/raid1/www/Hosts/bankrupt/TCR_Public/071009.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, October 9, 2007, Vol. 11, No. 239
Headlines
AEGIS ASSET: Fitch Cuts Rating on $8.8 Mil. Class N2 Notes to B
AFFINIA GROUP: Closes Indiana Manufacturing & Packaging Assets
AIRBORNE HEALTH: Moody's Holds B2 Corporate Family Rating
AMERICAN HOME: Wants Sale Protocol on Construction Loan Biz OK'd
AMERICAN HOME: JPMorgan Asks Add'l. Protections on Loan Biz Sale
AMERIGROUP CORP: Earns $32.8 Million in Quarter Ended June 30
ARVINMERITOR INC: Negative Cash Flow Cues Fitch to Cut Ratings
ASARCO LLC: Wants Exclusive Plan-Filing Period Extended to Feb. 11
BAUSCH & LOMB: WP Prism Deal Cues Moody's B2 Rating
BEAR STEARNS: Court Directs Liquidators to Make $8 Mil. Deposit
BEAR STEARNS: Federal Prosecutors Conduct Probe on Funds' Collapse
CARBIZ INC: To Fund Calcars Acquisition With New $30 Mil. Facility
CARBIZ INC: Expects Tenfold Revenues with Calcars Inc.'s Buyout
CATHOLIC CHURCH: Court Closes Portland's Chapter 11 Case
CATHOLIC CHURCH: Davenport Wants M. Murphy as Unknown Claims Rep.
CATHOLIC CHURCH: San Diego Dismissal Plea Hearing Set on Oct. 25
CHAPARRAL STEEL: S&P Withdraws Ratings After Deal Completion
CHARLES MCSWAIN: Voluntary Chapter 11 Case Summary
CHRYSLER LLC: Has Until Tomorrow to Close Negotiations with UAW
COLEMAN CABLE: Earns $4.1 Million in Second Quarter Ended June 30
CONSOL ENERGY: Closes Tri-River Fleeting & Tri-River Marine Buyout
CORD BLOOD: June 30 Balance Sheet Upside-Down by $4.4 Million
CPI INT'L: Earns $8.1 Million in Third Quarter Ended June 29
CREDIT SUISSE: Fitch Affirms Low-B Ratings on Three Cert. Classes
DANNY ZECK: Voluntary Chapter 11 Case Summary
DELPHI CORP: Disclosure Statement Hearing Moved to October 25
DELPHI CORP: Initiates 707 Adversary Cases Under Seal
DELTA AIR: Court Issues Final Decree Closing 17 Chapter 11 Cases
DLJ Commercial: Fitch Holds CCC Rating on Class B-8 Certs.
DURA AUTOMOTIVE: Plan Confirmation Hearing Set for November 26
EL TORO: Ninth Circuit Says Saddleback's Claim Shouldn't Be Capped
EMPIRE BEEF: Taps Triton Capital Partners as Investment Banker
ENERGY PARTNERS: Bids $19.2MM for Central Gulf of Mexico Leases
ENVIRONMENTAL ENERGY: Posts $603,205 Net Loss in Second Quarter
FOXTONS NORTH AMERICA: Files for Bankruptcy in New Jersey
FOXTONS NORTH AMERICA: Case Summary & 40 Largest Creditors
FIRST FRANKLIN: Fitch Takes Rating Actions on 10 Note Classes
FIRST FRANKLIN: Fitch Takes Rating Actions on Six Note Classes
GLOBAL CASH: Improved Financial Cues S&P to Lift Rating to BB-
GO BONDS: S&P Revises Outlook to Stable from Negative
GP INVESTMENTS: Fitch Rates Senior Perpetual Notes at B
GREENPOINT NET: Fitch Junks Rating on $5.9 Mil. Class Notes
GREENWICH CAPITAL: Fitch Assesses 14 Soundview Note Classes
HUDBAY MINERALS: Moody's Withdraws B1 Corporate Family Rating
INT'L PAPER: Completes $620MM Joint Venture with Ilim Holding
INTERNATIONAL RECTIFIER: Alex Lidow Resigns as CEO & Director
INTERNATIONAL RECTIFIER: Discloses Key Internal Initiatives
INTERTAPE POLYMER: Raises $62.9 Mil. from Common Shares Offering
J.B. POINDEXTER: Moody's Holds Corporate Family Rating at B2
J&R'S FOOD: Case Summary & 16 Largest Unsecured Creditors
JOHNSONDIVERSEY INC: Fitch Affirms B- Issuer Default Rating
KELLWOOD CO: Poor Credit Metrics Cue Moody's to Cut Ratings
KW EXCAVATION: Case Summary & 20 Largest Unsecured Creditors
LAWRENCE UTILITIES: Court Dismisses Chapter 11 Case
MACO STEEL: Case Summary & 19 Largest Unsecured Creditors
MAGSTAR TECH: Committee Grants 1-for-2,000 Reverse Share Split
MCKESSON CORP: Oncology Deal Cues Moody's to Hold Ratings
MERIT SECURITIES: Fitch Holds "C" Rating on Class B-1 Certs.
MGM MIRAGE: Dubai World Tender Offer for MGM Shares Expires
MIRANT CORP: District Court Affirms Ruling on Wilson's Fees
MIRANT CORP: Mirant Lovett Emerges from Bankruptcy Protection
MORGAN STANLEY: Fitch Holds Low-B Ratings on Six Cert. Classes
MOSAIC CO: Strong Cash Flow Cues Moody's to Lift Ratings
MOVIE GALLERY: Prepackaged Chapter 11 Plan Gets Creditors' Okay
MYLAN LABS: Acquires Generics Business of Merck KGaA
NASH FINCH: Court Grants TRO Enjoining Senior Noteholders
NEW CENTURY: Asks Court Nod to Include NCWC in O'Melveny Retention
NEW CENTURY: Court Approves Irell & Manella as Special Counsel
NEW CENTURY: Examiner Asks Court's OK to Subpoena Officers
NEXIA HOLDINGS: Settles Debenture Claims with 200,000 Shares
OFFICEMAX INC: Moody's Holds Ba2 Corporate Family Rating
POLYONE CORP: Will Pay $15.2 Mil. Remediation Charge in 3rd Qtr.
PORTELLA GROUP: Voluntary Chapter 11 Case Summary
QMED INC: Posts $9.2 Million Net Loss in Quarter Ended Aug. 31
REFCO INC: 2nd Circuit Junks Appeal on Sphinx-Refco Creditors Deal
ROBERT LOTT: Case Summary & 18 Largest Unsecured Creditors
SAMSONITE CORP: Pending CVC Deal Prompts S&P to Retain Neg. Watch
SERVICE FIRST LOGISTICS: Case Summary & Eight Largest Creditors
SHARP (NIM): Fitch Takes Rating Actions on Six Note Classes
SOVEREIGN BANCORP: Says 3rd Qtr. Results to be Lower than Expected
STELLAR FUNDING: S&P Holds Junk Rating and Removes Pos. Watch
SUNCHASE CAPITAL: Files Schedule of Assets and Liabilities
SUNCHASE CAPITAL: Taps Saul Ewing as Bankruptcy Counsel
SUNCHASE CAPITAL: Section 341(a) Meeting Scheduled on October 17
SYLVEST FARMS: Thomas Corbett Wants Chapter 11 Case Converted
TOWN SPORTS: CFO Robert Giardina to Leave Post this Month
TSG INC: Judge Cornish Approves Amended Disclosure Statement
TSG INC: Plan Confirmation Hearing Scheduled on November 14
TXU CORP: Gets Required Consents for $2.3 Bil. Debt Securities
TXU CORP: Targets October 10 Closing of Merger with KKR Unit
TXU CORP: Unit Inks Deal to Resolve Issues on TEFMSC Merger
VINCENT KRALYEVICH: Case Summary & 7 Largest Unsecured Creditors
VONAGE HOLDINGs: To Pay Sprint $80 Million as Patent Settlement
WEIGHT WATCHERS: June 30 Balance Sheet Upside-Down by $991,266
* Beard Audio Presents Three Bankruptcy-Related Oct. Conferences
* Large Companies with Insolvent Balance Sheets
*********
AEGIS ASSET: Fitch Cuts Rating on $8.8 Mil. Class N2 Notes to B
---------------------------------------------------------------
Fitch Ratings took these rating actions on Aegis Asset Backed
Securities Trust Net Interest Margin notes:
Aegis Asset Backed Securities Trust NIM 2005-3 Trust:
-- $1.3 million Class N1 downgraded to 'BBB-' from 'A-' ,
and placed on Rating Watch Negative;
-- $8.8 million Class N2 downgraded to 'B' from 'BB'.
Underlying Transaction: Aegis Asset Backed Securities
Trust 2005-3
The rating actions reflect actual pay-down performance of the NIM
securities to date compared to initial projections, as well as,
changes that Fitch previously made to its subprime loss
forecasting assumptions for the underlying transactions. The
updated assumptions better capture the deteriorating performance
of pools from 2006 and late 2005 with regard to continued poor
loan performance and home price weakness.
-- 'U.S. Subprime RMBS/HEL Upgrade/Downgrade Criteria'
(June 12, 2007);
-- 'Downgrade Criteria for Recent Vintage U.S. Subprime
RMBS' (Aug. 8, 2007)
-- 'U.S. Rating Criteria for Net Interest Margin
Securitizations: Updated' (Feb. 6, 2007)
AFFINIA GROUP: Closes Indiana Manufacturing & Packaging Assets
--------------------------------------------------------------
Affinia Group Inc. is closing its chassis products manufacturing
and packaging facility in Mishawaka, Indiana. Production and
packaging will be consolidated into its Oklahoma
City facility.
The distribution of the product will continue out of the
McHenry, Illinois master distribution center. The transition will
begin immediately and is expected to be complete by mid-2008.
"The consolidation of the Mishawaka chassis manufacturing and
packaging into Oklahoma City is another important step in
Affinia's transformation plan,” John R. Washbish, president of
Affinia's Under Vehicle Group, said. “The competitive landscape
is constantly changing, and like many companies we continue to
evaluate every aspect of our business to adapt to current market
conditions.”
"This closure in no way reflects on the talents or dedication of
the 192 hard-working people of Mishawaka,” Mr. Washbish said. “We
deeply regret the impact on the lives of our employees and their
families. We will work closely with them and provide all the help
we can, including the option of transfers to Oklahoma City, as
well as local placement and career assistance wherever possible."
About Affinia Group
Headquartered in Ann Arbor, Michigan, Affinia Group Inc. --
http://www.affiniagroup.com/-- designs, manufactures and
distributes aftermarket components for passenger cars, sport
utility vehicles, light, medium and heavy trucks and off-highway
vehicles. The company's product range addresses filtration, brake
and chassis markets in North and South America, Europe and Asia.
* * *
In January 2007, Moody's Investors Service placed Affinia Group
Inc.'s long term corporate family and probability of default
ratings at 'B2', which still hold to date. The outlook is stable.
Standard & Poor's placed the company's foreign and local issuer
credit ratings at 'B' in September 2005, which still hold to date.
AIRBORNE HEALTH: Moody's Holds B2 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service affirmed the B2 corporate family rating
of Airborne Health Inc.
Consideration of the ratings was prompted by the need to amend the
bank loan agreement, because credit metrics have not improved at
the pace mandated by the agreement. The Oct. 3, 2007 amendment
loosened financial covenants and raised pricing. The need for the
amendment has caused delays in finalizing the audit report for the
April 30, 2007 fiscal year. Affirmation of the ratings reflects
that credit metrics are still strong for the assigned ratings.
Credit metrics have never been the most important factor in
Moody's rating for Airborne; instead, we focus on the rapid
acceptance of the company's sole product, the company's small
size, and its limited history. The rating outlook is stable.
Ratings affirmed are:
-- $20 million 1st-Lien secured revolving credit facility at
B2 (LGD 3, 35%);
-- $160 million 1st-Lien secured term loan at B2 (LGD 3,
35%);
-- Corporate family rating at B2;
-- Probability of Default rating at B3.
The corporate family rating of B2 reflects the emphasis that
Moody's places on key considerations such as the company's small
scale, undiversified product offering, and bargaining power
relative to much larger retail customers. However, partially
offsetting these credit risks are elements such as solid credit
metrics for leverage, interest coverage, funds from operations to
debt, and return on assets as well as recent operating performance
with steady revenue growth and high margins.
Airborne Health, Inc, headquartered in Bonita Springs, Florida,
markets the "Airborne" effervescent health formula that is
designed to strengthen the immune system. The company's products
are distributed nationwide through about 70,000 supermarkets,
drugstores, discounters, club stores, and other retail locations.
Airborne generated net revenue of $147 million for the twelve
months ending July 31, 2007.
AMERICAN HOME: Wants Sale Protocol on Construction Loan Biz OK'd
-----------------------------------------------------------------
American Home Mortgage Investment Corp. and its debtor-affiliates
ask the U.S. Bankruptcy Court for the District of Delaware to
approve
their proposed procedures for the sale of their construction loans
and related servicing rights, and construction loan platform
related
to their construction loan business.
The Debtors also ask the Court to authorize the distribution of
the
sale proceeds, including the distribution of proceeds of:
* certain construction loans to ABN AMRO Bank N.V.; and
* administrative agent construction loans to Bank of
America, N.A., as administrative agent to the Second
Amended and Restated Credit Agreement dated August 10,
2006, pursuant to the terms of the Court's order
authorizing the Debtors to use the prepetition lenders'
cash collateral.
The Debtors explain that they intend to sell each of the Assets
through separate purchase agreements with different purchasers,
provided that the Debtors reserve the right to seek approval of a
combination bid, if there is a bid for Assets combination, to
obtain the highest value for the Assets.
Construction Loan Business
James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor
LLP, in Wilmington, Delaware, relates that in 2004, the Debtors
assembled a team of experienced construction lending and mortgage
banking professionals to establish a residential construction to
permanent mortgage business. The business is a full-service
construction and renovation lending operation, beginning from the
point of closing on a construction loan through draw
administration and to final permanent mortgage loan. The assets
related to the business include 575 construction loans with about
$341,000,000 in committed balances and $217,000,000 in
outstanding balances.
The Debtors' construction loan portfolios and agreements are with
ABN AMRO Bank N.V., JPMorgan Chase, Bank of America N.A., Credit
Suisse First Boston, Lehman Brothers, Inc., and American Home
Mortgage Capital. Payments during the term of the construction
loans are interest only based on the amount actually disbursed to
the borrower.
In light of their liquidity crises and subsequent shutdown of
their loan origination business, the Debtors propose to sell,
assign and transfer the Assets, in whole or in part through
auctions, to successful bidders, free and clear of all liens and
encumbrances, other than those expressly assumed. All Liens will
attach to proceeds of the Sale with the same validity, priority
and effect as the Liens had on the Assets immediately prior to
the sale.
Stipulation with ABN AMRO
The Debtors' largest construction loan portfolio is with ABN
AMRO, with which the Debtors recently entered into a stipulation
with, relating to the marketing and sale of certain construction
loans and servicing rights. They have agreed, among other
things, to the treatment to be accorded to the proceeds of the
sale of the ABN AMRO Construction Loan Portfolio and to transfer
to a third party the ABN Construction Loans, free and clear of
any liens, claims or encumbrances.
Sale Procedures
The Debtors contemplate an auction process, pursuant to which
bids for each of the Assets will be subject to higher or better
offers, Mr. Patton says. The Debtors will conduct separate
auctions for each of the Construction Loans Portfolios, and a
separate auction for the Construction Loan Platform if more than
one qualified bid is received for any Asset. Only qualified
bidders are allowed at the auctions, and they will be permitted
to increase their bids.
The Debtors will afford each qualified bidder reasonable due
diligence information, however, they will not be obligated to
furnish any information relating to the Assets, among others.
The deadline for submitting bids will be October 24, 2007 at 4:00
p.m. A bid must, among other things, (i) be on terms that are
not materially more burdensome or conditional than the terms of
the draft purchase agreement furnished by the Debtors, (ii) not
be conditioned on obtaining financing or the outcome of any due
diligence by the bidder, and (iii) not request or entitle the
bidder to any break-up fee, expense reimbursement or other
payment.
Auction and Sale Hearing
Subject to the Court's calendar, the Debtors seek to have a
hearing to consider the sale of the assets during the week of
November 5, 2007.
The Debtors request that objections to the proposed sales be due
October 26, at 4:00 p.m. Additional objections related to the
identity of a Successful Bidder will be permitted following
identification of the party.
Assumption, Assignment and Cure Payments
In connection with the Construction Loan Platform's sale, the
Debtors may sell, assume, and assign certain contracts related to
the Construction Loan Business, Mr. Patton notes. The Debtors
propose to serve on all non-debtor parties to the assumed
contracts a cure notice, including a calculation of the proposed
cure payment. Objections to the computed cure payments must be
filed by 4:00 p.m. on October 26.
Mr. Patton says that the Debtors will attempt to reconcile any
differences in the proposed cure payment believed by the non-
debtor party to exist. However, if the Debtors and the non-
debtor party cannot consensually resolve a cure payment
objection, the objection will be heard at the sale hearing. The
Debtors may also seek authority to assume and assign the
underlying contract at the sale hearing and continue adjudication
on the related cure payment objection to a subsequent hearing.
Moreover, to permit the assumed contracts' parties an opportunity
to object to the proposed purchaser's ability to provide adequate
assurance of future performance under the assumed contracts, the
Debtors propose that the adequate assurance objections must be
filed on a deadline as approved by the Court.
About American Home
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 Aug. 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 represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors has selected Hahn & Hessen LLP as
its counsel. 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. The Debtors' exclusive period to
file a plan expires on Dec. 4, 2007. (American Home Bankruptcy
News, Issue No. 9, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN HOME: JPMorgan Asks Add'l. Protections on Loan Biz Sale
----------------------------------------------------------------
American Home Mortgage Investment Corp. and American Home
Mortgage Corp. entered into a prepetition $200,000,000 senior
secured revolving warehouse facility with JPMorgan Chase Bank,
National Association. JPMorgan was granted a first-priority lien
and security interest in pledged residential loans and other loan
documentation, and all proceeds or rights related to the loans.
JPMorgan and certain of its affiliates support in principle the
Debtors' efforts to sell their construction loans and related
servicing rights, and construction loan platform related to
their construction loan business. JPMorgan, however, requires
additional protections and clarifications to the Debtors'
proposed asset sale procedures and the auction, before they will
consent to its inclusion to the sale process.
Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington,
Delaware, asserts that, specifically, the Debtors must:
-- grant the JPMorgan Entities the right to participate in the
auction to the same extent and on the same basis as the
other secured parties, like Bank of America, N.A.;
-- recognize JPMorgan's right to bid, including credit bid, at
the auction;
-- clarify the auction's bid requirements and other
procedures; and
-- agree to distribute directly to the JPMorgan Entities the
proceeds generated from the sale of the JPMorgan Loans.
The JPMorgan Entities also want the Debtors to provide non-debtor
parties to any assumed contracts an opportunity to generally
object to the assumption of the contracts. They elaborate that
the Debtors should amend the Sale Procedures to clarify that the
October 26 deadline for cure and assignment objection also
constitutes the deadline for non-debtor parties to file general
objections to the proposed assumption of the assumed contracts.
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 Aug. 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 represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors has selected Hahn & Hessen LLP as
its counsel. 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. The Debtors' exclusive period to
file a plan expires on Dec. 4, 2007. (American Home Bankruptcy
News, Issue No. 9, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMERIGROUP CORP: Earns $32.8 Million in Quarter Ended June 30
-------------------------------------------------------------
AMERIGROUP Corporation reported that its net income for the second
quarter of 2007 was $32.8 million versus $15.3 million for the
second quarter of 2006, a 115% increase compared to the prior year
and a 54% increase sequentially.
Total revenues for the second quarter of 2007 increased 56.2%
percent to $1.00 billion compared with $642.4 million in the
second quarter of 2006, resulting from 55.7% organic premium
revenue growth. Sequentially, total revenues increased 20.6%
compared with the first quarter of 2007.
Second quarter investment income and other revenue was
$17.8 million compared with $9.1 million in the second quarter of
2006. Sequentially, investment income and other revenue increased
$5.1 million, or 40.1%, from the first quarter of 2007. This
increase reflects investment income earned on funds held as
collateral for the letter of credit, as well as increased income
on the core investment portfolio.
"AMERIGROUP performed effectively and produced solid results
during the second quarter," said Jeffrey L. McWaters, AMERIGROUP
chairman and chief executive officer. "We significantly increased
the number of people we serve, growing across a number of our
states and programs. Our newest health plan in Tennessee is off
to a good start and results in our Georgia health plan are
encouraging. We believe our growth continues to be superb with
quarterly revenue topping $1.00 billion and total assets reaching
$1.90 billion, of which $1.35 billion is cash and investments."
Cash Flow
Cash and investments at June 30, 2007, totaled $1.35 billion.
Unregulated cash and investments were $497.3 million of which
$146.00 million was unrestricted.
Medical claims payable totaled $467.2 million, representing 52
days of claims expense and compares to 51 days in the previous
quarter.
Cash flow provided by operations totaled $140.9 million for the
three months ended June 30, 2007, and $170.6 million for the six
months compared to $121.3 million for the same period in the prior
year. Cash flow in the quarter was positively impacted by strong
net income, growth in claims payable and early receipt of premiums
in several states.
Balance Sheet
At June 30, 2007, the company's consolidated balance sheet showed
$1.90 billion in total assets, $1.07 billion in total liabilities,
and $833.3 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?241a
About Amerigroup Corporation
Headquartered in Virginia Beach, Virginia, Amerigroup Corporation
(NYSE: AGP) -- http://www.amerigroup.com/-- improves healthcare
access and quality for low-income Americans by developing
innovative managed health services for the public sector. Through
its wholly owned subsidiaries, Amerigroup serves more than 1.3
million people in the District of Columbia, Florida, Georgia,
Maryland, New Jersey, New York, Ohio, Tennessee, Texas and
Virginia.
* * *
AMERIGROUP Corp. still carries Moody's Investors Service' Ba3
senior debt rating, as well as Standard & Poor's Ratings Services'
BB counterparty credit rating. The outlook is stable.
ARVINMERITOR INC: Negative Cash Flow Cues Fitch to Cut Ratings
--------------------------------------------------------------
Fitch Ratings downgraded its ratings on ArvinMeritor as:
-- Issuer Default Rating to 'BB-' from 'BB';
-- Senior secured revolver to 'BB' from 'BB+'
-- Senior unsecured notes to 'B+' from 'BB-'
The rating outlook is negative. Including the undrawn portion of
the secured revolver, about $2.2 billion of debt is affected by
these actions.
Fitch's downgrade reflects continuing and expanded negative cash
flow, and the associated balance sheet erosion. Fitch expects
negative free cash flow to persist through at least the first half
of ARM's fiscal 2008, and the timing and extent of a reversion to
positive free cash flow remains uncertain. Improvement in
operating performance will depend on the pace and strength of a
rebound in the truck market, as well as the success of
restructuring efforts in the low-margin light vehicle systems
segment.
For the last twelve months ended June 30, ARM's free cash flow
(excluding receivable securitizations and factoring from operating
cash flow) was negative $334 million, including a non-recurring
working capital adjustment associated with a divestiture and a
voluntary pension contribution. Negative cash flow was financed
in part by proceeds from asset sales.
The company also increased utilization under an accounts
receivable (A/R) Expectations of continued weakness in operating
performance caused ARM to obtain an amendment to its fixed charge
coverage ratio for the fiscal fourth quarter, continuing through
fiscal 2008.
The ability to return to positive free cash flow in 2008 remains
uncertain and any improvement in the balance sheet is expected to
be limited. Further pressuring operating cash flow will be a
continued high level of restructuring outflows and higher capital
expenditures. LTM capital expenditures were $118 million,
representing 1.5% of sales. ARM's capital investment, as a
percent of revenues is one of the lowest among the automotive
suppliers covered by Fitch.
Given the company's level of capital investment relative to its
peers, Fitch is concerned additional expenditures may be needed,
potentially constraining the company's ability to generate Free
Cash Flow. Incremental capital investment is likely needed to
improve CVS Europe operating efficiency, expand LVS overseas
manufacturing, fund incremental restructuring efforts, and to
invest in supplier parks required at automakers' facilities as
well as a reduction in new vehicle life cycles. Financial support
to stressed Tier II and Tier III suppliers can also require
capital investment.
Weakness in the housing market could extend the current cyclical
trough and mute the expected upswing in Class 8 truck demand ahead
of more stringent 2010 diesel emission regulations. In addition,
inefficiencies in CVS Europe operations have arisen due to higher
than expected demand. ARM was unable to capitalize on higher
volumes and suffered higher costs for premium freight, higher cost
sources of supply and customer late penalties. Fitch expects
inefficiencies to continue well into fiscal 2008 and ARM is likely
to increase investment to improve operating flexibility.
ARM has demonstrated improvement in LVS profitability, although
margins remain modest. Any improvement will be derived largely
from restructuring programs, as margins remain under pressure from
significant exposure to the Detroit Three, annual contractual
pricedowns, higher raw material costs and costs related to a
financially strained automotive supply base.
Cash flow has been impacted by a working capital outflow of
included in fiscal year-to-date discontinued operations cash flow
of negative $118 million. The company expects to recoup about
$40 million in the first quarter of fiscal 2008 from cash purchase
price adjustments. In addition, ARM made substantial pension
contributions during fiscal 2007, including a significant
discretionary payment to its UK plan. With the improved funded
status, pension contributions will be reduced going forward.
ARM maintains adequate liquidity and has no major debt maturities
until after 2010. Fitch calculates, at the end of the fiscal
third quarter, liquidity was $1.3 billion, including $870 million
available under a revolving credit facility, $178 million in
available securitization and $284 million in cash and cash
equivalents. However, coverage and leverage ratios have eroded.
For the LTM as of June 30, Operating EBITDA to gross interest
expense was 2.8x versus 2.9x at the end of fiscal 2006. Over the
same time period, total debt to operating EBITDA was 3.8x compared
with 3.3x, while total adjusted debt to operating EBITDAR climbed
to 4.9x from 4x at fiscal year end, reflecting higher accounts
receivable financing.
ASARCO LLC: Wants Exclusive Plan-Filing Period Extended to Feb. 11
------------------------------------------------------------------
ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court
for the Southern District of Texas to further extend:
(i) the exclusive period in which they may file a Chapter 11
plan of reorganization until Feb. 11, 2008; and
(ii) the exclusive period for them to solicit acceptances of
that plan until April 14, 2008.
James R. Prince, Esq., at Baker Botts, L.L.P., in Dallas, Texas,
asserts that an extension of the exclusive periods will provide
the Debtors with necessary time to quantify, either by estimation
or negotiation, contingent claims and evaluate the best
alternative for the completion of the plan of reorganization exit
process.
Mr. Prince adds that the convergence of the Debtors' contingent
liability and asset determinations will allow the Debtors to
present a confirmable Chapter 11 plan for the benefit of all
creditors and stakeholders in a timely manner.
During the extension period, Mr. Prince says, the Debtors will
continue their efforts to resolve various cases and controversies
with their various creditor constituencies, and to work with
deliberate speed in resolving issues necessary to formulate a
confirmable Chapter 11 plan in an orderly manner.
Mr. Prince informs the Court that since the July 2007 hearing on
the Debtors' seventh request to extend their exclusive periods,
the Debtors have entered Phase Three of the Exit Process Timeline
and continue to make steady and substantial progress into Phase
Four.
ASARCO LLC has received indicative proposals from nine Potential
Plan Sponsors, including from the company's largest shareholder,
Harbinger Capital Partners Master Fund, Ltd., and the company's
parent Grupo Mexico S.A. de C.V.; and has had discussions
regarding the proposals with case fiduciaries and key
constituencies, Mr. Prince adds.
ASARCO, working with Lehman Brothers, Inc., has begun the process
of reviewing and evaluating the Plan Sponsor Proposals. Other
key constituencies and stakeholders are also involved in the
proposal review process. A number of Potential Plan Sponsors who
have presented proposals that are deemed attractive by ASARCO and
its constituencies are being invited to conduct due diligence on
the mines and facilities in mid-to-late October, according to Mr.
Prince. Once a plan sponsor is identified, the Company will
negotiate a final plan sponsor agreement and file a motion with
the Court. ASARCO expects it will be in a position to file a
plan of reorganization in the early part of 2008 if a suitable
plan sponsor is identified.
Mr. Prince also relates that the Debtors have continued to
prosecute the estimation proceedings with deliberate speed. The
Court has appointed the Honorable Elizabeth W. Magner from the
U.S. Bankruptcy Court for Eastern Louisiana to mediate the
asbestos liabilities dispute. ASARCO expects the mediation to
begin in late October and be completed by the end of November
2007.
In addition, Mr. Prince tells the Court that ASARCO has made
substantial progress in negotiating settlements to environmental
claims. Settlements have been reached with respect to 17 sites,
estimations have concluded for two sites, and mediations and
negotiations continue for another four sites. ASARCO expects the
environmental claims estimation process to be completed in
January or February 2008.
Moreover, ASARCO is preparing to move forward with the estimation
proceedings of toxic tort liability, which is scheduled for the
third week of January 2008. Approximately 850 toxic tort related
claims have been filed, aggregating approximately $1,470,000,000.
At present, Mr. Prince says ASARCO is resolving certain claims by
entering into agreement, drafting claim objections, exchanging
information with various claimants' counsel, and preparing for
mediation.
The Debtors also continue to pursue several major adversary
proceedings dealing with disputes regarding the improvident and
fraudulent sale of corporate assets before the Petition Date.
For the reasons stated, Mr. Prince asserts that extension of the
Debtors' exclusive periods is warranted.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The
Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr.
S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L.
Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P.,
and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and
Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C.,
represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
And investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for chapter 11
protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to
06-20776).
