/raid1/www/Hosts/bankrupt/TCR_Public/080619.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, June 19, 2008, Vol. 12, No. 145
Headlines
ABITIBIBOWATER INC: Subsidiary Amends Canadian Credit Agreement
AGILYSIS INC: Hires JP Morgan to Assess Strategic Alternatives
AGILYSIS INC: To Delay Filing of 2008 Annual Report
ALLTEL CORP: Posts $124.9 Million Net Loss in 2008 First Quarter
AMBAC FINANCIAL: Terminates Rating Contract with Fitch
AMERICAN HOME: Wants Removal Period Extended to Sept. 2
AMERICAN HOME: Wants to Reject Executives' Employment Agreements
AMERICAN HOME: Wants to Set June 20 as Cure Objection Deadline
AMERICAN HOME: AHM Servicing Asserts $12MM Claim for APA Breaches
ASARCO LLC: Concerned Groups Want Bidders' Environ. Records Opened
ASTRATA GROUP: Windes & McClaughry Expresses Going Concern Doubt
AURA SYSTEMS: Kabani & Company Expresses Going Concern Doubt
BIOPURE CORP: Posts $4,861,000 Net Loss in 2nd Qtr. Ended April 30
BLACKHAWK INC: Case Summary & 14 Largest Unsecured Creditors
CARBIZ INC: April 30 Balance Sheet Upside-Down by $17,289,387
CEDAR FUNDING: Judge Morgan Appoints Chapter 11 Trustee
CENTEX HOME: Fitch Takes Rating Actions on Various Cert. Classes
CHRISTOPHER ECKLER: Case Summary & 15 Largest Unsecured Creditors
CLEARPOINT BUSINESS: Gets 2nd Nasdaq Listing Non-compliance Notice
CORNERSTONE MINISTRIES: Examiner Not Required, Says Court
CROWN PLAZA: May Hire SulmeyerKupetz as General Counsel
DAN RIVER: Gets Final Approval to Access GMAC's $32 Mil. Facility
DAN RIVER: Greenberg Traurig Approved as Committee's Counsel
DENISE EVANS: Files Voluntary Chapter 11 Case Summary
DEUTSCHE MORTGAGE: Fitch Holds 'B+' Rating on $22.7MM Certificates
DLJ COMMERCIAL: Fitch Holds 'B-' Rating on $6.3MM Class B-7 Certs.
DORMIA INC: Files for Chapter 11, Obtains Financing From CIT
EFILESOLUTIONS INC: Owner Files for Bankruptcy Owing $16MM
ENCAP GOLF: Wachovia Bank Wants Chapter 11 Case Converted
ENCAP GOLF: Committee Taps J.H. Cohn as Financial Advisor
FORT DUQUESNE: Moody's Cuts Ratings on Four Notes Classes
FOUNDATIONS INC: Voluntary Chapter 11 Case Summary
FREMONT GENERAL: Files For Chapter 11, Unloads Bank Assets
FREMONT GENERAL: Case Summary & 21 Largest Unsecured Creditors
FRONTIER AIRLINES: Court OKs Houlihan as Panel's Financial Advisor
FRONTIER AIRLINES: Taps FTI Consulting as Specialist Fin. Advisors
GEMINI AIR: Files for Chapter 11, Receives $14 Million Loan
GEMINI AIR CARGO: Case Summary & 20 Largest Unsecured Creditors
GMAC COMMERCIAL: Fitch Chips Rating on $3.8MM Certs. to CCC/DR2
HALIFAX MEDICAL: Moody's Affirms Rating on Bonds at Ba3
HEALTHTRONICS INC: S&P Holds BB- Rating; Changes Outlook to Stable
HEXION SPECIALTY: Files Suit to Cancel $10BB Merger with Huntsman
HOLLINGER INC: Completes Settlement with Davidson and Sun-Times
HUNTSMAN CORP: Hexion Specialty Wants to Cancel $10.6BB Merger
IMARX THERAPEUTICS: Restructures, Axes All Workers Except CEO
IMARX THERAPEUTICS: Terminates LOI for Sale of Urokinase Assets
JEFFREY DENNIS: Case Summary & 11 Largest Unsecured Creditors
KGB: Moody's Hikes CF and PD Ratings to Ba3 from B2
LEVITT AND SONS: Plan-Filing Deadline Extended to June 27
LEVITT AND SONS: Court Compels TIG to Turnover Property
LEVITT AND SONS: Wachovia Bank Files Second Amended Complaint
LINN ENERGY: Moody's Puts B3 Rating on Proposed $400MM Sr. Notes
LOUISIANA RIVERBOAT: Wants Plan Filing Deadline Moved to Oct. 31
MMM HOLDINGS: Moody's Sees Direction of Caa1 Rating Uncertain
N-STAR REL: Fitch Affirms 'BB-' Rating on $22.5MM Class N Notes
NIGHTHAWK SYSTEMS: Posts $770,198 Net Loss in 2008 First Quarter
NON-INVASIVE MONITORING: Posts $488,000 Net Loss in Third Quarter
PACIFICNET INC: Kabani & Company Expresses Going Concern Doubt
PIERRE FOODS: Has Going Concern Doubt; Warns of Likely Bankruptcy
PINNACLE AUTO: Voluntary Chapter 11 Case Summary
PLASTECH ENGINEERED: JCI Credit Offers $176MM for Interiors Biz.
PLASTECH ENGINEERED: Names Stalking-Horse Bidders for Main Assets
PLASTECH ENGINEERED: Wants to Enforce Stay Against H.S. Die
PNA INTERMEDIATE: Reliance Steel Deal Cues Moody's Rating Review
PNA INTERMEDIATE: $1.1BB Reliance Steel Deal Cues S&P's Pos. Watch
PNC COMMERCIAL: Fitch Affirms Junk Rating on $6.8MM Class M Notes
PTS INC: March 31 Balance Sheet Upside-Down by $387,303
PUREDEPTH INC: April 30 Balance Sheet Upside-Down by $2,127,771
QUEBECOR WORLD: Court Approves EUR133 Mil. Sale of European Biz
QUIKSILVER INC: Moody's Reviews Ba3 Ratings for Possible Downgrade
RAPID LINK: April 30 Balance Sheet Upside-Down by $1,797,148
REFCO INC: Refco Commodity's Plan Satisfies Section 1129(d)
REFCO INC: Court Approves $1.25MM Settlement with Multi-Bank
REFCO INC: Refco LLC Ch. 7 Trustee Won't Dispute Goodman Claim
REFCO INC: Phillip Bennett Seeks Leniency from Life Sentence
REFCO INC: Trial of Ex-Lawyer Joseph Collins Set April 2009
RITE AID: Fitch Affirms 'B-' Issuer Default Rating
ROBERT ENDRESON: Voluntary Chapter 11 Case Summary
RURAL CELLULAR: Justice Dept. Okays Proposed Merger with Verizon
SADDLE MOUNTAIN: Fitch Slashes Rating on $17.55MM GO Bonds to BB
SALLY BEAUTY: Board Appoints Mark Flaherty as VP and CFO
SALOMON BROTHERS: Fitch Affirms 'B' Rating on $13.7MM Class J Loan
SCO GROUP: Posts $2,070,000 Net Loss in 2nd Quarter Ended April 30
SHARPER IMAGE: Gift Card Holder Seeks to Enforce Rights
SHEILA JONES: Case Summary & 16 Largest Unsecured Creditors
SIMDAG-ROBEL: Trump Tower Tampa Developer Files for Bankruptcy
SIMDAG-ROBEL: Case Summary & 20 Largest Unsecured Creditors
SIMON WORLDWIDE: Inks Recapitalization Pact with Overseas Toys
SMARTIRE SYSTEMS: April 30 Balance Sheet Upside-Down by $38.5MM
SOLUTIA INC: Pays Executive Emergence Bonuses in Stock, Not Cash
SOLUTIA INC: Faces Suit for PCB Contamination in Pensacola
SOLUTIA INC: Flexsys Unit to Halt Wales Manufacturing by Year-End
SOLUTIA INC: PHLX Commences Trading of 12 New Options
SOUNDVIEW HOME: Fitch Junks Rating on Class M-1 Certificates
SPECTRUM BRANDS: Inks Restricted Stock Pact with CEO Kent Hussey
ST. STEPHEN: Employee Transfer to ENC Might be Under Investigation
SYNOVICS PHARMA: April 30 Balance Sheet Upside-Down by $10,650,527
TANK SPORTS: Kabani & Company Expresses Going Concern Doubt
TARPON INDUSTRIES: Gets Final OK to Access Laurus' DIP Facility
TEEVEE TOONS: Has Until September 18 to File Chapter 11 Plan
TEKOIL & GAS: Bankruptcy Puts Ptarmigan Resources Deal in Limbo
TOTE-A-LUBE: Case Summary & 20 Largest Unsecured Creditors
TOUSA INC: DIP Termination Date Extended Until Today, June 19
TOUSA INC: In Talks to Address Objections on Cash Collateral Order
TYSON FOODS: Expected Credit Decline Cues Fitch to Lower Ratings
UAL CORP: Bank of America Discloses 14.79% Equity Stake
UAL CORP: Shareholders Re-Elect Directors at 2008 Annual Meeting
UAL CORP: Unit and AFA Offer Separation Deal to Flight Attendants
VALENCE TECHNOLOGY: PMB Helin Donovan Raises Going Concern Doubt
VICORP RESTAURANTS: Milbank Tweed Approved as Panel's Counsel
WELLMAN INC: Completes Amendment to DIP Agreement
WESCO HOLDINGS: S&P Puts 'BB-' Rating on Proposed $100MM Term Loan
WESTERN POWER: April 30 Balance Sheet Upside-Down by $14,383,000
WESTMORE COAL: Absaloka Mine Employees Reject Labor Agreement
WILDERNESS SHORES: Tricord Wants Former Case Reopened
YOSHINOYA NEW YORK: Files for Ch. 11 After Rent Cancellation
ZENITH FUNDING: Moody's Cuts Ba2 Rating on $71MM Notes to B1
ZIFF DAVIS: Court Confirms Reorganization Plan
ZIFF DAVIS: Files Supplements to Amended Joint Chapter 11 Plan
* Fitch Revises Q-IFS Ratings on Four Health Insurance Entities
* 24/7 Wall St. Rates Bankruptcy Probability of Large, Public Cos.
* Otterbourg Steindler Adds Former U.S. Bankruptcy Judge as Member
* Resilience Capital Partners Adds Chief Operating Officer
* Berger Singerman Hailed as One of Top Rated Florida Firms
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
ABITIBIBOWATER INC: Subsidiary Amends Canadian Credit Agreement
---------------------------------------------------------------
Bowater Inc., a subsidiary of AbitibiBowater Inc., entered into an
amendment to its Canadian credit agreement. The Amendment to the
Canadian credit agreement was entered into among Bowater and
certain subsidiaries and affiliates of Bowater, Bowater Canadian
Forest Products Inc., an indirect subsidiary of Bowater,
AbitibiBowater, certain lenders and The Bank of Nova Scotia, as
Administrative Agent for the various lenders under the credit
agreement. The Amendment principally:
(i) extends the maturity date of the credit facility from
May 28, 2008 to June 5, 2009,
(ii) imposes additional reporting obligations on BCFPI and
implements more extensive eligibility criteria for the
assets that may be used in determining the borrowing base
under the facility, thereby reducing the funds available
under the credit facility and
(iii) reduces the aggregate commitment of all the lenders party
thereto from $165,000,000 to $143,750,000.
Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/ -- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products. AbitibiBowater owns or operates 27 pulp and paper
facilities and 34 wood products facilities located in the United
States, Canada, the United Kingdom and South Korea.
AbitibiBowater is also among the world's largest recyclers of
newspapers and magazines. AbitibiBowater's shares trade under the
stock symbol ABH on both the New York Stock Exchange and the
Toronto Stock Exchange.
* * *
As reported in the Troubled Company Reporter on April 16, 2008,
Standard & Poor's Ratings Services assigned recovery ratings to
the senior unsecured debt issues of AbitibiBowater Inc., Abitibi-
Consolidated Inc., and Bowater Inc. At the same time, S&P lowered
the issue-level rating on these debts to 'CCC+' from 'B-'.
AGILYSIS INC: Hires JP Morgan to Assess Strategic Alternatives
--------------------------------------------------------------
Agilysys Inc. said that its board of directors has authorized the
company's management and financial advisors to explore a range of
strategic and financial alternatives to enhance shareholder value.
These alternatives include, but are not limited to, continued
implementation of Agilysys current strategic growth plan, a sale
of certain assets or the entire company, formation of joint
ventures, and a change to the company's capital structure. The
company has retained JPMorgan as financial advisor in the
evaluation process.
The company also announced that it is deferring its Aug. 1, 2008,
annual meeting of shareholders pending completion of the strategic
evaluation.
Agilysys cautions there can be no assurance that the exploration
of alternatives will result in a fundamental change to the
company's current strategic growth plan. The company only intends
to disclose developments regarding the process when the Board of
Directors has received recommendations from JPMorgan and has
completed its consideration of financial and strategic
alternatives. Agilysys announced May 13 that it had re-engaged
JPMorgan to assist in assessing the ongoing timing and
implementation of its strategic growth strategy.
"Given recent developments in our markets and the current
macroeconomic environment, we have expanded the process to further
evaluate all strategic options available to us to appropriately
maximize the creation of long-term shareholder value," said Arthur
Rhein, chairman, president and chief executive officer of
Agilysys.
Based on the company's 2008 annual report at Google Finance, the
company had $702.8 million in assets, $216.8 million in
liabilities, and $486.0 million in stockholders' equity.
Fourth Amendment to Credit Agreement
As reported in the Troubled Company Reporter on March 3, 2008,
On Feb. 21, 2008, Agilysys Inc. entered into a fourth amendment
agreement to its credit agreement, dated Oct. 18, 2005. The
credit agreement provides for loans and letters of credit
aggregating to $200 million, including a $20 million sub-facility
for letters of credit issued by LaSalle Bank NA or one of its
affiliates and a $20 million sub-facility for swingline loans,
which are short-term loans generally used for working capital
requirements.
About Agilysys Inc.
Agilysys Inc. (NASDAQ: AGYS) -- http://www.agilysys.com/--
provides IT solutions to corporate and public-sector customers,
including retail and hospitality. The company uses technology --
including hardware, software and services -- to help customers
resolve their most complicated IT needs. The company possesses
expertise in enterprise architecture and high availability,
infrastructure optimization, storage and resource management,
identity management and business continuity; and provides
industry-specific software, services and expertise to the retail
and hospitality markets. Headquartered in Boca Raton, Fla.,
Agilysys operates extensively throughout North America, with
additional sales offices in the United Kingdom and China.
AGILYSIS INC: To Delay Filing of 2008 Annual Report
---------------------------------------------------
On June 16, 2008, Agilysys Inc. filed Form 12b-25 with the U.S.
Securities and Exchange Commission to report that it will be
unable to timely file its Form 10-K for the fiscal year ended
March 31, 2008.
Agilysys said it will recognize its share of equity income, which
is expected to be significant, from the company's 20% ownership
interest in Magirus AG. This income is largely due to the gain on
sale of a portion of Magirus' business to Avnet in late 2007.
Due to the materiality of Magirus to Agilysys' financial
statements in fiscal 2008, an independent audit of Magirus AG must
be completed before the 2008 Form 10-K can be filed. It is
unlikely Agilysys will meet the Form 12b-25 extended timeline
based on the estimated time to complete the audit.
Fourth Amendment to Credit Agreement
As reported in the Troubled Company Reporter on March 3, 2008,
On Feb. 21, 2008, Agilysys Inc. entered into a fourth amendment
agreement to its credit agreement, dated Oct. 18, 2005. The
credit agreement provides for loans and letters of credit
aggregating to $200 million, including a $20 million sub-facility
for letters of credit issued by LaSalle Bank NA or one of its
affiliates and a $20 million sub-facility for swingline loans,
which are short-term loans generally used for working capital
requirements.
About Agilysys Inc.
Agilysys Inc. (NASDAQ: AGYS) -- http://www.agilysys.com/--
provides IT solutions to corporate and public-sector customers,
including retail and hospitality. The company uses technology --
including hardware, software and services -- to help customers
resolve their most complicated IT needs. The company possesses
expertise in enterprise architecture and high availability,
infrastructure optimization, storage and resource management,
identity management and business continuity; and provides
industry-specific software, services and expertise to the retail
and hospitality markets. Headquartered in Boca Raton, Fla.,
Agilysys operates extensively throughout North America, with
additional sales offices in the United Kingdom and China.
ALLTEL CORP: Posts $124.9 Million Net Loss in 2008 First Quarter
----------------------------------------------------------------
Alltel Corp reported a net loss of $124.9 million for the first
quarter quarter ended March 31, 2008, compared to net income of
$230.1 million for the same period of 2007.
The decrease in net income in 2008 was driven by the significant
increases in interest costs and depreciation and amortization
expense following the completion of the merger.
Revenues were $2.3 billion, an 11 percent increase from
$2.1 billion in the same period a year ago. Average revenue per
wireless customer was $53.64, up 2 percent from last year. Data
revenue per customer reached a new high of $7.50, a 60 percent
increase year-over-year.
Gross Customer Additions
Gross customer additions were almost 1.1 million in the quarter, a
26 percent increase from the same period a year ago, while net
customer additions were 385,000, a 63 percent increase from the
first quarter of 2007.
Consolidated EBITDA
Consolidated EBITDA (earnings before interest, taxes, depreciation
and amortization) was $847.3 million, an 18 percent increase from
$719.5 million in the same period a year ago.
Depreciation and Amortization Expense
Depreciation expense increased $37.6 million, or 12 percent, in
the three months ended March 31, 2008, as compared to the same
period of 2007. The increase in depreciation expense in the first
quarter of 2008 reflected growth in operating plant in service and
the effects of the write-up in the carrying value of Alltel's
property, plant and equipment to fair value of $402.5 million in
connection with the merger.
Compared to the same prior year period, amortization expense
increased $139.4 million in the first quarter of 2008 primarily
due to the recognition of $3.65 billion of finite-lived intangible
assets in connection with the merger and the effects of using an
accelerated amortization method for the customer list intangible
asset.
Interest Expense
Interest expense increased $449.8 million in the three months
ended March 31, 2008, compared to the same period of 2007. The
increase in the first quarter of 2008 primarily reflected the
unfavorable effects on interest costs resulting from the
significant increase in Alltel's long-term debt balance following
the completion of the merger.
Acquisition of Alltel by Two Private Investment Firms
On Nov. 16, 2007, Alltel was acquired by Atlantis Holdings LLC, a
Delaware limited liability company (Parent) and an affiliate of
private investment funds TPG Partners V, L.P. and GS Capital
Partners VI Fund, L.P. The acquisition was completed through the
merger of Atlantis Merger Sub Inc., a Delaware corporation and
wholly-owned subsidiary of Parent, with and into Alltel, with
Alltel surviving the merger as a privately-held, majority-owned
subsidiary of Parent.
Subsequent Event
On June 5, 2008, Alltel Corp. and Atlantis Holdings LLC entered
into an agreement with Verizon Wireless, a joint venture of
Verizon Communications and Vodafone. Under the terms of the
agreement, Verizon Wireless will acquire the equity of Alltel for
approximately $5.9 billion. Based on Alltel's projected net debt
at closing of $22.2 billion, the aggregate value of the
transaction is $28.1 billion.
Balance Sheet
At March 31, 2008, the company's consolidated balance sheet showed
$31.8 billion in total assets, $27.7 billion in total liabilities,
and $4.1 billion in total shareholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2e3b
About Alltel Corp.
Based in Little Rock, Ark., Alltel Corp. -- http://www.alltel.com/
-- operates America's largest wireless network, which delivers
voice and advanced data services nationwide to more than 13
million customers.
Alltel completed its merger with an affiliate of TPG Capital and
GS Capital Partners in November 2007 and ceased trading on the New
York Stock Exchange.
* * *
As reported in the Troubled Company Reporter on June 10, 2008,
Moody's Investors Service placed the long-term ratings of Alltel
on review for possible upgrade, including the company's
$2.3 billion Senior Unsecured Notes -- Caa1, LGD 6 (95%) and
$1.0 billion Senior Unsecured Toggle Notes -- Caa1 LGD 5 ratings.
This action follows Verizon Wireless' June 5, 2008 announcement
that it plans to acquire Alltel for about $28.1 billion in cash
and assumed debt.
AMBAC FINANCIAL: Terminates Rating Contract with Fitch
------------------------------------------------------
Ambac Financial Group Inc. decided to terminate its ratings
contract with Fitch Ratings Inc.
Ambac's decision came three months after larger bond-insurer MBIA
Inc. asked Fitch to withdraw its ratings on the company, The Wall
Street Journal reported.
According to WSJ, the move brings out speculations on whether
companies, particularly financial firms, will become more
aggressive in criticizing how the credit raters perform their job
and the validity some give those grades and how they are handed
out.
In a press statement, Ambac stated: "Our decision to refocus and
realign our business around our core expertise in the public
finance and infrastructure sectors has led us to re-evaluate our
ratings needs. As part of this review, we have asked Fitch to
remove its ratings on Ambac and all its subsidiaries effective
immediately."
Fitch confirmed it received Ambac's request and is considering it,
WSJ stated.
About Ambac Financial
Based in New York City, Ambac Financial Group, Inc. is a holding
company that provides financial guarantees and financial services
to clients in both the public and private sectors around the world
through its principal operating subsidiary, Ambac Assurance
Corporation. As an alternative to financial guarantee insurance
credit protection is provided by Ambac Credit Products, a
subsidiary of Ambac Assurance, in credit derivative format.
* * *
As reported in the Troubled Company Reporter on June 9, 2008,
Standard & Poor's Ratings Services lowered its standard long-term
ratings on 20 Ambac Assurance Corp.-backed issues listed below to
'AA' from 'AAA' and placed them on CreditWatch with negative
implications. At the same time, Standard & Poor's lowered its
underlying ratings on seven Ambac Assurance Corp.-backed issues
listed below to 'AA' from 'AAA' and placed them on CreditWatch
with negative implications. These actions follow Standard &
Poor's downgrade of Ambac Assurance Corp. to 'AA' from 'AAA' and
placement on CreditWatch with negative implications. )
AMERICAN HOME: Wants Removal Period Extended to Sept. 2
-------------------------------------------------------
American Home Mortgage Investment Corp. and its debtor-affiliates
ask the U.S. Bankruptcy Court for the District of Delaware to
extend through September 2, 2008, their deadline to remove pending
prepetition actions against them, pursuant to Section 1452 of the
Judiciary and Judicial Procedures Code, and Rules 9006 and 9027 of
the Federal Rules of Bankruptcy Procedure.
The Debtors ask the Court to approve the extension without
prejudice to:
-- any position they may take regarding whether Section 362 of
the Bankruptcy Code applies to stay any given civil action
pending against them; and
-- their right to seek further extensions.
Since the Petition Date, the Debtors have focused primarily on
maximizing the value of their bankruptcy estates through the
orderly liquidation of their assets, James L. Patton, Jr., Esq.,
at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware,
relates. To that end, the Debtors negotiated and sought Court
approval of various assets' sales, including their mortgage loan
servicing business. As a result, the Debtors have not had an
opportunity to fully investigate all of the State Court Actions
to determine whether removal is appropriate.
During the most recent extension of the Removal Period, the
Debtors, among other things:
-- completed the "legal" or final closing of the Servicing
Sale;
-- participated in a mediation regarding an appeal filed by DB
Structured Products, Inc., related to the Servicing Sale;
-- filed an answering brief in the Appeal;
-- gained approval of a marketing and negotiation process to
auction and sell certain non-performing loans; and
-- responded to, engaged in expedited discovery, and
participated in a trial regarding, a request for relief
from stay filed by Bank of America, N.A., administrative
agent for certain prepetition secured parties.
The Debtors believe that granting additional opportunity to
consider removal of the State Court Actions will assure that
their decisions are fully informed and consistent with the best
interests of their bankruptcy estates, Mr. Patton tells the
Court. Nothing in the Debtors' request will prejudice any party
to a proceeding, Mr. Patton assures the Court.
Judge Christopher Sontchi will convene a hearing on June 25, 2008,
at 10:00 a.m., to consider the Debtors' request. Pursuant to
Del.Bankr.LR 9006-2, the Debtors' Removal Period is automatically
extended until the conclusion of that hearing.
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 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.
(American Home Bankruptcy News, Issue No. 39; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN HOME: Wants to Reject Executives' Employment Agreements
----------------------------------------------------------------
Pursuant to Sections 105(a) and 365(a) of the Bankruptcy Code,
and Rule 6006 of the Federal Rules of Bankruptcy Procedure,
American Home Mortgage Investment Corp. and its debtor-affiliates
seek the authority of the U.S. Bankruptcy Court for the District
of Delaware to reject five employment agreements as of the
applicable effective dates:
Date of Rejection
Employee Agreement Effective Date
-------- --------- --------------
Stephen A. Hozie March 1, 2004 June 6, 2008
EVP and CFO
Alan B. Horn Dec. 23, 2002 June 6, 2008
EVP, General Counsel
and Secretary
Robert Bernstein Dec. 18, 2002 June 13, 2008
EVP and Controller
Craig S. Pino Feb. 10, 2004 June 13, 2008
EVP, Chief Investment
Officer and Treasurer
Robert F. Johnson, Jr. Jan. 1, 2004 June 13, 2008
EVP, Capital Markets
James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor,
LLP, in Wilmington, Delaware, reminds the Court that the Debtors
discontinued their loan origination business prior to the
Petition Date and on August 3, 2007, implemented a significant
reduction in their workforce. Since filing for bankruptcy, the
Debtors have engaged in the orderly liquidation of their assets
to maximize the value of their estates for the benefit of
stakeholders.
Upon review of the Employment Agreements, the Debtors have
determined that their continued employment of the five Executives
is burdensome and hold no material economic value to them or
their estates, and are not essential to the conduct of their
bankruptcy cases, Mr. Patton further argues.
However, the Debtors anticipate entering into less burdensome
employment arrangements with certain of the Executives because of
their historical knowledge of the Debtors, and their possession
of skills that are necessary to continue the Debtors'
restructuring efforts, Mr. Patton tells the Court.
Rejecting the Employment Agreements is an integral component of
the Debtors' continued efforts to maximize value for their
estates and creditors by, among other things, eliminating
unnecessary operating costs, Mr. Patton says.
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 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.
(American Home Bankruptcy News, Issue No. 39; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN HOME: Wants to Set June 20 as Cure Objection Deadline
--------------------------------------------------------------
Margaret B. Whiteman, Esq., at Young Conaway Stargatt & Taylor,
LLP, in Wilmington, Delaware, notifies the U.S. Bankruptcy Court
for the District of Delaware that a Cure Notice filed by American
Home Mortgage Investment Corp. and its debtor-affiliates on May
19, 2008, inadvertently included certain agreements that should
not have been included.
Accordingly, the Debtors partially withdraw the Cure Notice,
solely with respect to three trade confirmation agreements
American Home Mortgage Corp. into with:
(1) Countrywide Bank, N.A., dated as of December 30, 2005;
(2) Countrywide Bank, FSB, dated as of March 20, 2007; and
(3) Countrywide Bank, FSB, dated as of March 30, 2007.
AMERICAN HOME: AHM Servicing Asserts $12MM Claim for APA Breaches
-----------------------------------------------------------------
American Home Mortgage Servicing, Inc., formerly known as AH
Mortgage Acquisition Co., Inc., and purchaser of the Debtors'
loan servicing business, asks Judge Christopher Sontchi of the
U.S. Bankruptcy Court for the District of Delaware to:
-- allow its administrative expense claim amounting to more
than $12,000,000; and
-- direct American Home Mortgage Investment Corp., American
Home Mortgage Corp. and AHM SV, Inc., as sellers, to pay
the Claim as soon as reasonably practicable.
AHM Servicing asserts claims for certain damages arising from the
Sellers' breaches of a Servicing Business asset purchase
agreement, Victoria W. Counihan, Esq., at Greenberg Traurig, LLP,
in Wilmington, Delaware, tells Judge Sontchi. Following the
final closing of the Servicing Business sale on April 11, 2008,
Debtor American Home Mortgage Servicing Inc., changed its name to
AHM SV, Inc., while purchaser AHM Acquisition changed its name to
AHM Servicing.
Ms. Counihan contends that since the Servicing Business' initial
Sale closing on November 16, 2007, the Sellers have materially
breached the APA in several respects. Among other things, the
Sellers:
(i) refused to pay certain costs they are obligated to pay
under the APA, including, certain deficiencies in certain
lender-paid mortgage insurance and prepayment penalty
accounts, as well as the cost of delivery of the
applicable mortgage loan files to Irving, Texas; and
(ii) inappropriately used cash from separate accounts set up
for the benefit of the Purchaser.
AHM Servicing recently discovered that prior to the Petition
Date, AHM SV remitted to AHM Investment certain funds collected
for the servicing of certain mortgage loans that were required to
be held in custodial accounts for the benefit of the applicable
holder of certain loans.
The custodial accounts were required to be replenished under
servicing agreements, well prior to the Initial Closing,
Ms. Counihan relates. To rectify the breaches, AHM SV utilized
cash from AHM Servicing's separate accounts to make payments to
the applicable trust or holder of the loan, Ms. Counihan adds.
She contends that the use of cash from the AHM Servicing's
accounts clearly breached the APA, which not only prohibits the
Sellers from using cash in those accounts other than for
operation of the Servicing Business in the ordinary course, but
also requires that the Sellers -- not the purchaser, AHM
Servicing -- pay to cure pre-Initial Closing defaults under the
mortgage loan servicing agreements assumed and assigned to the
AHM Servicing.
As a result of all the various breaches, AHM Servicing has
incurred damages, and is entitled to an allowed administrative
priority claim, aggregating over $12,000,000, Ms. Counihan
maintains.
AHM Servicing reserves its rights to (i) amend its request to
include additional claims, or file an additional request for
allowance of more claims based on additional breaches discovered
during reconciliation process, and (ii) object to the Sellers'
reconciliation reports. Section 6.2 of the APA requires the
Sellers to deliver to the Purchaser the reconciliation reports.
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 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.
(American Home Bankruptcy News, Issue No. 39; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
ASARCO LLC: Concerned Groups Want Bidders' Environ. Records Opened
------------------------------------------------------------------
Three major U.S. environmental organizations -- Sierra Club,
Environmental Integrity Project, Public Citizen/Texas Office --
have urged U.S. Attorney General Michael Mukasey to "immediately
launch a full scale review of the environmental record of all
bidders [for the assets of ASARCO LLC and its debtor-affiliates],"
including Sterlite Industries (India), Ltd.
The joint letter to Mr. Mukasey, a copy of which was also sent to
the Texas Attorney General Greg Abbott -- who serves on the ASARCO
creditor committee -- and Arizona Attorney General Terry Goddard,
reads as: "Two weeks ago, we wrote to you urging the U.S.
Department of Justice to proceed with caution before turning over
the American Smelting and Refining Company -- which has a record
of one of the worst polluter in the country -- to a new corporate
parent with a weak environmental record. It is our view that
strong leadership and a commitment to the highest environmental
standards will be critically important to ending ASARCO's legacy
of pollution.
For this reason, we are concerned by reports that the U.S.
Department of Justice is supporting the sale of ASARCO to Sterlite
Industries Ltd., a subsidiary of Vedanta Resources PLC without
undertaking an assessment of the environmental record of Vedanta
and other bidders. Most troubling are the published reports of a
DOJ representative telling the court that Vedanta's environmental
record based on lower Indian environment standards should not be a
'dispositive disqualifying factor.'
We respectfully disagree and renew our call to the Department of
Justice to immediately launch a full scale review of the
environmental record of all bidders. We remain firm in our view
that the future parent of ASARCO must be an entity that can usher
in a much more constructive approach to environmental concerns."
The earlier June 3, 2008 letter is available online at
http://www.sierraclub.org/environmentallaw/lawsuits/docs/tx-
asarco_pr.pdf
About ASARCO
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 April 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).
ASTRATA GROUP: Windes & McClaughry Expresses Going Concern Doubt
----------------------------------------------------------------
Windes & McClaughry Accountancy Corporation in Irvine, Calif.,
raised substantial doubt on the ability of Astrata Group, Inc., to
continue as a going concern after it audited the company's
financial statements for the year ended Feb. 29, 2008.
The auditing firm pointed to the company's negative working
capital, accumulated deficit, and total stockholders˙ deficit of
about $10,000,000, $46,500,000, and $8,600,000, respectively, as
of Feb. 29, 2008, and the company's net loss and negative
operating cash flow of about $9,500,000 and $2,500,000,
respectively, for the year then ended.
Management presently believes that cash generated from operations,
combined with the company's current credit facilities and the debt
and equity financing proposals now under consideration, will be
sufficient to meet the company˙s anticipated liquidity
requirements through February 2009.
Subsequent Events
In a meeting held on May 27, 2008, the Board of Directors
approved and authorized the entry into the Warrant Exchange
Agreement, the Warrant Amendment Agreement and the Preferred Stock
Exchange Agreement with Vision Opportunity Master Fund Ltd. and
take any and all actions to give effect to this transaction. They
further authorized the filing of a Certificate of Designation for
Series C Convertible Preferred Stock and file an amendment to the
Corporation's Articles of Incorporation in the State of Nevada
increasing the Corporation's authorized shares of common stock,
par value $0.0001 per share to 300,000,000 and the Corporation's
authorized shares of preferred stock, par value $0.0001 per share
to 75,000,000; and they further approved the appointment of Mr.
John Clough as Director.
On May 27, 2008, John Clough was appointed to the board of
directors of the company. Mr. Clough currently serves as Special
Advisor to General Atlantic LLC, a position he has held since
December 2000. Mr. Clough currently serves on the Board of CDC
Corporation where he is a member of the company's audit committee.
He is also Chairman of the Executive Committee and Vice Chairman
of CDC Software. Mr. Clough is also a Director of Corgi
International and a member of the audit committee. He also serves
on various private company boards.
Following approval of the board of directors and a majority of its
shareholders, the company entered into a $4 million Warrant
Exchange Agreement, a Warrant Amendment Agreement, and a Preferred
Stock Exchange Agreement, dated as of May 29, 2008, between the
company and each of the holders of certain warrants, and holders
of certain series of preferred shares issued by the company
relating to the company's Series A and Series B Preferred shares.
The Amended and Restated Rights Agreements eliminate the anti-
dilution and cashless exercise provisions of the Series A and
Series B warrants.
Financials
The company posted a net loss of $9,516,207 on net sales of
$13,445,124 for the year ended Feb. 29, 2008, as compared with a
net loss of $14,679,287 on net sales of $3,472,020 in the prior
year.
At Feb. 29, 2008, the company's balance sheet showed $7,529,675 in
total assets and $16,111,323 in total liabilities, resulting in
$8,581,648 stockholders' deficit.
The company's consolidated balance sheet at Feb. 29, 2008, also
showed strained liquidity with $6,115,691 in total current assets
available to pay $16,101,488 in total current liabilities.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2e11
About Astrata Group
Headquartered in Costa Mesa, Calif., Astrata Group Inc. (OTC BB:
ATTG.OB) -- http://www.astratagroup.com/-- is engaged in the
telematics and Global Positioning System industry, focused on
advanced location-based IT products and services that combine
positioning, wireless communications, and information
technologies. The company provides advanced positioning products,
as well as monitoring and airtime services to industrial,
commercial, governmental entities, academic/research institutions,
and professional customers in a number of markets including
surveying, utility, construction, homeland security, military,
intelligence, mining, agriculture, marine, public safety, and
transportation.
AURA SYSTEMS: Kabani & Company Expresses Going Concern Doubt
------------------------------------------------------------
Los Angeles-based Kabani & Company, Inc., raised substantial doubt
on the ability of Aura Systems, Inc., to continue as a going
concern after it audited the company's financial statements for
the year ended Feb. 29, 2008.
The auditing firm disclosed that during the years ended Feb. 29,
2008, and Feb. 28, 2007, the company incurred losses of $8,960,486
and $6,168,447, respectively and had negative cash flows from
operating activities of $7,334,594 and $3,233,516, respectively
during the years ended Feb. 29, 2008, and Feb. 28, 2007. The
company had an accumulated deficit of $354,121,403 as of Feb. 29,
2008.
Substantial additional capital resources will be required to fund
continuing expenditures related to its research, development,
manufacturing and business development activities. During the
year ended Feb. 29, 2008, the company completed a private
placement wherein it raised $6,433,088 to be used to fund the
company's working capital needs. Assurance cannot be given that
this source of financing will continue to be available to the
company and demand for the company˙s equity instruments will be
sufficient to meet its capital needs.
Subsequent Events
Subsequent to the year-end, the company entered into an agreement
with Emerald Commercial Leasing, Inc., whereby the company will
acquire the transport refrigeration assets of Emerald, valued at
around $385,000. The company will also be hiring some of the
employees of Emerald, and has entered into an employment agreement
with its President, Mr. Joseph Dickman, effective Aug. 1, 2008.
The company is also negotiating to purchase the service and
installation facilities of Emerald, which comprises approximately
6 acres of land, including a service facility.
In March of 2008, the company's board of directors authorized the
modification of the terms of the warrants that had been issued to
creditors and investors as a result of the company's bankruptcy
filing. The revised terms allow the warrant holders to
immediately exercise their warrants at a price of $1.00 per share,
reduce the exercise price to $2.00 per share while modifying the
expiration date to Jan. 31, 2009, or continue to hold the warrants
with no change in the terms.
Financials
The company posted a net loss of $8,960,486 on net revenues of
$2,849,331 for the year ended Feb. 29, 2008, as compared with a
net loss of $6,168,447 on net revenues of $1,624,074 in the prior
year.
At Feb. 29, 2008, the company's balance sheet showed $5,258,627 in
total assets, $4,462,233 in total liabilities, and $796,394 in
total stockholders' equity.
The company's consolidated balance sheet at Feb. 29, 2008, showed
strained liquidity with $2,590,770 in total current assets
available to pay $2,542,456 in total current liabilities.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2e12
About Aura Systems
Headquartered in El Segundo, California, Aura Systems, Inc., --
http://www.aurasystems.com/-- develops and sells AuraGen(R)
mobile induction power systems to the industrial, commercial and
defense mobile power generation markets.
The company filed for chapter 11 protection on June 24, 2005
(Bankr. C.D. Calif. Case No. 05-24550). Ron Bender, Esq., at
Levene Neale Bender Rankin & Brill LLP, represents the Debtor in
its restructuring efforts. When the Debtor filed for bankruptcy,
it reported $18,036,502 in assets and $28,919,987 in debts. The
recapitalized company emerged from Chapter 11 proceedings in
accordance with the reorganization plan confirmed by the
bankruptcy court and became effective on Jan. 31, 2006.
BIOPURE CORP: Posts $4,861,000 Net Loss in 2nd Qtr. Ended April 30
------------------------------------------------------------------
Biopure Corporation reported a net loss of $4,861,000 for the
second quarter ended April 30, 2008, compared with a net loss of
$6,220,000 in the correponding period ended April 30, 2007.
Total revenues for the second fiscal quarter of 2008 were
$902,000, including $777,000 from sales of Oxyglobin, $89,000 from
sales of Hemopure in South Africa and $36,000 from funds received
from the U.S. Government.
Total revenues for the same period in 2007 were $619,000,
including $500,000 from Oxyglobin sales, $6,000 from sales of
Hemopure and $113,000 from the U.S. Government.
At April 30, 2008, the company's consolidated balance sheet showed
$18,323,000 in total assets, $4,120,000 in total liabilities, and
$14,203,000 in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended April 30, 2008, are available for
free at http://researcharchives.com/t/s?2e37
Going Concern Doubt
As reported in the Troubled Company Reporter on Feb. 1, 2008,
Ernst & Young, in Boston, expressed substantial doubt about
Biopure Corporation's ability to continue as a going concern after
auditing the company's consolidated financial statements for the
years ended Oct. 31, 2007, and 2007. The auditing firm pointed to
the company's recurring losses from operations and lack of
sufficient funds to sustain its operations through the end of
fiscal 2008.
The company may not continue to qualify for continued listing on
the Nasdaq Capital Market. The company is out of compliance with
the $1.00 minimum bid price requirement for continued inclusion of
its class A common stock in the Nasdaq Stock Market. The company
has until Dec. 8, 2008, to regain compliance with the minimum bid
price requirement. If the company's securities are delisted, its
ability to raise funds will be adversely affected.
About Biopure Corporation
Based in Cambridge, Mass., Biopure Corporation (Nasdaq: BPUR)
-- http://www.biopure.com/-- develops, manufactures and markets
pharmaceuticals, called oxygen therapeutics, that are
intravenously administered to deliver oxygen to the body's
tissues. Hemopure(R) is approved for sale in South Africa for the
treatment of surgical patients who are acutely anemic. Biopure's
veterinary product Oxyglobin(R), the only oxygen therapeutic
approved for marketing by both the U.S. Food and Drug
Administration and the European Commission, is indicated for the
treatment of anemia in dogs.
BLACKHAWK INC: Case Summary & 14 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Blackhawk, Inc.
5210 Auth Road
Suite 407
Suitland, MD 20746
Bankruptcy Case No.: 08-17979
Chapter 11 Petition Date: June 17, 2008
Court: District of Maryland (Greenbelt)
Judge: Wendelin I. Lipp
Debtor's Counsel: John C. Gordon, Esq.
532 Baltimore & Annapolis Boulevard
Severna Park, MD 21146
Tel: (410) 340-0808
johngordononline@yahoo.com
Estimated Assets: $100,000 to $500,000
Estimated Debts: $1 million to $10 million
Debtor's list of its 14 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Internal Revenue Service $1,650,000
31 Hopkins Plaza, Room 1150
Baltimore, MD 21201
DC Department of Employment Services $731,550
609 H Street NE, Room 356
Washington, DC 20002
Steel Hector & Davis LLP $84,099
200 South Biscayne Boulevard, 400
Miami, FL 33131
Radley Thomas Yvon & Clark $35,250
Image First $15,888
Daniels & Daniels Inc. $14,469
Gartrell & Associates $13,173
Poyner & Spruill LLP $5,917
Nextel Communications $5,304
State of Connecticut $4,808
City of Philadelphia $4,610
Sonia A. Timothy-Serrette $2,879
James McCollum, Jr. $2,021
The Baltimore Sun Company $1,157
CARBIZ INC: April 30 Balance Sheet Upside-Down by $17,289,387
-------------------------------------------------------------
Carbiz Inc.'s consolidated balance sheet at April 30, 2008, showed
$31,177,683 in total assets and $48,467,070 in total liabilities,
resulting in a $17,289,387 total stockholders' deficit.
At April 30, 2008, the company's consolidated balance sheet also
showed strained liquidity with $18,972,061 in total current assets
available to pay $29,358,247 in total current liabilities.
The company reported net earnings of $25,310 for the first quarter
ended April 30, 2008, compared with net earnings of $760,173 in
the corresponding period ended April 30, 2007.
In the three months ended April 30, 2008, revenues increased to
$8,923,272 compared to $880,586 in the same period ended
April 30, 2007. This was primarily due to the company's
acquisition of a number of buy-here-pay-here credit centers.
Gain on Debt Forgiveness
During the three months ended April 30, 2007, the company
negotiated the settlement of a $466,337 trade payable which
resulted in a gain from debt forgiveness of $391,337. There was
no similar item during the three months ended April 30, 2008.
Interest and Other Expenses
Interest expense and other expenses increased to $1,906,421 for
the three months ended April 30, 2008, compared to $89,508 during
the previous year's three month period, as a result of the
issuance of the four convertible debentures during the prior
fiscal year and the various credit facilities to support the
company's Midwest and Texas operations.
Gain on Derivative Instruments
For the three months ended April 30, 2008, the company incurred a
non-cash gain of $2,034,358 as a result of the fair value
adjustment of outstanding derivative instruments. During the
three months ended April 30, 2007, the company incurred a non-cash
gain of $678,621 including day one derivative losses on new
financings.
Full-text copies of the company's consolidated financial
statements for the quarter ended April 30, 2008, are available for
free at http://researcharchives.com/t/s?2e34
Going Concern Doubt
Aidman, Piser & Company, P.A., in Tampa, Florida, expressed
substantial doubt about Carbiz Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Jan. 31, 2008.
The company has incurred losses in the current period (exclusive
of gains on derivative instruments) and in each of the past
several years. In addition, the company had a working capital
deficiency of $10,386,186 and a stockholders' deficit of
$17,289,387 at April 30, 2008.
About CarBiz Inc.
Headquartered in Sarasota, Florida, CarBiz Inc. (OTC BB: CBZFF)
-- http://www.carbiz.com/-- owns and operates a chain of buy-here
pay-here dealerships through its CarBiz Auto Credit division. The
company is also a provider of software, training and consulting
solutions to the buy-here pay-here auto dealers in the United
States. CarBiz's suite of business solutions includes dealer
software products focused on the buy-here pay-here, sub-prime
finance and automotive accounting markets.
Capitalizing on expertise developed over 10 years of providing
software and consulting services to buy-here pay-here businesses
across the United States, CarBiz entered the buy-here pay-here
business in 2004 with a location in Palmetto, Florida. CarBiz has
added two more credit centers since - in Tampa and St. Petersburg
- and recently acquired a large regional chain in the Midwest,
bringing the total number of dealerships to 26 in eight states.
CEDAR FUNDING: Judge Morgan Appoints Chapter 11 Trustee
-------------------------------------------------------
The Hon. Marilyn Morgan of the U.S. Bankruptcy Court for the
Northern District of California ruled that an appointment of a
chapter 11 trustee is necessary in the case of Cedar Funding Inc.,
The Deal's John Blakeley says.
Ralph P. Guenther, Esq., of Duffy & Guenther LLP, counsel to an
investor group alleges that the Debtor and its officials were
involved in a Ponzi scheme, The Deal relates. The U.S. Trustee
and the investor group requested the Court to appoint a case
trustee because of their lack of confidence in the current
management.
