Outlook 2007: Dana, Dura, Radnor top 2006 bankruptcy filings; Owens Corning, Winn-Dixie lead exits

By Caroline Salls

Pittsburgh, Dec. 29 - While Dana Corp. and Dura Automotive Systems, Inc. highlighted 2006 Chapter 11 filings amid continued auto industry struggles, the year featured Chapter 11 exits for long-bankrupt companies such as Owens Corning and Fibermark Inc.

Along with Owens Corning, several other companies left long-standing asbestos liability troubles behind to emerge in 2006, including Kaiser Aluminum Corp., USG Corp. and Armstrong World Industries, Inc.

Other notable companies to emerge this year included supermarket operator Winn-Dixie Stores, Inc. and power company Mirant Corp.

Also, securities company Refco, Inc.'s plan of reorganization took effect in late December, allowing the company to begin winding up its business.

Among companies that both filed for and exited bankruptcy in 2006 were Mexico City cell phone company Grupo Iusacell Celular SA de CV, PTC Alliance Corp., a manufacturer and marketer of welded and cold drawn mechanical steel tubing, fabricated parts and precision components and chrome-plated steel bars; technology provider Silicon Graphics, Inc.; contractor ABB Lummus Global Inc.; pharmacy and health care services provider Curative Health Services, Inc.; flatware and dinnerware manufacturer Oneida Ltd.; oil and gas company Davis Petroleum Corp.; and electrical services provider Integrated Electrical Services, Inc.;

Also exiting bankruptcy were automotive component company J.L. French Automotive Castings Inc.; ethernet route provider Riverstone Networks, Inc.; school bus manufacturer Blue Bird Corp.; packaging product producer Pliant Corp.; Mexican satellite operator Satelites Mexicanos, SA de CV; timberland and cutting rights owner Inland Fiber Group, LLC; garden product company Easy Gardener Products, Ltd.; paper manufacturer and supplier Smart Papers LLC; and Vesta Insurance Group Inc.

Dana, Dura, Radnor file

Dana, with $7.9 billion in assets and $6.8 billion in debt, filed for bankruptcy in March in light of a continued decline in revenues resulting from the decreasing market share and production levels of its largest domestic customers, along with sharp increases in commodity and energy prices that have outpaced the cost savings Dana had been able to achieve.

The company said the general financial condition of the industry, together with Dana's inability to renew or expand its credit facilities in a timely manner, has significantly constrained its liquidity.

Dura succumbed to financial and industry pressures in late October and filed Chapter 11 to reduce debt and its balance sheet and to position it for long-term success.

Dura had $1.993 billion assets and $1.731 billion in debt.

Other automotive and transportation industry filings in 2006 included passenger and freight transport and marine container leasing company Sea Containers Ltd., automobile transporter Performance Transportation Services, Inc. and transit bus manufacturer Neoplan USA Corp., while auto parts maker Metalforming Technologies, Inc. exited Chapter 11 this year.

In addition, Eurotunnel SA, the Paris-based operator of the channel tunnel, filed for Safeguard protection in France.

Radnor Holdings Corp., with $361.45 million in assets and $325.3 million in debt, also made a splash onto the bankruptcy scene this year. The foam cup, container and expandable polystyrene bead manufacturer filed for Chapter 11 in August with plans to complete a sale of substantially all of its assets within 90 days.

The sale was approved in November but not without stiff opposition from the company's official committee of unsecured creditors, which continues to contend that Tennebaum Capital Partners bullied the company into bankruptcy.

Fraud allegations led to an involuntary Chapter 7 filing against beverage maker Le-Nature's, Inc. in connection with an investigation and lawsuit in the Delaware Court of Chancery.

Le-Nature's case was quickly converted to a voluntary Chapter 11 case in the U.S. Bankruptcy Court for the Western District of Pennsylvania.

Other manufacturers hitting the bankruptcy scene in 2006 included textile manufacturer Delta Mills, Inc.; knitwear manufacturer Anvil Holdings, Inc.; manufacturer and distributor of ladders, climbing equipment and ladder accessories Werner Holding Co. (DE), Inc.; producer of TV and computer monitor tubes LG. Phillips Displays USA, Inc.; manufacturer and marketer of water storage and pressure control products, water heaters and cylinders Amtrol Holdings, Inc.; and manufacturer and distributor of bath tissue, kitchen towels, napkins, and facial tissue Marcal Paper Mills, Inc.

