/raid1/www/Hosts/bankrupt/TCR_Public/070426.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, April 26, 2007, Vol. 11, No. 98
Headlines
750 EAST THUNDERBIRD: Files Disclosure Statement in Arizona
ACAS CLO: S&P Rates $15.5 Million Class D Notes at BB
ADVANCED MICRO: S&P Puts B- Rating on Proposed $1.8 Billion Notes
ADVANCIS PHARMACEUTICAL: Martin Vogelbaum Joins Board Of Directors
ADVANSTAR COMM: Commences Series of Senior Notes Tender Offering
AFFINIA GROUP: Posts $5 Mil. Net Loss in Fiscal Year Ended Dec. 31
ALL AMERICAN: Files for Chapter 11 Protection in Florida
ALL AMERICAN: Case Summary & 40 Largest Unsecured Creditors
ALLIED HOLDINGS: Trade Creditors Sell Claims Totaling $1,327,579
ALLIED HOLDINGS: Four Parties Object to Disclosure Statement
AMR CORP: Earns $81 Million in First Quarter Ended March 31
AMTROL INC: Unsecured Claims Will Be Paid In Full
ASARCO LLC: Wants to Enter Into 2007 Insurance Program with AIG
ASPEN VALLEY: Fitch Withdraws BB- Rating on Revenue Bonds
BAYONNE MEDICAL: Trustee Wants Patient Care Ombudsman Appointed
BEAR STEARNS: DBRS Puts Low-B Ratings on Two S. 2007 Cert. Classes
BISON BUILDING: Can Reject Three Construction Contracts
BRANDYWINE REALTY: Affiliate Prices $300 Million Guaranteed Notes
BRIGGS & STRATTON: Earns $7.8 Million in Quarter Ended March 31
BUCKEYE PACIFIC: Taps Michael Carmel as Bankruptcy Counsel
CALPINE CORP: Reaches Settlement with Cleco Corp. on Acadia Power
CIRRUS LOGIC: Fin'l Result Filing Cues S&P to Remove NegativeWatch
CITIFINANCIAL MORTGAGE: Fitch Cuts Ratings on Two Certs. to BB-
CITIGROUP COMMERCIAL: Fitch Holds BB+ Rating on Class RAM-2 Loan
CLAYTON WILLIAMS: S&P Holds B Credit Rating & Says Outlook is Neg.
CLEAN HARBORS: Earns $11 Million in Fourth Qtr. Ended December 31
CLECO CORP: Reaches Settlement with Calpine Corp. on Acadia Power
COMMONWEALTH EDISON: Moody's Says Senate Bill Won't Affect Ratings
CONGOLEUM CORPORATION: Ernst & Young Raises Going Concern Doubt
COREL CORP: February 28 Balance Sheet Upside-Down by $20.6 Million
CREDIT SUISSE: Fitch Lowers Ratings on 29 Certificate Classes
CRUM & FORSTER: Prices $330 Million of 7-3/4% Sr. Notes Offering
CRUM & FORSTER: Launches Tender Offer for 10-3/8% Senior Notes
CRUM & FORSTER: Moody's Rates $330 Million Senior Notes at Ba3
DELTA AIR: NY Bankruptcy Court Confirms Plan of Reorganization
DEPOMED INC: December 31 Balance Sheet Upside-Down by $27 Million
FELLOWS ENERGY: Mendoza Berger Raises Going Concern Doubt
FRASER PAPERS: Shareholders Trigger Pull Out to Buy Katahdin Paper
FREMONT HOME: S&P Cuts Rating on S. 2003-B Class M-6 Loans to BB-
GABRIEL COMMUNICATIONS: Moody's Rates $260MM Credit Facility at B2
GAYLORD ENTERTAINMENT: S&P Lifts Corporate Credit Rating to B+
GE CAPITAL: Fitch Holds BB+ Rating on $9.9 Million Class J Loans
GENERAL MOTORS: CEO Takes the Challenge to Beat Toyota's Sales
GENESIS WORLDWIDE: Wants Until August 31 to File Chapter 11 Plan
GRAY TELEVISION: Earns $11.7 Million in Year Ended December 31
HEALTHSOUTH CORP: Selling Diagnostic Division for $47.5 Million
HELIOS FINANCE: DBRS Rates $93.5M S. 2007-S1-B-3 Certificates at B
HINES HORTICULTURE: Gets Nasdaq Notice Due to Delayed 10-K Filing
HORSEHEAD IND: Wants Herrick Feinstein as Substitute Counsel
INNOVA ROBOTICS: LBB & Associates Expresses Going Concern Doubt
INTERPOOL INC: Fortress Offer Prompts Fitch's Negative Watch
INTERSTATE BAKERIES: Posts $42.2 Million Net Loss in Third Quarter
IPCS INC: Closes $475 Million of Senior Secured Notes Offering
JOAN FABRICS: U.S. Trustee Appoints Three-Member Creditors' Panel
JUST FOR FEET: Former Execs Inks Pact Paying $80 Mil. to Creditors
KARA HOMES: Gets Court Approval to Hire DJM Assets as Appraiser
LEBARON DRYWALL: Files Schedule of Assets and Liabilities
LOCAL TV: Moody's Junks Rating on $190 Million Senior Notes
LOCAL TV: S&P Junks Rating on Proposed $190 Million Senior Notes
MARINER ENERGY: Inks Amended & Consent Agreement with Union Bank
MARINER ENERGY: Launches $200 Million Senior Notes Offering
MARINER ENERGY: Moody's Rates Proposed $200MM Senior Notes at B3
MARINER ENERGY: S&P Rates Proposed $200 Mil. Notes Offering at B-
MILLENNIUM INORGANIC: Moody's Puts Corporate Family Rating at B2
MORTGAGE ASSET: Fitch Cuts Rating on 2002-OPT1 Class M-6 to BB-
MORTGAGE ASSET: Fitch Junks Rating on Three Certificates Classes
MORTGAGE ASSET: Fitch Holds BB+ Rating on Class B-4 Certificates
NEW CENTURY: Wants Hennigan Bennett as Special Litigation Counsel
NEW CENTURY: Wants Incentive and Employee-Retention Plans Approved
NEW CENTURY: NYSE Delists New Century Securities from Trading
NOVASTAR MORTGAGE: S&P Puts Rankings on Negative CreditWatch
NOVELL INC: Will Incur Additional Stock-Based Compensation Expense
OPTION ONE: Company Sale Cues S&P's Negative CreditWatch
PUTNAM STRUCTURED: Fitch Cuts Rating on Two Note Classes to B+
QUEEN'S SEAPORT: Receives $41 Million Bid from O&S Holdings
RANGE RESOURCES: Closes Public Offering of 8.05MM Shares of Stock
RIVIERA TOOL: CEO Kenneth K. Rieth Retires Effective Immediately
ROCKAWAY BEDDING: Section 341(a) Meeting Scheduled on May 9
ROCKAWAY BEDDING: Taps Duane Morris as Bankruptcy Counsel
ROUGE INDUSTRIES: Wants Plan Filing Period Stretched to May 15
ROYALTY PHARMA: Solid Sales Growth Prompts S&P's BB+ Ratings
SEA CONTAINERS: Court Approves PWC Legal as U.K. Counsel
SECURITY AVIATION: Has Until October 1 to File Chapter 11 Plan
SECURITY WITH ADVANCED: GHP Horwath Raises Going Concern Doubt
SENTEX SENSING: Feb. 28 Balance Sheet Upside-Down by $6.5 Million
SOLUTIA INC: Seeks July 30 Extension of Exclusive Plan Filing Date
SOLUTIA INC: Committees Want Exclusive Periods Terminated
SOLUTIA INC: Files 12th Request to Extend Lease Decision Deadline
SPEEDWAY MOTORSPORTS: Earns $111 Million in Full Year 2006
STRUCTURED ASSET: Fitch Holds Low-B Ratings on Six Certificates
STRUCTURED ASSET: Fitch Cuts Rating on 19 Certificate Classes
STRUCTURED REPACKAGED: S&P Cuts Ratings on $12 Mil. Certs. to BB+
SUPERCONDUCTOR TECHNOLOGIES: Auditor Raises Going Concern Doubt
SWEETMAN RENTAL: Exclusive Plan Filing Period Stretched to May 31
TARPON INDUSTRIES: Rehman Robson Raises Going Concern
TOWNSEND CONSTRUCTION: Files for Chapter 11 Protection in Arizona
U.S. STEEL: Earns $273 Million in Quarter Ended March 31
US ONCOLOGY: Has $20 Mil. Stockholders' Deficit at Dec. 31, 2006
VOUGHT AIRCRAFT: Dec. 31 Balance Sheet Upside-Down by $693 Million
WACHOVIA BANK: Fitch Affirms Low-B Ratings on Six Loan Classes
WACHOVIA BANK: Fitch Holds Ratings on All CRE CDO 2006-1 Classes
WARNER MUSIC: To Receive $110 Mil. from Bertelsmann-Napster Deal
WHERIFY WIRELESS: $7.2MM Financing Proceeds Pay Cornell Capital
WINDHAM COMMUNITY: Moody's Lowers Long-Term Bond Rating to B1
YUKOS OIL: Auctioneer Receives Zero Bids for Eight Non-Core Assets
YUKOS OIL: Samaraneftegaz Unit Plans Restructuring of Operations
* S&P Puts Ratings on 12 Classes from 9 Issuers Under Neg. Watch
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
750 EAST THUNDERBIRD: Files Disclosure Statement in Arizona
-----------------------------------------------------------
750 East Thurnderbird Road Corporation filed with the United
States Bankruptcy Court for the District of Arizona a Chapter 11
Plan of Reorganization and a Disclosure Statement explaining that
Plan.
Treatment of Claims
Under the Plan, Administrative Claims will be paid in full, in
cash.
SFG Funding VI LLC, a secured claim holder, is secured by a
mortgage lien on the Debtor's lot and building at 750 East
Thunderbird Road in Phoenix, Arizona. The Debtor will make
monthly contractual payments of $10,352 to SFG Funding starting
June 30, 2007. SFG Funding's mortgage note matures Aug. 1, 2007.
In the absence of new financing by Dec. 31, 2007, the Debtor will
sell the property and use the sale proceeds to payoff the SFG
Funding loan.
The Maricopa County Treasurer's secured claims will be paid in
full, either, from the:
i. refinancing of the existing mortgage loan; or
ii. sale proceeds of the property.
The Maricopa County has a $21,497 secured claim against the
Debtor.
Each holder of Unsecured Claims will be paid pro rata from the
Debtor's earned income after all valid claims have been paid.
Equity Interests will retain all legal and equitable
interests in the Debtor's exempt and non-exempt assets, as
all reconciliation issues have been met.
Based in Phoenix, Arizona, 750 East Thunderbird Road Corp. filed
for Chapter 11 protection on Jan. 9, 2007 (Bankr. D. Ariz. Case
No. 07-00089). Allan D. Newdelman, Esq., represents the Debtor.
No Official Committee of Unsecured Creditors has been appointed in
the Debtor's bankruptcy proceedings. When the Debtor filed for
protection from its creditors, it estimated its assets between
$1 million to $100 million and its debts between $100,000 to
$1 million.
ACAS CLO: S&P Rates $15.5 Million Class D Notes at BB
-----------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to ACAS CLO 2007-1 Ltd./ACAS CLO 2007-1 Corp.'s
$363 million floating-rate notes.
The preliminary ratings are based on information as of April 24,
2007. Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
-- The expected commensurate level of credit support in the
form of subordination to be provided by the notes junior
to the respective classes, and by the subordinated notes
and overcollateralization;
-- The cash flow structure, which was subjected to various
stresses requested by Standard & Poor's;
-- The collateral manager's experience; and
-- The transaction's legal structure, including the issuer's
bankruptcy remoteness.
Preliminary Ratings Assigned
ACAS CLO 2007-1 Ltd./ACAS CLO 2007-1 Corp.
Class Rating Amount
----- ------ ------
A-1 AAA $110,750,000
A-1-S AAA $135,000,000
A-1-J AAA $33,750,000
A-2 AA $25,000,000
B BBB $21,000,000
D BB $15,500,000
Subordinated notes NR $37,000,000
*NR - Not rated.
ADVANCED MICRO: S&P Puts B- Rating on Proposed $1.8 Billion Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Sunnyvale, California-based Advanced Micro
Devices Inc.'s.
"At the same time, we assigned our 'B-' rating to the company's
planned sale of $1.8 billion in senior unsecured convertible notes
due in 2015," said Standard & Poor's credit analyst Bruce Hyman.
The outlook is negative.
Proceeds of the new issue will be used in part to repay
$500 million of the company's term loan, and for other corporate
purposes. The 'B-' issue rating, one notch below the corporate
credit rating, reflects the substantial amount of secured debt in
the capital structure relative to the company's assets.
The ratings on AMD reflect subpar execution of the company's
business plans in a very challenging market, the company's highly
volatile operating performance and profitability, and ongoing
substantially negative free cash flows, in part offset by a
generally improved product line, expected adequate near-term
liquidity, and expectations that a planned change in business
model will reduce the company's asset intensity and capital
expenditures. AMD is the second-largest supplier of
microprocessors and is a major supplier of other chips for
personal computers and consumer electronics.
ADVANCIS PHARMACEUTICAL: Martin Vogelbaum Joins Board Of Directors
------------------------------------------------------------------
Advancis Pharmaceutical Corporation has appointed Martin Vogelbaum
to join the Advancis Board of Directors, expanding the size of its
board to seven directors.
Mr. Vogelbaum is a partner with Rho Ventures, a venture capital
firm focused on investing in technology and healthcare companies
through all stages of capital formation. Prior to joining Rho
Ventures, Mr. Vogelbaum spent five years as a general partner of
Apple Tree Partners, a life sciences venture capital firm, where
he founded several biotechnology companies. Previously, he was a
general partner of Oxford Bioscience Partners, which he joined in
1993. Mr. Vogelbaum currently serves on the board of several
privately- held companies, including chairman of Gloucester
Pharmaceuticals. Mr. Vogelbaum received his AB in biology and
history from Columbia University.
"The company is delighted to have Martin join the company's board,
as he brings a great deal of experience and additional perspective
that will be an asset to Advancis as the company continues to
implement its current initiatives," Dr. Edward Rudnic, Advancis
president and ceo, said. "I know the entire board joins me in
welcoming Martin to the company's board of directors and we look
forward to his contributions to the company."
"I am pleased to be joining the Advancis board," Mr. Vogelbaum
commented. "We have been long standing investors in Advancis so I
look forward to helping the company achieve its full potential as
it moves into its next stage of development."
About Rho Ventures
Rho Ventures -- http://www.rho.com/-- has been backing venture-
stage companies in the U.S. since its inception in 1981. Venture
capital funds under management currently exceed $1 billion. Rho
Ventures has invested in over 165 venture stage companies and
helped build market leaders across many high growth industries.
Previous investments include Ciena Corporation, Commerce One,
Compaq Computer Corporation, Diversa Corporation, Human Genome
Sciences, Inc., iVillage, Leukosite (currently part of Millennium
Pharmaceuticals), MedImmune, Inc., NitroMed, Senomyx, Tercica,
Tripod (currently part of Lycos), Vanda Pharmaceuticals and
Vicuron.
About Advancis Pharmaceutical
Advancis Pharmaceutical Corporation (NasdaqGM: AVNC) --
http://www.advancispharm.com/-- develops and commercializes anti-
infective drug products for infectious disease. It is developing
a portfolio of drugs based on its novel biological finding that
bacteria exposed to antibiotics in front-loaded, sequential
bursts, or pulses, are killed more efficiently than those exposed
to standard antibiotic treatment regimens. It currently issued 25
U.S. patents and two foreign patents covering its proprietary
once-a-day pulsatile delivery technology called PULSYS.
* * *
PricewaterhouseCoopers LLP raised substantial doubt about Advancis
Pharmaceutical Corporation's ability to continue as a going
concern after auditing the company's financial statements for the
years ended Dec. 31, 2006, and 2005. PwC pointed to the company's
recurring losses from operations and insufficient liquidity to
fund its ongoing operations.
ADVANSTAR COMM: Commences Series of Senior Notes Tender Offering
----------------------------------------------------------------
Advanstar Communications Inc. and Advanstar Inc. have commenced a
cash tender offer for Communications' 10 3/4% Second Priority
Senior Secured Notes due 2010 (CUSIP Nos. 00758RAM6 and 00758RAH7)
and 12% Senior Subordinated Notes due 2011 (CUSIP No. 00758RAF1)
and Advanstar's 15% Senior Discount Debentures due 2011 (CUSIP No.
00759JAE1).
Pursuant to the terms and conditions of the offers, Communications
will purchase any and all of its Senior Secured Notes and Senior
Subordinated Notes and Advanstar will purchase any and all of its
Debentures. Advanstar and Communications are also soliciting
consents to proposed amendments to the indentures governing each
of the Notes that would eliminate substantially all of the
restrictive covenants and eliminate or modify certain default
provisions in the indentures. The proposed amendments to the
indenture governing the Senior Secured Notes would also release
the security interest in the collateral under that indenture and
related security documents. The tender offer will expire at 5
p.m., New York City time, on May 18, 2007, unless extended or
terminated.
The tender offers and consent solicitations are being conducted in
connection with the pending acquisition of all of the outstanding
stock of Advanstar Holdings Corp., the holding company for
Advanstar and Communications, by an investor group led by Veronis
Suhler Stevenson. The consummation of the tender offers is
conditioned upon, and is expected to occur simultaneously with,
the closing of the Acquisition Transaction, but satisfactory
completion of the tender offers is not a condition to closing of
the Acquisition Transaction. The Expiration Date will be extended
to coincide with closing of the Acquisition Transaction, which is
not expected to close before May 31, 2007.
The tender offers and consent solicitations are being made solely
pursuant to an Offer to Purchase and Consent Solicitation
Statement dated April 19, 2007 and the related Consent and Letter
of Transmittal, which include a more comprehensive description of
the terms and conditions thereof.
Subject to the terms and conditions of the tender offers, the
purchase price for each $1,000 principal amount outstanding of
Senior Secured Notes validly tendered and accepted for purchase by
Communications will be the price calculated from the yield to
maturity on the applicable reference United States Treasury, as of
10:00 a.m., New York City time, on May 2, 2007 plus a fixed spread
of 0.50% less the consent payment referred to below. The
purchase price for each $1,000 principal amount outstanding of
Senior Subordinated Notes validly tendered and accepted for
purchase by Communications will be $1,013.5 and the purchase price
for each $1,000 principal amount outstanding of Debentures validly
tendered and accepted for purchase by Advanstar will be $1,012.5.
Holders who tender their Notes and deliver their consents prior to
5:00 p.m., New York City time, on May 2, 2007 will also receive a
consent payment of $30 per $1,000 outstanding principal amount of
Notes tendered and accepted in the offers. Holders whose Notes
are accepted for purchase in the tender offers will also receive
accrued and unpaid interest to, but not including, the settlement
date for the tender offers.
The principal purpose of the tender offers and the consent
solicitations is to acquire the outstanding Notes and eliminate
substantially all of the restrictive and reporting covenants,
eliminate or modify certain events of default and certain other
related provisions contained in the indentures with respect to the
Notes so that any non-tendered Notes do not restrict the future
financial and operating flexibility of Advanstar and
Communications. The proposed amendments to the indenture
governing the Senior Secured Notes would also release the security
interest in the collateral under that indenture and related
security documents. The tender offers and consent solicitations
are conditioned upon certain general conditions described in the
Statement. The proposed amendments to an indenture governing a
series of Notes will only become operative if the holders of at
least a majority of the aggregate principal amount of such series
of Notes validly consent to such amendments. Certain of the
proposed amendments to the indentures governing the Senior Secured
Notes and the Debentures will not become operative unless the
consent of holders of at least two-thirds of the outstanding
aggregate principal amount of such Notes are received.
Holders who desire to tender their Notes must consent to all the
proposed amendments and may not deliver a consent without
tendering their Notes. Any Notes tendered before the Consent Date
may be withdrawn at any time on or prior to the Consent Date, but
not thereafter, except as required by law. Any Notes tendered
after the Consent Date may not be withdrawn, except as may be
required by law. While the Issuers will extend the Expiration
Date until the date of the closing of the Acquisition Transaction,
they do not expect to extend withdrawal rights beyond the Consent
Date.
Credit Suisse Securities (USA) LLC is the exclusive Dealer Manager
and Solicitation Agent for the tender offers and consent
solicitations. Questions regarding the tender offer and consent
solicitation may be directed to:
Credit Suisse Securities (USA) LLC's
Liability Management Group
Tel: (800) 820-1653 (toll free), or
(212) 538-0652 (collect)
Requests for the Statement, Consent and Letter of Transmittal or
other documents related to the tender offer and solicitation may
be directed to the Information Agent:
D.F. King & Co. Inc.
Tel: (888) 628-8208 (toll free)
About Advanstar Communications Inc.
Headquartered in New York, Advanstar Communications Inc. --
http://www.advanstar.com/-- provides integrated marketing
solutions for the Fashion, Life Sciences and Powersports
industries. Advanstar serves business professionals and consumers
in these industries with its portfolio of 91 events, 66
publications and directories, 150 electronic publications and Web
sites, well as educational and direct marketing products and
services. Advanstar has roughly 1,000 employees and currently
operates from multiple offices in North America and Europe.
* * *
As reported in the Troubled Company Reporter on April 3, 2007,
Moody's Investors Service placed the ratings of Advanstar
Communications Inc., under review for possible downgrade. The
ratings placed under review were the company's First lien senior
secured revolving credit facility, Ba3; Senior secured first lien
term loan, Ba3; 10.75% senior secured second priority notes, B1;
12% senior subordinated global notes, Caa1; Corporate Family
rating, B3; and Probability of Default rating, B3. The ratings
review follows the report that Advanstar has entered into a
definitive agreement to be acquired by an investor group led by
Veronis Suhler Stevenson in a transaction valued at around
$1.1 billion.
AFFINIA GROUP: Posts $5 Mil. Net Loss in Fiscal Year Ended Dec. 31
------------------------------------------------------------------
Affinia Group Inc. reported results for the fourth quarter and
fiscal year ended Dec. 31, 2006.
2006 Year End
Net income for the year ended Dec. 31, 2006, improved by
$25 million to a loss of $5 million, as compared to a loss of
$30 million for the year ended Dec. 31, 2005.
For the fiscal year 2006, sales were $2.16 billion, as compared to
$2.13 billion for 2005. The increase reflects strong filtration
product and European heavy-duty product sales. The company's 2006
sales grew 1.4% despite the termination of a customer relationship
in early 2006, which reduced sales by $30 million. In addition,
the company's sales increased $39 million related to the impact of
foreign currency changes.
Gross profit increased 27% to $376 million in fiscal year 2006, as
compared to $295 million for the same period in 2005. The
improvement is primarily due to an overall improvement in
operational efficiency as a result of the company's business
restructuring.
As of Dec. 31, 2006, Affinia had $70 million of cash. Total long-
term debt outstanding as of Dec. 31, 2006 was $597 million, a
decrease of $15 million from the year ended Dec. 31, 2005.
Affinia had no borrowings under the company's receivables
securitization program at Dec. 31, 2006. At Dec. 31, 2006,
Affinia continued to be in compliance with all covenants in its
senior credit agreement including financial covenants consisting
of a cash interest expense ratio, a leverage ratio, and a maximum
annual capital expenditure.
"Affinia gross profit increased 27%, while sales rose 1.4% as we
continue to strengthen our competitive position in the dynamic
aftermarket," Thomas Madden, Affinia's Senior Vice President and
Chief Financial Officer, said.
"This year, Affinia continued to implement its restructuring plan
with great success," Terry McCormack, Affinia Group's President
and Chief Executive Officer, said. "Costs were down; and sales
and gross profitability were up during this transitional period.
We now look ahead to completing our restructuring plan, which will
significantly strengthen our position as a cost competitive global
manufacturer."
Fourth Quarter
Net income for the quarter ended Dec. 31, 2006, improved by
$14 million to a loss of $9 million, as compared to a net loss of
$23 million for the quarter ended Dec. 31, 2005.
For the fourth quarter 2006, sales were $502 million, as compared
to $514 million for the fourth quarter of 2005.
Gross profit for the quarter increased 45% to $87 million, as
compared to $60 million for the fourth quarter of 2005.
About Affinia Group
Headquartered in Ann Arbor, Michigan, Affinia Group Inc. --
http://www.affiniagroup.com/-- designs, manufactures and
distributes aftermarket components for passenger cars, sport
utility vehicles, light, medium and heavy trucks and off-highway
vehicles. The company's product range addresses filtration, brake
and chassis markets in North and South America, Europe and Asia.
* * *
As reported in the Troubled Company Reporter on Jan. 25, 2007,
Moody's Investors Service has upgraded Affinia Group Inc.'s
Corporate Family Rating to B2 from B3 and revised the outlook to
stable from negative.
ALL AMERICAN: Files for Chapter 11 Protection in Florida
--------------------------------------------------------
All American Semiconductor, Inc., yesterday filed a voluntary
petition for relief under Chapter 11 of the U.S. Bankruptcy Code
with the U.S. Bankruptcy Court for the Southern District of
Florida, Miami Division.
The filing includes All American's 33 subsidiaries in the United
States, Canada, Mexico, Europe and Asia. All American determined
to file for relief under Chapter 11 after extensively exploring
and carefully evaluating all of its options. All American
believes that the Chapter 11 process provides the best alternative
for maximizing the value of the Company for the benefit of its
stakeholders including suppliers, customers and employees.
First Day Motions
Simultaneous with the filing of its petitions, All American filed
first day motions seeking relief that will enable it to continue
operations during the Chapter 11 process, including debtor in
possession financing from its existing bank group and the payment
of employee related obligations, which All American expects the
Court to grant. All American expects to continue to pay its post-
petition obligations in the ordinary course.
Asset Sale
In addition, All American has filed a motion seeking Court
approval of a procedure for the sale of its businesses as a going
concern to be completed no later than June 8, 2007. In that
regard, All American has entered into a nonbinding letter of
intent with a third party to acquire substantially all of All
American's and its subsidiaries' assets through a Chapter 11 sale
process including Court approved bidding procedures. The net
proceeds from such proposed sale are not expected to pay in full
the outstanding debt of All American's bank group at the time of
closing of such sale. The proposed sale is subject to a number of
conditions, including but not limited to: (a) the potential
purchaser's completion of satisfactory due diligence, (b) the
parties entering into a definitive purchase and sale agreement,
(c) approval of the sale by the company's bank group, (d) approval
of the sale by the United States Bankruptcy Court and (e) other
customary conditions, terms and consents.
"The decision to file was a necessary step for our customers,
suppliers, and employees," said Bruce Goldberg, President and CEO
of All American. "We will continue working with our suppliers to
service our customers throughout the Chapter 11 process in order
to maximize the value of All American and its subsidiaries and to
maintain the going concern value of the Company pending a sale."
DIP Financing
To provide All American with liquidity during the sale process,
All American has negotiated a debtor-in-possession financing of up
to $25 million with its existing bank group, which is also subject
to Bankruptcy Court approval.
All American's decision to file voluntary petitions for relief
under Chapter 11 followed the expiration of its second forbearance
agreement with its lenders which had provided additional liquidity
to the Company in the short term. Prior to its Chapter 11 filing,
All American explored a variety of strategic alternatives,
including a sale, additional financing, refinancing or
recapitalization.
Squire, Sanders & Dempsey, LLP is acting as bankruptcy and
restructuring counsel and Raymond James & Associates, Inc.
continues to act as financial advisor to All American.
Non-Filing of Form 10-K
As previously reported, All American has not completed its year-
end audit and did not file its Form 10-K by April 17, 2007, the
extended due date pursuant to Form 12b-25 which the Company
previously filed with the Securities and Exchange Commission.
Delisting
As a result and as previously announced, All American received a
Staff Determination Letter from The NASDAQ Stock Market providing
that, unless the Company requested an appeal of the Staff
determination of its noncompliance with the continued listing
requirements set forth in NASDAQ Market Place Rule 4310(c)(14) by
4:00 p.m. Eastern Time on April 25, 2007, trading of the Company's
common stock would be suspended at the opening of business on
April 27, 2007 and the company's common stock would be delisted
from The NASDAQ Stock Market. All American does not plan to
request an appeal.
About All American
All American Semiconductor, Inc. -- http://www.allamerican.com/--
(Nasdaq: SEMI) is a Delaware corporation with its principle place
of business in Miami, Florida. It also maintains corporate
offices for West Coast operations in San Jose, California. All
American is a distributor of electronic components manufactured by
others. The company distributes a full range of semiconductors
including transistors, diodes, memory devices, microprocessors,
microcontrollers, other integrated circuits, active matrix
displays and various board-level products. All American also
distributes passive components such as capacitors, resistors and
inductors; and electromechanical products such as power supplies,
cable, switches, connectors, filters and sockets. All American
also offers complete solutions for flat panel display products.
In total, the company offers approximately 40,000 products
produced by approximately 60 manufacturers. These products are
sold primarily to original equipment manufacturers in a diverse
range of industries such as manufacturers of computers and
computer-related products, networking, satellite, wireless and
other communications products; Internet infrastructure equipment
and appliances; automobiles and automotive subsystems; consumer
goods; voting and gaming machines; defense and aerospace
equipment; and medical instrumentation. The company also sells
products to contract electronics manufacturers who manufacture
products for companies in all electronics industry segments.
The company has 36 strategic locations throughout North America,
as well as operations in both Asia and Europe.
ALL AMERICAN: Case Summary & 40 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: All American Semiconductor, Inc.
16115 Northwest 52 Avenue
Miami, FL 33014
Bankruptcy Case No.: 07-12963
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Palm Electronics Manufacturing Corp. 07-12965
Aved Industries, Inc. 07-12966
Access Micro Products, Inc. 07-12967
All American A.V.E.D., Inc. 07-12969
All American Added Value, Inc. 07-12970
All American IDT, Inc. 07-12971
All American Semiconductor of
Atlanta, Inc. 07-12972
All American Semiconductor of
Chicago, Inc. 07-12973
All American Semiconductor of
Florida, Inc. 07-12974
All American Semiconductor of
Huntsville, Inc. 07-12976
All American Semiconductor of
Massachusetts, Inc. 07-12977
All American Semiconductor of
Michigan, Inc. 07-12978
American Semiconductor of
Minnesota, Inc. 07-12979
All American Semiconductor of
New York, Inc. 07-12981
All American Semiconductor of
Ohio, Inc. 07-12982
All American Semiconductor of
Philadelphia, Inc. 07-12983
All American Semiconductor of
Phoenix, Inc. 07-12984
All American Semiconductor of
Portland, Inc. 07-12985
All American Semiconductor of
Rhode Island, Inc. 07-12986
All American Semiconductor of
Rockville, Inc. 07-12987
All American Semiconductor of
Salt Lake, Inc. 07-12988
All American Semiconductor of
Texas, Inc. 07-12989
All American Semiconductor of
Washington, Inc. 07-12990
All American Semiconductor of
Wisconsin, Inc. 07-12991
All American Semiconductor-Northern
California, Inc. 07-12993
All American Technologies, Inc. 07-12995
All American Transistor of
California Inc. 07-12996
AGD China, Inc. 07-12997
All American Semiconductor of
Canada, Inc. 07-12998
AGD Electronics Limited 07-12999
AllAmMex Components, S. de R.L. de C.V. 07-13000
AGD Electronics Asia Pacific Co., Ltd. 07-13001
AmeriCapital, LLC 07-13002
Type of Business: The Debtor is a distributor of electronic
components manufactured by others. The company
distributes a full range of semiconductors
including transistors, diodes, memory devices,
microprocessors, microcontrollers, other
integrated circuits, active matrix displays and
various board-level products. All American also
distributes passive components such as
capacitors, resistors and inductors; and
electromechanical products such as power
supplies, cable, switches, connectors, filters
and sockets. The company also offers complete
solutions for flat panel display products.
In total, the company offers approximately
40,000 products produced by approximately
60 manufacturers. The company has 36 strategic
locations throughout North America, as well as
operations in both Asia and Europe. See
http://www.allamerican.com/
Chapter 11 Petition Date: April 25, 2007
Court: Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Debtors' Counsel: Tina M. Talarchyk, Esq.
Squire Sanders & Dempsey LLP
1900 Phillips Point West
777 South Flagler Drive
West Palm Beach, FL 33401-6198
Tel: (561) 650-7261
Fax: (561) 655-1509
Financial Condition as of Feb. 28, 2007
Total Assets: $117,634,000
Total Debts: $106,024,000
Debtors' Consolidated List of 40 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
IXYS $3,028,095
3450 Bassett Street
Santa Clara, CA 95054
Samsung Semiconductor, Inc. $2,633,838
3655 North First Street
San Jose, CA 95134
AMI Semiconductors $2,086,501
2300 Buckskin Road
Pocatello, ID 83201
Kyocera Industrial Ceramics $1,340,201
5713 East Fourth Plain Road
Vancouver, WA 98661
Optrex America $1,154,155
46723 Five Mile Road
Plymount, MI 48170
Microsemi Commercial De Macau $1,093,524
11861 Western Avenue
Garden Grove, CA 92841
Powerex, Inc. $815,073
P.O. Box 8500
Philadelphia, PA 19178
Asahi Kasei Microsystems Co. $690,549
P.O. Box 374
San Jose, CA 95103
Zetex, Inc. $685,854
700 Veteran's Memorial Highway
Hauppauge, NY 11788
TDK Corporation of America $681,460
1221 Business Center Drive
Mt. Prospect, IL 60056
Fairchild Semiconductor Corp. $681,384
82 Running Hill Road
South Portland, ME 04106
Silicon Image, Inc. $572,966
1060 East Arques Avenue
Sunnyvale, CA 94085
Astec $503,616
5810 Van Allen Way
Carlsbad, CA 92008
On Semiconductor $470,069
5005 East McDowell Road
Phoenix, AZ 85008
Smart Power Systems Inc. $455,689
1760 Stebbins Drive
Houston, TX 77043
Semtech Corporation $432,365
200 Flynn Road
Camarillo, CA 93012
BOE-Hydis America Inc. $429,708
2290 North First Street, SYE 209
San Jose, CA 95131
Taiyo Yuden (U.S.A.), Inc. $419,992
1770 La Coasta Meadows Drive
San Marcos, CA 92078
Clare Inc. $379,294
78 Cherry Hill Drive
Beverly, MA 01915
Omnivision Technologies Inc. $375,735
1341 Orleans Drive
Sunnyvale, CA 94089
Truly Semiconductor Limited $364,099
2/Floor, Chung Shun Knitting Centre
Kwai Chung, Hong Kong
Smart Modular Technologies $299,258
Northwest 5337
Minneapolis, MN 55485
California Micro Devices Corp. $296,300
490 North McCarthy Boulevard #100
Milpitas, CA 95035
Mtron PTI $292,144
P.O. Box 630
Yankton, SD 57078
Alliance Semiconductor $256,012
2575 Augustine Drive
Santa Clara, CA 95054
APX Technology Corp. $235,567
Microsemi Corporation $224,886
Methode Electronics $217,704
Microsemi Lowell $215,211
Mircosemi $208,974
United Chemi-Con Inc. $208,687
Pixelworks, Inc. $196,452
Hyundai LCD America $195,632
AAEON Electronics Inc. $192,053
Solomon Tech. (USA) Corp. $189,000
Delta Prod Corp. $179,199
Everlight International Corp. $172,023
Pletronics Inc. $159,291
Condor DC Power Supplies $158,897
Diodes Inc. $157,641
ALLIED HOLDINGS: Trade Creditors Sell Claims Totaling $1,327,579
----------------------------------------------------------------
From March 3 to 27, 2007, the Clerk of the U.S. Bankruptcy Court
for the Northern District of Georgia recorded claim transfers made
by various creditors to:
(a) Sierra Liquidity Fund, located at 2699 White Road, Suite
255, in Irvine, California 92614:
Transferor Claim Amount
---------- ------------
Nass, Inc. $67,359
Nusoft Solutions, Inc. 204,500
The IFA Group, Inc. 71,967
Billy Sellers Transport, Inc. 48,760
Mabro Auto Transport 39,690
Time Auto Transport, Inc. 4,923
(b) ASM Capital, located at 7600 Jericho Turnpike, Suite 302,
in Woodbury, New York 11797:
Transferor Claim Amount
---------- ------------
Tri Star Steel Corporation $7,594
S&I Steam Cleaning Inc 18,965
Sco-Val Mobil Power Wash 3,510
(c) Revenue Management located at One University Plaza, Suite
312, in Hackensack, New Jersey 07601:
Transferor Claim Amount
---------- ------------
Les Service G&K $16,683
Building Services of America Inc 3,543
Cassens Transport Co 57,771
Cintas Canada 4,731
Cintas Location 2,222
Unifirst Canada 2,032
Canadian Linen Edmonton 2,066
New England Truck Stop Inc 6,745
Southwest Brake & Parts Inc 1,042
The Court also recorded Colonial Security Service Inc.'s claim
transfer for $25,619 to Fair Harbor Capital, LLC.
On March 27, 2007, JEMM Mobile Truck and Trailer, Inc.,
transferred several claims with face amounts of $737,856, in
aggregate, to UBS Securities LLC, located at 677 Washington
Blvd., in Stamford, Connecticut.
About Allied Holdings
Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other
OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its
affiliates provide short-haul services for original equipment
manufacturers and provide logistical services. The company and 22
of its affiliates filed for chapter 11 protection on July 31, 2005
(Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W.
Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in
their restructuring efforts. Henry S. Miller at Miller Buckfire &
Co., LLC, serves as the Debtors' financial advisor. Anthony J.
Smits, Esq., at Bingham McCutchen LLP, provides the Official
Committee of Unsecured Creditors with legal advice and Russell A.
Belinsky at Chanin Capital Partners, LLC, provides financial
advisory services to the Committee. When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts. (Allied Holdings Bankruptcy News,
Issue No. 45; Bankruptcy Creditors' Service, Inc.
http://bankrupt.com/newsstand/or 215/945-7000)
Plan Update
On March 2, 2007, the Debtors, Yucaipa and Teamsters filed a Co-
Sponsored Plan and Disclosure Statement explaining that plan. On
April 2, 2007, they filed an Amended Plan and on April 6 filed a
Second Amended Plan. The Court approved the adequacy of the
disclosure statement explaining the 2nd Amended Plan on April 6,
2007. The Court is set to consider confirmation of the Co-
Sponsored Plan on May 9, 2007.
ALLIED HOLDINGS: Four Parties Object to Disclosure Statement
------------------------------------------------------------
Various creditors of Allied Holdings, Inc. and its debtor-
affiliates have delivered to the U.S. Bankruptcy Court for the
Northern District of Georgia their objections to the disclosure
statement of the Debtors' Joint Plan of Reorganization. The
Objectors include:
(a) a group of holders of tort claims against the Debtors;
(b) ACE America Insurance Company and its affiliates;
(c) the Ad Hoc Committee of Equity Security Holders,
comprising Virtus Capital LP, Hawk Opportunity Fund, L.P.,
Aspen Advisors LLC, Sopris Capital Advisors, LLC, and
Armory Advisors LLC; and
(d) William Neary, United States Trustee.
The Objectors complain that the Disclosure Statement does not
provide adequate information required under Section 1125 of the
Bankruptcy Code.
The Tort Claimants have been expecting recovery from insurance
proceeds and deductibles. They note that the Debtors have
previously disclosed that approximately $100,000,000 exists in an
account with Haul Insurance, Ltd., a non-debtor subsidiary, to
"reinsure" the Debtors' deductibles and self-retentions.
