/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/050107.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, January 7, 2005, Vol. 9, No. 5 Headlines ADELPHIA COMMS: Circle Entities Object to Security Business Sale ADESA INC: Repurchases 4.38 Million Shares for $86.7 Million ADMIRAL CONSTRUCTION: Case Summary & Largest Unsecured Creditors ALAMOSA HOLDINGS: Sets Jan. 17 as Record Date for Dividend Payment ALLIANCE LAUNDRY: Moody's Rates Proposed Senior Debts at Low-B ALLIANCE LAUNDRY: S&P Rates Planned $250M Senior Sec. Debt at B ALOHA AIRGROUP: Hires Char Sakamoto as Corporate Counsel ALOHA AIRGROUP: Wants Access to $3 Million DIP Financing Facility AMERICAN SKIING: Subsidiary Amends Loan and Security Agreement AMES DEPARTMENT: Leesport Property Sale to Generate 500 New Jobs AMOROSO CONSTRUCTION: Disclosure Statement Hearing on Jan. 21 ANECO ELECTRICAL: Wants Access to $1,175,000 of DIP Financing ATA AIRLINES: December Capacity Down 12.4% from 2003 AVADO BRANDS: President & CFO Resign from Executive Posts BANKBOSTON COMMERCIAL: S&P Withdraws CLO Ratings BEARINGPOINT INC: Exercises Option to Buy Additional Debentures CATHOLIC CHURCH: Portland Diocese Publicizes April 29 Bar Date CEDRIC KUSHNER: $12.1M Equity Deficit Spurs Going Concern Doubt CHALMETTE LLC: Voluntary Chapter 11 Case Summary COX TECHNOLOGIES: Initial Liquidating Dividend is $0.14 Per Share CWALT INC: Moody's Puts Ba3 Rating on $4.3M Class B-3 Certificates DAYTON SUPERIOR: Moody's Affirms Low-B & Junk Ratings DELAFIELD 246 CORPORATION: List of 5 Largest Unsecured Creditors DELPHI: Joins Effort with Comcast in Auto Video Market Research DEX MEDIA: Registers Up to 18 Mil. Shares for Secondary Offering DEX MEDIA: Reconfirms 2004 Guidance & Issues 2005 Guidance DI GIORGIO: Moody's Rates New $150M Senior Unsecured Notes at B2 DI GIORGIO: S&P Places B- Rating on Proposed $150M Senior Notes DIGITAL LIGHTWAVE: Special Stockholders' Meeting Set for Feb. 10 THE DORIAN GROUP LTD: Voluntary Chapter 11 Case Summary EL SEGUNDO: S&P Places B+ Rating on Planned $130M Sr. Sec. Debts ENRON CORP: Wants Court to Establish Unsecured Claims Reserve FAIRPOINT COMMS: Launching Tender Offers & Soliciting Consents FREEDOM MEDICAL: Wants Permission to Use Lenders' Cash Collateral HARVEST ENERGY: Increases Exchangeable Share Ratio to 1.07345 IMC GLOBAL: Completes Solicitation on Public Debt Securities INNSUITES HOSPITALITY: Trustees Name Mason Anderson to Board INTEGRATED HEALTH: Reschedules Reserve Hearing Date to Feb. 23 INT'L FABRICATORS: Taps Evans & Mullinix as Bankruptcy Counsel INT'L FABRICATORS: Section 341(a) Meeting Slated for Feb. 2 INTRAWEST CORP: Inks Partnership Agreement with Points.com IWO HOLDINGS: Hires Weil Gotshal as Bankruptcy Counsel IWO HOLDINGS: Confirmation Hearing Scheduled for February 9 J. J. H. MAGUIRE INC: Court Formally Dismisses Chapter 11 Case KAISER ALUMINUM: 17 Parties Object to Disclosure Statement LEE PHARMACEUTICALS: Auditor Raises Going Concern Doubt LEHMAN: Fitch Downgrades Rating on Class B-1 Series 2001-B to BB LITTLE MT. ZION PENTECOSTAL: Voluntary Chapter 11 Case Summary LNR PROPERTY: Reports $27.7 Million Fourth Quarter Net Income MADISON RIVER: Fitch Places Sr. Unsec. Rating on Watch Positive MOST HOME: Funding Uncertainty Triggers Going Concern Doubt MUELLER: Moody's Reviewing Low-B & Junk Ratings & May Downgrade NAT'L CENTURY: Court OKs Protective Orders with Rule 2004 Targets NEW YORK STEEL: Case Summary & 41 Largest Unsecured Creditors PARK-OHIO: Can Draw Up to $200M Under Amended Bank Credit Pact PHARMACEUTICAL FORMULATIONS: Gets New $3.15MM Loan from GE Capital RECYCLED PAPERBOARD: U.S. Trustee Picks 5-Member Creditors Comm. RELIANCE GROUP: Agrees to Allow Citicorp Claim for $438,979 RITE AID: Fitch Assigns Low-B Ratings to Senior Notes RITE AID: Moody's Places B2 Rating on $200M Senior Secured Notes SCHLOTZSKY'S INC: Has Until Jan. 31 to File a Chapter 11 Plan SIX FLAGS: Launches Debt Offering to Repay Existing Indebtedness SOLUTIA INC: Forms Vydyne Automotive Global Team for Auto Segment STERLING FINANCIAL: Hosting 4th Qtr. Conference Call on Jan. 31 SUNSTRAND DEVELOPMENT: List of Largest Unsecured Creditor UGS CORP: Acquisition Plans Spur Moody's to Affirm Low-B Ratings US AIRWAYS: Labor Group to Vote on Revised Labor Pacts on Jan. 21 US AIRWAYS: Asks Court to Extend Plan Filing Period to March 31 US AIRWAYS: Wants to Modify CWA Collective Bargaining Agreements UTILITY CORPORATION: Declares $0.118 Monthly Dividend VANDERBILT MORTGAGE: Fitch Withdraws Ratings on 21 Classes VISUAL BIBLE: Auditors Raise Going Concern Doubt W.R. GRACE: Town of Acton Says Disclosure Statement is Inadequate W.R. GRACE: State of Montana Objects to Disclosure Statement WISTON XIV LIMITED: Case Summary & 6 Largest Unsecured Creditors YOUTHSTREAM MEDIA: Look for Form 10-K Annual Report on January 13 YUKOS OIL: Will Pursue Damages for Automatic Stay Violations YUKOS OIL: Missed Interest Payment Cues Moody's to Junk Ratings ZENITH NATIONAL: Fitch Holds BB+ Rating on Preferred Securities * BOOK REVIEW: American Economic History ********* ADELPHIA COMMS: Circle Entities Object to Security Business Sale ---------------------------------------------------------------- Steven Mishan, Esq., in Miami, Florida, tells the U.S. Bankruptcy Court for the Southern District of New York that Circle Acquisitions, Inc., and Circle Security Systems, Inc., are victims of an egregious fraud perpetrated by the officers, agents, employees and representatives of Starpoint Limited Partnership. Adelphia Cable Partners, LP, and West Boca Acquisition Limited Partnership -- the Holding Company -- are the partners of Starpoint Limited Partnership. Adelphia Cable is the general partner while West Boca is the limited partner. Adelphia Cable and West Boca are indirect subsidiaries of Adelphia Communications' debtor-affiliate ACC Operations, Inc. Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher, in New York, relates that Starpoint and its three subsidiaries, Cable Sentry Corporation, Coral Security, Inc., and Westview Security, Inc. -- the Security Business Debtors -- run the residential and commercial security business of the ACOM Debtors in New York, Florida and Pennsylvania. The ACOM Debtors asked the Court to approve the sale of the Security Business to Innova Security Solutions, LLC, pursuant to the terms of the Stalking Horse Agreement or alternatively to a Successful Bidder, free and clear of liens, claims, encumbrances and interests. The "Fraud" The Starpoint fraud involves Starpoint's purchase of the Circle Entities' security alarm business. Starpoint's officers and representatives promised to return to the Circle Entities all customer leads, maintenance and other streams of revenue generated by all individual security alarm contracts. The residual items in the Security Alarm Business have significant value and flow directly from the contracts sold and assigned. The evidence of the fraud is direct and compelling, Mr. Mishan alleges. The Starpoint officers and representatives never intended to deliver the residual compensation and interests flowing from the contracts sold to which the Circle Entities were entitled. Relief from stay has been granted and the Starpoint fraud case goes to the trial in arbitration on February 6, 2005. The Circle Entities filed a timely claim for $25,000,000. Mr. Mishan informs the Court that the Security Alarm Business and contracts sold to Starpoint are included in the proposed sale to Innova Security. Even with the Court's order jointly administering the ACOM Debtors' cases, no substantive consolidation has been ordered. The Circle Entities therefore believe that each estate and its assets and creditors are separate and unique. The ACOM Debtors' Disclosure Statement and Plan of Reorganization is not yet approved nor sent out to creditors. No one knows how the case will proceed except that liquidation motions have begun to be presented. Enormous legal fees and administrative expenses are being incurred, thus the Circle Entities consequently worry that funds generated from the proposed sale to Innova are in jeopardy of being dissipated or applied to interests other than Starpoint creditors. Among others, the Circle Entities object to the proposed sale in that the ACOM Debtors fail to identify what is to happen to the sale proceeds. The ACOM Debtors also fail to address why the Starpoint assets are to be the first sold. If the sale proceeds are to be applied in any fashion to dissipate the funds and leave no recourse for Starpoint creditors, good faith and full disclosure requires explanation, Mr. Mishan argues. Moreover, the ACOM Debtors' Sale Motion fails to assure that Starpoint's unsecured creditors will be fairly treated and without discrimination by other classes of creditors and creditors of other estates. The proposed sale appears to foster a commingling of assets between procedurally administered estates without substantive consolidation. The Asset Purchase Agreement also seems to indicate an upstreaming of the proceeds to Adelphia Communications Corporation Operations and others, leaving no treatment of Starpoint or its creditors. If the Starpoint assets are diverted from Starpoint for any reason, the Circle Entities want to know what is to happen to the Starpoint creditors. It would be simpler and more correct to provide that the proceeds would be set aside for the Starpoint estate and its creditors, Mr. Mishan suggests. The terms of the proposed sale, Mr. Mishan points out, fail to adequately protect the records of Starpoint related to the transaction with the Circle Entities from being lost or destroyed. The Asset Purchase Agreement protects the seller who will apparently designate the records to be retained. It does not contain any provision protecting all records including business income records, proceeds from the Security Alarm Business contracts which may be material to the February 6 Arbitration. The Circle Entities thus propose to amend the Asset Purchase Agreement allowing them to identify additional records to be retained and produced at the arbitration. Furthermore, the Asset Purchase Agreement permits the purchaser to dispose of records with notice to certain parties, excluding the Circle Entities. "Since it is likely that the purchaser will retain the same persons who committed or participated in the Starpoint fraud, the provision in the Asset Purchase Agreement immunizing the purchaser from destroying records would permit the spoliation of evidence with impunity," Mr. Mishan says. The Circle claim to the proceeds of the individual alarm or security contracts is in the nature of an interest in the res being sold. The word interest is not limited to liens and mortgages but encompasses obligations that are connected to or arise from the property being sold. Pursuant to Section 363(e) of the Bankruptcy Code, the Circle Entities seek adequate protection. Mr. Mishan explains that the Circle Entities seek assurance or adequate protection to the extent that if the arbitrator in the February 6 arbitration rules with them, and their position is vindicated by a substantial award, that the sale proceeds will be available to pay the award whether by claim payment, a Section 523 award, or otherwise. Therefore, the Circle Entities ask the Court to: (a) sustain their objection to the proposed sale to the extent that it provides no safeguards for them and other Starpoint creditor interests; and (b) grant adequate protection by providing that the proceeds will be set aside for Starpoint creditors and in particular that the Circle Entities' interests as determined by the arbitrator and by the Court will have a source of payment from Starpoint estate assets. Headquartered in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. (Adelphia Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADESA INC: Repurchases 4.38 Million Shares for $86.7 Million ------------------------------------------------------------ ADESA, Inc. (NYSE: KAR) repurchased 1.18 million additional shares on the open market at an average price of $20.02 per share during the fourth quarter of 2004. Previously, on October 24, 2004, ADESA announced that it had repurchased 3.2 million shares from certain employee benefit plans of ALLETE, Inc., its former parent company. In total, the Company repurchased 4.38 million shares during the fourth quarter of 2004 at a cost of $86.7 million. Headquartered in Carmel, Indiana, ADESA, Inc. (NYSE: KAR) -- http://www.adesainc.com/-- is North America's largest publicly traded provider of wholesale vehicle auctions and used vehicle dealer floorplan financing. The Company's operations span North America with 53 ADESA used vehicle auction sites, 28 Impact salvage vehicle auction sites and 83 AFC loan production offices. * * * As reported in the Troubled Company Reporter on June 4, 2004, Standard & Poor's Rating Services assigned its 'B+' rating to ADESA Inc.'s proposed $125 million senior subordinated notes due 2012, and affirmed its 'BB' corporate credit and senior secured ratings on the Carmel, Indiana-based operator of wholesale used-vehicle auctions and provider of used-vehicle floorplan financing. The outlook is stable. ADMIRAL CONSTRUCTION: Case Summary & Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Admiral Construction, Inc. 10000 Trails End Road Leander, Texas 78641 Bankruptcy Case No.: 05-10068 Chapter 11 Petition Date: January 3, 2005 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: Joseph D. Martinec, Esq. Martinec, Winn, Vickers & McElroy, P.C. 919 Congress Avenue, Suite 1500 Austin, TX 78701 Tel: 512-476-0750 Fax: 512-476-0753 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Flynn, George $30,000 17705 North Rim Leander, TX 78641 Contact Floorworks, Inc. $16,525 8606 Wall Street, Ste. 300 Austin, TX 78754 Benchmark Landscaping $16,482 109 North Ranch Road 620 Lakeway, TX 78734 MLA Labs $11,800 Chiles, Gene T. $11,531 Holt Engineering, Inc. $10,561 Diocese of Austin $9,714 ABC Fence Company $9,195 Haynie Consulting, Inc. $8,958 Texas Dept. of Transportation $8,913 Benchmark Landscaping $8,854 Gorthey, Kemp W. $8,129 K&M Contractors, Inc. $7,000 G.E. Painters $6,915 Plains Capital Bank $5,785 Ramsey Land Surveying $5,600 Security State Bank $5,000 Griffith, Virginia $5,000 McVay, Lanny A./TWC $5,000 Austin New Homes Guide $4,985 ALAMOSA HOLDINGS: Sets Jan. 17 as Record Date for Dividend Payment ------------------------------------------------------------------ Alamosa Holdings, Inc. (Nasdaq/NM:APCS), reported its dividend, record and ex-dividend dates for its 7.5% Series B Convertible Preferred stock. The Company has set a record date of January 17, 2005, for the dividend payment, with the dividend payable on January 31, 2005, at an annual rate of 7.5% of the $250 per share liquidation preference, in respect to the period from November 1, 2004 through January 31, 2005. The ex-dividend date will be January 13, 2005. Through July 31, 2008, Alamosa Holdings has the option to pay dividends on the Series B Convertible Preferred Stock in: (1) cash, (2) shares of the Alamosa Holdings' Series C convertible preferred stock, (3) shares of Alamosa Holdings common stock or (4) a combination thereof. The Company's Board of Directors has elected to pay the full amount of the dividend in cash. About the Company Alamosa Holdings, Inc. is the largest PCS Affiliate of Sprint based on number of subscribers. Alamosa has the exclusive right to provide digital wireless mobile communications network services under the Sprint brand name throughout its designated territory located in Texas, New Mexico, Oklahoma, Arizona, Colorado, Utah, Wisconsin, Minnesota, Missouri, Washington, Oregon, Arkansas, Kansas, Illinois and California. Alamosa's territory includes licensed population of 15.8 million residents. * * * As reported in the Troubled Company Reporter on Oct. 7, 2004, Standard & Poor's Ratings Services revised its outlook on Alamosa Holdings Inc. and related entities to positive from developing. Ratings on the company, including the 'CCC+' corporate credit rating, were affirmed. Lubbock, Texas-based Alamosa is the largest Sprint PCS affiliate and provides wireless services to about 813,000 subscribers in markets with a combined covered population of about 12.1 million. Total debt as of June 30, 2004 was $727.4 million. "The outlook revision reflects Alamosa's continued operating improvement over the past few quarters, owing to healthy subscriber growth, as well as tighter credit policies and lower costs under the Sprint PCS affiliation agreement, which the company renegotiated in late 2003," noted Standard & Poor's credit analyst Eric Geil. ALLIANCE LAUNDRY: Moody's Rates Proposed Senior Debts at Low-B -------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Alliance Laundry Systems LLC's proposed guaranteed senior subordinated notes (the notes will be co-issued by Alliance Laundry Corporation) and a B1 rating to Alliance Laundry Systems LLC's proposed senior secured revolving credit facility and senior secured term loan. Additionally, Moody's assigned a B1 senior implied rating to Alliance Laundry Systems LLC and withdrew the B2 senior implied rating of Alliance Laundry Holdings, Inc. In May 2004, Moody's downgraded the company's senior implied rating to B2 from B1, reflecting the concern that the issuance of income deposit securities -- IDS -- securities would significantly elevate Alliance's risk profile. Alliance recently withdrew its registration statement for the IDS. The restoration of the B1 senior implied rating reflects Moody's expectation that the company's liquidity profile under the proposed capital structure will be much stronger than under the IDS structure. The ratings are also supported by the company's strong market position within the commercial laundry market as well as the relative stability of its cash flows. Nevertheless, the ratings also recognize: (1) the significant increase in debt that will result from Teachers' Private Capital's, the private equity arm of the Ontario Teachers' Pension Plan, purchase of Alliance from Bain Capital and minority shareholders for $450 million (implying an LTM EBITDA multiple of approximately 8.0 times); and (2) Alliance's high pro forma leverage with adjusted debt to EBITDA of 6.8 times for the LTM ended September 30, 2004, (debt includes the new financing, securitized receivables and the overcollateralization of securitized finance receivables while EBITDA excludes non-recurring expenses associated with the IDS issuance). Although Moody's acknowledges that the company's pro forma credit metrics are weak for the B1 rating category, the ratings are predicated on our expectation that the company will continue to generate positive free cash flow that will be applied to debt reduction. The rating outlook is stable. The stable outlook reflects Moody's expectation that Alliance will generate no less than $20 million of free cash flow (FCF - cash from operations less capital expenditures) on an annual basis and that the company's adjusted leverage will decline below 6.0 times within the next 12 to 18 months. Conversely, Alliance's ratings would come under downward pressure should operating performance deteriorate or rising input costs increase adjusted leverage beyond 7.0 times or annual FCF fall below $20 million. These summarizes the ratings activity: Ratings assigned: * $150 million guaranteed senior subordinated notes, due 2013 -- B3 * $50 million guaranteed senior secured revolver, due 2011 -- B1 * $200 million guaranteed senior secured term loan B, due 2012 -- B1 * Senior implied rating -- B1 * Senior unsecured issuer rating -- B2 Ratings to be withdrawn: * $110 million senior subordinated notes, due 2008 -- B3 * $45 million senior secured revolver, due 2007 -- B1 * $136 million senior secured term loan, due 2007 -- B1 Alliance's ratings reflect: (1) its leading market position with 39% of the North American stand-alone commercial laundry equipment market serving laundromats, on-premises laundry, and multi-housing sectors, and (2) its entrenched relationships with distributors and route operators. These relationships are supported by Alliance's position as the only North American manufacturer capable of producing a full line of commercial washers and tumblers/dryers. The ratings also consider: (1) growth opportunities in the consumer market, which the company has recently re-entered, and (2) material barriers to entry in the commercial market, including: (a) a significant installed equipment base (estimated at 2 million units), (b) high switching costs, and (c) captive production facilities that enable it to manufacture equipment that complies with regional water usage and energy efficiency standards. These barriers contribute to the relative stability of Alliance's revenue stream and EBIT margins. Additionally, capital expenditure requirements are modest due to significant investments made by Raytheon (Alliance's former parent) prior to its 1998 recapitalization and its resulting free cash flow has demonstrated a low sensitivity to business cycles. However, the ratings also reflect: (1) the company's high financial leverage with adjusted debt to EBITDA of 6.8 times; (2) modest coverage of interest expense; (3) negative tangible net worth; (4) low growth rates in its core commercial end-market; (5) customer concentration with Coinmach (B2 senior implied) accounting for 16% of 2003 revenues; and (6) some margin compression stemming from elevated steel prices. The notching of the senior secured credit facility (rated B1) at the level of the senior implied reflects the significant portion of secured debt in the capital structure (57% assuming no draw under the revolver). Alliance Laundry Systems LLC's obligations under the credit facilities will be guaranteed by parent Alliance Laundry Holdings LLC and domestic subsidiaries (excludes special purpose entities in connection with the company's off-balance sheet facilities). The credit facility will be secured by substantially all of the tangible and intangible assets of the borrowers and its guarantors, as well as a 100% pledge of stock in domestic subsidiaries and a 65% pledge of stock in international subsidiaries. The collateral package excludes trade receivables and equipment notes subject to the securitization facilities. The lenders' position is further supported by an excess cash flow sweep provision and limitations on indebtedness, dividends, and capital expenditures. The notching of the senior subordinated notes (rated B3) two notches below the senior implied reflects their contractual subordination to a significant amount of senior secured indebtedness. The notes will be co-issued by Alliance Laundry Systems LLC and by Alliance Laundry Corporation and will be guaranteed by Alliance Laundry Holdings LLC and domestic subsidiaries (excludes special purpose entities in connection with the company's off-balance sheet facilities). The indentures for the senior subordinated notes will include standard limitations on dividends, restricted payments, and additional indebtedness. The ratings incorporate Alliance's high pro forma leverage with balance sheet debt increasing to $350 million from $280 million as of September 30, 2004. When adjusting for $31 million of securitized receivables and $12 million for the overcollateralization of securitized finance receivables, debt increases to $393 million as of the same date. Based on LTM EBITDA of $58 million (which excludes non-recurring IDS expenses), adjusted debt to EBITDA was 6.8 times. Adjusted debt to capitalization was 79% as of September 30, 2004 and tangible net worth stood at negative $235 million as of the same date. Moody's anticipates that Alliance will generate FCF of around $23 million in 2005, implying a pro forma FCF to adjusted debt of approximately 6%. Through a special-purpose bankruptcy remote subsidiary and a trust, Alliance provides financing to its customers through a $300 million revolver (which matures November 2005), backed by equipment loans and receivables originated by Alliance. Of the $300 million, $60 million is available for receivables, while funding for equipment loans is limited to the excess over the amount of receivables outstanding. Payment of interest and principal under the facility is guaranteed by Ambac Assurance Corporation. Moody's adjusted credit metrics add back the beneficial interests in securitized financial assets (excluding FASB 140 gain) reflecting the company's first loss exposure in the event of a default on the securitization facility. This amount was $12 million as of September 30, 2004. Alliance's recent re-entrance into the consumer market was not a significant factor in Moody's decision to restore the company's B1 senior implied rating. Moody's views the risks associated with this re-entry as minimal since the company anticipates only $2 million of incremental capex per year. The company plans to price its consumer washer/dryers at a premium to those of Maytag and Whirlpool, and Moody's does not expect that the company will gain material market share (exceeding 2%). Pro forma for the transaction, Alliance will have approximately $23 million available under a $50 million revolver maturing in 2011 (after consideration of $27 million LOC). Since Alliance's business is not seasonal, Moody's does not expect any material draws under the revolver over the next twelve months. Moreover, the company has a favorable debt maturity profile as the term loan B amortizes in installments of only $2 million per year until maturity. The asset-backed securitization facility expires in November 2005. However, the company anticipates receiving a commitment letter for a new securitization facility in early January. Alliance Laundry Systems LLC, located in Ripon, Wisconsin, designs and produces a full line of commercial laundry equipment in North America and worldwide. The company's revenues for the four quarters ended September 30, 2004 were $274 million. ALLIANCE LAUNDRY: S&P Rates Planned $250M Senior Sec. Debt at B --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Ripon, Wisconsin-based commercial laundry equipment manufacturer, Alliance Laundry Systems LLC. At the same time, Standard & Poor's assigned its 'B' rating and a recovery rating of '3' to Alliance Laundry's proposed $250 million senior secured bank facilities, indicating that the secured lenders can expect meaningful (50%-80%) recovery of principal in the event of default. The 'B' bank loan rating is at the same level as the corporate credit rating. Alliance Laundry had about $275 million of debt outstanding at Sept. 30, 2004. Standard & Poor's also assigned its 'CCC+' rating to Alliance Laundry's and Alliance Laundry Corp.'s (co-issuer) proposed $150 million subordinated notes due 2013. The subordinated debt and bank loan ratings are based on preliminary documentation and are subject to review once final documentation has been received. In addition, the outlook was revised to stable from negative. While the ratings already incorporate a very aggressive financial profile, the negative outlook reflected Standard & Poor's prior concern that the company's financial flexibility, including its ability to delever in the future, would have been substantially reduced due to its holding company's previous intention to issue income deposit securities (which represented dividend paying, shares of class A common stock, and subordinated debt). Net proceeds from the bank loan and subordinated debt offering, together with about $110 million of new equity, will be used to finance the purchase of the controlling interest in Alliance Laundry by Teachers' Private Capital, the private equity arm of the Ontario Teachers' Pension Plan Board, and to repay about $280 million of Alliance Laundry's outstanding debt and mandatorily redeemable preferred interests. The existing ratings on senior secured and subordinated debt will be withdrawn upon completion of the proposed transaction. ALOHA AIRGROUP: Hires Char Sakamoto as Corporate Counsel -------------------------------------------------------- Aloha Airgroup, Inc., and its debtor-affiliate sought and obtained permission from the U.S. Bankruptcy Court for the District of Hawaii to retain Char Sakamoto Ishii Lum & Ching as their special corporate counsel. Char Sakamoto will represent the Debtors in matters related to leases, governmental and legislative issues, subpoena and garnishment matters, and the negotiations with Aloha Airlines' aircraft and equipment lessors. The Firm did not disclose the hourly billing rates of its professionals. Elizabeth A. Ishii, Esq., shareholder and director of Char Sakamoto, assures the Court of her Firm's "disinterestedness" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc. -- http://alohaairlines.com/-- provides air carrier service connecting five major airports in the State of Hawaii. The Company and its debtor-affiliate Aloha Airlines, Inc., filed for chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case Nos. 04-03063 to 04-03064). Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky represent the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed more than $100 million in assets and debts. ALOHA AIRGROUP: Wants Access to $3 Million DIP Financing Facility ----------------------------------------------------------------- Aloha Airgroup, Inc., and its debtor-affiliate ask the U.S. Bankruptcy Court for the District of Hawaii for authority to enter into a postpetition credit agreement in the amount of $3 million with Aloha Securities and Investment Company and the ING Family Partnership. Aloha needs the loan to pay administrative expenses, operating expenses and the additional costs of conducting business in these bankruptcy proceedings. Without the financing, the Debtors' going concern value will diminish and their estates will suffer irreparable harm. The Debtor proposes to provide a lien on all of their assets to secure the new credit pursuant to 11 U.S.C. Sec. 364. Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc. -- http://www.alohaairlines.com/-- provides air carrier service connecting the five major airports in the State of Hawaii. Aloha Airgroup and its subsidiary Aloha Airlines, Inc., filed for chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063). Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., and Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky represent the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors it listed more than $50 million in estimated assets and debts. AMERICAN SKIING: Subsidiary Amends Loan and Security Agreement -------------------------------------------------------------- American Skiing Company's subsidiary, Grand Summit Resort Properties, Inc., entered into an Amendment Letter amending the Loan and Security Agreement -- LSA, dated as of Sept. 1, 1998, among Grand Summit, Textron Financial Corporation, as administrative agent and the lenders parties. The Letter Agreement generally modifies Grand Summit's obligation under the LSA to reduce the outstanding principal balance of the LSA as of December 31, 2004. The original requirement of the LSA mandated a maximum December 31, 2004, principal balance of $17,000,000. Pursuant to the Letter Agreement, this amount has been amended to a revised maximum principal balance amount of $17,350,989.59 as of December 31, 2004. In consideration of this amendment, Grand Summit paid the lenders an amendment fee of $25,000 and the fees of lenders' counsel. Headquartered in Park City, Utah, American Skiing Company -- http://www.peaks.com/-- is one of the largest operators of alpine ski, snowboard and golf resorts in the United States. Its resorts include Killington and Mount Snow in Vermont; Sunday River and Sugarloaf/USA in Maine; Attitash Bear Peak in New Hampshire; Steamboat in Colorado; and The Canyons in Utah. * * * As reported in the Troubled Company Reporter on Dec. 07, 2004, Standard & Poor's Ratings Services withdrew its ratings including the 'CCC' corporate credit rating on American Skiing Co. following the completion of the company's refinancing, which replaces its existing resort credit facility and its 12% senior subordinated notes with a new $230 million senior secured credit facility. The new facility consists of a $125 million first lien loan (including a $40 million revolving credit line) due November 2010 and a $105 million second lien term loan due 2011. The company also exchanged its 10.5% repriced convertible exchangeable preferred stock for junior subordinated debt due 2012, and it extended the maturity of its existing $18 million in junior subordinated notes to 2012. AMES DEPARTMENT: Leesport Property Sale to Generate 500 New Jobs ---------------------------------------------------------------- In the largest industrial transaction in the Commonwealth in 2004, Ashley Furniture, headquartered in Arcadia, Wisconsin, purchased the former Ames Merchandising Corporation's one-story facility situated on 180 acres for $26,750,000.00. The property was sold by Ames in late December pursuant to the Bankruptcy Court of the Southern District of New York with Kimco Funding LLC as the major creditor. Ashley Furniture, founded in 1945, has become the third largest home furniture manufacturing company in the country. Ashley plans to use the Leesport property as both a manufacturing and distribution center hub. After an exhaustive search for a class A distribution center encompassing all of New Jersey and Upstate Pennsylvania, the Leesport property became the ideal choice. Approximately 500 new jobs will be created as a result of this major sale. The modern, 1,200,000 square foot building includes: * 30' clear ceiling heights throughout; * 146 loading docks; * all municipal services; and * parking for 1000 trailers. Binswanger/CBB and the Binswanger/Klatskin alliance, formed in February 2001, co-brokered the transaction on behalf of Ashley. Binswanger, headquartered in Philadelphia, is an international full-service real estate organization with over 160 offices worldwide. Klatskin, headquartered in Teterboro, New Jersey, is New Jersey's foremost industrial and commercial real estate company. Ames Department Stores filed for chapter 11 protection on August 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. AMOROSO CONSTRUCTION: Disclosure Statement Hearing on Jan. 21 ------------------------------------------------------------- The Honorable Alan Jaroslovsky of the U.S. Bankruptcy Court for the Northern District of California will convene a hearing at 9:00 a.m., on January 21, 2005, to consider the adequacy of the Disclosure Statement explaining the Joint Liquidating Plan of Reorganization filed by Dennis J. Amoroso Construction Co., Inc., and its debtor-affiliate, Amoroso Investments, LLC. The Debtors filed their Disclosure Statement and Joint Plan on December 16, 2004. The Plan contemplates the appointment of a Liquidating Agent, who is charged with the obligation to take over the Debtors' remaining assets in trust, including principally the construction accounts receivable and the Travelers Bad Faith Litigation , reduce them to money, and distribute them to creditors in the priority set out in the Bankruptcy Code. The Plan groups claims and interests into eight classes and provides for these recoveries: a) Class 1 unimpaired claims consisting of Priority Claims for Wages, Unpaid Contribution to Employee Benefit Plans, and Consumer Deposits will be paid in full on the Effective Date; b) Class 2 impaired claims consisting of General Unsecured Creditors with claims amounting to over $500 will receive a Pro Rata payment from the liquidation of the Debtors' assets and the proceeds from a successful resolution of the Travelers Bad Faith Litigation and the Travelers Lien Litigation; c) Class 3 impaired claims consisting of Administrative Convenience Claims amounting to $500 or less will receive an immediate 75% lump sum dividend in full satisfaction of their claims; d) Class 4, Class 5 and 6 claims are all impaired claims consisting respectively of the Firemen's Fund Insurance Company, Travelers Casualty & Surety Co. of America and Kemper Insurance Company, which are all disputed and pending the resolution of those three disputes, the Plan provides that those claims will retain their equitable lien rights until the contingencies concerning those claims are resolved; e) Class 7 impaired claims consisting of the Allowed Amoroso Family Claims will be deemed subordinated to the full payment of the Class 1, Class 2, Class 3, Class 4, Class 5 and Class 6 Allowed Claims; and f) Class 8 impaired claims consisting of the Debtors' Equity Holders will be deemed cancelled on the Effective Date and no dividends or other payments will be made to those claims on account of their stock and llc memberships. Full-text copies of the Disclosure Statement and Joint Plan are available for a fee at: http://www.researcharchives.com/download?id=040812020022 Objections to the approval of the Disclosure Statement, if any, must be filed and served on or before January 16, 2005. Headquartered in Novanto, California, Dennis J. Amoroso Construction Co., Inc., is a general contractor. The Company and its debtor-affiliate filed for chapter 11 protection on September 21, 2004 (Bankr. N.D. Calif. Case No. 04-12244). John H. MacConaghy, Esq., at Law Offices of John H. MacConaghy represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. ANECO ELECTRICAL: Wants Access to $1,175,000 of DIP Financing ------------------------------------------------------------- Aneco Electrical Construction, Inc., asks the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, for authority to obtain postpetition financing of up to $1,175,000 from Safeco Insurance Company. Six weeks before the petition date, Safeco advanced approximately $3,836,000 to Aneco to cover a portion of the Debtor's general overhead and to purchase supplies and materials necessary to continually run Aneco's business. Safeco agreed to provide Aneco a fresh loan to avoid irreparable and immediate harm to the Debtor's business. Without the new credit, the Debtor is in danger of not being able to complete profitable jobs resulting in uncollected retainages and profits. To secure the DIP financing, Safeco will be granted super priority administrative expense claim status in accordance with Section 364(c)(1) of the Bankruptcy Code. Headquartered in Clearwater, Florida, Aneco Electrical Construction, Inc. -- http://www.anecoinc.com/-- is an electrical and telecommunications company serving the commercial, entertainment, industrial, medical, government and institutional building markets in the southeastern United States. The Company filed for chapter 11 protection on Dec. 30, 2004(Bankr. M.D. Fla. Case No. 04-24883). Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $51 million in estimated assets and $41 million in estimated debts. ATA AIRLINES: December Capacity Down 12.4% from 2003 ---------------------------------------------------- ATA Airlines, Inc., the principal subsidiary of ATA Holdings Corp. (OTC: ATAHQ), reported that December jet scheduled service traffic decreased 11.0 percent from 2003 to 911.8 million RPMs (revenue passenger miles). Capacity decreased 12.4 percent compared to 2003 to 1.3 billion ASMs -- available seat miles -- causing ATA's December jet scheduled service passenger load factor to increase 1.1 points to 69.9 percent. There were 738,081 passengers enplaned in December, a decrease of 8.3 percent. ATA enplaned 10,084,851 passengers in the year ending December 31, 2004, which is an increase of 7.6 percent in enplanements over the previous year. Captain William Beal, Senior Vice President of Operations said, "At a time when airports nationwide were at capacity with holiday travelers and challenged by severe weather, we provided our customers with outstanding performance. During the peak travel period from December 19 to January 3, we operated approximately 3,000 mainline flights, and during that busy time, only seven flights on our ATA system were canceled. This is certainly a reflection of the teamwork that our employees demonstrate during such a critical period as families travel to be together." "Another noteworthy achievement was the recently concluded college football season, which saw ATA transport more than 4,000 passengers through 32 different airports as they participated in 15 college football bowl games. Not only did ATA transport eight teams, but we also flew three bands and 10 planeloads of fans to various bowl games," said Capt. Beal. As of December 31, 2004, ATA has a fleet of 33 Boeing 737-800s, 15 Boeing 757-200s, 12 Boeing 757-300s, and five Lockheed L-1011s. Chicago Express Airlines, Inc., the wholly owned commuter airline based at Chicago-Midway Airport, operates 17 SAAB 340Bs. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. AVADO BRANDS: President & CFO Resign from Executive Posts --------------------------------------------------------- Louis J. Profumo, Chief Financial Officer of Avado Brands, Inc., resigned on Dec. 30, 2004. His resignation will take effect on Jan. 14, 2005. Robert Andreottola, President of Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery concepts also resigned on the same day and his resignation took effect on Dec. 31. 2004. Headquartered in Madison, Georgia, Avado Brands, Inc. -- http://www.avado.com/ -- owns and operates two proprietary brands comprised of 102 Don Pablo's Mexican Kitchens and 37 Hops Grillhouse & Breweries. The company recently introduced a new Hops City Grille concept that is currently in test in Florida. The Company and its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 4, 2004 (Bankr. N.D. Tex. Case No. 04-31555). Deborah D. Williamson, Esq., and Thomas Rice, Esq., at Cox & Smith Incorporated, represent the Debtors in their restructuring efforts. Miller Buckfire Lewis Ying & Co., LLC, is providing financial advisory services. When the Debtors filed for protection from its creditors, they listed $228,032,000 in total assets and $263,497,000 in total debts. BANKBOSTON COMMERCIAL: S&P Withdraws CLO Ratings ------------------------------------------------ Standard & Poor's Ratings Services withdrew its ratings on the class A-2, B-2, C-2, and D-2 notes issued by BankBoston Commercial Loan Master LLC Series 1999-1, an asset-backed CLO transaction that closed Nov. 5, 1999. The rating withdrawals follow the full redemption of the notes, which were in their "Controlled Accumulation Period." This controlled accumulation period followed the transaction's revolving period, whereby the full principal was returned to investors in a lump sum payment. In addition, the class A-1, B-1, C-1, and D-1 notes were redeemed in 2002. Ratings Withdrawn BankBoston Commercial Loan Master LLC Series 1999-1 Rating Balance (mil. $) Class To From Original Current Redemption Date ----- -- ---- -------- ------- --------------- A-2 NR AAA 597.50 0.00 Aug. 15, 2004 B-2 NR A 25.90 0.00 Nov. 15, 2004 C-2 NR BBB 26.60 0.00 Nov. 15, 2004 D-2 NR BB 12.80 0.00 Nov. 15, 2004 BEARINGPOINT INC: Exercises Option to Buy Additional Debentures --------------------------------------------------------------- BearingPoint, Inc., (NYSE: BE) has completed the private placement of an additional $50 million of its Convertible Subordinated Debentures. The debentures were issued upon the exercise of the option to purchase an additional: -- $25 million aggregate principal amount of the Company's 2.50% Series A Convertible Subordinated Debentures due December 15, 2024; and -- $25 million aggregate principal amount of the Company's 2.75% Series B Convertible Subordinated Debentures due December 15, 2024. The option was granted to the initial purchasers in the Company's previously announced private placement of $400 million aggregate principal amount of the Company's Convertible Subordinated Debentures. The Convertible Subordinated Debentures were sold to qualified institutional buyers in a private placement pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company intends to use the net proceeds from the sale of the additional debentures for general corporate purposes. The debentures and the shares of common stock issuable upon conversion of the debentures have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy the debentures or any other securities. About BearingPoint, Inc. BearingPoint, Inc., (NYSE: BE) is one of the world's largest business consulting, systems integration and managed services firms serving Global 2000 companies, medium-sized businesses, government agencies and other organizations. The Company provides business and technology strategy, systems design, architecture, applications implementation, network infrastructure, systems integration and managed services. The Company's service offerings are designed to help our clients generate revenue, reduce costs and access the information necessary to operate their business on a timely basis. Based in McLean, Virginia, BearingPoint has been named by Fortune as one of America's Most Admired Companies in the computer and data services sector. For more information, visit the Company's website at http://www.BearingPoint.com/ * * * As reported in the Troubled Company Reporter on Dec. 17, 2004, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured ratings on McLean, Virginia-based BearingPoint, Inc., to `BB+' from `BBB-'. At the same time, Standard & Poor's assigned a 'BB-' rating to the company's $325 million in Series A and Series B convertible subordinated notes due Dec. 14, 2024. "The downgrade reflects currently weak profitability and cash flow measures in a very competitive operating environment," said Standard & Poor's credit analyst Philip Schrank. The ratings reflect a currently high-cost structure, improving but low margins in relation to historical levels, and weakened cash flow protection measures. Offsetting these factors, the company maintains a good competitive position specifically in the Public Services sector (representing more than half of revenues), strong client relationships, and increased global scale. CATHOLIC CHURCH: Portland Diocese Publicizes April 29 Bar Date -------------------------------------------------------------- This week the Archdiocese of Portland began an extensive effort to notify anyone who believes he or she has a claim against the Archdiocese to file the claim by 5:00 p.m. Pacific Time on April 29, 2005. The April 29 bar date was set by the U.S. Bankruptcy Court as the last day to file claims. This notification process is a normal part of the bankruptcy proceedings. It will assist the Archdiocese and the Bankruptcy Court in establishing the total amount of outstanding debt the Archdiocese owes. The notice is directed to anyone who believes that the Archdiocese of Portland owes them money or to anyone who believes that the Archdiocese is responsible for causing them any injury or harm including child sexual abuse by a member of the clergy or an employee. The Archdiocese of Portland is placing a legal notice in major newspapers in Oregon, to the USA Today and the Wall Street Journal and to newspapers in Washington, Idaho, Montana, California and British Columbia. The notification will be placed in Catholic newspapers in Portland, Seattle, Spokane, Los Angeles and San Francisco. The notification will be sent by mail to creditors, to 81,070 registered Catholic households in western Oregon, to alumni in certain of the Catholic high schools, and to others. The legal notice states that one may have a claim against the diocese if: -- while a person was under the age of 18, he/she had sexual contact with or were sexually touched by a Catholic priest, employee, volunteer, or other person working for the Archdiocese of Portland in Oregon or for a Catholic Parish/School served by the Archdiocese; or -- he/she believes the Archdiocese is responsible for anything that caused his/her injury or harm at any age; or -- the Archdiocese owes him/her any money; or -- he/she asserts a right to payment from the Archdiocese, or -- he/she asserts a right to an equitable remedy (e.g., the right to require the Archdiocese to either do or not do something) which would result in the Archdiocese owing him/her money for its failure to do as required, whether or not the right is disputed, matured, secured, legal, equitable, or contingent upon the happening of some future event. Claims will be coordinated by the Bankruptcy Management Corporation - BMC Group, of El Segundo, Calif., an independent claims agent for the Archdiocese. A special web site http://www.bmcgroup.com/archdpdx/will be established to provide interested persons with helpful information, including Proof of Claim forms that can be downloaded, and a toll-free phone number 1-888-909-0100 to answer questions. The Archdiocese of Portland strongly encourages everyone believing that they have a claim against the Archdiocese to file the Proof of Claim form by the bar date: April 29, 2005 by 5:00 p.m. Pacific Time. Those with questions about a possible claim should call the BMC Group 1-888-909-0100, not the Archdiocese of Portland or their local parish. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq. and William N. Stiles, Esq. of Sussman Shank LLP represent the debtor in its restructuring efforts. When the debtor filed for chapter 11 protection, it listed estimated assets of $10,000,000 to $50,000,000 and estimated debts of $25,000,000 to $50,000,000. CEDRIC KUSHNER: $12.1M Equity Deficit Spurs Going Concern Doubt --------------------------------------------------------------- Cedric Kushner Promotions, Inc., incurred net losses of $9,702,355 and $5,347,903 during the nine months ended September 30, 2004, and 2003, respectively. In addition, the Company had a working capital deficiency of $10,911,333 at September 30, 2004. Furthermore, the Company had a stockholders' deficiency of $12,134,713 at September 30, 2004. These factors continue to raise substantial doubts about the Company's ability to continue as a going concern. At September 30, 2004, the Company's cash position reflected a balance of $95,744 compared to the $21,205 balance at December 31, 2003. Additionally, the Company had $4,980 held in escrow at September 30, 2004, subject to release in accordance with the terms of an escrow agreement dated February 17, 2004. Default The Company is in default of several notes and loans payable in the aggregate amount of approximately $2,793,650. The Company hopes to remedy these defaults through additional borrowings, conversion of existing debt to equity, ownership contributions, and renegotiation of existing terms and conditions of notes and loans payable in default. If the Company is unable to cure these defaults, it may significantly impede the Company's ability to raise additional funds and to conduct normal business operations. The Company expects to meet its long-term liquidity requirements through long-term borrowings, both secured and unsecured, the issuance of debt or equity securities and cash generated from operations. As of November 15, 2004, the Company has been unable to secure any source of long-term liquidity. If the Company is not successful in obtaining long-term liquidity, it risks being unable to replace maturing obligations when due. There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Further, there can be no assurance that any required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company's existing stockholders. Cedric Kushner promotes world champion and top contender boxers. In addition to its representation and promotion efforts, the agency also produces and syndicates world championship boxing events for distribution worldwide. A steady program supplier to the world's leading television networks, including HBO, SHOWTIME, ESPN, and EuroSport, the company promotes televised events from venues all around the world. With a roster rich in world champions and a track record that includes having promoted approximately 300 world championship bouts, CKP is at the forefront of the international boxing business. CKP, formed in 1974 by promoter Cedric Kushner, originally achieved prominence in the field of rock-'n-roll music and is now one of the most active promoters of championship bouts worldwide. In addition to its North American business, CKP is the foremost American-based promoter of boxing in Europe and Africa. CHALMETTE LLC: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Chalmette LLC 2323 Nantuckett Houston, Texas 77057 Bankruptcy Case No.: 05-30394 Chapter 11 Petition Date: January 4, 2005 Court: Southern District of Texas (Houston) Judge: Jeff Bohm Debtor's Counsel: Rodney E. Moton, Esq. 2626 South Loop West 230 Houston, TX 77054 Tel: 713-236-8184 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20-largest creditors. COX TECHNOLOGIES: Initial Liquidating Dividend is $0.14 Per Share ----------------------------------------------------------------- Cox Technologies, Inc., (OTCBB: COXT) filed Articles of Dissolution with the Secretary of State of North Carolina, to be effective Jan. 17, 2005. At the close of business on Jan. 17, 2005, the company will close its stock transfer books and discontinue recording transfers of its common stock. Thereafter, certificates representing the common stock will not be assignable or transferable on the books of the company. Any liquidating distributions made by the company will be made solely to the shareholders of record at the final record date, which is the close of business on Jan. 17, 2005. The company also reported that its board of directors has approved an initial cash distribution to its shareholders out of the proceeds of the sale of substantially all of its assets to Sensitech, Inc. The company will make an initial distribution to each shareholder of record as of the close of business on Jan. 17, 2005 of $0.14 for each share of Cox Technologies common stock held as of such record date. Cox Technologies will initiate the distribution upon finalization of the Jan. 17, 2005, record of shareholders, which is expected to be within a few days of the record date. Since the Asset Sale to Sensitech, Cox Technologies has been taking the necessary steps to liquidate and convert the remaining non-cash assets of the Company to cash and to pay the liabilities and obligations of the Company. As of Dec. 31, 2004, the company reported net assets in liquidation of approximately $6,152,614, or approximately $0.16 per share. The aggregate amount of the $0.14 per share cash distribution will be $5,343,390.78. In lieu of satisfying all of its liabilities and obligations prior to making the initial distribution to Cox Technologies' shareholders, the company has retained approximately $1,752,000 to provide for satisfaction of its liabilities and obligations. After the liabilities, expenses and obligations have been satisfied in full, Cox Technologies will distribute to its shareholders any remaining portion of the cash reserve. Management's current estimate is that the cumulative distribution will be in a range from $0.16 to $0.17 per common share, in the form of the initial distribution in the amount of $0.14 per share and one or more subsequent distributions estimated to be in the range of $0.02 to $0.03 per share. About Cox Technologies On April 16, 2004, Cox Technologies sold substantially all of its assets to Sensitech, for cash and is currently engaged in the process of orderly liquidation of its remaining assets, the winding up of its business and operations, and the dissolution of the Company. CWALT INC: Moody's Puts Ba3 Rating on $4.3M Class B-3 Certificates ------------------------------------------------------------------ Moody's Investors Service has assigned a rating of Aaa to the senior certificates issued in the CWALT, Inc., Alternative Loan Trust 2004-30CB securitization of Alternative-A loans secured by first liens on one to four-family residential properties. In addition ratings of Aa3, A3, Baa2 and Ba3 were assigned to classes M-1, B-1, B-2 and B-3, respectively. According to Moody's analyst Amita Shrivastava, the ratings of the certificates are based on the quality of the underlying mortgages, the credit support provided through subordination, the legal structure of the transaction, as well as Countrywide's capability as a servicer of mortgage loans. The underlying collateral consists predominantly of conforming balance fixed-rate mortgage loans. The loans in the pool primarily have original term to maturity of 30 years or 15-year loans. The credit quality of the pool is similar to Countrywide's recent securitizations of Alternative-A conforming balance fixed rate collateral. Countrywide Home Loans Servicing LP will be the master servicer of the mortgage loans. Countrywide is considered to be a highly capable servicer of prime quality mortgage loans. Countrywide Servicing was established by Countrywide Home Loans -- CHL -- in February 2000 to service loans originated by CHL. Moody's has assigned Countrywide Home Loans, Inc., servicer ratings of SQ1, Moody's highest servicer quality rating, for servicing of Prime/Alt-A loans. The complete rating actions are: Issuer: Alternative Loan Trust 2004-30CB Depositor: CWALT, Inc. Master Servicer: Countrywide Home Loans Servicing LP Class Amount Rating ----- ------ ------ Class 1-A-1 $90,744,055 Aaa Class 1-A-2 $101,045,000 Aaa Class 1-A-3 $55,600,000 Aaa Class 1-A-4 $25,292,308 Aaa Class 1-A-5 Interest Only Aaa Class 1-A-6 $37,430,380 Aaa Class 1-A-7 $40,000,000 Aaa Class 1-A-8 Interest Only Aaa Class 1-A-9 $4,444,000 Aaa Class 1-A-10 $60,000,000 Aaa Class 1-A-11 Interest Only Aaa Class 1-A-12 $104,600,800 Aaa Class 1-A-13 $26,150,200 Aaa Class 1-A-14 Interest Only Aaa Class 1-A-15 $35,300,000 Aaa Class 1-A-16 $15,864,000 Aaa Class 1-A-17 $5,318,637 Aaa Class 1-A-18 $1,970,020 Aaa Class 2-A-1 $172,942,300 Aaa Class 2-A-2 Interest Only Aaa Class 2-A-3 $14,000,000 Aaa Class 2-A-4 $20,771,400 Aaa Class 3-A-1 $93,255,800 Aaa Class PO $3,003,356 Aaa Class A-R $100 Aaa Class M $20,489,500 Aa3 Class B-1 $8,577,000 A3 Class B-2 $5,718,000 Baa2 Class B-3 $4,288,500 Ba3 DAYTON SUPERIOR: Moody's Affirms Low-B & Junk Ratings ----------------------------------------------------- Moody's Investor Service affirmed Dayton Superior Corp.'s debt ratings to reflect the company's recent financial performance, particularly the improvement reported in its third quarter results. The affirmation also considers: (1) recent improvement in the commercial construction marketplace, (2) the company's ability to pass on raw material price increases, and (3) the liquidity afforded by the company's revolver. The change in ratings outlook to stable from negative reflects the belief that the company's financial performance is currently improving. The affirmed ratings are: * $165 million 10.75% guaranteed senior secured second lien notes due 2008, affirmed at B3; * $155 million 13% guaranteed senior subordinated global notes due 2009, affirmed at Caa2; * Senior Implied, affirmed at B3; * Issuer Rating, affirmed at Caa1. The ratings affirmation reflects the company's role in the commercial construction marketplace and the belief that this market is showing signs of growth after a protracted period of weakness. The affirmation considers the company's recent financial performance including an increase of 14% in sales for the first nine months on a year over year basis, and an improvement in its operating margin to 5% from 4.4% for the nine months ended October 1, 2004 vs. September 26, 2003, respectively. The company's liquidity is anticipated to improve over the intermediate term due to an improvement in its working capital that is expected to be derived from reduced inventory levels. Additionally, the company's inventory position is high due to a strategic decision to buy steel in increased bulk in order to receive larger discounts and protect against additional short-term increases in steel prices. The company's liquidity is considered to be adequate based on current projections. Liquidity is provided by a $95 million revolving credit facility, $66 million of which was used as of October 1, 2004. Moody's notes that it does not rate the company's revolving credit facility. The revolver's availability is crucial as the company maintains almost no cash on its balance sheet and relies on its revolver to fund working capital swings. Although an improving commercial construction market should allow Dayton Superior an opportunity to improve its balance sheet during 2005, a slower than expected recovery could quickly become an important challenge given its liquidity profile. The ratings and or outlook may deteriorate if the company's free cash flow does not turn positive over the next couple of quarters, or if the company's EBITDA to interest is anticipated to fall below 1 times on a projected basis. A reduction in the company's projected liquidity could also cause a downgrade or a change in outlook. Swings in raw material costs and the company's ability to pass on these increases continues to be an important issue. The company's steel rods are used primarily in the construction of commercial concrete structures. Hence, a slowdown in the commercial building market would likely pressure the rating as the company's leverage levels are high and its interest coverage is low for the ratings category. A debt-financed acquisition that results in reduced coverage ratios could also prompt a downgrade. An improvement in the ratings outlook would likely occur if the company was able to significantly improve its operating results, or meaningfully reduce its debt levels. At a minimum, EBITDA to interest expense of over 2 times and free cash flow to total debt of over 5% on a sustainable basis would be necessary to consider a ratings upgrade or even an improved outlook. Headquartered in Dayton, Ohio, Dayton Superior Corporation is the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction, and metal accessories used in masonry construction. DELAFIELD 246 CORPORATION: List of 5 Largest Unsecured Creditors ---------------------------------------------------------------- Delafield 246 Corporation released a list of its 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Bleakle Platt Schmidt LLP Legal Services $26,689 PO Box 50556 White Plains, New York 10602 Teltler & Teltler Legal Services $12,324 1114 Avenue of the Americas New York, New York 10036 Shapiro Sher Giunor & Sandler Legal Services $10,835 36 South Charles Street Baltimore, Maryland 21201 Marshall S. Shieff, Esq. Legal Services $10,000 245 Saw Mill River Road Hawthorne, New York 10532 Delafield Estates Homeowners Assessments $1 Association Headquartered in Plainview, New York, Delafield 246 Corporation is a real estate investor and developer. The Company filed for chapter 11 protection on November 29, 2004 (Bankr. E.D.N.Y. Case No. 04-87515). Daniel A Zimmerman, Esq., at the Law Offices of Steven Cohn PC, represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $13,000,000 in assets and $9,001,200 in debts. DELPHI: Joins Effort with Comcast in Auto Video Market Research --------------------------------------------------------------- Delphi Corp. (NYSE: DPH) and Comcast Corporation (Nasdaq: CMCSA, CMCSK) reached an agreement under which the two companies will work together to develop ways to allow users to select video content, transfer it to an in-vehicle entertainment system, and take it with them on the go. Under the agreement, Delphi will work to develop an electronic consumer device for use in vehicles that enables the transfer and user selected playback of video, and Comcast will examine ways to allow users to access video content. "The Comcast and Delphi joint development project will seek to explore ways to empower users with a new mechanism to deliver video programming to the vehicle," said Dave Wohleen, Delphi vice president and president of Delphi's Electronics & Safety sector. "We're pleased to work with Delphi to explore how we can support an expanding array of products and services," said Steve Craddock, Comcast's senior vice president of New Media Development. The goal of the agreement is to leverage Delphi's 802.11 enabled rear-seat video system and allow users to securely transfer content to their vehicles. The agreement includes an anticipated timeline of 6 months to 18 months for evaluation and development. "Delphi has established a track record of leadership in automotive electronics and, as we expand our presence in adjacent technologies, we're radically transforming the everyday experiences people have both at home and on the road," said Beth Schwarting, Delphi Electronics & Safety general director of sales and marketing. "Our efforts will have the potential to become the coolest and most convenient way to get customized programming into the car." Delphi--http://www.delphi.com/--is a world leader in mobile electronics and transportation components and systems technology. Multi-national Delphi conducts its business operations through various subsidiaries and has headquarters in Troy, Michigan, USA, Paris, Tokyo and Sao Paulo, Brazil. Delphi's two business sectors -- Dynamics, Propulsion, Thermal & Interior Sector and Electrical, Electronics & Safety Sector -- provide comprehensive product solutions to complex customer needs. Delphi has approximately 186,500 employees and operates 171 wholly owned manufacturing sites, 42 joint ventures, 53 customer centers and sales offices and 34 technical centers in 41 countries. * * * As reported in the Troubled Company Reporter on Dec. 23, 2004, Standard & Poor's Ratings Services lowered its corporate credit rating on Delphi Corp. to 'BB+' from 'BBB-' and its short-term corporate credit rating to 'B' from 'A-3'. The ratings were removed from CreditWatch where they were placed Dec. 2, 2004. The outlook is stable. "The action reflected our view that Delphi's earnings outlook will remain weak for the next few years because of challenging conditions in the automotive industry, a heavy dependence on General Motors Corp. (BBB-/Stable/A-3), which is losing market share in the U.S., and continued heavy underfunded employee benefit obligations," said Standard & Poor's credit analyst Martin King. DEX MEDIA: Registers Up to 18 Mil. Shares for Secondary Offering ---------------------------------------------------------------- Dex Media, Inc., (NYSE: DEX) filed a registration statement with the Securities and Exchange Commission to register the sale of up to 18 million shares of common stock by certain of its stockholders. The shares of common stock are being offered by affiliates of TCG Holdings, L.L.C., and WCAS IX Associates, LLC. The shares to be sold in the offering represent approximately 12 percent of fully diluted shares outstanding as of Jan. 1, 2005. The underwriters will have an option to purchase up to an additional 2.7 million shares from the selling stockholders. Dex Media will not receive any proceeds from the offering. The offering will be made only by means of a prospectus. Once available, a preliminary prospectus may be obtained from: Morgan Stanley Attn: Prospectus Dept. 1585 Broadway New York, NY 10036 Tel. No.: (212) 761-4000 -- or -- Lehman Brothers Inc. 745 Seventh Ave. New York, NY 10019 Tel. No.: (212) 526-7000 -- or -- Merrill Lynch & Co. 4 World Financial Center New York, NY 10080 Tel. No.: (212) 449-1000 A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. About Dex Media, Inc. Dex Media, Inc., is the exclusive publisher of the official White and Yellow Pages directories in print, Internet and CD-ROM for Qwest Communications International Inc. The company publishes 269 directories in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. The company's