Among manufacturers exiting bankruptcy this year were manufacturer of ready to assemble furniture O'Sullivan Industries, Inc.; glass container manufacturer Anchor Glass Container Corp.; diversified manufacturer EaglePicher Inc.; High Voltage Engineering Corp., a maker of industrial power control and surface analysis products; producer of specialty fiber materials FiberMark; steel company WCI Steel Inc.; aluminum company Kaiser Aluminum Corp.; flooring company Armstrong World Industries, Inc.; and building materials companies USG Corp. and Owens Corning.

Victory Memorial Hospital joined other New York state-based health care providers Brooklyn Hospital Medical Center, New York United Hospital Medical Center and Saint Vincent Catholic Medical Centers in Chapter 11, with a New York health care commission recommending Victory Memorial be closed amid statewide hospital restructuring and cost-cutting efforts.

New York horse racing operator New York Racing Association Inc. also filed for Chapter 11 this year.

Medical supply, health care and pharmaceutical companies filing bankruptcy this year included Aphton Corp., SeraCare Health Services, Inc., OCA Inc., World Health Alternatives Inc. and Nellson Nutraceutical Inc.

Exiting in this category in 2006 were Able Laboratories, Inc. and aaiPharma Inc.

Hospitality companies that filed for bankruptcy this year included resort operator Premier Entertainment Biloxi, LLC and Tanner & Haley Resorts.

Retailers active

Retailers were active on the bankruptcy scene in 2006, with music retailers Musicland Holding Corp. and Tower Records filing for Chapter 11, along with diamond company M. Fabrikant & Sons Inc.; furniture retailer The Rowe Cos.; portrait studio operator Portrait Corp. of America; sporting goods retailer Copeland Sports; auto parts retailer Strauss Discount Auto; Global Home Products, Inc., a designer, marketer and manufacturer of branded consumer and specialty products to retail and hospitality customers and original equipment manufacturers; apparel company London Fog Group Inc. and broadband provider subsidiary NewComm Wireless Services, Inc.

Retailers emerging from bankruptcy in 2006 included Tony Roma's restaurant chain operator Romacorp; gift and collectible company Boyds Collection Ltd.; diet company Atkins Nutritionals, Inc.; AOL Latin America, Inc.; consumer electronics retailer Ultimate Electronics, Inc.; children's apparel company Happy Kids Inc., which had its case dismissed following liquidation; Crescent Jewelers and shoe retailer Footstar, Inc.; as well as provider of music, video and entertainment DMX Music, Inc.

Other 2006 bankruptcy filings included power plant and power equipment company Global Power Equipment Group Inc.; Argentinean bread and bakery company Compania de Alimentos Fargo SA; Vesta Insurance Group, Inc., television station owner Communications Corp. of America; real estate lender USA Commercial Mortgage Co.; holding company Innovative Communication Co.; metals company Galvex Holdings Ltd., which is in Chapter 7 bankruptcy; owner and operator of network-affiliated television stations Granite Broadcasting Corp.; housewares company Home Products International Inc.; and renewable energy company U.S. Energy Biogas Corp.

Others emerging this year included electronics testing company Telogy, Inc.; integrated voice and data services provider McLeodUSA Inc.; residential heating oil distributor Heating Oil Partners, LP; voice and data services company Birch Telecom, Inc.; integrated direct marketing company Protocol Services Inc.; offshore pipeline installation and subsea construction company Torch Offshore, LLC; airline ATA Airlines, Inc.; energy company Mirant Corp.; ABB Ltd. subsidiary Combustion Engineering; and insurance company Conseco Inc.

Looking ahead

Among companies winding up their reorganizations, former cable operator Adelphia Communications Corp. had an eventful year as the company was forced to make emergency changes to its plan to complete its sale to Time Warner and Comcast under a plan of reorganization to be confirmed by July 31.

The company expected to emerge from Chapter 11 bankruptcy by the end of the year, but now it has extended its plan of reorganization effective date to Jan. 12 from Dec. 22.

Meridian Automotive Systems, Inc. said recently it would emerge on Dec. 29.

In addition, Collins & Aikman Corp. announced that it would look to sell substantially all of its assets, and Delphi Corp. received proposals for an equity commitment and debtor-in-possession refinancing that may help that company emerge in the first half of 2007.

Delta Air Lines, Inc. received an $8 billion merger proposal from US Airways, but the bankrupt Delta has held steady on its plans to emerge as a stand-alone company in the first half of 2007.

Also, securities company Refco, Inc.'s plan of reorganization was confirmed in December, paving the way for the company to move toward emergence.

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