The Tort Claimants, however, complain that the Disclosure
Statement does not disclose any information about the
dispositions of the funds, or their availability to pay
deductibles. Instead, the Disclosure Statement assigns the their
claims a pro rata share of the Debtors' stock for the deductible
portions of the claims without explanation.
Representing the Tort Claimants, Darryl S. Laddin, Esq., at
Arnall, Golden, Gregory LLP, in Atlanta, Georgia, argues that the
Plan is attempting to categorically subordinate punitive damages
claims, which is beyond the Court's authority as a matter of law.
The punitive damages claims are potentially so high that their
inclusion within the class of general unsecured claimants would
substantially alter estimated distributions, Mr. Laddin contends.
Thus, he asserts, additional disclosure and a second solicitation
are required.
The ACE Companies object to the Disclosure Statement on these
grounds:
(a) the Disclosure Statement lacks adequate information that
would enable them, as creditors, to ascertain how their
claims and their insurance policies and agreements with
the Debtors will be classified and treated, or to make and
informed decision about the Plan; and
(b) the Plan is unconfirmable due to the proposed partial
consolidation and releases of non-debtor parties.
In addition, the ACE Companies want the Insurance Agreements and
the Policies assumed or continued as a whole.
Mr. Neary, the U.S. Trustee, contends that certain of the Plan's
provision for the discharge of debts and release of claims are
not permitted under the Bankruptcy Code. According to Mr. Neary,
the Disclosure Statement should:
* reveal the amount and nature of compensation to be paid to
insiders;
* reveal claims, if any, held by insiders;
* include a meaningful liquidation analysis.
Mr. Neary seeks the clarification of these statements in the
Disclosure Statement:
-- "The Debtors estimate that they have approximately
[$200,000,000] of claims subject to compromise"; and
-- The Official Committee of Unsecured Creditors will
"dissolve automatically" on the Effective Date.
According to the Ad Hoc Equity Committee, the Debtors' valuation
analysis filed as exhibit to the Disclosure Statement lacks the
requisite detail and explanation required for the information to
be accurate and sufficiently complete as required by Section
1125.
The Ad Hoc Equity Committee complains that the "Reorganization
Value Analysis" is a bare, conclusory analysis that was not
prepared by Miller Buckfire & Company, the Debtors' financial
advisor. Instead, FTI Consulting, Inc., a firm that has not been
approved by the Court, provided the analysis.
Paul N. Silverstein, Esq., at Andrews Kurth LLP, in New York, the
Ad Hoc Equity Committee's counsel, asserts that a reasonably
detailed analysis of the enterprise value of the Reorganized
Debtors is critical to the claimants and interest holders to make
an informed judgment whether to accept or reject the Plan. The
disclosure would also include:
(a) a description of FTI Consulting's connection with the Plan
Proponents;
(b) a disclosure as to why the Debtors' financial advisor did
not prepare a valuation analysis; and
(c) a disclosure as to why the Debtors' have not adopted the
FTI Consulting valuation.
The Disclosure Statement also fails to provide the financial,
operational and business implications to the Reorganized Debtors
if the Canadian Operations Sale is consummated, Mr. Silverstein
contends. There are no separate forecasts provided to illustrate
how the Reorganized Debtors would operate without their Canadian
operations, nor the impact on the Reorganized Debtors of selling
their Canadian operations to their primary competitor.
Mr. Silverstein argues that the Disclosure Statement does not
provide adequate background and detail of the history of labor
negotiations with the International Brotherhood of Teamsters,
including but not limited to, the Yucaipa Companies' role in the
negotiations and their relationships with IBT.
The Disclosure Statement should disclose that there are
alternatives to the Plan, which are a matter of public record
filed pursuant to the Securities and Exchange Commission rules,
Mr. Silverstein asserts.
The Ad Hoc Equity Committee relates that on March 27, 2007,
Sopris Partners, Series A of Sopris Capital Partners, L.P.,
submitted to the Debtors a revised plan of reorganization term
sheet for the Debtors. The Sopris Plan Term Sheet, according to
the Ad Hoc Equity Committee, provides for equal or better
recoveries to every creditor class, a materially better treatment
for labor and for a material distribution to stockholders.
Prior to the Disclosure Statement Hearing, the Ad Hoc Equity
Committee intends to submit a chart to the Plan Proponents that
will outline the fundamental and critical differences between the
Debtors' Plan and the Sopris Plan Term Sheet. The Committee
seeks the inclusion of the chart in any solicitation materials.
Misleading Plan Information Sent to IBT,
Sopris Capital Advisors Assert
According to a Form Schedule 13-D filed with the Securities and
Exchange Commission, Sopris Capital Advisors advised delivered a
letter to Jeffrey W. Kelley, Esq., at Toutman Sanders LLP, in
Atlanta, Georgia, the Debtors' counsel, advising that Allied
Holdings, Inc., "inappropriately transmitted false and misleading
information" regarding the Plan to the IBT members.
The Form 13D was filed by Sopris Partners, Series A of Sopris
Capital Partners, L.P.; Sopris Capital, LLC; Aspen Advisors LLC;
Sopris Capital Advisors, LLC; and Nikos Hecht.
Sopris Advisors claimed that the Debtors used confidential
employment data to transmit to all IBT-represented employees a
materially misleading letter from The Yucaipa Companies.
Sopris Advisors noted that Yucaipa's letter to IBT members stated
that if the employees did not support the Plan, the Debtors would
not "survive" and would be liquidated. As a consequence,
according to the Yucaipa letter, the IBT would lose their jobs.
Mr. Hecht contends that the suggestion the Debtors would not
"survive" and need to be liquidated if the Plan is not approved
and confirmed is materially misleading. Yucaipa's
characterization of the lack of alternatives to the Plan is also
materially misleading, he asserts.
MR. Hecht further notes that even if the Yucaipa Letter was not
blatantly false and misleading, it was inappropriate for the
Debtors and Yucaipa to transmit the Letter to the IBT members in
view of Section 1125(b) of the Bankruptcy Code.
Sopris Advisors demands that its letter to Mr. Kelley advising of
the false and misleading information be similarly transmitted to
the IBT members.
A full-text copy of the Sopris Letter sent to Mr. Kelley is
available for free at:
http://researcharchives.com/t/s?1ddf
Sopris Advisors Offer Modified Plan Term Sheet
In a separate filing with the SEC, Nikos Hecht discloses that
Sopris Capital Advisors delivered a letter on March 27, 2007, to
the Executive Chairman of the Board of Directors of AHI,
providing for a modified plan of reorganization term sheet, and
improving the terms of the Sopris Plan of Reorganization
submitted on March 14, 2007.
The key enhancements of the Modified Sopris Plan Term Sheet are:
* The leverage on the Reorganized Debtors is reduced by
$100,000,000 over the prior term sheets. Holders of Class
4A Allowed Note Claims will receive their pro rata portion
of $100,000,000 of New Preferred Stock in exchange for
their claims. The amount of New Notes issued will be
reduced by $100,000,000, and will be limited to only that
amount required to the extend the Allowed Class 4A Note
Claims are not satisfied in full by distribution of the
New Preferred Stock;
* The new capital structure will provide for the option of
zero cash interest on any new debt for at least two years.
The terms of the Sopris exit financing facility and the
Sopris Delayed Term Loan now include a provision to allow
the Reorganized Debtors to elect to pay interest in-kind
for up to three years from the Effective Date at the sole
option of the Reorganized Debtors. In addition, the terms
of the New Notes provide for, at minimum, a two year
interest free period, and an option for the Company to pay
interest in-kind for up to the life of the New Notes,
unless certain financial ratios are achieved. This
provision ensures that the Reorganized Debtors are only
obligated to pay cash interest on the New Notes when they
are financially in a position to do so. In addition, the
terms of the Sopris exit financing facility have been
modified to match the weighted average cost of the Debtors
proposed exit financing facility with Goldman Sachs.
* A $5,000,000 per year improvement is provided over the
Yucaipa Plan Term Sheet for the International Brotherhood
of Teamsters. The Modified Sopris Plan Term Sheet
proposed a modified collective bargaining agreement in
which wage concessions will be $30,000,000 per year for
the next three years rather than the $35,000,000 per year
that Yucaipa proposes -- a total improvement of
$15,000,000.
Sopris Advisors also informed the Board that a document posted on
the Teamsters Web site -- http://www.teamsters.org/-- on
March 21, 2007, titled "TDU Backs Hugh Sawyer/Rutland Family Over
Yucaipa Proposal," which purports to provide a comparison of the
terms in the Yucaipa and Sopris plans. The Leaflet contains a
series of false and misleading statements, Sopris Advisors
contends.
In its objection to the disclosure statement to the Debtors'
Plan, the Ad Hoc Committee of Equity Security Holders complains
that IBT misleadingly refers to the Sopris Plan Term Sheet to its
members as the "Hugh Sawyer/Rutland Family Proposal" in an effort
to inflame its members' passions against the Sopris Plan Term
Sheet because there is some "bad blood" between current
management and labor.
Sopris Advisors provides a summary of some of the major
misrepresentations in the Leaflet along with the relevant facts
to correct the false and misleading statements.
A full-text copy of Sopris Advisors' summary and relevant facts
is available for free at:
http://researcharchives.com/t/s?1de0
About Allied Holdings
Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other
OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its
affiliates provide short-haul services for original equipment
manufacturers and provide logistical services. The company and 22
of its affiliates filed for chapter 11 protection on July 31, 2005
(Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W.
Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in
their restructuring efforts. Henry S. Miller at Miller Buckfire &
Co., LLC, serves as the Debtors' financial advisor. Anthony J.
Smits, Esq., at Bingham McCutchen LLP, provides the Official
Committee of Unsecured Creditors with legal advice and Russell A.
Belinsky at Chanin Capital Partners, LLC, provides financial
advisory services to the Committee. When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts. (Allied Holdings Bankruptcy News,
Issue No. 45; Bankruptcy Creditors' Service, Inc.
http://bankrupt.com/newsstand/or 215/945-7000)
Plan Update
On March 2, 2007, the Debtors, Yucaipa and Teamsters filed a Co-
Sponsored Plan and Disclosure Statement explaining that plan. On
April 2, 2007, they filed an Amended Plan and on April 6 filed a
Second Amended Plan. The Court approved the adequacy of the
disclosure statement explaining the 2nd Amended Plan on April 6,
2007. The Court is set to consider confirmation of the Co-
Sponsored Plan on May 9, 2007.
AMR CORP: Earns $81 Million in First Quarter Ended March 31
-----------------------------------------------------------
AMR Corporation reported net income of $81 million for the first
quarter ended March 31, 2007. The current quarter results compare
to a net loss of $92 million in the first quarter of 2006.
AMR reported first quarter consolidated revenues of approximately
$5.4 billion, an increase of 1.6 percent over first quarter of
2006 consolidated revenues of approximately $5.3 billion. AMR
estimates that severe weather disruptions reduced first quarter
consolidated revenue by approximately $60 million. American's
mainline cost per available seat mile in the first quarter was up
0.9 percent year over year, which was 1.6 percentage points higher
than originally anticipated largely because of weather impacts
that caused American to cancel 2.9 percent of mainline scheduled
departures for the first quarter. Excluding fuel, mainline unit
costs in the first quarter increased by 2.2 percent year over
year.
"In spite of significant weather challenges, we continued to build
on our momentum by generating a profit in the first quarter. This
is our fourth consecutive profitable quarter and the first time we
have generated a profit in the first quarter since 2000," said AMR
chairman and chief executive officer Gerard Arpey. "We
strengthened our balance sheet and liquidity, took a key step in
our fleet renewal plan and reinvested in our products and
services. While we must continue to improve our financial
performance, we believe our results show that we have started 2007
on the right track."
Operational Performance
American's mainline passenger revenue per available seat mile
increased by 4.5 percent in the first quarter compared to the
year-ago quarter. Mainline capacity, or total available seat
miles, in the first quarter decreased 2.5 percent compared to the
same period in 2006.
American's mainline load factor - or the percentage of total seats
filled - was a record 78.1 percent during the first quarter,
compared to 77.2 percent in the first quarter of 2006. American's
first-quarter yield, which represents average fares, increased
3.3 percent compared to the first quarter of 2006, its eighth
consecutive quarter of year-over-year yield increases.
Balance Sheet Improvement
Arpey noted that AMR continued to strengthen its balance sheet in
the first quarter by reducing debt and improving its liquidity
position.
AMR ended the first quarter with $5.9 billion in cash and short-
term investments, including a restricted balance of $471 million,
compared to a balance of $4.8 billion in cash and short-term
investments, including a restricted balance of $510 million, at
the end of the first quarter of 2006.
AMR reduced Total Debt, which it defines as the aggregate of its
long-term debt, capital lease obligations, the principal amount of
airport facility tax-exempt bonds and the present value of
aircraft operating lease obligations, to $17.5 billion at the end
of the first quarter of 2007, compared to $19.7 billion a year
earlier. AMR reduced Net Debt, which it defines as Total Debt
less unrestricted cash and short-term investments, from
$15.4 billion at the end of the first quarter of 2006 to
$12.2 billion in the first quarter of 2007.
AMR contributed $62 million to its employees' defined benefit
pension plans in the first quarter and made an additional
$118 million contribution on April 13, as the company continues to
meet this important commitment to its employees. "As we continue
to execute on our turnaround plan, we are seeking to strike the
right balance between reinvestment in the business and the need
for further financial improvement," Arpey said. "We have more
hard work ahead of us, but we believe that we have the right
strategy in place to continue building our company for the long
term and to continue delivering benefits to shareholders,
customers and employees."
At March 31, 2007, the company's balance sheet showed
$29.9 billion in total assets, $29.6 million in total liabilities,
and $226 million in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2007, are available for
free at http://researcharchives.com/t/s?1de3
About AMR Corp.
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc., -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to approximately 150 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia. American
is also a scheduled airfreight carrier, providing freight and mail
services to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
* * *
As reported in the Troubled Company Reporter on April 12, 2007,
Standard & Poor's Ratings Services affirmed its ratings on AMR
Corp. (B/Positive/B-2) and subsidiary American Airlines Inc.
(B/Positive/--). The rating outlook is revised to positive from
stable.
AMTROL INC: Unsecured Claims Will Be Paid In Full
-------------------------------------------------
Amtrol Inc., its debtor-affiliates, and the Official Committee of
Unsecured Creditors filed with the U.S. Bankruptcy Court for the
District of Delaware an Amended Joint Disclosure Statement
explaining their Amended Joint Chapter 11 Plan of Reorganization.
Treatment of Claims
Under the Plan, Priority Non-Tax Claims will be paid in full, in
cash on the initial distribution date.
At the Debtors' sole option, each holder of Other Secured Claims
will be:
i. reinstated;
ii. paid in full, in cash on the initial distribution date; or
iii. satisfied through the surrender of collateral securing the
holder's claim.
At the reorganized Debtors' sole discretion, Unsecured Claims
will be reinstated or paid in full in cash after the initial
distribution date.
Additionally, each holder of Priority Non-Tax, Other Secured and
Unsecured Claims will recover 100% of their claims.
Each holder of Senior Note Claims will receive, either:
i. its pro rata share of 100% of the new Amtrol common
shares, subject to dilution in respect of:
a. new Amtrol common shares that may be issued pursuant to
the management stock incentive program;
b. their adjustments to the total issued new Amtrol common
shares; or
ii. cash in the amount of 60% of the principal amount of their
senior notes.
The Debtors says that Senior Note Claims totaling $102,671,800
plus accrued interest will recover 62.3% to 81.8%. If accrued
interest is not paid, holders of Senior Note Claims will recover
65.4% to 85.8%.
Holder of Intercompany and Equity Interests will not receive any
distribution under the Plan.
A full-text copy of the Amend Disclosure Statement is available
for a fee at:
http://www.researcharchives.com/bin/download?id=070425022447
About Amtrol Inc.
Headquartered in West Warwick, Rhode Island, Amtrol Inc. --
http://www.amtrol.com/-- manufactures and markets water storage
and pressure control products, water heaters and cylinders. The
company's major products include pressure tanks used in well
water, hydronic heating and potable hot water applications,
indirect-fired water heaters, and both LPG and disposable
refrigerant gas cylinders.
The company and three of its affiliates filed for chapter 11
protection on Dec. 18, 2006 (Bankr. D. Del. Lead Case No.
06-11446). Douglas Gray, Esq., Stuart J. Brown, Esq., and William
E. Chipman Jr., Esq., at Edwards Angell Palmer & Dodge LLP,
represent the Debtors. The Debtor's financial advisor is Miller
Buckfire & Co., LLC. Kara Hammond Coyle, Esq., and Pauline K.
Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent
the Official Committee of Unsecured Creditors. As of Apr. 1,
2006, the Debtors' consolidated financial condition showed
$229,270,000 in total assets and $235,802,000 in total debts.
Amtrol and its debtor affiliates recently obtained Court
permission to employ Huron Consulting Services LLC to provide
fresh start reporting and valuation services.
ASARCO LLC: Wants to Enter Into 2007 Insurance Program with AIG
---------------------------------------------------------------
ASARCO LLC and its debtor-affiliates ask permission from the U.S.
Bankruptcy Court for the Southern District of Texas to enter into
a 2007 workers' compensation insurance program with American
International Group Inc. and use estate property to assume and
cure existing workers' compensation insurance agreements with AIG.
AIG has handled ASARCO LLC's compensation insurance needs outside
Texas for several years under a series of annual insurance
agreements, James R. Prince, Esq., at Baker Botts L.L.P., in
Dallas, Texas, tells the Court.
Under the Existing Insurance Programs, ASARCO paid estimated
annual premiums for workers' compensation coverage based on the
number of workers on its payroll and the number of workdays. On
the expiration of a given coverage period, AIG compares the
estimated and actual payroll and reconciles ASARCO's premium
obligations, at which time ASARCO either pays an additional
premium or receives a return premium.
AIG recently completed its audit of ASARCO's premium obligations
for the year 2004 and determined that ASARCO owe an additional
premium of approximately $155,000, Mr. Prince says. AIG has not
completed its audit for the years 2005 and 2006.
According to Mr. Prince, ASARCO anticipates receiving a refund of
a portion of the 2005 premium because union members did not work
during a strike that lasted almost five months of that year. If
so, AIG would presumably assert a setoff right to obtain payment
of the 2004 Additional Premium in any event, Mr. Prince contends.
Before the Existing Insurance Programs expired on December 31,
2006, ASARCO directed its insurance consultant and broker, Willis
of Arizona, to solicit bids for a workers' compensation insurance
program for 2007. AIG and several other insurers submitted
proposals to cover ASARCO's 2007 workers' compensation risk. In
the bidding process, Willis determined that AIG submitted the
most competitive proposal.
Under the terms of the 2007 Renewal Insurance Program, ASARCO
paid $2,825,000 as estimated net premium. Mr. Prince says the
premium represents a substantial discount to the approximate
$3,910,000 premium paid in 2006. The Renewal Insurance Program
is being offered on a guaranteed-cost basis, according to Mr.
Prince, limiting ASARCO's cost to the premium paid, without the
need for a deductible or collateral.
A full-text copy of the 2007 Renewal Insurance Program is
available for free at http://researcharchives.com/t/s?1dd3
As a condition to entering the Renewal Insurance Program, AIG
requires ASARCO to pay the 2004 Additional Premium.
Mr. Prince contends that the AIG proposal features the benefit of
continuity. "ASARCO will enjoy the savings and efficiencies
associated with keeping the same insurance carrier and avoid the
costs and difficulties necessarily caused by a switch to a new
carrier."
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The
Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr.
S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L.
Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P.,
and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and
Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C.,
represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
And investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee.
ASARCO'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).
The Debtors' exclusive period to file a plan expires on Aug. 9,
2007. (ASARCO Bankruptcy News, Issue No. 43; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
ASPEN VALLEY: Fitch Withdraws BB- Rating on Revenue Bonds
---------------------------------------------------------
Fitch withdraws the 'BB-' rating on Aspen Valley Hospital
District, CO revenue bonds, series 2000 and 2001. The bonds were
pre-refunded with the District's refunding revenue bonds, series
2007. Fitch was not asked to rate series 2007 bonds or the
escrow.
BAYONNE MEDICAL: Trustee Wants Patient Care Ombudsman Appointed
---------------------------------------------------------------
The U.S. Trustee for Region 3 asks the U.S. Bankruptcy Court for
the District of New Jersey to designate Bayonne Medical Center as
a health care business and appoint a patient care ombudsman
pursuant to Section 333 of the Bankruptcy Code.
The Trustee reminds the Court that the Debtor operates a hospital
that provides a wide spectrum of healthcare specialties,
servicing every segment of the community. Additionally, the
Debtor also offers comprehensive inpatient and same day surgical
services, and operates a Vascular Institute and Women's Center.
The Trustee contends that the Debtor is a "health care business"
within the meaning of Section 101(27A) of the Bankruptcy Code,
citing that it is a private entity that is "primarily engaged in
offering to the general public facilities and services
for . . . the diagnosis or treatment of injury, deformity, or
disease; and surgical, drug treatment, . . . or obstetric care. .
. ."
The Trustee further contends that to ensure that the patients of
the Debtor are subject to proper care and to ensure the protection
of confidential patient records and property, a patient care
ombudsman should be appointed to monitor the quality of patient
care and to represent the interests of patients.
The Trustee relates that based on information stated in Court
during the first day hearings, the Debtor is pursuing dual paths
towards reorganization. The Debtor is attempting to reorganize
through future operations, while at the same time considering a
sale of the hospital or other options. The Debtor is losing
money on an ongoing basis and is only able to operate based upon
Court orders allowing the Debtor to use cash collateral and
debtor-in-possession financing of up to $4 million.
The Trustee concludes that while not needed for the appointment of
a patient care ombudsman, the fact that the financial strength of
the Debtor is in question, compels the appointment of a patient
care ombudsman.
About Bayonne Medical
Based in Bayonne, New Jersey, Bayonne Medical Center --
http://www.bayonnemedicalcenter.org/-- provides healthcare
services and operates a medical center. The company filed for
Chapter 11 protection on April 16, 2007 (Bankr. D. N.J. Case No.
07-15195). Stephen V. Falanga, Esq., at Connell Foley LLP, and
Adam C. Rogoff, Esq., at Cooley Godward Kronish LLP, represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of $1 million to $100 million. The Debtor's exclusive
period to file a plan expires on Aug. 14, 2007.
BEAR STEARNS: DBRS Puts Low-B Ratings on Two S. 2007 Cert. Classes
------------------------------------------------------------------
Dominion Bond Rating Service has assigned these ratings to the NIM
Notes, Series 2007-N4-VI issued by Bear Stearns Structured
Products Inc. NIM Trust 2007-N4 Notes:
* $15.4 million Class VI-A-1 rated at A (low)
* $2.3 million Class VI-A-2 rated at BBB (low)
* $1.2 million Class VI-A-3 rated at BB (high)
* $5 million Class VI-A-4 rated at B
The NIM Notes, Series 2007-N4-VI are backed by 100% interest in
the underlying Class C Certificates issued by BSSLT Trust 2007-
SV1. The underlying Class C Certificates will be entitled to
receive the excess cash flows, if any, generated by the mortgage
loans each month after payment of all the required distributions.
The NIM Notes, Series 2007-N4-VI will also be entitled to the
benefits of an underlying swap agreement with Bear Stearns
Financial Products Inc.
Payments on the NIM Notes, Series 2007-N4-VI will be made on the
first business day after the distribution date of the underlying
certificates, commencing in April 2007. The distribution of
interest and principal will be made sequentially to noteholders of
Classes VI-A-1 through VII-A-4 until the principal balance of each
such class has been paid to zero. Any remaining amounts will be
paid in full to the holders of the Class VI-C Notes issued by the
NIM Trust. The Classes I-C through VI-C Notes, as well as the NIM
Notes, Series 2007-N4-I through Series 2007-N4-V are not rated by
DBRS.
The mortgage loans in the BSSLT Trust 2007-SV1 were primarily
originated by PHH Mortgage Corporation, Decision One Mortgage
Company, LLC, and Wilmington Finance. The loans are fixed-rate,
second-lien residential mortgage loans, which are subordinate to
the senior-lien mortgage loans on the respective properties.
BISON BUILDING: Can Reject Three Construction Contracts
-------------------------------------------------------
Bison Building Company LLC obtained authority from the U.S.
Bankruptcy Court for the Eastern District of Virginia to reject
these contracts for the construction of single-family homes:
1) Haksong Jin Contract
* 1111 Shipman Lane, McLean, Virginia
* Contract Price: $539,000
2) Thuy P. Vu and Duc V. Vu Contract
* 10204 Colvin Run Road, Great Falls, Virginia
3) Abdul Slam & Sabahat Munir Contract
* 10513 Green Street, Lorton, Virginia
* Contract Price: $595,000
The Debtor sought to reject the contracts because they are no
longer beneficial to the estate.
Based in Springfield, Virginia, Bison Building Company LLC --
http://www.bisonbuildingcompany.com/-- is a custom home-builder.
The company filed for chapter 11 protection on Nov. 17, 2006
(Bankr. E.D. Va. Case No. 06-11534). Darrell William Clark, Esq.,
at Stinson Morrison Hecker, LLP, represents the Debtor in its
restructuring efforts. Bradford F. Englander, Esq., at Linowes
and Blocher LLP, represents the Official Committee of Unsecured
Creditors. When the Debtors filed for protection from its
creditors, it listed total assets of $9,943,454, and total
liabilities of $12,367,901.
BRANDYWINE REALTY: Affiliate Prices $300 Million Guaranteed Notes
-----------------------------------------------------------------
Brandywine Realty Trust's operating partnership, Brandywine
Operating Partnership LP, has priced the sale of $300 million of
5.7% unsecured guaranteed notes due May 1, 2017. Interest on the
notes will be payable semi-annually on May 1 and November 1,
commencing Nov. 1, 2007.
The notes are offered to investors at a price of 99.834% with a
yield to maturity of 5.72%, representing a spread at the time of
pricing of 1.1% to the yield on the February 2017 Treasury note.
All of the net proceeds of the offering will be used to repay
existing indebtedness under the company's unsecured revolving
credit facility. The sale of the notes is scheduled to close on
April 30, 2007.
The joint book-running managers for the offering are Banc of
America Securities LLC; J.P. Morgan Securities Inc. and Wachovia
Capital Markets LLC.
The co-managers are BMO Capital Markets Corp.; BNY Capital Markets
Inc.; Citigroup Global Markets, Inc.; Deutsche Bank Securities
Inc.; Greenwich Capital Markets, Inc.; Morgan Keegan & Company,
Inc.; Piper Jaffrey & Co. and RBC Capital Markets Corporation.
Copies of the prospectus supplement and prospectus relating to the
offering may be obtained from:
-- Banc of America Securities LLC
Prospectus Department
Third Floor
No. 100 West 33rd Street
New York, NY 10001
Tel: (800) 294-1322;
-- J. P. Morgan Securities Inc.
High Grade Syndicate Desk
No. 270 Park Avenue
New York, NY 10017
Tel: (212) 834-4533; or
-- Wachovia Capital Markets LLC
Mail Code NC0675
No. 1525 W. WT Harris Blvd
Charlotte, NC 28262
Tel: (866) 289-1262
About Brandywine Realty Trust
Headquartered in Radnor, Pennsylvania, Brandywine Realty Trust
(NYSE: BDN), http://www.brandywinerealty.com/-- is one of the
full-service, integrated real estate companies in the
United States and is focused primarily on the ownership,
management and development of class A, suburban and urban office
buildings in selected markets aggregating approximately 42 million
square feet.
* * *
Fitch assigned a 'BB+' rating on Brandywine Realty Trust's
Preferred Stock. The outlook is Positive.
BRIGGS & STRATTON: Earns $7.8 Million in Quarter Ended March 31
---------------------------------------------------------------
Briggs & Stratton Corporation reported fiscal 2007 third quarter
consolidated net sales of $717.1 million and consolidated net
income of $7.8 million, that included a $35.2 million pretax
write-down of assets primarily associated with the rationalization
of a major operating plant in the United States.
The third quarter of fiscal 2006 had consolidated net sales of
$800.2 million and consolidated net income of $60 million.
Consolidated net sales decreased $83.1 million or 10%.
Approximately 47% of the reduction is due to softer sales in the
Power Products Segment, primarily the result of lower sales
volumes of lawn and garden equipment and portable generators. The
remainder of the consolidated net sales decrease is due primarily
to lower unit shipments of engines.
Third quarter consolidated net income decreased $52.2 million
between years. In addition to the write-down of assets, net
income decreased $30.7 million due to lower sales and production
volumes in the Engines Segment and an unfavorable mix to smaller
displacement, lower priced engines. Lower engineering, selling
and administrative expenses increased net income $12.5 million
between years, however increased expenses in manufacturing during
the quarter essentially offset the benefit.
Income from operations of the Engines Segment for the third
quarter of fiscal 2007 was $12.9 million, down $75.9 million from
$88.8 million during the same period in the prior year.
Approximately $33.9 million of this decline is attributable to
expense incurred with the write-down of assets primarily
associated with the rationalization of a major operating plant in
the United States. The balance of this reduction is primarily the
result of lower sales and production volumes that impacted
operating income by approximately $35.8 million.
Income from operations from the Power Products Segment
was $5.9 million in the third quarter of fiscal 2007, down
$8.6 million between years. The operating income reduction was
the result of lower sales volumes, primarily on lawn and garden
equipment, and lower production volumes for both lawn and garden
equipment and portable generators resulting from soft demand and
our inventory control initiatives.
Other income increased to $4.8 million in the fiscal 2007 third
quarter, compared to other income of $$1.5 million in the fiscal
2006 third quarter, due to the timing of dividend receipts from
certain investments.
Interest expense increased to $12.7 million in the fiscal 2007
third quarter, from interest expense of $10.9 million in the
fiscal 2006 third quarter, due to higher borrowings for working
capital and higher rates.
At March 31, 2007, the company's balance sheet showed $2 billion
in total assets, $1.1 billion in total liabilities, and
approximately $901.6 million in total stockholders' equity.
Engine Manufacturing to Move to China
As disclosed in January of 2007, Briggs & Stratton continues to
evaluate and make changes to its manufacturing footprint.
Location, capacity, flexibility, product demand and costs are all
factors that are considered to optimize global manufacturing
operations.
As a result of this effort, the company decided in the third
quarter to discontinue its operations in Rolla, Mo. and has
recognized an impairment in the value of the fixed assets that the
company will not be able to use in its other manufacturing
locations. Engine manufacturing performed in Rolla will move to
China and other domestic locations.
In addition, the company continues to evaluate the future
direction of its facilities that produce lawn and garden
equipment. The potential asset write-down associated with a
decision to close a facility would be in the range of
$8 to $10 million.
About Briggs & Stratton
Headquartered in Wauwatosa, Wisconsin, Briggs & Stratton Corp.
(NYSE: BGG) -- http://briggsandstratton.com/-- manufactures
small, air-cooled engines for lawn and garden and other outdoor
power equipment. The company also produces generators and
pressure washers in the United States.
* * *
As reported in the Troubled Company Reporter on Jan. 25, 2007,
Standard and Poor's Rating Services lowered its corporate credit
and senior unsecured ratings for Briggs & Stratton Corp. to BB+
from BBB-. Outlook is stable.
BUCKEYE PACIFIC: Taps Michael Carmel as Bankruptcy Counsel
----------------------------------------------------------
Buckeye Pacific LLC asks the U.S. Bankruptcy Court for the
District of Arizona for permission to employ Michael W. Carmel,
Esq., as its bankruptcy counsel.
Mr. Carmel will:
a) give the Debtor legal advice with respect to its powers and
duties as Debtor-in-Possession in the continued operation
of the Debtor's business and management of Debtor's
property;
b) prepare on behalf of the Debtor the necessary applications,
answers, orders, reports and other legal papers; and
c) perform all other legal services for the Debtor which may
be necessary.
The Debtor discloses that Mr. Carmel will be paid $375 per hour.
Paralegals will be paid $125 per hour.
To the best of the Debtor's knowledge, Mr. Carmel represents no
interest adverse to the estate.
Headquartered in Scottsdale, Arizona, Buckeye Pacific, L.L.C. --
http://www.buckeyepacific.com/-- sells lumber and building
materials in wholesale. The company filed for chapter 11
protection on April 4, 2007 (Bankr. D. Ariz. Case No. 07-01481).
When the Debtor filed for protection from its creditors, it listed
total assets of $10,000,000 and total debts of $45,799,250.
CALPINE CORP: Reaches Settlement with Cleco Corp. on Acadia Power
-----------------------------------------------------------------
Calpine Corporation has reached a settlement with Cleco Corp.,
subject to bankruptcy court approval, resolving issues related to
their co-owned Acadia power plant.
Acadia Power Partners LLC owns the plant, an entity owned equally
by Cleco's Acadia Power Holdings LLC and Calpine Acadia Holdings
LLC.
Under the proposed settlement APH will receive allowed unsecured
claims against Calpine Energy Services LP, and Calpine of
$85 million in connection with two long-term tolling agreements
CES held for the output of the 1,160-megawatt plant located near
Eunice and Calpine's guaranty of those agreements.
Additionally, APH has agreed to purchase Calpine's 50% ownership
interest in Acadia Power Partners for $60 million, subject to any
higher or better offers Calpine may receive in a bankruptcy court-
sponsored auction. APH's $60 million offer, in effect, values a
50% interest in the Acadia power plant at $145 million, taking
into account the agreed value of certain priority distributions
and payments due APH.
APH's offer will serve as a "Stalking Horse" bid in the auction of
Calpine's interest in Acadia Power Partners. The auction process
is anticipated to begin in May, with the bankruptcy auction
expected in July. The terms of the auction, including a breakup
fee and other protections in favor of APH, will be considered at a
May 9 bankruptcy court hearing.
If APH is not the successful bidder, APH will retain its 50%
ownership in Acadia Power Partners and receive payment from the
successful bidder in the amount of $85 million. The $85 million
payment is the agreed value of certain priority distributions and
payments due APH under agreements with Calpine affiliates.
In either outcome, a Cleco subsidiary will assume operations and
project management functions at the plant.
About Cleco Corp.
Headquartered in Pineville, Louisiana, Cleco Corp. (NYSE:CNL) --
http://www.cleco.com/-- is a regional energy services holding
company that conducts substantially all of its business operations
through its two principal operating business segments, Cleco Power
LLC and Cleco Midstream Resources LLC.
Cleco Power is an integrated electric utility services subsidiary
which also engages in energy management activities. Cleco
Midstream is a merchant energy subsidiary that owns and operates a
merchant generation station, invests in a joint venture that owns
and operates a merchant generation station, and owns and operates
transmission interconnection facilities.
About Calpine Corporation
Headquartered in San Jose, California, Calpine Corporation
(OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies
customers and communities with electricity from clean, efficient,
natural gas-fired and geothermal power plants. Calpine owns,
leases and operates integrated systems of plants in 21 U.S. states
and in three Canadian provinces. Its customized products and
services include wholesale and retail electricity, gas turbine
components and services, energy management and a wide range of
power plant engineering, construction and maintenance and
operational services.
The company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. The Debtors' exclusive period to file chapter 11
plan of reorganization expires on June 20, 2007.
Calpine Corp. has until June 20, 2007, to file a plan, and until
Aug. 20, 2007, to solicit acceptances of that plan.
CIRRUS LOGIC: Fin'l Result Filing Cues S&P to Remove NegativeWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services removed its ratings on Austin,
Texas-based Cirrus Logic Inc. from CreditWatch negative, and
affirmed its 'B' corporate credit rating. The outlook is stable.
"The rating actions follow the company's filing of its delayed
financial statements and the conclusion of an investigation into
past stock option granting by a special committee appointed by the
company's board of directors," said Standard & Poor's credit
analyst Lucy Patricola. The special committee found potential
abuse, prior to 2003, in the establishment of grant dates that
involved the company's President and CEO, David French, who
subsequently resigned. In addition, administrative deficiencies
were identified, resulting in a $32.4 million noncash charge.
Three derivative lawsuits have been filed. A number of remedial
actions are being reviewed and implemented to govern future grants
of equity awards.
"The company's good liquidity and unleveraged financial profile
affords a cushion to absorb these developments at the current
rating level," added Ms. Patricola.
The 'B' rating reflects a narrow product focus and challenging
demand conditions for Cirrus' products, specifically its rapidly
evolving consumer electronics market. These are only partially
offset by Cirrus' more stable industrials business, adequate cash
balances, and debt-free status.
CITIFINANCIAL MORTGAGE: Fitch Cuts Ratings on Two Certs. to BB-
---------------------------------------------------------------
Fitch Ratings has taken rating actions on these CitiFinancial
Mortgage Securities Inc. issues:
Series 2002-1
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 upgraded to 'A+' from 'A';
-- Class M-3 affirmed at 'BBB';
-- Class M-4 affirmed at 'BBB-';
Series 2003-1
-- Class A affirmed at 'AAA';
-- Class MF-1 upgraded to 'AA+' from 'AA';
-- Class MF-2 upgraded to 'AA-' from 'A';
-- Class MF-3 upgraded to 'A' from 'BBB';
-- Class MF-4 upgraded to 'BBB' from 'BBB-';
-- Class MV-3 downgraded to 'BBB-' from 'A';
-- Class MV-4 downgraded to 'BB-' from 'BBB-';
Series 2003-3
-- Class A affirmed at 'AAA';
-- Class MF-1 upgraded to 'AA+' from 'AA';
-- Class MF-2 upgraded to 'AA-' from 'A';
-- Class MF-3 upgraded to 'A' from 'BBB';
-- Class MV-3 downgraded to 'BB-' from 'BBB'.
Series 2004-1
-- Class A affirmed at 'AAA';
-- Class MF-1 upgraded to 'AAA' from 'AA+';
-- Class MF-2 upgraded to 'AA+' from 'AA';
-- Class MF-3 upgraded to 'AA' from 'AA-';
-- Class MF-4 upgraded to 'AA-' from 'A+';
-- Class MF-5 upgraded to 'A+' from 'A';
-- Class MF-6 upgraded to 'A' from 'A-';
-- Class MF-7 upgraded to 'A-' from 'BBB+';
-- Class MF-8 upgraded to 'BBB+' from 'BBB';
-- Class MV-6 affirmed at 'A-';
-- Class MV-7 affirmed at 'BBB+';
-- Class MV-8 affirmed at 'BBB'.
The pools consist of fixed and adjustable rate mortgages extended
to subprime borrowers and are secured by first liens, primarily on
one- to four- family residential properties. All of the loans
were originated or acquired by CitiFinancial Mortgage Company, a
subsidiary of Citigroup Inc., and are serviced by CitiMortgage
(rated 'RPS1-' for subprime servicing by Fitch)
As of the March 2007 distribution date, the transactions are
seasoned from 53 (2002-1) to 36 (2004-1) months and the pool
factors (current mortgage loan principal outstanding as a
percentage of the initial pool) range from 12.9% (2002-1) to 35.3%
(2004-1)
The affirmations reflect a stable relationship between credit
enhancement and future loss expectations and affect approximately
$343.98 million of outstanding certificates.
The upgrades reflect an improvement between CE and loss
expectations and affect approximately $161.16 million in
outstanding certificates.
The negative rating actions reflect deterioration in the
relationship between CE and future loss expectations and affect
$33.18 million in outstanding certificates
The positive actions on the Group 1 bonds (signified by the letter
F in the class names, which denotes fixed rate collateral) from
series 2003-1, 2003-3 and 2004-1 are a result of delinquencies
that are much lower than expected, and reflect the low realized
loss to date and low expected future losses.