As reported in the Troubled Company Reporter , Jun 12, 2008
Cedar Funding president, David Nilsen allegedly embezzled about
$160 million of funds from at least 1,100 individuals. State
officials have asserted support to the appointment of the case
trustee.
Thomas R. Duffy, Esq., representing the plaintiffs in the case,
said that Mr. Nilsen extended $80 million in insider debts to
himself, his wife, company staff and a related company.
Monterey, California-based Cedar Funding Inc. --
http://www.cedarfundinginc.com/-- is a mortgage lender. It filed
its chapter 11 petition on May 26, 2008 (Bankr. N.D. Calif. Case
No. 08-52709). Four days prior to the bankruptcy filing,
Monterey County Superior advised the Debtor to consent to a
receivership. Judge Marilyn Morgan presides over the case.
Charles E. Logan, Esq., represents the Debtor in its restructuring
efforts. The Debtor listed assets of less than $50,000 and debts
of $100 million to $500 million.
CENTEX HOME: Fitch Takes Rating Actions on Various Cert. Classes
----------------------------------------------------------------
Fitch Ratings has taken rating actions on Centex Home Equity Loan
Trust mortgage pass-through certificates. Unless stated
otherwise, any bonds that were previously placed on Rating Watch
Negative are removed from Rating Watch Negative.
Centex Home Equity Loan Trust 2001-B
-- Class A5 affirmed at 'AAA';
-- Class A6 affirmed at 'AAA';
-- Class A-7 affirmed at 'AAA';
-- Class M-1 downgraded to 'A+' from 'AA';
-- Class M-2 downgraded to 'BBB' from 'A';
-- Class B downgraded to 'CC/DR4' from 'B'.
Deal Summary
-- Originator: Centex Home Equity Company, LLC (100%)
-- 60+ day Delinquency: 15.04%
-- Realized Losses to date (% of Original Balance): 5.90%
Centex Home Equity Loan Trust 2002-A, Group 1
-- Class AF-4 affirmed at 'AAA';
-- Class AF-5 affirmed at 'AAA';
-- Class AF-6 affirmed at 'AAA';
-- Class MF-1 affirmed at 'AA';
-- Class MF-2 downgraded to 'A-' from 'A';
-- Class BF downgraded to 'CCC/DR1' from 'BBB'.
Deal Summary
-- Originator: Centex Home Equity Company, LLC (100%)
-- 60+ day Delinquency: 10.44%
-- Realized Losses to date (% of Original Balance): 5.34%
Centex Home Equity Loan Trust 2002-A, Group 2
-- Class AV affirmed at 'AAA';
-- Class MV-1 affirmed at 'AA';
-- Class MV-2 affirmed at 'A';
-- Class BV downgraded to 'CC/DR4' from 'B-/DR1'.
Deal Summary
-- Originator: Centex Home Equity Company, LLC (100%)
-- 60+ day Delinquency: 27.02%
-- Realized Losses to date (% of Original Balance): 4.42%
Centex Home Equity Loan Trust 2002-C
-- Class AF-4 affirmed at 'AAA';
-- Class AF-5 affirmed at 'AAA';
-- Class AF-6 affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 downgraded to 'BB+' from 'A';
-- Class B-1 affirmed at 'CCC/DR1';
-- Class B-2 revised to 'C/DR5' from C/DR4'.
Deal Summary
-- Originator: Centex Home Equity Company, LLC (100%)
-- 60+ day Delinquency: 13.72%
-- Realized Losses to date (% of Original Balance): 4.71%
Centex Home Equity Loan Trust 2002-D
-- Class AF-4 affirmed at 'AAA';
-- Class AF-5 affirmed at 'AAA';
-- Class AF-6 affirmed at 'AAA';
-- Class A-IO affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 downgraded to 'BB+' from 'A';
-- Class B downgraded to 'CC/DR4' from 'B-/DR1'.
Deal Summary
-- Originator: Centex Home Equity Company, LLC (100%)
-- 60+ day Delinquency: 14.71%
-- Realized Losses to date (% of Original Balance): 4.48%
CHRISTOPHER ECKLER: Case Summary & 15 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Christopher W. Eckler
379 Amherst St.
PMB 111
Nashua, NH 03063
Bankruptcy Case No.: 08-11686
Chapter 11 Petition Date: June 16, 2008
Court: District of New Hampshire Live Database (Manchester)
Debtor's Counsel: Leonard G. Deming, II, Esq.
Email: deminglaw@aol.com
491 Amherst St., Ste. 22
Nashua, NH 03063
Tel: (603) 882-2189
Fax: (603) 882-5707
http://www.attorneydeming.com/
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
A copy of Christopher W. Eckler's list of 15 largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/nhb08-11686.pdf
CLEARPOINT BUSINESS: Gets 2nd Nasdaq Listing Non-compliance Notice
------------------------------------------------------------------
ClearPoint Business Resources, Inc. received a letter from The
Nasdaq Stock Market indicating that the company is not in
compliance with Nasdaq Marketplace Rule 4310(c)(4) because, for
the previous 30 consecutive business days, the bid price of the
company's common stock had closed below the minimum requirement of
$1.00 per share. The notice states that in accordance with the
Nasdaq Marketplace Rules, the company will be provided 180
calendar days, or until Dec. 8, 2008, to regain compliance with
Rule 4310(c)(4). If, at any time before Dec. 8, 2008, the bid
price of the company's common stock closes at $1.00 per share or
more for a minimum of 10 consecutive business days, the staff of
the Nasdaq Listing Qualifications Department may provide the
company written notification that it has achieved compliance with
Rule 4310(c)(4).
The notice also states that if the company does not regain
compliance with Rule 4310(c)(4) by Dec. 8, 2008, the Staff will
determine whether the Company meets the Nasdaq Capital Market
initial listing criteria in Marketplace Rule 4310(c), except for
the bid price requirement. If the company meets such initial
listing criteria, the Staff will notify the company that it has
been granted an additional 180 calendar day compliance period. If
the company is not eligible for an additional compliance period,
the Staff will provide written notification that the company's
securities will be delisted. At that time, the company would have
the ability to appeal the staff's decision to the Nasdaq Listing
Qualifications Panel. The company can offer no assurance that it
will be able to achieve compliance with the Nasdaq Marketplace
Rules.
Based in Chalfont, Pennsylvania, ClearPoint Business Resources
Inc., through its proprietary, technology-based iLabor network
platform, provides its clients a comprehensive web-based portal to
streamline the process involved in procurement and management of
temporary labor through a network of ClearPoint-approved staffing
vendors.
Clearpoint Business Resources Inc.'s consolidated balance sheet at
March 31, 2008, showed $10,264,003 in total assets and $26,251,109
in total liabilities, resulting in a $15,987,106 total
stockholders' deficit.
M&T Credit Pact Default
As disclosed in the Troubled Company Reporter on June 12, 2008,
ClearPoint Business is in default under a credit agreement, dated
Feb. 23, 2007, with Manufacturers and Traders Trust Company and
several lenders. As a consequence of the default, M&T declared
all ClearPoint's outstanding obligations under the Credit
Agreement to be immediately due and payable and terminated the
lenders' obligation to make any additional loans or issue
additional letters of credit to ClearPoint. ClearPoint is
in the process of negotiating a financing arrangement with a
potential lender. However, there is no assurance that
ClearPoint's capital raising efforts will be able to attract the
additional capital or other funds it needs to sustain its
operations.
Due to ClearPoint's financial position and results of operations,
on May 30, 2008, ClearPoint scaled back various aspects of its
operations. If ClearPoint is unable to obtain additional funding,
or such funding is not available on acceptable terms, this will
materially adversely impact ClearPoint's ability to continue
operations.
CORNERSTONE MINISTRIES: Examiner Not Required, Says Court
---------------------------------------------------------
The Hon. Robert E. Brizendine of the United States Bankruptcy
Court for the Northern District of Georgia denied request by
Donald F. Walton, the U.S. Trustee for Region 21, to appoint an
examiner to investigate alleged misconduct and irregularity in the
management of the affairs of Cornerstone Ministries Investments
Inc. by its current and former officers.
Insufficient grounds have been presented to support such relief,
according to Judge Brizendine. [The] appointment of an examiner
is unnecessary at this time and further, same would result in
efforts potentially duplicative of the attempt of the Official
Committee of Holders Unsecured Claims, he points out.
The alleged issues tied in with the Debtor raised by the U.S.
Trustee are being fully investigated well by the Committee, Judge
Brizendine notes.
As reported in the Troubled Company Reporter on May 1, 2008,
the examiner is expected to determine whether certain management
decisions made by the Debtor's officers would be declared as
fraud.
The U.S. Trustee alleged that two of the Debtor's officers and
eNable Business Solutions Inc. -- fka Cornerstone Capital
Advisors Inc., as investment and financial advisor -- each
acquired an 18% ownership interest in Wellstone LLC, the Debtor's
largest borrower in September 2006. The outstanding principal on
the loans to Wellstone reached $76 million on Sept. 30, 2007. In
addition, three of the loans with outstanding principal of
$6,574,991 was added after Wellstone became a related party.
The U.S. Trustee argued that the Debtor has transfered at least
$11 million in loans in the aggregate to wholly owned subsidiaries
of Cornerstone Group Holdings Inc.
Regulatory Filing
According to the Debtor's regulatory filing with the Securities
and Exchange Commission, the Debtor suffered a $417,183 net
operating loss during the nine month period ending Sept. 30, 2007,
compared with a $606,658 net operating income a year earlier.
Despite the loss, the Debtor was able to dole out dividends of at
least $517,931 to shareholders during the nine month ended
Sept. 30, 2007.
The Debtor's regulatory filing indicates that the advisory fees
payable to eNable Business rose from $1,085,322, for the nine
months ended Sept. 30, 2006, to $1,239,174 for the nine months
ended Sept. 30, 2007, an increase of $153,842.
The Debtor experienced cash shortfalls in September, October and
November of 2007, according to the Debtor's President and Chief
Executive Officer John T. Ottinger, Jr., in an affidavit filed
on Feb. 13, 2008. As of Nov. 12, 2007, "[the Debtor] had
approximately $8.5 million in real estate loan draw request
which it was not able to fund and $300,000 in bond redemption
commitments from October 2007 that it was holding pending receipt
of cash," Mr. Ottinger said.
A full-text copy of the Debtor's Regulatory Filing is available
for free at http://ResearchArchives.com/t/s?2b5b
About Cornerstone Ministries
Headquartered in Cumming, Georgia, Cornerstone Ministries
Investments Inc. -- http://www.cmiatlanta.com/-- is engaged in
financing the acquisition and development of facilities for use by
churches, faith-based or non-profit organizations and for-profit
organizations. The company offers development, construction,
bridge and interim loans, usually due within one to three years.
The company makes loans to four distinct groups of borrowers,
including churches, senior housing facilities, family housing
development projects and daycare/faith-based schools.
The company filed for Chapter 11 protection on Feb. 10, 2008 (N.D.
Ga. Case No. 08-20355). J. Robert Williamson, Esq., at Scroggins
and Williamson, represents the Debtor. The Debtor selected BMC
Group Inc. as claims, noticing and balloting agent. When the
Debtor filed for protection from its creditors, it listed assets
was $159,118,892 and debts of $153,847,984.
As reported in the Troubled Company Reporter on June 4, 2008, the
Court further extended the Debtor's exclusive period to file a
Chapter 11 plan until Sept. 8, 2008.
* * *
The Debtor reported an opening cash balance of $223,168 and a
closing cash balance of $256,014 for the period March 1, 2008
until March 31, 2008, according to its monthly financial report.
CROWN PLAZA: May Hire SulmeyerKupetz as General Counsel
-------------------------------------------------------
The United States Bankruptcy Court for the Central District of
California gave Crown Plaza Development LLC authority to employ
SulmeyerKupetz as its general bankruptcy counsel.
As Troubled Company Reporter on March 31, 2008, SulmeyerKupetz is
expected to, among others, assist with the examination of claims
of creditors in order to determine their validity, negotiate with
creditors for a plan of reorganization, and draft a plan of
reorganization and disclosure statement.
Based in Newport Coast, California, Crown Plaza Development, LLC
owns and develops real estate. The developer filed for Chapter 11
protection on Feb. 20, 2008 (Bankr. C.D. Calif. Case No. 08-
10776). Alan G. Tippie, Esq. at SulmeyerKupetz represents
the Debtor in its restructuring efforts. When the Debtor filed
for protection from its creditors, it listed $21,852,834 in total
assets and $$6,444,440 in total liabilities.
DAN RIVER: Gets Final Approval to Access GMAC's $32 Mil. Facility
-----------------------------------------------------------------
The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for
the District of Delaware authorized Dan River Inc. and its debtor-
affiliates to obtain, on a final basis, up to $32 million in
postpetition financing from a group of financial institutions led
by GMAC Commercial Finance LLC, in its capacity as agent for
itself.
As reported in the Troubled Company Reporter on April 25, 2008,
the Court authorized the Debtors to access, on an interim basis,
up to $30 million in DIP financing from the lenders.
The DIP facility will be used to finance the operation of their
businesses and preserve the value of their assets. The DIP
facility will bear interest at per annum rate equal to the
Base Rate -- the rate of interest declared by Bank of America,
N.A. -- in effect from time to time plus 4%.
The DIP liens are subject to a $250,000 carve-out for payment of
statutory fees to the U.S. Trustee, fee payable to the clerk of
the court, and allowed fees and expenses of professional advisors
retained by the Debtors or Committee. The Debtors agree to pay a
$500,000 DIP fee pursuant to the financing agreement, as amended.
To secure their DIP obligations, the lenders are entitled to a
first and senior priority to all other interest and liens.
The DIP agreement contains appropriate and conditional events of
default.
Indebtedness
As of April 18, 2008, in respect of all prepetition obligations,
the Debtors owe GMAC Commercial at least $24,868,719, which is
comprised of:
i) $24,568,719 in revolving loans made pursuant to certain
existing financing agreements in the aggregate and
ii) $300,000 in letters of credit plus interest accrued, costs,
expenses, fees and other charges.
A full-text copy of the DIP Agreement is available for free
at http://ResearchArchives.com/t/s?2cf0
About Dan River Inc.
Headquartered in Danville, Virginia, Dan River Inc. --
http://www.www.danriver.com/-- manufactures and markets textile
products for the home fashions, apparel fabrics and industrial
markets.
The company first filed for chapter 11 protection on March 31,
2004 (Bankr. N.D. Ga. Case No. 04-10990). James A. Pardo, Jr.,
Esq., at King & Spalding, represented them in their restructuring
efforts. The Debtor listed $441,800,000 in total assets and
$371,800,000 in total debts. The Court confirmed the Debtors' Plan
of Reorganization on Jan. 18, 2005, and the plan took effect on
Feb. 14, 2005.
Dan River's operations was acquired by GHCL Ltd. in January 2006
for approximately $93 million consisting of $17 million in cash
plus the assumption of $76 million in short- and long-term debt.
On March 24, 2008, GHCL announced plans to close its home textiles
sourcing and manufacturing segment, affecting Dan River as well as
GHCL's HW Baker and Best Textiles divisions.
Dan River Holdings LLC, Dan River Inc. and three other affiliates
filed for Chapter 11 protection on April 20, 2008, (Bankr. D. Del.
Lead Case No. 08-10727). Margaret M. Manning, Esq., at Whiteford
Taylor & Preston, represents the Debtors in their restructuring
efforts. The U.S. Trustee for Region 3 appointed creditors serve
on an Official Committee of Unsecured Creditors. As of April 20,
the Debtors listed assets between $50 million and $100 million and
debts between $100 million and $500 million.
DAN RIVER: Greenberg Traurig Approved as Committee's Counsel
------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
gave the Official Committee of Unsecured Creditors of Dan River
Inc. and its debtor-affiliates, permission to retain Greenberg
Traurig LLP as its counsel.
Greenberg Traurig is expected to:
a) provide legal advice with respect to the Committee's rights,
powers and duties in this case;
b) prepare all necessary applications, answers, response,
objections, orders, reports and other legal papers;
c) represent the Committee in any an all matters arising in the
cases including any dispute or issue with the Debtors,
allege secured creditors and other third parties;
d) assist the Committee in its investigation and analysis of
the Debtors, including but not limited to, the review and
analysis of all pleadings, claims and plans of
reorganization that may be filed in these cases and any
negotiations or litigation that may arise out of or in
connection with matters, operations and financial affairs;
e) represent the Committee in all aspects of confirmation
proceedings; and
f) perform all other legal services for the Committee that may
be necessary or desirable in these proceedings.
The firm's professionals and their compensation rates are:
Professionals Hourly Rates
------------- ------------
Nancy A. Mitchell, Esq. $780
Jeffrey M. Wolf, Esq. $650
Donald J. Detweiler, Esq. $535
Sandra G. M. Selzer, Esq. $415
Dennis A. Meloro, Esq. $385
Endicott Peabody, Esq. $375
Elizabeth C. Thomas, Esq. $195
Designations Hourly Rates
------------ ------------
Shareholders $235-$750
Associates $130-$480
Legal Assistants $65-$230
Paralegals $65-$230
Donald J. Detweiler, Esq., a shareholder of the firm, assures the
Court that the firm does not hold any interest adverse to the
Debtors' estate and is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
About Dan River Inc.
Headquartered in Danville, Virginia, Dan River Inc. --
http://www.www.danriver.com/-- manufactures and markets textile
products for the home fashions, apparel fabrics and industrial
markets.
The company first filed for chapter 11 protection on March 31,
2004 (Bankr. N.D. Ga. Case No. 04-10990). James A. Pardo, Jr.,
Esq., at King & Spalding, represented them in their restructuring
efforts. The Debtor listed $441,800,000 in total assets and
$371,800,000 in total debts. The Court confirmed the Debtors' Plan
of Reorganization on Jan. 18, 2005, and the plan took effect on
Feb. 14, 2005.
Dan River's operations was acquired by GHCL Ltd. in January 2006
for approximately $93 million consisting of $17 million in cash
plus the assumption of $76 million in short- and long-term debt.
On March 24, 2008, GHCL announced plans to close its home textiles
sourcing and manufacturing segment, affecting Dan River as well as
GHCL's HW Baker and Best Textiles divisions.
Dan River Holdings LLC, Dan River Inc. and three other affiliates
filed for Chapter 11 protection on April 20, 2008, (Bankr. D. Del.
Lead Case No. 08-10727). Margaret M. Manning, Esq., at Whiteford
Taylor & Preston, represents the Debtors in their restructuring
efforts. The U.S. Trustee for Region 3 appointed creditors serve
on an Official Committee of Unsecured Creditors. As of April 20,
the Debtors listed assets between $50 million to $100 million and
debts between $100 million to $500 million.
DENISE EVANS: Files Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Denise L. Evans
11823 Finnell Cutoff Road
Northport, Alabama 35475
Bankruptcy Case No.: 08-71204
Type of Business: The Debtor is a real estate broker and
consultant.
Chapter 11 Petition Date: June 17, 2008
Court: Northern District Of Alabama (Tuscaloosa)
Debtors' Counsel: Benjamin L. Woolf, Esq.
(blwoolf@bellsouth.net)
2703 7th Street
Tuscaloosa, Alabama 35401
Tel: (205) 464-0020
Fax: (205) 464-0400
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
The Debtor did not file a list of 20 Largest Unsecured Creditors.
DEUTSCHE MORTGAGE: Fitch Holds 'B+' Rating on $22.7MM Certificates
------------------------------------------------------------------
Fitch Ratings affirmed Deutsche Mortgage & Asset Receiving Corp.'s
commercial mortgage pass-through certificates, series 1998-C1, as:
-- Interest-only class X at 'AAA';
-- $4.0 million class D at 'AAA';
-- $27.2 million class E at 'AAA';
-- $45.4 million class F at 'AAA';
-- $45.4 million class G at 'A';
-- $18.2 million class H at 'BBB-';
-- $22.7 million class J at 'B+'.
The $20.3 million class K remains 'CCC/DR3'. Classes A-1, A-2, B
and C have been paid in full.
Although the transaction has paid down 7.5% since Fitch's last
rating action, increasing concentrations and the potential for
adverse selection warrant affirmations. As of the May 2008
distribution date, the pool's aggregate certificate balance has
been reduced by approximately 90.1% to $183.3 million from
$1.82 billion at issuance. Of the remaining 53 loans in the pool,
10 (6.2%) have been defeased.
Fitch has identified 11 Loans of Concern (15.8%), including seven
loans (7.4%) in special servicing.
The largest specially serviced loan (2.0%) is an office property
in Alton, Illinois. The loan transferred to the special servicer
due to the single tenant vacating the property prior to the
expiration of its lease, which was to occur at maturity. The
property remains 100% vacant. The special servicer is currently
negotiating a workout with the borrower.
The second largest specially serviced loan (1.8%) is secured by
two office properties located in Wappinger Falls and Poughkeepsie,
New York. The loan transferred to the special servicer on May 22,
2008 due to non-monetary default. The special servicer is working
to stabilize the property.
DLJ COMMERCIAL: Fitch Holds 'B-' Rating on $6.3MM Class B-7 Certs.
------------------------------------------------------------------
Fitch Ratings upgraded DLJ Commercial Mortgage Corp.'s commercial
mortgage pass-through certificates, series 1998-CF1 as:
-- $27.1 million class B-4 to 'AA+' from 'AA'.
Fitch also affirmed these classes:
-- Interest-only classes CP and S at 'AAA';
-- $7.1 million class B-1 at 'AAA';
-- $10 million class B-3 at 'AAA';
-- $6.3 million class B-7 at 'B-'.
Fitch does not rate the $14.7 million class B-2, $15 million class
B-5, $15 million class B-6 or $10.2 million class C certificates.
Class A-1A, A-1B, A-2, and A-3 are paid in full.
The upgrade is due to additional paydown since Fitch's last rating
action which has resulted in increased subordination levels. As
of the June 2008 distribution date, the pool's aggregate
certificate balance has been reduced 87.4% to $105.4 million from
$838.8 million at issuance. Of the remaining 29 loans, three
(8.5%) are fully defeased, including the fifth largest loan (5.3%)
in the deal.
Three loans (22.6%) have upcoming maturities within the next two
years. One (7%) in 2009 has a coupon of 7.9% and loan to value of
60.49%. Two (15%) in 2010 have coupons of 7.18% and 7.49%,
respectively, and LTV's of 75.89% and 14.32%.
One loan is currently in special servicing (8.5%) and is real
estate owned. The loan is secured by a retail property located in
Decatur, Georgia. The center is anchored by a Kroeger grocery
store which exercised their five year renewal option until 2013.
The Kmart remains vacant as well as the Hardees space. The
property is currently 51% occupied and the leasing broker
continues to market the vacant space. Losses are expected upon
disposition of the asset and will be absorbed by the non-rated
class C.
DORMIA INC: Files for Chapter 11, Obtains Financing From CIT
------------------------------------------------------------
Dormia, Inc. and several affiliated companies with retail stores
operated under the same name, filed for voluntary reorganization
under Chapter 11 of the U.S. Bankruptcy Code. Classic Sleep
Products, Dormia's wholesale mattress manufacturing business, is
not affected by the move and continues to service its customers as
usual.
To enhance its liquidity, Dormia stores has received a commitment
for a debtor-in-possession facility from The CIT Group.
The company plans to use the reorganization process to determine
strategic options for the locations and approximately 50 employees
working in the division. All stores will remain open for business
during this process and will maintain its high standards of
customer service.
"Like other specialty sleep manufacturers who entered the direct-
to-consumer business over the past few years, we saw this as an
opportunity to create another retail channel and to provide broad
exposure for our brand," said Classic Sleep Products President and
CEO Mike Zippelli. "While some of the stores performed well over
the years, we were never able to open enough locations to leverage
the advertising and operational support in multiple markets."
Mr. Zippelli said that after the company made the move in order to
refocus attention on growing its wholesale business, which is
experiencing a more than 15-percent increase in 2008 sales
compared to last year.
"Classic is doing very well, and we did not want to negatively
impact that business by supporting an unprofitable stores
division," he added.
About Dormia
Headquartered in Jessup, Maryland, Dormia Inc. --
http://www.dormia.com/-- is formed when Advanced Comfort Inc.
founded in 1991. Dormia sells beds and mattresses in the United
States. The company currently has 20 stores in nine states,
including: New York, Connecticut, Florida, Georgia, Indiana,
Kentucky, North Carolina, New Jersey and Ohio.
EFILESOLUTIONS INC: Owner Files for Bankruptcy Owing $16MM
----------------------------------------------------------
Chris Gautreau of 2TheAdvocate (La.) reports that Baton Rouge
businessman Jack Rome Jr. has filed for personal bankruptcy
protection from creditors owed nearly $16 million, mostly in the
form of personal loan guarantees arranged with numerous
individuals.
Mr. Rome's eFileSolutions Inc., an electronic tax-filing company
has sought Chapter 11 bankruptcy protection with the U.S.
Bankruptcy Court for the Middle District of Louisiana in December
2007 (Case No. 07-11736). His his business-consulting firm The
Acumen Group has been placed under control of Martin Schott as
Trustee.
Baton Rouge attorney Louis Phillips confirmed he has been retained
to represent eFileSolutions in its Chapter 11 filing, according to
the report.
Mr. Phillips said eFileSolutions has agreed to repay some of its
debt by selling a subsidiary company, while the remaining assets
will be sold off as well.
He also said, "We'll probably propose a plan within the next 60
days for some type of liquidation."
ENCAP GOLF: Wachovia Bank Wants Chapter 11 Case Converted
---------------------------------------------------------
Wachovia Bank, N.A., asks the Hon. Novalyn L. Winfield of the
United States Bankruptcy Court for the District of New Jersey to
convert the Chapter 11 cases of EnCap Golf Holdings LLC and NJM
Capital LLC to Chapter 7 liquidation proceedings or, to the extent
possible, dismiss their cases.
Mark A. Slama, Esq., at Windels Marx Lane & Mittendorf, says that
the Debtors' Chapter 11 voluntary petitions were filed in "Bad
Faith." A hearing is set for July 14, 2008, at 10:00 a.m., to
consider Wachovia Bank's conversion request.
Wachovia Bank, as agent for a group of financial institutions,
says that it holds the first mortgage of the Debtors' real
property in Bergen County in New Jersey securing its claims
against the Debtors for at least $155 million.
The Debtors have mismanaged the landfill project located in the
Meadowlands in New Jersey, Mr. Slama asserts. About a year ago,
the Debtors revealed to their stakeholders that they have incurred
at least $75 million in cost overruns on the projects which was
originally projected would cost roughly $113 million to complete,
He adds. As a result, the Debtors have:
i) breached their obligations under their redevelopment
agreement with the States of New Jersey,
ii) defaulted their financial obligations with Wachovia Bank,
and
iii) breached their obligations to pay their subcontractors
who have cease all work on the project in September 2007.
As the Debtors failed to cure the defaults, Wachovia Bank
commenced on Jan. 3, 2008, a foreclosure action before the New
Jersey Superior Court against the Debtors' real property but the
foreclosure was stayed -- including NJM Capital's attempt to
terminate EnCap's rights to develop the project -- when the
Debtors filed for bankruptcy on May 8, 2008.
Mr. Slama relates that the Debtors have no working capital and,
above all, the possibility of obtaining additional financing from
lenders to finance and complete the project is impossible.
About EnCap Golf
Headquartered in East Rutherford, New Jersey, EnCap Golf
Holdings, LLC, a subsidiary of Cherokee Investment Partners of
North Carolina, develops closed landfills and other brownfield
properties into golf courses. The company and its affiliate,
NJM Capital LLC, filed for Chapter 11 protection on May 8, 2008
(Bankr. D. N.J. Lead Case No.08-18581). Michael D. Sirota, Esq.,
at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack,
New Jersey, represents the Debtor. The U.S. Trustee for Region 3
appointed five creditors to serve on an Official Committee of
Unsecured Creditors. No professionals have yet been hired for the
Committee. When the Debtors filed for protection against their
creditors, they listed asset and debts between $100 million and
$500 million.
ENCAP GOLF: Committee Taps J.H. Cohn as Financial Advisor
---------------------------------------------------------
The Official Committee of Unsecured Creditors of EnCap Golf
Holdings LLC and NJM Capital LLC asks the United States Bankruptcy
Court for the District of New Jersey for permission to retain J.H.
Cohn LLP as its financial advisor.
As the Committee's financial advisor, J.H. Cohn will:
a) review and evaluate key motions to identify strategic case
issues and alternative approaches;
b) ascertain the extent and nature of the Debtors' assets and
liabilities;
c) gain an understanding of the Debtors' corporate structure,
including non-debtor entities and the status of their books
and records;
d) establish reporting procedures that will allow for the
monitoring of the Debtors' postpetition activities;
e) develop and evaluate financial information that allow
creditors to determine a course of action that will maximize
their dividend;
f) evaluate reasonableness of the Debtors' operating expenses
and related party charges of any;
g) monitor the Debtors' periodic operating results, liquidity
and compliance with any court-approved budgets and order;
h) communicate findings to the Committee;
i) identify and quantify recoverable assets which are not in
the Debtors' estate;
j) perform of other forensic procedures, as requested by the
Committee, including but not limited to, analysis and
investigation of transaction with non-debtor entities
related parties and insiders, potential preferences,
fraudulent conveyances and other potential prepetition
investigation;
k) assist the Committee in negotiating the key terms of a plan
of reorganization;
l) attend meetings including the Committee, the Debtors,
creditors, their attorneys and consultants, if required;
m) monitor the sale process conducted by the Debtors' financial
advisors;
n) evaluate the reasonableness of any offers to purchase the
Debtors' assets; and
o) other financial advisory services, as requested by the
Committee or its counsel.
The firm's professionals and their compensation rates for
accounting and financial advisory services are:
Designations Hourly Rates
------------ ------------
Senior Partners/Partners $515-$650
Director/Senior Manager $430-$500
Other Professionals Staff $170-$425
Paraprofessional $115-$155
Clifford A. Zucker, a partner of the firm, assures the Court that
the firm does not hold any interest adverse to the Debtors' estate
and is a "disinterested person" as defined in Section 101(14) of
the Bankruptcy Code.
Headquartered in East Rutherford, New Jersey, EnCap Golf
Holdings, LLC, a subsidiary of Cherokee Investment Partners of
North Carolina, develops closed landfills and other brownfield
properties into golf courses. The company and its affiliate,
NJM Capital LLC, filed for Chapter 11 protection on May 8, 2008
(Bankr. D. N.J. Lead Case No.08-18581). Michael D. Sirota, Esq.,
at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack,
New Jersey, represents the Debtor. The U.S. Trustee for Region 3
appointed five creditors to serve on an Official Committee of
Unsecured Creditors. No professionals have yet been hired for the
Committee. When the Debtors filed for protection against their
creditors, they listed asset and debts between $100 million and
$500 million.
FORT DUQUESNE: Moody's Cuts Ratings on Four Notes Classes
---------------------------------------------------------
Moody's Investors Service has downgraded the ratings of four
classes of notes issued by Fort Duquesne CDO 2006-1 Ltd., and left
on review for possible further downgrade one of these ratings.
Additionally, the ratings assigned to three classes of notes were
placed on review for possible downgrade, as:
Class Description: $450,000,000 Class A-1A Senior Secured Floating
Rate Notes Due 2046
-- Prior Rating: Aaa
-- Current Rating: Aaa, on review for possible downgrade
Class Description: $400,000,000 Class A-1B Senior Secured Floating
Rate Notes Due 2046
-- Prior Rating: Aaa
-- Current Rating: Aaa, on review for possible downgrade
Class Description: $100,000,000 Class A-2 Senior Secured Floating
Rate Notes Due
-- Prior Rating: Aa3, on review for possible downgrade
-- Current Rating: Ba2, on review for possible downgrade
Class Description: $26,500,000 Class B Senior Secured Floating
Rate Notes Due 2046
-- Prior Rating: Baa3, on review for possible downgrade
-- Current Rating: Ca
Class Description: $11,500,000 Class C Secured Floating Rate
Deferrable Notes Due 2046
-- Prior Rating: Caa2, on review for possible downgrade
-- Current Rating: C
Class Description: $5,500,000 Class D Floating Rate Deferrable
Notes Due 2046
-- Prior Rating: Ca
-- Current Rating: C
Class Description: $11,000,000 Class X Senior Secured Notes Due
2046
-- Prior Rating: Aaa
-- Current Rating: Aaa, on review for possible downgrade
Fort Duquesne CDO 2006-1 Ltd. is a collateralized debt obligation
backed primarily by a portfolio of structured finance securities.
The rating actions taken today reflect continuing deterioration in
the credit quality of the underlying portfolio and the occurrence
as reported by the Trustee of an event of default the took place
on May 30, 2008.
The event of default was caused by a failure of the ratio
calculated by dividing (a) the Net Outstanding Portfolio
Collateral Balance by (b) the Aggregate Outstanding Amount of the
Class A Notes to equal 100%, as set forth in Section 5.01(i) of
the Indenture dated as of Oct. 26, 2006. That event of default is
continuing.
As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, certain parties to the
transaction may be entitled to direct the Trustee to take
particular actions with respect to the Collateral Debt Securities
and the Notes.
The rating actions taken today reflect the increased expected loss
associated with tranches of the transaction. Losses are
attributed to diminished credit quality on the underlying
portfolio. The severity of losses of certain tranches may be
different, however, depending on the timing and choice of remedy
to be pursued following the default event. Because of this
uncertainty, the ratings assigned to Class A-1A, Class A-1B, Class
X, Class A-2 remain on review for possible further action.
FOUNDATIONS INC: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Foundations Inc.
fka Foundations, LLC
8 Via Burrone
Newport Coast, CA 92657
Tel: (949) 514-5625
Bankruptcy Case No.: 08-13321
Description: The Debtor's affiliate, Crown Plaza Development LLC,
filed its chapter 11 petition on Feb. 20, 2008
(Bankr. C.D. Calif. Case No. 08-10776). That case is
presided over by Judge Robert Kwan. Cynthia Gomez,
manager and sole member of Foundations Inc., filed
the petition on behalf of Foundations.
Chapter 11 Petition Date: June 12, 2008
Court: Central District Of California (Santa Ana)
Judge: Theodor Albert
Debtor's Counsel: Alan G. Tippie, Esq.
(atippie@sulmeyerlaw.com)
333 South Hope Street, 35th Floor
Los Angeles, CA 90071
Tel: (213) 626-2311
Fax: (213) 629-4520
Estimated Assets: $10 million to $50 million
Estimated Debts: $1 million to $10 million
List of Unsecured Creditors:
Creditor Nature of Claim Claim Amount
-------- --------------- ------------
Law Offices of Michael V. Legal Fees $400,000
Severo PC
811 Wilshire Blvd.
Suite 1005
Los Angeles, CA 90017
Tredway Lumsdaine & Doyle Legal Fees $133,000
LLP
Orange County Tax Assessor 2nd Installment $16,541
FREMONT GENERAL: Files For Chapter 11, Unloads Bank Assets
----------------------------------------------------------
Fremont General Corporation filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code on June 18, 2008,
before the United States Bankruptcy Court for the Central District
of California, Santa Ana Division.
Fremont General, which primarily does business through its wholly
owned bank subsidiary, Fremont Investment & Loan, has obtained
approval from the California Department of Financial Institutions
and the Federal Deposit Insurance Corporation to sell a
substantial portion of FIL's assets, including all of FIL's
branches, to CapitalSource Bank, a newly formed wholly owned
industrial banking unit of CapitalSource Inc.
CapitalSource will also assume all of FIL's deposits pursuant to
the terms of a Purchase and Assumption Agreement, dated April 13,
2008.
As part of the bankruptcy filing, the Company intends to
promptly file a motion with the Bankruptcy Court for its approval
to complete the acquisition of FIL's assets and deposits by
CapitalSource in accordance with federal bankruptcy laws. The
approval under the federal bankruptcy laws will be required to
complete the transaction, as well as the satisfaction of other
closing conditions.
The bankruptcy case is being administered in the Bankruptcy Court
under the caption "In re Fremont General Corporation, a Nevada
corporation, Case No. 8:08-bk-13421." The Company will continue
to operate its business as "debtor-in-possession" under the
jurisdiction of the Bankruptcy Court and in accordance with the
applicable provisions of the Bankruptcy Code and orders of
the Bankruptcy Court.
Fremont Investment & Loan did not file for bankruptcy, and
continues to operate its business in the normal course. Richard
A. Sanchez, Fremont General's Executive Vice President and Chief
Administrative Officer, says the bankruptcy filing does not and
will not impact the operation of the Bank or affect its FDIC
insurance of deposit accounts, which will continue to the
fullest extent provided by law.
Mr. Sanchez also notes that the bankruptcy filing constitutes an
event of default under the Indenture dated March 1, 1999, relating
to the Company's $169.0 million of Series B 7.875% Senior Notes
due March 2009 and the Indenture dated March 6, 1996, relating to
its 9% Junior Subordinated Debentures. However, he says, all
creditors -- including holders of the Senior Notes and the holders
of the Debentures -- are subject to an automatic stay of any
action to collect, assert, or recover a claim against the Company
as a result of the bankruptcy filing.
On June 2, 2008, Fremont Investment & Loan completed the sale of
its remaining mortgage servicing rights on its $12.2 billion
serviced loan portfolio (as of March 31, 2008) to Litton Loan
Servicing LP, a Delaware limited partnership and an affiliate of
Goldman, Sachs & Co. The parties entered into an Asset
Purchase Agreement on May 7, 2008.
The MSRs sold to Litton included all rights to service mortgage
loans under servicing agreements, including the rights to receive
servicing fees and ancillary income payable to FIL, as servicer,
and the rights and obligations to make, any advances required
pursuant to any servicing agreement, including obligations to
reimburse funds borrowed from any custodial or other accounts
under a servicing agreement, as well as certain other rights to
reimbursement.
FIL received approval of the Litton Agreement from the California
Department of Financial Institutions and a notice of non-objection
of the Federal Deposit Insurance Corporation.
About Fremont General
Fremont General (OTC: FMNT) -- http://www.fremontgeneral.com/--
is a financial services holding company with $8.8 billion in total
assets, at September 30, 2007. The Company is engaged in deposit
gathering through a retail branch network located in the coastal
and Central Valley regions of Southern California through Fremont
Investment & Loan. Fremont Investment & Loan funds its operations
primarily through deposit accounts sourced through its 22 retail
banking branches which are insured up to the maximum legal limit
by the FDIC.
The Retail Banking Division of the Bank continues to offer a
variety of savings and money market products as well as
certificates of deposits across its 22 branch network. Customer
deposits remain fully insured by the FDIC up to at least $100,000
and retirement accounts remain insured separately up to an
additional $250,000.
FREMONT GENERAL: Case Summary & 21 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Fremont General Corp.
2727 East Imperial Hwy.
Brea, CA 92821
Bankruptcy Case No.: 08-13421
Type of Business: The Debtor owns Fremont Investment & Loan, which
has more than 20 retail bank branches in
California. See http://www.fremontgeneral.com/
Chapter 11 Petition Date: June 18, 2008
Court: Central District Of California (Santa Ana)
Judge: Erithe A. Smith
Debtor's Counsel: Scott H. Yun, Esq.
Email: syun@stutman.com
Whitman L. Holt, Esq.
Email: wholt@stutman.com
1901 Ave. of the Stars, Ste. 1200
Los Angeles, CA 90067
Tel: (310) 228-5750, (310) 228-5690
Fax: (310) 228-5788
http://www.stutman.com/
Total Assets: $643,197,000
Total Debts: $320,630,000
Debtor's 21 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
HSBC Bank USA, N.A. successor indenture $166,530,000
Attn: Robert A. Conrad trustee for the
452 5th Ave. 7.875% senior notes
New York, NY 10016 due 2009 (the "Senior
Notes")
Bank of New York indenture trustee for $103,000,000
Attn: Bridget Schessler the 9% junior
301 Grant St. Ste. 1100 subordinated
Pittsburgh, PA 15219 debentures due March
Tel: (412) 236-9271 31, 2026; amount of
E-mail: claim is the
bridget.schessler@bnymellon.com approximate principal
on the entire issue
of junior
subordinated
debentures
Tennenbaum Multi-Strategy senior noteholder $135,101,000
2951 28th St., Ste. 1100
Santa Monica, CA 90405-2961
Attn: Hugh Wilson
Tennenbaum Capital Partners,
LLC
2951 28th St., Ste. 1000
Santa Monica, CA 90405
Tel: (310) 566-1000
Rita Angel senior noteholder $500,000
9 E. 79th St.
New York, NY 10021
Tel: (212) 249-4126
David C. Weavil, Mila D. senior noteholder $500,000
Weavil, Trustees
Weavil Family Trust
U/A 10/2/02
7348 Henson Forest Dr.
Summerfield, NC 27358
Tel: (336) 298-4126
Dennis G. Danko, Loretta M. senior noteholder $500,000
Danko, Trustees
Dennis & Loretta
M. Danko Fam Tr.
U/A 7/7/88
10941 E. Buckskin Trail
Scottsdale, AZ 85255
Tel: (480) 773-1700
HSBC Private Bank (Suisse) SA senior noteholder $400,000
P.O. Box 3580 CH-1211
Geneva, Switzerland
Tel: (+41) 58 705 55 55
Fax: (+41) 58 705 51 51
Clinton R. Stevenson, Jr., senior noteholder $309,000
Trustees
Clinton R. Stevenson, Jr.
Rev. Trust
U/A 2/18/04
Attn: Trimark Pacific Homes
31111 Agoura Rd., Ste. 210
Westlake Village, CA 91361
Tel: (818) 706-9797
Bankplus Wealth Management senior noteholder $250,000
Group
1068 Highland Colony Pkwy.
Ridgeland, MS 39157
Tel: (601) 969-7587
Zaki A. Sheikh R/O IRA FCC as senior noteholder $115,000
Custodian
Error Account Bonds, RBC senior noteholder $104,000
Capital Markets Corp.
Eric M. Banhazl & Ilyssa C. senior noteholder $100,000
Banhazl, Jt. Ten.
P. Reisbord, H. Reisbord, Co- senior noteholder $100,000
Trustees, Paul & Hay Reisbord
Trust U/A DTD 9/24/1980
Glenn & Machiko Teshirogi senior noteholder $80,000
RE U/A DTD 8/23/2003
NFS/FMTC IRA senior noteholder $65,000
Cape Haze, FL
Philip J. Salvati IRA, Bear senior noteholder $60,000
Stearns SEC Corp. Cust.
Lynne Unger senior noteholder $56,000
NFS/FMTC IRA senior noteholder $50,000
Santa Clarita, CA
NFS/FMTC IRA senior noteholder $50,000
Douglasville, GA
Gonzalo Fulquet & Elena Salles senior noteholder $50,000
& Alvaro Fulquet
Howard Amster represents himself unknown
to be a significant
holder of the trust
preferred securities,
which are backed by
the junior
subordinated
debentures
FRONTIER AIRLINES: Court OKs Houlihan as Panel's Financial Advisor
------------------------------------------------------------------
The Official Committee of Unsecured Creditors in Frontier Airlines
Holdings Inc. and its subsidiaries' Chapter 11 cases obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York to retain Houlihan Lokey Howard & Zukin Capital Inc.
as financial advisor, nunc pro tunc to April 24, 2008.
Houlihan Lokey is expected to:
* analyze business plans and forecasts of the Debtors;
* evaluate the Debtors' assets and liabilities;
* assess the Debtors' financial issues and options concerning
(i) the sale of the Debtors, either in whole or in part;
and (ii) the Debtors' Chapter 11 plan of reorganization or
liquidation;
* analyze and review the Debtors' financial and operating
statements;
* provide financial analyses as the Committee may require;
* assist in the determination of an appropriate capital
structure for the Debtors;
* evaluate the Debtors' debt capacity in light of its
projected cash flows;
* assist with a review of the Debtors' employee benefit
programs, including key employee retention, incentive,
pension and other post-retirement benefit plans;
* analyze strategic alternatives available to the Debtors;
* assist in the review of claims and with the related
reconciliation, estimation, settlement and litigation;
* assist the Committee in identifying potential alternative
sources of liquidity in connection with any debtor-in-
possession financing or Chapter 11 plan;
* represent the Committee in certain negotiations with the
Debtors and third parties;
* provide testimony in Court or on behalf of the Committee
with respect to certain issues; and
* provide other financial and investment banking services to
the Committee as may be agreed upon.
Pursuant to an engagement letter, Houlihan Lokey's compensation
will include:
-- a monthly fee of $150,000;
-- a transaction or deferred fee, payable by the Debtors in
an amount equal to 1.5% of the aggregate consideration
paid by the Debtors, pursuant to a Plan, on account of
allowed unsecured claims; and
-- reimbursement of necessary out-of-pocket expenses.
The Court directed Houlihan Lokey to keep its time records in
one-hour increments in connection with the services to be
rendered to the Committee pursuant to the Engagement Letter;
provided; however, that the firm will be excused from maintaining
time records for the period from April 24 to June 12, 2008.
Judge Robert D. Drain ruled that the Debtors will indemnify
Houlihan Lokey and its affiliates pursuant to the Engagement
Letter, provided that:
-- all requests of Indemnified Persons for payment of
indemnity, contribution or otherwise pursuant to the
Engagement Letter, will be made by means of an interim and
final fee application;
-- in no event will an Indemnified Person be indemnified or
receive contribution or payment under the Indemnification
if the Debtors, their estates, or the Committee asserts a
claim for faith, self-dealing, breach of fiduciary duty, if
any, gross negligence, or willful misconduct on the part of
other Indemnified Person; and
-- in the event that an Indemnified Person seeks
reimbursement for fees from the Debtors, supporting
documents will be annexed to Houlihan Lokey's own fee
applications, subject to the U.S. Trustee's guidelines.
About Frontier Airlines Inc.
Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provide air transportation for
passengers and freight. They operate jet service carriers linking
their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities
in Mexico, and 1 city in Canada, well as provide service from
other non-hub cities, including service from 10 non-hub cities to
Mexico. As of May 18, 2007 they operated 59 jets, including 49
Airbus A319s and 10 Airbus A318s.
