/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/050617.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, June 17, 2005, Vol. 9, No. 142 Headlines ADELPHIA COMMS: Can't File Complaint Against Devon G.P. & L. Mead ADVOCAT INC: Sterling Provides $5MM for Nursing Home Renovations AIR CANADA: Inks Agreement with Pilots on Boeing Purchase Issues ALDERWOODS GROUP: Four Directors Acquire 3,467 Common Shares ANDRE TATIBOUET: Wants to Hire Pat Choi as Real Estate Broker A.P.I. INC: Wants $14 Mil. Asbestos Insurance Settlement Approved ATA AIRLINES: Chicago Express Wants to Sell Assets to CSC for $1MM ATA AIRLINES: Wants to Reject Pitney Bowes Contracts ATHLETE'S FOOT: Wants Until Aug. 8 to Decide on Remaining Leases BEAR STEARNS: Moody's Junks $2.25 Million Class M Certificates BI-LO LLC: S&P Rates Proposed $420 Mil. Senior Secured Loan at B BRIDGEPOINT TECH: Unsecured Creditors Get 5% Recovery Over 3 Years BUEHLER FOODS: Committee Taps FTI Consulting as Financial Advisors CAPITAL AUTO: Moody's Rates $30M Class D Asset-Backed Notes at Ba2 CATHOLIC CHURCH: Tucson Representatives Object to Some Tort Claims CHAMPION ENTERPRISES: Moody's Affirms $89MM Senior Notes B3 Rating CHL MORTGAGE: Moody's Rates Class III-B-4 Trust at B2 COFFEYVILLE RESOURCES: S&P Rates $525 Million Debts at BB- COMBUSTION ENG'G: Owens-Illinois Can Pursue Third-Party Claim COMM 2001-J2: Moody's Affirms $11.96MM Class H Certificates at B1 COMMERCIAL FEDERAL: Moody's Reviews Ba2 Rating on Senior Debts CREDIT SUISSE: S&P Puts Low-B Ratings on Six Certificate Classes DATALOGIC INTERNATIONAL: Dismisses Kabani & Company as Accountants D-BOX TECHNOLOGIES: Solvency is Restored, But Losses Continue DELPHI CORP: Completes $2.8 Billion Refinancing Plan EAGLEPICHER INC: Taps Miller Buckfire as Financial Consultant EES COKE: Moody's Upgrades Series B Senior Secured Notes to Ba2 ENRON CORP: Inks Pact to Settle SPA Claims with Mirant for $12M ENTERPRISE PRODUCTS: New Debt Prompts S&P's Stable Outlook EXIDE TECH: Amends Senior Credit Facility Agreement FEDERAL-MOGUL: Has Until October 1 to Remove State Court Actions GE CAPITAL: Moody's Junks $20 Million Classes L & M Certificates GEERTSON LLC: Case Summary & 2 Largest Unsecured Creditors GENERAL MOTORS: Workers Has Until June 30 to Agree to Benefit Cuts HEALTHSOUTH CORP: Closes $200 Million Senior Unsecured Facility HEARTLAND TECH: Files for Chapter 11 Protection in N.D. Illinois HEARTLAND TECHNOLOGY: Case Summary & Known Creditors HOLLYWOOD CASINO: Wants Black Diamond's Arguments Excluded HUFFY CORP: Steven Lipton to Replace Robert Lafferty as CFO INTELIDATA TECH: Faces Possible Delisting from Nasdaq J.P. MORGAN: Fitch Affirms Low-B Ratings on Six Mortgage Certs. J.P. MORGAN: Fitch Places Low-B Ratings on 4 Mortgage Certificates KANEB PIPE: Moody's Confirms $250 Mil. Sr. Unsec. Notes Ba1 Rating KARLUS ARTIS: Case Summary & 20 Largest Unsecured Creditors KEY ENERGY: Moody's Continues $425M Debt Securities Ratings Review KMART CORP: Sears Relates HQ Relocation Cost & Benefit Estimates LACLEDE STEEL: Administrative Claims Bar Date Is July 1 LIFEPOINT HOSPITALS: Inks $192 Million Credit Pact with Lenders MAGNOLIA LLC: Case Summary & 11 Largest Unsecured Creditors MASTR REPERFORMING: Moody's Rates $985,000 Class B4 Certs. at Ba2 MCI INC: Shareholders Commence Proxy Battle Against Verizon Deal MERIDIAN AUTOMOTIVE: Court Okays $10 Mil. Advance to Foreign Units MERIDIAN AUTOMOTIVE: Court Says Utilities Adequately Assured MERIDIAN AUTOMOTIVE: MERI Withdraws Objections With Prejudice METALFORMING TECH: Files for Chapter 11 Protection in Delaware METALFORMING TECH: Case Summary & 30 Largest Unsecured Creditors METRIS COMPANIES: Plans a $30 Million Prepayment of Senior Notes MID-STATE RACEWAY: Jeffrey Gural & TrackPower File Chapter 11 Plan MIRANT CORP: Court OKs $85M Wrightsville Sale to Arkansas Electric MORGAN STANLEY: Moody's Affirms C Rating on $8.73MM Class H Certs. NEW MEXICO: Voluntary Chapter 11 Case Summary NORTHWEST AIRLINES: Reorganizes Marketing & Sales Functions PACIFIC MAGTRON: Inks Interim Management Pact with Micro Tech. PEGASUS SATELLITE: Can Assume Fox TV Executory Contracts PHEASANT BROOK: Case Summary & 9 Largest Unsecured Creditors PSYCHIATRIC SOLUTIONS: S&P Rates Proposed $325MM Term Loan at B+ R.F. CUNNINGHAM: Taps Holtz Rubenstein as Accountants SALOMON BROTHERS: Fitch Junks Ratings on 3 Mortgage Certificates SALTON INC: Fails to Make Interest Payment on $6.7M Sr. Sub. Notes SALTON INC: S&P Assigns D Ratings After Missing Interest Payment SAKS INC: Moody's Downgrades Senior Implied Rating From B1 to B2 SIERRAS INC: Voluntary Chapter 11 Case Summary SINCLAIR BROADCAST: Completes Debt-for-Equity Swap SYNAGRO TECHNOLOGIES: Prices 9-1/2% Senior Sub. Debt Tender Offer TRICN INC: MOSAID Tech Withdraws $3.1 Million Acquisition Offer TRI-NATIONAL DEV'T: Hires Mexico Retail as Real Estate Broker US AIRWAYS: Wants Court to Approve America West Merger M.O.U. W.R. GRACE: Wants to Contribute $1.3MM to Chattanooga Pension Plan WEIGHT WATCHERS: Moody's Affirms $350 Mil. Facility's Ba1 Rating WEIGHT WATCHERS: WW.com Acquisition Cues S&P to Affirm Ratings WESTPOINT STEVENS: Disclosure Statement Hearing Set for July 12 WESTPOINT STEVENS: Wants to Enter Into Clemson Office Space Lease WINN-DIXIE: Court Approves De Minimis Asset Sale Procedures WINN-DIXIE: Court Overrules JEA's Request for Security Deposit WYNDHAM INT'L: Moody's Affirms Junk Senior Unsecured Issuer Rating YUKOS OIL: Seeks to Recover $3 Billion from Sibneft * ROCG Launches New Global Consulting Firm * BOOK REVIEW: Dynamics of Institutional Change ********* ADELPHIA COMMS: Can't File Complaint Against Devon G.P. & L. Mead ----------------------------------------------------------------- The adversary proceeding No. 04-03192 between Devon Mobile Communications Liquidating Trust, as plaintiff, and Adelphia Communications Corporation, as defendant, has been reassigned from Judge Robert E. Gerber to Judge Cecelia G. Morris. ACOM asked Judge Morris for leave to file a Third-Party Complaint against Devon G.P. and its sole owner, Lisa-Gaye Shearing Mead, asserting claims for contribution, indemnity and breach of fiduciary duty. Judge Morris denied ACOM's request, without prejudice. ACOM asked for reconsideration, citing that its Third-Party Complaint more than adequately alleges that Devon G.P. and Lisa- Gaye Shearing Mead participated in or "aided and abetted" the tortious conduct -- deepening insolvency and breach of duty to fund operations -- with which ACOM is charged by the Devon Trustee. ACOM contends that, in its sweeping denial of any contribution claim against the Third-Party Defendants, the Court relied on a mistaken proposition of law and overlooked highly relevant authority that compels granting the Motion for Leave. Judge Morris denied ACOM's Motion for Reconsideration. Judge Morris notes that the factual allegations in the proposed third- party complaint consist almost exclusively of a recitation of the provisions of the Limited Partnership Agreement that empowered Devon G.P. to carry on the business of Devon L.P. "It is from these provisions that the Adelphia defendants claim an inference can be drawn that third-party defendants personally participated in the alleged wrongdoing . . . but the Court has found that no such inference can be drawn based upon the allegations contained in the third-party complaint. The Court also determined that any wrongdoing resulted in harm to the Liquidating Trust, not to Adelphia, and Adelphia does not argue that the Court's conclusion in that regard is incorrect." Judge Morris relates that she has extensively reviewed the parties' submissions and the transcripts of the hearings in this matter and was unable to find any reference to an aiding and abetting cause of action. "This new theory of liability was certainly available to Adelphia when it filed its third-party complaint; and Adelphia failed to plead a cause of action on that basis." The parties entered into a stipulation, which the Court approved, to expedite the production of discovery material, facilitate the prompt resolution of disputes over confidentiality, adequately protect material entitled to be kept confidential, and ensure that confidentiality is afforded only to material so entitled. A pre-trial conference is scheduled to be held on May 1, 2006, at 11:00 a.m. 