The Debtors' exclusive period to file a plan expires on Nov. 12,
2007. (ASARCO Bankruptcy News, Issue No. 56; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
BAUSCH & LOMB: WP Prism Deal Cues Moody's B2 Rating
---------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating to
WP Prism LLC. It is Moody's understanding that at the close of
the transaction, WP Prism LLC will merge into Bausch & Lomb
Incorporated, which will be the surviving entity.
Concurrently, Moody's also assigned ratings to the proposed senior
secured credit facilities, proposed senior unsecured notes,
proposed senior unsecured PIK toggle notes, and proposed senior
subordinated notes. Additionally, Moody's assigned a B2
Probability of Default Rating and an SGL-2 Speculative Grade
Liquidity Rating. The outlook for the ratings is stable.
Proceeds from the proposed credit facilities, proposed senior
unsecured notes, proposed senior unsecured PIK toggle notes, and
proposed senior subordinated notes, along with cash equity from
Warburg Pincus and some BOL existing cash, will be used to
complete the acquisition of BOL by WP for a total consideration of
$4.7 billion including about $785 million of existing debt.
Moody's continued the review for possible downgrade of Bausch &
Lomb Incorporated's existing ratings with the expectation that
they will be withdrawn at the close of the transaction if
substantially all existing debt is paid.
The B2 Corporate Family Rating acknowledges the pro forma high
leverage, pro forma negative free cash flow for the ratings
horizon, litigation risk stemming from tax and product recall
matters, and the highly competitive industry. Pro forma for the
Warburg Pincus transaction adjusted debt to EBITDA will be about
7 times for the last twelve months ended June 30, 2007.
Sidney Matti, analyst, stated that, "Moody's does not expect BOL's
leverage to decline materially over the intermediate term as the
company continues to embark on smaller acquisitions as well as
incur costs associated with both tax and product liability
litigation." Additionally, Moody's anticipates that free cash
flow to adjusted debt will remain negative over the ratings
horizon because of increased interest costs and weaker operating
performance stemming from the recall of the MoistureLoc product in
2006.
The B2 Corporate Family Rating also considers BOL's strong brand
equity, geographic and product diversity and its relative size
within the eye care industry. Moody's notes that BOL has a
significant presence outside the U.S. with over 55% of the
company's revenues being generated in foreign jurisdictions.
Additionally, the company has an extensive product portfolio with
a presence in the major segments of the eye care industry. The
geographic and product portfolio provides the company with
diversity to its revenues and operating performance. At
$2.4 billion in revenues for the last twelve months ended
June 30, 2007, the company is one of the largest players within
the eye care industry.
The stable ratings outlook anticipates the company will continue
to experience improving operating performance driven by the
introduction of new products and growth within the eye care
segment driven by favorable demographic trends as well as the
adoption by end users of newer technology. Additionally, the
rating outlook incorporates Moody's expectation that the company
will continue its acquisition strategy over the near term.
However, Moody's anticipates that the company will undertake
smaller acquisitions over the ratings horizon.
The SGL-2 speculative grade liquidity rating reflects a good
liquidity profile comprised of Moody's expectation for stable cash
flow generation coupled with cash on hand, availability under the
$500 million proposed senior secured revolving credit facility and
the covenant-lite structure of the senior secured credit
facilities.
Ratings are subject to review of final documentation.
These ratings were assigned to Bausch & Lomb Incorporated:
-- B2 Corporate Family Rating;
-- B2 Probability of Default Rating;
-- SGL-2 Speculative Grade Liquidity Rating;
-- B1 rating (LGD3/35%) on a $500 million Senior Secured
Revolver;
-- B1 rating (LGD3/35%) on a $1,100 million U.S. Senior
Secured Term Loan;
-- B1 rating (LGD3/35%) on a $300 million Delayed Draw Term
Loan;
-- Caa1 rating (LGD5/86%) on $400 million Senior Unsecured
Notes;
-- Caa1 rating (LGD5/86%) on $175 million Senior Unsecured
PIK Toggle Option Notes; and
-- Caa1 rating (LGD6/95%) on $175 million Senior
Subordinated Notes.
These rating was assigned to Bausch & Lomb B.V.:
-- B1 rating (LGD3/35%) on a $575 million European Senior
Secured Term Loan.
These Bausch & Lomb Incorporated ratings remain on review for
possible downgrade and will be withdrawn at the close of the
transaction:
-- Ba1 Corporate Family Rating;
-- Ba1 Probability of Default Rating;
-- Ba1 rating on $133.2 million Senior Unsecured Notes due
2007;
-- Ba1 rating on $50 million Senior Unsecured Notes due
2008;
-- Ba1 rating on $160 million Senior Unsecured Convertible
Notes due 2023;
-- Ba1 rating on $0.4 million Senior Unsecured Debentures
due 2026; and
-- Ba1 rating on $66.4 million Senior Unsecured Debentures
due 2028
Headquartered in Rochester, New York, Bausch & Lomb Incorporated
is a leading worldwide provider of eye care products, including
contact lens, lens care, ophthalmic pharmaceuticals, and surgical
products. BOL is being acquired by Warburg Pincus, a private
equity firm. For the twelve months ended June 30, 2007, the
company reported $2.4 billion in revenues.
BEAR STEARNS: Court Directs Liquidators to Make $8 Mil. Deposit
---------------------------------------------------------------
Judge Burton Lifland of the U.S. Bankruptcy Court for the
Southern District of New York issued on September 26, 2007, a
written order staying enforcement of an earlier decision denying
the requests of Bear Stearns High-Grade Structured Credit
Strategies Master Fund, Ltd., and Bear Stearns High-Grade
Structured Credit Strategies Enhanced Leverage Master Fund, Ltd.,
for protection under Chapter 15 of the Bankruptcy Code, pending
the Funds' appeal from that ruling.
For the stay to take effect, Judge Lifland directed Simon Lovell
Clayton Whicker and Kristen Beighton, the Bear Stearns Funds'
official liquidators, to deposit, with the Court's registry or in
separate bank accounts for each of the Debtors, $4,000,000 into
each Foreign Debtor's depository.
After collection of any proceeds of currently-uncollected
receivables and the liquidation of other assets located in the
United States, Judge Lifland said those U.S. Proceeds will be
deposited into each Funds' Depositories; provided that any
Proceeds (i) from receivables or other assets located outside the
United States or (ii) by operation of the cash management system
of any creditor or financial institution that have only
transitory contact with accounts located in the United States as
an administrative matter or through a clearing process, will not
be required to be deposited in the Depositories.
The Foreign Representatives are not prevented from acting in
their official capacity to pursue and liquidate assets located in
the United States or elsewhere. The Foreign Representatives may
seek modification of the Stay Order, or ask to remove or withdraw
the U.S. Proceeds deposited, or required to be deposited, in the
Depositories.
In the event that Judge Lifland's Decision denying the Funds'
Chapter 15 request is affirmed on appeal, the Foreign
Representatives may remove or withdraw any funds held in the
Depositories.
In the event of any conflict between the terms of the Stay Order
and any order or directive issued by the Grand Court of the
Cayman Islands, the Foreign Representatives will notify the
Bankruptcy Court of any conflict and thereafter submit a proposal
for the coordination of the Bankruptcy Court and the Grand Cayman
Court in resolving any conflict.
Judge Lifland said that the Stay applies in all respects to any
funds deposited in the Depositories.
Grand Cayman, Cayman Islands-based Bear Stearns High-Grade
Structured Credit Strategies Enhanced Leverage Master Fund Ltd.
and Bear Stearns High-Grade Structured Credit Strategies Master
Fund Ltd. are open-ended investment companies, which sought high
income and capital appreciation relative to the London Interbank
Offered Rate, and designed for long-term investors.
On July 30, 2007, the Funds filed winding up petitions under the
Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell
Clayton Whicker and Kristen Beighton at KPMG were appointed
joint provisional liquidators. The joint liquidators filed for
Chapter 15 petitions before the U.S. Bankruptcy Court for the
Southern District of New York the next day.
Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F.
Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
liquidators in the United States. The Funds' assets and debts are
estimated to be more than $100,000,000 each. (Bear Stearns Funds
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).
BEAR STEARNS: Federal Prosecutors Conduct Probe on Funds' Collapse
------------------------------------------------------------------
The U.S. Attorney's office in Brooklyn, New York, has launched a
criminal investigation into Bear Stearns High-Grade Structured
Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade
Structured Credit Strategies Enhanced Leverage Master Fund, Ltd.,
The Wall Street Journal said, citing people familiar with the
matter.
The U.S. Attorney's office, according to the Journal, asked for
information related to the Funds, whose collapse cost
approximately $1,600,000,000. The Journal said the investigation
is still in its early stages and no subpoenas have been issued
yet.
Bear Stearns Cos. is also already under an investigation by the
U.S. Securities and Exchange Commission, the Journal related.
Christopher Clark, Esq., at Dewey & LeBouef, LLP, a defense
attorney not involved in the case, told the Journal that criminal
probes into the trading practices of hedge funds are rare and
cases are difficult to prove.
"It's a tough case to make unless they have turned up some sort
of malfeasance," the Journal quoted Mr. Clark as saying. "The
law assumes the investors are sophisticated and understand the
risks. This was clearly a high-risk investment strategy."
Grand Cayman, Cayman Islands-based Bear Stearns High-Grade
Structured Credit Strategies Enhanced Leverage Master Fund Ltd.
and Bear Stearns High-Grade Structured Credit Strategies Master
Fund Ltd. are open-ended investment companies, which sought high
income and capital appreciation relative to the London Interbank
Offered Rate, and designed for long-term investors.
On July 30, 2007, the Funds filed winding up petitions under the
Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell
Clayton Whicker and Kristen Beighton at KPMG were appointed
joint provisional liquidators. The joint liquidators filed for
Chapter 15 petitions before the U.S. Bankruptcy Court for the
Southern District of New York the next day.
Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F.
Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
liquidators in the United States. The Funds' assets and debts are
estimated to be more than $100,000,000 each. (Bear Stearns Funds
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).
CARBIZ INC: To Fund Calcars Acquisition With New $30 Mil. Facility
------------------------------------------------------------------
CarBiz Inc. has obtained a new credit facility of $30 million in
connection with its recent acquisition of the Calcars group of
companies in the Midwest.
"This new credit facility provides CarBiz with capital to
aggressively grow our chain of 'buy-here pay-here' automotive
dealerships that is now 26 strong," Carl Ritter, chief executive
officer, said.
The credit facility includes:
-- a term loan of up to $21.925 million;
-- a revolving floor plan facility of up to $2 million; and
-- a revolving receivables loan facility of up to
$23 million.
In addition to this senior credit facility, CarBiz closed two
convertible debenture financings:
-- a $1.5-million secured convertible debenture financing
with Trafalgar Capital Specialized Investment Fund,
Luxembourg; and
-- an $800,000 unsecured convertible debenture financing
with warrants with a group of CarBiz insiders and related
parties.
Mr. Ritter said the CarBiz acquisition exemplifies a growing trend
of consolidation in the $150-billion alternative financial
services market, which includes such services as "buy-here pay-
here" auto sales, pay day loans, check cashing services, and more.
Other examples of recent consolidations include Diamond Castle's
acquisition of CheckSmart, First Cash Financial Services'
acquiring Auto Master BHPH, and Manchester Inc.'s acquisition of
several "buy-here pay-here" chains in the Southwest.
About CarBiz Inc.
Headquartered in Sarasota, Florida, CarBiz Inc. (OTC BB: CBZFF.OB)
-- http://www.carbiz.com/-- provides software, training and
consulting solutions to the United States automotive industry.
CarBiz's suite of business solutions includes dealer software
products focused on the "buy-here pay-here", sub-prime finance and
automotive accounting markets. CarBiz also operates "buy-here
pay-here" dealerships in Florida through its CarBiz Auto Credit
division that are wholly owned or joint venture companies.
Going Concern Doubt
Christopher, Smith, Leonard, Bristow & Stanell P.A., in Sarasota,
Florida, expressed substantial doubt about Carbiz Inc.'s ability
to continue as a going concern after auditing the company's
consolidated financial statements as of the years ended Jan. 31,
2007, and 2006. The auditing firm pointed to the company's
recurring losses from operations and net capital deficiency.
At July 31, 2007, the company's balance sheet showed total assets
of $1.8 million and total liabilities of $8.2 million, resulting
to a total shareholders' deficit of $6.4 million.
CARBIZ INC: Expects Tenfold Revenues with Calcars Inc.'s Buyout
---------------------------------------------------------------
CarBiz Inc. has acquired the assets of Calcars Inc. Calcars'
consolidated revenues for 2006 were more than $36 million, which
is expected to increase CarBiz revenues by almost 10 times.
"I cannot overstate what this means for CarBiz,” Carl Ritter,
chief executive officer, said. “We made an eight-year growth leap
virtually overnight. We had initiated an aggressive growth
strategy in Florida with a goal of 15 stores by 2010, but when
this opportunity presented itself, we moved quickly to complete a
deal. Before the acquisition, the CarBiz Auto Credit Division had
established three buy-here pay-here dealerships in Florida - all
in the Tampa Bay region.”
“The acquisition of Calcars establishes CarBiz as a "super-
regional" brand in the Midwest where 26 dealerships were acquired
in seven states,” Mr. Ritter continued. “Three of the acquired
stores will be closed. The remaining 23 dealerships are located
in Illinois, Indiana, Iowa, Kentucky, Nebraska, Ohio and
Oklahoma.”
Mr. Ritter said 117 employees in the Calcars network were offered
employment with CarBiz after the acquisition. CarBiz also will
add 10 employees at its Sarasota headquarters.
Mr. Ritter said the CarBiz acquisition exemplifies a growing trend
of consolidation in the $150-billion alternative financial
services market, which includes such services as buy-here pay-here
auto sales, pay day loans, check cashing services, and more.
Other examples of recent consolidations include Diamond Castle's
acquisition of CheckSmart, First Cash Financial Services'
acquiring Auto Master BHPH, and Manchester Inc.'s acquisition of
several buy-here pay-here chains in the Southwest.
"Industry sources estimate that the average sub-sector of the
alternative market is more than 40% consolidated already," Mr.
Ritter said. "The single exception is the buy-here pay-here auto
sales business where only 2 percent of the market is consolidated.
Yet, this sub-sector is a significant component of the alternative
financial services market."
About CalCars
Headquartered in Rockford, Illinois, The California Cars
Initiative – http://www.CalCars.org/-- is a non-profit
technology development and advocacy startup formed by a group of
entrepreneurs, engineers, environmentalists and consumers to jump-
start the market for plug-in hybrids. CalCars has built prototype
PHEVs and is harnessing the collective vision and purchasing power
of individuals and corporate and government fleets. CalCars aims
to engage major car makers to produce plug-in versions of existing
sedans and SUVs.
About CarBiz Inc.
Headquartered in Sarasota, Florida, CarBiz Inc. (OTC BB: CBZFF.OB)
-- http://www.carbiz.com/-- provides software, training and
consulting solutions to the United States automotive industry.
CarBiz's suite of business solutions includes dealer software
products focused on the "buy-here pay-here", sub-prime finance and
automotive accounting markets. CarBiz also operates "buy-here
pay-here" dealerships in Florida through its CarBiz Auto Credit
division that are wholly owned or joint venture companies.
Going Concern Doubt
Christopher, Smith, Leonard, Bristow & Stanell P.A., in Sarasota,
Florida, expressed substantial doubt about Carbiz Inc.'s ability
to continue as a going concern after auditing the company's
consolidated financial statements as of the years ended Jan. 31,
2007, and 2006. The auditing firm pointed to the company's
recurring losses from operations and net capital deficiency.
At July 31, 2007, the company's balance sheet showed total assets
of $1.8 million and total liabilities of $8.2 million, resulting
to a total shareholders' deficit of $6.4 million.
CATHOLIC CHURCH: Court Closes Portland's Chapter 11 Case
--------------------------------------------------------
The Hon. Elizabeth Perris of the U.S. Bankruptcy Court for the
District of Oregon issued a final decree on Sept. 28, 2007,
closing the Chapter 11 case of the Archdiocese of Portland in
Oregon.
The Court retains jurisdiction over any adversary proceedings
pending at the time of closure, and over the pending objection to
Claim No. 903, Judge Perris said.
Portland's Third Amended Plan of Reorganization was confirmed by
Order entered on April 17, 2007, and became effective on April
30, according to Albert N. Kennedy, Esq., at Tonkon Torp LLP, in
Portland, Oregon.
"All claimants were paid in full, with interest on April 30," Mr.
Kennedy said.
About Archdiocese of Portland
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers. David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case. In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities.
The Court approved the Debtor's disclosure statement explaining
its Second Amended Joint Plan of Reorganization on Feb. 27, 2007.
On April 17, 2007, the Court confirmed Portland's 3rd Amended
Plan. (Catholic Church Bankruptcy News, Issue No. 104; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
CATHOLIC CHURCH: Davenport Wants M. Murphy as Unknown Claims Rep.
-----------------------------------------------------------------
The Diocese of Davenport and the Official Committee of Unsecured
Creditors continue their ongoing discussions regarding the
structure of a joint and consensual plan of reorganization,
counsel for the Diocese, Richard A. Davidson, Esq., at Lane &
Waterman LLP, in Davenport, Iowa, tells the U.S. Bankruptcy Court
for the Southern District of Iowa.
According to Mr. Davidson, one of the key elements of the plan is
the appointment of an unknown claims representative to represent
the interests of unknown claimants and minors, specifically
individuals:
a. under the age of 18 as of the Petition Date;
b. who recovered their repressed memories of sexual abuse
after the Petition Date;
c. who had not, as of the Petition Date, discovered both the
injury and the causal relationship between the injury and
the sexual abuse; and
d. whose mental illness -- including but not necessarily
limited to, depression, post-traumatic stress disorder, and
anxiety -- tolled the statute of limitations applicable
under Iowa law for bringing a claim of sexual abuse.
The Diocese believes that the claimants in the four categories
hold current claims by virtue of past acts of abuse, even though
the claims may be unknown as of the present time. Thus, the
Debtor proposes that the individual appointed be called an
"Unknown Claims Representative" and that those persons, if any,
holding the claims be referred to as "Unknown Claimants".
Against this backdrop, the Diocese and the Committee nominate --
and ask the Court to appoint -- Michael Murphy of Alix Partners
LLP, as the Unknown Claims Representative.
"It is necessary for the Diocese to be able to confirm a plan of
reorganization that deals with current claims (disclosed or not),
and any claims that might legitimately arise in the future based
on the prepetition conduct of the Debtor," Mr. Davidson tells
Judge Jackwig.
It is necessary that all constituencies who assert or might assert
claims against the Diocese arising out of sexual abuse by clergy
or other workers associated with the Diocese have an opportunity
to be heard in the Reorganization Case, he adds.
Mr. Davidson notes that the Diocese and the Committee recognize
that the appointment of an Unknown Claims Representative is akin
to the appointment of another committee to represent the interests
of persons holding Tort Claims. However, the Diocese and the
Committee do not expect that the Unknown Claims Representative
will materially increase the administrative cost of the estate,
Mr. Davidson says. Instead, the Diocese expects that the parties
will work cooperatively where the interests of their clients are
similar, to avoid unnecessary and unreasonable duplication of
efforts and to preserve assets of the estate.
The Diocese has a very limited set of resources upon which it can
draw to satisfy the present and unknown claims resulting from the
sexual abuse by clergy and others in the Diocese, Mr. Davidson
explains. The main source of recovery for all creditors is from
the insurance carriers. For the process to work, the insurance
carriers must accept their liability for the claims and an Unknown
Claims Representative must be appointed to represent the interests
of the Unknown Tort Claimants, Mr. Davidson maintains.
About Diocese of Davenport
The Diocese of Davenport in Iowa filed for chapter 11 protection
(Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006.
Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the
Davenport Diocese in its restructuring efforts. Hamid R.
Rafatjoo, Esq., and Gillian M. Brown, Esq., of Pachulski Stang
Zhiel Young Jones & Weintraub LLP represent the Official Committee
of Unsecured Creditors. In its schedules of assets and
liabilities, the Davenport Diocese reported $4,492,809 in assets
and $1,650,439 in liabilities. (Catholic Church Bankruptcy News,
Issue No. 104; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: San Diego Dismissal Plea Hearing Set on Oct. 25
----------------------------------------------------------------
The Hon. Louise DeCarl Adler of the U.S. Bankruptcy Court for the
Southern District of California will convene a hearing on Oct. 25,
2007, at 10:00 a.m., to consider the request of The Roman Catholic
Bishop of San Diego to dismiss its chapter 11 case.
The Diocese, together with Catholic Mutual Relief Society and
Catholic Mutual Relief Insurance, among others, agreed to pay
$198,125,000, plus interest, if applicable, in full and complete
settlement of all claims filed by 144 claimants, for a full and
complete release of the Settling Creditors' lawsuits against the
Diocese.
As part of the Settlement, the Diocese asks the U.S. Bankruptcy
Court for the Southern District of California to dismiss its
Chapter 11 case. The Diocese also asks the Court to remand all
lawsuits removed after the commencement of the Case and confirm
that the automatic stay is lifted in all respects, pursuant to the
Settlement.
The Diocese believes that the the Official Unsecured Creditors
Committee will support its dismissal request.
Susan Boswell, Esq., at Quarles & Brady LLP, in Tuczon, Arizona,
relates that the Diocese prepared a proposed "Memorandum of
Understanding in The Matter of The Roman Catholic Bishop of San
Diego," which sets forth the basic terms of the Settlement.
The terms of the Settlement Agreement include:
-- The Settling Defense Payment Parties will not be jointly
and severally liable for the Settlement Amount, except that
the Diocese will be liable for the share of the Settlement
Amount that Catholic Mutual is to pay for the claims
against the Diocese until the first payment is made on
January 4, 2008. After the First Payment, which is 50% of
the Settlement Amount, the Diocese will be liable for its
allocated share as provided for in the Memorandum;
-- The Settlement Amount's unpaid balance is to be secured by
collateral acceptable to the Settling Creditors, whose
acceptance is not to be unreasonably withheld. If the
Settling Defense Payment Parties and the Settling Creditors
can not agree on the collateral, Judge Leo Papas will
select an "evaluator" to resolve the dispute;
-- All unpaid professionals' and experts' fees, through the
date of the Case's dismissal, will be paid by the Diocese.
To avoid further costs, final fee applications will not be
required, or filed, unless ordered by the Court. If a
dispute arises with respect to the fees, which the Court
does not resolve, a third party neutral will resolve it;
-- As outlined in the Memorandum, a "jurist" will be appointed
to address issues related to public disclosure and
production of the accused offenders' files in relevant
lawsuits;
-- Pending dismissal of the Case, all matters and proceedings
will be stayed except to the extent necessary to preserve
appeal rights;
-- The Creditors Committee has agreed not to object to certain
parish projects to avoid their being delayed, on certain
terms agreed to by the Diocese, the Organization of
Parishes for the Roman Catholic Diocese of San Diego, and
the Creditors Committee; and
-- All parties agree that Judge Papas will have jurisdiction
to resolve any disputes related to the Settlement.
A redacted version of the Memorandum will be filed with the Court
within next week, Ms. Boswell says. The Settling Creditors have
approved and signed the Memorandum. The Creditors Committee,
which fostered and facilitated the negotiation of the Memorandum,
was not a signatory. However, each of the Committee members
individually, or through his or her duly authorized
representative, is a signatory to the Memorandum of Understanding.
The Diocese asks the Court to dismiss its Chapter 11 case after
the execution by all parties of the Settlement contemplated by
the Memorandum, Ms. Boswell explains.
A copy of the Memorandum of Understanding is available for free
at http://ResearchArchives.com/t/s?2412
About the San Diego Diocese
The Roman Catholic Diocese of San Diego in California --
http://www.diocese-sdiego.org/-- employs approximately 3,000
people in various areas of work. The Diocese filed for Chapter 11
protection just before commencement of the first of court
proceedings for 140 sexual abuse lawsuits filed against the
Diocese. Authorities of the San Diego Diocese said they were not
in favor of litigating their cases.
The San Diego Diocese filed for chapter 11 protection on Feb. 27,
2007 (Bankr. S.D. Calif. Case No. 07-00939). Gerald P. Kennedy,
Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents
the Diocese. Attorneys at Pachulski Stang Ziehl & Jones LLP
represent the Official Committee of Unsecured Creditors. In its
schedules of assets and liabilities, the Diocese listed total
assets of $152,510,888 and total liabilities of $72,754,092.
On March 27, 2007, the Debtor filed its plan and disclosure
statement. San Diego's exclusive period to file a chapter 11 plan
expires on Oct. 15, 2007. (Catholic Church Bankruptcy News, Issue
No. 104; Bankruptcy Creditors' Service Inc.
http://bankrupt.com/newsstand/or 215/945-7000).
CHAPARRAL STEEL: S&P Withdraws Ratings After Deal Completion
------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on
Chaparral Steel Co., including its 'B+' corporate credit rating.
The action followed the completion of the acquisition of the
company by Gerdau Ameristeel Corp. (BB+/Watch Neg/--) and the
refinancing of the debt outstanding at Chaparral.
CHARLES MCSWAIN: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Charles A. McSwain
Phyllis M. McSwain
6528 Turnberry Lane Southeast
Olympia, WA 98501
Tel: (360) 456-7961
Bankruptcy Case No.: 07-43338
Chapter 11 Petition Date: October 7, 2007
Court: Western District of Washington (Tacoma)
Debtor's Counsel: Timothy J. Conway, Esq.
Tonkon Torp, L.L.P.
888 Southwest 5th Avenue, Suite 1600
Portland, OR 97204-2099
Tel: (503) 802-2027
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
The Debtor did not file a list of its largest unsecured creditors.
CHRYSLER LLC: Has Until Tomorrow to Close Negotiations with UAW
---------------------------------------------------------------
Chrysler LLC has until 11 a.m. tomorrow, Wednesday, Oct. 10, 2007,
to close its contract negotiations with the United Auto Workers
union, otherwise 49,000 union members will hold strike against the
company, according to various papers citing people familiar with
the matter.
As reported in yesterday's Troubled Company Reporter, the UAW
disclosed a 72-hour notice, on Oct. 6, 2007, for a potential
strike, forcing the car maker to reach an agreement with the union
after talks intensified over the weekend.
Sources say that the union will likely defer discussions on an
hourly or daily basis.
Both parties, analysts suggests, may come up with a contract
patterned after General Motors Corp.'s tentative agreement with
the union, although, may call for cost cuts in different places as
Chrysler's needs are distinct from GM's requirements.
Various papers relates that owner Cerberus Capital Management LP
doesn't want to be burdened with the cost of transferring retiree
health care administration to the UAW.
As previously reported, GM and the UAW reached a tentative
agreement on a new national labor contract after more than 73,000
UAW union members throughout the United States went on strike
against GM. The tentative agreement, covering approximately
74,000 represented employees, includes a memorandum of
understanding to establish an independent retiree health care
trust, as well as other changes to the national agreement.
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler,
Jeep, and Dodge brand names. It also sells parts and
accessories under the MOPAR brand.
The company has dealers worldwide, including Canada, Mexico,
U.S., Germany, France, U.K., Argentina, Brazil, Venezuela,
China, Japan and Australia.
* * *
On Oct. 1, 2007, Standard & Poor's Ratings Services placed its
corporate credit ratings on Chrysler LLC and DaimlerChrysler
Financial Services Americas LLC on CreditWatch with positive
implications.
As reported in the Troubled Company Reporter on Aug. 8, 2007,
Standard & Poor's Ratings Services revised its loan and recovery
ratings on Chrysler LLC's (B/Negative/--) $10 billion senior
secured first-lien term loan facility due 2013, following various
changes to terms and conditions prior to closing. The $10 billion
first-lien term loan now consists of a $5 billion "first-out"
tranche and a $5 billion "second-out" tranche, so the aggregate
amount of first-lien debt remains unchanged.
Accordingly, S&P assigned a 'BB-' rating to the $5 billion "first-
out" first-lien term loan tranche. This rating, two notches above
the corporate credit rating of 'B' on Chrysler LLC, and the '1'
recovery rating indicate S&P's expectation for very high recovery
in the event of payment default. S&P also assigned a 'B' rating
to the $5 billion "second-out" first-lien term loan tranche. This
rating, the same as the corporate credit rating, and the '3'
recovery rating indicate S&P's expectation for a meaningful
recovery in the event of payment default.
Moody's Investors Service has affirmed Chrysler Automotive LLC's
B3 Corporate Family Rating, and the Caa1 rating of the company's
$2 billion senior secured, second lien term loan in connection
with Monday's closing of DaimlerChrysler AG's sale of a majority
interest of Chrysler Group to Cerberus Capital Management LLC.
COLEMAN CABLE: Earns $4.1 Million in Second Quarter Ended June 30
-----------------------------------------------------------------
Coleman Cable Inc. reported net income of $4.1 million on net
sales of $247.0 million for the second quarter ended June 30,
2007, compared with net income of $12.8 million on net sales of
$114.4 million for the same period last year.
The increase in net sales was primarily due to the acquisition of
Copperfield, which accounted for 114.3% of the increase and,
together with increased demand in the consumer segment, more than
offset net sales declines in the other segments due to volume
declines net of price increases.
Operating income fell to $14.6 million during the quarter ended
June 30, 2007, versus $17.2 million during the same period last
year.
Gross profit margin for the three months ended June 30, 2007, was
11.5% compared to 21.5% for the three months ended June 30, 2006.
The decrease in the gross profit margin was primarily due to the
Copperfield acquisition.
Selling, engineering, general and administrative expense increased
to $11.0 million, compared to $7.1 million for the three months
ended June 30, 2006. The increase between the two periods
resulted primarily from the acquisition of Copperfield, an
increase in professional fees due to the change in equity
structure, an increase in stock compensation expense, and an
increase in advertising expense due to new customer setups and
promotions.
Interest expense, net, for the three months ended June 30, 2007,
was $8.1 million compared to $4.3 million for the three months
ended June 30, 2006.