The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297
thru 08-11299.) Hugh R. McCullough, Esq. at Davis Polk & Wardwell
represent the Debtors in their restructuring efforts. Togul, Segal
& Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors. At Dec. 31, 2007, Frontier
Airlines Holdings Inc. and its subsidiaries' total assets was
$1,126,748,000 and total debts was $933,176,000. (Frontier
Airlines Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
FRONTIER AIRLINES: Taps FTI Consulting as Specialist Fin. Advisors
------------------------------------------------------------------
Frontier Airlines Holdings Inc. and its subsidiaries seek
authority from the U.S. Bankruptcy Court for the Southern District
of New York to employ FTI Consulting Inc. as their specialist
financial advisors "for a limited assignment."
According to the Debtors, FTI is well-qualified to represent the
Debtors in a cost-effective, efficient and timely manner because
of its substantial experience providing financial advisory
services in restructuring and reorganization. Moreover, the firm
has an excellent reputation for its services in large and complex
Chapter 11 cases on behalf of debtors throughout the United
States.
Pursuant to an engagement letter, FTI will provide consulting and
advisory services that have been determined as non-duplicative of
the services to be provided by Seabury Group LLC, the Debtors'
lead financial advisors.
The Debtors and FTI expect these services to be completed by
June 30, 2008:
(a) assisting the Debtors with certain Chapter 11 reporting
requirements, including statement of financial affairs,
schedules of assets and liabilities, and monthly operating
reports;
(b) advising the Debtors on specific accounting matters
related to the Chapter 11 cases, as required by SOP 90-7;
(c) assisting the Debtors services that are specifically
related to reclamation claims; and
(d) any other financial advisory support services that may be
requested by the Debtors and agreed to by FTI and the
Official Committee of Unsecured Creditors, to the extent
approved by the Court as necessary.
As specialist financial advisors, FTI will be paid based on these
hourly rates:
Senior managing directors $650 - $715
Directors or managing directors $475 - $620
Consultants or senior consultants $235 - $400
Administrative and paraprofessionals $100 - $190
The Debtors also ask the Court to approve the indemnification
provisions of the Engagement Letter, which specifically provide
that the Debtors will have no obligation to indemnify FTI, or to
provide contribution or reimbursement to FTI, for any liabilities
or expenses that are (i) finally judicially determined to have
resulted from or (ii) agreed by FTI to have resulted from, the
reckless or willful misconduct, gross negligence, breach of
fiduciary duty, bad faith or self-dealing of FTI.
If, before the earlier of the entry of an order (i) confirming a
Chapter 11 plan and (ii) closing the Chapter 11 Cases, FTI
believes that it is entitled to the payment by the Debtors on
account of the Debtors' indemnification, contribution or
reimbursement obligations under the Engagement Letter, including,
without limitation, the advancement of defense costs, FTI must
file an application with the Court, and the Debtors may not pay
any amounts to FTI prior to the entry of a Court order approving
any payment.
Additionally, the Debtors and FTI have agreed that:
* any controversy or claim with respect to the services
provided by FTI to the Debtors will be brought in the
Bankruptcy Court;
* FTI, the Debtors, and all their successors and assigns
consent to the jurisdiction and venue of the Court as the
sole and exclusive forum for the resolution of claims,
causes of actions or lawsuits;
* FTI and the Debtors waive trial-by-jury, with the waiver
being informed and freely made;
* if the Bankruptcy Court does not have or retain jurisdiction
over the claims and controversies, FTI and the Debtors will
submit first to non-binding mediation or to binding
arbitration, in accordance with certain dispute resolution
procedures agreed between the parties; and
* judgment on any arbitration award may be entered in any
Court having proper jurisdiction.
David J. Beckman, a managing director at FTI, assures the Court
that his firm (i) has no connection with the Debtors, their
creditors or other parties-in-interest, (ii) does not hold any
interest adverse to the Debtors' estates, and (iii) is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Frontier Airlines Inc.
Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provide air transportation for
passengers and freight. They operate jet service carriers linking
their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities
in Mexico, and 1 city in Canada, well as provide service from
other non-hub cities, including service from 10 non-hub cities to
Mexico. As of May 18, 2007 they operated 59 jets, including 49
Airbus A319s and 10 Airbus A318s.
The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297
thru 08-11299.) Hugh R. McCullough, Esq. at Davis Polk & Wardwell
represent the Debtors in their restructuring efforts. Togul, Segal
& Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors. At Dec. 31, 2007, Frontier
Airlines Holdings Inc. and its subsidiaries' total assets was
$1,126,748,000 and total debts was $933,176,000. (Frontier
Airlines Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
GEMINI AIR: Files for Chapter 11, Receives $14 Million Loan
-----------------------------------------------------------
Gemini Air Cargo Inc. filed for bankruptcy protection under
Chapter 11 of the U.S. Bankruptcy Code before the United States
Bankruptcy Court for the Southern District of Florida, blaming
high fuel prices and revenue shortage, various sources report.
Gemini Air previously filed for chapter 11 protection on March 15,
2006 (Bankr. S.D. Florida Case Nos. 06-10870). Kourtney P. Lyda,
Esq., at Haynes and Boone, LLP, represented the company in its
restructuring efforts.
Mary Kirby of Flight International reports that Gemini Air
obtained a committed $14 million in loan from its senior lender to
fund business operations while it is in bankruptcy.
Lawrence Kahn, vice president of finance and chief financial
officer of Gemini Air, says in court filings that Bayside Air
Cargo Acquisition LLC owns 96% of the company's 96,000 common
stock. Laurus Master Fund Ltd. owns a warrant entitling it to
purchase at least 16,576 shares of common stock of the company, he
adds.
As reported in the Troubled Company Reporter on Aug. 17, 2006,
Gemini Cargo's Chapter 11 plan of reorganization was confirmed by
the Court on July 20, 2006.
Under the plan, Gemini Air's largest prepetition lender,
Bayside Capital, agreed to exchange its secured loans for a
combination of new indebtedness and majority ownership of the
reorganized company. In effect, Gemini Air was able to eliminate
approximately $50 million of debt and realign its balance sheet,
which improved Gemini Air's competitive position.
About Gemini Air
Headquartered in Dulles Virginia, Gemini Air Cargo, Inc. --
http://www.geminiaircargo.com/-- provides airfreight services.
It operates cargo schedules and charters on a wet-lease basis.
GEMINI AIR CARGO: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Gemini Air Cargo, Inc.
44965 Aviation Dr., Ste. 300
Dulles, VA 20166
Bankruptcy Case No.: 08-18175
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Gemini Cargo Logistics, Inc. 08-18173
Gemini Leasing, Inc. 08-18177
Gemini Leasing Holdings, Inc. 08-18179
Type of Business: The Debtors are aircraft, crew, maintenance and
insurance cargo airlines. They operate
worldwide cargo schedules and charters on a wet-
lease basis. See http://www.geminiaircargo.com/
Chapter 11 Petition Date: June 18, 2008
Court: Southern District of Florida (Miami)
Judge: A. Jay Cristol
Debtors' Counsel: Paul Steven Singerman, Esq.
Berger Singerman P.A.
Email: singerman@bergersingerman.com
200 S. Biscayne Blvd., Ste. 1000
Miami, FL 33131
Tel: (305) 755-9500
http://www.bergersingerman.com
Gemini Air Cargo, Inc's Financial Condition:
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
A. Gemini Air Cargo, Inc's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
MTU Maintenance Hannover GmbH vendor $3,563,400
Attn: Christopher Heck
Muenchner Strasse 31
30855 Langenhagen, Germany
Tel: 49 0 511 7806-621
Defense Finance & Accounting vendor $1,709,882
Attn: Charles McWilliams
DESC-RR, Bldg. 1621
1014 Billy Mitchell Blvd.
San Antonio, TX 78226
Tel: (210) 724-5305
KLM vendor $1,211,881
Department SPL/BE
P.O. Box 7700
1117 ZL Schiphol Airport
Armsterdam, the Netherlands
Tel: 31 020 649 4073
Finnair vendor $952,570
Attn: sami Sarelius
Technical Services, Helsinki-
Vantaa A
P.O. Box 15,01053 Finnair
Helsinki, Finland
Tel: 358 9 818 6379
American Express vendor $879,871
Attn: Ray G. Estrada
P.O. Box 369
Ashburn, VA 20146
Tel: (877) 709-0778
ASECNA vendor $838,416
75 Reu La Boetie
750008 Paris, France
Tel: 33 143 59 49 40
Alteon Training vendor $667,472
Attn: Ron Walters
4900 E. Conant St.
Long Beach, CA 90808
Tel: (562) 733-2100
E.N.N.A. vendor $501,293
1 Avenue de Independence
BP 383, 16000 Alger
Brussels, France
Tel: 213 021 65 74 71
Eurocontrol vendor $392,734
Attn: Roberto Giampietri
Rue de la fusee, 96
B-1130, Brussels, Belgium
Tel: 32 2 7293831
Aviation Concepts, Inc. vendor $344,958
Attn: D. Wood
5259 N.W. 108th Ave.
Sunrise, FL 33351
Tel: (954) 748-9911
Boeing-McDonnell Douglas vendor $309,411
Attn: David A. Fukuda
7922 Perimeter Road S.
Seattle, WA 98108
Tel: (425) 237-4602
International Air Transport- vendor $249,525
Switzerland
Miami Tech Line Maintenance vendor $195,510
Honeywell, Inc.-Chicago, IL vendor $191,731
Midnite vendor $182,114
Fast Forward Freight vendor $177,577
Empire Aero Center, Inc. vendor $176,583
Jeppesen Sanderson vendor $163,368
Airshop vendor $154,861
GB Malpensa vendor $147,238
B. Gemini Cargo Logistics, Inc. does not have any creditors who
are not insiders.
C. Gemini Leasing, Inc. does not have any creditors who are not
insiders.
D. Gemini Leasing Holdings, Inc. does not have any creditors who
are not insiders.
GMAC COMMERCIAL: Fitch Chips Rating on $3.8MM Certs. to CCC/DR2
---------------------------------------------------------------
Fitch Ratings has downgraded and assigned a Distressed Recovery
rating to these classes of GMAC Commercial Mortgage Securities,
Inc.'s mortgage pass-through certificates, series 2001-C2:
-- $3.8 million class O to 'B-' from 'B';
-- $3.8 million class P to 'CCC/DR2' from 'B-'.
In addition, Fitch affirmed these classes:
-- $22 million class A-1 at 'AAA';
-- $437.7 million class A-2 at 'AAA';
-- Interest-only class X-1 at 'AAA';
-- Interest-only class X-2 at 'AAA';
-- $34 million class B at 'AAA';
-- $11.3 million class C at 'AAA';
-- $15.1 million class D at 'AAA';
-- $9.4 million class E at 'AAA';
-- $15.1 million class F at 'AAA';
-- $10.4 million class G at 'AA+';
-- $9.4 million class H at 'AA';
-- $23.6 million class J at 'A-';
-- $5.7 million class K at 'BBB+';
-- $5.7 million class L at 'BBB';
-- $11.3 million class M at 'BB+';
-- $3.8 million class N at 'BB-'.
Fitch does not rate the $10.4 million class Q.
The downgrades reflect expected losses from the specially serviced
loans and an increase in Fitch Loans of Concern. As of the May
2008 distribution date, the pool's aggregate certificate balance
has decreased 16.2% to $632.4 million from $754.9 million at
issuance. Twenty-four loans (25.4%) have fully defeased as of May
2008.
Currently, Fitch has identified 17 Loans of Concern (26.1%),
including three specially serviced assets (5.6%). Five additional
loans (8.2%) have been identified as Loans of Concern since
Fitch's last rating action.
The largest specially serviced asset (2.9%) is a 178,591 square
foot office complex located in South Brunswick, New Jersey. The
asset transferred to special servicing in May 2008 due to monetary
default and is 64% occupied after the loss of a major tenant.
The second largest specially serviced asset (2.4%) is a 150,581 sf
office property in Horsham, Pennsylvania. This asset transferred
to special servicing in May 2008 due to monetary default after the
loss of a major tenant in 2007.
The third specially serviced asset (0.3%) is a real estate-owned
retail property in Morrow, Georgia. The asset was transferred to
special servicing after the largest tenant defaulted on their
lease. The property currently is 16% occupied and is currently
being marketed for sale.
The largest Fitch Loan of Concern, and the largest loan in the
pool (4.8%), is secured by an office portfolio collateralized by
four properties located in various cities in central and southern
Pennsylvania. The portfolio has experienced a decline in
occupancy since 2004 and the borrower is marketing the vacant
space. The reported consolidated occupancy was 75% as of April
2008.
The second largest Fitch Loan of Concern, and the second largest
loan in the pool (4.7%), is secured by a 282,850 sf office
property in Earth City, Missouri. Vacant space was recently
leased, with reported physical occupancy of 87% as of April 2008.
HALIFAX MEDICAL: Moody's Affirms Rating on Bonds at Ba3
-------------------------------------------------------
Moody's Investors Service has affirmed the Ba3 rating assigned to
Halifax Regional Medical Center's bonds, issued by the North
Carolina Medical Care Commission. The outlook is stable.
Legal Security: Bonds secured by a gross revenue pledge and
negative mortgage lien
Interest Rate Derivatives: None.
Strengths
-- Two consecutive years of positive operating results and good
operating cash flow
-- Large growth in liquidity during fiscal year 2007,
partly attributable to eleven day reduction of days in
accounts receivable
-- New surgeons driving higher surgical volumes; new
cardiologist expected to generate significant cardiac
catheterization and angioplasty volumes
-- Significant reduction in salary/benefit expense as a percent
of operating revenue to 46% (FY 2007) from 52% (FY 2004)
Challenges
-- Low capital spending in recent years is major driver of
liquidity growth
-- Challenging demographics in service area
-- Management has identified future capital needs that could
require significant additional borrowing
Recent Developments/Results
Fiscal Year 2007 built on the improved results recorded in
FY 2006 with operating income growing to $1.5 million and
$7.7 million operating cash flow (8.0% operating cash flow margin)
from $0.9 million and $7.6 million operating cash flow
(8.4% operating cash flow margin) in FY 2006. Revenue growth,
while moderate at 5.6% in FY 2007 over FY 2006, is up an
impressive 41% since FY 2004 and reflects the success of the
current management team (which started in FY 2005/2006) at
renegotiating commercial payer contracts and the growth in
surgical volumes.
Operating results in FY 2007 were led by a large increase in
surgeries and continued operating efficiencies that have reduced
salary and benefit expense as a share of total operating revenue.
The addition of two orthopedic surgeons since FY 2006 is largely
responsible for a 15.6% jump in surgeries in FY 2007, following a
21% jump in FY 2006.
Although these trends are positive, we caution that the reliance
on a small medical staff magnifies the risk of physician
departures. Salary and benefit expense as a share of operating
revenue has fallen from 52% in FY 2004 to 45% in FY 2007, helping
to keep expense growth to only 31% since FY 2004, well below the
41% growth in operating revenue across the same period.
Through seven months FY 2008, operating profitability has declined
to $0.6 million (1.1%) margin from $1.1 million (1.9% margin) at
the same time last year and operating cash flow of $3.9 million
lags last year by nearly $1.0 million. Moody's expect to see
continued variability in Halifax's financial performance over the
near term given some of the inherent weaknesses in its small size
($95 million revenue base and 58 active admitters) and service
area demographics.
As a result of the stronger operating results, Halifax's balance
sheet has improved; notably, unrestricted cash grew by 54% last
year, greatly improving liquidity to 86% cash-to-debt from 50% and
70 days cash on hand from 48 days.
The growth in cash was due to stronger operating cash flow and an
eleven day reduction in accounts receivable. Operating cash flow
has also improved from a low of 2.6% in FY 2004 to 8.0% in
FY 2007, reducing debt-to-cash flow from a high of 12.8 times in
FY 2004 to a more manageable 2.6 times in FY 2007.
Halifax is making several investments to enable near term growth
including the recruitment of additional surgeons and the recent
addition of a cardiologist who will be opening a new angioplasty
suite and has applied for certificate of need approval for a
mobile cardiac catheterization lab. Despite these investments,
Moody's believes the most likely outcome over the near term is a
slowdown in growth and moderation of operating performance.
Halifax's financial performance will be limited by its service
area, which exhibits population growth and wealth levels below
state averages. Medicaid is above average at nearly 20% of gross
revenue compared to the national median of 11%. Combined,
Medicare and Medicaid represent a high 72% of gross revenues.
Additionally, bad debt expense was a high 14.4% of net patient
revenues in FY 2007, up from 12% in FY 2004.
Furthermore, although the hospital's liquidity profile has
improved over the last two years, a major contributor to the build
up of cash was a slow down in capital spending. Capital spending
was just $2.1 and $2.0 million in each of the last two years,
approximating only 40% of depreciation expense. Capital spending
will pick up in FY 2008 as the hospital outfits the angioplasty
suite and purchases other necessary equipment.
Outlook
The stable outlook is attributable to Halifax's improved liquidity
position and positive operating results. We remain concerned that
future capital needs could exceed the organization's cash flow
generating ability.
What could change the rating--UP
Continued revenue growth and growth in operating cash flow; long-
term tenure of new surgeons at the medical staff and minimal
departures; additional growth in liquidity while spending
increasing amounts on capital
What could change the rating--DOWN
Decline in absolute or relative liquidity; loss of major admitting
physician; reduction of profitability measures; additional debt
without revenue and profitability growth
Key Indicators
Assumptions & Adjustments:
-- Based on financial statements for Halifax Regional Medical
Center Inc., Clinics and Foundation
-- First number reflects audit year ended Sept. 30, 2006
-- Second number reflects audit year Sept. 30, 2007
-- Investment returns normalized at 6% unless otherwise noted
* Inpatient admissions: 8,043; 7,855
* Total operating revenues: $89.8 million; $94.2 million
* Moody's-adjusted net revenue available for debt service:
$8.5 million; $8.9 million
* Total debt outstanding: $22.2 million; $19.9 million
* Maximum annual debt service (MADS): $3.5 million; $3.5 million
* MADS Coverage with reported investment income: 2.3 times;
2.5 times
* Moody's-adjusted MADS Coverage with normalized investment
income: 2.4 times; 2.5 times
* Debt-to-cash flow: 3.1 times; 2.6 times
* Days cash on hand: 48 days; 70 days
* Cash-to-debt: 50%; 86%
* Operating margin: 1.0%; 1.6%
* Operating cash flow margin: 8.4%; 8.0%
Rated Debt (debt outstanding as of Sept. 30, 2007)
-- Series 1998; fixed rate; $19.4 million outstanding; rated Ba3
HEALTHTRONICS INC: S&P Holds BB- Rating; Changes Outlook to Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Austin,
Texas-based HealthTronics Inc. to stable from negative. At the
same time, S&P affirmed the 'BB-' corporate credit rating on the
company.
"This action reflects stabilization of core lithotripsy
operations, and increased confidence that acquisitions will be
modest in scale and/or financed with a mix of debt and common
equity," said Standard & Poor's credit analyst David Peknay.
"Also, recent acquisitions should provide synergies and growth
opportunities."
The rating on HealthTronics reflects the company's narrow business
focus, mature lithotripsy operations, vulnerability to third-party
reimbursement, and significant minority interest payments. These
challenges are somewhat mitigated by HealthTronics' market
leadership in the lithotripsy medical segment, its efforts to
leverage its physician partner base to expand its product
portfolio, and its capacity to leverage its balance sheet.
HealthTronics is a leading provider of urology services (87% of
revenues), principally of noninvasive lithotripsy services to
treat kidney stones. The company also provides treatments for
benign and cancerous prostate conditions, and is expanding into
radiology oncology.
HEXION SPECIALTY: Files Suit to Cancel $10BB Merger with Huntsman
-----------------------------------------------------------------
Hexion Specialty Chemicals Inc. and related entities filed a suit
in the Delaware Court of Chancery to declare its contractual
rights with respect to a $10.6 billion merger agreement with
Huntsman Corporation. As reported in the Troubled Company
Reporter on July 13, 2007, the agreement includes assumption of
debt.
Hexion said in the suit that it believes that the capital
structure agreed to by Huntsman and Hexion for the combined
company is no longer viable because of Huntsman's increased net
debt and its lower than expected earnings. While both companies
individually are solvent, Hexion believes that consummating the
merger on the basis of the capital structure agreed to with
Huntsman would render the combined company insolvent.
The suit alleges that in light of this conclusion, Hexion does not
believe that the banks will provide the debt financing for the
merger contemplated by their commitment letters. Hexion stated in
its suit that, while it will continue to use its reasonable best
efforts to close the transaction, which includes obtaining all
necessary antitrust and regulatory approvals as required by the
merger agreement, it does not believe that alternate financing
will be available.
Hexion disclosed in the filing that its board of directors has
received an opinion from Duff & Phelps LLC, a provider of
independent financial advisory and investment banking services,
concluding that, based on the capital structure agreed to by the
parties at the time the merger agreement was signed, the combined
company would be insolvent based on the fact that it would not
meet the standard tests of solvency and capital adequacy set forth
in the opinion.
The suit also alleges that in light of the substantial
deterioration in Huntsman's financial performance, the increase in
its net debt and the expectation that the material downturn in
Huntsman's business will continue for a significant period of
time, Huntsman has suffered a material adverse effect as defined
in the merger agreement.
"While both Hexion and Huntsman can be successful as separate
companies, they cannot now support the debt load that was agreed
to at the time the transaction was put together," Craig O.
Morrison, Hexion's chairman, president and CEO, said. "We
continue to have enormous respect for Huntsman, the Huntsman
family and management team and still believe that a combination of
the two companies would offer significant strategic benefits."
"However, the financing for the acquisition is predicated on a
certain level of financial performance and, given the increase in
Huntsman's total debt and decrease in earnings, Hexion does not
believe that the transaction can be completed," Mr. Morrison said.
"While this development is disappointing, Hexion - with its long-
dated, stable capital structure, no significant debt maturities
until 2013, and with more than $475 million in liquidity --
remains very well positioned to service our customers, compete and
grow globally," Mr. Morrison continued.
About Huntsman Corporation
Headquartered in Salt Lake City, Utah, Huntsman Corporation
(NYSE:HUN) -- http://www.huntsman.com/-- is a manufacturer of
differentiated chemical products and inorganic chemical products.
The company operates in four segments: Polyurethanes, Materials
and Effects, Performance Products and Pigments. Its products are
used in a range of applications, including those in the adhesives,
aerospace, automotive, construction products, durable and non-
durable consumer products, electronics, medical, packaging, paints
and coatings, power generation, refining, synthetic fiber, textile
chemicals and dye industries.
About Hexion Specialty
Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --
http://www.hexionchem.com/-- is a producer of thermosetting
resins, or thermosets. Thermosets are a critical ingredient in
virtually all paints, coatings, glues and other adhesives produced
for consumer or industrial uses. Hexion Specialty Chemicals is
controlled by an affiliate of Apollo Management L.P.
As reported in the Troubled Company Reporter on May 16, 2008,
Hexion Specialty Chemicals Inc.'s balance sheet at March 31, 2008,
showed the company had total assets of $4.2 billion and total
liabilities of $5.5 billion, resulting in a shareholders' deficit
of $1.3 billion.
HOLLINGER INC: Completes Settlement with Davidson and Sun-Times
---------------------------------------------------------------
Hollinger Inc. completed its court-approved settlement with
Davidson Kempner Management LLC and certain of its affiliates and
Sun-Times Media Group Inc. The closing involved the
implementation of certain aspects of the Settlement.
As reported in the Troubled Company Reporter on May 28, 2008, the
Ontario Superior Court of Justice issued an order approving the
settlement. The order authorizes and directs the parties to carry
out each of the steps described in the Settlement and declares the
Settlement to be fair and commercially reasonable.
Exchange of Sun-Times Shares held by the company
The 14,990,000 shares of Class B Common Stock of Sun-Times owned
directly or indirectly by the company were converted on a one-for-
one basis into an equal number of shares of Class A Common Stock
and the company received an additional 1,499,000 shares of Class A
Common Stock from Sun-Times.
As a result of the conversion of the shares of Class B Common
Stock into the Exchanged Shares and the receipt of the Additional
Shares, the company, which held approximately 70.1% of the
combined voting power of all outstanding voting securities of
Sun-Times, now holds approximately 21.1% of the voting power of
Sun-Times.
The Exchanged Shares and the Additional Shares were delivered to
the indenture trustees of the secured notes of the company in
accordance with the terms of the indentures under which those
Notes were issued as replacement collateral for the shares of
Class B Common Stock.
Pursuant to the terms of the Settlement agreement, the Exchanged
Shares and the Additional Shares will be voted by the indenture
trustees of the Notes for the benefit of and at the direction of
the holders of the Notes in the manner contemplated by the
indentures. The company has provided the indenture trustees with
a proxy to facilitate the exercise of such voting rights.
In addition, the indenture trustees will be entitled to exercise
all other rights attached to the Exchanged Shares and the
Additional Shares and may realize upon the Exchanged Shares and
the Additional Shares in any commercially reasonable manner.
Changes to the Boards of the company and Sun-Times
Wesley Voorheis has resigned as the chief executive officer and a
director of the company, and David Drinkwater and Patrick Hodgson
have resigned as directors of the company, reducing the company's
board to two directors.
In addition, William Aziz, Brent Baird, Albrecht Bellstedt, Peter
Dey, Edward Hannah and Wesley Voorheis, who had been appointed to
the board of directors of Sun-Times by the company, have resigned
from Sun-Times' board of directors.
About Hollinger Inc.
Based in Toronto, Ontario, Hollinger Inc. (TSX: HLG.C)(TSX:
HLG.PR.B) -- http://www.hollingerinc.com/-- owns approximately
70.1% voting and 19.7% equity interest in Sun-Times Media Group
Inc., formerly Hollinger International Inc., a media company with
assets which include the Chicago Sun-Times newspaper and
Suntimes.com and a number of community newspapers and websites
serving communities in the Chicago area.
The company, along with two affiliates, 4322525 Canada Inc. and
Sugra Limited, filed separate Chapter 15 petitions on Aug. 1, 2007
(Bankr. D. Del. Case Nos. 07-11029 through 07-11031). Hollinger
also initiated Court-supervised restructuring under the Companies'
Creditors Arrangement Act (Canada) on the same day.
Derek C. Abbott, Esq., and Kelly M. Dawson, Esq., at Morris,
Nichols, Arsht & Tunnell LLP, represents the Debtors in their U.S.
proceedings.
As reported in the Troubled company Reporter on Feb. 22, 2008,
Hollinger Inc.'s consolidated balance sheet at Dec. 31, 2007,
showed C$79.8 million in total assets and C$219.3 million in
total liabilities, resulting in a C$139.5 million total
stockholders' deficit.
HUNTSMAN CORP: Hexion Specialty Wants to Cancel $10.6BB Merger
--------------------------------------------------------------
Hexion Specialty Chemicals Inc. and related entities filed a suit
in the Delaware Court of Chancery to declare its contractual
rights with respect to a $10.6 billion merger agreement with
Huntsman Corporation. As reported in the Troubled Company
Reporter on July 13, 2007, the agreement includes assumption of
debt.
Hexion said in the suit that it believes that the capital
structure agreed to by Huntsman and Hexion for the combined
company is no longer viable because of Huntsman's increased net
debt and its lower than expected earnings. While both companies
individually are solvent, Hexion believes that consummating the
merger on the basis of the capital structure agreed to with
Huntsman would render the combined company insolvent.
The suit alleges that in light of this conclusion, Hexion does not
believe that the banks will provide the debt financing for the
merger contemplated by their commitment letters. Hexion stated in
its suit that, while it will continue to use its reasonable best
efforts to close the transaction, which includes obtaining all
necessary antitrust and regulatory approvals as required by the
merger agreement, it does not believe that alternate financing
will be available.
Hexion disclosed in the filing that its board of directors has
received an opinion from Duff & Phelps LLC, a provider of
independent financial advisory and investment banking services,
concluding that, based on the capital structure agreed to by the
parties at the time the merger agreement was signed, the combined
company would be insolvent based on the fact that it would not
meet the standard tests of solvency and capital adequacy set forth
in the opinion.
The suit also alleges that in light of the substantial
deterioration in Huntsman's financial performance, the increase in
its net debt and the expectation that the material downturn in
Huntsman's business will continue for a significant period of
time, Huntsman has suffered a material adverse effect as defined
in the merger agreement.
"While both Hexion and Huntsman can be successful as separate
companies, they cannot now support the debt load that was agreed
to at the time the transaction was put together," Craig O.
Morrison, Hexion's chairman, president and CEO, said. "We
continue to have enormous respect for Huntsman, the Huntsman
family and management team and still believe that a combination of
the two companies would offer significant strategic benefits."
"However, the financing for the acquisition is predicated on a
certain level of financial performance and, given the increase in
Huntsman's total debt and decrease in earnings, Hexion does not
believe that the transaction can be completed," Mr. Morrison said.
"While this development is disappointing, Hexion - with its long-
dated, stable capital structure, no significant debt maturities
until 2013, and with more than $475 million in liquidity --
remains very well positioned to service our customers, compete and
grow globally," Mr. Morrison continued.
About Huntsman Corporation
Headquartered in Salt Lake City, Utah, Huntsman Corporation
(NYSE:HUN) -- http://www.huntsman.com/-- is a manufacturer of
differentiated chemical products and inorganic chemical products.
The company operates in four segments: Polyurethanes, Materials
and Effects, Performance Products and Pigments. Its products are
used in a range of applications, including those in the adhesives,
aerospace, automotive, construction products, durable and non-
durable consumer products, electronics, medical, packaging, paints
and coatings, power generation, refining, synthetic fiber, textile
chemicals and dye industries.
About Hexion Specialty
Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --
http://www.hexionchem.com/-- is a producer of thermosetting
resins, or thermosets. Thermosets are a critical ingredient in
virtually all paints, coatings, glues and other adhesives produced
for consumer or industrial uses. Hexion Specialty Chemicals is
controlled by an affiliate of Apollo Management L.P.
As reported in the Troubled Company Reporter on May 16, 2008,
Hexion Specialty Chemicals Inc.'s balance sheet at March 31, 2008,
showed the company had total assets of $4.2 billion and total
liabilities of $5.5 billion, resulting in a shareholders' deficit
of $1.3 billion.
IMARX THERAPEUTICS: Restructures, Axes All Workers Except CEO
-------------------------------------------------------------
In order to preserve cash, Imarx Therapeutics Inc.'s board of
directors authorized a restructuring that was implemented on June
11, 2008. Under the restructuring, all of the company's employees
other than Bradford Zakes, its president and chief executive
officer, were terminated. The costs associated with these actions
will be approximately $540,000, which is primarily comprised of
severance payments for the affected employees.
The company expects to pay out the $671,000 in restructuring
costs, in addition to employee accrued paid-time off balances
totaling approximately $130,000, during the second quarter of
2008.
Certain of the company's former key employees are expected to
enter into consulting agreements with the Company in order to
assist the company in exploring strategic alternatives for its
commercial urokinase assets, clinical-stage SonoLysis program and
other assets. The company is currently unable to estimate the
amount of consulting fees and costs, if any, it will incur in
connection with the consulting agreements.
The company may incur additional costs, charges or impairments
resulting from restructuring. Because the restructuring of the
Company has not yet been finalized the company cannot currently
estimate whether additional costs will result or be incurred.
CFO and VP Agreements
In connection with a general workforce reduction, Greg Cobb has
left the employ of the company and will no longer serve as the
company's chief financial officer or treasurer. The company
entered into a Separation and Release of Claims Agreement with Mr.
Cobb, provides Cobb a lump sum severance payment in an amount
equal to Mr. Cobb's salary for six months totaling $112,500. In
addition, the company shall pay on Mr. Cobb's behalf his COBRA
benefits for six months totaling approximately $7,200.
Additionally, Mr. Cobb provided a general release of all claims he
may have against the company other than rights to indemnification
he may have under the terms of an Indemnification Agreement dated
July 12, 2007, entered into with the company in connection with
the company's initial public offering of common stock.
The company has entered into a Consultant Services Agreement with
Mr. Cobb, which states that Mr. Cobb will provide general business
development services and assistance on the review, maintenance and
prosecution of its patent estate and patent applications on an as-
needed basis and as requested by the company from time-to-time.
Mr. Cobb will be paid $165 per hour for services rendered under
the agreement. The term of the agreement is 9 months and either
party may terminate the agreement upon the provision of 30 days
advance notice.
In connection with a general workforce reduction, Kevin Ontiveros
has left the employ of the company. The company entered into a
Separation and Release of Claims Agreement with Mr. Ontiveros.
The Separation and Release of Claims Agreement provides for a lump
sum severance payment in an amount equal to Mr. Ontiveros' salary
for six months totaling $103,260. In addition the company will
pay on Mr. Ontiveros' behalf his COBRA benefits for six months
totaling approximately $7,200.
Additionally, Mr. Ontiveros provided a general release of all
claims he may have against the company other than rights to
indemnification he may have under the terms of an Indemnification
Agreement dated July 12, 2007, entered into with the company in
connection with the company's initial public offering of common
stock. The company has entered into a Consultant Services
Agreement with Mr. Ontiveros. Mr. Ontiveros will continue to
serve as the company's vice president, legal affairs and general
counsel, and as the company's secretary, pursuant to the terms of
the Consultant Services Agreement. Beginning June 12, 2008,
through Aug. 31, 2008, Mr. Ontiveros will be paid at the fixed bi-
weekly rate of $12,913.00 for services rendered under the
agreement. Beginning Sept. 1, 2008, Mr. Ontiveros will be paid a
bi-weekly rate equal to $6,500 for Services rendered under the
agreement. These services will be provided until Dec. 31, 2008 or
the closing of a strategic transaction. Either party may
terminate the agreement upon the provision of 15 days advance
notice.
About ImaRx Therapeutics
Based in Tucson, Arizona, ImaRx Therapeutics Inc. (Nasdaq: IMRX)
-- http://www.imarx.com/-- is a biopharmaceutical company
developing and commercializing therapies for vascular disorders.
The company's research and development efforts are focused on
therapies for stroke and other vascular disorders using its
proprietary microbubble technology. The company's
commercialization efforts are currently focused on its product,
urokinase, for the treatment of acute massive pulmonary embolism.
Going Concern Doubt
Ernst & Young LLP, in Phoenix, Arizona, expressed substantial
doubt about ImaRx Therapeutics Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditing firm
said that the company has recurring losses, which has resulted in
an accumulated deficit of $81.2 million at Dec. 31, 2007.
Subsequent to the end of the quarter, the company paid
$5.2 million to satisfy all outstanding liabilities to Abbott
Laboratories, including the $10.8 million balance on the
$15.0 million non-recourse note.
IMARX THERAPEUTICS: Terminates LOI for Sale of Urokinase Assets
---------------------------------------------------------------
ImaRx Therapeutics, Inc. agreed with Microbix Biosystems to
terminate a non-binding letter of intent for Microbix Biosystems
to acquire ImaRx's urokinase inventory and related assets from
ImaRx for $17 million in cash.
Two recent events prompted this decision:
* Microbix has been unable to raise the funds required to close
the intended transaction; and
* ImaRx received the previously announced "approvable" letter
from the FDA on May 13, 2008, indicating that additional
testing would be required for approval of ImaRx's urokinase
stability testing program and release of labeled vials of
urokinase.
As a result of these events, the two companies have agreed to
terminate the letter of intent relating to the sale of ImaRx's
urokinase business, including those relating to exclusivity and
break-up fees.
The company intends to complete additional urokinase stability
testing and submit the data to the FDA within the next 90 days.
If the data are sufficient for the FDA to approve a lot release,
the company may be in a position to begin sales of its labeled
vials of urokinase with extended expiration dating in the fourth
quarter of this year. Release of future lots with expiration
dating beyond the currently labeled vials will be contingent upon
FDA approval of the stability testing program and FDA acceptance
of the testing results. Even if the stability testing program is
accepted and the testing results are favorable, it is uncertain
whether or to what extent the FDA might approve extended
expiration dating for ImaRx's inventory of unlabeled urokinase
vials.
Following a comprehensive review and consideration of these recent
events, the company's cash position, commercial and development
programs as well as external market conditions, ImaRx's Board of
Directors and management have determined that it is in the best
interests of the company to identify and evaluate alternative
strategies to maximize shareholder value. The company intends to
explore strategic alternatives for its commercial urokinase
assets, clinical-stage SonoLysis program as well as its other
company assets. Concurrent with this strategy, ImaRx will
immediately reduce its workforce in order to preserve additional
cash. Bradford Zakes, the company's President and CEO, will
continue in his role and other key employees will be retained as
consultants to support the strategic process.
"While these recent events are disappointing, we believe there is
significant value in our urokinase business, SonoLysis program and
other assets," Mr. Zakes stated. "Steps are being taken to
conserve cash while we identify, evaluate and pursue alternative
strategies to maximize shareholder value."
About ImaRx Therapeutics
Based in Tucson, Arizona, ImaRx Therapeutics Inc. (Nasdaq: IMRX)
-- http://www.imarx.com/-- is a biopharmaceutical company
developing and commercializing therapies for vascular disorders.
The company's research and development efforts are focused on
therapies for stroke and other vascular disorders using its
proprietary microbubble technology. The company's
commercialization efforts are currently focused on its product,
urokinase, for the treatment of acute massive pulmonary embolism.
Going Concern Doubt
Ernst & Young LLP, in Phoenix, Arizona, expressed substantial
doubt about ImaRx Therapeutics Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditing firm
said that the company has recurring losses, which has resulted in
an accumulated deficit of $81.2 million at Dec. 31, 2007.
Subsequent to the end of the quarter, the company paid
$5.2 million to satisfy all outstanding liabilities to Abbott
Laboratories, including the $10.8 million balance on the
$15.0 million non-recourse note.x
JEFFREY DENNIS: Case Summary & 11 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Jeffrey R. Dennis
2817 Timber Chase Trail
Littleton, CO 80126
Bankruptcy Case No.: 08-18483
Chapter 11 Petition Date: June 17, 2008
Court: District of Colorado (Denver)
Judge: Michael E. Romero
Debtor's Counsel: Lee M. Kutner, Esq.
Email: lmk@kutnerlaw.com
303 E. 17th Ave., Ste. 500
Denver, CO 80203
Tel: (303) 832-2400
http://www.kutnerlawoffice.com/contact.jsp
Estimated Assets: $100,000 to $500,000
Estimated Debts: $1 million to $10 million
A copy of Jeffrey R. Dennis' list of 11 largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/cob08-18483.pdf
KGB: Moody's Hikes CF and PD Ratings to Ba3 from B2
---------------------------------------------------
Moody's Investors Service upgraded kgb's (formerly "InfoNXX,
Inc.") Corporate Family Rating and Probability of Default Rating
to Ba3 from B2. Concurrently, Moody's upgraded the first lien
senior secured $200 million revolver due 2011 and
$292 million term loan due 2012 to Ba2 (LGD3, 33%) from
B1 (LGD3, 35%), and the second lien senior secured $125 million
term loan due 2013 to B2(LGD5, 84%) from Caa1(LGD5, 85%). The
outlook for the ratings is stable.
The two-notch upgrade to Ba3 CFR reflects the company's reduction
in financial leverage to levels that are low for the rating
category, improved scale, geographical and service diversification
and profitability resulting from successful execution on
acquisition integration and other important growth initiatives
over the last two years, as well as associated reductions in
leverage and improved free cash flow generation.
The ratings incorporate potential benefits of its proposed IPO,
which include the ability of owners to monetize holdings without
the need for dividend recapitalizations and access to the public
equity capital markets. The ratings continue to be constrained by
significant business and market risks, including customer
concentration, technological risks including the potential for
shifts to online sources for directory and other information, and
declining revenues per call in North America as a result of
competitive pressures.
However, these risks are partially mitigated by core competencies
which include building and strengthening consumer brands and
related assets which include leading brands in the European
market, as well as established customer relationships in the North
American market.
Moody's took these rating actions:
-- Upgraded the Corporate Family Rating to Ba3 from B2;
-- Upgraded the Probability of Default Rating to Ba3 from B2;
-- Upgraded the $200m senior secured first lien revolver due
2011 (consisting of a US revolver of $85 million a foreign
revolver of $115 million) to Ba2 (LGD3, 33%) from B1 (LGD3,
35%);
-- Upgraded the $292m senior secured first lien term loan B due
2012 (comprised of a $160 million US tranche and a EUR90.0
million non-US tranche) to Ba2, (LGD3, 33%) from B1 (LGD3,
35%);
-- Upgraded the $125m senior secured second lien term loan due
2013 to B2 (LGD5, 84%) from Caa1 (LGD5, 85%);
The ratings outlook is stable.
kgb (formerly InfoNXX, Inc.), based in New York, New York, is the
leading non-carrier provider of directory assistance services in
the U.S. and Europe. In the U.S., which comprised approximately
32% of fiscal year 2007 revenue, wireless carriers outsource
directory assistance calls to kgb and provide them a pre-arranged
fixed price per call.
In Europe, the directory assistance market is deregulated, giving
kgb pricing flexibility and an ability to market its brand and
telephone numbers directly to the end user. Revenue for the
twelve months ended March 31, 2007 was approximately $664 million.
LEVITT AND SONS: Plan-Filing Deadline Extended to June 27
---------------------------------------------------------
The Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the
Southern District of Florida extended, until June 27, 2008,
Levitt and Sons LLC and its debtor-affiliates' exclusive plan-
filing period.
In addition, the Court gave the Debtors until Sept. 30, 2008 to
solicit acceptances of that plan.
The Debtors have collaborated with the Official Committee of
Unsecured Creditors and Home Purchase Deposit Creditors Committee
with respect to all matters affecting the administration of their
Chapter 11 cases. The Debtors and the Creditors Committee have
been engaged in discussions regarding the terms of a joint
liquidating plan of reorganization for sometime, Jordi Guso,
Esq., at Berger Singerman, P.A., in Miami, Florida, informed the
Court.
The Debtors prepared a proposed plan, as to which the Creditors
Committee has had substantial input, Mr. Guso said. The
Creditors Committee is likely to be a co-proponent of the plan.
The collaboration between the Debtors and the Creditors Committee
with respect to the terms of a plan are ongoing, he relates.
The Depositors Committee has also been provided a draft of the
plan.
Following the Debtors' preparation of the draft plan, the
Creditors Committee and Levitt Corporation initiated discussions
regarding, among other things, the treatment of the claims of
Levitt and the resolution of potential claims against it,
according to Mr. Guso. At the conclusion of a conference held on
April 29, 2008, the Creditors Committee and Levitt reached an
agreement in principle, which may result in the resolution of the
treatment of applicable claims. When fully documented, the
settlement will be comprehensive and encompass a resolution of a
number of difficult and potentially complex claims, Mr. Guso
told the Court.
The Creditors Committee has also begun drafting the terms of a
formal comprehensive settlement agreement, Mr. Singerman averred.
The Debtors and the Creditors Committee intend to incorporate the
terms of the settlement into the proposed plan as a significant
aspect of the means for implementing the plan.
About Levitt and Sons
Based in Fort Lauderdale, Florida, Levitt and Sons LLC --
http://www.levittandsons.com/-- is the homebuilding subsidiary of
Levitt Corporation (NYSE:LEV). Levitt Corp. --
http://www.levittcorporation.com/-- together with its
subsidiaries, operates as a homebuilding and real estate
development company in the southeastern United States. The
company operates in two divisions, homebuilding and land. The
homebuilding division primarily develops single and multi-family
homes for adults and families in Florida, Georgia, Tennessee, and
South Carolina. The land division engages in the development of
master-planned communities in Florida and South Carolina.
Levitt and Sons LLC and 38 of its homebuilding affiliates filed
for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead
Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at
Berger Singerman, P.A., represent the Debtors in their
restructuring efforts. The Debtors chose AP Services, LLC as
their crisis managers, and Kurtzman Carson Consultants, LLC as
their claims and noticing agent. Levitt Corp., the parent
company, is not included in the bankruptcy filing.
The Debtors' latest consolidated financial condition as of
Sept. 30, 2007 reflect total assets of $900,392,000, and total
liabilities of $780,969,000. (Levitt and Sons Bankruptcy News,
Issue No. 22; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)
LEVITT AND SONS: Court Compels TIG to Turnover Property
-------------------------------------------------------
At the behest of Levitt and Sons LLC, and Soneet R. Kapila, as
chief administrator for certain Debtors that are borrowers under a
DIP Loan Agreement with Wachovia Bank N.A., the U.S. Bankruptcy
Court for the Southern District of Florida compelled the turnover
of an estate property held by The Interiors Group, Inc., to Mr.
Kapila upon payment of all storage and pick-up charges.
Among the master-planned communities owned by the Wachovia
Debtors are Seasons at Laurel Canyon, Cascades at World Golf
Village, and Seasons at Seven Hills. The clubhouses at World
Golf Village and Laurel Canyon are ready to be furnished so that
they may be opened for use by the Projects' residents. Mr.
Kapila has agreed with the residents to grand openings of the
Clubhouses over the upcoming fourth of July weekend.
Pursuant to three design agreements with Levitt and Sons, TIG
agreed to purchase, store and install furniture and design
elements for:
(i) the World Golf Village and Laurel Canyon Clubhouses at a
cost of approximately $535,000 for each Clubhouse; and
(ii) three model homes at Seven Hills at a cost of
approximately $200,000.
As of June 6, 2008, the Debtors inform the Court that they have
paid TIG roughly $1,000,000 pursuant to the Design Agreements.
Mr. Kapila emphasizes that he must have the Furniture and Design
Elements no later than June 16 in order to meet his commitment by
the July 4 grand openings.
The Debtors and Mr. Kapila also ask the Court to instruct any TIG
vendors in possession of the Furniture and Design Elements to
turn over, no later than June 16, the property to the Chief
Administrator upon payment of all unpaid sums due those vendors.
The Furniture and Design Elements will be paid from the funds
provided under the Wachovia DIP Facility, , according to Cynthia
C. Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville,
Florida.
