/raid1/www/Hosts/bankrupt/TCR_Public/070816.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, August 16, 2007, Vol. 11, No. 193
Headlines
23 CALCO: Case Summary & Five Largest Unsecured Creditors
ACCREDITED HOME: Court Sets Trial Date for Lone Star Pending Suit
ACCREDITED HOME: 10-Q Filing Delay Spurs Nasdaq Deficiency Notice
ADVANCED CARDIOLOGY: Court OKs Miguel Carbuccia as Expert Witness
ADVANCED HOMECARE: Moody's Junks Rating on Second Lien Term Loan
AIRTRAN HOLDINGS: Increases Offer To Acquire Midwest Airlines
AIRTRAN HOLDINGS: Shareholder Support for Midwest Buyout Increases
ALLIANCE LAUNDRY: S&P Places All Ratings Under Negative Watch
ALLIS-CHALMERS: Inks New Employment Pacts with CEO and CFO
AMERICAN HOME: Creditors Panel Selects Hahn & Hessen as Counsel
ARAMARK CORP: Stronger Credit Cues S&P Stable Outlook
ASSET SECURITIZATION: S&P Affirms B Rating on Class B-1 Certs.
BALLY TOTAL: Wants Pacts with Harbinger, et al. Approved
BALLY TOTAL: Inks Pact Amending Morgan Stanley DIP Loan
BAY CHEVROLET: Selling GM Franchise and Other Assets
BELLAVISTA MORTGAGE: S&P Assigns Default Rating on Class I-B-4
BLACK PRESS: S&P Holds B+ Rating and Removes Negative CreditWatch
BUCKNER APARTMENT: Case Summary & 19 Largest Unsecured Creditors
CAPITAL GROWTH: Posts $8.4 Million Net Loss in Qtr. Ended June 30
CENTENNIAL COMMS: May 31 Balance Sheet Upside-Down by $1.1 Billion
CENTRIX FINANCIAL: Court Sets Sept. 7 Admin. Claims Bar Date
CHEMTURA CORP: Incurs $2 Million Net Loss in 2007 Second Quarter
CLAUS ZIEGER: Case Summary & 19 Largest Unsecured Creditors
COMPTON PETROLEUM: Unit Gets 26.55 Mil. Tenders of Stylus Shares
CONNORS BROS: S&P Revises Outlook to Stable from Positive
DECKER OAKS: Voluntary Chapter 11 Case Summary
DEVELOPMENT FINANCE: Fitch Affirms BB Issuer Default Rating
DRS TECHNOLOGIES: Earns $1.7 Million in First Qtr. Ended June 30
DURA AUTOMOTIVE: Court Approves Backstop Rights Purchase Agreement
DURA AUTOMOTIVE: Court Okays Sale of Atwood Mobile for 160.2 Mil.
FLOWSERVE CORP: Moody's Affirms Ba3 Corporate Family Rating
GENERAL MOTORS: Completes $5.6 Billion Allison Transmission Sale
GENERAL MOTORS: Paying $0.25 Per Share Dividend on Sept. 10
GEOEYE INC: Roberta Lenczowski Joins Board of Directors
HC INNOVATIONS: Posts $1.9 Million Net Loss in Qtr. Ended June 30
HEALTHCARE ACQUISITION: Court Starts Hearing on PharmAthene Merger
HOVNANIAN ENTERPRISES: Weakening Market Cues S&P to Cut Ratings
I/OMAGIC CORP: Posts $506,535 Net Loss in Quarter Ended March 31
ICE 1: S&P Rates $40 Million Class D Notes at BB
IMPART MEDIA: Posts $1.8 Million Net Loss in Quarter Ended June 30
INTEGRA TELECOM: Secures $245 Mil. Equity Investment from Warburg
KC KRAMERIA: Case Summary & Four Largest Unsecured Creditors
LAZARD LTD: Paying $0.09 Per Share Quarterly Dividend on Aug. 31
LB-UBS COMMERCIAL: S&P Affirms B+ Rating on Class L Certificates
LIBERTY TAX III: June 30 Balance Sheet Upside-Down by $104.4 Mil.
LIMITED BRANDS: Declares Quarterly Dividend of $0.15 Per Share
LITTLE ROCK: S&P Lowers Rating on S. 2004B Revenue Bonds to BB
LPATH INC: Posts $3.5 Million Net Loss in Quarter Ended June 30
MASSEY ENERGY: Paying $0.04 Per Share Dividend on October 9
MEDICOR LTD: Court to Approve Asset Sale Procedures on Aug. 22
MEDQUEST INC: Moody's Affirms Caa1 Corporate Family Rating
MORGAN STANLEY: Fitch Retains Junk Rating on $7.5MM Class J Certs
MOVIE GALLERY: S&P Lowers CCC+ Corporate Credit Rating to CC
MPS GROUP: Board Authorizes Additional $75 Mil. Stock Repurchase
MSIM PECONIC: S&P Assigns BB Prelim Rating on $16MM Class E Notes
NATIONAL RECREATIONAL: Voluntary Chapter 11 Case Summary
NEWPARK RESOURCES: Inks $21.3 Million Asset Purchase Pact with SEM
POGO PRODUCING: Completes Sale of Northrock Resources for $2 Bil.
RED MILE: June 30 Balance Sheet Upside-Down by $1.9 Million
RF MICRO: To Acquire Sirenza Microdevices for $900 Million
ROBERT CALLEJO: Case Summary & Eight Largest Unsecured Creditors
ROBERT CHARTAIN: Case Summary & Nine Largest Unsecured Creditors
RONCO CORP: Judge Mund OKs Levene Neale as Panel's Bankr. Counsel
RONCO CORPORATION: Sells All Assets to Ronco Acquisition
ROTECH HEALTHCARE: Posts $6.6 Mil. Net Loss in Qtr. Ended June 30
RYERSON INC: Advises Stockholders to Reject Harbinger's Nominees
SANDY CREEK: Moody's Rates $1 Billion First Lien Term at Ba3
SECURUS TECH: Commences Exchange Offer for 11% Senior Sec. Notes
SHAW GROUP: Finalizes $1.1 Billion Mirant Power Plants Contract
SOLECTRON CORP: Special Stockholders' Meeting Set for Sept. 27
SOTHEBY'S: Moody's Lifts Corporate Family Rating to Ba2
SOUEIDAN GAS: Voluntary Chapter 11 Case Summary
SPATIALIGHT INC: June 30 Balance Sheet Upside-Down by $11.9 Mil.
SPECTRUM BRANDS: Posts $7.4 Mil. Net Loss in Quarter Ended July 1
SR TELECOM: June 30 Balance Sheet Upside-Down by CDN$14 Million
STRUCTURED ASSET: Moody's May Cut Rating on Class B1 Certificates
TARPON IND: Inks Loan Pacts with Laurus to Repay LaSalle Bank
TECUMSEH PRODUCTS: Three New Members Join Board of Directors
TENNECO INC: Fitch Affirms BB- Issuer Default Rating
THERMADYNE HOLDINGS: Strong Performance Cues S&P to Lift Rating
THORNBURG MORTGAGE: No Plans of Filing for Bankruptcy, COO Says
THORNBURG MORTGAGE: Board Moves Dividend Payment to September 17
THORNBURG MORTGAGE: Moody's Cuts Sr. Unsecured Debt Rating to B2
TRAPEZA CDO: Fitch Puts BB+ Rating on $5 Million Class G Notes
UNIVERSAL INSURANCE: Accepting Buyout Bids Until August 31
WARNACO INC: Moody's Affirms Ba3 Corporate Family Rating
* John Bowman Joins King & Spalding's Houston Office as Partner
* Scouler & Co. Appoints John Hedge at Newly Opened Atlanta Office
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
23 CALCO: Case Summary & Five Largest Unsecured Creditors
---------------------------------------------------------
Debtor: 23 Calco Inc.
1800 Valley View Lane, Suite 300
Dallas, TX 75234
Bankruptcy Case No.: 07-33953
Chapter 11 Petition Date: August 14, 2007
Court: Northern District of Texas (Dallas)
Debtor's Counsel: John P. Lewis, Jr.
1412 Main Street, Suite 210
Dallas, TX 75202
Tel: (214) 742-5925
Fax: (214) 742-5928
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's Five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
L.C. Veal & Son Excavating excavation services $336,750
7020 Catamaran Drive
Citrus Heights, CA 95621
Bay Rose, Ltd. loans $60,000
5000 East 2nd Street, Unit L
Benicia, CA 94510
County of Sacramento, real property taxes $28,004
California
700 H Street, Room 1710
Sacramento, CA 95814
City of Folson, California potential claims unknown
under subdivision
agreement
Lincoln General Insurance indemnity for labor unknown
Company and materials bond
ACCREDITED HOME: Court Sets Trial Date for Lone Star Pending Suit
-----------------------------------------------------------------
The Delaware Chancery Court has agreed to an expedited trial in
Accredited Home Lenders Holding Co.'s pending lawsuit against Lone
Star Fund V (U.S.), L.P. and two of its affiliates, which lawsuit
seeks specific performance of Lone Star's obligations to close
Lone Star's tender offer for the outstanding common stock of
Accredited and to complete the merger. The Court set the trial
for late September or early October of this year.
The company also disclosed that, as of 5:00 p.m, Eastern time, on
Aug. 14, 2007, over 97% of Accredited's outstanding common stock
had been validly tendered and not withdrawn in response to Lone
Star's tender offer (including approximately 40% delivered through
notices of guaranteed delivery). With this development,
Accredited believes that all conditions to closing the tender
offer will have been satisfied at the currently scheduled
expiration time of midnight, Eastern time, on Aug. 14, 2007.
Accredited noted that, on Aug. 13, 2007, Lone Star had sent
Accredited a letter stating that Lone Star would extend the tender
offer beyond the Expiration if Accredited requested an extension
under the Agreement and Plan of Merger between the parties.
However, Accredited responded in a letter to Lone Star earlier
today stating that Accredited could not consider making such a
request because Accredited does not know which conditions to the
closing of the tender offer Lone Star believes have not been
satisfied. Accredited's letter also stated that, if more than 50%
of Accredited's outstanding common stock had been tendered at the
Expiration and Lone Star did not accept and pay for the tendered
shares, Accredited expected that Lone Star, in order to preserve
the status quo, would extend the tender offer throughout the
pendency of the litigation. Lone Star subsequently reported that
the tender offer was extended until midnight on Aug. 28, 2007.
About Lone Star Funds
Lone Star -- http://www.lonestarfunds.com/-- is a private equity
firm in the U.S. Since 1995, the principals of Lone Star have
organized private equity funds totaling more than $13.3 billion to
invest globally in corporate secured and unsecured debt
instruments, real estate related assets and select corporate
opportunities.
About Accredited Home
Headquartered in San Diego, California, Accredited Home Lenders
Holding Co. (NASDAQ:LEND) -- http://www.accredhome.com/-- is a
mortgage company operating throughout the U.S. and in Canada.
Founded in 1990, the company originates, finances, securitizes,
services, and sells non-prime mortgage loans secured by
residential real estate.
* * *
As reported in the Troubled Company Reporter on April 5, 2007,
Accredited received waivers of certain covenants on three of its
warehouse facilities, which have a combined total of approximately
$100 million in outstanding advances at March 31, 2007.
Accredited agreed with its lenders that it will not draw down
additional borrowings under the facilities at the current time.
In the event such modifications or waivers on the company's credit
facilities are required and Accredited is unable to obtain them
during the remainder of 2007 or thereafter, Accredited may trigger
an event of default under its credit facilities, which could in
turn result in cross defaults under the company's other
facilities. The occurrence of such events would have a material
and adverse impact on the company's ability to fund mortgage loans
and continue as a going concern.
ACCREDITED HOME: 10-Q Filing Delay Spurs Nasdaq Deficiency Notice
-----------------------------------------------------------------
Accredited Home Lenders Holding Co. received an additional
deficiency notice from the NASDAQ Listing Qualifications Staff on
Aug. 13, 2007, due to the delay in the filing of the company's
Form 10-Q for the quarter ended June 30, 2007, as required by the
NASDAQ Marketplace Rule 4310(c)(14). The notice was required by
NASDAQ rules due to the company's announcement on Aug. 10, 2007,
that it will not file its Form 10-Q prior to the expiration of the
12b-25 extension period.
As reported in the Troubled Company Reporter on March 22, 2007,
Accredited received a notice of non-compliance from NASDAQ on
March 16, 2007 because of the delay in the filing of the company's
Form 10-K for the fiscal year ended Dec. 31, 2006. Also as
previously reported, Accredited received an additional deficiency
notice from NASDAQ on May 14, 2007 because of the delay in the
filing of the company's Form 10-Q for the quarter ended March 31,
2007.
In response to that notice, Accredited requested a hearing before
a NASDAQ Listing Qualifications Panel. At the hearing, which was
held on May 3, 2007, the company presented its plan to regain
compliance with NASDAQ's filing requirement. On July 23, 2007,
the NASDAQ Listing Qualifications Panel determined to continue the
listing of the company's common stock if the company filed its
Form 10-K for 2006 by Sept. 12, 2007 and its Form 10-Q for the
quarter ended March 31, 2007 by Sept. 18, 2007. On Aug. 2, 2007,
the company filed its Form 10-K for 2006. The company is
currently working on completing the Form 10-Q for the quarter
ended March 31, 2007 and will then begin work on the Form 10-Q for
the quarter ended June 30, 2007.
NASDAQ has provided Accredited with the opportunity to make a
submission in response to the most recent notice by Aug. 20, 2007.
The company intends to provide a timely submission to NASDAQ for
its review.
About Accredited Home
Headquartered in San Diego, California, Accredited Home Lenders
Holding Co. (NASDAQ:LEND) -- http://www.accredhome.com/-- is a
mortgage company operating throughout the U.S. and in Canada.
Founded in 1990, the company originates, finances, securitizes,
services, and sells non-prime mortgage loans secured by
residential real estate.
* * *
As reported in the Troubled Company Reporter on April 5, 2007,
Accredited received waivers of certain covenants on three of its
warehouse facilities, which have a combined total of approximately
$100 million in outstanding advances at March 31, 2007.
Accredited agreed with its lenders that it will not draw down
additional borrowings under the facilities at the current time.
In the event such modifications or waivers on the company's credit
facilities are required and Accredited is unable to obtain them
during the remainder of 2007 or thereafter, Accredited may trigger
an event of default under its credit facilities, which could in
turn result in cross defaults under the company's other
facilities. The occurrence of such events would have a material
and adverse impact on the company's ability to fund mortgage loans
and continue as a going concern.
ADVANCED CARDIOLOGY: Court OKs Miguel Carbuccia as Expert Witness
-----------------------------------------------------------------
Advanced Cardiology Center Corp. has obtained permission from
the U.S. Bankruptcy Court for the District of Puerto Rico to
engage the services of Eng. Miguel Carbuccia Rivera as its
expert witness.
As reported in the Troubled Company Reporter on June 28, 2007,
the Debtor told the Court that Mr. Carbuccia has agreed to prepare
an expert report to testify as an witness in the proceedings of
the Debtor's civil case, ISCI 2005-01176 (206).
The Debtors will pay Mr. Carbuccia an hourly rate of $85.
Mr. Carbuccia assured the Court that he does not have an interest
materially adverse to the interest of the estate or of any class
of creditors or equity security holders, by reason of any direct
or indirect relationship to, connection with, or interest in, the
Debtor.
Mr. Carbuccia can be reached at:
P.O. Box 191601
Hato Rey Station
San Juan, Puerto Rico 00919-1602
Telephone: (787) 632-5906
Based in Mayaguez, Puerto Rico, Advanced Cardiology Center Corp.
filed for Chapter 11 protection on Jan. 8, 2007 (Bankr. D. P.R.
Case No. 07-00061). Alexis Fuentes-Hernandez at Fuentes Law
Offices represents the Debtor. No Official Committee of Unsecured
Creditors has been appointed on this case. When the Debtor filed
for protection from its creditors, it estimated assets and debts
between $10 million and $50 million.
ADVANCED HOMECARE: Moody's Junks Rating on Second Lien Term Loan
----------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating to
Advanced Homecare Holdings, Inc. and a B2 rating to the company's
first lien credit facility. Moody's also assigned a Caa2 rating
to Advanced Homecare's second lien term loan. The outlook for the
ratings is stable.
The B3 rating reflects the company's small size, high leverage and
limited operating history. Moody's notes that the company
generated less than $100 million of revenue for the twelve months
ended March 31, 2007. Further, Moody's forecasts the ratio of
debt to EBITDA in the range of 5.5 to 6 times and the ratio of
EBIT to interest of about 1.2 times for the twelve months ended
March 31, 2008.
The ratings also incorporate Moody's concerns regarding the size
and pace of the company's acquisition activity; the company has
completed four large acquisitions since June 2006, which
represents approximately 30% of the company's pro forma revenues
for the twelve months ended June 30, 2007. Moody's believes that
there is a risk that the company's operating metrics may soften
because of staffing changes and platform integration issues.
Partially offsetting these concerns is the fact that the company
has been disciplined in the prices it has paid for acquisitions.
The ratings are supported by the company's strong margins and low
capital expenditure needs, which translate into positive operating
cash flow and free cash flow despite the small size of the
company. Additionally, in-house logistics and technology enable
the company to achieve market density and treat higher acuity
patients on a profitable basis.
Moody's assigned these ratings:
-- Corporate Family Rating, B3
-- $25 million First Lien Revolving Credit Facility, B2, LGD3,
40%
-- $106.5 million First Lien Term Loan B, B2, LGD3, 40%
-- $29 million Second Lien Term Loan, Caa2, LGD6, 91%
-- Probability of Default Rating, B3
The outlook is stable.
Advanced Homecare Holdings, Inc., headquartered in Dallas, Texas,
provides home healthcare in the Texas, Oklahoma and New Mexico
markets.
AIRTRAN HOLDINGS: Increases Offer To Acquire Midwest Airlines
-------------------------------------------------------------
AirTran Holdings Inc., the parent of AirTran Airways, stated in a
press statement that at the request of Midwest shareholders,
AirTran has increased its offer for Midwest Air Group, to $16.25
per share in a negotiated merger transaction.
The offer includes $10 per share in cash and 0.6056 of a share of
AirTran common stock. Based on the closing price of AAI on
Aug. 13, 2007, the total value of AirTran's increased offer
represents approximately $445 million.
"Owners of Midwest recognize the overwhelming benefits of forming
a truly national, low-cost, efficient carrier that will add
flights, increase jobs and lower fares," Joe Leonard, AirTran
Airways Chairman and CEO, said. "Midwest's shareholders are
concerned that the acquisition of Midwest by a private equity
firm, along with Northwest Airlines, will block competition, raise
fares, reduce employment levels and reduce service.
"There is very serious concern among Midwest stakeholders that
their interest and those of Midwest employees and communities will
not be well served by the proposed acquisition of Midwest by the
private equity/Northwest group and that, antitrust issues may
prevent a deal with Northwest from ever closing," Mr. Leonard
said. "Clearly, our increased offer represents more value and the
best course for the future for Midwest owners, employees and
customers."
In a separate statement, the board of directors of Midwest Air
Group, parent company of Midwest Airlines, disclosed that they
will take AirTran's revised offer under consideration.
Headquartered in Oak Creek, Wisconsin, Midwest Air Group Inc.
(Amex: MEH) -- http://www.midwestairlines.com-- the parent
company of Midwest Airlines, provides scheduled passenger
service in the United States and internationally. It offers
scheduled passenger service to destinations in the United
States and regional scheduled passenger service to cities
primarily in the Midwest and to Toronto, Canada.
AirTran Holdings Inc., through its subsidiary AirTran Airways Inc.
(NYSE: AAI) -- http://www.airtran.com/-- operates over 600 daily
flights to 50 destinations. The airline's hub is at Hartsfield-
Jackson Atlanta International Airport, where it is the second
largest carrier. AirTran Airways recently added the fuel-
efficient Boeing 737-700 aircraft to create America's youngest
all-Boeing fleet. The airline is also the first carrier to
install XM Satellite Radio on a commercial aircraft and the only
airline with Business Class and XM Satellite Radio on every
flight.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its ratings on AirTran
Holdings Inc. and its primary operating subsidiary, AirTran
Airways Inc., including the 'B-' corporate credit rating on
AirTran Holdings.
As reported in the Troubled Company Reporter on Nov. 23, 2006,
Moody's Investors Service confirmed its B3 Corporate Family Rating
for AirTran Holdings Inc. and its Caa1 rating on the company's
7% Guaranteed Convertible Notes Due July 1, 2023, in connection
with its implementation of its Probability-of-Default and Loss-
Given-Default rating methodology for the Transportation sector.
Moody's also assigned an LGD6 rating to those loans, suggesting
noteholders will experience a 91% loss in the event of a default.
AIRTRAN HOLDINGS: Shareholder Support for Midwest Buyout Increases
------------------------------------------------------------------
AirTran Holdings Inc., the parent of AirTran Airways, disclosed
that Midwest Air Group shareholder support has increased in
support of the company's plan to merge and create a truly national
low-cost, high quality airline.
As of the close of business on Aug. 10, 2007, shareholders have
agreed to tender approximately 15.5 million shares of Midwest to
Galena Acquisition Corp., a wholly owned subsidiary of AirTran,
which represents 62.7% of all outstanding shares of Midwest Air
Group -- a 3.2 percentage point increase over the number of shares
tendered at the expiration of the last tender offer which expired
June 8, 2007.
"Now, for the fourth consecutive time, we are pleased by the
response from Midwest's shareholders who have steadily increased
their support for AirTran's tender offer and our long-term
strategic plan," Joe Leonard, AirTran Airways chairman and chief
executive officer, said. "We call upon Midwest's Board of
Directors to listen to the overwhelming majority of their
shareholders and negotiate a definitive merger agreement with
AirTran."
Headquartered in Oak Creek, Wisconsin, Midwest Air Group Inc.
(Amex: MEH) -- http://www.midwestairlines.com-- the parent
company of Midwest Airlines, provides scheduled passenger
service in the United States and internationally. It offers
scheduled passenger service to destinations in the United
States and regional scheduled passenger service to cities
primarily in the Midwest and to Toronto, Canada.
AirTran Holdings Inc., through its subsidiary AirTran Airways Inc.
(NYSE: AAI) -- http://www.airtran.com/-- operates over 600 daily
flights to 50 destinations. The airline's hub is at Hartsfield-
Jackson Atlanta International Airport, where it is the second
largest carrier. AirTran Airways recently added the fuel-
efficient Boeing 737-700 aircraft to create America's youngest
all-Boeing fleet. The airline is also the first carrier to
install XM Satellite Radio on a commercial aircraft and the only
airline with Business Class and XM Satellite Radio on every
flight.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its ratings on AirTran
Holdings Inc. and its primary operating subsidiary, AirTran
Airways Inc., including the 'B-' corporate credit rating on
AirTran Holdings.
As reported in the Troubled Company Reporter on Nov. 23, 2006,
Moody's Investors Service confirmed its B3 Corporate Family Rating
for AirTran Holdings Inc. and its Caa1 rating on the company's
7% Guaranteed Convertible Notes Due July 1, 2023, in connection
with its implementation of its Probability-of-Default and Loss-
Given-Default rating methodology for the Transportation sector.
Moody's also assigned an LGD6 rating to those loans, suggesting
noteholders will experience a 91% loss in the event of a default.
ALLIANCE LAUNDRY: S&P Places All Ratings Under Negative Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services placed all of its ratings on
Alliance Laundry Systems LLC, including the 'B' corporate credit
rating, on CreditWatch with negative implications. Approximately
$409 million of debt is affected by this action.
The CreditWatch placement follows the company's announcement that
it has identified errors in its reconciliation of unvouched
payables, which has resulted in the understatement of the
company's liabilities. The company is in the process of
completing its analysis of the effect that these errors will have
on its previously filed financial statements but currently
believes that liabilities were understated in the range of
$2.4 million to $2.7 million. Alliance Laundry is unable to
timely file its June 2007 Form 10-Q until this review is
completed, which constitutes an event of default under the
company's senior credit agreement. Until such default is either
cured or waived, the company does not have access to its revolving
credit facility. This could also impact Alliance Laundry's
liquidity under its asset-backed facility.
"We will monitor developments associated with the company's
liquidity in order to assess the implications for the ratings,"
said Standard & Poor's credit analyst Christopher Johnson.
ALLIS-CHALMERS: Inks New Employment Pacts with CEO and CFO
----------------------------------------------------------
The board of directors of Allis-Chalmers Energy Inc., following
approval by the company's compensation committee, ratified a new
employment agreement between the company and Munawar H.
Hidayatallah, chairman and chief executive officer of the company,
effective April 1, 2007.
Also, on Aug. 3, 2007, the board of directors of the company,
following approval by the company's compensation committee,
ratified a new employment agreement with Victor M. Perez, chief
financial officer of the company, effective April 3, 2007.
Employment Agreement — Munawar Hidayatallah
The term of the agreement with Mr. Hidayatallah is for three
years. Pursuant to the agreement, Mr. Hidayatallah is entitled to
an annual base salary of $500,000, subject to annual cost of
living increases, and will be eligible for an annual incentive
bonus up to a maximum of 100% of his base salary if the company
achieves certain performance goals.
In addition, pursuant to the agreement, on Aug. 3, 2007, the board
of directors, following approval by the compensation committee,
granted Mr. Hidayatallah:
i. 200,000 stock options to vest 20% on the first anniversary
of the grant date, 20% on the second anniversary of the
grant date and the remaining 60% on the third anniversary of
the grant date and
ii. performance awards in the amount of 685,000 shares of
restricted stock, effective April 1, 2007, to vest in three
equal installments commencing on the first anniversary of
the effective date, subject to 100% vesting of both the
stock options and restricted stock upon a "change in
control" or termination of Mr. Hidaytallah's employment
without "cause".
The vesting of the performance awards are also subject to Mr.
Hidayatallah achieving certain performance criteria related to the
increase in stockholder value.
The agreement also provides for
i. tax gross-up payments for taxes incurred under Section 4999
of the Internal Revenue Code,
ii. reimbursement of legal fees incurred in connection with the
negotiation of the agreement and
iii. reimbursements for travel and lodging related to
Mr. Hidayatallah's travel from his principal residence to
the company's headquarters in Houston, Texas.
If Mr. Hidayatallah's employment is terminated as a result of a
"change in control" or without "cause", he will receive:
i. a severance payment equal to three times his then current
salary,
ii. compensation for accrued, unused vacation as of the date of
termination and
iii. any further compensation that may be provided by the terms
of any benefit plans in which he participates and the terms
of any outstanding equity grants.
Employment Agreement — Victor Perez
The term of the new agreement with Mr. Perez is for three years.
Pursuant to the new agreement, Mr. Perez is entitled to an annual
base salary of $286,000, subject to an annual increase in the
discretion of the Board of Directors, and will be eligible for an
annual incentive bonus up to a maximum of 50% of his base salary
if the company achieves certain performance goals.
In addition, pursuant to the new agreement, on Aug. 3, 2007, the
board of directors granted Mr. Perez performance awards consisting
of 15,000 stock options and 25,000 shares of restricted stock,
each grant to vest 20% on the first anniversary of the grant date,
20% on the second anniversary of the grant date and the remaining
60% on the third anniversary of the grant date. The vesting of
such stock options and shares of restricted stock are also subject
to Mr. Perez achieving certain performance criteria related to
increases in the company's stock price, maintaining financial
accounting and auditing expenses and meeting certain guidance
parameters for the company.
If Mr. Perez's employment is terminated without "cause", he will
receive:
i. severance payments for the lesser of one year following
termination of employment or the remaining term of the New
Agreement at his then current salary,
ii. compensation for accrued, unused vacation as of the date of
termination and
iii. any further compensation that may be provided by the terms
of any benefit plans in which he participates and the terms
of any outstanding equity grants.
The foregoing summaries are not complete and are qualified in
their entirety by reference to the full texts of the employment
agreements of Messrs. Messrs. Hidayatallah and Perez, which will
be filed in the company's next periodic report.
About Allis-Chalmers
Allis-Chalmers Energy Inc. --http://www.alchenergy.com/-- (NYSE:
ALY) is a Houston based multi-faceted oilfield services company.
It provides services and equipment to oil and natural gas
exploration and production companies, domestically in Texas,
Louisiana, New Mexico, Colorado, Oklahoma, Mississippi, Utah,
Wyoming, Arkansas, Alabama, West Virginia, offshore in the Gulf of
Mexico, and internationally primarily in Argentina and Mexico.
Allis-Chalmers provides rental services, international drilling,
directional drilling, tubular services, underbalanced drilling,
and production services.
* * *
As of June 2007, Allis-Chalmers Energy carries Moody's Investors
Service's B2 corporate family rating.