Liquidity and Capital Resources
As of June 30, 2007, the company had $345.1 million in total
outstanding long-term debt, including capital lease obligations.
Net cash used by operating activities for the six months ended
June 30, 2007, was $14.0 million compared to net cash provided by
operating activities of $5.7 million for the six months ended
June 30, 2006.
Net cash used in investing activities for the six months ended
June 30, 2007, was $218.4 million due to $3.0 million of capital
expenditures and $215.4 million for the acquisition of
Copperfield.
Net cash provided by financing activities for the six months ended
June 30, 2007, was $217.8 million, due to net borrowings under the
revolving loan facilities of $99.1 million and the issuance of
additional senior notes of $119.6 million including premiums, net
of fees and expenses. This was offset by the payment of long-term
debt of $500,000 and $400,000 of common stock issuance costs
related to the private equity offering.
At June 30, 2007, the company's consolidated balance sheet showed
$538.2 million in total assets, $451.9 million in total
liabilities, and $86.3 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?241b
About Coleman Cable
Headquartered in Waukegan, Illinois, Coleman Cable Inc. (Nasdaq:
CCIX) -- http://www.colemancable.com/-- is a manufacturer and
innovator of electrical and electronic wire and cable products for
security, sound, telecommunications, and electrical, commercial,
industrial and automotive industries.
* * *
On March 21, 2007, Moody's Investors Service placed the long term
corporate family and probability of default ratings of Coleman
Cable Inc. at "B1" with a stable outlook. The ratings apply to
date.
CONSOL ENERGY: Closes Tri-River Fleeting & Tri-River Marine Buyout
------------------------------------------------------------------
CONSOL Energy Inc. has acquired Tri-River Fleeting Harbor Services
Inc. and Tri-River Marine Inc.
Terms of the purchase were not disclosed, and the deal was closed
on October 3. With the arrangement, CONSOL Energy acquires
control of eight towboats that operate along the Monongahela and
Ohio rivers.
"The addition of eight additional vessels through this acquisition
will increase our efficiency and expand our fleeting services for
our traditional customers along the Upper Ohio River System,"
James C. Grech, senior vice president - CONSOL Energy Sales
Company, said. "It will also enable CONSOL to take advantage of
Tri-River's current market of transporting aggregates and
materials other than coal to a new customer
base.
"CONSOL Energy's more than 125 years of experience along the
inland rivers dovetails nicely with the successful operations of
Tri-River's assets, especially when you include our purchase of
Mon River and J.A.R. assets from the Guttman Group in 2006."
With the Tri-River acquisition, CONSOL Energy adds 60 new
employees and increases its fleet of towboats to 27 vessels. With
the purchase, no additional barges were added to CONSOL's current
fleet of 650 barges.
"One synergy evident with the purchase is that Tri-River has
experience transporting limestone used for scrubbers at power
plants burning coal to generate electricity," Mr. Grech said. "As
more such scrubber units come online in the next few years, that
experience will be beneficial to CONSOL in terms of our existing
and new markets."
About CONSOL Energy Inc.
Headquartered in Atlanta, Georgia, CONSOL Energy Inc. (NYSE: CNX)
-- http://www.consolenergy.com/-- is a multi-energy producer of
coal, gas and electricity. CONSOL produces both high-Btu coal and
gas, which collectively fuels two-thirds of all U.S. power
generation, from reserves located mainly east of the Mississippi
River. CONSOL Energy is a fuel supplier to the electric power
industry in the northeast quadrant of the United States. In
addition, CONSOL Energy has expanded the use of its vast property
holdings by brokering various industrial and retail development
projects and overseeing timber sale and forestry management
activities both in the U.S. and abroad. The company also
maintains the private research and development facilities devoted
to coal and energy utilization and production.
* * *
CONSOL Energy Inc. carries Moody's Investor Services "Ba2" long
term corporate family rating and probability of default rating,
which were placed in March 2006 with a stable outlook. The
ratings still hold to date.
CORD BLOOD: June 30 Balance Sheet Upside-Down by $4.4 Million
-------------------------------------------------------------
Cord Blood America Inc.'s consolidated balance sheet at June 30,
2007, showed $6.3 million in total assets and $10.7 million in
total liabilities, resulting in a $4.4 million total stockholders'
deficit.
The company's consolidated balance sheet at June 30, 2007, also
showed strained liquidity with $1.3 million in total current
assets available to pay $10.7 million in total current
liabilities.
The company reported a net loss of $1.8 million, or $0.02 a share,
in the second quarter of 2007 and a net loss for the first half of
2007 of $3.1 million, or $0.04 a share, compared to a loss of
$0.07 per share for the same period in 2006.
Revenues for the second quarter ended June 30, 2007, totaled
$2.3 million, up 194% compared to revenues totaling $797,907 in
the second quarter of 2006.
Revenues for the first six months of 2007 totaled $4.0 million, up
221% compared to revenues of $1.3 million in the first half of
2006.
The company reported a gross profit of $796,761 in the second
quarter of 2007 compared to a gross profit of $125,255 in the same
period in 2006. Gross profit for the first six months of 2007
totaled $1.4 million, compared to a gross profit of $96,641 in the
first half of 2006.
"There were many positives in the first half of 2007 and a most
important key indicator of this is gross profit, which increased
from 21% of revenues to 34%. Economies of scale, especially for
the company's Cord Blood division, started to positively impact
the company's financial results," said Matthew Schissler, chief
executive officer, Cord Blood America. "We intend to remain
focused on our successful strategy of strategic, organic growth,
accretive acquisitions and reducing overhead in the upcoming
reporting periods."
"Strong growth for the quarter, combined with a significant
decrease in marketing costs, shows that the strategies we are
pursuing are promoting excellent results," said Mr. Schissler.
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?241c
Going Concern Doubt
Rose, Snyder & Jacobs, in Encino, California, expressed
substantial doubt about Cord Blood America Inc.'s ability to
continue as a going concern after auditing the company's balance
sheet for the years ended Dec. 31, 2006, and 2005. The auditing
firm pointed to the company's recurring operating losses,
continuing use of cash in operating activities, insufficient
working capital and accumulated deficit at Dec. 31, 2006.
About Cord America
Headquartered in West Hollywood, California, Cord Blood America
Inc. (OTCBB: CBAI) -- http://www.cordblood-america.com/-- is the
parent company of CorCell, which facilitates umbilical cord blood
stem cell preservation for expectant parents and their children.
CPI INT'L: Earns $8.1 Million in Third Quarter Ended June 29
------------------------------------------------------------
CPI International Inc. reported that its net income for the third
quarter of fiscal 2007 equaled $8.1 million, a significant
increase from the $4.5 million generated in the same quarter of
fiscal 2006. CPI's net income in the most recent quarter was
favorably impacted by a $1.8 million non-recurring tax benefit
related to the filing of amended income tax returns for previous
fiscal years.
In the third quarter, the company generated total sales of
$87.3 million, a slight decrease from the $87.8 million generated
in the same quarter of fiscal 2006.
For the first nine months of fiscal 2007, CPI booked orders
totaling $269.4 million and generated sales totaling
$259.5 million. As a result, the book-to-bill ratio for the
period was 1.04. In comparison, for the first nine months of
fiscal 2006, the company booked orders totaling $246.2 million and
generated sales totaling $257.1 million, resulting in a book-to-
bill ratio of 0.96.
"In the third quarter of fiscal 2007, we continued to profitably
manage CPI's businesses and to generate growth in our net income,
EBITDA and free cash flow," said Joe Caldarelli, chief executive
officer. "Demand for CPI's products remains solid, as evidenced
by the increase in our year-to-date orders. Our sales in the most
recent quarter were healthy, decreasing only slightly from last
year's record third quarter sales levels due to the timing of
order placements and the resulting shipments on certain key
programs. Our outlook for coming quarters remains solid."
CPI generated $17.3 million, or 19.8% of sales, in EBITDA in the
third quarter of fiscal 2007, a 13% increase from the
$15.3 million generated in the comparable quarter of the previous
year.
CPI's financial results in the third quarter of fiscal 2006
included certain unusual, material charges. In the year-ago
quarter, the company's financial results were impacted by move-
related expenses, including indirect expenses for unfavorable
overhead absorption and manufacturing variances related to the
relocation of the company's Eimac operations. In addition, in the
third quarter of fiscal 2006, CPI had higher net debt levels and,
as a result, higher interest expense than in the third quarter of
fiscal 2007.
As of June 29, 2007, CPI's cash and cash equivalents totaled
$39.4 million, an increase from the $12.6 million reported as of
June 30, 2006. For this 12 month period, net cash provided by
operating activities totaled $28.2 million, free cash flow totaled
$19.4 million and adjusted free cash flow totaled $30.0 million.
Acquisition of Malibu Research
On Aug. 10, 2007, Communications & Power Industries completed the
acquisition of Malibu Research Associates Inc. for approximately
$22.0 million in cash, funded entirely from cash on hand.
Communications & Power Industries also agreed to make up to
$15.0 million in additional earnout payments, which are primarily
contingent upon the achievement of certain financial objectives
over the three years following the acquisition. Malibu Research
Associates is a leader in the design, manufacture and integration
of advanced antenna systems for radar, radar simulators and
telemetry systems, as well as for strategically vital data links
used in unmanned aerial vehicles and other military systems.
Debt Refinancing
On Aug. 1, 2007, Communications & Power Industries entered into an
amended and restated senior credit facility in the aggregate
principal amount of $160 million, consisting of a $100 million
term loan and a $60.0 million revolving credit facility, which
replaced the existing $130 million credit facility. The net
proceeds from this debt refinancing will be used to repurchase and
redeem $58.0 million in principal amount of CPI's floating rate
senior notes.
In the fourth quarter of fiscal 2007, the company expects to incur
approximately $5.0 million in one-time, non-cash costs associated
with the write-off of deferred debt issue costs and approximately
$2.0 million in redemption premiums and other expenses associated
with the repurchasing and redemption of the $58.0 million of
floating rate senior notes.
At June 29, 2007, the company's consolidated balance sheet showed
$462.2 million in total assets, $339.7 million in total
liabilities, and $122.5 million in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 29, 2007, are available for
free at http://researcharchives.com/t/s?241d
About CPI International
Headquartered in Palo Alto, California, CPI International Inc.
(Nasdaq: CPII) -- http://www.cpii.com/-- is the parent company of
Communications & Power Industries Inc., a provider of microwave,
radio frequency, power and control solutions for critical defense,
communications, medical, scientific and other applications.
* * *
As reported in the Troubled Company Reporter on July 26, 2007,
Moody's upgraded its ratings on CPI International Inc. including
the company's $22 million floating rate notes due 2015, which was
lifted to B3 (LGD6, 95%) from Caa1 (LGD5, 89%).
CREDIT SUISSE: Fitch Affirms Low-B Ratings on Three Cert. Classes
-----------------------------------------------------------------
Fitch Ratings upgrades two classes of Credit Suisse First Boston's
commercial mortgage pass-through certificates, series 2002-CP3 as:
-- $10.1 million class E to 'AAA' from 'AA+';
-- $14.6 million class F to 'AA+' from 'AA';
In addition, Fitch affirms these classes:
-- $56.8 million class A-2 at 'AAA';
-- $521.9 million class A-3 at 'AAA';
-- Interest-only classes A-SP and A-X at 'AAA';
-- $34.7 million class B at 'AAA';
-- $40.3 million class C at 'AAA';
-- $9 million class D at 'AAA';
-- $15.7 million class G at 'A';
-- $11.2 million class H at 'A-';
-- $17.9 million class J at 'BBB';
-- $6.7 million class K at 'BBB-';
-- $4.5 million class L at 'BB';
-- $11.2 million class M at 'B+';
-- $4.5 million class N at 'B-'
Fitch does not rate the $13.5 million class O certificate. Class
A-1 has paid in full.
The upgrades reflect the increased credit enhancement due to an
additional 1.2% paydown and 10.2% defeasance since Fitch's last
rating action. As of the September 2007 distribution date, the
pool has paid down 13.8% to $772.4 million from $895.7 million at
issuance. In total, 20 loans (25.3%) have defeased, including the
third largest loan (7.5%) in the pool.
There are currently no delinquent or specially serviced loans.
Fitch is monitoring nine loans of concern (16.3%), the largest
(5.3%) is a 1,083-unit multifamily property located in the St.
Louis suburb of Maryland Heights, Missouri, and is current. The
property has experienced cash flow declines since 2004 due to low
occupancy. The borrower attributes low occupancy to an ongoing
construction project to expand the lanes on one of the roads
adjacent to the property. The borrower is aggressively marketing
the vacant units through concessions and heavy advertising;
occupancy is 90% with a DSCR of 1.10x as of June 2007.
The second largest Fitch loan of concern (4.3%) is secured by a
288,948 square foot retail center located in Secaucus, New Jersey
and is current. Occupancy at the property has fallen to 56% as of
June 2007. The master servicer is working with the borrower to
redevelop the asset.
Fitch reviewed the performance of the transaction's one shadow
rated loan, the Westfarms Mall (9.6%). This $73.9 million A-note
balance is held pari-passu to another A-note and senior to a $52.0
million B-note, which are both held outside of this transaction.
The loan is secured by 600,148 sf retail center in Farmington, CT
and maintains an investment grade credit assessment. Occupancy
has remained relatively stable and as of Year End 2006 was 97.1%
DANNY ZECK: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Danny Zeck Ford Lincoln Mercury Corp.
aka Rusty Eck Ford Mercury
4501 South 4th Street
Leavenworth, KS 66048
Tel: (816) 228-9947
Bankruptcy Case No.: 07-22249
Chapter 11 Petition Date: October 5, 2007
Court: District of Kansas (Kansas City)
Judge: Robert D. Berger
Debtor's Counsel: Donald G. Scott, Esq.
R. Pete Smith, Esq.
McDowell Rice Smith and Buchanan, P.C.
350 Skelly Building
605 West 47th Street
Kansas City, MO 64112-1905
Tel: (816) 753-5400
Fax: (816) 753-9996
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
DELPHI CORP: Disclosure Statement Hearing Moved to October 25
-------------------------------------------------------------
The Hon. Robert Drain of the United States Bankruptcy Court for
the Southern District of New York moved the hearing to consider
approval of the disclosure statement explaining Delphi Corp.'s
plan of reorganization to Oct. 25, 2007, The Associated Press
reports.
Delphi asked the Court at a hearing on October 3 to defer ruling
on the adequacy of the disclosure statement to give the company
time to negotiate for financing to fund the plan, AP says.
Delphi Chairman Robert Miller said the company is very close to
securing a financing deal to fund its chapter 11 plan, The Wall
Street Journal reports. Mr. Miller noted that the turmoil in
credit markets that created financing difficulties for the company
appeared to be settling down, the Journal says. "I am confident
that we will get the funding put together very shortly," Mr.
Miller said.
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Chicago, Illinois, told the Court at a hearing
Wednesday that the funding may be less than the $7.1 billion
originally sought.
Mr. Butler also told Judge Drain the Plan will undergo "laser-
like, focused amendments" which may affect creditor recoveries,
the Journal says.
Delphi expects to have a financing commitment letter by the end of
the disclosure hearing, Bloomberg News relates.
Mr. Miller expects the company to emerge from bankruptcy by the
end of the year.
About Delphi
Headquartered in Troy, Mich., Delphi Corporation (OTC: DPHIQ) --
http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional headquarters
in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.
The Debtors' exclusive plan-filing period expires on Dec. 31,
2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan
of Reorganization and a Disclosure Statement explaining that Plan.
(Delphi Bankruptcy News, Issue No. 88 Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
DELPHI CORP: Initiates 707 Adversary Cases Under Seal
-----------------------------------------------------
Delphi Corp. has initiated 707 adversary cases against suppliers
and other business contacts before the U.S. Bankruptcy Court for
the Southern District of New York.
Delphi initially filed:
* 440 lawsuits on Sept. 28, 2007,
* 137 lawsuits on Sept. 29, and
* 130 lawsuits on Sept. 30.
All of the adversary complaints have been filed under seal.
The Debtors obtained permission in August to file the lawsuits
secret. The Debtors want to keep the actions secret to avoid
"unnecessarily alarming potential defendants." The Debtors had
pointed out they have worked to preserve and repair their business
relationship with many of the potential defendants and have
negotiated or regained favorable credit terms with many suppliers
and are continuing to do so.
The Debtors had estimated that they may have more than 11,000
potential preference claims arising from transfers totaling
$5,800,000,000 without taking into account potential defenses.
According to John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, in Chicago, Illinois, the Debtors' counsel,
the constructively fraudulent transfer reach-back period, made
applicable by Section 544(b) of the Bankruptcy Code and state law,
is generally six years under the law of Michigan and New York.
With a company of Delphi's size, there are literally hundreds of
thousands of transactions that occurred during those
constructively fraudulent transfer reach-back periods, Mr. Butler
had said.
Mr. Butler also had noted that the Debtors initially do not intend
to pursue avoidance actions in light of their anticipated
reorganization. However, as a precautionary measure, the Debtors
must preserve the actions in some manner, he said.
The Court had granted a temporary stay of the adversary
proceedings. The stay would continue until the earlier of service
of process and further Court order. During the stay, the Debtors
may amend their complaint, and after notice to the statutory
committees, dismiss it.
The docket for the adversary proceedings have likewise been
sealed.
The Debtors won't pursue any preference action against an entity
if the aggregate value of transfers to, or for the benefit of,
that entity is less than $250,000 in value. If the preference
action is against an insider or involves a person or transaction
associated with the U.S. Securities and Exchange Commission
investigation of the Debtors, the Debtors may also abandon the
actions after notice to the Statutory Committees. If a Statutory
Committee objects within 10 days after service of the notice, the
Debtors would bring the matter before the Court for a ruling on
whether the proposed abandonment satisfies Section 554(a) of the
Bankruptcy Code.
The Debtors may abandon these categories of preference actions:
* payments to parties with a secured or priority interest in
the payments;
* union dues;
* pension plan contributions;
* payments required under the terms of collective bargaining
agreements;
* payments to reimburse employee business expenses;
* ordinary course wages, salaries, and employee benefits;
* payments required by a garnishment to satisfy third-party
judgments and obligations;
* contributions to charitable organizations; and
* payments to foreign suppliers, shippers, insurance
providers, and utilities.
For purposes of identifying and preserving potential fraudulent
transfer claims, the Debtors considered merger and acquisition
deals at or exceeding $20,000,000; transfers to Delphi's board of
directors or strategy board members other than for compensation
or ordinary-course expense reimbursements; unusual securities
transactions; dividend distributions to 5% shareholders; and
Delphi's financially troubled supplier program.
About Delphi
Headquartered in Troy, Mich., Delphi Corporation (OTC: DPHIQ) --
http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional headquarters
in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.
The Debtors' exclusive plan-filing period expires on Dec. 31,
2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan
of Reorganization and a Disclosure Statement explaining that Plan.
(Delphi Bankruptcy News, Issue No. 87 Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
DELTA AIR: Court Issues Final Decree Closing 17 Chapter 11 Cases
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
issued a final decree closing the Chapter 11 cases of 17 of Delta
Air Lines Inc.'s reorganized debtor-affiliates, effective
Sept. 28, 2007, pursuant to Section 350(a) of the Bankruptcy Code
and Rule 3022 of the Federal Rules of Bankruptcy Procedure.
The cases closed are:
Debtor Case No.
------ --------
ASA Holdings, Inc. 05-17946
Comair Holdings, LLC 05-17931
Comair Services, Inc. 05-17935
Crown Rooms, Inc. 05-17922
DAL Aircraft Trading, Inc. 05-17941
DAL Global Services, LLC 05-17928
DAL Moscow, Inc. 05-17937
Delta Airelite Business Jets, Inc. 05-17942
Delta Benefits Management, Inc. 05-17945
Delta Connection Academy, Inc. 05-17926
Delta Corporate Identity, Inc. 05-17939
Delta Loyalty Management Services, LLC 05-17932
Delta Technology, LLc 05-17927
Delta Ventures III, LLc 05-17936
Epsilon Trading, LLC 05-17943
Kappa Capital Management, Inc. 05-17947
Song, LLC 05-17921
As reported in the Troubled Company Reporter on Sept. 27, 2007,
Timothy E. Graulich, Esq., at Davis, Polk & Wardwell, in New York,
told the Court that the 17 estates meet each of the six factors:
(1) The Court's Order on April 25, 2007 confirming
the Reorganized Debtors' Plan is final; notwithstanding it
being subjected to a single appeal restricted to the
narrow question of the scope of exculpation clauses in the
Plan that are applicable to UMB Bank, N.A.;
(2) Delta has established reserves of stock that will be
distributed to the Creditors of Delta and Comair, Inc.
which do not implicate the Fully Administered Cases;
(3) Delta has distributed and transferred the cash, stock,
notes and other property, to be disbursed following the
confirmation of the Plan;
(4) Pursuant to the Plan, the Reorganized Debtors have assumed
management of the reorganized estates, with the election
of a new Board of Directors;
(5) One interim distribution to Creditors has been made and
one to be contemplated in November 2007. The distributions
are not being made out of the assets of the Fully
Administered Cases' estates; and
(6) All pending motions, contested matters, and adversary
proceedings will be resolved using the pools of assets
established by the Plan, and will not affect the Fully
Administered Cases.
Mr. Graulich adds that the 17 reorganized debtor-affiliates'
cases are inactive and that the Debtors' bankruptcy cases are
substantively limited to Delta and Comair.
In addition, the closing will be cost-effective. Since there will
be no remaining administration required with respect to the Fully
Administered Cases, no U.S. Trustee fees will be incurred.
The request is frequently granted in large bankruptcy cases where
only a few of the cases need to remain open for purposes of
administering the estate, Mr. Graulich notes. Pursuant to 28
U.S.C. Section 1930(a)(6), a debtor in a chapter 11 case must pay
the U.S. Trustee a quarterly payment for each bankruptcy case
that it administers.
Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 328 destinations in 56
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities.
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.
On Jan 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on Feb. 2,
2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure
statement. In April 2007, the Court confirmed the Debtors' plan.
(Delta Bankruptcy News, Issue No. 80; Bankruptcy Creditors'
Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on July 16, 2007,
Fitch Ratings has initiated coverage of Delta Air Lines Inc.
with the assignment of these debt ratings: issuer default rating
'B'; First-lien senior secured credit facilities 'BB/RR1'; and
Second-lien secured credit facility (Term Loan B) 'B/RR4'
As reported in the Troubled Company Reporter on May 2, 2007,
Standard & Poor's Ratings Services raised its ratings on Delta Air
Lines Inc. (B/Stable/--), including raising the corporate credit
rating to 'B', with a stable outlook, from 'D', following the
airline's emergence from Chapter 11 bankruptcy proceedings.
DLJ Commercial: Fitch Holds CCC Rating on Class B-8 Certs.
----------------------------------------------------------
Fitch affirmed DLJ Commercial Mortgage Corp.'s pass-through
certificates, series 1999-CG2, as:
-- $855.2 million class A-1B at 'AAA';
-- Interest-only class S at 'AAA';
-- $69.8 million class A-2 at 'AAA';
-- $81.4 million class A-3 at 'AAA';
-- $19.4 million class A-4 at 'AAA';
-- $58.1 million class B-1 at 'AAA';
-- $23.3 million class B-2 at 'AAA';
-- $38.8 million class B-3 at 'AA-';
-- $31 million class B-4 at 'A-';
-- $15.5 million class B-5 at 'BBB';
-- $19.4 million class B-6 at 'BB+';
-- $15.5 million class B-7 at 'B+';
-- $10.8 million class B-8 at 'CCC/DR3'
Class A-1A has been paid in full. The balance of the non-rated
class C has been reduced to zero due to realized losses on
specially serviced assets.
The affirmations are the result of stable performance and pay down
since Fitch's last rating action. As of the September 2007
distribution date, the pool's aggregate certificate balance has
been reduced 20.1% to $1.24 billion from $1.55 billion at
issuance. Ninety-four loans (37.7%) have defeased since issuance.
There are currently no delinquent or specially serviced loans.
DURA AUTOMOTIVE: Plan Confirmation Hearing Set for November 26
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware set a
hearing on Nov. 26, 2007, to consider confirmation of the Plan of
Reorganization filed by DURA Automotive Systems Inc. and its
debtor-affiliates.
The the Court, on Oct. 3, approved the adequacy of the Disclosure
Statement explaining the Debtors' Plan.
A full-text copy of the Amended Plan is available for free at:
http://ResearchArchives.com/t/s?2411
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 expired on Sept. 30,
2007. (Dura Automotive Bankruptcy News, Issue No. 31 Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
EL TORO: Ninth Circuit Says Saddleback's Claim Shouldn't Be Capped
------------------------------------------------------------------
The U.S. Ninth Circuit Court of Appeals reversed a ruling issued
by the Bankruptcy Appellate Panel and declared that Saddleback
Valley Community Church's damages claims against El Toro Materials
Co. Inc. shouldn't be capped.
Saddleback had filed an adversary proceeding against the Debtor
claiming $23 million in damages for the alleged cost of cleaning
up the Debtor's mess. Saddleback says that the Debtor left one
million tons of wet clay, mining equipment and other materials, on
its after property after Saddleback rejected the lease to El Toro.
The Debtor had asked that a cap be made on the damages claim in
order to limit its liability on the alleged cleanup costs.
The U.S. Bankruptcy Court for the Central District of California
said that Saddleback's recovery isn't limited by Section 502(b)(6)
of the Bankruptcy Code. The BAP however overturned the Bankruptcy
Court's decision saying that any damages would be capped.
In an opinion, Judge Alex Kozinski stated that the BAP considered
itself bound by its precedent in Kuske v. McSheridan (In re
McSheridan), 184 B.R. 91 (B.A.P. 9th Cir. 1995), and thus ruled
that Saddleback's recovery should be capped. Judge Kozinski
however said that "[t]o the extent that McSheridan holds section
502(b)(6) to be a limit on tort claims other than those based on
lost rent, rent-like payments or other damages directly arising
from a tenant's failure to complete a lease term, it is
overruled."
Robert C. Braun, Esq., Penelope Parmes, Esq., and Roger F.
Friedman, Esq., at Rutan & Tucker, LLP, represent Saddleback.
Ronald K. Van Wert, Esq., at Robert K. Van Wert P.C., and William
Malcom, Esq., at Malcom & Cisneros represent the Debtor.
Based in Lake Forest, California, El Toro Materials Co. Inc. is a
mining company. The company filed for chapter 11 protection on
Nov. 18, 2002 (Bank. C.D. Calif. Case No. 02-18913).
EMPIRE BEEF: Taps Triton Capital Partners as Investment Banker
--------------------------------------------------------------
Empire Beef Co. Inc., dba Empire Beef & Redistribution Company,
seeks authority from the U.S. Bankruptcy Court for the Western
District of New York to employ Triton Capital Partners Ltd. as its
financial consultants and investment banker.
Triton Capital will provide employees to serve as financial
advisors and investment banker for the Debtor with the emphasis on
assisting the Debtor with the sale of substantially all of its
assets. These employees will also:
(a) work with the Debtor's lenders to ensure adequate
funding for the Debtor's bankruptcy process;
(b) assist the Debtor's operations with the objective of
stabilizing operations and preserving value; and
(c) assist in the management of the Debtor's bankruptcy
efforts, including working with parties-in-interest.
Triton Capital's professional hourly rates are:
Designation Hourly Rates
----------- ------------
Partners $350 - $500
Directors/Vice Presidents $250 - $450
Associates/Analysts $150 - $300
The Debtor will also pay a non-refundable retainer of $40,000 per
month for a minimum term of two months. The retainer will be paid
in cash monthly in advance with the first retainer payment made
upon the execution of agreement.
If the Debtor completes a capital placement with any party during
the term of agreement or with a covered party within 12 months
after the termination of agreement, the Debtors will also pay an
aggregate fee equal to:
(a) 1% of the cumulative amount of consideration up to
$30 million; plus
(b) 3% of the cumulative amount of consideration above
$30 million.
The Debtor has also agreed to pay a sale transaction fee in the
amount equal to one and one half times the standard Lehman Scale
with a minimum of $500,000, and break-up fee, in case of
termination of agreement prior to consummation in the amount of
$200,000. However, if the Debtor subsequently completes such
transactions, the break-up fee will be creditable againts any
transaction fee due at that time.
David J. Asmann, Esq., a partner in the Triton Capital Partners
Ltd., tells the Court that the firm holds no interest adverse to
the Debtor or its estate and is “disinterested” as defined in
Section 101(14) of the Bankruptcy Code.
Headquartered in Rochester, New York, Empire Beef Co. --
http://www.empirebeef.com/-- ships six million pounds of beef,
pork, lamb, veal, seafood, poultry, cheese, processed meats, and
multiple food products per week to more than twenty states, the
Caribbean, and other international destinations. The meat are
purchased from packers like Hormel, JBS Swift, and Perdue Farms,
Empire Beef & Redistribution distributes packers' beef, cheese,
lamb, pork, poultry, seafood, and veal in a 20 state area of the
northeastern US. The firm also offers portion-controlled
marinated and flavor-enhanced fresh and frozen meat products for
foodservice companies as well as for retail sale. Empire has
portion-control facilities in New York and Pennsylvania.
The company filed for Chapter 11 protection on Sept. 6, 2007,
(Bankr. W. D. NY Case No. 07-22226). Garry M. Graber, Esq., at
Hodgson Russ LLP represent the Debtor. Peter Scribner, Esq. is
counsel to the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it listed
assets between $1 million to $100 million.
ENERGY PARTNERS: Bids $19.2MM for Central Gulf of Mexico Leases
---------------------------------------------------------------
Energy Partners, Ltd., was the high bidder on eight leases at the
Central Gulf of Mexico Lease Sale 205 held on Oct. 3, 2007, in New
Orleans, Louisiana.
The eight high bid lease blocks cover a total of 40,760 acres on a
gross basis, and include seven blocks on the Gulf of Mexico Shelf
and one in deepwater. EPL's share of the high bids totals
$19.2 million.