The overcollateralization for all of these groups are currently at
their targets.
The downgrades on the Group 2 bonds (signified by the letter V in
the class name, which denotes variable rate collateral) from the
series 2003-1 and 2003-3 transactions reflect deterioration in the
OC and higher than expected losses and delinquencies. The three
month average losses, net of excess spread, for the 2003-1
transaction is approximately $181,000, and for the 2003-3
transaction the three month net losses are approximately $345,000.
Losses of this magnitude can only be withstood by the available CE
for the most subordinate bond in each group for between six and 12
months. If the trusts continue to suffer losses that further
corrode the available CE, further actions may be necessary.
Fitch will continue to closely monitor these transactions.
CITIGROUP COMMERCIAL: Fitch Holds BB+ Rating on Class RAM-2 Loan
----------------------------------------------------------------
Fitch Ratings upgrades Citigroup Commercial Mortgage Trust, series
2006-FL2 as:
-- $17.9 million class B to 'AAA' from 'AA+';
-- $20.9 million class C to 'AAA' from 'AA+';
-- $38.8 million class D to 'AA+' from 'AA'.
In addition, Fitch affirms the ratings on these classes:
-- $252.9 million class A-1 at 'AAA';
-- $237.2 million class A-2 at 'AAA';
-- Interest-Only classes X-1, X-2, and X-3 at 'AAA';
-- $26.9 million class E at 'AA-';
-- $26.9 million class F at 'A+';
-- $23.9 million class G at 'A';
-- $20.9 million class H at 'A-';
-- $22.4 million class J at 'BBB+';
-- $22.4 million class K at 'BBB';
-- $23.9 million class L at 'BBB-';
-- $817,531 class CAC-1 at 'BBB+';
-- $560,072 class CAC-2 at 'BBB';
-- $651,240 class CAC-3 at 'BBB-';
-- $1.9 million class CAN-1 at 'BBB+';
-- $2.8 million class CAN-2 at 'BBB';
-- $5.4 million class CAN-3 at 'BBB-';
-- $10.6 million class CNP-1 at 'BBB-';
-- $20.1 million class CNP-2 at 'BBB-';
-- $5.2 million class CNP-3 at 'BB+';
-- $1.0 million class DSG-1 at 'BBB-';
-- $1.2 million class HFL at 'BBB-';
-- $5.8 million class MVP at 'BBB-';
-- $2.0 million class RAM-1 at 'BBB-';
-- $2.4 million class RAM-2 at 'BB+'.
Fitch does not rate classes DHC-1, DHC-2, DHC-3, DSG-2, PHH-1,
PHH-2, SRL, and WPP. Classes HGI-1, HGI-2, HMP-1, HMP-2, HMP-3,
WBD-1, and WBD-2 have paid in full.
The upgrades are due to the payoff of four loans: Palmer House
Hilton, Hilton Garden Inn Times Square, Hampton Inn Times Square,
and 9900 Wilshire Boulevard. In addition, one loan, the TECOTA
Building (5.9%), is amortizing on a 25 year schedule, and Mervyn's
Portfolio (11.0%), CarrAmerica National Pool Portfolio (10.7%),
and CarrAmerica CARP Pool Portfolio (1.8%) loans' balances have
been reduced due to partial releases. As of the April 2007
distribution date, the pool's aggregate certificate balance has
decreased 39.2% to $801.9 million from $1.3 billion at issuance.
There are no delinquent or specially serviced loans.
There are 12 loans remaining in the pool. All pooled senior
participations included in the trust have credit characteristics
consistent with investment-grade obligations.
CLAYTON WILLIAMS: S&P Holds B Credit Rating & Says Outlook is Neg.
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on oil and gas exploration and production company
Clayton Williams Energy Inc. and revised the outlook on the
company to negative from stable.
As of Dec. 31, 2006, Midland, Texas-based Clayton Williams had
roughly $430 million of debt outstanding.
"The negative outlook reflects our concerns about Clayton
Williams' ability to improve operating results and reduce its
heavy debt burden in the near term," said Standard & Poor's credit
analyst Paul Harvey.
Poor drilling results during 2006, largely due to Clayton
Williams' higher-risk South Louisiana exploration, resulted in
negative free cash flow and escalating debt leverage that was
around $9.50 per barrel of oil equivalent at year-end 2006. In
addition, finding and development costs increased to over $8 per
thousand cubic feet equivalent (mcfe), and over $10 per mcfe when
acquisitions and revisions are included. Such levels would not be
sustainable at Standard & Poor's longer-term pricing assumptions
of $4.50 per mcfe.
"The ratings on Clayton Williams reflect its aggressive growth and
exploration strategy, recent mediocre operating performance, high
debt leverage, elevated cost structure, and small reserve base,"
Mr. Harvey added. "The ratings also incorporate Clayton Williams'
average reserve life, high operatorship of its properties, and
significant ownership by management and the Clayton Williams
family."
The negative outlook reflects concerns about Clayton Williams'
near-term ability to improve its lagging operational performance
while reducing debt levels. If Clayton Williams fails to
accomplish that, liquidity and debt leverage would likely become
strained, resulting in a downgrade. If Clayton Williams is able
to execute a deleveraging plan while improving operating results,
the outlook could be revised to stable.
CLEAN HARBORS: Earns $11 Million in Fourth Qtr. Ended December 31
-----------------------------------------------------------------
Clean Harbors Inc. increased revenues to $231.8 million in the
fourth quarter of 2006 from $193.7 million in the fourth quarter
of 2005. Net income attributable to common shareholders rose to
$11.4 million, from $7.9 million in the same period of 2005.
Income from operations grew to $19.8 million from $14.3 million
for the fourth quarter of 2005.
Comments on the Fourth Quarter
"The fourth quarter of 2006 was a strong conclusion to the best
year in Clean Harbors' history," said Alan S. McKim, chairman and
chief executive officer. "With solid demand across our business
lines and good weather, we delivered quarterly revenue in excess
of $200 million for the second consecutive quarter, exclusive of
any revenue attributed to Teris, which we acquired in August."
"Organic growth in the fourth quarter was primarily driven by our
Technical Services business, which continued to perform large
facilities projects," Mr. McKim said. "Incineration volumes were
strong, and we achieved utilization of 91 percent, despite the
addition of significant capacity earlier in the year. Reflecting
increased activity in both the United States and Canada, total
landfill volumes were nearly 30 percent higher than in the same
period in 2005.
"In Site Services, we continued our steady geographic expansion
with the opening of another branch in southern Florida. We did
not have any major emergency response events in the quarter,
unlike the fourth quarter of 2005 when we posted more than $17
million of higher margin revenue related to post-hurricane clean-
up projects. Consequently, our Site Services margins were down,
even though we generated a steady stream of small scale projects
that produced approximately $7 million in revenue in the quarter."
Comments on Full-Year 2006
Revenues for the year ended Dec. 31, 2006, increased to
$829.8 million, as compared with $711.2 million for full-year
2005. Income from operations for full-year 2006 increased to
$74.4 million versus $51.3 million in the prior year.
The company generated net income attributable to common
shareholders of $46.4 million for the full-year 2006. This
compares with a 2005 net income attributable to common
shareholders of $25.3 million.
"The year 2006 was outstanding for Clean Harbors both financially
and operationally," Mr. McKim said. "We added substantial
incineration capacity, constructed several secure landfill cells,
upgraded numerous facilities, expanded our transportation fleet,
and exceeded our Health, Safety & Compliance targets. In support
of our successful strategy of introducing the Clean Harbors brand
into new markets and expanding our footprint, we opened six new
Site Services locations in 2006. These initiatives enabled us to
post the largest organic increase in revenues in the Company's
history.
"At the same time, we successfully completed the Teris
acquisition, which will broaden our service offerings and improve
our ability to service our customers," said Mr. McKim. "Although
Teris is still ramping up, it turned in an exemplary month in
December. We also met our goal of Teris being accretive in the
fourth quarter and we expect to see continued improvement
throughout 2007."
We successfully drove annual top-line growth, while continuing to
closely manage our operating costs and environmental liabilities,
as well as improve our operating efficiencies. As a result, net
income grew substantially from 2005 and EBITDA grew by
approximately 33 percent."
As of Dec. 31, 2006, the company listed $670.8 million in total
assets and $497.6 million in total liabilities, resulting in a
$173.2 million total stockholders' equity.
On Aug. 18, 2006, the company purchased all of the membership
interests in Teris LLC. As a result of that purchase, the company
acquired a hazardous waste incineration facility in Arkansas and a
licensed transportation, storage and disposal facility in
California. Subject to certain closing adjustments, the purchase
price for Teris was about $51.5 million.
The company has accrued environmental liabilities, valued as of
Dec. 31, 2006, at about $173.4 million, substantially all of which
the company assumed as part of the acquisition of Teris and
Safety-Kleen Corp.'s Chemical Services Division.
Cash and Cash Equivalents
The company believes that its primary sources of liquidity are
cash flows from operations, existing cash, and funds available to
borrow under its $70 million revolving credit facility. For the
year ended Dec. 31, 2006, the company generated cash from
operations of $61.4 million. As of Dec. 31, 2006, cash and cash
equivalents were $73.6 million, marketable securities were
$10.2 million, funds available to borrow under the Revolving
Facility were about $24.4 million and properties held for sale
were $7.4 million.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1bf9
About Clean Harbors
Headquartered in Norwell, Massachusetts, Clean Harbors Inc.
(NasdaqGS: CLHB) -- http://www.clenharbors.com/-- provides
environmental and hazardous waste management services in North
America. It operates through two segments, Technical Services and
Site Services. The Technical Services segment collects,
transports, treats, and disposes hazardous and non-hazardous
wastes for commercial and industrial customers, health care
providers, educational and research organizations, and other
environmental services companies and governmental entities. The
Site Services segment provides environmental site services to
maintain industrial facilities and process equipment, as well as
clean up of hazardous materials to chemical, petroleum,
transportation, utility, and governmental agencies.
* * *
Clean Harbors Inc. carries Moody's Investors Service B1 Corporate
Family Rating. Ratings outlook is positive.
CLECO CORP: Reaches Settlement with Calpine Corp. on Acadia Power
-----------------------------------------------------------------
Cleco Corp. has reached a settlement with Calpine Corporation,
subject to bankruptcy court approval, resolving issues related to
their co-owned Acadia power plant.
Acadia Power Partners LLC owns the plant, an entity owned equally
by Cleco's Acadia Power Holdings LLC and Calpine Acadia Holdings
LLC.
Under the proposed settlement APH will receive allowed unsecured
claims against Calpine Energy Services LP, and Calpine of
$85 million in connection with two long-term tolling agreements
CES held for the output of the 1,160-megawatt plant located near
Eunice and Calpine's guaranty of those agreements.
Additionally, APH has agreed to purchase Calpine's 50% ownership
interest in Acadia Power Partners for $60 million, subject to any
higher or better offers Calpine may receive in a bankruptcy court-
sponsored auction. APH's $60 million offer, in effect, values a
50% interest in the Acadia power plant at $145 million, taking
into account the agreed value of certain priority distributions
and payments due APH.
APH's offer will serve as a "Stalking Horse" bid in the auction of
Calpine's interest in Acadia Power Partners. The auction process
is anticipated to begin in May, with the bankruptcy auction
expected in July. The terms of the auction, including a breakup
fee and other protections in favor of APH, will be considered at a
May 9 bankruptcy court hearing.
If APH is not the successful bidder, APH will retain its 50%
ownership in Acadia Power Partners and receive payment from the
successful bidder in the amount of $85 million. The $85 million
payment is the agreed value of certain priority distributions and
payments due APH under agreements with Calpine affiliates.
In either outcome, a Cleco subsidiary will assume operations and
project management functions at the plant.
"The company is pleased to have reached an agreement with Calpine
and look forward to assuming the daily activities of the plant,"
Michael Madison, Cleco president and ceo said.
About Calpine Corporation
Headquartered in San Jose, California, Calpine Corporation
(OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies
customers and communities with electricity from clean, efficient,
natural gas-fired and geothermal power plants. Calpine owns,
leases and operates integrated systems of plants in 21 U.S. states
and in three Canadian provinces. Its customized products and
services include wholesale and retail electricity, gas turbine
components and services, energy management and a wide range of
power plant engineering, construction and maintenance and
operational services.
The company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. The Debtors' exclusive period to file chapter 11
plan of reorganization expires on June 20, 2007.
Calpine Corp. has until June 20, 2007, to file a plan, and until
Aug. 20, 2007, to solicit acceptances of that plan.
About Cleco Corp.
Headquartered in Pineville, Louisiana, Cleco Corp. (NYSE:CNL) --
http://www.cleco.com/-- is a regional energy services holding
company that conducts substantially all of its business operations
through its two principal operating business segments, Cleco Power
LLC and Cleco Midstream Resources LLC.
Cleco Power is an integrated electric utility services subsidiary
which also engages in energy management activities. Cleco
Midstream is a merchant energy subsidiary that owns and operates a
merchant generation station, invests in a joint venture that owns
and operates a merchant generation station, and owns and operates
transmission interconnection facilities.
* * *
In March 2003, Moody's Investors Service assigned a Ba2 rating to
Cleco Corp.'s Preferred Stock.
COMMONWEALTH EDISON: Moody's Says Senate Bill Won't Affect Ratings
------------------------------------------------------------------
Moody's Investors Service views Friday's passage of rate freeze
legislation by the Illinois Senate under Senate Bill 1592 to be
neutral to the overall credit quality of Commonwealth Edison
Company (ComEd: Ba1 senior unsecured; on review for possible
downgrade).
While the exclusion of ComEd from the current version of SB 1592
could be viewed as a positive for the utility's credit quality,
the transition to market generation rates for customers of ComEd
and the other Illinois utilities continues to be met with
political and consumer opposition, which continues to contribute
to uncertainties about the utility's future financial performance.
The current version of SB 1592 would freeze electric rates for at
least one year for Ameren's three Illinois utilities at the 2006
level. House Bill 1750, which passed the Illinois House, would
freeze electric rates at the 2006 level for three years for ComEd
and Ameren's three Illinois utilities. It is possible that the
Illinois House will amend SB 1592 to include ComEd in the
legislation. While passage and enactment of either bill in their
current form remains uncertain, Moody's believes that some form of
rate concession or credits may need to be provided to certain
customers in the short-term given the reaction by customers to
higher electric rates. To that end, ComEd yesterday announced it
was preparing to implement a $64 million relief package for
certain residential electric customers in their service territory.
Additionally, Moody's believes that even if rate freeze
legislation is not passed, modifications to the utilities' power
procurement process and varying degrees of re-regulation may
emerge over the intermediate term, given the unsettled transition
to market generation rates in the state.
In the interim, the business environment for ComEd will remain
challenging. ComEd has publicly indicated its intention to file a
distribution rate case in 2007. ComEd's ability to obtain
constructive regulatory outcomes in future distribution rate cases
is important to the company's future financial metrics, which are
expected to weaken in 2007. Moody's believes that obtaining
supportive regulatory outcomes in future distribution rate cases
may prove to be a daunting task given the current highly
politicized environment concerning electric rates in the state and
ComEd's affiliate relationship with Exelon Generation, a wholesale
power producer.
In light of the unsettled transition to market generation rates in
the state, continued calls for rate freeze legislation by key
stakeholders, and the challenging business environment for ComEd,
the utility's ratings remain under review for possible downgrade.
ComEd's ratings could be downgraded several notches in the event
that rate freeze legislation is passed by the entire Illinois
General Assembly and enacted into law. The ratings could be
removed from review for possible downgrade if calls for rate
freeze legislation from key stakeholders diminish or if parties
reach a reasonable consensus concerning the current transition to
market generation rates that enables the transition to proceed in
a manner not materially detrimental to Com Ed's credit quality.
Headquartered in Chicago, Illinois, Commonwealth Edison Company is
a regulated electricity transmission and distribution company, and
is a wholly owned subsidiary of Exelon Corporation.
CONGOLEUM CORPORATION: Ernst & Young Raises Going Concern Doubt
---------------------------------------------------------------
Congoleum Corporation's auditors, Ernst & Young LLP, raised
substantial doubt about the company's ability to continue as a
going concern after auditing the company's financial statements as
of Dec. 31, 2006. The auditing firm reported that the company has
been and continues to be named in a significant number of lawsuits
stemming primarily from the company's manufacture of asbestos-
containing products. The company has recorded significant charges
to earnings to reflect its estimate of costs associated with this
litigation. On Dec. 31, 2003, Congoleum sought relief under
Chapter 11 of the U.S. Bankruptcy Code, as a means to resolve
claims asserted against it related to the use of asbestos in its
products decades ago. Congoleum's financial statements for 2002,
2003, 2004, and 2005 also received audit opinions containing going
concern qualifications.
Roger S. Marcus, chairman of the Board, commented, "We have been
receiving this form of audit opinion every year since we first
announced our reorganization plans in January of 2003. Although
the audit opinion is included in the annual report on form 10-K we
filed, the American Stock Exchange brought to our attention their
rule requiring a specific news release to announce the opinion,
and we are issuing this release to comply with that rule."
As of Dec. 31, 2006, the company had $184,202,000 in total assets
and $230,755,000 in total liabilities, resulting in a $46,553,000
total stockholders' deficit. Its retained deficit as of Dec. 31,
2006, was $64,726,000.
Unrestricted cash and cash equivalents, including short-term
investments at Dec. 31, 2006, were $18,591,000, a decrease of
$5,920,000 from Dec. 31, 2005. Working capital was $11,453,000 at
Dec. 31, 2006, up from $11,282,000 one year earlier.
Due to the Chapter 11 proceedings, the company has been precluded
from making interest payments on its outstanding Senior Notes
since Jan. 1, 2004. The amount of accrued interest that is due
but has not been paid on the Senior Notes at Dec. 31, 2006, is
about $33,200,000, including interest on the unpaid interest due,
of which $3,600,000 was owed at the time of the Chapter 11 filing.
The company generated net sales of $219,474,000 and net income of
$679,000 for the year ended Dec. 31, 2006, as compared with net
sales of $237,626,000 and a net loss of $21,575,000 for the year
ended Dec. 31, 2005.
The decrease in sales resulted primarily from volume declines in
residential sheet sales to both the remodel and builder segments
primarily in the fourth quarter of 2006, and lower sales to the
manufactured housing industry reflecting reduced demand versus
that experienced in 2005 as a result of hurricane related
business. This was partially mitigated by the impact of selling
price increases instituted in late 2005 and in 2006. There were
no asbestos-related charges in 2006, compared to $25,326,000 in
2005.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1ddc
About Congoleum Corp.
Congoleum Corporation (AMEX: CGM) -- http://www.congoleum.com/--
manafactures resilient flooring, serving both residential and
commercial markets. Its sheet, tile and plank products are
available in a wide variety of designs and colors, and are used in
remodeling, manufactured housing, new construction and commercial
applications. Congoleum is a 55% owned subsidiary of American
Biltrite Inc.
On Dec. 31, 2003, Congoleum Corporation filed a voluntary petition
with the U.S. Bankruptcy Court for the District of New Jersey,
Case No. 03-51524, seeking relief under Chapter 11 of the U.S.
Bankruptcy Code as a means to resolve claims asserted against it
related to the use of asbestos in its products decades ago.
On Sept. 15, 2006, Congoleum Corporation filed its Tenth Modified
Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code of Congoleum Corporation, et al., and the Asbestos Claimants'
Committee, dated as of Sept. 15, 2006, and related proposed
Disclosure Statement with the United States Bankruptcy Court for
the District of New Jersey. On Feb. 5, 2007, the Court ruled that
certain aspects of Congoleum's plan must be modified to comply
with the requirements of the U.S. Bankruptcy Code.
COREL CORP: February 28 Balance Sheet Upside-Down by $20.6 Million
------------------------------------------------------------------
Corel Corporation's balance sheet at Feb. 28, 2007, showed
$270.8 million in total assets and $291.4 million in total
liabilities, resulting in a $20.6 million total stockholders'
deficit.
The company's balance sheet at Feb. 28, 2007, also showed strained
liquidity with $65.4 million in total current assets available to
pay $107.7 million in total current liabilities.
Corel Corporation reported a net loss of $11.9 million for the
first quarter ended Feb. 28, 2007, compared to a net loss of
$1.6 million for the first quarter of fiscal 2006. Revenues in
the first quarter of fiscal 2007 were $52.6 million, an increase
of 19% over revenues of $44.3 million in the first quarter fiscal
2006.
Results for the first quarter of 2007 include the results from the
acquisition of InterVideo as of Dec. 12, 2006.
Excluding InterVideo revenue of $9.7 million in the first quarter,
revenue from the Corel business was $42.9 million, a decline of 3%
year over year, primarily driven by a decrease in revenue for the
company's WordPerfect business. More specifically, the
WordPerfect business declined by $3.3 million in the first
quarter, and the rest of the Corel portfolio, before the impact of
the acquisition of Intervideo, grew by $1.9 million or by 5% year
over year. This was primarily driven by growth of WinZip, iGrafx
and Paintshop Pro.
Operating expenses increased $19.5 million to $46.1 million for
the current quarter, when compared to operating expenses of
$26.6 million for the first quarter of fiscal 2006, mainly due to
increases in (i) research and development expenses, (ii) general
and administrative expenses, and (iii) acquired in-process
research and development expenses.
Research and development expenses increased by 83.5% to
$11.3 million in the current quarter. This is due to the
inclusion of $4.9 million of research and development costs
related to InterVideo activities. As a percentage of total
revenues, research and development expenses increased
significantly to 21.6% from 14.0%. This is due to the mix of
InterVideo products which are research intensive relative to Corel
products.
General and administration expenses increased to $9.1 million in
the first quarter of fiscal 2007 from $5.4 million in the first
quarter of fiscal 2006, due primarily to the inclusion of
InterVideo operating costs of $2.3 million, as well as general and
administration costs related to existing Corel activities and
operations which increased by 26.5% to $6.8 million for the
quarter ended Feb. 28, 2007, due to additional public company
costs such as director and officer insurance.
Intangible assets acquired with InterVideo included $7.8 million
of in-process research and development projects that, on the date
of the acquisition, the related technology had not reached
technological feasibility and did not have an alternate future
use. As required by purchase accounting, this in-process research
and development was expensed upon acquisition.
"With revenue at the high end of our guidance and earnings above
guidance, Q1 was another solid quarter for Corel as we reported
our first combined results for Corel and InterVideo," said David
Dobson, chief executive officer of Corel Corporation. "The
strength of our existing portfolio was demonstrated through the
performance of WinZip, iGrafx, CorelDRAW Graphics Suite and Paint
Shop Pro. We achieved these results while completing the
acquisition of InterVideo and establishing a new Digital Media
business to pursue the significant market opportunities we see
ahead."
Added Mr. Dobson, "I am pleased with the progress we have made in
advancing the integration and creating a global team that is well
positioned in the rapidly growing digital media market. With a
proven product portfolio, expanded distribution capabilities, and
growing traction in developing and emerging markets, Corel is
poised to capitalize on the growing market demand for compelling
digital content that is easy to create and share."
Full-text copies of the company's consolidated financial
statements for the quarter ended Feb. 28, 2007, are available for
free at http://researcharchives.com/t/s?1de6
Cash Flows
Cash provided by operations increased by $12.5 million to
$18.4 million for the three months ended Feb. 28, 2007, compared
to $5.9 million for the three months ended Feb. 28, 2006. The
increase is due to the receipt of cash for royalty revenues.
Cash provided by financing activities was $91.9 million for the
three months ended Feb. 28, 2007, compared to the use of cash in
financing activities of $11 million for the three month period
ended Feb. 28, 2006. The increase in financing activities relates
to the $70 million term loan and the use of $23 million of the
company's operating line of credit obtained to finance the
acquisition of InterVideo.
Cash used in investing activities was $120.5 million for the three
months ended Feb. 28, 2007, a significant increase over the cash
used of $430,000 for the three months ended Feb. 28, 2006. This
cash outlay reflects the purchase of InterVideo on Dec. 12, 2006,
and the remaining interest in Ulead on Dec. 28, 2006, for
$120.4 million.
Acquisition of InterVideo
On Dec. 12, 2006, the company acquired InterVideo Inc., which had
a majority interest in Ulead Inc., in an all cash transaction of
approximately $198.6 million. InterVideo is a provider of digital
media authoring and video playback software with a focus on high-
definition and DVD technologies. As part of the acquisition of
InterVideo the remaining voting equity interest in Ulead Inc. was
completed by the company on Dec. 28, 2006, in an all cash
transaction of approximately $21.7 million.
About Corel Corporation
Headquartered in Ottawa, Canada, Corel Corporation (NASDAQ: CREL)
(TSX: CRE) -- http://www.corel.com/-- is a developer of graphics,
productivity and digital media software with more than 100 million
users worldwide. Corel's products are sold in more than 75
countries through a well-established network of international
resellers, retailers, original equipment manufacturers, online
providers and Corel's global websites.
* * *
As reported in the Troubled Company Reporter on Nov. 7, 2006,
Standard & Poor's Ratings Services affirmed its 'B' long-term
corporate credit and senior secured debt ratings on Corel Corp.
CREDIT SUISSE: Fitch Lowers Ratings on 29 Certificate Classes
-------------------------------------------------------------
Fitch Ratings has taken rating actions on these Credit Suisse
First Boston Home Equity Asset Trust (HEAT) transactions:
CSFB Home Equity Asset Trust, series 2002-4
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class B-1 downgraded to 'BB' from 'BBB-'.
CSFB Home Equity Asset Trust, series 2002-5
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class B-1 downgraded to 'B+' from 'BB+'.
CSFB Home Equity Asset Trust, series 2003-1
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A+';
-- Class M-3 affirmed at 'A';
-- Class B-1 downgraded to 'BBB' from 'BBB+';
-- Class B-2 downgraded to 'B' from 'BB';
-- Class B-3 downgraded to 'C' from 'B+', and assigned a
Distressed Recovery rating of DR5.
CSFB Home Equity Asset Trust, series 2003-2
-- Class M-1 affirmed at 'AA';
-- Class M-2 downgraded to 'A-' from 'A+';
-- Class M-3 downgraded to 'BBB-' from 'A';
-- Class B-1 downgraded to 'B' from 'BB+';
-- Class B-2 downgraded to 'C' from 'B', and assigned a
Distressed Recovery rating of DR5.
CSFB Home Equity Asset Trust, series 2003-3
-- Class M-1 affirmed at 'AA';
-- Class M-2 downgraded to 'A-' from 'A+';
-- Class M-3 downgraded to 'BBB+' from 'A-';
-- Class B-1 downgraded to 'BB+' from 'BBB+';
-- Class B-2 downgraded to 'BB-' from 'BBB-';
-- Class B-3 downgraded to 'B' from 'BB+'.
CSFB Home Equity Asset Trust, series 2003-4
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'A-';
-- Class B-1 downgraded to 'BBB-' from 'BBB+';
-- Class B-2 downgraded to 'BB-' from 'BB+';
-- Class B-3 downgraded to 'B+' from 'BB'.
CSFB Home Equity Asset Trust, series 2003-5
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 downgraded to 'A-' from 'A';
-- Class M-3 downgraded to 'BBB-' from 'A-';
-- Class B-1 downgraded to 'BB' from 'BBB+';
-- Class B-2 downgraded to 'B' from 'BB';
-- Class B-3 downgraded to 'C' from 'B+', and assigned a
Distressed Recovery rating of DR6.
CSFB Home Equity Asset Trust, series 2003-6
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'A-';
-- Class B-1 affirmed at 'BBB+';
-- Class B-2 downgraded to 'BB' from 'BBB-';
-- Class B-3 downgraded to 'C' from 'BB-', and assigned a
Distressed Recovery rating of DR4.
CSFB Home Equity Asset Trust, series 2003-7
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'A-';
-- Class B-1 downgraded to 'BBB' from 'BBB+';
-- Class B-2 downgraded to 'BB-' from 'BB+';
-- Class B-3 downgraded to 'B' from 'B+'.
CSFB Home Equity Asset Trust, series 2003-8
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'A-';
-- Class B-1 affirmed at 'BBB+';
-- Class B-2 downgraded to 'BB+' from 'BBB-';
-- Class B-3 downgraded to 'B' from 'BB-'.
CSFB Home Equity Asset Trust, Series 2004-1
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'A';
-- Class B-1 affirmed at 'BBB+';
-- Class B-2 affirmed at 'BBB';
-- Class B-3 affirmed at 'BBB-'.
CSFB Home Equity Asset Trust, Series 2004-2
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'A';
-- Class B-1 affirmed at 'A-';
-- Class B-2 affirmed at 'BBB+';
-- Class B-3 affirmed at 'BBB-'.
CSFB Home Equity Asset Trust, Series 2004-3
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'A-';
-- Class B-1 affirmed at 'BBB+';
-- Class B-2 affirmed at 'BBB';
-- Class B-3 affirmed at 'BBB-'.
CSFB Home Equity Asset Trust, Series 2004-4
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'AA';
-- Class M-3 affirmed at 'AA-';
-- Class M-4 affirmed at 'A+';
-- Class M-5 affirmed at 'A';
-- Class M-6 affirmed at 'A-';
-- Class B-1 affirmed at 'BBB+';
-- Class B-2 affirmed at 'BBB';
-- Class B-3 affirmed at 'BBB-'.
CSFB Home Equity Asset Trust, Series 2004-5
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'AA';
-- Class M-3 affirmed at 'AA-';
-- Class M-4 affirmed at 'A+';
-- Class M-5 affirmed at 'A';
-- Class M-6 affirmed at 'A-';
-- Class B-1 affirmed at 'BBB+';
-- Class B-2 affirmed at 'BBB';
-- Class B-3 affirmed at 'BBB-'.
CSFB Home Equity Asset Trust, Series 2004-6
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'AA';
-- Class M-3 affirmed at 'AA-';
-- Class M-4 affirmed at 'A+';
-- Class M-5 affirmed at 'A+';
-- Class M-6 affirmed at 'A';
-- Class B-1 affirmed at 'A-';
-- Class B-2 affirmed at 'BBB+';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BBB-'.
CSFB Home Equity Asset Trust, Series 2004-7
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'AA+';
-- Class M-3 affirmed at 'AA';
-- Class M-4 affirmed at 'AA-';
-- Class M-5 affirmed at 'A+';
-- Class M-6 affirmed at 'A';
-- Class B-1 affirmed at 'A-';
-- Class B-2 affirmed at 'BBB+';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BBB-'.
CSFB Home Equity Asset Trust, Series 2004-8
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'AA';
-- Class M-3 affirmed at 'AA-';
-- Class M-4 affirmed at 'A+';
-- Class M-5 affirmed at 'A';
-- Class M-6 affirmed at 'A';
-- Class B-1 affirmed at 'A-';
-- Class B-2 affirmed at 'BBB+';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BBB-'.
The collateral of the above transactions consists of first and
second lien fixed-rate and adjustable-rate subprime mortgage
loans. As of the March 2007 distribution date, the transactions
are seasoned from a range of 26 to 56 months, and the pool factors
(current collateral balance as a percentage of original collateral
balance) range from approximately 6% to 29%. All of the mortgage
loans were purchased by an affiliate of the depositor from various
sellers in secondary market transactions.
The affirmations reflect adequate relationships of credit
enhancement to future loss expectations and affect approximately
$2.151 billion of outstanding certificates. The classes with
negative rating actions reflect the deterioration in the
relationship of CE to future loss expectations and affect
approximately $165.995 million of outstanding certificates. All
of the affected transactions have pool factors below 15%. The
HEAT 2002 and 2003 vintage collateral pools have generally
experienced faster prepayments than the industry average due to
higher than average ARM and California concentrations. The fast
prepayments and rising interest rates have reduced the excess
spread available to cover losses while adverse selection in the
remaining pool has resulted in rising delinquency and loss rates.
As a result, monthly losses are generally exceeding excess spread
resulting in overcollateralization amounts below their target
amounts.
The mortgage loans are being serviced by various entities which
include Ocwen Financial Corp. ('RPS2' rated by Fitch), Wells Fargo
Home Mortgage, Inc. ('RPS1'), Chase Home Finance, LLC ('RPS1') and
Select Portfolio Servicing, Inc. ('RPS2'). The depositor is
Credit Suisse First Boston Mortgage Securities Corp.
Fitch will continue to closely monitor the above transactions.
CRUM & FORSTER: Prices $330 Million of 7-3/4% Sr. Notes Offering
----------------------------------------------------------------
Crum & Forster Holdings Corp., a wholly owned subsidiary of
Fairfax Financial Holdings Limited, priced an offering of
$330 million of 7-3/4% Senior Notes due May 1, 2017 at an issue
price of 100%.
The 2017 Notes are being sold on a private basis in the United
States pursuant to Rule 144A and outside the United States
pursuant to Regulation S under the Securities Act of 1933, with
registration rights.
Net proceeds of the offering, after commissions and expenses, are
estimated to be approximately $325.2 million. The net proceeds of
the offering, together with available cash on hand, will be used
to purchase the Company's 10-3/8% Senior Notes due 2013, pursuant
to the tender offer to purchase for cash any and all of the
outstanding 2013 Notes.
The closing of the offering of the 2017 Notes is conditioned upon
the receipt of consents from holders of a majority of the
outstanding principal amount of the 2013 Notes to adopt proposed
amendments to the indenture governing the 2013 Notes, and the
effectiveness of such amendments, in connection with the tender
offer and related consent solicitation.
Based in Morristown, New Jersey, Crum & Forster Holdings Corp. --
http://www.cfins.com/-- is a wholly owned subsidiary of Fairfax
Financial Holdings Limited (TSX and NYSE: FFH). Through eight
subsidiaries, the company offers an array of property/casualty
insurance products to businesses, including management liability,
automobile, and workers' compensation coverage.
CRUM & FORSTER: Launches Tender Offer for 10-3/8% Senior Notes
--------------------------------------------------------------
Crum & Forster Holdings Corp., a wholly owned subsidiary of
Fairfax Financial Holdings Limited, commenced a tender offer to
purchase for cash any and all of its outstanding 10-3/8% Senior
Notes due 2013.
In conjunction with the tender offer, the Company also commenced a
consent solicitation to eliminate substantially all the covenants
and certain events of default, and to eliminate or modify certain
other provisions. The tender offer and consent solicitation are
being made pursuant to the Company's Offer to Purchase and Consent
Solicitation Statement dated April 23, 2007.
Holders who properly tender and deliver their consents to the
proposed amendments on or prior to midnight, New York City time,
on May 4, 2007, unless extended or earlier terminated, will be
eligible to receive the total consideration, which includes a
consent payment equal to $30.00 per $1,000 principal amount of the
tendered Notes.
Total consideration for the Notes will be determined using the
standard market practice of pricing to the first redemption date.
As such, the Notes will be priced at a fixed spread of 50 basis
points over the bid-side yield on the 4.875% Treasury Note due May
31, 2008. The price will be determined at 2:00 p.m., New York
City time, on May 4, 2007, based on a yield determined by the
Treasury bid-side price reported by the Bloomberg Government
Pricing Monitor, or any recognized quotation source selected by
Merrill Lynch & Co., as the Dealer Manager in its sole discretion
if the Bloomberg Government Pricing Monitor is not available or is
manifestly erroneous. The detailed methodology for calculating
the total consideration for validly tendered Notes is outlined in
the Statement, which will be available from the information agent
beginning on April 23, 2007.
Holders who properly tender after the Consent Expiration Date but
on or prior to the Offer Expiration Date will be eligible to
receive as consideration the purchase price, which equals the
total consideration less the consent payment.
In addition, all Notes accepted for payment will be entitled to
receipt of accrued and unpaid interest in respect of such Notes
from the last interest payment date prior to the applicable
settlement date to, but not including, the applicable settlement
date.
The tender offer will expire at midnight, New York City time, on
May 18, 2007, unless extended or earlier terminated. Settlement
for all Notes tendered on or prior to the Consent Expiration Date
and accepted for payment is expected to be promptly following the
Consent Expiration Date. Settlement for all Notes tendered after
the Consent Expiration Date, but on or prior to the Offer
Expiration Date, is expected to be promptly following the Offer
Expiration Date.
Consummation of the tender offer, and payment for the tendered
notes, is subject to the satisfaction or waiver of certain
conditions described in the Statement, including consummating an
issuance of new senior debt securities in an amount sufficient
(together with cash on hand) to pay for all Notes tendered and any
related fees and expenses, receipt of consents from holders of a
majority of the outstanding principal amount of the Notes, as well
as other customary conditions.
Holders may withdraw their tenders and revoke their consents at
any time before the proposed amendments become effective, which is
expected to be promptly following the Consent Expiration Date, but
not thereafter.
Merrill Lynch & Co. is acting as dealer manager and solicitation
agent for the tender offer and the consent solicitation. The
tender agent and information agent is D. F. King & Co., Inc.
Based in Morristown, New Jersey, Crum & Forster Holdings Corp. --
http://www.cfins.com/-- is a wholly owned subsidiary of Fairfax
Financial Holdings Limited (TSX and NYSE: FFH). Through eight
subsidiaries, the company offers an array of property/casualty
insurance products to businesses, including management liability,
automobile, and workers' compensation coverage.
CRUM & FORSTER: Moody's Rates $330 Million Senior Notes at Ba3
--------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to the
$330 million in senior unsecured notes, due 2017, to be issued by
Crum & Forster Holdings Corp.
The net proceeds from the issuance will used to purchase some or
all of Crum & Forster's currently outstanding $300 million in
senior unsecured notes due in 2013, which have a June 2008 call
date. Moody's notes that the issuance of the 2017 Notes, in
combination with the repurchase of the 2013 Notes, amounts to a
refinancing of existing long-term debt.
Crum & Forster will issue these notes to qualified institutional
buyers in the United States in accordance with Rule 144a of the
U.S. Securities Act. Outside the United States, the notes will be
issued pursuant to Regulation S under the Securities Act of 1933,
with registration rights.
Crum & Forster's main operating companies, United States Fire
Insurance Company and The North River Insurance Company (North
River) are rated Baa3 for insurance financial strength. Crum &
Forster is a wholly-owned subsidiary of Fairfax Financial Holdings
Ltd. (NYSE: FFH) whose senior debt is rated Ba3 with a stable
outlook.
According to Moody's, Crum & Forster's ratings reflect its
diversified revenue stream by geography and product, a centralized
underwriting approach which has produced steadily improving
underwriting results, and a high quality investment portfolio with
downside equity risk partially mitigated by a hedging strategy.
Offsetting these strengths are significant financial leverage and
debt service requirements at FFH, exposure to asbestos and
environmental claims, and exposure to natural and man-made
catastrophes.
The debt issuance represents a modest positive for Crum & Forster
as the effective maturity of the debt is extended, the semi-annual
coupon payments are likely to be lower, and a number of covenants
will be eliminated. That said, a significant premium is to be paid
to holders of the 2013 Notes and financial leverage at both FFH
and Crum & Forster is expected to increase marginally.
Upward rating pressure could emerge if Crum & Forster maintains
its financial leverage in the low 20s, continues to produce steady
increases in GAAP net income, earnings interest coverage is
consistently above 4x and its cash flow interest coverage is above
3x, while one year reserve development is below 5% of policyholder
surplus.
Downward rating pressure could emerge if Crum & Forster's
financial leverage increased above 30%, the company suffered an
annual net loss as the result of adverse claims development or
earnings interest coverage fell below 2x or cash flow coverage
fell below 1.5x.