AMERICAN HOME: Creditors Panel Selects Hahn & Hessen as Counsel
---------------------------------------------------------------
Hahn & Hessen LLP has been selected as counsel to the Official
Committee of Unsecured Creditors in the Chapter 11 case of
American Home Mortgage Investment Corp. filed in Delaware
Bankruptcy Court on Aug. 6, 2007. Members of the Creditors
Committee include Wilmington Trust Company, The Bank of New York
Trust Company, Deutsche Bank National Trust, Nomura Credit &
Capital, Impac Funding, Waldners Business Environments and United
Parcel Service. Blank Rome LLP has been selected as Delaware
counsel.
The firm is also currently representing the Official Creditors'
Committees in the Delaware Chapter 11 filings of subprime lenders,
New Century and Resmae. Jeff Schwartz, Mark Indelicato and Mark
Power, all partners in the firm's bankruptcy group, lead the team
in all three cases.
The case is expected to follow a track not dissimilar to New
Century in that there are currently motions before the Court to
sell the servicing platform on an expedited basis as well to
establish procedures for selling other financial assets that the
debtor may own, including residual interests, scratch and dent
loans and other miscellaneous assets.
"We are hopeful that our experience in the insolvency arena
coupled with our knowledge of the issues peculiar to distressed
mortgage lenders will enable us to assist the Committee in
maximizing creditor returns," Mr. Schwartz said.
Hahn & Hessen LLP is a full service commercial firm serving
primarily financial institutions and the financial services
industry.
About American Home Mortgage
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for chapter 11
protection on August 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP are the proposed counsel to the Debtors. Epiq
Bankruptcy Solutions LLC is the proposed claims and noticing
agent. No Official Committee of Unsecured Creditors has been
appointed to date. As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000, and total stockholders' equity of
$1,223,744,000. The Debtors' exclusive period to file a plan
expires on Dec. 4, 2007.
ARAMARK CORP: Stronger Credit Cues S&P Stable Outlook
-----------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Philadelphia, Pennsylvaniabased ARAMARK Corp. to stable from
negative. At the same time, Standard & Poor's affirmed its
ratings on ARAMARK, including the 'B+' corporate credit rating.
"The outlook revision reflects ARAMARK's stronger than expected
credit measures since the January 2007 management buyout," said
Standard & Poor's credit analyst Jean C. Stout. The company has
reduced debt by $350 million since the management buyout, largely
as a result of applying the net proceeds from a recent asset sale
to bank debt, and has experienced good operating performance. "And
we expect that the improvement in the company's financial profile
will be maintained," said Ms. Stout.
Standard & Poor's ratings on ARAMARK continue to reflect its
highly leveraged financial profile and significant cash flow
requirements to fund interest and capital expenditures. These
factors are somewhat mitigated by ARAMARK's good position in the
competitive, fragmented markets for food and support services, and
uniform and career apparel. These positions translate into a
sizable stream of recurring revenues and healthy cash flow
generation.
ASSET SECURITIZATION: S&P Affirms B Rating on Class B-1 Certs.
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its rating on the class
A-8Z commercial mortgage pass-through certificates from Asset
Securitization Corp.s series 1997-D5 on CreditWatch with
developing implications. Concurrently, S&P affirmed its ratings
on the remaining classes of certificates from the same
transaction.
The class A-8Z certificates are solely dependent on the cash flow
from the Comsat loan, which matures on Sept. 11, 2007. The credit
tenant occupying 100% of the building backing the Comsat loan has
informed the master servicer that it will vacate the property at
the end of its lease term in September 2007. The master servicer,
KeyBank Real Estate Capital, indicated that it has received a
payoff notification. The CreditWatch placement will be revised or
updated pending the payoff of the loan.
The affirmed ratings reflect credit enhancement levels that
adequately support the current ratings.
As of the July 16, 2007, remittance report, the trust collateral
for Asset Securitization Corp.'s series 1997-D5 consisted of 85
mortgage loans with an aggregate principal balance of
$959 million, down from 155 loans totaling $1.8 billion at
issuance. KeyBank reported primarily year-end 2006 financial
information for 96% of the pool, which excludes $341.2 million
(35%) of defeased collateral. Based on this information, Standard
& Poor's calculated a weighted average debt service coverage of
1.43x. All of the loans in the pool are current, and no loans are
with the special servicer, ORIX Capital Markets LLC. To date, the
trust has experienced 12 losses totaling
$74.4 million.
Excluding defeased loans, 21.2% ($203.3 million) of the loans in
the pool have anticipated repayment dates within the next 12
months. Of these, KeyBank has indicated that 11.7% ($23.8
million) paid off after the July 2007 remittance report. Of the
remaining near-term ARD loans, 75.1% have DSCs that are currently
under 1.05x.
There is ongoing litigation by ORIX Capital Markets LLC, in the
name of the trustee, LaSalle Bank N.A., against the depositor and
loan seller. The claims include, among other things, the breach
of representation and warranties of several loans that were in the
trust. Litigation expenses relating to this matter are being
passed through to the trust.
The top 10 loan exposures secured by real estate have an aggregate
balance of $444.8 million (46%) and a weighted average DSC of
1.45x. Four of the top 10 exposures are on the master servicer's
watchlist and are discussed below. Standard & Poor's reviewed the
property inspection reports provided by KeyBank, and all of the
assets underlying the top 10 exposures were considered to be in
"good" or "excellent" condition.
KeyBank reported a watchlist of 18 loans totaling $172 million
(18%) that includes four of the top 10 exposures, comprising 70%
($121.0 million) of the loans on the watchlist. Details are as:
-- The fifth-largest exposure ($46.0 million, 5%), the
Century Building, is secured by a 12-story, 351,800-sq.-
ft. office property in Crystal City, Virginia. The loan
was placed on the watchlist due to a low DSC of 0.95x for
the three months ended March 31, 2007, which is
attributable to a low occupancy of 58% for the same time
period.
-- Swissbank Tower, the sixth-largest exposure ($45 million,
5%), is secured by a condominium interest comprising of
the air rights located above the Saks Fifth Avenue
department store in New York City. The 29-story,
314,400-sq.-ft. office building known as Swissbank Tower
occupies the air rights, which are leased to UBS AG
(AA+/A-1+/Stable) until Dec. 31, 2086. The loan is on
the watchlist due to a low DSC of 1.01x for the three
months ended March 31, 2007.
-- The eighth-largest exposure ($16.1 million, 2%), Amherst
Multifamily pool, is secured by two multifamily apartment
complexes with 535 units in Amherst, Massachusetts and
Sunderland, Massachusetts. The combined year-end 2006
DSC for this loan was 1.17x, and the combined occupancy
was 89% as of March 2007. The loan appears on the
watchlist due to its anticipated repayment date in August
2007. The master servicer has indicated that the loan
was paid off on Aug. 10, 2007.
-- Sheraton Fontainebleau, the ninth-largest exposure ($14
million, 1%), is secured by a 250-guestroom, full-service
hotel in Ocean City, Maryland. The loan was placed on
the watchlist due to a low reported DSC of 0.90x for the
three months ended March 31, 2007, which is attributable
to a low occupancy of 57% as of June 30, 2007.
The remaining loans on the watchlist have low DSCs, upcoming lease
expirations, or upcoming loan maturities.
Standard & Poor's stressed various assets in the mortgage pool as
part of its analysis, including those on the watchlist and other
assets considered credit-impaired. In addition, S&P considered
the nondefeased loans in the pool with near-term ARDs. The
resultant credit enhancement levels adequately support the
affirmed ratings.
Rating Placed on Creditwatch Developing
Asset Securitization Corp.
Commercial mortgage pass-through certificates
series 1997-D5
Rating
------
Class To From
----- -- ----
A-8Z A/Watch Dev A
Ratings Affirmed
Asset Securitization Corp.
Commercial mortgage pass-through certificates
series 1997-D5
Class Rating Credit enhancement
----- ------ ----------------
A-1C AAA 41.72%
A-1D AAA 41.72%
A-1E AAA 36.24%
A-2 AAA 27.09%
A-3 AA+ 21.61%
A-4 A+ 18.86%
A-5 A- 14.75%
A-6 BBB- 10.17%
B-1 B 3.77%
BALLY TOTAL: Wants Pacts with Harbinger, et al. Approved
--------------------------------------------------------
Bally Total Fitness Holding Corporation and its debtor-
affiliates seek authority from the U.S. Bankruptcy Court
for the Southern District of New York in Manhattan to enter
into an investment agreement and restructuring support
agreement with Harbinger Capital Partners Master Fund I,
Ltd., Harbinger Capital Partners Special Situations Fund,
L.P., Liberation Investments, L.P., and Liberation
Investments, Ltd..
The Debtors also ask the Court to approve break-up
fee and expense reimbursement provisions stated in the
Investment Agreement.
The Debtors and the Harbinger entities reached agreement on
Aug. 13, 2007, on the terms of a restructuring proposal.
The agreement is reflected in (i) a first amended joint
prepackaged Chapter 11 plan of Reorganization, (ii) an investment
agreement with Harbinger Capital, and (iii) a new restructuring
support agreement with Harbinger Capital, Liberation Investments,
and certain "Consenting Subordinated Noteholders" including
Tennenbaum Capital Partners, LLC.
The Investment Agreement and the related New Restructuring
Support Agreement are key drivers of the Modified Plan, David S.
Heller, Esq., at Latham & Watkins LLP, in Chicago, Illinois,
tells the Court.
Pursuant to the Investment Agreement, Harbinger Capital will
acquire 100% of the New Common Stock of Reorganized Bally issued
on the effective date of the Plan in exchange for a purchase
price of approximately $233,600,000. This investment is
necessary to fund the distributions under the Modified Plan and
to fund the Reorganized Debtors' working capital and capital
expenditure needs after the Effective Date, Mr. Heller says.
Harbinger Capital will receive protections in the form of a
$10,000,000 Break-Up Fee and Expense Reimbursement capped at
$5,000,000 in the event that the Investment Agreement is
terminated and Bally consummates an alternative "Superior
Transaction".
Harbinger Capital would also be entitled to Expense
Reimbursement, capped at either $3,000,000 or $5,000,000 if the
Investment Agreement is terminated on certain other specified
grounds, including, among others, an uncured material breach by
Bally of its covenants under the Investment Agreement or the New
Restructuring Support Agreement.
In the event that Harbinger Capital breaches its representations,
warranties or obligations under the Investment Agreement,
Harbinger Capital will not be liable to the Debtors for any
punitive or consequential damages and in no event will Harbinger
Capital be liable for damages in excess of $50,000,000.
The Investment Agreement may be terminated:
(a) by the mutual consent of the parties;
(b) by Harbinger Capital if (i) Bally enters into an
Alternative Transaction, (ii) the Board of Directors
withdraws or changes its recommendation of the Agreement
in a manner materially adverse to the Investors or
recommends an Alternative, (iii) the Debtors withdraw the
Modified Plan or if the Debtors seek to convert any of the
Chapter 11 Cases to Chapter 7, (iv) the Effective Date of
the Modified Plan has not occurred by September 30, 2007,
(v) Bally breaches in any material respect its
representations, warranties or covenants under the
Investment Agreement, subject to its right to timely cure,
(vi) the consummation of the transactions contemplated
is prohibited by Law or by any judicial or governmental
action, (vii) any Debtor breaches the New Restructuring
Support Agreement in any material respect, subject to
their right to timely cure, (viii) the Break-Up Fee or
Expense Reimbursement is not approved by a Final Order of
the Bankruptcy Court by September 3, 2007, or (ix) an
event occurs that has a Material Adverse Effect and that
cannot be cured by September 30, 2007; and
(c) by Bally if (i) Harbinger Capital breaches the Investment
Agreement or the New Restructuring Support Agreement,
subject to their rights to timely cure, (ii) the Board
of Directors determines that termination of the Investment
Agreement is necessary in order for Bally to accept any
Superior Transaction or the if the Bankruptcy Court on its
own, (iii) the Effective Date of the Plan has not
occurred by September 30, 2007, which date may be extended
to October 15, 2007, if the Confirmation Order has been
entered by the Bankruptcy Court on or prior to Sept. 30,
2007, and the New Investors continue using commercially
reasonable efforts to consummate the Modified Plan, or
(iv) the consummation of the transactions contemplated is
prohibited by Law or by any judicial or governmental
action.
A full-text copy of the Investment Agreement is available for
free at http://researcharchives.com/t/s?227c
Restructuring Support Agreement
Mr. Heller notes that the Original Plan was the result of several
months of negotiations with the Prepetition Noteholders
Committee. As a result of these successful negotiations, the
Debtors, holders of a majority of the Prepetition Senior Notes
and holders of more than 80% of the Prepetition Subordinated
Notes entered into a Restructuring Support Agreement dated as of
June 15, 2007.
Under the Restructuring Support Agreement, the Consenting
Subordinated Noteholders agreed, among other things, and subject
only to the conditions set forth in the Agreement, (i) to vote in
favor of the Original Plan, (ii) not to withdraw or revoke their
votes, (iii) not to object to the confirmation of the Original
Plan, and (iv) not to take any other action, including, without
limitation, initiating any legal proceeding that is inconsistent
with, or that would delay consummation of, the Original Plan.
These undertakings by the Consenting Subordinated Noteholders
extend not just to the Original Plan but also to any
modifications that are not inconsistent with the terms of the
Original Plan.
Because the Modified Plan provides the same or better treatment
to every class of creditors and equity holders, the Debtors
believe that the Modified Plan is "not inconsistent with" the
Original Plan, and as a result, the Original Restructuring
Support Agreement remains binding on all holders of Prepetition
Senior Notes and Prepetition Subordinated Notes that were
signatories to that agreement.
Nevertheless, Mr. Heller says, to facilitate the expeditious
implementation of the Modified Plan, the parties have agreed to
condition the effectiveness of the Investment Agreement upon the
execution and delivery of the New Restructuring Support Agreement
by the Debtors, Harbinger Capital, Liberation Investments, and
the Consenting Subordinated Noteholders.
A full-text copy of the New Restructuring Support Agreement is
available for free at http://researcharchives.com/t/s?227d
Although the Consenting Subordinated Noteholders have not yet
committed to signing the New Restructuring Support Agreement, the
Debtors intend to request that the Consenting Subordinated
Noteholders sign that agreement following the Court's approval of
the request, Mr. Heller explains.
The Debtors also seek the Court's authority to assume the
June 15, 2007 Restructuring Support Agreement.
Mr. Heller informs Judge Lifland that the Debtors' assumption of
the Restructuring Support Agreement is a condition to the
effectiveness of the Investment Agreement, and is, therefore, a
critical piece of the transactions contemplated by the Modified
Plan.
By assuming the Restructuring Support Agreement, the Debtors
intend to eliminate any uncertainty about the position of the
Consenting Noteholders with respect to the Modified Plan.
Mr. Heller assures the Court that the Debtors have performed, and
will continue to perform, their obligations under the
Restructuring Support Agreement, and do not owe any cure amounts
pursuant to Section 365(b)(1)(A) of the Bankruptcy Code.
Accordingly, the Debtors are not required to establish
"adequate assurance of future performance" under Section
365(b)(1)(C). Nonetheless, for the avoidance of doubt, the
Debtors assert that they have provided adequate assurance of
future performance.
About Bally Total Fitness
Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs
of Canada (R) brands.
Bally Total and its affiliates filed for chapter 11 protection
on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-packaged
chapter 11 plan. Joseph Furst, III, Esq. at Latham & Watkins,
L.L.P. represents the Debtors in their restructuring efforts.
As of June 30, 2007, the Debtors had $408,546,205 in total assets
and $1,825,941,54627 in total liabilities.
No schedule has been set to date for an organizational meeting
that would create an Official Committee of Unsecured Creditors.
The Court recently held that the meeting of creditors pursuant to
Section 341(a) of the Bankruptcy Code will not be convened, and
is canceled, if the Debtors' Plan of Reorganization is confirmed
on or prior to October 16, 2007. (Bally Total Fitness Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Services Inc.
http://bankrupt.com/newsstand/or 215/945-7000).
BALLY TOTAL: Inks Pact Amending Morgan Stanley DIP Loan
-------------------------------------------------------
Following Bally Total Fitness Holding Corporation and its
debtor-affiliates' filing of their First Amended Joint
Prepackaged Chapter 11 Plan of Reorganization, Morgan Stanley
Senior Funding Inc. argued that its original contractual
commitment to provide the DIP Facility and Exit Facility did
not extend to the Debtors if they sought confirmation of the
Modified Plan.
As reported in the Troubled Company Reporter on Aug. 2, 2007,
Morgan Stanley agreed to arrange a $292,000,000 DIP facility
comprised of a $50,000,000 revolving facility and a $242,000,000
term loan facility.
To avoid the risks and costs of litigation on these matters, the
Debtors negotiated an amendment with the Morgan Stanley, whereby
the DIP Lenders would provide the DIP Facility and Exit Facility
to the Debtors regardless of whether the Debtors sought or
obtained confirmation of their Original Plan or Modified Plan.
The DIP Agent charged a $1,000,000 amendment fee -- which is
being paid by Harbinger Capital Partners Master Fund I, Ltd., and
Harbinger Capital Partners Special Situations Fund, L.P. -- and
required increases in interest rates and fees, as well as
modifications to the financial covenants.
David S. Heller, Esq., at Latham & Watkins LLP, in Chicago,
Illinois, notes that these modifications do not materially alter
the treatment of any class of claims or interests in the Plan and
will be disclosed to the the U.S. Bankruptcy Court for the
Southern
District of New York in Manhattan at the Final DIP Hearing
scheduled for Aug. 21, 2007.
A redlined copy of the Amended DIP Agreement is available for
free at http://researcharchives.com/t/s?227e
Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs
of Canada (R) brands.
Bally Total and its affiliates filed for chapter 11 protection
on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-packaged
chapter 11 plan. Joseph Furst, III, Esq. at Latham & Watkins,
L.L.P. represents the Debtors in their restructuring efforts.
As of June 30, 2007, the Debtors had $408,546,205 in total assets
and $1,825,941,54627 in total liabilities.
No schedule has been set to date for an organizational meeting
that would create an Official Committee of Unsecured Creditors.
The Court recently held that the meeting of creditors pursuant to
Section 341(a) of the Bankruptcy Code will not be convened, and
is canceled, if the Debtors' Plan of Reorganization is confirmed
on or prior to October 16, 2007. (Bally Total Fitness Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Services Inc.
http://bankrupt.com/newsstand/or 215/945-7000).
BAY CHEVROLET: Selling GM Franchise and Other Assets
----------------------------------------------------
Bay Chevrolet Corp. is selling certain of its assets including
a General Motors Corp. franchise with undermarket long term
lease. For more information, contact the Debtor's attorney,
Lisa Golden, Esq., at telephone number (516) 746-8000.
Headquartered in Little Neck, New York, Bay Chevrolet Corp.
filed a chapter 11 petition on July 25, 2007 (Bankr. E.D. N.Y.
Case No. 07-43949). When it sought bankruptcy protection, the
Debtor listed total assets of $2,790,000 and total debts of
$646,279. Bay Chevrolet's case summary was published in the
Troubled Company Reporter on July 30, 2007.
BELLAVISTA MORTGAGE: S&P Assigns Default Rating on Class I-B-4
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
B-1 and B-2 mortgage-backed securities issued by BellaVista
Mortgage Trust 2005-2. At the same time, S&P lowered its ratings
on classes I-B-3 and I-B-4 from BellaVista Mortgage Trust 2004-1.
Concurrently, S&P affirmed its ratings on 53 classes from four
BellaVista Mortgage Trust deals, including the two series
mentioned above.
The raised ratings are based on sufficient credit enhancement
levels to support the certificates at the higher rating levels.
The projected credit support percentages are at least 2.12x the
credit enhancement associated with the higher rating categories.
The lowered ratings reflect current and projected credit support
levels that do not support the previous ratings. This transaction
has also experienced greater losses over the past 12 months. In
addition, the current delinquency level suggests that this trend
could continue. Currently, 90-plus-day delinquencies (including
REOs and foreclosures) are 6.56% of the current pool balance for
series 2004-1. Cumulative losses are 0.20% of the original pool
balance.
The affirmations are based on credit support percentages that are
sufficient to maintain the current ratings on the securities.
Subordination provides credit support for all of these
transactions. Standard & Poor's will continue to monitor these
transactions to ensure that the revised and affirmed ratings
accurately reflect the associated risks.
The collateral backing the certificates consists of prime, 30-year
hybrid adjustable-rate mortgages.
Ratings Raised
BellaVista Mortgage Trust 2005-2
Mortgage loan pass-through certificates
Rating
------
Class To From
----- -- ----
B-1 AA+ AA
B-2 A+ A
Ratings Lowered
BellaVista Mortgage Trust 2004-1
Mortgage loan pass-through certificates
Rating
------
Class To From
----- -- ----
I-B-3 B BB
I-B-4 D B
Ratings Affirmed
BellaVista Mortgage Trust
Mortgage loan pass-through certificates
Series Class Rating
------ ----- ------
2004-1 I-A,I-M,II-A-1,II-A-2 AAA
2004-1 II-A-3,II-A-4,II-A-5 AAA
2004-1 I-A-IO,II-A-2-IO AAA
2004-1 II-A-4-IO AAA
2004-1 I-B-1 AA
2004-1 II-M AA+
2004-1 II-B-1 AA-
2004-1 I-B-2 BBB+
2004-1 II-B-2 BBB
2004-1 II-B-3 BB
2004-1 II-B-4 B
2004-2 A-1,A-2,A-3,A-4,X,A-R AAA
2004-2 M AA
2004-2 B-1 A
2004-2 B-2 BBB
2004-2 B-3 BB
2004-2 B-4 B
2005-1 I-A-1,I-A-2,II-A,III-A AAA
2005-1 IV-A,I-A-X,II-A-X,IV-A-X AAA
2005-1 B-X, B-1 AAA
2005-1 B-2 AA
2005-1 B-3 A-
2005-1 B-4 BB+
2005-1 B-5 B
2005-2 I-A,II-A-1,II-A-2,I-A-X AAA
2005-2 II-A-X,II-PO,B-X,B-PO,A-R AAA
2005-2 B-3 BBB
2005-2 B-4 BBB-
2005-2 B-5 BB
2005-2 B-6 B
BLACK PRESS: S&P Holds B+ Rating and Removes Negative CreditWatch
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B+' long-term corporate credit rating, on Victoria, British
Colombia-based newspaper publisher Black Press Ltd. At the same
time, S&P removed the ratings from CreditWatch with negative
implications, where they were placed June 28, 2007. The outlook
is stable.
"The move follows Black Press' decision to not proceed with its
offer to acquire all of the units outstanding of Osprey Media
Income Fund, a leading publisher of newspapers, magazines, and
specialty publications in Ontario," said Standard & Poor's credit
analyst Lori Harris. Black Press had previously offered to
acquire the business for CDN $566 million, which, if completed,
would have resulted in weaker credit protection measures on a pro
forma basis. However, the company has since withdrawn its offer.
"The ratings on Black Press reflect its acquisitive nature, high
pro forma leverage, lack of revenue diversification outside of the
newspaper industry, and significant annual cash investment
required to support the company's Hawaiian newspaper operation,"
Ms Harris added. Partially offsetting these factors are Black
Press' solid market position within several of its regions, good
brand equity, and management's successful track record of
integrating acquired assets. Although Black Press participates in
the challenging newspaper industry, the company is somewhat
insulated against economic factors as a sizable portion of its
revenue base comes from the community newspaper segment. This
segment is less reliant on customer subscriptions and national
advertising revenues, which tend to be more volatile than local
advertisers.
The stable outlook reflects Standard & Poor's expectation that
Black Press will maintain its leading position in its core markets
and credit measures will remain in line with the ratings in the
medium term. S&P could raise the ratings if the company
meaningfully improves its financial risk profile and strengthens
its business risk profile by turning around the U.S. operations.
Alternatively, S&P could lower the ratings if Black Press fails to
meet expectations or show substantial improvement in its credit
measures, or makes a significant debt-financed acquisition.
Adding to downward pressure on the ratings would be the ongoing
weakness of the Hawaiian operation, which could begin to absorb a
higher portion of free cash flow, resulting in a decrease in funds
available for debt servicing.
BUCKNER APARTMENT: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Buckner Apartment Partners #1, Ltd.
dba Buckner Park Apartments
P.O. Box 440067
Houston, TX 77244-0067
Bankruptcy Case No.: 07-35573
Type of business: The Debtor owns real estate.
Chapter 11 Petition Date: August 14, 2007
Court: Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: Michael S. Holmes, Esq.
2211 Norfolk, Suite 1190
Houston, TX 77098
Tel: (713) 23-6500
Fax: (713) 956-6284
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
D.K.M. Partners loans $1,963,608
14800 St. Mary's Lane,
Suite 130
Houston, TX 77079
Michael Mossey, Trustee contract $500,000
c/o Amerifund Capital
Group
14800 St. Mary's Lane,
Suite 130
Houston, TX 77079
Champion Energy contract $229,215
79904 North Sam Houston
Parkway, Suite 200
Houston, TX 77064
Reliant Energy Retail contract $135,600
Services, L.L.C.
MPower Retail Energy contract $67,896
City of Dallas-Water contract $61,627
Department
Home Depot Supply, Inc. collecting for- $54,013
Atmos Energy contract $48,795
Nathan Sommers Jacobs attorney fees $31,925
T.X.U. Energy contract $31,641
Fizer Beck attorney fees $26,581
Strategic Energy contract $10,616
Allied Waste Management contract $10,000
O'Connor & Associates contract $9,272
East Texas Petrol contract $8,628
Alberto Hernandez contract $8,002
Southwest Water Consultants, contract $5,140
Inc.
Roxford Funding open account $4,281
Environmental Company, Inc. contract $2,909
CAPITAL GROWTH: Posts $8.4 Million Net Loss in Qtr. Ended June 30
-----------------------------------------------------------------
Capital Growth Systems Inc. reported a net loss of $8.4 million on
revenues of $4.2 million for the second quarter ended June 30,
2007, compared with a net loss of $627,350 on $0 revenues for the
same period ended June 30, 2006.
Revenue generated from the company's circuits and networks
business totaled $2.6 million. Revenues generated from services
totaled $1.4 million for the three month period ended June 30,
2007. Software revenues totaled $209,640.
The increase in net loss primarily reflects the increase in total
operating expenses to $7.5 million during the quarter ended
June 30, 2007, compared to total operating expenses of $279,343 in
the comparable period in 2006, and a $2.2 million increase in
interest expense.
The increase in operating expense is the result of the company's
acquisition of 20/20 Technologies, CentrePath Inc. and Global
Capacity Group, which were all subsequent to June 30, 2006. Of
the total, $5.0 million was compensation expense, of which
approximately $2.6 million related to non-cash stock-based
compensation expense. Depreciation and amortization expense of
$776,737 relates primarily to the company's network operating
center in Waltham, Massachusetts and the fair value assigned to
the company's intellectual property.
The remaining compensation, professional fees and other operating
costs relate to the company's continuing efforts in building and
supporting its current operations into a world class
telecommunications logistic provider.
At June 30, 2007, the company's consolidated balance sheet showed
$35.4 million in total assets, $18.5 million in total liabilities,
and $16.9 million in total stockholders' equity.
The company's consolidated balance sheet at June 30, 2007, also
showed strained liquidity with $5.8 million in total current
assets available to pay $16.0 million in total current
liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2007, are available for
free at http://researcharchives.com/t/s?2273
Going Concern Doubt
Plante & Moran PLLC, in Elgin, Illinois, expressed substantial
doubt about Capital Growth Systems Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the years ended Dec. 31, 2006, and 2005. The
auditing firm pointed to the company's recurring losses, negative
cash flows from operations, and net working capital deficiency.
About Capital Growth
Headquartered in Chicago, Capital Growth Systems Inc. (OTC BB:
CGSY.OB) is a publicly-traded corporation that delivers telecom
integration services to a global client set consisting of systems
integrators, telecommunications companies and enterprise
customers. Currently, CGSY consists of six operating
subsidiaries: Global Capacity Group Inc., CentrePath Inc., Magenta
Ltd., 20/20 Technologies Inc., Frontrunner Network Systems
Corporation, and Nexvu Technologies Inc.
CENTENNIAL COMMS: May 31 Balance Sheet Upside-Down by $1.1 Billion
------------------------------------------------------------------
Centennial Communications Corp. had total assets of $1.3 billion,
total liabilities of $239.3 million, and total stockholders'
deficit of $1.1 billion as of May 31, 2007.
The company reported income from continuing operations of $5.9
million for the fiscal fourth quarter of 2007 as compared to
income from continuing operations of $5.3 million, in the fiscal
fourth quarter of 2006. The fiscal fourth quarter of 2007
included $1.8 million of stock-based compensation expense due to
the company's adoption of SFAS 123R.
Consolidated adjusted operating income from continuing operations
for the fiscal fourth quarter was $89.1 million, as compared to
$90.3 million for the prior-year quarter.
For the full year, the company reported income from continuing
operations of $7 million as compared to income from continuing
operations of $27.1 million for fiscal year 2006.
The company reported full-year 2007 consolidated revenue from
continuing operations of $911.9 million, which included
$498.6 million from U.S. wireless and $413.3 million from Puerto
Rico operations.