leading Internet based directory, DexOnline.com, is the most used Internet Yellow Pages in the states Dex Media serves, according to market research firm comScore. In 2003, after giving effect to the acquisition of Dex Media West, LLC, Dex Media, Inc. generated revenues of approximately $1.6 billion. * * * As reported in the Troubled Company Reporter on June 18, 2004, Fitch Ratings affirmed these ratings on Dex Media's subsidiaries, Dex Media East LLC (DXME) and Dex Media West LLC (DXMW): DXME -- $1.1 billion senior secured credit facility 'BB-'; -- $450 million senior unsecured notes due 2009 'B'; -- $525 million senior subordinated notes due 2012 'B-'. DXMW -- $2.1 billion senior secured credit facility 'BB-'; -- $385 million senior unsecured notes due 2010 'B'; -- $780 million senior subordinated notes due 2013 'B-'. In addition, Fitch has assigned a 'CCC+' rating to the holding company's, Dex Media Inc., $500 million 8% notes due 2013 and its $750 million 9% aggregate principal discount notes due 2013, which has a current accreted value of $512 million. Approximately $6.3 billion of debt is affected by Fitch's actions. The Rating Outlook is Stable. On July 28, 2004, Moody's Investor Service upgraded its credit ratings by two notches to B3. In anticipation of a common stock offering and the use of a portion of the proceeds to reduce debt, on May 17, 2004, Standard & Poors revised the outlook on Dex's single-B credit ratings to stable from negative. DEX MEDIA: Reconfirms 2004 Guidance & Issues 2005 Guidance ---------------------------------------------------------- Dex Media, Inc., (NYSE: DEX) reconfirmed its full-year 2004 guidance, including: -- adjusted free cash flow of approximately $485 million, comprised of estimated cash flow from operations of $490 million less estimated capital expenditures of $55 million plus IPO-related cash requirements of $50 million; -- debt paydown of approximately $460 million; -- an adjusted EBITDA margin of approximately 56 percent; and -- adjusted revenue growth between 1.2 percent and 1.3 percent. Additionally, Dex Media is providing general full-year 2005 guidance, which includes an expectation that free cash flow will increase over 2004, in part due to a decrease in capital expenditures and an improved capital structure with debt paydown (before giving effect to dividend payments) approximating one-half turn of leverage; and an adjusted EBITDA margin percentage and full-year revenue growth rate, while fluctuating on a quarterly basis, consistent with 2004 results. Adjusted free cash flow and adjusted EBITDA are non-GAAP measures. Management believes that providing guidance on these non-GAAP measures enables investors to better assess and understand the company's ability to meet debt service, make capital expenditures and meet its working capital requirements. Dex Media does not intend for the information to be considered in isolation or as a substitute for GAAP measures. Other companies may define similar measures differently. About Dex Media, Inc. Dex Media, Inc., is the exclusive publisher of the official White and Yellow Pages directories in print, Internet and CD-ROM for Qwest Communications International, Inc. The company publishes 269 directories in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. The company's leading Internet based directory, DexOnline.com, is the most used Internet Yellow Pages in the states Dex Media serves, according to market research firm comScore. In 2003, after giving effect to the acquisition of Dex Media West, LLC, Dex Media, Inc. generated revenues of approximately $1.6 billion. * * * As reported in the Troubled Company Reporter on June 18, 2004, Fitch Ratings affirmed these ratings on Dex Media's subsidiaries, Dex Media East LLC (DXME) and Dex Media West LLC (DXMW): DXME -- $1.1 billion senior secured credit facility 'BB-'; -- $450 million senior unsecured notes due 2009 'B'; -- $525 million senior subordinated notes due 2012 'B-'. DXMW -- $2.1 billion senior secured credit facility 'BB-'; -- $385 million senior unsecured notes due 2010 'B'; -- $780 million senior subordinated notes due 2013 'B-'. In addition, Fitch has assigned a 'CCC+' rating to the holding company's, Dex Media Inc., $500 million 8% notes due 2013 and its $750 million 9% aggregate principal discount notes due 2013, which has a current accreted value of $512 million. Approximately $6.3 billion of debt is affected by Fitch's actions. The Rating Outlook is Stable. On July 28, 2004, Moody's Investor Service upgraded its credit ratings by two notches to B3. In anticipation of a common stock offering and the use of a portion of the proceeds to reduce debt, on May 17, 2004, Standard & Poors revised the outlook on Dex's single-B credit ratings to stable from negative. DI GIORGIO: Moody's Rates New $150M Senior Unsecured Notes at B2 ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Di Giorgio Corp.'s new $150 million senior unsecured note issuance, the proceeds of which, in combination with drawings under its revolving credit facility, will be used to refinance existing indebtedness and pay a dividend, and affirmed the existing senior implied rating at B1. The rating outlook has been changed to negative. The change in the outlook to negative reflects a significant increase in leverage at a point in time when the company is operating with the loss of one of its largest customers. In addition, the payment of a large dividend in the face of a potential decline of nearly 20% in EBITDA for the year vs. 2003 and the fact that its payment required a drawdown under the revolver thus becoming a significant contributor to the increase in leverage. Ratings would be negatively impacted if current performance levels declined as evidenced by any increase in the pro-forma 5.7x debt/EBITDA and if excess cash flow is not used over the short to intermediate term to reduce debt under the revolver. Substantial ownership changes or use of liquidity reserves for non-productive uses also could adversely impact Moody's view of the financial risks facing the company. The outlook could be changed back to stable if the company were able to reduce debt so that debt/EBITDA was no greater than 4.75x and that the revenue and cash flow recently lost is replaced with either new customers or additional business with existing customers. The affirmation of Di Giorgio's long-term ratings reflect: (1) the company's modest free cash flow margins (defined as EBITDA less cash outflows for interest expense, taxes, working capital, and maintenance capital expenditures), (2) high amount of leverage for its current rating category, and (3) the recent history of paying out substantial portions of net income in the form of dividends. Exposure to the economic fortunes of a single region and the intense supermarket competition around New York City also adversely affect Moody's opinion of the challenges facing Di Giorgio. The ratings are supported by: (1) Di Giorgio's established position as the leading independent wholesaler to New York metro area grocers, (2) its lengthy history of net profitability, and (3) the consistent trend of small annual improvements in operating performance. In addition, while the company has a relatively small revenue base, the focus on a single region provides efficiencies in areas such as distribution and purchasing. The B2 rating on the senior unsecured notes recognizes that, while these notes do not enjoy any upstream guarantees from subsidiaries, Di Giorgio Corp. directly owns most of the consolidated assets and directly undertakes most of the business activities; however, the notes are effectively subordinated to material amounts of more senior indebtedness in the form of an unrated $90 million secured revolving credit facility. The senior unsecured notes also rank pari passu with trade accounts payable, which were approximately $67 million at 10/31/04. As of the end of the October 2004 quarter, $75 million of the revolving credit commitment was available. Rating assigned: * $150 million senior unsecured notes due 2013 at B2. Ratings affirmed: * Senior implied at B1; * Senior unsecured issuer rating at B2. Di Giorgio Corporation, headquartered in Carteret, New Jersey, distributes groceries principally in and around New York City and Philadelphia. Revenue for the 12 months ended October 2004 approximated $1.3 billion. DI GIORGIO: S&P Places B- Rating on Proposed $150M Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' rating to Di Giorgio Corp.'s proposed $150 million senior notes due 2013. The notes will be offered under Rule 144A without registration rights. Along with borrowings under the company's credit facility, proceeds from this issuance will be used to repay the outstanding principal of the 10% notes due in 2007, fund a $10 million dividend to the holders of class A and class B common stock, and cover fees and expenses. Existing ratings on Di Giorgio, including the 'B' corporate credit rating, were affirmed. The outlook is stable. Pro forma for the refinancing, Di Giorgio will have $184 million of debt on its balance sheet ($242 million of lease-adjusted debt) as of Sept. 25, 2004. Pro forma lease-adjusted debt to EBITDA will be 5.8x, and trailing-12-month EBITDA interest coverage will be just under 2.0x. As part of its refinancing plan, management intends to amend its current bank facility to extend the maturity date to 2009 and to increase the size to $100 million, as well as allow for the dividend payment to occur following the note refinancing. Current ratings do not factor in any material debt-financed acquisition activity or further sizeable debt-financed dividends. "The ratings reflect the company's heavy debt burden, its participation in the highly competitive food wholesale and distribution industry, and the expectation that credit measures will remain consistent with current ratings for the next several years," said Standard & Poor's credit analyst Stella Kapur. Although Carteret, New Jersey-based Di Giorgio has a somewhat protected niche market position in the New York metropolitan area, its customer base is concentrated. Excluding The Great Atlantic & Pacific Tea Co. Inc. -- A&P, which the company lost as a customer in October 2003, Di Giorgio's five largest customers accounted for 42% of last-12-month net sales as of Sept. 25, 2004. This customer concentration, combined with heavy dependence on a single market, exposes the company to potential revenue losses if a key customer leaves or if there is an economic downturn in the region. Di Giorgio has been focusing on replacing the loss of its contract with A&P. While the company has made some progress in adding new customers and expanding its geographic presence in the New England and greater Philadelphia areas, as well as in the Caribbean, substantial growth would still be needed to improve credit measures to historical levels. In addition, many of Di Giorgio's current customers are feeling the effects of a more competitive supermarket industry environment. DIGITAL LIGHTWAVE: Special Stockholders' Meeting Set for Feb. 10 ---------------------------------------------------------------- A Special Meeting of Stockholders of Digital Lightwave, Inc., will be held at the principal offices of the Company located at 15550 Lightwave Drive, Clearwater, Florida 33760, on February 10, 2005, at 10:00 a.m., local time, for these purposes: (1) to approve amendments to the Company's 2001 Stock Option Plan to: (a) increase by 5,000,000 the total number of shares of common stock available for issuance under the plan; (b) modify the circumstances in which vesting of certain options granted under the plan may be accelerated; and (c) increase by 500,000, to 750,000, the aggregate number shares of common stock for which options may be granted to a single participant per fiscal year under the plan. (2) to approve the conversion feature of the debt held by Optel Capital, LLC and the issuance of common stock upon the possible conversion of the debt; (3) to approve an amendment to the Company's Amended and Restated Certificate of Incorporation, increasing the number of authorized shares of common stock of the Company to 300,000,000; and (4) to transact other business as may properly come before the Meeting or any adjournment or postponement of the Meeting. Only stockholders of record at the close of business on December 29, 2004, will be entitled to notice of, and to vote at, the Meeting and any adjournments thereof. Based in Clearwater, Florida, Digital Lightwave, Inc., provides the global communications networking industry with products, technology and services that enable the efficient development, deployment and management of high-performance networks. Digital Lightwave's customers -- companies that deploy networks, develop networking equipment, and manage networks -- rely on its offerings to optimize network performance and ensure service reliability. The Company designs, develops and markets a portfolio of portable and network-based products for installing, maintaining and monitoring fiber optic circuits and networks. Network operators and telecommunications service providers use fiber optics to provide increased network bandwidth to transmit voice and other non-voice traffic such as internet, data and multimedia video transmissions. The Company provides telecommunications service providers and equipment manufacturers with product capabilities to cost-effectively deploy and manage fiber optic networks. The Company's product lines include: Network Information Computers, Network Access Agents, Optical Test Systems, and Optical Wavelength Managers. The Company's wholly owned subsidiaries are Digital Lightwave (UK) Limited, Digital Lightwave Asia Pacific Pty, Ltd., and Digital Lightwave Latino Americana Ltda. At September 30, 2004, Digital Lightwave's balance sheet showed a $22,560,000 stockholders' deficit, compared to a $21,140,000 deficit at December 31, 2003. THE DORIAN GROUP LTD: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: The Dorian Group, Ltd. aka Dorian Recordings aka Craig Dory Recordings aka On Demand Media Services aka Reference Recordings, LLC 8 Brunswick Road Troy, New York 12180 Bankruptcy Case No.: 05-10056 Type of Business: The Debtor produces and releases audiophile- quality recordings of fine classical and acoustic traditional music for nearly 16 years. See http://www.dorian.com/ Chapter 11 Petition Date: January 5, 2005 Court: Northern District of New York (Albany) Judge: Robert E. Littlefield Jr. Debtor's Counsel: Robert J. Rock, Esq. Law Office of Robert J. Rock 60 South Swan Street Albany, New York 12210 Tel: (518) 463-5700 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. EL SEGUNDO: S&P Places B+ Rating on Planned $130M Sr. Sec. Debts ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to El Segundo, California-based Wyle Laboratories, Inc. At the same time, Standard & Poor's assigned its 'B+' rating, with a recovery rating of '3', to Wyle's proposed first-priority senior secured bank facility, which consists of a $30 million, first-priority senior secured revolving credit line, and a $100 million, first-priority senior secured term loan. "The 'B+' rating is the same as the corporate credit rating, and indicates that first-priority senior secured creditors can expect meaningful recovery (50%-80%) of principal in the event of bankruptcy," said Standard & Poor's credit analyst Joshua Davis. Standard & Poor's also assigned its 'B-' rating, with a recovery rating of '5', to Wyle's proposed $50 million, second-priority senior secured term loan. Second-priority senior secured creditors can expect negligible recovery (0%-25%) of principal in the event of bankruptcy. The outlook is negative. The proceeds of the facility are to be used to purchase the assets of the Aeronautics business of General Dynamics Advanced information Systems, Inc., a wholly owned subsidiary of General Dynamics Corp. Based in Lexington Park, Maryland, Aeronautics is a provider of aeronautical research, development, test and evaluation services, and solutions to the Department of Defense and international militaries. Wyle is a leading supplier of test, engineering, technical services, and life science solutions and services to Federal government agencies, including the Department of Defense and the National Aeronautics and Space Administration -- NASA, and prime contractors to the Federal government. The company is estimated to have generated revenues of approximately $217 million in the year ended Dec. 31, 2004. The ratings reflect modest profitability inherent in the government services business, reliance on budgets of key Federal government agencies, and high financial leverage, on a pro forma basis. These factors partly are offset by: (1) a strong niche position providing technical support; (2) test and evaluation services; (3) a broader and deeper business profile resulting from the acquisition; and (4) a predictable revenue stream based on contractual backlogs of business. Wyle's business profile is supported by expertise in aerospace test and engineering services, and longstanding contractual relationships with key government agencies. ENRON CORP: Wants Court to Establish Unsecured Claims Reserve ------------------------------------------------------------- Enron Corp. and its affiliated Reorganized Debtor entities estimate that pursuant to their confirmed Chapter 11 Plan, more than $12 billion in value will be distributed to over 10,000 creditors. Over 25,000 claims were filed against the Debtors. Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the claims were filed by or on behalf of most of the major institutional investors in the United States, trade creditors, energy traders, former employees, and other creditor and equity constituencies. The Debtors have worked diligently to review and reconcile each of the claims. Of the claims filed in the Debtors' cases, around 9,000 disputed claims remain to be resolved through litigation or compromise with about 4,000 claims that are unliquidated in whole or in part. The vast majority of the Disputed Claims are filed as unsecured or, if filed as secured, priority or administrative, are the subject of pending motions seeking to: -- reclassify the claims as unsecured; -- subordinate the claims; or -- expunge the claims in their entirety. Consistent with the terms of the Plan, after its effectivity, distributions were immediately made on allowed, secured, priority, administrative and convenience class claims. Also pursuant to the Plan, distributions will not be made on account of allowed unsecured claims until appropriate reserve methodology has been approved by the Court and implemented. The Debtors anticipate that the first distributions on Allowed Unsecured Claims will be in April 2005. To facilitate making distributions on Allowed General Unsecured Claims, the Reorganized Debtors seek the Court's authority to establish an unsecured claims reserve pursuant to their proposed reserve methodology. Proposed Reserve Methodology Given the volume of remaining disputed, liquidated and unliquidated claims in their cases, the Reorganized Debtors developed a reserve methodology intended to strike a balance between: (a) enabling the Reorganized Debtors to make meaningful distributions to holders of Allowed General Unsecured Claims as early as April 2005; and (b) not jeopardizing the recovery of holders of Disputed Claims in the event that their claims are subsequently allowed. Mr. Rosen says that the Reserve Methodology uses the approach approved in the Plan for liquidated claims and a conservative approach for unliquidated claims in determining a reserve amount for General Unsecured Claims, with the reserve serving as the denominator for calculation of distributions under the Plan. The Reserve Methodology is comprised of a four-step calculation: (1) determination of a reserve for allowed and disputed liquidated General Unsecured Claims; (2) determination of a reserve for unliquidated General Unsecured Claims; (3) determination of the sum of the Liquidated Reserve and the Unliquidated Reserve -- Unadjusted GUC Reserve; and (4) imposition of a minimum and a maximum threshold on the Unadjusted GUC Reserve -- Adjusted GUC Reserve. For purposes of applying the Reserve Methodology to calculate April 2005 distributions, the amounts available for distribution will be determined using the net proceeds from the liquidation of assets to the extent that the proceeds have been realized by the Reorganized Debtors when the data is finalized for purposes of running that certain customized distribution model. Liquidated Reserve Around 8,000 liquidated and partially liquidated claims treated as unsecured -- Disputed Liquidated Claims -- that aggregates $70 billion remain unresolved. Excluding Intercompany Claims between Debtors, there are also about 10,000 allowed unsecured claims and estimated claims aggregating $35 billion -- Determined Claims. For purposes of determining the "Liquidated Reserve" component for the Stand Alone Recovery, the Liquidated Reserve for each Reorganized Debtor can be expressed in this formula: Disputed Determined Liquidated Liquidated Claims + Claims = Reserve Similarly, for purposes of determining the "Liquidated Reserve" component for the Sub/Con Recovery, the formula for the Liquidated Reserve will be: Disputed Determined Liquidated Liquidated Claims + Claims = Reserve The Liquidated Reserve will therefore account for all liquidated amounts asserted against the Reorganized Debtors, which could become Allowed General Unsecured Claims against them. Unliquidated Reserve Absent liquidation of all unliquidated Claims, there is no scientific means of quantifying the amount of the Reorganized Debtors' exposure on the claims on a claim-by-claim basis. On the other hand, if required to liquidate all the claims by agreement, estimation, or litigation, before making any distributions on Allowed General Unsecured Claims, then the distributions would be substantially delayed. Accordingly, the Reorganized Debtors propose a means to amply protect the holders of Unliquidated and Disputed Claims, but still allow for distributions to commence to the holders of Allowed General Unsecured Claims. The proposed "Unliquidated Reserve" is calculated using three variables for each Reorganized Debtor: (a) Whether an unliquidated claim has been filed asserting claims arising from the Debtors' West Coast power operations and remains unresolved against the Debtors -- WCP Claims; (b) Excluding the WCP Claims, the number of unliquidated claims remaining against each Reorganized Debtor; and (c) The aggregate amount of third-party claims against a Reorganized Debtor as reflected on Appendix C-I to the Disclosure Statement -- C-I Third Party Claim Estimates-- for the Stand Alone Recovery or Appendix C-II to the Disclosure Statement -- C-II Third Party Claim Estimates -- for the Sub/Con Recovery. Each of the three variables factors into the calculation of the Unliquidated Reserve by adding $3 billion to the reserve if there are any WCP Claims against the applicable Debtor and by then taking the greatest of: -- the number of unliquidated Claims, excluding WCP Claims, against a Reorganized Debtor times $5 million; -- the C-I or C-II, as applicable, Third Party Claim Estimates; and -- $50 million. The formula for the Unliquidated Reserve will therefore be: Greatest of: (i) $5 million x number of unliquidated claims excluding WCP Claims; (ii) as applicable, C-I or C-II Third-Party Claim Estimates; and (iii) $50 million + if any WCP Claims, then add $3 billion = Unliquidated Reserve Reserve Formula The Unadjusted GUC Reserve essentially represents a sum of the Liquidated and Unliquidated Reserves: (if applicable) (if applicable) Unadjusted Liquidated + Unliquidated = GUC Reserve Reserve Reserve For the Stand Alone Recovery, the Liquidated Reserve and the Unliquidated Reserve for the respective Debtor is used. For the Sub/Con Recovery, the Liquidated Reserve and the Unliquidated Reserve for the consolidated Debtors is used. Once the Unadjusted GUC Reserve has been determined, to the extent that it includes an Unliquidated Reserve component, it is then subject to adjustment in accordance with the minimum and maximum thresholds. The minimum threshold provides that the Adjusted GUC Reserve will not be less than the sum of: (a) as applicable, C-I or C-II Third Party Claim Estimates; (b) the non-Debtor affiliate claims estimated for the Stand Alone Recovery or the Sub/Con Recovery in the Disclosure Statement; and (c) the greater of $50 million and the number of unliquidated claims, excluding WCP Claims, against the Reorganized Debtor times $5 million. The formula can be expressed in this manner: Greater of: (i) $50 million; and (ii) $5 million x number of unliquidated claims excluding WCP Claims + as applicable, C-I or C-II Third-Party Claim Estimates + Non-Debtor Estimates = Minimum for Adjusted GUC Reserve The maximum threshold provides that, if the Unadjusted GUC Reserve is greater than $25 billion, then the Adjusted GUC Reserve will be limited to the sum of two times: (a) as applicable, C-I or C-II Third Party Claim Estimates; and (b) the Non-Debtor Estimates. The maximum threshold can be expressed in this formula: (C-I or C-II Third Party Claim Estimates + Non-Debtor Estimates) x 2 = Maximum for Adjusted GUC Reserve Subsequent Distributions As Disputed Unliquidated Claims are resolved in their cases, the Reorganized Debtors reserve the right to seek modifications to their proposed Reserve Methodology. Distribution Model Given the magnitude of claims against the Debtors and the complexity of the Debtors' prepetition ownership structure, a complex computer program was required to maintain the requisite data regarding assets, liabilities, and value allocation, and to provide a means for calculating distributions or recoveries under the Plan. According to Mr. Rosen, the Distribution Model is a complex and customized software program. The Distribution Model reflects the assets and liabilities of each Debtor for distribution purposes. Based on the Debtors' books, records and good-faith estimates of unliquidated liabilities and asset values, the Distribution Model was used to generate the summaries included in the Debtors' Disclosure Statement entitled "Estimated Assets, Claims and Distributions." To commence distributions in April 2005 for all Reorganized Debtors with allowed claims, the Reserve Methodology must be approved no later than January 2005 to allow sufficient time for integration of the reserve methodology into the Distribution Model for calculating distributions on Allowed Unsecured Claims. Reserve Methodology is Necessary The Reserve Methodology, Mr. Rosen asserts, was designed conservatively to balance the need to make meaningful distributions to holders of Allowed General Unsecured Claims while ensuring that ample funds are available for the benefit of holders of Disputed Claims, to the extent their claims are allowed in the future. Without any reserve methodology, the Reorganized Debtors would be unable to make distributions to holders of Allowed General Unsecured Claims at this time. The Reserve Methodology is therefore necessary and appropriate to facilitate distributions under the Plan and must be approved. Headquartered in Houston, Texas, Enron Corporation is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. Enron filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. FAIRPOINT COMMS: Launching Tender Offers & Soliciting Consents -------------------------------------------------------------- FairPoint Communications, Inc., commenced concurrent cash tender offers for all of its outstanding: -- 9-1/2% Senior Subordinated Notes Due 2008; -- Floating Rate Callable Securities Due 2008; -- 12-1/2% Senior Subordinated Notes Due 2010; and -- 11-7/8% Senior Notes Due 2010. In conjunction with the tender offers, FairPoint is soliciting consents from holders of the Notes to effect certain proposed amendments to the indentures governing such Notes. The tender offers and consent solicitations are being made pursuant to: (i) an Offer to Purchase and Consent Solicitation Statement, dated as of January 5, 2005, for the 2008 Notes; (ii) a Consent and Letter of Transmittal, dated as of Jan. 5, 2005, for the 2008 Notes; (iii) an Offer to Purchase and Consent Solicitation Statement, dated as of January 5, 2005, for the 12-1/2% Notes and the 11-7/8% Notes; and (iv) a Consent and Letter of Transmittal, dated as of Jan. 5, 2005, for the 12-1/2% Notes and the 11-7/8% Notes. The tender offers and consent solicitations will expire at 5:00 p.m., New York City time, on February 3, 2005, unless one or more of such tender offers and consent solicitations are extended. The purchase price for the 2008 Notes that are validly tendered and accepted for payment on or prior to the Expiration Date will be equal to $1,015.42 per $1,000 principal amount of 9-1/2% Notes and $982.50 per $1,000 principal amount of Floating Rate Notes, plus any accrued and unpaid interest on the 2008 Notes up to, but not including, the payment date for such notes. The purchase price to be paid for each $1,000 in principal amount of the 12-1/2% Notes validly tendered will be: (i) the present value on the settlement date for such Notes of $1,062.50 per $1,000 principal amount of the 12-1/2% Notes (the amount payable on the first optional redemption date of the 12-1/2% Notes) and all scheduled interest payments on the 12-1/2% Notes from the settlement date to May 1, 2005, discounted at a rate equal to the sum of: (x) the yield on the 1.625% U.S. Treasury Note due April 30, 2005 and (y) a fixed spread of 50 basis points, minus accrued and unpaid interest up to, but not including, the settlement date, minus (ii) an amount equal to the consent payment. Also, accrued and unpaid interest will be paid on the tendered 12-1/2% Notes up to, but not including, the settlement date for such notes. The purchase price to be paid for each $1,000 in principal amount of the 11-7/8% Notes validly tendered will be: (i) the sum of: (a) 35% of $1,118.75 per $1,000 principal amount of the 11-7/8% Notes (which is the equity claw-back amount for the 11-7/8% Notes under the indenture governing such Notes) plus (b) 65% of the present value on the settlement date for such Notes of $1,059.38 per $1,000 principal amount of the 11-7/8% Notes (the amount payable on the first optional redemption date of the 11-7/8% Notes) and all scheduled interest payments on the 11-7/8% Notes from the settlement date to March 1, 2007, discounted at a rate equal to the sum of: (x) the yield on the 2.25% U.S. Treasury Note due February 15, 2007 and (y) a fixed spread of 50 basis points, minus accrued and unpaid interest up to, but not including, the settlement date, minus (ii) an amount equal to the consent payment. In addition, accrued and unpaid interest will be paid on the tendered 11-7/8% Notes up to, but not including, the settlement date for such notes. In addition to the prices above, a consent payment of $20.00 will be paid for each $1,000 in principal amount of the Notes to holders who tender their Notes and provide their consents to the proposed amendments to the indentures governing the Notes prior to the consent payment deadline of 5:00 p.m., New York City time, on January 20, 2005, unless extended. Holders of Notes tendered after the Consent Payment Deadline will not receive a consent payment. Notes tendered and consents delivered may not be withdrawn or revoked after 5:00 p.m., New York City time, on January 20, 2005, unless such time or date has been extended. Among other things, the proposed amendments to the indentures governing the Notes would eliminate most of the indentures' principal restrictive covenants and would amend certain other provisions contained in the indentures. Adoption of the proposed amendments requires the consent of the holders of at least a majority of the aggregate principal amount of the 12-1/2% Notes outstanding, a majority of the aggregate principal amount of the 11-7/8% Notes outstanding and a majority of the aggregate principal amount of the 2008 Notes outstanding (voting as a single class). Holders who tender their Notes will be required to consent to the proposed amendments and holders may not deliver consents to the proposed amendments without tendering their Notes in the tender offers. Tendered Notes may be withdrawn and consents may be revoked at any time prior to the Withdrawal Deadline, but not thereafter. The tender offers are subject to several conditions, including, among other things: -- FairPoint's completion of its proposed initial public offering of its common stock and obtaining a new senior secured credit facility; -- a minimum tender condition; and -- a requisite consents and execution of the supplemental indentures condition. FairPoint expects to complete the initial public offering of its common stock and obtain a new senior secured credit facility on or prior to the Expiration Date of the tender offers. FairPoint may amend, extend or terminate one or more of the tender offers and consent solicitations in its sole discretion. This press release is neither an offer to purchase nor a solicitation of an offer to sell the Notes. The offer and consent solicitation is being made pursuant to each Offer to Purchase and Consent Solicitation Statement and related materials, copies of which will be delivered to all noteholders. Persons with questions regarding the offer and the consent solicitation should contact the Dealer Manager and Solicitation Agent: Banc of America Securities LLC Tel. No.: (888) 292-0070 or (212) 847-5834 -- or -- Global Bondholder Services Corporation Information Agent Tel. No.: (212) 430-3774 About the Company FairPoint is one of the leading providers of telecommunications services in rural communities