The Debtors and Mr. Kapila ask the Court to clarify that they,
together with TIG, reserve all rights with respect to the
Furniture and Design Elements, provided that the Debtors:
-- accept the Furniture and Design Elements in an "AS-IS"
condition;
-- agree to pay all storage and pick-up charges relating to
the Furniture and Design Elements; and
-- agree to relieve TIG from any responsibility for the
delivery and installation of the Furniture and Design
Elements.
About Levitt and Sons
Based in Fort Lauderdale, Florida, Levitt and Sons LLC --
http://www.levittandsons.com/-- is the homebuilding subsidiary of
Levitt Corporation (NYSE:LEV). Levitt Corp. --
http://www.levittcorporation.com/-- together with its
subsidiaries, operates as a homebuilding and real estate
development company in the southeastern United States. The
company operates in two divisions, homebuilding and land. The
homebuilding division primarily develops single and multi-family
homes for adults and families in Florida, Georgia, Tennessee, and
South Carolina. The land division engages in the development of
master-planned communities in Florida and South Carolina.
Levitt and Sons LLC and 38 of its homebuilding affiliates filed
for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead
Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at
Berger Singerman, P.A., represent the Debtors in their
restructuring efforts. The Debtors chose AP Services, LLC as
their crisis managers, and Kurtzman Carson Consultants, LLC as
their claims and noticing agent. Levitt Corp., the parent
company, is not included in the bankruptcy filing.
The Debtors' latest consolidated financial condition as of
Sept. 30, 2007 reflect total assets of $900,392,000, and total
liabilities of $780,969,000. (Levitt and Sons Bankruptcy News,
Issue No. 22; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)
LEVITT AND SONS: Wachovia Bank Files Second Amended Complaint
-------------------------------------------------------------
Wachovia Bank N.A. delivered its Second Amended Complaint for
declaratory judgment against Levitt and Sons, LLC; Levitt and Sons
of Horry County, LLC; Levitt and Sons of Hall County, LLC; Levitt
and Sons of Cherokee County, LLC; Weinstock & Scavo, P.C.; and The
Floyd Law Firm, P.C., as defendants, and Chicago Title Insurance
Company, as defendant-intervenor.
To note, the Levitt Defendants contended that Wachovia Bank is
obligated to deliver partial mortgage releases with respect to 85
homes sold by one or more of the Levitt Defendants to third party
purchasers referred to as Unreleased Lots.
Wachovia Bank asserts that it is obliged to deliver a partial
release of the Levitt Defendents -- if and only if -- all
conditions precedent to the obligation set forth in the Loan
Documents it entered into with the Levitt Defendants are
satisfied at the time a release is requested.
Robert N. Gilbert, Esq., at Carlton Fields, P.A., in West Palm
Beach, Florida, argues that because the Levitt Defendants did not
satisfy the conditions precedent, Wachovia Bank was not, and is
not, obligated to deliver the Releases.
The Second Amended Complaint sets forth facts currently known to
Wachovia Bank, which relieve it of any obligation to deliver the
Releases.
Through discovery, Wachovia Bank expects additional facts to come
to light, which may further demonstrate that the Levitt
Defendants were in default earlier than Sept. 17, 2007, and that
in any event that Wachovia was not and is not required to execute
the Releases.
Mr. Gilbert notes that after the date of bankruptcy, Wachovia Bank
and LAS, along with other Levitt entities, entered into a Court-
approved DIP Credit Agreement. The DIP Loan provides that LAS,
along with the other Levitt entities, released various claims and
demands against Wachovia Bank, he point out.
A full-text copy of the Second Amended Complaint is available for
free at:
http://researcharchives.com/t/s?2e3d
Accordingly, Wachovia Bank asks the U.S. Bankruptcy Court for the
Southern District of Florida to:
(a) declare that it has not obligation to any of the
Defendants to execute or deliver the Releases on the
Unreleased Lots;
(b) declare that none of the Defendants has any claim against
it as a result of the failure to deliver the Releases on
the Unreleased Lots;
(c) awarding it costs incurred in prosecuting the Complaint.
About Levitt and Sons
Based in Fort Lauderdale, Florida, Levitt and Sons LLC --
http://www.levittandsons.com/-- is the homebuilding subsidiary of
Levitt Corporation (NYSE:LEV). Levitt Corp. --
http://www.levittcorporation.com/-- together with its
subsidiaries, operates as a homebuilding and real estate
development company in the southeastern United States. The
company operates in two divisions, homebuilding and land. The
homebuilding division primarily develops single and multi-family
homes for adults and families in Florida, Georgia, Tennessee, and
South Carolina. The land division engages in the development of
master-planned communities in Florida and South Carolina.
Levitt and Sons LLC and 38 of its homebuilding affiliates filed
for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead
Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at
Berger Singerman, P.A., represent the Debtors in their
restructuring efforts. The Debtors chose AP Services, LLC as
their crisis managers, and Kurtzman Carson Consultants, LLC as
their claims and noticing agent. Levitt Corp., the parent
company, is not included in the bankruptcy filing.
The Debtors' latest consolidated financial condition as of
Sept. 30, 2007 reflect total assets of $900,392,000, and total
liabilities of $780,969,000. (Levitt and Sons Bankruptcy News,
Issue No. 22; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)
LINN ENERGY: Moody's Puts B3 Rating on Proposed $400MM Sr. Notes
----------------------------------------------------------------
Moody's Investors Service assigned a first time B1 corporate
family rating to Linn Energy, LLC, a B3 (LGD 6; 92%) rating to its
proposed $400 million offering of senior unsecured notes, a B1
probability of default rating, and an SGL-3 speculative grade
liquidity rating. The rating outlook is stable.
Note proceeds from the pending offering will repay the
$400.0 million Second Lien Term Loan Agreement maturing on
July 31, 2009. Under Moody's Loss Given Default methodology, the
rating for the proposed senior notes offering is two notches lower
than the B1 CFR.
This is the result of the company's estimated $1.1 billion
outstanding balance under the borrowing base revolver,
constituting nearly 71% of the capital structure as determined by
the LGD methodology compared to the proposed $400 million notes
offering (about 22%).
The B1 CFR reflects the company's limited track record with the
bulk of its current asset base as well as the company's Limited
Liability Company structure. Linn's property base has undergone
significant change over the past year and roughly 70% of the pro
forma proven reserve base has been owned for less than a year.
As such, there has been insufficient time to identify clear
sustained organic operating trends and the B1 accommodates the
need to see a clear ability to sustain sequential quarterly
production gains, as well as sound reserve and production
replacement at competitive and sustainable costs.
This is particularly important given the company's LLC structure
which contains the burden of not only sustaining, but also growing
its regular cash distributions to unit holders, and the need to
supplement organic growth with acquisitions. This distribution
obligation amplifies the relatively high reinvestment risk for the
company but is compounded by having a depleting capital base
underpinning a depleting asset base.
Moody's notes that as opposed to the Master Limited Partnership
structure, Linn's LLC business model does not have the extra
burden of incentive distribution rights which tends to drive even
higher cash distributions due to the favorable split of
incremental distributions to the general partner. However, it
still carries a higher degree of event risk with its need to
augment its organic growth with acquisitions.
The B1 CFR also reflects the company's relatively high leverage on
the proven developed reserve base which is in line with the
average for the B1 rated exploration and production peers. Pro
forma for the pending Appalachian and Verden asset sales, Moody's
estimates Linn's debt to PD reserves will be approximately
$7.16/boe, which is in line for the B1 rated peers, and higher
than the Ba3 rated E&P peer group.
Moody's expects that leverage will likely remain on the higher end
for the rating as the LLC model does not lend itself to much debt
reduction given that cash flow after maintenance capex will be
paid the unitholders instead of debt reduction.
In addition, given the company's plans to possibly repurchase
$100 million of partnership units, it appears unlikely that the
company may have less of a desire/ability to issue a significant
amount of units for any near-term potential acquisitions, which
may result in sustained higher levels of debt within the company.
However, given the company's scale and diversification, the B1
rating can handle some incremental leverage.
The B1 CFR is supported by the company's significant scale, which
is more in line with higher rated E&P peers, and the durability of
its property base which contains a lower than average decline
rate. Pro forma for the pending sale of the Appalachian
properties and Verden sale, Linn's total proven reserves and PD
reserves of about 283 mmboe and 201 mmboe respectively are in line
with 304 mmboe and 192 mmboe respective averages for the Ba3 peer
group.
While Linn has significantly hedged its expected natural gas and
oil production through 2014 to protect its cash flows available
for capex and distributions, there could be an adverse impact if
costs continue to face upward pressure. Since the majority of the
hedges are fixed price swaps, they do not protect against surges
in costs as the sector has experienced over the past several
years.
If costs continue to rise and begin to outpace the benefit of the
swapped prices, Linn could face a unit cash margin squeeze, and
hurt the company's ability to cover its capex and distributions
without additional debt.
The stable outlook assumes that the company will be able to at
least demonstrate stable production trends, while maintaining a
manageable cost structure. The outlook also assumes that the
contemplated $100 million unit repurchase is a one-time event and
is not a precursor to ongoing unit buybacks. In addition, the
stable outlook reflects the expectation that leverage on the PD
reserves remains within the $8.00/boe range even as the company
pursues additional acquisitions.
The speculative grade liquidity rating of SGL-3 primarily reflects
Moody's expectation that Linn will have adequate liquidity to
cover its planned capital spending needs, interest expense, and
working capital requirements over the next twelve months. Given
its LLC structure, Moody's does not expect Linn to have much free
cash flow after unit distributions, but will have adequate
availability under its senior secured revolving credit facility to
cover any funding needs.
Linn Energy is a Houston, TX based independent energy company
engaged in the development, production, acquisition, and
exploitation of long life crude oil and natural gas properties in
the United States. The company's reserves and production are
located in California and Mid- Continent regions.
LOUISIANA RIVERBOAT: Wants Plan Filing Deadline Moved to Oct. 31
----------------------------------------------------------------
Louisiana Riverboat Gaming Partnership and its debtor-affiliates
ask the United States Bankruptcy Court for the Western District of
Louisiana to extend their exclusive periods to:
a) file a Chapter 11 plan until Oct. 31, 2008, and
b) solicit acceptances of that plan until Jan. 31, 2009.
The Debtors say that the extension will allow them to
complete and provide additional information to their creditors
and negotiate with parties-in-interest to achieve a feasible
restructuring plan. The Debtors are in talks with several parties
including the Official Committee of Unsecured Creditors about the
potential plan of restructuring.
The Debtors together with their financial advisor will schedule a
meeting with their second lien lenders, who holds $44.5 million of
the $65 million of second lien debt, to review the Debtors'
financial and operational status.
The Debtors' exclusive period to file a Chapter 11 plan expired on
April 25, 2008.
About Louisiana Riverboat
Headquartered in Bossier City, Louisiana, Louisiana Riverboat
Gaming Partnership, which does business as Diamond Jacks Casino &
Resort, and its debtor-affiliates -- http://www.islecorp.com/--
operate casinos and hotels. The company and five of its
affiliates filed for Chapter 11 protection on March 11, 2008
(Bankr. W.D. La. Lead Case No.08-10824). Tristan E. Manthey, Esq.
and William H. Patrick, III, Esq., at Heller Draper Hayden Patrick
and Horn, represent the Debtors. The Debtors selected Kurtzman
Carson Consultants LLC as their claims agent. The U.S. Trustee
for Region 5 has not appointed creditors to serve on an Official
Committee of Unsecured Creditors.
As reported in the Troubled Company Reporter on May 20, 2008, the
Debtors' summary of schedules showed total assets of $250,357,475
and total debts of $220,551,127.
MMM HOLDINGS: Moody's Sees Direction of Caa1 Rating Uncertain
-------------------------------------------------------------
Moody's Investors Service changed its review of the Caa1 senior
debt ratings of MMM Holdings, Inc., NAMM Holdings, Inc., and
Preferred Health Management Corporation to direction uncertain.
The previous review for possible downgrade, which was announced on
April 2, 2008, was a result of a possible breach of the Debt to
EBITDA financial covenant in the company's bank loan agreement
which tightened in 2008. Moody's commented that while this threat
remains, a continuation of the improved financial results
evidenced during the first quarter of 2008, along with a
successful negotiation of new terms under its credit facility,
could result in an upgrade.
First quarter 2008 financial results indicate that the company
continues to make progress in addressing the high medical
utilization and costs in its Puerto Rico operations. These issues
had resulted in a significant earnings decline at the end of 2006
and early 2007 and a breach of several financial covenants in its
bank loan agreement. In addition, the rating agency noted that
MMM has reversed the membership decline it experienced in 2007
with membership gains during the first three months of 2008.
The rating agency stated, however, that despite this progress, the
company has not yet renegotiated the financial covenants with its
lenders. Although the company is currently in compliance with all
financial covenants, Moody's noted that the combination of the
decline in medical membership in Puerto Rico during 2007, lower
than expected debt amortization in 2007, and the tightening Debt
to EBITDA covenant limit in 2008 will make it difficult for MMM to
be in compliance with this covenant at the end of 2008.
The rating agency commented that this uncertainty with respect to
the status of the financial covenants is the key driver for the
rating remaining under review.
According to Moody's, the company is current on all required debt
service and continues to make all required principal and interest
payments, including an excess principal payment of approximately
$20 million made on March 28, 2008.
Moody's said that the focus of its review will be the progress
and/or terms of any renegotiation of the credit facility as well
as sustainability of recent earnings improvement and membership
growth.
These ratings are under review with direction uncertain:
-- MMM Holdings, Inc. -- senior secured debt rating at Caa1;
corporate family rating at Caa1;
-- NAMM Holdings, Inc. -- senior secured debt rating at Caa1;
-- Preferred Health Management Corporation -- senior secured
debt rating at Caa1;
-- MMM Healthcare, Inc. -- insurance financial strength rating
at B1;
-- PrimeCare Medical Network, Inc. -- insurance financial
strength rating at B1.
MMM Healthcare offers Medicare Advantage products exclusively to
eligible participants in Puerto Rico. Moody's notes that the
company currently enjoys being the market leader in providing
Medicare Advantage products in Puerto Rico.
NAMM is a medical management company that operates in California
and Illinois. Its regulated operating subsidiary, PrimeCare
Medical Network, Inc., consists of 10 owned IPAs in Southern
California that contract with major health care benefit companies
on a capitated basis to provide medical care to commercial and
Medicare members.
Aveta, Inc., the parent company of MMM, PHMC and NAMM, is a
privately-owned company incorporated in Delaware and headquartered
in Fort Lee, New Jersey. As of March 31, 2008, Aveta (as Aveta
Holdings, LLC) reported stockholders' equity of ($12) million and
approximately 197,500 Medicare members. For the first three
months of 2008, total revenues were $485 million.
Moody's health insurance financial strength ratings are opinions
about the ability of life and health insurance companies to
punctually repay senior policyholder claims and obligations.
Moody's corporate family rating is an opinion of a corporate
family's ability to honor all of its financial obligations and is
assigned to a corporate family as if it had a single class of debt
and a single consolidated legal entity structure.
N-STAR REL: Fitch Affirms 'BB-' Rating on $22.5MM Class N Notes
---------------------------------------------------------------
Fitch affirmed all classes of N-Star REL CDO VIII, Ltd./LLC
floating-rate notes as:
-- $100,000,000 class A-1 affirmed at 'AAA'
-- $260,000,000 class A-R affirmed at 'AAA';
-- $103,050,000 class A-2 affirmed at 'AAA';
-- $60,300,000 class B affirmed at 'AA+';
-- $24,300,000 class C affirmed at 'AA';
-- $17,100,000 class D affirmed at 'AA-';
-- $22,050,000 class E affirmed at 'A+';
-- $25,200,000 class F affirmed at 'A';
-- $26,100,000 class G affirmed at 'A-';
-- $20,700,000 class H affirmed at 'BBB+';
-- $26,100,000 class J affirmed at 'BBB';
-- $18,900,000 class K affirmed at 'BBB-';
-- $22,050,000 class L affirmed at 'BB+';
-- $14,850,000 class M affirmed at 'BB'; and
-- $22,500,000 class N affirmed at 'BB-'.
Fitch's affirmation of the above classes is based on the
transaction maintaining an adequate reinvestment cushion,
remaining within its other transaction covenants, and passing
Fitch's property value decline stress scenarios. The deal was
reviewed as over 25% of the portfolio has turned over since the
last review.
Deal Summary:
N-Star VIII, a wholly owned subsidiary of NorthStar Realty Finance
Corp., is a $900,000,000 revolving commercial real estate cash
flow collateralized debt obligation that closed on Dec. 7, 2006.
As of the June 2, 2008 trustee report and based on Fitch
categorizations, the CDO was substantially invested as: commercial
mortgage whole loans/A-notes (71.2%), commercial real estate
mezzanine loans (17.4%), CRE CDOs (4.5%), CMBS (2.6%), CRE B-notes
(1.9%), and cash (2.4%). The CDO is also permitted to invest in
REIT debt and loans secured by credit tenant leases. As of
June 2, 2008, $79,085,000 has been advanced from the A-R class
leaving $180,915,000 outstanding. It is expected that the future
funding on the loans will be covered by the remaining A-R
facility.
The portfolio is selected and monitored by NS Advisors, LLC
NStar), as collateral asset manager. NStar, a wholly owned
subsidiary of NorthStar, is rated 'CAM2' by Fitch. N-Star VIII
has a five-year reinvestment period during which, if all
reinvestment criteria are satisfied, principal proceeds may be
used to invest in substitute collateral. The reinvestment period
ends January 2012.
Asset Manager:
NorthStar is an internally-managed real estate finance company
operating as a REIT that has three primary business lines: real
estate debt, real estate security purchasing, and net lease
property ownership. The Real Estate Debt business originates,
acquires, and structures senior and subordinate debt investments
secured primarily by commercial real estate properties. The Real
Estate Securities business invests in commercial real estate debt
securities, including CMBS, CDOs, REIT unsecured debt, and credit
tenant lease loans. The Net Lease Properties business
concentrates on the acquisition of real estate properties
primarily net leased to corporate tenants. As of March 31, 2008,
NS Advisors, LLC had approximately $7.1 billion in assets under
management, consisting of real estate securities and real estate
debt positions financed through nine issued CDOs.
NIGHTHAWK SYSTEMS: Posts $770,198 Net Loss in 2008 First Quarter
----------------------------------------------------------------
Nighthawk Systems Inc. reported a net loss of $770,198 on revenue
of $826,321 for the first quarter ended March 31, 2008, compared
with a net loss of $1,117,302 on revenue of $212,021 in the same
period last year.
A large portion of the increase in revenues, $517,533, was
produced from sales of IPMediaPro 3000HD set top boxes.
At March 31, 2008, the company's consolidated balance sheet showed
$5,856,210 in total assets, $2,988,444 in total liabilities, and
$2,867,766 in total stockholders' equity.
The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $788,267 in total current assets
available to pay $2,988,444 in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2e3e
Going Concern Doubt
GHP Horwath, P.C., in Denver, expressed substantial doubt about
Nighthawk Systems Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 31, 2007. The auditing firm pointed to the
company's net loss and working capital deficiency.
About Nighthawk Systems
Based in San Antonio, Texas, Nighthawk Systems Inc. (OTC BB: NIHK)
-- http://www.nighthawksystems.com/-- is a provider of
intelligent devices and systems that allow for the centralized,
on-demand management of assets and processes. Nighthawk products
are used throughout the United States in a variety of mission
critical applications, including remotely turning on and off and
rebooting devices, activating alarms, and emergency notification,
including the display of custom messages. Nighthawk's IPTV set-
top boxes are utilized by the hospitality industry to provide in-
room standard and high definition television and video on demand.
NON-INVASIVE MONITORING: Posts $488,000 Net Loss in Third Quarter
-----------------------------------------------------------------
Non-Invasive Monitoring Systems Inc. reported a net loss of
$488,000 on total revenues of $39,000 for the third quarter ended
April 30, 2008, compared with a net loss of $383,000 on total
revenues of $77,000 in the same period last year.
The $38,000 decrease in revenues was primarily due to a $48,000
reduction in royalty revenue, offset in part by a $10,000 increase
in product sales.
The increase in net loss was primarily due to an increase in
operating expenses.
Balance Sheet
At April 30, 2008, the company's balance sheet showed in
$1,722,000 in total assets, $308,000 in total liabilities, and
$1,414,000 in total stockholders' equity.
Full-text copies of the company's financial statements for the
quarter ended April 30, 2008, are available for free at:
http://researcharchives.com/t/s?2e35
Going Concern Doubt
Eisner LLP, in New York, expressed substantial doubt about Non-
Invasive Monitoring Systems Inc.'s ability to continue as a going
concern after auditing the company's financial statements for the
year ended July 31, 2007. The auditing firm pointed to the
company's recurring losses from operations and accumulated
deficit.
About Non-Invasive Monitoring
Based in Miami, Florida, Non-Invasive Monitoring Systems Inc.
(OTC BB: NIMU) -- http://www.nims-inc.com/-- is engaged in the
development of innovative medical products utilizing new and
unique technologies to address a wide variety of medical
conditions. The company specializes in products that use a
natural approach to assist subjects without the use of drugs or
any invasive procedures.
The company's flagship product is the Acceleration Therapeutics
AT-101.
PACIFICNET INC: Kabani & Company Expresses Going Concern Doubt
--------------------------------------------------------------
Kabani & Company Inc. raised substantial doubt about the ability
of PacificNet Inc. to continue as a going concern after it
audited the company's financial statements for the year ended
Dec. 31, 2007.
The auditing firm reported that during the year ended Dec. 31,
2007, the company incurred net losses of $14,195,000. In
addition, the company had a negative cash flow in operating
activities amounting to negative $1,079,000 in the year ended
Dec. 31, 2007, and the company˙s accumulated deficit was
$65,070,000 as of Dec. 31, 2007. In addition, the company is
in default on its convertible debenture obligation and three
holders of Convertible Subordinated Debentures filed an
involuntary petition for Chapter 11 relief in federal bankruptcy
court on Saturday, March 22, 2008, in Wilmington, Del.
Convertible Debenture Obligations
On April 30, 2007, the company entered into a sale and purchase
agreement to dispose of its interest in Guangzhou3G for a
consideration of $6 million. The deal was subsequently reopened
for renegotiation in November 2007.
On May 15 and 20, 2007, the company entered into various
definitive agreements to divest and reduce its equity interests
in certain unprofitable subsidiaries to below 20% equity
interest, namely: Linkhead, Clickcom, PacTelso, PacSo and
PacPower.
Involuntary Bankruptcy Petition
On March 27, 2008, three holders of PACT's Convertible
Subordinated Debentures filed an involuntary petition for
Chapter 11 relief in federal bankruptcy court on March 22, 2008,
in Wilmington, Del.
The company has retained counsel to oppose the filing because the
petition fails to meet the standard for invoking an involuntary
bankruptcy and fails to take into consideration other agreements
between the company and the petitioning creditors. The company
intends to vigorously oppose the petition and move for dismissal
of the filing, and if successful will seek damages and attorney
fees.
Default Notice
Subsequently, PACT also received default notice from all but one
of the debenture holders including Iroquois Master Fund Ltd.,
Alpha Capital AG, Whalehaven Capital Fund Limited, DKR Soundshore
Oasis Holding Fund Ltd., Basso Fund Ltd., Basso Multi-Strategy
Holding Fund Ltd., and Basso Private Opportunities Holding Fund
Ltd. from the same Convertible Subordinated Debentures related
to the private offering of $8,000,000 principal amount
variable debentures consummated on March 13, 2006, and due March
2009.
PACT has retained counsel to oppose the above petition.
The amount of the debt in question is as follows: Iroquois Master
Fund Ltd. $2.5 million, Whalehaven Capital Fund Limited $958,000,
Alpha Capital AG $685,000 DKR Soundshore Oasis Holding Fund Ltd
$960,000, and Basso Fund Ltd., Basso Multi-Strategy Holding Fund
Ltd., and Basso Private Opportunities Holding Fund Ltd., a
combined amount of $500,000.
Financials
The company posted a net loss of $14,195,000 on total net
revenues of $18,994,000 for the year ended Dec. 31, 2007, as
compared with a net loss of $12,415,000 on total net revenues
of $29,073,000 in the prior year.
At Dec. 31, 2007, the company's balance sheet showed $24,720,000
in total assets, $20,208,000 in total liabilities, and $2,792,000
in total stockholders' equity.
The company's consolidated balance sheet at Dec. 31, 2007, showed
strained liquidity with $16,419,000 in total current assets
available to pay $13,241,000 in total current liabilities.
The company incurred accumulated losses of $65,000,000 and
$51,000,000 as of Dec. 31, 2007 and 2006 respectively.
A full-text copy of the company's 2007 annual report is
available for free at http://ResearchArchives.com/t/s?2e00
About PacificNet Inc.
Headquartered in Beijing, China, PacificNet Inc., (NasdaqGM:
PACT) -- http://www.pacificnet.com-- provides gaming and mobile
game technology worldwide. The company, through its
subsidiaries, offers solutions in casino equipment supply; and
the development, installation, and support of systems and game
content for the casino, lottery, and amusement with prizes (AWP)
markets. The company was founded in 1987 and has additional
offices in Hong Kong, Shanghai, Shenzhen, Guangzhou, Macau, and
Zhuhai, China; the United States; and the Philippines.
Iroquois Master Fund Ltd., Whalehaven Capital Fund Ltd. and
Alpha Capital AG filed for involuntary Chapter 11 petition
against the Debtor on March 22, 2008, (Bank. D. Del. Case No.
08-10528.) Adam Friedman, Esq. at Olshan Grundman, et al. and
Robert S. Brady, Esq. and Ian S. Fredericks, Esq. at Young
Conaway, et al. represent the petitioners in this case.
PIERRE FOODS: Has Going Concern Doubt; Warns of Likely Bankruptcy
-----------------------------------------------------------------
Cincinnati-based Deloitte & Touche LLP raised substantial doubt
about the ability of Pierre Foods, Inc., to continue as a going
concern after it audited the company's financial statements for
the year ended March 1, 2008.
The auditing firm disclosed that the company is currently in
default under its credit agreement and has been unable to
negotiate an amendment with its lender. There can be no assurance
that the company can obtain additional financing on terms
acceptable to it, if at all. Additionally, there can be no
assurance that the company will be able to realize its assets and
discharge its liabilities in the normal course of business and
avoid seeking the protection of applicable federal and state
bankruptcy laws.
Default and Possible Bankruptcy
Pierre Foods is currently in default under its senior credit
facility as a result of its failure, among other things, to
satisfy the financial covenants of its Credit Agreement as of
March 1, 2008. These defaults entitle the lenders under the
senior credit facility, among other things, to declare all amounts
outstanding thereunder, together with accrued and unpaid interest,
to be immediately due and payable. An acceleration under the
senior credit facility would constitute an event of default under
the indenture governing the Notes, entitling the indenture trustee
or the holders of at least 25% of the Notes outstanding to declare
all amounts owing under the Notes to also be immediately due and
payable. In addition, the defaults under the company's senior
credit facility create a default under its interest rate swap
agreement. On June 16, 2008, the company voluntarily terminated
its Swap Agreement. As a result of the early termination, around
$4.0 million in net settlement payments will be payable upon
demand.
The company disclosed that it does not currently have cash
available to satisfy these obligations if they were to be
accelerated or payment demanded.
As a result of these defaults, the company is currently prohibited
from borrowing under its revolving credit facility.
On July 15, 2008, the company is required to make an interest
payment on the Notes of $6.2 million, and unless the company can
restructure its existing senior debt or secure additional
financing prior to that time, the company may not have sufficient
liquidity to make that payment and thereafter continue to satisfy
its liquidity and working capital requirements. In light of
current market conditions for debt financing, the company's
current financial condition and lack of significant unencumbered
assets, the company may not be able to secure additional financing
and restructure its current debt.
If the company is unable to secure additional financing or
restructure its current debt, it warned that it may be required to
file for bankruptcy protection.
Also as a result of these defaults, the company said it may be
unable to renew its letters of credit in place to its insurance
carrier for the underwriting of certain performance bonds and to
its insurance carriers for outstanding and potential workers'
compensation and general liability claims. In order for the
company to continue its participation in the USDA Commodity
Program, which directly constitutes about 8% of the company's
annual net revenues, on or before July 1, 2008, the company must
amend or provide a new letter of credit to secure a performance
bond required by the USDA. The company may be required to fund
all or a substantial portion of the required letter of credit and
may not be able to do so as a result of its current financial
situation and its inability to borrow additional funds under its
credit facility. The failure to participate in the USDA Commodity
Program may also negatively impact sales to customers who purchase
commercial products in addition to those that are part of the USDA
Commodity Program.
The company's current financial condition and its resulting
uncertainty have been disruptive to the business.
Management of the company has devoted substantial time and
attention to addressing the situation, reducing its focus on
operating the business. In addition, the company's current
financial condition and its resulting uncertainty may also cause
employee attrition, vendors and suppliers to terminate their
relationship with the company or to tighten credit; and could
result in the loss of existing customers or inability to attract
new customers. The company said that any of these developments
could have a material adverse effect on the company's business,
operating results, financial condition and liquidity.
Subsequent Events
Sale of Assets
On May 2, 2008, the company entered into an agreement to sell its
administrative offices, in addition to the furniture and fixtures
therein, located in Rome, Georgia for approximately $1.0 million.
Payment was received by the company on May 13, 2008, all of which
was then paid to its senior lenders.
The sale closed on May 12, 2008. The administrative offices, and
the furniture and fixtures, are classified as assets held-for-sale
in the consolidated balance sheet as of March 1, 2008.
Fire at Hamilton Plant
On July 14, 2007, the company's meat processing plant located in
Hamilton, Ala., was destroyed by a fire and was deemed to be a
complete loss. During fiscal 2008, the company received a
$1.0 million advance on the property portion of the insurance
claim. Subsequent to fiscal 2008 year-end, the company received a
second advance of $1.0 million on the property portion of the
insurance claim and an initial advance of $1.0 million on the
business interruption portion of the claim.
Swap
Effective Oct. 29, 2007, and Aug. 16, 2007, the company entered
into the Swaps to reduce its exposure to interest rate
fluctuations on portions of its term loan with the objective of
minimizing the impact of interest rate fluctuations and
stabilizing cash flows.
The Swaps have notional amounts of $25.0 million and $175.0
million with fixed rates of 4.52% and 5.14%, respectively, thereby
effectively converting portions of the floating rate term debt to
fixed rate obligations of 8.52% and 9.14%, respectively, as of
March 1, 2008 (4.52% and 5.14% plus applicable margin). The Oct.
29, 2007, swap will expire on May 18, 2009. A portion of the Aug.
16, 2007, swap with a notional amount of $25.0 million will expire
on Aug. 16, 2008, with the remaining $150.0 million expiring on
Aug. 16, 2009. The difference between the three-month LIBOR rate
and respective swap rates will be settled in cash on the interest
payment dates. The change in the fair value of the Swaps of
around $6.9 million is reflected as an increase in interest
expense in fiscal 2008.
As of March 1, 2008, the company has recorded a liability totaling
$6.9 million to recognize the Swaps at fair value.
Financials
The company posted a net loss of $241,605,000 on net revenues of
$643,270,000 for the year ended March 1, 2008, as compared with a
net income of $1,800,000 on total revenues of $487,843,000 in the
prior year.
At March 1, 2008, the company's balance sheet showed $349,458,000
in total assets and $441,289,000 in total liabilities, resulting
in $91,831,000 stockholders' deficit.
The company's consolidated balance sheet at March 1, 2008, also
showed strained liquidity with $146,487,000 in total current
assets available to pay $421,368,000 in total current liabilities.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2e2f
About Pierre Foods
Headquartered in Cincinnati, Ohio, Pierre Foods Inc. --
http://www.pierrefoods.com/-- manufactures and markets high-
quality, differentiated processed food solutions, focusing on pre-
cooked and ready-to-cook protein products, compartmentalized
meals, and hand-held convenience sandwiches.
PINNACLE AUTO: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Pinnacle Auto Wholesale, Inc.
180 Carter Hentry Drive
Fairfield, CT 06824
Bankruptcy Case No.: 08-50519
Description: Moises Espanol, president, filed the petition on the
Debtor's behalf.
Chapter 11 Petition Date: June 17, 2008
Court: District of Connecticut (Bridgeport)
Debtor's Counsel: Scott M. Charmoy, Esq.
(scottcharmoy@charmoy.com)
Charmoy & Charmoy
1261 Post Road
P.O. Box 804
Fairfield, CT 06824
Tel: (203) 255-8100
Fax: 203-255-8101
Estimated Assets: $0 to $50,000
Estimated Debts: $1 million to $10 million
A list of the Debtor's unsecured creditors is available for free
at http://bankrupt.com/misc/ctb-08-50519-cred.pdf
PLASTECH ENGINEERED: JCI Credit Offers $176MM for Interiors Biz.
----------------------------------------------------------------
An unit of Johnson Controls Inc. has been selected as the
stalking-horse bidder for the interiors and underhood business of
Plastech Engineered Products Inc. and its debtor-affiliates.
Absent higher bids at the auction, the Debtors will sell the
Stamping Business to JCIM, LLC, at terms provided for in their
Asset Purchase Agreement.
The salient terms of the APA signed by JCIM; the Debtors; and
Goldman Sachs Credit Partners LP, as agent for First Lien Term
Loan Lenders, are:
Purchased Assets. The Debtors will convey to JCIM, as
buyer, and assignee of the First Lien
Lenders' rights to their collateral, all
properties, assets and rights relating to
or that are used by the Debtors or
related to the Interiors Business. The
Debtors will also assign to JCIM:
-- their 51% equity interest, including
all rights and privileges related or
incident thereto, in TrimQuest, LLC.
-- all tangible personal property and
inventories located at the Shreveport
and Kenton plants, and the Bryan,
Caro, Croswell, Fayette, Franklin
(Ninth Avenue), Franklin (Alpha
Drive), Owensboro, and Talon Court
warehouse facilities.
Excluded Assets. Excluded assets include shares of capital
stock or other equity interest by
Plastech or its subsidiaries other than
TrimQuest.
Assumed
Liabilities. JCIM will assume certain liabilities,
including, (a) product-related warranties
or guarantees with respect to products
sold from the Stamping Business on or
after closing, (b) statutory liens for
taxes (c) liabilities that may arise
under the WARN Act as a result of plant
closings or mass layoff, or terminations
by JCIM, (d) all liabilities attributable
to the performance of assumed contracts,
and liabilities with respect to claims
arising out of ownership of Assets or
transferred employees, and (e) all
liabilities of Plastech related to the
Assets for mechanics', carriers',
workers', repairers' and similar Liens
that are senior to and have priority over
Liens securing the First Lien Term Loan
Indebtedness and the Second Lien Term
Loan Indebtedness.
Purchase Price. The consideration for the Assets will be:
* Inventories. Cash amount equal to the
value of the inventories.
* TrimQuest membership and certain fixed
collateral. Cash in the amount of
$17,000,000
* Interiors Business. In the form of:
-- certain First Lien Term Loan
Indebtedness in the aggregate
principal amount of $160,000,000 to
be surrendered by the First Lien
Collateral Agent, and
-- JCIM's assumption of the Assumed
Liabilities.
Transferred
Employees: JCIM will offer employment to each CB
Employee, i.e., certain identified
employees who are covered by collective
bargaining agreements or other labor
contracts, including the National
Agreement between Plastech Engineered
Products, Inc., and the International
Union, United Automobile, Aerospace and
and Agricultural Implement Workers of
America.
JCIM will also offer employment to
certain of the Debtors' employees in (i)
their corporate facilities located at
1600 Harmon Road, Auburn Hills, Michigan;
2500 Executive Hills Boulevard, Auburn
Hills, Michigan; 22000 Garrison,
Dearborn, Michigan; and 835 Mason,
Dearborn, Michigan; and (ii) their
facility at 600 South Washington,
Holland, Michigan, 49423. The Debtors,
will, however, will terminate certain
employees at the Corporate Facilities on
or before June 30, 2008.
Assumed Contracts: Plastech will assume and assign to JCIM
certain contracts and leases, including
the Plastic Component Sourcing Agreement
between JCI and Plastech dated October 5,
2001, and related agreements, including
the Operating Agreement dated April 1,
2007, between JCI and Plastech.
Conditions
to Closing. Conditions include (i) neither Ford Motor
Company nor General Motors Corporation
will have terminated its existing
agreements with the Debtors prior to
effectiveness, (ii) the Court's approval
of the First Lien Lenders' credit bid,
and (iii) the consummation of the pending
settlement agreement between the First
Lien Term Lender Parties and the Official
Committee of Unsecured Creditors,
including, without limitation, certain 11
U.S.C. Section 506(c) waivers and other
protections to the First Lien Lender
Parties.
Termination Events: JCIM may terminate the APA if conditions
to closing are not satisfied or waived by
June 30, 2008.
The Debtors will designate to JCIM assets and leases with respect
to these leased properties:
Facility Type Address City, State
------------- ------- -----------
Warehouse 720 East Perry Bryan, OH
Warehouse 342 Ninth Avenue Franklin, TN
Warehouse 116 Alpha Drive Franklin, TN
Tech Center 1600 Harmon Road Auburn Hills, MI
Plant(PHC) 1111 South Colling Caro, MI
Warehouse 436 Green Street, Caro, MI
Warehouse 1065 East Caro Rd. Caro, MI
Plant 2924 East 126th Street Chicago, IL
Plant 100 Seltzer Road Croswell, MI
Warehouse 381 Melvin Street Croswell, MI,
Corporate 835 Mason Avenue Dearborn, MI,
Warehouse 240 East Industrial Parkway Fayette, OH
Plant 2200 Revard Road Monroe, MI
Plant 1833 Frenchtown Center Monroe, MI
Plant 2860 Dormax Street, N.W. Grandville, MI
Plant(PHC) 4683 50th Street, S.E. Kentwood, MI
Plant 7009 W. Mount Hope Lansing, MI
Plant 8161 National Turnpike Louisville, KY
Plant 71111 Trade Port Drive Louisville, KY
Plant 3900 West Military McAllen, TX
Plant 6900 Jefferson Metrop McCalla, AL
Plant 838 Industrial Drive Owensboro, KY
Plant 518 Industrial Drive Owensboro, KY
Warehouse 719 Foust Street Owensboro, KY
Plant 2233 Petit Street Port Huron, MI
Plant(PHC) 9800 Inkster Road Romulus, MI
Closed Plant 9630 Interport Dr. Shreveport, LA
Plant 4741 Talon Court Kentwood, MI
Warehouse 5050 Kendrick Street S.E. Grand Rapids, MI
Warehouse 5325 Dixie Hwy. Waterford, MI
Corporate 2500 Executive Hill Auburn Hills, MI
Corporate 22000 Garrison Rd Dearborn, MI
Properties owned by the Debtors that are part of JCIM sale are:
Facility Type Address City, State
------------- ------- -----------
Plant 918 South Union Street Bryan, OH
Plant 5020 White Lake Road Clarkston, MI
Plant 705 E. Van Riper Road Fowlerville, MI
Plant 309 Eddy Lane Franklin, TN
Plant 1502 Old US 23, P.O. Box Hartland, MI
Plant 300 S. Progress Drive, East Kendallville, IN
Plant 535 West Linfoot Wauseon, OH
Properties not included in the sale that are either leased or
owned by the Debtors are:
Facility Type Address Leased or Owned?
------------- ------- ----------------
Warehouse 17900 Ryan Rd., Detroit, MI Leased
Warehouse 4890 E. Nevada, Detroit, MI Leased
Closed Plant 515 Poplar St., Kenton, TN Owned
A copy of the JCI APA is available for free at:
http://researcharchives.com/t/s?2e3c
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
PLASTECH ENGINEERED: Names Stalking-Horse Bidders for Main Assets
-----------------------------------------------------------------
Plastech Engineered Products Inc. and its debtor-affiliates have
identified the stalking-horse bidders for their main business
units:
Business Unit Stalking Horse Bidder
------------- ---------------------
Automotive stamping JD Norman Ohio Holdings, Inc.
manufacturing business
Interior and Johnson Controls, Inc. unit JCIM
underhood business LLC
Plastic-based Decoma International of America Inc.
automotive exteriors
components business
Goldman Sachs Credit Partners LP, as agent for First Lien Term
Loan Lenders, have supported the bids of JCIM and Decoma by
crediting bidding their liens and interests in the Debtors'
assets.
According to the Debtors' notices, the Stalking Horse Bidders
have (i) satisfied or waived any "due diligence" or financing
contingencies and (ii) submitted a list of executory contracts
and unexpired leases of which they propose to take assignment as
of the closing date of the sale.
In the event the Debtors choose other bids as the highest and
best bids at the auction, the Debtors will pay the corresponding
Stalking Horse Bidder a combined break-up fee and expense
reimbursement in an amount not to exceed 2.5% of the purchase
price proposed by the Stalking Horse Bidder.
Aside from the Exteriors, Interiors, and Stamping Businesses, the
Debtors are also marketing their carpet installation business,
and miscellaneous assets, including:
* 51% equity interest in TrimQuest LLC;
* stock or equity interest in any or all of Plastech's
direct or indirect subsidiaries;
* any of their plants or facilities; and
* any or all of their miscellaneous capital assets.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
PLASTECH ENGINEERED: Wants to Enforce Stay Against H.S. Die
-----------------------------------------------------------
Plastech Engineered Products Inc. and its debtor-affiliates ask
the U.S. Bankruptcy Court for the Eastern District of Michigan to
enforce the automatic stay against H.S. Die Engineering Inc. in
relation to tooling issues.
In connection with their request to sell one or more of their
business units, the Debtors designated Decoma International of
America, Inc., and Goldman Sachs Credit Partners L.P., as
collateral agent for the First Term Loans as the stalking horse
bidder for their Exteriors Business.
An Asset Purchase Agreement is constituted in relation to the
Stalking Horse Agreement on the Debtors' exteriors business.
Decoma has sought to purchase all of the Debtors' right, title
and interest in the tooling exclusively used in the Exteriors
Business, including tooling owned by the Debtors, and the
Debtors' interest, including possessory rights, in tooling owned
by any OEM Customer.
H.S. Die Engineering, Inc., a party in possession of tooling used
in the Debtors' manufacture of component parts for one of their
major customers, General Motors Corporation, refused to ship
related tooling on grounds of unpaid claims for the Tools by the
Debtors.
Pursuant to a Tooling Purchase Order, upon completion of the
Tooling, and final approval -- the PPAP -- by the Debtors, and
General Motors of the initial samples manufactured, H.S. Die will
furnish an invoice to the Debtors, which the Debtors will pay
within 45 days from General Motors' remittance to the Debtors.
H.S. Die alleges it is owed $387,200 for the Tooling.
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, & Flom
LLP, in Wilmington, Delaware, related that the GM Tooling has not
yet gone through PPAP so that it has not been finally approved by
the Debtors or General Motors. Since the Tooling has not yet
received PPAP approval, General Motors has not yet remitted
payment to the Debtors. Accordingly, the Debtors are not yet
obligated to pay H.S. Die.
Although H.S. Die alleges it has completed the GM Tooling, H.S.
Die has refused to surrender possession of the GM Tooling to the
Debtors, Mr. Galardi said. To obtain timely PPAP approval, the
Tooling must be immediately released to the Debtors. Pursuant to
certain production purchase orders, PPAP status is required by
August 4, 2008 to complete the Debtors' validation testing and
begin producing component parts.
H.S. Die demanded, as prerequisite to compliance under the
Purchase Order, the payment of approximately $330,000 for alleged
liens on tools shipped to the Debtors prepetition, including
$691,000 for alleged cancellation charges on another program.
Mr. Galardi asserted the component parts are essential to General
Motors' manufacturing and assembly operations, shortage of which
may disrupt General Motors' production. An alternate supply of
the component parts is not readily available, he relates, given
the unique tooling used in their manufacture.
Thus, the Debtors asked the Court to enforce the automatic stay
pursuant to Section 362 of the U.S. Bankruptcy Code against H.S.
Die for refusing to ship the GM Tooling to the Debtors, and
require H.S. Die to release the Tooling to the Debtors in
accordance with their Contracts.
The Court approved the Debtors' request to shorten notice for a
hearing on June 17, 2008, at 4:00 p.m. (Eastern).
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
PNA INTERMEDIATE: Reliance Steel Deal Cues Moody's Rating Review
----------------------------------------------------------------
Moody's Investors Service placed PNA Intermediate Holding
Corporation's ratings (B2 corporate family rating) and PNA Group
Inc's B3 guaranteed senior global notes rating under review for
possible upgrade. PNA is 100% owned by PNA Intermediate Holding
Corporation.
The review was prompted by the announcement that Reliance Steel
and Aluminum Co. was acquiring PNA Group Holding Corporation (the
parent of PNA Intermediate Holding) in a transaction valued at
approximately $1.1 billion, including the refinancing of debt at
PNA and PNA Intermediate Holding Corporation.
The transaction is expected to be financed through borrowings
under Reliance's revolving credit facility and a $750 million
issuance in a combination of debt and equity. The closing of the
transaction is a subject to regulatory approvals and other
conditions.
The review for possible upgrade reflects strategic benefits PNA
would be able to realize as part of a larger organization, as well
as the potential for an improved debt position given that the
existing debt will be refinanced. Moody's review will focus on
PNA's strategic fit within a larger organization as well as the
company's capital structure.
On Review for Possible Upgrade:
Issuer: PNA Group, Inc.
-- B3 Senior Unsecured Regular Bond/Debenture, LGD 4, 67%
Issuer: PNA Intermediate Holding Corporation
-- B2 Probability of Default Rating,
-- B2 Corporate Family Rating,
-- Caa1 Senior Unsecured Regular Bond/Debenture, LGD 6, 92%
Outlook Actions:
Issuer: PNA Group, Inc.