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. 96; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADVOCAT INC: Sterling Provides $5MM for Nursing Home Renovations ---------------------------------------------------------------- Advocat Inc. (NASDAQ OTC: AVCA) plans to renovate seven nursing home facilities that it currently leases from Sterling Acquisition Corp., a wholly owned subsidiary of Omega Healthcare Investors, a publicly owned REIT. Sterling will provide up to $5 million in capital over the next 18 months to fund the renovations. "We plan to significantly upgrade seven facilities that we lease from Sterling," stated William R. Council, III, Chief Executive Officer of Advocat. "The capital improvements will focus on updating both the interior and exterior of these facilities that are 20-40 year old. We identified facilities having an opportunity to increase occupancy and believe the capital improvements will be an important part in attracting new residents." As part of the agreement, Sterling will advance funds to Advocat for capital improvements made to the facilities on or before December 31, 2006. The annual base rent related to these facilities will be increased to reflect the amount of capital improvements made to the respective facilities. "The funding from Sterling will allow us to significantly update these seven facilities," continued Mr. Council. "We anticipate our staff and existing residents will benefit from the renovations and other upgrades. In addition, we expect these facilities to be more marketable after the renovations are complete, improving our opportunities to build our occupancy rates in these select markets." About the Company Advocat Inc. provides long-term care services to nursing home patients and residents of assisted living facilities in nine states, primarily in the Southeast. * * * As reported in the Troubled Company Reporter on Apr. 25, 2005, BDO Seidman LLP raised substantial doubt about Advocat Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004. The Company incurred operating losses in two of the three years in the period ended December 31, 2004, and although the Company reported a profit for the year ended December 31, 2004, that profit primarily resulted from non-cash expense reductions caused by downward adjustments in the Company's accrual for self-insured risks associated with professional liability claims. AIR CANADA: Inks Agreement with Pilots on Boeing Purchase Issues ---------------------------------------------------------------- Air Canada reached a tentative agreement with the Air Canada Pilots Association (ACPA) on costs and other related issues relating to the introduction of the new Boeing wide-body aircraft in the fleet. The agreement with ACPA is subject to ratification by the union members. The airline has received from Boeing an extension of the June 10 deadline to allow sufficient time for the ratification process to take place. Pending pilot ratification by June 19, the agreement is expected to be finalized allowing the aircraft order to go forward. The purchase agreement with Boeing includes firm orders for 18 Boeing 777s, plus purchase rights for 18 more, in a yet-to-be- determined mix of the 777 family's newest models: the 777-300ER, the 777-200LR Worldliner (the longest range airplane in the world), and the newly announced 777 Freighter. Air Canada's 777 deliveries are scheduled to begin next year with the arrival of three 777-300ERs in 2006. The renewal plan also includes firm orders for 14 ultra-efficient new Boeing 787 Dreamliners, scheduled for delivery min 2010. Air Canada filed for CCAA protection on April 1, 2003 (Ontario Superior Court of Justice, Case No. 03-4932) and filed a Section 304 petition in the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Mr. Justice Farley sanctioned Air Canada's CCAA restructuring plan on Aug. 23, 2004. Sean F. Dunphy, Esq., and Ashley John Taylor, Esq., at Stikeman Elliott LLP, in Toronto, serve as Canadian Counsel to the carrier. Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher, serve as the Debtors' U.S. Counsel. When the Debtors filed for protection from their creditors, they listed C$7,816,000,000 in assets and C$9,704,000,000 in liabilities. On September 30, 2004, Air Canada successfully completed its restructuring process and implemented its Plan of Arrangement. The airline exited from CCAA protection raising $1.1 billion of new equity capital and, as of September 30, has approximately $1.9 billion of cash on hand. As of December 31, 2004, Air Canada's shareholders' deficit narrowed to CDN$203 million compared to a $4.155 billion deficit at December 31, 2003. (Air Canada Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALDERWOODS GROUP: Four Directors Acquire 3,467 Common Shares ------------------------------------------------------------ In separate regulatory filings with the Securities and Exchange Commission, four directors of Alderwoods Group, Inc., report that they acquired an aggregate of 3,467 shares of the Company's common stock in May 2005: Securities Beneficially Owned Director Shares Acquired Following Transaction -------- --------------- --------------------- Lloyd E. Campbell 1,908 11,168 Charles M. Elson 257 27,959 David R. Hilty 350 15,797 Olivia F. Kirtley 952 17,359 The shares acquired by Ms. Kirtley and Mr. Elson were issued in the form of deferred stock credited to a "participant account" in the name of Ms. Kirtley and Mr. Elson. Alderwoods Group is the second largest operator of funeral homes and cemeteries in North America, based upon total revenue and number of locations. As of June 19, 2004, the Company operated 716 funeral homes, 130 cemeteries and 61 combination funeral home and cemetery locations throughout North America. Of the Company's total locations, 59 funeral homes, 53 cemeteries and four combination funeral home and cemetery locations were held for sales as of June 19, 2004. The Company provides funeral and cemetery services and products on both an at-need and pre-need basis. In support of the pre-need business, the Company operates insurance subsidiaries that provide customers with a funding mechanism for the pre-arrangement of funerals. (Loewen Bankruptcy News, Issue No. 99; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As previously reported in the Troubled Company Reporter on July 27, 2004, Standard & Poor's Ratings Services it affirmed its 'B+' corporate credit rating on the funeral home and cemetery operator Alderwoods Group, Inc., and assigned its 'B' debt rating to the company's proposed $200 million senior unsecured notes due in 2012. At the same time, Standard & Poor's also assigned its 'BB-' senior secured bank loan rating and its '1' recovery rating to Alderwoods' proposed $75 million revolving credit facility, which matures in 2008, and to its proposed term loan B, which matures in 2009. The existing term loan had $242 million outstanding at March 27, 2004, but will be increased in size. The bank loan ratings indicate that Standard & Poor's expects a full recovery of principal in the event of a default, based on an assessment of the loan collateral package and estimated asset values in a distressed default scenario. The company is expected to use the proceeds from the new financings to redeem $320 million of 12.25% senior unsecured notes, repay a $25 million