across the country. Incorporated in 1991, FairPoint's mission is to operate and acquire telecommunications companies that set the standard of excellence for the delivery of service to rural communities. Today, FairPoint owns and operates 26 rural local exchange companies located in 17 states. FairPoint serves customers with approximately 272,691 access line equivalents (including voice access lines and digital subscriber lines) and offers an array of services including local voice, long distance, data, Internet and broadband product offerings. * * * As reported in the Troubled Company Reporter on June 8, 2004, Standard & Poor's Ratings Services said that it affirmed the 'B+' corporate credit rating and other ratings of Charlotte, North Carolina-based incumbent rural local exchange carrier FairPoint Communications, Inc. The ratings have also been removed from CreditWatch, where they were placed May 5, 2004. The CreditWatch listing reflected concerns that the company's proposed offering of $750 million in income deposit securities, along with the anticipated high common dividend payout associated with these issues, would reduce the company's financial flexibility. The outlook is negative. Standard & Poor's has assigned a 'CCC+' rating to the company's proposed senior subordinated notes due 2019, a major portion of which would be issued under the IDS structure and a small portion outside. Although the specific mix of debt and equity to be issued under the IDS has yet to be determined, the final amount of the senior subordinated notes will not affect FairPoint's corporate credit rating, nor the rating on these notes. Proceeds from a proposed $450 million secured bank credit facility, from the subordinated notes, and from the common equity component of the IDS will be used to refinance essentially all of FairPoint's existing debt and redeem the company's series A preferred stock. FairPoint had total debt of about $920 million, which includes about $101 million of preferred shares subject to mandatory redemption, at March 31, 2004. Given that the IDS offering will likely contain a significant common equity component, total debt is expected to be lower after the refinancing. "While the issuance of the income deposit securities would incrementally weaken FairPoint's financial risk profile, the magnitude is not sufficient to warrant a downgrade," said Standard & Poor's credit analyst Michael Tsao. "However, the reduced financial flexibility underpins the negative outlook." FREEDOM MEDICAL: Wants Permission to Use Lenders' Cash Collateral ----------------------------------------------------------------- Freedom Medical, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Pennsylvania for authority to use the cash collateral securing repayment of amounts owed to Wachovia Bank, National Association, and certain consignors and distributors. The Debtor owes Wachovia in excess of $21 million. The Debtor requires the use of the cash collateral to pay present operating expenses and pay vendors to ensure a continued supply of goods and services essential to the Debtor's ongoing viability. The Debtor's use of the cash collateral will be governed by a proposed budget, which has not yet been submitted by the Debtor. Freedom Medical believes that the creditors are adequately protected for any diminution on the value of the cash collateral that the Debtor uses because those expenditures will preserve the going concern value of the estate. Headquartered in Exton, Pennsylvania, Freedom Medical, Inc., -- http://www.freedommedical.com/-- sells electronic medical equipment and related services to hospitals, alternate site healthcare providers, and EMS transport organizations. The Company filed for chapter 11 protection on December 29, 2004 (Bankr. E.D. Pa. Case No. 04-37092). When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $50 million. HARVEST ENERGY: Increases Exchangeable Share Ratio to 1.07345 ------------------------------------------------------------- Harvest Energy Trust (TSX:HTE.UN) reported an increase to the Exchange Ratio of the Exchangeable Shares of Harvest Energy Trust from 1.06466 to 1.07345. This increase will be effective on January 17, 2005. As part of the Plan of Arrangement with Storm Energy, which closed on June 30, 2004, Harvest issued Exchangeable Shares, which are exchangeable into trust units at a ratio that adjusts each month. The Exchangeable Shares are not publicly traded. However, holders of Harvest Exchangeable Shares can exchange all or a portion of their holdings at any time by giving notice to their investment advisor or Valiant Trust Company at its principal transfer office at 310, 606 - 4th Street SW, Calgary, AB, T2P 1T1 (telephone: 403-233-2801). Harvest Energy Trust -- http://www.harvestenergy.ca/-- is a Calgary-based energy trust actively managed to deliver stable monthly cash distributions to its Unitholders through its strategy of acquiring, enhancing and producing crude oil, natural gas and natural gas liquids. Harvest trust units are traded on the Toronto Stock Exchange under the symbol "HTE.UN". * * * As reported in the Troubled Company Reporter on Oct. 5, 2004, Standard & Poor's Ratings Services assigned its 'B+' long-term corporate credit rating to Calgary, Alberta-based Harvest Energy Trust and its 'B-' senior unsecured debt rating to the proposed $200 million seven-year bond to be issued by Harvest Operations Corporation, a wholly owned subsidiary of Harvest Energy Trust. The debt is fully guaranteed by the trust and all its wholly owned subsidiaries. IMC GLOBAL: Completes Solicitation on Public Debt Securities ------------------------------------------------------------ The Mosaic Company (NYSE: MOS) said Mosaic Global Holdings Inc., formerly IMC Global Inc., and Phosphate Acquisition Partners L.P., the successor to Phosphate Resource Partners Limited Partnership, both wholly owned subsidiaries of Mosaic, have received and accepted the required consents from the holders of all series of their outstanding public debt securities pursuant to the previously announced solicitation of consents. IMC and PLP have executed supplemental indentures with respect to each series of the Securities and the proposed amendments to the terms of each series of the Securities have become operative. Also, Mosaic and two of its subsidiaries have issued certain guarantees to all holders of each series of the Securities. IMC has also deposited with the Information Agent for the consent solicitation the applicable consent fees relating to consents received from the holders of its 10.875% Senior Notes due 2008, 11.250% Senior Notes due 2011 and 10.875% Senior Notes due 2013. Goldman, Sachs & Co. acted as the Solicitation Agent and Bondholder Communications Group acted as the Information Agent for the consent solicitation. About The Mosaic Company The Mosaic Company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. For the global agriculture industry, Mosaic is a single source for phosphates, potash, nitrogen fertilizers and feed ingredients. More information on the company is available at http://www.mosaicco.com/ * * * As reported in the Troubled Company Reporter on Oct. 18, 2004, the ratings of IMC Global Inc. (B1 senior implied) and Phosphate Resource Partners (Caa1 senior unsecured) remain on review for possible upgrade. The review was prompted by the announcement in January of 2004 that IMC and Cargill Crop Nutrition, a wholly owned business unit of Cargill, Incorporated (A2 senior unsecured, stable outlook) had reached an agreement to merge. The combined company, to be called The Mosaic Company, will remain a public entity, owned approximately 66.5% by Cargill and 33.5% by existing IMC shareholders. As reported in the Troubled Company Reporter on Oct. 4, 2004, Fitch Ratings assigned prospective credit ratings to debt at IMC Global, Inc., and The Mosaic Company. IMC Global's ratings are currently on Rating Watch Positive pending the completion of the merger with Cargill Crop Nutrition. On a prospective basis, IMC's public debt would be upgraded: -- Senior unsecured debt (without subsidiary guarantees) to 'BB-' from 'B'; -- Senior unsecured debt (with subsidiary guarantees) to 'BB' from 'B+'; -- Senior secured bonds (related to Phosphate Resource Partners LP) to 'BB-' from 'B'; -- Mandatory convertible preferred securities to 'B' from 'CCC+'. INNSUITES HOSPITALITY: Trustees Name Mason Anderson to Board ------------------------------------------------------------ InnSuites Hospitality Trust's Board of Trustees appointed Mason Anderson to the Board. Mr. Anderson will also serve on the Audit, Compensation, Governance and Nominating, and Executive Committees of the Board. Mr. Anderson is an "independent" Trustee, as defined by Securities and Exchange Commission rules and American Stock Exchange listing standards. Mr. Anderson is self-employed as a private investor, including as an investor in real estate in the southwestern United States, and owns 218,606 Shares of Beneficial Interest in the Trust (or approximately 9.3% of the Trust's outstanding Shares). The appointment of Mr. Anderson to the Board of Trustees and the Audit Committee will return the Trust to compliance with the American Stock Exchange's audit committee requirements. The Board of Trustees approved the implementation of all of the proposals approved by the shareholders at the Trust's annual meeting held on December 10, 2004, and described in the Trust's Proxy Statement relating to that meeting. The proposals, which are intended to return the Trust to compliance with the American Stock Exchange's continued listing standards, are: A. the issuance of Shares of Beneficial Interest of the Trust in exchange for the cancellation of indebtedness owed by the Trust to RRF Limited Partnership; B. the issuance of Shares of Beneficial Interest of the Trust in consideration of the Trust's acquisition of all general partner interests of Yuma Hospitality Properties, Ltd. which are currently held by RRF Limited Partnership; C. the issuance of Shares of Beneficial Interest of the Trust in exchange for the cancellation of indebtedness owed by the Trust to certain affiliates of James Wirth, the Trust's President and CEO; and D. the issuance of Shares of Beneficial Interest of the Trust upon the conversion of Class B limited partnership units in RRF Limited Partnership into Shares of Beneficial Interest by James Wirth and certain of his affiliates. The Trust expects to implement the proposals on or about Jan. 31, 2005, its fiscal year end. The Board of Trustees also approved the payment of a cash dividend of $0.01 per share payable on January 31, 2005 to shareholders of record on January 18, 2005. The Trust has paid dividends in each of the last 35 fiscal years. InnSuites Hospitality Trust is a mid-market studio and two-room suite hospitality real estate investment trust with 8 moderate service and full service hotels containing 1,243 hotel suites located in Arizona, New Mexico and Southern California. For investor information, visit http://www.innsuitestrust.com/ At July 31, 2004, InnSuites Hospitality's balance sheet showed a $155,232 stockholders' deficit, compared to a $1,573,599 deficit at Jan. 31, 2004. INTEGRATED HEALTH: Reschedules Reserve Hearing Date to Feb. 23 -------------------------------------------------------------- On October 6, 2004, the United States Bankruptcy Court for the District of Delaware entered a consent order, which established certain deadlines and authorized expedited discovery in connection with C. Taylor Pickett and Daniel J. Booth's request to establish Indemnification Obligation and Reserve with respect to their administrative claims against the Integrated Health Services, Inc., and its debtor-affiliates. The Consent Order provides that the hearing on Messrs. Pickett and Booth's request is to be held on January 11, 2005, at 9:30 a.m. In a Court-approved stipulation, IHS Liquidating and Messrs. Pickett and Booth have engaged in good-faith negotiations and have agreed to reschedule the Reserve Request Hearing Date to February 23, 2005, at 2:00 p.m. In addition, the Reserve Request Reply Deadline is also rescheduled to 4:00 p.m. on Feb. 9, 2005. Integrated Health Services, Inc. -- http://www.ihs-inc.com/-- operated local and regional networks that provide post-acute care from 1,500 locations in 47 states. The Company and its 437 debtor-affiliates filed for chapter 11 protection on February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical Corporation and its direct and indirect debtor-subsidiaries broke away from IHS and emerged under their own plan of reorganization on March 26, 2002. Abe Briarwood Corp. bought substantially all of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan on May 12, 2003, and that plan took effect September 9, 2003. Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D. Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP, represent the IHS Debtors. On September 30, 1999, the Debtors listed $3,595,614,000 in consolidated assets and $4,123,876,000 in consolidated debts. (Integrated Health Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Service, Inc., 215/945-7000) INT'L FABRICATORS: Taps Evans & Mullinix as Bankruptcy Counsel -------------------------------------------------------------- International Fabricators & Erectors, Inc., asks the U.S. Bankruptcy Court for the Western District of Missouri for permission to employ Evans & Mullinix, P.A., as its general bankruptcy counsel. Evans & Mullinix is expected to: a) assist the Debtor in the analysis of its financial situation and render legal advise to the Debtor in relation to the chapter 11 case; b) assist the Debtor in the preparation and filing of any Petitions, Schedules, Statement of Financial Affairs and proposed Plan of Reorganization; c) represent the Debtor at the meeting of creditors and any confirmation hearings and any other hearings related to its chapter 11 case; d) provide all other legal services to the Debtor that are appropriate and necessary in its chapter 11 case. Thomas M. Mullinix, Esq., and Joanne B. Stutz, Esq., are the lead attorneys for the Debtor's restructuring. Mr. Mullinix discloses the Firm received a $4,320.75 retainer. For their services, Mr. Mullinix will bill the Debtor $250 per hour, while Ms. Stutz will charge at $235 per hour. Mr. Mullinix adds that Paralegals who will perform services to the Debtor will charge at $65 per hour. Headquartered in Kansas City, Missouri, International Fabricators & Erectors, Inc., manufactures fabricated metal products. The Company filed for chapter 11 protection on December 29, 2004 (Bankr. W.D. Mo. Case No. 04-47993). When the Debtor filed for protection from its creditors, it listed total assets of $6,152,005 and total debts of $6,334,382. INT'L FABRICATORS: Section 341(a) Meeting Slated for Feb. 2 ----------------------------------------------------------- The United States Trustee for Region 13 will convene a meeting of International Fabricators & Erectors, Inc.'s creditors at 2:00 p.m., on February 2, 2005, at the U.S. Courthouse, Room 2110A, 400 E. 9th Street, Kansas City, Missouri. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Kansas City, Missouri, International Fabricators & Erectors, Inc., manufactures fabricated metal products. The Company filed for chapter 11 protection on December 29, 2004 (Bankr. W.D. Mo. Case No. 04-47993). Joanne B. Stutz, Esq., at Evans & Mullinix, P.A., represents the Debtor's restructuring. When the Debtor filed for protection from its creditors, it listed total assets of $6,152,005 and total debts of $6,334,382. INTRAWEST CORP: Inks Partnership Agreement with Points.com ---------------------------------------------------------- Points International Ltd. (TSX: PTS, OTC: PTSEF), owner and operator of Points.com, disclosed an agreement with Intrawest Corporation (NYSE: IDR, TSX: ITW), the leading developer and operator of village-centered destination resorts across North America. The agreement with Intrawest will provide Points.com's members with the ability to exchange the miles and points from their favorite loyalty programs for gift certificates that can be used at many Intrawest owned and operated ski or golf resorts. This agreement also gives Points.com the ability to reach Intrawest's members through resort publications and other communication channels. "Intrawest Corporation is a well recognized and respected brand and represents a new and exciting opportunity for us to add breadth to the Points.com business," said Rob MacLean, CEO of Points International Ltd. "With ski and golf resort destinations throughout North America, Intrawest provides both American and Canadian Points.com members with a unique redemption opportunity for their loyalty program points and miles." About Points International Ltd. Points International Ltd. is the owner and operator of Points.com, the world's leading reward program management portal. At Points.com consumers can exchange points and miles between reward programs so that they can Get More Rewards, Faster(TM). Points.com has attracted over 40 of the world's leading reward programs including Delta SkyMiles(R), eBay Anything Points, American Airlines AAdvantage(R) program, S&H greenpoints, Asia Miles(R), and Priority Club(R) Rewards. About Intrawest Corporation Intrawest Corporation is one of the world's leading destination resort and adventure travel companies. Intrawest has interests in 10 mountain resorts in North America's most popular mountain destinations, including Whistler Blackcomb, a host venue for the 2010 Winter Olympic and Paralympic Games. The company owns Canadian Mountain Holidays, the largest heli-skiing operation in the world, and a 67 percent interest in Abercrombie & Kent, the world leader in luxury adventure travel. The Intrawest network also includes Sandestin Golf and Beach Resort in Florida and Club Intrawest -- a private resort club with nine locations throughout North America. Intrawest is developing five additional resort village developments at locations in North America and Europe. Intrawest is headquartered in Vancouver, British Columbia. For more information, visit http://www.intrawest.com/ * * * As reported in the Troubled Company Reporter on Sept. 24, 2004, Moody's Investors Service assigned a B1 rating to Intrawest Corporation's U.S. dollar-denominated 7.5% senior unsecured note offering, due 2013 and Canadian dollar-denominated 7.5% senior unsecured note offering, due 2009, for an aggregate amount of approximately US$325 million. In addition, these rating actions were taken by Moody's: * Ratings assigned: -- U.S. dollar-denominated 7.5% senior notes, due 2013 rated B1 -- Canadian dollar-denominated 7.5% senior notes, due 2009 rated B1 * Ratings affirmed: -- Senior implied rating at Ba3 -- Senior unsecured issuer rating at B1 -- US$350 million 7.5% senior notes due 2013 rated B1 -- US$125 million 10.5% senior notes due 2010 rated B1 -- US$135 million 10.5% senior notes due 2010 rated B1 -- US$125 million 10.5% senior notes due 2010 rated B1 The ratings outlook is stable. IWO HOLDINGS: Hires Weil Gotshal as Bankruptcy Counsel ------------------------------------------------------ IWO Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to retain Weil, Gotshal & Manges LLP as its general bankruptcy counsel. Weil Gotshal has worked for the Debtors since July 2003 in representing and advising them in the restructuring of their financial obligations and in the preparation for the commencement of their chapter 11 cases. Weil Gotshal is expected to: a) take all necessary action to protect and preserve the Debtors' estates, including: (i) the prosecution of actions on the Debtors' behalf, (ii) the defense of any actions commenced against the Debtors, (iii) the negotiation of disputes in the which the Debtors are involved, and (iv) the preparation of objections to claims filed against the Debtors; b) prepare on behalf of the Debtors, all necessary motions, applications, answers, orders, reports, and other papers in connection with the Debtors' estates and serve those papers to the Debtors' creditors; c) provide legal services to the Debtors in connection with the confirmation of their proposed plan of reorganization; and d) provide all other necessary legal services to the Debtors in connection with the prosecution of their chapter 11 cases. Jeffrey L. Tanenbaum, Esq., a Member at Weil Gotshal, is the lead attorney for the Debtors. Mr. Tanenbaum discloses that the Firm received a $500,000 postpetition retainer. Mr. Tanenbaum reports Weil Gotshal's professionals bill: Designation Hourly Rate ----------- ----------- Counsel/Members $550 - 775 Associates 260 - 495 Paraprofessionals 130 - 240 Weil Gotshal assures the Court that it does not represent any interest adverse to the Debtors or their estates. Headquartered in Lake Charles, Louisiana, IWO Holdings, Inc., -- http://iwocorp.com/-- through its Independent Wireless One Corporation subsidiary, is a PCS affiliate of Sprint PCS. IWO Holdings provides mobile digital wireless personal communications services, or PCS, under the Sprint and Sprint PCS brand names in upstate New York, New Hampshire (other than Nashua market), Vermont and portions of Massachusetts and Pennsylvania. The Debtors filed for chapter 11 protection on January 4, 2005 (Bankr. D. Del. Case Nos. 05-10009 to 05-10011). When the Debtors sought bankruptcy protection, they reported assets amounting to $246,921,000 and debts amounting to $413,275,000. IWO HOLDINGS: Confirmation Hearing Scheduled for February 9 ----------------------------------------------------------- The Honorable Peter J. Walsh of the U.S. Bankruptcy District of Delaware will convene a hearing at 1:30 p.m., on February 9, 2005, to consider the adequacy of the proposed Disclosure Statement filed by IWO Holdings, Inc., and its debtor-affiliates and the confirmation of the their proposed prepackaged Joint Plan of Reorganization. The Debtors filed their Disclosure Statement and Joint Plan on January 4, 2005. As reported in the Troubled Company Reporter on January 5, 2005, pursuant to the proposed Chapter 11 plan: (i) IWO will repay in full its outstanding senior credit agreement debt in the aggregate principal amount of $215,000,000; (ii) its outstanding Senior Notes in the aggregate principal amount of $160,000,000 will be exchanged for all of the new common stock of IWO; (iii) all other general unsecured claims will be unimpaired and paid in full; and (iv) the existing common stock of IWO, all of which is owned by US Unwired Inc., will be cancelled. IWO has entered into a lock-up agreement with holders of approximately 68% of the outstanding principal amount of its Senior Notes pursuant to which they have agreed to vote in support of the Chapter 11 plan. In connection with the Chapter 11 plan, a newly formed corporation which will be merged into IWO upon consummation of the Plan anticipates issuing $225,000,000 in aggregate proceeds of new notes. The proceeds of such new notes would be used primarily to repay IWO's senior credit agreement debt. If IWO receives the requisite votes from the holders of its Senior Notes, it intends to effectuate the proposed pre-packaged Chapter 11 plan of reorganization pursuant to a filing under the Bankruptcy Code in late December 2004 or early January 2005. Full-text copies of the Disclosure Statement and Joint Plan are available for a fee at: http://www.researcharchives.com/download?id=040812020022 Confirmation objections to the Disclosure Statement and Joint Plan, if any, must be filed and served by February 3, 2005. Headquartered in Lake Charles, Louisiana, IWO Holdings, Inc., -- http://iwocorp.com/-- through its Independent Wireless One Corporation subsidiary, is a PCS affiliate of Sprint PCS. IWO Holdings provides mobile digital wireless personal communications services, or PCS, under the Sprint and Sprint PCS brand names in upstate New York, New Hampshire (other than Nashua market), Vermont and portions of Massachusetts and Pennsylvania. The Debtors filed for chapter 11 protection on January 4, 2005 (Bankr. D. Del. Case Nos. 05-10009 to 05-10011). Jeffrey L. Tanenbaum, Esq., at Weil Gotshal & Manges LLP, and Mark D. Collins, Esq., at Richards Layton & Finger represent the Debtors. When the Debtors sought bankruptcy protection, they reported assets amounting to $246,921,000 and debts amounting to $413,275,000. J. J. H. MAGUIRE INC: Court Formally Dismisses Chapter 11 Case -------------------------------------------------------------- The Honorable Raymond T. Lyons Jr. of the U.S. Bankruptcy Court for the District of New Jersey ordered the dismissal of the chapter 11 proceedings of J. J. H. Maguire, Inc. The case was dismissed on Dec. 30, 2004, because JJH Maguire failed to submit its: (1) Summary of Schedules (2) Statement of Financial Affairs (3) Disclosure of Attorney Compensation (4) Corporate Resolution (5) 20 Largest Unsecured Creditors, and (6) List of Equity Security Holders The deadline for filing these documents was Dec. 22, 2004. JJH Maguire did not file a motion to extend the deadline for filing these schedules. Headquartered in Trenton, New Jersey, J. J. H. Maguire, Inc., filed for chapter 11 protection on December 7, 2004 (Bankr. D. N.J. Case No. 04-48435). Stephen Dicht, Esq., at Stephen P. Dicht & Associates, P.C., represents the debtor. When the Debtor filed for protection from its creditors, it estimated assets of more than $1 million and debts of less than $1 million. KAISER ALUMINUM: 17 Parties Object to Disclosure Statement ---------------------------------------------------------- At least 17 entities filed objections to the Disclosure Statements on the Liquidation Plans of Alpart Jamaica, Inc., and Kaiser Jamaica Corporation, and Kaiser Alumina Australia Corporation and Kaiser Finance Corporation: * Law Debenture Trust Company of New York; * Martin J. Murphy, the legal representative for future asbestos claimants; * The Official Committee of Asbestos Claimants; * Bear, Steams & Co., Inc., Citadel Equity Fund Ltd., and Citadel Credit Trading Ltd.; * Anne M. Ferazzi, as the legal representative for the future silica claimants; * The Liverpool Limited Partnership; * Certain insurance companies, which include: (a) Columbia Casualty Insurance Company, Transcontinental Insurance Company, Harbor Insurance Company, and Continental Insurance Company; (b) Affiliated FM Insurance Company; (c) Federal Insurance Company; (d) Allstate Insurance Company; and (e) ACE Companies; and * the U.S. Trustee. Jason M. Madron, Esq., at Richards, Layton & Finger, in Wilmington Delaware, tells the Court that the vast majority of the Objections primarily relate either to the timing of Disclosure Statement approval and the scheduling of a confirmation hearing, or are disguised confirmation objections. To the extent the Objections actually raise disclosure issues, Mr. Madron says, Alpart Jamaica, Kaiser Jamaica, Kaiser Australia and Kaiser Finance have revised the Disclosure Statements and will circulate the revised versions and black-lines. Accordingly, there should be no question that the Disclosure Statements, as revised, contain adequate information as required by Section 1125 of the Bankruptcy Code. Section 1125(a)(1) defines "adequate information" to mean: [I]nformation of a kind, and in sufficient detail . . . that would enable a hypothetical reasonable investor typical of holders of claims or interests of the relevant class to make an informed judgment about the plan. . . ." Moreover, in enacting Section 1125, Congress envisioned that courts would take a practical and flexible approach, basing the determination of adequate information on the unique facts and circumstances of each case. According to Mr. Madron, without exhibits, the Disclosure Statements are each 65 pages long and provide extensive information regarding the Debtors, including the Liquidating Debtors and the Liquidating Plans. The Disclosure Statements contain detailed information regarding, among other things: (a) the Liquidating Plans, including: -- the proposed distribution trust, the assets to be contributed, and the procedures for distributions; -- the proposed treatment of claims and interests under the Liquidating Plans; and -- the conditions precedent to confirmation and effectiveness of the Liquidating Plans; (b) certain events preceding the Liquidating Debtors' Chapter 11 cases; (c) the Liquidating Debtors' operations during the pendency of these cases; (d) distributions under the Liquidating Plans; (e) information regarding voting on and confirmation of the Liquidating Plans; (f) United States income tax consequences of consummation of the Liquidating Plans; and (g) the applicability of certain United States federal and state securities laws. Mr. Madron asserts that none of the confirmation issues raised in the Objections even remotely demonstrates that the Liquidating Plans are unconfirmable on their face. Hence, the confirmation issues should be considered, if at all, only in connection with the plan confirmation hearing. The Debtors will present at the confirmation hearing that the relevant confirmation standard has been satisfied. No such challenges are properly before the Court at this time. Accordingly, any Objections to the Disclosure Statements based on confirmation standards should be overruled. A. Timing of the Confirmation Process Several of the objecting parties assert that the Court should not permit the Liquidating Debtors to proceed with solicitation or schedule a confirmation hearing on the Liquidating Plans until various pending disputes are resolved and, with respect to the Kaiser Australia and Kaiser Finance Plan, the sale of Kaiser Australia's interests in and related to Queensland Alumina Limited is closed. In particular, Law Debenture alleges that it "defies common sense" to proceed with solicitation and schedule a confirmation bearing because: (a) it is a condition precedent to the Liquidating Plans that the Debtors' pending settlement with the Pension Benefit Guaranty Corporation and the pending settlement of intercompany claims among the Debtors and the official committee of unsecured creditors have been approved; and (b) the inter-creditor dispute between the senior and subordinated noteholders relating to the enforcement of the subordination provisions in the subordinated note indenture must be adjudicated before the confirmation. With respect to the PBGC Settlement, Mr. Madron notes that Law Debenture is essentially the only objecting party and, as a representative of subordinated noteholders, has an incentive to litigate for a "home run" against the PBGC on its claims regardless of the risks involved. Law Debenture does not even contest the components of the PBGC Settlement relating to the termination of the Debtors' pension plans, the approval of the replacement pension plans or the PBGC's administrative claim. Law Debenture objects only to the aggregate unsecured claim of the PBGC proposed to be allowed in respect of the terminated plans and, even on that point, essentially limits its arguments to the contention that a particular "prudent investor rate" should be applied. Even if the Court ultimately finds that a "prudent investor rate" should be used to determine the amount of the PBGC's claims for unfunded benefit liabilities in the absence of a settlement, the Court will not conclude that the PBGC Settlement, which fairly resolves this legal and factual issue as well as numerous other issues, is unreasonable. Solicitation and confirmation should not be delayed because Law Debenture is challenging one aspect of the PBGC Settlement. The existence of the Guaranty Subordination Dispute is, likewise, no reason to delay solicitation and scheduling of confirmation. To the contrary, proceeding with solicitation and confirmation of the Liquidating Plans will promote judicial economy and maximize the prospects for a consensual resolution. The Liquidating Plans contain an offer to settle the Guaranty Subordination Dispute, providing the holders of the subordinated notes $16,000,000 -- $8,000,000 under each Liquidating Plan -- if the subordinated noteholder class accepts the Liquidating Plans. Thus, if the Liquidating Plans are accepted, the Guaranty Subordination Dispute will be mooted. If the proposed compromise in the Liquidating Plans is not accepted, the Guaranty Subordination Dispute can be resolved as part of the confirmation process. Absent the ability to proceed with solicitation of the Liquidating Plans, the potential for the issue to be settled pursuant to the compromise in the Liquidating Plans may be lost and litigation of the dispute will likely proceed forward. Law Debenture and certain other parties suggest that no solicitation should occur until the ISA is approved. The Asbestos Committee and the Asbestos Representative, notwithstanding that their constituents have no claims against the Liquidating Debtors, contend that the Court should not permit solicitation or schedule a confirmation hearing as requested because "the Court is going to need the entire time designated on January 31, 2005 through February 2, 2005 for an evidentiary hearing on the [ISA] Motion." They further contend that "the time devoted to the evidentiary hearing on the [ISA] motion should [not] be hurried or eroded by scheduling the confirmation hearings for the same days." Mr. Madron tells the Court that the Debtors do not intend to truncate or otherwise shortcut the evidentiary hearing on the ISA Motion, and there is no harm in scheduling confirmation for the same dates. If it turns out that the evidentiary hearing on the ISA Motion takes all three days then the confirmation hearing can simply be continued at that point. If, on the other hand, the hearing on the ISA Motion does not take that long, confirmation can proceed without delay. Mr. Madron