"This lease sale was a long awaited one, and we are pleased that
we were successful with high bids within our core areas, including
two leases in our highly successful South Timbalier area and a
deepwater lease that enhances our existing portfolio," Richard A.
Bachmann, EPL's Chairman and CEO commented.
Headquartered in New Orleans, Louisiana, Energy Partners Ltd.
(NYSE: EPL) -- http://www.eplweb.com/-- is an independent oil and
natural gas exploration and production company. Founded in 1998,
the company's operations are focused along the U. S. Gulf Coast,
both onshore in south Louisiana and offshore in the Gulf of
Mexico.
* * *
Energy Partners Ltd. holds to date Moody's Investors Services'
"B3" Corporate Family and Probability of Default Ratings, which
were placed on March 2007.
ENVIRONMENTAL ENERGY: Posts $603,205 Net Loss in Second Quarter
---------------------------------------------------------------
Environmental Energy Services Inc. reported a comprehensive loss
of $603,205 during the three months ended June 30, 2007, as
compared to comprehensive income of $996,594 during the three
months ended June 30, 2006. In the three months ended June 30,
2006, the company recorded an unrealized gain of $1.2 million from
changes in the market value of its interest in Wastech common
stock. In 2007, the company reported its interest in Wastech
under the equity method, and therefore did not record gain or loss
as a result of changes in the market value of its interest in
Wastech.
Loss from operations during the three months ended June 30, 2007,
was $468,145, as compared to a loss from operations of $199,786
during the three months ended June 30, 2006. The decrease in
income from operations was primarily attributable to decreased
royalty revenue.
The company's revenues in the three months ended June 30, 2007,
were $58,107, as compared to $33,597 in the three months ended
June 30, 2006.
Net other expense increased to $135,060 in the three months ended
June 30, 2007, as compared to net other income of $118 in the
three months ended June 30, 2006, due to interest expense of
$28,000, a loss on settlement of $80,025 resulting from the
settlement of a disputed claim with a director, and share of
unconsolidated entity loss of $24,752, representing the company's
share of the net loss incurred by Wastech Inc. during the period.
At June 30, 2007, the company's consolidated balance sheet showed
$19.6 million in total assets $7.7 million in total liabilities,
$3.1 million in minority interest in consolidated subsidiary, and
$8.8 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?2415
Going Concern Doubt
As reported in the Troubled Company Reporter on May 10, 2007,
Turner Jones & Associates PLLC, in Vienna, Virginia, expressed
substantial doubt about Environmental Energy Services 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 reported that the company's operating activities,
except collection on a royalty agreement, have ceased. Without
substantial input of equity capital, the company will not be able
to resume meaningful revenue-producing activities.
About Environmental Energy
Headquartered in Boise, Idaho, Environmental Energy Services Inc.
(Other OTC: EESV.PK) -- http://www.eesvinc.com/-- is an oil and
gas exploration, development and production company. During
fiscal 2006, the company acquired oil and gas leases in Arkansas,
Louisiana, Oklahoma and Alaska. Its largest property to date is a
working interest in over 50,000 acres of leases in the
Fayetteville Shale Field in Arkansas. Its current focus is on
developing its working interest in the Fayetteville Shale Field in
Arkansas, and secondarily the exploration and development of its
gas field in Louisiana.
FOXTONS NORTH AMERICA: Files for Bankruptcy in New Jersey
---------------------------------------------------------
Foxtons North America has filed for chapter 11 protection with the
United States Bankruptcy Court for the District of New Jersey
after laying off 350 of its 380 employees.
A company official earlier said that the recent credit market
turmoil affected the company's liquidity to operate as a going
concern.
Michael Holt, Esq., Foxtons' attorney, told reporters in an
interview following the filing that the Debtor plans to liquidate
its assets despite uncertainty of the brand's survival in the U.S.
market.
Headquartered in West Long Branch, New Jersey, Foxtons North
America -- http://foxtons.com/-- is a discount real estate
agency. The company had real estate offices in New York, New
Jersey and Connecticut.
Foxtons North America was part of London-based parent Foxtons Ltd.
until earlier this year, when Foxtons Ltd. accepted a buyout offer
from U.K. firm BC Partners Ltd. Foxtons' U.K. founder Jon Hunt
retained the U.S. branches as part of the transaction.
FOXTONS NORTH AMERICA: Case Summary & 40 Largest Creditors
----------------------------------------------------------
Lead Debtor: Foxtons North America, Inc.
aka YourHomeDirect.com
185 Route 36
West Long Branch, NJ 07764
Bankruptcy Case No.: 07-24497
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Foxtons, Inc. 07-24496
Type of business: The Debtors are real estate agents.
See http://www.foxtons.com/
Chapter 11 Petition Date: October 5, 2007
Court: District of New Jersey (Trenton)
Judge: Michael B. Kaplan
Debtors' Counsel: Daniel M. Eliades, Esq.
Harry M. Gutfleish, Esq.
Michael E. Holt, Esq.
Forman Holt Eliades & Ravin, L.L.C.
218 Route 17 North
Rochelle Park, NJ 07662
Tel: (201) 845-1000
Total Assets Total Debts
------------ -----------
Foxtons North America, Inc. $487,757 $40,885,834
Foxtons, Inc. $2,618,254 $480,945
A. Foxtons North America, Inc's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Enterprise Fleet Services Vehicle Fleet/ $3,074,178
1550 Route 23 North, Autos are leased
Suite 100
Wayne, NJ 07470
General Electric Capital $272,264
Corp.
311 North Bayside Drive
Safety Harbor, FL 34695
Marple Fleet Leasing Van fleet/Vans are $70,958
3015 West Chester Pile leased
Broomall, PA 19008
A.T.&T. Utilities $61,269
Insight Trade Debt $22,320
Cooper Electric Supply Co. Trade Debt $21,684
G.B. Contracting Trade Debt $18,415
Fleet Fueling Gas for Autos $17,773
Wright Express Corporation
U.P.S. 0727R.P. Trade Debt $14,761
Sheraton-Eatontown Trade Debt $10,571
American Express Buisness Credit $10,150
Card
Schneider and Associates Service Fees $9,277
A.T.&T. Utilities $8,600
G.M.A.C. Payment Processing Trade Debt $8,175
Center
Tompkins, McQuire, Service Fees $7,515
Wachenfield, Barry, L.L.P.
Monster, Inc. Trade Debt $6,250
C.S. A.V. Systems Trade Debt $5,692
Marple Fleet Leasing Trade Debt $5,332
Capital Public Affairs, Inc. Trade Debt $5,000
I.C.S./Integrated Cabling Trade Debt $4,063
Solutions
B. Foxtons, Inc's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
R.S.T. Marketing Trade Debt $213,380
1272 Corporate Park Road
Forest, VA 24551
D.N.R. Group, L.L.C. Trade Debt $68,226
1720 Watterson Trail
Louisville, KY 40241
Verizon Wireless Utilities $44,047
P.O. Box 489
Newark, NJ 07101
Spartan Graphics, Inc. Trade Debt $31,290
United States Postal Service Trade Debt $26,878
on behalf of R.S.T.
Landmark Signs Trade Debt $26,552
C2 Media.com Trade Debt $9,402
West Long Branch Hotel, Trade Debt $7,815
L.L.C.
A.D.P., Inc. Trade Debt $5,844
Applied Image Inc. Trade Debt $5,821
Garden State Multiple Listing Trade Debt $4,825
Zimtek Limited Trade Debt $4,124
Verizon Wireless Utilites $3,909
Staples Trade Debt $3,163
Franklin D. McArthur, Jr. Small Claims $3,000
Plaintiff
Westchester B.M.W. & Mini Trade Debt $2,816
Citibank $2,800
Wanda S. Jones Small Claims $2,621
Plaintiff
J.&L. Body Shop Trade Debt $2,011
Michael J. Tagesen, Jr. Trade Debt $1,945
FIRST FRANKLIN: Fitch Takes Rating Actions on 10 Note Classes
-------------------------------------------------------------
Fitch Ratings took these rating actions on 10 First Franklin Net
Interest Margin notes:
First Franklin NIM Trust, series 2005-FF1:
-- $1.2 million class N-2 affirmed at 'BBB';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2005-FF1
First Franklin NIM 2005-FF5 LTD:
-- $0.8 million class N2 placed on Rating Watch Negative;
-- $1.7 million class N3 placed on Rating Watch Negative;
Underlying Transaction: First Franklin Mortgage Loan
Trust 2005-FF5
First Franklin NIM notes, series 2005-FFH2:
-- $3.4 million class B downgraded to 'C' from 'BBB' and
assigned a DR rating of 'DR6';
-- $1 million class C downgraded to 'C' from 'BBB-' and
assigned a DR rating of 'DR6';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2005-FFH2
First Franklin Mortgage Loan Trust Cl-14 NIM 2005-FFH3:
-- $4.9 million class N1 downgraded to 'B' from 'BBB+' and
placed on Rating Watch Negative;
-- $4 million class N2 downgraded to 'C' from 'BBB-' and
assigned a DR rating of 'DR6';
-- $3.7 million class N3 downgraded to 'C' from 'B-' and
assigned a DR rating of 'DR6';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2005-FFH3
First Franklin Mortgage Loan Trust Cl-15 NIM 2005-FFH4:
-- $1.8 million class N1 downgraded to 'BB' from 'A-' and
placed on Rating Watch Negative;
-- $4.4 million class N2 downgraded to 'C' from 'BBB-' and
assigned a DR rating of 'DR6';
-- $3 million class N3 downgraded to 'C' from 'BB' and
assigned a DR rating of 'DR6';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2005-FFH4
First Franklin Mortgage Loan Trust Cl-16 NIM 2006-FF8:
-- $1.2 million class N1 affirmed at 'A-';
-- $7.2 million class N2 downgraded to 'B' from 'BBB-';
-- $4.2 million class N3 downgraded to 'C' from 'BB' and
assigned a DR rating of 'DR5';
-- $6.7 million class N4 downgraded to 'C' from 'B' and
assigned a DR rating of 'DR5';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2006-FF8
First Franklin Mortgage Loan Trust NIM notes, series 2006-FF10:
-- $14.7 million class A downgraded to 'B' from 'BBB-';
-- $3.9 million class B downgraded to 'C' from 'BB' and
assigned a DR rating of 'DR5';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2006-FF10
First Franklin Mortgage Loan Trust NIM notes, series 2006-FF12:
-- $16.7 million class A downgraded to 'BB' from 'BBB-';
-- $5.1 million class B downgraded to 'B' from 'BB';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2006-FF12
First Franklin Mortgage Loan Trust NIM notes, series 2006-FF15:
-- $43 million class A downgraded to 'B' from 'BBB-';
-- $12 million class B downgraded to 'C' from 'BB' and
assigned a DR rating of 'DR5';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2006-FF15
First Franklin Mortgage Loan Trust NIM notes, series 2006-FF17:
-- $16 million class A downgraded to 'B' from 'BBB-';
-- $4.2 million class B downgraded to 'C' from 'BB' and
assigned a DR rating of 'DR5';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2006-FF17
The rating actions reflect actual pay-down performance of the NIM
securities to date compared to initial projections, as well as,
changes that Fitch previously made to its subprime loss
forecasting assumptions for the underlying transactions. The
updated assumptions better capture the deteriorating performance
of pools from 2006 and late 2005 with regard to continued poor
loan performance and home price weakness.
-- 'U.S. Subprime RMBS/HEL Upgrade/Downgrade Criteria'
(June 12, 2007);
-- 'Downgrade Criteria for Recent Vintage U.S. Subprime
RMBS' (Aug. 8, 2007)
-- 'U.S. Rating Criteria for Net Interest Margin
Securitizations: Updated' (Feb. 6, 2007).
FIRST FRANKLIN: Fitch Takes Rating Actions on Six Note Classes
--------------------------------------------------------------
Fitch Ratings took these rating actions on six First Franklin Net
Interest Margin notes:
First Franklin, Cl-5 NIM notes:
-- $1.4 million class N4 downgraded to 'C' from 'BB' and
assigned a distressed recovery (DR) rating of 'DR6';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2003-FF5
First Franklin, Cl-8 NIM notes:
-- $2.9 million class N8 downgraded to 'C' from 'BBB' and
assigned a DR rating of 'DR6';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2004-FFH2
First Franklin, Cl-10 NIM notes:
-- $2.7 million class N3 downgraded to 'C' from 'BBB-' and
assigned a DR rating of 'DR6';
-- $4 million class N4 downgraded to 'C' from 'BB+' and
assigned a DR rating of 'DR6';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2004-FFH3
First Franklin, Cl-11 NIM notes:
-- $1.3 million class N3 downgraded to 'C' from 'B+' and
assigned a DR rating of 'DR6';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2004-FFH4
First Franklin, Cl-12 NIM notes:
-- $2.6 million class N3 affirmed at 'BBB-';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2004-FF11
First Franklin NIM Trust, series 2004-FFH1:
-- $0.3 million class N4 downgraded to 'C' from 'BBB+' and
assigned a DR rating of 'DR6';
Underlying Transaction: First Franklin Mortgage Loan
Trust 2004-FFH1
GLOBAL CASH: Improved Financial Cues S&P to Lift Rating to BB-
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Las Vegas-based Global Cash Access Inc. to 'BB-' from
'B+', following continued positive operating trends and an
improved financial profile. The outlook is stable.
At the same time, S&P raised its rating on the company's
$235 million senior subordinated notes due 2012 to 'B' from 'B-'.
"The ratings on Global Cash Access reflect its narrow product
focus relative to the overall software and services industry and
customer concentration risk," said Standard & Poor's credit
analyst David Tsui. "These factors are offset somewhat by the
company's good customer relationships, recurring revenues from
long-term contracts, and 60% share of U.S. and other
major gaming markets in revenues."
Global Cash Access is the gaming industry's leading provider of
transaction-processing services and technology products that
dispense cash to customers on the casino floor. The company's
ATMs and cash access services distribute cash and advances through
ATM, debit, and credit card transactions.
Revenue for the June quarter, in line with the recent trends, was
up 13% from the year-earlier period, driven by increasing use of
cash advances and ATMs, and higher revenue per transaction. EBITDA
margin was stable compared with the past three quarters, at about
19%. Standard & Poor's believes
operating lease-adjusted debt to EBITDA is solid for the rating at
2.4x and provides some cushion for additional debt or shareholder
friendly activities.
GO BONDS: S&P Revises Outlook to Stable from Negative
-----------------------------------------------------
Standard & Poor's Ratings Services revised its outlook to stable
from negative on Littleton, Massachusetts' GO bonds following the
town's success in reversing the negative trend in its fiscal
operations and ability to bring balance and stability back to
recurring revenues and expenditures.
"The stable outlook reflects our expectation that the town will
continue to manage recurring revenues and expenditures and
maintain reserve levels according to their established goals and
policies," said Standard & Poor's credit analyst Victor Medeiros.
"Further stability is provided by the town's sound wealth and
income levels as well as ongoing economic development," Mr.
Medeiros added.
The town's location along Interstate 495, which rings metropolitan
Boston, Massachussetts, provides residents with access to large
job centers. In addition, IBM recently signed a lease to
completely occupy the renovated Littleton Corporate Center
(formerly occupied by Hewlett Packard), with the intent to
consolidate its 12 to 14 facilities around the state and bring
roughly 3,400 jobs into the town by next summer.
Littleton is primarily a residential community with a small
commercial base. The town's unemployment rate has historically
remained below state and national levels and it has above-average
wealth and income levels.
GP INVESTMENTS: Fitch Rates Senior Perpetual Notes at B
-------------------------------------------------------
Fitch Ratings assigned a 'B/RR4' rating to GP Investments Ltd's
extension of its 2007 senior perpetual notes program for
$40 million. The rating outlook is positive.
On July 25, 2007, Fitch revised the Rating Outlook of GP's Issuer
Default Rating of 'B' and its original $150 million perpetual
notes issuance to positive from stable given the significant
expected increase in assets under management and its positive
effects on GP's recurrent income. Resolution of the positive
outlook will depend on the ability of GP to sustain the expected
increase in recurring income and keep adequate control of its
expenses, while a successful deployment of new investments will
also be monitored. The need for a significantly more diversified
investment portfolio, a further increase of recurrent income to
cover operating expenses, and a more developed valuation
methodology, are key to sustain an improvement in GP's rating
going forward.
The perpetual notes have no fixed final maturity date and will be
repaid only in the event that the issuer redeems the notes or upon
acceleration due to an event of default. The notes are general
unsubordinated obligations of GP and rank pari passu with the
company's unsubordinated indebtedness. The obligations of GP
under the notes are supported by an 18-month coupon payment
reserve which will be deposited in a trustee. The rating of the
issuance recognizes the liquidity implicit in the coupon reserve,
augmented by substantial cash currently on hand; nevertheless, the
concern is that the latter is intended to be used for investments,
and its availability at any point during the life of the debt
instrument is difficult to predict.
GP's ratings are supported by adequate leverage levels, the
franchise of the company and the experience of the management
team, which augurs well for positive prospects going forward.
Also, the significant increase in the size of its portfolio of
managed investments results in a positive trend on its recurrent
income. The ratings are constrained, however, by the concentrated
nature of the current and intended investment portfolio (by
country and by individual investment size), the uncertainty
related to the maturation period of the investment portfolio, and
GP's timing and ability to realize investment gains.
GP is a Bermuda exempted company that consolidates the activities
of a private equity business and an asset management business in
Brazil. The origins of the company date back to 1993. A major
corporate reorganization was completed in 2005 in preparation for
an IPO of the company during 2006. GP is listed on the Luxembourg
Stock Exchange and also has a BDS program on the Brazilian Stock
Market.
GREENPOINT NET: Fitch Junks Rating on $5.9 Mil. Class Notes
-----------------------------------------------------------
Fitch Ratings took these rating actions on Greenpoint Net Interest
Margin Notes:
Greenpoint NIM 2005-HE1 Trust:
-- $5.9 million Class Notes downgraded to 'C' from 'BB', and
assigned a Distressed Recovery (DR) rating of 'DR4'
Underlying Transaction: Greenpoint Mortgage Funding Trust
2005-HE1
Greenpoint NIM 2005-HE4 Trust:
-- $1.1 million Class N2 downgraded to 'C' from 'BBB-', and
assigned a DR rating of 'DR6'
Underlying Transaction: Greenpoint Asset-Backed Notes
2005-HE4
The rating actions reflect actual pay-down performance of the NIM
securities to date compared to initial projections, as well as,
changes that Fitch previously made to its subprime loss
forecasting assumptions for the underlying transactions. The
updated assumptions better capture the deteriorating performance
of pools from 2006 and late 2005 with regard to continued poor
loan performance and home price weakness.
-- 'U.S. Subprime RMBS/HEL Upgrade/Downgrade Criteria'
(June 12, 2007);
-- 'Downgrade Criteria for Recent Vintage U.S. Subprime
RMBS' (Aug. 8, 2007)
-- 'U.S. Rating Criteria for Net Interest Margin
Securitizations: Updated' (Feb. 6, 2007).
Fitch's Distressed Recovery ratings, introduced in April 2006
across all sectors of structured finance, are designed to estimate
recoveries on a forward-looking basis while taking into account
the time value of money.
GREENWICH CAPITAL: Fitch Assesses 14 Soundview Note Classes
-----------------------------------------------------------
Fitch Ratings took these rating actions on 14 Greenwich Capital
Soundview Net Interest Margin Notes:
Soundview NIM Trust 2005-OPT2:
-- $3.6 million Class Notes downgraded to 'C/DR5' from
'BBB';
Underlying Transaction: Soundview Home Loan Trust
2005-
OPT2
Soundview NIM Trust 2005 CI-5:
-- $1.2 million Class N2 affirmed at 'BBB-';
Underlying Transaction: Soundview Home Equity Loan Trust
2005-OPT3
Soundview NIM Trust 2005 CI-6:
-- $3.8 million Class N2 downgraded to 'BB' from 'BBB-';
-- $6.6 million Class N3 downgraded to 'B' from 'BB ';
Underlying Transaction: Soundview Home Loan Trust 2005-
OPT4
Soundview NIM Trust 2005 CI-8:
-- $1.7 million Class N1 downgraded to 'BB' from 'A-';
-- $2.2 million Class N2 downgraded to 'BB' from 'BBB- ';
Underlying Transaction: Soundview Home Equity Loan Trust,
Series 2005-4
Soundview NIM Trust 2006 CI-11:
-- $8.3 million Class N2 rated 'BBB-', placed on Rating
Watch Negative;
-- $4.8 million Class N3 affirmed at 'BB';
-- $7.6 million Class N4 affirmed at 'B';
Underlying Transaction: Soundview Home Loan Trust 2006-
OPT1
Soundview NIM Trust 2006 CI-12:
-- $3.7 million Class N1 affirmed at 'A-';
-- $14 million Class N2 downgraded to 'BB' from 'BBB-';
-- $7.2 million Class N3 affirmed at 'BB';
-- $12 million Class N4 affirmed at 'B';
Underlying Transaction: Soundview Home Loan Trust 2006-
OPT2
Soundview NIM Trust 2006 CI-13:
-- $3.2 million Class N-1 downgraded to 'BB' from 'A-';
-- $3.9 million Class N-2 downgraded to 'B' from 'BBB-', and
placed on Rating Watch Negative;
-- $1.8 million Class N-3 downgraded to 'C/DR5' from 'BB+';
-- $1 million Class N-4 downgraded to 'C/DR5' from 'BB'
Underlying Transaction: RFC RAMP 2006-RS3
Soundview NIM Trust 2006 CI-14:
-- $3.3 million Class N1 affirmed at 'A-';
-- 1$16.7 million Class N2 downgraded to 'BB' from 'BBB-';
-- $13.5 million Class N3 downgraded to 'B' from 'BB-';
-- $6 million Class N4 downgraded to 'B' from 'B+';
Underlying Transaction: Soundview Home Loan Trust 2006-
OPT3
Soundview NIM Trust 2006 CI-15:
-- $8.4 million Class N1 affirmed at 'A-';
-- $25.8 million Class N2 downgraded to 'BB' from 'BBB-';
-- $15.3 million Class N3 downgraded to 'B' from 'BB';
-- $25 million Class N4 downgraded to 'C/DR5' from 'B'
Underlying Transaction: Soundview Home Loan Trust 2006-
OPT5
Soundview NIM Trust 2006 CI-16:
-- $8.7 million Class N-1 downgraded to 'BB' from 'A-';
-- $5.2 million Class N-2 downgraded to 'B' from 'BBB';
-- $3.3 million Class N-3 downgraded to 'C/DR5' from 'BBB-';
-- $5.9 million Class N-4 downgraded to 'C/DR5' from 'B+'
Underlying Transaction: RFC RASC 2006-KS5
Soundview NIM Trust 2006 CI-18:
-- $10.7 million Class N-1 affirmed at 'A-';
-- $13.5 million Class N-2 rated 'BBB-', and placed on
Rating Watch Negative;
-- $9.4 million Class N-3 affirmed at 'BB'.
Underlying Transaction: Soundview 2006-EQ1
Soundview NIM Trust 2006 CI-20:
-- $9.2 million Class N-1 downgraded to 'BB' from 'A-', and
placed on Rating Watch Negative;
-- $6.7 million Class N-2 downgraded to 'B' from 'BBB-', and
placed on Rating Watch Negative;
-- $3.4 million Class N-3 downgraded to 'C' from 'BB', and
assigned a DR rating of DR5.
Underlying Transaction: Soundview 2006-NLC1
Soundview NIM Trust 2006 CI-21:
-- $16.5 million Class N-1 affirmed at 'A-';
-- $7.2 million Class N-2 affirmed at 'BBB'
-- $10.5 million Class N-3 affirmed at 'BB'
Underlying Transaction: Soundview 2006-WF2
Soundview NIM Trust 2006 CI-22:
-- $8.9 million Class N1 downgraded to 'BBB' from 'A-';
-- $5.2 million Class N2 downgraded to 'BB' from 'BBB- ';
-- $5.8 million Class N3 downgraded to 'B' from 'BB';
-- $5.8 million Class N4 downgraded to 'C/DR6' from 'B';
Underlying Transaction: Soundview Home Loan Trust 2006-
EQ2
The rating actions reflect actual pay-down performance of the NIM
securities to date compared to initial projections, as well as,
changes that Fitch previously made to its subprime loss
forecasting assumptions for the underlying transactions. The
updated assumptions better capture the deteriorating performance
of pools from 2006 and late 2005 with regard to continued poor
loan performance and home price weakness.
HUDBAY MINERALS: Moody's Withdraws B1 Corporate Family Rating
-------------------------------------------------------------
These ratings of HudBay Minerals Inc. and Hudson Bay Mining and
Smelting Co. Ltd. have been withdrawn:
HudBay Minerals Inc.:
-- Corporate Family Rating of B1
-- Probability of Default of B1
Hudson Bay Mining and Smelting Co., Ltd.:
-- Speculative Grade Liquidity rating of SGL-1
Moody's has withdrawn these ratings for business reasons. Moody's
added that the ratings were withdrawn because this issuer has no
rated debt outstanding.
HudBay Minerals Inc., based in Winnipeg, Manitoba, is engaged in
the mining and processing of zinc, copper and other by-product
metals and had revenues in 2006 of CDN$1.1 billion.
INT'L PAPER: Completes $620MM Joint Venture with Ilim Holding
-------------------------------------------------------------
International Paper and Ilim Holding S.A. have completed the
formation of a 50:50 joint venture. To form the joint venture,
International Paper purchased 50% of Ilim Holding S.A., for
approximately $620 million.
The joint venture will operate as Ilim Group. The deal received
approval from the Russian Federal Antimonopoly Service in June and
the partners signed a definitive agreement for the deal in August.
"The formation of this 50:50 joint venture is a real strategic
milestone for International Paper," John Faraci, International
Paper chairman and chief executive officer, said. "Both parties
bring important strengths and expertise to the JV, and we are very
positive about the future success of this new partnership."
"We are very pleased to begin our partnership with Ilim and work
together to continue to grow this business," Mary Laschinger,
International Paper senior vice president and president of IP
Europe, said. "We believe the joint venture has all the
ingredients needed for success: good
management, talented, hard-working employees, a solid asset base
with improvement potential, and strong supply positions in high-
growth markets."
"We are opening a new page in the history of Ilim Group and the
entire Russian pulp and paper industry,” Zakhar Smushkin, chairman
of Ilim Group, said. “We have formed an alliance that is
unprecedented in our sector and will become the center of dynamic
growth of the entire Russian forest products industry. This is a
response to global market challenges and the appeals from the
Russian President and the government of the Russian Federation.”
“The company's products will be able to meet the demand of the
growing Russian market for high-quality paper and packaging
products and also resolve the import replacement problem,” said
Mr. Smushkin. “In five years' time, every fourth sheet of paper
and every third corrugated box in the Russian market
will be produced by our company."
A key element of the joint venture strategy is a long-term
investment program in which the joint venture will invest, through
cash from operations and additional debt, approximately $1.5
billion in Ilim's four mills over approximately five years.
This investment in the Russian pulp and paper industry will
upgrade equipment, increase production capacity and allow for new
high-value uncoated paper, pulp and corrugated packaging product
development.
The pulp and paper mill that International Paper owns and
operates in Svetogorsk, in Russia's Leningrad region, will not be
owned by the joint venture and will continue to operate as part of
IP's European Papers business. Similarly, Ilim Pulp's wood
products enterprises will not be integrated into the joint
venture; instead they will be combined to create Russia's largest
wood products holding company.
Board of Directors and Management Team
The joint venture has formed a new board of directors which
includes four members each from Idba Empire Beef & Redistribution
Companylim and International Paper. Board members from
International Paper are: (i) Mary Laschinger, senior vice
president and president, IP Europe; (ii) Cato Ealy, senior vice
president, corporate development;
(iii) Richard Phillips, retired senior vice president,
technology; and (iv) Dwight Van Inwegen, chief financial officer,
IP Europe.
Ilim is represented by the Ilim Pulp shareholders Boris
Zingarevich, Mikhail Zingarevich, and Leonid Erukhimovich, well as
Zakhar Smushkin, who will also chair the board of directors.
Paul Herbert, former International Paper senior vice president,
was named the joint venture's chief executive officer.
Ilim Group's full management team consists of:
-- Sergey Kostylev, deputy CEO (formerly of Ilim)
-- Alexandr Pozdnyakov, deputy CEO, managing director, Ilim
West (formerly of Ilim)
-- Brian McDonald, deputy CEO, managing director, Ilim East
(formerly of International Paper)
-- Yuri Aivazov, deputy CEO, managing director, corrugated
box business (formerly of Ilim)
-- Alexandr Emdin, deputy CEO, chief financial officer
(formerly of Ilim)
-- John Rankin, deputy CEO, managing director, manufacturing
and investments (formerly of International Paper)
-- Yuri Masiyansky, chief administration and human resources
director (formerly of Ilim)
-- Alexandr Bass, chief managing director, supply chain
(formerly of Ilim)
-- Viktor Atamanov, managing director, strategic planning
and marketing (formerly of Ilim)
-- Alexei Lomko, general counsel and central legal (formerly
of Ilim)
-- Alexandr Khromov, managing director, security (formerly
of Ilim)
-- Elena Konnova, public relations director (formerly of
Ilim)
-- Dmitry Chuiko, government relations director (formerly of
Ilim)
-- Igor Tyukov, board of directors administration officer
(formerly of Ilim)
About Ilim Group
Ilim Group -- http://www.ilimgroup.com/-- was registered in St.
Petersburg on Sept. 27, 2006. In 2007, the Group was joined by
Kotlas Pulp and Paper Mill, Bratsk Pulp and Containerboard Mill
and Ust-Ilimsk Pulp and Paper Mill as the mills were converted to
a single share. On July 2 Ilim Group started its activities as a
unified company. Production assets of the Group are structured on
the production and geographical basis and include these business
units: SevCBP (Northern Pulp and Paper Production), SibCBP
(Siberian Pulp and Paper Production), Consumer Packaging and
Corrugated Packaging. The company also includes centralized
service providers to the Group's branches and subsidiaries.