subordinated loan, and fund transaction costs. As of March 27, 2004, the company had $614 million of debt outstanding. ANDRE TATIBOUET: Wants to Hire Pat Choi as Real Estate Broker ------------------------------------------------------------- Andre S. Tatibouet asks the U.S. Bankruptcy Court for the District of Hawaii for permission to employ Pat Choi Realty as his Real Estate Broker. The Debtor wants Pat Choi to market and sell his residence located at 3131 Noela Street in Honolulu, Hawaii, for $18,750,000. The Debtor says he no longer needs the house and its prompt sale is necessary to obtain more cash. Patricia Choi, the principal broker, tells the Court that the Firm will be paid a 4.5% commission of the house's selling price. Pat Choi assures the Court that it does not represent any interest adverse to the Debtor or his estate. Andre S. Tatibouet owns the Coral Reef Hotel in Hawaii and filed for chapter 11 protection on April 5, 2005 (Bankr. D. Hawaii Case No. 05-00829). James A. Wagner, Esq., at Wagner Choi & Evers, represents Mr. Tatibouet. Mr. Tatibouet estimates his assets and liabilities between $10 million and $50 million. A.P.I. INC: Wants $14 Mil. Asbestos Insurance Settlement Approved ----------------------------------------------------------------- A.P.I. Inc. asks the U.S. Bankruptcy Court for the District of Minnesota to approve a settlement agreement with Great American Insurance Company and Agricultural Insurance Company. Great American and Agricultural Insurance Parties issued insurance policies to the Company. In the early to mid-1980's, the Debtor began tendering asbestos claims to a number of its insurers, including Great American and Agricultural Insurance. While Great American and Agricultural Insurance have paid substantial amounts for claims under those policies, the parties dispute the nature and extent of Great American and Agricultural Insurance's obligations under these policies. This dispute has been the subject of numerous settlement discussions and attempts at mediation over the course of the last year and is also the subject of pending coverage litigation in the Ramsey County District Court (Court File No.: 62-C9-02). The parties agree that: (1) Great American and Agricultural Insurance will pay $14 million to the Asbestos Settlement Trust to be created under a chapter 11 plan; (2) Great American and Agricultural Insurance will assign their rights to assert contribution claims to the Debtor; (3) the Debtor will surrender all rights in the insurance policies; and (4) the parties will exchange mutual releases. Faye Knowles, Esq., at Fredrikson & Byron, P.A., in Minneapolis, Minnesota, tells the Court that the Coverage Litigation has been pending since 2002. Even if the Debtor were to ultimately prevail at trial, due to probable appeals, the Debtor would likely face years of delay before any judgment could be collected, in the absence of this settlement. Headquartered in St. Paul, Minnesota, A.P.I. Inc., f/k/a A.P.I. Construction Company -- http://www.apigroupinc.com/-- is a wholly owned subsidiary of the API Group, Inc., and is an industrial insulation contractor. The Company filed for chapter 11 protection on January 5, 2005 (Bankr. D. Minn. Case No. 05-30073). James Baillie, Esq., at Fredrikson & Byron P.A., represents the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed total assets of $34,702,179 and total debts of $63,000,000. ATA AIRLINES: Chicago Express Wants to Sell Assets to CSC for $1MM ------------------------------------------------------------------ Chicago Express Airlines, Inc., seeks the U.S. Bankruptcy Court for the Southern District of Indiana's permission to sell certain of its assets to CSC Investment Group, Inc., the second highest bidder at the March 31, 2005 auction. The proposed transaction transfers certain assets of Chicago Express for $1.25 million, subject to the finalization of a definitive agreement, Terry E. Hall, Esq., at Baker & Daniels, LLP, in Indianapolis, Indiana, relates. Chicago Express consulted the Official Committee of Unsecured Creditors, the Air Transportation and Stabilization Board, and Southwest Airlines, Inc., in selecting CSC Investment to replace Okun Enterprises, Inc., as winning bidder. Okun Enterprises had earlier withdrawn its commitment to purchase Chicago Express. Ms. Hall says no contracts are implicated for assumption and assignment in the proposed sale to CSC Investment. 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 Nos. 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. (ATA Airlines Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Wants to Reject Pitney Bowes Contracts ---------------------------------------------------- Since 2001, ATA Airlines, Inc., leased and used certain postage and mailing equipment owned by Pitney Bowes Credit Corporation under: -- an Equipment Lease, dated August 3, 2001; -- an Equipment Maintenance Agreement, dated September 10, 2001; and -- a Soft-Guard Agreement, dated September 10. Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis, Indiana, relates that ATA Airlines used the equipment at a reservation facility in Chicago, Illinois. However, the Chicago Reservation has been closed, and the lease to the facility has been rejected pursuant to the Court's March 21, 2005 Order. Hence, ATA Airlines no longer has any need for the equipment or the ancillary services provided under the Contracts. Pursuant to Section 365 of the Bankruptcy Code, the Debtors seek the U.S. Bankruptcy Court for the Southern District of Indiana's authority to reject the Contracts. The Debtor propose that the rejection be effective when they notify Pitney Bowes that they are relinquishing possession of the equipment, and identify the location of the equipment to Pitney Bowes. 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 Nos. 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. (ATA Airlines Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATHLETE'S FOOT: Wants Until Aug. 8 to Decide on Remaining Leases ---------------------------------------------------------------- Athlete's Foot, LLC, and its debtor-affiliate ask the U.S. Bankruptcy Court for the Southern District of New York to extend, until Aug. 8, 2005, the period within which they must assume, assume and assign, or reject unexpired leases and executory contracts. The Debtors tell the Court that they are party to 12 unexpired non-residential real property leases. The Debtors remind the Court that the current deadline for them to decide what to do with the leases expires on June 23, 2005. The Debtors are in the midst of negotiating assumption and assignments with subtenants and have begun discussions with others. The Debtors say that if an extension is not granted, they will not be able to conclude the negotiations and the valuable lease interests will be lost on June 23. Bonnie Lynn Pollack, Esq., at Angel & Frankel, P.C., assures the Court that the Landlords are not prejudiced by this extension. The Debtors are current on the payment of all post-petition rent. Ms. Pollack further tells the court that while the landlords are not prejudiced by an extension, the Debtors' are extremely prejudiced absent one. Headquartered in New York, New York, Athlete's Foot Stores, LLC, -- http://www.theathletesfoot.com/--operates approximately 125 athletic footwear specialty retail stores in 25 states. The Company and its debtor-affiliate filed for chapter 11 protection on December 9, 2004 (Bankr. S.D.N.Y. Case No. 04-17779). Bonnie Lynn Pollack, Esq., and John Howard Drucker, Esq., at Angel & Frankel, P.C. represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed total assets of $33,672,000 and total debts of $39,452,000. BEAR STEARNS: Moody's Junks $2.25 Million Class M Certificates -------------------------------------------------------------- Moody's Investors Service upgraded