The company reported fiscal fourth-quarter consolidated revenue
from continuing operations of $228.2 million.
Consolidated revenue from continuing operations excluding the USF
charge grew 8% versus the adjusted fiscal fourth quarter of 2006.
The company ended the quarter with 1,101,000 total wireless
subscribers, which compares to 1,031,500 for the year-ago quarter
and 1,085,500 for the previous quarter ended Feb. 28, 2007.
The company reported 419,500 total access lines and equivalents at
the end of the fiscal fourth quarter, which compares to 335,600
for the year-ago quarter.
Full-text copies of the company's financials are available for
free at http://researcharchives.com/t/s?2286
"The momentum in our U.S. wireless retail business is very strong
as we head into fiscal 2008," said Michael J. Small, Centennial's
chief executive officer. "We achieved these results by building a
powerful retail distribution presence, launching innovative
service offerings and customer care programs and tirelessly
developing our Trusted Advisor brand."
Mr. Small continued, "In Puerto Rico, our unlimited offering
continues to make progress in revitalizing customer growth and
improving customer retention to its best mark in two years. With
all of our businesses moving in the right direction, our focus
remains on growing cash flow and deleveraging to increase
shareholder value."
Other Highlights
The company said it will redeem $25 million aggregate principal
amount of its $45 million outstanding 10-3/4% senior subordinated
notes due Dec. 15, 2008. The redemption will occur on or about
Sept. 7, 2007 at face value with no prepayment penalties.
Fiscal 2008 Outlook
The company expects consolidated AOI from continuing operations
between $385 million and $405 million for fiscal 2008, excluding
about $10.3 million of projected stock-based compensation expense
based on stock options outstanding as of May 31, 2007.
Consolidated AOI from continuing operations for fiscal year 2007
was $365.1 million, excluding an aggregate $11 million USF charge
related to prior periods. Centennial's fiscal 2008 AOI outlook
reflects the company's best estimate of Puerto Rico USF revenue in
consideration of recent adjustments. The company has not included
a reconciliation of projected AOI because projections for some
components of this reconciliation are not possible to forecast at
this time.
The company expects U.S. wireless roaming revenue to decline
between $15 million and $20 million during fiscal 2008. U.S.
wireless roaming revenue for fiscal 2007 was $65.5 million.
The company expects the sum of consolidated capital expenditures
and spectrum acquisition costs will be about $140 million for
fiscal 2008. Capital expenditures including spectrum acquisition
costs for fiscal 2007 were $130.1 million.
About Centennial Communications
Headquartered in Wall, New Jersey, Centennial Communications
Corp. (NASDAQ: CYCL) -- http://www.centennialwireless.com/--
provides regional wireless and integrated communications
services in the United States and the Puerto Rico with
approximately 1.1 million wireless subscribers and 387,500
access lines and equivalents. The US business owns and operates
wireless networks in the Midwest and Southeast covering parts of
six states. Centennial's Puerto Rico business owns and operates
wireless networks in Puerto Rico and the U.S. Virgin Islands and
provides facilities-based integrated voice, data and Internet
solutions. Welsh, Carson, Anderson & Stowe and an affiliate of
the Blackstone Group are controlling shareholders of Centennial.
CENTRIX FINANCIAL: Court Sets Sept. 7 Admin. Claims Bar Date
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado fixed
Sept. 7, 2007, as the last day for all parties holding
administrative expense claims against Centrix Financial LLC
and its debtor-affiliates to file their proofs of claim.
The bar date refers to administrative expense claims arising
on or after Sept. 15, 2006.
Proofs of claim must be filed with the Clerk of the United
States Bankruptcy Court for the District of Colorado, at the
United States Customs House, No. 721, 19th Street, in Denver,
Colorado.
Headquartered in Reno, Nevada, Centrix Financial LLC provides
subprime auto loans. Centrix and its affiliates filed separate
Chapter 11 petitions on Sept. 19, 2006 (Bankr. Dist. Nev. Lead
Case No. 06-50631). CMGN LLC, one of the affiliates, filed its
Chapter 11 petition on Sept. 4, 2006 (Bankr. Dist. Nev. Case
No:06-50631).
Three of Centrix Financial's creditors, IFC Credit Corporation,
Suntrust Leasing, and Wells Fargo Equipment Finance, subsequently
filed involuntary chapter 11 petition against the Debtors on
Sept. 15, 2006 (Bankr. Dist. Colo. Case No:06-16403) The
Creditors assert they are owed more than $4.6 million. Lee M.
Kutner, Esq., at Kutner Miller, P.C., and David von Gunten, Esq.,
at Von Gunten Law LLC, represent the creditor petitioners.
The Debtors' cases has been consolidated and transferred on
Sept. 27, 2006 (Bankr. Dist. Colo. Case No: 06-16791) Craig D.
Hansen, Esq., in Phoenix, Arizona and Elizabeth K. Flaagan, Esq.,
in Denver, Colorado, represent the Debtors.
CHEMTURA CORP: Incurs $2 Million Net Loss in 2007 Second Quarter
----------------------------------------------------------------
Chemtura Corporation posted a net loss of $2 million for the
second quarter of 2007 and net earnings on a non-GAAP basis of
$43 million.
The net loss for the quarter includes:
* a loss from continuing operations of $30 million;
* income from discontinued operations of $3 million; and
* gain on a discontinued operations sale of $25 million.
On a non-GAAP basis, net earnings include income from continuing
operations of $40 million, and income from discontinued operations
of $3 million.
"Our second quarter results reflect numerous positives: record
earnings for Consumer Products despite a slowdown at the end of
the quarter; outstanding performance for Crop Protection despite
legacy bad debt issues in Latin America related to prior growing
seasons; continued sequential improvement in Polymer Additives;
and excellent performance from our Kaufman Holdings businesses
in the first full quarter since we acquired them at the end of
January," Robert Wood, Chairman and CEO, said.
Headquartered in Middlebury, Connecticut, Chemtura Corporation
(NYSE:CEM) -- http://www.chemtura.com/-- is a global
manufacturer and marketer of specialty chemicals, crop
protection, and pool, spa and home care products. The company
has approximately 6,400 employees around the world and sells its
products in more than 100 countries. The company has facilities
in Singapore, Australia, China, Hong Kong, India, Japan, South
Korea, Taiwan, Thailand, Brazil, Belgium, France, Germany,
Mexico, and the United Kingdom.
* * *
As reported in the Troubled Company Reporter on May 21, 2007,
Moody's Investors Service lowered Chemtura Corporation's corporate
family rating to Ba2 from Ba1 and also lowered the company's
outstanding debt ratings to Ba2. Moody's also revised the ratings
outlook to stable from negative.
CLAUS ZIEGER: Case Summary & 19 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Claus D. Zieger
1335 Virginia Road
San Marino, CA 91108
Bankruptcy Case No.: 07-17026
Chapter 11 Petition Date: August 14, 2007
Court: Central District Of California (Los Angeles)
Judge: Sheri Bluebond
Debtor's Counsel: Alan I. Nahmias, Esq.
Plotkin, Rapoport & Nahmias
16633 Ventura Boulevard, Suite 800
Encino, CA 91436-1836
Tel: (818) 906-1600
Fax: (818) 907-9261
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's List of its 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Advance Paper Box Personal Guarantee $750,000
c/o Alpert, Barr & Grant of Interbath, Inc.
6345 Balboa Boulevard debt
Suite 300
Encino, CA 91316
Seeta Zieger Personal Loan $50,000
9230 Kinglet Drive
West Hollywood, CA 90069
American Express Credit Card $21,730
P.O. Box 0001
Los Angeles, CA 90096-0001
Union Bank of California Credit Card $20,485
LA County Tax Collector Property Tax $5,669
California Yacht Club Membership $1,419
Southern California Edison Utilities - $8
Edison Co. Mammoth
Utilities - $685
San Marino
Mammoth Ski & Racquet Club $498
California American Water Utility Bill $330
Zepplin Stremel Pool Service $235
Pro Tech Boat Cleaning Service $97
Athens Services Waste Disposal $70
Time Warner Cable Utilities $56
Verizon Wireless Tel. Service $50
City Clerk's Tax & Permit Unknown
Dept. of Benefit Payments Unknown
Employment Development Dept. Unknown
Franchise Tax Board Unknown
Internal Revenue Service Unknown
COMPTON PETROLEUM: Unit Gets 26.55 Mil. Tenders of Stylus Shares
----------------------------------------------------------------
Compton Petroleum Corporation's wholly owned subsidiary,
Compton Petroleum Acquisition Limited, has, pursuant to its
July 5, 2007 offer to acquire all of the outstanding common
Shares of Stylus Energy Inc., received to date tenders of
26,551,650 Stylus Shares, representing approximately 99.68% of the
outstanding Stylus Shares, excluding the Stylus Shares held by the
Offeror or its affiliates.
Since all of the conditions to the Offer have been satisfied, the
Offeror has taken up, and will pay for all of the Stylus Shares
validly deposited pursuant to the offer and not withdrawn prior to
Aug. 14, 2007.
The Offeror intends to acquire the balance of the Stylus Shares
not acquired pursuant to the Offer by way of a compulsory
acquisition pursuant to the provisions of the Business
Corporations Act on the same terms as the Stylus Shares acquired
under the Offer.
About Stylus Energy Inc.
Headquartered in Calgary, Stylus Energy Inc. (TSX Symbol: STY) –
http://www.stylusenergy.com/-- is a junior oil and natural gas
company with operations in Alberta.
About Compton Petroleum Corporation
Headquartered in Calgary, Alberta, Compton Petroleum Corporation
(TSX: CMT)(NYSE:CMZ) – http://www.comptonpetroleum.com/-- is
actively engaged in the exploration, development, and production
of natural gas, natural gas liquids, and crude oil in the Western
Canada Sedimentary Basin. The company is a wholly-owed subsidiary
of Compton Petroleum Acquisition Limited.
* * *
As reported in the Troubled Company Reporter on July 16, 2007,
Moody's Investors Service changed Compton Petroleum Corporation's
rating outlook to negative from stable. Moody's rated B1 its
corporate family rating and B2 its senior unsecured note rating.
CONNORS BROS: S&P Revises Outlook to Stable from Positive
---------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Toronto-
based Connors Bros. Income Fund to stable from positive. At the
same time, S&P affirmed the ratings on the company, including the
'B+' long-term corporate credit rating.
"The revised outlook is based on challenges Connors is facing
because of a product recall, including reduced financial
flexibility and expected weaker performance in the second-half of
2007," said Standard & Poor's credit analyst Lori Harris. "This
situation is a result of the company's need to recall certain meat
products in the U.S. and Canada through its Castleberry's Food Co.
subsidiary because of potential contamination to the food from
under-processing," Ms Harris added.
Even though the recalled products represent less than 4% of
Connors' annual revenue, the costs associated with this action are
significant at $35 million, net of $5 million in insurance
proceeds (reported in the second quarter ended June 30, 2007).
Furthermore, the recall resulted in the need for covenant relief
in the second quarter because Connors was not in compliance with
its leverage covenant and distribution payout ratio. The company
is suspending monthly distributions for six months to preserve
cash for payment of the product recall. Excluding the recall, the
company's performance was in line with Standard & Poor's
expectations for second-quarter 2007; however, its financial
flexibility has been reduced and we expect second-half 2007
performance to be negatively affected by the temporary production
stoppage of the affected products.
The ratings on Connors reflect its aggressive acquisition
strategy, narrow product portfolio, supply variability, and
limited financial flexibility. These factors are partially offset
by the company's solid credit protection measures for the ratings;
national consumer franchises with its Bumble Bee, Clover Leaf, and
Brunswick canned seafood brands; and its portfolio of leading
regional brands.
The stable outlook reflects the expectation that any material
problems related to the product recall are behind the company.
Furthermore, Standard & Poor's expects that Connors will maintain
its leading position in its core categories, that its acquisitions
will be successfully integrated, and credit measures will remain
in line with our expectations in the medium term. S&P could
revise the outlook back to positive if Connors strengthens its
business risk profile, while also improving its financial risk
profile on a sustainable basis through lower debt leverage and
increased financial flexibility. Should Connors experience future
material product recall-related expenses or if its financial
performance is not in line with Standard & Poor's expectations in
the next several quarters, we could revise the outlook to
negative.
DECKER OAKS: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Decker Oaks Land Company Ltd.
617 West Main
Tomball, TX 77375
Bankruptcy Case No.: 07-35558
Debtor-affiliate filing a separate Chapter 11 petition:
Entity Case No.
------ --------
HHJ Inc. 07-35556
Decker Oaks Development II, Ltd. 07-35557
Chapter 11 Petition Date: August 14, 2007
Court: Southern District of Texas (Houston)
Judge: Letitia Z. Clark
Debtors' Counsel: Margaret Maxwell McClure, Esq.
909 Fannin
Suite 3810
Houston, TX 77010
Tel: (713) 659-1333
Fax: (713) 658-0334
Estimated Assets Estimated Debts
---------------- ---------------
Decker Oaks Land $1 Million to $1 Million to
Company, Ltd. $100 Million $100 Million
Decker Oaks $1 Million to $1 Million to
Development II, Ltd. $100 Million $100 Million
HHJ Inc. $1 Million to $1 Million to
$100 Million $100 Million
The Debtors did not file a list of their 20 largest unsecured
creditors.
DEVELOPMENT FINANCE: Fitch Affirms BB Issuer Default Rating
-----------------------------------------------------------
Fitch affirms the ratings of Development Finance Limited and
assigns ratings to DFL Caribbean Holdings Limited. The Rating
Outlook is Stable.
Ratings reflect ownership, efficient operating structure, and
sizable portion of stable long-term funding. Offsetting factors
include the company's concentration of exposure, comparatively
high level of impaired loans, small size and limited market
position.
Recently, the company converted to a holding company structure
under DFL Caribbean Holdings Limited. The holding company
structure more clearly separates risks by product type and
geography and allows management and the board to more clearly
monitor performance, risks and regional expansion efforts.
Policies for holding company leverage appear reasonable. It is
believed that more than sufficient liquidity will be maintained at
the holding company level.
The largest shareholders are RBTT Financial Holdings with 31%, the
Government of Trinidad and Tobago with 28%, the European
Investment Bank with 8.5%, and the Inter-American Investment
Corporation with 8.5%. Fitch believes there is a moderate
probability of support from DFL's institutional owners in the
event of serious financial difficulties.
Fitch affirms these ratings:
Development Finance Limited
-- Long-term Issuer Default Rating at 'BB';
-- Short-term IDR at 'B';
-- Individual rating at 'D';
-- Support rating at '3'.
Fitch assigns these ratings:
DFL Caribbean Holdings Limited
-- Long-term Issuer Default rating at 'BB';
-- Short-Term IDR at 'B';
-- Individual rating at 'D';
-- Support rating at '3'.
DRS TECHNOLOGIES: Earns $1.7 Million in First Qtr. Ended June 30
----------------------------------------------------------------
DRS Technologies Inc. posted record first quarter revenues, for
the first quarter of fiscal 2008 of $735.6 million, 17% higher
than revenues of $630.3 million for the same quarter last fiscal
year. Net earnings of $1.7 million for the first three months of
fiscal 2008 were reduced by the TWS II charge discussed earlier,
which amounted to $23.2 million after taxes.
Fiscal 2008 first quarter operating income of $31.3 million
includes the $36.8 million pretax charge. The operating margin
for the fiscal 2008 three-month period was 4.3% after giving
effect to the charge. Without the adverse impact from the pretax
charge, the company would have reported operating income of
$68.1 million and an operating margin of 9.3% for the first
quarter of fiscal 2008, compared with last year's first quarter
operating income of $65 million and operating margin of 10.3%.
Interest and related expenses for the first quarter of fiscal 2008
were $28.7 million, compared with $29.9 million a year ago. The
decrease was due to lower average borrowings outstanding
associated with financing the Engineered Support Systems
acquisition, completed in the last quarter of fiscal 2006.
The effective income tax rate for the initial quarter of fiscal
2008 was about 37%, compared with about 39% for the same period
last fiscal year.
Net cash provided by operating activities for the first quarter of
fiscal 2008 was $0.5 million, a 102% improvement over the
negative $25.9 million reported for the fiscal 2007 first quarter.
Free cash flow was a negative $13.4 million for the first quarter
of fiscal 2008, a 66% improvement over the negative $39 million
for the first quarter in the prior fiscal year.
Fiscal 2008 first quarter capital expenditures were $13.9 million,
essentially flat with the same quarter last year. The company
said that it expects to generate positive free cash flow as the
year progresses.
Balance Sheet Highlights
The company reported total assets of $4.1 billion, total
liabilities of $2.6 billion, and total stockholders' equity of
$1.5 billion as of June 30, 2007.
At June 30, 2007, the company had $34.1 million in cash and cash
equivalents, compared with $95.8 million at March 31, 2007, the
company's fiscal 2007 year end. Lower cash and cash equivalents
at the end of the first quarter of fiscal 2008 reflected
utilization of about $50 million in cash for prepaying the
company's long-term debt.
Total debt at June 30, 2007 was $1.7 billion. The company had no
borrowings against its revolving credit facility at June 30, 2007.
Full-text copies of the company's financials are available for
free at http://researcharchives.com/t/s?2287
"Before giving effect to the charge, DRS generated strong first
quarter operating income of $68.1 million and diluted earnings per
share of $0.60, 15% above diluted EPS for the same quarter last
year," said Mark S. Newman, DRS Technologies' chairman, president
and chief executive officer. "Coupled with record first quarter
revenues in each of operating segments, strong demand for our
products and services, and a healthy level of funded backlog,
results excluding the TWS II provision demonstrate the overall
strength and diversity of our business base."
New Contract Awards and Backlog
DRS secured a first quarter record of $939.5 million in new orders
for products and services during the fiscal 2008 three-month
period, 20% above bookings of $782.1 million for the comparable
prior-year period and a 36% rise sequentially above the fourth
quarter of fiscal 2007. Funded backlog at June 30, 2007, of
$3.26 billion was 27% above funded backlog of $2.56 billion at the
same time last year.
New contracts awarded to the company's Reconnaissance,
Surveillance & Target Acquisition Segment during the first
quarter of fiscal 2008 were valued at $196.8 million.
For the first three months of fiscal 2008, the company's
Sustainment Systems Segment booked contracts valued at
$130.8 million.
Outlook
The company reiterated its fiscal 2008 guidance for revenues and
diluted EPS issued on July 27, 2007 and today updated its
estimates on other metrics, as indicated in the table below.
DRS's recently increased fiscal 2008 guidance for revenues
represents about 8 to 10% organic growth over fiscal 2007
revenues. The revised fiscal 2008 diluted EPS estimate of $3 to
$3.10 reflects the adverse impact of the TWS II provision
mentioned earlier, significantly offset by the benefit of higher
revenues, planned operating improvements, an estimated
$11.7 million curtailment gain during the second quarter of fiscal
2008 from one of the company's benefit plans and a lower effective
income tax rate.
"DRS closed the first quarter with a strong book-to-bill ratio of
about 1.3 to 1 and a diversified, well-funded backlog, which
is providing a strong foundation for business growth in the new
fiscal year," added Mr. Newman. "The government's fiscal 2008
defense budget process to date is revealing strong bipartisan
support for many of the programs with which we are involved, as
well as strong awareness of the longer-term initiatives necessary
to address future critical defense and national security issues.
As a result, we continue to see many opportunities to apply our
products, services and technologies to the challenges facing our
military, government intelligence and homeland security
customers."
About DRS Technologies
Based in Parsippany, New Jersey, DRS Technologies Inc. (NYSE: DRS)
-- http://www.drs.com/-- is a supplier of integrated products,
services and support to military forces, intelligence agencies and
prime contractors worldwide. The company employs 10,000 people.
* * *
DRS Technologies' 7-5/8% senior subordinated notes due 2018 carry
Moody's Investors Service's 'B3' rating, Fitch's 'B-' rating and
Standard & Poor's 'B' rating.
DURA AUTOMOTIVE: Court Approves Backstop Rights Purchase Agreement
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
two important agreements that will help facilitate and finance
DURA Automotive Systems, Inc.s emergence from bankruptcy. The
Court entered an order approving DURA's asset purchase agreement
for the sale of its Atwood Mobile Products division and approved
its amended backstop rights purchase agreement. The order for the
backstop agreement will be submitted tomorrow under certificate of
counsel. These milestones keep the company on track for an
expected emergence from Chapter 11 in the fourth quarter of 2007.
"We are pleased with the Court's decision, which enables us to
continue on a path toward emergence," Larry Denton, DURA
Automotive's Chairman and Chief Executive Officer, said. "We have
made significant progress with our creditors and other
constituencies to foster a consensual reorganization process."
On Aug. 13, 2007, DURA filed an amended backstop rights purchase
agreement and related stockholder agreement which reflects a
global resolution of issues among the company, Pacificor, LLC and
the Creditors' Committee. Under the terms of the amended
agreement, upon emergence the company will be privately held with
a range of minority shareholder protections. The Court has
approved this agreement, which provides an equity backstop
commitment of between $140 and $160 million.
Rochester Hills, Mich.-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural
door modules and exterior trim systems for the global automotive
industry. The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries. DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.
The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr.
D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc
Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine
Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the
Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J.
DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton
& Finger, P.A. Attorneys are the Debtors' co-counsel. Baker &
McKenzie acts as the Debtors' special counsel. Togut, Segal &
Segal LLP is the Debtors' conflicts counsel. Miller Buckfire &
Co., LLC is the Debtors' investment banker. Glass & Associates
Inc., gives financial advice to the Debtor. Kurtzman Carson
Consultants LLC handles the notice, claims and balloting for the
Debtors and Brunswick Group LLC acts as their Corporate
Communications Consultants for the Debtors. As of July 2, 2006,
the Debtor had $1,993,178,000 in total assets and $1,730,758,000
in total liabilities.
The Debtors' exclusive plan-filing period expires on Sept. 30,
2007.
DURA AUTOMOTIVE: Court Okays Sale of Atwood Mobile for 160.2 Mil.
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
DURA Automotive Systems Inc. and its debtor-affiliates' asset
purchase agreement with Atwood Acquisition Co., LLC, an affiliate
of private equity firm Insight Equity, for the sale of DURA's
Atwood Mobile Products division, headquartered in Elkhart,
Indiana. The agreement provides for the acquisition of Atwood
Mobile Products for an aggregate cash consideration of
$160.2 million.
DURA was advised by Miller Buckfire, AlixPartners and Kirkland &
Ellis in connection with both the backstop and Atwood sale
agreements.
As reported in yesterdays Troubled Company Reporter, the Debtors
disclosed that they canceled the scheduled auction for Atwood
Mobile Products, Inc.'s assets, in light of the absence of
competing bids for the Elkhart, Indiana-based business.
In a notice filed before the U.S. Bankruptcy Court for the
District of Delaware, Dura Automotive said that they have not
received additional "qualified bids" for Atwood by the August 8
deadline to submit bids.
Rochester Hills, Mich.-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural
door modules and exterior trim systems for the global automotive
industry. The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries. DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.
The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr.
D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc
Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine
Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the
Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J.
DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton
& Finger, P.A. Attorneys are the Debtors' co-counsel. Baker &
McKenzie acts as the Debtors' special counsel. Togut, Segal &
Segal LLP is the Debtors' conflicts counsel. Miller Buckfire &
Co., LLC is the Debtors' investment banker. Glass & Associates
Inc., gives financial advice to the Debtor. Kurtzman Carson
Consultants LLC handles the notice, claims and balloting for the
Debtors and Brunswick Group LLC acts as their Corporate
Communications Consultants for the Debtors. As of July 2, 2006,
the Debtor had $1,993,178,000 in total assets and $1,730,758,000
in total liabilities.
The Debtors' exclusive plan-filing period expires on Sept. 30,
2007.
FLOWSERVE CORP: Moody's Affirms Ba3 Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service affirmed Flowserve Corporation's
corporate family rating at Ba3 and probability of default at B1.
At the same time, Moody's affirmed the Ba2 rating to the company's
senior secured term loan and assigned a Ba2 rating to Flowserve's
senior secured revolving credit facility.
The rating actions result from Flowserve extending the maturity of
its revolving credit facility by two years to August 2012. The
outlook is stable.
Flowserve's Ba3 corporate family rating reflects the company's
leading market position in the fluid motion and control
manufacturing industry, diverse product offering and global foot
print. Moody's also anticipates that Flowserve will benefit from
revenue growth as demand for industrial pumps, seal, valves, and
services continue to remain robust over the intermediate term as
well as the prudent financial policies being embraced by
management.
Through LTM June 2007, Flowserve's key credit metrics (as adjusted
per Moody's FM Methodology) were:
-- EBITA margin -- 9%;
-- EBIT/interest expense -- 3.3 times;
-- debt/EBITDA -- 2.8 times; and,
-- retained cash flow/debt at 21%.
These strengths, however, are balanced against the ongoing
cyclicality of Flowserve's end markets. Additionally, the
corporate family rating is constrained by the ongoing
investigation into the Oil-for-Food Program and shareholder
lawsuit. Also, there is the potential for Flowserve to pursue
further growth initiatives which could require incremental capital
investments.
The stable outlook reflects Moody's expectations that Flowserve's
debt protection measures are supportive of the Ba3 rating over the
next twelve to eighteen months. The company's current good
liquidity profile, with balance sheet cash of about $48 million at
the end of 2Q07 should enable it to fund modest growth without
incurring significant additional financial leverage.
Consequently, even in consideration of a modest cyclical downturn
in business trends, Moody's anticipates that Flowserve will
maintain appropriate financial metrics for its current rating.
The rating for the company's senior secured bank credit facility
consisting of the revolving credit facility and term loan reflects
the overall probability of default of the company, to which
Moody's assigns a probability of default of B1. The Ba2 rating of
the senior secured bank credit facility is rated one notch above
the corporate family rating and reflects an LGD2 (20%) loss given
default assessment. This credit facility reflects its senior
position in Flowserve's capital structure, a first priority in
substantially all of the company's assets, and the benefit from
almost $200 million in junior claims.
These rating/assessments were affected by this action:
-- Corporate family rating affirmed at Ba3;
-- Probability of default rating affirmed at B1;
-- $600 million senior secured term loan due August 2012 affirmed
at Ba2 (LGD2, 20%); and,
-- $400 million senior secured revolving credit facility due
August 2012 assigned at Ba2 (LGD2, 20%).
Flowserve Corporation, headquartered in Irving, TX, is one of the
world's leading providers of fluid motion and control products and
services. Operating in over 55 countries, the company produces
engineered and industrial pumps, seals and valves. The company
also provides a range of related flow management services.
GENERAL MOTORS: Completes $5.6 Billion Allison Transmission Sale
----------------------------------------------------------------
General Motors Corp. has completed the sale of its Allison
Transmission commercial and military business to The Carlyle
Group and Onex Corporation for about $5.6 billion.
The company expects to use the funds to strengthen liquidity and
support heavy investments in new products and technology, such
as its continued energy diversity initiatives.
Allison Transmission designs and manufactures automatic
transmissions for medium and heavy duty commercial vehicles.
Its products are used in on-highway, off-highway and vehicles.
Headquartered in Indianapolis, Indiana, Allison Transmission
employs approximately 3,400 people, has seven plants in
Indianapolis and sells its transmissions through a worldwide
distribution network with sales offices in North America, South
America, Europe, Africa and Asia. The company generates annual
revenues in excess of $2 billion.
About Carlyle Group
The Carlyle Group –- http://www.carlyle.com/-- is a private
equity firm with $58.5 billion under management. Carlyle
invests in buyouts, venture & growth capital, real estate and
leveraged finance in Asia, Europe and North America, focusing on
aerospace & defense, automotive & transportation, consumer &
retail, energy & power, healthcare, industrial, infrastructure,
technology & business services and telecommunications & media.
Since 1987, the firm has invested $28.3 billion of equity in
636 transactions for a total purchase price of $132 billion.
The Carlyle Group employs more than 800 people in 18 countries.
In the aggregate, Carlyle portfolio companies have more than
$87 billion in revenue and employ more than 286,000 people
around the world.
About Onex
Onex Corp. makes private equity investments through the Onex
Partners and ONCAP family of Funds. These companies are in a
variety of industries, including electronics manufacturing
services, aerostructures manufacturing, healthcare, financial
services, aircraft & aftermarket, metal services, customer
management services, theatre exhibition, personal care products
and communications infrastructure.
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 280,000 people around the world and manufactures cars and
trucks in 33 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India. In 2006, nearly 9.1 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
* * *
As reported in the Troubled Company Reporter on May 28, 2007,
Standard & Poor's Ratings Services placed General Motors Corp.'s
corporate credit rating at B/Negative/B-3.
At the same time, Moody's Investors Service affirmed GM's B3
Corporate Family Rating and B3 Probability of Default Rating,
and maintained its SGL-3 Speculative Grade Liquidity Rating.
The rating outlook remains negative, according to Moody's.