About International Paper
Headquartered in Stamford, Connecticut, International Paper Co.
(NYSE: IP) -- http://www.internationalpaper.com/-- is an uncoated
paper and packaging company with primary markets and manufacturing
operations in North America, Europe, Russia, Latin America, Asia
and North Africa. International Paper employs approximately
54,000 people in more than 20 countries, and serves customers
worldwide.
* * *
In December 2005, Moody's Investors Service placed International
Paper Co.'s senior subordinate rating at 'Ba1'. The rating still
holds to date with a stable outlook.
INTERNATIONAL RECTIFIER: Alex Lidow Resigns as CEO & Director
-------------------------------------------------------------
International Rectifier Corporation disclosed the resignation of
Dr. Alex Lidow as chief executive officer and as a director,
effective immediately.
Don Dancer continues as International Rectifier's acting chief
executive officer. Mr. Dancer has served in that position since
Aug. 28, 2007.
The board of directors has engaged Korn/Ferry International
(NYSE:KFY) to conduct a search for Dr. Lidow's permanent
replacement. The search is being led by Dr. James Plummer,
Chairman of the Corporate Governance and Nominating Committee.
"We want to thank Alex for his contributions to the company,” Don
Dancer, International Rectifier's acting chief executive
officer, said. “During his tenure, he led the pioneering power
MOSFET technology, which drove the adoption of power management
across broader end use applications. His focus on power
management helped to solidify International Rectifier as a
leader in the industry. Alex has also encouraged the next
generation of technology professionals who will continue to
create and provide our customers with innovative products."
"I have appreciated the opportunity to serve International
Rectifier as a Director and CEO the last 12 years," Dr. Lidow
said. "International Rectifier and the power management
industry have a bright future, and I believe the company will
continue to deliver enormous value to the companies it serves
and end-users by helping to reduce global energy consumption and
improving energy efficiency."
Dr. Lidow will receive accrued salary, bonus and vacation
through the date of his departure. He will be entitled to
exercise his vested options for an additional eighteen months,
or 90 days following the date on which the company becomes
current in its SEC financial reports, whichever is later. The
company has agreed to vest all of Dr. Lidow's options that had
not already vested.
Based in El Segundo, California, International Rectifier
Corporation (NYSE:IRF) -- http://www.irf.com/-- is a designer,
manufacturer and marketer of power management product devices,
which use power semiconductors. The company's products are used
in a variety of end applications, including computers,
communications networking, consumer electronics, energy-efficient
appliances, lighting, satellites, launch vehicles, aircraft and
automotive diesel injection. Its products consist of Power
Management Integrated Circuits (Power Management ICs), Power
Components and Power Systems. It summarizes its segments in two
groups: Focus Products and Non-Focus Products. The company has
manufacturing facilities in the U.S., Mexico, United Kingdom,
Germany and Italy; and has subsidiaries in Japan and Singapore.
* * *
As reported in the Troubled Company Reporter on Sept. 14, 2007,
Standard & Poor's Ratings Services said that its 'BB' corporate
credit rating on International Rectifier Corp. remains on
CreditWatch with negative implications.
INTERNATIONAL RECTIFIER: Discloses Key Internal Initiatives
-----------------------------------------------------------
International Rectifier Corporation announced these initiatives:
-- Shifted reporting of the internal audit function to the
Audit Committee of the board of directors and the general
counsel.
-- Appointed a lead independent director.
-- Appointed a Special Committee of the board to advise and
support the acting chief executive officer.
-- Evaluated independent third party consulting firms to
document and assess the design effectiveness of processes
and controls.
-- Revamped the company's hotline process and placed it
under the internal audit function.
-- Changed reporting relationships at the company's Japan
subsidiary to improve oversight of the subsidiary.
-- Added interim processes to help assure adherence to
proper revenue recognition policies at the Japan
subsidiary.
The company expects to continue to assess and improve its
internal controls and corporate governance environment.
"During this period of transition for the company, the
Audit Committee and I are working diligently to bring the
internal accounting investigation to a resolution,” Jack Vance,
International Rectifier's lead independent director,
said. “We are also taking steps to implement meaningful changes
to our internal controls and governance policies. Going forward,
we will continue to work with Don Dancer, International
Rectifier's acting chief executive officer, as well as our
executive leadership team and our employees to help ensure that
our company continues to create the products and deliver the level
of service our customers have come to expect of International
Rectifier."
Previously, the Board of Directors designated a Special
Committee, comprised of independent directors of the company, to
advise and support the company's acting chief executive officer.
The committee is chaired by Dr. Vance, former senior partner of
McKinsey & Co. The other members include:
* Mr. Robert Attiyeh, former chief financial officer of
AMGEN Inc.;
* Dr. Philip M. Neches, former chief technology officer of
Teradata Corporation, NCR Corporation, and the AT&T
Multimedia Products and Systems Group;
* Dr. James Plummer, Dean of Engineering at Stanford
University; and
* Dr. Rochus Vogt, retired provost of the California
Institute of Technology.
Based in El Segundo, California, International Rectifier
Corporation (NYSE:IRF) -- http://www.irf.com/-- is a designer,
manufacturer and marketer of power management product devices,
which use power semiconductors. The company's products are used
in a variety of end applications, including computers,
communications networking, consumer electronics, energy-efficient
appliances, lighting, satellites, launch vehicles, aircraft and
automotive diesel injection. Its products consist of Power
Management Integrated Circuits (Power Management ICs), Power
Components and Power Systems. It summarizes its segments in two
groups: Focus Products and Non-Focus Products. The company has
manufacturing facilities in the U.S., Mexico, United Kingdom,
Germany and Italy; and has subsidiaries in Japan and Singapore.
* * *
As reported in the Troubled Company Reporter on Sept. 14, 2007,
Standard & Poor's Ratings Services said that its 'BB' corporate
credit rating on International Rectifier Corp. remains on
CreditWatch with negative implications.
INTERTAPE POLYMER: Raises $62.9 Mil. from Common Shares Offering
----------------------------------------------------------------
Intertape Polymer Group Inc. raised a total of $42,165,060 and
CDN$20,620,699 in its rights offering. Based on current exchange
rates, this represents total proceeds of approximately
$62.9 million.
As a result, Intertape is issuing an aggregate of 17,969,388
common shares, at issue prices of $3.44 and CDN$3.61 per share.
There are 58,956,328 Intertape common shares issued and
outstanding.
The net proceeds from the rights offering will be used to reduce
its long-term debt.
"We are pleased with the support shown by our shareholders,”
Melbourne F. Yull, Intertape's executive director, stated. “We
believe the success of the rights offering clearly reflects the
support of our shareholders for the policies and priorities we
have outlined. We are committed to enhancing the value of
Intertape for all of its shareholders by executing our business
plan."
Based in Montreal, Quebec and Sarasota/Bradenton, Florida,
Intertape Polymer Group Inc. (NYSE,ITP; TSX: ITP.TO) --
http://www.intertapepolymer.com/-- develops and manufactures
specialized polyolefin plastic and paper-based packaging products
and complementary packaging systems for industrial and retail use.
The company employs approximately 2,100 employees with operations
in 17 locations, including 13 manufacturing facilities in North
America and one in Europe.
* * *
On Sept. 10, 2007, Standard & Poor's placed Intertape Polymer
Group Inc.'s long term foreign and local issuer credit ratings at
'B-'.
J.B. POINDEXTER: Moody's Holds Corporate Family Rating at B2
------------------------------------------------------------
Moody's Investors Service affirmed the long-term debt ratings (CFR
at B2) of J.B. Poindexter & Co., Inc., but changed the rating
outlook to negative from stable.
In a related action Moody's lowered the company's Speculative
Grade Liquidity Rating to SGL-3 from SGL-1. While the SGL-3
rating reflects the expectation of adequate liquidity over the
next twelve months, as of the date of this press release, the
company has not announced an extension of the original maturity
date of its $30 million asset based revolving credit facility
which matures in March 2008.
The negative outlook reflects the short term status of the
company's liquidity facility combined with the expectation that JB
Poindexter's operating performance will be pressured by lower
customer orders in the second half of 2007 and early 2008,
resulting from higher emission control standards in the commercial
vehicle market.
Commercial vehicle orders are expected to be pressured from a
weaker housing market and current indications of weakening
consumer demand. While JB Poindexter maintained about
$23 million in cash at June 30, 2007, much of the cash was used to
fund an acquisition announced in the third quarter of 2007.
Capital expenditures are expected to approximate 2006 levels of
about $16 million over the next twelve months.
As of June 30, 2007 the asset based revolving credit facility was
unfunded and there was about $27.6 million of availability after
letters of credit. The revolving credit facility is supported by
a borrowing base currently well in excess of the $30 million
commitment. JB Poindexter furthermore has the option to increase
the revolving credit commitment up to $50 million, subject only to
payment of a $100,000 fee and the absence of an event of default.
The company maintains sufficient room under the debt incurrence
test of the senior notes to accommodate such an up sizing. A
fixed charge coverage ratio is the only financial covenant
applicable to the revolving credit facility, and is only
applicable when excess revolver availability falls below $10
million.
Ratings lowered:
-- Speculative Grade Liquidity Rating, to SGL-3, from SGL-1
Ratings affirmed:
-- B2, Corporate Family Rating
-- B2, Probability of Default
-- B3 (LGD4, 62%) rating for the $200 million of 8.75%
guaranteed senior unsecured notes due March 2014
Moody's last rating action for JB Poindexter was on
Sept. 22, 2006 when the LGD Methodology was applied.
JB Poindexter, headquartered in Houston, Texas, manufactures
commercial truck bodies for medium-duty trucks, pickup truck caps
and tonneau covers, truck bodies for walk-in step vans, provides
contract manufacturing services for precision metal parts and
machining and casting services, markets expandable foam plastics
used for packaging, shock absorption, and material handling
products. JB Poindexter's pro forma annualized revenues are about
$827 million.
J&R'S FOOD: Case Summary & 16 Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: J.&R.'s Food, Inc.
dba Western Sizzlin of Marion
1610 North Main Street
Marion, NC 28752
Bankruptcy Case No.: 07-40568
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
The Steak House, Inc. 07-40569
Type of business: The Debtors owns and operates restaurants.
Chapter 11 Petition Date: October 5, 2007
Court: Western District of North Carolina (Shelby)
Judge: George R. Hodges
Debtors' Counsel: David G. Gray, Esq.
Westall, Gray, Connolly & Davis, P.A.
81 Central Avenue
Asheville, NC 28801
Tel: (828) 254-6315
Total Assets: Total Debts:
------------- ------------
J.&R.'s Food, Inc. $912,000 $1,085,412
The Steak House, Inc. $33,000 $156,168
A. J&R's Food, Inc's Four Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
I.F.H. $40,000
543 12th Street Drive,
Nortwest
Hickory, NC 28603
Western Sizzlin $28,412
Franchise Administration
P.O. Box 12167
Roanoke, VA 24023-2167
North Carolina Department of $10,000
4 West Edenton Street
Raleigh NC 27601
U.S. Food Service $7,000
B. The Steak House, Inc's 's 14 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Institution Food House $68,896
543 12th Street Drive,
Northwest
Hickory, NC 28603-2947
Western Sizzlin Corp. $49,539
PO Box 12167
Roanoke, VA 24023
U.S. Foodservice, Inc. $13,650
125 Fort Mill Parkway
Fort Mill, SC 29715
De Lage Landen $11,000
Lamar Advertising $7,622
Pepsi-Cola $2,389
FirstComp $803
G.D.S.-Morganton $797
Ecolab, Inc. $585
K.E.G. $342
RICOH Americas Corp. $162
Edwards Equipment Co., Inc. $154
Avaya Financial Services $150
Central Maryland Association $80
JOHNSONDIVERSEY INC: Fitch Affirms B- Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings affirmed JohnsonDiversey Inc.'s ratings as:
-- Issuer default rating at 'B-';
-- Senior secured bank credit facilities at 'BB-/RR1'
Fitch also upgrades JohnsonDiversey's senior subordinated debt
rating to 'B/RR3' from 'B-/RR4'.
In addition, Fitch affirms JohnsonDiversey Holdings Inc.'s IDR of
'B-' and senior discount notes rating of 'CCC/RR6'.
The ratings cover about $1.5 billion of debt. The rating outlook
for both JohnsonDiversey and JohnsonDiversey Holdings Inc. is
revised to stable from negative.
The rating affirmation is supported by JohnsonDiversey's modestly
improved profitability and stable debt levels during the last
year. The stable rating outlook also reflects JohnsonDiversey's
modest improvement in EBITDA margins and the continued progress on
its previously announced restructuring plan. Fitch expects
margins to continue to improve as the restructuring program
reaches completion. Along with some margin improvement, Fitch
also expects cash flow to improve and the company should have the
ability to repay debt starting by the end of 2008.
Free cash flow, defined as net cash from operating activities less
capital expenditures and dividends, is projected to be negative in
2007 but turn positive in 2008 through 2010. Fitch remains
concerned that at least temporarily JohnsonDiversey may need to
borrow to complete the restructuring program. Fitch is also
concerned with JohnsonDiversey's reliance on alternative funding
sources other than internal cash flow generated from operations to
facilitate the potential exit of Unilever's 33% ownership interest
of JohnsonDiversey Holdings Inc. Fitch views the potential exit
by Unilever similarly to any other event risk related to changes
in ownership of a company.
The upgrade of the senior subordinated notes at JohnsonDiversey is
a result of the increased enterprise value due to modest
improvement in EBITDA as well as a lower EBITDA discount. This
increased enterprise value provides for a higher recovery value
for the subordinated notes. The subordinated notes are expected
to have a recovery of 70% or 'RR3'. Fitch's recovery ratings
incorporate an evaluation using a distressed EBITDA and a derived
multiple reflecting scorecard characteristics for the company and
industry; the going concern value remains higher than the asset
liquidation value. Recovery prospects for JohnsonDiversey's
senior subordinated notes are rated good.
Total expenses to date related to the company's current
restructuring program were about $314 million, of which
$207 million was in cash charges as of June 29, 2007.
Additionally, JohnsonDiversey has spent $29 million in capital
expenditures related to the restructuring program. Additional
asset sales should provide JohnsonDiversey incremental cash to
help fund and complete the current restructuring program. FCF for
the latest 12 months ending June 29, 2007 was negative
$152 million, which includes about $99 million in capital
expenditures.
JohnsonDiversey is a global player in the industrial and
institutional cleaning market and sells its products into the
following product segments: floor care, foodservice, food
processing, restroom/housekeeping, laundry and industrial.
JohnsonDiversey is a wholly owned subsidiary of JohnsonDiversey
Holdings, which is owned by Commercial Markets Holdco (67%) and
Unilever (33%). JohnsonDiversey had $2.97 billion in net sales
and about $300 million in EBITDA before one-time charges for the
12 months ending June 29, 2007.
KELLWOOD CO: Poor Credit Metrics Cue Moody's to Cut Ratings
-----------------------------------------------------------
Moody's Investors Service lowered its Corporate Family and
Probability of Default Ratings on Kellwood Company to Ba3 from
Ba2, concluding the review for possible downgrade that commenced
on Sept. 10, 2007. At the same time the ratings on the company's
unsecured debentures were lowered to B1 from Ba3. The rating
outlook is stable.
The rating downgrade is primarily driven by expectations that
recovery in credit metrics to levels more appropriate for the Ba2
rating category has become prolonged as sales and margin erosion
in the company's heritage women's sportswear businesses have
weakened at a more rapid pace than anticipated. While the company
is implementing initiatives to improve performance in these areas,
competitive pressures in the moderate priced segments where the
company still has a significant presence are expected to remain.
The company does maintain a strong liquidity profile which
provides it with flexibility however financial metrics remain
weak.
"Kellwood's strategy has been to expand its presence in higher
margin upscale brands, such as its recent acquisitions of Vince
and Hanna Andersson, and while these acquisitions have diversified
the company's business mix, the benefits from recent acquisitions
have been eroded by continued pressure on sales and margins,
particularly in the company's moderately priced portfolio," said
Moody's vice president and senior analyst Scott Tuhy. "At the
same time, the rating action takes into consideration that with
moderating contributions from the company's heritage business, the
company is even more reliant upon successfully executing the
transition into higher price categories."
The stable rating outlook reflects the breadth of diversification
of the company's businesses, expected maintenance of good near
term liquidity, the anticipated benefits from recent restructuring
actions and expectations the company will maintain a balanced
acquisition strategy and conservative financial policies
consistent with historical levels.
Moody's notes that on Sept. 18, 2007, Kellwood received an
unsolicited and non-binding offer from a significant shareholder
to acquire the company. At this time the company has stated it
will carefully evaluate the offer and has yet to make a formal
response to the proposal. This offer has no bearing on the rating
action taken. The current ratings contemplate the company will
maintain its historically conservative financial policies, and any
actions that indicate more aggressive financial policies could
create negative rating pressure.
These ratings were downgraded:
-- Corporate Family Rating and Probability of Default Rating
-- to Ba3 from Ba2
-- $140 million Debentures due July 15, 2009 -- to B1 (LGD 5
-- 70%) from Ba3 (LGD 5 -- 70%)
-- $130 million Debentures due Oct. 15, 2017 -- to B1
(LGD 5 -- 70%) from Ba3 (LGD 5 -- 70%)
Based in St Louis, Missouri, Kellwood Company is a marketer of
apparel and consumer soft goods, specializing in branded, as well
as private label products, marketed across a number of channels of
distribution. The company's brand portfolio includes "Sag
Harbor", "Gerber Childrenswear", "Hanna Andersson" and "Vince".
The company reported revenues near $2 billion for its most recent
fiscal year.
KW EXCAVATION: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: K.W. Excavation, Inc.
P.O. Box 922
Morgan, UT 84050
Bankruptcy Case No.: 07-24738
Type of business: The Debtor is an excavating contractor.
Chapter 11 Petition Date: October 5, 2007
Court: District of Utah (Salt Lake City)
Judge: Glen E. Clark
Debtor's Counsel: Knute Rife, Esq.
P.O. Box 2941
Salt Lake City, UT 84110
Tel: (801) 809-9986
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
H.D. Supply Waterworks trade debt $173,446
2457 South 1620 West
Ogden, UT 84401
John Wilkinson trade debt $137,000
1200 East 100 South
Morgan, UT 84050
Engineered Structures, Inc. trade debt $125,000
c/o Kim Trout
225 North Ninth Street,
Suite 820
Boise, ID 83701
Rhine Construction trade debt $96,932
Precast Concrete Products trade debt $66,325
Strong & Hanni, P.C. professional $44,841
services
Wilkinson Construction trade debt $44,223
B.T. Funding trade debt $35,280
Mountain States Supply trade debt $34,568
Little K, Inc. trade debt $29,945
Wheeler Machinery Co. trade debt $23,821
Dirt Hog Trucking, Inc. trade debt $21,250
Scott Machinery trade debt $19,325
Tesco Williamsen trade debt $15,361
Wells Fargo trade debt $14,000
Craythorne, Inc. trade debt $8,373
United Rentals Northwest, trade debt $7,507
Inc.
Morgan Asphalt, Inc. trade debt $6,375
Sam's Club trade debt $5,881
Dura-Crete, Inc. trade debt $5,157
LAWRENCE UTILITIES: Court Dismisses Chapter 11 Case
---------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana has
dismissed the Chapter 11 case of Lawrence Utilities LLC, Cathy
Kightlinger of The Indianapolis Star reports.
In August 2007, the company filed for bankruptcy stating that it
wanted "to ensure continued, uninterrupted operation of the
Lawrence water and sewer utilities and expedite the resolution of
longstanding legal grievances the City of Lawrence has imposed on
the community and Lawrence Utilities since 2003, through claims
the utility's operating agreement is void."
However, according to Ms. Kightlinger, Lawrence Mayor Deborah
Cantwell claimed that the bankruptcy filing was an attempt to
delay the dispute between city and the company. Mayor Cantwell,
Ms. Kightlinger adds, had sued the company in the Marion Superior
Court alleging that ratepayers were paying too much for the
services offered.
Headquartered in Lawrence, Indiana, Lawrence Utilities LLC --
http://www.lawrenceutilitiesllc.com/-- operates and maintains the
City of Lawrence's three water treatment facilities, five water
storage facilities, 25 sewer-pumping stations and several support
facilities. It also services and maintains 2,000 fire hydrants,
4,000 water main valves, 4,000 manholes and 290 miles of water and
sewer mains.
The Debtor filed for chapter 11 protection on Aug. 8, 2007 (Bankr.
S.D. Ind. Case No. 07-07454). George W. Hopper, Esq., and Jason
R. Burke, Esq., at Hopper & Blackwell, P.C., represented the
Debtor. When the Debtor filed for protection from its creditors,
it listed total assets of $5,181,965 and total liabilities of
$11,087,083.
MACO STEEL: Case Summary & 19 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Maco Steel, Inc.
8057 Graphic Industrial Drive
Belmont, MI 49306
Bankruptcy Case No.: 07-07346
Type of business: The Debtor provides the following products and
services: C.N.C. flame cut shapes, mold plates-
rails-holder blocks, die plates-master plates-
sub plates-parallels, die sets-die set kits-die
set components and welded assemblies and
fabricating. See http://www.macosteel.com
Chapter 11 Petition Date: October 5, 2007
Court: Western District of Michigan (Grand Rapids)
Judge: Jeffrey R. Hughes
Debtor's Counsel: John T. Piggins, Esq.
Miller Johnson
250 Monroe Avenue Northwest, Suite 800
Grand Rapids, MI 49503
Tel: (616) 831-1793
Fax: (616) 988-1793
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
------ --------------- ------------
Macwin Steel trade debt $631,389
7830 Ackley Avenue
Detroit, MI 48211
I.M. Steel, Inc. trade debt $274,136
1685 North Route 50
Bourbannais, IL 60914
Galco trade debt $223,113
P.O. Box 84
Chappaqua, NY 10514
Eddie Kane Steel trade debt $71,374
Archer Steel Co. trade debt $70,000
Nance Steel Sales, Inc. trade debt $42,887
Ohio Steel Sheet & Plate, trade debt $36,173
M.D.L. Mold & Die Components, trade debt $28,687
Fraser Grinding Co. trade debt $26,816
Hansen Balk Steel Treating, trade debt $24,505
Inc.
Saint-Gobain Abrasives, Inc. trade debt $21,415
Global Alloys, L.L.C. trade debt $16,551
Peerless Steel of Grand trade debt $12,654
Rapids
Waddell Electric Co. trade debt $11,253
Metals U.S.A. Plates & Shapes trade debt $10,726
The Cincinnati Life Insurance trade debt $15,833
Danley I.E.M. trade debt $7,252
Dick Dykehouse Co. trade debt $7,470
Richards Machine Repair, trade debt $4,777
L.L.C.
MAGSTAR TECH: Committee Grants 1-for-2,000 Reverse Share Split
--------------------------------------------------------------
A special committee of MagStar Technologies Inc.'s board of
directors has approved a 1-for-2,000 share combination, or reverse
split, such that shareholders owning less than one whole share of
the company's common stock after the reverse split will have their
fractional shares cancelled and converted into the right to
receive the cash consideration described herein.
As a result of the transaction, each share of the common stock
held of record or beneficially by a shareholder owning fewer than
2,000 shares of MagStar's common stock on the record date to be
determined will be converted into the right to receive $0.425 per
pre-reverse split share, without interest.
Shareholders who own 2,000 or more shares of MagStar's common
stock on the record date will not be entitled to receive any cash
for any whole or fractional shares that may result from the
reverse split.
If the proposed transaction is completed, MagStar would no longer
be required to file periodic reports with the SEC. The
deregistration of MagStar's common stock will also have the effect
of terminating the eligibility of its common stock for quotation
on the Over-The-Counter Bulletin Board.
MagStar has not yet determined the record date or the completion
date for the proposed transaction. The consummation of the
proposed transaction is subject to a number of conditions,
including the completion of various filings with the SEC.
Additionally, MagStar has made certain calculations regarding the
reverse split relating to its effect upon its shareholder base to
determine the feasibility and structure of the going-private
transaction, and to make sure that the proposed
transaction is compliant with Minnesota law.
The special committee of the board has retained the right to amend
the terms of or cancel the transaction at any time prior to
consummation of the transaction if it determines, in its
discretion, that the transaction is not in the best interests of
MagStar or its shareholders.
About MagStar Technologies
Headquartered in Hopkins, Minnesota, MagStar Technologies Inc.
(OTC BB: MGST) -- http://www.magstar.com/-- develops and
manufactures centrifuges, conveyors, medical devices, spindles,
and sub assemblies for medical, magnetic, motion control and
industrial original equipment manufacturers. The company
manufactures close tolerance bearing-related assemblies for the
medical device industry. The company also contract manufactures
biometric identification assemblies, spindles, precision slides
and complex magnetic assemblies. Its products are sold throughout
the U.S. and North America, Europe, and Asia.
* * *
At June 30, 2007, the company's balance sheet showed total assets
of $2.6 million and total liabilities of 5.3 million, resulting in
a total stockholders' deficiency $2.7 million.
MCKESSON CORP: Oncology Deal Cues Moody's to Hold Ratings
---------------------------------------------------------
Moody's Investors Service affirmed McKesson Corporation's ratings
(Baa3 senior unsecured and Prime-3 short term) following the
company's announcement that:
1. it planned to acquire Oncology Therapeutics Network (OTN,
not rated by Moody's) -- a specialty pharmaceutical
distributor -- for about $575 million, including assumed
debt; and
2. the board had authorized a new $1 billion share buyback
program.
The rating outlook remains stable.
The affirmation recognizes that although this acquisition comes
closely on the heels of the completion of the PerSe acquisition,
the strategic rationale behind the transaction appears to be
sound. Specializing in the distribution of oncology and
rheumatology drugs, OTN should provide McKesson with the
opportunity to augment its currently lagging market position in a
segment which has greater growth potential than its core drug
distribution business. In Moody's opinion, however, the price of
the transaction may be rich, given OTN's profitability levels
publicly reported through 2004.
McKesson's relatively steady free cash flow levels and solid
liquidity profile, which includes cash balances of about
$2.2 billion as of June 30, 2007 and access to sizeable external
facilities, provide sufficient flexibility for an acquisition of
this size. The stable outlook assumes that even after this
transaction, McKesson's cash flow to debt measures should remain
consistent with our previous expectations incorporated in
McKesson's Baa3 ratings. The affirmation also assumes that the
company will execute its new repurchase program over time rather
than on an accelerated basis, in order to preserve its favorable
liquidity position.
Ratings affirmed:
McKesson Corporation:
-- Senior unsecured notes at Baa3
-- Backed Industrial Revenue Bonds/PC at Baa3
-- Short-term rating at Prime-3
-- Sr. shelf at (P) Baa3
-- Sr. subordinated shelf at (P) Ba1
-- Subordinated shelf at (P) Ba1
-- Junior subordinated shelf at (P) Ba1
-- Preferred shelf rating at (P) Ba2
Medis Health & Pharma Services:
-- Short term rating at Prime-3
McKesson Corporation, located in San Francisco, California, is a
leading pharmaceutical drug distributor. Its information systems
business provides software and hardware support to a large portion
of the nation's hospitals. The company reported revenues of about
$94 billion for the twelve months ended June 30, 2007.
MERIT SECURITIES: Fitch Holds "C" Rating on Class B-1 Certs.
------------------------------------------------------------
Fitch Ratings took rating actions on these MERIT Securities
Corporation RMBS issue:
Series 12-1:
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'BBB-';
-- Class M-2 affirmed at 'B';
-- Class B-1 remains at 'C/DR5'
The collateral in the aforementioned transaction consists of
conventional, one- to four-family fully amortizing first lien
mortgage loans and manufactured housing installment sales
contracts. The MH portion of the pool was originated by Dynex
Financial and is currently serviced by Origen Financial. The non-
MH portion of the pool was originated and is currently serviced by
various entities. As of the August 2007 distribution date, MERIT
series 12-1 transaction is 101 months seasoned, and the pool
factor (current mortgage loan principal outstanding as a
percentage of the initial pool) is about 43%.
The affirmation reflects a satisfactory relationship between
credit enhancement and future loss expectations and affects about
$145.8 million of outstanding certificates.
MGM MIRAGE: Dubai World Tender Offer for MGM Shares Expires
-----------------------------------------------------------
Infinity World Investments LLC, a wholly-owned subsidiary of Dubai
World, that its cash tender offer to purchase up to
14.2 million shares of MGM MIRAGE common stock at $84 per share
has expired.
Dubai World and Infinity World have been advised by Mellon
Investor Services LLC, the depositary for the tender offer, that
as of the expiration of the offer at 11:59 p.m., New York City
time, on Oct. 5, 2007, stockholders of MGM MIRAGE had tendered
348,903 shares of MGM MIRAGE common stock, representing
approximately 0.12% of the outstanding shares of MGM MIRAGE common
stock. Infinity World has accepted all 348,903 shares of MGM
MIRAGE common stock validly tendered for payment and will promptly
complete the purchase pursuant to the terms of the tender offer.
The tender offer was made pursuant to definitive agreements
between Dubai World and MGM MIRAGE dated Aug. 21, 2007, in which
Dubai World and MGM MIRAGE agreed to form a 50/50 joint venture,
CityCenter Holdings LLC, and in which Infinity World would acquire
stock of MGM MIRAGE both through the tender offer, and also
through the direct purchase from MGM MIRAGE of 14.2 million shares
of MGM MIRAGE common stock at the same price of $84 per share that
was paid to shareholders electing to sell in the tender offer.
Dubai World intends to promptly complete the direct purchase from
MGM MIRAGE pursuant to the definitive agreements. Once the direct
purchase of shares of MGM MIRAGE common stock is complete,
Infinity World will own 14,548,903 million shares of MGM MIRAGE
common stock, representing approximately 4.9% of the total
outstanding shares.