explains that the ability to proceed with confirmation as soon as possible is not only in the interests of the Liquidating Debtors' creditors, but also of the creditors of Kaiser Aluminum & Chemical Corporation given that the ISA and the Liquidating Plans provide for the payment of: (1) substantial cash by the Liquidating Debtors to KACC upon consummation of the Liquidating Plans; and (2) an additional $5,000,000 to KACC if the Alpart Jamaica and Kaiser Jamaica Plan becomes effective by April 30, 2005 and the Kaiser Australia and Kaiser Finance Plan becomes effective by June 30, 2005. Postponement of confirmation could delay these payments and jeopardize altogether KACC's entitlement to an additional $5,000,000. Citadel contends that the ISA must be approved before solicitation. According to Citadel, this is necessary because otherwise "creditors will not have sufficient information to determine whether the [Liquidating] Plans are confirmable, let alone feasible." Citadel's contention is likewise unfounded. Mr. Madron notes that the Disclosure Statements make clear that the ISA has not been approved yet and that approval is a condition precedent to confirmation. Solicitation does not need to await approval of the ISA solely so creditors have additional assurances that the Liquidating Plans will be confirmed. Citadel also argues that "the fact that the QAL sale will not close until the first quarter of next year precludes approval of the QAL Disclosure Statement." Citadel is wrong. The sale of the Debtors' interests in and related to QAL has already been approved by the Court, and a related purchase agreement has already been entered into with Alumina & Bauxite Company, Ltd. There is also a back-up purchase agreement with Pegasus Queensland Acquisition Pty Limited that can be consummated if, for any reason, the purchase agreement with Alumina & Bauxite does not close. Thus, there can be little concern that the QAL, sale will not be consummated, and Sections 1123(a)(5)(D) and (b)(3) expressly contemplate that a plan may provide for a post-confirmation sale of assets as a means for implementation. Even if the Liquidating Debtors acknowledge that there is some risk that if solicitation proceeds changes may later need to be made to the Liquidating Plans requiring re-solicitation, there are nonetheless distinct benefits to proceeding forward with solicitation and confirmation, including: (a) the potential settlement of the Guaranty Subordination Dispute; (b) the increased prospects for a consensual resolution of both bondholder subordination disputes by adjudicating or resolving all matters that relate to distributions to bondholders at the same time as part of confirmation; (c) the continued pressure on all constituencies to move these cases forward -- which should increase the prospects for one or more of the existing disputes to be consensually resolved; and (d) the avoidance of unnecessary delay in making distributions to creditors of the Liquidating Debtors. Significantly, none of the objecting parties has articulated any harm beyond the expenditure of additional fees and expenses that may be incurred if re-solicitation becomes necessary. Under these circumstances, the Liquidating Debtors insist that solicitation of the Liquidating Plans should be allowed to proceed. B. Asbestos Committee and Asbestos Representative The Asbestos Representative and the Asbestos Committee argue that the Disclosures Statements do not contain adequate information regarding the ISA. They allege that the ISA is the "cornerstone" of the Liquidating Plans. Mr. Madron clarifies that the ISA is not the "cornerstone" of the Liquidating Plans, nor do the Liquidating Plans seek approval of the ISA. Rather, the Debtors and the Creditors' Committee are seeking approval of the ISA in a separate request they jointly filed in October 2004. The ISA Motion, which was served on all parties requesting notice in these cases, contains a detailed description of the ISA. Further, in November 2004, the Debtors served a notice on all parties-in-interest notifying them that, among other things, they could obtain, at no cost, a copy of the ISA either from the Debtors' Web Site or by written request to Logan & Company, Inc., the Debtors' claims and noticing agent. Thus, parties-in-interest should already have ample information regarding the ISA, and any issues parties-in-interest may have with the ISA should be addressed in connection with the ISA Motion, not in connection with confirmation of the Liquidating Plans. The Asbestos Representative and the Asbestos Committee also contend that the Disclosure Statements fail to provide adequate information regarding substantive consolidation under the Liquidating Plans. Specifically, the Asbestos Representative and the Asbestos Committee argue that the Liquidating Debtors must establish under applicable case law that they are entitled to substantive consolidation. The Disclosure Statements must include an explanation as to "why it is appropriate to substantively consolidate these two pairs of Debtors when they contend it is not appropriate to substantively consolidate other debtors. . . ." As an initial matter, Mr. Madron tells Judge Fitzgerald, the Asbestos Representative and the Asbestos Committee's objection is a confirmation objection. Nonetheless, Mr. Madron explains that the Liquidating Debtors propose to substantively consolidate Alpart Jamaica and Kaiser Jamaica, and Kaiser Australia and Kaiser Finance, solely for administrative convenience. Alpart Jamaica and Kaiser Jamaica have the same joint creditors and Kaiser Australia and Kaiser Finance share the same joint creditors as well. Absent substantive consolidation, the creditors of the Liquidating Debtors would receive exactly the same distributions on their claims as they would with substantive consolidation -- the only difference would be that the recovery would occur through two plans rather than one. Eliminating substantive consolidation under the Liquidating Plans would result only in a more costly and less efficient plan process without any benefit to the Liquidating Debtors' estates and creditors. In addition, the Liquidating Debtors are not required to include an "explanation of why they have concluded that it is not appropriate to substantively consolidate these estates with KACC." Although the Asbestos Committee and the Asbestos Representative have argued in response to the ISA Motion that substantive consolidation is somehow appropriate, neither the Debtors nor any other party has requested that the Court substantively consolidate the Liquidating Debtors with KACC. The Liquidating Debtors should not have to explain why "relief that no one has sought from the Court is unsupportable." Furthermore, the Asbestos Representative and the Asbestos Committee object to the deemed acceptance of the Liquidating Plans by the Debtors holding intercompany claims, implying that it somehow creates a solicitation issue. Putting aside the fact that this is a confirmation objection rather than a disclosure issue, Mr. Madron asserts that the deemed acceptance of the Liquidating Plans by the Debtors holding intercompany claims clearly is permitted. The Debtors are not third-party creditors that must be solicited, and the other Debtors have all consented to and support the Liquidating Plans. C. U.S. Trustee The U.S. Trustee raises concerns with respect to these issues: (a) ISA The U.S. Trustee states that the Disclosure Statements do not contain adequate information regarding how the ISA affects the Liquidating Debtors. Mr. Madron tells the Court that all details regarding the ISA are contained in the ISA Motion, which are provided, or made available, to all creditors. A significant amount of additional detail on the ISA is not required in the Disclosure Statements. (b) Substantive Consolidation According to the U.S. Trustee, the Disclosure Statements fail to "adequately explain the basis on which the [Liquidating] Debtors . . . are not being substantively consolidated with other affiliated debtors, and the economic effect of choosing not to so consolidate." The Liquidating Debtors propose to substantively consolidate Alpart Jamaica and Kaiser Jamaica, and Kaiser Australia and Kaiser Finance, solely for administrative Convenience. Moreover, neither the Debtors nor any other party has sought the substantive consolidation of all the Debtors' estates. Accordingly, the Liquidating Debtors should not be required to explain why substantive consolidation of additional Debtors' estates is not supportable. (c) Claims Against Multiple Debtors The U.S. Trustee says the Disclosure Statements does not adequately explain, with respect to the classes of claims that have been asserted against multiple debtors: -- the basis on which the particular payment percentages on the claim in each Liquidating Plan have been determined; and -- the extent to which the claimants are likely to recover additional sums in respect of the claims from other related debtors. To the extent appropriate, the Liquidating Debtors will be revising the Disclosure Statements to address this objection. (d) Liquidating Plans The U.S. Trustee objects to the Liquidating Plans on several grounds: -- The procedures in the Liquidating Plans for objecting to claims after the effective date of the plans are contrary to law "to the extent that they purport to divest the [U.S. Trustee] and other parties of statutory rights" to object to claims; -- The Liquidating Plans impermissibly purport to release claims of unsecured creditors and interest holders against numerous third-parties without requiring the express consent of those parties to the releases and without providing parties voting for the Plans the opportunity to opt out of giving the releases; -- The effect of the proposed injunction in the Liquidating Plans is contrary to law because it is the equivalent to a "discharge" under Section 1141(a)(3); and -- The Liquidating Plans impermissibly provide that the tort claims are deemed objected to. According to Mr. Madron, the objections are confirmation objections and not issues of disclosure. Thus, these objections are premature and not appropriately raised in connection with the approval of the Disclosure Statements. Nonetheless, with respect to the Release objection, the Liquidating Debtors note that courts in the third and other circuits have held that consensual releases of creditors' claims against non-debtor parties are permissible, including releases of officers and directors. Furthermore, with respect to the Injunction objection, the injunction under the Liquidating Plans will not protect the Liquidating Debtors because they will be dissolved as of the effective date of the Plans. The injunction under the Liquidating Plans is not the equivalent of a discharge. (e) Kaiser Finance Claim The U.S. Trustee complains that the Disclosure Statement with respect to Kaiser Australia and Kaiser Finance's Plan fails to provide adequate information regarding "the potential range of recovery by [Kaiser Finance] on its intercompany claim against KACC and the potential impact of the recovery on that asset on distribution to creditors under [Kaiser Australia and Kaiser Finance's] Plan." To the extent appropriate, the Liquidating Debtors will be revising the Disclosure Statements to address this objection. (f) Voting Procedures The voting procedures in the Plans provide that a claim will be counted for voting purposes at the lesser of the scheduled amount or the amount set forth in a timely filed proof of claim. The U.S. Trustee disagrees. Pursuant to Rule 3003(c)(4) of the Federal Rules of Bankruptcy Procedure, the U.S. Trustee points out that a duly filed proof of claim supercedes any scheduling of the claim in question. Section 502(a) further provides that a proof of claim filed in accordance with Section 501 is deemed allowed, unless a party-in-interest objects. Thus, the specific provision under the Voting Procedures is contrary to law. The U.S. Trustee also notes that the Plan provision stating that a claim will be counted for voting purposes in the amount allowed temporarily for voting purposes by the Court, runs afoul another provision, which states that if an objection is filed at least 15 days before the deadline for "voting," the claim will be temporarily allowed or disallowed in accordance with the relief sought in the objection. Creditors should be given opportunity to ask the Court for temporary allowance of claims for voting purposes notwithstanding the Claims Objection. Furthermore, the U.S. Trustee objects to any relief, which would permit the Debtors to disenfranchise any or all creditors unilaterally by filing an objection without affording each affected claimant a reasonable opportunity to seek temporary allowance notwithstanding the objection. The Liquidating Debtors intend to discuss the objections with the U.S. Trustee to address its concerns. D. Liverpool Liverpool holds 9-7/8% Senior Notes due 2002, which were issued in February 1994 by KACC. Liverpool asserts that: (a) the claims in respect of the 9-7/8% Notes and the 10-7/8% Senior Notes due 2006 should be placed in separate classes under the Liquidating Plans; (b) the Disclosure Statements should contain certain additional information regarding the Guaranty Subordination Dispute; and (c) there should be separate ballots for each of the 9-7/8% Notes, the 10-7/8% Notes and the "Subordinated Notes." Liverpool asserts that only $100,000,000 worth -- and all related interest and fees -- of the $225,000,000 in guarantees in respect of the 9-7/8% Notes constitute "Senior Indebtedness" under the indenture in connection with the 12-3/4% Senior Subordinated Notes due 2003. Liverpool explains that at the time the 9-7/8% Notes and the 9-7/8% Notes Guarantees were issued, there was a corresponding reduction of $100,000,000 in the credit commitment under the Debtors' senior credit facility. This, Liverpool contends, constituted a refinancing of $100,000,000 of the Debtors' senior credit facility, resulting in that amount of the 9-7/8% Notes Guarantees being entitled to "Senior Indebtedness" status under the Subordinated Notes Indenture, while the remainder of the 9-7/8% Notes Guaranties and the guarantees in respect of the 10-7/8% Senior Notes are not so entitled. Mr. Madron argues there is no evidence whatsoever that suggests that the parties intended to treat a portion of the 9-7/8% Notes Guarantees as senior while the remainder was not. To the contrary, the 9-7/8% Notes Guarantees and the guarantees in respect of the 10-7/8% Notes were intended to be and are senior in their entirety. Accordingly, Liverpool's objection regarding the propriety of placing the claims in respect of the 9-7/8% Notes and the 10-7/8% Notes in the same class is wholly unfounded. The 9- 7/8% Notes and the 10-7/8% Notes are entitled to pari passu treatment under each of the Liquidating Plans. Liverpool also asserts that the Disclosure Statements should contain certain additional information regarding the Guaranty Subordination Dispute. However, this objection will be mooted, at least in part, if the holders of the Subordinated Notes vote in favor of the Liquidating Plans. Mr. Madron relates that the Liquidating Plans contain an offer to settle the Guaranty Subordination Dispute. If the holders of the Subordinated Notes vote in favor of the Liquidating Plans, those holders will receive $16,000,000 in total, or $8,000,000 from each plan. Even if holders of the Subordinated Notes vote against the Liquidating Plans or Liverpool votes against and opposes the Liquidating Plans, the Liquidating Debtors have reserved the right in those Plans to seek confirmation by cramdown and have the right to seek any amendments to the Liquidating Plans in connection with that cramdown as may be necessary. Moreover, Liverpool's objection is an issue for confirmation and not an issue of disclosure. Thus, it is premature and not appropriately raised in connection with the approval of the Disclosure Statements. Although the Liquidating Debtors do not believe that all of the detail suggested by Liverpool is required for the Disclosure Statements to be approved by the Court as containing adequate information, the Liquidating Debtors, nonetheless, are revising the Disclosure Statements to address some of Liverpool's concerns and will circulate a revised draft of the Disclosure Statements. Liverpool also takes issue with the form of ballot for the 9-7/8% Notes, the 10-7/8% Notes and the Subordinated Notes. The Liquidating Debtors never intended to place all of the notes issuances on the same ballot for solicitation purposes. Liverpool's confusion on this issue, Mr. Madron says, likely results from the fact that, because the ballots for each of the notes will be identical except for the name of the notes and the CUSIP number, only one form of ballot was submitted the Debtors' request for approval of tabulation and solicitation procedures. Mr. Madron informs Judge Fitzgerald that the proposed ballot included the names for each issuance in bold and brackets and left a blank for the CUSIP number. The Liquidating Debtors fully intend to provide each issuance of notes with its own ballot. E. Certain Insurers The Insurers want: (a) "super-preemptory" provisions included in the Liquidating Plans to preserve the Insurers' rights related to their insurance policies; and (b) the Liquidating Plans modified to provide for injunctive relief to the extent necessary to consummate a global insurance settlement. Mr. Madron asserts that the Insurers do not have standing to object to the Disclosure Statements because they are not parties- in-interest under Section 1128(b). The Liquidating Debtors reserve all their rights to challenge the Insurers' standing in their Chapter 11 cases. Mr. Madron also contends that the Insurers' confirmation objection is premature and not appropriately raised in connection with the approval of the Disclosure Statements. Nonetheless, Mr. Madron points out that the Liquidating Debtors have no asbestos liability and the Insurers' policies will not be affected by the Liquidating Plans. Moreover, it is anticipated that any plan for KACC will include a channeling injunction for all asbestos liabilities pursuant to Section 524(g), which injunction will extend to the Liquidating Debtors. Accordingly, there is simply no need for the super-preemptory provision requested by the Insurers. For the same reasons, the Insurers' request for a modification to the Liquidating Plans to provide appropriate injunctive relief to the extent necessary to consummate a global insurance settlement is without merit. The Liquidating Debtors, Mr. Madron maintains, have no asbestos liability and appropriate injunctive relief will be sought in a KACC plan. There is, therefore, no reason to modify the Liquidating Plans to provide for a contingency that will simply not occur. Accordingly, the Debtors ask the Court for an order: (a) finding that the Disclosure Statements contain "adequate information" as required by Section 1125; and (b) permit the Liquidating Debtors to proceed with solicitation and schedule a confirmation hearing as requested. Headquartered in Houston, Texas, Kaiser Aluminum Corporation -- http://www.kaiseral.com/-- operates in all principal aspects of the aluminum industry, including mining bauxite; refining bauxite into alumina; production of primary aluminum from alumina; and manufacturing fabricated and semi-fabricated aluminum products. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429). Corinne Ball, Esq., at Jones Day, represent the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEE PHARMACEUTICALS: Auditor Raises Going Concern Doubt ------------------------------------------------------- Lee Pharmaceuticals reported a $1,229,000 net loss during fiscal year 2004. Working capital was a negative $3,519,000 at September 30, 2004, as compared with a negative $3,524,000 at September 30, 2003. The ratio of current assets to current liabilities was 0.5 to 1 at September 30, 2004, and September 30, 2003. The decrease in the negative working capital of $5,000 was due primarily to an increase in accounts receivable ($432,000), an increase in other prepaids ($199,000) and a decrease in the short term portion of notes payable ($556,000). Offsetting these were increases in accounts payable ($601,000), amounts due to related parties ($315,000) and inventory reserves ($250,000). The Company has failed to make principal and interest payments on certain loans. The total arrearage is principal of $1,712,000 plus interest of $1,071,000, an aggregate of $2,783,000, of which $2,005,000 is due to related parties and $778,000 to non-related parties. Effective September 1, 2004, the Company reached an agreement with a non-related party to consolidate 11 of its notes payable plus accrued and unpaid related interest (totaling $2,176,000) into one note payable, due on December 1, 2005, with interest payable at the one month LIBOR (London Interbank Offered Rate) rate. The interest rates on the above cancelled 11 notes payable were at 20% or 24%. The LIBOR rate at September 30, 2004 was 1.8401%. The Company anticipates a cash savings of approximately $381,000 per year. Also, effective September 20, 2004, the Company implemented a wage freeze for all employees, plus a staff and corresponding salary reduction in certain areas. The Company anticipates a cash savings of approximately $450,000 per year. The total savings of these two actions is approximately $831,000. In addition, in November 2004, the Company's outside finance lender agreed to adjust the Company's monthly principal payments on its various equipment loans by one-half, commencing January 1, 2005. The expected annual principal payment savings (net of interest) related to this transaction is approximately $40,000. The Company is expecting to increase sales volume by expanding existing product lines. There can be no guarantee that this will materialize. Going Concern Doubt In the letter to the Company's Board of Directors, dated December 14, 2004, the independent auditor for Lee Pharmaceuticals stated that the Company has not shown a trend for generating sufficient net income and cash flow from normal operations. Those conditions raise substantial doubt about its ability to continue as a going concern. Lee Pharmaceuticals is engaged in the development, purchase, manufacture, and marketing of consumer personal care products and professional dental products, all of which are targeted for the improved well-being of the human body. The Company's business is directed to two main areas: (a) the development and marketing of a range of consumer products including over-the-counter items, health and beauty aids, cosmetics and prescription drug products containing controlled substances and (b) the manufacture and sale of materials and supplies for use in the professional dental health field. LEHMAN: Fitch Downgrades Rating on Class B-1 Series 2001-B to BB ---------------------------------------------------------------- Fitch took action on these classes of Lehman asset-backed securities manufactured housing contracts, series 2001-B: -- Classes A-1 to A-7 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B-1 downgraded to 'BB' from 'BBB-'. The affirmations on the remaining classes reflect credit enhancement consistent with future loss expectations. The affirmation of Class A-7 is also based on a certificate insurance policy from Ambac Assurance Corp. Fitch currently rates Ambac's insurer financial strength -- IFS -- 'AAA'. The downgrade action on Class B-1, reflecting $77,862,302, is due to the continuing reduction in credit enhancement combined with high losses and delinquencies. Overcollateralization, the source of credit enhancement for this deal, is steadily decreasing by approximately $2 million per month, while monthly losses remain at about $3 million (six-month rolling average). The pool factor is 69% as of the Dec. 15, 2004, distribution. LITTLE MT. ZION PENTECOSTAL: Voluntary Chapter 11 Case Summary -------------------------------------------------------------- Debtor: Little Mt. Zion Pentecostal Faith Church Inc. 531-535 West 159th Street New York, New York 10032 Bankruptcy Case No.: 05-40051 Type of Business: The Debtor operates a church. Chapter 11 Petition Date: January 5, 2005 Court: Southern District of New York (Manhattan) Judge: Prudence Carter Beatty Debtor's Counsel: James E. Hurley, Jr., Esq. 75 Maiden Lane, Suite 233 New York, New York 10038 Tel: (212) 402-6822 Fax: (212) 405-2119 Estimated Assets: $500,000 to $1 Million Estimated Debts: More than $100 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. LNR PROPERTY: Reports $27.7 Million Fourth Quarter Net Income ------------------------------------------------------------- LNR Property Corporation (NYSE:LNR), reported net earnings for its fourth quarter ended November 30, 2004 of $27.7 million, compared to net earnings of $19.6 million for the same quarter in 2003. For the year ended November 30, 2004, net earnings were $126.2 million, compared to net earnings of $109.6 million for 2003. Mr. Jeffrey P. Krasnoff, President and Chief Executive Officer of LNR, stated, "Throughout 2004, our unique franchise continued to create and then realize value from our real estate investments. With strong capital inflows into the real estate sector during the year, we took advantage of the demand for our valuable income producing assets, bringing in $760 million of cash from sales of our assets, recognizing $161 million in gains." Mr. Krasnoff added, "We continued to maintain our disciplined investment strategy of deploying our capital to those opportunities that demonstrate the most attractive risk adjusted returns. With this approach, we were successful in acquiring over $1.2 billion of assets during the year in the U.S. and Europe. Utilizing our disciplined value-add asset management culture, we ended the year with a diverse portfolio of real estate assets, an effectively match-funded balance sheet and a strong liquidity position." Pending Transaction On August 29, 2004, LNR entered into a merger agreement with a newly formed company, which will be majority owned by funds and accounts managed by Cerberus Capital Management, L.P., and other investors selected by Cerberus, under which holders of LNR's common stock and Class B common stock will receive $63.10 per share in cash and LNR will become indirectly wholly owned by the newly formed company, Riley Property Holdings. Cerberus is a New York-based global private investment firm, which, together with its affiliates, manages in excess of $14 billion of capital. The transaction will require approval by the holders of a majority in voting power of LNR's stock. Stuart A. Miller, Chairman of the LNR Board of Directors, partnerships owned by his family and a trust of which he is a primary beneficiary, collectively own shares carrying the power to cast approximately 77% of the votes that can be cast with regard to the transaction. Mr. Miller, the partnerships and the trust have agreed to vote their shares in favor of the merger as long as the Company's Board of Directors and a special committee of the Board continue to recommend the transaction. A shareholders' meeting to approve the merger has been scheduled for January 31, 2005 and a proxy statement relating to that meeting has been mailed to shareholders. Additional information related to the merger transaction and the shareholders' meeting can be found in the proxy statement. The merger is expected to be completed shortly after the shareholders' meeting. In anticipation of the merger and the resulting capital structure of LNR, all three rating agencies have recently downgraded the Company's debt ratings. Moody's Investors Services downgraded the Company's ratings for senior unsecured debt from Ba2 to B3, and senior subordinated notes from Ba3 to Caa1. Standard and Poor's Ratings Services downgraded the Company's ratings for senior unsecured debt from BB to B, and senior subordinated notes from B+ to CCC+. Fitch Ratings downgraded the Company's ratings for senior unsecured debt from BB+ to B, and senior subordinated notes from BB- to B-. As required, the Company follows Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." Under SFAS No. 144, any time the Company sells, or determines to sell, a rental real estate property, it is required to reclassify the revenues and expenses of that property, including the profit or loss on the sale of that property, both with regard to the current period and with regard to the past, as discontinued operations. Primarily because of this, approximately 35% of the Company's earnings during the fourth quarter and approximately 23% of the Company's earnings during the fiscal year are characterized as earnings from discontinued operations. However, because the Company, as a real estate operating company, is regularly engaged in the business of acquiring and developing properties for the purpose of improving them and selling them at a profit, the Company's management considers earnings from properties the Company sells, or holds for sale, as an important part of its ongoing operations. Fourth Quarter Performance Net earnings for the quarter increased by $8.0 million, or 41%, compared with last year's fourth quarter. This increase resulted primarily from a higher level of recurring income, including higher management and servicing fees, interest income and net rents (rental income less costs of rental operations). In addition, last year's fourth quarter results included a one-time charge of $18.3 million related to the early extinguishment of debt. These increases were partially offset by property impairment charges recorded in the current quarter and higher general and administrative expenses. Total revenues and other operating income increased by $19.0 million, or 16% this quarter, compared with last year's fourth quarter. Total revenues and other operating income increased primarily as a result of higher gains on sales of real estate property assets, higher equity in earnings of unconsolidated entities, higher rental income, higher management and servicing fee income, and higher interest income. These increases were partially offset by lower gains on sales of real estate securities in 2004, compared to 2003. Real Estate Properties Earnings before income taxes from real estate property activities were $47.8 million for the quarter ended November 30, 2004, compared to $25.5 million for the same period in 2003. This increase was primarily due to higher gains on sales of real estate property assets, higher equity in earnings of unconsolidated entities, and higher net rents, partially offset by an $8.6 million impairment charge primarily related to two under- performing hospitality properties. Gains on sales of real estate property assets were $29.6 million for the quarter ended November 30, 2004, compared to $13.3 million for the same period in 2003. Gains on sales of real estate property assets fluctuate from quarter to quarter primarily due to the timing of asset sales. Equity in earnings of unconsolidated entities increased by $16.1 million for the quarter ended November 30, 2004, compared to the same period in 2003. This increase primarily resulted from higher earnings on sales of underlying assets, including homesites, commercial land and operating properties. Net rents increased to $9.2 million for the quarter ended November 30, 2004, from $7.2 million for the same period in 2003, primarily due to the portfolio of income producing properties acquired from The Newhall Land and Farming Company late in the first quarter of 2004 and development properties coming on-line, partially offset by sales of stabilized properties in 2004. LNR's domestic real estate portfolio, including properties held in unconsolidated entities, at quarter-end included approximately 6.7 million square feet of office, retail, industrial and warehouse space, 0.5 million square feet of ground leases, 1,500 hotel rooms, and 9,500 apartments (8,800 in affordable housing communities), either completed or under development. This compares with approximately 6.5 million square feet of office, retail, industrial and warehouse space, 0.3 million square feet of ground leases, 2,100 hotel rooms, and 11,000 apartments (9,500 in affordable housing communities), either completed or under development, twelve months earlier. At November 30, 2004, LNR's consolidated domestic operating property portfolio, excluding $289.9 million of market-rate properties undergoing development or repositioning and $74.5 million relating to the affordable housing business, was yielding approximately 12% on net book cost. Real Estate Loans LNR's real estate loan business consists of lending in unique high-yielding situations. Earnings before income taxes from real estate loans were $10.3 million for the quarter ended November 30, 2004, compared to $13.0 million for the same period in 2003. This decrease was primarily due to higher operating expenses related to growth in the Company's loan investing activity in the U.S. and Europe. During the fourth quarter, the Company funded five new B-note investments for $80.2 million and received $47.2 million from the payment in full of three B-note investments and the sale of one B-note investment. Subsequent to the end of the fourth quarter, the Company purchased or committed to fund four additional B-note investments for $94.3 million. Assuming these loans are funded, investments under the Company's B-note program will have a face value of approximately $583.0 million, a 32% increase over November 30, 2003. Real Estate Securities Earnings before income taxes from real estate securities were $21.9 million for the quarter ended November 30, 2004, compared to $44.0 million for the same period