GENERAL MOTORS: Paying $0.25 Per Share Dividend on Sept. 10
-----------------------------------------------------------
General Motors Corp. has disclosed a third-quarter dividend of
$0.25 per share on GM common stock. The dividend is payable
Sept. 10, 2007, to holders of record as of Aug. 17, 2007.
The dividend is unchanged from the previous quarter.
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 280,000 people around the world and manufactures cars and
trucks in 33 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India. In 2006, nearly 9.1 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
* * *
As reported in the Troubled Company Reporter on May 28, 2007,
Standard & Poor's Ratings Services placed General Motors Corp.'s
corporate credit rating at B/Negative/B-3.
At the same time, Moody's Investors Service affirmed GM's B3
Corporate Family Rating and B3 Probability of Default Rating,
and maintained its SGL-3 Speculative Grade Liquidity Rating.
The rating outlook remains negative, according to Moody's.
GEOEYE INC: Roberta Lenczowski Joins Board of Directors
-------------------------------------------------------
GeoEye Inc. has appointed Roberta E. "Bobbi" Lenczowski to its
board of directors. Ms. Lenczowski's career as an executive of
the National Geospatial - Intelligence Agency included most
serving as NGA's Technical Executive and West Senior Executive.
“We are delighted to have Bobbi join our board,” retired Air Force
Lt. Gen. James A. Abrahamson, GeoEye's chairman of the board,
said. “Her impressive career and take-charge attitude guided her
to be one of the most respected and trusted NGA leaders. As an
early adopter of our industry's technology, she literally helped
embed the word 'geospatial' into the lexicon. Her advocacy for
'geospatial intelligence' began with her participation on the
December 1995 implementation team to create the then National
Imagery and Mapping Agency, or what is now known as the NGA."
"I am excited to be joining GeoEye's board," Ms. Lenczowski said.
"As I once said in a keynote address, geographic information
systems will increasingly emphasize 'how the world works' rather
than simply 'how the world looks.' Over the past two years
consulting within the commercial sector, I've continued to serve
the geospatial community and to encourage the advancement of
geospatial intelligence. Collaboration has always been my key
strategy. As a GeoEye board member, I will bring my expertise in
building a network of effective relationships which cover the
present, but branch into GeoEye's future."
“Bobbi's experience as a senior intelligence official plus her
deep familiarity with the geospatial industry make Bobbi the
perfect addition to our board,” Matthew O'Connell, GeoEye's chief
executive officer, president and director said. “As we move
towards next year's launch of our next-generation imaging
satellite, GeoEye-1, Bobbi's thoughtful advice and strategic
counsel will help GeoEye continue to be the leader in the
geospatial industry."
Ms. Lenczowski has more than 30 years of industry experience. In
November 1977, she began her professional career with the Defense
Mapping Agency, one of the component agencies forming NIMA, now
NGA. After retiring, Ms. Lenczowski formed Roberta E. Lenczowski
Consulting in May 2005.
She currently serves as a board director for TechniGraphics and
the Leonard Wood Institute and as an external director for of
EarthData International Inc. Ms. Lenczowski earned her classical
bachelor of arts in philosophy from Creighton University in 1963,
graduating summa cum laude. She completed degree requirements for
a master of arts in philosophy from St. Louis University in 1970
and for a master of science in geodetic science from Washington
University in 1981. In addition, she has fulfilled partial
requirements toward a master of science in computer science from
University of Missouri, Rolla.
About GeoEye Inc.
Headquartered in Dulles, Virginia, GeoEye (Nasdaq: GEOY) --
http://www.geoeye.com/-- is a commercial imaging satellites
operator. GeoEye was a result of ORBIMAGE's acquisition of Space
Imaging in January 2006. The company provides geospatial data,
information and value-added products for the national security
community, strategic partners, resellers and commercial customers.
GeoEye operates three Earth imaging satellites: OrbView-2,
OrbView-3 and IKONOS and possesses a network of regional ground
stations, a robust image archive, and geospatial imagery
processing capabilities.
GeoEye is currently building its next-generation commercial
satellite imaging system, GeoEye-1, which will provide a ground
resolution of 0.41-meter panchromatic and 1.65-meter multispectral
or color imagery. The launch of GeoEye-1 is slated for later in
2007 from the Vandenberg Air Force Base in California.
* * *
As reported in the Troubled Company Reporter on July 3, 2007,
Standard & Poor's Ratings Services revised its outlook on GeoEye
Inc. to developing from negative. All ratings, including the 'B-'
corporate credit rating, were affirmed.
HC INNOVATIONS: Posts $1.9 Million Net Loss in Qtr. Ended June 30
-----------------------------------------------------------------
HC Innovations Inc. reported on Aug. 13, 2007, its results for the
second quarter and six months ended June 30, 2007.
Net loss for the three months ended June 30, 2007, was
$1.9 million, compared with a net loss of $831,000 for the three
months ended June 30, 2006. Total revenues for the second quarter
ended June 30, 2007, increased 108% to $2.8 million compared with
total revenues of $1.3 million for the prior-year period.
Net loss for the first half of 2007, was $3.3 million, compared
with a net loss of $1.3 million, for the first half of 2006.
Total revenues for the six months ended June 30, 2007, increased
88% to $5.0 million compared with total revenues of $2.6 million
for the prior year period.
In commenting on the results, Dr. David Chess, chief executive
officer of HC Innovations, said, "We are pleased with the progress
we are making in expanding the footprint of our company and
communicating the value of our unique services. We are confident
that the major new contracts we signed during the first six months
of 2007 will enhance our future revenue and earnings. We view our
success in signing these contracts as a testimony to the integrity
of our care management programs, our strong leadership and the
continued increasing demand for our services. We have continued
to invest heavily in building our corporate infrastructure as well
as expanded development of our proprietary electronic health
record (SAMehr(TM)) software systems that drive our programs and
provide significant competitive advantages. We have also invested
heavily in expansion markets, which, although it has temporarily
suppressed short-term margins and earnings, we expect to result in
future growth and positive earnings.
"Our demand has been driven by extraordinary improvements in
patient wellness while delivering significant cost savings for our
customers. We have expanded our operations to nine states and
revenues have more than doubled compared with the second quarter
of 2006. In addition, during the first six months of this year,
we have made significant strides in strengthening our balance
sheet to further position the company for continued growth. We
are confident that the pace of our expansion will accelerate as
our visibility increases and demand grows."
Dr. Chess dded, "We also are excited about the success we are
having in enhancing our management team. In the past quarter, we
have added several talented individuals to our senior management
team. In early July, we announced the addition of Brett Cohen as
Vice President, Strategic Development, and Maureen Mulvey as
Director of Human Resources, and further additions will be
announced in the near future. Also, we are evaluating candidates
for our Board of Directors, and we look forward to announcing
individuals who will add expertise and make important
contributions to our company. Lastly, our Medical Advisory Board
is in formation and will include several prominent national
industry members."
In closing, Dr. Chess added, "We believe our timing is excellent
and that we are at a tipping point in the healthcare industry.
Costs are increasing dramatically, reimbursement pressures are
exacerbating the problem, medical professionals are becoming
scarcer, and all of this is happening while our target
populations of medically unstable and frail people are
underserved and expanding. We are on track and well positioned
to meet this inevitable and growing need."
At June 30, 2007, the company's consolidated financial statements
for the quarter ended June 30, 2007, showed $7.5 million in total
assets, $3.1 million in total liabilities, and $4.3 million in
total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2007, are available for
free at http://researcharchives.com/t/s?2271
Going Concern Doubt
Carlin, Charron & Rosen LLP, in Glastonbury, Connecticut,
expressed substantial doubt about HC Innovations Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the years ended Dec. 31,
2006, and 2005. The auditing firm said that the company has a
working capital deficiency of $3,276,083 as of Dec. 31, 2006, has
sustained net losses of $3,250,665 and $1,378,789 for the years
ended Dec. 31, 2006, and 2005, respectively, and has an
accumulated deficit of $5,246,964 as of Dec. 31, 2006.
About HC Innovations
Headquartered in Shelton, Connecticut, HC Innovations Inc. (OTC
BB: HCNV.OB) -- http://www.hcinnovationsinc.com/-- creates value
and cost savings for HMOs, nursing homes, and insurance companies
(government and private) by identifying niche markets with high
medical costs and implementing proprietary solutions. HC
Innovations combines proprietary information systems with highly
trained nurses and nurse practitioners to improve health
conditions with hands-on care. HC Innovations currently provides
services for Medicare, Medicaid, sub-acute care and specialty-
needs programs in Connecticut, New Jersey, New York,
Tennessee, Texas, Florida, Ohio, Illinois and Massachusetts.
HEALTHCARE ACQUISITION: Court Starts Hearing on PharmAthene Merger
------------------------------------------------------------------
To affirm the validity of the merger between Healthcare
Acquisition Corp. and PharmAthene, proceedings were initiated with
the Delaware Chancery Court.
“We hope that the Court of Chancery will determine that the Merger
was validly approved and consummated so that PharmAthene may, in
accordance with the desires of an overwhelming majority of its
stockholders, make use of the funds held in escrow towards the
furtherance of its business plan,” David P. Wright, president and
chief executive officer of PharmAthene, said.
“We remind you that the action initiated by our shareholder is
intended to seek affirmation from the court of the validity of the
merger, and should not be interpreted by PharmAthene shareholders
as a challenge to the merger,” Mr. Wright continued.
The certificate of merger was filed on August 3, 2007. Shares of
PharmAthene began trading on the American Stock Exchange on
Aug. 7, 2007, under the symbol 'PIP' and 'PIP-WT' for the
company's warrants.
About PharmAthene Inc.
PharmAthene Inc. -- http://www.PharmAthene.com/-- was formed as a
result of a merger with Healthcare Acquisition Corp. PharmAthene
is a biodefense company developing and commercializing medical
countermeasures against biological and chemical threats.
PharmAthene's lead programs include Valortimâ„¢ for the prevention
and treatment of anthrax infection and Protexia(R) for the
prevention and treatment of morbidity and mortality associated
with exposure to chemical nerve agents.
About Healthcare Acquisition Corp.
Healthcare Acquisition Corp. (AMEX:HAQ; HAQ.W) was incorporated in
Delaware on April 25, 2005, as a blank check company whose
objective is to acquire, through a merger, capital stock exchange,
asset acquisition or other similar business combination, an
operating business.
Primarily all activity through Dec. 31, 2006, relates to the
company's formation and the public offering identifying and
evaluating prospective target businesses. On Jan. 19, 2007, the
company signed an agreement and plan of merger with PharmAthene,
Inc. The company has until Aug. 3, 2007 to complete the business
combination or it must be liquidated.
* * *
As reported in the Troubled Company Reporter on June 15, 2007,
LWBJ, LLP, at West Des Moines, Iowa, raised substantial about
Healthcare Acquisition Corp.'s ability to continue as a going
concern, after reviewing the company's quarterly financial
statements for the three months ended March 31, 2007.
The auditor related that the company will face a mandatory
liquidation by Aug. 3, 2007, if a business combination is not
consummated.
At March 31, 2007, the company had total assets of $72,375,242,
total liabilities of $14,920,515, and a stockholders' equity of
$57,454,727, compared to $71,738,744 in total assets, $$14,625,002
in total liabilities, and a stockholders' equity of $57,113,742 at
Dec. 31, 2006.
HOVNANIAN ENTERPRISES: Weakening Market Cues S&P to Cut Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Hovnanian Enterprises Inc. to
'BB-' from 'BB'. At the same time, S&P lowered the senior
subordinated debt rating to 'B' from 'B+' and the preferred stock
rating to 'B-' from 'B'. The outlook remains negative. The
rating actions affect $2.2 billion of rated securities.
"The rating actions reflect our expectation that the further
weakening of the housing market in recent months, continued
pressure due to credit tightening, the concessionary environment,
and inventory overhang, and the likelihood for a protracted
recovery will strain Hovnanian's profitability and interest
coverage beyond previous expectations and for a longer duration,"
explained Standard & Poor's credit analyst George Skoufis. "To
manage through this downturn, Hovnanian's management will need to
reign in capital spending and pursue cash generation strategies
more aggressively to strengthen its internal liquidity; the
company must also manage its debt levels to avoid additional
pressure on its liquidity position and the risk of violating its
bank facility interest coverage covenant." Hovnanian's diverse
product platform and seasoned management support the ratings.
Standard & Poor's expects very challenging housing market
conditions to continue to stress Hovnanian's profit margins and
interest coverage. S&P would lower its ratings if strategies to
generate positive free cash flow and reduce bank borrowings are
not successful, leaving the company's liquidity position
constrained. However, S&P would revise its outlook to stable if
the homebuilding sector stabilizes and Hovnanian's key credit
metrics and overall liquidity position improve.
I/OMAGIC CORP: Posts $506,535 Net Loss in Quarter Ended March 31
----------------------------------------------------------------
I/OMagic Corp. reported a net loss of $506,535 for the first
quarter ended March 31, 2007, compared with a net loss of
$1.1 million for the same period ended March 31, 2006.
Net sales decreased by $1.3 million, or 14.5%, to $7.7 million in
the first quarter of 2007 as compared to $9.0 million in the first
quarter in 2006. A combination of factors affected the company's
net sales, including a $2.7 million decrease in sales of the
company's optical data storage products. Sales of CD- and DVD-
based products continued to decline in the first quarter of 2007
because they are generally included as a standard component in
most new computer systems.
Also, sales of mobile data storage products decreased by 28% to
$3.3 million, or 45% of net sales, in the first quarter of 2007 as
compared to $4.6 million, or 51% of net sales, in the first
quarter of 2006, which was partially offset by an increase in net
sales of desk-top data storage products during the first quarter
of 2007 of $2.4 million, or 33% of net sales, as compared to none
for the first quarter of 2006.
The decrease in net loss is primarily attributable to an increase
in gross profit and a decrease in selling, marketing and
advertising expenses as well as a decrease in general and
administrative expenses, partly offset by an increase in net
interest expense.
Gross profit increased by $113,000, or 14.5%, to $896,000 in
the first quarter of 2007 as compared to $783,000 in the first
quarter in 2006. The increase in gross profit primarily resulted
from an increase in net sales.
Selling, marketing and advertising expenses decreased by $188,000,
or 35%, to $343,000 in the first quarter of 2007 as compared to
$531,000 in the first quarter in 2006.
General and administrative expenses decreased by $313,000, or 30%,
to $848,000 in the first quarter of 2007 as compared to
$1.2 million in the first quarter in 2006. This decrease was
primarily due to a $197,000 decrease in legal fees related to
prior year litigation expenses, a $64,000 decrease in audit fees,
and decrease in other G&A expenses.
Net interest expense increased by $41,000, or 51%, to $121,000 in
the first quarter of 2007 as compared to $80,000 in the first
quarter in 2006. This increase primarily resulted from higher
borrowings on the company's line of credit and higher effective
rates of interest on those borrowings in the first quarter of 2007
as compared to the first quarter of 2006.
At March 31, 2007, the company's consolidated balance sheet showed
$20.4 million in total assets, $14.4 million in total liabilities,
and $6.0 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?2275
Going Concern Doubt
Swenson Advisors LLP, in San Diego, expressed substantial doubt
about I/OMagic Corp.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 31, 2006. The auditing firm reported that the
company has incurred significant operating losses, serious
liquidity concerns and may require additional financing in the
foreseeable future.
At March 31, 2007, the company had cash and cash equivalents of
$79,507. The company currently has almost no amounts available to
it for borrowing under its credit facility with Silicon Valley
Bank. In addition, as of Aug. 10, 2007, the company had only
$403,000 of cash on hand. The company presently may not have
sufficient liquidity to fund its operating needs for the next
twelve months.
About I/OMagic Corporation
I/OMagic Corporation (OTC BB: IOMG) -- http://iomagic.com/--
provides data storage products such as CD-RW and DVD+/-RW drives,
USB Portable Storage Devices and floppy drives, including the
MediaStation, DataStation, and GigaBank(TM) products. The Ccmpany
sells products under three brand names -- I/OMagic(R), Hi-Val(R)
and Digital Research Technologies(R) -- through nationally-
recognized computer, consumer electronics and office supply
superstores and other retailers.
ICE 1: S&P Rates $40 Million Class D Notes at BB
------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to ICE 1:
EM CLO Ltd./ICE 1: EM CLO Corp.'s $908 million notes.
The transaction is a CLO backed primarily by loans and bonds to
emerging market issuers, with up to 50% of the collateral
consisting of synthetic securities.
The ratings reflect:
-- The credit enhancement provided through the subordination
of cash flows to the junior and income notes;
-- The transaction's cash flow structure, which was
subjected to various stresses requested by Standard &
Poor's;
-- The collateral manager's experience and track record in
emerging market CDOs;
-- The interest rate swap provided by Citigroup Financial
Products Inc.; and
-- The issuer's bankruptcy remoteness at closing.
The ICE 1: EM CLO Ltd./ICE 1: EM CLO Corp. transaction is divided
into senior, subordinate, and income notes. The senior and junior
notes pay a floating interest rate plus a margin. As of Aug. 15,
2007, approximately 50% of the collateral portfolio has been
purchased or committed to be purchased, with the remainder to be
acquired by the effective date in July 2008.
Los Angeles-based ICE Canyon LLC, the collateral manager, was
founded in October 2006 by Nathan Sandler. This is ICE Canyon's
first transaction. However, before founding ICE Canyon
Mr. Sandler spent several years as a senior manager of emerging
market CDOs. Citigroup Global Markets Inc. is the sole bookrunner
and Merrill Lynch, Pierce, Fenner and Smith Inc. is the co-
placement agent of the transaction.
Ratings Assigned
ICE 1: EM CLO Ltd./ICE 1: EM CLO Corp.
Class Rating Interest Amount
----- ------ -------- ------
A-1D AAA 0.35% $450,000,000
A-1R** AAA 0.45% $50,000,000
A-2 AAA 0.60% $184,000,000
A-3 AA 0.85% $95,000,000
B A 1.70% $51,000,000
C BBB 3.00% $38,000,000
D BB 5.00% $40,000,000
Income notes NR N/A $116,500,000
*Spread over six-month LIBOR.
**Class A-1R is a dual-currency revolving series that may be drawn
in euros or U.S. dollars. If it is drawn in euros, the floating
interest rate will be six-month EURIBOR.
NR Not rated.
N/A Not applicable.
IMPART MEDIA: Posts $1.8 Million Net Loss in Quarter Ended June 30
------------------------------------------------------------------
Impart Media Group, Inc. reported on Aug. 13, 2007, its financial
results for the 2007 second quarter.
The company reported a net loss of $1.8 million compared to a net
loss of $2.8 million in the second quarter of 2006. The company
also reported a net loss available to common stockholders of
$4.3 million compared to $2.9 million in the same period in 2006.
The company reported revenue of $1.8 million for the second
quarter of 2007, compared with $1.4 million during the second
quarter of 2006, representing a 23% increase year over year. The
company attributed the revenue increase to the continuing, strong
sales success of direct-to-consumer advertising.
The decrease in net loss for the 2007 second quarter was primarily
attributable to the increased revenue and gross margins in the
direct response business unit, plus decreases in operating
expenses. The net loss available to stockholders increased
primarily due to the contractual revaluation of the series A
preferred shares conversion price in conjunction with the
convertible debenture funding in the second quarter.
Joe F. Martinez, Impart's chief executive officer said, "Our
direct response business unit experienced another stellar quarter
under Michael Medico's direction, with continuing momentum leading
into the next quarter. Additionally, we have accelerated our
aggressive market development strategies, prioritizing project
engagements and simultaneously seeding the digital signage sector
with our new Valet kiosks, Concierge systems, and 3D displays. We
are attracting and selling new client network applications with
market-specific, user interface products. We anticipate an
increase in digital signage installations and, consequently,
increased revenues in the second half of 2007."
Mr. Martinez concluded, "The focus and corporate priorities for
the second half of 2007 are sales …sales …and more sales to meet
our stated topline revenue projections for 2007. I believe that
we have reached the inflection point in the out-of-home space, as
the second half of 2007 should validate all of our business and
product retooling efforts over the past twelve months. Our sales
pipeline is robust and we look forward to converting sales leads
and business negotiations into contract signings with billable
deliverables."
At June 30, 2007, the company's consolidated balance sheet showed
$13.2 million in total assets, $10.7 million in total liabilities,
and $2.5 million in total stockholders' equity.
The company's consolidated balance sheet at June 30, 2007, also
showed strained liquidity with $5.3 million in total current
assets available to pay $9.5 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2007, are available for
free at http://researcharchives.com/t/s?2276
Going Concern Doubt
As reported in the Troubled Company Reporter on April 20, 2007,
Peterson Sullivan PLLC expressed substantial doubt about the
Impart Media Group Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2006, an 2005. The auditing firm pointed
to the company's recurring losses.
About Impart Media
Based in Seattle, Impart Media Group Inc. (OTC BB: IMMG.OB) --
http://www.Impartmedia.com/-- provides end-to-end information
networks, transactional kiosks, digital signage solutions, and
direct-to-consumer advertising.
INTEGRA TELECOM: Secures $245 Mil. Equity Investment from Warburg
-----------------------------------------------------------------
Integra Telecom Inc. and its major shareholders have signed
agreements with Warburg Pincus, a global private equity firm,
whereby Warburg Pincus will invest at least $245 million to obtain
a substantial equity interest in Integra Telecom. The proceeds
from this transaction will be paid to certain existing Integra
investors in exchange for outstanding shares. Integra Telecom
will continue to operate as a privately held company and will not
raise any primary equity in this transaction.
"Warburg Pincus' substantial investment in Integra validates our
business model and recognizes the future potential that the
company has as the largest, most established competitive local
exchange carrier in the Western United States," Dudley R. Slater,
chief executive officer of Integra Telecom, Inc, said. "This is a
tremendous vote of confidence for the success we've accomplished
to date and the strong position our team has created in the
industry."
Integra disclosed on March 20, 2007, that it intends to acquire
Eschelon Telecom, Inc. The Warburg Pincus equity transaction is
separate from and not required to complete the Eschelon purchase,
which will be financed through committed credit facilities
arranged by Deutsche Bank, Morgan Stanley and CIBC World Markets.
Upon finalizing the Eschelon acquisition, the combined companies
will create the largest, most profitable CLEC in the Western
United States. The Eschelon acquisition is expected to close on
Aug. 31, 2007.
"Integra has demonstrated the value and increasing differentiation
of a well-executed, customer-focused model, Jim Neary, a managing
director of Warburg Pincus, said. We believe the combined company
is well-positioned to be the leading competitive alternative for
the business market in the Western United States."
Deutsche Bank Securities acted as exclusive mergers and
acquisitions advisor to Integra, and Morgan Stanley acted as the
exclusive merger and acquisitions advisor to Warburg Pincus. The
transaction is subject to a number of approvals, including
regulatory approvals, and is expected to close in the fall of
2007.
About Integra Telecom
Headquartered in Portland, Oregon, Integra Telecom, Inc. --
http://www.integratelecom.com/-- provides voice, data and
Internet communications to thousands of business and carrier
customers in eight Western states, including: Arizona, California,
Idaho, Minnesota, North Dakota, Oregon, Utah and Washington. The
company owns and operates a best-in-class fiber-optic network
comprised of eight metropolitan access networks, a nationally
acclaimed tier one Internet and data network and a 4,700-mile
high-speed long haul network. Primary equity investors in the
company currently include Banc of America Capital Investors,
Boston Ventures and Nautic Equity Partners.
* * *
As reported in the Troubled Company Reporter on July 17, 2007,
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to Portland, Oregon-based Integra Telecom Inc., a
competitive local exchange carrier. The outlook is positive.
At the same time, S&P assigned bank loan and recovery ratings to
Integra Telecom Holdings Inc.'s proposed $1.035 billion secured
credit facilities, which are guaranteed by Integra Telecom Inc.
The secured first-lien facilities -- consisting of a $50 million
revolver and $715 million term loan -- are rated 'CCC+', one notch
below the corporate credit rating. The $270 million secured
second-lien term loan is rated 'CCC', two notches below the
corporate credit rating. Integra Telecom Inc.'s proposed $215
million senior unsecured floating-rate PIK loan is rated 'CCC'.
Moody's Investors Service assigned a B3 corporate family rating, a
B3 probability of default rating and a Caa2 rating for the
proposed Senior unsecured PIK loan at Integra Telecom, Inc.
In addition, Moody's assigned a B1 rating for the proposed
$765 million 1st lien senior secured credit facilities and Caa1
rating for the proposed $270 million 2nd lien term loan at Integra
Telecom Holdings Inc. The outlook is stable.
KC KRAMERIA: Case Summary & Four Largest Unsecured Creditors
------------------------------------------------------------
Debtor: K.C. Krameria Properties, L.L.C.
14900 Akron Street
Brighton, CO 80602
Bankruptcy Case No.: 07-18967
Type of business: The Debtor owns real estate.
Chapter 11 Petition Date: August 14, 2007
Court: District of Colorado (Denver)
Judge: Elizabeth E. Brown
Debtor's Counsel: Jeffrey Weinman, Esq.
William A. Richey, Esq.
730 17th Street, Suite 240
Denver, CO 80202
Tel: (303) 572-1010
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's Four Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
J.C.M. Enterprises $4,047
2897 Signal Creek PI
Denver, CO
Xcel Energy $3,184
P.O. Box 840
Denver, CO 80201-0840
H.U.B. International $2,881
Hartford Casualty
Insurance Co.
1801 Broadway, Suite 820
Denver, CO 80202-3836
A.K. Machinery $2,460
LAZARD LTD: Paying $0.09 Per Share Quarterly Dividend on Aug. 31
----------------------------------------------------------------
Lazard Ltd.'s Board of Directors has declared a quarterly
dividend of $0.09 per share on its outstanding Class A common
stock, payable on Aug. 31, 2007, to stockholders of record on
Aug. 10, 2007.
Lazard Ltd. -- http://www.lazard.com/-- one of the world's
preeminent financial advisory and asset management firms,
operates from 29 cities across 16 countries in North America,
Europe, Asia, Australia and South America. With origins dating
back to 1848, the firm provides services including mergers and
acquisitions advice, asset management, and restructuring advice
to corporations, partnerships, institutions, governments, and
individuals. The company has locations in Australia, China,
France, Germany, India, Japan, Korea and Singapore.
The company reported total assets of $2.6 billion, total
liabilities of $2.8 billion, and minority interest at
$55.7 million, resulting in a total stockholders' deficit of
$206.8 million as of March 31, 2007.
LB-UBS COMMERCIAL: S&P Affirms B+ Rating on Class L Certificates
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on two
classes of LB-UBS Commercial Mortgage Trust's commercial mortgage
pass-through certificates from series 2000-C4. Concurrently, S&P
affirmed its ratings on the remaining classes from this
transaction.
The raised and affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios.
The transaction's credit profile benefits from the defeasance of
$258 million (33%) of the pool's collateral.
As of the July 17, 2007, remittance report, the collateral pool
consisted of 140 loans with an aggregate balance of $782 million,
down from 167 loans with a balance of $999.1 million at issuance.
The master servicer, KeyBank Real Estate Capital Inc., provided
year-end 2006 and interim 2007 financial statements for 98% of the
pool, which excludes the defeased collateral. Based on this
information, Standard & Poor's calculated a weighted average debt
service coverage of 1.69x for the pool, up from 1.40x at issuance.
The financial reporting figures exclude the defeased collateral
and credit tenant lease loans (1.86% of pool). There are six
loans totaling $20.6 million (3%) with the special servicer,
CWCapital Asset Management (CWCapital); these include one asset
that is currently in foreclosure, with an exposure of $6.7
million, and three real estate owned assets with a total exposure
of $8.7 million. The remaining loans in the pool are current.
Appraisal reduction amounts totaling $4.3 million are in effect
related to the three REO assets and the foreclosed asset. To
date, the trust has reported 10 losses totaling
$6.3 million.
The top 10 loan exposures secured by real estate have an aggregate
outstanding trust balance of $250.8 million (32%). The weighted
average DSC for the top 10 exposures was 2.08x for year-end 2006,
up from 1.67x at issuance. The increase in DSC is primarily due
to the substantial increases (15% or more) in net cash flow for
five of the top 10 loans since issuance. Standard & Poor's
reviewed property inspections provided by the master servicer for
all of the assets underlying the top 10 loans, and all were
characterized as "good."
Credit characteristics for the largest and third-largest loans in
the pool continue to be consistent with those of 'AAA' rated
obligations in the context of their inclusion in the pool. Details
of these loans are:
-- Westfield Shoppingtown South Shore, the largest loan in
the pool ($80.4 million, 10%), is secured by 1.03 million
sq. ft. of a 1.2 million-sq.-ft. regional shopping mall
in Bay Shore, Long Island, New York. As of year-end
2006, the servicer-reported DSC and occupancy were 1.83x
and 94%, respectively.
-- Westfield Shoppingtown Plaza Camino Real, the third-
largest loan in the pool ($36.0 million, 5%), is secured
by 578,766 sq. ft. of a 1,148,028-sq.-ft. regional
shopping mall in Carlsbad, California. The year-end
servicer-reported DSC and occupancy were 4.38x and 94%,
respectively, as of March 31, 2007.