As a wholly owned subsidiary of Fairfax Financial, the company
makes significant dividend contributions ($90 million in 2006) up
to its ultimate parent to support its debt obligations. As such,
Crum & Forster's ratings are linked to that of its parent, FFH. At
present, Moody's applies a standard three-notch differential
between the holding company's (Crum & Forster's) senior debt
rating and the insurance financial strength of its operating
insurance companies (U.S. Fire and North River). To the extent
FFH's financial flexibility weakened, Crum & Forster's senior debt
rating could come under negative pressure. Conversely, upward
rating pressure could come from improved performance of Crum &
Forster's operating insurers combined with an improvement in
financial flexibility at FFH such that FFH reduces its
consolidated financial leverage and continues to improve its
liquidity position while avoiding further regulatory and financial
reporting challenges.
Crum & Forster is a financial services holding company whose
operating subsidiaries primarily underwrite property and casualty
insurance in the United States. At December 31, 2006, Crum &
Forster Holdings Corp. reported net premiums written of $1.2
billion, net income of $312 million, and year-end shareholders'
equity of $1.1 billion.
DELTA AIR: NY Bankruptcy Court Confirms Plan of Reorganization
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
today issued a ruling confirming Delta's Plan of Reorganization,
clearing the way for the airline's emergence from Chapter 11.
Delta expects its plan to become effective on April 30, once all
closing conditions of the plan have been met and the company's
$2.5 billion in exit financing has closed.
"This is an exciting day for everyone at Delta," Gerald Grinstein,
Delta's Chief Executive Officer, said. "Achieving a turnaround of
this magnitude in little more than 19 months would not have been
possible without the hard work and dedication of Delta people
worldwide, and the leadership, the vision and the flawless
execution of our plan by our outstanding management team led by Ed
Bastian and Jim Whitehurst. We are also grateful to all the other
people who have helped make this possible for Delta, including the
unwavering support of our customers and the communities we serve."
After Delta's confirmation hearing, the Honorable Adlai S. Hardin,
Jr. issued his ruling affirming that the company had met all of
the necessary statutory requirements to confirm its Plan of
Reorganization and exit from Chapter 11. Earlier in the month,
Delta creditors overwhelmingly supported the plan. More than 95%
of the ballots cast and claims value voting were in favor of the
plan.
Judge Hardin's ruling also applies to all of Delta's wholly owned
subsidiaries that filed for Chapter 11 protection, including
Comair, Delta Global Services, Delta Technology, Delta Air Elite
and Delta Connection Academy. Each of those subsidiaries is
expected to emerge from Chapter 11 alongside Delta on April 30.
"Delta is now poised to enter the next chapter of our history as a
strong airline ready to compete in an ever changing industry," Mr.
Grinstein concluded.
Delta's common stock has been approved for listing on the New York
Stock Exchange under the ticker symbol "DAL". Trading on the NYSE
is expected to commence April 26, 2007, on a "when issued" basis
(DAL.WI), and "regular way" trading is anticipated to begin on
May 3, 2007. Current holders of Delta's pre-plan equity, which
has recently traded over the counter under the symbol "DALRQ,"
will not receive any distributions under Delta's Plan of
Reorganization. These equity interests will be cancelled upon the
effectiveness of the plan. Accordingly, Delta urges caution be
exercised with respect to investments in Delta's existing equity
securities and any of Delta's liabilities and other securities.
Distribution to Creditors
A person holding a general unsecured claim of $10,000 against
Delta (in Delta Classes 4 and 5) would receive an initial
distribution of approximately 225 shares of new common stock in
the reorganized Delta Air Lines. (Net distributions for Delta
retirees and current and former employees generally will be
smaller on account of withholding obligations). The initial
distribution excludes approximately 135 million shares that are
reserved from distribution due to disputed unsecured claims in
Delta Classes 4 and 5. A total of 358,786,580 shares will
ultimately be distributed to creditors in Delta Classes 4 and 5
under the Plan.
As a result of the significantly higher percentage of disputed
claims outstanding against the Comair debtors, there will be a
lower percentage distribution to Comair creditors at this time.
Thus, a person holding a general unsecured claim of $10,000
against Comair (in Comair Class 4) would receive an initial
distribution of approximately 139 shares. The initial distribution
excludes approximately 25 million shares that are reserved from
distribution due to disputed unsecured claims in Comair's Class 4.
A total of 27,213,420 shares will ultimately be distributed for to
creditors in Comair Class 4 under the Plan.
About Delta Air
Headquartered in Atlanta, Georgia, Delta Air Lines (OTC:DALRQ)
-- http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities.
Plan Update
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.
On Jan 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on Feb. 2,
2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure
statement.
DEPOMED INC: December 31 Balance Sheet Upside-Down by $27 Million
-----------------------------------------------------------------
Depomed Inc. disclosed its financial results for the year ended
Dec. 31, 2006, with total assets of $52,617,184 and total
liabilities of $79,905,644, resulting in a $27,288,460 total
shareholders' deficit. Accumulated deficit stood at $184,111,185
as of Dec. 31, 2006. Cash and cash equivalents and marketable
securities at Dec. 31, 2006 were $14,574,110 and $16,984,503,
respectively.
For the full year, revenues totaled $9,551,218, as compared with
$4,405,329 reported for the full year 2005. Of the total revenue
recognized in 2006, $1,265,000 was in product sales revenue from
the commercial supply of ProQuin(R) XR to Esprit Pharma and
$3,931,000 related to royalties on ProQuin XR sales. In addition,
$526,000 was in product sales of Glumetza(TM) through King
Pharmaceuticals and $109,000 was attributed to royalties on sales
of Glumetza in Canada through Biovail Corporation.
For the full year ended Dec. 31, 2006, a net loss of $39,659,288
was reported, as compared with a net loss of $24,467,272 for the
year ended Dec. 31, 2005. Research and development expenses for
the year ended Dec. 31, 2006, were $26,891,139, as compared with
$18,369,217 for the year ended Dec. 31, 2005. The increase was
primarily due to expenses related to clinical development of
Gabapentin GR for the treatment of postherpetic neuralgia (PHN)
and diabetic peripheral neuropathy (DPN).
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1de1
"In 2006 we continued to make significant progress throughout the
business, successfully adding to and advancing our product
pipeline and establishing partnerships to help further grow our
commercial presence and leverage our AcuForm(TM) drug delivery
technology," said John W. Fara, Ph.D., president, chief executive
officer and chairman of Depomed. "Looking ahead, we remain
committed to supporting efforts to increase product sales. We
look forward to the completion of the Phase 3 clinical trial of
Gabapentin GR(TM) in postherpetic neuralgia in the coming months
and to the initiation of a Phase 2 clinical trial of Gabapentin GR
in menopausal hot flashes in the second quarter."
Recent Events and 2006 Highlights
-- Filed Investigational New Drug application for Gabapentin
GR for the treatment of menopausal hot flashes; Phase 2
trial expected to begin in the second quarter ended March
2007;
-- Completed enrollment in Phase 3 clinical trial of
Gabapentin GR for the treatment of PHN by March 2007;
-- License agreement entered into with Biovail for use of
AcuForm drug delivery technology for the development of up
to two Biovail products by February 2007;
-- Announced positive results from Phase 2 clinical trial of
Gabapentin GR for DPN that demonstrate a statistically
significant reduction in pain, compared to placebo on
December 2006;
-- Secured exclusive rights to gabapentin for the treatment
of menopausal hot flashes on October 2006;
-- Initiated U.S.-commercial launch of Glumetza by partner,
King Pharmaceutical on September 2006;
-- Completed Phase 1 clinical trial in gastroesophageal
reflux disease on August 2006; and
-- Formed strategic collaboration agreement with Patheon,
Inc., facilitating partnering of AcuForm technology on
August 2006.
About Depomed Inc.
Depomed Inc. (NasdaqGM: DEPO) -- http://www.depomedinc.com/-- is
a specialty pharmaceutical company utilizing its innovative
AcuForm(TM) drug delivery technology to develop novel oral
products and improved, extended release formulations of existing
oral drugs. AcuForm-based products are designed to provide once-
daily administration and reduced side effects, improving patient
convenience, compliance and pharmacokinetic profiles. ProQuin(R)
XR (ciprofloxacin hydrochloride) extended-release tablets have
been approved by the FDA for the once-daily treatment of
uncomplicated urinary tract infections and are currently being
marketed in the United States. In addition, once-daily GlumetzaTM
(metformin hydrochloride extended release tablets) has been
approved for use in adults with type 2 diabetes and is currently
being marketed in the United States and Canada. The company is
currently evaluating Gabapentin GRTM for the treatment of two pain
indications, postherpetic neuralgia and diabetic peripheral
neuropathy, and menopausal hot flashes.
FELLOWS ENERGY: Mendoza Berger Raises Going Concern Doubt
---------------------------------------------------------
Mendoza Berger & Company, in Irvine, Calif., raised substantial
doubt about Fellows Energy Ltd.'s ability to continue as a going
concern after auditing the company's financial statements for the
years ended Dec. 31, 2006, and 2005. The auditor pointed to the
company's significant losses from operations.
The company reported a net loss of $8,590,847 on revenues of
$423,761 for the year ended Dec. 31, 2006, as compared with a net
loss of $3,591,161 on zero revenues in the prior year.
As of Dec. 31, 2006, the company's balance sheet showed total
assets of $9,863,885, total liabilities of $7,566,830, and
shareholders' equity of $2,297,055. As of Dec. 31, 2006, the
company's accumulated deficit stood at $16,135,944, up from an
accumulated deficit as of Dec. 31, 2005, of $7,548,658.
A full-text copy of the company's annual report is available for
free at http://researcharchives.com/t/s?1d03
About Fellows Energy
Incorporated in Nevada on April 9, 2001, Fellows Energy Ltd.
(OTCBB: FLWE) -- http://www.fellowsenergy.com/--was originally
formed to offer business consulting services in the retail
automobile fueling industry. In November 2003, the company ceased
all activity in the automotive fueling industry and entered the
oil and gas business, focusing on exploration for oil and gas in
the Rocky Mountain Region. On January 5, 2004, the company
acquired certain interests in certain oil and gas leases and other
interests owned by Diamond Oil & Gas Corporation, a Nevada
corporation. Diamond is wholly owned by George S. Young, Fellows
Energy Ltd.'s CEO.
FRASER PAPERS: Shareholders Trigger Pull Out to Buy Katahdin Paper
------------------------------------------------------------------
Fraser Papers Inc. is withdrawing the proposal to acquire the
Katahdin Paper LLC from Brookfield Asset Management Inc, after
discussions with its shareholders.
As a result, the company intends to make an offer to all holders
of its 8.75% senior notes to purchase the remaining $84 million of
notes outstanding, including $15.5 million that the company
currently holds, at a price of 100% of the principal amount plus
accrued interest to the settlement date, pursuant to the terms
under the existing trust indenture.
"The company is disappointed that it is unable to adequately
communicate the attributes that this transaction would bring to
Fraser and its shareholders," Peter Gordon, president commented.
"As a result, the company will proceed with the redemption of its
outstanding senior notes and continue to execute the company's
focused strategy pursuing value-added products in niche market
segment."
Written notices will be mailed on or before May 31, 2007 to each
holder of the notes. Fraser Papers intends to tender all of the
$15.5 million of the notes that it holds. The settlement date for
the repurchase will be no earlier than 30 days after notices are
mailed.
As reported on the Troubled Company Reporter on April 4, 2007, the
company's Board of Directors, on recommendation of a Special
Committee of the Board, approved the acquisition of
Katahdin Holdings from a subsidiary of Brookfield Asset
Management Inc.
The total cash consideration for the acquisition was estimated to
be $80 million, subject to an adjustment based on working capital
at the time of closing. In addition, Fraser Papers will pay
distributions to Brookfield contingent on the generation of
distributable cash flow generated by the super-calendered
business.
In support of the transaction, Brookfield has agreed to provide a
secured credit facility to fund the cash flow requirements of the
super-calendered operations. Recourse under the facility will be
limited to the cash flows of the super-calendered business.
Reflecting this amendment to the original purchase agreement,
which further limits Fraser Papers' at risk capital, the
distributions to Brookfield will start at 90% of cumulative
distributable cash flow and decline over time as certain
thresholds are reached. No distributions will be paid until the
Brookfield facility has been repaid in full.
In addition, the board approved a bridge loan facility to finance
the acquisition. The $40 million, 120-day facility is being
provided by CIT Business Credit Canada Inc. on substantially the
same terms as the company's existing $90 million facility. The
company plans to refinance the bridge facility through an
expansion of its working capital facility or an equity rights
offering to shareholders subsequent to closing the acquisition.
About Brookfield
Brookfield Asset Management Inc. (TSX: BAM) (NYSE: BAM) --
http://www.brookfield.com/-- is a publicly owned asset management
holding company with about $50 billion in assets under management.
Through its subsidiaries the firm invests in the property, power,
and infrastructure sectors.
About Katahdin
Katahdin Holdings LLC owns a directory paper business in the North
America. It also owns a super-calendered paper business for the
retail insert, catalogue and magazine market. In addition to
production capacity of 250,000 tons per year of directory papers
and 180,000 tons per year of super-calendered grades, Katahdin has
integrated pulp facilities with capacity to produce 215,000 tons
per year of groundwood pulp and 110,000 tons per year of recycled
pulp. These manufacturing facilities are complemented by a 30-
megawatt biomass cogeneration facility. Fraser Papers has managed
these operations on behalf of Brookfield since 2003.
About Fraser Papers
Fraser Papers Inc. (TSE: FPS) -- http://www.fraserpapers.com/--
is an integrated specialty paper company which produces a broad
range of specialty packaging and printing papers. The company has
operations in New Brunswick, Maine, New Hampshire and Quebec.
* * *
As reported in the Troubled Company Reporter on Feb. 15, 2007,
Standard & Poor's Ratings Services lowered its ratings on Fraser
Papers Inc., including the long-term corporate credit rating, to
'CCC+ from 'B-'. The outlook is negative.
The company also carries Moody's Caa2 long-term corporate family
and probability of default ratings as well as the ratings agency's
Caa3 senior unsecured debt rating.
FREMONT HOME: S&P Cuts Rating on S. 2003-B Class M-6 Loans to BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class M-6
issued by Fremont Home Loan Trust 2003-B to 'BB-' from 'BBB-'.
The rating remains on CreditWatch, where it was placed with
negative implications Nov. 22, 2006.
The negative rating action and ongoing CreditWatch status reflects
deterioration of available credit support during the recent
distribution periods. Credit enhancement for this class is
provided by overcollateralization and monthly excess interest
since it is the most subordinate class in the transaction. From
the November 2006 to the March 2007 distribution period, O/C has
deteriorated by $639,905 and is currently not meeting its target
of $3.09 million by $777,383. As of the March 2007 remittance
period, current and projected credit support is lower than
original levels at the 'BBB-' rating level. The six- and 12-month
average losses have been approximately $207,621 and $216,909,
respectively, while the deal has incurred $5.30 million in
cumulative realized losses (0.86% of the original principal
balance). While this transaction is 39 months seasoned, total and
serious (90-plus day, foreclosure, and REO) delinquencies are
15.05% and 8.97%, respectively.
Standard & Poor's will continue to closely monitor the performance
of this class. If losses decline to a point at which they no
longer exceed monthly excess interest, and the level of credit
enhancement is not further eroded, S&P will affirm the rating and
remove it from CreditWatch. Conversely, if delinquencies continue
to translate into substantial realized losses in the coming months
and continue to erode available credit enhancement, S&P will take
further negative rating actions on this class, and possibly on the
more senior tranches.
GABRIEL COMMUNICATIONS: Moody's Rates $260MM Credit Facility at B2
------------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to the proposed
$260 million 1st lien credit facility at Gabriel Communications
Finance Company, a wholly owned subsidiary of NuVox, Inc.
NuVox's other wholly owned subsidiary, NuVox Transition
Subsidiary, LLC, will be a co-borrower of the new credit
facilities, which are being raised in connection with NuVox's
proposed merger with Florida Digital Network, Inc. Moody's has
also affirmed Gabriel's B2 corporate family rating. The ratings
outlook is stable.
On March 21, 2007, NuVox and FDN announced the plan to merge the
two companies in a stock-for-stock transaction, which will result
in NuVox and FDN shareholders owning approximately 66% and 34%,
respectively, of the outstanding common stock of the combined
company. The proceeds of the new credit facilities will be used
to refinance the existing debt at NuVox and FDN, in addition to
funding a special dividend of $130 million to the combined
company's shareholders.
The B2 corporate family rating reflects NuVox's challenging
position as a competitive local exchange carrier serving a
footprint predominantly overlapping AT&T Inc.'s territories. The
rating broadly reflects NuVox's substantial business risk,
relatively high pro-forma leverage for a CLEC (3.5x, Moody's
adjusted, Total Debt/LTM 1Q 2007 EBITDA), the company's relatively
moderate size, and the potential for more acquisitions. NuVox's
B2 rating also considers the execution risk associated with
sustaining revenue growth while integrating the operations of FDN.
The rating is tempered by NuVox's greater scale in the
Southeastern markets as a result of the merger, given the large
network overlap of the two companies, and the potential for
generating EBITDA growth driven by merger synergies.
The stable rating outlook incorporates the anticipated delevering
to below 3.0x by the year-end 2008, helped by the realization of
$14 million in cost synergies from the merger and Moody's
expectations of modest revenue growth estimates of about 3-to-5%.
Moody's has taken these rating actions:
Issuer: Gabriel Communications Finance Company, Inc.
* Corporate Family Rating -- Affirmed B2
* Probability of Default Rating -- Affirmed B3
* $10 million 1st Lien Secured Revolving Credit Facility due
2013 -- Assigned B2, LGD3 -- 33%
* $250 million 1st Lien Secured Term Loan due 2014 -- Assigned
B2, LGD3 -- 33%
* Existing Senior Secured Revolving Credit Facility due 2011
-- Affirmed B2, to be withdrawn
* Senior Secured Term Loan due 2012 -- Affirmed B2, to be
withdrawn
* Outlook -- Stable
NuVox, headquartered in Greenville, SC, is a CLEC and generated
$342 million of revenues in 2006. FDN is a Maitland, Florida,
based CLEC serving small and medium-sized business customers in
Florida and Georgia, with revenues of $163 million in 2006.
GAYLORD ENTERTAINMENT: S&P Lifts Corporate Credit Rating to B+
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Gaylord Entertainment Co. to 'B+' from 'B' and affirmed
its 'B-' rating on the company's senior unsecured debt. At the
same time, Standard & Poor's removed the ratings from CreditWatch,
where they were placed with positive implications April 6, 2007.
The rating outlook is stable. Gaylord had about $850 million of
lease-adjusted debt at December 2006.
"The upgrade reflects Standard & Poor's expectation that the
Gaylord National Hotel Resort and Convention Center near
Washington D.C. will have a good opening in the June 2008
quarter," said Standard & Poor's credit analyst Emile Courtney.
"In addition, we expect pro forma EBITDA and cash flow will
increase significantly in 2008 as a result of the Gaylord National
opening and a continued good lodging environment. Over the next
few years, borrowings to fund Gaylord's various capital spending
projects will be lower than previously expected, as noncore asset
sale proceeds generated in 2007 are being used to finance
expansion in the hotel business."
Leverage, as measured by total lease-adjusted debt to EBITDA, is
expected to be weak in 2007, mostly due to high levels of capital
spending related to Gaylord National. However, it is expected to
improve meaningfully in 2008 and be sustained at levels consistent
with the 'B+' corporate credit rating. Following the opening of
Gaylord National, pro forma leverage is expected to decline to
less than 6x, and EBITDA coverage of interest is expected increase
to more than 2x. The affirmation of the senior unsecured debt
rating, which is two notches below the corporate credit rating,
reflects the amount of secured debt in the capital structure.
The 'B+' rating on Nashville, Tenn.-based Gaylord reflects the
company's small hotel portfolio, its strategy to expand its brand
through large-scale development projects, its reliance on external
sources of capital to fund growth, and construction and start-up
risks associated with multiple potential developments.
GE CAPITAL: Fitch Holds BB+ Rating on $9.9 Million Class J Loans
----------------------------------------------------------------
Fitch Ratings upgrades GE Capital's commercial mortgage pass-
through certificates, series 2001-1 as:
-- $15.5 million class F to 'AAA' from 'AA+';
-- $14.1 million class G to 'AA' from 'AA-';
-- $25.4 million class H to 'A-' from 'BBB+';
-- $18.3 million class I to 'BBB' from 'BBB-'.
In addition, Fitch affirms the ratings on these classes:
-- $47.9 million class A-1 at 'AAA';
-- $703 million class A-2 at 'AAA';
-- Interest-only classes at 'AAA'.
-- $45.2 million class B at 'AAA';
-- $49.4 million class C at 'AAA';
-- $15.5 million class D at 'AAA';
-- $15.5 million class E at 'AAA';
-- $9.9 million class J at 'BB+'.
Fitch does not rate classes K through N.
The upgrades reflect the increased credit enhancement levels as a
result of amortization, paydown and additional defeasance of seven
loans (8.2%) since Fitch's rating action in December 2006. As of
the April 2007 distribution date, the pool's aggregate certificate
balance has decreased 12% to $992.1 million from $1.13 billion at
issuance. In total, 35 loans, 29.2% of the pool, have defeased.
There are currently no specially serviced or delinquent loans in
the transaction.
59 Maiden Lane (4.7%), maintains its investment grade credit
assessment by Fitch. The loan is secured by a 1,000,000 square
foot office property located in Manhattan's financial district.
As of Dec. 30, 2006, the property was 99% occupied.
GENERAL MOTORS: CEO Takes the Challenge to Beat Toyota's Sales
--------------------------------------------------------------
In response to Toyota Motor Corp.'s disclosure early this week
that it topped General Motors Corp. in quarterly sales for the
first time, GM Chairman and Chief Executive Rick Wagoner vowed to
"fight hard for every sale," the Associated Press reports.
AP cited Mr. Wagoner as saying that GM's business strategies
around the globe were working and would help the auto manufacturer
succeed.
"We still have the majority of the year in front of us, and we
will fight hard for every sale -- all the while staying focused on
our long-term goals as a global, growing company," Mr. Wagoner
said in an email obtained by AP.
Toyota said it sold 2.35 million vehicles world-wide in the
first quarter of 2007, AP relates, citing preliminary figures.
Early this month, GM said in a press statement that for the first
quarter of 2007, the company delivered 909,094 vehicles, a decline
of 5.6%, driven by reductions of almost 60,000 daily rental
vehicle sales. GM's retail sales for the first quarter of 2007
were up 0.5%. The reductions in fleet sales have resulted in a
significant improvement in the retail/fleet mix, the company
explained.
In addition, GM Latin America, Africa and Middle East region set a
new first quarter sales record in 2007, selling over 269,000
vehicles, up approximately 39,000 units over the same period last
year. GM said its quarterly market share in the region increased
0.2% to 16.3%.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the
world's largest automaker and has been the global industry sales
leader for 76 years. GM currently employs about 280,000 people
around the world. GM manufactures its cars and trucks in 33
countries. In 2006, nearly 9.1 million GM cars and trucks were
sold globally 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
$1.5 billion secured term loan of General Motors Corp.
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
$1.5 billion secured term loan of General Motors Corp.
GENESIS WORLDWIDE: Wants Until August 31 to File Chapter 11 Plan
----------------------------------------------------------------
Genesis Worldwide Inc. and its debtor-affiliates ask the United
States Bankruptcy Court for the Southern District of Ohio to
further extend their exclusive periods to:
a. file a Chapter 11 plan of reorganization through and
including Aug. 31, 2007; and
b. solicit acceptances of that plan until Oct. 30, 2007.
This is the Debtors' 16th request for extension of the exclusive
periods. The Debtors' exclusive period to file a plan expires on
April 30, 2007.
The Debtors tell the Court that the extension will not be
prejudicial to its creditors.
Headquartered in Dayton, Ohio, Genesis Worldwide Inc., fka The
Monarch Machine Tool Company, engineers and manufactures high
quality metal coil processing and roll coating and electrostatic
oiling equipment. Genesis Worldwide and its debtor-affiliates
filed for chapter 11 protection on September 17, 2001 (Bankr. S.D.
Ohio Case No. 01-36605). Nick V. Cavalieri, Esq., at Bailey
Cavalieri LLC, represents the Debtors in their chapter 11
proceedings. Daniel M Anderson, Esq., at Schottenstein Zox & Dunn
represents the Official Committee of Unsecured Creditors. As of
June 30, 2001, the Debtors reported assets totaling $122,766,000
and debts totaling $121,999,000.
GRAY TELEVISION: Earns $11.7 Million in Year Ended December 31
--------------------------------------------------------------
Gray Television, Inc. disclosed results from operations for the
three months and year ended Dec. 31, 2006.
The company reported $11.7 million net income on $332.1 million of
revenues for the year ended Dec. 31, 2006, versus $3.3 million net
income on $261.5 million of revenues for the year ended Dec. 31,
2005. Net income for the quarter ending Dec. 31, 2006, was $8.5
million on $101.9 million of operating revenues.
For the year ended Dec. 31, 2006, pro forma net revenue increased
13%, to $334.7 million, compared to $297.1 million in 2005. Pro
forma net revenue increased 26% in the fourth quarter of 2006, to
$101.9 million, compared to $81.2 million in 2005.
For the year ended Dec. 31, 2006, pro forma Broadcast Cash Flow
increased 21%, to $143.8 million, compared to $119.1 million in
2005. Pro forma Broadcast Cash Flow increased 42%, to $48.6
million, in the fourth quarter of 2006 compared to $34.3 million
in 2005.
Gray's quarter and year-end results benefited from record net
political revenue in a non-presidential election year. The
company's news stations in a majority of its markets allowed it to
capture a majority of the net political revenue spent in those
markets.
At Dec. 31, 2006, the company's balance sheet showed total assets
of $1.6 billion and total liabilities of $1.2 billion, resulting
in a $379.7 million stockholders' equity.
Expansion of Operations
Since Jan. 1, 2005, Gray has continued to grow through
acquisitions of new stations and the start up of new operations.
During the last two years, the company has completed two "top 100
market" acquisitions with the purchase of WSAZ, Charleston --
Huntington, West Virginia, on Nov. 30, 2005 and WNDU, South Bend,
Indiana on March 3, 2006. These two stations are significant to
Gray and have added to Gray's Broadcast Cash Flow from their date
of acquisition. Due to their relative significance to Gray's
results of operations, Gray's pro forma results have been
presented to include the results of WSAZ and WNDU as if each
station had been acquired on Jan. 1, 2005.
About Gray Television
Headquartered in Atlanta, Georgia, Gray Television Inc. (NYSE: GTN
and GTN.a) -- http://www.gray.tv/-- is a television broadcast
company. Including its pending acquisition of WNDU-TV, South
Bend, IN, Gray operates 36 television stations serving 30 markets.
Each of the stations is affiliated with CBS (17 stations), NBC (10
stations), ABC (8 stations), or Fox (1 station). In addition,
Gray currently operates seven digital multi-cast television
channels in seven of its existing markets, which are affiliated
with either UPN or Fox.
* * *
As reported in the Troubled Company Reporter on Feb. 16, 2007,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Gray Television Inc. to 'B' from 'B+' and removed the
ratings from CreditWatch, where they were placed with negative
implications on Sept. 11, 2006. The rating outlook is stable.
HEALTHSOUTH CORP: Selling Diagnostic Division for $47.5 Million
---------------------------------------------------------------
HealthSouth Corporation announced a definitive agreement to sell
its Diagnostic Division to The Gores Group for approximately
$47.5 million. In addition, over the past 12 months, HealthSouth
has realized $20.5 million in cash in connection with the
divestiture of a number of individual diagnostic imaging
facilities, as well as various equipment and assets owned by the
division. The transaction with the Gores Group is expected to be
completed by the end of June or early in the third quarter of
2007, and is subject to customary closing conditions, including
regulatory approval.
HealthSouth's Diagnostic Division is currently comprised of a
network of 54 freestanding diagnostic imaging centers in 19 states
and the District of Columbia. While not all services are provided
at all sites, 80% of the centers are multi-modality facilities
offering a combination of outpatient diagnostic imaging services,
including MRI, CT, X-ray, ultrasound, mammography, fluoroscopy,
and nuclear medicine services.
"Today's announcement reflects continued progress in our strategic
repositioning of HealthSouth as a post-acute healthcare provider,
focusing on inpatient rehabilitative services. We have now
entered into definitive agreements for the sale of all three of
our ambulatory divisions. As with the sale of the other two
divisions, the proceeds from this transaction will be used to pay
down a portion of our long-term debt," said Jay Grinney,
HealthSouth president and chief executive officer. "We conducted
a rigorous auction process and we congratulate The Gores Group on
being the winning bidder. We look forward to working with them to
ensure a smooth transition as our Diagnostic Division becomes a
stand-alone entity."
"The Gores Group is excited about the strength of the Diagnostic
Division's platform and geographic footprint, creating numerous
opportunities for expansion within the imaging industry. The
Diagnostic Division's existing infrastructure, coupled with Gores'
financial support, will allow for accelerated growth through
state-of-the art imaging equipment and superior patient care,"
said Ryan Wald, managing director, The Gores Group.
It is anticipated that the operations of the division will remain
headquartered in Birmingham, Ala. HealthSouth will provide
certain corporate support services to the new company for an
interim period of time under a Transition Services Agreement.
Deutsche Bank Securities served as HealthSouth's financial advisor
for the transaction.
About The Gores Group
The Gores Group -- http://gores.com/-- is a private equity firm
focused on acquiring controlling interests in mature and growing
businesses which can benefit from the firm's operating experience
and flexible capital base. The firm combines the operational
expertise and detailed due diligence capabilities of a strategic
buyer with the seasoned M&A team of a traditional financial buyer.
Headquartered in Los Angeles, California, The Gores Group
maintains offices in Boulder, Colorado and London.
About HealthSouth
Headquartered in Birmingham, Alabama, HealthSouth Corporation
(NYSE:HLS) -- http://www.healthsouth.com/-- is one of the
nation's largest providers of healthcare services with a focus in
the inpatient rehabilitation industry.
The company's Dec. 31, 2006 balance sheet showed $3.4 billion
in total assets, $4.9 billion in total liabilities, $271.1 million
in minority interest, and $387.4 million in convertible perpetual
preferred stock, resulting in a $2.2 billion total stockholders'
deficit.
HELIOS FINANCE: DBRS Rates $93.5M S. 2007-S1-B-3 Certificates at B
------------------------------------------------------------------
Dominion Bond Rating Service has assigned these provisional
ratings to the Credit-Linked Notes, Series 2007-S1 of HELIOS
Finance Limited Partnership 2007-S1:
* AAA to $4,988,237,000 Class A-1
* AA to $249,412,000 Class A-2
* "A" to $249,412,000 Class A-3
* BBB to $249,412,000 Class B-1
* BB to $93,529,000 Class B-2
* B to $93,529,000 Class B-3
* B (low) to $19,953,000 Class B-4
Note that Classes B-1, B-2, B-3 and B-4 are 144A offerings and the
notes will be funded at closing. Retained risk positions, Classes
A-1, A-2 and A-3, will require that rating agency conditions are
satisfied if and when issued.
HELIOS Finance Limited Partnership 2007-S1 is a $6.2 billion
dollar synthetic auto ABS transaction that references a portfolio
of auto loans originated by Wachovia Dealer Services, Inc.,
previously known as WFS Financial Inc. The credit-linked notes
will be issued by HELIOS and will be funded at closing. Proceeds
from the funded notes will be invested in eligible investments
that will collateralize the credit-linked notes.
The credit risk of the reference portfolio is tranched and divided
into risk positions that order the priority of losses in reverse
sequential order. Each risk position has a notional amount and
corresponds to a class of notes that will either be issued at
closing or may be issued at some future date. Under the CDS
agreement, Wachovia Bank, as protection payer, will pay to the
issuer a fixed rate that covers expenses and coupon payments for
the notes in excess of the earnings on the eligible investments.
The Issuer is required to pay Wachovia Bank an amount equal to the
net losses realized on the reference portfolio to the extent that
they are allocable to a risk position corresponding to a funded
class of notes.
Net losses are allocated on each distribution date and are
allocated as impairment amounts first to the most subordinated
risk positions. Each risk position is adjusted on the
distribution date by the impairment amount. Credit-linked notes
will not accrue interest on impaired amounts. Principal reduction
amounts based on the amortization of the reference portfolio will
be allocated first to the most senior positions and, after the
stepdown date, may be allocated pro rata among the risk positions
for which no trigger event or risk position floor amounts have
been hit.
The ratings of the offered notes and retained risk positions will
reflect the quality of the underlying reference auto loans, the
credit quality of the eligible investments, to a limited extent
the financial strength of the CDS counterparty and the integrity
of the transaction legal structure.
HINES HORTICULTURE: Gets Nasdaq Notice Due to Delayed 10-K Filing
-----------------------------------------------------------------
Hines Horticulture Inc. has received a Nasdaq Staff Determination
Letter stating that the company is not in compliance with the
requirements for continued listing as set forth in Nasdaq
Marketplace Rule 4310(c)(14) because it has not timely filed its
Annual Report on Form 10-K for fiscal year ended Dec. 31, 2006.
Accordingly, the Nasdaq Staff Determination Letter indicated that
the company's securities are subject to delisting from the Nasdaq
Global Market unless Hines Horticulture requests a hearing before
a Nasdaq Listing Qualifications Panel.
The company intends to timely request a hearing to review the
staff's determination, which will automatically stay the delisting
and allow the company's common stock to continue trading on Nasdaq
under its symbol, HORT, pending the hearing and a decision by the
Qualifications Panel. There can be no assurance that the
Qualifications Panel will grant the company's request for
continued listing as a result of the hearing.
Hines Horticulture is endeavoring to become current in its filings
under the Securities Exchange Act of 1934 soon as practicable.
About Hines Horticulture
Headquartered in Irvine, California, Hines Horticulture Inc.
(NASDAQ: HORT) -- http://www.hineshorticulture.com/-- operates
commercial nurseries in North America, producing a broad
assortment of container grown plants. Hines Horticulture sells
nursery products primarily to the retail segment, which includes
premium independent garden centers, as well as leading home
centers and mass merchandisers, such as Home Depot, Lowe's and
Wal-Mart.
* * *
Hines Horticulture Inc.'s long term foreign and local issuer
credit carry Standard and Poor's 'B-' rating.
HORSEHEAD IND: Wants Herrick Feinstein as Substitute Counsel
------------------------------------------------------------
Horsehead Industries Inc., nka HH Liquidating Corp., and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York for permission to employ Herrick, Feinstein
LLP as their substitute counsel, nunc pro tunc March 1, 2007.
According to the Debtors, Herrick, Feinstein will replace Cole,
Schotz, Meisel, Forman & Leonard P.A.
On Aug. 22, 2002, the Court entered an order to employ Angel &
Frankel P.C. as the Debtors' counsel. Effective Jan 1, 2006, the
attorneys of Angel & Frankel joined Cole Schotz.
In January and February 2007, Joshua J. Angel, Esq., Frederick
E. Schmidt, Esq., and Seth F. Kornbluth, Esq., each of whom
previously with Angel & Frankel and, later, Cole Schotz, joined
Herrick Feinstein.
For purposes of efficiency and continuity, the same attorneys
from Angel & Frankel should continue their representation of the
Debtors as attorneys of Herrick Feinstein.
The firm will:
a. provide legal advice to the Debtors with respect to their
powers and duties in the continued operations of their
business as debtors-in-possession;
b. prepare, on the Debtors' behalf, all necessary
applications, answers, order and other legal papers
required in connection with the administration of the
Chapter 11 estate;
c. appear before the Court to represent and protect the
Debtors' interest and estate, except as to matters
assigned to other retained counsel;
d. represent the Debtors in any adversary proceeding, either
commenced by or against the Debtors;
e. assist the Debtors in formulation and implementation of a
Chapter 11 plan; and
f. perform all other legal services for the Debtors, as
debtors-in-possession that may be necessary herein.
The firm's professionals and their billing rates are:
Professionals Hourly Rates
------------- ------------
Joshua J. Angel, Esq. $800
Andrew C. Gold, Esq. $625
Paul Rubin, Esq. $550
Eric Sleeper, Esq. $550
John August, Esq. $480
Frederick E. Schmidt, Esq. $355
Seth F. Kornbluth, Esq. $355
Mr. Angel assures the Court that the firm does not hold any
interests adverse to the Debtors' estate and is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Angel can be reached at:
Joshua J. Angel, Esq.
Herrick, Feinstein LLP
2 Park Avenue
New York, New York 10016
Tel: (212) 529-1400
Fax: (212) 529-1500
http://www.herrick.com/
Horsehead Industries Inc. dba Zinc Corporation of America,
the largest zinc producer, filed for chapter 11 protection on
August 19, 2002 in the U.S. Bankruptcy Court for the Southern
District of New York. When the Company filed for protection
from its creditors, it listed $215,579,000 in assets and
$231,152,000 in debts.
INNOVA ROBOTICS: LBB & Associates Expresses Going Concern Doubt
---------------------------------------------------------------
LBB & Associates Ltd. LLP, in Houston, Texas, raised substantial
doubt about Innova Robotics & Automation Inc.'s ability to
continue as a going concern after auditing the company's financial
statements for the year ended Dec. 31, 2006. The auditor pointed
to the company's recurring losses from operations, and the need
for additional financing to fund the company's projected loss in
2007.
For the year ended Dec. 31, 2006, the company posted a $5,607,098
net loss on $1,340,222 of revenues, compared with a $1,881,125 net
loss on zero revenues in the prior year.
At Dec. 31, 2006, the company's balance sheet showed $1,836,606 in
total assets and $5,167,287 in total liabilities, resulting in a
$4,439,459 stockholders' deficit.
A full-text copy of the company's 2006 annual report is available
for free at http://researcharchives.com/t/s?1da5
About Innova Robotics
Headquartered in Fort Myers, Fla., Innova Robotics & Automation,
Inc. fka Innova Holdings Inc. -- http://www.innovaholdings.com/--
through its subsidiaries, provides hardware and software systems-
based solutions to the military, service, personal, and industrial
robotic markets in the United States. It offers nonproprietary
and open-architecture PC controls, software, and related products
for robots and other automated equipment. The company provides
Universal Robot Controller, an open-architecture control system
that operates the robot; and Universal Automation Controller, a
general-purpose motion control system for automated machines.
INTERPOOL INC: Fortress Offer Prompts Fitch's Negative Watch
------------------------------------------------------------
On Friday, April 20, 2007, Interpool Inc. (NYSE: IPX) announced
that it had entered into a definitive agreement to be acquired by
certain private equity funds managed by affiliates of Fortress
Investment Group LLC pursuant to a merger in which all IPX
stockholders would receive $27.10 in cash for each share of IPX
common stock that they hold. The total transaction value,
including assumed debt, is approximately $2.4 billion.
Fitch placed the ratings of Interpool and its related subsidiaries
on Rating Watch Negative on Jan. 17, 2007. The action reflected
Fitch concerns regarding the underlying financing structure of a
proposed acquisition offer led by its current chief executive
officer, Marty Tuchman for $24 per share of common stock.
IPX's board of directors had formed a special committee of
independent directors to review and evaluate Tuchman's acquisition
offer. The special committee, acting through its advisors,
solicited competing offers for the company and negotiated the
terms of the Fortress offer.
In Fitch's view, a sale of IPX to Fortress may result in a
weakening of IPX's financial profile. Therefore, Fitch has
maintained the debt ratings of IPX and its related subsidiaries on
Rating Watch Negative. Ratings could be lowered if IPX's post-
merger financial profile reflects higher leverage, weaker
liquidity, or reduced unencumbered revenue generating assets.