-- Outlook, Changed To Rating Under Review From Stable
Issuer: PNA Intermediate Holding Corporation
-- Outlook, Changed To Rating Under Review From Stable
PNA Group, Inc., headquartered in Atlanta, is a relatively large
metal distributor that operates 23 steel service centers
throughout the U.S. and manages five joint ventures, which operate
a total of seven service centers. In the LTM period 3/31/08 PNA
generated approximately $1.7 billion in revenues. PNA is
100% owned by PNA Intermediate Holding Corporation
Reliance Steel and Aluminum, headquartered in Los Angeles,
California, is the largest metal distributor in the United States,
operating more than 180 service centers throughout the U.S. and
Belgium, Canada, China, South Korea, and the UK. In the LTM
period 3/31/08 Reliance generated approximately $7.3 billion in
revenues.
PNA INTERMEDIATE: $1.1BB Reliance Steel Deal Cues S&P's Pos. Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit ratings on Atlanta, Georgia-based PNA Intermediate Holding
Corp. and its wholly owned subsidiary PNA Group Inc. on
CreditWatch with positive implications.
"The CreditWatch listing follows the recent announcement that
Reliance Steel & Aluminum Co. will acquire PNA for approximately
$1.1 billion," said Standard & Poor's credit analyst Sherwin
Brandford.
The sale is expected to close within 60 days, subject to the
satisfaction of certain conditions, including obtaining required
regulatory approvals.
In resolving the CreditWatch, S&P will continue to monitor
developments associated with the potential acquisition of the
company. S&P expect a portion of the proceeds from the sale to be
used to repay all of PNA's debt outstanding. Upon completion of
the sale, S&P would withdraw its ratings on PNA.
PNC COMMERCIAL: Fitch Affirms Junk Rating on $6.8MM Class M Notes
-----------------------------------------------------------------
Fitch Ratings upgraded these classes of notes from PNC Commercial
Mortgage Acceptance Corp.'s commercial mortgage pass-through
certificates, series 2000-C1:
-- $12 million class F to 'AA+' from 'AA';
-- $12 million class G to 'A+' from 'A'.
In addition, Fitch has affirmed these classes:
-- $320.6 million class A-2 at 'AAA';
-- Interest-only class X at 'AAA';
-- $34 million class B at 'AAA';
-- $34 million class C at 'AAA';
-- $10 million class D at 'AAA';
-- $26 million class E at 'AAA';
-- $18 million class H at 'BBB';
-- $8 million class J at 'BBB-';
-- $7 million class K at 'BB';
-- $8 million class L at 'B';
-- $6.8 million class M at 'CC/DR4'.
Class A-1 certificates have been paid in full. The balance of the
class N and class O certificates have been reduced to zero due to
realized losses.
The upgrades are due to increased credit enhancement due to
paydown and defeasance since the last Fitch rating action.
Thirty-eight loans (36.3%) are fully defeased, including six of
the top ten loans (16.7%). As of the May 2008 distribution date,
the principal balance has been reduced 38% to $496.7 million from
$801 million at issuance.
There are currently three assets (0.3%) in special servicing.
Losses are not expected on the specially serviced loans at this
time.
Of the pool, thirteen loans (4.8%) mature in 2008, fifty-one loans
(34.4%) mature in 2009 and sixty-four loan (51%) mature in 2010.
The weighted averaged coupon of these maturing loans is 6.93%,
8.42% and 8.74%, respectively.
The largest loan in the pool (4.4%) is defeased. The largest non-
defeased loan (3.4%) is collateralized by an industrial/ warehouse
property located in Auburn Hills, Michigan. The year to date debt
service coverage ratio as of September 2007 was 1.08x. The
property is occupied by one tenant, whose lease renewed in 2006,
expires after the loan term.
PTS INC: March 31 Balance Sheet Upside-Down by $387,303
-------------------------------------------------------
PTS Inc.'s consolidated balance sheet at March 31, 2008, showed
$1,547,816 in total assets, $1,761,755 in total liabilities, and
$173,364 in minority interest, resulting in a $387,303 total
stockholders' deficit.
At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $411,961 in total current assets
available to pay $1,302,832 in total current liabilities.
The company reported a net loss of $471,299 on sales of $280,725
for the first quarter ended March 31, 2008, compared with a net
loss of $599,579 on sales of $292,323 in the same period last
year.
The company said the decrease in revenues was due to bad weather
conditions that occurred during the current period, which reduced
the number of construction sites available for inspection.
Going Concern Doubt
Lynda R. Keeton CPA, LLC, in Las Vegas, expressed substantial
doubt about PTS Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 31, 2007. The auditing firm pointed to the
company's limited operations and continued net losses.
About PTS Inc.
Headquartered in Las Vegas, Nevada, PTS Inc. (OTC BB: PTSH)
-- http://www.ptspi.com/-- is a holding company with two
operating subsidiaries.
GloveBox Inc. which owns the rights to patented, revolutionary
Glove Box(TM), the only product that offers contamination
reduction through automated glove dispensing. The Glove Box(TM)
system is a free-standing dispenser of disposable latex gloves.
Disability Access Consultants Inc. which conducts facility
inspections, policy review and program analysis in addition to
comprehensive continuums of other compliance services.
PUREDEPTH INC: April 30 Balance Sheet Upside-Down by $2,127,771
---------------------------------------------------------------
PureDepth Inc.'s consolidated balance sheet at April 30, 2008,
showed $4,650,041 in total assets and $6,777,812 in total
liabilities, resulting in a $2,127,771 total stockholders'
deficit.
At April 30, 2008, the company's consolidated balance sheet also
showed strained liquidity with $1,681,737 in total current assets
available to pay $4,627,938 in total current liabilities.
The company reported a net loss of $1,544,069 on total revenue of
$297,552 for the first quarter ended April 30, 2008, compared with
a net loss of $1,978,243 on total revenue of $231,598 in the
corresponding period ended April 30, 2007.
Full-text copies of the company's consolidated financial
statements for the quarter ended April 30, 2008, are available for
free at http://researcharchives.com/t/s?2e33
Going Concern Doubt
Stonefield Josephson Inc., in San Francisco, exressed substantial
doubt about PureDepth Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Jan. 31, 2008. The auditor pointed
to the company's significant operating losses.
About PureDepth Inc.
Headquartered in Redwood City, Calif., PureDepth Inc. (OTC BB:
PDEP) -- http://www.puredepth.com/-- and its subsidiaries engage
in the development, marketing, licensing, and support of Multi-
Layer Display (MLD) technology and related products and services.
The company's MLD technology provides a method of displaying
multiple windows on which different data or images can be
overlapped displaying 3D content.
Its technology has applications in location-based entertainment
devices; computer monitors; public information display systems;
mobile devices; flat panel televisions; and automotive, defense,
and other vertical markets. The company also manufactures
prototype MLD-enabled display devices. PureDepth has operations
in the United States and New Zealand.
QUEBECOR WORLD: Court Approves EUR133 Mil. Sale of European Biz
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a purchase agreement between Quebecor World Inc. and its
debtor-affiliates and Hombergh Holdings BV's affiliate, Vadeho
II, B.V., under which HHBV will pay EUR133,000,000, for the
Debtors' European assets, and assume certain liabilities, ABI
World relates.
The sale agreement requires Vadeho to acquire all of the issued
and outstanding shares of non-debtor Quebecor World European
Holding S.A., from QWI; and non-debtor 4434889 Canada Inc.'s
membership interest in QW SPV (USA) LLC. The agreement
contemplates for the assignment of intercompany loans, totaling
EUR515,000,000 as of May 28, 2008, advanced by the Debtors to the
European affiliates to Vadeho.
Specifically, the sale agreement provides that:
(a) Vadeho will pay EUR2,001 for the Shares held in the share
capital of QWEH;
(b) Vadeho will pay EUR68,000,000 for the Intercompany Loans;
(c) Vadeho will reimburse QWI for the full value of any
intercompany advances made by QWI to the European
Operations from the date of the Sale Agreement to the
closing of the transaction;
(d) Vadeho will assume debts totaling EUR61,400,000;
(e) the sale and purchase transaction under the Sale Agreement
is made on an "as-is, where-is" basis and the purchase
price payable by the Purchaser is not subject to any
adjustment; and
(f) certain QWI-related entities will continue to provide
services and supplies to the purchaser at cost until
Dec. 31, 2008.
A full-text copy of the Share Purchase Agreement is available for
free at http://ResearchArchives.com/t/s?2df2
Michael J. Canning, Esq., at Arnold & Porter LLP, in New York,
told the Court that the cash portion of the purchase price
attributable to the intercompany loans was paid into escrow upon
the execution of the sale agreement, with the full amount of the
escrowed balance payable on closing. The purchaser will execute
a subordinated and unsecured, five-year vendor take back note
with a principal value of EUR21,500,000. Interest on the Note is
payable quarterly at a rate of 7% per annum and the principal is
repayable at maturity.
The sale agreement also contemplates that closing of the sale
must occur on the later of June 18, 2008. If closing does not
occur by June 30, 2008, the sale agreement may be terminated.
Bill Glass, a representative of QWI, in an interview with the
Union-network.org, relates that, after approval of the Canadian
Court of the sale of the European Assets, the name "Quebecor"
will no longer be used as the name of the QWI's European
Operations. A new company name will be used instead.
Mr. Canning told the Court that the Debtors will derive an
immediate and direct benefit from the sale of the European
Operations pursuant to the sale agreement.
Ernst & Young, Inc., the Court-appointed monitor of Quebecor
World, Inc., and its affiliates reorganization proceedings under
the Canadian Companies' Creditors Arrangement Act, reported that
since 2004, the European assets showed a steady decline of
EUR289,000,000 or 28% of sales. In 2003, the European assets
reported sales of EUR1,017,000,000 and EBITDA of EUR82,000,000.
In 2007, the European assets reported sales of EUR754,000,000 and
EBITDA of EUR4,000,000.
E&Y said the deteriorating sales resulted from a number of
factors including difficult market conditions and internal
efforts undertaken to rationalize production capacity within the
European Operations.
QWI anticipates that tax losses ranging from $700,000,000 to
$770,000,000 will arise upon completion of the Sale Transaction,
according to E&Y. QWI will pursue an alternative divestiture
process if the Sale Transaction is not completed and has employed
Banc of America Securities Limited as financial advisor to assist
with any divestiture.
If the proposed sale transaction does not occur, Mr. Canning said
the favorable terms provided for under the Sale Agreement may not
be replicated, and the Debtors may forever lose the debt
reduction otherwise available from the disposition of the
European Operations. He noted that based on the most recent cash
flow forecast prepared by the European Assets, the required
funding will exceed the remaining balance of the DIP Funding
Basket by the end of August 2008. The magnitude of the financial
support and the current restriction on QWI in providing funding
beyond the DIP Funding Basket necessitates a quick completion of
a sale.
Committee Supports Sale
The Official Committee of Unsecured Creditors told the
Bankruptcy Court that it does not object to the sale of the
European affiliates as the sale is the "best" available
alternative at this time.
However, based on the information contained in the Debtors'
pleadings and the Committee's analysis of the historical sales
process during the past few weeks, the Committee says it has
grave concerns regarding the Debtors' failure to consummate
previous offers for substantially greater value than the proposed
Europe Sale.
Indeed, David H. Botter, Esq., at Akin Gump Strauss Hauer & Feld
LPP, in New York, pointed out that, based on the Committee's
analysis, it appears as though the Debtors' failure to consummate
several offers for substantially greater value than the proposed
sale may have deprived them and its creditors of hundreds of
millions of dollars of additional value for the European assets.
Accordingly, though the Committee recognized that the proposed
Europe Sale is the only alternative available to preserve the
remaining value of the European assets, the Committee reserves
all of its rights in connection with the process and all prior
sales efforts related to the European assets including its
continuous investigation of the cause of the tremendous
degradation in value of the European assets over the last 12 to
18 months.
If after completion of the investigation the Committee determines
that any claims or causes of action exist in connection with the
degradation of value, the Committee tells the Court that it will
pursue all available remedies against those responsible.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to July 25, 2008. (Quebecor World Bankruptcy
News; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Europe on Feb. 13,
2008 Moody's Investors Service assigned a Ba2 rating to the
$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession. The
related $600 million super priority senior secured term loan
was rated Ba3 (together, the DIP facilities). The RTL's better
asset value coverage relative to the TL accounts for the
ratings' differential.
QUIKSILVER INC: Moody's Reviews Ba3 Ratings for Possible Downgrade
------------------------------------------------------------------
Moody's Investors Service placed Quiksilver, Inc.'s Ba3 Corporate
Family Rating, Ba3 Probability of Default Rating, and Ba3 (LGD 4,
59%) $400 million senior unsecured note rating on review for
possible downgrade. LGD assessments and point estimates are also
subject to change. The company's SGL-3 rating was affirmed.
The review for possible downgrade considers the uncertainty
associated with company's ability to successfully conclude a sale
of its Rossignol ski equipment business. Quiksilver has announced
that the Rossignol ski business, which has incurred significant
operating losses, is for sale and has been accounted for as a
discontinued operation.
While a successful sale of Rossignol could have an immediate
positive impact on Quiksilver's consolidated operating
performance, the amount, timing and terms of any sale remains
uncertain. Failure to sell the business in the near-term term
would likely mean that Quiksilver will not be able to achieve the
credit metrics necessary to maintain its current rating.
Quiksilver's debt-to-EBITDA ratio for the latest 12-month period
ended April 30, 2008 was in the mid 5 times range (treating
Rossignol as a continuing operation). This is considered high for
the rating, and is largely the result of operating losses at
Rossignol which was acquired in July 2005. The company's core
apparel and footwear businesses, which represent a majority of
consolidated revenue, continue to perform well.
Moody's review will focus on the outcome of the sale process for
Rossignol, including the terms and conditions of any potential
sale. Ratings could be lowered if the company is unable to
conclude a sale in the near term.
The affirmation of Quiksilver's SGL-3 Speculative Grade Liquidity
Rating is based on the company's adequate liquidity, represented
by its approximate $91 million in cash and equivalents as of
April 30, 2008 and supplemental liquidity support in the form of a
committed $300 million asset based credit facility. At the same
time, the SGL-3 continues to recognize the company's continued
reliance internationally on short term uncommitted funding
arrangements.
Quiksilver, Inc. is a diversified designer and distributor of
branded apparel and footwear including Quiksilver, Roxy, and DC,
as well as ski and snowboard equipment under the Rossignol brand.
The company reported fiscal-year 2007 total revenue from
continuing operations of approximately $2.05 billion.
RAPID LINK: April 30 Balance Sheet Upside-Down by $1,797,148
------------------------------------------------------------
Rapid Link Inc.'s consolidated balance sheet at April 30, 2008,
showed $8,898,730 in total assets and $10,695,878 in total
liabilities, resulting in a $1,797,148 total stockholders'
deficit.
At April 30, 2008, the company's consolidated balance sheet also
showed strained liquidity with $1,776,544 in total current assets
available to pay $3,149,603 in total current liabilities.
The company reported net earnings of $442,164 on revenues of
$3,450,350 for the second quarter ended April 30, 2008, compared
with a net loss of $637,297 on revenues of $3,720,098 in the same
period ended April 30, 2007.
The decrease in revenues is primarily attributable retail revenue
component, which decreased $240,000.
Effective April 30, 2008, the company entered into a purchase
agreement to sell Canmax Retail Systems, a former operating
subsidiary of the company to a third party for a nominal fee. The
sale of Canmax resulted in a gain of $1,062,000.
Full-text copies of the company's consolidated financial
statements for the quarter ended April 30, 2008, are available for
free at http://researcharchives.com/t/s?2e39
Going Concern Doubt
As reported in the Troubled Company Reporter on Jan 29, 2008, KBA
Group LLP, in Dallas, expressed substantial doubt about Rapid
Link Inc.'s ability to continue as a going concern after auditing
the company's consolidated financial statements for the years
ended Oct. 31, 2007, and 2006. The auditing firm pointed to the
company's recurring losses from continuing operations during each
of the last two fiscal years and working capital and stockholders'
deficits.
About Rapid Link
Headquartered in Omaha, Nebraska, Rapid Link Inc. (OTC BB: RPID)
-- http://www.rapidlink.com/-- is a facilities-based, diversified
communication services company providing various forms of voice,
internet and data services to wholesale and retail customers
throughout the world.
During the second quarter of fiscal 2008, the company acquired One
Ring Networks, which operates one of the largest hybrid fiber
optic and fixed wireless networks in the United States, and is one
of the few carriers offering end-to-end communications and
networking services.
REFCO INC: Refco Commodity's Plan Satisfies Section 1129(d)
-----------------------------------------------------------
On June 12, 2008, Refco Commodity Management, Inc., stepped Judge
Robert D. of the U.S. Bankruptcy Court for the Southern District
of New York Drain through the requirements for confirmation of its
Chapter 11 Plan of Liquidation pursuant to Section 1129(a) of the
Bankruptcy Code:
(1) The Plan complies with Section 1129(a)(1) because the
various Classes of Claims and Interests are classified
based on valid business, factual and legal reasons, and
those Classes do not unfairly discriminate between
holders of Claims and Interests.
(2) The Plan complies with Section 1129(a)(2) because the
Debtor has complied with all of the provisions of the
Bankruptcy Code and the Bankruptcy Rules governing notice
and related matters in connection with the Plan, the
Disclosure Statement, and all other matters considered by
the Bankruptcy Court in their cases.
(3) The Plan complies with Section 1129(a)(3) because the Plan
was proposed in good faith and not by any means forbidden
by law, with legitimate and honest purposes.
(4) The Plan complies with Section 1129(a)(4) because payments
made or to be made by the Debtor to Professionals for
services or costs and expenses incurred have been approved
by, or are subject to the approval of, the Bankruptcy
Court.
(5) Section 1129(a)(5) is not applicable to the Plan since it
is a plan of liquidation and there will be no Directors,
Officers or Insiders going forward.
(6) Section 1129(a)(6) is inapplicable because RCMI's
businesses will not involve rates established or approved
by, or otherwise subject to, any governmental regulatory
commission.
(7) The Plan complies with the requirements of Section
1129(a)(7).
(8) The Plan complies with the requirements of Section
1129(a)(8) because Classes 1, 2, 3, 4 and 5 are impaired
under the Plan, and they are conclusively presumed to
have accepted the Plan, pursuant to the terms of the
already effective Chapter 11 Plan of Refco, Inc.
(9) The treatment of Administrative Claims, Priority Tax
Claims and Non-Tax Priority Claims pursuant the Plan
satisfies the requirements of Sections 1129(a)(9).
(10) The Plan satisfies Section 1129(a)(10) because the
Impaired Classes are conclusively presumed to have
accepted the Plan.
(11) To the extent applicable to a plan of liquidation, Section
1129(a)(11) is not applicable to the Plan.
(12) The Plan complies with the requirements of Section
1129(a)(12) because all the fees payable under Section
1930 of the Judiciary Code have been paid or will be paid
on the Effective Date of the Plan.
(13) Section 1129(a)(13) is satisfied since all retiree
benefits will be treated as executory contracts subject to
rejection in accordance with the Plan, with all Claims for
rejection damages to be paid in full.
(14) Section 1129(a)(14), which addresses domestic support
obligations, does not apply to the Debtor.
(15) Section 1129(a)(15), which concerns individual debtors,
does not apply to the Debtor.
(16) The Plan complies with Section 1129(a)(16) because the
Confirmation Order will provide that any transfers of
property contemplated by the Plan would be made in
accordance with any applicable non-bankruptcy law.
The Court finds that the Plan satisfies the requirements of
Section 1129(d) as its purpose is not the avoidance of taxes or
the avoidance of the requirements of Section 5 of the Securities
Act of 1933, and no governmental unit has requested that the
Court deny Plan confirmation on that basis.
A full-text copy of the RCMI Plan Confirmation Order is available
for free at:
http://bankrupt.com/misc/RCMIConfirmationOrder.pdf
Headquartered 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 has operations in Bermuda.
The company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$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 Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
REFCO INC: Court Approves $1.25MM Settlement with Multi-Bank
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the Settlement Agreement between Marc S. Kirschner, the
RCM Plan Administrator, Albert Togut, the Refco, LLC Chapter 7
Trustee, Refco Securities LLC, and Multi-bank Securities, Inc.
The Settlement Agreement resolves (i) the adversary proceeding
commenced by the RCM Administrator against Multi-Bank; and (ii) a
Financial Industry Regulatory Authority Arbitration proceeding
against RSL.
Multi-Bank agreed to pay $1,250,000 to the RCM Plan
Administrator, and the RCM Administrator will dismiss the
Adversary Proceeding against Multi-Bank.
Headquartered 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 has operations in Bermuda.
The company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$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 Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
REFCO INC: Refco LLC Ch. 7 Trustee Won't Dispute Goodman Claim
--------------------------------------------------------------
In response to Richard M. Goodman's motion for preclusion, Albert
Togut, the Chapter 7 Trustee for Refco LLC's estate, says that he
will not seek to introduce evidence at trial that the net
liquidation value of Charles Mady's account at Lind-Waldock &
Company exceeded $5,000,000.
According to the Chapter 7 Trustee, during fact discovery he did
not become aware of any documents indicating that the Account's
balance exceeded $5,000,000. However, because Mr. Mady's daily
account statements showed numerous intraday transactions, and end
of day balances in the $3,500,000 to $4,000,000 range, it was
necessary to perform analyses, in order to determine whether the
intraday balance of Mr. Mady's account reached $5,000,000. The
Chapter 7 Trustee's conclusion was that it was unlikely that the
net liquidation value of the Account exceeded $5,000,000.
The Chapter 7 Trustee points out that his counsel has
consistently and repeatedly advised Mr. Goodman's counsel of the
his position. He states that he will not contend at trial, or
introduce evidence, that the net liquidation value of Mr. Mady's
account exceeded $5,000,000.
With respect to Mr. Goodman's motion for sanctions on the belated
production of documents, the Chapter 7 Trustee says that the two
documents at issue are:
1. a Refco, Inc. Compliance Manual -- Account Executives and
Guaranteed IBs, dated September 1, 2000; and
2. four additional sample pages of contact logs relating to
accounts other than Mr. Mady's Account.
The Contact Logs were produced in response to Mr. Goodman's
counsel's request for other sample pages of contact logs.
According to the Chapter 7 Trustee, his counsel did not know of
the existence of the Refco Manual until May 2008, since it had
been in the possession of MF Global, Inc. He asserts that MF
Global had advised that it could not locate any Refco compliance
manuals from the relevant time frame. The Chapter 7 Trustee's
counsel produced those to Mr. Goodman's counsel as soon as they
became available.
The Chapter 7 Trustee contends that the Sanctions Motion violates
Rule 7007-1 of the Local Rules of Civil Procedure, since
Mr. Goodman neither requested an informal conference with the
Court, nor made a good-faith effort to resolve the alleged issues
by agreement. Thus, the Sanctions Motion is subject to being
stricken.
More importantly, Chapter 7 Trustee argues, the Sanctions Motion
is baseless and without merit. The Chapter 7 Trustee requests
the Court to deny the Sanctions Motion in its entirety.
Headquartered 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 has operations in Bermuda.
The company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$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 Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
REFCO INC: Phillip Bennett Seeks Leniency from Life Sentence
------------------------------------------------------------
Phillip R. Bennett, former chief executive officer, chairman, and
controlling shareholder of Refco Inc., asked Judge Naomi R.
Buchwald of U.S. District Court for the Southern District of New
York for a sentence that will be "substantially below the life
sentence" required by federal guidelines, David Glovin of
Bloomberg News reported.
Mr. Bennett, whose sentencing is scheduled for July 3, 2008,
faces life imprisonment after pleading guilty to a 20-count
indictment including bank fraud, money laundering, and other
crimes, in connection with a $2,400,000,000 fraud that deceived
banks, auditors and investors.
Prosecutors had asked Judge Buchwald to impose "an appropriately
stiff term of imprisonment," stating that federal sentencing
guidelines call for the statutory maximum sentence of 315 years
for Bennett's crimes.
According to his lawyers, Mr. Bennett has taken responsibility
for his crimes. He has offered to cooperate with prosecutors and
helped Refco's bankruptcy trustee recover funds for investors,
Mr. Glovin stated.
Gary Naftalis, Esq., counsel for Mr. Bennett, wrote in a Court-
filed brief that a life sentence would be "nothing short of
'barbarity.'" According to Bloomberg, Mr. Naftalis stated at
least six reasons for a leniency towards Mr. Bennett. He pointed
out that Mr. Bennett used hundreds of millions of dollars to pay
down Refco's debt, and worked to save it from bankruptcy long
before the fraud was uncovered. He noted that the prosecutors
have rejected Mr. Bennett's offer of assistance.
"Mr. Bennett has not shirked responsibility," Mr. Naftalis said,
but "was trying to save the company, he was not stealing, and he
did not intend for anyone to lose money."
However, according to Assistant U.S. Attorneys Neil Barofsky,
Esq., and Christopher Garcia, Esq., Mr. Bennett "stood on top of
a conspiracy of historic proportions, defrauding his victims of
billions of dollars based on a series of lies." They said
Mr. Bennett defrauded victims from all walks of life, including
his own secretary, who lost a $5,000 investment in Refco, to make
himself a billionaire.
"Bennett was a charlatan nonpareil, and he deployed his
considerable charm in the perpetuation of a massive, eight-year
long fraud," the Assistant U.S. Attorneys maintained.
Headquartered 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 has operations in Bermuda.
The company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$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 Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
REFCO INC: Trial of Ex-Lawyer Joseph Collins Set April 2009
-----------------------------------------------------------
Judge Leonard Sand of the U.S. District Court for the Southern
District of New York has scheduled the jury trial of Joseph P.
Collins, Esq., a partner at Mayer, Brown, Rowe & Maw LLP, to
begin on April 6, 2009, Martha Graybow of Reuters reported.
Federal prosecutors had sought to commence the trial in November,
but the defense attorneys said they needed more time to review
the thousands of documents.
Mr. Collins, Refco, Inc.'s former lawyer, has been accused with
conspiracy and securities fraud for his involvement in a scheme
concealing Refco's financial condition in connection with its
bankruptcy, Ms. Graybow said. He allegedly helped hide Refco's
losses by drafting loan documents, which temporarily transferred
the losses off the company's books. He pleaded not guilty to the
charges.
"This is as complicated a criminal matter, your honor, as I have
ever seen," William Schwartz, Esq., for the defense, told the
Court. According to Ms. Graybow, the case is unusual because
outside lawyers rarely face criminal charges in big financial
fraud cases.
Mr. Collins is on leave while the charges are pending,
Ms. Graybow noted. The trial is expected to last for four to six
weeks.
Headquartered 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 has operations in Bermuda.
The company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$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 Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
RITE AID: Fitch Affirms 'B-' Issuer Default Rating
--------------------------------------------------
Fitch Ratings has taken rating actions on Rite Aid Corporation.
These ratings reflect Rite Aid's proposed refinancing activity and
new debt structure.
These ratings have been affirmed:
-- Issuer Default Rating 'B-';
-- $1.75 billion bank credit facility 'BB-/RR1';
-- Term loans 'BB-/RR1'; and
-- Second lien senior secured notes 'BB-/RR1'.
Fitch has assigned ratings to these proposed financings:
-- $350 million secured term loan due 2014 'BB-/RR1'; and
-- $425 million second lien senior secured notes due 2016
'BB-/RR1'.
In addition, Fitch has downgraded these ratings:
-- Guaranteed senior unsecured notes to 'CCC/RR6' from
'CCC+/RR5'; and
-- Non-guaranteed senior unsecured notes to 'CCC-/RR5' from
'CCC'/RR6'.
The Rating Outlook is Stable.
The proceeds of the new term loan and secured notes, which total
$775 million, will be used to fund Rite Aid's tender offers on its
$360 million 8.125% senior secured notes due 2010, $200 million
7.5% senior secured notes due 2015 and $150 million 9.25% senior
unsecured notes due 2013. Post these transactions and the May
2008 convertible notes offering, proceeds of which will be used to
refinance the 6.125% senior unsecured notes due 2008, total debt
will remain relatively flat at $6.1 billion. However, Rite Aid's
debt profile will have a greater amount of secured debt which
reduces the recovery prospects on the unsecured debt. As a
result, the unsecured notes have been downgraded as outlined
above.
The ratings on Rite Aid reflect its strong market share within the
drug retailing sector, management's efforts to improve the
productivity of its store base, the company's adequate liquidity
and active management of debt, as well as the benefits from
leveraging a larger store base. The ratings consider the risk
associated with integrating and improving operations at the
acquired Brooks and Eckerd stores; the company's high leverage and
limited capital for investment; as well as operating statistics
that trail those of its competitors.
Rite Aid is the third largest drugstore chain in the U.S.,
operating approximately 5,000 stores in 31 states and D.C. The
June 2007 acquisition of over 1,800 Brooks/Eckerd stores
solidified the company's position as the leading drugstore
retailer in the Eastern U.S., providing it with significant
operating leverage in this region. Rite Aid enjoys a top two
market position in approximately 67% of the eastern metropolitan
markets and a top three market position in 73% of the top 233
markets in which it operates.
Since current management assumed control in 1999, the company has
improved store operations and closed unproductive stores leading
to strong front-end sales growth. As a result, operating EBITDA
increased from below $200 million in fiscal year 2000 to over
$600 million in FY2007 and over $825 million in FY2008 (including
nine months of acquired operations).
However, Rite Aid's operating metrics significantly lag those of
its largest competitors, CVS Caremark and Walgreen. This is
particularly evident on the prescription side of the business
which accounts for 65%-70% of retail revenues. Average weekly
prescriptions per store for Rite Aid has been flat at around 1,150
versus Walgreen at 1,800 and CVS Caremark at 1,625 in their most
current fiscal years. Rite Aid has been challenged in improving
its pharmacy comparable store sales as it has been capital
constrained relative to its major peers.
However, Rite Aid has started a modest new store program in key
strategic markets over the last two years and this, in combination
with store relocations, remodeling activity, and prescription file
buys should lead to improved productivity over time. Fitch views
pharmacy comparable store sales improvement as a key factor in
strengthening EBITDA margin which were 3.4% at the end of March 1,
2008, significantly below its two leading competitors.
For the Brooks/Eckerd stores that Rite Aid acquired in June 2007,
sales and margin trends remain pressured. However, Fitch expects
Rite Aid to realize the $300 million in annual synergies targeted
in FY2009 from purchasing and reductions in corporate and
administrative expenses. Further opportunities include front-end
productivity improvement to bring the acquired stores in-line with
core Rite Aid stores, additional purchasing efficiencies, and
further optimization of the store base and distribution center
network. An important rating consideration will be the ability of
Rite Aid to stabilize and improve comparable sales growth for the
acquired stores.
The current refinancing will improve Rite Aid's liquidity position
by allowing the company to access all $716.2 million additional
borrowing capacity under its $1.75 billion revolving credit
facility as of March 1, 2008. The limitations on liens in the
8.125% senior secured notes due 2010 and the 7.5% senior secured
notes due 2015 limited the additional borrowing capacity under its
revolving credit facility to $441.6 million. Sale-leasebacks of
owned stores and distribution facilities as well as significant
collateral on prescription files provide additional sources of
liquidity. However, overall leverage remains high with total
adjusted debt/EBITDAR of 8.0 times for FY2008 post the Brooks
Eckerd transaction, versus 6.9x at the end of FY2007.
The issue ratings shown above are based on Fitch's recovery
analysis and assume the completion of the refinancing. The
revolving credit facility and terms loans have a first lien on the
company's cash, accounts receivable, investment property,
inventory and prescription lists, and is guaranteed by Rite Aid's
subsidiaries giving them an outstanding recovery (90%-100%). The
company's senior secured notes have a second lien on the same
collateral as the revolver and term loans and are guaranteed by
Rite Aid's subsidiaries and are also expected to have an
outstanding recovery. Given the amount of existing secured debt
in the company's capital structure, the unsecured notes and
convertible bonds are assumed to have poor recovery prospects
(0%-10%) in a distressed scenario.
ROBERT ENDRESON: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Robert M. Endreson Revocable Trust
627 Papalani Street
Kailua, HI 96734
Bankruptcy Case No.: 08-00804
Description: Robert M. Endreson, trustee, filed the petition on
the Debtor's behalf.
Chapter 11 Petition Date: June 16, 2008
Court: District of Hawaii (Honolulu)
Debtor's Counsel: Eric Liepins, Esq.
(eric@ealpc.com)
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
Estimated Assets: $1,375,000
Estimated Debts: $1,253,000
List of Unsecured Creditors:
Creditor Nature of Claim Claim Amount
-------- --------------- ------------
Wells Fargo Bank judgment $88,000
Smoki Foods judgment $65,000
c/o Ron Grant
RURAL CELLULAR: Justice Dept. Okays Proposed Merger with Verizon
----------------------------------------------------------------
The U.S. Department of Justice has allowed a merger between Rural
Cellular Corporation and Verizon Wireless, a joint venture of
Verizon Communications Inc. and Vodafone, to proceed subject to
certain conditions.
Review of the Merger by the Federal Communications Commission is
still pending. Consummation of the Merger is also subject to the
satisfaction or waiver of all of the conditions to closing set
forth in the Agreement and Plan of Merger, dated as of July 29,
2007, by and among Cellco Partnership, dba Verizon Wireless, and
RCC. Accordingly, while RCC believes closing will occur in the
third quarter, there can be no assurance when the Merger will
ultimately become effective.
Based in Alexandria, Minnesota, Rural Cellular Corporation
(Nasdaq: RCCC) -- http://www.unicel.com/-- provides wireless
communication services to Midwest, Northeast, South and Northwest
markets located in 15 states.
On Oct. 4, 2007, the company disclosed that its shareholders voted
to approve the merger agreement providing for the acquisition of
Rural Cellular Corporation by Verizon Wireless for approximately
$2.67 billion in cash and assumed debt. The acquisition is
subject to certain closing conditions, including governmental and
regulatory approvals, and is expected to close during the second
quarter of 2008.
Rural Cellular Corp.'s consolidated balance sheet at March 31,
2008, showed $1.3 billion in total assets, $1.9 billion in total
liabilities, and $205.7 million in redeemable preferred stock,
resulting in a $785.4 million total stockholders' deficit.
* * *
Rural Cellular Corporation still carries Fitch Ratings' CCC Issuer
default rating assigned on July 30, 2007.
SADDLE MOUNTAIN: Fitch Slashes Rating on $17.55MM GO Bonds to BB
----------------------------------------------------------------
In the course of surveillance, Fitch downgraded the approximately
$17.55 million in outstanding general obligation bonds of Saddle
Mountain Unified School District No. 90 to 'BB' from 'A-'. The
Rating Outlook is Stable.
The downgrade reflects the district's weakened financial
performance, which resulted in its being placed under state
receivership in June 2007. The district recorded operating losses
in two of the last four years, resulting in negative fund balances
in several of its operating funds. Under the state receiver the
district has been forced to make substantial expenditure cuts in
order to restore balanced financial operations. The district
anticipates a return to a positive general fund balance at the end
of fiscal year 2009. Financial support from Maricopa County,
which Fitch expects to continue, has allowed the district to
fulfill its present financial obligations.
Furthermore, the district is experiencing rapid enrollment growth
and corresponding capital needs, placing additional demands on its
already strained resources. Fitch will monitor the district's
pace of recovery under new management. It's emergence from
receivership and ability to generate consecutive years of positive
financial results are imperative in order for the district to
return to an investment grade rating.
The district's enrollment has increased over 300% since 2000 to
1,146 students, which necessitated the building of new schools,
including its first high school. The district's capital
expenditures for these schools exceeded the capital funds made
available from the Arizona's School Funding Board, resulting in
operating deficits, the biggest of which was $1.6 million in
fiscal year 2005.
The district's general fund and debt service fund balance are
currently negative $900,000 and negative $290,655, respectively.
Although the district's operating income was positive in fiscal
year 2007, it overspent appropriations by approximately
$3.2 million. Because cash was not available to meet all of the
district's obligations, the county treasurer advanced the district
$1.1 million in fiscal 2007. The district's receiver has forced
it to make substantial service cuts in order to cure its deficits.
Staff, programs, preventative maintenance and other non-emergency
expenses were cut and class sizes have increased.
The district anticipates continued enrollment growth, which may
force the district to consider building more schools in the near
future. Population growth and residential developments have the
potential to increase property tax revenues and aid the district's
recovery; however rapid enrollment growth may outpace revenues,
pressuring facilities and staff at a time when the district's
financial position is already weak.
The district receives no state aid because of its property rich
tax base. Approximately 92% of the district's assessed valuation
is concentrated in the four owners of the Palo Verde Nuclear
Generation Station. Although still a credit concern, the
district's concentration risk is somewhat offset by the utility's
role as a major power provider for the southwestern region of the
U.S. Currently, the district has 17.55 million in outstanding
general obligation debt, which is equal to low 0.40% of market
value due to its property rich tax base. This series (2002A) will
be retired entirely by 2014.
Saddle Mountain USD No. 90 encompasses 550 sq miles in the west-
central portion of Maricopa County. The district captures most of
the undeveloped land in the western valley of the Phoenix-Mesa
MSA, the unincorporated areas Tonopah and Wintersburg and a
portion of the Town of Buckeye.
SALLY BEAUTY: Board Appoints Mark Flaherty as VP and CFO
--------------------------------------------------------
The Board of Directors of Sally Beauty Holdings, Inc. elected Mark
J. Flaherty as Senior Vice President and Chief Financial Officer.
Mr. Flaherty oversees accounting, payroll and benefits, treasury
and risk management, finance, tax, investor relations, strategic
planning and loss prevention.
Mr. Flaherty has served as the Acting Chief Financial Officer of
the Company since April 11, 2008, and as its Vice President, Chief
Accounting Officer and Controller since October of 2007. Prior to
joining the company, Mr. Flaherty served in a number of positions
with Tandy Brands Accessories, Inc., most recently as its Chief
Financial Officer from August 2002 to October 2007. Mr. Flaherty
previously held the positions of Divisional Controller and
Assistant Corporate Controller of various companies in the real
estate and staffing industries. Prior to 1991, Mr. Flaherty was
employed in the audit practice at the accounting firm formerly
known as Coopers & Lybrand. Mr. Flaherty is a certified public
accountant.
"[Mr. Flaherty] has done a terrific job as Acting CFO; the Board
of Directors and I are very pleased to appoint him as Senior Vice
President and CFO," Gary Winterhalter, President and Chief
Executive Officer, said. "He brings significant public-company
financial and operational experience and is a great addition to
our management team."
Based in Denton, Texas, Sally Beauty Holdings Inc. (NYSE: SBH)
-- http://www.sallybeautyholdings.com/-- is an international
specialty retailer and distributor of professional beauty
supplies. Through the Sally Beauty Supply and Beauty Systems
Group businesses, the company sells and distributes through over
3,500 stores, including approximately 200 franchised units,
throughout the United States, the United Kingdom, Canada, Puerto
Rico, Mexico, Japan, Ireland, Spain and Germany. Beauty Systems
Group stores, branded as CosmoProf or Armstrong McCall stores,
along with its outside sales consultants, sell up to 9,800
professionally branded products including Paul Mitchell, Wella,
Sebastian, Goldwell, and TIGI which are targeted exclusively for
professional and salon use and resale to their customers.
Sally Beauty Holdings Inc.'s consolidated balance sheet at
March 31, 2008, showed $1.4 billion in total assets, $2.1 billion
in total liabilities, and $6.2 million in stock options subject to
redemption, resulting in a $735.3 million total stockholders'
deficit.
SALOMON BROTHERS: Fitch Affirms 'B' Rating on $13.7MM Class J Loan
------------------------------------------------------------------
Fitch Ratings has upgraded Salomon Brothers Mortgage Securities
VII, Inc., series 2000-C2 as:
-- $13.7 million class F to 'AA' from 'AA-'.
Fitch has also affirmed these classes:
-- $416.5 million class A-2 at 'AAA';
-- Interest-only class X at 'AAA';
-- $33.2 million class B at 'AAA';
-- $33.2 million class C at 'AAA';
-- $7.8 million class D at 'AAA';
-- $11.7 million class E at 'AAA';
-- $9.8 million class G at 'A-';
-- $21.5 million class H at 'BBB-';
-- $13.7 million class J at 'B'.
$5.9 million class K remains at 'CCC/DR2', while classes L and M
remain at 'C/DR6'. Class N has been depleted due to realized
losses to the trust.
The upgrade is due to increased credit enhancement as a result of
additional principal paydown since Fitch's last rating action. As
of the May 2008 distribution date, the pool's aggregate
certificate balance has been reduced 26% to $578 million from
$781.5 million at issuance. There are 147 loans remaining in the
pool, down from the original 193. 46 (35.9%) loans are defeased,
including the largest loan in the pool (5%).
Fitch has identified 15 loans (9.9%) as Fitch loans of concern,
including the four specially serviced assets (4.1%) as well as
loans with declining debt service coverage ratio and/or occupancy.
The largest specially serviced asset (2.5%), which is also the
sixth largest loan in the pool, is secured by a 251,365 square
foot retail center located in Baltimore, Maryland. The asset has
been real estate-owned since February 2006. Litigation against
the guarantor over carve-out claims is over and post-judgment
collection efforts are underway. The property is under marketing
for sale.
The second largest specially serviced asset (1.5%) is secured by a
148,319 sf office property located in Lansing, Michigan. The loan
was transferred to the special servicer due to imminent default.
Loan assumption has completed and it will be transferred back to
the master servicer shortly.
The third largest specially serviced asset (0.8%) is secured by a
212-unit apartment complex in Oklahoma City, Oklahoma. The loan
was transferred to special servicing due to imminent default
following a fire at the property in July 2006. As a result,
several of the damaged units remain off-line. As of January 2008,
occupancy rate was 32.5%, compared to 94.4% at issuance.
Foreclosure petition has been filed and the receiver has taken
over the property. Special servicer is pursuing judgment against
the guarantor for misuse of insurance proceeds.
Six loans (1.3%) are scheduled to mature in 2008, including three
retail loans (0.5%), two limited-service hotel loans (0.6%) and
one office loan (0.18%). All six loans are non-defeased and
current with interest rate ranging from 6.95% to 7.9%. The two
hotel loans have been identified as Fitch loans of concern due to
deteriorating performance. The remaining four loans have improved
year-end 2007 DSCR compared to that at issuance. Occupancy at
these four properties has been stable to slightly improving since
issuance.
59 loans (33.9%) are scheduled to mature in 2009, of which 23
(14.5%) are defeased and seven (4.5%) are Fitch loans of concerns.
In addition, 57 loans (45.6%) are scheduled to mature in 2010, 19
of which (15%) are defeased and five (8.3%) are Fitch loans of
concern.
SCO GROUP: Posts $2,070,000 Net Loss in 2nd Quarter Ended April 30
------------------------------------------------------------------
The SCO Group Inc. reported a net loss of $2,070,000 on total
revenues of $3,661,000 for the second quarter ended April 30,
2008, compared with a net loss of $1,143,000 on total revenues of
$6,014,000 in the same period ended April 30, 2007.
The decrease in total revenues was primarily attributable to
continued competition from other operating systems, particularly
Linux, and from continuing negative publicity from the SCO
Litigation and the company's filing Chapter 11 bankruptcy.
Reorganization expense, which consists of legal and professional
fees associated with the company's Chapter 11 bankruptcy and
development of a reorganization plan, was $635,000 during the
three months ended April 30, 2008.
As of April 30, 2008, the company had a total of $3,162,000 in
cash and $3,131,000 in restricted cash, of which $1,739,000 is
designated to pay for experts, consultants and other expenses in
connection with the litigation between the company and IBM, Novell
and Red Hat, and the remaining $1,392,000 of restricted cash is
payable to Novell for its retained binary royalty stream.
Balance Sheet
At April 30, 2008, the company's consolidated balance sheet showed
$11,157,000 in total assets, $10,535,000 in total liabilities, and
$622,000 in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended April 30, 2008, are available for
free at http://researcharchives.com/t/s?2e31
About The SCO Group Inc.
Headquartered in Lindon, Utah, The SCO Group Inc. (SCOXQ.PK) --
http://www.sco.com/-- focuses on marketing reliable, cost-
effective UNIX software products and related services for the
small-to-medium sized business market, including replicated site
franchises of Fortune 1000 companies.
The company and its affiliate, SCO Operations Inc., filed for
Chapter 11 protection on Sept. 14, 2007, (Bankr. D. Del. Lead
Case No. 07-11337). Epiq Bankruptcy Solutions LLC, acts as the
Debtors' claims and noticing agent. The United States Trustee
failed to form an Official Committee of Unsecured Creditors in
these cases due to insufficient response from creditors. The
Debtors' exclusive period to file a chapter 11 plan expires on
March 12, 2008. The Debtors' schedules of assets and
liabilities showed total assets of US$9,549,519 and total
liabilities of US$3,018,489.
As reported in the Troubled Company Reporter on Feb. 12, 2008,
the Court further extended the Debtors' exclusive periods to
file a Chapter 11 plan until May 11, 2008; and solicit
acceptances of that plan until July 11, 2008.
SHARPER IMAGE: Gift Card Holder Seeks to Enforce Rights
-------------------------------------------------------
Frederick Prohov, on behalf of himself and a putative class of The
Sharper Image Corporation gift card holders, asks the U.S.
Bankruptcy Court for the District of Delaware to lift the
automatic stay and permit him to file a class action complaint to
determine the rights of the Gift Card Holders under Section
507(a)(7) of the Bankruptcy Code.
Mr. Prohov filed a claim against the Debtor regarding his $50
gift card that was dishonored.
Representing Mr. Prohov, Christopher D. Loizides, Esq., at
Loizides, P.A., in Wilmington, Delaware, relates that, as of
May 2, 2008, the Debtor's gift card policy as posted on the
Sharper Image Web site states that if a customer choose to redeem
his card or certificates, he must purchase merchandise equal to
twice the current value of the card or the certificates to redeem
the card or the certificates. The Web site further states that a
customer who does not wish to redeem his card or certificates may
have a priority claim in Sharper Image's bankruptcy case.
According to Mr. Loizides, the Debtor's customer and merchandise
gift card policy materially and significantly diminishes the
value of the Gift Cards because to redeem the card a holder is
required to purchase merchandise equal to twice the current value
of the card or certificate. Claims arising from gift cards,
reward cards, and merchandise certificates, to the extent of
$2,425 per claim, constitute customer deposits within the meaning
of Section 507(a)(7). Therefore, the customers are entitled to
priority treatment.