There are six assets totaling $20.6 million with the special
servicer. Details of these assets are:
-- The largest specially serviced asset in the pool ($6.3
million, 1%) is secured by Grapevine I & II Professional
Buildings, a 58,560-sq.-ft. office complex in Grapevine,
Texas. The borrower for this asset has filed for
bankruptcy protection, and the special servicer has moved
for a lift of stay to initiate foreclosure. The borrower
initially requested debt relief after a major tenant
(Magnum Hunter, 33.4% of gross leasable area) vacated the
property. The most recent inspection shows the property
to be in good condition overall. An ARA of $439,601 is
in effect for this asset.
Details of the REO assets with the special servicer are:
-- Flairwood Apartments ($3.1 million, 0.4%) is a 120-unit
multifamily property in Memphis, Tennessee. Occupancy as
of March 31, 2007, was 85%. The property is currently
listed for sale for $3.8 million. An ARA of $2.3 million
is in effect.
-- Willow Creek Apartments ($3.0 million, 0.38%) is a 166-
unit multifamily property in Memphis, Tennessee.
Occupancy as of year-end 2006 was 68%. The property is
currently listed for sale for $3.1 million. An ARA of
$1.3 million is in effect.
-- Green Mountain and Hunt's Homestead Manufactured Housing
($694,000, 0.08%) are two mobile-home properties with 73
total pads located in Pownal, Vt., and Chatham, N.Y.
Hunts Homestead was sold in March 2007, and a purchase
agreement for Green Mountain was just signed and is
scheduled to close in April 2008.
Two of the specially serviced loans are current. Details of these
loans are:
-- Towne Center at Brookhill ($4.7 million, 1%) is secured
by a 99,477-sq.-ft. retail shopping center in
Westminster, Colorado. The loan was transferred to the
special servicer for nonmonetary default because there
was an unauthorized transfer of ownership.
-- Cartwheel Lodge of Gonzales ($2.9 million, 0.4%) is
secured by a 120-unit health care facility in Gonzales,
Texas (74 miles east of San Antonio). The loan was
transferred to the special servicer due to imminent
default based on an anonymous phone call to the servicer
indicating that the borrower had opened a new assisted-
living facility nearby and planned to move all the
residents to this new property. The property was 4%
occupied as of June 19, 2007.
KeyBank reported 29 loans ($90.6 million, 11.58%) on its
watchlist, which includes the seventh-largest loan. The
Dierberg's Clocktower Place loan ($12.2 million, 1.56%) is secured
by a 214,198-sq.-ft. grocery-anchored retail shopping center 10
miles north of St. Louis, Missouri. The loan was added to the
watchlist due to impending lease expirations for its two major
anchors, Dierberg's Market (35% GLA; expiring Nov. 30, 2007) and
TJ Maxx (12% GLA; expiring Jan. 31, 2008). Year-end 2006 DSC was
1.47x, and occupancy was 89%. After the July remittance report,
the master servicer reported that the loan had been transferred to
special servicing for nonmonetary default due to an unauthorized
transfer of ownership interest.
The remaining loans on the watchlist have low occupancy levels,
upcoming lease expirations, and/or low DSCs.
Standard & Poor's stressed the loans on the watchlist, along with
other loans with credit issues, as part of its pool analysis. The
resultant credit enhancement levels support the raised and
affirmed ratings.
Ratings Raised
LB-UBS Commercial Mortgage Trust
Commercial mortgage pass-through certificates series 2000-C4
Rating
------
Class To From Credit enhancement
----- -- ---- ----------------
D AAA AA+ 13.88%
E AA+ AA 12.92%
Ratings Affirmed
LB-UBS Commercial Mortgage Trust
Commercial mortgage pass-through certificates series 2000-C4
Class Rating Credit enhancement
----- ------ ----------------
A-2 AAA 26.02%
B AAA 20.59%
C AAA 15.48%
F A 10.69%
G BBB+ 9.09%
H BBB- 6.22%
J BB+ 4.62%
K BB 3.66%
L B+ 2.70%
X AAA N/A
N/A - Not applicable.
LIBERTY TAX III: June 30 Balance Sheet Upside-Down by $104.4 Mil.
-----------------------------------------------------------------
Liberty Tax Credit Plus III L.P.'s consolidated balance sheet at
June 30, 2007, showed $103.9 million in total assets,
$209.0 in total liabilities, and ($660,158) in minority interest,
resulting in a $104.4 million total partners' deficit.
Liberty Tax Credit Plus III L.P. reported net income $5.8 million
on revenues of $3.371 million for the first quarter ended June 30,
2007, compared with net income of $2.8 million on revenues of
$3.370 million for the same period in 2006.
Rental income decreased approximately 2% to $3.09 million for the
three months ended June 30, 2007 as compared to $3.15 million for
the corresponding period in 2006, primarily due to an increase in
vacancies at one Local Partnership and a decrease in rental
subsidies at a second Local Partnership partially offset by an
increase in rental rates at other Local Partnerships.
Other income increased approximately $61,000 for the three months
ended June 30, 2007, as compared to the corresponding period in
2006, primarily due to an increase in interest income earned on
higher cash and cash equivalent balances resulting from the sale
of properties at the Partnership level offset by an insurance
reimbursement received in 2006 due to hurricane damages at one
Local Partnership.
Total expenses, excluding general and administrative and repairs
and maintenance, remained fairly consistent with increases of less
than 1% for the three months ended June 30, 2007 as compared to
the corresponding periods in 2006.
General and administrative increased approximately $235,000 for
the three months ended June 30, 2007, as compared to the
corresponding period in 2006, primarily due to an increase in
office salaries and bad debt expense at one Local Partnership and
an increase in accounting expense at the Partnership level
resulting from the sale of properties.
Repairs and maintenance increased approximately $212,000 for the
three months ended June 30, 2007, as compared to the corresponding
period in 2006, primarily due to an increase in security contract
and fire prevention costs at one Local Partnership, an increase in
repair contracts at a second Local Partnership, an increase in
carpet, maintenance materials and other exterior costs at a third
Local Partnership and an increase in grounds maintenance at a
fourth Local Partnership.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2007, are available for
free at http://researcharchives.com/t/s?227b
Going Concern Doubt
Trien Rosenberg Rosenberg Weinberg Ciullo & Fazzari LLP, in New
York, expressed substantial doubt about six of the Liberty Tax
Credit Plus III L.P. subsidiary partnerships' ability to continue
as a going concern after auditing the partnership and
subsidiaries' consolidated financial statements for the years
ended March 31, 2007, and 2006. These subsidiary partnerships'
net losses aggregated $3.7 million, $5.5 million, $5.1 million in
fiscal 2006, 2005, and 2004, respectively, and their assets
aggregated $23.4 million and $30.0 million at March 31, 2007, and
2006, respectively.
About Liberty Tax
Headquartered in New York City, Liberty Tax Credit Plus III L.P.
is a limited partnership, which was formed under the laws of the
State of Delaware on Nov. 17, 1988. Liberty Tax Credit Plus III
L.P. invests in other limited partnerships, each of which owns one
or more leveraged low- and moderate-income multifamily residential
complexes that are eligible for the low-income housing tax credit
enacted in the Tax Reform Act of 1986, and to a lesser extent, in
local partnerships owning properties that are eligible for the
historic rehabilitation tax credit.
The Partnership has invested all of the net proceeds of its
original offering in 62 Local Partnerships. As of June 30, 2007,
the Partnership has sold its limited partnership interest in
eighteen (18) Local Partnerships, the property and the related
assets and liabilities of twelve (12) Local Partnerships, two
properties owned by a Local Partnership and transferred the deed
to the property and the related assets and liabilities of one
Local Partnership. In addition, the Partnership has entered into
agreements for the sale of three Local Partnerships.
Liberty Tax Credit's general partners are Related Credit
Properties III L.P., a Delaware limited partnership, and Liberty
GP III Inc., a Delaware corporation.
LIMITED BRANDS: Declares Quarterly Dividend of $0.15 Per Share
--------------------------------------------------------------
Limited Brands declared its regular quarterly dividend of $.15 per
share payable on Sept. 14, 2007, to shareholders of record at the
close of business on Aug. 30, 2007. This is the company's 131st
consecutive quarterly dividend.
Limited Brands (NYSE: LTD) through Victoria's Secret, Bath & Body
Works, C.O. Bigelow, Limited Stores, La Senza, White Barn Candle
Co., Henri Bendel and Diva London, presently operates 3,140
specialty stores.
The company's products are also available online at --
http://www.VictoriasSecret.com//-- http://w.BathandBodyWorks.com/
-- and -- http://www.LaSenza.com/--
* * *
As reported in the Troubled Company Reporter on July 3, 2007,
Moody's Investors Service lowered both the long term and short
term ratings of Limited Brands, Inc. with a stable outlook.
The downgrade is based upon the company's intention to raise an
additional $1.25 billion in debt, which will cause two out of
three credit metrics cited in Moody's press release of Nov. 15,
2006, to fall below a level that would prompt a downgrade. This
rating action concludes the review for possible downgrade that was
initiated on June 22, 2007.
Moody's downgraded these ratings: Senior unsecured to Baa3 from
Baa2; Senior unsecured shelf at to (P) Baa3 from (P) Baa2;
Subordinated shelf at to (P) Ba1 from (P) Baa3; Preferred shelf at
to (P) Ba2 from (P) Ba1; Commercial paper to Prime-3 from Prime-2.
LITTLE ROCK: S&P Lowers Rating on S. 2004B Revenue Bonds to BB
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Little
Rock Family Housing LLC, Arkansas' taxable military housing
revenue bonds series 2004A and 2004B to 'BBB+' and 'BB' from 'AA-'
and 'A-', respectively. At the same time, Standard & Poor's
placed the bonds on CreditWatch with developing implications.
"The rating actions reflect our financial projections of declining
debt service coverage on the series 2004A and 2004B bonds based on
2006 unaudited financial statements", said Standard & Poor's
credit analyst Mikiyon Alexander. The projected decline in debt
service is due to substantial construction delays, as the
developer has only completed 23% of scheduled new construction
since the beginning of the initial development period, which will
account for 5% of total new construction upon stabilization, and
demolition commencing ahead of schedule with 73% of total
demolition complete. These two factors have caused the current
unit number to fall below the end-state unit requirement.
Furthermore, vacancy is higher than projected at 20.5% which could
reduce lower than expected net operating income during the
remainder of the IDP. There is no capitalized interest in this
transaction to compensate for any shortfalls in NOI.
The CreditWatch placement reflects significant delays in
construction, with only 23% of the scheduled new construction
complete, and the fact that audited financial statements have not
been completed and reviewed by Standard & Poor's for 2006. Little
Rock Family Housing LLC series 2004A and 2004B revenue bonds have
semiannual interest payment dates in July and January.
Standard & Poor's has received verified fund balances from the
trustee which indicate that at the projected debt service coverage
level, the July 15 payment was met without withdrawing money from
the debt service reserve fund for the series 2004A and 2004B
bonds. It is uncertain if a draw on the DSRF will be required for
the series 2004B bonds for the Jan. 15 debt service payment due to
the financial stresses. The debt service reserve fund for both
the series 2004A and 2004B bonds is funded at maximum annual debt
service.
Standard & Poor's discussions with the U.S. Air Force and the
developer indicated that a recovery plan is contemplated, but has
not been finalized at this time. Despite the potential
construction risk Standard & Poor's still believes that Little
Rock Air Force Base has high military essentiality. Little Rock
Family Housing LLC has experienced substantial increases in the
Basic Allowance for Housing over the past several years, growing
by 5% from 2006 to 2007.
Factors that could lead to an upgrade include: higher-than-
projected debt service coverage after the release and review of
audited financial statements and a recovery plan finalized in the
near future. Factors that could lead to a downgrade include:
lower-than-anticipated debt service coverage, a draw on the debt
service reserve fund, and failure to finalize a recovery plan.
LPATH INC: Posts $3.5 Million Net Loss in Quarter Ended June 30
---------------------------------------------------------------
Lpath Inc. Inc. reported a net loss of $3.5 million for the second
quarter ended June 30, 2007, compared with a net loss of
$1.5 million for the comparable period in 2006.
Grant revenue for the three-month period ended June 30, 2007,
decreased to $153,000 from $185,000 for the three-month period
ended June 30, 2006. The decrease of $32,000 was due to the fact
that the level of effort required by certain grants declined as
these grants wound-down to completion in the second quarter of
2007.
The increase in net loss is primarily attributable to increases in
research & development expenses and general & administrative
expenses, partly offset by an increase in interest income.
Research and development expenses increased from $1.1 million for
the second quarter of 2006 to $2.8 million for the second quarter
of 2007. The increase of $1.7 million reflects the progress of
pre-clinical research and development activities from the second
quarter of 2006 to the second quarter of 2007.
General and administrative expenses increased from $610,000 for
the three-month period ended June 30, 2006, to $967,000 for the
three-month period ended June 30, 2007. Legal fees, accounting
fees, investor relations, stock administration, and insurance
expenses increased, in aggregate, by approximately $185,000.
Employee compensation, benefits, and general facility expenses
increased by approximately $188,000, reflective of the changes in
general and administrative personnel between the two years.
Stock-based compensation charges decreased by $16,000.
Interest income was $125,000 for the quarter ended June 30, 2007,
compared with $48,000 for the quarter ended June 30, 2006. The
$77,000 increase was principally a result of higher levels of
invested cash as compared to the prior year.
At June 30, 2007, the company's consolidated balance sheet showed
$15.4 million in total assets, $1.9 million in total liabilities,
and $13.5 million in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2007, are available for
free at http://researcharchives.com/t/s?2278
Going Concern Doubt
As reported in the Troubled Company Reporter on May 2, 2007,
LevitZacks CPAs expressed substantialdoubt about Lpath Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements as of Dec. 31, 2006,
and 2005. The auditing firm pointed to the company's significant
cash losses from operations since inception and the company's
expectation to continue to incur cash losses from operations in
2007 and beyond.
Lpath has an accumulated deficit of $19.3 million as of June 30,
2007. The company does not expect to generate meaningful revenues
from its drug development programs in the foreseeable future.
During 2007 the company expects to continue to incur cash losses
from operations. While the company had cash totaling
$14.4 million as of June 30, 2007, the cost of its ongoing drug
discovery and development efforts, including general and
administrative expenses, are expected to consume approximately
$15.0 million in the next twelve months. Given the present
anticipated expenditures, additional capital will be required to
continue to fund the company's research and development projects
beyond approximately June of 2008.
About Lpath Inc.
Headquartered in San Diego, Calif., Lpath Inc., formerly Lpath
Therapeutics Inc., (OTC BB: LPTN) -- http://www.lpath.com/--
is a biotechnology company focused on the discovery and
development of lipidomic-based therapeutics. Lipidomics is an
emerging field of medical science whereby bioactive signaling
lipids are targeted to treat important human diseases. The
company's lead product candidate, Sphingomab(TM), is a humanized
monoclonal antibody against a validated cancer target,
sphingosine-1-phosphate (S1P), and has demonstrated compelling
results in preclinical studies against multiple forms of cancers,
against age-related macular degeneration (AMD), and against heart
failure.
MASSEY ENERGY: Paying $0.04 Per Share Dividend on October 9
-----------------------------------------------------------
The board of directors of Massey Energy Company, at a regularly
scheduled meeting, declared a quarterly dividend in the amount of
$0.04 per share to be paid on Oct. 9, 2007, to shareholders of
record on Sept. 25, 2007.
Headquartered in Richmond, Virginia, Massey Energy Company (NYSE:
MEE) -- http://www.masseyenergyco.com/-- is a coal producer with
operations in West Virginia, Kentucky and Virginia.
* * *
As reported in the Troubled Company Reporter on June 25, 2007,
Standard & Poor's Ratings Services revised its outlook on Massey
Energy Co. to stable from developing and affirmed its 'B+'
corporate credit and other ratings on the company.
As reported in the Troubled Company Reporter on Feb. 19, 2007,
Dominion Bond Rating Service downgraded the Senior Unsecured Debt
rating of Massey Energy Company to BB (low) from BB. The trend is
Stable.
MEDICOR LTD: Court to Approve Asset Sale Procedures on Aug. 22
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware scheduled
an Aug. 22, 2007 hearing to consider approval of MediCor Ltd.
and its debtor-affiliates' proposed bidding procedures for the
sale of substantially all of their assets.
The Debtors proposed a public sale of the assets to be held
Sept. 18, 2007, 10:00 a.m., at the Doubletree Hotel, 633 East
Cabrillo Boulevard in Santa Barbara, California.
To participate in the auction, bids must be actually received
no later than 5:00 p.m. (prevailing Eastern time) on Sept. 12,
2007.
The Debtors asked the Court for a Sept. 24, 2007 hearing
regarding the results of the sale.
For further information about the sale, contact:
Alvarez & Marsal North America, LLC
Attn: Dennis Stogsdill
6th Floor, 600 Lexington Avenue
New York, NY 10022
Telephone: (646) 495- 4153
Facsimile: (212) 759-6302
or
Lowenstein Sandler PC
Attention: Jeffrey D. Prol, Esq.
65 Livingston Avenue
Roseland, NJ 07068
Telephone: (973) 597-2500
Facsimile: (973) 597-2491
Headquartered in North Las Vegas, Nevada, MediCor Ltd. --
http://www.medicorltd.com/-- acquires, develops, manufactures
and markets products primarily for aesthetic, plastic and
reconstructive surgery and dermatology markets.
The company and seven of its affiliates filed for chapter 11
protection on June 29, 2007 (Bankr. D. Del. Case No. 07-10877)
to effectuate the orderly marketing and sale of their business.
Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP,
represents the Debtors. The Debtors engaged Alvarez & Marsal
North America LLC as their restructuring advisor. David W.
Carickhoff, Jr., Esq., and Jason W. Staib, Esq., at Blank Rome
LLP serve as the Official Committee of Unsecured Creditor's
counsel. At Sept. 30, 2006, the Debtors' balance sheet showed
total assets of $120,354,097, and total debts of $121,439,609.
The Debtors' exclusive period to file a chapter 11 plan expires
on Oct. 27, 2007.
MEDQUEST INC: Moody's Affirms Caa1 Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service changed the rating outlook for MedQuest,
Inc. the operating subsidiary of MQ Associates, Inc., to
developing from stable following Moody's announcement that Novant
Health Inc. plans to acquire MedQuest through a cash payment of
$45 million and contingent consideration in an amount up to
$35 million based on the company's adjusted EBITDA during the
upcoming 2008 fiscal year.
Novant will additionally assume the debt of MedQuest and MQ
Associates in the amount of $358 million. The transaction will
involve a change of control under the terms of the indentures
governing MQ Associates' 12 1/4% senior discount notes and
MedQuest's 11 7/8% senior subordinated notes. The transaction
will be subject to Hart-Scott-Rodino clearance and certain other
regulatory approvals. Novant is a leading not-for-profit
integrated healthcare system operating in the Carolinas.
These ratings were confirmed:
MQ Associates (parent):
-- $136 million (current accretion to $115.5 million as of March
31, 2007) senior discount notes due 2012, rated Caa3 (LGD6,
90%)
-- Corporate Family Rating, rated Caa1
-- Probability of Default Rating, rated Caa1
MedQuest:
-- $25 million (originally $80 million) senior secured revolving
credit facility due 2009 (formerly 2007; amended as of
June 29, 2007), rated B1 (LGD2, 11%)
-- $60 million senior secured term loan due 2009, rated B1 (LGD2,
11%)
-- $180 million senior subordinated notes due 2012, rated Caa1
(LGD4, 56%)
The outlook has been changed to developing from stable because
Moody's believes the proposed combination is likely to be
completed and because the acquiror, Novant, holds leading market
positions in its markets. However, the details of the company's
capital structure going forward are not known at this time,
including whether or not Novant intends to inject any equity into
MQ Associates. In the event that the transaction is completed and
the MedQuest debt is substantially repaid instead of being assumed
by Novant, Moody's will withdraw the current ratings.
If, however, the transaction is not completed, a material portion
of the MedQuest debt remains outstanding and there is a
significant, incremental deterioration in MedQuest's operations,
Moody's will likely re-evaluate the ratings and outlook on
MedQuest.
MedQuest is a leading operator of independent, fixed-site,
outpatient diagnostic imaging centers in the United States. These
centers provide high quality diagnostic imaging services using a
variety of technologies, including magnetic resonance imaging,
computed tomography, nuclear medicine, general radiology,
ultrasound and mammography. As of March 31, 2007, MedQuest
operated a network of eighty-nine centers in thirteen states
located primarily throughout the southeastern and southwestern
United States. For the twelve months ended March 31, 2007, the
company reported revenues of about $265 million.
MORGAN STANLEY: Fitch Retains Junk Rating on $7.5MM Class J Certs
-----------------------------------------------------------------
Fitch Ratings affirms Morgan Stanley Capital I, Inc.'s commercial
mortgage pass-through certificates, series 1997-HF1 as:
-- Interest-only class X at 'AAA'.
The $7.5 million Class J remains at 'CCC/DR1'.
Classes A-1, A-2, B, C, D, E, F, G and H have paid in full. Class
K has been reduced to $0 due to realized losses.
The affirmation is due to stable performance of the remaining
loans since the last rating action. As of the August 2007
distribution date the pool's collateral balance had been reduced
by 99.6% to $2.5 million from $618.4 million at issuance.
Only two loans remain the trust. The largest, Lariat Properties
(83.7%) is secured by three crossed retail properties located in
Eden Prairie, Minnesota and matures in 2012. The other loan,
Colonial Self Storage (16.3%) is secured by a self-storage
facility in Wixom, Michigan and matures in 2011.
MOVIE GALLERY: S&P Lowers CCC+ Corporate Credit Rating to CC
------------------------------------------------------------
On Aug. 15, 2007, Standard & Poor's Ratings Services said it
lowered its ratings, including the corporate credit rating, on
Dothan, Alabama-based Movie Gallery Inc. to 'CC' from 'CCC+' based
on the company's extremely poor liquidity position. At the same
time, S&P lowered the ratings on the company's bank loans and
senior unsecured debt to 'CC'. This rating level indicates a high
vulnerability to nonpayment. The outlook has been revised to
negative.
Movie Gallery reported cash on hand of $45.5 million and no
availability under the $100 million revolver as of July 1, 2007.
As a result of the noncompliance with the financial covenants
contained in the first-lien facilities, the company executed a
forbearance agreement with its lenders, which expired Aug. 14,
2007.
"Movie Gallery remains challenged by poor industry fundamentals,"
said Standard & Poor's credit analyst David Kuntz, "and sharp
declines in its core rental business have exacerbated already-weak
operating performance."
MPS GROUP: Board Authorizes Additional $75 Mil. Stock Repurchase
----------------------------------------------------------------
MPS Group Inc.'s board of directors gave its consent for the
repurchase of up to an additional $75 million of the company's
common stock. The company intends to repurchase shares from time
to time in open- market or private transactions, as market
conditions permit.
"We have a healthy capital structure that allows us to fund
operational needs, complete strategic acquisitions designed to
supplement our growth, and buy back our common stock," Robert
Crouch, senior vice president and chief financial officer of MPS
Group, said. "Combined with the $4 million remaining from the
prior authorization, the company now has available $79 million
with which to repurchase company stock. Based upon the current
business environment, we believe our continued buyback activity
will benefit our shareholders."
Headquartered in Jacksonville, Florida, MPS Group Inc. (NYSE:MPS)
-- http://www.mpsgroup.com/-- provides staffing, consulting, and
solutions in the disciplines of information technology, finance
and accounting, law, engineering, and healthcare. MPS Group
delivers its services to government entities and businesses in
virtually all industries throughout the United States, Canada, the
United Kingdom, and Europe.
At March 31, 2007, the company's balance sheet showed total assets
of $1.1 billion and total liabilities of $201 million, resulting
in a $975 million stockholders' equity.
* * *
Standard & Poor's assigned BB- long-term foreign and local issuer
credit ratings to MPS Group Inc. on November 2002.
MSIM PECONIC: S&P Assigns BB Prelim Rating on $16MM Class E Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to MSIM Peconic Bay Ltd./MSIM Peconic Bay Corp.'s
$369.5 million floating-rate notes due 2019.
The preliminary ratings are based on information as of Aug. 15,
2007. Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
-- The notes' credit enhancement provided through the
subordination of cash flows to the more junior classes
and subordinated notes;
-- The transaction's cash flow structure, which has been
subjected to various stresses requested by Standard &
Poor's;
-- The asset manager's experience; and
-- The transaction's legal structure, including the issuer's
bankruptcy remoteness.
Preliminary Ratings Assigned
MSIM Peconic Bay Ltd./MSIM Peconic Bay Corp.
Class Rating Amount
----- ------ ------
A-1-A AAA $240,000,000
A-1-B AAA $60,000,000
B AA $14,000,000
C A $19,500,000
D BBB $20,000,000
E BB $16,000,000
Subordinated notes NR $30,500,000
NR Not rated.
NATIONAL RECREATIONAL: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: National Recreational Communities, Inc.
536 Mountain Shadow Lane
Bloomsburg, PA 17815
Bankruptcy Case No.: 07-52046
Type of business: The Debtor is a real estate holding company.
Chapter 11 Petition Date: August 14, 2007
Court: Middle District of Pennsylvania (Wilkes-Barre)
Judge: Robert N. Opel, II
Debtor's Counsel: Brian E. Manning, Esq.
502 South Blakely Street, Suite B
Dunmore, PA 18512
Tel: (570) 558-1126
Fax: (866) 559-9808
Total Assets: $9,600,000
Total Debts: $732,000
The Debtor does not have any creditors who are not insiders.
NEWPARK RESOURCES: Inks $21.3 Million Asset Purchase Pact with SEM
------------------------------------------------------------------
Newpark Resources Inc. has signed an asset purchase agreement with
SEM Construction Company. Under the terms of the agreement,
Newpark Resources is to acquire substantially all of the assets
and operations of SEM for cash consideration of $21.3 million,
subject to working capital and other adjustments.
The acquisition is expected to be accretive to Newpark Resources,
Inc. earnings in 2007.
“We are excited to disclose this acquisition, which fits very well
into our long-term strategy for the Mats and Integrated Services
business,” Paul Howes, president and chief executive officer of
Newpark, stated. “This acquisition provides us with geographic
expansion into the important Piceance basin, which will help to
offset the cyclicality of our Gulf Coast business.”
“Also, this acquisition provides an expansion to our product and
service offerings, including well site equipment rentals, which is
consistent with our strategy of becoming a total well site
services provider to the oil and gas industry,” Mr. Howes ended.
This acquisition is subject to the completion of final due
diligence and other customary requirements and is expected to
close during the third quarter of 2007.
About SEM Construction Company
Headquartered in Grand Junction, Colorado, SEM Construction
Company is a full-service well site construction company engaged
in construction, reclamation, maintenance, and general rig work at
drilling locations for the oil and gas industry throughout Western
Colorado.
About Newpark Resources Inc.
Headquartered in Metarie, Louisiana, Newpark Resources Inc. (NYSE:
NR) -- http://www.newpark.com/-- provides drilling fluids,
temporary worksites and access roads for oilfield and other
commercial markets, and environmental waste treatment solutions.
* * *
Moody's Investor Services assigned B1 on Newpark Resources Inc.'s
long term corporate family rating and probability of default
rating. The outlook is stable.
Standard and Poor's rated B+ its long term foreign and local
issuer credit on November 2006.
POGO PRODUCING: Completes Sale of Northrock Resources for $2 Bil.
-----------------------------------------------------------------
Pogo Producing Company has closed the sale of its wholly owned
subsidiary, Northrock Resources Ltd., to Abu Dhabi National Energy
Company PJSC for approximately $2 billion in cash.
On a pro forma basis Pogo will have a:
-- focused onshore U.S. asset base with proven reserves of
approximately 1.3 tcfe with approximately 81% in the Western
U.S. Division (includes 720 bcfe in the Permian Basin and
Texas Panhandle, 244 bcfe in the Rockies and 101 bcfe in the
San Juan Basin) and 19% in the onshore Gulf Coast Division,
including 180 bcfe in south Texas;
-- reserves mix that is 65% natural gas; and
-- reserves life of 12 years.
Also, on July 17, 2007, Pogo has entered into a definitive merger
agreement to be acquired by Plains Exploration & Production
Company in a stock and cash transaction.
Under the terms of the agreement, Pogo stockholders will receive
0.68201 shares of PXP common stock and $24.88 of cash for each
share of Pogo common stock.
Pogo stockholders will have the right to elect to receive cash or
stock, subject to proration if either the cash or stock election
is oversubscribed.
The transaction, which is subject to stockholder approval from
both companies, closing of the Northrock disposition, and other
customary conditions, is expected to close in the fourth quarter
of 2007.