Moreover, a rating downgrade could also entail increased notching
between existing classes of debt.
Fitch notes that currently there are limited details available
regarding Fortress' plans for IPX's balance sheet structure,
including leverage position, equity and the mix of secured and
unsecured debt. However, some comments from Fortress regarding
tender offers for outstanding debt and obtaining new sources of
financing may prove to benefit Interpool's current debt holders.
Fitch will continue to monitor developments and make adjustments
in ratings and the Rating Watch as necessary. However, until
additional details regarding IPX's financial position are more
definitive, Fitch will likely maintain its current rating
position.
Fitch currently rates Interpool and its subsidiaries as, all on
Rating Watch Negative:
Interpool Inc.
-- Long-term Issuer Default Rating 'BB+';
-- Senior unsecured debt 'BB+';
-- Senior secured credit facility 'BBB-'.
Interpool Containers Limited
-- Long-term Issuer Default Rating 'BB+'.
Interpool Capital Trust
-- Preferred stock 'BB-'.
Headquartered in Princeton, New Jersey, with roots dating to 1968,
Interpool Inc. is the holding company for Interpool Limited,
Interpool Containers Limited, and Trac Lease, Inc.
INTERSTATE BAKERIES: Posts $42.2 Million Net Loss in Third Quarter
------------------------------------------------------------------
Interstate Bakeries Corp. reported a net loss of $42.2 million on
net sales of $861.6 million for the sixteen weeks ended
March 10, 2007, compared with a net loss of $42.6 million on net
sales of $874.8 million for the same period ended March 4, 2006.
Wholesale operations net sales for the third quarter of fiscal
2007 were $768.6 million, a decrease of approximately $6 million,
or 0.8%, from net sales of approximately $774.6 million in fiscal
2006. Net sales for the third quarter for fiscal 2007 reflected
unit volume declines of approximately 6.2%, primarily as a result
of sales discontinued as part of the company's restructuring
efforts, reduced demand, and from the effects of a highly
competitive market with increased promotional spending. These
declines were partially offset by an overall unit value increase,
related to selling price increases and product mix changes, of
approximately 6.4% for the third quarter.
Retail operations net sales for the third quarter of fiscal 2007
were approximately $93.1 million, a decrease of approximately
$7.1 million, or 7.2%, from net sales of approximately
$100.2 million for the same period in fiscal 2006. The decline in
revenue is mainly attributable to the closing of retail outlets in
conjunction with the company's restructuring efforts.
The operating loss for the third quarter of fiscal 2007 was
approximately $19.7 million, a decrease of approximately $200,000
from the prior year's operating loss of approximately
$19.9 million.
For the sixteen weeks ended March 10, 2007, reorganization charges
relating to expense or income items that the company incurred
under its bankruptcy proceedings were approximately $10 million.
Reorganization charges for the sixteen weeks ended March 4, 2006,
were approximately $10.3 million.
Net interest expense for the third quarter was approximately
$14.7 million representing a decrease of approximately
$1.8 million when compared to approximately $16.5 million in the
third quarter of fiscal 2006. This decrease resulted primarily
from a $1.6 million decline in the amortized debt fees associated
with the pre-petition and post-petition debt facilities and a
decrease in funded debt levels, offset by slightly higher interest
rates.
Cash Flows
During the forty weeks ended March 10, 2007, the company used
$7.3 million of cash, which was the net impact of $30.8 million in
cash used in operating activities, $68.5 million in cash generated
from investing activities, and $45 million in cash used in
financing activities.
Cash used in operating activities for fiscal 2007 was
$30.8 million, which represents a decrease of $14.5 million from
cash used in fiscal 2006 of $45.3 million.
Cash provided by investing activities during fiscal 2007 was
$68.5 million, $88.1 million more than the cash used during fiscal
2006 of $19.6 million. This significant increase is primarily
attributable to the release, pursuant to the eighth amendment to
the DIP Facility, of restricted cash previously held as collateral
and unavailable to the company in the amount of $89.2 million at
Aug. 25, 2006, the effective date of the eighth amendment to the
DIP Facility.
Cash used in financing activities for fiscal 2007 was $45 million,
primarily due to a reduction in pre-petition secured debt of
$45.4 million. This compares to cash generated from financing
activities in fiscal 2006 which totaled $12 million due mostly to
an increase in pre-petition secured revolving credit facility of
$13.4 million.
Sources of Liquidity and Capital
At March 10, 2007, under its Senior Secured Credit Facility, the
company owed $374.1 million in term loans and $73.4 million in a
revolver loan. In addition, at March 10, 2007, the company had
issued $101.7 million in letters of credit under its revolver
loan.
As of March 10, 2007, the company had approximately $70.9 million
in available cash and $90.9 million available for borrowing under
the DIP Facility. This compares to the $78.2 million in available
cash and $90.1 million available for borrowing under the DIP
Facility as of June 3, 2006. These amounts of available cash
exclude $37.6 million and $26.7 million at March 10, 2007, and
June 3, 2006, respectively, related to checks written in excess of
recorded balances included in accounts payable on the company's
consolidated balance sheets.
At March 10, 2007, the company's balance sheet showed
$1.11 billion in total assets and $1.44 billion in total
liabilities, resulting in a $335.1 million total stockholders'
deficit.
The company's balance sheet at March 10, 2007, also showed
strained liquidity with $360.2 million in total current assets
available to pay $812.2 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the sixteen weeks ended March 10, 2007, are
available for free at http://researcharchives.com/t/s?1dde
About Interstate Bakeries
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh-baked
bread and sweet goods, under various national brand names,
including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and
Drake's(R). Currently, IBC employs more than 25,000 people and
operates 45 bakeries, as well as approximately 800 distribution
centers and approximately 800 bakery outlets throughout the
country. The company and seven of its debtor-affiliates filed for
chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014)
in total debts.
IPCS INC: Closes $475 Million of Senior Secured Notes Offering
--------------------------------------------------------------
iPCS Inc. has closed its offering of $475 million in aggregate
principal amount of senior secured notes, consisting of
$300 million in aggregate principal amount of First Lien Senior
Secured Floating Rate Notes due 2013 and $175 million in aggregate
principal amount of Second Lien Senior Secured Floating Rate Notes
due 2014 in a private placement transaction pursuant to Rule 144A
and Regulation S under the Securities Act of 1933, as amended. The
Notes are senior secured obligations of iPCS and unconditionally
guaranteed on a senior secured basis by all of iPCS's existing and
future domestic restricted subsidiaries.
iPCS also has accepted for purchase and payment $164,975,000
aggregate principal amount of its outstanding 11 1/2% Senior Notes
due 2012 (CUSIP No. 44980YAG2) and $125 million aggregate
principal amount of its 11 3/8% Senior Notes due 2012 (CUSIP No.
44043UAL4) as of the initial acceptance date of today for its
tender offer and consent solicitation. The complete terms and
conditions of the tender offer and consent solicitation are
described in the Offer to Purchase and Consent Solicitation
Statement of iPCS dated April 9, 2007.
iPCS used a portion of the net proceeds from the Notes offering to
repurchase its outstanding 11 1/2% Notes and 11 3/8% Notes
pursuant to the tender offer and consent solicitation. iPCS also
intends to use the remaining net proceeds from the Notes offering,
together with a portion of its available cash, to pay a special
cash dividend to common stockholders and to pay related fees and
expenses of the offering. The special dividend will be in an
aggregate amount of approximately $186 million, which represents
$11 per share. The record date and payment date of the special
cash dividend will be disclosed by iPCS within the next week.
Payment of the special cash dividend, including the amount and
timing, is subject to final approval by iPCS's board of directors.
There can be no assurance that the special cash dividend will be
consummated on the currently proposed terms or at all.
About iPCS Inc.
Headquartered in Schaumburg, Illinois, iPCS Inc. (Nasdaq: IPCS) --
http://www.ipcswirelessinc.com/-- is an affiliate of Sprint
Nextel Corporation with the exclusive right to sell wireless
mobility communications network products and services under the
Sprint brand in 80 markets including markets in Illinois,
Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee. The
territory includes key markets such as Grand Rapids (MI), Fort
Wayne (IN), Tri-Cities (TN), Scranton (PA), Saginaw-Bay City (MI)
and Quad Cities (IA/IL). As of March 31, 2007, iPCS's licensed
territory had a total population of approximately 15 million
residents, of which its wireless network covered approximately
11.4 million residents, and iPCS had approximately 590,900
subscribers.
* * *
As reported in the Troubled Company Reporter on April 11, 2007,
Moody's Investors Service affirmed its B3 corporate family rating
for iPCS Inc. The company's SGL-3 rating has also been affirmed.
Moody's has changed its outlook for iPCS to developing.
JOAN FABRICS: U.S. Trustee Appoints Three-Member Creditors' Panel
-----------------------------------------------------------------
The U.S. Trustee for Region 3 appointed three creditors to serve
on an Official Committee of Unsecured Creditors in Joan Fabrics
Corporation's chapter 11 case.
The three committee members are:
1. Unifi Manufacturing, Inc.
Attn: Charles Floyd McCoy
7201 West Friendly Avenue
Greensboro, NC 27410
Tel: (336) 316-5660
Fax: (336) 856-4364.
2. American Fibers and Yarns, Co.
Attn: John R. Mays
55 Vilcom Circle, Suite 300
Chapel Hill, NC 27514
Tel: (919) 969-4300
Fax: (919) 969-4269.
3. R. L. Stowe Mills, Inc.
Attn: Wayne McCarty
100 North Main Street
Belmont, NC 28012
Tel: (704) 825-5314
Fax: (704) 825-7414.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
expense. They may investigate the Debtor's 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 Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Based in Tyngsboro, Massachusetts, Joan Fabrics Corporation
manufactures automotive and furniture upholstery fabrics. The
company has a manufacturing facility in North Carolina and an
affiliate entity in Mexico.
The Debtor and its affiliate, Madison Avenue Designs, LLC, filed
for Chapter 11 protection on April 10, 2007 (Bankr. D. Del. Case
Nos. 07-10479 and 07-10480). Laura Davis Jones, Esq., Curtis A.
Hehn, Esq., and Michael Seidl, Esq., at Jones Pachulski Stang
Ziehl Young Jones & Weintraub, LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed estimated assets and debts of
$1 million to $100 million. The Debtors' exclusive period to file
a chapter 11 plan expires on Aug. 8, 2007.
JUST FOR FEET: Former Execs Inks Pact Paying $80 Mil. to Creditors
------------------------------------------------------------------
Former key employees of Just For Feet Inc. and the estate of
company founder Harold Ruttenberg have agreed to pay approximately
$80 million in cash to end a lawsuit brought by the Debtor's
trustee, The Birmingham News reported Tuesday.
According to the source, trustee for the Debtor Charles Goldstein
sued the company's leaders, directors and outside auditors
contending that they failed to file for bankruptcy in a timely
manner, deciding instead to refinance debt.
The settlement, which was finalized last month, includes roughly
$41 million of combined payment by five former outside directors
of the Debtor, The Wall Street Journal relates.
Headquartered in Birmingham, Ala., Just For Feet Inc. operates
both large format superstores and smaller specialty stores, each
specializing in brand-name athletic and outdoor footwear and
apparel.
In a 1999 report, the Associated Press said that the shoe retailer
sought chapter 11 protection a day after missing an $11 million
interest payment on $200 million in bond debt and less than a week
after it announced it would close 85 specialty shops.
KARA HOMES: Gets Court Approval to Hire DJM Assets as Appraiser
---------------------------------------------------------------
The United States Bankruptcy Court for the District of New Jersey
gave Kara Homes Inc. permission to employ DJM Asset Management LLC
as its appraiser.
The Debtor tells the Court that it selected DJM Assets because of
its knowledge, expertise and experience with valuation services in
the real estate industry.
The firm is expected to provide liquidation analysis for each
residential development outline on the Debtor's addendum to the
agreement dated March 15, 2007.
The firm discloses that it will cost the Debtor $85,000 in total
fees for the residential development. In addition, out-of-pocket
expenses will be billed at cost under separate invoice.
Matthew L. Rufrano, DJM Assets' managing director, assures the
Court that the firm does not hold any interest adverse to the
Debtor's estate and is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
Mr. Rufrano can be reached at:
Matthew L. Rufrano, MAI
Managing Director
DJM Assets Management LLC
445 Broad Hollow Road, Suite 417
Melville, NY 11747
Tel: (631) 927-0037
Fax: (631) 752-1231
http://www.djmasset.com/
A full-text copy of Kara Homes' Addendum is available for free
at http://ResearchArchives.com/t/s?1de4
A full-text copy of Kara Home and DJM Assets' Agreement is also
available for free at http://ResearchArchives.com/t/s?1de5
Headquartered in East Brunswick, New Jersey, Kara Homes Inc.
aka Kara Homes Development LLC, builds single-family homes,
condominiums, town homes, and active-adult communities. The
company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. D.
N.J. Case No. 06-19626). On Oct. 9, 2006, nine affiliates filed
separate chapter 11 petitions in the same Bankruptcy Court. On
Oct. 10, 2006, 12 more affiliates filed chapter 11 petitions.
David L. Bruck, Esq., at Greenbaum, Rowe, Smith, et al.,
represents the Debtors. Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard represents the Official Committee of
Unsecured Creditors. Traxi LLC serves as the Debtors' crisis
manager. The Debtors engaged Perry M. Mandarino as chief
restructuring officer, and Anthony Pacchia as chief financial
officer. When Kara Homes filed for protection from its creditors,
it listed total assets of $350,179,841 and total debts of
$296,840,591.
LEBARON DRYWALL: Files Schedule of Assets and Liabilities
---------------------------------------------------------
LeBaron Drywall Inc. delivered to the U.S. Bankruptcy Court for
the District of Alaska, its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $18,955,000
B. Personal Property 129
C. Property Claimed
as Exempt
D. Creditors Holding $13,379,795
Secured Claims
E. Creditors Holding 53,511
Unsecured Priority Claims
F. Creditors Holding 287,289
Unsecured Nonpriority
Claims
---------- -----------
Total $18,955,129 $13,720,595
Headquartered in Anchorage, Alaska, LeBaron Drywall, Inc. builds
condominiums. The company filed for Chapter 11 protection on
February 21, 2007 (Bankr. D. Alaska Case No. 07-00070). John C.
Siemers, Esq., at Burr Pease & Kurtz, represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed estimated assets and debts of $1 million
to $100 million.
LOCAL TV: Moody's Junks Rating on $190 Million Senior Notes
-----------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
Local TV Finance, LLC. Additionally, Moody's assigned a Ba3
rating to Local TV's proposed $305 million senior secured credit
facility ($30 million 6-year senior secured revolving credit
facility, $275 million 6-year senior secured first lien term loan
facility) and a Caa1 rating to its proposed $190 million 8-year
senior notes.
Proceeds of $465 million from the term loan facility and senior
notes along with $130 million of cash equity from the new equity
sponsors, Oak Hill Capital Partners, will be used by Local TV, LLC
(Local TV's parent) to finance the acquisition of nine television
stations and related assets from The New York Times Company for
$575 million (excluding fees and expenses). The acquisition is
expected to close in May of 2007. This is the first time that
Moody's has assigned ratings to Local TV Finance, LLC.
The B2 rating reflects significant debt to EBITDA leverage of 8.4x
(pro forma 2006) and modest free cash flow generation that Moody's
believes will allow for only limited debt reduction over the
rating horizon. The rating further reflects the company's modest
scale, the inherent cyclicality of advertising spending and the
increasing business risk associated with the broadcast television
industry as advertising spending gets diversified over a growing
number of media.
The company's rating is supported by the diversity of Local TV's
network affiliations, lack of revenue concentration in any one
particular market, the #1 or #2 position in local news audience
and revenue share in most of its markets and Moody's expectation
of improvement in EBITDA margins through cost reduction
initiatives for the station assets as a stand-alone company.
Ratings/assessments assigned:
Local TV Finance, LLC
* Corporate family rating - B2
* Probability-of-default rating -- B2
* $30 million 6-year Senior Secured Revolving Credit Facility
-- Ba3 (LGD 2, 27%)
* $275 million 6-year Senior Secured First Lien Term Loan
-- Ba3 (LGD 2, 27%)
* $190 million 8-year Senior notes -- Caa1 (LGD 5, 82%)
The rating outlook is Stable.
Local TV Finance, LLC, headquartered in Ft. Worth, Texas, will own
nine television broadcasting stations in eight mid-sized markets
upon completion of the proposed acquisition from The New York
Times Company.
LOCAL TV: S&P Junks Rating on Proposed $190 Million Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Local TV LLC and its operating subsidiary, Local
TV Finance LLC, which are analyzed on a consolidated basis. The
outlook is negative.
At the same time, Standard & Poor's assigned its bank loan and
recovery ratings to Local TV's proposed $305 million senior
secured credit facilities due 2013. The credit facilities are
rated 'B', at the same level as the corporate credit rating, with
a recovery rating of '3', indicating an expectation of meaningful
(50%-80%) recovery of principal in the event of a payment default.
The proposed credit facilities consist of a $30 million revolving
credit facility and a $275 million term loan, both due 2013. S&P
also assigned its 'CCC+' rating, two notches below the corporate
credit rating, to the company's proposed $190 million Rule 144A
offering of senior unsecured notes due 2015.
Proceeds from the transaction will be used to finance the
acquisition of the New York Times television stations by Local TV
LLC, a wholly owned investment of Oak Hill Capital Partners. Pro
forma for the proposed transaction, total debt outstanding as of
Dec. 31, 2006, was $465 million.
"The ratings reflect the company's high debt leverage, weak
conversion of EBITDA into discretionary cash flow because of
increased interest expense, high sensitivity to election cycles,
and TV broadcasting's mature revenue growth prospects," said
Standard & Poor's credit analyst Deborah Kinzer.
These factors are only partially offset by Local TV's good cash
flow diversity among its major-network-affiliated TV stations in
midsize markets, competitive local news positions in most of its
markets, broadcasting's good margin and discretionary cash flow
potential, and strong station asset values.
MARINER ENERGY: Inks Amended & Consent Agreement with Union Bank
----------------------------------------------------------------
Mariner Energy Inc. and it affiliates Mariner Energy Resources
entered into a Amendment No. 3 and Consent to Credit Agreement,
dated as of April 23, 2007, with Union Bank of California N.A.,
as administrative agent, which further amends the Amended and
Restated Credit Agreement, dated as of March 2, 2006, to increase
from $350 million to $600 million the aggregate principal amount
of certain unsecured bonds that the company may issue with a non-
default interest rate of 10% or less per annum and a scheduled
maturity date after March 1, 2012.
Under the Amended Credit Agreement, it provides that the new bond
issuance of up to $300 million before May 1, 2007, will remain at
its current level of $450 million, subject to adjustment under the
Credit Agreement.
A full-text copy of the Amended No. 3 and Consent is available for
free at http://ResearchArchives.com/t/s?1de2
Based in Houston, Tex., Mariner Energy, Inc. explores, develops,
and produces oil and natural gas with principal operations in the
Gulf of Mexico and West Texas.
MARINER ENERGY: Launches $200 Million Senior Notes Offering
-----------------------------------------------------------
Mariner Energy Inc. intends to offer $200 million aggregate
principal amount of senior notes due 2017 through an underwritten
public offering.
The company said it will use the net proceeds from the offering to
repay debt under its secured bank credit facility. The company
can not provide assurance regarding the amount of notes to be
issued, if any, until the offering has been completed.
J.P. Morgan Securities Inc. acts as sole book-running manager of
the offering. The offering of notes will be made only by means of
a prospectus, copies of which may be obtained from J.P. Morgan
Securities Inc., 270 Park Ave., 8th Floor, New York, NY 10019,
Tel: 212-834-4555.
Based in Houston, Tex., Mariner Energy, Inc. explores, develops,
and produces oil and natural gas with principal operations in the
Gulf of Mexico and West Texas.
MARINER ENERGY: Moody's Rates Proposed $200MM Senior Notes at B3
----------------------------------------------------------------
Moody's assigned a B3 rating to Mariner Energy, Inc.'s proposed
offering of at least $200 million of senior unsecured notes (the
proceeds of which will be used to repay secured revolver
borrowings) and affirmed the company's B2 corporate family rating.
Simultaneously, Moody's upgraded the company's existing
$250 million 7.5% senior unsecured notes, and assigned a
speculative grade liquidity rating of SGL-2. The outlook is
stable.
The ratings for the new notes reflect both the overall probability
of default of the company, which Moody's affirms the B2 PDR, and
an instrument level loss given default of LGD 5 (72%). The one
notch upgrade of the company's existing senior unsecured notes
rating reflects a lower expected loss driven largely by the lower
proportion of secured debt ahead of the senior unsecured notes.
The affirmation of the B2 CFR reflects company's ability to
demonstrate sequential quarterly production gains post the
acquisition of Forest Oil's Gulf of Mexico assets in Q1'06 and the
increased scale this acquisition provided which places Mariner in
line with the B2 peer group on a proved reserve basis (though on a
proven developed reserve basis is still below the peer average).
The affirmation also reflects the company's slightly improved
drillbit finding and development cost as it replaced nearly 200%
of production, excluding the impact of the Forest asset
acquisition while the sector in general has seen its drillbit F&D
costs rise significantly in 2006. However, due to the Forest
asset acquisition, the company's 3-year all sources F&D for 2006
was about $19.43/boe versus $9.20/boe for 2005, resulting in a
total full cycle costs of about $33.57/boe. While this costs
structure is higher than year-ago levels, it currently compares
favorably to the B2 peer group.
However, the B2 rating is tempered by the company's higher than
expected leverage on the proven developed reserves, which pro
forma for the bond offering is approximately $9.12/boe. While
Mariner's leverage on the PD reserve base is on the lower end of
the B2 peer group (but still higher than the higher rated peers),
Mariner's PD reserve life of 3.9 years increases an already high
reinvestment risk and this risk would be amplified with additional
leverage.
In addition, Moody's believes that leverage could stay somewhat
elevated given the bulk of the pro forma debt is long-term debt
and that the company has a large development program this year
that could result in additional debt throughout the year. The B2
also reflects Moody's expectation that the company will be
somewhat acquisitive as it seeks to ultimately transform itself
into more of an onshore company with acquisitions that could
contain a significant debt component. Further, the future capital
required to develop the company's proven undeveloped reserves is
very high resulting in a debt plus future development capital to
total proved reserves of about $14.00/boe. Moody's considers this
very high for the rating and highlights the significant amount of
future capital requirements the company faces to develop its
current inventory of PUDs.
Moody's notes that as long commodity prices are supportive and the
company's cash on cash margins do not deteriorate, the current
ratings can accommodate some strategic acquisitions funded with a
significant debt component. The ratings outlook is stable
reflecting the expectation that the company continues its
sequential quarterly production gains and that the company reports
solid reserve replacement at sustainable costs. A positive
outlook and/or upgrade would be considered if the company reduces
its leverage on the PD reserves while still demonstrating
consistent production gains, reserve replacement and cost
improvement.
The stable outlook assumes that the company will continue to mount
sequential quarter production gains; that costs remain
competitive; and that leverage will be no higher than current
levels and will start to improve by the end of 2007. A positive
outlook and/or upgrade will be considered upon leverage trending
towards the $7.00/boe range (assuming commodity prices are still
very supportive) and that the company's capital productivity (F&D
costs and reserve replacement) continue their current trends. A
largely equity funded acquisition that is viewed to add
diversification and durability to the existing reserve and
productive base would be a ratings positive.
The SGL-2 rating reflects the company's very good liquidity
position as its internal cashflow should be sufficient to cover
planned capex, interest expense, and working capital needs. In
addition, Moody's expects the company will have at least $300
million available under its revolving credit facility and should
be comfortably within the facilities maintenance covenants, thus
ensuring accessibility over the next four quarters.
The SGL-2 is tempered by the continued exposure to commodity price
movements that could impact cashflows (though the company has
hedged a significant portion of production) and that the revolver
lenders are secured be essentially all of Mariner's assets,
leaving no significant alternate source of readily available
liquidity.
Mariner Energy, Inc., headquartered in Houston, Texas, is engaged
in the exploration and production of oil and gas primarily in the
Gulf of Mexico and West Texas.
MARINER ENERGY: S&P Rates Proposed $200 Mil. Notes Offering at B-
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on oil and gas exploration and production company
Mariner Energy Inc. and revised the outlook on the company to
positive from stable.
At the same time, Standard & Poor's assigned its 'B-' rating to
Mariner's proposed $200 million senior unsecured note offering.
Proceeds for the offering will be used to repay outstanding
borrowings on Mariner's credit facility.
Pro forma the transaction, Houston-based Mariner should have
around $650 million of debt outstanding.
"The new outlook reflects the improvements, both operational and
financial, since the close of Mariner's acquisition of Forest
Energy Resources Inc. in early 2006," said Standard & Poor's
credit analyst Paul B. Harvey.
"If Mariner is able to continue its strong operational and
financial performance, while further integrating the Forest
assets, we could its rating over the next 12 to18 months," said
Mr. Harvey.
The ratings on Mariner reflect its aggressive growth and
exploration strategy, elevated debt leverage, and short reserve
life reflective of its small, concentrated reserve base focused in
the Gulf of Mexico.
MILLENNIUM INORGANIC: Moody's Puts Corporate Family Rating at B2
----------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
Millennium Inorganic Chemicals, Inc. in connection with National
Titanium Dioxide's proposed acquisition of MIC from Lyondell
Chemical Company.
Moody's also assigned Ba3 ratings to the company's $550 million
first lien credit facilities and a B3 rating to its $230 million
second lien term loan. The total transaction consideration is
approximately $1.146 billion including fees and expenses, which is
expected to be financed with aggregated proceeds of $780 million
from first and second lien term loan facilities, roughly $350
million in cash equity and $16 million of assumed debt held in
Brazil. A new $100 million first lien revolving credit facility
is projected to be undrawn at close. The ratings outlook is
stable; this is a first time rating for Millennium Inorganic
Chemicals, Inc.
MIC's corporate family rating is constrained by:
(1) limited free cash flow generation,
(2) a weakening of TiO2 supply/demand fundamentals over the
intermediate term,
(3) some uncertainty over the timing of a sustained
improvement to MIC's manufacturing costs and production
volumes,
(4) single product nature of the business,
(5) significant customer concentration, and
(6) the narrow financial disclosure going forward, due to the
lack of SEC filings.
MIC's ratings anticipate that management will be able to achieve
6-8% operating margins within the next two years; however, Moody's
does not expect the company to generate any significant free cash
flow or meaningfully reduce debt over this timeframe. Free cash
flow will likely be limited due to the level of capital
expenditures required to improve production volumes and operating
efficiencies to industry norms. "The new management at Millennium
must overcome a history of poor operating performance," says
Moody's Senior Vice President John Rogers. Under Moody's Global
Chemical Industry rating methodology, the company's metrics map to
the upper end of the "B" rating category. The key rating factors
currently influencing the B2 rating are Financial Strength,
Management Strategy and Business Profile.
The company's stable outlook is supported by:
(1) its position as the second-largest global producer of
TiO2,
(2) an experienced management team that has successfully
managed the substantial expansion of Cristal's low-cost
facility in Yanbu, Saudi Arabia,
(3) large production facilities in the US, Europe and Asia,
(4) the ability to expand higher margin non-pigment product
lines, and
(5) restrictive covenants in the credit facilities that limit
dividends.
If MIC can generate in excess of $160 million of EBITDA within the
first year of operation and maintain pigment production volumes in
excess of 635 thousand metric tonnes (95% of nameplate capacity)
per annum, Moody's could raise the company's ratings, providing
pigment prices stabilize. Pro forma credit metrics are difficult
to estimate given the magnitude of the operational problems at
Millennium over the past year. However, based on a modest
discount to industry norms, pro forma debt to EBITDA is likely to
be in the range of 5.0-5.5 times.
The notching of the revolver and the first lien term loan to Ba3,
two notches above the corporate family rating, reflects the strong
collateral package and access to the vast majority of assets
including international assets. The notching of the second lien
term loan to B3, one notch below the corporate family rating,
reflects the substantial value of the collateral. However, the
current draft of the credit facilities does have a provision for a
$100 million accordion facility in the first lien term loan, which
could adversely affect the second lien's recovery value. Moody's
believes that this accordion facility could be used to acquire
additional assets or fund a significant capacity expansion.
Millennium Inorganic Chemicals, Inc.:
* Corporate Family Rating, B2
* Probability of Default Rating, B2
* $100 million Guaranteed First Lien Revolving Credit Facility
due 2012, Ba3 (LGD3, 30%)
* $550 million First Lien Term Loan due 2014, Ba3 (LGD3, 30%)
* $230 million Second Lien Term Loan due 2014, B3 (LGD5, 77%)
The ratings are subject to the review of executed documents.
Millennium Inorganic Chemicals, to be headquartered in Hunt
Valley, Maryland, is the world's second largest producer of
titanium dioxide. The company is also a producer of performance
chemicals, including TiCl4 and ultrafine TiO2. Revenues were
$1.3 billion for the year ending December 31, 2006. MIC is
expected to become a wholly owned subsidiary of The National
Titanium Dioxide Company Limited, which has a large TiO2 facility
in Yanbu, Saudi Arabia.
MORTGAGE ASSET: Fitch Cuts Rating on 2002-OPT1 Class M-6 to BB-
---------------------------------------------------------------
Fitch has taken rating actions on these Mortgage Asset
Securitization Transactions Asset Back Securities Trust mortgage
pass-through certificates:
Series 2002-OPT1
-- Class M-2 affirmed at 'AAA';
-- Class M-3 affirmed at 'AA';
-- Class M-4 affirmed at 'A+';
-- Class M-5 affirmed at 'BBB';
-- Class M-6 downgraded to 'BB-' from 'BBB-'.
Series 2003-WMC2
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'A-';
-- Class M-4 affirmed at 'BBB+'
-- Class M-5 affirmed at 'BBB';
-- Class M-6 downgraded to 'BB+' from 'BBB-'.
Series 2005-NC2
-- Classes A-1 through A-4 affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'AA+';
-- Class M-3 affirmed at 'AA+';
-- Class M-4 affirmed at 'AA';
-- Class M-5 affirmed at 'AA-';
-- Class M-6 affirmed at 'A+';
-- Class M-7 affirmed at 'A-';
-- Class M-8 affirmed at 'BBB+';
-- Class M-9 affirmed at 'BBB';
-- Class M-10 is rated 'BBB' and placed on Rating Watch
Negative;
-- Class M-11 is rated 'BBB-' and placed on Rating Watch
Negative.
The affirmations, affecting approximately $735 million of the
outstanding certificates, are taken as a result of a stable
relationship between credit enhancement and expected loss. The
downgrades, affecting approximately $6.9 million of the
outstanding certificates, are taken as a result of deterioration
in the relationship between CE and expected loss. The Rating
Watch Negative affects approximately $13.1 million of the
outstanding certificates.
The collateral of series 2002-OPT1 and series 2003-WMC2 primarily
consists of fixed-rate and adjustable-rate subprime mortgage loans
secured by first and second liens on one- to four-family
residential properties. The collateral of series 2005-NC2
primarily consists of adjustable-rate, interest-only, subprime
mortgage loans secured by first liens on one- to four-family
residential properties. The loans underlying series 2002-OPT1
were originated or acquired by Option One Mortgage Corp. and are
serviced by Option One Mortgage Corp. (rated 'RPS1' by Fitch).
The loans underlying 2003-WMC2 were originated or acquired by WMC,
a mortgage banking company incorporated in the State of California
and are services by Chase Home Finance, LLC (rated 'RPS1' by
Fitch). The loans underlying series 2005-NC2 were originated or
acquired by New Century Mortgage Corp. and are serviced by Ocwen
Financial Corp. (rated 'RPS2' by Fitch).
Series 2005-NC2, classes M-10 and M-11 are placed on Rating Watch
Negative because of current trends in the relationship between
serious delinquency and credit enhancement. This transaction has
6.8% of the current collateral balance in foreclosure and REO. In
addition, the 60+ DQ (including loans in bankruptcy, FC, and REO)
is 12.0% of the current collateral balance, which is relatively
high compared to the subprime industry average. The OC is
currently at target and providing 2.5% in credit enhancement to
class M-12, which is not rated by Fitch. In addition, the
annualized excess spread currently available to absorb losses is
0.51%.
As of the March 2007 distribution date, series 2002-OPT1 has a
pool factor (i.e., current mortgage loans outstanding as a
percentage of the initial pool) of 8% and is seasoned 52 months.
Series 2003-WMC2 has a pool factor of 8% and is seasoned 42
months. Series 2005-NC2 has a pool factor of 72% and is seasoned
16 months.
MORTGAGE ASSET: Fitch Junks Rating on Three Certificates Classes
----------------------------------------------------------------
Fitch Ratings has taken rating action on these Mortgage Asset
Securitization Transactions Second Lien mortgage pass-through
certificates:
Series 2005-1
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'A-';
-- Class M-4 affirmed at 'BBB+';
-- Class M-5 affirmed at 'BBB';
-- Class M-6 downgraded to 'BB+' from 'BBB-';
-- Class M-7 downgraded to 'CC' from 'BB+' and assigned a
Distressed Recovery rating of 'DR4';
-- Class M-8 downgraded to 'C/DR6' from 'B-/DR2';
-- Class M-9 downgraded to 'C/DR6' from 'CC/DR3'.
The affirmations affect approximately $105.5 million of the
outstanding certificates. The downgrades affect approximately
$15.2 million of the outstanding certificates. Fitch previously
took negative rating action on the above transaction in July 2006,
November 2006, and February 2007.
The above transaction was structured to have growing
overcollateralization after a three-month OC holiday. The OC
never reached its targeted level of $8.4 million (3.4% of the
original collateral balance) and was completely eroded as of the
November 2006 distribution date. Since then, monthly collateral
losses have continued to exceed excess spread causing the M-10
bond to be completely written-down in March 2007 and the M-9 bond
to incur principal write-downs. The write-downs are the result of
loss and deterioration in the dollar amount of excess spread due
to much faster-than-expected prepayments and rising interest
rates.
The collateral of the above transaction consists of fixed-rate
loans secured by second liens on residential properties. The
loans were originated by various originators and are serviced by
Irwin Home Equity Corp. (rated 'RPS2' by Fitch). The transaction
is master serviced by Wells Fargo Bank, N.A. (rated 'RMS1').
The cumulative loss is $13.1 million or 5.3% of the original
collateral balance. The above transaction is seasoned 18 months
and has a pool factor (i.e., current mortgage loans outstanding as
a percentage of the initial pool) of 49%.
Fitch will continue to closely monitor the transaction.
MORTGAGE ASSET: Fitch Holds BB+ Rating on Class B-4 Certificates
----------------------------------------------------------------
Fitch Ratings has taken rating actions on these Mortgage Asset
Securitization Transactions, Inc. Alternative Loan Trust mortgage
pass-through certificates:
Series 2003-4
-- Class A affirmed at 'AAA';
-- Class B-1 upgraded to 'AAA' from 'AA+';
-- Class B-2 affirmed at 'AA-';
-- Class B-4 affirmed at 'BB+'.
The affirmations, affecting approximately $117 million of the
outstanding certificates, reflect a stable relationship between
credit enhancement and expected loss. The upgrade, affecting
approximately $9.6 million of the outstanding certificates,
reflects an improvement in the relationship between CE and
expected loss. Classes B-3, B-5, and B-6 are not rated by Fitch.
The CE for all Fitch rated classes has more than doubled since
issuance. In addition, the 90+ delinquency (including bankruptcy,
foreclosure, and REO) is only 0.54% of the current collateral
balance. The transaction has experienced approximately $282,000
in cumulative loss to date.
The collateral of the above transaction primarily consists of
fixed-rate mortgage loans extended to Alt-A borrowers and secured
by first liens on one- to four-family residential properties. The
loans were originated by various originators and are service by
various servicers. The transaction is master serviced by Wells
Fargo Bank Minnesota, N.A., which is rated 'RPS1' by Fitch.
As of the March 2007 distribution date, the transaction has a pool
factor (current mortgage loan principal outstanding as a
percentage of the initial pool) of approximately 29% and is 46
months seasoned.
NEW CENTURY: Wants Hennigan Bennett as Special Litigation Counsel
-----------------------------------------------------------------
New Century Financial Corporation and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware for
authority to employ Hennigan, Bennett & Dorman LLP, as their
special litigation counsel, nunc pro tunc to April 6, 2007.
On April 5, 2007, UBS Real Estate Securities Inc. filed a
complaint against the Debtors, initiating Adversary Proceeding
No. 07-50875. Concurrent with its filing, UBS filed a request
seeking a temporary restraining order and preliminary injunctive
relief.
The Debtors decided to employ HBD as their special litigation
counsel to avoid any issues with respect to actual or potential
conflicts of interest arising from the fact that UBS and certain
of its affiliates are a client of the Debtors' principal
bankruptcy counsel.
Monika L. McCarthy, senior vice president and assistant general
counsel of New Century Financial Corp., relates that HBD has
experience in virtually all aspects of the law that may arise in
connection with the proposed representation. Of particular
relevance to the Debtors' Chapter 11 cases is HBD's experience it
acquired in dealing with true sale issues arising in connection
with certain financing transactions. It has served as special
litigation counsel in connection with In re LTV Steel Company,
Case No. 00-43866 (Bankr. N.D. Ohio), and has dealt with similar
issues for several clients in the Enron Chapter 11 cases.
HBD will provide, among other things, ordinary and necessary
legal services as may be required in connection with:
-- the UBS Adversary Proceeding, including the requests by
UBS for a temporary restraining order and preliminary
injunctive relief; and
-- representing the Debtors in other bankruptcy and
commercial litigation matters.
The Debtors do not intend for HBD to be responsible for the
provision of substantive legal advice outside of the insolvency
and business litigation areas; and to devote attention to, form
professional opinions as to, or advise the Debtors with respect
to its disclosure obligations under federal securities or other
non-bankruptcy laws or agreements.
The Debtors will pay HBD according to its customary hourly rates:
Attorneys $245 - $805
Financial Consultants $415 - $635
Paralegals, Clerks $65 - $255
The Debtors will reimburse the firm for reasonable costs and
expenses incurred in connection with the Debtors' Chapter 11
cases.
In addition, HBD will charge a reasonable fee for services
rendered, which fee is based upon not only the total number of
hours charged at guideline hourly rates, but also upon other
factors as the complexity of the problems presented to the firm;
amounts at issue; nature, quality and extent of the opposition
encountered; results accomplished; skill exercised to achieve the
results; extent of services rendered; and extent to which HBD is
at risk in being paid.
After confirmation of a plan of reorganization, HBD will assess
and determine the amount of its total fee. To the extent the fee
exceeds the total number of hours of service provided charged at
guideline hourly rates, it would consult with the Debtors before
setting the final fee.
HBD has advised the Debtors that it has not, does not, and will
not represent any interested party with respect to matters
related to the Debtors' Chapter 11 cases.
Bruce Bennett, a partner at HBD, discloses that it serves or has
served as counsel in matters unrelated to the Debtors' Chapter 11
cases where certain of the interested parties were adverse to
HBD's clients. The firm also currently represents Maguire
Properties, Inc., and certain of its affiliates in matters
unrelated to the Debtors' cases.
In addition, the firm represents Deutsche Asset Management,
certain affiliates of which has been identified as creditors of
the Debtors. HBD will not represent Maguire or DAM in matters
relating to the Debtors or their Chapter 11 cases, he assures the
Court.
Mr. Bennett assures the Court that HBD represents no interest
adverse to the Debtors.