Mr. Loizides asserts that the fact that the Debtor has chosen not
to honor the Gift Card in full gives rise to the question of what
precisely are the rights of holders of gift card claims. That
question must be brought to the attention of a court of law. The
issues are:
-- the proper venue for the adjudication;
-- whether the claims should be handled collectively or piece
meal;
-- whether the claims should be adjudicated through an
adversary proceeding or as part of the claims
administration process; and
-- when the claims should be heard.
Mr. Prohov also asks the Court to (i) provide notice to all
potential Gift Card Holders informing them of their potential
claims under Section 507(a)(7), and (ii) establish a separate
bard date for the claims.
About Sharper Image
Based in San Francisco, California, Sharper Image Corp. --
http://www.sharperimage.com/-- is a multi-channel specialty
retailer. It operates in three principal selling channels: the
Sharper Image specialty stores throughout the U.S., the Sharper
Image catalog and the Internet. The company has operations in
Australia, Brazil and Mexico. In addition, through its Brand
Licensing Division, it is also licensing the Sharper Image brand
to select third parties to allow them to sell Sharper Image
branded products in other channels of distribution.
The company filed for Chapter 11 protection on Feb. 19, 2008
(Bankr. D.D., Case No. 08-10322). Steven K. Kortanek, Esq. at
Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the
Debtor in its restructuring efforts. An Official Committee of
UnsecuredCreditors has been appointed in the case. Whiteford
Taylor Preston LLC is the Committee's Delaware counsel
When the Debtor filed for bankruptcy, it listed total assets of
$251,500,000 and total debts of $199,000,000. The Debtors'
exclusive period to file a plan expires on June 18, 2008. It is
asking the court to extend the period to Sept. 12.
(Sharper Image Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
SHEILA JONES: Case Summary & 16 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Sheila Katherine Jones
8839 Big Bluff Ave.
Las Vegas, NV 89148
Bankruptcy Case No.: 08-16333
Chapter 11 Petition Date: June 16, 2008
Court: District of Nevada (Las Vegas)
Judge: Mike K. Nakagawa
Debtor's Counsel: Michael J. Dawson, Esq.
Email: mdawson@lvcoxmail.com
515 S. Third St.
Las Vegas, NV 89101
Tel: (702) 384-1777
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
A copy of Sheila Katherine Jones's petition is available for free
at:
http://bankrupt.com/misc/nvb08-16333.pdf
SIMDAG-ROBEL: Trump Tower Tampa Developer Files for Bankruptcy
--------------------------------------------------------------
SimDag-Robel LLC, the developer for the Trump Tower Tampa, filed
for Chapter 11 bankruptcy protection with Middle District of
Florida (Tampa) on Tuesday, reports day.
Billionaire Donald Trump announced plans for the a 52-story luxury
condominium tower on Ashley Drive three years ago. SimDag would
build the 190 units by licensing Mr. Trump's name. Mr. Trump would
get half the profits from condo sales.
But the company failed to get the $200 million loan from banks and
investors. It is now facing lawsuits from buyers of units costing
up to $6 million. Mr. Trump also filed a suit against the
developer last year because of delays in building the tower.
There were $1 million in unpaid licensing fees, according to
Tampabay.com.
SimDag bankruptcy attorney Jeffrey Warren said SimDag-Robel's
owners Jody Simon and Frank Dagostino will try to maximize the
value of the lot for creditors, James Thorner of St. Petersburg
Times reports.
"It could be a sale, it could be development of Trump Tower
Tampa," Mr. Warren said, according to the report. "The filing of
the bankruptcy doesn't stop any of the other activities."
According to Tampa Bay Business Journal, last week, Colonial Bank,
a subsidiary of Colonial Bancgroup Inc., started foreclosure
proceedings on the land where Trump Tower was supposed to have
been built, seeking a return more than $3.2 million.
The bankruptcy filing lists estimates of more than 200 creditors,
reports say.
SIMDAG-ROBEL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: SimDag-Robel, LLC
102 West Whiting St.
Ste. 502
Tampa, FL 33602
Bankruptcy Case No.: 08-08804
Type of Business: The Debtor owns and operates a real estate
business.
Chapter 11 Petition Date: June 17, 2008
Court: Middle District of Florida (Tampa)
Judge: K. Rodney May
Debtor's Counsel: Adam L. Alpert, Esq.
Email: aalpert@bushross.com
Jeffrey W. Warren, Esq.
Email: jwarren@bushross.com
Bush Ross, P.A.
P.O. Box 3913
Tampa, FL 33601-3913
Tel: (813) 224-9255
Fax: (813) 223-9620
http://www.bushross.com/
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Jerry Barnett, Miguel Alfredo, $1,600,000
Ron Yutrenka
Kevin Brodsky $1,600,000
24 N. Harbor City, Blvd.
Melborne, FL 32953
The William G. Allen Trust $791,487
17002 Abastros De Avila
Tampa, FL 33613
Ernest Smith $777,000
815 S. Howard Ave.
Tampa, FL 33606
Bryon Wolf $735,000
6116 Kipps Colony Dr. W.
Gulfport, FL 33707
Alan Bridges $615,000
371 Channelside Walkway Dr.
Ste. 1902
Tampa, FL 33602
Eden Lane Properties, LLC $600,000
12713 Hunting Horn Court
Potomac, MD 20854
Frank Varollo, John Borelli, $590,000
Ronald Cunningham
Michael D. Dinkel $580,000
17619 Deer Isle Circle
Winter Garden, FL 34787
Adele Yunger, Joshua Halpern $508,200
6411 E. McLaurin Dr.
Tampa, FL 33647
Robert Gesmeyer, Ben Benvenuti $420,000
3507 Bayshore Blvd.
Ste. 1702
Tampa, FL 33629
TAC Realty, Scot McNay, Maria $333,508
Delourdes-McNay
100 Oakmont Lane, Ste. 410
Belleair, FL 33756
Art P. Caruso $280,000
Mr. and Mrs. Art P. Caruso
5713 E. Longboat Blvd.
Tampa, FL 33615
Jean and Michael Shahnasarian $278,000
3414 W. Linebaugh Ave.
Tampa, FL 33618
Thomas Frederick $276,696
10705 Lake Alice Cove
Odessa, FL 33556
Jugal K. Taneja $264,000
Mr. and Mrs. Jugal K. Taneja
6950 Brian Dairy Rd.
Largo, FL 33777
Mr. and Mrs. Gerald R. Palmer $250,000
7906 Frost Crystal Court
Fairfax Station, VA 22039
Peter Defreitas $250,000
1551 N.W. 82nd Ave.
Ste. 246-442
Miami, FL 33126
Tom Bower $250,000
19 Hendricks Isle
Fort Lauderdale, FL 33301
Shaukat H. Chowdhari $247,717
SIMON WORLDWIDE: Inks Recapitalization Pact with Overseas Toys
--------------------------------------------------------------
Simon Worldwide, Inc. entered into an Exchange and
Recapitalization Agreement with Overseas Toys, L. P., the holder
of all the outstanding shares of Preferred Stock of Simon,
pursuant to which all the outstanding Preferred Stock would be
converted into shares of Common Stock representing 70% of the
shares of Common Stock outstanding immediately following the
conversion.
The Agreement was negotiated on Simon's behalf by a Special
Committee of disinterested directors which, based in part upon the
opinion of the Committee's financial advisor, determined that the
transaction is fair to the holders of Common Stock from a
financial point of view. Closing of the transaction is contingent
upon stockholder approval of an amendment to Simon's charter at a
meeting expected to be held in the Fall.
Headquartered in Los Angeles, Calif., Simon Worldwide Inc. (OTC:
SWWI) was prior to August 2001, a multi-national, full service
promotional marketing company. In August 2001, McDonald's
Corporation, the company's principal customer, terminated its 25-
year relationship with the company as a result of the embezzlement
by a former company employee of winning game pieces from
McDonald's promotional games administered by the company.
As a result of the loss of its customers, the company no longer
has any operating business. Since August 2001, the company has
concentrated its efforts on reducing its costs and settling
numerous claims, contractual obligations, and pending litigation.
As a result of these efforts, the company has been able to resolve
a significant number of outstanding liabilities that existed at
Dec. 31, 2001, or arose subsequent to that date. At March 31,
2008, the company had reduced its workforce to 4 employees from
136 employees at Dec. 31, 2001. The company is currently managed
by the chief executive officer, together with a principal
financial officer and an acting general counsel.
Simon Worldwide's consolidated balance sheet at March 31, 2008,
showed $18,705,000 in total assets, $1,703,000 in total
liabilities, and $34,033,000 in redeemable preferred stock,
resulting in a $17,031,000 total stockholders' deficit.
Going Concern Doubt
As reported in the Troubled Company Reporter on April 8, 2008, BDO
Seidman, LLP, in Los Angeles, espressed substantial doubt about
Simon Worldwide Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2007, and 2006.
BDO Seidman pointed to the company's stockholders' deficit,
significant losses from operations, and lack of any operating
revenue.
SMARTIRE SYSTEMS: April 30 Balance Sheet Upside-Down by $38.5MM
---------------------------------------------------------------
SmarTire Systems Inc.'s consolidated balance sheet at April 30,
2008, showed $3,240,386 in total assets, $38,162,990 in total
liabilities, and $3,565,585 in preferred shares, resulting in a
$38,488,189 total stockholders' deficit.
At April 30, 2008, the company's consolidated balance sheet also
showed strained liquidity with $2,349,235 in total current assets
available to pay $36,214,162 in total current liabilities.
The company reported a net loss of $7,772,004 on revenue of
$794,373 for the third quarter ended April 30, 2008, compared with
a net loss of $4,021,068 on revenue of $933,113 in the same period
ended April 30, 2007.
Full-text copies of the company's consolidated financial
statements for the quarter ended April 30, 2008, are available for
free at http://researcharchives.com/t/s?2e2c
Going Concern Doubt
BDO Dunwoody LLP, in Vancouver, Canada, expressed substantial
doubt about SmarTire Systems Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the years ended July 31, 2007, and 2006. The
auditing firm pointed to the company's accumulated deficit and
working capital deficiency.
The company has incurred recurring operating losses and as of
April 30, 2008, had an accumulated deficit of $146,822,824 and a
working capital deficiency of $33,864,927 of which $33,739,519 is
potentially convertible into shares of common stock of the
company, subject to certain restrictions.
About SmarTire Systems
Headquartered in Richmond, British Columbia, Canada, SmarTire
Systems Inc. (OTC BB: SMTR) -- http://smartire.com/-- develops,
subcontracts its manufacturing, and markets tire pressure
monitoring systems (TPMSs), which monitor tire pressure and tire
temperature in a range of vehicles. The company sells TPMSs for
trucks, buses, recreational vehicles, passenger cars and
motorcycles. It has three wholly owned subsidiaries: SmarTire
Technologies Inc., SmarTire USA Inc. and SmarTire Europe Limited.
SOLUTIA INC: Pays Executive Emergence Bonuses in Stock, Not Cash
----------------------------------------------------------------
The Executive Compensation and Development Committee of the board
of directors of Solutia Inc. approved, during a May 20, 2008
meeting, a recommendation to pay out in company stock, rather
than cash, awards earned under the Emergence Incentive Bonus
Program to certain executive officers, who are participants of
the program, Rosemary L. Klein, Solutia's senior vice president,
general counsel and secretary, disclosed in a regulatory filing
with the U.S. Securities and Exchange Commission.
The ECDC also approved restricted stock awards pursuant to the
2007 Management Incentive Plan to certain executive officers.
The restricted stock vests on May 19, 2009.
No. of Shares Total No. of
Executive Officer Awarded Shares Owned
----------------- ------------- ------------
Jeffry N. Quinn 130,075 330,075
James M. Sullivan 49,624 120,519
Luc De Temmerman 47,368 87,368
Jonathon P. Wright 47,368 87,368
James R. Voss 46,805 89,305
In a separate filing, Ms. Klein disclosed that Kent J. Davies,
senior vice president and president CPFilms, acquired 37,556
shares of Solutia common stock. Mr. Davies has a total of
75,556 shares.
According to Ms. Klein, in approving the awards, the ECDC
considered, among other factors:
-- the strong financial performance of the Company which has
led to over $1,000,000,000 increase in net sales and more
than tripling earnings before interest expense, income
taxes, depreciation and amortization and reorganization
items from 2004 to 2007;
-- the strategic repositioning and enhancement of the
company's portfolio which formed the basis for the
Solutia's successful emergence from bankruptcy;
-- the continuing strategic initiatives being led by senior
management to enhance shareholder value;
-- the overall design features and intentions of the
company's existing Emergence Incentive Bonus Program; and
-- the desire to retain and continue to motivate superior
financial performance and strengthening of the company's
market leading positions.
On May 21, 2008, the company determined it would adopt a Solutia
Inc. Supplemental Savings and Investment Plan for certain
management and executive employees, effective for compensation
payable beginning Jan. 1, 2009. The adoption is aimed at
restoring benefits lost as a result of IRS limits on qualified
plans, Ms. Klein related.
Pursuant to the Supplemental SIP:
* participants will be able to defer up to 35% of their base
salary and annual bonus;
* the company will provide matching contributions at 7%, the
same rate of matching contributions that the participants
are eligible to receive under the Solutia Inc. Savings and
Investment Plan. The matching contributions are based on
the amount of a participant's salary and bonus that is in
excess of the qualified plan limits established by the
Internal Revenue Code -- $230,000 in 2008;
* a participant's deferral and the company's matching
contribution will be deemed invested in investment options
selected by a participant, which are expected to be
similar to the investment options currently provided under
the SIP, and will be credited to a participant's plan
account with earnings or losses that match the earnings or
losses for those investment options; and
* participants will be entitled to receive a distribution of
their account balance in accordance with the terms and
conditions of the Supplemental SIP, which may include
payment in installments or a lump sum, depending upon the
participant's particular circumstances.
The Supplemental SIP will be filed by the company with SEC as an
exhibit to its next periodic report once all of its terms and
conditions have been finalized, Ms. Klein said.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE:
SOA-WI) -- http://www.solutia.com/-- and its subsidiaries,
manufactures and sells chemical-based materials, which are used in
consumer and industrial applications worldwide.
The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03-
17949). When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.
Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, as lead bankruptcy counsel, and David A. Warfield,
Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St.
Louis Missouri, as special counsel. Trumbull Group LLC is the
Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira
S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice. The Official Committee of Retirees of Solutia, Inc., et
al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke,
Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne,
LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E.
Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter
Young & Rediker, LLC, in Birmingham, Alabama.
On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement. On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan. The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007,
the Debtor re-filed a Consensual Plan & Disclosure Statement and
on Nov. 29, 2007, the Court confirmed the Debtors' Consensual
Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008.
(Solutia Bankruptcy News, Issue No. 127; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on March 4, 2008,
Standard & Poor's Ratings Services raised its corporate credit
rating on Solutia Inc. to 'B+' from 'D', following the company's
emergence from bankruptcy on Feb. 28, 2008, and the implementation
of its financing plan. The outlook is stable.
S&P also affirmed its 'B+' rating and '3' recovery rating on
Solutia's proposed senior secured term loan. In addition, S&P
assigned its 'B-' rating to Solutia's $400 million unsecured
bridge loan facility. S&P also withdrew its 'B-' rating on the
proposed $400 million unsecured notes, which have been replaced by
the bridge facility in Solutia's capital structure.
SOLUTIA INC: Faces Suit for PCB Contamination in Pensacola
----------------------------------------------------------
MSNBC reported that a suit against Monsanto Company, Pharmacia
Corporation, Solutia Inc., and Solutia's Pensacola, Florida plant
manager was filed on June 6, 2008, alleging polychlorinated
biphenyl contamination of surrounding waters.
The suit was filed in Pensacola, Florida circuit court on behalf
of 50 plaintiffs living near Escambia Bay. According to news
reports, the plaintiffs allege that Solutia's Pensacola plant on
Old Chemstrand Road is the source of the PCB contamination, which
has affected surrounding waters and fish.
The plaintiffs are seeking unspecified damages and the clean-up
of the water. They claim that property values have and will
continue to decline due to the PCB contamination, Pensacola News
Journal said.
Anniston, Alabama-based attorney Donald Stewart is representing
the 50 plaintiffs. Mr. Stewart previously represented around
3,500 plaintiffs in Anniston, Alabama, which case was later
combined with another case with 17,000 plaintiffs, in a PCB suit
against Monsanto, which was settled in 2003 for $600,000,000,
according to MSNBC.
Monsanto spokesman Glynn Young told PNJ that PCBs were never
manufactured at the Pensacola plant, and that pursuant to an
agreement between Solutia and Monsanto, Monsanto is responsible
for the suit.
The plant was previously operated by Monsanto, which was founded
in 1901. Monsanto was acquired by Pharmacia in 2000. Solutia
spun-off Monsanto in 1997 and has been operating the Pensacola
plant since then.
"The plant, like most of American industry, used PCBs in
transformers, as hydraulic fluids and in other applications until
the late 1970s," PNJ quoted Mr. Young.
According to Solutia spokesman Dan Jenkins, "Any alleged PCB
contamination related to the plant stems from a leak that
occurred in 1969, nearly 30 years before Solutia existed."
"That discharge predates Solutia's existence, so any tort is
Monsanto's responsibility," Mr. Jenkins said, TMCnet reported.
"The tiny amounts of PCBs reportedly found in the Escambia River
and bay pose no threat to human health, wildlife or the
environment," Mr. Young stated, according to PNJ.
PNJ reported that researchers from the University of West Florida
recently found that PCB levels in mullet and other fish taken
from Escambia Bay were higher than state and federal thresholds.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE:
SOA-WI) -- http://www.solutia.com/-- and its subsidiaries,
manufactures and sells chemical-based materials, which are used in
consumer and industrial applications worldwide.
The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03-
17949). When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.
Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, as lead bankruptcy counsel, and David A. Warfield,
Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St.
Louis Missouri, as special counsel. Trumbull Group LLC is the
Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira
S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice. The Official Committee of Retirees of Solutia, Inc., et
al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke,
Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne,
LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E.
Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter
Young & Rediker, LLC, in Birmingham, Alabama.
On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement. On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan. The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007,
the Debtor re-filed a Consensual Plan & Disclosure Statement and
on Nov. 29, 2007, the Court confirmed the Debtors' Consensual
Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008.
(Solutia Bankruptcy News, Issue No. 127; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on March 4, 2008,
Standard & Poor's Ratings Services raised its corporate credit
rating on Solutia Inc. to 'B+' from 'D', following the company's
emergence from bankruptcy on Feb. 28, 2008, and the implementation
of its financing plan. The outlook is stable.
S&P also affirmed its 'B+' rating and '3' recovery rating on
Solutia's proposed senior secured term loan. In addition, S&P
assigned its 'B-' rating to Solutia's $400 million unsecured
bridge loan facility. S&P also withdrew its 'B-' rating on the
proposed $400 million unsecured notes, which have been replaced by
the bridge facility in Solutia's capital structure.
SOLUTIA INC: Flexsys Unit to Halt Wales Manufacturing by Year-End
-----------------------------------------------------------------
Solutia Inc. said that its Flexsys(r) subsidiary intends to cease
manufacturing at its facility in Ruabon, Wales, by the end of
2008, with complete site exit by the end of 2011.
"This action is part of our strategy to strengthen the profitable,
market-leading positions that Flexsys holds across most of its
portfolio, while taking steps to limit our exposure in smaller
product lines where Flexsys is no longer cost competitive," said
Jim Voss, president of Flexsys and senior vice president of
Solutia Inc.
Mr. Voss added, "Our Ruabon site makes three product lines for
which the market is over-supplied due to emerging competition
from Far Eastern producers. Despite the significant steps our
Ruabon management and employees have taken to improve the position
of the site, it is unfortunately no longer cost competitive on a
global scale. We will work to ensure the employees impacted by
this change are treated the right way, and that our customers have
a smooth transition to a new supply arrangement."
Once Flexsys ceases its manufacturing operations at Ruabon, it
will no longer participate in the market for the three product
lines currently manufactured at that site: Santogard(r) PVI pre-
vulcanization inhibitors; Perkacit(r) DPG, which is used as a
secondary accelerator in the rubber vulcanization process; and
Flectol(r) TMQ and Flectol(r) HPG, which protect against
oxidative aging.
Flexsys products play an essential role in the manufacturing of
tires and other rubber products, such as belts, hoses, seals, and
footwear. Flexsys is a global business with offices,
manufacturing facilities and technology centers around the world.
Flexsys has annual sales of over $650,000,000, about two-thirds of
which take place outside the United States.
* * *
In a regulatory filing with the U.S. Securities and Exchange
Commission, Rosemary L. Klein, Solutia's senior vice president,
general counsel and secretary, relates the company expects the
phase out of the Ruabon Facility will result in estimated pre-tax
charges to income from continuing operations of approximately
$45,000,000 to $60,000,000 over the next four years, beginning in
the second quarter of 2008.
According to Ms. Klein, in connection with the phase-out, Solutia
expects to incur:
(a) severance and employee benefits of $17,000,000 to
$22,000,000;
(b) indirect residual costs, which Solutia is contractually
obligated to incur to continue providing third party
operations at the site for the next two years of
approximately $13,000,000 to $16,000,000; and
(c) other costs, including clean-out and demolition of
approximately $15,000,000 to $22,000,000.
The negative impact on Solutia's income from continuing
operations before income taxes is expected to be $3,000,000 to
$7,000,000 in 2008, Ms. Klein says.
The aggregate net cash impact of the phase out of the Ruabon
facility occurring between 2008 and 2011 is expected to be
significantly less than the major type of charges, primarily due
to working capital benefits realized; the elimination of cash
losses currently being generated by these businesses; and
proceeds from site-related asset dispositions, Ms. Klein states.
The shutdown of these businesses will reduce annual revenue by
approximately $50,000,000, according to Ms. Klein. The
annualized benefit to income from continuing operations before
income taxes is estimated to be $8,000,000 to $12,000,000, which
is expected to be fully realized in 2011, she adds.
Wrexham Council Concerned Over Site Contamination
Wrexham council leader Aled Roberts told BBC News of concerns
over contamination at Flexsys factory sites in Wrexham, the
largest town in North Wales.
Mr. Roberts said that clean-up "might have to be dealt with by
the UK government," BBC reported.
Chemicals have been stored on-site over the years, which might
have contaminated nearby areas, Mr. Roberts said. According to
the Environment Agency, certain areas in the vicinity of the site
is inhabitable, BBC reported.
The specialized rubber chemicals factory has been in operation
since the 1930s. The factory, locally known as the Ruabon Works,
is one of the oldest industrial sites in Wrexham, BBC said.
Flexys Seeks Asia-Pacific Expansion
Solutia said that its Flexsys subsidiary is seeking to expand its
Crystex(r) insoluble sulfur manufacturing capacity in the Asia-
Pacific region and is currently evaluating sites to determine the
most suitable location. Flexsys presently has seven plants
worldwide that produce Crystex insoluble sulfur, including
facilities in Kuantan, Malaysia, and Kashima, Japan.
"Flexsys is strengthening its commitment to the Asia-Pacific
region. The Asian market, specifically China and India, continues
to be an important and rapidly growing market for Flexsys," said
Jim Voss, president of Flexsys and senior vice president of
Solutia Inc. "Expanding in the Asia-Pacific region demonstrates
our strong commitment to our customers to provide more localized
service, support, and delivery of our products." He added, "We
will continue to invest in capacity expansions and new technology
to provide our customers with the innovative products that they
have come to expect from Flexsys."
Global demand for tyres continues to rise around the world. It is
estimated that by 2010, global annual tyre production will reach
1.7 billion, up from 1.4 billion in 2005. Asia has become an
increasingly important center for tyre production based on strong
local demand and as an exporter to other world areas. Most of
that growth in Asia comes from China and India.
"We want to help our customers seize the enormous opportunity in
this region," said Tim Wessel, vice president of Crystex and
Antidegradants, Flexsys. "We are seeing increased demand for our
Crystex HD (High Dispersion) grade of insoluble sulfur. In order
to meet the long-term needs of our customers, we will be investing
in additional capacity."
Crystex insoluble sulfur is the vulcanizing agent of choice for
critical applications in the tyre industry, providing the highest
level of quality and performance. In addition, Crystex HD
insoluble sulfur offers tyre manufacturers improved productivity
and safety in their manufacturing processes.
Flexsys products play an essential role in the manufacturing of
tyres and other rubber products, such as belts, hoses, seals,
and footwear. Flexsys is a global business with offices,
manufacturing facilities and technology centers around the world.
Flexsys has annual sales of over $650 million, about two-thirds
of which take place outside the United States.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE:
SOA-WI) -- http://www.solutia.com/-- and its subsidiaries,
manufactures and sells chemical-based materials, which are used in
consumer and industrial applications worldwide.
The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03-
17949). When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.
Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, as lead bankruptcy counsel, and David A. Warfield,
Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St.
Louis Missouri, as special counsel. Trumbull Group LLC is the
Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira
S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice. The Official Committee of Retirees of Solutia, Inc., et
al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke,
Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne,
LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E.
Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter
Young & Rediker, LLC, in Birmingham, Alabama.
On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement. On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan. The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007,
the Debtor re-filed a Consensual Plan & Disclosure Statement and
on Nov. 29, 2007, the Court confirmed the Debtors' Consensual
Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008.
(Solutia Bankruptcy News, Issue No. 127; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on March 4, 2008,
Standard & Poor's Ratings Services raised its corporate credit
rating on Solutia Inc. to 'B+' from 'D', following the company's
emergence from bankruptcy on Feb. 28, 2008, and the implementation
of its financing plan. The outlook is stable.
S&P also affirmed its 'B+' rating and '3' recovery rating on
Solutia's proposed senior secured term loan. In addition, S&P
assigned its 'B-' rating to Solutia's $400 million unsecured
bridge loan facility. S&P also withdrew its 'B-' rating on the
proposed $400 million unsecured notes, which have been replaced by
the bridge facility in Solutia's capital structure.
SOLUTIA INC: PHLX Commences Trading of 12 New Options
-----------------------------------------------------
The Philadelphia Stock Exchange began trading of 12 new options of
Solutia Inc. on June 9, 2008. The first 10 options were allocated
to Citadel Derivatives Group, LLC:
* Market Vectors Russia ETF Trust (option/stock symbol: RSX)
will trade on the February expiration cycle with initial
expiration months of June, July, August and November.
Position and exercise limits have been set at 7,500,000
shares.
* Methanex Corp. (option/stock symbol: MEOH) will trade on
the January expiration cycle with initial expiration
months of June, July, October and January. Position and
exercise limits have been set at 7,500,000 shares.
* Sadia SA (option/stock symbol: SDA) will trade on the
March expiration cycle with initial expiration months of
June, July, September and December. Position and exercise
limits have been set at 15,000,000 shares until September
2008, where limits revert to 5,000,000 shares.
* SASOL LTD (option/stock symbol: SSL) will trade on the
March expiration cycle with initial expiration months of
June, July, September and December. Position and exercise
limits have been set at 25,000,000 shares.
* Frontline LTD New (option/stock symbol: FRO) will trade on
the February expiration cycle with initial expiration
months of June, July, August and November. Position and
exercise limits have been set at 25,000,000 shares.
* Energen Corp(option/stock symbol: EGN) will trade on the
January expiration cycle with initial expiration months of
June, July, October and January. Position and exercise
limits have been set at 7,500,000 shares.
* China Direct Inc. (option/stock symbol: CDS) will trade on
the March expiration cycle with initial expiration months
of June, July, September and December. Position and
exercise limits have been set at 7,500,000 shares.
* Auxilium Pharmaceuticals Inc. (option/stock symbol: AUXL)
will trade on the March expiration cycle with initial
expiration months of June, July, September, December and
January. Position and exercise limits have been set at
20,000,000 shares.
* American Water Works Co, Inc. (option/stock symbol: AWK)
will trade on the March expiration cycle with initial
expiration months of June, July, September and December.
Position and exercise limits have been set at 7,500,000
shares.
* Solutia, Inc. (option/stock symbol: SOA) will trade on the
March expiration cycle with initial expiration months of
June, July, September and December. Position and exercise
limits have been set at 5,000,000 shares.
The final two options were allocated to Timber Hill LLC:
* Logictech International (option/stock symbol: LOGI) will
trade on the March expiration cycle with initial
expiration months of June, July, September, December and
January. Position and exercise limits have been set at
25,000,000 shares.
* KKR Financial Corp. (option/stock symbol: KFN) will trade
on the January expiration cycle with initial expiration
months of June, July, October and January. Position and
exercise limits have been set at 25,000,000 shares.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE:
SOA-WI) -- http://www.solutia.com/-- and its subsidiaries,
manufactures and sells chemical-based materials, which are used in
consumer and industrial applications worldwide.
The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03-
17949). When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.
Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, as lead bankruptcy counsel, and David A. Warfield,
Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St.
Louis Missouri, as special counsel. Trumbull Group LLC is the
Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira
S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice. The Official Committee of Retirees of Solutia, Inc., et
al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke,
Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne,
LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E.
Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter
Young & Rediker, LLC, in Birmingham, Alabama.
On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement. On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan. The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007,
the Debtor re-filed a Consensual Plan & Disclosure Statement and
on Nov. 29, 2007, the Court confirmed the Debtors' Consensual
Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008.
(Solutia Bankruptcy News, Issue No. 127; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on March 4, 2008,
Standard & Poor's Ratings Services raised its corporate credit
rating on Solutia Inc. to 'B+' from 'D', following the company's
emergence from bankruptcy on Feb. 28, 2008, and the implementation
of its financing plan. The outlook is stable.
S&P also affirmed its 'B+' rating and '3' recovery rating on
Solutia's proposed senior secured term loan. In addition, S&P
assigned its 'B-' rating to Solutia's $400 million unsecured
bridge loan facility. S&P also withdrew its 'B-' rating on the
proposed $400 million unsecured notes, which have been replaced by
the bridge facility in Solutia's capital structure.
SOUNDVIEW HOME: Fitch Junks Rating on Class M-1 Certificates
------------------------------------------------------------
Fitch Ratings has taken rating actions on the Soundview Home
Equity Loan Trust mortgage pass-through certificates listed below.
Unless stated otherwise, any bonds that were previously placed on
Rating Watch Negative are now removed.
Soundview Home Equity Loan Trust 2001-1
-- Class A affirmed at 'AAA';
-- Class M-1 downgraded to 'CCC/DR1' from 'AA-';
-- Class M-2 downgraded to 'C/DR5' from 'CC/DR2'.
Deal Summary
-- Originator: Delta Funding Corporation (100%)
-- 60+ day Delinquency: 33.87%
-- Realized Losses to date (% of Original Balance): 8.05%
SPECTRUM BRANDS: Inks Restricted Stock Pact with CEO Kent Hussey
--------------------------------------------------------------
Spectrum Brands, Inc. entered into these agreements:
(1) the Restricted Stock Award Agreement with Kent J. Hussey,
the company's Chief Executive Officer;
(2) a letter agreement with John A. Heil, the company's
President - Global Pet Supplies; and
(3) individual Retention Agreements with Anthony L. Genito, the
company's Executive Vice President and Chief Financial
Officer, David R. Lumley, the Company˙s President - Global
Batteries & Personal Care, and Amy J. Yoder, the company's
President - Home & Garden.
In addition, the company amended these agreements:
(4) the Employment Agreement by and between the company and
Kent J. Hussey, dated April 1, 2005 and amended June 29,
2007; and
(5) the Employment Agreement, dated March 27, 2007, by and
between the company and Amy J. Yoder.
The Hussey Award
The company has granted Mr. Hussey 100,000 shares of the company's
common stock, par value $.01 per share, subject to certain
restrictions with 50% of the shares vesting on the first and
second anniversaries of the effective date of the grant. The
restrictions will lapse immediately if Mr. Hussey's employment
with the Company (or its subsidiaries or affiliates) is terminated
by the company without "Cause" or in the event of Mr. Hussey˙s
death or "disability." Mr. Hussey will forfeit all shares subject
to restrictions that have not lapsed in the event that Mr.
Hussey˙s employment with the company (or its subsidiaries or
affiliates) is terminated for any reason other than without Cause,
death, Disability, or termination as a result of Constructive
Termination. The Compensation Committee of the Board of Directors
of the company may, in its sole discretion, accelerate the
expiration of any restriction period, waive any restrictions or
waive any forfeiture of shares under this award.
The Heil Agreement
In recognition of Mr. Heil's past and continued services, and in
connection with Mr. Heil's termination arising from the company's
sale of its Global Pet Business, the Compensation Committee has
approved the Heil Agreement. Under the terms of the Heil
Agreement, Mr. Heil will receive a cash payment of $337,500 no
later than 30 days after the closing of the sale of the company's
global pet supply and aquatic business. In addition, all
restrictions remaining on shares issued to Mr. Heil under the
restricted stock award agreements between the company and Mr. Heil
(dated April 1, 2005 in the amount of 25,000 shares and Feb. 1,
2006 in the amount of 18,000 shares) shall lapse immediately
before Mr. Heil's termination.
Retention Agreements
In order to incentivize the continued service of Messrs. Genito
and Lumley and Ms. Yoder the Board of Directors of the company has
authorized the grant of a retention incentive. The Retention
Agreements are subject to the terms of the Executives' respective
employment agreements. The term of each Retention Agreement runs
through and includes Dec. 31, 2009. Each Retention Agreements
reserves the company's rights to terminate an Executive's
employment at any time, and the Executives have the right to
terminate their employment with the Company at any time.
Under the Retention Agreements, Messrs. Genito and Lumley and Ms.
Yoder will receive cash payments in an amount equal to $562,500,
$787,500 and $600,000 respectively. If an Executive is employed
by the company on Dec. 31, 2008, he/she will receive 50% of his or
her Retention Incentive on the company's first payroll following
Dec. 31, 2008. If the Executive is employed by the company on
Dec. 31, 2009, he or she will receive 50% of his or her Retention
Incentive on the company's first payroll following Dec. 31, 2009.
If, before Dec. 31, 2009, there is a "Change in Control" any
portion of the Retention Incentive not yet paid will be paid upon
the Change in Control.
In the event an Executive terminates his or her employment for
"Good Reason" or in the event the company terminates an Executive
without "Cause", the Executive shall be paid the Retention
Incentive that would have been paid to Executive but for the early
termination of Executive's employment. If the Executive
voluntarily ends his and her employment without Good Reason or his
employment is terminated by the company for Cause before Dec. 31,
2009, the Executive will forfeit any and all unpaid Retention
Incentive payments.
The Second Hussey Amendment
The Second Hussey Amendment modifies the Amended and Restated
Employment Agreement, dated April 1, 2005, by and between the
company and Mr. Hussey, as amended on June 29, 2007. The Second
Hussey Amendment provides:
* Mr. Hussey's "Base Salary" is increased from $750,000 to
$825,000, effective June 1, 2008;
* the target upon which Mr. Hussey's "Bonus" is based is
increased from 100% to 125% of Mr. Hussey's annual base
salary, effective with the bonus payable to Mr. Hussey for
the company's 2008 fiscal year; and
* the target upon which Mr. Hussey's long-term incentive award
is based is increased from 150% to 175% of Mr. Hussey's
annual base salary, effective with the long-term incentive
award payable to Mr. Hussey for the company's 2009 fiscal
year.
The Yoder Amendment
The Yoder Amendment modifies the Employment Agreement, dated March
27, 2007, by and between the company and Ms. Yoder. The Yoder
Amendment provides that the target upon which Ms. Yoder's "Bonus"
is based is increased from 75% to 100% of Ms. Yoder's annual base
salary, effective with the bonus payable to Ms. Yoder for the
company's 2008 fiscal year.
About Spectrum Brands
Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE:
SPC) -- http://www.spectrumbrands.com/-- is a supplier of
consumer batteries, lawn and garden care products, specialty pet
supplies, shaving and grooming products, household insect control
products, personal care products and portable lighting.
* * *
As disclosed in the Troubled Company Reporter on May 26, 2008,
Moody's Investors Service placed the Caa1 corporate family rating
and Caa1 probability of default rating of Spectrum Brands under
review following the announcement that Spectrum has entered into a
definitive agreement to sell its Global Pet business to Applica
Pet Products, a subsidiary of Salton, Inc., for over $900 million.
As reported in the TCR on May 23, 2008, following the announcement
that Spectrum Brands has signed a definitive agreement with
Salton, Inc. for the sale of its Global Pet Business for
approximately $692.5 million in cash and an aggregate principal
amount of Spectrum's subordinated debt securities equal to
$222.5 million, Fitch affirms Spectrum Brands, Inc. ratings as
Issuer Default Rating at 'CCC'; $1 billion term loan B at 'B/RR1';
$225 million ABL at 'B/RR1'; EUR350 million term loan at 'B/RR1';
$700 million 7.4% senior sub note at 'CCC-/RR5'; $2.9 million 8.5%
senior sub note at 'CCC-/RR5'; and $347 million 11.25% variable
rate toggle senior sub note at 'CCC-/RR5'. The Rating Outlook is
Negative.
Standard & Poor's Ratings Services placed its ratings on Atlanta-
based Spectrum Brands Inc., including the 'CCC+' long-term
corporate credit rating, on CreditWatch with positive
implications. The CreditWatch status indicates that S&P could
either raise or affirm the ratings following the completion of its
review. Approximately $2.6 billion of debt was outstanding as of
March 30, 2008.
ST. STEPHEN: Employee Transfer to ENC Might be Under Investigation
------------------------------------------------------------------
Graeme Neill of The Bookseller (U.K.) reports that the Charity
Commission is to investigate U.S. orthodox Christian charity St.
Stephen the Great after it filed for Chapter 11 protection on June
4, 2008.
The report cited an e-mail message from SSG chairman Mark Brewer
to former employees saying the bookshops will now be operated by
ENC Management Company and they are invited to apply for a
position with the new operator. The report noted that ENC Shop
Management and SSG have brothers Mark and Phil Brewer as directors
for both companies.
According to the report, a spokesman for the Charity Commission
said, they are currently considering whether the transfer raises
any issues for the Charity Commission to investigate.
Meanwhile, according to the report, a spokeswoman for shop workers
union Usdaw said it was continuing to represent 15 members of
staff who are taking the Brewers to tribunal over contractual
issues.
"Usdaw was also examining what effect the bankruptcy would have on
the UK business, and the 'validity' of staff having to reapply for
their jobs with ENC," the report stated, citing the spokeswoman.
Based in Houston, the Debtor -- http://ststephentrust.org.uk/--
is an Orthodox lay charity company, which was established in 2004
to acquire redundant churches in order to put them into use for
Orthodox Christian worship. Its objects also include spreading
the Gospel message through distribution of the printed word and
supporting Orthodox Christian mission in the U.K. It filed for
bankruptcy with the U.S. Bankruptcy Court for the Southern
District of Texas (Houston), Case No.: 08-33689. It listed
estimated assets of $100,001 to $500,000 and estimated debts of
$1,000,001 to $10 million in its court filing.
SYNOVICS PHARMA: April 30 Balance Sheet Upside-Down by $10,650,527
------------------------------------------------------------------
Synovics Pharmaceuticals Inc.'s consolidated balance sheet at
April 30, 2008, showed $23,932,400 in total assets and $34,582,927
in total liabilities, resulting in a $10,650,527 stockholders'
deficit.
At April 30, 2008, the company's consolidated balance sheet also
showed strained liquidity with $5,897,566 in total current assets
available to pay $28,948,897 in total current liabilities.
The company reported a net loss of $2,941,124 on net revenues of
$6,121,632 for the second quarter ended April 30, 2008, compared
with a net loss of $6,772,301 on net revenues of $5,713,761 in the
same period ended April 30, 2007.
The company said that the increase in revenues results from a
continued strong growth of the company's over-the-counter product
line as well as increases in sales of the prescription product
line. The increase in revenue was negatively impacted by the
continued decline in sales of ephedrine and pseudoephedrine
products caused by the temporary disruption in the availability of
ephedrine guaifenesin products in the soft gel form.
Full-text copies of the company's consolidated financial
statements for the quarter ended April 30, 2008, are available for
free at http://researcharchives.com/t/s?2e2b
Going Concern Doubt
As reported in the Troubled Company Reporter on Feb. 21, 2008,
Miller, Ellin & Company LLP, in New York, expressed substantial
doubt about Synovics Pharmaceuticals Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Oct. 31,
2007. The auditing firm stated that the company has negative
working capital and has experienced significant losses and
negative cash flows.
About Synovics Pharmaceuticals
Based in Ft. Lauderdale, Fla., Synovics Pharmaceuticals Inc.
(OTC BB: SYVC) -- http://www.bionutrics.com/-- through its
subsidiaries, engages in the development, manufacture, and
commercialization of generic over-the-counter (OTC) pharmaceutical
products and generic prescription drug products. The company's
OTC product categories include analgesics, cough, cold,
antihistamines, asthma relief, and laxatives. It also offers
private label solid dosage Rx products, including Estratest, a
product used by post-menopausal women.
Synovics Pharmaceuticals packages and distributes its private
label, or store brand OTC products to chain drug stores,
wholesalers, and distributors in the United States. It has a
strategic partnership with Maneesh Pharmaceuticals Pvt. Ltd. The
company was founded in 1983. It was formerly known as Bionutrics
Inc.
TANK SPORTS: Kabani & Company Expresses Going Concern Doubt
-----------------------------------------------------------
Los Angeles-based Kabani & Company, Inc., raised substantial doubt
about the ability of Tank Sports, Inc., to continue as a going
concern after it audited the company's financial statements for
the year ended Feb. 29, 2008. The auditor pointed to the
company's accumulated deficit of $6,788,710 as of Feb. 29, 2008,
and a net loss of $5,744,719 during the year ended Feb. 29, 2008.
Management's Plan
The company said that its continuing losses have adversely
affected the liquidity of the Tank Sports and its subsidiaries,
collectively called Group. Losses might continue for the
immediate future. The Group faces some business risks, which
includes but not limited to, its ability to maintain vendor and
supplier relationships by making timely payments when due.
Management has taken many steps to revise its operating and
financial requirements, which it believes are sufficient to
provide the company with the ability to continue as a going
concern. The acquisition and consolidation measures have
strengthen its market position, included, but not limited to,
restructuring of management and labor forces, consolidation of
regional marketing facility, ERP system integration, better
inventory control, further development of marketing promotion and
sales network, and improvement of customer service infrastructure.
The management has taken steps to upgrade the company's product
line with more advanced engine technologies by collaborating with
National Motor in Taiwan and Jianshe Motor Industry in China.
With all steps taken, the management believes that it will
significantly increase its overall productivity and revenues,
reduce unnecessary costs and expenses, and achieve a goal of high
profit margin with the controlled budget.
Management has devoted considerable effort to build up "Tank",
"Redcat" and Dazon brand names; set up more dealers to increase
sales; liquidate less profitable products, and focus on selling
more profitable products; strive to reduce product costs and
operating expenses through fully functioning of manufacturing
capacity in Shanghai; increase product range by utilization of R&D
capacity; and obtain additional equity. Management believes that
these actions will allow the Group to continue operations through
the next fiscal year.
Notes Payable
On Feb. 29, 2008, the company borrowed $1,500,000 from a non-
related party with an interest rate of 4.41%. This unsecured note
payable was due on Feb. 28, 2009. The note payable was
subordinated to the line of credit of $7,280,000.
On Feb. 15, 2007, the company signed the "Second Amended and
Restated Promissory Note and Security Agreement" with Hexagon
Financial LLC. The company is indebted to the Payee of $882,839,
which reflected the book value of the Payee's inventory in related
to the acquisition of Redcat as of Jan. 28, 2007. The note has a
fixed interest rate of 5% per annum. Pursuant to the agreement,
the company shall make $100,000 payments on April 5, 2007, and
April 10, 2007, and $300,000 immediately upon the closing of the
line of credit with United Commercial Bank but no later than
Aug. 1, 2007. And then the company should make payments of
$50,000 for every month starts in June 1, 2007, and ends on
Jan. 31, 2008. Any default amount under this agreement bears
interest at a rate equal to 10% per annum. In November 2007, the
Payee promised to reduce the outstanding note payable to $275,000
and to amend the payment schedule if the company adheres to the
new payment schedule and the stock repurchase agreement, as
defined in Note 20. As of Feb. 29, 2008, the company has a
payable of $500,740 due the Payee. In May 2008 the company and the
Payee negotiated the terms of the settlement of the stock
repurchase agreement and the note settlement. As a result of the
negotiations, the company paid $250,000 on May 10, 2008, and
$180,000 on May 30, 2008, to complete the settlement. The company
bought back 137,669 shares at $1.05 a share and recorded another
treasury shares acquisition for $144,552 and applied $285,448 as
final settlement of the Payee's debt of $500,740.
Financials
The company posted a net loss of $5,744,719 on net revenues of
$11,610,750for the year ended Feb. 29, 2008, as compared with a
net loss of $249,325 on net revenues of $9,588,238 in the prior
year.
At Feb. 29, 2008, the company's balance sheet showed $18,665,077
in total assets and $19,423,473 in total liabilities, resulting in
$758,396 stockholders' deficit.
The company's consolidated balance sheet at Feb. 29, 2008, also
showed strained liquidity with $10,279,517 in total current assets
available to pay $19,124,075 in total current liabilities.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2e32
About Tank Sports
Headquartered in El Monte, California, Tank Sports Inc.
(OTCBB: TNSP) -- http://www.tank-sports.com/-- develops,
engineers, and markets high-performance on-road motorcycles &
scooters, off-road all-terrain vehicles (ATVs), dirt bikes and
Go Karts through OEMs in China. The company's motorcycles and
ATVs products are manufactured in China and Mexico.
TARPON INDUSTRIES: Gets Final OK to Access Laurus' DIP Facility
---------------------------------------------------------------
The Hon. Steven W. Rhodes of the United States Bankruptcy Court
for the Eastern District of Michigan authorized Tarpon Industries
Inc. and its debtor-affiliates to obtain, on a final basis, up to
$1,200,000 in debtor-in-possession financing under a revolving
credit facility from a consortium of financial institutions led by
Laurus Master Fund Ltd. The DIP facility lien will bear interest
at 14% per annum.