the rating of one class, downgraded the ratings of two classes and affirmed the ratings of thirteen classes of Bear Stearns Commercial Mortgage Securities Trust 2001-TOP4, Commercial Mortgage Pass-Through Certificates, Series 2001-TOP4 as: -- Class A-1, $336,992,693, Fixed, affirmed at Aaa -- Class A-2, $60,000,000, Floating, affirmed at Aaa -- Class A-3, $320,234,000, Fixed, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class B, $24,819,000, Fixed, upgraded to Aa1 from Aa2 -- Class C, $24,819,000, Fixed, affirmed at A2 -- Class D, $9,025,000, Fixed, affirmed at A3 -- Class E, $20,307,000, Fixed, affirmed at Baa2 -- Class F, $9,025,000, Fixed, affirmed at Baa3 -- Class G, $9,025,000, Fixed, affirmed at Ba1 -- Class H, $9,025,000, Fixed, affirmed at Ba2 -- Class J, $6,769,000, Fixed, affirmed at Ba3 -- Class K, $4,513,000, Fixed, affirmed at B1 -- Class L, $4,512,000, Fixed, downgraded to B3 from B2 -- Class M, $2,257,000, Fixed, downgraded to Caa1 from B3 As of the May 16, 2005 distribution date, the transaction's aggregate balance has decreased by approximately 5.8% to $850.3 million from $902.5 million at securitization. The Certificates are collateralized by 151 mortgage loans secured by commercial and multifamily properties. The loans range in size from less than 1.0% to 8.5% of the pool, with the top ten loans representing 34.9% of the pool. The pool consists of five shadow rated loans, representing 21.4% of the pool, and a conduit component, representing 78.6% of the pool. Three loans, representing 1.7% of the pool, have defeased and have been replaced with U.S. Government securities. The pool has not experienced any losses since securitization. Two loans, representing less than 1.0% of the pool, are in special servicing. Moody's is not estimating any losses on these loans at this time. Twenty loans, including three of the top ten loans (discussed below), are on the master servicer's watchlist. The watchlisted loans represent 23.7% of the pool. Moody's was provided with partial or full year 2004 operating results for 87.5% of the performing loans. Moody's loan to value ratio for the conduit component is 76.8%, compared to 76.4% at securitization. Class B has been upgraded due to stable overall pool performance and increased credit support. Classes L and M have been downgraded due to LTV dispersion. Based on Moody's analysis, 6.0% of the pool has a LTV greater than 100.0%, compared to 1.0% at securitization. The largest shadow rated loan is the 1350 Avenue of the Americas Loan ($72.6 million - 8.5%), which is secured by a 547,000 square foot Class A office building located in the Plaza District submarket of New York City. The property was 99.5% occupied as of December 2004, compared to 93.4% at securitization. Major tenants include: * Harper Collins (12.1% NRA -- lease expiration November 2020); and * Burberry (8.2% NRA - lease expirations in 2006 and 2011). The property's performance has improved since securitization due to higher occupancy and increased rents. The loan sponsor is Reckson Associates, a publicly traded REIT. Moody's current shadow rating is A1, compared to A2 at securitization. The second shadow rated loan is the Morris Corporate Center IV Loan ($40.3 million - 4.7%), which is secured by a 340,000 square foot Class A office complex located in Parsippany, New Jersey. The property is 100.0% leased through January 2010 to Aventis Pharmaceuticals, Inc., a subsidiary of Aventis S.A. (Moody's backed senior unsecured rating A1). Aventis vacated the property prior to securitization but has sublet approximately 80.0% of the premises. The loan is on the master servicer's watchlist due to the dark tenant. The loan sponsor is Lexington Corporate Properties Trust, a publicly traded REIT, and the New York Common Retirement Fund. Moody's current shadow rating is Baa3, the same as at securitization. The third shadow rated loan is the 155 Federal Street and 10 High Street Loan ($30.2 million -- 3.6%), which is secured by two adjacent office buildings totaling 285,000 square feet located in downtown Boston. The loan is on the master servicer's watchlist due to a decline in occupancy. The property was 77.8% occupied as of December 2004, compared to 93.0% at securitization. Net operating income for the first six months of 2004 annualized is $3.6 million, compared to $5.6 million at securitization. The Boston office market has realized a decrease in rental levels along with increased vacancy since securitization. Moody's current shadow rating is B3, compared to Baa2 at securitization. The fourth shadow rated loan is the 7000 Marina Boulevard Loan ($21.7 million - 2.6%), which is secured by a 84,500 square foot office building located just south of San Francisco in Brisbane (San Mateo County), California. The property is 100.0% occupied by Wal-Mart.com under a lease that expires in January 2012. The lease is guaranteed by Wal-Mart Stores, Inc. (Moody's senior unsecured rating Aa2). Although the property's cash flow has been stable since securitization, the San Francisco market has experienced significant declines in both occupancy and rental levels. The current market rent is estimated at $25.00 per square foot compared to the in-place rent of $65.00. Although there is minimal term risk because of Wal-Mart's guarantee, there is greater balloon risk due to the softness of the San Francisco office market. Moody's current shadow rating is Ba1, compared to Baa3 at securitization. The fifth shadow rated loan is the Tyson's Square Loan ($17.1 million - 2.0%), which is secured by a 163,000 square foot retail power center located in Tyson's Corner, Virginia. The property is 100.0% occupied, the same as at securitization. Major tenants include: * Marshalls (33.3% GLA - lease expiration December 2011); * Sports Authority (25.4% GLA - lease expiration April 2015); and * Comp USA (17.3% GLA - lease expiration November 2009). Moody's current shadow rating is A1, compared to A2 at securitization. The top three conduit loans represent 9.7% of the outstanding pool balance. The largest conduit loan is the Bridgewater Promenade Loan ($29.9 million - 3.5%), which is secured by a 234,000 square foot power center located in Bridgewater (Somerset County), New Jersey. The property is 100.0% occupied, the same as at securitization. The major tenants include: * Bed Bath & Beyond (17.2% GLA - lease expiration January 2010); * Babies "R" Us (16.0% GLA - lease expiration January 2014); and * Marshalls (13.5% GLA - lease expiration October 2009). Moody's LTV is 90.6%, essentially the same as at securitization. The second largest conduit loan is the East Gate Square - Phase I Loan ($27.5 million - 3.2%), which is secured by a 241,000 square foot power center located in Mount Laurel, New Jersey, a suburb of Philadelphia. The property is 100.0% occupied, the same as at securitization. Major tenants include: * Shop Rite (25.0% GLA - lease expiration June 2019); * Office Max (12.7% GLA - lease expiration June 2008); and * Linens-N-Things (12.5% GLA - lease expiration June 2008). Moody's LTV is 80.6%, compared to 87.7% at securitization. The third largest conduit loan is the York Galleria Loan ($25.1 million - 3.0%), which is a 50.0% pari-passu loan secured by a 767,000 square foot regional mall located in York, Pennsylvania. Anchors include Sears, J.C. Penney, Bon Ton and Boscov's. Bon Ton and Boscov's own their own parcels and respective improvements. Although the property's performance has been stable since securitization, the loan is on the master servicer's watchlist due to a decline in occupancy. The loan sponsor is CBL & Associates, a publicly traded REIT. Moody's LTV is 83.3%, compared to 83.7% at securitization. The pool's collateral is a mix of: * retail (42.0%), * office (26.5%), * multifamily (14.7%), * industrial and self storage (13.5%), * US Government