MacKenzie Partners, Inc. is acting as the Information Agent. For
questions regarding this offer, investors may call MacKenzie
Partners collect at (212) 929-5500 or toll free at (800) 322-2885.
About Infinity World and Dubai World
Infinity World Investments LLC is a wholly-owned subsidiary of
Dubai World –- http://www.dubaiworld.ae/-- which is a major
investment holding company with a portfolio of businesses that
includes DP World, Jafza, Nakheel, Dubai Drydocks, Maritime City,
Istithmar, Kerzner, One & Only, Atlantis, Barney's, Island Global
Yachting, Limitless, Inchcape Shipping Services, Tejari,
Technopark and Tamweel. The Dubai World Group has more than
50,000 employees in over 100 cities around the globe. The group
also has real estate investments in the US, the UK and South
Africa. In the last five years, Dubai World has developed 80,000
luxury residential villas and apartments and approximately three
million square feet of retail space.
About MGM MIRAGE
Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) --
http://www.mgmmirage.com/-- is a hotel and gaming company.
It owns and operates 17 properties located in Nevada, Mississippi
and Michigan, and has investments in three other properties in
Nevada, New Jersey and Illinois.
* * *
As reported in the Troubled Company Reporter on Aug. 27, 2007,
Moody's Investors Service changed MGM MIRAGE's rating outlook to
stable from negative and affirmed all existing ratings, including
its "Ba2" corporate family rating and speculative grade liquidity
rating of SGL-3.
MIRANT CORP: District Court Affirms Ruling on Wilson's Fees
-----------------------------------------------------------
The Hon. Terry R. Means of the United States District Court for
the Northern District of Texas, Fort Worth Division, has issued a
final judgment affirming an order of the U.S. Bankruptcy Court for
the Northern District of Texas awarding Mirant Corp. shareholders
Frank Smith, Kent Koerper, Bart Engram, Mary Leight, and L. Matt
Wilson a reduced amount of attorneys' fees and expenses under
Section 503(b)(4) of the Bankruptcy Code.
As previously reported, the United States Trustee, in connection
with the 2003 bankruptcy filing of Mirant and 82 of its
subsidiaries, appointed a committee for the unsecured creditors of
Mirant and a committee for the unsecured creditors of Mirant
Americas Generation, LLC. The U.S. Trustee then invited the 50
largest shareholders to form an equity-security-holders committee.
Mr. Wilson was a member of the Equity Committee.
In late 2004, Mirant and the Creditors Committee began to posit
that existing shareholders were not entitled to monetary recovery,
which would suggest that the Equity Committee should be
discharged. Mirant's reorganization plans, which were filed in
early 2005, stated that its value was substantially less than its
outstanding debt, which would leave existing shareholders with no
monetary recovery.
To determine Mirant's value, the Bankruptcy Court scheduled a
valuation hearing. The Wilson Shareholders hired Mr. Wilson to
represent all shareholders at the valuation hearing and later
proceedings in seeking a higher recovery to existing shareholders.
The Wilson Shareholders' fee agreement with Mr. Wilson provided
that they would be responsible to him only for a 1% contingency on
profits they actually realized in connection with the sale of
their stock. The Wilson Shareholders moved to participate in the
Valuation Hearing. The Bankruptcy Court granted the request, but
limited them to cross-examination. The Wilson Shareholders, along
with five other groups, participated in the Valuation Hearing.
After the hearing, the Bankruptcy Court ordered that a committee
be formed to recalculate Mirant's value. During the revaluation,
a new reorganization plan was offered that gave existing
shareholders a more favorable recovery. In response to the new,
more favorable reorganization plan, the Bankruptcy Court suspended
the Revaluation Committee. The Wilson Shareholders filed their
objected, but was subsequently overruled by the Bankruptcy Court.
Judge Lynn then entered a confirmation order effecting Mirant's
emergence from Chapter 11 bankruptcy on Jan. 3, 2006.
The Wilson Shareholders filed a fee application under Section
503(b)(4), seeking payment of fees and expenses totaling
$645,147.
Mirant and the Equity Committee objected to the Fee Application,
arguing that the amounts could not be reimbursed from the estate
because the Wilson Shareholders' duty to pay was contingent on any
future profit they received from the sale of their stock. Judge
Lynn concluded that Section 503(b)(4) allowed Mr. Wilson to apply
directly for payment by the estate even though the Wilson
Shareholders were not obligated to pay his fees.
The Bankruptcy Court then found that Mr. Wilson had made a
substantial contribution, but stated that he "overestimates the
magnitude of the contribution made," and that his contribution
"has not been entirely positive." Thus, Mr. Wilson was awarded
partial payment in the amount of $15,000 to "defray Wilson's out-
of-pocket costs for attending the Valuation Hearing" and to ensure
that Mr. Wilson was not rewarded "for conduct that should not be
encouraged in chapter 11 cases."
Judge Lynn denied the Wilson Shareholders' Motion to Reconsider.
In December 2006, the Wilson Shareholders filed a notice of
appeal as to the Bankruptcy Court's ruling on the Fee Application
and as to the denial of the Motion to Reconsider. Mirant filed a
cross-appeal as to the Bankruptcy Court's decision awarding Mr.
Wilson any payment.
The District Court has consolidated the two appeals, finding that
oral argument is not needed.
In his seven-page Affirmation Order, Judge Means found that the
compensation award to Mr. Wilson was statutorily authorized and
the reduced award was not an abuse of discretion.
Compelled by the Bankruptcy Court's reasoning, Judge Means holds
that Section 503(b)(4) does not require that the attorneys' fees
and expenses be incurred by the entity.
"Section 503(b)(4) only requires that the attorney represented a
Section 503(b)(3) entity and made a substantial contribution,"
Judge Means stated in the Order. "To engraft a requirement that
the entity must have incurred the expense is at odds with a
natural reading of the statute."
Judge Means maintains that the purpose of Section 503(b) is to
encourage creditor participation.
"As pointed out the by California bankruptcy court, it would be
nonsensical from a policy standpoint to foreclose an attorney's
claim for attorney's fees and expenses, when he made a
substantial contribution and represented a Section 503(b)(3)
entity, merely because the entity is not obligated to pay the
attorney," Judge Means said.
Moreover, Judge Means pointed out that the Bankruptcy Court
obviously looked at the statutory considerations and concluded
that Mr. Wilson's duplication of efforts and misbehavior
justified the reduced award. "These considerations were proper
and support a conclusion that the bankruptcy court did not abuse
its discretion in reducing Mr. Wilson's compensation request,"
the judge said.
Accordingly, the District Court determined that the Bankruptcy
Court was correct to hold that Mr. Wilson's compensation claim
was statutorily authorized.
Judge Means also ruled that all costs will be taxed against the
party that incurred them.
About Mirant Corp.
Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE:
MIR) -- http://www.mirant.com/-- is an energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant's investments in the Caribbean
include three integrated utilities and assets in Jamaica, Grand
Bahama, Trinidad and Tobago and Curacao. Mirant owns or leases
more than 18,000 megawatts of electric generating capacity
globally.
Mirant Corporation filed for chapter 11 protection on July 14,
2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on Jan. 3, 2006.
Thomas E. Lauria, Esq., at White & Case LLP, represented the
Debtors in their successful restructuring. When the Debtors
filed for protection from their creditors, they listed
$20,574,000,000 in assets and $11,401,000,000 in debts. The
Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7,
2007, the Court entered a final decree closing 46 Mirant cases.
Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant
New York Inc., and Hudson Valley Gas Corporation, were not
included. On Feb. 15, 2007, Mirant NY-Gen filed its Chapter 11
Plan of Reorganization and on Feb. 22 filed a Disclosure Statement
explaining that Plan. The Court approved the adequacy of Mirant
NY-Gen's Disclosure Statement on March 22, 2007, and confirmed the
Amended Plan on May 7, 2007. Mirant NY-Gen emerged from chapter
11 on May 7, 2007.
On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan of
Reorganization. The Court confirmed Mirant Lovett's Plan on
Sept. 19, 2007. (Mirant Bankruptcy News, Issue No. 131;
Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
* * *
The ratings of Mirant Corp. (Issuer Default Rating of 'B+') and
its subsidiaries remain on Fitch's Rating Watch Negative following
the company's plans to pursue alternative strategic options
including a possible purchase of Mirant by a third party.
MIRANT CORP: Mirant Lovett Emerges from Bankruptcy Protection
-------------------------------------------------------------
Mirant Lovett LLC has formally emerged from bankruptcy protection
under Chapter 11.
In a notice filed with the U.S. Bankruptcy Court for the Northern
District of Texas, Jeff P. Prostok, Esq., at Forshey & Prostok
LLP, in Fort Worth, Texas, informed creditors and parties-in-
interest that Mirant Lovett's Plan of Reorganization became
effective on Oct. 2, 2007. The Mirant Lovett Plan was confirmed
September 19.
As of the Effective Date, the terms of the Mirant Lovett Plan and
the Confirmation Order are binding upon:
-- Mirant Lovett;
-- the holders of all impaired or unimpaired claims against
and equity interests in Mirant Lovett;
-- each person acquiring property under the Mirant Lovett
Plan; and
-- any other party-in-interest appearing in Mirant Lovett's
Chapter 11 cases.
To the extent any provision of the Confirmation Order may be
inconsistent with the terms of the Mirant Lovett Plan, the terms
of the Confirmation Order are binding and conclusive, stated Mr.
Prostok.
To facilitate Plan distributions, Mr. Prostok said, a Mirant
Lovett creditor must be responsible for maintaining accurate
address information on file with Epiq Bankruptcy Solutions, LLC.
Failure to maintain that information may result in a forfeiture
of any distributions to which the creditor would otherwise be
entitled.
Mr. Prostok added that all professionals employed under a Court
order must file by November 16 an application for final allowance
of compensation and reimbursement of expenses for professional
services rendered through the Mirant Lovett Plan Effective Date.
Failure to timely file and serve a final fee application will
result in the fee claim being forever barred and discharged.
About Mirant Corp.
Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE:
MIR) -- http://www.mirant.com/-- is an energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant's investments in the Caribbean
include three integrated utilities and assets in Jamaica, Grand
Bahama, Trinidad and Tobago and Curacao. Mirant owns or leases
more than 18,000 megawatts of electric generating capacity
globally.
Mirant Corporation filed for chapter 11 protection on July 14,
2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria,
Esq., at White & Case LLP, represented the Debtors in their
successful restructuring. When the Debtors filed for protection
from their creditors, they listed $20,574,000,000 in assets and
$11,401,000,000 in debts. The Debtors emerged from bankruptcy on
Jan. 3, 2006. On March 7, 2007, the Court entered a final decree
closing 46 Mirant cases.
Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant
New York Inc., and Hudson Valley Gas Corporation, were not
included. On Feb. 15, 2007, Mirant NY-Gen filed its Chapter 11
Plan of Reorganization and on Feb. 22 filed a Disclosure Statement
explaining that Plan. The Court approved the adequacy of Mirant
NY-Gen's Disclosure Statement on March 22, 2007, and confirmed the
Amended Plan on May 7, 2007. Mirant NY-Gen emerged from chapter
11 on May 7, 2007.
On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan of
Reorganization. The Court confirmed Mirant Lovett's Plan on
Sept. 19, 2007. (Mirant Bankruptcy News, Issue No. 131;
Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
* * *
The ratings of Mirant Corp. (Issuer Default Rating of 'B+') and
its subsidiaries remain on Fitch's Rating Watch Negative following
the company's plans to pursue alternative strategic options
including a possible purchase of Mirant by a third party.
MORGAN STANLEY: Fitch Holds Low-B Ratings on Six Cert. Classes
--------------------------------------------------------------
Fitch Ratings affirmed Morgan Stanley Capital I Trust's
commercial mortgage pass-through certificates, series 2005-HQ5,
as:
-- $63.2 million class A-1 at 'AAA';
-- $160.9 million class A-2 at 'AAA';
-- $159.4 million class A-3 at 'AAA';
-- $66.4 million class A-AB at 'AAA';
-- $711.3 million class A-4 at 'AAA';
-- $112.4 million class A-J at 'AAA';
-- Interest-only class X-1 at 'AAA';
-- Interest-only class X-2 at 'AAA';
-- $30.5 million class B at 'AA';
-- $19 million class C at 'AA-';
-- $15.2 million class D at 'A+';
-- $17.1 million class E at 'A';
-- $15.2 million class F at 'A-';
-- $15.2 million class G at 'BBB+';
-- $13.3 million class H at 'BBB';
-- $21 million class J at 'BBB-';
-- $5.7 million class K at 'BB+';
-- $5.7 million class L at 'BB';
-- $5.7 million class M at 'BB-';
-- $3.8 million class N at 'B+';
-- $1.9 million class O at 'B';
-- $3.8 million class P at 'B-'
Fitch does not rate the $19 million class Q certificates.
The rating affirmations reflect stable performance and pay down
since Fitch's last ratings action. As of the September 2007
distribution date, the pool has paid down 3.8% to $1.47 billion
from $1.52 billion at issuance. To date, four loans (11.9%) have
defeased, including the third largest loan (7.4%) which is also
shadow rated.
There is currently one loan (0.3%) in special servicing which is
secured by a multifamily property in Pittsburgh, Pennysylvania.
The loan transferred to the special servicer due to delinquency.
The borrower has brought the loan current. The special servicer is
monitoring the loan for 90 days prior to returning it to the
master servicer.
Fitch reviewed the shadow ratings of the remaining non-defeased
shadow rated loans: Wells REF Portfolio (9.9%), Houston Center
(8.2%), 111 Eighth Avenue (5%), and Towne East Square Mall (3%).
Based on their stable performance the loans maintain their
investment grade shadow ratings.
The largest shadow rated loan, the Wells REF Portfolio (9.9%), is
secured by nine office properties located in six different states,
containing a total of 2.9 million square feet. The whole loan
consists of a $125 million Group 1 Note in the MSCI 2004-HQ4
trust, an $80 million Group 2 Note in MSCI 2005-TOP17, and a $145
million Group 3 Note which is included in this trust. As of year-
end (YE) 2006, all of the properties remain 100% leased and
performance has been stable since issuance.
Houston Center (8.2%) is secured by a three million sf mixed-use
office and retail property located in downtown Houston, Texas.
Major tenants at the property are Lyondell Petrochemical, Enron,
Shell Oil Company, Merrill Lynch and Bank One. As of March 31,
2007, occupancy has increased to 93% from 91.1% at issuance.
MOSAIC CO: Strong Cash Flow Cues Moody's to Lift Ratings
--------------------------------------------------------
Moody's upgraded The Mosaic Company's corporate family rating to
Ba1 from Ba3.
The decision to raise the CFR two notches to Ba1 reflects both the
enhanced strength of Mosaic's cash flow, caused by extremely
robust conditions in Mosaic's fertilizer markets, along with
management's ability to realize its often stated public goal of
materially reducing debt. The outlook is for the ratings is
stable.
Since its formation Mosaic management has indicated many times in
public forums, including its most recent annual report, its goal
of reducing debt and moving toward investment grade status.
Concrete steps in this goal were made over the last 16 months. In
the fourth fiscal quarter of 2007 $280 million of balance sheet
debt was repaid, followed by $176 million in June and July of
2007, and a further $300 million at the end of September 2007 -
for a total of $756 million in balance sheet debt reduction. The
rating action expects at least several hundred million dollars in
incremental debt reduction over the coming four quarters as
management moves to an anticipated steady state debt level.
Mosaic's credit metrics have exceeded the levels that we cited in
our rating action of Nov. 7, 2006 affirming the Ba3 CFR.
The stable outlook reflects Moody's belief that management will
stay committed to their goal of debt reduction. Moody's also
expects that Mosaic will continue to benefit from the healthy
operating environment and robust pricing for fertilizer products
and that this will serve to improve Mosaic's operating margins and
cash flow metrics. Our conclusions are founded on the currently
high crop prices, which encourage spending on crop nutrients,
especially in light of global expansion and associated grain
demand for both food and energy needs.
The Ba1 ratings reflect Mosaic's meaningful size, customer/product
diversity, and the company's significant market positions in the
global fertilizer industry. Offsetting this favorable business
position is the company's exposure to the historically volatile
crop nutrient markets.
As a function of the increase in the CFR and the application of
our LGD methodology to Mosaic's proposed capital structure a
number of Moody's ratings were raised.
Upgrades:
Issuer: The Mosaic Company
-- Corporate Family Rating, Upgraded to Ba1 from Ba3
-- Probability of Default Rating, Upgraded to Ba1 from Ba3
-- Senior Secured Guaranteed Bank Credit Facility, Upgraded
to Baa2 (LGD2, 16%) from Ba1 (LGD2, 27%)
-- Senior Unsecured Guaranteed Regular Bond/Debenture,
Upgraded to Ba1 (LGD4, 63%) from B1 (LGD5, 76%)
Issuer: Mosaic Global Holdings Inc.
-- Senior Unsecured Guaranteed Regular Bond/Debenture,
Upgraded to Ba1 (LGD4, 63%) from B1 (LGD5, 76%)
-- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2
(LGD6, 94%) from B2, (LGD6, 94%)
Issuer: Phosphate Acquisition Partners L.P.
-- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2
(LGD6, 97%) from B2 (LGD6, 97%)
The Mosaic Company, headquartered in Plymouth, Minnesota, is a
leading global producer of phosphate and potash fertilizers and
animal feed ingredients. Mosaic generated annual revenues of
about $5.8 billion for the fiscal year ending May 31, 2007.
MOVIE GALLERY: Prepackaged Chapter 11 Plan Gets Creditors' Okay
---------------------------------------------------------------
Movie Gallery Inc. intends to file for bankruptcy protection this
month after reaching an agreement with lead creditors on a
prepackaged plan, Christopher Witkowsky of the Wall Street Journal
reports citing sources familiar with the matter.
Under the pre-negotiated plan, Movie Gallery would convert its
bonds and part of its second-lien debt to stock, various reports
say.
Last month, Movie Gallery planned to close approximately 520
underperforming and unprofitable Movie Gallery and Hollywood Video
stores, as part of its efforts to conserve cash and reduce the
company's cost structure to address the financial and industry
challenges it has been experiencing.
Movie Gallery retained an outside professional services firm, the
Great American Group, to assist it in conducting sales of the
inventory at the closing stores.
Previously, the company decided to defer payment of interest due
Sept. 10, 2007, under the company's Second Lien Credit Agreement,
which action triggered an event of default.
According to a regulatory filing, as of July, the company had
$1.2 billion in debt, including $322 million in bonds,
$175 million in second-lien debt, and $600 million in first-lien
debt.
The company's balance sheet at July 1, 2007, showed total assets
of $892.0 million and total liabilities of $1.45 billion,
resulting in a $560.3 million total stockholders' deficit. The
company's consolidated balance sheet further showed strained
liquidity with $291.1 million in total current assets available to
pay $1.42 billion in total current liabilities.
For the second quarter ended July 1, 2007, the company reported a
$309.9 million net loss compared to a $14.9 million net loss for
the second quarter ended July 2, 2006. Total revenues for the
second quarter were $561.2 million, a 6.7% decrease from
$601.3 million in the second quarter of 2006. Decline in revenues
was primarily due to a decline in consolidated same-store sales
and a decrease in the number of weighted average stores operated.
About Movie Gallery Inc.
Headquartered in Dothan, Alabama, Movie Gallery Inc. (Nasdaq:
MOVI) -- http://www.moviegallery.com/-- is a North American video
rental company with more than 4,550 stores located
in all 50 U.S. states and Canada operating under the brands Movie
Gallery, Hollywood Video and Game Crazy. The Game Crazy brand
represents 606 in-store departments and 14 free-standing stores
serving the game market in urban locations across the Untied
States. Since Movie Gallery's initial public offering in August
1994, the company has grown from 97 stores to its present size
through acquisitions and new store openings. It operates over
4,600 stores in the United States, Canada, and Mexico under the
Movie Gallery, Hollywood Entertainment, Game Crazy, and VHQ
banners.
* * *
As reported in the Troubled Company Reporter on Sept. 24, 2007,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Dothan, Alabama-based Movie Gallery Inc. to 'D' from
'CC' based on the company not making its interest payment on its
second-lien term loan by the end of the specified grace period.
At the same time, S&P lowered the rating on the company's second-
lien term loan to 'D' and affirmed the first-lien and senior
unsecured debt rating of 'CC'. The 'CC' rating level indicates a
high vulnerability to nonpayment.
As reported in the Troubled Company Reporter on Sept. 20, 2007,
Moody's Investors Service downgraded Movie Gallery Inc.'s long
term credit ratings, including its corporate family rating to C
from Caa3; probability of default rating to D from Caa2; rating of
the company's $100 million senior secured revolving credit
facility to Caa1 (LGD2, 18%) from B2 (LGD2, 18%); rating of the
company's $25 million synthetic letter of credit facility to Ca
(LGD4, 55%) from Caa2 (LGD4, 55%); rating of the company's
$600 million first lien term loan to Ca (LGD4, 55%) from Caa2
(LGD4, 55%); rating of the company's $175 million second lien term
loan to C (LGD5, 81%) from Caa3 (LGD5, 81%); rating of the
company's senior unsecured notes to C (LGD6, 95%) from Ca (LGD6,
95%). The rating outlook is stable.
MYLAN LABS: Acquires Generics Business of Merck KGaA
----------------------------------------------------
Mylan Labs has completed its acquisition of Merck KGaA's
generics business (Merck Generics) to become one of the largest
quality generics and specialty pharmaceuticals companies in the
world. Mylan and Merck KGaA initially announced the signing of
a definitive agreement under which Mylan would acquire Merck
Generics for EUR4.9 billion ($6.8 billion) in an all-cash
transaction on May 12, 2007.
"The new Mylan now has all of the critical attributes we need to
ensure future success and deliver powerful growth,” Robert J.
Coury, Mylan's Vice Chairman and Chief Executive
Officer said. “We have enhanced scale and stability, a truly
global reach, vertical and horizontal integration, and breadth and
depth in our management team. Most importantly, we have a
common purpose and dedication to executing on our strategy and
delivering superior shareholder returns."
The new Mylan is the third largest generic company worldwide
that employs more than 11,000 people and has a global presence
in more than 90 countries. Mylan's broad product offering now
includes more than 570 products and the world's second largest
portfolio of active pharmaceutical ingredients with 126 U.S.
drug master files. Mylan has a powerful global pipeline with
more than 255 applications or dossiers pending regulatory
approval. The new Mylan will benefit from substantial
operational efficiencies and economies of scale from increased
sales volumes and its vertically and horizontally integrated
platform.
Dey, Mylan's specialty pharmaceuticals business,
brings additional exciting and diversified opportunities through
its existing strengths in the respiratory arena.
"The scale of the new Mylan is evident in every area of our
business: we have scale in our geographic reach, scale in R&D,
scale in manufacturing, scale in API, scale in our combined
product portfolio, and scale in our global commercial footprint,”
Mr. Coury continued. “We will leverage this scale to drive
operational efficiencies and extract synergies from our combined
company, while attracting exciting new opportunities. We have
also created an extremely well balanced and diversified company,
with significantly reduced risks related to any one particular
market or product. Importantly, we will also ensure that we
retain the qualities that customers around the world have come to
expect from both Mylan and Merck Generics.
"The Merck Generics business is even stronger than we expected
and, through the integration planning, we have confirmed that we
truly share a common culture and values centered on quality,
integrity, reliability and service. I am thrilled to welcome
Merck Generics nearly 5,000 employees to the new and expanded
Mylan family. After months of careful preparation, we have hit
the ground running with the integration of our businesses and I
am delighted that we will be operating as a single, integrated
company from day one."
Mylan also disclosed that the company will change its name from
Mylan Laboratories Inc. to Mylan Inc. to better reflect the
broader scope of its business. The company also confirmed that
it has changed its financial year to begin reporting on a
calendar year basis.
About Mylan Laboratories
Mylan Laboratories Inc. (NYSE: MYL) -- http://www.mylan.com/--
is a global pharmaceutical company with market leading positions
in generic pharmaceuticals, transdermal technology and unit dose
packaged products. Mylan operates through three principal
subsidiaries: Mylan Pharmaceuticals, a world leader in generic
pharmaceuticals; Mylan Technologies, the largest producer of
generic and branded transdermal patches for the U.S. market; and
UDL Laboratories, the top U.S.-supplier of unit dose
pharmaceuticals.
Mylan also owns a controlling interest in Matrix Laboratories,
one of the world's premier suppliers of active pharmaceutical
ingredients. Mylan also has a European platform through
Docpharma, a Matrix subsidiary, which is a marketer of branded
generics in Europe.
* * *
Moody's Investor Services placed Mylan Laboratories Inc.'s
probability of default and long-term corporate family ratings at
"Ba1" in May 2007.
NASH FINCH: Court Grants TRO Enjoining Senior Noteholders
---------------------------------------------------------
The Hennepin County District Court in Minnesota granted Nash Finch
Company a temporary restraining order preventing and enjoining
certain hedge funds who are beneficial owners purporting to hold
at least 25% of the aggregate principal amount of the Nash-Finch
Senior Subordinated Convertible Notes due 2035 from declaring an
acceleration of any debt due under the Indenture governing the
Notes while the litigation is pending.
The Order also tolls the 30-day cure period, during which Nash
Finch may cure the alleged default under the Indenture, should the
Court determine that a default has occurred. The restraining Order
will remain in effect until 10 days after the Court reaches a
decision on the underlying dispute as to whether the Trustee
should execute the Supplemental Indenture submitted by the company
and whether the company's adjustment to the conversion rate was
done in accord with the terms of the Indenture.
"We appreciate the Court's decision to issue a temporary
restraining order which preserves the status quo, and we look
forward to demonstrating to the Court the Company properly made
the required adjustment to the conversion rate on the Notes after
the Company increased the amount of the quarterly dividend paid to
our shareholders," Bob Dimond, Executive Vice President and CFO of
Nash Finch, said.
Senior Notes Conversion Rate Determination Request
As reported in the Troubled Company Reporter on Oct. 5, 2007, Nash
Finch filed a petition on Sept. 26, 2007, asking the Hennepin
County District Court to determine that Nash Finch properly
adjusted the conversion rate on its Senior Subordinated
Convertible Notes due 2035 after Nash Finch increased the amount
of the dividends it paid to its shareholders.
Notice of Default
On Sept. 10, 2007, Nash Finch received a purported notice of
default, which was subsequently reissued on Sept. 27, 2007, to
correct a procedural defect in the initial notice, from certain
hedge funds who are beneficial owners purporting to hold at least
25% of the aggregate principal amount of the Notes. The hedge
funds alleged in the notice that Nash Finch was in breach of
Section 4.08(a)(5) of the Indenture which provides for an
adjustment of the conversion rate on the Notes in the event of an
increase in the amount of certain cash dividends to holders of
Nash Finch's common stock. As previously reported, if the Court
determines the hedge fund's assertion to be correct, Nash Finch
would cure the default by making an upward adjustment in the
conversion rate of 0.4307 shares per $1,000 bond.
About Nash Finch
Headquartered in Minneapolis, Minnesota, Nash Finch Company
(NASDAQ:NAFC) -- http://www.nashfinch.com/-- distributes food
products. Nash Finch's core business, food distribution, serves
independent retailers and military commissaries in 31 states, the
District of Columbia, Europe, Cuba, Puerto Rico, the Azores and
Egypt. The company also owns and operates a base of retail
stores, primarily supermarkets under the Econofoods(R), Family
Thrift Center(R) and Sun Mart(R) trade names.
NEW CENTURY: Asks Court Nod to Include NCWC in O'Melveny Retention
------------------------------------------------------------------
New Century Financial Corp. and its debtor-affiliates ask the
United States Bankruptcy Court for the District of Delaware for
permission to expand the scope of O'Melveny & Myers LLP's
retention, to include New Century Warehouse Corporation, a wholly
owned subsidiary of New Century Financial Corp., nunc pro tunc to
Aug. 3, 2007.
As reported in the Troubled Company Reporter on May 22, 2007, the
Court approved the employment of O'Melveny & Myers LLP as Debtors'
general bankruptcy counsel effective as of April 2, 2007.
Monika L. McCarthy, senior vice president and general counsel to
the Debtors, states that through its representation of the
Debtors, O'Melveny had acquired detailed knowledge of NCWC's
businesses, financial affairs and capital structure.
Ms. McCarthy adds that O'Melveny's depth of experience in
business reorganizations and its familiarity with the Debtors
qualifies it to effectively deal with the legal issues likely to
arise in NCWC's chapter 11 case.
O'Melveny will be compensated pursuant to the terms of the
O'Melveny Retention Order, and will include all fee and expense
requests in its application relating to its services for all the
Debtors, Ms. McCarthy adds.
Founded in 1995, Irvine, Calif.-based New Century Financial
Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real
estate investment trust, providing mortgage products to borrowers
nationwide through its operating subsidiaries, New Century
Mortgage Corporation and Home123 Corporation. The company offers
a broad range of mortgage products designed to meet the needs of
all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. The
Official Committee of Unsecured Creditors selected Hahn & Hessen
as its bankruptcy counsel and Blank Rome LLP as its co-counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950.
The Debtors' exclusive period to file a plan expires on Nov. 28,
2007. (New Century Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
NEW CENTURY: Court Approves Irell & Manella as Special Counsel
--------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
has approved New Century Financial Corp.'s retention of Irell &
Manella LLP as their special litigation, employee benefits and
insurance counsel, nunc pro tunc to April 20 through June 27,
2007.
The Hon. Judge Kevin J. Carey noted that the services I&M rendered
have been completed, and I&M will not provide any additional
services to the Debtors absent further order from the Court.
The Debtors do not waive any objection to undisclosed connections
I&M had with any party-in-interest during the Employment Period,
and I&M remains obligated to disclose these connections pursuant
to Rule 2014 of the Federal Rules of Bankruptcy Procedure.