in 2003. This decrease was primarily due to lower gains on sales of real estate securities, lower equity in earnings of unconsolidated entities and higher operating expenses, partially offset by higher management and servicing fee income and higher interest income. The Company recorded no gains on sales of real estate securities during the quarter ended November 30, 2004, compared to $22.9 million for the same period in 2003. The gain in the prior year primarily resulted from a CMBS resecuritization transaction completed in September 2003. Equity in earnings of unconsolidated entities decreased by $7.4 million for the quarter ended November 30, 2004, compared to the same period in 2003. The decline in earnings is primarily due to reduced income from the Madison Square joint venture and from a joint venture that owned several investments at a discount, which paid off in the prior year period. Madison's income decreased because of lower interest income resulting from the timing and amount of expected principal collections related to short-term floating-rate securities owned by the venture and higher interest expense due to a refinancing within the venture, which occurred in the second quarter of 2004. At the end of the fourth quarter, the Company's investment in Madison was $31.7 million. Since inception, the Company has received $188.7 million in cash distributions and fees from Madison on an original investment of $90.1 million. Management and servicing fee income increased to $13.8 million for the quarter ended November 30, 2004, from $8.5 million for the same period in 2003, primarily due to the growth of the Company's special servicing activity. Operating expenses increased to $8.3 million for the quarter ended November 30, 2004, from $5.1 million for the same period in 2003, primarily due to increases in personnel and out-of-pocket expenses directly related to growth of the Company's CMBS portfolio in the U.S. and Europe and increased special servicing activity. Interest income increased to $22.9 million for the quarter ended November 30, 2004, from $18.4 million for the same period in 2003, primarily due to an increase in yields and a higher average level of CMBS investments, slightly offset by a higher level of write- downs on a small number of bond positions. The Company's annualized cash yield on its fixed-rate CMBS portfolio was approximately 16% at the end of the 2004 period. The cash yield on the unrated portion of this portfolio was approximately 37% at the end of the 2004 period. During the quarter ended November 30, 2004, the Company acquired $72.8 million face amount of non-investment grade CMBS for $38.3 million in seven separate CMBS transactions. Subsequent to the end of the quarter, the Company purchased or committed to purchase securities in six additional CMBS transactions. Assuming these transactions close as anticipated, the total face amount of the Company's direct non-investment grade CMBS investments will be approximately $2.7 billion with an amortized cost of approximately $1.0 billion. The rated portion of this portfolio will be approximately $1.3 billion of face value with an amortized cost of approximately $821 million. The unrated portion of this portfolio will be approximately $1.4 billion of face value with an amortized cost of approximately $208 million. With these new transactions, the Company will have an investment in or have servicing rights for 155 CMBS pools with an aggregate original face amount of approximately $152 billion, compared to 119 pools with an aggregate original face amount of $102 billion at November 30, 2003. Fiscal Year Performance Real Estate Properties For the year ended November 30, 2004, real estate property earnings before income taxes increased to $160.1 million, from $113.7 million for the same period in 2003, primarily due to higher gains on sales of real estate property assets, including sales of property assets within unconsolidated entities, partially offset by lease termination fee income received in the prior year and lower net rents. Net rents decreased to $44.8 million for the year ended November 30, 2004, from $48.1 million for the same period in 2003. The decrease in net rents was primarily due to sales of properties throughout 2003 and 2004, as well as the loss of a tenant in the third quarter of 2003 that had leased 100% of one of the Company's office buildings. The Company received a lease termination fee from this tenant of $15.1 million in 2003. These decreases were partially offset by the portfolio of income producing properties acquired from Newhall late in the first quarter of 2004. Real Estate Loans For the year ended November 30, 2004, real estate loan earnings before income taxes increased to $53.6 million, from $47.7 million for the same period in 2003, primarily due to higher interest income and higher gains on sales of mortgage loans, partially offset by higher operating expenses. Interest income increased to $54.5 million for the year ended November 30, 2004, from $49.4 million for the same period in 2003. This increase was primarily due to a higher average level of loan investments primarily related to the Company's B-note portfolio. Gains on sales of mortgage loans were $4.0 million for the year ended November 30, 2004, primarily due to the third quarter sale of a mortgage loan assumed by the Company through the unwinding of a CMBS trust, which occurred during the second quarter of 2004, for a gain of $3.8 million. There were no sales of mortgage loans in 2003. Operating expenses increased to $5.9 million for the year ended November 30, 2004, from $4.2 million for the same period in 2003, primarily due to growth in the Company's loan investing activity in the U.S. and Europe. Real Estate Securities For the year ended November 30, 2004, real estate securities earnings before income taxes decreased to $134.7 million, from $169.4 million for the same period in 2003, primarily due to lower gains on sales of real estate securities, lower equity in earnings of unconsolidated entities and higher operating expenses, partially offset by higher management and servicing fee income. Gains on sales of securities were $21.3 million for the year ended November 30, 2004, compared to $52.7 million for the same period in 2003. During the first quarter of 2004, the Company sold $28.7 million face amount of investment grade rated CMBS through a resecuritization of one non-investment grade rated CMBS bond and recognized a pretax gain of $17.3 million. During the year ended November 30, 2003, pretax gains of $47.7 million were recognized on sales of investment grade CMBS through resecuritization transactions. Equity in earnings of unconsolidated entities decreased by $14.2 million for the year ended November 30, 2004, compared to the same period in 2003, primarily reflecting a decrease in earnings from Madison, as previously discussed. Management and servicing fee income increased to $56.1 million for the year ended November 30, 2004, compared to $35.7 million for the same period in 2003, primarily due to increased activity in the Company's specially serviced portfolio. Operating expenses increased by $7.1 million for the year ended November 30, 2004, compared to the same period in 2003, primarily due to increases in personnel and out-of-pocket expenses directly related to growth of the Company's CMBS portfolio in the U.S. and Europe and increased special servicing activity. Financing and Capital Structure The following discussion of financing and capital structure is based upon financing arrangements currently in place. If the transaction with Riley Property Holdings takes place as anticipated, all or substantially all of the Company's current financing arrangements will be replaced with new arrangements that will be significantly different from those described below. At November 30, 2004, the Company had $1.8 billion of available liquidity, which consisted primarily of cash and availability under existing credit facilities. Only 9% of the Company's debt is scheduled to mature over the next twelve months, assuming extension options are exercised. The Company continues its efforts to maintain a highly match- funded balance sheet. In order to minimize the effects of interest rate risk, the Company seeks to match fixed-rate assets with fixed-rate debt, and floating-rate assets with floating-rate debt. At November 30, 2004, a 100 basis point increase in LIBOR would decrease the Company's net earnings by $0.3 million, or $0.01 per share diluted, on an annualized basis. The Company also seeks to fund itself so the maturities of its liabilities closely match the maturities of its assets. At November 30, 2004, the Company's weighted average debt maturity was 6.5 years, which the Company believes matches well with its expected asset holding periods. Interest expense increased by 6% and 4% for the three- and twelve-month periods ended November 30, 2004, respectively, compared to the same periods in the prior year, primarily due to higher average debt balances, partially offset by lower average interest rates. The weighted average interest rate on outstanding debt was 6.2% at November 30, 2004, compared to 6.5% at November 30, 2003. At November 30, 2004, the Company was operating at a 1.24:1 net debt to book equity ratio, compared to 1.27:1 at Nov. 30, 2003. About the Company LNR Property Corporation [NYSE: LNR] is a real estate investment and management company headquartered in Miami Beach, Florida, USA, with assets of $3.1 billion and equity of $1.1 billion at May 31, 2004. * * * As reported in the Troubled Company Reporter on Dec. 20, 2004, despite the downgrade by Fitch Ratings of LNR Property Corporation, Fitch anticipates affirming Lennar Partners, Inc.'s special servicer rating of 'CSS1' pending an annual review in first-quarter 2005. The proposed capital structure after the acquisition of Lennar's parent company, LNR Property Corp., by Riley Property Holdings LLC, majority owned by affiliates of Cerberus Capital Management, LP, precipitated Fitch's rating action. For more information, see the press release 'Fitch Lowers LNR's Senior Subordinated Debt to 'B-' Rating Outlook Stable' dated Dec. 14, 2004, and available on the Fitch Ratings web site at http://www.fitchratings.com/ The expectation to affirm the servicer rating is based on Fitch's continuing discussions with Lennar senior management and their assertion that the CMBS servicing business will continue to operate as it currently does. Fitch will continue to monitor the acquisition and its impact on the servicing business. MADISON RIVER: Fitch Places Sr. Unsec. Rating on Watch Positive --------------------------------------------------------------- Fitch Ratings placed the senior unsecured debt of Madison River Capital, LLC -- MRC -- on Rating Watch Positive. Fitch believes that the announcement by Madison River Communications Corp. (Madison River Communications) that it has filed for an initial public offering -- IPO -- is a positive development for MRC's 13.25% senior unsecured notes due March 2010, of which there is $198 million outstanding. Madison River Communications is a holding company for MRC, as well as Madison River Telephone Company, LLC. The notes of MRC are currently rated 'B' by Fitch. In addition to the IPO, Madison River Communications intends to obtain $525 million in new secured credit facilities. The $525 million facility breaks down into a $450 million, seven-year term loan and a $75 million, six-year revolving credit facility. The proceeds from the IPO and the new credit facilities, combined with cash on hand, will be used to refinance the outstanding debt of MRC's subsidiaries, as well as the existing 13.25% notes. Proceeds will also be used to retire other debt and redeem the outstanding minority interest of one of its subsidiaries. Other than the rated senior unsecured notes, substantially all of the remainder of the debt to be refinanced consists of approximately $424 million at Sept. 30, 2004, of senior secured borrowings by Madison River LTD Funding -- MRLTDF -- from the Rural Telephone Finance Cooperative -- RTFC. MRLTDF is a holding company for three rural telephone subsidiaries: * Mebtel, * Gulf Coast Services, and * Coastal Communications. A fourth telephone subsidiary, Gallatin River Holdings, LLC, has provided a guaranty to the RTFC. In addition, its operating assets and revenues are subject to a first mortgage lien in favor of the RTFC. Fitch believes Madison River Communications' successful execution of the IPO and arrangement of new credit facilities would be a positive development for MRC's rated senior unsecured debt, given the greater certainty offered by its near-term repayment. Following the recapitalization of MRC, Fitch intends to rate Madison River Communications' outstanding bank debt and remove MRC from Rating Watch Positive. The credit profile after Madison River Communications completes its refinancing is not yet clear. While Fitch believes Madison River Communications will operate with lower leverage than MRC does currently, the ultimate level of debt in the capital structure will depend on the successful execution of the IPO and also on the level of the proceeds flowing to Madison River Communications versus the selling shareholders. In addition, Madison River Communications is expected to have a relatively high dividend payout of its free cash flow following the IPO, and Fitch will need to evaluate this payout in relation to the future investment needs of the business. The current 'B' rating reflects the stability of MRC's rural local exchange operations, including moderate revenue growth prospects, opportunity for free cash flow, and solid expense controls. The rating also recognizes MRC's relatively high leverage for a local exchange carrier, potential for higher levels of competition and technological substitution, as well as its exposure to growing regulatory risk. As of Sept. 30, 2004, the ratio of total debt to the last 12 months EBITDA was approximately 6.5 times, a slight improvement from the 6.8x recorded in 2003. Leverage was moderately lower, at 6.1x, when the subordinated capital certificates -- SCCs -- issued by the RTFC are netted against debt. MRC is required to purchase SCCs from the RTFC in the amount of 10% of funds borrowed from the RTFC, and the SCCs are redeemed when MRC makes principal payments on its borrowings. The SCCs are a legal obligation of the RTFC. MOST HOME: Funding Uncertainty Triggers Going Concern Doubt ----------------------------------------------------------- Most Home Corp.'s operations have primarily been financed through the issuance of common stock. The Company has suffered recurring losses to October 31, 2004, and has an accumulated deficit of $2,414,095. The Company does not have sufficient working capital to sustain operations for the twelve months ending October 31, 2005. Additional debt or equity financing of approximately $615,000 will be required for this period and may not be available on reasonable terms. If sufficient financing cannot be obtained, the Company may be required to reduce operating activities. Management's intention is to generate sufficient financing through one or more private placements of the Company's common or preferred stock. Additional financing is anticipated, but not guaranteed, through the exercise of outstanding stock options and warrants. Management also expects the full repayment of amounts due from related parties prior to July 31, 2005. Subsequent to October 31, 2004, the Company received proceeds of $307,000 from the exercise of stock options and warrants. There can be no certainty whatsoever that such sources will provide additional cash in the twelve months ending October 31, 2005. These conditions currently exist that raise substantial doubt on the Company's ability to continue as a going concern. Most Home Corp.'s primary business activity is providing a service that allows real estate professionals and the general public to find customer service oriented real estate agents in North American cities through the Company's web sites MOSTREFERRED.COM and related web sites. MUELLER: Moody's Reviewing Low-B & Junk Ratings & May Downgrade --------------------------------------------------------------- Moody's Investors Service placed the ratings of Mueller Group, Inc., under review for possible downgrade. The action was prompted by Moody's concerns over Mueller's December 29, 2004, announcement that it was unable to file its 10-K for the fiscal year ended September 30, 2004. In November 2004, Mueller's Audit Committee was notified of alleged potential accounting improprieties. The Audit Committee appointed an independent law firm to investigate the allegations and until this investigation is concluded, Mueller cannot complete the preparation of its financial statements. If the company fails to file the 10-K within a 15-day period after the due date of the 10-K (or January 13th), it would constitute a default under its credit facility, senior subordinated and senior secured notes, as well as Mueller Water Products, Inc., senior discount notes (unrated). These ratings were placed under review for downgrade: * Second lien senior secured notes, due 2011 -- B3 * Senior subordinated notes, due 2012 -- Caa1 * First lien senior secured term loan and revolving credit facility -- B2 * Senior implied rating -- B2 * Senior unsecured issuer rating -- Caa1 In the short-term, Moody's is concerned over the potential for a technical default under Mueller's notes indentures and credit facility agreement should the company not resolve the investigation and file the 10-K or obtain the necessary waivers required by the bond indentures and credit facility agreement. If the company does execute a waiver, Moody's remains concerned with regard to the magnitude of any accounting improprieties as well as any potential weaknesses in the company's financial reporting and internal controls. Depending on the dispersion of the notes investor base, the company's ability to quickly secure a waiver could be uncertain. Mueller's cash balance stood at $23 million as of June 26, 2004. Headquartered in Decatur, Illinois, Mueller Group, Inc., is wholly owned by Mueller Holdings (N.A.), Inc., which is in turn owned by DLJ Merchant Banking Partners II, LP and related funds. The company produces a wide range of flow control products including hydrants, valves, pipe fittings, pipe hangers, pipe nipples, among other related products. Mueller Group, Inc., generated revenues of $996 million for the LTM ended June 26, 2004. NAT'L CENTURY: Court OKs Protective Orders with Rule 2004 Targets ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Ohio approves protective agreements entered into by National Century Financial Enterprises, Inc., and its debtor-affiliates and nine additional individuals and entities: (1) Lance K. Poulsen, (2) Barbara L. Poulsen, (3) KULD Partners, (4) Intercontinental Investment Associates, (5) Healthcare Capital LLC, (6) Flohaz Partners LLC, (7) South Atlantic Investments, LLC, (8) Thor Capital Holdings LLC, and (9) Kachina Inc. Brandon T. Allen, Esq., at Gibbs & Bruns, in Houston, Texas, relates that the agreements are necessary to protect the confidentiality of certain documents and information produced by the Entities in response to the Subpoena and Orders issued by various courts in connection with Rule 2004 discovery. The parties agree that the Debtors will use all non-public material solely for the investigation, prosecution or defense of lawsuits by, on behalf of, or against the Debtors' estates. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust, is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represents the Debtors in their restructuring efforts. (National Century Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000) NEW YORK STEEL: Case Summary & 41 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: New York Steel Fabricators, Inc. 99 Street Nicholas Avenue Brooklyn, New York 11237 Bankruptcy Case No.: 05-10171 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- New York Steel Fabricators, LLC 05-10175 New York Plank Services, LLC 05-10177 New York Plank Services, Inc. 05-10180 Kingston Trucking & Rigging Corporation 05-10181 Cavalier Construction Corporation 05-10182 Type of Business: The Debtors are engaged in the business of pre-cast concrete flooring, erection for various construction projects in the New York City metropolitan area. Chapter 11 Petition Date: January 5, 2005 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: J. Ted Donovan, Esq. Kevin J. Nash, Esq. Finkel Goldstein Berzow Rosenbloom Nash, LLP 26 Broadway, Suite 711 New York, New York 10004 Tel: (212) 344-2929 Fax: (212 422-6836 Total Assets Total Debts ------------ ----------- New York Steel Fabricators, Inc. $2,867,976 $2,598,957 New York Steel Fabricators, LLC $380,000 $2,026,631 New York Plank Services, LLC $78,147 $666,299 New York Plank Services, Inc. $865,672 $2,386,908 Kingston Trucking & Rigging Corp. $0 $374,633 Cavalier Construction Corporation $0 $479,219 A. New York Steel Fabricators, Inc.'s 12 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Inter-Reco Inc. $518,192 175 Foelich Farm Boulevard Woodbury, New York 11797 Budget Installation Corporation $175,000 PO Box 9015 Rockville Centre, New York 11571 C & B Steel $163,918 PO Box 5268 Kansing, Illinois 60438 Commerce and Industry Insurance Company (AIG) $29,000 Anthony Franco, P.E. $27,244 Awisco New York Corporation $25,705 Eliou & Scopelitis Steel Fabrication $17,280 Cap Rents $16,950 Bushwick Metals Inc. $5,596 K-Detailing $4,476 JW Rufolo & Associates $3,609 Fastenal Industrial & Construction Supply $990 B. New York Steel Fabricators, LLC's 13 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ C & B Steel $340,000 PO Box 5268 Lansing, Illinois 60438 K Detailing $148,740 1628 Bath Avenue Brooklyn, New York 11214 Bushwick Metals Inc. $106,716 560 North Washington Avenue Bridgeport, Connecticut 06604 Eliou & Scopelitis Steel Fabrication $53,674 Proco $53,000 Awisco 6499 $35,428 JW Rufolo & Associates $9,317 Nicholas J. Bouras, Inc. $8,267 Hunterspoint Steel $3,250 Eli Xanthopoulos, P.E. $2,888 Tri-State Shearing & Bending Inc. $2,178 East New York Hardware Company, Inc. $1,848 Federal Express $1,537 C. New York Plank Services, LLC's 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ New York Hoist LLC $82,800 99 Street Nicholas Avenue Brooklyn, New York 11237 Hunterspoint Steel Company $14,646 29-03 Hunterspoint Avenue Long Island City, New York 11101 Nextel $4,894 PO Box 17621 Baltimore, Maryland 21297-1621 East New York Hardware $4,132 Bushwick Metals, Inc. $3,703 Siegel Brothers $3,364 JW Rufolo & Associates $2,662 Core Tech Associates Corporation $1,750 Federal Express $1,073 JJ Kerry's Discount Office Supplies $841 D. New York Plank Services, Inc.'s 6 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Inter-Reco Inc. $437,748 175 Frochlick Farm Boulevard Woodbury, New York 11797 American International Company $111,716 c/o Heltner & Breltstein 26 Court Street Brooklyn, New York 11242 Anthony Franco, P.E., P.C. $40,434 960 Bellmore Avenue North Bellmore, New York 11710 New York City Department of Housing $15,370 Cap Rents $3,896 JW Ruffolo & Associates Inc. $2,850 PARK-OHIO: Can Draw Up to $200M Under Amended Bank Credit Pact -------------------------------------------------------------- Park-Ohio Industries, Inc., a subsidiary of Park-Ohio Holdings Corp. (Nasdaq: PKOH) has amended its existing bank credit agreement. The amendment was effective Dec. 29, 2004, and extends the term of the facility to December 2010. Additionally, the amendment: -- increases the Company's borrowing capacity to $200 million, -- modifies certain covenants to provide greater flexibility, and -- provides an immediate 25 basis point interest reduction with the opportunity for further reductions. The Company's outstanding credit balance as of year-end was $120.6 million. Edward F. Crawford, Chairman and CEO, said, "This amendment concludes our strategic initiative to refinance our bonds and to improve and extend our credit facility. The credit markets have demonstrated their confidence in Park-Ohio and have recognized our performance over the last two years." Park-Ohio Industries, Inc., provides supply chain logistics services and a manufactures highly engineered products for industrial original equipment manufacturers. Headquartered in Cleveland, Ohio, the Company operates 24 manufacturing sites and 32 supply chain logistics facilities. Visit the Company Web site at http://www.pkoh.com/for more information. * * * As reported in the Troubled Company Reporter on Nov. 22, 2004, Moody's Investors Service assigned a Caa1 rating to Park-Ohio Industries, Inc.'s proposed $200 million of new guaranteed senior subordinated notes due 2014. The net proceeds of these proposed notes, along with borrowings under the company's revolving credit facility, will be applied toward the repayment of Park-Ohio's existing 9.25% unguaranteed senior subordinated notes due December 2007. Moody's affirmed all of Park-Ohio's existing ratings and maintained the stable outlook. The company commenced a tender offer for any and all of its existing senior subordinated notes on November 9, 2004. In conjunction with the tender offer, Park-Ohio is soliciting consents to eliminate substantially all restrictive covenants and also shorten the minimum period required for notice of redemption of the notes for any existing notes that are not tendered. The tender offer is conditioned upon the successful financing of the new guaranteed senior subordinated notes issuance as well as other general conditions. The anticipated tender premium to be paid approximates $4 million. The existing notes are otherwise callable, with the redemption price scheduled to decline on December 1, 2004, to 101.542%, from 103.083%. It is expected that Moody's will withdraw the rating of the existing senior subordinated notes upon completion of the proposed transactions. To the extent that the tender offer is successful but a material stub of the existing subordinated notes remains with minimal covenant protection, any remaining existing notes would likely either be called by the company as of December 1, 2004 (or otherwise face a rating downgrade). PHARMACEUTICAL FORMULATIONS: Gets New $3.15MM Loan from GE Capital ------------------------------------------------------------------ Pharmaceutical Formulations, Inc., paid the principal due under its outstanding 8% Convertible Subordinated Debentures Due 2002 and 8.25% Convertible Subordinated Debentures Due 2002, totaling $1,105,000 On December 30, 2004. The debenture holders had previously agreed to forebear the right to force payment on the due date of the debentures so long as they were paid on or before June 15, 2005. ICC Industries Inc., the Company's largest stockholders, provided bridge financing for the principal payments. On December 31, 2004, the Company entered into a new three-year loan agreement with General Electric Capital Corporation for $3,147,027.37, bearing interest at 6.76% per annum, which loan was secured by the Company's equipment. The loan is repayable in 35 monthly installments of principal and interest of $96,826.11 with a final monthly installment equal to the balance of principal and interest due. The amount of the ICC bridge financing was repaid out of the GE Capital loan and the balance of the GE Capital loan was utilized to refinance existing GE equipment leases. Pharmaceutical Formulations, Inc., is a major manufacturer of over one hundred different types of solid-dose, over-the-counter (OTC) pharmaceutical products. Primary health care categories include: * Internal analgesics (i.e.. equivalent to Bayer aspirin and Advil ibuprofen) * Cold/allergy/sinus (i.e.. equivalent to Benadryl , Sudafed and Tylenol Cold). * Stomach remedies (i.e.. antacids, travel sickness). The products are sold nationally, primarily under store-brand labels and, to a lesser extent, under a control label, Health Pharm. These products are sold through mass merchandisers, grocery and drug chains, convenience stores and warehouse clubs. As of October 2, 2004, the stockholders' deficit shown on the Company's balance sheet widened to $22,250,000 from an $18,712,000 deficit at January 3, 2004. RECYCLED PAPERBOARD: U.S. Trustee Picks 5-Member Creditors Comm. ---------------------------------------------------------------- The United States Trustee for Region 3 appointed five creditors to serve on the Official Committee of Unsecured Creditors of Recycled Paperboard Inc. of Clifton's chapter 11 case: 1. UGI Energy Services, Inc. Attn: Frank H. Markle 1100 Brkshire Blvd., Ste. 305 Wyomissing, Pennsylvania 19610 Phone: 610-373-7999, Fax: 610-374-4288 2. PSE&G Attn: Suzanne M. Klar, Esq. 80 Park Plaza, T5D Newark, New Jersey 07102 Phone: 973-430-6483, Fax: 973-645-1103 3. Cellmark Attn: James Derrico 80 Washington Street So. Norwalk, Connecticut 06854 Phone: 203-299-5000, Fax: 203-299-5010 4. Tidewater Fibre Corp Attn: Joseph A. Benedetto 1958 Diamond Hill Road Chesapeake, Virginia 23324 Phone: 757-543-5766, Fax: 757-543-9532 5. T&M Trading, Inc. Attn: Billy J. Tuttle 17 Village Court Hazlet, New Jersey 07730 Phone: 732-203-1115, Fax: 732-264-2055 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Clifton, New Jersey, Recycled Paperboard Inc., manufactures recycled mixed paper and newspaper to make index, tag & bristol, and blanks. The Company filed for chapter 11 protection on November 29, 2004 (Bankr. D.N.J. Case No. 04-47475). David L. Bruck, Esq., at Greenbaum, Rowe, Smith & Davis LLP, represents the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed total assets of $17,800,000 and total debts of $41,316,455. RELIANCE GROUP: Agrees to Allow Citicorp Claim for $438,979 ----------------------------------------------------------- As reported in the Troubled Company Reporter on Dec. 20, 2004, Reliance Insurance Company leased all or portions of the 7th, 8th, 9th and 19th floors of a high rise office building located at 77 Water Street, in New York City from Citicorp North America, Inc. For all four floors, RIC paid Citicorp $233,200 per month, plus certain electricity charges. Prior to May 2001, RIC vacated three floors of 77 Water Street and occupied only one floor. Citicorp filed Claim No. 2025727 against RIC for rent at 77 Water Street from June 1, 2001, through August 10, 2001, plus interest, attorney's fees and costs. Citicorp asserted that its claim is entitled to administrative priority, above claims of policyholders. M. Diane Koken, Insurance Commissioner of Pennsylvania and Liquidator of Reliance Insurance Company, issued a Notice of Determination asserting that RIC did not owe the amounts sought and Citicorp's Claim is not entitled to administrative priority. On the Liquidator's behalf, Ann B. Laupheimer, Esq., at Blank Rome, in Philadelphia, Pennsylvania, argued that Citicorp was not entitled to the amounts asserted. RIC occupied only one of the four floors from May 29, 2001, until August 10, 2001, when RIC vacated 77 Water Street entirely, disavowed the Lease and returned the space to Citicorp. The other three floors had been vacant "for some time." RIC tried to return the three floors to Citicorp without success. RIC made it clear to Citicorp it would not pay rent or other charges after leaving 77 Water Street. Ms. Laupheimer asserts that the Citicorp Claim amounts are not entitled to administrative priority. Administrative priority is reserved for the actual, reasonable and necessary costs and expenses incurred to preserve and protect the assets of the estate. Therefore, Citicorp's Claim should be classified as Priority Level (c), which includes general unsecured creditors. Citicorp Objects to Treatment Citicorp objects to the Priority Level (c) classification, asserting that the amounts owed constituted costs and expenses of administering the RIC estate while in rehabilitation. Therefore, Andrew K. Stutzman, Esq., at Stradley, Ronon, Stevens & Young, counsel for Citicorp, insists that the Claim should be classified as Priority Level (a). Liquidator Responds Ms. Laupheimer concedes that if the Court does grant administrative priority, it should do so for only a portion of the Claim -- the fair market value of the space RIC actually occupied from May 29, 2001, to August 10, 2001. Since RIC was using only one quarter of the property, one quarter of the rent may be characterized as an administrative expense, Ms. Laupheimer says. Citicorp may have a claim for the remainder of the rent, but it rises no higher than claims of other creditors in Class (e). The Liquidator asks the Commonwealth Court in Pennsylvania to overrule Citicorp's objection. To settle the matter, the Liquidator will amend the Notice of Determination to classify 25% of the rent and electricity charges sought by Citicorp as administrative priority. The remainder of the Claim will be classified as Class (e). * * * Pursuant to a stipulation, Citicorp North America and the Liquidator, M. Diane Koken, agree that Citicorp will have an allowed: -- administrative claim for $274,362 with a classification of Priority Level (a); and -- a general unsecured claim for $438,979, plus interest and attorneys' fees with a classification of Priority Level (e). Headquartered in New York, New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, in turn, owns 100% of Reliance Insurance Company. The holding and intermediate finance companies filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing $12,598,054,000 in assets and $12,877,472,000 in debts. The insurance unit is being liquidated by the Insurance Commissioner of the Commonwealth of Pennsylvania. (Reliance Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., 215/945-7000) RITE AID: Fitch Assigns Low-B