securities (1.7%), * lodging (0.9%), and * healthcare (0.7%). Approximately 18.3% of the pool is comprised of loans secured by single tenant properties. The collateral properties are located in 28 states. The highest state concentrations are: * California (23.4%), * New Jersey (14.4%), * New York (10.1%), * Florida (5.7%), and * Massachusetts (5.6%). All of the loans are fixed rate. BI-LO LLC: S&P Rates Proposed $420 Mil. Senior Secured Loan at B ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to BI-LO LLC and a 'B' bank loan rating to the company's proposed $420 million senior secured credit facilities. The recovery rating is '3'. The outlook is stable. "The rating reflects high debt leverage, weak operating performance, and a short track record of operating as an independent company," said Standard & Poor's credit analyst Mary Lou Burde. Greenville, South Carolina-based BI-LO was purchased in January 2005 from its Dutch parent, Koninklijke Ahold N.V., for $567 million in cash plus a $100 million letter of credit in support of contingent consideration (based on proceeds from asset sales) by Lone Star Funds, a private investment company. Proceeds from the rated bank facilities, together with $150 million in equity from Lone Star and $93 million from a sale/leaseback, are being used to refinance bridge financing and provide additional liquidity. Pro forma for the refinancing, operating lease-adjusted debt leverage will be 5.4x (excluding synergies). If the company is successful in obtaining expected cost savings, total debt to EBITDA could improve to less than 5x at the end of 2005. Soft consumer spending and increasing competition from both conventional and nontraditional food retailers are pressuring sales and operating margins across the industry. BI-LO, which operates the BI-LO and Bruno's supermarket chains, has been especially vulnerable over the past two years, as its previous parent was focused on noncore issues associated with its accounting investigation along with supermarket operations. The stores also suffered from a lack of capital investment as Ahold needed to use cash flow for debt reduction. None of the accounting irregularities were related to BI-LO. BI-LO's sales and EBITDA fell in 2004, and the operating margin was 5.7%, well below the industry average of 7%. Including the achievement of partial synergies in 2005, this could potentially rise to over 6%. Although BI-LO operates in the fast-growing Southeastern U.S., competition is intense, and turning around negative sales trends will be challenging. In recent years, BI-LO has lost market share in certain markets, though its core stores hold the first or second position in the majority of their markets. BRIDGEPOINT TECH: Unsecured Creditors Get 5% Recovery Over 3 Years ------------------------------------------------------------------ The Honorable Frank R. Monroe of the U.S. Bankruptcy Court for the Western District of Texas confirmed the Amended Plan of Reorganization filed by BridgePoint Technical Manufacturing Corp. Judge Monroe entered a confirmation order on June 13, 2005, after determining that the Plan satisfies the 13 standards for confirmation stated in Section 1129(a) of the Bankruptcy Code. About the Plan The Plan provides for the full payment of administrative claims, priority non-tax claims and priority tax claims on the Effective Date. Silicon Valley Bank's $1,128,506 claim will be paid in full pursuant to the terms of its existing loan agreement with the Debtor. EOS' $9,231,000 claim will be exchanged for a 6% unsecured promissory note for $600,000. Claims of The CIT Group/Equipment Financing, Inc., Credence Capital Corporation, VenCore Solutions, LSC, Winthrop Resources Corp., Greater Bay Capital and Maxus Leasing Group, Inc., will receive payments in amounts agreed upon and approved by the Bankruptcy Court. The Debtor intends to recharacterize its equipment lease with General Electric Capital Corporation as a financing transaction. Pursuant to the Plan, the Debtor will retain two pieces of water prober equipment and will pay GECC $3,000 per month plus a 7% interest per annum after the Effective Date. General unsecured creditors owed $3 million in the aggregate will recover about 5% of their claims. Payments will be made quarterly over a three-year period 90 days after the Effective Date of the Plan. Equity interests will be cancelled. Headquartered in Austin, Texas, BridgePoint Technical Manufacturing Corp. -- http://www.bridgept.com/-- provides engineering, testing, packaging, and circuit board assembly services to semiconductor and computer companies. The Company filed for chapter 11 protection on September 3, 2004 (Bankr. W.D. Tex. Case No. 04-14555). Mark Curtis Taylor, Esq., at Hohmann & Taube, LLP, represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets of $1 million to $10 million and estimated debts of $10 million to $50 million. BUEHLER FOODS: Committee Taps FTI Consulting as Financial Advisors --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Buehler Foods, Inc., and its debtor-affiliates asks the U.S. Bankruptcy Court for the Southern District of Indiana for permission to employ FTI Consulting, Inc., as its financial advisors. FTI Consulting will: a) assist in the review of the Debtors' current and historical operating performance and their short-term cash flows; b) assist the Committee with information and analyses pursuant to the Debtors' DIP financing, including preparation for hearings regarding the use of cash collateral and DIP financing; c) assist and advise the Committee with respect to the Debtors' identification of core business assets and the disposition of assets or liquidation of unprofitable operations; d) assist in the review of financial information distributed by the Debtors to creditors, including cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is required; e) assist in the review of the Debtors' performance of cost and benefit evaluations with respect to the assumption and rejection of executory contracts and leases, and in the valuation of the present level of the Debtors' operations and identification of areas of potential cost savings; and f) provide all other business and financial consulting services that the Committee will require in the Debtors' chapter 11 cases. Steven Simms, a Senior Managing Director at FTI Consulting, discloses that the Firm will be paid a $50,000 monthly fee plus reimbursement of other expenses incurred by FTI Consulting during its term of engagement by the Committee. FTI Consulting assures the Court that it does not represent any interest materially adverse to the Committee, the Debtors or their estates. Headquartered in Jasper, Indiana, Buehler Foods, Inc., owns and operates grocery stores under the BUY LOW and Save-A-Lot banners in Illinois, Indiana, and Kentucky, North Carolina, and Virginia. The company also sells gas at about a dozen locations. In 2004 Buehler Foods acquired 16 Winn-Dixie stores in Louisville, Kentucky, and renamed them Buehler's Markets. Founded in 1940, the company is still run by the Buehler family. The Company and its debtor-affiliates filed for chapter 11 protection on May 5, 2005 (Bankr. S.D. Ind. Case No. 05-70961). Jerald I. Ancel, Esq., at Sommer Barnard Attorneys, PC, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets of $10 million to $50 million and debts of $50 million to $100 million. CAPITAL AUTO: Moody's Rates $30M Class D Asset-Backed Notes at Ba2 ------------------------------------------------------------------ Moody's Investors Service has assigned ratings of Prime-1, Aaa, A1, Baa3 and Ba2 to the notes issued by Capital Auto Receivables Asset Trust 2005-1 (CARAT 2005-1). The ratings are based on: * the quality of the underlying auto loans and their expected performance; * the strength of the transaction's structure; * the enhancement