As reported in the Troubled Company Reporter on May 25, 2007, a
class action lawsuit relating to New Century Financial Corporation
and its debtor-affiliates' alleged violation of the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. Section 2101
et. seq. and California Civil Code Section 1400, et. seq., was
filed on April 17, 2007, in the Debtors' Chapter 11 cases.
As special litigation, employee benefits and insurance counsel,
Irell & Manella advised Debtors relative to certain insurance
matters and also represented Debtors in employee benefit matters,
including the wind-up of the Debtors' benefit plans, and issues
concerning Debtors' Consolidated Omnibus Budget Reconciliation Act
obligations, as well as provided legal services in connection with
the WARN Class Action.
About New Century
Founded in 1995, Irvine, Calif.-based New Century Financial
Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real
estate investment trust, providing mortgage products to borrowers
nationwide through its operating subsidiaries, New Century
Mortgage Corporation and Home123 Corporation. The company offers
a broad range of mortgage products designed to meet the needs of
all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. The
Official Committee of Unsecured Creditors selected Hahn & Hessen
as its bankruptcy counsel and Blank Rome LLP as its co-counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950.
The Debtors' exclusive period to file a plan expires on Nov. 28,
2007. (New Century Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
NEW CENTURY: Examiner Asks Court's OK to Subpoena Officers
----------------------------------------------------------
Michael J. Missal, the examiner appointed in New Century Financial
Corp. and debtor-affiliates' bankruptcy cases, asked the U.S.
Bankruptcy Court for the District of Delaware for authority to
examine the Debtors' current and former officers, directors,
employees, and other persons with information relevant to the
issues currently being investigated, citing that the examination
is necessary in order to complete his investigation.
Mr. Misal also asked the Court's authority to compel the
production of documents testimony of witnesses through the
issuance of subpoenas.
The Examiner is currently working with the Debtors' counsel and
the prospective examinees to schedule voluntary interviews at
certain dates, before issuing subpoenas to compel their
appearance.
However, despite the Examiner's best efforts, he has not been
able to secure voluntary interviews within a reasonable time
frame, including those with certain members of the Debtors'
former senior management.
The Court will consider Mr. Missal's request at an Oct. 17
hearing.
Founded in 1995, Irvine, Calif.-based New Century Financial
Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real
estate investment trust, providing mortgage products to borrowers
nationwide through its operating subsidiaries, New Century
Mortgage Corporation and Home123 Corporation. The company offers
a broad range of mortgage products designed to meet the needs of
all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. The
Official Committee of Unsecured Creditors selected Hahn & Hessen
as its bankruptcy counsel and Blank Rome LLP as its co-counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950.
The Debtors' exclusive period to file a plan expires on Nov. 28,
2007. (New Century Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
NEXIA HOLDINGS: Settles Debenture Claims with 200,000 Shares
------------------------------------------------------------
Nexia Holdings Inc. has settled all claims arising from a
debenture issued in 2004. Nexia has issued 200,000 shares of
Series C Preferred Stock to settle the claims in the amount of
approximately $278,000.
The parties have signed an Agreement and General Release that
provides that all claims are being released in exchange for the
preferred stock that is being issued.
"I am pleased with this opportunity to exchange debt for equity in
the company and believe that it will serve to strengthen the
balance sheet and improve the financial performance of the
company, especially over the long term,” Richard Surber, CEO of
Nexia, said. “I am excited to have this investment in Nexia's
future growth and the confidence it expresses in our potential to
achieve continued success."
Headquartered in Salt Lake City, Utah, Nexia Holdings Inc. (OTCBB:
NEXH) -- http://www.nexiaholdings.com/-- engages in the
acquisition, lease, management, and sale of real estate properties
in the continental United States, through its subsidiaries. It
operates, owns, or has interests in a portfolio of commercial,
industrial, and residential properties. The company's commercial
properties comprise Wallace-Bennett Building, and a one-story
retail building
in Salt Lake City, Utah; and an office building in Kearns, Utah.
Its residential property comprises a condominium unit located in
close proximity to Brian Head Ski Resort and the surrounding
resort town in southern Utah. The company's industrial property
includes Parkersburg Terminal in Parkersburg, West Virginia. It
also owns parcels of undeveloped land in Utah and Kansas.
* * *
At June 30, 2007, the company's balance sheet showed total assets
of $4.4 million and total liabilities of $5.3 million, resulting
to a shareholders' deficit of $0.9 million.
The company has incurred cumulative operating losses through
June 30, 2007, of $17.9 million which raises substantial doubt
about the company's ability to continue as a going concern. There
is an increase in the cumulative operating loss of $868,384 for
the quarter ended June 30, 2007. The company had a negative
working capital balance at June 30, 2007, of $1.99 million.
OFFICEMAX INC: Moody's Holds Ba2 Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service affirmed the Ba2 corporate family rating
of OfficeMax Inc. and changed the outlook to stable from negative.
The speculative grade liquidity rating of SGL-2 was also affirmed.
The stable outlook recognizes the company's improved operating
performance as a result of the new management team's turnaround
plan, which has resulted in improving credit metrics with LTM
June 30, 2007 leverage reducing to 4.3x and EBIT Margin improving
to 5%. The Ba2 rating considers OfficeMax's credit metrics, which
are solid for the rating category. It also reflects its position
as the number three dedicated retailer of office supplies in the
U.S. in a highly-competitive and fragmented segment, with
competition from indigenous competitors such as Staples and Office
Depot, as well as discounters such as Wal-Mart and Target, and the
warehouse clubs Costco and Sam's Club.
The rating also recognizes that OfficeMax still must continue to
make progress with its turnaround plan, especially in its
logistics and supply chain, and that its margins significantly lag
both Staples and Office Depot. "OfficeMax has made solid progress
over the past 12-18 months in its repositioning, however it is
still making up for the significant ground it lost to Staples and
Office Depot during the prior several years", stated Moody's
senior analyst Charlie O'Shea.
The SGL-2 speculative grade liquidity rating reflects Moody's
expectation that OfficeMax will be able to fund almost all of its
cash flow requirements over the next twelve months out of internal
sources, including cash balances and operating cash flow, with
little or no reliance on the new unrated
$700 million secured bank revolving credit facility.
These ratings were affirmed:
-- Corporate family rating affirmed at Ba2;
-- Probability of default rating affirmed at Ba2;
-- 7% senior secured notes due 2013 at Baa2;
-- 7.50% senior unsecured notes due 2008 at Ba3 (LGD4, 69%);
-- 6.50% senior unsecured notes due 2010 at Ba3 (LGD4, 69%);
-- 9.45% debentures due 2009 at Ba3 (LGD4, 69%);
-- 7.35% debentures due 2016 at Ba3 (LGD4, 69%);
-- Medium term notes at Ba3 (LGD4, 69%);
-- Revenue bonds at Ba3 (LGD4, 69%);
-- American & Foreign Power Co. debentures at Ba3 (LGD4,
69%), and
-- Speculative Grade Liquidity Rating at SGL-2.
Based in Naperville, Illinois, OfficeMax is the third largest
retailer of office products in North America, with LTM
June 30, 2007 revenues of $9 billion and about 920 retail stores
and a sizeable contract wholesale delivery network.
POLYONE CORP: Will Pay $15.2 Mil. Remediation Charge in 3rd Qtr.
----------------------------------------------------------------
PolyOne Corporation said Friday that it will take a special charge
in the third quarter of 2007 for remediation costs at a site
located in Calvert City, Kentucky.
PolyOne has been informed of rulings by the United States District
Court for the Western District of Kentucky on several pending
motions in the case of Westlake Vinyls Inc. v. Goodrich
Corporation, et al., which has been pending since 2003. The Court
held that third-party defendant PolyOne must pay the remediation
costs at the former Goodrich Corporation (now Westlake Vinyls,
Inc.) Calvert City facility, together with certain defense costs
of Goodrich Corporation. The rulings also provided that PolyOne
can seek indemnification for contamination attributable to
Westlake.
The environmental obligation at the site arose as a result of an
agreement by PolyOne's predecessor, the Geon Company, at the time
of its spin-off from Goodrich Corporation in 1993, to indemnify
Goodrich for environmental costs at the site. Neither PolyOne nor
the Geon Company ever owned or operated the facility. Subject to
the indemnification and other potential recovery rights discussed
below, PolyOne will make a good faith payment of certain past
remediation invoices. PolyOne currently estimates that the
negative impact on third-quarter 2007 net income for this payment
will be a special charge of approximately $15.2 million.
In addition, as a result of the rulings in the litigation, in
accordance with U.S. generally accepted accounting principles,
PolyOne will adjust its environmental reserve from $59.0 million
at June 30, 2007, a portion of which already relates to the
Calvert City site. The uncertainty associated with the litigation
does not make it possible to conclusively determine what PolyOne's
environmental reserve will be upon resolution of the case, but
PolyOne will increase the reserve in the third quarter of 2007,
resulting in a charge of approximately $18.7 million (after tax)
in the third quarter for remediation costs. Should the rulings
stand, PolyOne expects that the annual additional cash cost for
this remediation will be approximately $1.5 million to $2.0
million.
PolyOne retains the right to appeal the decisions in this case,
will vigorously pursue insurance proceeds and reimbursement for
costs incurred to the extent attributable to actions or inaction
by Westlake and will challenge amounts that PolyOne believes were
improperly invoiced by Goodrich Corporation. PolyOne intends to
decrease the environmental reserve in future periods upon receipt
of recoveries from Westlake, applicable insurance policies or
other sources.
About PolyOne Corp.
Headquartered in northeast Ohio, PolyOne Corporation (NYSE: POL) -
-- http://www.polyone.com/ -- is a leading global provider of
specialized polymer materials, services and solutions. PolyOne
has operations in North America, Europe, Asia and Australia, and
joint ventures in North America and South America.
* * *
As reported in the Troubled Company Reporter on July 13, 2007,
Fitch Ratings upgraded PolyOne Corporation's Issuer Default Rating
to 'BB-' from 'B', Senior unsecured debt and debentures to 'BB-'
from 'B+/RR3', and rating outlook to stable.
PORTELLA GROUP: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Portella Group, Inc.
8295 East Raintree Drive, Suite F
Scottsdale, AZ 85260
Tel: (480) 367-0944
Bankruptcy Case No.: 07-05167
Type of Business: The Debtor's affiliate, Portella
Manufacturing, LLC, filed for Chapter 11
protection on October 1, 2007 (Bankr.
D. Ariz. Case No. 07-05055).
Chapter 11 Petition Date: October 5, 2007
Court: District of Arizona (Phoenix)
Judge: Redfield T. Baum Sr.
Debtor's Counsel: Robert J. Berens, Esq.
Mann, Berens, & Wisner, LLP
3300 North Central Avenue, Suite 2400
Phoenix, AZ 85012
Tel: (602) 258-6200
Fax: (602) 258-6212
Estimated Assets: $100,000 to $1 Million
Estimated Debts: $1 Million to $100 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
QMED INC: Posts $9.2 Million Net Loss in Quarter Ended Aug. 31
--------------------------------------------------------------
Qmed Inc. reported a net loss of $9.2 million on revenue of
$10.8 million for the third quarter ended Aug. 31, 2007, compared
with a net loss of $3.3 million on revenue of $2.2 million for the
same period ended Aug. 31, 2006.
The $8.6 million revenue increase is attributable to an increase
of approximately $9.5 million in premium and service revenue
related to increased enrollment in the South Dakota Special Needs
Plan project and the commencement of operations of the QMedCare
SNP in New Jersey on Jan. 1, 2007. This increase was offset by a
decrease of approximately $907,000 in disease management services
revenue.
Loss from operations increased to $9.3 million for the quarter
ended Aug. 31, 2007, compared to loss from operations of
$3.5 million in the same period in 2006, primarily due the
$14.1 million increase in cost of revenue attributable to an
increase in medical claims associated with the SNP projects.
At Aug. 31, 2007, the company's consolidated balance sheet showed
$16.4 million in total assets, $13.0 million in total liabilities,
and $3.4 million in total stockholders' equity.
The company's consolidated balance sheet at Aug. 31, 2007, also
showed strained liquidity with $10.0 million in total current
assets available to pay $12.7 million in total current
liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Aug. 31, 2007, are available for
free at http://researcharchives.com/t/s?2417
Liquidity and Capital Resources
To date, principal sources of working capital have been the
proceeds from public and private placements of securities. The
working capital deficit was approximately $2.6 million at Aug. 31,
2007, as compared to approximately $11.1 million of working
capital at Nov. 30, 2006. The working capital decrease of
approximately $13.7 million was primarily due to the net loss of
approximately $13.1 million resulting in cash used in operations
of approximately $5.1 million along with an additional
$2.5 million of cash classified as long term restricted cash in
order to establish a required insolvency reserve for QMedCare of
New Jersey Inc.
Going Concern
During the nine months ended August 31, 2007, the company incurred
net losses totaling $13.1 million, had net cash used in operating
activities of $5.1 million as of Aug. 31, 2007. The company
believes these factors raise substantial doubt as to the company’s
ability to continue as a going concern.
About Qmed Inc.
Headquartered in Eatontown, New Jersey, Qmed Inc. (NasdaqCM: QMED)
-- http://www.qmedinc.com/-- provides evidence-based clinical
information management systems around the country to its health
plan customers. The system incorporates Disease Management
services to patients and decision support to physicians. The
company's QMedCare subsidiary specializes in serving high-risk
populations of Medicare beneficiaries.
REFCO INC: 2nd Circuit Junks Appeal on Sphinx-Refco Creditors Deal
------------------------------------------------------------------
The United States Court of Appeals for the Second Circuit on
Friday rejected an appeal by certain investors and the Joint
Official Liquidators of SPhinX Managed Futures Fund SPC from a
lower court ruling approving a deal between Refco creditors and
SPhinX.
A three-man panel upheld a November 2006 order of the U.S.
District Court for the Southern District of New York affirming a
ruling of the U.S. Bankruptcy Court for the Southern District of
New York approving the settlement of a preference action initiated
by the Official Committee of Unsecured Creditors on behalf of
Refco Capital Markets, Ltd., against SPhinX.
The Second Circuit held that investors at SPhinX have no standing
to contest the settlement, and that Kenneth M. Krys and
Christopher Stride, the Cayman Islands liquidators for SPhinX, are
precluded from appealing the settlement.
Prior to Refco's collapse in October 2005, directors at SPhinX had
hired PlusFunds Group, Inc., a registered investment advisor, to
manage SPhinX in exchange for management fees. The Investors
alleged that PlusFunds in turn hired Refco Alternative Investments
to oversee Refco-related investments for SPhinX. According to the
Investors, RAI regularly executed trades for Sphinx, as directed
by PlusFunds, and oversaw its margin cash.
The Investors further alleged that RAI, at PlusFunds' direction,
caused SPhinX's excess margin cash to be invested in accounts at
RCM.
On October 10, 2005, Refco Inc., announced it had discovered a
substantial, previously undisclosed liability that caused a crisis
of confidence in RCM's ability to accommodate client withdrawals.
On October 17, Refco and certain of its affiliates sought
bankruptcy protection.
Five days prior to the bankruptcy filing, $312,046,266 in funds
were transferred from the SPhinX accounts at RCM to its affiliate
Refco LLC, and ultimately to accounts held on behalf of the cells
at Lehman Brothers.
The Investors alleged that the transfer was made at the behest of
PlusFunds CEO Chris Sugrue, who, the Investors said, maintained
previously undisclosed allegiances to Refco.
On December 16, 2005, the Committee commenced an adversary
proceeding to recover the transfer made to the cells.
SPhinX argued it was inequitable to allow RCM to recover the
entire $312,000,000 because RCM and its non-debtor affiliates had
abused the bankruptcy process to the detriment of SPhinX.
At the close of discovery in April 2006, and on the eve of an
argument on the Committee's request for summary judgment, the
Committee and SPhinX agreed to settle. SPhinX agreed to return
$263,000,000 to the RCM estate and waive any claim against RCM
related to the transfer, including any claim pursuant to Section
502(h) of the Bankruptcy Code.
The Investors called the "worse-than-losing" Settlement a result
of an "incestuous relationship" between Refco, PlusFunds, and
SPhinX. The Investors said SPhinX agreed to return all but about
15% of the purported preference and to abandon any future claims
against the RCM estate arising from the transfer at issue.
The Committee responded that the settlement was fair given the
weakness of SPhinX's defenses, and the cost, expense, and delay
associated with further litigating the legal and factual issues in
the adversary proceeding.
The Committee justified the inclusion of the Section 502(h) waiver
in the Settlement as reasonable, because: (1) in order to assert a
claim pursuant to Section 502(h), SPhinX would have been required
to repay the full amount of the transfer, which SPhinX contended
it could not do consistent with Cayman law, (2) Sphinx, unlike
other creditors of the RCM estate, would recover on its related
claims against RCM immediately through the Settlement and did not
have to wait for a plan of reorganization, and (3) even if SPhinX
satisfied the requirement for making a Section 502(h) claim by
returning the entire amount of the transfer, plus interest, other
parties may have sought to equitably subordinate SPhinX's claim
against RCM.
Under Section 502(h) of the Bankruptcy Code, a claim of a
transferee of an avoidable transfer will be disallowed if the
transferee does not pay the owed amount or turn over the property
as required under the Bankruptcy Code.
Bankruptcy Judge Robert D. Drain approved the Settlement as being
in the best interests of the Refco Debtors, their estates and
creditors. Judge Drain held that the Investors lacked standing to
object because they were not a "party in interest" under Section
1109(b). The Bankruptcy Court held as a matter of law that the
Settlement affected the Investors as equity holders in SPhinX only
indirectly.
The District Court agreed, finding that the Investors were "not
directly and adversely affected pecuniarily by the challenged
ruling of the Bankruptcy Court because they do not hold a direct
interest in the Debtor."
On appeal, the Second Circuit said the Investors cannot claim that
they seek to enforce any rights distinct from those of SPhinX as a
creditor and a defendant in an adversary proceeding. The Second
Circuit said SPhinX is a single legal entity, and that the
individual cells are not legally separate entities from SPhinX.
By investing in SPhinX, the Investors placed control of their
funds entirely within the hands of the SPhinX directors or
managers acting on the directors' behalf. Only SPhinX, the Second
Circuit held, not individual Investors, or even Investors as a
group, could assert a claim against the Refco estate, and only
SPhinX was permitted to negotiate a settlement with the Committee.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in 14
countries and an extensive global institutional and retail client
base. Refco's worldwide subsidiaries are members of principal
U.S. and international exchanges, and are among the most active
members of futures exchanges in Chicago, New York, London and
Singapore. In addition to its futures brokerage activities, Refco
is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported $16.5 billion in assets and $16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its direct and indirect subsidiaries,
including Refco Capital Markets Ltd. and Refco F/X Associates LLC,
on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006.
Refco Commodity's exclusive period to file a chapter 11 plan
expired on Feb. 13, 2007. (Refco Bankruptcy News, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
ROBERT LOTT: Case Summary & 18 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Robert L. Lott
dba Carpe Diem Investments
dba Pat Hubbard Training Stables
465 Stony Point Road, No. 248
Santa Rosa, CA 95401
Bankruptcy Case No.: 07-11265
Chapter 11 Petition Date: October 5, 2007
Court: Northern District of California (Santa Rosa)
Judge: Alan Jaroslovsky
Debtor's Counsel: Michael C. Fallon, Esq.
Law Offices of Michael C. Fallon
100 East Street, Suite 219
Santa Rosa, CA 95404
Tel: (707) 546-6770
Fax: (866) 305-7592
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's list of its 18 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ghiggioli Trust, et al. $1,185,000
Redwood Trust Deed Services
392 Tesconi Circle
Santa Rosa, CA 95401
World Savings & Loan Conventional Real $773,710
4101 Wiseman Boulevard # Mc-T Estate Mortgage
San Antonio, TX 78251
Litton Loan Servicing Conventional Real $687,223
4828 Loop Central Drive Estate Mortgage
Houston, TX 77081
Chase Manhattan Mortgage Secured Credit $437,113
10790 Rancho Bernardo Road Line
San Diego, CA 92127
Larry Lefore $400,000
6770 Ellen Lane
Forestville, CA 95436
Countrywide Home Lending Conventional $275,476
450 American Street Credit Real Estate
Reporting Mortgage
Simi Valley, CA 93065
Karin Frank $267,000
c/o Matthew R. Eason, Esq.
Eason & Tambornini
1819 K Street, Suite+ 200
Sacramento, CA 95818
Hubbert Revocable Trust $200,000
Robert Cooper $200,000
Ed Kramer $55,000
EDD $21,000
WFS Financial Automobile $14,168
Sergo Roman $13,000
Bank of America Credit Card $12,750
Four Corners Feed Store $7,700
Home Depot $5,395
Cotati Large Animal Hospital $5,000
Simon's & Woodard $4,596
SAMSONITE CORP: Pending CVC Deal Prompts S&P to Retain Neg. Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on
Mansfield, Massachussetts-based luggage manufacturer Samsonite
Corp, including the 'BB-' corporate credit rating, would remain on
CreditWatch with negative implications, pending completion of the
company's acquisition by CVC Capital Partners, which is expected
to close in the fourth quarter of calendar 2007. Samsonite had
reported debt outstanding of about $553 million at July 31, 2007.
The company was initially placed on CreditWatch on July 5, 2007,
following the announcement that Samsonite had entered into a
written consent and voting agreement to be acquired by CVC Capital
Partners for about $1.7 billion in cash, including the assumption
of debt. Samsonite recently disclosed that total funded debt
outstanding at the close of the transaction
is expected to be about $1.3 billion. The transaction is still
subject to receipt of regulatory approval, as well as satisfaction
of other customary closing conditions.
Samsonite's pro forma capital structure has not yet been finalized
and details about the financing have not been disclosed. However,
based on the company's expectation that funded debt will total
about $1.3 billion at the close of the transaction, Standard &
Poor's believes credit measures will
weaken substantially from current levels, including the potential
for leverage to be well over 8x.
"As a result, we expect that Samsonite's ratings will be lowered
to the 'B' category," said Standard & Poor's credit analyst
Christopher Johnson.
To resolve the CreditWatch, Standard & Poor's will meet with
management to discuss the financing of the planned transaction and
the company's operating trends. The company's expected very high
debt leverage and operating strategy after the transaction will be
key areas of focus.
SERVICE FIRST LOGISTICS: Case Summary & Eight Largest Creditors
---------------------------------------------------------------
Debtor: Service First Logistics Corporation
2500 Mt. Moriah, Suite H-207
Memphis, TN 38115
Bankruptcy Case No.: 07-29741
Type of business: The Debtor is a third-party logistics provider.
See http://servicefirstlogisticscorp.com
Chapter 11 Petition Date: October 5, 2007
Court: Western District of Tennessee (Memphis)
Judge: David S. Kennedy
Debtor's Counsel: William A. Cohn, Esq.
The Cohn Law Firm
291 Germantown Bend Cove
Cordova, TN 38018
Tel: (901) 757-5557
Estimated Assets: Less than $10,000
Estimated Debts: $1 Million to $100 Million
Debtor's Eight Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ambassador Staffing $476,628
P.O. Box 2057
Thomasville, GA 31799-2057
P.D.C. Properties, Inc./ $360,313
C.B.R.E.
8395 Jackson Road,
Suite F
Sacramento, CA 95826
Raymond Leasing $165,522
P.O. Box 203905
Houston, TX 77216-3905
DeLage Landon Financial/ $115,059
Microsoft Capita
Carolina Handling $97,386
Greater Bay Capital $54,506
Black Equiptment $32,407
Best Loading Service $27,926
SHARP (NIM): Fitch Takes Rating Actions on Six Note Classes
-----------------------------------------------------------
Fitch Ratings took these rating actions on 6 Sharp notes:
Sharps SP I LLC Net Interest Margin Trust 2004-HE1N:
-- $3.5 million class N remains at 'C/DR6';
Underlying Transaction: ACE Securities Home Equity Loan
Trust, Series 2004-HE1
Sharps SP I LLC NIM Trust, Series 2004-HS1N:
-- $1.6 million class N remains at 'C/DR6';
Underlying Transaction: ACE Securities Home Equity Loan
Trust, Series 2004-HS1
Sharps SP I LLC Net Interest Margin Trust, Series 2006-AHM4N:
-- $11.7 million class N-1 affirmed at 'AA'-;
-- $11 million class N-2 affirmed at 'BBB-';
-- $6.8 million class N-3 affirmed at 'BB-';
Underlying Transaction: American Home Mortgage Assets
Trust 2006-4
Sharps SP I LLC Net Interest Margin Trust, Series 2006-AHM5N:
-- $23.6 million class N-1 affirmed at 'A-';
-- $11 million class N-2 affirmed at 'BBB-';
-- $5.8 million class N-3 affirmed at 'BB';
Underlying Transaction: American Home Mortgage Assets
Trust 2006-5
Sharps SP I LLC Net Interest Margin Trust 2006-OA1N:
-- $7.6 million class N-1 affirmed at 'A-';
-- $7.1 million class N-2 affirmed at 'BBB-';
-- $3.7 million class N-3 affirmed at 'BB';
Underlying Transaction: Deutsche ALT-A Securities
Mortgage Loan Trust 2006-OA1
Sharps SP I LLC Net Interest Margin Trust 2006-RS6N:
-- $5.4 million class N-A remains at 'A-', and is placed on
Rating Watch Negative;
-- $5.5 million class N-B downgraded to 'C/DR4' from 'BB';
Underlying Transaction: RAMP Series 2006-RS6 Trust
The rating actions reflect actual pay-down performance of the NIM
securities to date compared to initial projections, as well as,
changes that Fitch previously made to its subprime loss
forecasting assumptions for the underlying transactions. The
updated assumptions better capture the deteriorating performance
of pools from 2006 and late 2005 with regard to continued poor
loan performance and home price weakness.
SOVEREIGN BANCORP: Says 3rd Qtr. Results to be Lower than Expected
------------------------------------------------------------------
Sovereign Bancorp Inc. disclosed Friday that deterioration in the
consumer credit environment and volatility in the mortgage-backed
securities and credit markets are expected to have an adverse
impact on its third quarter of 2007 financial results.
The following accounts for a significant portion of the expected
decline in third quarter of 2007 results:
-- an increase in the provision for credit losses of between
$104 and $114 million to $155 and $165 million pre-tax
compared to $51 million in the second quarter. Approximately
$50 million of the increase in provision for credit losses is
related to the company's remaining correspondent home equity
loan portfolio. Many of these correspondent home equity
loans are non-prime loans which have been impacted by the
deterioration in the housing market and the reduction
in the number of mortgage lenders in the industry.
Approximately $40 million of increase in the provision for
credit losses is related to the company's decision to
increase reserves in the indirect auto lending portfolio in
response to recent and anticipated higher net credit losses,
as well as portfolio growth.
The remaining increase in provision for credit losses relates
to loan loss reserves to cover exposures in the commercial
portfolio, primarily in the construction lending and
commercial real estate portfolios, as well as increased
charge-offs.
-- charges of approximately $20 million pre-tax related to
losses on financings that the company provided to a number of
mortgage companies who have declared bankruptcy and/or
defaulted on certain agreements.
-- charges of approximately $15 million pre-tax related to the
lower of cost or market adjustments on certain loan
portfolios that were classified on the balance sheet as Loans
Held for Sale.
Headquartered in Philadelphia, Sovereign Bancorp Inc. (NYSE: SOV)
-- http://www.sovereignbank.com/-- is the parent company of
Sovereign Bank, a financial institution with $82 billion in
assets as of June 30, 2007, with principal markets in the
Northeast United States. Sovereign Bank has nearly 750 community
banking offices, over 2,250 ATMs and approximately 12,000 team
members. Sovereign offers a broad array of financial services and
products including retail banking, business and corporate banking,
cash management, capital markets, wealth management and insurance.
Sovereign reported net revenues of $1.08 billion for the first six
months ended June 30, 2007.
* * *
Sovereign Bancorp Inc. still carries Fitch's BB+ Subordinate Debt
rating last placed on March 10, 2003.
STELLAR FUNDING: S&P Holds Junk Rating and Removes Pos. Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC-' rating on
the class A-3 floating-rate notes issued by Stellar Funding Ltd.,
and removed it from CreditWatch with positive implications.
Since the Jan. 16, 2007, payment date, the deal has paid down the
A-3 notes significantly. However, the credit quality of the
portfolio has also deteriorated during this period, resulting in
the affirmation of the rating.
Rating Affirmed and Removed from Creditwatch Positive
Stellar Funding Ltd.
Rating
------
Class To From Balance
----- -- ----- -------
A-3 CCC- CCC-/Watch Pos $19,207,000
Other Outstanding Rating
Stellar Funding Ltd.
Class Rating Balance
----- ------ -------
A-4 CC 48.000
SUNCHASE CAPITAL: Files Schedule of Assets and Liabilities
----------------------------------------------------------
Sunchase Capital Partners XI LLC filed with the U.S. Bankruptcy
Court for the District of Maryland its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $15,200,000
B. Personal Property $878
C. Property Claimed as
Exempt
D. Creditors Holding $15,200,000
Secured Claims
E. Creditors Holding $0
Unsecured Priority
Claims
F. Creditors Holding $3,633,218
Unsecured Non-priority
Claims
----------- -----------
TOTAL $15,200,878 $18,833,219
Based in Columbia, Maryland, Sunchase Capital Partners XI, LLC
provides capital to high turnover business. The Debtor filed for
chapter 11 protection on Sept. 10, 2007 (Bankr. D. Md. Case No.
07-18677).
SUNCHASE CAPITAL: Taps Saul Ewing as Bankruptcy Counsel
-------------------------------------------------------
Sunchase Capital Partners XI LLC, asks the United States
Bankruptcy Court for the District of Maryland for permission to
employ Saul Ewing LLP, as its counsel.