The definitive joint proxy statement/prospectus and such other
documents may be obtained for free from PXP by directing a request
to:
Plains Exploration & Production Company
Attention: Joanna Pankey
700 Milam, Suite 3100
Houston, Texas 77002
Tel (713) 579-6000
or
Pogo Producing Company
Attention: Clay Jeansonne
No. 5 Greenway Plaza, Suite 2700
Houston, TX 77046
Tel (713) 297-5000
Headquartered in Houston, Texas, Pogo Producing Company (NYSE:
PPP) -- http://www.pogoproducing.com/-- explores for, develops
and produces oil and natural gas. Pogo owns approximately
4,000,000 gross leasehold acres in major oil and gas provinces in
North America, 3,119,000 acres in New Zealand and 1,480,000 acres
in Vietnam.
* * *
As reported in the Troubled Company Reporter on May 31, 2007,
Standard & Poor's Ratings Services said that its 'BB' corporate
credit rating on Pogo Producing Co. remains on CreditWatch with
developing implications following the company's announcement that
it is selling its Canadian oil- and gas-producing subsidiary for
$2 billion.
RED MILE: June 30 Balance Sheet Upside-Down by $1.9 Million
-----------------------------------------------------------
Red Mile Entertainmetn Inc.'s consolidated balance sheet at
June 30, 2007, showed $11.4 million in total assets and
$13.3 million in total liabilities, resulting in a $1.9 million
total stockholders' deficit.
Red Mile Entertainment Inc. reported a net loss of $1.4 million
for the first quarter ended June 30, 2007, compared with a net
loss of $990,925 for the same period a year ago.
Revenues were approximately $274,000 during the three months ended
June 30, 2007, as compared to approximately $42,000 during the
three months ended June 30, 2006, an increase of approximately
$232,000 or 556%. The increase is primarily due to sales of
Crusty Demons in Australia and sales of Aircraft Power Pack in
North America.
The increase in net loss primarily reflects increases in operating
expenses and interest expense.
Research and development expenses were approximately $154,000
during the three months ended June 30, 2007, as compared to
approximately $86,000 during the three months ended June 30, 2006,
an increase of approximately $68,000 or 80%. Virtually all of the
costs for R&D during the three months ended June 30, 2007, related
to costs incurred in development prior to the related game
reaching technological feasibility.
General and administrative costs were approximately $898,000
during the three months ended June 30, 2007, as compared to
approximately $683,000 during the three months ended June 30,
2006, an increase of $215,000 or 32%. The majority of the
increase relates to employee salaries and related costs and
amortization on the convertible debentures.
Sales, marketing and business development costs were approximately
$235,000 during the three months ended June 30, 2007, as compared
to approximately $232,000 during the three months ended June 30,
2006, an increase of $3,000 or 2%.
For the three month ended June 30, 2007, interest expense on the
senior secured convertible debentures was $113,044, of which
$16,347 was capitalized to software development costs.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2007, are available for
free at http://researcharchives.com/t/s?2279
Going Concern Doubt
Burr, Pilger & Mayer LLP, in San Francisco, expressed substantial
doubt about Red Mile Entertainment Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the years ended March 31, 2007, and 2006. The
auditing firm pointed to the company's recurring losses, negative
cash flows from operations, and accumulated deficit. At June 30,
2007, the company's accumulated deficit has increased to
$18.6 million.
About Red Mile Entertainment
Headquartered in Sausalito, California, Red Mile Entertainment
Inc. (OTC BB: RDML.OB) -- http://www.redmileentertainment.com/--
is a worldwide developer and publisher of interactive
entertainment software. Red Mile creates, licenses and incubates
premier intellectual properties and develops products for console
video game systems, personal computers and other interactive
entertainment platforms.
RF MICRO: To Acquire Sirenza Microdevices for $900 Million
----------------------------------------------------------
RF Micro Devices Inc. and Sirenza Microdevices have signed a
definitive merger agreement.
Under the terms of the merger agreement unanimously approved by
the respective boards of directors of the two companies, each
outstanding share of Sirenza's common stock will be exchanged for
a combination of 1.7848 shares of RFMD common stock and $5.56 in
cash. Outstanding options to purchase Sirenza stock will be
assumed by RFMD and converted into options to purchase RFMD stock.
Based on RFMD's closing stock price on Aug. 10, 2007, the last
trading day prior to the announcement of the transaction, the
consideration is valued at $16.64 per share, which represents a
17% premium over Sirenza's closing stock price on such date,
and an offer value of approximately $900 million comprised of
$300 million in cash with the balance in stock. The transaction
is intended to allow all or a portion of the consideration
receivable in RFMD stock to be tax-free to Sirenza stockholders.
Upon completion of the transaction, current RFMD and Sirenza
stockholders will own approximately 67% and 33%, respectively, of
the combined company on a fully diluted basis.
Highlights of the combination are:
-- Accelerates RFMD's penetration of multiple high-growth
markets;
-- Increases RFMD's total addressable market by approximately
67% to more than $20 billion;
-- Enables RFMD to extend its deep high-performance IC design
and integration expertise into Sirenza's multi-market end
markets;
-- Diversifies RFMD's global customer base;
-- Strengthens RFMD's management team; and
-- Enhances RFMD's margin profile
The transaction is expected to be completed in RFMD's third fiscal
quarter, ending Dec. 29, 2007, and is subject to approval by the
stockholders of both companies as well as regulatory approval.
RFMD expects the transaction to be accretive to non-GAAP EPS
within six months of closing, with modest synergies assumed.
The management teams of RFMD and Sirenza will be combined to
address the expanded opportunities created by the merger. Bob Van
Buskirk, president and CEO of Sirenza, will relocate to North
Carolina and will lead RFMD's new Multi-Market Products Group.
Bob Bruggeworth, president and CEO of RFMD, will continue as
president and CEO of the combined company. The post-closing board
of directors of the combined company is expected to consist of
nine members from RFMD and two members from Sirenza.
"This strategic acquisition brings together two companies with
leadership positions and considerable expertise in RF systems and
solutions," Bob Bruggeworth, president and CEO of RFMD, said. "It
creates the world's largest, most diversified and best positioned
RF company, with a broad set of customers and a diversified
product portfolio of high performance components and systems-
level solutions. The transaction will allow RFMD to capitalize on
the RF integration and systems-level design expertise we continue
to pioneer in the cellular world and apply those capabilities
across Sirenza's broad footprint in multiple high-growth RF
markets, including broadband/CATV, wireless infrastructure, WiMAX
and aerospace and defense. Similarly, the transaction will allow
Sirenza to expand its revenue stream beyond component-level
solutions and drive supply chain and procurement efficiencies, as
a result of RFMD's leadership in high-volume semiconductor
manufacturing. Our two businesses are highly complementary in
terms of customers, markets, products and manufacturing expertise,
and our combination will create an RF market leader with breadth,
scale and capabilities that are unrivalled."
"We are very pleased to be announcing this transaction, which we
believe clearly serves not only best interests of the shareholders
of Sirenza, but also the interests of the shareholders of RFMD as
well as the customers and employees of both companies," Bob Van
Buskirk, president and CEO of Sirenza, said. "We have great
potential to accelerate revenue growth and expand margins by
leveraging the technology base, supply chain and leadership
position RFMD has achieved. There is a tremendous opportunity to
apply the highly integrated, systems-level design expertise
demanded by RFMD's cellular handset customers to the markets that
Sirenza currently serves. RFMD and Sirenza serve customers
representing a combined total addressable market of greater than
$20 billion, and our very complementary companies can deliver more
highly integrated solutions that will enhance the quality,
efficiency and performance of our customers' end-products."
Merrill Lynch & Co. acted as exclusive financial advisor to RFMD,
and Banc of America Securities LLC acted as exclusive financial
advisor to Sirenza.
About Sirenza
Headquartered in Broomfield, Colorado, Sirenza Microdevices
(Nasdaq: SMDI) – http://www.sirenza.com/-- is a supplier of radio
frequency components.
About RF Micro Devices
Headquartered in Greensboro, North Carolina, RF Micro Devices,
Inc. (Nasdaq: RFMD) -- http://www.rfmd.com/-- designs and
manufactures radio systems and solutions for mobile communication
applications.
* * *
Standard and Poor's rated B+ RF Micro Devices' long term foreign
and local issuer credit effective October 2003.
ROBERT CALLEJO: Case Summary & Eight Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Robert Callejo, Jr.
Edita Dandoy Callejo
18564 Bucknall Road
Saratoga, CA 95070
Bankruptcy Case No.: 07-52443
Type of business: The Debtors own and operate a residential day
care facility for the elderly.
Chapter 11 Petition Date: August 13, 2007
Court: Northern District of California (San Jose)
Judge: Arthur S. Weissbrodt
Debtor's Counsel: Stanley A. Zlotoff, Esq.
300 South 1st Street, Suite 215
San Jose, CA 95113
Tel: (408) 287-1313
Estimated Assets: $2,199,421
Estimated Debts: $1,475,128
Debtor's Eight Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Wells Fargo Education co-signor on $30,000
Financial Services
P.O. Box 5185
Sioux Falls, SD 57117-5185
Bank of America credit card $16,025
P.O. Box 15026
Wilmington, DE 19850-5026
Wells Fargo Bank, N.A. credit line $14,370
P.O. Box 4233
Portland, OR 97208-4233
J.P. Morgan Chase Legal credit card $11,901
Department
Citi Cards Sears $8,811
Home Depot credit card $6,121
American Express green card $3,265
Washington Mutual Bank credit card $1,730
ROBERT CHARTAIN: Case Summary & Nine Largest Unsecured Creditors
----------------------------------------------------------------
Debtors: Robert W. Chartain
Orlene M. Chartain
479 Sequoia Avenue
Redwood City, CA 94061
Bankruptcy Case No.: 07-31047
Chapter 11 Petition Date: August 14, 2007
Court: Northern District of California (San Francisco)
Judge: Thomas E. Carlson
Debtors' Counsel: Craig V. Winslow, Esq.
630 North San Mateo Drive
San Mateo, CA 94401
Tel: (650) 347-5445
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's List of its Nine Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Wells Fargo Bank $15,609
P.O. Box 10347
Des Moines, IA 50306
Bank of America Credit Card $11,118
P.O. Box 15026
Wilmington, DE 19850-5026
Beneficial Loan $6,555
2105 Bascom Avenue, Suite 190
Campbell, CA 95008
San Mateo County Credit Union Credit Card $1,569
Capital One Bank Credit Card $927
FIA Card Services Credit Card $677
HomeGuard Inspection Service $625
City of Redwood City Utility Bills $234
Capital One Bank Credit Card $191
RONCO CORP: Judge Mund OKs Levene Neale as Panel's Bankr. Counsel
-----------------------------------------------------------------
The Honorable Geraldine Mund of the United States Bankruptcy
Court for the Central District of California gave the Official
Committee of Unsecured Creditors of Ronco Corporation and its
debtor-affiliate, Ronco Marketing Corporation, permission to
retain Levene, Neale, Bender, Rankin & Brill L.L.P., as its
general bankruptcy counsel.
As reported in the Troubled Company Reporter on July 16, 2007,
as the Committee's counsel, the firm is expected to:
a. advise the Committee with regard to the requirements of
the Bankruptcy Court, Bankruptcy Code, Bankruptcy Rules
and the office of the United States Trustee as they
pertain to the Committee;
b. advise the Committee with regard to certain rights and
remedies of the Debtors' bankruptcy estates and the
rights, claims and interests of creditors;
c. represent the Committee in any proceeding or hearing in
the Bankruptcy Court involving the Debtors' estates unless
the Committee is represented in the proceeding or hearing
by other special counsel;
d. conduct examinations of witnesses, claimants or adverse
parties and represent the Committee in any adversary
proceeding except to the extent that any adversary
proceeding is in an area outside of the firm's expertise;
e. prepare and assist the Committee in the preparation of
reports, applications, pleadings and orders including,
but not limited to, applications to employ professionals,
and responding to pleadings filed by any other party in
interest in these cases, including the Debtors;
f. assist the Committee to evaluate any sale or other
disposition of assets in these cases;
g. assist the Committee to evaluate the existence of any
assets and causes of action to pursue and represent the
Committee in connection with pursuit of any causes of
action;
h. assist the Committee in the negotiation, formulation,
preparation and confirmation of a plan of reorganization
and the preparation and approval of a disclosure statement
in respect of the plan; and
i. perform any other services which may be appropriate in the
firm's representation of the Committee during these
bankruptcy cases.
The firm's professionals billing rates are:
Professionals Hourly Rates
------------- ------------
Martin J. Brill, Esq. $575
Davide W. Levene, Esq. $575
David L. Neale, Esq. $525
Ron Bender, Esq. $525
Craig M. Rankin, Esq. $525
Martin J. Brill, Esq., a partner of the firm, assured the Court
that the firm does not hold any interest adverse to the Debtors'
estate and is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code.
Mr. Brill can be reached at:
Martin J. Brill, Esq.
Levene, Neale, Bender, Rankin & Brill L.L.P.
10250 Constellation Boulevard, Suite 1700
Los Angeles, California 90067
Tel: (310) 229-1234 and (310) 229-1244
Headquartered in Simi Valley, California, Ronco Corporation --
http://www.ronco.com/-- engages in manufacturing, sourcing,
marketing, and distributing proprietary branded consumer products
for use in kitchen and home. The company filed for Chapter 11
protection on June 14, 2007 ( Bankr. C.D. Ca. Case No: 07-12000).
tacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff and Stern,
L.L.P., represents the Debtor in its restructuring efforts.
Daniel H. Reiss, Esq., at Levene Neale Bender Rankin & Brill LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for bankruptcy, it listed assets at $13,879,000
and debts at $32,736,000.
RONCO CORPORATION: Sells All Assets to Ronco Acquisition
--------------------------------------------------------
The United States Bankkruptcy Court for the Central District of
California authorized Ronco Corporation and its debtor-affiliate,
Ronco Marketing Corporation, to sell substantially all of their
assets to Ronco Acquistion Corporation, free and clear of liens.
The Court also approved the assumption and rejection of executory
contracts under Section 365 of the Bankruptcy Code.
Ronco Acquisition has agreed to purchase the Debtors' assets and
pay in cure cost of up to a maximum amount of $750,000.
The Debtors tell the Court that the cash purchase price will
likely be less than $10 million. Upon consummation of the sale,
the Debtors will disburse the sale proceeds to its secured
creditor, Laurus Master Fund Ltd.
Headquartered in Simi Valley, California, Ronco Corporation --
http://www.ronco.com/-- engages in manufacturing, sourcing,
marketing, and distributing proprietary branded consumer products
for use in kitchen and home. The company filed for Chapter 11
protection on June 14, 2007 ( Bankr. C.D. Ca. Case No: 07-12000).
tacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff and Stern,
L.L.P., represents the Debtor in its restructuring efforts.
Daniel H. Reiss, Esq., at Levene Neale Bender Rankin & Brill LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for bankruptcy, it listed assets at $13,879,000
and debts at $32,736,000.
ROTECH HEALTHCARE: Posts $6.6 Mil. Net Loss in Qtr. Ended June 30
-----------------------------------------------------------------
Rotech Healthcare Inc. repored a net loss of $6.6 million and an
operating income of $5.7 million for the second quarter ended
June 30, 2007, compared with a net loss of $430.7 million and an
operating loss of $462.6 million for the comparable period last
year.
Total net revenues for the three months ended June 30, 2007,were
$144.3 million as compared to $111.8 million for the comparable
period in 2006. The net increase of $32.5 million was primarily
attributable to net revenue increases for the three months ended
June 30, 2007 of:
-- $13.3 million from the transition of patients formerly
receiving compounded budesonide to commercially available
alternative products;
-- $6.5 million from organic patient growth representing a 3.3%
increase in oxygen patient counts and a 15.1% increase in
CPAP product counts; and
-- $13.1 million reduction in the provision for accounts
receivable contractual allowances.
These increases in net revenue were offset by a decrease of
$400,000 in net revenues for the three months ended June 30, 2007,
as a result of the Deficit Reduction Act of 2005 (DRA) reductions
in oxygen reimbursement rates.
The reduction in the provision for accounts receivable contractual
allowances is attributable to the $17.5 million in additional
provisions for accounts receivable contractual allowances which
were recorded as a reduction to net revenues for the three months
ended June 30, 2006.
The company recorded an estimated non-cash goodwill impairment
charge of $449.0 million for the three months ended June 30, 2006,
as the result of an overall decline in profitability which
resulted primarily from decreases in Medicare reimbursement rates,
including the reductions for compounded budesonide and the
resulting decline in market capitalization. The company did not
have any similar impairment charges during the three months ended
June 30, 2007.
Net interest expense for the three months ended June 30, 2007,
totaled $12.0 million, an increase of $3.2 million or 37.3% from
the comparable period in 2006. The increase is primarily
attributable to an increase of approximately $110.1 million in the
average debt outstanding during the three months ended June 30,
2007, as compared to the comparable period in 2006, as well as an
increase of approximately 309 basis points in the average
applicable variable interest rates.
Federal and state income tax for the three months ended June 30,
2007 was $233,000 as compared to a federal and state income tax
benefit of $40.6 million for the comparable period in 2006. This
decrease in tax benefit is primarily the result of a decrease in
the loss before income taxes and a lower effective tax rate due to
the recording of a full valuation allowance against future
benefits of current period losses.
The decrease in net loss was primarily due to three significant
accounting adjustments in 2006 that did not recur in 2007. These
three adjustments are the $449.0 million non-cash goodwill
impairment charge, the $17.5 million increase in contractual
adjustments, and the $40.6 million tax benefit. These three
adjustments contributed an aggregate of $425.9 million to the net
loss for the three months ended June 30, 2006.
At June 30, 2007, the company's consolidated balance sheet showed
$548.9 million in total assets, $536.5 million in total
liabilities, $5.1 million in series A convertible redeemable
preferred stock, and $7.3 million in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2007, are available for
free at http://researcharchives.com/t/s?2272
As at June 30, 2007, the company had cash and cash equivalents,
excluding restricted cash of $12.5 million, of $48.9 million,
compared with cash and cash equivalents of $10.3 million at
Dec. 31, 2006.
As of June 30, 2007, the company had the following debt facilities
and outstanding debt:
-- $181.8 million senior secured term loan with a maturity date
of Sept. 26, 2011. As of June 30, 2007, the entire amount of
the term loan was outstanding. As a payment-in-kind term
loan facility, accrued interest is added to the principal
amount on each interest payment date, provided that the
company may pay, at its election, any such accrued interest
in cash on such date. The company elected not to pay any
such accrued interest in cash during the six months ended
June 30, 2007. Accordingly, during the six months ended
June 30, 2007, a total of $1.8 million in accrued interest
has been added to the principal amount on the applicable
interest payment dates, increasing the principal amount
outstanding to $181.8 million as of June 30, 2007.
-- $300.0 million aggregate principal amount of 9.5% senior
subordinated notes. As of both June 30, 2007, and Dec. 31,
2006, the company had a balance of $287.0 million
outstanding.
The company has outstanding letters of credit totaling
$11.9 million as of June 30, 2007, which are cash collateralized
at 105% of their face amount. The cash collateral in the amount
of $12.5 million is recorded as restricted cash in the company's
consolidated balance sheet as of June 30, 2007.
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/ -- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
* * *
As reported in the Troubled Company Reporter on April 2, 2007,
Standard & Poor's raised Rotech Healthcare Inc.'s corporate credit
rating to 'B-' from 'CCC'.
RYERSON INC: Advises Stockholders to Reject Harbinger's Nominees
----------------------------------------------------------------
Ryerson Inc. urges stockholders to reject Harbinger's hand-picked
slate of nominees at Ryerson's upcoming annual meeting.
“Harbinger is asking Ryerson's stockholders to hand over control
of their company without saying whether or not Harbinger's
nominees will complete the sale to Platinum, without compensating
stockholders, without a strategy, operating plan or management
team, and importantly in today's credit environment, without
securing committed financing for approximately $900 million of
debt that would become due upon a change in control of the
board.” Neil Novich, chairman and chief executive officer of
Ryerson, said.
“We find Harbinger's rhetoric describing our strategic review
process as 'flawed' both inaccurate and hypocritical. Our Board
engaged in an exhaustive process, contacting over 50 parties
during the review and negotiated a go-shop provision in the deal,
which has kept the door open for other bidders” Mr. Novich
continued. “In fact, Harbinger was invited to be part of this
process and declined twice. Instead, they put forward several
nominees that oversaw what many would consider to be the very
definition of a flawed process when these individuals served on
the board of Metals USA.”
“We urge our stockholders to support our current capable,
independent board of directors to be assured of keeping their
opportunity to vote on the Platinum transaction for $34.50 per
share,” Mr. Novich concluded."
Security holders may obtain a free copy of the proxy statement
and any other relevant documents, when available, by directing a
request to:
Ryerson Inc.
Attention: Investor Relations
2621 West 15th Place,
Chicago, IL 60608
For questions and assistance with voting WHITE proxy card, or need
additional copies of proxy material, please call:
MacKenzie Partners Inc.
105 Madison Avenue
New York, NY 10016
Tel (212) 929-5500 (Call Collect)
(800) 322-2885 (toll-free)
About Harbinger Capital Partners
The Harbinger Capital Partners investment team located in New York
City manages in excess of $5 billion in capital through two
complementary strategies. Harbinger Capital Partners Master Fund
I Ltd. is focused on restructurings, liquidations, event-driven
situations, turnarounds, and capital structure arbitrage,
including both long and short positions in highly leveraged and
financially distressed companies. Harbinger Capital Partners
Special Situations Fund L.P. is focused on distressed debt
securities, special situation equities, and private loans/notes in
a predominantly long-only strategy.
About Ryerson Inc.
Ryerson Inc. (NYSE: RYI) -- http://www.ryerson.com/-- is a
distributor and processor of metals in North America, with 2006
revenues of $5.9 billion. The company services customers through
a network of service centers across the United States and in
Canada, Mexico, India, and China. On Jan. 1, 2006, the company
changed its name from Ryerson Tull, Inc. to Ryerson Inc.
* * *
AS reported in the Troubled Company Reporter on July 26, 2007,
Moody's Investors Service placed Ryerson Inc.'s B1 corporate
family rating under review for possible downgrade.
SANDY CREEK: Moody's Rates $1 Billion First Lien Term at Ba3
------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to $1 billion of
8-year senior secured first lien term and construction loans to be
issued by Sandy Creek Energy Associates, L.P., which is owned
50/50 by LS Power Associates and Dynegy Inc. through an
intermediate holding company.
Combined with $647 million of equity, the proceeds from the
issuance of the loans will be used to fund SCEA's 75% share in the
construction of a 900 MW coal-fired power plant in Texas, and to
pay an upfront hedge premium and financing costs. A $75 million
liquidity facility, which will not be rated, will be in place six
months prior to commercial operations to support a permanent six-
month debt service reserve and provide for working capital needs.
The rating outlook is stable.
Sandy Creek will be a 900 MW supercritical, coal-fired, baseload
power project located in Riesel, Texas, in the ERCOT-North market.
Construction is expected to start in August 2007 and substantial
completion is expected to be achieved in February 2012. The
project will be constructed by a reputable consortium consisting
of Gilbert Industrial Corp, Overland Contracting, Inc, and Zachry
Construction Corp. It is expected to be fully permitted for
construction and operation by financial close with key operating
agreements in place.
Brazos Electric Cooperative, Inc, whose distribution members
provide electricity throughout 68 counties in Texas, will be
purchasing a 225 MW undivided interest in Sandy Creek, which
represents 25% of the plant's capacity. Brazos has also
contracted for an additional 150 MW, or 22% of SCEA's share of
remaining capacity under a 30-year power purchase agreement.
Additionally, the equivalent of 150 MW of on-peak merchant output
will be hedged through a gas put spread with an A-rated
counterparty through the maturity of the term loan in 2015,
providing some cash flow protection against a decline in merchant
power prices if gas prices fall below $7.25/MMBtu. The project
will utilize low-cost Powder River Basin coal transported via a
Union Pacific Railroad mainline.
The Ba3 OpCo senior secured rating is based upon several factors,
including the strong economics of the project driven by low
variable costs, the robust financial metrics, the experience of
the EPC Consortium and Sponsors, as well as the superior
supercritical technology. The rating also reflects the challenges
associated with Sandy Creek's planned construction of a coal-fired
power project, the high capital costs needed to develop the
plant's new supercritical technology and a limited amount of
contracted revenues at the outset.
Moody's considered these strengths and opportunities:
Strong project economics driven by the low operating costs of the
baseload coal plant in a market where gas sets the marginal price;
the project is expected to run most of the time based on its
position below the minimum system demand on the ERCOT-North supply
curve;
SCEA has executed a long-term, 30-year PPA with Brazos for 150 MW,
demonstrating that there is a market for its low-cost power within
ERCOT with a load serving entity that operates in this market; the
contract provides for fixed capacity payments, a pass-through of
fuel and fuel transportation costs and a pass-through of all fixed
and variable operating expenses; this provides an underpinning of
relative predictability and stability for at least some of the
project's cash flows;
Locational advantages include close proximity to transportation
for coal supply, interconnection within ERCOT-North transmission
system that includes high growth cities of Dallas and Fort Worth,
and onsite ash disposal facility;
Some downside risk protection against declining gas prices via a
put spread from 2012 through 2015 on an additional 150 MW;
Robust financial metrics for a single asset despite high capital
costs;
Reputable EPC Consortium;
Fixed-price, date certain turnkey construction contract with
liquidated damages package up to 25% of contract price and a 5%
contingency account;
New, efficient technology plant;
Strong, experienced Sponsors;
Significant equity contribution of $647 million, which will be
funded by sponsors over time to cover project construction,
supported by equity contribution agreements, which are backstopped
by letters of credit and guarantees.
The strengths are tempered by these risks and weaknesses:
Sandy Creek is a greenfield project that is under construction and
that is not expected to generate revenues until 2012;
Only 150 MW or 22% of SCEA's share of the project's output will be
initially sold under a long-term PPA, although Moody's expects
that more will be entered into over time; a further 150 MW of the
remaining output will be partially hedged through 3-year natural
gas put option and sold into the ERCOT-North market;
The hedge only protects merchant revenues if gas prices fall
within a certain band; nevertheless the plant is still susceptible
to market and operational risks;
Relatively high capital costs associated with the supercritical
technology;
Lack of operating agreement or fuel supply agreement in place at
financial close exposes the project to potential for actual fuel
and operating costs varying significantly from projected costs;
Single asset risk;
Joint ownership of the project limits lenders access to the
facility as collateral;
The equity contribution is not funded until after all the debt has
been utilized;
A significant portion of the equity commitment (over 30%) is
provided by an unrated entity, LS Power Equity Partners II, L.P.,
albeit one that has the financial capacity to make this
commitment; a guarantee from the Fund and not a bank letter of
credit backstops its equity commitment.
Moody's also considered the structural protections that include a
waterfall of accounts controlled by a trustee, a six-month debt
service reserve, a 100% excess cash sweep, standard covenant
restrictions and limitations on additional indebtedness. The term
loans will be secured pari passu by a perfected first priority
pledge of 100% of the equity interests in SCEA; a first priority
mortgage on all the real property interests of SCEA, including
SCEA's interest in the Sandy Creek project site and all related
fixtures, easements, rights-of-way and licenses; a first priority
security interest in all SCEA's personal property, including the
rights of SCEA under all the project contracts; and all proceeds
of the foregoing.
The stable outlook incorporates the expectation that the project
will achieve commercial operations by the substantial completion
date and generate sufficient cash flows in the near to medium term
to meet base case projections, based upon its position on the
dispatch curve and Moody's expectation that the project will run
most of the time as projected. SCEA believes that it will be able
to sell additional undivided interests in the project and enter
into more long-term contracts similar to its contract with Brazos,
which will provide additional cash flow certainty and
predictability.
The ratings are predicated upon final documentation in accordance
with Moody's current understanding of the transaction, its terms
and conditions, including pricing, and final debt sizing
consistent with initially projected credit metrics.
Sandy Creek Energy Associates, LP, is a bankruptcy remote special
purpose entity formed to construct, finance, own and operate its
75% share of Sandy Creek Energy Station. The Delaware
incorporated limited partnership is indirectly owned 50/50 by LS
Power Associates and Dynegy Inc. through an intermediary holding
company.
SECURUS TECH: Commences Exchange Offer for 11% Senior Sec. Notes
----------------------------------------------------------------
Securus Technologies Inc. commenced its offer to exchange all of
its 11% Second-priority Senior Secured Notes due 2011 that were
issued in a private offering on June 29, 2007, and up to $268,000
aggregate principal amount of its 11% Second-priority Senior
Secured Notes due 2011 that were issued in a private offering on
Sept. 9, 2004, which were not tendered in its 2005 exchange offer,
for newly registered 11% Second-priority Senior Secured Notes due
2011.
The exchange offer for the outstanding notes, which is required by
a registration rights agreement to which Securus Technologies is a
party, was made pursuant to a prospectus dated Aug. 13, 2007.