About New Century
Founded in 1995 and headquartered in Irvine, California, New
Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/
-- is a real estate investment trust, providing mortgage products
to borrowers nationwide through its operating subsidiaries, New
Century Mortgage Corporation and Home123 Corporation. The company
offers a broad range of mortgage products designed to meet the
needs of all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. When the
Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950. The Debtors'
exclusive period to file a chapter 11 plan expires on July 31,
2007. (New Century Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
NEW CENTURY: Wants Incentive and Employee-Retention Plans Approved
------------------------------------------------------------------
New Century Financial Corporation and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware to approve
their incentive and employee-retention plans, and authorize
payments, as administrative expenses of the estates, to members of
senior management and certain key employees pursuant to the plans.
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, proposed counsel to the Debtors, relates
that the plans are critical to encourage and to motivate the
Debtors' workforce during this tumultuous period.
Mr. Collins explains that, after years of growth into one of the
largest sub-prime originators and purchasers in the nation, over
the past several months, the Debtors have been weathering the
effects of a restatement of financial results, a termination of
financing for operations, the freeze of operations of the
Debtors' substantial loan origination business and major
reductions in force.
The Debtors are suddenly in the process of selling substantially
all of their assets, and doing so in an expedited fashion in an
effort to maximize value while the window of opportunity is still
open. As part of the Debtors' efforts to negotiate and close the
sales transactions with Carrington Capital Management, LLC, and
Greenwich Capital Financial Products, Inc., solicit potential
overbidders for these sales and solicit bidders for other assets,
the Debtors' employees have been called upon to take on
responsibilities and expend significantly more time and effort
than contemplated by the normal terms of their employment.
Accordingly, at this time, the Debtors require the means to
motivate leadership and to address steeply declining morale of
their employees.
To properly and fairly incentivize and reward the performance of
critical employees for the benefit of the estates, the board of
directors of the Debtors approved the formation of the Executive
Incentive Plan and Key Employee Incentive Retention Plan.
Under the Executive Incentive Plan, the Debtors intend to provide
incentives to members of senior management upon the consummation
of sales of assets at minimum threshold levels. Payments under
the plan are 100% contingent upon the Debtors' successful
completion of asset sales -- thereby aligning the interests of
management with stakeholders. Moreover, senior management will
get nothing if it receives commensurate offers of employment as
part of a transaction.
Under the Key Employee Incentive Retention Plan, the Debtors
intend to pay bonuses key employees, including employees under
their wholesale and retail loan origination business, who remain
with the Debtors while the asset sales are being completed. The
Debtors seek to pay $2,800,000 for retention bonuses plus a
limited $250,000 critical retention pool to be used for
unforeseen, extraordinary circumstances.
Executive Incentive Plan
The EIP is designed to provide the participants with greater
compensation in the event that they obtain greater value for the
Debtors' estates and creditors.
The Debtors propose that conditioned upon the occurrence of
either the closing of the asset sales to Carrington and Greenwich
or transactions that are higher or otherwise better and the
Debtors' other assets, a pool of funds be made available to the
EIP Participants. The Debtors further propose that the EIP
Compensation Pool increase only as the value available to pay to
stakeholders increases.
The size realization of various transaction values to enable EIP
Participants to participate in "upside" opportunities, broken
into four components:
(1) Servicing Assets Sale: The contribution, if any, upon the
consummation of the Servicing Assets Sale will be
calculated based on the extent to which the ratio of (i)
the net liquidation price to (ii) the principal amount of
loans held by securitization trusts and third party whole
loan purchasers for which the company has mortgage service
rights equals or exceeds 50.0. There will be no Servicing
Asset Sale Contribution if BPS is less than 50.0. If BPS
is equal to 50.0, the Servicing Assets Sale Contribution
will be $1,164,405. If BPS is greater than 50.0, the
Servicing Assets Sale Contribution will be increased
proportionately.
(2) Mortgage Assets Sale: The contribution, if any, upon the
consummation of the Mortgage Assets Sale will be based on
the extent to which the liquidation price equals or
exceeds $47,000,000.
Liquidation Price Contribution
----------------- ------------
less than $47 mil. None
equal to $47 mil. $419,820
greater than $47 mil. $419,820 plus
2% of excess of $47 mil.
(3) WRO Assets Sale: The contribution, if any, upon the
consummation of the WRO Assets Sale will be based on the
extent to which the liquidation price equals or exceeds
the WRO Assets Sale target price.
Liquidation Price Contribution
----------------- ------------
Less than Target Price None
Equal to Target Price $1,584,225
Exceeds Target Price $1,584,225 plus
2% of excess of Target Price
(4) RPML Sale: The contribution upon the consummation of the
RPML Sale to the extent that the company manages to sell
the assets will be equal to 0.5% of the liquidation price.
The EIP Participants are the CEO plus seven members of the
Debtors' executive management team. Participation in the EIP
affords the EIP Participants the opportunity to receive incentive
pay targeted at a range of between 45% and 90% of their base
annual salary. EIP Participants will be eligible for
distributions within 50 days after each of the asset sales
closes.
Key Employee Incentive Retention Plan
The successful consummation of the Carrington and Greenwich deals
and potential sale of the Debtors' other businesses, in turn,
depend upon the Debtors' ability to retain certain non-executive
employees with the knowledge and skill to continue the Debtors'
business operations, Mr. Collins relates.
Under the KEIRP, the Debtors intend to provide:
(i) employee retention pay to certain key employees based on
their continued employment with the Debtors in the maximum
aggregate of $2,800,000, and
(ii) sales-incentive pay to certain key employees based on the
successful completion of asset sales.
The KEIRP applies to 123 employees. KEIRP Participants fall into
five tiers:
* Tiers I and II: Tiers I and II are eligible for bonuses
in the amount of 35% and 45% of base salary, respectively.
Of the total bonus pay to these participants, 45% is
employee retention pay that is conditioned upon a
participant's continued employment by the Debtors on
July 9, 2007.
* Tiers III and IV: Tiers III and IV are eligible for
bonuses in the amount of 15% and 25% of base salary,
respectively. They will receive 100% of bonus pay upon
the continued employment with the Debtors on July 9, 2007.
Bonus pay is not conditioned upon results in the Debtors'
asset sales.
* Tier V: Tier V participants are employees of the Debtors'
Servicing Business. The employees are eligible for
employee retention bonuses upon their continued employment
with the Debtors on June 9, 2007, and their bonus pay is
not conditioned upon results in the Debtors' asset sales.
Critical Retention Pool
In addition, the company will contribute $250,000 to finance
bonuses to be paid under the Plan. The Critical Retention Pool
may be distributed by the company in its sole discretion, in
addition to any Retention Bonuses or Incentive Bonuses, to
recognize contributions made by the company's employees receiving
the bonuses toward increasing the liquidation value of the
company's assets.
U.S. Trustee Wants More Time to Review
Kelly Beaudin Stapleton, the United States Trustee for Region 3,
asks the Court to give parties-in-interest more time to review the
Debtors' request to make sale-related incentive payment to senior
management and retain incentive pay to certain employees.
Joseph J. McMahon, Jr., Esq., U.S. trial attorney for the United
States Department of Justice, Office of the United States
Trustee, in Wilmington, Delaware, says the Debtors' analysis for
an expedited consideration of their request can be reduced to
this statement: "[W]e need to have the EIP/KEIRP Motion heard on
April 24 because there is an unsubstantiated risk that our
employees may become distracted."
The Debtors' analysis does not justify expedited review of the
request, Mr. McMahon contends. Given that the Debtors are no
longer originating mortgage loans, the employees who stand to
benefit the most from the Debtors' request should have
substantially reduced duties and, accordingly, there is no trade-
off between their attention to ordinary-course operations and the
activity in the bankruptcy cases, Mr. McMahon explains.
Rather, Mr. McMahon notes, the compelling interest that the U.S.
Trustee and other parties-in-interest have in conducting a
thorough review of the Debtors' proposal to commit substantial
amounts of estate property to employees in the liquidating cases
should be the paramount consideration in scheduling the Debtors'
request for hearing.
The Honorable Kevin J. Carey will convene a hearing to consider
the Debtors' request on May 7, 2007, at 10:00 a.m. Objections, if
any, are due April 30.
About New Century
Founded in 1995 and headquartered in Irvine, California, New
Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/
-- is a real estate investment trust, providing mortgage products
to borrowers nationwide through its operating subsidiaries, New
Century Mortgage Corporation and Home123 Corporation. The company
offers a broad range of mortgage products designed to meet the
needs of all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. When the
Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950. The Debtors'
exclusive period to file a chapter 11 plan expires on July 31,
2007. (New Century Bankruptcy News, Issue No. 5 and 6; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
NEW CENTURY: NYSE Delists New Century Securities from Trading
-------------------------------------------------------------
The New York Stock Exchange Inc. advised the U.S. Securities and
Exchange Commission that it has removed from listing and
registration New Century Financial Corporation's:
1) common stock, $0.01 par value;
2) 9.125% Series A Cumulative Redeemable Preferred Stock; and
3) 9.75% Series B Cumulative Redeemable Preferred Stock
Pursuant to 17 CFR 240.12d2-2(b), the Exchange has complied with
its rules to strike the New Century securities from listing or
withdraw registration on the Exchange, NYSE director Paras Madho
says.
On March 13, 2007, New Century announced that the NYSE had
determined that its securities were "no longer suitable for
continued listing on the NYSE and will be suspended immediately."
New Century said the NYSE made the decision based on the
company's recent filings with the Commission regarding the
uncertainly of its current liquidity position.
New Century went public on June 26, 1997. Its shares were
initially traded on the NASDAQ. The shares began trading on the
NYSE on October 1, 2004.
Founded in 1995 and headquartered in Irvine, California, New
Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/
-- is a real estate investment trust, providing mortgage products
to borrowers nationwide through its operating subsidiaries, New
Century Mortgage Corporation and Home123 Corporation. The company
offers a broad range of mortgage products designed to meet the
needs of all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. When the
Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950. The Debtors'
exclusive period to file a chapter 11 plan expires on July 31,
2007. (New Century Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
NOVASTAR MORTGAGE: S&P Puts Rankings on Negative CreditWatch
------------------------------------------------------------
Standard & Poor's Ratings Services placed its subprime and special
servicer rankings on NovaStar Mortgage Inc. on CreditWatch with
negative implications.
The negative CreditWatch placements reflect S&P's revised
assessment of the parent company's financial position, which S&P
currently deem as insufficient. Consequently, S&P has removed
NovaStar Mortgage from its Select Servicer List.
Standard & Poor's will continue to monitor the situation and will
take ranking actions as necessary based on any changes in the
financial position of NovaStar Financial.
NOVELL INC: Will Incur Additional Stock-Based Compensation Expense
------------------------------------------------------------------
Novell Inc. filed an update of its ongoing review of the company's
stock-based compensation expense and related potential accounting
impact, in an 8-K filing dated April 19, 2007, with the Securities
and Exchange Commission.
Based on preliminary findings, the Audit Committee of Novell's
Board of Directors engaged independent outside legal counsel to
assist with the conduct of the review. As a result of the ongoing
review, Novell delayed the filing of its Quarterly Reports on Form
10-Q for the fiscal quarters ended July 31, 2006, and Jan. 31,
2007, and its Annual Report on Form 10-K for the fiscal year ended
Oct. 31, 2006.
Novell Inc. reports that the investigatory portion of the review,
which is now substantially complete, has not identified any
intentional wrongdoing by any former or current Novell employees,
officers or directors.
Management believes, however, based on the findings of the review
thus far, together with the assistance of management's separately
retained outside legal counsel and forensic accounting firm, that
Novell utilized incorrect measurement dates for some of the stock-
based compensation awards granted during the review period,
Nov. 1, 1996, through Sept. 12, 2006. As such, Novell will need
to revise the measurement dates utilized for these awards for
financial accounting and reporting purposes and will be required
to recognize additional stock-based compensation expense as a
result.
As of April 19, 2007, Novell has not yet determined with finality
the amount of the stock-based compensation charges that will
result from the adjustment in measurement dates, the resulting tax
and accounting impact of such charges, or the impact of such
charges on its previously issued financial statements.
Novell and its advisers continue to work diligently on the review
and the company will disclose the results once the review is
completed. At this time, however, Novell is not in a position to
predict when the review will be completed.
Headquartered in Waltham, Mass., Novell, Inc. (Nasdaq: NOVL) --
http://www.novell.com/-- delivers Software for the Open
Enterprise. With more than 50,000 customers in 43 countries,
Novell helps customers manage, simplify, secure and integrate
their technology environments by leveraging best-of-breed, open
standards-based software.
Novell has sales offices in Argentina, Brazil and Colombia.
* * *
Novell, Inc.'s Subordinated Debt carries Moody's Investors
Service's 'B1' rating.
OPTION ONE: Company Sale Cues S&P's Negative CreditWatch
---------------------------------------------------------
Standard & Poor's Ratings Services placed its STRONG subprime
servicer ranking and its AVERAGE special servicer ranking on
Option One Mortgage Corp. on CreditWatch with negative
implications. The outlook was formerly stable.
The CreditWatch placements follow the April 20, 2007, announced
sale of Option One to Cerberus Capital Management L.P. Given
Cerberus' ownership interest in another large mortgage entity,
Standard & Poor's is concerned about the future viability of the
Option One servicing operation. Standard & Poor's will continue
to monitor the situation and will adjust the ranking as necessary.
PUTNAM STRUCTURED: Fitch Cuts Rating on Two Note Classes to B+
--------------------------------------------------------------
Fitch downgrades three and affirms four classes of notes issued by
Putnam Structured Product CDO 2001-1, Ltd.
These rating actions are effective immediately:
-- $52,474,476 class A-1MM-a notes affirmed at 'AAA/F1+';
-- $46,852,211 class A-1MM-b notes affirmed at 'AAA/F1+';
-- $98,389,642 class A-1SS notes affirmed at 'AAA';
-- $35,000,000 class A-2 notes affirmed at 'AAA';
-- $24,000,000 class B notes downgraded to 'A' from 'AA';
-- $7,771,053 class C-1 notes downgraded to 'B+' from 'BB+';
-- $7,778,207 class C-2 notes downgraded to 'B+' from 'BB+'.
Putnam 2001-1 is a collateralized debt obligation (CDO) that
closed Nov. 30, 2001 and is managed by The Putnam Advisory
Company, LLC. Putnam 2001-1 exited its reinvestment period in
November 2006 and currently has a portfolio composed of
residential mortgage-backed securities (32.3%), real estate
investment trust (REIT) debt (23.5%), corporate bonds (16.1%),
commercial mortgage-backed securities (13.6%), asset-backed
securities (7.4%), and CDOs (7.1%). Fitch discussed the current
state of the portfolio with the asset manager and their portfolio
management strategy going forward. In addition, Fitch conducted
cash flow modeling utilizing various default timing and interest
rate scenarios to measure the breakeven default rates going
forward relative to the minimum cumulative default rates required
for the rated liabilities.
The portfolio has become more susceptible to interest rate risk
since Fitch's last review in May 2006. Approximately 12.3% of the
portfolio consists of inverse floaters, which as of the latest
trustee report dated March 30, 2007, were earning a weighted
average coupon of just over 4.8%. The weighted average coupon
test as of the same report was failing at 6.4% versus a trigger of
7.5%. The weighted average spread test was also failing at 1.5%
versus a trigger of 1.8% as of the latest trustee report.
On the last payment date on Feb. 26, 2007, the portfolio failed to
generate sufficient interest proceeds to satisfy the interest
obligations to the class C notes. The class A/B and C interest
coverage tests were both failing, with levels of 105.4% and 97.4%,
respectively, versus triggers of 109.0% and 105.0%, respectively.
These IC test failures led to the diversion of interest proceeds,
which would have otherwise been paid as interest to the class C
notes, to redeem the class A-1MM-a, A-1MM-b, and A-1SS notes. As
a result, the class C-1 and C-2 note balances have increased due
to the capitalization of pay-in-kind (PIK) interest. The class
A/B and C IC tests were passing with levels of 119.3% and 109.6%
as of the latest trustee report; however, these results were
significantly based on projected, not realized, interest receipts.
Fitch has determined through cash flow modeling that the
performance of the notes of Putnam 2001-1 will be highly dependent
on the direction of future interest rates, in addition to the
credit performance of the underlying portfolio. In Fitch's
modeling, the portfolio is unable to generate sufficient interest
proceeds to compensate the costs of the floating-rate liabilities
in both rising and flat interest rate scenarios. This leads to
deteriorating performance in the lower part of the capital
structure while the senior notes benefit from structural
protection features. In a decreasing interest rate scenario all
notes perform very well as the cost of funding decreases, and the
inverse floaters contribute significant amounts of interest. This
interest rate sensitivity has led to increased risk to the class B
and class C tranches.
The ratings of the class A-1MM-a, A-1MM-b, A-1SS, A-2, and B notes
address the likelihood that investors will receive full and timely
payments of interest, as per the governing documents, as well as
the stated balance of principal by the legal final maturity date.
In addition, the ratings on the class A-1MM-a and A-1MM-b notes
address the noteholders' ability to put the notes back to the put
provider on its next applicable remarketing date. The ratings of
the class C-1 and C-2 notes address the likelihood that investors
will receive ultimate and compensating interest payments, as per
the governing documents, as well as the stated balance of
principal by the legal final maturity date.
Fitch will continue to monitor and review this transaction for
future rating adjustments.
QUEEN'S SEAPORT: Receives $41 Million Bid from O&S Holdings
-----------------------------------------------------------
O&S Holdings LLC has executed a purchase agreement with Howard
Ehrenberg, partner at the Los Angeles-based law firm of
SulmeyerKupetz and the appointed Trustee of Queen's Seaport
Development Inc. bankruptcy by the Office of the United States
Trustee, to acquire the company that oversees the 66-year lease of
the Queen Mary and its surrounding 40 acres of mix-use waterfront
property for $41 million.
By being first, O&S has assumed the roles as the "stalking-horse"
bidder, which means that any other parties interested in
participating in the QSDI auction would need to overbid O&S
Holdings' current bid by at least $2.5 million.
"One of our goals when putting the Queen's Seaport Development
Inc. up for bid to qualified buyers was to receive bids which
would enable repayment of the debt to the creditors," Mr.
Ehrenberg said. "The $41 million stalking-horse bid from O&S
Holdings not only ensures that repayment will be made but also
demonstrates that developers recognize the value of the mix-use
property surrounding the Queen Mary." Mr. Ehrenberg has worked
closely with Long Beach city's Steven T. Gubner, Esq. of Ezra
Brutzkus Gubner LLP to identify only qualified bidders.
O&S Holdings' Managing Member Gary Safady believes that "the Queen
Mary attraction and surrounding real estate present an unrivaled
draw for Southern California tourism, with value yet to be
actualized from any prior operators of these assets."
Founded by Paul Orfalea, the founder of Kinko's Copies, and his
cousin Gary Safady in 1992, O&S Holdings specializes in mixed-use
commercial developments and currently has more than 9 million
square feet in various stages of development across the country.
O&S Holdings signed an unconditional offer with a non-refundable
deposit, which will be held in an interest bearing account.
Queen's Seaport Development Inc. filed for bankruptcy protection
in March 2005 when the city of Long Beach claimed that Queen's
Seaport Development, Inc. had taken rental credits it wasn't
entitled to take and owed the city millions in back rent.
Mr. Ehrenberg was appointed Trustee in April of 2006 and has since
been overseeing the finances and operations of the company.
Abut O&S Holdings
Headquartered in Santa Monica, California, O&S Holdings, LLC --
http://www.osholdings.com/-- is a real estate developer formed in
1992 by Gary Safady and his cousin Paul Orfalea, the founder of
Kinko's Copies. O&S Holdings and its affiliates own more than 80
properties in the United States, including the 550,000 sq. ft.
Louisiana Boardwalk in Bossier City, Louisiana, and is currently
developing the 2 million square feet Bridge Street Town Centre in
Huntsville, Alabama, the 1 million feet Bridge Street Town Center
in McKinney, Texas and the 5 million square feet Bridge Street
Town Center Chicagoland in Illinois. In addition, O&S Holdings is
the franchisee of the Westin Huntsville, the Westin Heavenly Spa,
the Westin McKinney and the developer of Monaco Pictures.
About Queen's Seaport
Headquartered in Long Beach, California, Queen's Seaport
Development Inc. -- http://www.queenmary.com/-- operates the
Queen Mary ocean liner, various attractions and a hotel. The
company filed for chapter 11 protection on March 15, 2005
(Bankr. C.D. Calif. Case No. 05-15175). Joseph A. Eisenberg,
Esq., at Jeffer Mangles Butler & Marmaro LLP represented the
Debtor. Ira Benjamin Katz serves as counsel to unsecured
creditors. On April 12, 2006, the Court appointed Howard M.
Ehrenberg as the Debtor's chapter 11 trustee. Mr. Ehrenberg is
represented by Larry D. Simons, Esq., at SulmeyerKupetz PC in Los
Angeles, California. When the Debtor filed for protection from
its creditors, it listed estimated assets and debts of $10 million
to $50 million.
A hearing on the adequacy of the Debtor's disclosure statement was
scheduled on March 30, 2007. No related Court filings are
available to date.
RANGE RESOURCES: Closes Public Offering of 8.05MM Shares of Stock
-----------------------------------------------------------------
Range Resources Corporation has closed its public offering of
8.05 million shares of its common stock at a price of $36.28 per
share. This includes the purchase by the underwriters of an
additional 1.05 million shares of common stock to cover over-
allotments. As a result of the public offering, Range now has
147.7 million shares of common stock outstanding.
Range intends to use the net proceeds from the offering to fund
acquisitions. Pending such use, the funds will be used to pay
down a portion of the outstanding balance of Range's senior credit
facility.
The offering was being led by J.P. Morgan Securities Inc. and
Credit Suisse Securities (USA) LLC as joint book-runners.
Co-managers in the underwriting group were Deutsche Bank
Securities Inc.; Friedman, Billings, Ramsey & Co. Inc.; Morgan
Stanley & Co. Incorporated; Raymond James & Associates Inc.;
Johnson Rice & Company LLC; KeyBanc Capital Markets Inc.; BMO
Capital Markets Corp.; Calyon Securities (USA) Inc.; Fortis
Securities LLC; Natexis Bleichroder Inc.; Pickering Energy
Partners Inc.; RBC Capital Markets Corporation; Simmons & Company
International; and SunTrust Capital Markets Inc.
About Range Resources
Headquartered in Fort Worth, Texas, Range Resources Corporation
(NYSE: RRC) is an independent oil and gas company operating in the
Southwestern, Appalachian and Gulf Coast regions of the United
States.
* * *
As reported in the Troubled Company Reporter on Dec. 28, 2006,
Moody's Investors Service confirmed 'Ba3' on Range Resources
Corporation's corporate family rating, 'Ba3' on probability of
default rating, and 'B1' and LGD5, 76% ratings on the senior
subordinated notes. The outlook is positive.
RIVIERA TOOL: CEO Kenneth K. Rieth Retires Effective Immediately
----------------------------------------------------------------
Riviera Tool Company disclosed the retirement of Kenneth K.
Rieth as the company's president, chairman and chief executive,
effective immediately.
The company says it has created an interim team of executives to
serve in Reith's absence until the company names a permanent
replacement. Rieth had served as president of Riviera Tool
Company since 1980.
"The company wants to thank Ken for his years of service at
Riviera Tool and wish him the best with his retirement," Peter
Canepa, chief financial officer of Riviera Tool, said. "Ken
guided Riviera Tool for more than 27 years, though both exciting
and tough times. The company will miss his leadership and
insight, and appreciate his very important contribution to the
company."
About Riviera Tool
Based in Grand Rapids, Michigan, Riviera Tool Company (ASE: RTC)
(OTC Pink Sheets: RIVT) -- http://www.rivieratool.com/-- designs
and manufactures die systems for the production of underbody
panels, inter-structural panels, outer body panels, and bumper
systems. A majority of the company's sales are to
DaimlerChrysler, General Motors Corporation, Mercedes-Benz, BMW
and their tier one suppliers of sheet metal stamped parts and
assemblies.
Going Concern Doubt
BDO Seidman LLP expressed substantial doubt about Riviera Tool
Company's ability to continue as a going concern after auditing
the company's consolidated financial statements for the year ended
Aug. 31, 2006. The auditing firm pointed to the company's
recurring losses from operations and retained deficit.
ROCKAWAY BEDDING: Section 341(a) Meeting Scheduled on May 9
-----------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Rockaway
Bedding, Inc.'s creditors at 10:00 a.m., on May 9, 2007, at the
Office of the U.S. Trustee, Raymond Boulevard, One Newark Center,
Suite 1401 in Newark, New Jersey.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Based in Randolph, New Jersey, Rockaway Bedding, Inc. --
http://www.rockawaybedding.com/-- manufactures and markets beds,
mattresses and futons. The company and six of its affiliates
filed for Chapter 11 protection on April 9, 2007 (Bankr. D. N.J.
Case Nos. 07-14890 through 07-14898). When the Debtors filed for
protection from their creditors, they listed estimated assets and
debts of $1 million to $100 million. The Debtors' exclusive
period to file a chapter 11 plan of reorganization expires on
Aug. 7, 2007.
ROCKAWAY BEDDING: Taps Duane Morris as Bankruptcy Counsel
---------------------------------------------------------
Rockaway Bedding Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of New Jersey for permission to
employ Duane Morris LLP, as their bankruptcy counsel, nunc pro
tunc to April 9, 2007.
Duane Morris will:
-- advise the Debtors of their rights, powers, and duties
as debtors-in-possession in continuing to operate and
manage their assets;
-- advise the Debtors concerning, and assisting in the
negotiation of the use of cash collateral and/or post-
petition financing, debt restructuring and related
transactions;
-- review the nature and validity of agreements, including
executory contracts and leases, and give the Debtors
advise relating to the Debtors' businesses and properties;
-- review the nature and validity of liens, claims, and
interests, if any, asserted against the Debtors' property
and advise as the enforceability and validity of those
liens, claims, and interests;
-- advise the Debtors concerning the collection, recovery and
appropriate protection of all tangible and intangible
property of their estate;
-- prepare, on behalf of the Debtors, all necessary and
appropriate applications, motions, pleadings, orders,
notices, petitions, schedules and other documents, and
review all financial and other reports to be filed in the
Debtors' Chapter 11 cases;
-- advise the Debtors concerning, and preparing responses to,
applications, motions, pleadings, notices and other
papers, which may be filed in the Debtors' Chapter 11
cases;
-- counsel the Debtors in connection with formulating,
negotiating and promulgating a plan of reorganization,
disclosure statement and related documents; and
-- perform all other legal services for and on behalf of the
Debtors, which may be necessary or appropriate in the
administration of their Chapter 11 cases.
The Debtors say that before filing for bankruptcy, they paid Duane
Morris a $111,000 retainer.
Duan Morris will be paid according to these customary hourly
rates:
Professional Designation Hourly Rates
------------ ----------- ------------
William S. Katchen, Esq. Of Counsel $650
David H. Stein, Esq. Partner $430
Michael F. Hahn, Esq. Associate $360
Gia G. Incardone, Esq. Associate $250
Mr. Katchen assured the Court that Duane Morris does not hold or
represent any interest adverse to the Debtors, their creditors or
estates.
About Rockaway Bedding
Based in Randolph, New Jersey, Rockaway Bedding, Inc. --
http://www.rockawaybedding.com/-- manufactures and markets beds,
mattresses and futons. The company and six of its affiliates
filed for Chapter 11 protection on April 9, 2007 (Bankr. D. N.J.
Case Nos. 07-14890 through 07-14898). When the Debtors filed for
protection from their creditors, they listed estimated assets and
debts of $1 million to $100 million. The Debtors' exclusive
period to file a chapter 11 plan of reorganization expires on
Aug. 7, 2007.
ROUGE INDUSTRIES: Wants Plan Filing Period Stretched to May 15
--------------------------------------------------------------
Rouge Industries Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend their
exclusive periods to:
a) file a plan of reorganization until May 15, 2007; and
b) solicit acceptances to that plan until July 16, 2007.
The Debtors have filed 15 prior motions for the extension of their
exclusive periods.
The Debtors assure the Court that they intend to move forward with
the filing of a plan and disclosure statement. The Debtors,
however, still need additional time to file the plan to allow the
Debtors to consider certain aspects of the plan based on their
settlement discussions with the Pension Benefit Guaranty
Corporation and the International Union, United Automobile
Aerospace and Agricultural Implement Workers of America.
Based in Dearborn, Michigan, Rouge Industries Inc., an
integrated producer of flat-rolled steel, filed for chapter 11
protection on October 23, 2003 (Bankr. D. Del. Case No. 03-13272).
Adam G. Landis, Esq., at Landis Rath & Cobb LLP and Alicia Beth
Davis, Esq., at Morris Nichols Arsht & Tunnell represent the
Debtors. Kurt F. Gwynne, Esq., and Richard Allen Keuler, Jr.,
Esq., at Reed Smith LLP serve as counsel to the Official Committee
of Unsecured Creditors. When the Debtors filed for protection
from their creditors, they listed $558,131,000 in total assets and
$558,131,000 in total debts.
On Dec. 19, 2003, the Court approved the sale of substantially all
of the Debtors' assets to SeverStal N.A. for $285.5 million. The
Asset Sale closed on Jan. 30, 2005.
ROYALTY PHARMA: Solid Sales Growth Prompts S&P's BB+ Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' corporate
credit rating to New York City-based Royalty Pharma. The outlook
is positive.
At the same time, Standard & Poor's assigned its loan and recovery
ratings to Royalty Pharma Finance Trust's $1.4 billion senior
secured term loan due 2013. The debt is rated 'BB+' with a
recovery rating of '2', indicating the expectation for a
substantial (80%-100%) recovery of principal in the event of a
payment default. Proceeds from the financing will be used to
refinance existing debt and to fund the acquisition of royalty
streams.
"The ratings on Royalty Pharma reflect the company's diverse
portfolio of royalty-generating pharmaceutical assets, the solid
sales growth prospects of those assets, and the company's track
record of performance," explained Standard & Poor's credit analyst
Arthur Wong. "These strengths are partially offset by the
aggressive acquisition pace of the company."
Royalty Pharma has very little infrastructure and working capital
needs. Therefore, more than 99% of its royalty revenues are
included in EBITDA and readily translate into free cash flows.
Assuming the completion of the proposed acquisition, debt to
EBITDA will initially be more than 4x, but could quickly decline
given expected free cash flows available for debt repayment of
roughly $200 million annually. However, Standard & Poor's expects
debt to EBITDA to remain around 4x over the intermediate term,
given the company's acquisitiveness. While this metric is more
aggressive than what is typical for a 'BB+' rating, Standard &
Poor's recognizes that given the limited to no execution risk and
the stable, long-term nature of the royalty streams, Royalty
Pharma can support a higher debt leverage at each given ratings
level.
SEA CONTAINERS: Court Approves PWC Legal as U.K. Counsel
--------------------------------------------------------
Sea Containers Ltd. and its debtor-affiliates obtained authority
from the U.S. Bankruptcy Court for the District of Delaware to
employ PricewaterhouseCoopers Legal LLP as their United Kingdom
pension and labor counsel, nunc pro tunc to Feb. 23, 2007.
As reported in the Troubled Company Reporter on Apr. 16, 2007, SCL
related that the UK pension laws underwent significant reform
from April 2005. Given the prior decision of management to engage
Kirkland & Ellis LLP as its lead bankruptcy counsel, the Debtors
require the assistance of experienced outside pension counsel, who
can provide advice regarding the new pension laws, during the
pendency of the Chapter 11 cases.
SCL told the Court that PwC Legal's assistance is also required
in respect of UK labor law, predominantly on daily labor law
advice arising in the course of or in relation to the Debtors'
business and the Chapter 11 process, including verification and
endorsement that actions taken by the Debtors to comply with the
Bankruptcy Code do not conflict with the requirements of United
Kingdom labor law. The Debtors also need assistance on matters
where joint pension and labor law assistance is required.
PwC Legal is expected to:
(1) as to issues arising from their or their subsidiaries'
participation in defined benefit pension schemes
established under U.K. law, including advice in relation
to regulatory issues and ceasing to participate;
(2) on daily issues that arise, including verification and
endorsement that the Debtors' actions comply with the
Bankruptcy Code and do not conflict with the requirements
of the U.K.; and
(3) on contentious matters, including claims brought against
the Debtors in any court or employment tribunal.
PwC Legal's services will be paid based on the firm's customary
hourly rates:
Designation Hourly Rate
----------- ---------------
Partners & Heads of Practice Areas GBP450 - GBP500
Assistant Solicitors GBP275 - GBP350
Trainee Solicitors GBP150 - GBP170
Darryl Evans, Esq., a member of PwC Legal, assures the Court that
his firm is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code.
Sea Containers Ltd. also discloses that PwC Legal is a member of
PricewaterhouseCoopers LLP's network of firms and is the
associated law firm of PwC in the U.K. It is a separate legal
entity from PwC.
About Sea Containers
Headquartered in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of $62,400,718 and total liabilities of
$1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on June 12, 2007.
SECURITY AVIATION: Has Until October 1 to File Chapter 11 Plan
--------------------------------------------------------------
The Honorable Donald MacDonald IV of the U.S. Bankruptcy Court for
the District of Alaska gave Security Aviation Inc. until Oct. 1,
2007, to file a Chapter 11 plan and disclosure statement.
The Debtor tells the Court that its motion for substantive
consolidation is pending before the Court. The motion seeks to
consolidate all the business entities of Security Aviation owner
Mark Avery that would have significant impact on inter-entity
liabilities.
The Debtor said it received two offers, which seek to purchase the
primary assets of its business, hence, it is in the process of
evaluating the offers and soliciting other interested parties to
submit competing offers.
At present, the Debtor believes that it is likely that most of the
assets of the estate will be sold as an ongoing entity. Depending
upon the claims filed and the resolution of the proof of claim
filed by the company's principal Robert Kane, the sale of the
business may generate sufficient assets to pay all of Security
Aviation's creditors in full.
Both substantive consolidation and the Kane litigation will affect
the determination of the claims against the estate. The Debtor
believes that the matters should precede any formulation of the
plan and disclosure statement.
Headquartered in Anchorage, Arkansas, Security Aviation, Inc. --
http://www.securityaviation.biz/-- provides air charter services.
The Debtor filed for chapter 11 protection on Dec. 21, 2006
(Bankr. D. Ala. Case No. 06-00559). Cabot C. Christianson,
Esq., at Christianson & Spraker, represents the Debtor. No
Committee of Unsecured Creditors has been appointed in the
Debtor's case. The Debtor's schedules filed with the Court listed
assets of $14,928,446 and liabilities of $54,771,582.
SECURITY WITH ADVANCED: GHP Horwath Raises Going Concern Doubt
--------------------------------------------------------------
GHP Horwath, P.C. raise substantial doubt about the ability of
Security With Advanced Technology Inc., formerly A4S Security
Inc., to continue as a going concern after auditing the company's
financial statements for the year ended Dec. 31, 2006. The
auditing firm pointed to the company's inability to generate
significant revenues in 2006, net loss of about $9,347,000, and
consumed cash in operating activities of about $5,651,000, for the
year ended Dec. 31, 2006.
The company generated net sales of $295,996 and $108,541 for the
years 2006 and 2005, respectively. Its net loss for the year 2005
was $4,193,048.
As of Dec. 31, 2006, the company had total assets of $8,933,104
and total liabilities of $1,282,239, resulting in a $7,650,865
total stockholders' equity. Cash and short-term investments held
as of Dec. 31, 2006, were $934,650 and $2,000,000, respectively.
At Dec. 31, 2006, the company had working capital of $2,726,000.
Capital expenditures, primarily for tooling, development and
testing equipment, office equipment and facility improvement costs
for the fiscal year ending Dec. 31, 2007, are anticipated to total
about $200,000 to $400,000.
Effective as of Dec. 31, 2006, the company completed the
acquisition of Vizer Group Inc. and Vizer's wholly owned
subsidiary, Avurt International Inc.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1dd5
Security With Advanced Technology Inc. (Nasdaq: SWAT, SWATW) --
http://www.swat-systems.com/-- provides security products and
services, which include non-lethal personal protection devices,
surveillance and intrusion detection systems and mobile digital
video surveillance solutions. SWAT's products and services are
designed for government agencies, military and law enforcement, in
addition to transportation, commercial facilities and non-lethal
personal protection segments. The company's business includes
sales and marketing, engineering, customer support, manufacturing,
administration and finance. It maintains facilities and/or
personnel to support these efforts in Westminster, Colorado,
Cleveland, Ohio, Kansas City, Missouri, and Sacramento,
California. In October 2006, the company changed its name to
Security With Advanced Technology Inc., from A4S Security Inc.
SENTEX SENSING: Feb. 28 Balance Sheet Upside-Down by $6.5 Million
-----------------------------------------------------------------
Sentex Sensing Technology Inc. reported a net loss of $104,762 for
the first quarter ended Feb. 28, 2007, compared with a net loss of
$132,283 for the same period 12 months ago.
The company reported no revenues for the quarter ended
Feb. 28, 2007, compared to interest and other income of $5,246
reported for the same period ended Feb. 28, 2006.
The company currently has no active operation. Since the
conclusion of fiscal Year 2006, the company has been working
diligently to raise capital and do a strategic acquisition that
will move the company forward.
At Feb. 28, 2007, the company's balance sheet showed $1.9 million
in total assets, $8.4 million in total liabilities, and
$6.5 million in total stockholders' deficit.
The company's balance sheet at Feb. 28, 2007, also showed strained
liquidity with zero current assets available to pay $8.4 million
in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Feb. 28, 2007, are available for
free at http://researcharchives.com/t/s?1dda
Going Concern Doubt
As reported in the Troubled Company Reporter on March 26, 2007,
Hausser + Ta`ylor LLC, in Cleveland, raised substantial doubt
about Sentex Sensing Technology Inc.'s ability to continue as a
going concern after auditing the company's financial statements
for the years ended Nov. 30, 2006, and 2005. The auditing firm
reported that the company continues to sustain substantial net and
operating losses, and that at Nov. 30, 2006, current liabilities
exceed current assets by $8,272,195.
About Sentex Sensing
Based in Cleveland, Sentex Sensing Technology Inc. (OTC BB: SNTX)
-- http://www.sentextech.com/-- used to operate as a multimodal
biometric technology company, providing fingerprint, facial and
voice biometric technologies, as well as systems, and critical
system components that empower the identification of individuals
in large-scale ID and ID management programs. At present the
company has no active operation.
SOLUTIA INC: Seeks July 30 Extension of Exclusive Plan Filing Date
------------------------------------------------------------------
Solutia Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to extend their
exclusive periods an additional 90 days each, with their exclusive
period to file a reorganization plan through and including
July 30, 2007, and their exclusive period to solicit acceptances
for that plan through and including Sept. 28, 2007.
The Debtors relate that since the March 12, 2007 hearing on their
prior request for an extension, they have continued to make
significant progress with plan of reorganization negotiations by
bringing all of its stakeholders together for settlement
discussions.
On April 10, Solutia met with and provided its stakeholders with a
proposal to modify the plan of reorganization as a starting point
for negotiations between and among Solutia and all of its
stakeholders.
Solutia believes that the plan proposal sets forth a rational and
reasonable settlement of all of the unresolved issues in the
Chapter 11 cases and intended for the proposal to act as a
platform for discussion and good faith negotiations.
At the end of the April 10 meeting, Monsanto Company and the Ad
Hoc Committee of Solutia Noteholders informed Solutia that they
had reached a settlement between themselves and wanted Solutia to
join the settlement.