Saul Ewing will:
a. advice the Debtor of its right, powers and duties as a
debtor and debtor in possession;
b. advice the Debtor concerning, and assist in the
negotiation and documentation of any debt restructurings
and related transactions;
c. review the nature and validity of liens asserted against
the property of the Debtor and advise the Debtor
concerning the enforceability of such liens;
d. prepare on behalf of the Debtor all necessary and
appropriate applications, motions, pleadings, notices and
other papers that may be filed and served in this
Chapter 11 case;
e. advise the Debtor concerning, and prepare responses to,
applications, motions, pleadings, notices and other
papers that may be filed and served in this Chapter 11
case;
f. counsel the Debtor in connection with the formulation and
consummation of any plan and related documents; and
g. perform all other legal services for and on behalf of the
Debtor that may be necessary or appropriate in the
administration of this Chapter 11 case.
The Debtors' will pay RAS for its services at these rates:
Designation Hourly Rate
----------- -----------
Partners $315-$750
Associate $180-$360
Paralegal $100-$180
The primary professionals employed in this engagement are Irving
E. Walker, Esq., with a rate of $475 per hour, G. David Dean,
Esq., with a rate of $250 per hour, and Renee Lowder with a rate
of $160 per hour.
To the best of the Debtor's knowledge, Saul Ewing does not hold or
represent any interest adverse to the Debtor. Saul Ewing is a
"disinterested person" as that phrase is defined in section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Saul Ewing, LLP
Lockwood Place
500 E. Pratt Street, Suite 800
Baltimore, Maryland 21202
Phone: (410) 332-8704
Based in Columbia, Maryland, Sunchase Capital Partners XI, LLC
provides capital to high turnover business. The Debtor filed for
chapter 11 protection on Sept. 10, 2007 (Bankr. D. Md. Case No.
07-18677).
SUNCHASE CAPITAL: Section 341(a) Meeting Scheduled on October 17
----------------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of creditors
of Sunchase Capital Partners XI, LLC at 9:00 a.m., on Oct. 17,
2007, at Room 2650, 101 West Lombard Street, in Baltimore.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Based in Columbia, Maryland, Sunchase Capital Partners XI, LLC
provides capital to high turnover business. The Debtor filed for
chapter 11 protection on Sept. 10, 2007 (Bankr. D. Md. Case No.
07-18677).
SYLVEST FARMS: Thomas Corbett Wants Chapter 11 Case Converted
-------------------------------------------------------------
J. Thomas Corbett, the chief deputy bankruptcy administrator of
Sylvest Farms Inc. and its debtor-affiliates' Chapter 11 case,
asks the United States Bankruptcy Court for the District of
Alabama to convert the Debtors' case into a Chapter 7 liquidation
proceeding, or in the alternative, dismiss the Debtors' case.
Mr. Corbett argued that the Debtors' have failed to, among others:
a. file bank statements and operating reports for the months
ending June 30, July 31 and Aug. 31, 2007;
b. pay quarterly fee for the quarter ending June 30, 2007; and
The Debtors also failed to transmit a statement of disbursement
made during the quarter ending June 30, 2007, Mr. Corbett added.
The Court will convene a hearing on Nov. 6, 2007, 11:00 a.m., to
consider Mr. Corbett's request.
Headquartered in Montgomery, Alabama, Sylvest Farms, Inc. --
http://sylvestcompanies.com/-- produces, processes and markets
poultry products. The Debtors employ approximately 1,500 workers.
The Company and two debtor-affiliates filed for chapter 11
protection on April 18, 2006 (Bankr. N.D. Ala. Case No. 06-40525).
Richard A. Robinson, Esq., and Eric S. Golden, Esq., at Baker &
Hostetler LLP represent the Debtors. R. Scott Williams, Esq., at
Haskell Slaughter Young & Rediker LLC represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated their total
assets and debts at $50 million to $100 million.
TOWN SPORTS: CFO Robert Giardina to Leave Post this Month
---------------------------------------------------------
Robert Giardina, chief executive officer of Town Sports
International Holdings Inc., will resign from his position with
the company due to personal and health reasons. Mr. Giardina's
resignation will be effective Oct. 31, 2007.
He will continue to serve as a member on the board of directors
and will work with the company in an advisory capacity.
"This is a difficult decision for me, but due to recent health
issues and for personal reasons I have decided to moderate my
professional commitments,” Mr. Giardina commented. “My long
career at TSI has been extremely rewarding and I am pleased to
have had the opportunity to work with such a talented team of
individuals. I remain committed to the company and intend to be
as actively involved as my situation permits in an advisory role
and as an ongoing member of the board."
"Bob has been a great leader and has been an integral part in the
growth and success of TSI,” Paul N. Arnold, chairman of the board,
commented. “I wish him the very best and thank him for his
considerable contributions to the company during his
26-year tenure."
Alex Alimanestianu, 48, will succeed Mr. Giardina as chief
executive officer effective Nov. 1, 2007. He will retain his
current title as president. Mr. Alimanestianu was also elected as
a member of the board of directors. Mr. Alimanestianu joined TSI
in 1990 as vice president and general counsel and was appointed
executive vice president, development in 1995 and chief
development officer in January 2002.
He was named president and chief development officer in March
2006. Before joining the company, he worked as TSI's outside
counsel. Mr. Alimanestianu has been involved in the development
or acquisition of virtually all of the company's clubs.
"I am confident that this will be a smooth transition as Alex has
been with the company for 17 years and has worked very closely
with Bob in taking TSI to where it is today,” continued Mr.
Arnold. “Alex is a highly talented individual, with strong
strategic skills and leadership capabilities and we look forward
to working with him."
"It has been a great pleasure and privilege to have worked with
Bob so closely over many years,” Mr. Alimanestianu commented. “I
am honored to have the opportunity to succeed him and carry out
our vision for the company. Looking ahead, the entire TSI
organization is excited about the opportunity to further solidify
our leadership position in our markets and to continue with our
expansion plans."
About Town Sports International Holdings Inc.
Headquartered in New York City, Town Sports International Holdings
Inc. (NASDAQ:CLUB) -- http://www.mysportsclubs.com/-- is an owner
and operator of fitness clubs in the northeast and Mid-Atlantic
regions of the United States. It owns and operates 141 fitness
clubs in the United States and Switzerland. As of Dec. 31, 2006,
the company owned and operated 147 fitness clubs and partly owned
and operated two fitness clubs. These 149 clubs collectively
served approximately 453,000 members. It is a fitness club
operator in Manhattan with 38 locations and it operated a total of
99 clubs under the New York Sports Clubs brand name within a 75-
mile radius of New York City as of Dec. 31, 2006. TSI operated 21
clubs in the Boston region under its Boston Sports Clubs brand
name, 19 clubs in the Washington, D.C. region under its Washington
Sports Clubs brand name and seven clubs in the Philadelphia region
under its Philadelphia Sports Clubs brand name as of Dec. 31,
2006.
* * *
At June 30, 2007, the company's balance sheet showed total assets
of $458.8 million and total liabilities of 471 million, resulting
in a total shareholders' deficit of $12.15 million.
TSG INC: Judge Cornish Approves Amended Disclosure Statement
------------------------------------------------------------
The Honorable Tom R. Cornish of the United States Bankruptcy
Court for the Eastern District of Oklahoma approved TSG Inc. and
its debtor-affiliates' Amended Disclosure Statement explaining
their Amended Chapter 11 Plan of Liquidation.
Under the Plan, Administrative Claims will be paid in full.
All Secured Claims against the Debtors, except Xtria LLC's claim,
will retain all of the liens and all of the security interests in
the collateral securing their liens.
Xtria LLC's secured claim will receive the collateral securing
its claim under the Plan.
Holders of Unsecured Claims, totaling approximately $13 million,
will receive a pro rata distribution.
Holders of Equity Interest and Subordinated Claims will not
receive any distribution under the Plan.
A full-text copy of TSG's Amended Disclosure Statement is
available for a fee at:
http://www.researcharchives.com/bin/download?id=071008023525
Based in Oklahoma, TSG Inc. -- http://www.tsgincorporated.com/--
is a private health care company operating under the name, The
Schuster Group. The company filed for Chapter 11 protection on
Nov. 9, 2006 (Bankr. E.D. Okla. Case No. 06-80899). Cherish King
Ralls, Esq., at Crowe & Dunlevy, represents the Debtor. Ross A.
Plourde, Esq., at Mcafee & Taft, represents the Official Committee
of Unsecured Creditors. When the Debtor filed for protection from
their creditors, it listed assets and debts between $1 million to
$100 million.
TSG INC: Plan Confirmation Hearing Scheduled on November 14
-----------------------------------------------------------
The Honorable Tom R. Cornish of the United States Bankruptcy
Court for the Eastern District of Oklahoma will convene a hearing
on Nov. 14, 2007, 9:00 a.m., at U.S. Post Office & Courthouse,
Courtroom 215, 4th Grnad Okmulgee, to consider confirmation of
TSG Inc. and its debtor-affiliates' Amended Chapter 11 Plan of
Liquidation.
Based in Oklahoma, TSG Inc. -- http://www.tsgincorporated.com/--
is a private health care company operating under the name, The
Schuster Group. The company filed for Chapter 11 protection on
Nov. 9, 2006 (Bankr. E.D. Okla. Case No. 06-80899). Cherish King
Ralls, Esq., at Crowe & Dunlevy, represents the Debtor. Ross A.
Plourde, Esq., at Mcafee & Taft, represents the Official Committee
of Unsecured Creditors. When the Debtor filed for protection from
their creditors, it listed assets and debts between $1 million to
$100 million.
TXU CORP: Gets Required Consents for $2.3 Bil. Debt Securities
--------------------------------------------------------------
TXU Corp. has received consents (coupled with tenders) from
holders of a majority of the 4.80% Series O Senior Notes due 2009
of TXU Corp., considered as one class, and from holders of a
majority of the 6.125% Senior Notes due 2008 and 7.000% Senior
Notes due 2013 of Texas Competitive Electric Holdings Company LLC,
considered together as one class, to adopt the proposed amendments
and waivers to the terms of the applicable indentures under which
the Notes were issued, to the officer's certificates related to
the Notes and to the Notes themselves.
As of 5:00 p.m., New York City time, on Oct. 5, 2007, TXU Corp.
had received consents and tenders for the following principal
amounts of Notes:
a) $995.7 million (or approximately 99.6% of the aggregate
principal amount) of the 4.80% Series O Senior Notes due
2009 issued by TXU Corp.,
b) $246.9 million (or approximately 98.8% of the aggregate
principal amount ) of the 6.125% Senior Notes due 2008
issued by TCEH and
c) $994.9 million (or approximately 99.5% of the aggregate
principal amount) of the 7.000% Senior Notes due 2013
issued by TCEH.
The Consent Payment Deadline with respect to the tender offers and
consent solicitations has now passed and withdrawal rights have
terminated. Holders who have not already tendered their Notes may
do so at any time at or prior to midnight, New York City time, on
Oct. 23, 2007, unless extended or earlier terminated by TXU Corp.,
but such holders will only be eligible to receive the applicable
tender offer consideration for their Notes, which is an amount,
paid in cash, equal to the applicable total consideration less the
$30 consent payment. In each case, holders whose Notes are
accepted for payment in the tender offers will receive accrued and
unpaid interest in respect of such Notes from the last interest
payment date prior to the applicable payment date to, but not
including, the applicable payment date for Notes purchased in the
tender offers.
It is expected that the supplemental indentures giving effect to
the Proposed Amendments will be executed and become effective
promptly. The Proposed Amendments will become operative
immediately prior to the acceptance for payment of Notes tendered
at or prior to the Consent Payment Deadline pursuant to the tender
offers.
The tender offers and consent solicitations are being conducted in
connection with the proposed merger of TXU Corp. with Texas Energy
Future Merger Sub Corp., a wholly-owned subsidiary of Texas Energy
Future Holdings Limited Partnership.
The tender offers and consent solicitations relating to the Notes
are made upon the terms and conditions set forth in the Offer to
Purchase and Consent Solicitation Statement dated Sept. 25, 2007,
and the related Consent and Letter of Transmittal. The tender
offers and consent solicitations are subject to the satisfaction
of certain conditions, including the Merger having occurred or the
Merger occurring substantially concurrent with the initial payment
date for the tender offers.
TXU Corp. has retained Goldman, Sachs & Co. and Banc of America
Securities LLC to act as the dealer managers for the tender offers
and solicitation agents for the consent solicitations. Goldman,
Sachs & Co. may be contacted at (212) 357-0775 (collect) or (877)
686-5059 (toll-free) and Banc of America Securities LLC may be
contacted at (704) 388-9217 (collect) and (888) 292-0070 (toll-
free). Requests for documentation may be directed to Global
Bondholder Services Corporation, the Information Agent, which can
be contacted at (212) 430-3774 (for banks and brokers only) or
(866) 804-2200 (for all others toll-free).
About TXU Corp.
Headquartered in Dallas, Texas, TXU Corp. (NYSE: TXU) --
http://www.txucorp.com/-- is an energy holding company that
manages a portfolio of competitive and regulated energy
subsidiaries, primarily in Texas , including TXU Energy, Luminant,
and Oncor. TXU Energy provides electricity and related services
to 2.1 million electricity customers in Texas. Luminant has over
18,300 MW of generation in Texas , including 2,300 MW of nuclear
and 5,800 MW of coal-fueled generation capacity. Oncor operates a
distribution and transmission system in Texas , providing power to
three million electric delivery points over more than 101,000
miles of distribution and 14,000 miles of transmission lines.
TCEH is the holding company for TXU Corp.'s competitive
businesses, Luminant and TXU Energy, and was formerly known as TXU
Energy Company LLC.
* * *
TXU Corp. continue to carry Moody's "Ba1" senior unsecured debt
rating well as Fitch's "BB+" long-term issuer default rating.
Both ratings were placed on Feb. 26, 2007.
Additionally, TXU still carries Standard & Poor's "BB" Long-term
foreign and local issuer credit ratings, which were placed on
March 2, 2007, with a negative outlook.
TXU CORP: Targets October 10 Closing of Merger with KKR Unit
------------------------------------------------------------
TXU Corp. expects closing of its merger with a subsidiary of Texas
Energy Future Holdings Limited Partnership on Oct. 10, 2007,
subject to the satisfaction of the applicable closing conditions.
TEF was formed by a group of investors led by Kohlberg Kravis
Roberts & Co. L.P. and Texas Pacific Group To facilitate the
merger. Holders of record of TXU Corp. common stock upon close of
the merger will be entitled to $69.25 per share.
"The closing of the merger will represent the culmination of many
months of hard work by TXU's employees and board of directors and
the representatives of KKR, TPG and other members of the investor
group," TXU Corp. chairman and CEO C. John Wilder said. "We are
very pleased to be able to announce an expected closing date for a
transaction that was overwhelmingly approved by TXU's
shareholders."
Headquartered in Dallas, Texas, TXU Corp. (NYSE: TXU) --
http://www.txucorp.com/-- is an energy holding company that
manages a portfolio of competitive and regulated energy
subsidiaries, primarily in Texas , including TXU Energy, Luminant,
and Oncor. TXU Energy provides electricity and related services
to 2.1 million electricity customers in Texas. Luminant has over
18,300 MW of generation in Texas , including 2,300 MW of nuclear
and 5,800 MW of coal-fueled generation capacity. Oncor operates a
distribution and transmission system in Texas , providing power to
three million electric delivery points over more than 101,000
miles of distribution and 14,000 miles of transmission lines.
TCEH is the holding company for TXU Corp.'s competitive
businesses, Luminant and TXU Energy, and was formerly known as TXU
Energy Company LLC.
* * *
TXU Corp. continue to carry Moody's "Ba1" senior unsecured debt
rating well as Fitch's "BB+" long-term issuer default rating.
Both ratings were placed on Feb. 26, 2007.
Additionally, TXU still carries Standard & Poor's "BB" Long-term
foreign and local issuer credit ratings, which were placed on
March 2, 2007, with a negative outlook.
TXU CORP: Unit Inks Deal to Resolve Issues on TEFMSC Merger
-----------------------------------------------------------
Oncor Electric Delivery Company, a subsidiary of TXU Corp., has an
agreement in principle with major interested parties to resolve
all outstanding issues in the Public Utility Commission of Texas
review related to the proposed merger of TXU Corp. with Texas
Energy Future Merger Sub Corp, a wholly-owned subsidiary of TEF,
along with Texas Energy Future Holdings Limited Partnership.
TEF was formed by a group of investors led by Kohlberg Kravis
Roberts & Co. and Texas Pacific Group to facilitate the merger.
The agreement, also includes provisions under which the PUC
would dismiss Oncor's pending rate case. The agreement is subject
to approval by the PUC.
In addition to commitments Oncor made in its filings in the PUC
review, the stipulated agreement dba Empire Beef & Redistribution
Companyincludes these provisions:
* Oncor will agree to a one-time credit of $72 million,
which is intended for all retail customers in its service
territory, subject to PUC dismissal of Oncor's currently
pending rate case, which will be requested by the parties
to the settlement agreement. It is the intent of the
parties to the agreement that the benefits of the credit
flow directly to consumers, rather than to retail electric
providers. Consistent with its existing agreement with
the cities it serves, Oncor will file a system-wide rate
case no later than July 1, 2008, based on a test-year
ended Dec. 31, 2007.
* Oncor will incur a one-time $35 million write-off in 2007
or 2008 to its storm reserve and a one-time write-off in
2007 or 2008 to the 2002 restructuring expenses held as
regulatory assets of approximately $21 million.
* Oncor will make annual reports to the PUC regarding
compliance with its commitments.
* TEF and Oncor will limit the dividends paid by Oncor
through Dec. 31, 2012, to an amount not to exceed Oncor's
net income, subject to certain defined adjustments.
* Oncor will commit to minimum capital spending of $3.6
billion over the five-year period ending Dec. 31, 2012,
subject to certain defined conditions.
* Oncor will agree to certain system reliability, street
light maintenance and customer service standards.
About TXU Corp.
TXU Electric Delivery Co fka Oncor Electric Delivery Co. --
http://www.oncor.com/-- a subsidiary of Dallas, Texas-based TXU
Corp. that is into electric distribution and transmission business
that provides power to more than 3 million homes and businesses
and operates more than 115,000 miles of transmission and
distribution lines in Texas. TXU Corp is an energy holding
company that manages a portfolio of competitive and regulated
energy subsidiaries, primarily in Texas , including TXU Energy,
Luminant, and Oncor.
TCEH is the holding company for TXU Corp.'s competitive
businesses, Luminant and TXU Energy, and was formerly known as TXU
Energy Company LLC.
* * *
TXU Corp. continue to carry Moody's "Ba1" senior unsecured debt
rating well as Fitch's "BB+" long-term issuer default rating.
Both ratings were placed on Feb. 26, 2007.
Additionally, TXU still carries Standard & Poor's "BB" Long-term
foreign and local issuer credit ratings, which were placed on
March 2, 2007, with a negative outlook.
VINCENT KRALYEVICH: Case Summary & 7 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Vincent Kralyevich
241 Willow Drive
Little Silver, NJ 07739
Bankruptcy Case No.: 07-24460
Chapter 11 Petition Date: October 5, 2007
Court: District of New Jersey (Trenton)
Judge: Raymond T. Lyons Jr.
Debtor's Counsel: Richard Honig, Esq.
Hellring, Lindeman, Goldstein & Siegal, LLP
One Gateway Center, 8th Floor
Newark, NJ 07102
Tel: (973) 621-9020
Total Assets: $446,100
Total Debts: $1,592,131
Debtor's list of its Seven Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
American Express Rewards Gold $571,663
P.O. Box 2855
New York, NY 10116
American Express Corp. $191,803
P.O. Box 2855
New York, NY 10116
Commerce Bank, NA Credit Line $151,223
200 West 26th Street
New York, NY 10001
Credit Cards $50,158
Chase Manhattan Bank $69,940
American Express Credit Line $27,144
State of New Jersey $6,000
State of New York $200
VONAGE HOLDINGs: To Pay Sprint $80 Million as Patent Settlement
---------------------------------------------------------------
Vonage Holdings Corp. has settled its pending patent dispute with
Sprint Nextel Corp. and entered into a licensing arrangement under
Sprint's Voice over Packet patent portfolio. The parties have
entered into an agreement to resolve this patent dispute as well
as entered into a business relationship. In addition, Sprint has
agreed to license Vonage its VOP portfolio.
The agreement is valued at $80 million, including $35 million for
past use of license, $40 million for a fully paid future license,
and $5 million in prepayment for services.
Last month, a Kansas jury handed down a verdict finding that
Vonage had infringed six Sprint patents.
"We are pleased to resolve our dispute with Sprint and enter into
a productive future relationship," Sharon O'Leary, General Counsel
for Vonage, said. "We believe this deal is good news for Vonage,
our customers and our shareholders. It allows us to put this
litigation behind us and continue to focus on our core business by
removing the uncertainty of legal reviews and long term court
action."
About Sprint Nextel
Headquartered in Reston, Virginia, Sprint Nextel Corp. (NYSE: S)
-– http://www.sprint.com/-- offers a range of wireless and
wireline communications services bringing the freedom of mobility
to consumers, businesses and government users. Sprint Nextel is
widely recognized for developing, engineering and deploying
innovative technologies, including two robust wireless networks
serving 54 million customers at the end of the second quarter
2007; industry-leading mobile data services; instant national and
international walkie-talkie capabilities; and a global Tier 1
Internet backbone.
About Vonage
Headquartered in Holmdel, New Jersey, Vonage Holdings Corp.
(NYSE:VG) -- http://www.vonage.com/-- provides broadband
telephone services with over 1.4 million subscriber lines as of
February 8, 2006. Utilizing its voice over Internet protocol
technology platform, the company offers feature-rich, low-cost
communications services with a call quality comparable to
traditional telephone services. While customers in the United
States represent over 95% of its subscriber lines, Vonage
continues to expand internationally, having launched its service
in Canada in November 2004, and in the United Kingdom in May 2005.
WEIGHT WATCHERS: June 30 Balance Sheet Upside-Down by $991,266
--------------------------------------------------------------
Weight Watchers International Inc.'s consolidated balance sheet at
June 30, 2007, showed $1.04 billion in total assets and
$2.04 billion in total liabilities, resulting in a $991,266 total
stockholders' deficit.
The company's consolidated balance sheet at June 30, 2007, further
showed strained liquidity with $202.1 million in total current
assets available to pay $2.04 billion in total current
liabilities.
The company reported net income of $58.0 million in the second
quarter ended June 30, 2007, versus $57.9 million in the second
quarter of 2006. During the first quarter of 2007, the company
increased its debt level primarily to finance its self-tender and
repurchase of 19.1 million shares. Accordingly, interest expense
in the second quarter of 2007 was $29.0 million, up from
$11.5 million in the second quarter of 2006, while fully diluted
shares of the company decreased to 79.4 million shares from 100.2
million shares in the second quarter of 2006.
For the second quarter of 2007, net revenues increased 20% or
$65.2 million to $386.3 million, up from $321.1 million in the
second quarter of 2006. Fully diluted earnings per share were
$0.73 in the second quarter of 2007 versus $0.58 in the prior year
period, up 26%. During the second quarter of 2006, the company
completed the refinancing of its debt and incurred an early
extinguishment of debt charge of $0.01 per fully diluted share.
Excluding this non-recurring expense, fully diluted earnings per
share were $0.59 for the second quarter of 2006.
First Half 2007 Results
For the first half of 2007, net revenues increased 18.5% or
$122.6 million to $785.7 million, up from $663.1 million in the
first half of 2006. Fully diluted earnings per share were $1.36
in the first half of 2007 versus $1.14 in the prior year period.
Excluding from the first half of 2007 and the first half of 2006,
$0.02 per share and $0.01 per share, respectively, of non-
recurring expense associated with the early extinguishment of
debt, fully diluted earnings per share were $1.38 for the first
half of 2007 as compared to $1.15 in the prior year period, up
20%.
During the first half of 2007, net income was $111.8 million
versus $114.9 million in the first half of 2006. Interest expense
in the first half of 2007 was $54.3 million, up from $22.8 million
in the first half of 2006, while average fully diluted shares of
the company decreased.
Commenting on results, David Kirchhoff, president and chief
executive officer, said, "I am pleased with our strong second
quarter results which benefited from the continued positive impact
of our Monthly Pass committment plan in North America, robust
product sales around the world and the expanding awareness of our
Weight Watchers Online internet product. We are now focused on
taking meaningful steps to bring new energy to the brand with more
effective and differentiated marketing, which we believe will
support our continued growth into 2008 and beyond."
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?2419
About Weight Watchers
Headquartered in New York City, Weight Watchers International
Inc. (NYSE: WTW) -- http://www.weightwatchersinternational.com/--
provides weight management services, with a presence in 30
countries around the world, including Brazil, the Netherlands,
and New Zealand. The company serves its customers through
Weight Watchers branded products and services, including
meetings conducted by Weight Watchers International and its
franchisees.
* * *
In August 2001, Moody's Investor Services placed Weight Watchers
International Inc.'s long term corporate family and bank loan debt
ratings at "Ba1". These ratings hold to this date.
* Beard Audio Presents Three Bankruptcy-Related Oct. Conferences
----------------------------------------------------------------
Beard Audio Conferences presents three bankruptcy-related audio
conferences for October 2007.
* The Subprime Sector Meltdown:
Legal Developments and Latest Opportunities
with Stephen B. Selbst
* Partnerships in Bankruptcy: Unwinding the Deal
with Alexander M. Laughlin and H. Jason Gold
* Using Virtual Data Rooms to Expedite
M&A and Insolvency Proceedings
with Eric S. Kurtzman and Jonathan A. Carson
To register, visit http://www.beardaudioconferences.com
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------ -------
Absolute Softwre ABT (1) 63 22
AFC Enterprises AFCE (31) 158 3
Alaska Comm Sys ALSK (23) 562 19
Apex Silver Mine SIL (131) 1,385 146
AthenaHealth Inc ATHN (18) 1,072 (2)
Authentic Inc AUTH (4) 22 0
Bare Escentuals BARE (162) 196 68
Bearingpoint Inc BE (338) 1,836 133
Blount International BLT (89) 471 141
CableVision System CVC (5,064) 10,072 17
Carrols Restaurant TAST (18) 459 (36)
Cell Therapeutic CTIC (85) 90 21
Centennial Comm CYCL (1,078) 1,322 20
Cheniere Energy CQP (181) 1,935 145
Choice Hotels CHH (72) 332 (33)
Cincinnati Bell CBB (744) 1,953 (2)
Claymont Stell PLTE (41) 152 72
Compass Minerals CMP (49) 674 139
Corel Corp. CRE (16) 261 (31)
Crown Holdings CCK (90) 6,793 428
Crown Media HL CRWN (588) 749 63
CV Therapeutics CVTX (129) 308 226
Cyberonics CYBX (17) 135 (28)
Dayton Superior DSUP (99) 337 95
Deluxe Corp DLX 0 1,410 (164)
Demantec Inc DMAN (10) 60 (7)
Denny's Corporation DENN (207) 439 (54)
Domino's Pizza DPZ (1,434) 474 87
Dun & Bradstreet DNB (425) 1,418 (268)
Einstein Noah Re BAGL (46) 136 (3)
Emeritus Corp. ESC (111) 950 (62)
Enzon Pharmaceutical ENZN (57) 355 166
Extendicare Real EXE-U (16) 1,331 146
Foamex Intl FMXI (257) 566 146
Ford Motor Co F (1,422) 287,939 (4,704)
Gencorp Inc. GY (31) 1,082 74
General Motors GM (2,290) 186,527 (4,638)
Graftech International GTI (4) 788 260
Healthsouth Corp. HLS (1,292) 2,402 (463)
I2 Technologies ITWO (6) 195 39
ICO Global C-New ICOG (116) 628 146
IDEARC Inc IAR (8,575) 1,576 326
IMAX Corp IMX (64) 220 12
IMAX Corp IMAX (64) 220 12
Incyte Corp. INCY (120) 309 250
Indevus Pharma IDEV (75) 156 14
Intermune Inc ITMN (68) 241 181
ITC Deltacom Inc ITCD (49) 409 9
Koppers Holdings KOP (44) 699 196
Linear Tech Corp LLTC (708) 1,219 681
Lockerbie & Hole LH (3) 123 (25)
McMoran Exploration MMR (50) 446 (1)
Mediacom Comm MCCC (120) 3,624 (278)
National Cinemed NCMI (559) 446 40
Navisite Inc NAVI (14) 116 11
New River Pharma NRPH (110) 152 (19)
Nexstar Broadcasting NXST (81) 704 (20)
NPS Pharm Inc NPSP (226) 150 (107)
ON Semiconductor ONNN (118) 1,428 322
Primedia Inc PRM (426) 1,233 770
Protection One PONN (4) 678 (302)
Qwest Communication Q (1,556) 20,389 (1,263)
Radnet Inc. RDNT (49) 393 38
Ram Energy Resources RAME (1) 203 (8)
Regal Entertainment RGC (96) 2677 (89)
Riviera Holdings RIV (24) 443 28
RSC Holdings Inc RRR (129) 3,430 (202)
Rural Cellular RCCC (602) 1,260 14
Sealy Corp. ZZ (145) 1,017 49
Sipex Corp SIPX (18) 44 2
Sirius Satellite SIRI (539) 1,688 (176)
St. John Knits Inc. SJKI (52) 213 80
Station Casinos STN (167) 3,745 (62)
Stelco Inc STE (108) 2,734 726
Town Sports Int. CLUB (12) 459 (52)
Unisys Corp. UIS (2) 3,832 40
VMWare Inc-CL A VMW (138) 1,422 23
Voyager Learning VLCY (53) 917 (637)
Weight Watchers WTW (991) 1,046 (85)
Western Union WU (86) 5,328 945
Westmoreland Coal WLB (115) 764 (51)
Worldspace Inc. WRSP (1,683) 424 (20)
WR Grace & Co. GRA (390) 3,706 922
XM Satellite XMSR (597) 1,813 (153)
Xoma Ltd XOMA (14) 68 23
*********
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, Joseph Medel C.
Martirez, Sheena R. 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 ***