Copies of the exchange offer prospectus and related transmittal
materials governing the exchange offer are available from The Bank
of New York Trust Company N.A., the exchange agent for the offer,
at:
The Bank of New York Corporate Trust Operations
Attn: Randolph Holder
101 Barclay Street 7 East
New York, NY 10286
Tel (212) 815-5098
Fax (212) 298-1915
The exchange offer will expire at 5 p.m. Eastern Daylight Time on
Sept. 14, 2007, unless extended.
Headquartered in Dallas, Texas, SECURUS Technologies Inc. --
http://www.t-netix.com/-- provides cell phone services. The
company gets 80% of its revenues from the provision of
telecommunications services to more than 3,000 correctional
facilities across the US. The company designs, implements, and
maintains telecommunications systems and provides collect, pre-
paid, and debit calling for inmates. It also sells jail
management software, as well as applications for record management
and computer-aided dispatch. Parent company H.I.G. Capital
acquired T-NETIX and Evercom Inc. in 2004 and combined them the
following year.
* * *
SECURUS Technologies Inc. carries Moody's Investors Service's B3
corporate family rating, B2 senior secured debt rating, and B3
probability of default rating. The outlook is stable.
SHAW GROUP: Finalizes $1.1 Billion Mirant Power Plants Contract
---------------------------------------------------------------
The Shaw Group Inc. disclosed that the Fossil Division of its Shaw
Power Group has signed an engineering, procurement and
construction contract with Mirant Mid-Atlantic, LLC and Mirant
Chalk Point, LLC totaling $1.1 billion to retrofit their Chalk
Point, Morgantown and Dickerson power plants in Maryland with new
emissions controls.
The contract finalizes an alliance agreement signed in July 2006.
The retrofit will include flue gas desulfurization units, which
are designed to significantly reduce sulfur dioxide emissions.
Completion of the retrofit program is scheduled for December 2009.
The final agreement results in a $200 million increase to the
company's backlog. The additional booking will be reflected in
the company's fourth quarter results.
“We are delighted to continue our strong relationship with Mirant
and finalize this contract for Mirant's three Maryland coal-fired
generating plants,” J.M. Bernhard Jr., chairman, president and
chief executive officer of Shaw, said. “These state-of-the-art
air quality control systems, coupled with our procurement and
construction expertise, further Shaw's standing as an industry
leader in the emissions control market for the power industry.”
Based in Baton Rouge, Louisiana, The Shaw Group Inc. (NYSE: SGR)
-- http://www.shawgrp.com/-- provides services to the
environmental, infrastructure and homeland security markets,
including consulting, engineering, construction, remediation and
facilities management services to governmental and commercial
customers. It is also a vertically integrated provider of
engineering, procurement, pipe fabrication, construction and
maintenance services to the power and process industries. The
company segregates its business activities into four operating
segments: Environmental & Infrastructure; Energy & Chemicals;
Maintenance, and Fabrication, Manufacturing & Distribution. In
January 2005, the company sold substantially all of the assets
of its Shaw Power Technologies, Inc. and Shaw Power Technologies
International, Ltd. units to Siemens Power Transmission and
Distribution Inc., a unit of Siemens AG.
The company has operations in Chile, China, Malaysia, the United
Kingdom and, Venezuela, among others.
* * *
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on The Shaw Group Inc. and removed it from
CreditWatch, where it was placed with negative implications in
October 2006. S&P said the outlook is stable.
In addition, 'BB' senior secured debt rating was affirmed after
the $100 million increase to the company's revolving credit
facility.
SOLECTRON CORP: Special Stockholders' Meeting Set for Sept. 27
--------------------------------------------------------------
Solectron Corporation has set, on Sept. 27, 2007, a special
meeting of stockholders, to consider and vote upon the proposed
merger with Flextronics International Ltd.
The meeting will be held at Solectron's principal executive
offices at 847 Gibraltar Drive, Building 5, Milpitas,
California, 95035 and will begin at 8:00 a.m. Pacific time. The
record date for the meeting is Aug. 6, 2007. A definitive joint
proxy statement/prospectus relating to the special meeting will
be mailed to stockholders beginning on or about Aug. 13, 2007.
Headquartered in Milpitas, California, Solectron Corp.
(NYSE: SLR) -- http://www.solectron.com/-- provides a full
range of worldwide manufacturing and integrated supply chain
services to the world's premier high-tech electronics companies.
Solectron's offerings include new-product design and
introduction services, materials management, product
manufacturing, and product warranty and end-of-life support.
The company operates in more than 20 countries on five
continents including France, Malaysia, and Brazil, among others.
* * *
As reported in the Troubled Company Reporter on Dec. 14, 2006,
Standard & Poor's Ratings Services raised its corporate credit
and senior unsecured ratings on Milpitas, California-based
Solectron Corp. to 'BB-' from 'B+', and its subordinated debt
rating to 'B' from 'B-'. S&P said the outlook is stable.
On May 9, 2007, Fitch Ratings affirmed Solectron Corporation's
BB- Issuer Default Rating; BB+ rating of its Senior secured bank
facility; BB- Senior unsecured debt rating; and B+ Subordinated
debt rating.
SOTHEBY'S: Moody's Lifts Corporate Family Rating to Ba2
-------------------------------------------------------
Moody's Investors Service upgraded the long term debt ratings of
Sotheby's; the outlook is stable. The upgrade reflects the
company's very strong operating performance as a result of the
auction market reaching historical highs which has resulted in
Sotheby's achieving very healthy credit metrics and Moody's
expectation that the company will be able to support reasonable
credit metrics even if the art market softens.
These ratings are upgraded:
-- Corporate family rating to Ba2 from Ba3;
-- Probability of default rating to Ba2 from Ba3;
-- Senior unsecured notes rating to Ba3 (LGD5-84%) from B2 (LGD6-
90%).
The Ba2 corporate family rating balances:
i. Sotheby's strong brand name and its recognized expertise in
an industry that has high barriers to entry and is dominated
by two players against
ii. Moody's expectation that credit metrics will be uneven over
the intermediate term given the significant cyclicality of
the international auction market.
Sotheby's operating performance has been very strong since the
middle of 2003 as a result of robust conditions in the auction
market. This has led to the company building up a healthy cash
balances ($343 million at 6/30/2007) and to a notable improvement
in credit metrics to solidly investment grade levels. The
corporate family rating also reflects the company's good
liquidity, which provides it with the flexibility to weather a
cyclical downturn in the auction market and the potential for
operating performance volatility. The rating continues to be
constrained by the very high seasonality of the company's cash
flow and the high level of fixed costs that make it difficult for
the company to adjust to cyclical downturns.
The rating on the senior unsecured notes reflects both the overall
probability of default of the company, at Ba2, and a loss given
default of LGD5. The senior unsecured notes were upgraded by two
notches to Ba3 largely due to changes in the company's other
liabilities included in the waterfall analysis, particularly a
decrease in accounts payable and an increase in the pension
obligation at the holding company.
The senior unsecured notes are rated one rating level below the
corporate family rating reflecting their junior position to both
the $300 million senior secured revolving credit facility and the
company's accounts payable and lease rejection claims. The
company's senior unsecured notes are at the holding company and
are not guaranteed by the operating subsidiaries, therefore, they
are structural subordinated to the trade claims and lease
rejection claims located at the operating subsidiaries.
Sotheby's, headquartered in New York NY, is one of the two largest
auction houses in the world. Total revenues for the fiscal year
ended Dec. 31, 2006 were nearly $665 million.
SOUEIDAN GAS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Soueidan Gas & Mini Mart, Inc.
18854 Northline Road
Southgate, MI 48195
Bankruptcy Case No.: 07-55957
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Soueidan Auto Wash, Inc. 07-55966
Soueidan Car Wash, Inc. 07-55962
Type of Business: The Debtors offers car washing services.
Chapter 11 Petition Date: August 14, 2007
Court: Eastern District of Michigan (Detroit)
Judge: Walter Shapero
Debtors' Counsel: James C. Bowser, Esq.
413 Clinton Avenue
St. Clair, MI 48079
Tel: (810) 329-3500
Estimated Assets Estimated Debts
---------------- ---------------
Soueidan Gas and $1 Million to $1 Million to
Mini Mart, Inc. $100 Million $100 Million
Soueidan Auto $100,000 to $1 Million to
Wash, Inc. $1 Million $100 Million
Soueidan Car $1 Million to $1 Million to
Wash, Inc. $100 Million $100 Million
The Debtors did not file a list of their 20 largest unsecured
creditors.
SPATIALIGHT INC: June 30 Balance Sheet Upside-Down by $11.9 Mil.
----------------------------------------------------------------
SpatiaLight Inc. reported its financial results for the period
ended June 30, 2007.
The company's consolidated balance sheet at June 30, 2007, showed
$5.9 million in total assets and $17.8 million in total
liabilities, resulting in a $11.9 million total stockholders'
deficit.
The company's consolidated balance sheet at June 30, 2007, also
showed strained liquidity with $925,774 in total current assets
available to pay $16.6 million in total current liabilities.
Net loss was $6.4 million and $12.3 million, respectively for the
second quarter and six months ended June 30, 2007, versus
$5.3 million and $10.9 million, respectively for the same periods
in 2006. Much of this loss was non-cash due to the impact of
stock based financing and associated expenses.
The company recognized revenue of approximately $3,000 and $59,000
during the quarters ended June 30, 2007, and 2006, respectively.
Revenue in both periods was derived primarily from sales of LCoS
Sets to LGE.
Net cash used in operating activities totaled approximately
$1.8 million and $3.5 million for the three months ended June 30,
2007 and 2006, respectively, and approximately $4.2 million and
$7.7 million for the six months ended June 30, 2007, and 2006,
respectively. Cash used in operating activities decreased for the
three and six month periods ended June 30, 2007, as compared to
the same periods in 2006 primarily due to decreased operations due
to financial constraints.
Net loss for the quarter includes selling, general and
administrative expenses of $1.6 million and $2.9 million,
respectively for the second quarter and six months ended June 30,
2007, compared to $2.9 million and $5.5 million, respectively for
the same periods in 2006, reflecting significant reduction in
spending rates and in stock based compensation. SG&A expenses
includes administrative costs associated with both the company's
US and Korean facilities. The cost reductions include reductions
in staffing as well as reduced legal, accounting, consulting and
other general and administrative expenses.
Research and development expenses were $405,000 and $699,000,
respectively, for the three and six months ended June 30, 2007,
versus $411,000 and $653,000, respectively, for the same periods
in 2006. The slight decrease in the three months is due primarily
to timing differences while the overall increase for the six month
period is a result of increased spending related to the company's
agreements with Deocom, Foreal and the Joint Development Agreement
with SI Infocomm and SCRAM Technologies.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2007, are available for
free at http://researcharchives.com/t/s?2270
Going Concern Doubt
As reported in the Troubled Company Reporter on March 23, 2007,
Odenberg, Ulakko, Muranishi & Co. LLP, in San Francisco, expressed
substantial doubt about SpatiaLight Inc.'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 auditing firm
pointed to the company's recurring operating losses, negative cash
flows from operations, negative working capital position, and
stockholders' deficit.
About SpatiaLight
SpatiaLight Inc. (NasdaqCM: HDTV)-- http://www.spatialight.com/
-- founded in 1989, manufactures high-resolution liquid crystal on
silicon imagers for use in high-definition display applications
such as rear projection televisions, monitors, front projection
systems, near-to-eye applications, micro-projectors and other
display applications. The company's primary manufacturing
facility is located in South Korea.
SPECTRUM BRANDS: Posts $7.4 Mil. Net Loss in Quarter Ended July 1
-----------------------------------------------------------------
Spectrum Brands, Inc. disclosed third quarter net loss of
$7.4 million for the quarter ended July 1, 2007, compared with
a net income of $2.5 million for the same period in 2006.
Spectrum Brands' third quarter net sales were $442 million, an
increase of 3.4% compared with net sales of $427.5 million in the
comparable period last year.
Gross profit and gross margin for the quarter were $164.2 million
and 37.1%, respectively, versus $156.4 million and 36.6% for the
same period last year. Restructuring and related charges of
$4.1 million were included in the current quarter's cost of goods
sold; cost of goods sold in the comparable period last year
included $2.7 million in similar charges. Excluding these
restructuring and related charges, gross margin improved as the
positive impact of price increases and manufacturing cost
efficiencies offset increased raw material costs.
Spectrum generated third quarter operating income of $3.7 million
versus $10.5 million in the same quarter of fiscal 2006. The
primary reason for the decline was a significant increase in
restructuring and related charges of $30.6 million in fiscal 2007
compared with $6.8 million in the prior year, which more than
offset a $7.8 million reduction in operating expenses in the
current quarter.
"Our overall portfolio continues to make progress and we are
confident that we are taking the right actions for the long-term
to drive revenue growth, reduce costs and create sustainable
value,” Spectrum Brands Chief Executive Officer Kent Hussey
stated. “As we previously disclosed, our third quarter financial
results were lower than we had anticipated; however, we did see
year over year improvement in sales, operating expenses and
EBITDA. Looking forward, we expect further year over year
improvement in EBITDA in the fourth quarter of 2007 and beyond,
largely driven by cost reduction actions already completed or
underway. In order to restore a more normal capital structure to
the business as quickly as possible, we have decided to sell an
attractive strategic asset. Details of the sale will be announced
when the sale process is formally initiated within the next
several weeks.”
Headquartered in Atlanta, Georgia, Spectrum Brands (NYSE: SPC)
-- http://www.spectrumbrands.com/-- is a consumer products
company and a supplier of batteries and portable lighting, lawn
and garden care products, specialty pet supplies, shaving and
grooming and personal care products, and household insecticides.
Spectrum Brands' products are sold by the world's top 25 retailers
and are available in more than one million stores in 120 countries
around the world. The company has manufacturing and distribution
facilities in China, Australia and New Zealand, and sales offices
in Melbourne, Shanghai, and Singapore.
* * *
As reported in the Troubled Company Reporter on April 30, 2007,
Fitch Ratings affirmed the ratings of Spectrum Brands Inc.,
including its CCC issuer default rating, its CCC- rating of the
company's $700 million 7-3/8% senior subordinated note due 2015
and its CCC- rating of the company's $350 million 11.25% Variable
Rate Toggle Interest pay-in-kind Senior Subordinated Note due
2013. The Outlook remains Negative.
SR TELECOM: June 30 Balance Sheet Upside-Down by CDN$14 Million
---------------------------------------------------------------
SR Telecom Inc. reported on Aug. 9, 2007, its unaudited second
quarter 2007 results for the three months ended June 30, 2007.
SR Telecom Inc.'s consolidated balance sheeT at June 30, 2007,
showed CDN$83.9 million in total assets and CDN$97.9 million in
total liabilities, resulting in a CDN$14.0 million total
stockholders' deficit.
Net loss was CDN$14.9 million compared to CDN$17.3 million in
2006. Operating loss from continuing operations was
CDN$13.7 million, a CDN$4.0 million improvement over the
CDN$17.7 million operating loss recorded during the same period
one year ago.
SR Telecom's second quarter revenue grew 51% to CDN$22.4 million
from CDN$14.8 million during the same period in 2006, reflecting
the ongoing implementation of major contracts in Mexico and
Argentina.
These improvements–a result of the increase in sales volume,
higher margins on equipment sales and a CDN$2.3 million decline in
selling, general and administrative (SG&A) expenses–were offset by
a CDN$600,000 increase in restructuring charges and a CDN$700,000
million rise in research and development expenses. The 2007
restructuring charges relate to the company's announced plan to
reorganize its internal operations and centralize activities; the
R&D increase is a reflection of the additional resources the
company has devoted to the development, delivery and deployment of
WiMAX solutions in 2007.
"Our second quarter performance, while clearly an improvement over
last year's results, reflects the delays in manufacturing and
deliveries that we encountered during the quarter as we worked to
resolve our capital issues," said Serge Fortin, president and
chief executive officer of SR Telecom. "We know that much remains
to be done for SR Telecom to regain positive and sustainable
momentum, yet it is encouraging that our customers have continued
to demonstrate their belief in our ability to design, deliver and
deploy high-quality wireless solutions. The additional
CDN$45 million in available funds we received through the term
loan in early July will enable us to further invest in our WiMAX
technology, strengthen our customer relations and execute on our
growth strategy."
Year-to-date revenue was CDN$45.2 million, up 33.0% from
CDN$34.0 million in the first six months of 2006. Operating loss
for the six-month period in 2007 was CDN$22.5 million compared to
CDN$29.2 million in the same period of 2006. The year-to-date net
loss was CDN$27.1 million compared to CDN$30.9 million during the
first six months in the prior year.
Backlog at June 30, 2007, stood at CDN$27.1 million, the majority
of which is expected to be delivered by the end of this year.
This compares with CDN$45.4 million at the end of 2006 and
CDN$31.3 million at the end of the first quarter of 2007.
Financial position
As reported in the Troubled Company Reporter on July 6, 2007, the
company entered into an agreement, with a syndicate of lenders
comprised of shareholders and lenders, that provides a new term
loan of up to CDN$45 million, of which CDN$35 million was drawn
immediately. The CDN$10 million balance is available for drawdown
for a period of one year from the signing date.
As at June 30, 2007, the company's consolidated cash, including
restricted cash, was CDN$9.2 million, down from CDN$26.2 million
at Dec. 31, 2006, and reflects the use of cash to fund continuing
operating activities and capital requirements; it does not include
additional funding from the new term loan.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2007, are available for
free at http://researcharchives.com/t/s?2277
Going Concern Doubt
There is substantial doubt about the appropriateness of the use of
the going concern assumption because of the company's losses for
the current and prior years, negative cash flows, reduced
availability of supplier credit and lack of operating credit
facilities. As such, the realization of assets and the discharge
of liabilities and commitments in the ordinary course of business
are subject to significant uncertainty.
For the three and six months ended June 30, 2007, the company
realized a net loss of CDN$14.9 million and CDN$27.1 million,
respectively (CDN$115.6 million for the year ended Dec. 31, 2006),
and used cash of CDN$9.2 million and CDN$21.6 million,
respectively (CDN$45.2 million for the year ended Dec. 31, 2006)
in its continuing operating activities. Going forward, the
company will continue to require substantial funds as it continues
the development of its WiMAX product offering.
About SR Telecom
Headquartered in Quebec, Canada, SR Telecom (TSX: SRX) --
http://www.srtelecom.com/-- delivers broadband wireless access
(BWA) solutions that enable service providers to deploy voice,
Internet and next-generation services in urban, suburban and
remote areas. SR Telecom's products are currently deployed in
more than 110 countries worldwide.
STRUCTURED ASSET: Moody's May Cut Rating on Class B1 Certificates
-----------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
ratings of 12 tranches issued by Structured Asset Investment Loan
Trust in 2004. The collateral backing each deal placed on review
consists primarily of first-lien, subprime fixed and adjustable
rate mortgage loans.
These actions are based on a systematic review of Moody's rated
SAIL transactions from 2004. The tranches being reviewed have
experienced a decrease in available credit enhancement and the
recent pace of losses in each deal has eroded
overcollateralization below its targeted level. This has caused
the protection available to the subordinate bonds to be
diminished.
Moody's review will focus on available credit enhancement,
including overcollateralization, subordination, excess spread, and
mortgage insurance relative to expected losses.
Complete rating actions are:
Review for possible downgrade:
Issuer: Structured Asset Investment Loan Trust 2004-1
-- Cl. M5, Placed on Review for Possible Downgrade, currently
Baa2
-- Cl. M6, Placed on Review for Possible Downgrade, currently
Baa3
Issuer: Structured Asset Investment Loan Trust 2004-3
-- Cl. M5, Placed on Review for Possible Downgrade, currently
Baa2
Issuer: Structured Asset Investment Loan Trust 2004-4
-- Cl. M7, Placed on Review for Possible Downgrade, currently
Baa2
-- Cl. M8, Placed on Review for Possible Downgrade, currently
Baa3
Issuer: Structured Asset Investment Loan Trust 2004-5
-- Cl. B, Placed on Review for Possible Downgrade, currently Baa3
Issuer: Structured Asset Investment Loan Trust 2004-7
-- Cl. M7, Placed on Review for Possible Downgrade, currently
Baa3
Issuer: Structured Asset Investment Loan Trust 2004-8
-- Cl. M9, Placed on Review for Possible Downgrade, currently
Baa3
Issuer: Structured Asset Investment Loan Trust 2004-BNC1
-- Cl. M5, Placed on Review for Possible Downgrade, currently
Baa1
-- Cl. M6, Placed on Review for Possible Downgrade, currently
Baa2
-- Cl. M7, Placed on Review for Possible Downgrade, currently
Baa3
-- Cl. B1, Placed on Review for Possible Downgrade, currently Ba1
TARPON IND: Inks Loan Pacts with Laurus to Repay LaSalle Bank
-------------------------------------------------------------
Tarpon Industries Inc. restructured its senior debt by entering
into term loan and revolver credit facilities with Laurus Master
Fund.
Laurus is a substantial family of funds which provides financing
to companies of Tarpon's size on a competitive basis. Laurus has,
since late 2005, been a junior lender to Tarpon.
In the latest transaction, Laurus provided the funding to repay
Tarpon's former senior lender, LaSalle Bank Midwest N.A. and its
Canadian affiliate.
Tarpon's chief executive officer, James Bradshaw, noted: "We are
pleased at this vote of confidence by Laurus, and we believe we
will benefit from its entrepreneurial approach to financing
companies such as Tarpon."
Tarpon has also entered into an agreement with Dr. Jean Fuselier
and Fuselier Holding LLC relating to the company's accounts
payable. In consideration for shares of common stock to be
issued, and upon shareholder approval for their issuance, the
Fuselier entities will assume a substantial amount of Tarpon's
trade payables and become obligated to satisfy the same. A
shareholders' meeting is being scheduled for mid September to
early October of this year.
James Bradshaw stated: "We look forward to working with Dr.
Fuselier and his team. The satisfaction of these accounts payable
will substantially improve our liquidity. Coupled with our major
cost cutting initiatives announced and implemented in June, and
the restructuring of our debt, the Fuselier agreements will allow
Tarpon to focus its efforts on growing our business," Mr. Bradshaw
concluded. "As our recent new sales contract announcements
indicate, providing quality products to major national customers
has become a hallmark of Tarpon. These recent transactions should
allow us to continue on the path towards a profitable and
attractive enterprise for our shareholders."
About Tarpon Industries
Headquartered in Marysville, Michigan, 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.
Going Concern Doubt
As reported in the Troubled Company Reporter on April 26, 2007,
Rehman Robson 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.
TECUMSEH PRODUCTS: Three New Members Join Board of Directors
------------------------------------------------------------
Tecumseh Products Company has appointed three new members to the
company's board of directors. Director Kevin E. Sheehan has
resigned from the board, for personal and family health reasons.
The board will have its complement of seven members when, Edwin L.
Buker joins the company as chief executive officer and as a
director.
Joining the Tecumseh board effective Aug. 13, 2007, along with Mr.
Buker, are:
-- William E. Aziz, 52, managing partner of BlueTree Advisors,
of Oakville, Ontario, a firm founded in 2002 by Mr. Aziz
that provides operational, financial and strategic planning
advisory services to public and private businesses in all
industries. Mr. Aziz also serves as the chief financial
officer of Hollinger Inc., a public company listed on the
Toronto Stock Exchange, with a subsidiary (SunTimes Media
Group, an operator of daily newspapers) listed on the New
York Stock Exchange.
-- Steven J. Lebowski, 55, an attorney and certified public
accountant in Milford, Michigan. Mr. Lebowski is also vice
president and an owner of Architectural Door and Millworks
PC, a privately held wholesale distributor of doors based in
New Hudson, Michigan.
-- Jeffry N. Quinn, 48, chairman of the board, president and
chief executive officer, and previously chief restructuring
Officer, of Solutia Inc, of St. Louis, Missouri, a $3.7
billion specialty chemical and materials company. Solutia,
which was formerly a unit of Monsanto, has been operating
under Chapter 11 bankruptcy protection since late 2003.
"I'm pleased to welcome Messrs. Aziz, Lebowski and Quinn, well as
Ed Buker, to the Tecumseh board,” David M. Risley, chairman of the
board of Tecumseh, said. “These appointments are further steps in
providing Tecumseh with the leadership, experience and expertise-
at both the board and management levels that the company needs as
we continue our efforts to place Tecumseh on a solid strategic,
operational and financial footing."
Also effective Aug. 13, as part of the transition to Mr. Buker's
role as chief executive officer, James J. Bonsall has assumed a
transitional role as Tecumseh's executive vice president,
reporting to Mr. Buker. Mr. Bonsall served as the company's
president and chief operating officer.
About Tecumseh Products Company
Headquartered in Tecumseh, Mich., Tecumseh Products Company
(Nasdaq: TECUA, TECUB) -- http://www.tecumseh.com/-- manufactures
hermetic compressors for air conditioning and refrigeration
products, gasoline engines and power train components for lawn and
garden applications, submersible pumps, and small electric motors.
The company has offices in Italy, United Kingdom, Brazil, France,
and India.
At March 31, 2007, the company's balance sheet showed total assets
of $97.3 million, total liabilities of $101.4 million, resulting
to a shareholders' deficit of $4.1 million.
TENNECO INC: Fitch Affirms BB- Issuer Default Rating
----------------------------------------------------
Fitch Ratings has affirmed these ratings of Tenneco, Inc:
-- Issuer Default Rating at 'BB-';
-- Senior secured revolver at 'BB+';
-- Senior secured term loan A at 'BB+';
-- Senior secured tranche B-1 LC/revolver 'BB+';
-- Senior secured second lien notes 'BB';
-- Senior subordinated notes at 'B'.
The Rating Outlook remains Positive. The ratings cover
approximately $1.4 billion of debt.
Fitch's ratings reflect Tenneco's solid revenue growth deriving
from new product introductions and new business wins, continuing
diversification away from the Detroit Three, good liquidity, and
steady underlying margin performance in the midst of difficult
industry conditions. The company's operating discipline, product
launches, and working capital management over the past several
years are also positive credit factors. Credit concerns include
modest free cash flow, declining market share and volumes of the
company's D3 customers, pricing pressures and commodity cost
pressures.
The Rating Outlook is Positive given Tenneco's expected revenue
growth, margin performance, EBITDA growth and strong competitive
position in growth product areas such as air quality and safety
products. Capital expenditure levels and working capital
requirements are expected to limit free cash flow in 2007, and
debt reduction will be modest. Fitch expects that continued
growth in EBITDA will expand free cash flow generation over time,
which will be a key factor for a review of the rating for an
upgrade.
Tenneco has been able to offset the challenges facing the
automotive industry with increased revenue from new business
launched, gains in manufacturing efficiency, close attention to
working capital requirements and a geographically diverse customer
base compared with other North American suppliers. Over the
previous three years, Tenneco's North American EBITDA margin has
been 10% or better, an impressive result considering the drop in
D3 production volume and commodity cost inflation during the same
time period. The total amount of Tenneco's new business backlog
is approximately $1.3 billion through 2009, about
$1 billion of which is expected to be launched this year. Exhaust
systems compose the majority of the new business being launched,
including diesel particulate filters which represent a strong
growth opportunity. Currently, Tenneco has 14 car models equipped
with its DPF technology and the company is scheduled to launch
eight more in 2007. In its ride control business, the company has
been awarded business for its computerized electronic suspension
on the Audi A6, several Volvo models and three additional
undisclosed European OEM vehicle platforms. Over the longer term,
Tenneco should benefit from more strict air quality standards and
demand for safety related products.
Total debt-to-EBITDA was 3.3 times at the end of the second
quarter 2007 (2.9x debt net of cash), only slightly lower than the
year-end level of 3.4x but down substantially from 4.7x in 2002.
Management's stated long-term objective is to achieve net debt-to-
EBITDA of 2x. The company generated only modest free cash flow of
$22 million in 2006, albeit in a difficult industry environment.
After an increase in working capital investment, LTM free cash
flow at the end of the second quarter was ($56) million.
Tenneco's working capital position remains relatively healthy
versus the industry, supplemented by a current cash level of $168
million. Fitch expects Tenneco to be slightly free cash flow
positive in 2007 with the potential for further improvement in
2008.
The escalation in commodity costs, especially stainless steel for
exhaust systems, has moderated relative to the previous three
years. However, Tenneco expects the full year 2007 gross negative
impact from steel to be $85 to $90 million. Tenneco will be
challenged to fully offset the negative impact with cost reduction
initiatives, material substitutions, low-cost country sourcing,
aftermarket price increases and OEM customer recoveries.
At the end of the second quarter 2007, total liquidity was
approximately $582 million, including cash and marketable
securities balance of $168 million. Tenneco had $302 million of
availability under its $550 million revolver and approximately
$106 million available after $24 million in outstanding letters of
credit under its Tranche B-1 facility. The company also has a
U.S. securitization facility of approximately $100 million, of
which only $6 million was available at the end of the quarter. In
addition, Tenneco had $54 million outstanding under its
uncommitted European receivable facilities, the availability of
which Fitch does not include in liquidity since the facility is
cancelable at any time. Tenneco has no exposure to refinancing
risk given that the company's credit facility was refinanced in
March this year and that the company has no significant debt
maturities until after 2011.