On April 16, after extensive deliberations regarding the
settlement with its Board of Directors, Solutia responded by
letter to the settlement by proposing to modify the Plan proposal.
Other major stakeholders were also invited to participate in a
follow up negotiation session scheduled for April 23.
Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York,
states that the negotiations demonstrate the divergent interests
of Solutia's stakeholders on familiar Plan confirmation issues.
However, they also highlight what the creditors have in common.
Solutia believes that the creditors understand the importance of
the settlement reached between Solutia and Monsanto regarding the
reallocation of legacy liabilities. As a result, Solutia believes
the creditors want to structure a modification to the Plan that
preserves the legacy liability reallocation settlement.
Mr. Henes points out that since the last exclusivity hearing,
Solutia has completed three key value-maximizing efforts:
-- Proposed auction of its Dequest water-treatment
phosphonates business. The auction is scheduled for
May 16, and the sale hearing on May 18. Even if no higher
or better offers are received, Solutia will receive at
least $60,000,000.
-- Acquisition of Akzo Nobel N.V.'s stake in Flexsys, the
50%/50% rubber chemicals joint venture between Akzo and
Solutia. Owning Flexsys will improve Solutia's earnings
and cash flow and enhance Solutia's credit metrics by
decreasing Solutia's debt-to-EBITDAR ratio.
-- Proposed settlement of Solutia's claims against FMC
Corporation relating to the Astaris joint venture. Under
the settlement, Solutia will receive $22,500,000 from FMC.
The settlement proposal will be heard on May 1.
Solutia assures the Court that it is not seeking an extension of
exclusivity to pressure creditors. Given the significant progress
made since the March 12 hearing, Solutia should be afforded
additional time to continue the ongoing negotiations with its
stakeholders and to file a plan in the very near future, Mr. Henes
says.
There is no dispute that the Debtors' Chapter 11 cases are complex
and involve a number of competing and ever-evolving stakeholders,
Mr. Henes notes. Moreover, no party will be prejudiced by an
extension of the Exclusive Periods because Solutia is paying its
debts as they become due -- a factor that strongly favors
extending exclusivity, he adds.
Unresolved contingent liabilities, including the JPMorgan
Adversary Proceeding and the Equity Committee Adversary Proceeding
also warrant an extension of exclusivity. The contingent
liabilities shape the overall structure of any confirmable plan,
Mr. Henes states. Only the Debtors are in a position to balance
the competing interests among the stakeholders and to propose a
plan at this point that addresses the contingent liabilities and
satisfies the Bankruptcy Code's distribution scheme, he asserts.
About Solutia Inc.
Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ)
-- http://www.solutia.com/-- and its subsidiaries, engage in the
manufacture and sale of chemical-based materials, which are used
in consumer and industrial applications worldwide. The company
and 15 debtor-affiliates filed for chapter 11 protection on
Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the
Debtors filed for protection from their creditors, they listed
$2,854,000,000 in assets and $3,223,000,000 in debts.
Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore
& Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn &
Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and
noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice. (Solutia
Bankruptcy News, Issue No. 84; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
In February 2007, the Honorable Prudence Carter Beatty entered a
bridge order extending the Debtors' exclusive period to file a
plan until April 30, 2007.
SOLUTIA INC: Committees Want Exclusive Periods Terminated
---------------------------------------------------------
The Official Committee of Equity Security Holders and Ad Hoc
Committee of Solutia Inc. Noteholders ask the U.S. Bankruptcy
Court for the Southern District of New York to terminate
Solutia and its debtor-affiliates' exclusive periods to file a
plan of reorganization and solicit acceptances of that plan.
(1) Equity Committee
The Equity Committee relates that the Debtors' Chapter 11 cases
have been stagnant for almost four years and the Debtors remain
mired in litigation with the Ad Hoc Committee of Noteholders, at
the same time cling to the core of a proposed settlement with
Monsanto Company and Pharmacia Corp. that significantly limits the
Debtors' reorganization options.
Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pitman LLP, in New
York, asserts that the Debtors have proven unable to develop a
confirmable plan that realizes the full value of their estates.
The Equity Committee believes that the plan the Debtors will
finally propose will once again fail to maximize the value of the
estates and will be uncomfortable, she says.
"Termination of exclusivity will open the plan of reorganization
process so that the Equity Committee can propose a plan designed
to maximize value of these estates through a sale of certain
business assets, and reorganize around viable and strong remaining
businesses, which the Equity Committee submits could provide a
full recovery for unsecured creditors as well as a meaningful
recovery to the public shareholders," Ms. Dine tells the Court.
If the Court terminates exclusivity, permitting the Equity
Committee access the Debtors' books and records, and other
confidential information, the Equity Committee is confident that
it can find potential buyers willing to purchase the sale
businesses for considerable value in an open, competitive process.
The Equity Committee is also considering and analysing whether,
even without the sale of assets, a plan can be proposed providing
for full recovery to the senior creditors and preserve and provide
any additional value for the public shareholders, Ms. Dine informs
the Court.
Moreover, at this late stage of the Debtors' Chapter 11
proceedings, the Court, together with all of the Debtors'
constituents, should be entitled to consider alternative plans, on
parallel tracks, Ms. Dine points out.
Ms. Dine states that it has become apparent that the Debtors are
now focused only on an expedient plan proposal designed to allow
them to exit Chapter 11 as quickly as possible, rather than
focusing on a result that would maximize value to benefit all
parties-in-interest.
For instance, she notes, the Debtors' 2007 annual incentive
program originally proposed to reward "those executives and other
key employees of the Company who have a significant role in the
bankruptcy process to incent them to strive for a prompt emergence
from bankruptcy for the Company, and to focus on the maximization
of enterprise value."
While the Equity Committee proposed a supplement to be added to
the AIP to provide even greater rewards to management for
maximizing value in the plan process, in a last-minute effort to
appease the Bondholders, the Debtors amended the AIP to, among
other things, eliminate the language tying senior management's
bonuses to the enterprise value of the company, and instead,
encourages management to focus on a speedy emergence from Chapter
11 at the expense of the incentive to obtain the maximum value for
the Debtors, Ms. Dine argues.
Although the Debtors' sole priority is now a speedy emergence from
Chapter 11, it still remains unclear which path towards emergence
Solutia intends to pursue. In contrast, the Equity Committee is
extremely focused on developing a resolution and plan that will
maximize recoveries to all stakeholders, Ms. Dine maintains.
The Debtors cannot use adversary proceedings as a shield to
protect themselves in light of the Equity Committee's ability to
propose a plan that would satisfy the parties' claims for relief
in the litigations, Ms. Dine says.
Ms. Dine relates that JPMorgan Chase Bank, National Association,
as indenture trustee, commenced on May 27, 2005 Adversary
Proceeding No. 05-01843 against Solutia. The trial was concluded
on July 10, 2006, however, the Court has not yet ruled on it.
The Debtors are quick to assume that a confirmable plan can
provide for a reserve in an amount sufficient to satisfy the
claims of the Bondholders to the extent liens are reinstated. The
Equity Committee's modified sale plan, however, provides that the
Bondholders will be paid in full, thus nullifying the Bondholder
Adversary Proceeding, Ms. Dine tells the Court.
The Equity Committee filed an adversary proceeding on March 7,
2005, against New Monsanto and Pharmacia. The parties agreed to a
standstill on January 11, 2007. On April 6, the Equity Committee
notified New Monsanto and Pharmacia of its intent to terminate the
standstill agreement and move forward with the adversary
proceeding.
Any plan proposed by the Debtors that does not take the Equity
Committee Adversary Proceeding into account is simply unrealistic
and unconfirmable, Ms. Dine insists.
Furthermore, terminating the exclusive periods will not impede the
Debtors' ability to continue to formulate their own plan of
reorganization and move forward with their own efforts to emerge
from bankruptcy, Ms. Dine points out.
(2) Noteholders Committee
Bennett J. Murphy, Esq., at Hennigan, Bennett & Dorman LLP, in
Lose Angeles, California, relates that after three and a half
years, the Debtors' principal constituencies -- Monsanto and the
Noteholders, have agreed on terms for a plan of reorganization.
The modified Plan, which is the product of the settlement
discussions suggested by the Court on March 12, 2007, at the
conclusion of the Debtors' 10th request to extend their exclusive
periods, provides for Monsanto and the Noteholders to make major
concessions in a fair and reasonable compromise of pending
litigation and to general unsecured creditors. It is also
confirmable whether or not the class accepts the settlement Plan,
he says.
On April 10, 2007, the Noteholders Committee and Monsanto
presented the Settlement Plan with the following key components:
-- Monsanto would substantially reduce the equity stake it
would receive in reorganized Solutia, as compared to the
global settlement;
-- Monsanto would fully perform all of the obligations of the
former Global Settlement notwithstanding receiving less
compensation via its reduced equity stake;
-- Noteholders would receive less than the full recovery they
would receive as secured creditors, in a fair and
reasonable compromise of the JPMorgan Adversary Proceeding;
-- Noteholders would agree to commit new capital to assure
that the Debtors will have adequate cash for the funding
obligations under the Global Settlement and the retiree
settlement by "backstopping" a $200,000,000 rights
offering;
-- general unsecured creditors would receive equity in
reorganized Solutia and an opportunity to acquire more in
the rights offering;
-- general unsecured creditors and equity security holders
would be offered warrants for stock in reorganized Solutia,
allowing them to participate in the potential "upside"
value of reorganized Solutia post-emergence;
-- general unsecured creditors would receive substantially
more than if the Noteholders were successful in the
JPMorgan Adversary Proceeding; and
-- all complex issues in the pending JPMorgan and Equity
Committee adversary proceedings will be resolved without
the delay and expense attendant to further proceedings in
the Court and potential appeals.
"In an astonishing and dismaying response, the Debtors have
refused to seek confirmation of the plan. . . The Debtors - as
stakeholders - should not be permitted to stand in the way of a
confirmable plan providing for a comprehensive settlement of
litigation that will otherwise mire these cases in expense and
delay for years," Mr. Bennett argues.
Mr. Bennett tells the Court that it has been evident to the
Noteholders Committee for quite some time that the Debtors are
pursuing a different strategy as partisans, aimed at serving the
interests of general unsecured creditors over those of
Noteholders, even if the results are enormous litigation costs and
long delays in the Debtors' emergence from bankruptcy.
The Debtors have even withheld from the Court the fact that the
discussions held at the direction of the Court succeeded by
producing a confirmable settlement plan, Mr. Bennett points out.
The Debtors' refusal to seek confirmation of the Settlement Plan
makes it obvious that they are merely using their exclusive
periods to pressure the Noteholders and Monsanto into making
further concessions to the holdout class of general unsecured
creditors, he contends.
Mr. Bennett asserts that the Debtors' exclusive period should be
terminated so that the Settlement Plan can be filed and advanced
to confirmation.
Debtors Object
Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York,
relates that Solutia pursued an exploratory sales process in the
Fall of 2006. Solutia received six non-binding indications of
interests wherein three conformed to Solutia's request that
potential purchasers submit bids to purchase substantially all of
the equity of reorganized Solutia.
However, the indications of interest, while robust, were not
sufficient enough to win the support of Solutia's stakeholders,
Mr. Henes says. The three non-conforming indications of interest
led Solutia to explore the potential of selling certain businesses
in an attempt to generate additional value, he adds.
Mr. Henes argues that the Equity Committee has failed to satisfy
its burden to prove that exclusivity should be terminated. Its
request, which is tantamount to the appointment of the Equity
Committee itself as a Chapter 11 trustee, is not supported by the
facts or case law, he maintains.
Moreover, the Equity Committee's professed concern that Solutia's
yet-to-be filed Plan will not maximize value should be resolved in
the context of a confirmation hearing, Mr. Henes asserts. The
Equity Committee's request should be denied, he tells the Court.
The Equity Committee's goal of requiring single-minded pursuit of
only the Modified Sale Plan should not be forced upon Solutia, its
Board of Directors, or the many other creditors of Solutia's
estates, Mr. Henes argues. The Board's judgment, which is the
product of significant deliberation and investigation, to pursue
alternatives other than the Modified Sale Plan, is reasonable and
should not be disturbed, he maintains.
Mr. Henes contends that the Equity Committee's request is in
reality an objection to an as-yet unfilled plan of reorganization.
It speculates that an amended plan will not maximize the value of
the estate and that it is "highly unlikely to satisfy the 'best
interests of creditors test' under Section 1129(a)(7)(A)(ii) of
the Bankruptcy Code. This is an issue for plan confirmation and
not a ground to terminate exclusivity now, he points out.
About Solutia Inc.
Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ)
-- http://www.solutia.com/-- and its subsidiaries, engage in the
manufacture and sale of chemical-based materials, which are used
in consumer and industrial applications worldwide. The company
and 15 debtor-affiliates filed for chapter 11 protection on
Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the
Debtors filed for protection from their creditors, they listed
$2,854,000,000 in assets and $3,223,000,000 in debts.
Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore
& Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn &
Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and
noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice. (Solutia
Bankruptcy News, Issue No. 84; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
In February 2007, the Honorable Prudence Carter Beatty entered a
bridge order extending the Debtors' exclusive period to file a
plan until April 30, 2007.
SOLUTIA INC: Files 12th Request to Extend Lease Decision Deadline
-----------------------------------------------------------------
As of April 18, 2007, Solutia Inc. and its debtor-affiliates are
parties to approximately 30 unexpired non-residential real
property leases. Jonathan S. Henes, Esq., at Kirkland & Ellis
LLP, in New York, relates that the Debtors use the Unexpired
Leases in connection with their operations throughout the world.
Many of the Debtors' offices, from which they conduct key aspects
of their operations, are located on premises subject to certain of
the Unexpired Leases. The Unexpired Leases are integral to the
continued operation of the Debtors' businesses and constitute
valuable assets of the estates, Mr. Henes tells the Honorable
Prudence Carter Beatty of the U.S. Bankruptcy Court for the
Southern District of New York.
The Debtors are currently actively working with their stakeholders
towards finalizing a modified Plan of Reorganization, which they
believe will contemplate the same assumption and rejection
procedures outlined in the Plan for the Unexpired Leases. Until
the modified Plan is finalized, the Debtors will not be in a
position to make a final determination to assume or reject the
Unexpired Leases, Mr. Henes says.
Mr. Henes assures the Court that the Debtors are current under the
Unexpired Leases and have the financial wherewithal to continue to
make all payments under the Unexpired Leases.
Pursuant to their Plan, the Debtors will inform the counterparties
to the leases at least 10 days prior to the confirmation hearing
of the Debtors' intent to assume any of the leases. To the extent
an unexpired lease is not assumed under the Plan, that lease will
be rejected.
The Debtors ask the Court to extend the time to which they may
assume or reject the Unexpired Leases to and including 10 days
before the Confirmation Hearing of the modified Plan.
About Solutia Inc.
Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ)
-- http://www.solutia.com/-- and its subsidiaries, engage in the
manufacture and sale of chemical-based materials, which are used
in consumer and industrial applications worldwide. The company
and 15 debtor-affiliates filed for chapter 11 protection on
Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the
Debtors filed for protection from their creditors, they listed
$2,854,000,000 in assets and $3,223,000,000 in debts.
Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore
& Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn &
Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and
noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice. (Solutia
Bankruptcy News, Issue No. 84; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
In February 2007, Judge Beatty entered a bridge order extending
the Debtors' exclusive period to file a plan until April 30, 2007.
SPEEDWAY MOTORSPORTS: Earns $111 Million in Full Year 2006
----------------------------------------------------------
Speedway Motorsports Inc. reported fourth quarter 2006 results
that include total revenues of $148,220,000 and net income of
$28,801,000. Full year 2006 results include total revenues of
$567,365,000 and a net income of $111,222,000.
During the fourth quarter 2005, the company had total revenues of
$152,545,000 and a net income of $34,181,000. Full year 2005
results include total revenues of $544,068,000 and a net income of
$108,135,000.
"Fiscal 2006 for Speedway Motorsports was our seventh consecutive
year of record revenues and net income, demonstrating that SMI's
solid earnings and cash flows growth provide us with increasing
resilience to unforeseen factors," stated H.A. Wheeler, chief
operating officer and president of Speedway Motorsports.
The company's balance sheet reflected total asset of
$1,589,523,000 and total liabilities of $769,434,000, resulting in
$820,089,000 total stockholders' equity as of Dec. 31, 2006. The
company held cash, cash equivalents, and short-term investments of
$121,139,000 as of Dec. 31, 2006. Revolving credit facility
borrowings and outstanding letter of credit stood at $98,438,000
and $1,172,000, respectively, as of Dec. 31, 2006.
Allowance for Bad Debts
At Dec. 31, 2006, uncertainty exists as to the full realization of
receivables due from two foreign entities and Oasis under certain
profit and loss sharing arrangements. Uncertainty exists about
collecting amounts from two foreign entities because of problems
with respect to access to funds, creditworthiness and certain
other factors outside of the company's control when conducting
operations in a foreign country. The company is currently
pursuing available recoverability alternatives. As of Dec. 31,
2006, the company has recorded allowances for possible
uncollectible amounts of about $17.6 million based on estimated
ultimate realization after possible recovery, settlement and other
costs and insurance. In 2006, recovery allowances of about
$15.1 million are reflected in other direct operating expense.
2007 Earnings Guidance
"The company estimates 2007 total revenues of $550-570 million,
net income of $107-111 million, depreciation and interest of $62-
67 million, and diluted earnings per share of $2.43-2.53, assuming
current industry and economic trends continue, and excluding our
50% share of Motorsports Authentics joint venture operating
results, changes in our non-core businesses, capital expenditures
exceeding current plans, or the impact of further increases in
fuel prices, interest rates, geopolitical conflicts, poor weather
surrounding our events or other unforeseen factors," William R.
Brooks, chief financial officer and executive vice president of
Speedway Motorsports, stated.
"Our 2007 season is off to a tremendous start, as most of our
NASCAR NEXTEL Cup and Busch event sponsorships for 2007, and
several for 2008, are already sold and pre-sales for other
corporate event related revenues are trending ahead of last year,"
stated O. Bruton Smith, chairman and chief executive officer of
Speedway Motorsports.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1dd8
About Speedway Motorsports
Based in Concord, North Carolina, Speedway Motorsports Inc. --
http://www.speedwaymotorsports.com/-- promotes, markets, and
sponsors motorsports activities in the U.S. It owns and operates
Atlanta Motor Speedway, Bristol Motor Speedway, Infineon Raceway,
Las Vegas Motor Speedway, Lowe's Motor Speedway, and Texas Motor
Speedway. The company also provides event souvenir merchandising
services, food, beverage, and hospitality catering services, and
radio programming, production, and distribution services.
* * *
Speedway Motorsports Inc. carries Moody's Investors Service's Ba1
Corporate Family Rating.
STRUCTURED ASSET: Fitch Holds Low-B Ratings on Six Certificates
---------------------------------------------------------------
Fitch Ratings has taken rating actions on these Structured Asset
Securities Corp. residential mortgage-backed certificates:
Series 2005-NC1
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'AA+';
-- Class M-3 affirmed at 'AA';
-- Class M-4 affirmed at 'A+';
-- Class M-5 affirmed at 'A';
-- Class M-6 affirmed at 'A-';
-- Class M-7 affirmed at 'BBB';
-- Class M-8 affirmed at 'BBB-';
Series 2005-NC2
-- Class A affirmed at 'AAA';
-- Class M-2 affirmed at 'AA+';
-- Class M-3 affirmed at 'AA+';
-- Class M-4 affirmed at 'AA';
-- Class M-5 affirmed at 'AA';
-- Class M-6 affirmed at 'A+';
-- Class M-7 affirmed at 'A';
-- Class M-8 affirmed at 'A-';
-- Class M-9 affirmed at 'BBB+';
-- Class M-10 affirmed at 'BBB';
Series 2005-OPT1
-- Class A affirmed at 'AAA';
Series 2005-RMS1
-- Class A affirmed at 'AAA';
Series 2005-WF1
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA-';
-- Class M4 affirmed at 'A+';
-- Class M5 affirmed at 'A';
-- Class M6 affirmed at 'A-';
-- Class M7 affirmed at 'BBB+';
-- Class M8 affirmed at 'BBB';
-- Class M9 affirmed at 'BBB-';
-- Class B1 affirmed at 'BB+';
Series 2005-WF2
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA-';
-- Class M4 affirmed at 'A+';
-- Class M5 affirmed at 'A';
-- Class M6 affirmed at 'A-';
-- Class M7 affirmed at 'BBB+';
-- Class M8 affirmed at 'BBB;
-- Class M9 affirmed at 'BBB-';
-- Class B1 affirmed at 'BB+';
Series 2005-WF3
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA-';
-- Class M4 affirmed at 'A+';
-- Class M5 affirmed at 'A';
-- Class M6 affirmed at 'A-';
-- Class M7 affirmed at 'BBB+';
-- Class M8 affirmed at 'BBB';
-- Class M9 affirmed at 'BBB-';
-- Class B1 affirmed at 'BB+';
Series 2005-WF4
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA-';
-- Class M4 affirmed at 'A+';
-- Class M5 affirmed at 'A';
-- Class M6 affirmed at 'A-';
-- Class M7 affirmed at 'BBB+';
-- Class M8 affirmed at 'BBB';
-- Class M9 affirmed at 'BBB-';
-- Class B1 affirmed at 'BBB-';
Series 2005-WMC1
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'A-';
-- Class M-4 affirmed at 'BBB';
-- Class M-5 affirmed at 'BBB-';
-- Class M-6 affirmed at 'BBB-';
-- Class B affirmed at 'BB+';
Series 2006-AM1
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'AA';
-- Class M-3 affirmed at 'AA-';
-- Class M-4 affirmed at 'A+';
-- Class M-5 affirmed at 'A';
-- Class M-6 affirmed at 'A-';
-- Class M-7 affirmed at 'BBB+';
-- Class M-8 affirmed at 'BBB';
-- Class M-9 affirmed at 'BBB';
-- Class B-1 affirmed at 'BBB-';
-- Class B-2 affirmed at 'BB+';
Series 2006-BC1
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA+';
-- Class M3 affirmed at 'AA+';
-- Class M4 affirmed at 'AA';
-- Class M5 affirmed at 'AA-';
-- Class M6 affirmed at 'A+';
-- Class M7 affirmed at 'A';
-- Class M8 affirmed at 'A-';
-- Class M9 affirmed at 'BBB+';
-- Class B1 affirmed at 'BBB';
-- Class B2 affirmed at 'BB+';
Series 2006-OPT1
-- Class A affirmed at 'AAA';
-- Class B affirmed at 'BB+';
-- Class M1 affirmed at 'AA';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'A+';
-- Class M4 affirmed at 'A';
-- Class M5 affirmed at 'A-';
-- Class M6 affirmed at 'BBB+';
-- Class M7 affirmed at 'BBB';
-- Class M8 affirmed at 'BBB-';
Series 2006-OW1
-- Class A affirmed at 'AAA';
Series 2006-WF1
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA-';
-- Class M4 affirmed at 'A+';
-- Class M5 affirmed at 'A';
-- Class M6 affirmed at 'A-';
-- Class M7 affirmed at 'BBB+';
-- Class M8 affirmed at 'BBB';
-- Class M9 affirmed at 'BBB-';
The affirmations, affecting approximately $6.39 billion of the
outstanding balances, are taken due to a satisfactory relationship
of credit enhancement to expected losses.
As of the April distribution date, the transactions listed above
are seasoned from 11 (2006-BC1, 2006-AM1, 2006-OPT1) to 26 (2005-
NC1, 2005-WF1) months. The pool factors (current principal
balance as a percentage of original) range approximately from 22%
(2005-WMC1) to 82% (2006-OW1).
The underlying collateral consists of fully amortizing 15 to 30-
year fixed and adjustable-rate mortgages secured by first liens on
one- to four-family residential properties extended to subprime
borrowers. The mortgage loans were acquired by Lehman Brothers
Holdings Inc. from various banks and other mortgage lending
institutions and are master serviced by Aurora Loan Services,
Inc., which is rated 'RMS1-' by Fitch.
STRUCTURED ASSET: Fitch Cuts Rating on 19 Certificate Classes
-------------------------------------------------------------
Fitch Ratings has taken rating actions on these Structured Asset
Securities Corp. residential mortgage-backed certificates:
Series 2005-S1
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA+';
-- Class M3 affirmed at 'AA';
-- Class M4 affirmed at 'A+';
-- Class M5 affirmed at 'A';
-- Class M6 affirmed at 'A';
-- Class M7 affirmed at 'A-';
-- Class M8 affirmed at 'BBB+';
-- Class B1 downgraded to 'BBB-' from 'BBB';
-- Class B2 downgraded to 'BB+' from 'BBB-';
-- Class B3 downgraded to 'B' from 'BBB-';
-- Class B4 affirmed at 'C' and Distressed Recovery Rating
changed to 'DR6' from 'DR5';
Series 2005-S2
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA-';
-- Class M4 affirmed at 'A+';
-- Class M5 affirmed at 'A';
-- Class M6 affirmed at 'A-';
-- Class M7 affirmed at 'BBB+';
-- Class M8 affirmed at 'BBB+';
-- Class M9 affirmed at 'BBB';
-- Class M10 downgraded to 'BB-' from 'BBB-';
-- Class B1 downgraded to 'B' from 'BB+';
-- Class B2 downgraded to 'C/DR6' from 'B';
Series 2005-S3
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA-';
-- Class M4 affirmed at 'A+';
-- Class M5 affirmed at 'A';
-- Class M6 affirmed at 'A-';
-- Class M7 affirmed at 'BBB+';
-- Class M8 affirmed at 'BBB+';
-- Class M9 affirmed at 'BBB';
-- Class M10 downgraded to 'BBB-' from 'BBB';
-- Class M11 downgraded to 'BB-' from 'BBB-';
-- Class B1 downgraded to 'B' from 'BB+';
-- Class B2 downgraded to 'C/DR6' from 'BB';
Series 2005-S5
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA-';
-- Class M4 affirmed at 'A';
-- Class M5 affirmed at 'A-';
-- Class M6 affirmed at 'BBB+';
-- Class M7 affirmed at 'BBB';
-- Class M8 Downgraded from 'BBB-' to 'BB';
-- Class B1 Downgraded from 'BB+' to 'B+';
-- Class B2 Downgraded from 'BB+' to 'B';
-- Class B3 affirmed at 'C' and Distressed Recovery Rating
changed from 'DR4' to 'DR6';
-- Class B4 affirmed at 'C' and Distressed Recovery Rating
affirmed at 'DR6';
Series 2005-S6
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA-';
-- Class M4 affirmed at 'A+';
-- Class M5 affirmed at 'A';
-- Class M6 affirmed at 'A-';
-- Class M7 affirmed at 'BBB+';
-- Class M8 affirmed at 'BBB';
-- Class M9 affirmed at 'BBB-';
-- Class B1 affirmed at 'BB+';
-- Class B2 downgraded to 'BB' from 'BB+';
-- Class B3 downgraded to 'B' from 'BB';
Series 2005-S7
-- Class A affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA-';
-- Class M4 affirmed at 'A+';
-- Class M5 affirmed at 'A';
-- Class M6 affirmed at 'A-';
-- Class M7 affirmed at 'BBB+';
-- Class M8 affirmed at 'BBB';
-- Class M9 downgraded to 'BB' from 'BBB-';
-- Class B downgraded to 'B+' from 'BB+'.
The affirmations, affecting approximately $1.25 billion of the
outstanding balances, are taken due to a satisfactory relationship
of credit enhancement to expected losses.
The negative rating actions affecting approximately $143.2 million
of the outstanding balances reflect deterioration in the
relationship between CE and expected losses. Faster-than-expected
prepayment speeds and rising interest rates have caused
significant deterioration in the amount of excess spread available
to cover losses and maintain overcollateralization. Additionally,
losses have generally been incurred earlier than expected causing
significant erosion in the OC amount. The OC has fallen below
half of the target amount for all transactions and in series 2005-
S1 and 2005-S5 the most subordinate classes have already
defaulted.
The transactions are seasoned from a range of 15 (series 2005-S1)
to 24 (series 2005-S7) months and the pool factors (current
mortgage loan principal outstanding as a percentage of the initial
pool) range from approximately 26% (series 2005-S1) to 65% (series
2005-S7).
The mortgage pools consist of conventional, fixed rate, fully
amortizing and balloon, second lien residential mortgage loans.
The mortgage loans were acquired by Lehman Brothers Holdings Inc.
from various banks and other mortgage lending institutions and are
master serviced by Aurora Loan Services, Inc., which is rated
'RMS1-' by Fitch.
STRUCTURED REPACKAGED: S&P Cuts Ratings on $12 Mil. Certs. to BB+
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
A-1 and A-2 of the $12 million fixed-rate callable certificates
issued by Structured Repackaged Asset-Backed Trust Securities for
United States Cellular Corp. Securities Series 2004-6 to 'BB+'
from 'BBB-'. The ratings remain on CreditWatch, where they were
originally placed with negative implications on Nov. 17, 2006.
The rating actions follow the April 23, 2007, lowering of the
corporate credit rating on United States Cellular Corp. to 'BB+'.
The rating remains on CreditWatch with negative implications.
STRATS for United States Cellular Corp. Securities Series 2004-6
is a pass-through transaction, and the ratings on this transaction
are based solely on the rating assigned to the underlying assets,
United States Cellular Corp.'s 6.70% senior notes due Dec. 15,
2033.
SUPERCONDUCTOR TECHNOLOGIES: Auditor Raises Going Concern Doubt
---------------------------------------------------------------
Stonefield Josephson Inc. in Los Angeles, California, raised
substantial doubt about Superconductor Technologies Inc.'s ability
to continue as a going concern after auditing the company's
financial statements as of Dec. 31, 2006. The auditing firm cited
substantial net losses of the company and its accumulated deficit
of $190,859,000 as of Dec. 31, 2006.
The company posted a net loss of $1.6 million for the fourth
quarter, as compared to a net loss of $2.1 million in the third
quarter of 2006 and $3.0 million in the fourth quarter of 2005.
Total net revenues for the fourth quarter were $5.3 million,
compared to $5.9 million in the third quarter of 2006 and
$7.4 million in the year ago fourth quarter.
The net loss for 2006 was $29.6 million and included a non-cash
goodwill impairment charge of $20.1 million, as compared to a net
loss of $14.2 million for the prior year. The prior year loss
included restructuring and impairment charges of $1.2 million.
For the full year of 2006, total net revenues were $21.1 million,
compared to $24.2 million for 2005.
"We continue to have success with customers as they roll out high
speed data networks, although fourth quarter orders from our new
Tier 1 carrier customer were less than expected due to its year
end capital budget constraints," Jeff Quiram, STI's president and
chief executive officer, said. "We remain focused on expanding
our customer base and have begun trials with another large
carrier. We are also continuing our efforts on expanding our
product portfolio.
As of Dec. 31, 2006, STI had $10 million in working capital,
including $5.5 million in cash and cash equivalents.
At Dec. 31, 2006, the company's balance sheet showed total assets
of $21.9 million and total liabilities of $3.9 million, resulting
in a $17.9 million stockholders' equity.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1dd7
Based in Santa Barbara, California, SuperConductor Technologies
Inc. -- http://www.suptech.com/-- develops, manufactures and
markets infrastructure products for wireless voice and data
applications.
SWEETMAN RENTAL: Exclusive Plan Filing Period Stretched to May 31
-----------------------------------------------------------------
The Honorable Charles M. Caldwell of the U.S. Bankruptcy Court for
the Southern District of Ohio extended, until May 31, 2007, the
exclusive period wherein Sweetman Rental LLC can file a plan of
reorganization and disclosure statement. The Court extended the
exclusive period after a status conference hearing on March 15,
2007.
Based in Lancaster, Ohio, Sweetman Rental, LLC dba Sweetman Music
-- http://www.sweetmanmusic.com/-- sells musical instruments in
Central and Southeastern Ohio, and offers repair services on
musical instruments. The company filed for Chapter 11 protection
on Jan. 9, 2007 (Bankr. S.D.OH. Case No. 07-50116). Matthew
Fisher, Esq. of the Allen, Kuehnle, Stovall & Neuman LLP
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
assets between $100,000 and $1 million and estimated debts
between $1 million and $100 million.
TARPON INDUSTRIES: Rehman Robson Raises Going Concern
-----------------------------------------------------
Rehman Robson, in Troy, Mich., expressed substantial doubt about
Tarpon Industries Inc.'s ability to continue as a going concern
after auditing the company's financial statements for the year
ended Dec. 31, 2006. The auditor pointed to the company's
sustained recurring net losses since its inception, negative
working capital, and default of its principle loan agreements due
to its violation of specific financial and non-financial debt
covenants.
The company reported a net loss of $9,992,879 on revenues of
$75,330,908 for the year ended Dec. 31, 2006, as compared with a
net loss of $7,309,490 on revenues of $60,850,620 for the prior
year.
As of Dec. 31, 2006, the company's balance sheet reflected total
assets of $24,116,184 and total liabilities of $27,543,400
resulting in shareholders' deficit of $3,427,216. As of Dec. 31,
2006, the company's accumulated deficit stood at $20,713,749, up
from an accumulated deficit as of Dec. 31, 2005, of $10,720,870.
A full-text copy of the company's annual report is available for
free at http://researcharchives.com/t/s?1d03
Headquartered in Marysville, Mich., Tarpon Industries, Inc.
(AMEX:TPO) -- http://www.tarponind.com/--through its wholly owned
subsidiaries within the United States and Canada, manufactures and
sells structural and mechanical steel tubing and engineered steel
storage rack systems. Through an aggressive acquisition-driven
business model, the Company's mission is to become a larger and
more significant manufacturer and distributor of structural and
mechanical steel tubing, engineered steel storage rack systems and
related products.
TOWNSEND CONSTRUCTION: Files for Chapter 11 Protection in Arizona
-----------------------------------------------------------------
Townsend Construction Inc. filed for Chapter 11 bankruptcy last
week in the U.S. Bankruptcy Court for the District of Arizona,
preventing major lender Consolidated Mortgage LLC from selling
Townsend's 1,120 vacant lots in southern Arizona, Joanna Dodder
of The Daily Courier reports.
The source says that with 18 property liens, 73 mechanics liens,
34 complaints from homeowners and subcontractors pending in the
Arizona Registrar of Contractors, and four civil lawsuits under
her belt, owner and former Arizona Senate candidate Elise Townsend
has no intention of selling off everything in a Chapter 7
bankruptcy stating that Townsend Construction is a viable company.
According to the source, Ms. Townsend blamed her misfortune on the
downturn in the construction industry, rumors of bankruptcy and
gender discrimination in a small-town construction business.
However, angry citizen investors and former employees concur that
the problems started when Ms. Townsend decided to run for the
Senate in the spring of 2006. Ms. Townsend wasn't able to give
her full attention to her business, The Daily Courier relates.
In addition, the source says that the Arizona Registrar of
Contractors cancelled the company's residential construction
license and suspended its commercial construction license after
Ms. Townsend failed to respond to a subcontracting complaint filed
by Progressive Plastering. Technically, the company can't fix
problems in Townsend homes.
Headquartered in Prescott, Arizona, Townsend Construction Inc. --
http://www.townsendhomes.com/-- is a semi-custom, custom home
builder. The company filed for Chapter 11 protection on April 16,
2007 (Bankr. D. Ariz. Case No. 07-01693). Mark J. Giunta, Esq.,
represents the Debtor in its restructuring efforts. As of Dec.
31, 2006, the Debtor had $35,144,072 in total assets and
$34,484,047 in total debts.
U.S. STEEL: Earns $273 Million in Quarter Ended March 31
--------------------------------------------------------
United States Steel Corporation reported first quarter 2007 net
income of $273 million on net sales of $3.76 billion, compared to
fourth quarter 2006 net income of $297 million on net sales of
$3.77 billion and first quarter 2006 net income of $256 million on
net sales of $3.73 billion.
Commenting on results, U. S. Steel chairman and chief executive
officer John P. Surma said, "Considering market conditions, we had
a good quarter with solid results from Flat-rolled and Tubular and
a particularly strong performance by our European segment. We
continued to generate substantial cash, redeemed $49 million of
debt and made a voluntary contribution of $35 million to our main
defined benefit pension plan."
The company reported first quarter 2007 income from operations of
$346 million, compared with income from operations of $341 million
in the fourth quarter of 2006 and $369 million in the first
quarter of 2006.
In the first quarter of 2007, net interest and other financial
costs included a $3 million pre-tax charge related to the early
redemption of the company's 10% Senior Quarterly Income Debt
Securities. This charge reduced net income by $2 million. In the
fourth quarter of 2006, net interest and other financial costs
included a $32 million pre-tax charge related to the early
redemption of most of the company's 10-3/4% Senior Notes. This
item and other items not allocated to segments decreased net
income by $33 million. Other items not allocated to segments in
the first quarter of 2006 consisted of an asset impairment charge,
which reduced net income by $5 million.
During the first quarter of 2007, the company repurchased 305,000
shares of common stock for $25 million.
Reportable Segments and Other Businesses
Total segment income from operations was $385 million, or $76 per
ton, in the first quarter of 2007, compared with $414 million, or
$85 per ton, in the fourth quarter of 2006 and $429 million, or
$80 per ton, in the first quarter of 2006.
First quarter 2007 segment results decreased from fourth quarter
2006 as was expected. Flat-rolled income more than doubled from
the fourth quarter due primarily to higher contract prices and
improved operating efficiencies, partially offset by lower spot
prices and higher raw material costs. U. S. Steel Europe income
increased mainly due to higher shipment volumes. Tubular results
were lower than the fourth quarter on lower shipments and prices,
reflecting continued high imports and customer inventory levels.
The decline in results for Other Businesses was related to normal
seasonal effects at the company's iron ore operations in Minnesota
and the non-recurrence of fourth quarter land sales.
At March 31, 2007, the company's balance sheet showed
$10.91 billion in total assets, $6.25 billion in total
liabilities, and $4.66 billion in total stockholders' equity.
Update on Lone Star Acquisition
Concerning the March 28, 2007, definitive agreement between U. S.
Steel and Lone Star Technologies Inc., regulatory filings have
been made under the Hart-Scott-Rodino Act in the United States and
in several other nations. U. S. Steel expects that the
transaction, which is subject to the approval of Lone Star's
shareholders and regulatory approvals, will be completed late in
the second quarter or early in the third quarter of 2007.
About United States Steel
Headquartered in Pittsburgh, Pa., United States Steel Corporation
(NYSE: X) -- http://www.ussteel.com/-- manufactures a wide
variety of steel sheet, tubular and tin products; coke, and
taconite pellets; and has a worldwide annual raw steel capability
of 26.8 million net tons.
U. S. Steel's domestic primary steel operations are: Gary Works in
Gary, Ind.; Great Lakes Works in Ecorse and River Rouge, Mich.;
Mon Valley Works, which includes the Edgar Thomson and Irvin
plants, near Pittsburgh and Fairless Works near Philadelphia, Pa.;
Granite City Works in Granite City, Ill.; Fairfield Works near
Birmingham, Ala.; Midwest Plant in Portage, Ind.; and East Chicago
Tin in East Chicago, Ind. The company also operates two seamless
tubular mills, Lorain Tubular Operations in Lorain, Ohio; and
Fairfield Tubular Operations near Birmingham, Ala.
Internationally, U. S. Steel has steelmaking subsidiaries in
Kosice, Slovakia, and in Sabac and Smederevo, Serbia.
* * *
U.S. Steel carries Standard & Poor's BB+ rating.