Ratings to Senior Notes ----------------------------------------------------- Fitch Ratings assigned a 'B' rating to Rite Aid Corporation's 7.5% $200 million senior secured notes due 2015. The proceeds from the issue will be used to repay the $170.5 million 7.625% senior unsecured notes due April 2005 and the $38.1 million 6% senior notes due December 2005. These notes rank pari passu with the company's outstanding secured notes. Fitch rates Rite Aid: -- $1.7 billion senior unsecured notes 'B-'; -- $800 million senior secured notes 'B'; -- $1.4 billion bank facility 'B+.' The Rating Outlook is Stable. The ratings reflect Rite Aid's improving operating performance, strengthened debt profile, and positive industry fundamentals. The ratings also consider the company's limited financial flexibility, the competitive operating environment, and various industry pricing pressures. RITE AID: Moody's Places B2 Rating on $200M Senior Secured Notes ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the $200 million 7.5% 2nd-lien senior secured note (2015) offering of Rite Aid Corporation and affirmed all other ratings. Along with available cash, proceeds from the new debt will redeem the $171 million 7.625% senior note (April 2005) issue and the $38 million 6.0% fixed-rate senior note (Dec. 2005) issue. Limiting the ratings are the company's highly leveraged financial condition and weak operations relative to its higher rated peers. The limited availability of alternate liquidity also constrains the liquidity rating. However, Moody's confidence that management will continue to achieve the revenue and cash flow objectives required to turn around the company's performance and the marginal improvements in financial flexibility and liquidity afforded by the new notes relative to the replaced debt benefit the ratings. The Speculative Grade Liquidity Rating considers that the company currently has significant borrowing capacity available under the Accounts Receivable Securitization Facility and the Revolving Credit Facility. The rating outlook is stable. The rating assigned is: * $200 million 7.5% 2nd-lien senior secured notes (2015) at B2. Ratings affirmed are: * $660 million 2nd-lien senior secured notes (comprised of 2 previously existing issues) at B2, * $1.45 billion of senior notes (comprised of 9 separate issues) at Caa1, * $250 million of 4.75% convertible notes (2006) at Caa1, * Senior Implied Rating at B2, and the * Unsecured Issuer Rating at Caa1. The Speculative Grade Liquidity rating is SGL-2. Moody's will withdraw the ratings on the 7.625% senior notes (2005) and 6.0% fixed rate notes (2005) upon their retirement. Moody's does not rate the $1.4 billion 1st-Lien secured bank loan or the $400 Accounts Receivable Securitization Facility. The ratings recognizes Moody's expectation that operating performance will further improve because: (1) debt protection measures remain weak on an absolute basis, (2) store performance (namely, average unit volume and store-level margin) is mediocre relative to the company's higher rated peers of Walgreen (senior unsecured Aa3) and CVS (senior unsecured A3), and (3) retail prescription market share has declined. The historical inability to fund repair and maintenance capital expenditures at the level of depreciation also adversely impacts Moody's opinion of the company. However, the fundamental ratings recognize Moody's opinion that operating momentum will lead to progress in year-over-year cash flow, liquidity, and debt protection measures. The success at emphasizing front-end sales, the importance of Rite Aid as the third largest drug store chain and retailer of about 6% of the prescription drugs dispensed in the U.S., and potential scale advantages in purchasing, marketing, and information technology also benefit Moody's perception of the company. Moody's expectation that the company will generate enough operating cash flow to support it's obligations over the next four quarters and the liquidity cushion provided by $850 million of Revolving Credit Facility availability and $65 million in Accounts Receivable Securitization availability support the SGL-2. Moody's anticipates that the company will generate at least $700 million in EBITDA for each of the Fiscal Years ending February 2005 and February 2006. However, constraining the rating are the limited availability of alternate liquidity, given that virtually all assets (including accounts receivable and inventory) already secure debt and the challenges at complying with tightening bank loan financial covenants. The stable outlook considers Moody's opinion that the company will comfortably meet its minimal obligations from internally generated cash flow over at least the next 12 months. Minimal obligations include payment of cash interest expense, support of seasonal working capital fluctuations, scheduled repayment of debt principal, and capital investment. Ratings could be lowered if the pace of operating improvement slows down, the company cannot resume a normal capital expenditure program over the intermediate-term, or rolling over maturing debts becomes problematic. Another rating upgrade will require material improvements in fixed charge coverage and leverage as well as substantial progress at narrowing the operating performance gap with its peers. An upgrade of the SGL rating is unlikely until operating cash flow significantly exceeds necessary cash outflows. The SGL rating would be lowered if the company utilized a significant proportion of currently available liquidity for purposes such as repurchasing/redeeming debt, fixed charge coverage, leverage, and interest coverage do not improve as rapidly as mandated by bank loan covenants, or operating cash flow does not continue growing. Enough liquidity is needed to accommodate seasonal working capital fluctuations because pharmacy revenue is higher during the winter months. The B2 rating on the senior secured notes (includes the $360 million 8.125% notes (2010), the $300 million 9.5% notes (2011), and the new $200 million 7.5% notes (2015)) acknowledges the second-lien on virtually all of the company's assets as well as the guarantees of the company's operating subsidiaries. In the event of a hypothetical default, the company's assets would first repay the bank loan. Regardless, Moody's believes that collateral value exceeds the secured debt commitment. The Caa1 rating on the senior unsecured notes (comprised of $1.45 billion of 9 different rated senior note issues plus the $250 million of 4.75% convertible notes) considers their contractual and structural subordination to the secured debt. The senior unsecured notes, through being issued at the holding company level without guarantees from operating subsidiaries, are also structurally subordinated to $827 million of vendor accounts payable. The company has repurchased $65 million of debt (face value) on the open market through the first three quarters of Fiscal 2005 and intends to redeem two senior note issues with proceeds from the new second-lien notes. Until the maturities of the unsecured notes later in 2005, proceeds from the new secured notes will temporarily pay down the revolving credit facility and accounts receivable securitization facility. The company's operating and debt protection measures have significantly improved over the past several years, but lease adjusted leverage of about 6 times is still high and fixed charge coverage of about 1 ½ times is still low. Operating margin for the November 2004 quarter declined slightly relative to the previous quarter, however, margin improved to 2.6% through the first three quarters of the Fiscal Year ending February 2005 compared to 2.0% in the same period of the prior year. During the first three quarters, higher average unit volume in both the front-end and pharmacy allowed better leveraging of fixed costs and EBITDA margin (adjusted for one-time charges) improved to 4.4% from 3.8% over the same periods. Comparable store sales in December 2004 declined relative to the same period of 2003. In Moody's opinion, capital investment must remain substantial given that Rite Aid had underinvested in store remodels during the past several years as evidenced by depreciation (currently about $254 million) exceeding capital expenditures. While recognizing the current cash flow situation, the recent downward reduction in capital expenditure guidance to $225-250 million from $275-325 million will prove costly over the long-term in Moody's opinion. Rite Aid Corporation, with headquarters in Camp Hill, Pennsylvania, is the third largest domestic drug store chain with 3363 stores in 28 states and the District of Columbia. Revenue for the twelve months ending Nov. 27, 2004 equaled $16.9 billion. SCHLOTZSKY'S INC: Has Until Jan. 31 to File a Chapter 11 Plan ------------------------------------------------------------- The Honorable Leif Clark of the U.S. Bankruptcy Court for the Western District of Texas extended the period within which Schlotzsky's, Inc., and its debtor-affiliates have the exclusive period to file a chapter 11 plan through and including January 31, 2005. The Debtors have until March 31, 2005, to solicit acceptances of that plan from their creditors. This is the Debtors first extension of their exclusive periods. The Debtors gave the Court five reasons militating in favor of the extension of their exclusive periods: a) the Debtors' chapter 11 case is large and complex with: (i) a variety of secured creditors with different claims against assets and entities within the capital structure, (ii) numerous liens and claims against critical assets that involve creditors of non-debtor, affiliated entities over whom the Debtors have limited control and influence, and (iii) various dissident and sometimes rebellious franchisees spread across the U.S.; b) the extension will give the Debtors more time to formulate a plan of reorganization that is acceptable to their creditors and other parties in interest; c) the extension will give the Debtors more time to engage in the process of analyzing and reconciling all the claims filed by their creditors; d) the Debtors are paying all their postpetition debts as they become due; and e) the Debtors will not use the extension to prejudice the legitimate interests of their creditors and other parties in interest. Headquartered in Austin, Texas, Schlotzsky's, Inc. -- http://www.schlotzskys.com/-- is a franchisor and operator of restaurants. The Debtors filed for chapter 11 protection on August 3, 2004 (Bankr. W.D. Tex. Case No. 04-54504). Amy Michelle Walters, Esq., and Eric Terry, Esq., at Haynes & Boone, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $111,692,000 in total assets and $71,312,000 in total debts. SIX FLAGS: Launches Debt Offering to Repay Existing Indebtedness ---------------------------------------------------------------- Six Flags, Inc., (NYSE: PKS) has commenced an offering of $195 million aggregate principal amount of its 9-5/8% senior notes due 2014, pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The notes will be issued as additional debt securities under an indenture pursuant to which, on December 5, 2003, the Company previously issued and sold $325 million aggregate principal amount of its 9-5/8% senior notes due 2014. The net proceeds of the offering will be used to redeem all of the Company's outstanding 9-1/2% senior notes due 2009, that have not been previously called for redemption. The securities to be offered have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States, absent registration or an applicable exemption from such registration requirements. This announcement is not an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of the securities in any state where such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The information contained in this news release, other than historical information, consists of forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although Six Flags believes that the expectations reflected in such forward- looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. About the Company Six Flags, Inc., -- http://www.sixflags.com/-- through its subsidiaries, own and operate a total of 31 parks in North America and Europe. Six Flags parks serve 34 of the 50 largest metropolitan areas in the United States. * * * As reported in the Troubled Company Reporter on Nov. 16, 2004, Standard & Poor's Ratings Services lowered its ratings on theme park operator Six Flags, Inc., including its corporate credit rating, which was lowered to 'B-' from 'B'. The rating outlook was revised from stable to negative. The Oklahoma City, Oklahoma-based company's total debt and preferred stock as of September 30, 2004, was $2.4 billion. "The downgrade is based on Six Flags' weaker-than-expected operating outlook for the full year 2004 and its higher debt leverage," said Standard & Poor's credit analyst Hal F. Diamond. SOLUTIA INC: Forms Vydyne Automotive Global Team for Auto Segment ----------------------------------------------------------------- Solutia, Inc., (OTC Bulletin Board: SOLUQ) disclosed the formation of the Vydyne Automotive global development team, aimed at increasing its presence in the global automotive segment. Through the implementation of this team, Solutia will offer a bundled family of nylon based product solutions for the automotive market, including resins for injection molded and extruded components, and a portfolio of Technical Nylon Fibers (TNF) for high performance tires, airbags, hoses, and high-end interiors. For over 30 years, Vydyne(R) has been the trade name for Solutia's injection molding nylon resins. Today, Solutia combined all of its nylon products and automotive personnel to form a focused global team, Vydyne Automotive. "We are experiencing strong global sales of our nylon products and have added individuals in North America, Europe, and Asia to support the growth of our nylon products in automotive applications," said Michael Colella, global commercial director for Nylon Resins. "We have unique core competencies and capabilities that we are leveraging to help our customers design new products and improve their time-to-market." Vydyne(R) nylon resins are used in a variety of powertrain, chassis, and interior and exterior vehicle applications such as radiator end tanks, air pistons, fuel filler doors, release levers, exterior mirror brackets, oil filler tubes, and power steering reservoirs. "The Vydyne Automotive marketing effort offers us an excellent opportunity to showcase the breadth of nylon products and services we have for the OEM, Tier 1 and 2, and replacement automotive markets," said John Jurecko, automotive marketing for nylon resins. "In addition, we are placing an increased emphasis on product development efforts and are planning a commercial launch of several new products in early 2005." Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. STERLING FINANCIAL: Hosting 4th Qtr. Conference Call on Jan. 31 --------------------------------------------------------------- Sterling Financial Corporation (Nasdaq: STSA) will release fourth quarter earnings at 6:30 a.m. PT on Monday, Jan. 31, 2005. The company will host a conference call for investors later that day at 11:00 a.m. PT to discuss the company's financial results. To participate in the conference call, domestic callers should dial 630-395-0018 approximately five minutes before the scheduled start time. You will be asked by the operator to identify yourself and provide the password "STERLING" to enter the call. A continuous replay will be available approximately one hour following the conference call and may be accessed by dialing 203-369-0619. The continuous replay will be offered through Monday, Feb. 28, 2005 at 5:00 p.m. PT. Additionally, Sterling's 2004 fourth quarter earnings conference call is being made available on-line at the company's website http://www.sterlingsavingsbank.com/ To access this audio presentation call, click on "Investor Relations" then click on the live audio webcast icon. About the Company Sterling Financial Corporation of Spokane, Washington, is a unitary savings and loan holding company, which owns Sterling Savings Bank. Sterling Savings is a Washington State-chartered, federally insured stock savings association, which opened in April 1983. Sterling Savings, based in Spokane, Washington, has branches throughout Washington, Oregon, Idaho and Montana. Through Sterling's wholly owned subsidiaries, Action Mortgage Company and INTERVEST-Mortgage Investment Company, it operates loan production offices in Washington, Oregon, Idaho, Arizona and Montana. Sterling's subsidiary Harbor Financial Services provides non-bank investments, including mutual funds, variable annuities and tax-deferred annuities, through regional representatives throughout Sterling Savings' branch network. * * * As reported in the Troubled Company Reporter on July 22, 2004, Fitch Ratings has upgraded the long-term rating of Sterling Financial Corporation to 'BB+' from 'BB'. All other ratings have been affirmed by Fitch. Additionally, Fitch has assigned ratings to Sterling Savings Bank, including an investment grade long-term deposit rating of 'BBB-'. SUNSTRAND DEVELOPMENT: List of Largest Unsecured Creditor --------------------------------------------------------- Sunstrand Development Corporation released a list of its Largest Unsecured Creditor: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Small Business Administration SBA Loan $429,418 c/o Joel R. Nathan Value of Security: Assistant U.S. Attorney $1,900,000 219 South Dearborn Street, Suite 500 Chicago, Illinois 60604 Headquartered in Elgin, Illinois, Sunstrand Development Corporation filed for chapter 11 protection on December 7, 2004 (Bankr. N.D. Ill. Case No. 04-45020). Michael J. Chmiel, Esq., at Chmiel & Matuszewich represents the Debtor in their restructuring efforts. When the Debtor filed for protection from their creditors, it listed $2,641,226 in assets and $2,329,419 in debts. UGS CORP: Acquisition Plans Spur Moody's to Affirm Low-B Ratings ---------------------------------------------------------------- Moody's Investors Service placed the subordinated debt ratings of UGS Corp. on review for possible downgrade, and affirmed the company's other ratings following the announcement of UGS' intention to acquire Tecnomatix Technologies. The affirmations reflect Moody's expectations that UGS' metrics will marginally decline following the acquisition but will remain within an appropriate range for the senior implied and secured debt ratings. The review for possible downgrade of the subordinated notes reflect the potential for that rating to decline if UGS uses debt to finance the $228 million price, representing a multiple of about 20 times Tecnomatix' estimated trailing twelve month EBITDA. (This is based on historical information and does not include potential synergies following the acquisition.) These ratings are affected: Debt affirmed: * Senior implied rating of B1; * $125 million senior secured revolving credit facility rated B1; * $500 million senior secured term loan rated B1; * Speculative Grade Liquidity Rating of SGL-3. The outlook of the affirmed debt remains stable. The secured debt and senior implied ratings both benefit from the full enterprise value of the consolidated entity through guarantees of domestic subsidiaries, bolstered by royalty agreements between domestic and foreign entities which transfer much of the benefit of international operations to the U.S. Secured lenders also benefit from a pledge of 65% of the stock of foreign subsidiaries. The affirmations also recognize UGS' good performance since its sale by EDS in May 2004 and the potential strategic benefit of acquiring Tecnomatix, while noting UGS' high leverage and modest coverage, the potential for earnings volatility, and a lack of material cash flow generation available to reduce debt in the near term. Debt placed on review for possible downgrade: * $550 million of senior subordinated notes rated B3; * Senior unsecured issuer rating of B2. The ratings, which rank below the secured debt have been weakly positioned, and per Moody's press release of May 2004, they are particularly sensitive to: (1) changes in credit and operating metrics as a result of UGS' corporate structure, (2) weak bond covenant protections, and (3) a large amount of secured debt combined with a small amount of tangible assets. Moody's believes that bondholders could experience material loss of principal in a distressed scenario. UGS' complex corporate structure limits the support available to all rated debt, but particularly to the subordinated bondholders. An increase in secured or unsecured debt without a substantial increase in guarantor support would effectively subordinate bondholders further behind secured debt and subsidiary obligations. Tecnomatix is an Israeli corporation, and Moody's assumes that, as a subsidiary, it will not meaningfully increase the level of domestic guarantees available to bondholders. Moody's review will focus: (1) on the actual changes to UGS' corporate structure and consolidating financial statements; (2) on the financing options which UGS will choose for the acquisition; (3) on the actual changes to debt and operating metrics; and (4) on the potential for Tecnomatix' operating contribution to improve following its integration into UGS. UGS Corp. is headquartered in Plano, Texas. The company is one of the leading providers of product lifecycle management software. Twelve-month revenues are estimated to be about $1 billion for the year ending December 2004. US AIRWAYS: Labor Group to Vote on Revised Labor Pacts on Jan. 21 ----------------------------------------------------------------- US Airways, Inc., reported that the International Association of Machinists and Aerospace Workers -- IAM -- agreed to put out for separate ratification votes revised company proposals on new labor agreements for the mechanic and related, fleet service, and maintenance training specialist workgroups. The IAM has agreed to complete the ratification votes by Friday, Jan. 21, 2005. Judge Stephen S. Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia ruled in favor of the company's request to reject the IAM's current collective bargaining agreements and to permit termination of the company's three mainline defined benefit plans. US Airways will delay implementation of the court ruling as applied to the IAM collective bargaining agreements until after the ratification process has been completed, in the hope that all proposals will be ratified. The company will, however, proceed with respect to the court's granted relief that involves termination of the three mainline defined benefit pension plans, and will start working with the Pension Benefit Guarantee Corp. to begin the orderly transfer of the plans. The company had pending before the court a motion for permanent relief from the existing labor agreements with the IAM, as well as for relief with respect to retiree medical benefits and termination of the mainline defined benefit plans. All other US Airways workgroups -- the Air Line Pilots Association - ALPA, the Association of Flight Attendants - AFA, the Communications Workers of America - CWA, and three units of the Transport Workers Union - TWU -- had ratified new labor agreements and were no longer included in the company's request. In addition, the company reached settlements with current retirees and the IAM concerning the relief it had sought for retiree medical benefits. The company said that it was hopeful of ratification of all three IAM proposals. "We have worked very hard to craft alternative proposals that still meet the company's cost savings targets, but preserve jobs and pay as much as possible," said Jerrold A. Glass, US Airways senior vice president - employee relations. "Regrettably, we cannot save every job and every function, and these employees, like all other workgroups, must share in the changes that the company needs to make. But we are quite hopeful that our employees will see these proposals as viable alternatives, and they will quickly be ratified." Mr. Glass said that the IAM will be providing its members a detailed analysis of the proposals, but among the key provisions: Mechanics & Related workgroup: * Pay rates for mechanics would be significantly better than the current pay that reflects a 21 percent temporary cut; * Heavy maintenance on Airbus narrowbody aircraft will be brought in-house and certain Boeing 737 work will continue to be done in-house. Widebody heavy maintenance and other work to be specified, including some Boeing 737 inspection activity, will be done using outside maintenance vendors; * Base maintenance will continue to be performed in Charlotte, North Carolina, and Pittsburgh; * Line maintenance positions will increase with anticipated schedule changes in 2005; * Utility classification and certain utility positions will be preserved at base maintenance facilities only, with other utility and cleaning services to be outsourced; and * IAM employees displaced by outsourcing will be offered existing and future fleet service positions. Fleet Service workgroup: * Pay rates for fleet service employees at hubs and major stations would be significantly better than the current pay that reflects a 21 percent temporary pay reduction; * Most existing fleet service work will be preserved; * A majority of scope provisions will remain unchanged except the right to outsource fleet work at the smaller cities and a second-tier pay scale for medium-sized cities; and * Continuation in the pre-existing IAM multi-employer national pension plan at unreduced levels. Overall, these three workgroups include approximately 8,500 employees. If the agreements are ratified and implemented, the company said that the majority of IAM jobs will be preserved. "We need the support and participation of our employees to complete our transformation into a competitive airline," said Mr. Glass. "The announcements by other airlines this week further underscore the rapid changes that are taking place. I believe our employees understand the gravity of the situation, and will support these proposals as the best way to send a message to our customers and the financial community that we are united in our efforts to be successful." Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. US AIRWAYS: Asks Court to Extend Plan Filing Period to March 31 --------------------------------------------------------------- Pursuant to Section 1121(b) of the Bankruptcy Code, US Airways, Inc., and its debtor-affiliates have the exclusive right for 120 days after their bankruptcy petition date to file a plan of reorganization. The Debtors have 180 days from the Petition Date to solicit and obtain acceptances of a plan. The Debtors' exclusive period to file a plan expires on January 10, 2005, and the period to solicit acceptances expires on March 11, 2005. Against this backdrop, the Debtors ask the United States Bankruptcy Court for the Eastern District of Virginia to extend their exclusive period to file a plan of reorganization to March 31, 2005, and the period to solicit acceptances to June 30, 2005. Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado, notes that the Debtors are obligated under the Global Settlement with General Electric Capital Corporation to file a plan and disclosure statement by February 15, 2005, and February 18, 2005, respectively. The Debtors anticipate meeting these deadlines. Just to be safe, the Debtors would like an extension of the Exclusive Periods. The Debtors' request will be heard at the next hearing on January 27, 2005. In view of the 17-day gap between the expiration of the Exclusive Periods and the hearing, the Debtors also ask the Court for a bridge order until the time the Court rules on the request. An extension through the January hearing will not prejudice the rights of any party-in-interest. Mr. Leitch reminds the Court that the Debtors are making progress in their implementation of the Transformation Plan. The Debtors, while working to stabilize their operations, have taken many significant steps to facilitate their emergence from chapter 11 as a stronger, financially sound and competitive airline. The Debtors do not plan to seek further extensions. The request should provide a sufficient buffer for contingencies that may arise, as well as an opportunity to obtain the input of the estates' other stakeholders before finalizing the plan. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000) US AIRWAYS: Wants to Modify CWA Collective Bargaining Agreements ---------------------------------------------------------------- US Airways, Inc., and its debtor-affiliates seek the permission of U.S. Bankruptcy Court for the Eastern District of Virginia to enter into modifications of their collective bargaining agreement with the Communications Workers of America, AFL-CIO. Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado, recounts that on October 22, 2004, the Debtors delivered a Section 1113 Proposal to the CWA. After numerous meetings, on Dec. 2, 2004, the CWA and the Debtors agreed to certain modifications to the CWA collective bargaining agreement. The CWA membership ratified the Agreement on December 23, 2004. The Agreement covers four areas: 1) Pay -- The Agreement reduces pay for CSA/RSA/Club Representatives/CTO and CSS/Lead employees starting January 1, 2005. These employees will be paid at a seniority level one step lower than their current level, and will remain at that level for the next two years. On January 1, 2008, the top pay rate will be increased. The Agreement reduces pay for the CAR, DMSC and BCC employees by 12.9% and freezes their current seniority pay for two years. The Agreement freezes the seniority pay step for MidAtlantic Airways and Mainline Express employees for two years. Other additional premium pay items will be eliminated or reduced. General increases to pay scales contained in the current agreements will be replaced with these increases: January 1, 2009 by 3.0%; January 1, 2010 by 4.0%; January 1, 2011 by 4.0%; and January 1, 2012 by 2.0% 2) Productivity -- The Agreement modifies the work rules on holidays, vacation accrual, sick leave and part-time employees. The Agreement provides for an "early out" program to reduce the potential for furloughing CWA- represented employees. Employees recalled from furlough that substitute for an employee participating in the early out will be paid at the first step of the seniority classification pay scale. Employees recalled from furlough that substitute for an employee that is not an early out, will have their pay seniority reduced by the number of years furloughed. 3) Benefits -- The Agreement modifies the Defined Contribution Plan, reducing employer contributions to a flat rate of 3% of pay for Mainline and Mainline Express CWA employees. The Agreement eliminates the current base and match for the Defined Contribution Plan. The Agreement modifies medical benefits for pre-65 future retirees and eliminates medical benefits for post-65 future retirees. 4) Scope -- The Agreement lifts or modifies various restrictions regarding minimum aircraft in the Debtors' fleet, furloughs and outsourcing of Reservations, Dividend Miles Service Center and Baggage Call Center work. The Agreement creates a Work at Home program for RSAs, who will be paid at a reduced rate compared to mainline RSAs. The Agreement creates a "Ready Reserve" classification, which will modify pay and benefits. The Agreement provides profit sharing for CWA-represented employees, subject to certain conditions. If the conditions are met, the Debtors' profit sharing pool will be established at 10% of pretax profit for pretax margins ranging from 0.1% to 5.0%, and at 25% of pretax profit in excess of a pretax margin of 5%. The CWA's portion of the profit sharing pool will be proportionate to the CWA's share of the cost savings achieved through the Transformation Plan. Potential CWA equity participation remains to be determined, based on the actions of other stakeholders. If the CWA elects profit sharing, it must waive any claim to any new equity issued during these proceedings. Mr. Leitch explains that retiree health benefits for future retirees were modified only because the CWA declined to serve as the "authorized representative" for current retirees. The Agreement does not address current retirees. The valuation of the Agreement substitutes a "plug" number to modify current retiree benefits, which must be sought pursuant to Section 1114. Mr. Leitch tells the Court that the modified collective bargaining agreement addresses the Debtors' financial, transformational and labor relations imperatives in a manner that will best serve the interests of the bankruptcy estates, the CWA and its members. The Agreement will provide the Debtors' estates with approximately $130,000,000 in cost savings in 2005, with increased amounts in future years, except the final year of the contract. The Agreement will provide immediate and long-term cash savings, plus the flexibility to implement the Transformation Plan. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000) UTILITY CORPORATION: Declares $0.118 Monthly Dividend ----------------------------------------------------- The Board of Directors of Utility Corp. declared a regular dividend distribution of $0.118 per Class C Share payable on January 31, 2005 to holders of record at the close of business on January 17, 2005. Shareholders are entitled to receive dividends as declared by the Board of Directors of Utility Corp. It is the Company's policy to declare and pay equal monthly dividends on the outstanding Class C Shares based on dividends received and interest earned less expenses. Utility Corp. is a mutual fund corporation whose investment portfolio consists primarily of publicly listed common shares of selected Canadian utility companies. The Class C Shares of Utility Corp. are listed for trading on The Toronto Stock Exchange under the symbol UTC.C. As of September 30, 2004, the Company's balance sheet shows an accumulated deficit totaling $2,036,972 and a $43,088 stockholders' deficit. VANDERBILT MORTGAGE: Fitch Withdraws Ratings on 21 Classes ---------------------------------------------------------- Fitch Ratings has affirmed 112 classes of 12 Vanderbilt Mortgage Finance -- VMF -- manufactured housing securitizations. Included in the affirmations are 21 classes that had previously been on Rating Watch Evolving, and are being removed. The 12 transactions represent Fitch's entire VMF portfolio and affect approximately $1.2 billion in outstanding principal. To date, losses allocated to the trust on VMF securitizations have been low due to VMF's practice of purchasing defaulted loans, which were originated through CHI's sale center, out of the trust prior to liquidation. Although there has been and continues to be no obligation on the part of VMF to buy such loans out of its programs, these actions have permitted credit enhancement in the programs to at least double, and in some cases triple, over time. Pool factors (the percentage of mortgage loan principal outstanding to original mortgage loan principal) range from as low as 22.75% on the most seasoned 1998-A Group 1 transaction to 55.69% on the 2001-B transaction. Fitch's affirmation of the ratings on these transactions takes into account the support provided by VMF, and as such places a good deal of emphasis on the historical and expected performance of the notes rather than that of the loans. However, it should be noted that in the event that this support wanes or ceases entirely, these classes would be subject to a rating evaluation that would shift its emphasis to the historical and expected performance of the collateral itself. Fitch's initial loss severity assumptions did not rely upon VMF's ability to make full remaining principal balance payments to the trust on defaulted loans. Rather, they were in line with historical loss severities for an experienced vertically integrated company, such as CHI. From 1998 to the middle of 2000, each Fitch-rated VMF transaction was structured with two groups. Group 1 of each transaction generally comprised fixed-rate bonds collateralized with fixed- rate collateral and Group 2 comprised floating-rate bonds collateralized with adjustable-rate collateral. Fitch has taken the following actions on Vanderbilt Mortgage and Finance Manufactured Housing: 1998-A, Group 1: -- Classes IA-4 and IA-5 affirmed at 'AAA'; -- Class IA-6 affirmed at 'AA-'; -- Class IB-1 affirmed at 'BBB'. 1998-A, Group 2: -- Class IIA-1 affirmed at 'AAA'; -- Class IIB-1 affirmed at 'AA'; -- Class IIB-2 affirmed at 'BBB+'; 1998-B, Group 1: -- Classes IA-4 and IA-5 affirmed at 'AAA'; -- Class IA-6 affirmed at 'AA-'; -- Class IB-1 affirmed at 'BBB'. 1998-B, Group 2: -- Class IIA-1 affirmed at 'AAA'; -- Class IIB-1 affirmed at 'AA'; -- Class IIB-2 affirmed at 'BBB+'; 1998-C, Group 1: -- Classes IA-3 through IA-5 affirmed at 'AAA'; -- Class IA-6 affirmed at 'AA-'; -- Class M is affirmed at 'A' -- Class IB-1 affirmed at 'BBB'. 1998-C, Group 2: -- Class IIA-1 affirmed at 'AAA'; -- Class IIB-1 affirmed at 'AA'; -- Class IIB-2 affirmed at 'BBB+'; 1998-D, Group 1: -- Class IA-1 affirmed at 'AAA'; -- Class IA-2 affirmed at 'AA-'; -- Class IM-1 affirmed at 'A'; -- Class IB-1 is affirmed at 'BBB'; 1998-D, Group 2: -- Class IIA-1 affirmed at 'AAA'; -- Class IIB-1 affirmed at 'AA'; -- Class IIB-2 affirmed at 'BBB+'; 1999-A, Group 1: -- Classes IA-3 to IA-5 affirmed at 'AAA'; -- Class IA-6 affirmed at 'AA-'; -- Class IM-1 affirmed at 'A'; -- Class IB-1 affirmed at 'BBB'. 1999-A, Group 2: -- Class IIA-1 affirmed at 'AAA'; -- Class IIB-1 affirmed at 'AA'; -- Class IIB-2 affirmed at 'BBB+'; 1999-B, Group 1: -- Classes IA-4 to IA-6 affirmed at 'AAA'; -- Class IA-7 affirmed at 'AA-'; -- Class IM-1 affirmed at 'A'; -- Class IB-1 affirmed at 'BBB'. 1999-B, Group 2: -- Class IIA-1 affirmed at 'AAA'; -- Class IIB-1 affirmed at 'AA'; -- Class IIB-2 affirmed at 'BBB+'; 1999-C, Group 1: -- Classes IA-3 to IA-4 affirmed at 'AAA'; -- Class IA-5 affirmed at 'AA-'; -- Class IM-1 affirmed at 'A'; -- Class IB-1 affirmed at 'BBB'. 1999-C, Group 2: -- Class IIA-1 affirmed at 'AAA'; -- Class IIB-1 affirmed at 'AA'; -- Class IIB-2 affirmed 'BBB+'; 1999-D, Group 1: -- Classes IA-3 and IA-4 affirmed at 'AAA'; -- Class IA-5 affirmed at 'AA-'; -- Class IM-1 affirmed at 'A'; -- Class IB-1 affirmed at 'BBB'. 1999-D, Group 2: -- Class IIA-1 affirmed at 'AAA'; -- Class IIB-1 affirmed at 'AA'; -- Class IIB-2 affirmed at 'A+'; -- Class IIB-3 affirmed 'BBB+'; 2000-A, Group 1: -- Classes IA-3 and IA-4 affirmed at 'AAA'; -- Class IA-5 affirmed at 'AA-'; -- Class IM-1 affirmed at 'A'; -- Class IB-1 affirmed at 'BBB'. 2000-A, Group 2: -- Class IIA-1 affirmed at 'AAA'; -- Class IIB-1 affirmed at 'AA-'; -- Class IIB-2 affirmed at 'BBB'; 2000-C: -- Class A ARM affirmed at 'AAA'; -- Classes A-3 and A-4 affirmed at 'AAA'; -- Class A-5 affirmed at 'AA-'; -- Class M-1 affirmed at 'A'; -- Class B-1 affirmed at 'BBB', removed from Rating Watch Negative. 2000-D: -- Classes IA-3 and A-4 affirmed at 'AAA'; -- Class IA-5 affirmed at 'AA-'; -- Class IM-1 affirmed at 'A'; -- Class B-1 affirmed at 'BBB', removed from Rating Watch Negative. 2001-B: -- Classes IA-2 to A-4 affirmed at 'AAA'; -- Class IA-5 affirmed at 'AA'; -- Class IM-1 affirmed at 'A'; -- Class B-1 affirmed 'BBB', removed from Rating Watch Negative. As of Jan. 14, 2004, a total of 21 subordinate classes were secured by a guarantee provided by CHI. When Berkshire acquired CHI, these classes were placed on Credit Watch Evolving. After a review of the acquisition, Fitch is no longer able to maintain an opinion on the financial strength of CHI as separate entity and has therefore withdrawn the ratings on these classes: -- Series 1998-A, Group 1 Class IB-2 rated 'BB+' -- Series 1998-A, Group 2 Class IIB-3 rated 'BBB' -- Series 1998-B, Group 1 Class IB-2 rated 'BB+' -- Series 1998-B, Group 2 Class IIB-3 rated 'BBB' -- Series 1998-C, Group 1 Class IB-2 rated 'BB+' -- Series 1998-C, Group 2 Class IIB-3 rated 'BBB' -- Series 1998-D, Group 1 Class IB-2 rated 'BB+' -- Series 1998-D, Group 2 Class IIB-3 rated 'BBB' -- Series 1999-A, Group 1 Class IB-2 rated 'BB+' -- Series 1999-A, Group 2 Class IIB-3 rated 'BBB' -- Series 1999-B, Group 1 Class IB-2 rated 'BB+' -- Series 1999-B, Group 2 Class IIB-3 rated 'BBB' -- Series 1999-C, Group 1 Class IB-2 rated 'BB+' -- Series 1999-C, Group 2 Class IIB-3 rated 'BBB' -- Series 1999-D, Group 1 Class IB-2 rated 'BB+' -- Series 1999-D, Group 2 Class IIB-4 rated 'BBB' -- Series 2000-A, Group 1 Class IB-2 rated 'BB+' -- Series 2000-A, Group 2 Class IIB-3 rated 'BBB' -- Series 2000-C Class B-2 rated 'BB+' -- Series 2000-D Class B-2 rated 'BB+' -- Series 2001-B Class B-2 rated 'BB+' VISUAL BIBLE: Auditors Raise Going Concern Doubt ------------------------------------------------ Visual Bible International, Inc., had approximately $83,625 in cash and cash equivalents, exclusive of a cash escrow amount of $291,976 and a working capital deficit of $9,873,467 at September 30, 2004. The primary source of liquidity to meet Company obligations during the three months ended September 30, 2004, was provided from funds made available relating to the sales of DVD/video units of The Gospel of John. For fiscal year 2004, management anticipates cash needs of approximately $6,250,000, consisting of approximately $750,000 for marketing of The Gospel of John, approximately $2,000,000 relating to operations, approximately $3,500,000 earmarked for reduction of liabilities, exclusive of payments of interest and principal relating to the debentures, which was subject to a Forbearance Agreement until July 31, 2004. Management expects these cash needs to be funded by collection of accounts receivable principally arising from sales of DVD/video units of The Gospel of John, additional sales of DVD/video units and other sources of capital. Without the collection of the accounts receivables, additional sales and other sources of capital, revenue from operations will not be sufficient to sustain the Company's current working capital obligations and requirements. Going Concern Doubt As reported in the audit report on the financial statements of the Company for the fiscal year ended December 31, 2003, dated May 22, 2004 and included within the Company's Form 10-KSB filing for 2003 the financial statements have been prepared assuming that the Company will continue as a going concern for which there exist substantial doubt. Visual Bible International, Inc., is a global faith-based media company, which has secured the exclusive visual and digital rights to popular versions of the Bible. The Company has produced and successfully released the word-for-word books of Matthew and Acts and a production of a word-for-word film adaptation of The Gospel of John was released during September 2003. W.R. GRACE: Town of Acton Says Disclosure Statement is Inadequate ----------------------------------------------------------------- The Town of Acton, Massachusetts contends that the Disclosure Statement of W.R. Grace & Co., and its debtor-affiliates does not contain "adequate information," as that term is defined in Section 1125 of the Bankruptcy Code, concerning the Town's claim and its potential impact on the Plan. According to the Disclosure Statement, the Debtors "estimate that there are no allowed secured claims as of the Effective Date." It is unclear from the Disclosure Statement, however, whether the efficacy of the Debtors' Plan depends on the accuracy of that "estimate." In accordance with its request for stay relief and for related determinations, the Town recently made an actual sewer assessment of $3,691,692 with respect to the six parcels of land owned by the Debtors. Under Massachusetts General Laws, because the Town recorded the orders for constructions of the sewer prepetition in the appropriate Massachusetts registries of deeds, the Town's claim for the actual sewer assessment is secured by duly perfected and validly enforceable liens on the six parcels of land. Although neither the Disclosure Statement nor the Plan specifically refer to its claim, the Town infers that the Debtors do not consider the Town's claim to be secured. While the Debtors may "estimate" that the Town's claim is not secured, for a reasonable investor of each voting class to make an informed judgment about the Plan's efficacy, the Debtors should disclose to the creditors the existence and amount of the Town's asserted secured claim and the impact, if any, on the Debtors' Plan if the Town's claim is allowed as a secured claim. Thus, the Town asks the U.S. Bankruptcy Court for the District of Delaware to require the Debtors to amend their Disclosure Statement so as to reveal that the Town has asserted a $3,691,692 secured claim and determine the impact the Town's claim -- as a secured claim -- will have on the Debtors' Plan. Headquartered in Columbia, Maryland, W.R. Grace & Co., -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. (W.R. Grace Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000) W.R. GRACE: State of Montana Objects to Disclosure Statement ------------------------------------------------------------ The State of Montana Department of Environmental Quality, Department of Public Health and Human Services, and Risk Management and Tort Defense Division ask the U.S. Bankruptcy Court for the District of Delaware not to approve the Disclosure Statement of W.R. Grace & Co., and its debtor-affiliates. On March 23, 2003, MDEQ timely filed several proofs of claim each totaling $8,510,022 for the costs of remediating contamination by tremolite asbestos, a hazardous or deleterious substance, resulting from the mining of asbestos-contaminated vermiculite from Zonolite Mountain, and the processing, transportation and disposal of asbestos-contaminated substances in or near Libby, Montana and Troy, Montana. The Health Department timely filed two proofs of claim against the Debtors on March 23, 2003, for $11,824,887 and $3,817,681 for the cost of future and past Medicaid reimbursement. The Health Department's proofs of claim were based on a federal statute as well as common law claims, civil federal racketeering, negligence, unjust enrichment, civil conspiracy, strict liability and deceptive trade practices. The Defense Division timely filed a proof of claim on March 25, 2003, asserting claims against the Debtors for contribution and indemnification as a result of a lawsuit filed by nine individuals, all of whom were diagnosed with asbestos disease, against the State of Montana and other defendants. An action, which was filed by miners who had worked at the Libby, Montana facility, originally sued the Debtors for their failure to provide a safe working environment. However, the Debtors' bankruptcy stayed any action against them. The miners then sued the State in the Montana State Court, alleging that it negligently failed to warn them of the known dangers to all mine workers and their families, resulting to suffered injuries and damages. The District Court granted the State's request to dismiss, concluding that the State had no legal right duty to the miners. The miners appealed the decision to the Montana Supreme Court, which issued an opinion on December 14, 2004, reversing and remanding the District Court's dismissal of the action. The State notes that the Debtors' Disclosure Statement provides a description of their business, asbestos liability and ongoing litigation. However, there is no discussion of any of the State's claims against the Debtors and how they will be treated under the Plan. Specifically, there is no discussion on the miners litigation and the Debtors' potential responsibility for damages nor is there any discussion of the Debtors' liability for Medicaid reimbursement. The Plan and Disclosure Statement currently provide for the treatment of holders of general unsecured claims. Presumably, the State's claims are included within that class. Yet, the Debtors fail to discuss the State's position that it is prohibited from accepting stock and corporation as payment of a debt and how its claims will be treated under the Plan as a result of that prohibition. The State also avers that the release, discharge, injunction and exculpation language set forth in the Disclosure Statement should acknowledge and provide that the State is not precluded from enforcing any environmental claims and consent decrees that it may have with respect to the Debtors. Similarly, the Disclosure Statement should also discuss the Debtors' obligations to comply with all applicable state and federal environmental laws. Moreover, the Disclosure Statement fails to discuss and explain that the provisions automatically releasing creditor claims against the non-debtor are inconsistent with Third Circuit law and incorrectly imply that these non-debtors are not subject to potential environmental liabilities. The Debtors fail to disclose how those provisions violate Sections 524(e) of the Bankruptcy Code as well as district law. Courts within the Third Circuit have held that non-consensual non-debtor releases are not permitted under the Bankruptcy Code. Headquartered in Columbia, Maryland, W.R. Grace & Co., -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. (W.R. Grace Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000) WISTON XIV LIMITED: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Wiston XIV Limited Partnership dba Candletree Apartments 16012 Metcalf Avenue, Suite 300 Stilwell, Kansas 66085 Bankruptcy Case No.: 05-80037 Chapter 11 Petition Date: January 5, 2005 Court: District of Nebraska (Omaha) Debtor's Counsel: Robert V. Ginn, Esq. Brashear & Ginn 711 North 108th Court Omaha, NE 68154 Tel: 402-348-1000 Fax: 402-348-1111 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 6 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Hertz Equipment Rental Corp. Unknown 3817 NW Expressway Oklahoma City, OK 73112 Janet Isley Unknown 4733 Pasadena Circle Omaha, NE 68134 Jansen International Unknown c/o Tom Krautner 922 West Greens Road Houston, TX 77067 Nicole Miklas Unknown 11114 Docatur Plaza #402 Omaha, NE 68154 Lewis, Rice & Fingersh $62,096 R&A Construction, Inc. $16,029 YOUTHSTREAM MEDIA: Look for Form 10-K Annual Report on January 13 ----------------------------------------------------------------- YouthStream Media Networks, Inc., has incurred a delay in assembling the information required to be included in its September 30, 2004, Form 10-K Annual Report. The Company expects to file its September 30, 2004, Form 10-K Annual Report with the Securities and Exchange Commission by January 13, 2005. During the fiscal year ended September 30, 2004, the Company conducted all of its business operations through a wholly owned subsidiary, Beyond the Wall, Inc. On February 25, 2004, the Company sold substantially all of the assets of this subsidiary to Clive Corporation, Inc., and 1903 West Main Street Realty Management, LLC, which also assumed certain of the liabilities related to the business. The Company had previously discontinued its business operations that were not sold in this transaction. Net cash proceeds from the sale of the business were approximately $820,000. The Company's consolidated financial statements for the fiscal year ended September 30, 2004, will reflect the operations of this business as a discontinued operation through February 25, 2004. The Company's consolidated financial statements for the fiscal year ended September 30, 2003, will be restated to reflect the operations of this business as a discontinued operation. As a result of the sale of the Company's remaining business operations in February 2004, the Company expects to report no revenues from continuing operations and a reduced net loss for the fiscal year ended September 30, 2004, as compared to the fiscal year ended September 30, 2003. YouthStream Media Networks, Inc., operates a retail business, Beyond the Wallr (also known as Trent Graphics), which sells decorative wall posters and related items through a chain of retail stores and on-campus sales events. At June 30, 2004, YouthStream Media's balance sheet showed a $12,855,000 stockholders' deficit, compared to a $10,699,000 deficit at Sept. 30, 2003. YUKOS OIL: Will Pursue Damages for Automatic Stay Violations ------------------------------------------------------------ Yukos Oil Company issued a notice to all persons and entities who participated in the December 19, 2004, auction of the stock of Yuganskneftegas that is owned by Yukos Oil Company to Baikal Finance Group, or who may participate in consummation of the sale or purchase of that Stock, or the financing of that transaction, or in other actions that interfere with the property of Yukos' bankruptcy estate. The advertisements were placed in Thursday's global editions of the Financial Times, Wall Street Journal, New York Times, and International Herald Tribune. The ads also appeared in Russia's dailies Izvestiya and the Moscow Times. A full copy of the advertisement may be viewed at http://www.yukosbankruptcy.com/ Zack A. Clement, Esq., at Fulbright & Jaworski, LLP, in Houston, Texas, relates that the Temporary Restraining Order issued by the Court on December 16, 2004, was requested by Yukos to supplement and specifically enforce the automatic stay of Section 362 of the Bankruptcy Code, pursuant to an injunction issued under Section 105 of the Bankruptcy Code, to try to stop the conduct of the Auction. United States law gives the U.S. Bankruptcy Court for the Southern District of Texas in Houston, exclusive jurisdiction over the property of Yukos' Chapter 11 estate "wherever located." Under the law, an automatic stay went into immediate effect when the company filed for bankruptcy on December 14, 2004. The automatic stay protects the company's assets through the bankruptcy process. It prevents creditors from collecting claims (including tax claims) that arose prior to the bankruptcy filing or from taking "possession" or "control" of Yukos property covered under the filing. The automatic stay and the Court's December 16 Temporary Restraining Order barring the auction was violated when Gazpromneft and Baikal Finance Group participated in the auction on December 19. Even though the TRO expired, the automatic stay remains in force indefinitely through the bankruptcy process and until lifted or amended by the Court. Though Baikal Finance Group, a previously unknown company, emerged as the winning bidder in the auction, days later its shares were transferred to or purchased by Rosneft, a government-owned oil company, itself set to be acquired by Gazprom. Yukos believes that the terms of the TRO apply to actions that were taken by various parties at the Auction, including by Baikal Finance Group, and to actions taken to consummate the sale of the Stock and related transactions. In any event, the TRO does not limit the general application of the automatic stay. Yukos asserts that the Stock is a property of its bankruptcy estate, and that the Auction was a violation of the automatic stay, which became immediately effective when Yukos filed for bankruptcy. Mr. Clement notes that if sale of the Stock is consummated, it will damage Yukos in excess of $20 billion. Yukos will pursue one or more damage recovery actions in forums Yukos believes appropriate to redress the damage against any party who have participated in, and do in the future participate in: (1) the Auction; (2) the financing of the sale or purchase of the Stock; (3) the closing of the sale or purchase of the Stock; (4) any agreements concerning subsequent transactions relating to the Stock or its value, including agreements to transfer some or all of the Stock to other Parties, to merge with other Parties so that they will benefit from the value of the Stock, or other transactions whose intent or effect is to achieve similar economic result, or the financing of any transactions; (5) any actions to sell or purchase the stock Yukos owns in Tomskneft or in Samaraneftegaz, or any other Yukos Subsidiary, or the financing of any transactions; (6) any actions to interfere with Yukos' employment relationships with its employees; (7) any other actions to obtain possession or control of property of Yukos' Chapter 11 estate; (8) any actions to collect against Yukos on a claim arising before the Petition Date; or (9) any other actions violating Section 362(a). Yukos will choose when, and in what forums, it will pursue the Recovery Actions and will file and add substantive pleadings and parties in the Recovery Actions as it learns more about the actions of parties in connection with interference with the property of its Chapter 11 bankruptcy estate. Yukos also filed a Report Concerning the Violations of the Automatic Stay and Non-Compliance with Court Orders. A full-text copy of that Report is available at no charge at: http://yukosbankruptcy.com/pdf/Report%20on%20Stay.pdf Headquartered in Houston, Texas, Yukos Oil Company -- http://www.yukos.com/-- is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in the energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742). Zack A. Clement, Esq., C. Mark Baker, Esq., Evelyn H. Biery, Esq., John A. Barrett, Esq., Johnathan C. Bolton, Esq., R. Andrew Black, Esq., Fulbright & Jaworski, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $12,276,000,000 in total assets and $30,790,000,000 in total debts. (Yukos Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) YUKOS OIL: Missed Interest Payment Cues Moody's to Junk Ratings --------------------------------------------------------------- Moody's Investors Service downgraded the senior implied rating of Yukos Oil Company to Ca from Caa2. The company's senior unsecured issuer rating was also downgraded to Ca from Caa3. Both ratings have a stable outlook. Moody's does not rate any specific debt in relation to Yukos. Moody's action follows reports that Yukos has missed an interest payment on its syndicated bank facility on December 27, 2004, and Moody's expectation of the reduced weighted average recovery potential for all of Yukos' financial creditors following the forced sale of its main production asset, Yuganskneftegaz. The largest part of the company's financial debt relates to secured facilities once totaling USD 2.6 billion, which are secured by export proceeds and were originally guaranteed by some of Yukos' main production assets, including Yuganskneftegaz. Yuganskneftegaz was recently sold to recover some of the back-dated tax claims made against Yukos. Moody's believes that parts of these facilities have been paid off over recent months from secured export proceeds. However, with the loss of Yuganskneftegaz and the magnitude of remaining tax claims, the prospect for further immediate debt repayments has diminished considerably. A portion of the facilities is fully supported by the Menatep Group - Yukos' main shareholder - whilst the remainder is related to western banks. Moody's has assumed that the recovery probability for the Menatep Group could be further impaired by actions taken by the Russian government, while recovery for the banks is likely to be considerably higher. This assumption of different recovery for different classes of debt weighs negatively on Moody's overall view on average recoverability. The ultimate repayment modus is now likely to be determined by the Russian government, given that state-owned Yuganskneftegaz remains the guarantor of the debt. Yukos Oil Company (OAO NK Yukos), headquartered in Moscow, was one of Russia's largest vertically integrated oil company's with production of 310 million barrels of oil and 3.27 billion cubic meters of gas during the first six months of 2004. With the auction of its main subsidiary Yuganskneftegaz in December 2004, Yukos lost approximately 60% of its oil production and reserves. ZENITH NATIONAL: Fitch Holds BB+ Rating on Preferred Securities --------------------------------------------------------------- Fitch Ratings affirmed the 'A-' insurer financial strength --IFS -- ratings of Zenith National Insurance Corp.'s three insurance subsidiaries, Zenith Insurance Company, ZNAT Insurance Company, and Zenith Star Insurance Company. Fitch also affirmed Zenith National's long-term issuer rating of 'BBB-', convertible senior note rating of 'BBB-', and the 'BB+' rating of Zenith National Insurance Capital Trust I securities. The Rating Outlook is Stable. The ratings reflect Zenith's disciplined underwriting focus, improved underwriting results, and strong capitalization. Partially offsetting these positives are business line and geographical concentration risks and underwriting losses prior to the most recent periods. Fitch expects Zenith to further improve its niche position as a workers' compensation insurer in a few select states, primarily in California and Florida, where approximately 69% and 17%, respectively, of the company's workers' compensation premium was earned in 2004. The company also has reinsurance operations that selectively underwrite worldwide assumed treaty reinsurance of property losses from catastrophes and large property risks. Zenith's competitive strategy focuses on profitability through maintaining underwriting discipline and pricing risks accordingly, with a key operating goal to achieve a combined ratio of 100% or lower. The company does not set growth targets and is not a low- cost provider, allowing premium volume to fluctuate based on market conditions. In 2003, Zenith returned to underwriting profitability with a statutory combined ratio of 93.7%. This follows a trend of improving combined ratios from 130.7% in 2000 to 114.5% in 2001 and 104.6% in 2002. The dramatic improvement in the combined ratio has been driven by a significant drop in the loss ratio as higher pricing trends have more than offset negative claims severity trends. Through the first nine months of 2004 the statutory combined ratio was 89.9%, which included $18.5 million pre-tax of estimated catastrophe losses in the reinsurance segment for the third-quarter hurricanes. Insurance company statutory surplus has increased dramatically in recent years from $254 million at year-end 2001 to $544 million as of Sept. 30, 2004, driven by the improved operating results in addition to capital contributions from Zenith National. Zenith National's capital mix is prudent, consisting of 19% convertible senior notes, 9% hybrid trust preferred, and 72% common equity at Sept. 30, 2004. The senior notes have been convertible into common stock since the first quarter of 2004. Entity/Issue/Type Action Rating/Outlook: Zenith National Insurance Corp. -- Long-term issuer Affirm 'BBB-'/Stable; -- $125 million 5.75% convertible senior notes due March 30, 2023, affirm 'BBB-'/Stable. Zenith National Insurance Capital Trust I -- $59 million 8.55% trust preferred securities due Aug. 1, 2028, affirm 'BB+'/Stable. Zenith Insurance Company -- Insurer financial strength Affirm 'A-'/Stable. ZNAT Insurance Company -- Insurer financial strength Affirm 'A-'/Stable. Zenith Star Insurance Company -- Insurer financial strength Affirm 'A-'/Stable. * BOOK REVIEW: American Economic History ---------------------------------------- Author: Seymour E. Harris Publisher: Beard Books Paperback: 572 pages List Price: $34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/158798136X/internetbankrupt Review by Gail Owens Hoelscher A classic text on a fascinating topic by a host of notable authors is again in print. American Economic History is a collection of 15 studies of the economic development of the United States from about 1800 to the late 1950s, written by 20 prominent and diverse 20th century thinkers. The authors show America to be, in the words of contributor Arthur Schlesinger, Jr., "a compact example of the growth of an underdeveloped country into a great and rich industrial state." The chapters are divided into four topics: major issues, policy issues, determinants of income, and regional growth. The section on major issues includes an compelling discussion by Mr. Schlesinger called "Ideas and the Economic Process." In it, he claims that the contribution to our unprecedented growth by the "unfettered individual," the "genius" personage of the American businessman, has been exaggerated, while the roles of public policy and the influx of ideas and capital from abroad have been diminished. Mr. Schlesinger concludes that "(t)he ability to change one's mind (which is easier in a society in which people have the freedom to think, inquire and speculate) turns out, in the last analysis, to be the secret of American economic growth, without which resources, population, climate and the other favoring factors would have been of no avail." To complete this section, Alfred H. Conrad discusses income growth and structural change over time, and Peter B. Kenan undertook a statistical survey of growth in population, transportation, output, wealth, and industry. The second part deals with policy. J. G. Gurley and E. S. Shaw discuss the history of U.S. monetary policy, concluding that "the failure to manufacture enough money may bring on recession and stultify economic growth, (but) it is also clear that merely manufacturing money is not enough." Mr. Harris devotes a chapter to fiscal policy, defined as an attempt "to adapt tax, spending, and debt policies to the needs of the economy." He agrees with Herbert Hoover, in that "when the private economy was foundering, it was the task of the government to increase the total amount of purchasing power at the disposal of the people," and the "medicine for recession was to cut taxes and increase the total amount of spending." Asher Achinstein chronicles economic fluctuations in the U.S., and Douglass C. North the role of the U.S. in the international economy. G. A. Lincoln, W. Y. Smith, and J. B. Durst recount the effects of war and defense on the economy. Part Three deals with determinants of income. In it are thorough discussions of population and immigration (Elizabeth W. Gilboy and Edgar M. Hoover); patterns of employment (Stanley Lebergott); natural resource policies ( Joseph L. Fisher and Donald J. Patton); transportation (Merton J. Peck); trade unionism and collective bargaining (Lloyd Ulman); and agriculture (John D. Black). The writers discuss the historic linkages between and among population growth, construction, and transportation growth. Messrs. Fisher and Patton lament the lack of serious effort to conserve resources until the first quarter of the 20th century. Professor Ulman concludes that collective bargaining contributed much to the growth of fringe benefits. Professor Black charts the decline in relative importance of the agricultural sector. The book ends with a chapter on regional income trends, 1840-1950, by Richard A. Easterlin. Seymour E. Harris (1897-1974), earned undergraduate and doctoral degrees from Harvard University. He was chairman of the Department of Economics at Harvard and the University of California, San Diego. Advisor to numerous government officials, he was editor of the Review of Economics and Statistics from 1943 to 1964 and associate editor of the Quarterly Journal of Economics from 1947 to 1974. ********* 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. 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. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Dylan Carlo Gallegos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo and Peter A. Chapman, Editors. Copyright 2005. 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 $675 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 ***