provided by subordination ranging from 6.50% to 1.00%, overcollateralization of 1.00% (as a percentage of the initial discounted pool balance), a fully funded non- declining 0.50% reserve account and available excess spread; and * the experience of General Motors Acceptance Corporation as servicer. The complete rating action is: Issuer: Capital Auto Receivables Asset Trust 2005-1 * $550,000,000 LIBOR + 0.01% Class A-1 asset-backed notes, rated Prime-1 * $450,000,000 LIBOR + 0.04% Class A-2a asset-backed notes, rated Aaa * $250,000,000 3.73% Class A-2b asset-backed notes, rated Aaa * $600,000,000 LIBOR + 0.06% Class A-3 asset-backed notes, rated Aaa * $760,000,000 4.05% Class A-4 asset-backed notes, rated Aaa * $229,825,000 LIBOR + 0.10% Class A-5 asset-backed notes, rated Aaa * $122,803,000 LIBOR + 0.375% Class B asset-backed notes, rated A1 * $46,051,000 4.73% Class C asset-backed notes, rated Baa3 * $30,701,000 6.50% Class D asset-backed notes, rated Ba2 This is GMAC's first public retail deal of the year. Like the company's 2004-2 securitization, this transaction marks a distinct departure from most recent CARAT transactions, in which the pools were comprised exclusively of low-interest subvened loans made with respect to new vehicles. The pool securing the 2005-1 notes was instead (as was the case in 2004-2) randomly selected from GMAC's portfolio according to much broader criteria. The result is that the 2005-1 pool is comprised, by principal balance, of loans made with respect to: * new vehicles (80.0%); * used vehicles (20.0%); * subvened receivables (72.8%); * nonsubvened receivables (27.2%) (all percentages unchanged from the initial 2004-2 pool); * contracts with original terms less then or equal to 60 months (74.4%, down from 82.9% in 2004-2); and * contracts with original terms greater than 60 months (25.6%, up from 17.1% in 2004-2). As a result of the inclusion of a broader array of receivable types in the 2005-1 pool, Moody's loss expectation is higher than it has been in the all new/all subvened CARAT transactions, as some of the receivable types experience higher losses. The modest negative of the inclusion of more longer-term contracts in the 2005-1 pool is offset by the lack of a revolving period, which was a key structural feature of the 2004-2 transaction. Five classes of notes bear floating rates of interest while the underlying auto loans bear a fixed rate. To mitigate interest rate risk, the trust has executed interest rate swaps with Aa2/Prime-1-rated HSBC Bank USA. The swap obligations of HSBC are also supported by back-up commitments of GMAC. Under each of the swaps, the trust will pay a fixed rate to HSBC and in return will receive an amount equal to LIBOR plus the relevant margin. GMAC, the servicer, is a wholly owned subsidiary of General Motors Corporation. GMAC's long-term senior unsecured debt is rated Baa2 and its commercial paper is rated Prime-2. Moody's outlook for the company is negative. The principal business of GMAC is financing the acquisition and sale of GM and other manufacturers' products by its franchised GM dealers. CATHOLIC CHURCH: Tucson Representatives Object to Some Tort Claims ------------------------------------------------------------------ A. Bates Butler III, the Unknown Claims Representative, and Charles L. Arnold, the Guardian Ad Litem, complain that Claim No. 25 is not on the tort victim form, and more information is needed. The Representatives ask the U.S. Bankruptcy Court for the District of Arizona to direct the Claimant to complete the tort victim claim before an objection is required. Claim No. 237 describes an abuse, but fails to provide any dates. Messrs. Butler and Arnold contend that the claim may be barred by the statute of limitations. Accordingly, the Representatives ask the Court to order the Claimant to provide dates and additional information. Upon receiving the additional information, the Representatives will determine if there are grounds for an objection. The Representatives tell the Court that Claim Nos. 92, 216, 218, 247, 250 and 251, on their faces, are barred by the statute of limitations. There is no information to suggest the statute was tolled for any reason. Claim No. 92 alleges an abuse that occurred in 1965 to 1977 when the victim was 32 years old. Claim No. 216 describes an abuse that occurred in 1977 or 1978 when the victim was 20 to 21 years old. Claim No. 218 alleges an abuse that occurred in 1979 to 1982 when the victim was 17 to 20 years old. Claim No. 247 describes an abuse that occurred in 1984 to 1987 when the victim was 31 to 34 years old. Claim No. 250 alleges an abuse that occurred in 1969 to 1972 when the victim was 10 to 13 years old. Claim No. 251 describes an abuse that occurred in 1974 to 1975 when the victim was 16 years old. The Representatives object to the six Claims. They also reserve the right to file further objections if it is determined that the Claims are not barred by the statute of limitations. The Roman Catholic Church of the Diocese of Tucson filed for chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on September 20, 2004, and delivered a plan of reorganization to the Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson Diocese. (Catholic Church Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000) CHAMPION ENTERPRISES: Moody's Affirms $89MM Senior Notes B3 Rating ------------------------------------------------------------------ Moody's Investors Services affirmed the ratings of Champion Enterprises, Inc. and changed the outlook to stable from negative to reflect the company's reduced debt balances, improvement in cash flows and margins, and recent sales growth. The speculative grade liquidity rating of SGL-2 has also been affirmed and indicates expected good liquidity for the coming 12 month period. Moody's affirmed these ratings for: Champion Enterprises, Inc.: * $89 million 7.625% senior notes, due 2009, rated B3; * Senior unsecured issuer rating, rated B3; * $400 million multiple seniority shelf registration, rated P(B3)/(P)Caa1/(P)Caa2; * Senior Implied, rated B1; * Speculative Grade Liquidity Rating, rated SGL-2. Champion Home Builders Co.: * $98 million 11.25% senior notes, due 2007, rated B2. Moody's changed Champion's ratings outlook to stable from negative. The change in outlook reflects company's decrease in leverage, improvement in free cash flows, and higher operating margins. The company's total debt decreased to $202 million for the first quarter of 2005 from $259 million the end of 2003. With total debt to capitalization for the same period decreasing to 66% from 92%. Champion's manufacturing margins rose to 4.7% of sales, the highest level since 1999 as the company is benefiting from an increase in net sales due to a higher average selling price. In the first quarter of 2005, manufacturing and retail net sales increased 14% and 29%, respectively, on a year over year basis. To accommodate the increase in demand, Champion is expanding its plant capacity in Arizona and Florida. However, the expansions will not have a significant effect on company's capital expenditures as capital expenditures for 2006 are only projected to increase to $15 million from $13 million in 2005. Moody's notes that the improvement in the company's performance has not yet been sufficient to warrant a positive outlook. The improvement in the company's margins was supported largely by price increases and product mix. For the first quarter of 2005, the company's retail operations sold 150 new and 72 used homes. This compares with 129 new and 89 used in the same period last year. Champion sold a total of 4,490 homes in the first quarter vs. 5,005 for the first quarter of 2004. The ratings outlook could become positive if recent price increases are sustained and volume levels are at least maintained. Additionally, Moody's would like