US ONCOLOGY: Has $20 Mil. Stockholders' Deficit at Dec. 31, 2006
----------------------------------------------------------------
US Oncology Holdings Inc., the parent company of US Oncology Inc.
reported financial results for the quarter and year ended Dec. 31,
2006.
At Dec. 31, 2007, the company's balance sheet showed $2.36 billion
in total assets and $2.38 billion in total liabilities, resulting
in a $20 million total stockholders' deficit.
Net income for the fourth quarter of 2006 was $3.3 million, a
decrease of $1.2 million from the fourth quarter of 2005 and a
decrease of $3.4 million from the third quarter of 2006.
For the year, net income increased to $26.2 million in 2006 from
$19.1 million in 2005.
Cash Flow
During the quarter ended Dec. 31, 2006, operating cash flow was
$57.1 million, compared to $44.1 million in the third quarter of
2006 which reflects lower interest payments in the current
quarter.
The company generated operating cash flow of $20.5 million during
2006, compared to $113.9 million in 2005. The decrease in
operating cash flow was primarily due to working capital
investments of $113 million during the first quarter of 2006,
principally for inventory and accounts payable at the company's
distribution center.
In December 2006, the company completed a private placement of
participating preferred and common stock to Morgan Stanley
Strategic Investments for proceeds of $150 million. Proceeds from
the offering, along with cash on hand, were used in January 2007
to pay a $190 million dividend to shareholders of record
immediately prior to the offering.
As of Feb. 20, 2007, the company had $105.3 million of cash and
investments, and availability under the revolving credit facility
of $136.7 million.
The company's reported operating cash flow for the quarter ended
Dec. 31, 2006 was $57.1 million. For the year ended Dec. 31,
2006, the company reported operating cash flow was $20.5 million.
For the quarter ended Dec. 31, 2006, US Oncology reported
operating cash flow was $56.5 million. For the year ended
Dec. 31, 2006, US Oncology reported operating cash flow was
$43.6 million.
These factors highlighted the fourth quarter and fiscal year
results:
* Operating cash flow for the year ended Dec. 31, 2006 was
$20.5 million, compared with $113.9 million in 2005. The decrease
in operating cash flow is primarily due to working capital
investments for the company's distribution center made during the
first quarter of 2006.
* During 2006, 173 physicians began practicing as part of the
US Oncology network. For the same period, 100 physicians
separated from the network, including the termination of a service
agreement with a group of 35 physicians comprising the company's
last large net revenue model practice and 41 retirements. In the
fourth quarter of 2006, the company's network grew by 38
physicians, which represents over 50% of the 2006 net growth.
* As of Dec. 31, 2006, 54 physicians had executed agreements
to join the US Oncology network and are expected to begin
practicing under these agreements in 2007. These agreements
include a 5-physician practice affiliating under comprehensive
service agreements that will expand the geographic reach of the
Company's network. Also, at Dec. 31, three integrated cancer
centers were under construction and are expected to begin
providing patient care in 2007.
About US Oncology Inc.
Headquartered in Houston, Texas, US Oncology Inc. --
http://www.usoncology.com/-- provides comprehensive cancer-care
services through a network of more than 1,067 affiliated
physicians. The company provides affiliated physician practices
with administrative and billing support, access to advanced
treatments and technologies at integrated community-based cancer
care centers, therapeutic drug management programs and cancer-
related clinical research studies. US Oncology is a wholly owned
subsidiary of US Oncology Holdings Inc., a holding company. For
the twelve months ended Dec. 31, 2006 the company reported
revenues of $2.8 billion.
* * *
As reported in the Troubled Company Reporter on March 8, 2007,
Standard & Poor's Ratings Services assigned its 'B-' rating to US
Oncology Holdings Inc.'s $400 million senior unsecured floating
rate PIK toggle notes due March 2012. US Oncology Holdings, the
parent of Houston, Texas-based cancer care company US Oncology
Inc., will use the proceeds to repay its existing senior
indebtedness and fund a dividend to its shareholders.
VOUGHT AIRCRAFT: Dec. 31 Balance Sheet Upside-Down by $693 Million
------------------------------------------------------------------
Vought Aircraft Industries Inc. reported $1.6 billion in total
assets and $2.3 billion in total liabilities, resulting in a
$693.3 million in total stockholders' deficit as of Dec. 31, 2006.
The company's December 31 balance sheet also showed strained
liquidity with $520.6 million in total current assets available to
pay $651.3 million in total current liabilities.
Fourth Quarter Results
The net loss for the fourth quarter ended Dec. 31, 2006, was
$6.3 million, as compared with a net loss of $15.6 million for the
same period last year. This reduced loss was primarily the result
of improved program margins partially offset by higher non-
recurring program period expense.
Net sales for the fourth quarter 2006 were $417.6 million, an
increase compared with $360 million for the same period last year.
The growth in revenue was due to increases throughout all of
Vought's product categories, with the largest from increased
deliveries on commercial and military programs.
"We are pleased with our 2006 performance, as strong upward trends
for commercial and military aircraft continued to drive higher
sales across many program platforms," said Vought's president and
chief executive officer, Elmer Doty. "During the year, we moved
forward on all fronts, implementing the majority of our
restructuring actions. The results of these actions will continue
to be reflected in our ongoing performance. Lower operating and
SG&A costs, combined with improved program performance, will
continue to improve the profitability of our ongoing business."
Mr. Doty continued, "As we move forward in 2007, we continue to
take the necessary steps to lay the foundation for growth. This
includes continued progress on the 787 program, which remains on
schedule. It also includes the recent appointment of Keith Howe
as our new chief financial officer. Keith's extensive industry
and financial management experience will be valuable to us as we
continue to grow our business."
Year End Results
For the full year 2006, net sales were $1.5 billion, an increase
compared with $1.3 billion for 2005. The increase is partially
due to customer settlements finalized during the second quarter of
2006, as well as higher delivery rates in all product categories.
Excluding the one-time impact of customer settlements, ongoing
sales for 2006 were $1.4 billion, an increase over last year,
primarily from increased military and business jet program sales.
Net loss for 2006 was $36.7 million, compared with a net loss of
$229.7 million for 2005. This improvement was primarily due to
increased sales and customer settlements in 2006 as well as the
absence of one-time facility consolidation and disruption charges
recorded in 2005.
For the full year 2006, the net cash expenditures for the 787
program were $47 million including start-up, capital and
production costs offset by advances and settlements.
Cash and cash equivalents at the end of the year 2006 were
$93.4 million, as compared with $10.1 million in 2005. As of
Dec. 31, 2006, the company had no borrowings under the company's
$150 million six-year revolving loan. It had long-term debt of
about $687 million, which included $417 million incurred under the
company's senior secured credit facilities and $270 million of 8%
senior notes due 2011. In addition, the company had $47 million
outstanding letters of credit under the $75 million synthetic
facility and $1.3 million of capital lease obligations.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1ddb
787 Program Update
The 787 program continues to be a key focus. Vought has now built
three sets of fuselage barrels and the company's composite
manufacturing process has been verified as acceptable for
production. Global Aeronautica, Vought's joint venture with
Alenia North America, has received the first shipment from Fuji
Heavy Industries and Kawasaki Heavy Industries for integration.
About Vought Aircraft
Vought Aircraft Industries Inc. -- http://www.voughtaircraft.com/
is global independent supplier of aerostructures. Headquartered
in Dallas, the company designs and manufactures major airframe
structures such as wings, fuselage subassemblies, empennages,
nacelles and other components for prime manufacturers of aircraft.
Vought has annual sales of about $1.6 billion and about 5,900
employees in nine U.S. locations. There is currently no
established public trading market for the company's common stock.
WACHOVIA BANK: Fitch Affirms Low-B Ratings on Six Loan Classes
--------------------------------------------------------------
Fitch upgrades Wachovia Bank Commercial Mortgage Trust, series
2004-C12 as:
-- $13.6 million class MAD to 'AAA' from 'BBB-'.
In addition, Fitch affirms the ratings on these classes:
-- $26.2 million class A1 at 'AAA';
-- $112.4 million class A1-A at 'AAA';
-- $199 million class A2 at 'AAA';
-- $82 million class A3 at 'AAA';
-- $474.9 million class A4 at 'AAA';
-- Interest-only class IO at 'AAA';
-- $25.2 million class B at 'AA+';
-- $9.3 million class C at 'AA';
-- $22.6 million class D at 'A';
-- $10.6 million class E at 'A-';
-- $12 million class F at 'BBB+';
-- $12 million class G at 'BBB';
-- $13.3 million class H at 'BBB-';
-- $4 million class J at 'BB+';
-- $2.7 million class K at 'BB';
-- $5.3 million class L at 'BB-';
-- $4 million class M at 'B+';
-- $2.7 million class N at 'B';
-- $2.7 million class O at 'B-'.
Fitch does not rate the $16 million class P.
The upgrade is due to the defeasance of the 11 Madison Avenue
loan. As of the April 2007 distribution date, the pool's
aggregate principal balance has decreased 2.5% to $1.05 billion
from $1.08 billion at issuance; 9.81% of the pool has defeased
since issuance.
Four loans (23.4% of the pool) maintain investment grade credit
assessments. The 11 Madison Avenue loan has defeased since
Fitch's last review in August 2006.
Ernst & Young Plaza (10.9%) is secured by a 1.2 million square
feet office building and retail center as well as a portion of an
adjacent parking garage in the downtown submarket of Los Angeles,
California. As of December 2006, the total occupancy is 86.0%,
with office 91.5% occupied and retail 70.6% occupied. At
issuance, total occupancy was 86.7%, with office 92.4% occupied
and retail 71.1% occupied.
Eastdale Mall (3.0%) is secured by a 485,772 sf regional mall
located in Montgomery, Alabama. The mall is anchored by Dillard's
(177,427 sf) and JC Penney (98,542 sf), which are not part of the
collateral, Parisian (127,938 sf), and Sears (143,504 SF). At
issuance, the collateral was 96.5% occupied with 89.1% in-line
occupancy. As of January 2007, the collateral was 90.9% occupied
with 79.5% in-line occupancy.
Highland Pinetree Apartments (1.7%) is secured by 320 multifamily
units located in Fullerton, California. As of December 2006, the
property was 93.1% occupied compared to 97.8% at issuance.
WACHOVIA BANK: Fitch Holds Ratings on All CRE CDO 2006-1 Classes
----------------------------------------------------------------
Fitch affirms all classes of Wachovia Bank CRE CDO 2006-1
floating-rate notes as:
-- $616,500,000 class A-1A at 'AAA';
-- $68,500,000 class A-1B at 'AAA';
-- $145,000,000 class A2A at 'AAA';
-- $145,000,000 class A-2B at 'AAA';
-- $53,300,000 class B at 'AA';
-- $39,000,000 class C at 'A+';
-- $12,350,000 class D at 'A';
-- $13,650,000 class E at 'A-';
-- $24,700,000 class F at 'BBB+';
-- $16,900,000 class G at 'BBB';
-- $35,100,000 class H at 'BBB-';
-- $13,000,000 class J at 'BB+';
-- $14,950,000 class K at 'BB';
-- $9,100,000 class L at 'BB-';
-- $34,450,000 class M at 'B+';
-- $16,250,000 class N at 'B';
-- $6,500,000 class O at 'B-'.
Deal Summary:
Wachovia CRE CDO is a revolving commercial real estate cash flow
collateralized debt obligation, which closed on July 11, 2006. It
was incorporated to issue $1,300,000,000 of floating-rate notes
and preferred shares. Since close, 38 loans have been added to
the pool and 18 have paid off, resulting in a net increase of 20
loans totaling $173.58 million or a 13.3% increase to the CDO par
balance (including related future funding obligations). Based on
the March 16, 2007 effective date trustee report and Fitch
categorization, the CDO was invested in a portfolio of commercial
mortgage whole loans and A-notes (80.3%), B-notes (6.3%),
mezzanine loans (2.6%), and cash (10.8%). The CDO is also
permitted to invest in commercial mortgage backed securities,
commercial real estate CDOs, REIT debt and synthetic assets.
The collateral manager is Structured Asset Investors, LLC, a
wholly owned subsidiary of Wachovia Corporation. An affiliate,
Wachovia Bank N.A.'s Structured Finance Group, is serving as sub-
advisor. SFG is responsible for selecting assets and monitoring
the portfolio. This CDO has a five year reinvestment period,
during which if all reinvestment criteria are satisfied, principal
proceeds may be used to invest in substitute collateral. The
reinvestment period ends in September 2011.
Collateral Asset Manager:
SFG focuses on providing non-recourse, transitional and high
leverage capital to Wachovia's commercial real estate customer
base. SFG is housed in the corporate and investment banking
group, specifically within the fixed income division's real estate
capital markets group. SFG is rated a 'CAM 2' commercial real
estate loan CDO Asset Manager. SFG is currently staffed by 20
experienced commercial real estate professionals. The current
outstanding balance of the SFG investment portfolio is
approximately $3.9 billion. The unit benefits from the commercial
bank's robust internal procedures and controls. Additionally, the
unit's lending activities are supported by the bank's commercial
mortgage loan servicing units, which carry Fitch ratings of
'CPS2+', 'CMS2', and 'CSS2'.
Performance Summary:
As of the March 2007 trustee report, the CDO has maintained its
original cushion of 6% as of the date the deal was rated. The
Fitch poolwide expected loss (PEL) is 19.875% compared to the
covenant of 25.875%. Although the diversity of the portfolio has
improved, the 38 loans of approximately $585.7 million (45.1% of
the total portfolio) that have been added to the deal since close
currently have a higher expected loss (21.5%) than that of the
original loans as they are in the beginning stages of their
business plans. As expected, the original loans in the portfolio
have improved as those assets have moved towards stabilization,
resulting in a lower expected loss of 18.125%.
Although the cushion is below average for CREL CDOs, the portfolio
is well diversified. Additionally, the expectation is that the
portfolio will continue to be weighted in whole loans and A-notes
and be secured by traditional property types. Wachovia's CREL
origination platform is diverse and well established. As a
result, the expectation is that SFG will be able to manage the
portfolio within more narrowly defined parameters compared with
other CREL CDOs.
At close, the CDO was 75.88% (985.5 million) ramped. As of the
effective date, the CDO is 80% invested in assets with an
additional 9% of the par balance allocated to delayed funding
obligations. Based on the amount invested, the pool has migrated
towards a greater percentage of whole loans and A-notes and a
slightly less percentage of B-notes and mezzanine loans.
The weighted average spread (WAS) of outstanding loan balances
decreased since close to 2.7% from 3.2%; however the WAS still
remains above the covenant of 1.5%. On the other hand, the
weighted average coupon (WAC) has increased slightly to 7.5% from
7.3% at close. However the percent of fixed rate loans is only
1.7%. These loans are unhedged, but the percent is well within
the maximum covenanted bucket percentage of unhedged fixed rated
loans. The weighted average life has remained unchanged from 1.7
years at close, which continues to imply that the loans will fully
turnover during the reinvestment period.
The over-collateralization ratios of all classes have remained
stable since close while the interest coverage ratios have
improved over the same period. The improvement in the IC ratios
is attributed to the ramp up of $585.7 million in loans since
close, for a net increase of $173.58 million when accounting for
payoffs. Both ratios are above their covenants as of the March
2007 effective date trustee report.
Collateral Analysis:
One condo conversion loan (3.77% of the CDO) on a property located
in Florida was purchased out of the CDO at par in December. The
condo conversion was not performing as expected due to slow sales
and was deemed a credit risk security for the months of October
and November 2006, followed by a designation as a 'Defaulted
Security' in December 2006.
The portfolio's largest asset type exposure continues to be
multifamily, 31.2% of the CDO balance. The second largest asset
type exposure is office at 27.7%. All property type
concentrations are within the covenants.
The pool has above average loan diversity relative to other CRE
CDOs. The pool currently consists of 73 loans and the Fitch LDI
score is 201, compared to the covenant of 400. No loan represents
more than 7% of the ramped portfolio. The CDO is well within all
of its geographic location covenants with the largest exposure 31%
located in California.
WARNER MUSIC: To Receive $110 Mil. from Bertelsmann-Napster Deal
----------------------------------------------------------------
Warner Music Group Corp. disclosed Tuesday in a regulatory filing
with the Securities and Exchange Commission that it will receive
$110 million from a settlement of contingent claims held by the
company relating to Bertelsmann AG's relationship with Napster in
2000-2001.
Warner Music says the settlement covers the resolution of the
legal claims of the company's recorded music and music publishing
businesses.
According to the company, Bertelsmann admits no liability in
making the settlement.
Last month, Standard & Poor's Ratings Services noted that as of
Dec. 31, 2006, Warner Music had approximately $2.27 billion of
debt outstanding.
Warner Music's credit status prompted S&P to place its ratings on
the company, including the 'BB-' corporate credit rating, on
CreditWatch with negative implications, following the company's
statement that it is exploring a possible merger agreement with
EMI Group PLC, which EMI management has confirmed.
"The two companies have not announced a deal or the possible
structure of financing, other than indicating that consideration
for any deal would be entirely in cash," said Standard & Poor's
credit analyst Michael Altberg. "This has prompted our
consideration of a potential downgrade."
Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- is
a music company that operates through numerous international
affiliates and licensees in more than 50 countries, including the
Philippines.
WHERIFY WIRELESS: $7.2MM Financing Proceeds Pay Cornell Capital
---------------------------------------------------------------
Wherify Wireless Inc. disclosed that its recent equity financing,
resulting in $7.2 million in gross proceeds, has enabled the
company to meet the terms of a conditional agreement with Cornell
Capital Partners LLC.
Pursuant to the agreement, which was conditioned on the close of
the financing, Cornell agreed:
a) to waive all known defaults of the company that exist as of
April 11, 2007;
b) not to accelerate the repayment of its debentures at any
time prior to Dec. 11, 2007;
c) to extend the maturity date of the debentures to
Feb. 1, 2009;
d) amend the debenture conversion price to a fixed price of
$0.25 with certain anti-dilution provisions; and
e) cancel warrants to purchase 15.5 million shares of common
stock and retain the remaining warrants to purchase
7 million shares of common stock.
"By raising additional capital and restructuring the Cornell
debentures, which significantly reduces the potential stock
overhang, Wherify has taken major steps in positioning the company
for future growth," W. Douglas Hajjar, a director of Wherify,
said. "In the future the company will disclose the appointment of
a new management team and to refine the company's strategy to
address the growing location-based service market."
Full-text copy of the company's 8-K filed on April 24, 2007, with
the Securities and Exchange Commission is available for free at:
http://ResearchArchives.com/t/s?1de7
About Wherify Wireless Inc.
Based in Redwood Shores, California, Wherify Wireless Inc. (OTCBB:
WFYW) -- http://www.wherifywireless.com/-- develops patented
wireless location products and services for family safety,
communications, and law enforcement. The company's portfolio of
intellectual property includes its proprietary integration of the
U.S. Government's Global Positioning System and wireless
communication technologies; its patented back-end location
service; the Wherifone(TM) GPS locator phone which provides real-
time location information and lets families with pre-teens,
seniors, or those with special needs, stay connected and in
contact with each other; and its FACES(R) industry-leading facial
composite technology, which is currently being used by thousands
of public safety agencies worldwide.
The company's balance sheet as of Dec. 31, 2006, showed total
assets of $4.15 million and total liabilities of $24.88 million,
resulting in a total stockholders' deficit of $20.73 million.
WINDHAM COMMUNITY: Moody's Lowers Long-Term Bond Rating to B1
-------------------------------------------------------------
Moody's Investors Service has downgraded Windham Community
Memorial Hospital's long-term bond rating to B1 from Ba3, removing
the rating from Watchlist where it was placed on December 27,
2006. The negative outlook has been maintained at the lower
rating level. The rating action affects approximately
$15.1 million of CHEFA Series C bonds.
The downgrade action follows the receipt of audited financial
statements for fiscal year 2006 financials which show that
unrestricted cash and investments were $1.4 million lower than
originally presented based on preliminary unaudited FY 2006
results. The downgrade also reflects a continued delay in the
receipt of approximately $5 million of funds, currently held in
accounts receivable, that management had expected to receive by
this time. As a result, cash remains very weak compared to
national benchmarks. Whether these funds will be realized and the
timing of collection remains uncertain.
Legal Security: The CHEFA Series C bonds are secured by a mortgage
of WCMH property.
Interest Rate Derivatives: WCMH has no swaps outstanding.
Strengths
* Turnaround efforts begun in FY 2003 that have lead to
stabilization of operating performance with breakeven
performance in FY 2005 and a modest $328,000 loss in
FY 2006, significant improvement over a high $4.2 million
operating loss in FY 2003; 5 months of FY 2007 performance
shows operating income on a par with FY 2006; debt service
coverage is adequate at 2.31 times in FY 2006
* Steady 6% increase in inpatient admissions and 9% increase
in outpatient surgeries from FY 2002 to FY 2006; 4% increase
in admissions in 5 months of FY 2007 over the same period in
FY 2006
* Leading market position in its service area with limited
competition
* $5 million of capital expenditures in FY 2006 for necessary
investments in picture archiving and communication systems,
an upgraded information system, and a new emergency room,
double the size of the previous one; additional $3.4 million
of investments in CT scanner and MRI system upgrades in
FY 2007 anticipated
Challenges
* Decline in unrestricted cash and investments to very low
$2.0 million (9.7 days) at FYE 2006 from higher $9.2 million
(50.9 days) at FYE 2005; corresponding decline in cash-to-
debt to weak 11.1% from stronger 48.5% at FYE 2005; cash as
of February 28, 2007 shows slight increase to $2.4 million
or 11.5 days
* Accounts receivable at high 68.8 days at FYE 2006 due to
approximately $5 million of funds being held up in accounts
receivable as a result of converting to a new information
system in November 2005; uncertainty surrounding receipt of
these funds
* Physician retention and recruitment challenges due to the
hospital's small size and rural demographic
* A $3.4 million increase in debt via capital leases as of
Feb. 28, 2007
Outlook
The negative outlook reflects our concerns that operating
performance will continue to be challenged due to the
demographically challenged market and physician issues. It also
reflects the very limited cash position which provides the
hospital with little cushion in the event of operating
deficiencies.
What could change the rating -- UP
Continued increase in patient volumes; improved and sustained
operating margins leading to materially improved liquidity ratios
What could change the rating -- DOWN
Decline in unrestricted liquidity; decline in patient volumes
leading to weakening of operating performance and debt ratios; any
increase in debt without material increase in cash flow generation
Key Indicators
Assumptions & Adjustments:
- Based on financial statements for Windham Community Memorial
Hospital, Inc.
- First number reflects audit year ended September 30 2005
- Second number reflects audit year ended September 30, 2006
- Investment returns smoothed at 6% unless otherwise noted
* Inpatient admissions: 4,807; 4,947
* Total operating revenues: $69.4 million; $76.1 million
* Moody's adjusted net revenue available for debt service:
$5.2 million; $4.3 million
* Total debt outstanding: $19.1 million; $17.6 million
* Maximum annual debt service: $1.9 million; $1.9 million
* MADS Coverage based on reported investment income:
2.68 times; 2.53 times
* Moody's adjusted MADS coverage: 2.82 times; 2.31 times
* Debt-to-cash flow: 4.79 times; 5.57 times
* Days cash on hand: 50.9 days; 9.7 days
* Cash-to-debt: 48.5%; 11.1%
* Operating margin: 0.1%; -0.4%
* Operating cash flow margin: 6.2%; 5.3%
Rated Debt (debt outstanding as of Sept. 30, 2006)
CHEFA Series C bonds: $15.1 million
YUKOS OIL: Auctioneer Receives Zero Bids for Eight Non-Core Assets
------------------------------------------------------------------
The Russian Federal Property Fund received no applications for the
assets of bankrupt OAO Yukos Oil Co.'s Lot 6, which was scheduled
for auction on April 20, Interfax reports.
The bidding deadline expired on April 18.
Interfax says the lot, which carried a RUR3.12 million starting
price and a RUR31,000 bid increment, is comprised of Yukos' eight
non-core assets:
-- 86.61% stake in the ES financial and industrial group
-- 100% stake in Yukos-Invest investment company
-- 100% stake in Ordaliya 2000
-- 90.7% stake in Rus
-- 100% stake in the Granit private security company
-- 100% stake in Corporate Security Service
-- 100% stake in Audit and Balance Sheets company
-- 100% in FTT Service
Four out of 14 lots have been auctioned to date. These include:
Lot Winning Bid
No. Assets Auction Winner (in RUR)
--- ------------------------ -------------- -------------
1 9.44% in Rosneft Rosneft through 197.8 billion
12 Yuganskneftegaz RN-Razvitiye
promissory notes
2 20% in Gazprom Neft EniNeftegaz for 151.5 billion
100% in OAO Arcticgaz Gazprom
100% in ZAO Urengoil
19 other assets
4 100% in ZAO Energy Monte-Valle 3.5 billion
Service Co.
100% in ESKOM- EnergoTrade
25.73% in Belgorodenergo
25.15% in Tambovenergo
25.15% in Tambov Energy
Sales Company
25.15% in Tambov Trunk
Grid Company
25% in Belgorod Trunk
Grid Company
25% in Belgorod Sales
Company
25% in Corporate Service
Systems
3.18% in Territorial
Generation Company
No. 4
5 energy assets in the Rosneft through 1.03 billion
Tambov and Belgorod Neft-Aktiv
regions
The auction for Lot No. 3, which comprised of Yukos' research and
development assets, was called off due to a lack of bids.
Interfax relates the assets will be grouped together with Lot No.
14, which will be sold next month.
About Yukos Oil
Headquartered in Moscow, Yukos Oil -- http://yukos.com-- is an
open joint stock company existing under the laws of the Russian
Federation. Yukos is involved in energy industry substantially
through its ownership of its various subsidiaries, which own or
are otherwise entitled to enjoy certain rights to oil and gas
production, refining and marketing assets.
The Company filed for Chapter 11 protection on Dec. 14, 2004
(Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed
on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A few days
later, the Russian Government sold its main production unit
Yugansk to a little-known firm Baikalfinansgroup for US$9.35
billion, as payment for $27.5 billion in tax arrears for 2000-
2003. Yugansk eventually was bought by state-owned Rosneft,
which is now claiming more than $12 billion from Yukos.
On March 10, 2006, a 14-bank consortium led by Societe Generale
filed a bankruptcy suit in the Moscow Arbitration Court in an
attempt to recover the remainder of a $1 billion debt under
outstanding loan agreements. The banks, however, sold the claim
to Rosneft, prompting the Court to replace them with the state-
owned oil company as plaintiff.
On April 13, 2006, court-appointed external manager Eduard
Rebgun filed a chapter 15 petition in the U.S. Bankruptcy Court
for the Southern District of New York (Bankr. S.D.N.Y. Case No.
06-0775), in an attempt to halt the sale of Yukos' 53.7%
ownership interest in Lithuanian AB Mazeikiu Nafta.
On May 26, 2006, Yukos signed a $1.49 billion Share Sale and
Purchase Agreement with PKN Orlen S.A., Poland's largest oil
refiner, for its Mazeikiu ownership stake. The move was made a
day after the Manhattan Court lifted an order barring Yukos from
selling its controlling stake in the Lithuanian oil refinery.
On Aug. 1, 2006, the Hon. Pavel Markov of the Moscow Arbitration
Court upheld creditors' vote to liquidate OAO Yukos Oil Co. and
declared what was once Russia's biggest oil firm bankrupt.
YUKOS OIL: Samaraneftegaz Unit Plans Restructuring of Operations
----------------------------------------------------------------
Samaraneftegaz, a wholly owned subsidiary of OAO Yukos Oil Co.
plans to restructure its operations, Interfax reports citing
company spokesperson Natalia Sycheva as saying.
Interfax says the company aims to set up three branches in the
north, east and south of Samara region, which will work
independently from the head office in Samara. The restructuring
will see units in Sukhodol, Neftegorsk and Otradnoye and will be
carried out to optimize on-site work by the company, Interfax
relates.
According to Ms. Sycheva, the company had a similar scheme a few
years back until its owner decided to centralize management in
2000.
As reported in the Troubled Company Reporter-Europe on April 11,
Samaraneftegaz will be auctioned on May 10 along with Yukos' oil
refineries comprising of Kuibyshevsky, Novokuibyshevsky, and
Syzransky, and other assets, as part of Yukos' liquidation
process.
Ms. Sycheva said the restructuring process is not related to the
upcoming auction. If the new owner approves the plan, it will be
implemented in 2008, Interfax relates.
The block will carry a RUR154.9 billion or US$6 billion starting
price with a RUR260 million increment. Bidding deadline for the
block is set at May 7.
About Yukos Oil
Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an
open joint stock company existing under the laws of the Russian
Federation. Yukos is involved in energy industry substantially
through its ownership of its various subsidiaries, which own or
are otherwise entitled to enjoy certain rights to oil and gas
production, refining and marketing assets.
The Company filed for Chapter 11 protection on Dec. 14, 2004
(Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed
on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A few days
later, the Russian Government sold its main production unit
Yugansk to a little-known firm Baikalfinansgroup for US$9.35
billion, as payment for $27.5 billion in tax arrears for 2000-
2003. Yugansk eventually was bought by state-owned Rosneft,
which is now claiming more than $12 billion from Yukos.
On March 10, 2006, a 14-bank consortium led by Societe Generale
filed a bankruptcy suit in the Moscow Arbitration Court in an
attempt to recover the remainder of a $1 billion debt under
outstanding loan agreements. The banks, however, sold the claim
to Rosneft, prompting the Court to replace them with the state-
owned oil company as plaintiff.
On April 13, 2006, court-appointed external manager Eduard
Rebgun filed a chapter 15 petition in the U.S. Bankruptcy Court
for the Southern District of New York (Bankr. S.D.N.Y. Case No.
06-0775), in an attempt to halt the sale of Yukos' 53.7%
ownership interest in Lithuanian AB Mazeikiu Nafta.
On May 26, 2006, Yukos signed a $1.49 billion Share Sale and
Purchase Agreement with PKN Orlen S.A., Poland's largest oil
refiner, for its Mazeikiu ownership stake. The move was made a
day after the Manhattan Court lifted an order barring Yukos from
selling its controlling stake in the Lithuanian oil refinery.
On Aug. 1, 2006, the Hon. Pavel Markov of the Moscow Arbitration
Court upheld creditors' vote to liquidate OAO Yukos Oil Co. and
declared what was once Russia's biggest oil firm bankrupt.
* S&P Puts Ratings on 12 Classes from 9 Issuers Under Neg. Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on 12
subordinate classes from 11 different 2006-vintage residential
mortgage-backed securities transactions from nine issuers on
CreditWatch with negative implications. The affected classes
are rated 'AA', 'BBB+', 'BBB-', 'BB+', 'BB', and 'B'.
The CreditWatch placements reflect early signs of poor performance
of the collateral backing these transactions. Ten of the
transactions were issued during the first half of 2006, while the
other two were issued in the second half. The percentage of loans
in these pools that are severely delinquent (90-plus-days,
foreclosure, REO) ranges from 3.60% (Alternative Loan Trust
2006-HY3) to 12.66% (MASTR Asset Backed Securities Trust 2006-
WMC2) of the current pool balances. Cumulative losses range from
zero (several of the pools) to 2.39% (Ace Securities Corp. Home
Loan Trust 2006-SL2) of the original pool balances, but most of
these transactions have not experienced significant losses, except
for Ace Securities Corp. Home Loan Trust 2006-SL2.
The placement of S&P's ratings on CreditWatch when a transaction
has not experienced a loss represents a new methodology derived
from S&P's normal surveillance practices. S&P had not used this
methodology before applying it to the 2006 and 2005 vintages
because transactions from earlier vintages did not see the
combination of early high delinquencies and minimal or no losses.
Because these deals have not seen any substantial cumulative
realized losses, we measured deal performance against the stressed
time to disposition of the loans and a reinstatement rate
assumption of zero for all of the severely delinquent loans.
The performance of many of the 2006 transactions may be exhibiting
weakness because of origination issues, such as aggressive
residential mortgage loan underwriting, first-time home-buyer
programs, piggyback second-lien mortgages, speculative borrowing
for investor properties, and a higher concentration of
"affordability" loans.
Ten of the transactions with subordinate ratings being placed on
CreditWatch were issued during the first half of 2006, before S&P
raised its loss coverage levels for loans with the layered risks
mentioned above. Standard & Poor's consecutively raised its 'BBB'
loss coverage levels for transactions issued from the first
through fourth quarters of 2006. The average quarterly 'BBB' loss
coverage levels in 2006 were as follows: 7.36% in the first
quarter; 7.83% in the second quarter; 12.10% in the third quarter;
and 12.70% in the fourth quarter. Future rating actions on the
classes from the transactions listed below will depend on the
extent to which the high levels of severely delinquent mortgage
loans result in increased levels of actual realized losses. Based
on March 2007 reporting data, transactions issued during the
second half of 2006 are generally passing the stress levels,
primarily because they typically have more loss coverage.
Credit support for each series is derived from either
subordination or a combination of subordination, excess interest,
and overcollateralization. O/C levels are at or near their
targets for these deals, except for the Ace Securities Corp. Home
Equity Loan Trust 2006-SL2 transaction, which is below its target
by 31%. Subordination amounts, however, have not yet declined
significantly.
Standard & Poor's will continue to closely monitor the performance
of these transactions. Over the next three months, S&P will
monitor any losses incurred from the liquidation of REO assets.
If these losses are material, and if delinquencies continue at
their present pace, S&P will likely lower its ratings up to three
notches, depending on individual performance. Conversely, if the
delinquency rates decline and the transactions do not realize
substantial cumulative losses, S&P will affirm the ratings and
remove them from CreditWatch negative.
These transactions are collateralized by Alt-A (five), subprime
(two), closed-end second-lien (three), or multiple loan (one)
products. The transactions were initially backed by pools of
fixed- and adjustable-rate mortgage loans secured by first,
second, or third liens on one- to four-family residential
properties.
Ratings Placed on Creditwatch Negative
Ace Securities Corp. Home Equity Loan
Trust 2006-SL2
Rating
------
Series Class To From
------ ----- -- ----
2006-SL2 B-1 BB+/Watch Neg BB+
Alternative Loan Trust
Rating
------
Series Class To From
------ ----- -- ----
2006-HY3 B-4 B/Watch Neg B
2006-OC1 M-8 BBB-/Watch Neg BBB-
2006-OC2 M-9 BBB-/Watch Neg BBB-
2006-OC4 B BBB+/Watch Neg BBB+
Banc of America Funding 2006-D Trust
Rating
------
Series Class To From
------ ----- -- ----
2006-D 1-M-6 BBB-/Watch Neg BBB-
Bear Stearns Alt-A Trust 2006-3
Rating
------
Series Class To From
------ ----- -- ----
2006-3 I-B-3 BB/Watch Neg BB
MASTR Asset Backed Securities Trust 2006-WMC2
Rating
------
Series Class To From
------ ----- -- -----
2006-WMC2 M-10 BB+/Watch Neg BB+
Nomura Asset Acceptance Corp. Alternative Loan Trust,
Series 2006-S2
Rating
------
Series Class To From
------ ----- -- ----
2006-S2 B-4 BB+/Watch Neg BB+
2006-S2 B-5 BB/Watch Neg BB
Securitized Asset Backed Receivables LLC
Trust 2006-WM1
Rating
------
Series Class To From
------ ----- -- -----
2006-WM1 B-4 BB+/Watch Neg BB+
Structured Asset Securities Corp. Mortgage
Loan Trust 2006-S2
Rating
------
Series Class To From
------ ----- -- ----
2006-S2 B4 BB/Watch Neg BB
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:
In re Arrin Systems, Inc.
Bankr. S.D. Calif. Case No. 07-01926
Chapter 11 Petition filed April 18, 2007
See http://bankrupt.com/misc/casb07-01926.pdf
In re The K Corporation
Bankr. N.D. Ind. Case No. 07-20935
Chapter 11 Petition filed April 18, 2007
See http://bankrupt.com/misc/innb07-20935.pdf
In re Victor M. Bello
Bankr. N.D. Ohio Case No. 07-12705
Chapter 11 Petition filed April 18, 2007
See http://bankrupt.com/misc/ohnb07-12705.pdf
In re Key Largo Watersports, Inc.
Bankr. S.D. Fla. Case No. 07-12820
Chapter 11 Petition filed April 19, 2007
See http://bankrupt.com/misc/flsb07-12820.pdf
In re Route 18 Amusement Center, Inc.
Bankr. D. N.J. Case No. 07-15391
Chapter 11 Petition filed April 19, 2007
See http://bankrupt.com/misc/njb07-15391.pdf
In re Affordable Dentures-Hazleton, P.C.
Bankr. M.D. Pa. Case No. 07-50948
Chapter 11 Petition filed April 20, 2007
See http://bankrupt.com/misc/pamb07-50948.pdf
In re Sorkin Sorkin & Fritz
Bankr. E.D. Pa. Case No. 07-12303
Chapter 11 Petition filed April 20, 2007
See http://bankrupt.com/misc/paeb07-12303.pdf
In re Stewart RPH, LLP
Bankr. D. Ariz. Case No. 07-01778
Chapter 11 Petition filed April 20, 2007
See http://bankrupt.com/misc/azb07-01778.pdf
In re Yeshiva and Congregation Zanzer Klaus
Bankr. S.D.N.Y. Case No. 07-22356
Chapter 11 Petition filed April 20, 2007
See http://bankrupt.com/misc/nysb07-22356.pdf
In re 11076 Lampione Street Corporation
Bankr. D. Nev. Case No. 07-12228
Chapter 11 Petition filed April 23, 2007
See http://bankrupt.com/misc/nvb07-12228.pdf
In re CATIBE Inc.
Bankr. D. P.R. Case No. 07-02152
Chapter 11 Petition filed April 23, 2007
See http://bankrupt.com/misc/prb07-02152.pdf
In re Hansen Mechanical Inc.
Bankr. N.D. Ill. Case No. 07-07278
Chapter 11 Petition filed April 23, 2007
See http://bankrupt.com/misc/ilnb07-07278.pdf
In re Kata Inc.
Bankr. E.D. Pa. Case No. 07-20678
Chapter 11 Petition filed April 23, 2007
See http://bankrupt.com/misc/paeb07-20678.pdf
In re Ocean Fresh Seafood Corp.
Bankr. D. N.J. Case No. 07-15539
Chapter 11 Petition filed April 23, 2007
See http://bankrupt.com/misc/njb07-15539.pdf
In re Catherine L. Littleton
Bankr. C.D. Calif. Case No. 07-11323
Chapter 11 Petition filed April 24, 2007
See http://bankrupt.com/misc/cacb07-11323.pdf
In re K&M Contracting, Inc.
Bankr. D. N.J. Case No. 07-15580
Chapter 11 Petition filed April 24, 2007
See http://bankrupt.com/misc/njb07-15580.pdf
In re Performance Silicones Inc.
Bankr. C.D. Calif. Case No. 07-12203
Chapter 11 Petition filed April 24, 2007
See http://bankrupt.com/misc/cacb07-12203.pdf
In re White & Rose Copiague, Ltd.
Bankr. E.D. N.Y. Case No. 07-71437
Chapter 11 Petition filed April 24, 2007
See http://bankrupt.com/misc/nyeb07-71437.pdf
In re White & Rose Woodbury, Ltd.
Bankr. E.D. N.Y. Case No. 07-71435
Chapter 11 Petition filed April 24, 2007
See http://bankrupt.com/misc/nyeb07-71435.pdf
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy,
Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva,
Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez,
Tara Marie A. Martin, and Peter A. Chapman, Editors.
Copyright 2007. All rights reserved. ISSN: 1520-9474.
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publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
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