Judge Rhodes also authorized the Debtors to access the lenders'
cash collateral until July 25, 2008.
A full-text copy of the cash collateral budget is available for
free at http://ResearchArchives.com/t/s?2e38
Before the Debtors' bankruptcy filing, the Debtors and Laurus
Master are parties to certain securities purchase agreements. All
obligations of the Debtors are secured by a first priority
security interest in substantially all of the Debtors' assets. At
present, the Debtors owe at least $15,911,928 in prepetition debt
to Laurus Master.
The Debtors tell the Court that they have insufficient funds and
have the urgent need to meet payroll, purchase raw materials and
other necessary supplies to produce goods for sale to satisfy
their obligations to their customers.
The DIP lien is subject to a carve-out for payment for
professional advisors to the Debtors or committee, statutory fees
of the U.S. Trustee and fees of Chapter 7 Trustee in the event the
Debtors' cases are converted to Chapter 7 liquidation proceedings.
There is a $75,000 carve-out for professionals retained by the
Debtors or the committee. There is also a $10,000 carve-out to be
paid to a Chapter 7 Trustee.
The Debtor agrees to pay a host of fees including $200,000 closing
fee.
To secure the Debtors' DIP obligations, the lenders will be
granted first priority and junior security interest in all of the
Debtors' assets
The DIP lien contains appropriate and customary events of default.
About Tarpon Industries
Based in Marysville, Michigan, Tarpon Industries Inc. --
http://www.tarponind.com/-- manufactures and sells engineered
steel storage rack systems and a variety of steel tubing products
in the United States and Canada through its subsidiary Eugene
Welding Co. The company's products include structural and roll-
formed steel selective racks, push-back racks, cantilevered racks,
archival storage systems and order picking systems. The company
markets its steel tubing products throughout the Unites States to
OEM automotive, boating, industrial equipment, construction,
agricultural, steel service centers, leisure and recreational
vehicle markets.
The company and its affiliate filed for Chapter 11 protection on
April 29, 2008 (Bankr. E.D. Mich. Case Nos. 08-50367 and 08-
50381). Jeffrey S. Grasl, Esq. and Stephen M. Gross, Esq., at
McDonald Hopkins LLC, represents the Debtors in their
restructuring efforts. The U.S. Trustee for Region 9 appointed
creditors to serve on an Official Committee of Unsecured
Creditors. Jean R. Roberston, Esq., at Calfee, Halter & Griswold,
LLP, represents the Committee. When the Debtors filed for
protection from their creditors, they listed estimated assets and
debts of $10 million to $50 million.
TEEVEE TOONS: Has Until September 18 to File Chapter 11 Plan
------------------------------------------------------------
The Hon. L. Gropper of the United States Bankruptcy Court for the
Southern District of New York extended the exclusive periods of
TeeVee Toons Inc. dba T.V.T. Records to:
a) file a Chapter 11 plan until Sept. 18, 2008, and
b) solicit acceptances of that plan until Nov. 18, 2008.
The Debtor tells the Court that it needs time to complete the sale
of substantially all of its assets, which could generate enough
cash to allow for a distribution to unsecured and non-priority
creditors.
The Debtors' initial exclusive periods to file a Chapter 11 plan
expired on Jun. 18, 2008.
Briefly Noted
On May 1, 2008, Judge Gropper authorized the Debtor to obtain, on
a final basis, up to $2.5 million in postpetition financing under
a revolving credit facility from group of financial institution
led by Bernard National Loan Investors Ltd., as agent., secured by
first priority perfected liens on substantially all property of
the Debtor's estate.
As of its bankruptcy filing, the Debtor owes $6,725,000 plus
unpaid interest and other charges to Bernard National.
The proceeds of loan will be used to pay transaction expenses and
to fund working capital requirements and general corporate
purposes relating to Debtor's post-petition operations.
About TEEVEE Toons
Headquartered in New York City, TEEVEE Toons Inc. dba T.V.T.
Records -- http://www.tvtrecords.com/-- is an American record
label. The Debtor filed for Chapter 11 petition on Feb. 19, 2008
(Bankr. S. D. N.Y. Case No.: 08-10562.) The Official Committee of
Unsecured Creditors has selected Sonnenschein Nath & Rosenthal LLP
as its counsel. Alec P. Ostrow, Esq. and Constantine Pourakis,
Esq, at Stevens & Lee, P.C. represent the Debtor in its
restructuring efforts. The U.S. Trustee for Region 2 appointed
creditors to serve on an Official Committee of Unsecured
Creditors. Carole Neville, Esq. at Sonnenschein Nath & Rosenthal
LLP, represents the Committee in this case.
The summary of schedules the Debtor filed on April 16, 2008, with
the Court showed total assets of $17,420,159 and unstated debts.
TEKOIL & GAS: Bankruptcy Puts Ptarmigan Resources Deal in Limbo
---------------------------------------------------------------
St. John's Telegram (Canada) reports that the bankruptcy of Tekoil
& Gas Corp. has put into uncertainty the future of its farm-in
agreement with Ptarmigan Resources. The deal concerns an offshore
parcel EL-1069, south of the Bay of Islands.
According to the report, Tekoil prepared a site to drill into the
offshore parcel in Little Port, a Bay of Islands community, and a
start to the well was made earlier this year. But there was no
more activity at the site since, the report said.
Jim Wright, a director and chief executive officer of Ptarmigan
Resources, said the well in Little Port was turned over to his
company by Tekoil. He said Ptarmigan was always the operator of
the exploration license, but Tekoil was the operator of the well
until the company returned it.
Tekoil & Gas filed for Chapter 11 protection with the U.S.
Bankruptcy Court for the Southern District of Texas. In its
court filing, the company listed assets and debts of between
$10 million and $50 million.
According to a report by the Troubled on June 12, 2008, Tekoil &
Gas received a Notice of Acceleration and Demand from J. Aron &
Company, as administrative agent and lender, alleging that certain
events of default have occurred under credit and guaranty
agreement dated May 11, 2007. The approximate amount due under
the Credit Agreement is $34,212,200.
On May 30, 2008, Tekoil and Mr. Western received a Notice of
Foreclosure Sale from J. Aron regarding its intent to sell the
collateral -- all of the interest of Tekoil in subsidiary, which
owns substantially all of the consolidated income-producing assets
-- to the highest qualified bidder in public on June 10, 2008.
According to Bloomberg, the filing is an attempt by Tekoil to keep
J. Aron from foreclosing its assets.
Tekoil's consolidated balances sheet shows total assets of
$63,140,619 and total debts of $56,892,745, for the quarterly
period ended March 31, 2008.
Headquartered in Houston, Tekoil & Gas Corporation --
http://www.tekoil.com/-- develops and acquires oil and gas
fields. The company was incorporated in Florida in 2004.
TOTE-A-LUBE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Tote-A-Lube LLC
860 Johnson Drive
Delano, MN 55328
Bankruptcy Case No.: 08-42990
Type of Business: The Debtors manufacture and sell lubricant
containers. See http://www.totealube.com/
Chapter 11 Petition Date: June 17, 2008
Court: District of Minnesota (Minneapolis)
Judge: Robert J. Kressel
Debtor's Counsel: Michael L. Meyer, Esq.
(mlmeyer@ravichmeyer.com)
Ravich Meyer Kirkman McGrath
Nauman & Tansey P.A.
4545 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Tel: (612) 317-4745
Fax: (612) 332-8302
Total Assets: $5,054,106
Total Debts: $4,639,883
Debtor's list of its 20 largest unsecured creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ron Carlson Note, Non-Compete $2,398,472
4073 Shamineau View Road Royalties
Motley, MN 56466
Reids Welding & Custom Goods and Services $11,919
Manufacturing Inc.
905 13th Street North
Benson, MN 56215
Lagr Inc. Consulting Agreement $11,833
4073 Shamineau View Road
Motley, MN 56466
Liquidynamics Goods & Services $11,617
USF Holland Goods & Services $8,187
Morrison Bros. Co. Goods & Services $7,983
DKS Systems Inc. Goods & Services $6,875
Boulay Heutmaker Goods & Services $6,445
Fredrikson & Byron Goods & Services $5,788
Vitran Express Goods & Services $4,697
King Solutions Inc. Goods & Services $4,330
Spantek Expanded Metals Inc. Goods & Services $2,211
Robert Cosgrove Goods & Services $1,987
N&M Transfer Company Inc. Goods & Services $1,879
JWDA Inc. Goods & Services $1,850
Thermoplastic Processes Goods & Services $1,448
1st Priority Services Inc. Goods & Services $1,273
B&H Equipment Goods & Services $1,259
Greenleaf Inc. Goods & Services $1,069
Whitmore Manufacturing Co. Goods & Services $1,002
TOUSA INC: DIP Termination Date Extended Until Today, June 19
-------------------------------------------------------------
At the behest of the Debtors and Citicorp North America, Inc.,
Judge John K. Olson of the U.S. Bankruptcy Court for the Southern
District of Florida has extended the Interim Termination Date of
the Debtors' Senior Secured Super-Priority Debtor-in-Possession
Credit and Security Agreement to June 19, 2008.
Judge Olson previously extended the Termination Date from June 11
to June 17.
The Commitments as defined in the DIP Credit Agreement and any
and all related obligations are terminated, provided that all
other terms of the DIP Credit Agreement and Interim DIP Order
will continue to govern through and including the extended
Interim Termination Date.
Citicorp North America Inc. has committed to extend $650 million
in postpetition financing to the Debtors.
As reported in the Troubled Company Reporter on Feb 1, 2008, the
Debtors received approval from the Court to immediately borrow
$135 million to pay normal operating expenses, including employee
wages, construction costs, and payments to suppliers.
DIP Terms
The DIP Credit Agreement provides for a total commitment of up to
$650 million, consisting of:
(a) a $130 million interim/permanent commitment, in the form
of revolving credit loans and letters of credit; and
(b) a $650,000,000 roll-up commitment made up of:
-- a term loan tranche equal to $650 million multiplied
by the term loan percentage of the first priority
secured facilities;
-- a letter of credit term loan tranche equal to the
stated amount of outstanding letters of credit under
the first priority revolver as of the roll- up date;
and
-- a revolving credit tranche equal to $650 million
minus the sum of the amounts of (i) the term loan
tranche plus (ii) the letter of credit term loan
tranche.
The facilities will mature on the earliest to occur of:
(i) the date of the substantial consummation of a confirmed
Reorganization Plan in the Chapter 11 cases;
(ii) the scheduled termination date, which refers to:
-- the date that is 60 days after the Interim Order is
entered by the Bankruptcy Court, if the roll-up event
does not occur and the final order is not entered by
the Bankruptcy Court within 60 days after the interim
order is entered;
-- Dec. 31, 2008, if the roll-up event does not occur
and the final order is entered with respect to the
interim/permanent commitment within 60 days after the
interim order is entered; or
-- Dec. 31, 2008, if the roll-up date occurs;
(iii) the date of the termination of the revolving credit
commitments and letter of credit term loan commitments
pursuant to optional prepayment or reduction of the
loans in whole or in part; or
(iv) the date on which the obligations become due and payable
pursuant to acceleration.
All letters of credit issued under the Revolving Credit
Commitment will be issued by Citibank N.A., and will have an
expiry date of no later than the earlier of (i) one year from the
date of issuance or (ii) 15 days prior to the scheduled
termination date. The Debtors will pay to the issuer a 0.25%
issuance fee and to the lenders a letter of credit fee equal to
5.25% of the aggregate outstanding stated amount of each letter
of credit, payable monthly in arrears.
The Debtors may elect that the loans comprising each borrowing
bear interest at a rate per annum equal to (i) the base rate plus
the applicable margin, or (ii) the eurodollar rate -- subject to a
floor of 3.25% -- plus the Applicable Margin:
(i) at the Base Rate plus 4.25% per annum; or
(ii) at the reserve adjusted Eurodollar Rate plus 5.25%
per annum.
If any event of default occurs and is continuing under the DIP
facility, then the borrowers will pay interest on overdue amounts
at a per annum rate 2% greater than the rate of interest
specified.
Interest on each base rate loan will be payable in arrears on the
last day of each calendar month, upon prepayment, and at
maturity. Interest on Eurodollar Rate Loans will be payable in
arrears on the last day of each monthly interest period, upon the
prepayment thereof, and at maturity.
The DIP Obligations will be secured, subject to the carve-out, by
a first priority, priming and senior security interest and lien
not subject to subordination on all property and assets of the
Debtors.
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.:
08-10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta,
Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at
Berger Singerman to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker and
financial advisor. Ernst & Young LLP is selected as the Debtors'
independent auditor and tax services provider. Kurtzman Carson
Consultants LLC acts as the Debtors' Notice, Claims & Balloting
Agent. The Official Committee of Unsecured Creditors hired
Patricia A. Redmond, Esq., and the law firm Stearns Weaver
Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA
Inc.'s financial condition as of Sept. 30, 2007, showed total
assets of $2,276,567,000 and total debts of $1,767,589,000. Its
consolidated detailed balance sheet as of Feb. 29, 2008 showed
total assets of $1,961,669,000 and total liabilities of
$2,278,106,000.
TOUSA's Exclusive Plan Filing Period expires October 25, 2008.
(TOUSA Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
TOUSA INC: In Talks to Address Objections on Cash Collateral Order
------------------------------------------------------------------
TOUSA Inc. and its debtor-affiliates inform the U.S. Bankruptcy
Court for the Southern District of Florida that it has negotiated
the terms of an amended cash collateral order to address various
objections to the original order.
According to the Debtors' counsel, Paul Steven Singerman, Esq.,
at Berger Singerman P.A., in Miami, Florida, parties in the
negotiation included the Official Committee of Unsecured
Creditors, the Debtors and the First Lien Lenders. Certain issues,
however, remain unresolved.
A black-lined version of the proposed Amended Cash Collateral
Order, marked to show the changes made to the original order, is
available for free at
http://bankrupt.com/misc/Tousa_BlacklinedAmendedCashCollOrder.pdf
Mr. Singerman summarized the remaining issues with respect to the
Debtors' Cash Collateral use:
(a) The Court must clarify the extent of the proposed
Adequate Protection Liens and Adequate Protection Claims
granted to the lenders.
The Creditors Committee believes that the Adequate
Protection Liens and Adequate Protection Claims must be
limited to those Debtors against whom the lenders have
valid security interests.
The First Lien Lenders believe that the Adequate
Protection Liens and Claims should be satisfied from all
available collateral, whether or not the Prepetition
Lenders are determined to have valid liens and claims with
respect to the collateral as of the Petition Date.
(b) The First Lien Lenders believe that Avoidance Proceeds
sufficient to reimburse them for the aggregate
amount of Collateral that is subject to a valid lien and
claim used to fund the investigation, initiation and
prosecution of the Avoidance or tort actions, must be
available to satisfy Adequate Protection Claims.
The Creditors Committee argue that Adequate Protection
Claims must under no circumstances be satisfied from
Avoidance Proceeds.
(c) The Creditors Committee objects to any "pay down" of the
First Priority Indebtedness. The Creditors Committee
contends that the disgorgement provisions relating to any
paydown are inadequate and impair its litigation position
vis-a-vis the First Lien Lenders.
(d) The Creditors Committee contends that the Carve-Out for
its professional fees should not be limited to $450,000
per month, and that the post-termination Carve-Out should
be increased to $10,000,000 for all professionals.
(e) The Court must strike the provision prohibiting the
Debtors or any other party to use any portion of the Cash
Collateral to object to or contest in any manner the
Prepetition Secured Indebtedness or liens, or to assert or
prosecute any actions against any of the lenders.
In addition to the remaining issues that will likely require the
Court's consideration, the Creditors Committee has suggested a
few additional language changes to the Amended Cash Collateral
Order that the Debtors and First Lien Lenders continue to review
and consider, according to Mr. Singerman.
Wells Fargo, Et. Al. Object to
Cash Collateral Amendment
Wells Fargo Bank N.A., as successor administrative agent pursuant
to a Second Lien Credit Agreement dated July 31, 2007, stated that
neither it nor the Second Priority Lenders participated in any of
the direct negotiations or meetings, nor were they provided with
any drafts of the Proposed Amended Cash Collateral Order.
Wells Fargo contends that it opposes the Proposed Cash Collateral
Order to the extent that:
(a) the Proposed Order provides for a number of documents,
reports, information or notices to be submitted by the
Debtors to the First Priority Agents and the Creditors
Committee, but not to Wells Fargo;
(b) the Creditors Committee asserts that Cash Collateral
should be utilized to fund the Committee's fees and
expenses in pursuing avoidance actions and any other
challenges to the claims, guarantees and liens of the
Second Priority Agent and the Second Priority Lenders;
(c) the Second Priority Fee Cap is $450,000. Now that the
Court has authorized the Creditors Committee to commence
litigation against the Second Priority Agent, among other
defendants, the professional fees and expenses that will
be incurred will be very substantial, Wells Fargo notes;
and
(d) the Budget incorporates the Second Priority Fee Cap.
According to Jeffrey I. Snyder, Esq., at Bilzin Sumberg Baena
Price & Axelrod LLP, in Miami, Florida, Wells Fargo supports a
"pay down" of the First Priority Indebtedness on the basis that
it will reduce the interest expense accruing senior to the
security interests of the Second Lien Agent. Wells Fargo's
support is conditioned on the payment being made and applied in
accordance with the relevant documentation, Mr. Synder clarifies.
Neither Wells Fargo nor the Second Priority Lenders were parties
to the negotiation of the Proposed Order, Mr. Synder reiterates.
Therefore, he maintains, the burden of proof remains with the
Debtors to demonstrate that Wells Fargo and the Second Priority
Lenders are adequately protected and will remain adequately
protected notwithstanding the Creditors Committee's proposed use
of Cash Collateral for litigation funding.
Supplemental Objections
The Creditors Committee, in its supplemental objection, raised
similar concerns as the Remaining Issues and asks the Court to
sustain its objection.
In their supplemental objection, Noteholders Aurelius Master Ltd.,
Aurelius Capital Partners LP, GSO Special Situations Fund L.P.,
GSO Special Situations Overseas Master Fund Ltd., GSO Credit
Opportunities Fund (Helios), L.P., and Carlyle Strategic Partners
ask the Court to deny the Cash Collateral Motion.
Paul J. Battista, Esq., at Genevese, Joblove & Battista P.A., in
Miami, Florida, argued on behalf of the Noteholders, that the
$190,000,000 paydown of disputed claims directly violates Section
361 of the Bankruptcy Code. The Paydown provides for an alleged
"adequate protection" payment, he pointed out, that is
uncorrelated to any alleged diminution in collateral caused by the
Debtors' use of Cash Collateral, and that will be made to
creditors whom Debtors admit are oversecured.
There is no need or legal justification for a cash payment of 47%
of disputed claims, which payment represents approximately 60% of
the Debtors' cash-on-hand, along with payments of interest, fees,
other charges and replacement and additional liens, Mr. Battista
asserted.
Mr. Battista further contended that the Court must deny the Cash
Collateral Motion for these additional reasons:
* The Debtors cannot "settle" an unassessed issue. Among
other things, the Debtors admittedly did not conduct an
analysis of the extent, if any, to which their use of the
cash collateral diminishes the lenders' interest in their
collateral. The Debtors did not exercise any business
judgment because they could not form any view of the
relative strength of the lenders' claim to adequate
protection payments.
* The "pay down" is an impermissible payment on a disputed
claim.
Citicorp Responds
Citicorp North America Inc., as administrative agent for the
First Priority Lenders, reiterated its support for the Proposed
Cash Collateral Order.
Allan E. Wulbern, Esq., at Smith Hulsey & Busey, in Jacksonville,
Florida, contended that despite the objections of the Creditors
Committee and the Noteholders, the Paydown is in the best
interests of the Debtors' estates as it will result in interest
savings in excess of $20,000,000 on an annualized basis. "The
interest savings is not only of huge importance to the Debtors
and the unsecured creditors, but also protects the Secured
Lenders."
The Debtors are paying interest at a non-default rate out of the
Secured Lenders' dwindling Collateral. Removing that interest
expense will make more of the remaining value of the Collateral
available to the Secured Lenders as well as other constituencies,
Citicorp told the Court.
Mr. Wulbern explained that through the disgorgement provisions
contained in the Proposed Order, Citibank has attempted to
balance the basic economic requirements for a paydown with
meaningful protections for the estates' provisional interest in
the Paydown.
Moreover, Mr. Wulbern pointed out, the Secured Lenders are not
aware of any court in this country requiring a secured lender to
fund litigation against itself. To the contrary, it is
exceedingly common for courts to approve cash collateral orders
that expressly prohibit an unsecured creditors' committee or a
debtor from funding litigation against the secured creditor with
its own collateral
Citicorp maintained that while the Creditors Committee has
received Court authority to commence litigation to seek to have
the liens reduced or invalidated, there has been no judicial
determination or indication that the Secured Lenders' liens are in
any way invalid. The Secured Lenders are entitled to adequate
protection under the Bankruptcy Code, Citicorp asserted.
Mr. Wulbern added that contrary to the Creditors Committee's
assertions, the Carve-Out in the Proposed Order does not cap the
fees of its professionals; rather it simply sets forth the degree
to which the Secured Lenders have agreed to voluntarily
subordinate their liens and claims to the claims of the
committee's professionals for unpaid fees and expenses.
"The Budget is designed to ensure that the professionals are not
financing the Debtors' Chapter 11 cases, while the Carve-Out
provides a voluntary limitation on the rights of the Secured
Lenders to attempt to reach back in the event these cases become
administratively insolvent," Mr. Wulbern stated.
Citicorp is simply requesting a superpriority administrative
expense claim on account of valid liens to provide reimbursement,
if necessary, for the fees and expenses and other costs
associated with obtaining an avoidance action recovery for the
benefit of the unsecured creditors, according to Mr. Wulbern.
Citicorp said unless the Debtors are prepared and able to
dismantle the cash management system and other interrelationships
among themselves, precisely allocate common expenses among
themselves, and provide sufficient adequate protection on a
Debtor-by-Debtor basis, then the Secured Lenders would not be
prepared to proceed under the construct proposed by the Creditors
Committee.
Debtors Talk Back
The Debtors emphasized that the Court must approve the Cash
Collateral Motion to ensure that they will have adequate
financing for the next six months.
The Debtors told the Court that they have worked hard, together
with the First Lien Lenders and the Creditors Committee, to
narrow the issues standing in the way of a fully consensual
agreement.
The Debtors counsel, Mr. Singerman, cited that nothing in the
Objections provide any legal basis to reject the agreement that
the Debtors have negotiated with the First Lien Lenders for the
continued use of the cash collateral. "The Proposed Order should
be approved despite the remaining objections," he asserted.
Moreover, the interest savings that will be realized after Paydown
of the First Lien Indebtedness, combined with the detailed
disgorgement provisions with respect to any Paydown, support the
conclusion that the Proposed Order is in the best interests of the
Debtors' estates, Mr. Singerman maintained.
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.:
08-10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta,
Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at
Berger Singerman to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker and
financial advisor. Ernst & Young LLP is selected as the Debtors'
independent auditor and tax services provider. Kurtzman Carson
Consultants LLC acts as the Debtors' Notice, Claims & Balloting
Agent. The Official Committee of Unsecured Creditors hired
Patricia A. Redmond, Esq., and the law firm Stearns Weaver
Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA
Inc.'s financial condition as of Sept. 30, 2007, showed total
assets of $2,276,567,000 and total debts of $1,767,589,000. Its
consolidated detailed balance sheet as of Feb. 29, 2008 showed
total assets of $1,961,669,000 and total liabilities of
$2,278,106,000.
TOUSA's Exclusive Plan Filing Period expires October 25, 2008.
(TOUSA Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
TYSON FOODS: Expected Credit Decline Cues Fitch to Lower Ratings
----------------------------------------------------------------
Fitch Ratings has downgraded the ratings for Tyson Foods, Inc. and
its subsidiaries as:
Tyson
-- Issuer Default Rating to 'BB+' from 'BBB-';
-- Unsecured bank facility to 'BB+' from 'BBB-';
-- 6.85% 2016 senior unsecured notes to 'BB+' from 'BBB-';
-- 8.25% 2011 senior unsecured notes to 'BB' from 'BBB-';
-- 7.0% 2018 senior unsecured notes to 'BB' from 'BBB-';
-- 7.0% 2028 senior unsecured notes to 'BB' from 'BBB-';
-- Short-term IDR to 'B' from 'F3';
-- Commercial paper to 'B' from 'F3'.
Tyson Fresh Meats, Inc.
-- 7.95% 2010 senior unsecured notes to 'BB+' from 'BBB-';
-- 7.125% 2026 senior unsecured notes 'BB+' from 'BBB-';
Lakeside Farm Industries Ltd.
-- Term loan to 'BB+' from 'BBB-'.
The Rating Outlook is Negative.
At March 29, 2008, Tyson had approximately $3 billion in total
debt.
The downgrade reflects expectations that Tyson's credit statistics
will continue to deteriorate in the near term due to lower than
anticipated operating earnings and cash flow. Higher than
predicted grain cost and the length of time required to pass these
costs on, through pricing, is reducing the profitability of the
company's poultry operations, which typically generates a
significant portion of the company's cash flow.
The ratings also factor in the value of the company's beef assets
organized under TFM which has guaranteed a portion of Tyson's
unsecured debt obligations. Debt obligations of Tyson, including
outstanding balances on its bank facility and the $990 million
(as of March 29, 2008) of 6.85% notes due 2016, which are
guaranteed by TFM, have been downgraded one notch to 'BB+' while
debt that does not have the benefit of this guarantee has been
downgraded two notches to 'BB'. Debt issued directly at the TFM
or Lakeside subsidiary level, which is structurally senior to
Tyson's other debt that does not have the TFM guarantee, has been
downgraded one notch to 'BB+'.
The Negative Outlook reflects the risk that operating cost
pressures could accelerate significantly. Additionally,
uncertainty regarding the sustainability of the current
outperformance in Tyson's pork segment and the longer-term
profitability of its beef operations remains. Further downgrades
could be triggered by a prolonged period of higher than expected
leverage while the outlook could be stabilized if cash flow
generated from the chicken segment normalizes and the company
demonstrates the ability to sustain credit statistics appropriate
for the current ratings.
During the first half of fiscal 2008, consolidated cash flow from
operating activities declined 58% to $144 million due primarily to
higher grain costs in the chicken segment and increased inventory
requirements. Operating income improved dramatically in the pork
segment, which experienced 390 basis points of margin expansion to
8.4%, due primarily to lower live hog input costs. However, this
was more than offset by considerable declines in the chicken and
beef segments which experienced an operating loss of $26 million
and $96 million, respectively, down from the $134 million and
$1 million of operating income earned during the first half of the
previous year.
While liquidity is currently not an issue for Tyson and the
company does not have material near term maturities, this
operating performance resulted in credit statistics that are weak
for the investment grade level. For the latest twelve month
period ended March 29, 2008, total debt-to-operating EBITDA was
3.0 times, operating EBITDA-to-gross interest expense was 4.4x and
FFO fixed charge coverage was 3.0x.
Tyson currently expects incremental grain cost to exceed
$600 million in fiscal 2008; up from the additional $334 million
absorbed in fiscal 2007. The company is also projecting a
$400 million increase in the cost of other ingredients such as
cooking oil and breading in fiscal 2008. The combination of price
increases, hedging and, to a lesser extent, productivity
initiatives are expected to only partially help offset these
higher operating costs in the near term. Due to the contract
nature of the business, the reluctance of industry players to
meaningfully reduce supply, the magnitude and the continued
escalation of grain prices, these costs are being passed along
slower than Fitch originally anticipated.
Tyson's ratings consider the company's significant size and
diversification among the various meat proteins. These
considerations are balanced against a high level of business risk
and volatility in its financial performance. While not
anticipated, Fitch is cognizant that unpredictable shocks; such as
disruptions in exports or incidences of food-borne illnesses, to
global supply and demand can have considerable effects on Tyson's
operating and financial performance. Since each of these
situations must be evaluated individually, they have not been
factored into the ratings.
UAL CORP: Bank of America Discloses 14.79% Equity Stake
-------------------------------------------------------
In a regulatory filing with the United States Securities and
Exchange Commission, dated June 10, 2008, Bank of America
Corporation disclosed that it beneficially owns 18,607,769 shares
of UAL Corp. Common Stock, representing 14.79% of UAL's total
outstanding shares.
BofA reported that it has shared voting power of all the shares,
as well as shared dispositive power for 18,604,169 shares. BofA
is the parent holding company of nine other entities, which also
disclosed individual ownership of UAL stock:
% of UAL's
No. of outstanding
Entity Shares shares
------ ------ -----------
NB Holdings Corporation 17,233,522 13.70%
Bank of America, N.A. 9,069,873 7.21%
Columbia Management Group
LLC 49,824 0.04%
Columbia Management Advisors
LLC 49,824 0.04%
Banc of America Securities
Holdings Corporation 8,163,649 6.49%
Banc of America Securities
LLC 8,163,649 6.49%
Banc of America Investment
Advisors, Inc 1,038 0.0008%
NMS Services Inc. 1,374,247 1.09%
NMS Services (Cayman) Inc. 1,374,247 1.09%
Charles F. Bowman, senior vice president of Bank of America
Corporation, reported that the 9,069,873 shares held by Bank of
America, N.A., includes:
-- 4,657,481 shares of common stock held as trustee on
behalf of the UAL Ground EE 401K ER Stock Fund;
-- 1,896,694 shares of common stock held as trustee on
behalf of the UAL Mgmt and Admin 401K ER Stock Fund; and
-- 2,240,971 shares of common stock held as trustee on
behalf of the UAL Flight Att 401K ER Stock Plan.
BofA, N.A. has shared voting and dispositive powers with respect
to the shares of UAL common stock held under the terms of certain
trusts established to fund UAL's 401K plans, Mr. Bowman states.
BofA, N.A. has sole voting power for 220,803 shares, as well as
shared voting power for 8,849,070 shares. Moreover, it has sole
dispositive power for 221,003 shares, and shared dispositive
power for 8,845,270 shares.
NB Holdings shares the power to vote on all shares it holds, and
has shared dispositive power for 17,229,922 shares.
BofASHC, Columbia Management Group, and NMS Services have shared
voting and dispositive power on all its shares, while BofAS,
Columbia Management Advisors, and NMS Services (Cayman) have sole
voting and dispositive power of all its shares. BofA Investment
has share voting power for all its shares.
About UAL Corporation
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest
air carrier. The airline flies to Brazil, Korea and Germany.
The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts. Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.
Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006. The company emerged from bankruptcy
protection on Feb. 1, 2006.
(United Airlines Bankruptcy News, Issue No. 158; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported in the Troubled Company Reporter on May 3, 2007,
Fitch Ratings has affirmed the Issuer Default Ratings of UAL
Corp. and its principal operating subsidiary United Airlines
Inc. at B-.
UAL CORP: Shareholders Re-Elect Directors at 2008 Annual Meeting
----------------------------------------------------------------
UAL Corporation, the holding company whose primary subsidiary is
United Airlines, said that its shareholders re-elected each
of its directors for a one-year term at UAL's 2008 Annual
Meeting.
Each of the 10 directors standing for election by the common
stockholders of the Company was re-elected:
-- Richard J. Almeida -- retired Chairman and Chief Executive
Officer of Heller Financial, Inc.;
-- Mary K. Bush -- President of Bush International, a global
consulting firm;
-- W. James Farrell -- retired Chairman and Chief Executive
Officer of Illinois Tool Works, Inc., an engineering
components manufacturer;
-- Walter Isaacson -- President and Chief Executive Officer
of the Aspen Institute, an international education and
leadership organization; former Chairman and Chief
Executive Officer of CNN;
-- Robert D. Krebs -- retired Chairman and Chief Executive
Officer of Burlington Northern Santa Fe Corporation;
-- Robert S. Miller -- Executive Chairman of Delphi
Corporation, a supplier of mobile electronics and
transportation systems; former Non-Executive Chairman of
Federal Mogul Corporation, an auto parts supplier, and
former Chairman and Chief Executive Officer of Bethlehem
Steel Corporation;
-- James J. O'Connor -- retired Chairman and Chief Executive
Officer of Unicom Corporation, a holding company, and its
wholly owned subsidiary, Commonwealth Edison Company;
-- Glenn F. Tilton -- Chairman, President and Chief Executive
Officer of UAL Corporation and its wholly owned
subsidiary, United Air Lines, Inc.; former Vice Chairman
of ChevronTexaco Corporation; former Chairman of the Board
and Chief Executive Officer of Texaco, Inc.;
-- David J. Vitale -- Senior Advisor to the Chief Executive
Officer of the Chicago Public School system and the former
Chief Administrative Officer of the Chicago Public School
system; former President and Chief Executive Officer of
the Chicago Board of Trade; and
-- John H. Walker -- Chief Executive Officer of Global Brass
and Copper and the former Chief Executive Officer and
President of the Boler Company, a transportation
manufacturer; former Chief Executive Officer, former
President and Chief Operating Officer of Weirton Steel
Corporation.
In addition, holders of two classes of preferred stock -- the
Class Pilot MEC Junior Preferred Stock and the Class IAM Junior
Preferred Stock -- elected Captain Stephen A. Wallach and Stephen
R. Canale as UAL directors. Mr. Wallach is Chairman of United
Airlines ALPA-MEC (Air Line Pilots Association - Master Executive
Council) and Captain, United Boeing 747-400; Mr. Canale is
President and Directing General Chairman of the IAM (International
Association of Machinists and Aerospace Workers) District Lodge
141.
Glenn F. Tilton, Chairman, President and Chief Executive Officer
of UAL Corporation and United Air Lines, Inc., said, "[O]ur
stockholders showed their confidence in our Board, overwhelmingly
electing Directors to another term, and approving an equity
incentive plan that will enable United to attract, retain and
reward key leaders. Equally important, our owners recognize our
strong corporate governance and soundly rejected the proposal for
say on pay."
Final voting tallies will be included in the Company's next
quarterly report filed with the Securities and Exchange
Commission.
Workers Picket Shareholder Meeting
Shouting "Glenn's Gotta Go," United Airlines flight attendants,
represented by the Association of Flight Attendants-CWA, AFL-CIO
(AFA-CWA), together with other United employees, picketed the UAL
Corp. Shareholder meeting at the Marriott Warner Center in
Woodland Hills, California on June 11, 2008. The picketers were
referring to Glenn Tilton, chairman, president and chief
executive officer of UAL.
Hotel security, United's corporate security and private security
were all on the scene, according to a statement made by United's
AFA-CWA.
During the Shareholder Meeting AFA-CWA Master Executive Council
President Greg Davidowitch was to present a shareholder proposal
for an advisory vote on executive pay. Shareholders have been
voting on the proposal in recent weeks.
Mr. Tilton and General Counsel Paul Lovejoy were booed and hissed
when the directors were re-elected, and when it was announced
that the executives won approval of their new $130 million dollar
bonus plan, the AFA-CWA statement disclosed.
"Executive 'pay-for-pulse' must die at United Airlines. The
notion that executives are paid for performance, but continue to
be richly rewarded when they fail shareholders, workers and
passengers is absurd," stated Greg Davidowitch, AFA-CWA President
at United. "How is it conscionable for executives to reap
substantial salary increases and bonus packages, while workers
and passengers continue to suffer the effects of bankruptcy?
Flight attendants and other workers are coming together to demand
change and good decisions for the future of United Airlines."
About UAL Corporation
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest
air carrier. The airline flies to Brazil, Korea and Germany.
The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts. Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.
Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006. The company emerged from bankruptcy
protection on Feb. 1, 2006.
(United Airlines Bankruptcy News, Issue No. 158; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported in the Troubled Company Reporter on May 3, 2007,
Fitch Ratings has affirmed the Issuer Default Ratings of UAL
Corp. and its principal operating subsidiary United Airlines
Inc. at B-.
UAL CORP: Unit and AFA Offer Separation Deal to Flight Attendants
-----------------------------------------------------------------
United Airlines Inc., the wholly owned subsidiary of UAL
Corporation, and the Association of Flight Attendants announced
that they have come to agreement on a one-time opportunity for
eligible flight attendants to voluntarily separate from the
company. The program will be available for up to 600 United
flight attendants.
Flight attendants who are at least 45 years old and have at least
15 years of flight attendant service with the company as of Aug.
1, 2008 will be eligible to participate. Participants will be
entitled to severance payments based on years of service and
retiree travel benefits.
"We are pleased to have reached an agreement with the AFA that
benefits our employees and our company, and will mitigate the
impact of our announced capacity reductions," said Alex Marren,
senior vice president -- Onboard Service for United.
United will continue to explore viable alternatives related to
capacity reductions with all unions representing its employees.
About UAL Corporation
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest
air carrier. The airline flies to Brazil, Korea and Germany.
The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts. Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.
Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006. The company emerged from bankruptcy
protection on Feb. 1, 2006.
(United Airlines Bankruptcy News, Issue No. 158; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported in the Troubled Company Reporter on May 3, 2007,
Fitch Ratings has affirmed the Issuer Default Ratings of UAL
Corp. and its principal operating subsidiary United Airlines
Inc. at B-.
VALENCE TECHNOLOGY: PMB Helin Donovan Raises Going Concern Doubt
----------------------------------------------------------------
PMB Helin Donovan, LLP, expressed substantial doubt about the
ability of Valence Technology, Inc., to continue as a going
concern after it audited the company's financial statements for
the year ended March 31, 2008. The auditor pointed to the
company's recurring losses from operations, negative cash flows
from operations and net stockholders' capital deficiency.
Management's Statement
The management stated that the company has incurred operating
losses each year since its inception in 1989 and had an
accumulated deficit of $536.3 million as of March 31, 2008. For
the years ended March 31, 2008 and 2007, the Company sustained net
losses available to common stockholders of $19.6 million and $22.4
million, respectively.
Valence Technology Management said "We have planned for an
increase in sales and, if we experience sales in excess of our
plan, our working capital needs and capital expenditures would
likely increase from that currently anticipated." In particular,
the Valence Technology's recently announced contract with The
Tanfield Group, PLC, will require the company to expend additional
amounts for inventory and capital equipment, in advance of any
revenues. The company's ability to meet this additional customer
demand would depend on its ability to arrange for additional
equity or debt financing since it is likely that cash flow from
sales will lag behind these increased working capital
requirements.
All of the company's assets are pledged as collateral under
various loan agreements with Valence Technology, Inc., Chairman
Carl Berg or related entities. If the company fails to meet its
obligations pursuant to these loan agreements, these lenders may
declare all amounts borrowed from them, together with accrued and
unpaid interest thereon, to be due and payable. If this were to
occur, the company would not have the financial resources to repay
its debt and these lenders could proceed against its assets.
"We have and will continue to have a significant amount of
indebtedness and other obligations. As of March 31, 2008, we had
approximately $75.1 million of total consolidated indebtedness.
Included in this amount are $34.6 million of loans outstanding,
net of discount, to an affiliate of Carl Berg, $21.5 million of
accumulated interest associated with those loans and $19.0 million
of principal and interest outstanding with a third party finance
company. We also have an upcoming obligation to redeem our
outstanding shares of Series C-1 Convertible Preferred Stock and
Series C-2 Convertible Preferred Stock held by affiliates of Carl
Berg for up to $8,610,000, plus accrued dividends, which, as of
March 31, 2008, were $431,000. Our substantial indebtedness and
other obligations could negatively impact our current and future
operations," the management added.
Liquidity and Capital Resources
At March 31, 2008, the company's principal sources of liquidity
were cash and cash equivalents of $2.6 million. The company does
not expect that its cash and cash equivalents will be sufficient
to fund its operating and capital needs for the next 12 months
following March 31, 2008, nor does the company anticipate product
sales during fiscal 2009 will be sufficient to cover its operating
expenses. Historically, the company has relied upon management's
ability to periodically arrange for additional equity or debt
financing to meet the company's liquidity requirements.
Unless the company's product sales are greater than management
currently forecasts or there are other changes to its business
plan, the company said it will need to arrange for additional
financing within the next three to six months to fund operating
and capital needs. This financing could take the form of debt or
equity. Given the company's historical operating results and the
amount of its existing debt, as well as the other factors, the
company may not be able to arrange for debt or equity financing
from third parties on favorable terms or at all.
The company's cash requirements may vary materially from those now
planned because of changes in the company's operations including
the failure to achieve expected revenues, greater than expected
expenses, changes in OEM relationships, market conditions, the
failure to timely realize the company's product development goals,
and other adverse developments. These events could have a
negative impact on the company's available liquidity sources
during the next 12 months, the company warned.
Financials
The company posted a net loss of $19,440,000 on total revenues of
$20,777,000 for the year ended March 31, 2008, as compared with a
net loss of $22,251,000 on total revenues of $16,674,000 in the
prior year.
At March 31, 2008, the company's balance sheet showed $27,158,000
in total assets and $94,475,000 in total liabilities, resulting in
$67,317,000 stockholders' deficit.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2e30
About Valence Technology Inc.
Valence Technology Inc. (NASDAQ:VLNC) -- http://www.valence.com/
-- develops and markets the industry's commercially available,
safe, large-format family of lithium phosphate rechargeable
batteries. Valence holds a worldwide portfolio of issued and
pending patents relating to its lithium phosphate rechargeable
batteries. The company has facilities in Austin, Texas; Las
Vegas, Nevada; Mallusk, Northern Ireland and Suzhou, China.
VICORP RESTAURANTS: Milbank Tweed Approved as Panel's Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave the
Official Committee of Unsecured Creditors of VICORP Restaurants
Inc. and VI Acquisition Corp. permission to retain Milbank Tweed
Hadley & McCloy LLP as their counsel.
As reported in the Troubled Company Reporter on May 14, 2008,
the firm is expected to:
a. advise the Committee with respect to its rights, powers and
duties in these cases,
b) assist and advise the Committee with respect to its
communications with the general creditor body regarding
significant matters, and
c) assist the Committee in preparing pleadings and applications
as may be necessary.
Abhilash M. Raval, Esq., at member at Milbank Tweed, told the
Court that the firm's professionals will bill the Debtor these
hourly rates:
Designations Hourly Rates
------------ ------------
Partners $700-$950
Other Counsel $650-$850
Associates and Senior Attorneys $275-$670
Legal Assistants $155-$325
Mr. Raval assured the Court that the firm is disinterested as that
term is defined in Section 101(14) of the U.S. Bankruptcy Code.
About VICORP Restaurants
Based in Denver, Colorado, VICORP Restaurants Inc. --
http://www.vicorpinc.com/-- operates two restaurant concepts
under proven and well-recognized brands, Village Inn and Bakers
Square. Founded in 1958, VICORP has 343 restaurants in 25 states,
consisting of 250 company-operated restaurants and 93 franchised
restaurants. Known for its strong breakfast heritage, Village Inn
has been serving its signature breakfast items like one-of-a-kind
skillet dishes and made-from-scratch pancakes for 50 years. In
addition, Village Inn offers traditional American fare for lunch
and dinner.
The company and its affiliates filed for Chapter 11 protection on
April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Donna L.
Culver, Esq., at Morris Nichols Arsht & Tunnell, and Kimberly
Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A.
Robinson, Esq., at Reed Smith LLP, represents the Debtors in their
restructuring efforts. The Debtors chose Wells Fargo Trumbull as
their claims, noticing, and balloting agent.
The U.S. Trustee for Region 3, appointed seven members to the
Official Committee of Unsecured Creditors in the Debtors' cases.
When the Debtors filed for protection from their creditors, they
listed estimated assets and debts of $100 million to $500 million.
WELLMAN INC: Completes Amendment to DIP Agreement
-------------------------------------------------
Wellman Inc. completed an amendment to its DIP Agreement that will
allow it to pursue a stand-alone plan of reorganization. The
amended DIP Agreement requires that the company adhere to the
timetable in completing its plan of reorganization:
-- File, with the Bankruptcy Court, by June 25, 2008,
(i) a plan of reorganization;
(ii) a disclosure statement; and
(iii) a commitment of at least $70 million to backstop a
rights offering which is reasonably acceptable to the
DIP lenders;
-- Obtain an indicative commitment for exit financing by
July 14, 2008;
-- Obtain a fully underwritten commitment for exit financing
by July 30, 2008;
-- Obtain Bankruptcy Court approval of the disclosure statement
by Aug. 4, 2008;
-- Obtain an order confirming the plan of reorganization by
Sept. 15, 2008; and
-- Complete the plan of reorganization and exit bankruptcy by
Sept. 25, 2008.
The company has reached an understanding with the two largest
holders of Wellman's second-lien debt to backstop an $80 million
rights offering. This commitment is expected to be finalized
before June 25, 2008.
The company has also made significant progress on the other
elements of the plan of reorganization; however, there can be no
assurances that the company will be able to complete the plan of
reorganization.
"We look forward to working with the backstop parties and our
other stakeholders to complete the plan of reorganization and
emerge from bankruptcy with a strong financial position," Mark
Ruday, Wellman's chief executive officer, stated. "This will
allow us to capture more profitable growth opportunities in PET
resins well as in our other businesses. We appreciate the time
and effort invested by all of our stakeholders and look forward to
working with them to maximize the value of the company."
About Wellman Inc.
Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]:
WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and
markets packaging and engineering resins used in food and beverage
packaging, apparel, home furnishings and automobiles. They
manufacture resins and polyester staple fiber a three major
production facilities.
The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595).
Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York
City, represents the Debtors.
Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.
On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $498,867,323 in assets and $684,221,655 in liabilities as
of Jan. 31, 2008.
WESCO HOLDINGS: S&P Puts 'BB-' Rating on Proposed $100MM Term Loan
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on aerospace supplier Wesco Holdings Inc. The
outlook is stable.