to see an improvement in some of the weaker markets (primarily the Midwest) and free cash flow to total debt improves to over 10% from the low single digits. The ratings could improve if sales continue to strengthen, and sales volumes improve from current levels without reduction in margins. Moody's also has affirmed Champion's SGL-2 rating. The rating reflects the company's good liquidity supported by improvement in cash flow generation. On April 2, 2005, company's cash balance was $142 million and there were no near term debt maturities. Moody's believes that the company's high cash balance offsets the company's low revolver availability, and provides adequate support for its seasonal working capital swings. Moody's notes that company has poor alternative liquidity options as its assets are pledged to the senior credit facility. The company recently announced that it was in the process of selling its retail unit. The sale of its retail operations is expected to reduce the company's working capital requirements. Champion will keep its Advantage Homes retail operations that are based in California. However, the sale of its other retail units may have unanticipated consequences on the company's distribution network. Champion has a $75 million revolving credit facility with Wachovia Capital Finance Corporation that expires in 2006. The credit facility's availability is determined by the company's borrowing base, which was recently $62 million. However, because Champion had $61 million in letters of credit outstanding, the unused availability on its revolver is very low. Access to the revolver is not limited by covenant restrictions as they only take effect when the cash falls below $35 million. Champion's SGL ratings consider: * the high seasonality in working capital; * low revolver availability; and * lack of alternative liquidity sources. Due to the uncertainty in general economic conditions, Moody's has a cautionary view on the company's ability to pass on higher raw material costs and notes that higher inventory would affect Champion's working capital usage. Headquartered in Auburn Hills, MI, Champion Enterprises, Inc. is the manufactured housing industry's leading producer, with 2004 revenues of $1,150 million. CHL MORTGAGE: Moody's Rates Class III-B-4 Trust at B2 ----------------------------------------------------- Moody's Investors Service has assigned a rating of Aaa to the senior certificates issued in the CHL Mortgage Pass-Through Trust 2005-11 securitization of prime-quality hybrids, adjustable rate and negative amortization loans secured by first liens on one- to four-family residential properties. In addition, ratings ranging from Aa2 to B2 were assigned to various subordinate classes in the transaction. According to Moody's analyst Amita Shrivastava, the ratings of the certificates are based on: * the quality of the underlying mortgage; * 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 of 30-year adjustable rate loans, hybrids and negative amortization mortgage loans. The loans in groups 1 and 2 are hybrid mortgage loans, group 5 loans are adjustable rate loans with no fixed period and loans in groups 3, 4 and 6 are negative amortization loans. Credit quality of loans in groups 1 and 2 and groups 3 and 4 are similar to the quality of loans in Countrywide's other recent securitizations of hybrids and negative amortization loans. Groups 5 and 6 are unusual in that the loans in these two loan groups have principal balances greater than $1.0 million. Loan groups 1 and 2 are together referred to as aggregate group I, groups 3 and 4 as aggregate group II and loan groups 5 and 6 as aggregate group III. Moody's expects collateral losses in group I to range from 0.60% to 0.70%, in group II to range from 1.10% to 1.20% and in group III to range from 1.25% to 1.35%. 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. The complete rating actions are: Issuer: CHL Mortgage Pass-Through Trust 2005-11 Depositor: CWMBS, Inc. Master Servicer: Countrywide Home Loans Servicing LP * Class 1-A-1, Aaa * Class 1-A-2, Aaa * Class 1-X, Aaa * Class 2-A-1, Aaa * Class 3-A-1, Aaa * Class 3-A-2, Aaa * Class 3-A-3, Aaa * Class 3-X, Aaa * Class 4-A-1, Aaa * Class 4-A-2, Aaa * Class 4-X, Aaa * Class 5-A-1, Aaa * Class 5-A-2, Aaa * Class 5-X, Aaa * Class 6-A-1, Aaa * Class 6-A-2, Aaa * Class 6-X, Aaa * Class A-R, Aaa * Class I-M-1, Aa2 * Class I-B-1, A2 * Class I-B-2, Baa2 * Class II-M-1, Aa2 * Class II-B-1, A2 * Class II-B-2, Baa2 * Class III-M-1, Aa2 * Class III-B-1, A2 * Class III-B-2, Baa2 * Class III-B-3, Ba2 * Class III-B-4, B2 COFFEYVILLE RESOURCES: S&P Rates $525 Million Debts at BB- ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Coffeyville Resources LLC. At the same time, Standard & Poor's assigned its preliminary 'BB-' rating to Coffeyville's $275 million first lien senior secured loans (including the $50 million delayed draw loan), $100 million revolving credit facility, and $150 million letter of credit facility. Standard & Poor's also assigned its '1' recovery rating to the credit facilities that hold a first lien position. The '1' recovery rating indicates the high expectation for the full recovery of principal in the event of payment default. Furthermore, Standard & Poor's assigned its preliminary 'B' rating and '3' recovery rating to Coffeyville's $275 million senior secured second lien term loan, indicating the expectation for meaningful (50%-80%) recovery of principal in the event of payment default. The outlook is stable. The ratings are subject to final documentation. "The stable outlook on Coffeyville reflects the ability of the assets to sustain uncertain pricing scenarios given the hedge that is in place for the first four years," said Standard & Poor's credit analyst Arleen Spangler. The hedge allows Coffeyville to prepay a significant amount of the first lien debt during its term. Because of the tight supply/demand situation and the continued high price of crude oil, crack spreads should remain strong for the foreseeable future. Coffeyville is a midsize 100,000 barrel per day independent refiner located in Coffeyville, Kan. In addition to the refinery, Coffeyville also has an adjacent nitrogen fertilizer plant. COMBUSTION ENG'G: Owens-Illinois Can Pursue Third-Party Claim ------------------------------------------------------------- Owens-Illinois sought and obtained from the U.S. Bankruptcy Court for the District of Delaware relief of the automatic stay imposed by 11 U.S.C. Section 362(a) to allow it to assert a third-party claim against Combustion Engineering, Inc. On June 16, 2004, Arletta Pippen, as executrix of the Verna Watts estate and Charles Watts, Jr., as executor of the estate of Charles Watts, Sr., filed a suit against the Debtor and Owens- Illinois in the Superior Court of the State of Delaware [Case No. 02C-03-220]. The suit alleges injury caused by asbestos exposure. Owens-Illinois denied the charges while Combustion Engineering settled with the plaintiffs. Section 6304 of Title 10 of the Delaware Code states that once a plaintiff settles with a defendant, the remaining defendants are entitled to a reduction of any claim by the amount of consideration paid. Owens-Illinois seeks to add the Debtor to its case solely for the purpose of apportioning fault and reducing judgment for potential damages. The Chapter 11 Filing ABB Ltd.'s U.S. subsidiary, Combustion Engineering, Inc., filed for chapter 11 protection on February 17, 2003, and delivered its prepackaged plan to the U.S. Bankruptcy Court for the District of Delaware that day to halt and resolve the tide of asbestos-related personal injury suits brought against the companies. Over the dozen years prior to the chapter 11 filing -- according to information obtained from http://www.LitigationDataSource.com-- the number of claims against Combustion Engineering, its affiliates, ABB and former joint venture partners, skyrocketed: Year Asbestos Claims Asserted Against CE ---- ----------------------------------- 1990 18,891 . 