THERMADYNE HOLDINGS: Strong Performance Cues S&P to Lift Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on
Thermadyne Holdings Corp., including its corporate credit rating
to 'CCC+' from 'CCC'. In addition, Standard & Poor's removed the
ratings from CreditWatch with positive implications, where they
were placed on April 5, 2007. The outlook is positive. As of
June 30, 2007, the St. Louis, Missouri-based welding-equipment
manufacturer had total outstanding debt of approximately
$280 million.
"The upgrade reflects Thermadyne's strengthening operating
performance, recent bank refinancing, and successful filing of its
second-quarter Form 10Q," said Standard & Poor's credit analyst
Anita Ogbara. The company has recently made progress in
addressing some of its accounting issues. However, the company
concluded that it had a material weakness in internal controls
over financial reporting as of Dec. 31, 2006, and amended the 2006
Form 10K and first-quarter 2007 Form 10Q. The amendments did not
change the consolidated financial statements.
During the past two quarters, operations have stabilized somewhat.
For the 12 months ended June 30, 2007, Thermadyne generated
approximately $40 million of operating EBITDA, and operating
margins (before depreciation and amortization) rose to about 10%.
Still, performance is down substantially from 2001-2002 levels
when operating margins were in the mid-teens. The company has
also completed a series of small divestitures of poorly-performing
operations. Currently, Thermadyne is implementing a number of
steps to regain lost market share and to improve operating
efficiencies and performance, including revamping its sales
organization, expanding the product offering globally, moving some
manufacturing to lower-cost countries, and standardizing
information systems.
THORNBURG MORTGAGE: No Plans of Filing for Bankruptcy, COO Says
---------------------------------------------------------------
Thornburg Mortgage Inc. President and Chief Operating Officer
Larry Goldstone said that the company has no intention of filing
for bankruptcy despite disruptions in the mortgage market and
delays in the company's ability to fund mortgage assets, declaring
that they had obtained financing, various papers report citing Mr.
Goldstone's CNBC interview.
As of June 30, 2007, the company had entered into three committed
whole loan financing facilities with a total borrowing capacity of
$900 million that will expire between August 2007 and April 2008,
according to a regulatory filing. In addition to this committed
borrowing capacity, the company has an uncommitted borrowing
capacity of $1.4 billion.
The mortgage lending industry has been in an uproar since three
large mortgage lenders, HomeBanc Corp., American Home Mortgage
Holding, Inc. and Aegis Mortgage Corp., filed for bankruptcy for
the past two weeks.
Thornburg has strived to survive the worsening mortgage market
situation, especially since investors were hesitant to purchase
many kinds of loans due to rising defaults, and banks refuse to
extend credit to mortgage lenders, Jonathan Stempel and Shikhar
Balwani of Reuters reports.
About Thornburg Mortgage
Thornburg Mortgage Inc. (NYSE: TMA) --
http://www.thornburgmortgage.com/-- is a single-family prime
residential mortgage lender focused principally on the jumbo
segment of the adjustable rate mortgage market. It originates,
acquires, and retains investments in adjustable and variable rate
mortgage assets. Its ARM assets comprise of purchased ARM assets
and ARM loans, including traditional ARM assets and hybrid ARM
assets.
* * *
As reported in the Troubled Company Reporter on Aug. 14, 2007,
Standard & Poor's Ratings Services lowered its long-term
counterparty credit rating on Thornburg Mortgage Inc. to 'B' from
'BB'. The rating was also placed on CreditWatch Negative.
THORNBURG MORTGAGE: Board Moves Dividend Payment to September 17
----------------------------------------------------------------
The board of directors of Thornburg Mortgage Inc. rescheduled the
payment date of the company's second quarter common dividend of
$0.68 per share to Sept. 17, 2007. On this date, the company will
receive its scheduled monthly mortgage payments for August
and will have had more opportunity to manage through this
difficult environment. The dividend was originally scheduled to
be paid on Aug. 15, 2007, to shareholders of record on Aug. 3,
2007, as previously noted in the company's second quarter
earnings disclosure on July 19, 2007.
The board of directors said it took this action in response to
significant disruptions in the mortgage market which resulted in
the sudden and unprecedented decline in the market prices of its
AAA-rated mortgage securities that began on Aug. 9, 2007, and
subsequent increase in margin calls related to its repurchase
agreement financings on those securities. There have also been
disruptions in the company's ability to fund its mortgage assets
in the commercial paper and the asset-backed securities markets.
To date, the company has successfully met all of its commercial
paper obligations. Finally, the company has also experienced
delays in its ability to fund mortgage loans to its lending
partners.
"After extensive deliberation, and acknowledging the severity of
the situation, the board determined that the best way to preserve
shareholder value in the near term and grow it over time is to
retain our cash to enhance our ability to work with our lenders
and weather this tumultuous environment,” Larry Goldstone, the
company's president and chief operating officer, said. “We will
continue to monitor the situation."
"After careful analysis of the current value of our mortgage
securities portfolio, we believe that our book value, which
includes recent changes in the market value of our mortgage
securities and liabilities is $14.28 per share as of Aug. 13,
2007, versus $19.38 per share as of June 30, 2007,” Mr. Goldstone
continued. “The majority of that book value decline has occurred
over the past week, and is not a reflection of a change in the
credit quality of our mortgage assets. As such, and barring
substantial additional decline in the market value of mortgage-
backed securities, we will continue to originate and invest in
high-quality mortgage assets once we get through this environment.
While this market event represents a disappointing setback for us
and our shareholders, we will rebuild when the environment
stabilizes.
"Thornburg Mortgage has successfully managed through challenging
market environments in the past, and we are applying our
experience to preserve as much shareholder value as we can. We
are exploring a variety of strategies to help preserve shareholder
value, including the opportunistic sale of our mortgage assets.
Despite the uncertainty of the current market environment, we
believe that the future profitability of the mortgage business is
likely to be far superior to what we've experienced over the last
several years, as this environment has eliminated substantial
market competition from numerous mortgage originators and
investors. As evidence of our confidence in the long-term success
of the company, management has purchased over 500,000 shares over
the past three weeks. Nonetheless, the company remains affected
by the industry-wide liquidity squeeze, and unfortunately, we
cannot predict when stability and rational behavior will be
restored in the mortgage markets."
"Our credit quality is among the highest in the industry, our
assets among the most liquid of any financial institution, and our
client orientation is without parallel in the mortgage industry,”
Mr. Goldstone continued. “We take great pride in the integrity
with which we operate, we have developed a strong mortgage lending
franchise, and we fully expect to emerge from this unprecedented
environment well positioned to continue building on our strengths
as a lean, nimble operating company that benefits all of our
constituents."
About Thornburg Mortgage
Headquartered in Santa Fe, New Mexico, Thornburg Mortgage Inc.
(NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single-
family prime residential mortgage lender focused principally on
the jumbo segment of the adjustable rate mortgage market. It
originates, acquires, and retains investments in adjustable and
variable rate mortgage assets. Its ARM assets comprise of
purchased ARM assets and ARM loans, including traditional ARM
assets and hybrid ARM assets.
* * *
As reported in the Troubled Company Reporter on Aug. 14, 2007,
Standard & Poor's Ratings Services lowered its long-term
counterparty credit rating on Thornburg Mortgage Inc. to 'B' from
'BB'. The rating was also placed on CreditWatch Negative.
THORNBURG MORTGAGE: Moody's Cuts Sr. Unsecured Debt Rating to B2
----------------------------------------------------------------
Moody's Investors Service downgraded from Ba3 to B2 and from B2 to
Caa1 the senior unsecured debt and preferred stock ratings,
respectively, of Thornburg Mortgage, Inc. The ratings remain
under review for possible downgrade.
"These rating actions reflect further deterioration in Thornburg's
liquidity position due to significant funding and valuation
volatility in the single-family mortgage market, even for the
prime quality assets in which Thornburg Mortgage invests," says
Brian Harris, Moody's analyst.
Moody's notes that Thornburg's rating continues to reflect the
REIT's superior asset quality. Thornburg focuses on originating
and investing in prime jumbo single-family mortgages. However,
since the last rating committee, the REIT's liquidity and access
to the capital markets continues to be constrained by dislocations
in mortgage pricing in the jumbo mortgage market.
Moody's review of Thornburg Mortgage's ratings for possible
downgrade reflects concerns regarding further deterioration in
Thornburg's funding capacity due to financial market stresses.
A stable rating outlook would likely result from successful
efforts by the REIT to strengthen its liquidity position through
such means as lengthening debt maturities or solidifying borrowing
facilities. A rating downgrade would reflect further difficulties
in meeting margin calls on secured debt, or additional shrinkage
of borrowing options.
These ratings were downgraded:
Thornburg Mortgage, Inc.
-- Senior debt to B2, from Ba3;
-- Preferred stock to Caa1, from B2;
-- Senior debt shelf to (P)B2, from (P)Ba3;
-- Preferred stock shelf to (P)Caa1, from (P)B2.
Thornburg Mortgage, Inc. based in Santa Fe, New Mexico, USA, is a
prominent mortgage investor and originator organized as a REIT.
As of June 30, 2007, Thornburg Mortgage had assets of
$57.5 billion and book equity of $2.7 billion.
TRAPEZA CDO: Fitch Puts BB+ Rating on $5 Million Class G Notes
--------------------------------------------------------------
Fitch assigns these ratings to Trapeza CDO XIII, Ltd. and Trapeza
CDO XIII, Inc.,:
-- $375,000,000 class A-1 senior secured floating rate notes,
due 2042 'AAA';
-- $97,000,000 class A-2a senior secured floating rate notes,
due 2042 'AAA';
-- $5,000,000 class A-2b senior secured fixed/floating rate
notes, due 2042 'AAA';
-- $21,000,000 class A-3 senior secured floating rate notes,
due 2042 'AAA';
-- $65,000,000 class B secured deferrable floating rate notes,
due 2042 'AA';
-- $58,000,000 class C-1 secured deferrable floating rate
notes, due 2042 'A';
-- $5,000,000 class C-2 secured deferrable fixed/floating rate
notes, due 2042 'A';
-- $61,000,000 class D secured deferrable floating rate notes,
due 2042 'A-';
-- $37,000,000 class E secured deferrable floating rate notes,
due 2042 'BBB';
-- $13,000,000 class F secured deferrable floating rate notes,
due 2042 'BBB-';
-- $5,000,000 class G secured deferrable floating rate notes,
due 2042 'BB+'.
UNIVERSAL INSURANCE: Accepting Buyout Bids Until August 31
----------------------------------------------------------
Parties interested in acquiring Universal Insurance Exchange
or in participating in a plan of reinsurance for the company
have until 3:00 p.m. on Aug. 31, 2007, to submit their bids.
Copies of proposals must be sent to:
a) Jennifer Meiners
Law Offices of Brian E. Riewe
Suite 101
4408 Spicewood Springs Road
Austin, TX 78759
b) Robert H. Nunnally, Jr.
Wisener Nunnally Gold, L.L.P
Suite 110
625 West Centerville Road
Garland, TX 75041
For more information, see http://www.sdrtexas.com/
Universal Insurance Exchange is a Texas reciprocal insurance
exchange which was licensed to underwrite business in the State
of Texas on or about November 14, 1980. Its attorney-in-fact is
Universal Paratransit Insurance Services Corp.
On January 26, 2006, UIE and Paratransit were placed into
receivership by the 53rd District Court of Travis County, Texas.
H. Koehler Co., Inc. was appointed Special Deputy Receiver
on April 13, 2006. The 53rd District Court entered an Agreed
Order
Approving Plan of Rehabilitation on July 2, 2007.
WARNACO INC: Moody's Affirms Ba3 Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service affirmed Warnaco's Ba3 corporate family,
Ba1 senior secured and B1 senior unsecured ratings and revised the
company's outlook to positive from stable.
The positive outlook reflects the fact that Warnaco's progress in
the integration and execution of the January 2006 Fingen SpA
acquisition, which gave Warnaco the licensing rights to distribute
Calvin Klein jeans, accessories and other apparel in European and
Asian markets, has progressed better than initially anticipated.
The Calvin Klein businesses, both domestic and international, have
helped drive the company's operating profitability improvements.
Since the acquisition, Moody's adjusted operating margins have
improved from a high of 8% at fiscal 2005 to 9.1% for the last 12
months ending March 31, 2007, with double digit operating margins
in the fourth quarter of 2006 and the first quarter of 2007.
Leverage, as measured by debt / EBITDA, has improved from 3.3x at
fiscal 2006 to 2.7x at March 31, 2007 due to improved performance
and prepayment of debt with proceeds from the sale of non-core
businesses.
Upward rating momentum could build if the company continues to
demonstrate growth in revenues above peers, sustained operating
margins approaching 10% and improved free cash flow to debt above
10%. The outlook reflects Moody's expectations that the company
will continue to improve revenue growth and profitability over the
near term, and that if consumer demand were to soften, its
financial performance would remain sufficiently strong to support
a positive outlook.
These ratings were affirmed and LGD assessments amended:
-- Corporate Family Rating at Ba3
-- Probability of Default Rating at Ba3
-- $225 senior secured revolving credit facility at Ba1 (LGD2
20%, was 22%)
-- $180 million senior secured term loan at Ba1 (LGD2 20%, was
22%)
-- $210 million senior unsecured debt at B1 (LGD5 76%, was 78%)
Warnaco Inc. and its parent, The Warnaco Group, Inc., are
headquartered in New York, NY. The company is one of the world's
leading designers, manufacturers and marketers of intimate
apparel, sportswear, and swimwear worldwide under brands that it
owns or licenses, such as Warner's, Olga, Lejaby, Calvin Klein,
Speedo, and Chaps. The company reported revenues of about
$1.9 billion for the last 12 month period ending June 30, 2007.
* John Bowman Joins King & Spalding's Houston Office as Partner
---------------------------------------------------------------
King & Spalding said that high-profile litigator John P. Bowman
has joined the international arbitration practice as a partner in
the Houston office. Mr. Bowman's arrival marks the 33rd lateral
hire, including seven new partners, at the firm in the past year.
Bowman focuses almost exclusively on domestic and international
disputes for energy and petrochemical companies. Few lawyers have
Bowman's depth of experience in handling significant energy
disputes, particularly in the international arbitration arena.
"John is a seasoned lawyer in the area of international
arbitration and is recognized as one of the premier litigators in
the energy field," said Robert E. Meadows, managing partner of
King & Spalding's Houston office. "He brings considerable depth
to the firm's renowned international arbitration practice, and we
are excited about the additional benefits his experience will
bring our clients."
Bowman joins King & Spalding from Fulbright & Jaworski L.L.P.,
where he was a partner and co-chair of its arbitration and ADR
(alternative dispute resolution) practice group.
Mr. Bowman has more than 27 years' experience in the litigation
and arbitration of energy disputes domestically and
internationally. His practice focuses on international oil
companies, state oil companies, oil and gas promoters and
investors, well service companies, drilling companies, seismic
companies, gas suppliers and distributors, petrochemical
manufacturers and power companies. H e represents energy companies
in a wide range of litigation and arbitration, including disputes
concerning AMIs and confidentiality agreements, production sharing
agreements, joint operating agreements, seismic licensing
agreements, drilling contracts, offshore platform installation
contracts, operation and maintenance agreements, purchase and sale
agreements and representation agreements. He also represents
companies in the computer, medical devices and television
industries and in international commercial arbitrations.
Mr. Bowman earned a B.A. degree from the University of Kansas and
a J.D. degree from the University of Kansas Law School. He is a
member of the panel of arbitrators of the AAA International Centre
for Dispute Resolution, a fellow and certified tutor of The
Chartered Institute of Arbitrators (London), and fellow and member
of the board of directors of the College of Commercial
Arbitrators.
The firm's international arbitration practice was ranked second in
the world in Focus Europe's May 2007 Arbitration Scorecard issue,
based on size and number of disputes handled across the globe.
King & Spalding was also included in Focus Europe's list of "Ten
Big Awards" for the firm's representation of Azurix Corp in a
dispute against the government of Argentina. The arbitration team
specializes in disputes involving energy, construction, insurance,
investments, and general commercial matters. It has handled
arbitrations under the rules of the International Centre for
Settlement of Investment Disputes, the International Chamber of
Commerce, the Inter-American Commercial Arbitration Commission,
the American Arbitration Association, the London Court of
International Arbitration, the United Nations Commission on
International Trade Law, and the Iran-U.S. Claims Tribunal.
Arbitrated disputes in which firm lawyers have been involved have
ranged from $1 million to more than $1 billion.
"We are very excited to welcome John to King & Spalding and look
forward to the contributions he will make to the continued
expansion of our international arbitration group," said R. Doak
Bishop, the co-head of King & Spalding's international arbitration
practice.
Edward G. Kehoe, the other co-head of that practice, added: "Our
clients increasingly are turning to arbitration for the resolution
of international disputes, and John's vast, unsurpassed experience
in this discipline will add greatly to our ability to help them
address the legal challenges they face around the world."
About King & Spalding
King & Spalding, LLP -- http://www.kslaw.com/-- is an
international law firm with more than 800 lawyers in Atlanta,
Dubai, Houston, London, New York, Riyadh (affiliated office) and
Washington, D.C. The firm represents half of the Fortune 100, and
in a Corporate Counsel survey in August 2006 was ranked one of the
top ten firms representing Fortune 250 companies overall.
King & Spalding boasts one of the nation's preeminent financial
restructuring practices. It provides valuable knowledge and in-
depth experience to virtually all facets of corporate
reorganizations, in-court and out-of-court debt restructuring,
bankruptcy and insolvency litigation, and distressed asset mergers
and acquisitions. This practice is regularly retained in large
bankruptcy matters and workouts to represent debtors, trustees,
creditors' committees, institutional lenders, other critical
creditors and parties-in-interest, and potential acquirers of
businesses and large assets.
The Houston office of King & Spalding, with more than 100 lawyers,
provides a variety of services to clients the world over. Chief
among its practices are those focusing on litigation and
transactional law, especially energy, international arbitration
and Latin American matters.
* Scouler & Co. Appoints John Hedge at Newly Opened Atlanta Office
------------------------------------------------------------------
Scouler & Company hired senior financial executive John Hedge to
open the company's Atlanta office, establishing an operational
foothold in the southeastern corridor. Atlanta will be the third
office opened in just three months of operations by Scouler &
Company, joining New York and Los Angeles. Founder and managing
principal Dan Scouler observed, "John Hedge is the complete
package, a seasoned financial professional with CFO and COO
experience, who has the entrepreneurial flair and innovative
approaches to problem-solving that are the hallmarks of Scouler &
Company."
Prior to joining Scouler & Company, Mr. Hedge served as chief
financial officer and executive vice president-finance of
TestAmerica Analytic Testing Corp. where he secured financing for
the company's largest-ever acquisition, building the U.S. market
leader for environmental laboratory services. Mr. Hedge
orchestrated and integrated numerous other acquisitions for
TestAmerica, implemented cost reduction and efficiency strategies,
and helped position the firm for major growth in what is
traditionally a commodity business. Additionally, Mr. Hedge held
full P&L responsibility for the company including cash management,
risk management, forecasting, insurance, legal, MIS, operational
accounting, contact administration and financial reporting, while
maintaining relationships with lending sources and private equity
owners.
Mr. Hedge was brought in as CFO of Mosler Inc., the safe
manufacturing and security services company, to clean up
operations and administer a complex Chapter 11 bankruptcy, where
he engineered the sale of the company for four times the value
expected by its lenders. Encouraged by the experience, Mr. Hedge
went on to establish Regents Partners LLC, a troubled company
financial consulting firm where he leveraged relationships with
secured lenders and equity owners to create and preserve value for
financially-challenged companies.
A 1981 graduate of the University of Notre Dame with a bachelor of
business administration degree in accounting, Mr. Hedge went on to
earn his certified public accountant accreditation and is a member
of the Association of Insolvency and Restructuring Advisors and
the American Institute of Certified Public Accountants.
About Scouler & Company
Los Angeles-based Scouler & Company -- http://www.scouler.com/--
is a restructuring, crisis management and transaction services
firm serving companies, investors and lenders nationally. The
Scouler & Company services portfolio encompasses financial
advisory, business stabilization, technology advisory, interim
executive management and transaction services.
The Scouler & Company/Atlanta office is located at 400 Colony
Square, Suite 200, 1201 Peachtree Street, Atlanta, GA, 30361,
phone 404.881.2888 and is now operational.
* 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 David Wayne Hodnik
Bankr. N.D. Tex. Case No. 07-20392
Chapter 11 Petition filed August 7, 2007
See http://bankrupt.com/misc/txnb07-20392.pdf
In Re Kids Medical Therapies, Inc.
Bankr. N.D. Ga. Case No. 07-11872
Chapter 11 Petition filed August 8, 2007
See http://bankrupt.com/misc/ganb07-11872.pdf
In Re JoGal, L.L.C.
Bankr. D. N.J. Case No. 07-21221
Chapter 11 Petition filed August 8, 2007
See http://bankrupt.com/misc/njb07-21221.pdf
In Re Global Transportation Resources, Inc.
Bankr. W.D. Penn. Case No. 07-11258
Chapter 11 Petition filed August 8, 2007
See http://bankrupt.com/misc/pawb07-11258.pdf
In Re B.&C. Concrete Cutting, L.L.C.
Bankr. M.D. Tenn. Case No. 07-05644
Chapter 11 Petition filed August 8, 2007
See http://bankrupt.com/misc/tnmb07-05644.pdf
In Re Brant Teddy Lesogor
Bankr. M.D. Tenn. Case No. 07-05645
Chapter 11 Petition filed August 8, 2007
See http://bankrupt.com/misc/tnmb07-05645.pdf
In Re Lucked Land Company, L.L.C.
Bankr. D. Ariz. Case No. 07-03903
Chapter 11 Petition filed August 9, 2007
Filed as Pro Se
In Re Klasik6, L.L.C.
Bankr. D. Ariz. Case No. 07-03904
Chapter 11 Petition filed August 9, 2007
Filed as Pro Se
In Re Quantic Research Systems, Inc.
Bankr. D. Col. Case No. 07-18784
Chapter 11 Petition filed August 9, 2007
See http://bankrupt.com/misc/cob07-18784.pdf
In Re Rome Enterprises, Ltd.
Bankr. D.C. Case No. 07-00417
Chapter 11 Petition filed August 9, 2007
See http://bankrupt.com/misc/dcb07-00417.pdf
In Re M.W.P. Construction, L.L.C.
Bankr. M.D. Ga. Case No. 07-70706
Chapter 11 Petition filed August 9, 2007
See http://bankrupt.com/misc/gamb07-70706.pdf
In Re Byron Irvin Borchers
Bankr. S.D. Ind. Case No. 07-07507
Chapter 11 Petition filed August 9, 2007
See http://bankrupt.com/misc/insb07-07507.pdf
In Re Ideal Crafts Imports
Bankr. E.D. N.Y. Case No. 07-73069
Chapter 11 Petition filed August 9, 2007
See http://bankrupt.com/misc/nyeb07-73069.pdf
In Re Edward Griggs, Jr.
Bankr. S.D. N.Y. Case No. 07-22755
Chapter 11 Petition filed August 9, 2007
See http://bankrupt.com/misc/nysb07-22755.pdf
In Re D.E. Brooks Enterprises, Inc.
Bankr. W.D. Okla. Case No. 07-12843
Chapter 11 Petition filed August 9, 2007
See http://bankrupt.com/misc/okwb07-12843.pdf
In Re Tuttle, Sullivan & Company, Inc.
Bankr. S.D. Tex. Case No. 07-35491
Chapter 11 Petition filed August 9, 2007
See http://bankrupt.com/misc/txsb07-35491.pdf
In Re James Spaulding Powell, L.L.C.
Bankr. D. Col. Case No. 07-18828
Chapter 11 Petition filed August 10, 2007
Filed as Pro Se
In Re Owens Research, Inc.
Bankr. M.D. Fla. Case No. 07-03448
Chapter 11 Petition filed August 10, 2007
See http://bankrupt.com/misc/flmb07-03448.pdf
In Re Dale's Service, Inc.
Bankr. D. Idaho Case No. 07-01255
Chapter 11 Petition filed August 10, 2007
Filed as Pro Se
In Re M.F.L. Design and Fabrication, Inc.
Bankr. W.D. Mich. Case No. 07-05763
Chapter 11 Petition filed August 10, 2007
See http://bankrupt.com/misc/miwb07-05763.pdf
In Re Triple Crown, L.P.
Bankr. E.D. N.C. Case No. 07-02928
Chapter 11 Petition filed August 10, 2007
See http://bankrupt.com/misc/nceb07-02928.pdf
In Re Gene Garrett
Bankr.E.D. Tex. Case No. 07-41806
Chapter 11 Petition filed August 10, 2007
See http://bankrupt.com/misc/txeb07-41806.pdf
In Re C.P.S., Inc.
Bankr. N.D. Tex. Case No. 07-43489
Chapter 11 Petition filed August 10, 2007
See http://bankrupt.com/misc/txnb07-43489.pdf
In Re Harvest Community Church of Jay, Inc.
Bankr. M.D. Fla. Case No. 07-07129
Chapter 11 Petition filed August 12, 2007
See http://bankrupt.com/misc/flmb07-07129.pdf
In Re Diane K. Tweedy
Bankr. D. Ariz. Case No. 07-01498
Chapter 11 Petition filed August 13, 2007
See http://bankrupt.com/misc/azb07-01498.pdf
In Re Thomas Mather, Sr.
Bankr. E.D. Calif. Case No. 07-12469
Chapter 11 Petition filed August 13, 2007
See http://bankrupt.com/misc/caeb07-12469.pdf
In Re Main Street U.S.A. Mortgage, Inc.
Bankr. M.D. Fla. Case No. 07-03621
Chapter 11 Petition filed August 13, 2007
Filed as Pro Se
In Re Lakeshore Construction Company of Wolfeboro, Inc.
Bankr. D. N.H. Case No. 07-11721
Chapter 11 Petition filed August 13, 2007
See http://bankrupt.com/misc/nhb07-11721.pdf
In Re Mirti, Inc.
Bankr. D. N.J. Case No. 07-21474
Chapter 11 Petition filed August 13, 2007
See http://bankrupt.com/misc/njb07-21474.pdf
In Re Alonso Investments, L.L.C.
Bankr. D. N.J. Case No. 07-21485
Chapter 11 Petition filed August 13, 2007
See http://bankrupt.com/misc/njb07-21485.pdf
In Re Mr. Plumber, Inc.
Bankr. D. New Mexico Case No. 07-11957
Chapter 11 Petition filed August 13, 2007
See http://bankrupt.com/misc/nmb07-11957.pdf
In Re Hot Spot II Diner Corporation
Bankr. E.D. Penn. Case No. 07-14673
Chapter 11 Petition filed August 13, 2007
See http://bankrupt.com/misc/paeb07-14673.pdf
In Re Griffin Moving Services, Inc.
Bankr. S.D. Tex. Case No. 07-35554
Chapter 11 Petition filed August 13, 2007
See http://bankrupt.com/misc/txsb07-35554.pdf
In Re Jennifer Janequa Sway
Bankr. E.D. Wash. Case No. 07-02615
Chapter 11 Petition filed August 13, 2007
Filed as Pro Se
In Re Jag Business Services, L.L.C.
Bankr. D. Ariz. Case No. 07-03979
Chapter 11 Petition filed August 14, 2007
Filed as Pro Se
In Re O.U.A. Dynasty, Inc.
Bankr. D. Del. Case No. 07-11135
Chapter 11 Petition filed August 14, 2007
See http://bankrupt.com/misc/deb07-11135.pdf
In Re Chase Investors, Inc.
Bankr. M.D. Fla. Case No. 07-07190
Chapter 11 Petition filed August 14, 2007
See http://bankrupt.com/misc/flmb07-07190.pdf
In Re Sedrick Lawrence Johnson
Bankr. N.D. Ga. Case No. 07-73084
Chapter 11 Petition filed August 14, 2007
Filed as Pro Se
In Re Richard Marshall Rice
Bankr. W.D. Louisiana Case No. 07-12112
Chapter 11 Petition filed August 14, 2007
See http://bankrupt.com/misc/lawb07-12112.pdf
In Re T.N. Properties, Inc.
Bankr. W.D. Mo. Case No. 07-42798
Chapter 11 Petition filed August 14, 2007
See http://bankrupt.com/misc/mswb07-42798.pdf
In Re Gerardo P. Galiano
Bankr. S.D. N.Y. Case No. 07-22781
Chapter 11 Petition filed August 14, 2007
See http://bankrupt.com/misc/nysb07-22781.pdf
In Re Global Imports, Ltd.
Bankr. W.D. Wash. Case No. 07-13792
Chapter 11 Petition filed August 14, 2007
See http://bankrupt.com/misc/wawb07-13792.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, John Paul C. Canonigo, Sheena Jusay, and
Peter A. Chapman, Editors.
Copyright 2007. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $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.
*** End of Transmission ***