S&P assigned issue-level and recovery ratings to Wesco Aircraft
Hardware Corp.'s proposed $100 million incremental term loan
facility. The issue-level rating is 'BB-'. The recovery rating
is '2', indicating an expectation of substantial (70%-90%)
recovery in the event of a payment default. S&P affirmed its
'BB-' rating on Wesco Aircraft's $525 million first-lien credit
facility, which has a '2' recovery rating.
At the same time, S&P lowered its rating on Wesco Aircraft's
$150 million second-lien term loan to 'B-', two notches below the
corporate credit rating on Wesco Holdings, from 'B'. The recovery
rating has been revised to '6' from '5', indicating an expectation
of negligible (0%-10%) recovery in the event of a payment default.
The downgrade reflects the potential impact of the additional
$100 million of first-lien debt on recovery.
The incremental term loan will finance the purchase of Airtechnics
Inc., a distributor of electromechanical and interconnect products
to the aerospace and defense industry. The Airtechnics
acquisition is complementary to Wesco Holdings' existing business
and offers cross-selling opportunities and access to new markets.
"The corporate credit rating on Wesco Holdings reflects relatively
high debt leverage, weak cash flow protection measures, and risks
associated with cyclical demand for commercial aircraft, the
company's largest end market," said Standard & Poor's credit
analyst Roman Szuper. These factors outweigh Wesco Holdings'
position as a leading distributor of small aerospace components
and very good profit margins.
Valencia, California-based Wesco Holdings is the leading
distributor of high-volume, low-cost (generally priced below
$250 per unit) aerospace parts, such as fasteners, rivets, nuts,
bolts, screws, and clamps. Known as "C class" components, they
comprise about 90% of the company's sales. The company also
provides supply chain management services, including just-in-time
service. Generally favorable market conditions are likely to
generate higher sales and operating profits for Wesco Holdings in
its fiscal year ending Sept. 30, 2008. The company does not
disclose financial results to the public.
A generally favorable market environment, efficient operations,
and improving performance should support growth initiatives and
maintain a financial profile appropriate for the rating. Better-
than-expected results, combined with meaningful debt reduction,
could lead us to revise the outlook to positive. An outlook
revision to negative is less likely, but could be driven by
additional debt-financed acquisitions, material deterioration in
business prospects, or major shortfalls in financial performance.
WESTERN POWER: April 30 Balance Sheet Upside-Down by $14,383,000
----------------------------------------------------------------
Western Power & Equipment Corp.'s consolidated balance sheet at
April 30, 2008, showed $35,503,000 in total assets and $49,886,000
in total liabilities, resulting in a $14,383,000 total
stockholders' deficit.
At April 30, 2008, the company's consolidated balance sheet also
showed strained liquidity with $22,924,000 in total current assets
available to pay $48,204,000 in total current liabilities.
The company reported a net loss of $2,014,000 on net revenues of
$15,736,000 in the third quarter ended April 30, 2008, compared
with a net loss of $2,020,000 on net revenues of $23,257,000 in
the same period ended April 30, 2007.
For the three-month period ended April 30, 2008 equipment sales
and rentals decreased by $6,680,000 and product sales decreased by
$1,297,000 while mining sales increased by $456,000.
Net loss from continuing operations for the quarter ended
April 30, 2008, was $2,014,000 compared with a net loss from
continuing operations of $2,368,000 for the prior year's
comparative quarter.
Included in the net loss for the third quarter ended April 30,
2007, is a $1,967,000 gain on the transfer of a 10% ownership in
the company's subsidiary, Arizona Pacific Materials LLC, as a
settlement of 50% of a technical default penalty assessed in
January 2007.
Full-text copies of the company's consolidated financial
statements for the quarter ended April 30, 2008, are available for
free at http://researcharchives.com/t/s?2e3a
Going Concern Doubt
Marcum & Kliegman LLP, in New York, expressed substantial doubt
about Western Power & Equipment Corp.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the years ended July 31, 2007, and 2006. The
auditing firm reported that the company continues to incur
operating losses and is in default with its convertible debt
agreement.
The company has a net negative working capital and does not have
the resources to repay the convertible debt. If management is not
successful in restructuring the convertible debt or obtaining
alternative financing and/or additional capital, the company may
have to sell off some or all of its assets and the company's
operations may not be able to continue.
About Western Power
Based in Vancouver, Washington, Western Power & Equipment Corp.
(OTC BB: WPEC) -- http://www.wpec.com/-- is engaged in the sale,
rental, and servicing of light, medium-sized, and heavy
construction, agricultural, and industrial equipment, parts, and
related products which are manufactured by Case Corporation and
certain other manufacturers and operates a mining company in
Arizona. Products sold, rented, and serviced include backhoes,
excavators, crawler dozers, skid steer loaders, forklifts,
compactors, log loaders, trenchers, street sweepers, sewer
vacuums, and mobile highway signs.
The company maintains two distinct segments which include Western
Power & Equipment Corp., the equipment dealership and Arizona
Pacific Materials LLC, a mining operation.
WESTMORE COAL: Absaloka Mine Employees Reject Labor Agreement
-------------------------------------------------------------
Represented employees of Westmoreland Resources, Inc.'s Absaloka
Mine chose to impose a labor stoppage following more than four
months of negotiations. The previous collective bargaining
agreement with the International Union of Operating Engineers
Local 400 expired on March 1, 2008. The represented employees had
continued to work under the terms of the expired agreement while
negotiations were underway.
The represented employees voted, on June 6, 2008, on an agreement
that the company believes offered fair increases in wages and
benefits. After the proposed collective bargaining agreement was
rejected by the represented employees, they chose to initiate a
work stoppage on June 7, 2008. The company expects open
communication between the parties to continue.
"We continue to be committed to offer fair and reasonable wages
and benefits to our Westmoreland Resources, Inc. employees and
remain optimistic this labor stoppage will be short in duration,"
D.L. Lobb, President and Chief Executive Officer of Westmoreland
Coal Company, commented. "We are committed to our customers
during this time and will continue to strive to meet their needs."
Headquartered in Colorado Springs, Colo., Westmoreland Coal
Company (AMEX: WLB) -- http://www.westmoreland.com/-- is the
oldest independent coal company in the United States. The company
mines coal, which is used to produce electric power, and the
company owns power-generating plants. The company's coal
operations include coal mining in the Powder River Basin in
Montana and lignite mining operations in Montana, North Dakota and
Texas. Its current power operations include ownership and
operation of the two-unit ROVA coal-fired power plant in North
Carolina.
At March 31, 2008, the company's consolidated balance sheet showed
$783.2 million in total assets and $961.0 million in total
liabilities, resulting in a $177.8 million total stockholders'
deficit.
WILDERNESS SHORES: Tricord Wants Former Case Reopened
-----------------------------------------------------
Homebuilder, Tricord Inc., asked the U.S. Bankruptcy Court for the
Western District of Virginia to reopen Wilderness Shores Inc.'s
first bankruptcy case in hopes of foreclosing on the Debtor's
property, Carolyn Okomo of The Deal says.
Wilderness first sought bankruptcy protection under chapter 11 on
July 3, 2000, which case was later converted to a chapter 7
proceeding, was closed, reopened and closed again. In May 21,
2008, the Debtor filed its second chapter 11 petition.
Tricord had asserted claims against 45 acres of lot "under a lost
1989 note," The Deal notes. During the first bankruptcy case,
Tricord bought the Debtor's lot under a foreclosure sale handled
by B. Calvin Burns, a senior lender awarded with a relief from
stay in 2000, The Deal says. According to The Deal, Mr. Burns,
who was owed $1.2 million, commenced the foreclosure sale on Nov.
27, 2000. Burns LP subsequently bought the property and resold it
to Tricord, The Deal says.
The Hon. William E. Anderson scheduled a status conference to
resolve the matter on Aug. 18, 2008, The Deal relates. The
meeting of creditors of Wilderness is set for July 9, 2008, The
Deal adds.
Linden, Virginia-based Wilderness Shores Inc. previously filed for
chapter 11 on July 3, 2000 (Bankr. W.D. Va. Case No. 00-01852).
The 2000 bankruptcy case was subsequently converted to a chapter 7
proceeding and was closed on Dec. 3, 2003. That case was reopened
on June 7, 2007, after the Debtor tried to assert ownership in a
property held by creditor, Tricord Inc. Tricord failed to obtain
relief from stay to foreclose on the disputed property. The
reopened 2007 case closed on May 21, 2008.
The Debtor' second chapter 11 petition was filed on May 21, 2008
(Bankr. W.D. Va. Case No. 08-61184). Judge William E. Anderson
presides over the case. Richard A. Lash, Esq., at Buonassassi,
Henning & Lash PC represents the Debtor in its restructuring
efforts. When the Debtor filed for its second bankruptcy, it
listed assets of $1,000,000 to $10,000,000 and debts of $100,000
to $500,000.
YOSHINOYA NEW YORK: Files for Ch. 11 After Rent Cancellation
------------------------------------------------------------
Yoshinoya Holdings Co., which operates "gyudon" beef-on-rice dish
restaurants, said Wednesday that U.S. subsidiary Yoshinoya New
York Inc. has decided to file for the Chapter 11 bankruptcy
proceedings.
Yoshinoya New York opted for the step to facilitate its
negotiations on the cancellation of a rent contract following
restaurant closure in November 2006, according to the parent firm.
The negotiations have hit a snag, it said.
The unit's liabilities totaled $1.41 million as of the end of
December last year.
Yoshinoya New York will continue operating its gyudon restaurant
in Times Square, the sole outlet for the firm now.
Besides the New York restaurant, the Yoshinoya group has 83
outlets in the United States, most of which are on the West Coast.
On the Net: http://www.yoshinoyausa.com/.
ZENITH FUNDING: Moody's Cuts Ba2 Rating on $71MM Notes to B1
------------------------------------------------------------
Moody's has downgraded and left on review for possible further
downgrade these notes issued by Zenith Funding, Ltd.:
Class Description: $71,000,000 Class A-1 Floating Rate Notes Due
2039
-- Prior Rating: Ba2, on review for possible downgrade
-- Current Rating: B1, on review for possible downgrade
Finally, Moody's has downgraded this note:
Class Description: $36,000,000 Class A-2 Floating Rate Subordinate
Notes Due 2039
-- Prior Rating: Caa2, on review for possible downgrade
-- Current Rating: Ca
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, which consists primarily of structured
finance securities.
ZIFF DAVIS: Court Confirms Reorganization Plan
----------------------------------------------
Ziff Davis Media, Inc., and its debtor-affiliates stepped Judge
Burton Lifland of the U.S. Bankruptcy Court for the Southern
District of New York through the 13 statutory requirements under
Section 1129(a) of the Bankruptcy Code necessary to confirm its
Second Amended Plan of Reorganization:
A. The Amended Plan complies with the applicable provisions of
the Bankruptcy Code, thereby satisfying Section 1129(a)(1).
The Amended Plan complies with Sections 1122 and 1123(a) of
the Bankruptcy Code because in addition to the Administrative
Expense Claims and Priority Tax Claims, which need not be
designated, the Plan designates eight Classes of Claims and
Interests. Each Claim in each class are is to be provided
the same treatment under the Plan unless the holder of a
claim has agreed to a less favorable treatment.
Valid business, factual and legal reasons exist for
separately classifying the various Classes of Claims and
Interests created under the Plan, the classifications were
not done for any improper purpose and the Classes do not
unfairly discriminate between or among holders of Claims or
Interests.
In accordance with Sections 1122 and 1123(a)(2), the Amended
Plan specifies which classes of Claims and Equity Interests
are not impaired, and sets forth the treatment for the
impaired classes, and specifies the treatment of Claims and
Equity Interests in those classes.
In accordance with satisfying Section 1123(a)(4), the Amended
Plan provides for the same treatment by the Debtors for each
Claim or Equity Interest in each Class unless the holder of a
particular Claim or Equity Interest has agreed to a less
favorable treatment of the Claim or Equity Interest.
The Amended Plan and its Supplements provide adequate and
proper means for implementation, satisfying Section
1123(a)(5). The New Debtors Certificates of Incorporation
and By-Laws, the form of which was filed with the Court on
May 30, 2008 as part of the Plan Supplement, comply with
Section 1123(a)(6).
The Amended Plan contain provisions with respect to the
manner of appointment of the directors and officers of the
Reorganized Debtors that are consistent with the interests of
creditors, equity security holders and public policy in
accordance with Section 1123(a)(7).
Moreover, the Plan reflects the date it was filed with the
Court and identifies the entities submitting it as Plan
proponents.
B. Pursuant to Section 1129(a)(2), the Debtors have complied
with the applicable provisions of the Bankruptcy Code.
Specifically, the Debtors have complied with Sections 1125
and 1126, the Federal Rules of Bankruptcy Procedure, and the
Disclosure Statement Order in transmitting the Plan, the
Disclosure Statement, the Ballots or Notice of Non-Voting
Status, as the case may be, and related documents in
soliciting and tabulating votes on the Plan.
C. The Debtors have proposed the Amended Plan in good faith and
not by any means forbidden by law, with the legitimate and
honest purpose of maximizing the value of the Debtors'
estates and to effectuate a successful reorganization of the
Debtors, thereby satisfying Section 1129(a)(3).
D. Any payment made or to be made by any of the Debtors for
services, for costs and expenses in, or in connection with
their Chapter 11 proceedings, has been approved by, or is
subject to the approval of, the Bankruptcy Court as
reasonable, thereby satisfying Section 1129(a)(4).
E. The Amended Plan complies with Section 1129(a)(5). The
identity and affiliations of the persons proposed to serve as
initial directors or officers of the Reorganized Debtors
after confirmation of the Amended Plan have been fully
disclosed in the Plan Supplements. The proposed members of
the Board of Directors for Reorganized Ziff Davis Holdings
Inc. and Reorganized Ziff Davis Media Inc. are:
Director Affiliations
-------- ------------
Bruce Benson FTI Consulting, Inc., Senior Managing
Director
Gene Davis Pirinate Consulting Group LLC, Chairman
and CEO
Hal Goldstein MHR Fund Management LLC, Co-Founder and
Managing Prinicipal; Loral Space and
Communications, Inc., Board Member; GF
Health Products, Inc., Board Member
Chris McGill Miss.com, Founder and C.E.O.
David Van Harmonic, Inc., Independent Director; 360
Valkenburg Networks, Inc., Independent Director; Zero
Point Corporation, Executive Chairman;
Malone University, Trustee; The Cable
Center, Director; Zero Point Corporation,
Chairman and President and Balfour
Associates, Inc., Chairman
Jason Young Ziff Davis Holdings, Inc., CEO
Mr. Young will be the director of Reorganized Ziff Davis
Development, Inc., Reorganized Ziff Davis Intermediate
Holdings, Inc., Reorganized Ziff Davis Internet, Inc.,
Reorganized Ziff Davis Publishing, Inc., and Reorganized Ziff
Davis Publishing Holdings, Inc.
F. Section 1129(a)(6) is satisfied because the Amended Plan does
not provide for any change in rates over which a governmental
regulatory commission has jurisdiction.
G. The Amended Plan satisfies Section 1129(a)(7) because the
liquidation analyses provided by Mark D. Moyer, the Debtors'
chief restructuring officer, in the Disclosure Statement, the
Plan Supplements and other evidence proffered or adduced at
the Confirmation Hearing:
* are persuasive and credible;
* have not been controverted by other evidence; and
* establish that each Holder of an Impaired Claim either has
accepted the Plan or will receive or retain under the Plan,
property of a value that is not less than the amount the
holder would receive if the Debtors were liquidated under
Chapter 7.
H. Section 1129(a)(8) is satisfied with respect to Classes
1,2,3,4,5,6 and 7 as these Claims and Interests are not
impaired and are conclusively presumed to have accepted the
Amended Plan in accordance with Section 1126(f) and the
accepting Classes as set forth in the Voting Certification
have voted to accept the Plan in accordance with Sections
1126(c) and (d).
Section 1129(a)(8) has not been satisfied with respect to
Class 8, which will not receive any property under the Plan
and, therefore, are deemed to have rejected the Plan pursuant
to Section 1126(g). However, the Plan is confirmable because
the Plan satisfies Section 1129(b) of the Bankruptcy Code
with respect to the Rejecting Classes.
I. The treatment of Administrative Expense Claims and Priority
Non-Tax Claims under the Plan satisfies the requirements of
Sections 1129(a)(9)(A) and (B), and the treatment of Priority
Tax Claims satisfies the requirements of Section
1129(a)(9)(C).
J. At least one Class of Claims against each of the Debtors that
is impaired under the Amended Plan has accepted the Plan,
determined without including any acceptance of the Plan by
any insider, thus satisfying the requirements of Section
1129(a)(10).
K. Section 1129(a)(11) is satisfied because the Disclosure
Statement, Moyer Declaration, Plan Supplements, Voting
Certification, Solicitation Affidavits, Confirmation
Memorandum, and all evidence proffered or adduced at the
Confirmation Hearing
* is persuasive and credible;
* has not been controverted by other evidence; and
* establishes that confirmation of the Plan is not likely to
be followed by the liquidation or the need for further
financial reorganization, of the Reorganized Debtors.
Stephenie Kjontvedt, senior manager of BMC Group, Inc., the
Debtors' Voting Agent, submitted to the Court on June 11,
2008, the Voting and Tabulation Results with respect to the
Debtors' Amended Plan, reflecting that creditors voted in
favor of the Plan:
___________________________________________________________
| | | |
| | Accepting | Rejecting |
| Class |________________________|______________________|
| | Votes | Amount | Votes | Amount |
| | Counted | Held | Counted | Held |
|___________|_________|______________|_________|____________|
| | | | | |
| Class 4 | 73 | $181,236,000 | 0 | 0 |
| Claim | | | | |
| Holders | (100%) | (100%) | (0%) | (0%) |
|___________|_________|______________|_________|____________|
| | | | | |
| Class 5 | 25 | $84,589,583 | 0 | $0 |
| Claim | | | | |
| Holders | (100%) | (100%) | (0%) | (0%) |
|___________|_________|______________|_________|____________|
| | | | | |
| Class 6 | 6 | $4,148,555 | 4 | $211,585 |
| Claim | | | | |
| Holders | (60%) | (95.15%) | (40%) | (4.85%) |
|___________|_________|______________|_________|____________|
| | | | | |
| Class 7 | 38 | $227,193 | 3 | $23,187 |
| Claim | | | | |
| Holders | (92.68%)| (90.74%) | (7.32%) | (9.26%) |
|___________|_________|______________|_________|____________|
L. All fees payable under Section 1930 of the Judiciary
Procedures Code, U.S. Code, as determined by the Court on the
Confirmation Date, have been paid or will be paid for each
quarter on or before the Effective Date and the Reorganized
Debtors will continue to pay the fees as they become due from
the Effective Date through the closing of the Chapter 11
cases, thus, satisfying the requirements of Section
1129(a)(12).
M. Section 1129(a)(13) of the Bankruptcy Code does not apply to
the Debtors' Chapter 11 cases because the Debtors are not
obligated to pay any retiree benefits.
Finding that the Debtors' Second Amended Plan of Reorganization
satisfies the requirements of the Bankruptcy Code, Judge Lifland
confirmed the Plan on June 17, 2008.
Judge Lifland overruled any objections that have not been
withdrawn, waived or settled. All reservations of rights
pertaining to Confirmation of the Plan, are overruled on the
merits, the Court held.
A full-text copy of Judge Lifland's Confirmation Order is
available for free at:
http://bankrupt.com/misc/ZIFF_ConfirmationOrder.pdf
Debtors Made Strong Case for Plan Confirmation
Prior to the Confirmation Hearing, the Debtors asserted that
their Amended Plan substantially deleverages their balance sheet
by converting approximately $429,000,000 in bond debt into equity
in the Reorganized Debtors, and $57,500,000 of new secured notes.
In addition, under the Plan unsecured non-bondholder creditors
will share in a pool of $1,250,000 in cash, and convenience class
claimants will receive a 50% distribution in cash on their
allowed claims. Old Ziff Davis Holdings Common Stock and
Interests will be canceled.
"If the Plan is confirmed and becomes effective, the Debtors will
emerge from Chapter 11 with considerably less debt and will be
well-positioned for future growth," Mr. Neier said.
The existing stock of Ziff Davis Media will be canceled. Holders
of secured notes aggregating $242,500,000 will receive 90% of the
stock of Reorganized Ziff Davis, while holders of subordinated
notes totaling $186,000,000 will receive the remaining 10%.
Holders of unsecured claims will receive 9% recovery in cash.
The Official Committee of Unsecured Creditors reserved its rights
with respect to the form of warrant agreement and the new
management incentive plan included in the Plan Supplement.
Kable's Objection
Kable Fulfillment Services, Inc. was the sole objecting party to
Plan Confirmation. Kable initially asked the Court to condition
confirmation of the Debtors' Amended Plan on the Debtors' payment
of a cure amount aggregating $491,554, with respect to a master
services agreement among the parties. However, Kable
subsequently withdrew its objection after reaching an agreement
with the Debtors on its Cure Claim.
About Ziff Davis Media, Inc.
Headquartered in New York city, Ziff Davis Media, Inc. --
http://www.ziffdavis.com/-- and its affiliates are integrated
media companies serving the technology and videogame markets.
They are information services and marketing solutions providers of
technology media, including publications, Websites, conferences,
events, eSeminars, eNewsletters, custom publishing, list rentals,
research and market intelligence. Their US-based media properties
reach over 22 million people per month at work, home and play.
They operate in three segments: the Consumer Tech Group, which
includes PC Magazine and pcmag.com; the Enterprise Group, which
includes eWEEK and eweek.com, and the Game Group, which includes
Electronic Gaming Monthly and 1up.com.
Ziff Davis Holdings Inc. is the ultimate parent company of Ziff
Davis Media Inc.
The company and six debtor-affiliates filed for bankruptcy
protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768).
Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the
Debtors in their restructuring efforts. An Official Committee of
Unsecured Creditors have been appointed in the case. When Ziff
Davis filed for bankruptcy protection, it listed assets of between
$100 million to $500 million and debts of $500 million to
$1 billion.
(Ziff Davis Bankruptcy News, Issue No. 14, Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstandor
215/945-7000)
ZIFF DAVIS: Files Supplements to Amended Joint Chapter 11 Plan
--------------------------------------------------------------
Ziff Davis Media Inc. and its debtor-affiliated had notified the
U.S. Bankruptcy Court for the Southern District of New York that
they will provide three additional Plan Supplements at a later
date:
-- The Directors of Reorganized Ziff Davis Holdings;
-- The New Management Incentive Plan; and
-- The Form of New Senior Secured Note Documents.
Accordingly, the Debtors delivered to the Court on June 17, 2008,
copies of:
a. the Directors of Reorganized Ziff Davis Holdings;
b. the Form of New Senior Secured Note Documents, a full-text
copy of which is available for free at:
http://bankrupt.com/misc/ZIFF_FormNewSeniorSecuredNoteDocuments
.pdf
c. three amended schedules of rejected contracts and leases. A
full-text copy of the Third Amended Schedule is available at:
http://bankrupt.com/misc/ZIFF_ThirdAmendedRejLeases.pdf
However, the Debtors sought the Court's permission to file their
New Management Incentive Plan under seal, on the grounds that the
document contains confidential commercial information regarding
the Debtors' post-emergence business plan. The Debtors asserted
that disclosure of the information to their competitors would be
detrimental to the Reorganized Debtors' business.
About Ziff Davis Media, Inc.
Headquartered in New York city, Ziff Davis Media, Inc. --
http://www.ziffdavis.com/-- and its affiliates are integrated
media companies serving the technology and videogame markets.
They are information services and marketing solutions providers of
technology media, including publications, Websites, conferences,
events, eSeminars, eNewsletters, custom publishing, list rentals,
research and market intelligence. Their US-based media properties
reach over 22 million people per month at work, home and play.
They operate in three segments: the Consumer Tech Group, which
includes PC Magazine and pcmag.com; the Enterprise Group, which
includes eWEEK and eweek.com, and the Game Group, which includes
Electronic Gaming Monthly and 1up.com.
Ziff Davis Holdings Inc. is the ultimate parent company of Ziff
Davis Media Inc.
The company and six debtor-affiliates filed for bankruptcy
protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768).
Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the
Debtors in their restructuring efforts. An Official Committee of
Unsecured Creditors have been appointed in the case. When Ziff
Davis filed for bankruptcy protection, it listed assets of between
$100 million to $500 million and debts of $500 million to
$1 billion.
(Ziff Davis Bankruptcy News, Issue No. 14, Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstandor
215/945-7000)
* Fitch Revises Q-IFS Ratings on Four Health Insurance Entities
---------------------------------------------------------------
Fitch Ratings has revised the Quantitative Insurer Financial
Strength ratings of these four health insurance entities.
Entity/NAIC Code/State/Rating Revision
-- ElderPlan, Inc. (95662)/NY/ to 'BBq' from 'Aq';
-- Mount Carmel Health Plan, Inc. (95655)/OH/ to 'BBq' from
'Aq';
-- SummaCare, Inc. (95202)/OH/ to 'BBq' from 'BBBq';
-- WellCare of New York, Inc. (95534)/NY/ to 'BBq' from 'BBBq'.
Fitch has revised the ratings on these health insurance entities
following the determination late last week that in August 2007
Fitch inadvertently published preliminary rather than final Q-IFS
ratings for the named entities. These ratings were based on year-
end 2006 financial results. Fitch detected the situation as part
of its currently ongoing annual review of Q-IFS ratings. Fitch
has confirmed that final Q-IFS ratings were published for all
other health insurance entities. Fitch expects to complete its
update of all health Q-IFS ratings using year-end 2007 financial
information within the next several weeks.
Q-IFS ratings are point-in-time ratings generated solely using a
statistical model that utilizes the five most recent years of
statutory financial statement information. The model incorporates
'rating logic' that mirrors many aspects of the quantitative
analysis that is used to assign traditional Insurer Financial
Strength ratings.
* 24/7 Wall St. Rates Bankruptcy Probability of Large, Public Cos.
------------------------------------------------------------------
The site 24/7 Wall St., which gives analysis and commentary for
U.S. and global equity investors, rates the probability of several
large public companies of filing Chapter 11 bankruptcy protection
within the year.
On top of its list is AMR Corp. (AMR), which it says has 50%
chance of filing for bankruptcy, followed by UAL Corporation (UAL)
which has 25%, Northwest Airlines (NWA) 20%, and Gatehouse, 20%.
Also in the list, in decreasing order of probability, are Delta,
Lee Enterprises, Lehman, Continental, Wachovia, General Motors,
Ford, McClatchy, and AIG, whose chances range from 10% to 3%.
The article, authored by Douglas A. McIntyre & Jon C. Ogg, says
these are possibilities rather than predictions. It based its
evaluation on cash flow and balance sheets for "the most obvious
sectors," including financials, airlines, old media, and autos.
These numbers are based on the chance of a "Chapter 11" filing or
a sudden "implied Chapter 11" event happening in the next six
months, according to the article.
* Otterbourg Steindler Adds Former U.S. Bankruptcy Judge as Member
-----------------------------------------------------------------
Former U.S. Chief Bankruptcy Judge Melanie L. Cyganowski has
joined the law firm of Otterbourg Steindler Houston & Rosen P.C.
as a member of the firm.
Ms. Cyganowski served for 14 years, from 1993 to 2007, as a U.S.
Bankruptcy Judge for the Eastern District of New York. During her
last two years at the court she was the Chief Judge. She left the
bench to join Greenberg Traurig in New York before her move to
become a member of Otterbourg's creditors' rights and insolvency
practice group.
"We are very excited to have an attorney of [Ms. Cyganowski's]
capabilities and outstanding reputation join us," Daniel Wallen,
chairman of Otterbourg, said. "Her experience as a judge only
adds further to the quality and depth of our well known strength
in the bankruptcy arena."
"After being on the bench for fourteen years, I've seen just about
every creditors' rights issue from every viewpoint and understand
how cases can take different twists and turns," Ms. Cyganowski
remarked. "It's a unique perspective that I believe translates
well into private practice."
"Otterbourg has experience and expertise that rivals any large
financial law firm and surpasses many. Its focus on the creditors'
rights field meant it has been part of most major bankruptcies,
whether representing a creditors' committee, secured or unsecured
creditors, a lender or a potential buyer of assets," noted
Ms. Cyganowski. "I am greatly looking forward to being able to
contribute to the practice."
By joining Otterbourg, Ms. Cyganowski continues a long history
between the firm, which was founded in 1909, and the bankruptcy
court. Several bankruptcy judges pursued their careers at
Otterbourg, including Ms. Cyganowski's predecessor as Chief Judge
of the Bankruptcy Court for the Eastern District of New York,
Conrad B. Duberstein. Mr. Duberstein chaired Otterbourg's
creditors' rights and insolvency department before moving to the
bench, where he served for almost 25 years.
Before her judgeship, Mr. Cyganowski was a law clerk for Judge
Charles L. Brieant, of the United States District Court for the
Southern District of New York, and then practiced in the
litigation departments at Sullivan and Cromwell LLP for seven
years and at Milbank Tweed Hadley & McCloy LLP for four years.
Ms. Cyganowski is a member of the executive committee of the
Commercial & Federal Litigation Section of the New York State Bar
Association, a member of the National Conference of Bankruptcy
Judges, a Fellow of the American Bar Foundation and a director of
the New York Institute of Credit where she is also a vice-
president of its Women's Division. She sits on the advisory board
of the St. John's University School of Law, Masters Program in
Bankruptcy.
In 2007, Ms. Cyganowski received the New York Institute of
Credit's 19th Annual Trustee Award. In 2006, she was the
recipient of the New York State Bar Association, Commercial &
Federal Litigation Section "Hail to the Chiefs" award and the
Turnaround Management Association Award.
About Otterbourg Steindler Houston & Rosen
Headquartered in New York City, Otterbourg Steindler Houston &
Rosen -- http://www.oshr.com/-- specializes in the representation
of financial institutions and creditors, including commercial
banks, investment banks, asset-based lenders and hedge funds in
all aspects of their businesses, including the structuring and
documentation of loan transactions, acquisitions, litigation and
alternative dispute resolution, real estate transactions,
workouts, restructurings and bankruptcy proceedings. Founded in
1909, the firm has particular expertise in leveraged finance,
asset based lending and second lien loans, whether within the
United States or cross-border, well as the representation of
committees of unsecured creditors in large and complex bankruptcy
reorganization cases throughout the United States. It is also
known for its representation of individual institutional lenders,
bank groups, commercial enterprises and other secured and
unsecured creditors in complex, high profile litigation and its
role as co-general counsel for the Commercial Finance Association.
* Resilience Capital Partners Adds Chief Operating Officer
----------------------------------------------------------
Ziv Sarig has joined Resilience Capital Partners, a Cleveland-
based private equity firm, as chief operating officer.
Mr. Sarig was most recently the chief financial officer of TOA
Technologies, an international leader in customer appointment and
mobile workforce management. During his tenure with the company,
revenues increased three times and contracts were executed with
leading cable and telecommunication customers in North America and
Europe. Mr. Sarig spearheaded the successful venture capital and
debt financing of the company in 2007.
Prior to TOA, Mr. Sarig was CFO of the Parkwood Corporation
(Mandel family office), and was a member of the team planning,
designing, and overseeing the multi-billion dollar portfolio
(Private Equity, Real Estate, Hedged Equity, Long Only Equity,
Absolute Return and Fixed Income) management and investment
process. Mr. Sarig was a board member of IEL, a Private Equity
fund (established by Parkwood in 2003) based in Tel Aviv, Israel.
He began his career with Ernst & Young and Arthur Andersen. Mr.
Sarig is a CPA (Israel) and holds a BA and an MBA from the College
of Management Tel Aviv, Israel. Mr. Sarig served in the Israel
defense forces where he was a company commander of 60 combat
soldiers.
"We are privileged to have [Mr. Sarig] join our firm. [Mr.
Sarig's] broad investment (including Alternative Investments),
financial, operational and entrepreneurial (Hi Tech) experience
will have a profound impact on our future growth and the eventual
success of our investments," said Bassem Mansour and Steve Rosen,
Managing Partners of Resilience Capital Partners.
"I am excited to join the Resilience Capital Partners team. They
have built a great firm and I look forward to providing meaningful
contributions to the success and continued expansion of the firm,"
said Mr. Sarig.
The firm's contact information:
Resilience Capital Partners
Phone: 216-292-0200
Mr. Ziv Sarig
Phone: (216) 292-0506
E-mail: :zsarig@resiliencecapital.com
Resilience Capital Partners -- http://www.resiliencecapital.com
-- is a private equity firm based in Cleveland, Ohio focused on
investing in underperforming and turnaround situations.
Resilience's investment strategy is to acquire lower middle market
companies that have solid fundamental business prospects, but have
suffered from a cyclical industry downturn, are under-capitalized,
or have less than adequate management resources. Resilience
typically acquires companies with revenues of $25 million
to $250 million. Since its inception in 2001, Resilience has
acquired 16 companies with revenues in excess of $1 billion.
* Berger Singerman Hailed as One of Top Rated Florida Firms
-----------------------------------------------------------
Berger Singerman has been ranked among the top rated law Florida
firms in Chambers USA 2008 America's Leading Business Lawyers in
the bankruptcy and restructuring category.
This is the sixth consecutive year in which the firm has received
a first tier rating for its bankruptcy and reorganization practice
and has been included in the guide.
In addition to recognition of the firm, shareholders Brian Gart,
Esq., Jordi Guso, Esq., Brian Rich, Esq., Paul Steven Singerman,
Esq., Arthur Spector, Esq., and Daniel Thompson, Esq. received
individual recognitions.
"Inclusion in Chambers USA is based on feedback from both clients
and other attorneys, and it is a true honor to receive this
recognition," said Singerman. "I am extremely proud of the talent
and passionate commitment to client service of our entire team."
This is the fourth annual Chambers USA guide of the best law firms
and lawyers published by the illustrious London-based Chambers &
Partners. Chambers & Partners publishes similar U.K. and Global
guides which are widely respected. Research is conducted via in-
depth telephone interviews with clients and with attorneys, each
one lasting about half an hour. The qualities on which the
rankings are assessed include technical legal ability,
professional conduct, client service, commercial awareness or
astuteness, diligence, commitment, and other qualities most valued
by the client.
Chambers' researched rankings and editorials are referred to
extensively by general counsel and other purchasers of legal
services worldwide who consider Chambers assessments when choosing
counsel.
Berger Singerman -- http://www.bergersingerman.com/-- is a
Florida business law firm with 62 attorneys working out of offices
in Boca Raton, Fort Lauderdale, Miami and Tallahassee. Members of
the firm have expertise in all areas of commercial law, including
banking, creditors' rights, business reorganization, bankruptcy,
corporate & securities, dispute resolution and litigation, white
collar crime, real estate, environmental and land use, health
care, tax, estate planning, and probate.
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent Chapter 11 cases filed with assets and liabilities below
$1,000,000:
In Re Old State Utility Corp.
dba Old State Utility, Inc.
dba Old State Utilities Corp.
Bankr. S.D. Ind. Case No. 08-70737
Chapter 11 Petition filed June 9, 2008
See http://bankrupt.com/misc/insb08-70737.pdf
In Re Mid-Florida Trust & Properties, Inc.
Bankr. M.D. Fla. Case No. 08-03315
Chapter 11 Petition filed June 10, 2008
Filed as Pro Se
In Re Stanley T. McCulloch
Bankr. N.D. Ala. Case No. 08-81759
Chapter 11 Petition filed June 11, 2008
See http://bankrupt.com/misc/alnb08-81759.pdf
In Re Cesar Chavez Learning Communinty, Inc.
Bankr. D. Ariz. Case No. 08-06960
Chapter 11 Petition filed June 11, 2008
See http://bankrupt.com/misc/azb08-06960.pdf
In Re Jose Antonio Chavez
Bankr. N.D. Calif. Case No. 08-11149
Chapter 11 Petition filed June 11, 2008
See http://bankrupt.com/misc/canb08-11149.pdf
In Re Weaver Oil Co., Inc.
Bankr. N.D. Fla. Case No. 08-40379
Chapter 11 Petition filed June 11, 2008
See http://bankrupt.com/misc/flnb08-40379.pdf
In Re P.J.'s Trucking, Inc.
Bankr. E.D. Mich. Case No. 08-54157
Chapter 11 Petition filed June 11, 2008
See http://bankrupt.com/misc/mieb08-54157.pdf
In Re Fremar, LLC
Bankr. D. N.J. Case No. 08-20830
Chapter 11 Petition filed June 11, 2008
See http://bankrupt.com/misc/njb08-20830.pdf
In Re Ronald L. Botzenhart
Bankr. D. N.J. Case No. 08-20897
Chapter 11 Petition filed June 11, 2008
See http://bankrupt.com/misc/njb08-20897.pdf
In Re Uptown Radio, LLC
Bankr. S.D. N.Y. Case No. 08-12180
Chapter 11 Petition filed June 11, 2008
See http://bankrupt.com/misc/nysb08-12180.pdf
In Re Kenneth W. Klesyk
dba Specialty Awning & Remodeling
Bankr. W.D. Penn. Case No. 08-70632
Chapter 11 Petition filed June 11, 2008
See http://bankrupt.com/misc/pawb08-70632.pdf
In Re G&G Machining, Inc.
Bankr. S.D. Ind. Case No. 08-06839
Chapter 11 Petition filed June 11, 2008
Filed as Pro Se
In Re PNZ, Inc.
dba Palmer Cafe
Bankr. N.D. Ill. Case No. 08-15134
Chapter 11 Petition filed June 12, 2008
See http://bankrupt.com/misc/ilnb08-15134.pdf
In Re Gilbert Avionics, Inc.
Bankr. W.D. La. Case No. 08-50689
Chapter 11 Petition filed June 12, 2008
See http://bankrupt.com/misc/lawb08-50689.pdf
In Re Lerner DDL, LLC
dba Fat Boys Subs & Salads
Bankr. D. N.J. Case No. 08-20970
Chapter 11 Petition filed June 12, 2008
See http://bankrupt.com/misc/njb08-20970.pdf
In Re Blink Hair Face Body, Inc.
Bankr. D. N.J. Case No. 08-20975
Chapter 11 Petition filed June 12, 2008
See http://bankrupt.com/misc/njb08-20975.pdf
In Re VGD Holdings Group, Inc.
aka Gregory Doyle
Bankr. S.D. N.Y. Case No. 08-36260
Chapter 11 Petition filed June 12, 2008
Filed as Pro Se
In Re Kirt Anthony Cottrell
Bankr. E.D. N.C. Case No. 08-03953
Chapter 11 Petition filed June 12, 2008
Filed as Pro Se
In Re White Tigers, LLC
Bankr. S.D. N.Y. Case No. 08-36264
Chapter 11 Petition filed June 12, 2008
Filed as Pro Se
In Re 1950 Wyoming Avenue Associates, Inc.
Bankr. M.D. Penn. Case No. 08-51652
Chapter 11 Petition filed June 12, 2008
Filed as Pro Se
In Re James Buckman
Bankr. S.D. Fla. Case No. 08-17851
Chapter 11 Petition filed June 12, 2008
Filed as Pro Se
In Re Dyersburg Piano CO.
dba Vintage Piano Shop
Bankr. W.D. Tenn. Case No. 08-12090
Chapter 11 Petition filed June 12, 2008
See http://bankrupt.com/misc/tnwb08-12090.pdf
In Re J.P. Turner & Brothers, Inc.
Bankr. W.D. Va. Case No. 08-71093
Chapter 11 Petition filed June 12, 2008
See http://bankrupt.com/misc/vawb08-71093.pdf
In Re Ralph Crews, Jr.
Bankr. W.D. Wis. Case No. 08-13004
Chapter 11 Petition filed June 12, 2008
See http://bankrupt.com/misc/wiwb08-13004.pdf
In Re Ken Robbins Productions, Inc.
Bankr. C.D. Calif. Case No. 08-18509
Chapter 11 Petition filed June 13, 2008
See http://bankrupt.com/misc/cacb08-18509.pdf
In Re Merlin Properties, LLC
Bankr. D. Neb. Case No. 08-81485
Chapter 11 Petition filed June 13, 2008
See http://bankrupt.com/misc/neb08-81485.pdf
In Re Utilities Contracting Services, Inc.
Bankr. D. N.J. Case No. 08-21037
Chapter 11 Petition filed June 13, 2008
See http://bankrupt.com/misc/njb08-21037.pdf
In Re Precision Service, Inc.
aka Precision Service Plumbing & Heating
Bankr. D. N.M. Case No. 08-11898
Chapter 11 Petition filed June 13, 2008
See http://bankrupt.com/misc/nmb08-11898.pdf
In Re L205-1 ID Bear Lane, LLC
dba BTC VII LLC
Bankr. W.D. Wash. Case No. 08-13658
Chapter 11 Petition filed June 13, 2008
Filed as Pro Se
In Re Myoung Han Byun
Bankr. D. Nev. Case No. 08-16300
Chapter 11 Petition filed June 14, 2008
See http://bankrupt.com/misc/nvb08-16300.pdf
In Re Vinyard Pets, LLC
dba Petland at Sonterra
Bankr. W.D. Tex. Case No. 08-51700
Chapter 11 Petition filed June 14, 2008
See http://bankrupt.com/misc/txwb08-51700.pdf
In Re Southern Connecticut Pizza, Inc.
Bankr. D. Conn. Case No. 08-21129
Chapter 11 Petition filed June 15, 2008
See http://bankrupt.com/misc/ctb08-21129.pdf
In Re Jrh Holdings, LLC
Bankr. D. N.H. Case No. 08-11675
Chapter 11 Petition filed June 15, 2008
See http://bankrupt.com/misc/nhb08-11675.pdf
In Re Paul A. McCoy
dba McCoy's Excavating & Welding
Bankr. N.D. Ohio Case No. 08-41742
Chapter 11 Petition filed June 15, 2008
See http://bankrupt.com/misc/ohnb08-41742.pdf
In Re Institute of Florida Real Estate Career
fka IFREC
fka IFREC Real Estate Schools
Bankr. M.D. Fla. Case No. 08-04983
Chapter 11 Petition filed June 16, 2008
See http://bankrupt.com/misc/flmb08-04983.pdf
In Re LIHE, Inc.
dba Lela's, Inc. & Lighthouse Clothing
Bankr. S.D. Ga. Case No. 08-20593
Chapter 11 Petition filed June 16, 2008
See http://bankrupt.com/misc/gasb08-20593.pdf
In Re Renaissance Spa, LLC
Bankr. E.D. Mich. Case No. 08-54521
Chapter 11 Petition filed June 16, 2008
See http://bankrupt.com/misc/mieb08-54521.pdf
In Re Christopher Brian Chambers
Bankr. W.D. Mich. Case No. 08-05284
Chapter 11 Petition filed June 16, 2008
See http://bankrupt.com/misc/miwb08-05284.pdf
In Re L.P. Stair & Rail, Inc.
Bankr. E.D. N.Y. Case No. 08-73109
Chapter 11 Petition filed June 16, 2008
See http://bankrupt.com/misc/nyeb08-73109.pdf
In Re Pianombrosa, LLC
Bankr. S.D. N.Y. Case No. 08-22840
Chapter 11 Petition filed June 16, 2008
Filed as Pro Se
In Re Kay L. Spear
Bankr. S.D. N.Y. Case No. 08-22842
Chapter 11 Petition filed June 16, 2008
Filed as Pro Se
In Re Meridian HCS, LLC
Bankr. W.D. Tex. Case No. 08-51703
Chapter 11 Petition filed June 16, 2008
See http://bankrupt.com/misc/txwb08-51703.pdf
In Re Martha L. Leyva-Mendivil
dba Aqui Esta!
Bankr. D. Ariz. Case No. 08-07230
Chapter 11 Petition filed June 17, 2008
See http://bankrupt.com/misc/azb08-07230.pdf
In Re Bolden's Manufacturing, Inc.
dba RX Outreach
dba XTreme Team
dba Hydro Lab
Bankr. S.D. Ind. Case No. 08-07070
Chapter 11 Petition filed June 17, 2008
See http://bankrupt.com/misc/insb08-07070.pdf
In Re RX Outreach, LLC
Bankr. S.D. Ind. Case No. 08-07071
Chapter 11 Petition filed June 17, 2008
See http://bankrupt.com/misc/insb08-07071.pdf
In Re John W. Mercer, Jr.
Bankr. W.D. La. Case No. 08-31023
Chapter 11 Petition filed June 17, 2008
See http://bankrupt.com/misc/lawb08-31023.pdf
In Re Women's Health Associates of Monroe, APMC
Bankr. W.D. La. Case No. 08-31024
Chapter 11 Petition filed June 17, 2008
See http://bankrupt.com/misc/lawb08-31024.pdf
In Re G Works Painting, LLC
Bankr. D. Nev. Case No. 08-50967
Chapter 11 Petition filed June 17, 2008
See http://bankrupt.com/misc/nvb08-50967.pdf
In Re RRA Co. LLC
Bankr. S.D. Ohio Case No. 08-55756
Chapter 11 Petition filed June 17, 2008
See http://bankrupt.com/misc/ohsb08-55756.pdf
In Re H3M Properties
Bankr. M.D. Penn. Case No. 08-51706
Chapter 11 Petition filed June 17, 2008
See http://bankrupt.com/misc/pamb08-51706.pdf
In Re National Residential Communities, LLC
Bankr. D. Nev. Case No. 08-16440
Chapter 11 Petition filed June 17, 2008
Filed as Pro Se
In Re 1600 Pennsylvania Avenue, LLC
Bankr. M.D. Penn. Case No. 08-51701
Chapter 11 Petition filed June 17, 2008
Filed as Pro Se
In Re David A. Jefferson
Bankr. M.D. Tenn. Case No. 08-05108
Chapter 11 Petition filed June 17, 2008
Filed as Pro Se
In Re EYESthere, Inc.
Bankr. N.D. Tex. Case No. 08-32920
Chapter 11 Petition filed June 17, 2008
See http://bankrupt.com/misc/txnb08-32920.pdf
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Raphael M. Palomino, Shimero R. Jainga, Ronald C. Sy, Joel
Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino
Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Joseph
Medel C. Martirez, Ma. Cristina I. Canson, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.
Copyright 2008. 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 ***