1991 19,000 . 1992 20,000 + 1993 21,000 + 1994 22,000 ++ 1995 23,842 +++ 1996 27,577 ++++++ 1997 28,976 +++++++ 1998 28,264 ++++++ 1999 33,961 ++++++++++ 2000 39,138 +++++++++++++ 2001 54,569 ++++++++++++++++++++++++ 2002 79,204 ++++++++++++++++++++++++++++++++++++++++ CE is named as a defendant in cases pending in multiple jurisdictions, with plaintiffs alleging injury as a result of exposure to asbestos in products manufactured or sold by CE or that was contained in materials used in CE's construction or maintenance projects. Combustion Engineering's History Combustion Engineering was formed in Delaware in 1912 as The Locomotive Superheater Co. and manufactured and sold superheaters for steam locomotives. From the 1930s forward, CE's core business is designing, selling and erecting power- generating facilities, including major steam generators. CE also services large steam boilers and related electrical power generating equipment. From the 1930s through the 1960s, asbestos insulation was used on many CE boilers. Bankruptcy Professionals Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart LLP, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent Combustion Engineering. The Blackstone Group, L.P., provides CE with financial advisory services. David M. Bernick, Esq., at Kirkland & Ellis, provides legal advice to ABB. The CE Settlement Trust, holding the largest unsecured claim against CE's estate, is represented by Hasbrouck Haynes, Jr. CPA, at Haynes Downard Andra & Jones LLP. COMM 2001-J2: Moody's Affirms $11.96MM Class H Certificates at B1 ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of sixteen classes of COMM 2001-J2, Commercial Mortgage Pass-Through Certificates as: -- Class A-1, $252,750,512, Fixed, affirmed at Aaa -- Class A-1F, $25,853,854, Floating, affirmed at Aaa -- Class A-2, $405,000,000, Fixed, affirmed at Aaa -- Class A-2F, $420,000,000, Floating, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class XC, Notional, affirmed at Aaa -- Class XP, Notional, affirmed at Aaa -- Class B, $91,840,000, Fixed, affirmed at Aa2 -- Class C, $115,910,000, Fixed, affirmed at Baa1 -- Class D, $31,636,000, Other Non-Fixed, affirmed at Baa2 -- Class E, $27,369,000, Other Non-Fixed, affirmed at Baa3 -- Class E-CS, $10,000,000, Fixed, affirmed at Baa3 -- Class E-IO, Notional, affirmed at Baa3 -- Class F, $13,550,000, Other Non-Fixed, affirmed at Ba1 -- Class G, $33,201,000, Other Non-Fixed, affirmed at Ba3 -- Class H, $11,969,332, Fixed, affirmed at B1 The Certificates are collateralized by eleven fixed-rate mortgage loans secured by 14 properties. As of the May 16, 2005 distribution date, the transaction's aggregate certificate balance has decreased by approximately 4.4% to $1.45 million from $1.51 million at closing as a result of scheduled loan amortization. Pool performance has been mixed with three loans, representing 29.1% of the pool, exhibiting performance worse than anticipated and the balance of the pool exhibiting performance in-line with or exceeding expectations. Moody's is therefore affirming all of the above Classes. The Citigroup Center Loan ($326.6 million - 22.6%) is secured by Citigroup Center, a 1.6 million square foot Class A office building located in New York City. The building is currently 94.2% leased, compared to 99.9% at securitization. The largest tenant is Citibank N.A. (Moody's senior unsecured rating Aa1; stable outlook), which leases approximately 34.0% of the building. The borrower is an affiliate of Boston Properties, Inc. Moody's considers in-place rent to be in-line with current market rates. This fixed rate loan matures in May 2011. The loan amortizes on a 30-year schedule and has amortized by approximately 4.7% since securitization. There is a junior participation interest in an approximate amount of $172.2 million held outside the trust. Moody's loan to value ratio is 52.7%, compared to 57.2% at Moody's last full review in November 2002 and compared to 58.0% at securitization. Moody's current shadow rating is A1, compared to A3 at last review and at securitization. The AT&T Building Loan ($215.8 million -- 15.0%) is secured by a Class B office and telecommunications building located at 32 Avenue of the Americas in lower Manhattan. The building was approximately 79.2% occupied as of February 2005, compared to 83.6% at securitization. Prior to June 2003 the loan was in special servicing for a loan modification. Principal payments were deferred through March 2006 at which time the loan commences amortizing on a 25-year schedule. Property vacancy increased due to the bankruptcy and subsequent lease rejection of Global Crossing Holdings, Ltd. (9.4% of NRA). Existing tenants include: * AT&T Corp. (31.8% of NRA -- lease expiration July 2010; Moody's senior unsecured rating Ba1; on review for possible upgrade); * Qwest Communications International, Inc. (14.6% of NRA - lease expiration August 2020); and * MCI Communications Corporation (9.2% of NRA - lease expiration September 2015). Increases in vacancy and operating costs have resulted in decreased cash flow since securitization. The borrower is an affiliate of Rudin Family Holdings, one of New York City's largest private real estate organizations. This fixed rate loan matures in August 2011. The loan has amortized by approximately 3.5% since securitization. Moody's LTV is in excess of 100.0%, compared to 78.8% at securitization. The loan was shadow rated Baa2 at securitization. The Willowbrook Mall Loan ($167.9 million - 11.6%) is secured by approximately 496,600 square feet of mall shop space in Willowbrook Mall, a 1.5 million square foot super-regional mall located in Wayne, New Jersey. Willowbrook Mall, considered one of the top malls in the region, is anchored by: * Macy's and Bloomingdale's (parent Federated Department Stores, Inc. - Moody's senior unsecured rating Baa1; on review for possible downgrade); * Lord & Taylor (parent The May Department Stores Company - Moody's senior unsecured rating Baa2; on review for possible downgrade);and * Sears (Moody's senior unsecured shelf (P)Ba1; stable outlook). The borrower is an affiliate of General Growth Properties, Inc. (Moody's senior unsecured rating (P)Ba2; stable outlook). This fixed rate loan matures in July 2011 and amortizes on a 30-year schedule. The loan has amortized by approximately 3.8% since securitization. Moody's LTV is 64.6%, compared to 69.5% at last review and compared to 68.5% at securitization. Moody's current shadow rating is Baa1, compared to Baa2 at last review and at securitization. The Wyndham Anatole Hotel Loan ($144.5 million -- 10.0%) is secured by a 1,614-room convention hotel located in the Market Center area of Dallas, Texas. The hotel features more than 333,000 square feet of meeting/function space. Hotel occupancy averaged 57.3% for calendar year 2004, compared to 67.3% at securitization. RevPAR and the ADR for the same period were $71.67 and $125.06 respectively, compared to $90.07 and $133.90 at securitization. The property manager is Wyndham Management Corporation. This fixed rate loan matures in August 2011 and amortizes on the basis of a 25-year schedule. The loan has amortized by approximately 5.9% since securitization. There is additional debt in the form of a mezzanine loan in the original amount of $23.5 million. Moody's LTV is 65.9%, compared to 63.8% at last review and compared to 66.3% at securitization. Moody's current shadow rating is Baa2, compared to Baa1 at last review and compared to Baa2 at securitization. The Guardian Life Building Loan ($128.3 million - 8.9%) is secured by three parcels known as: 1) Seven Hanover Square (the "Guardian Life Tower Property"); 2) 46 Water Street; and 3) 78 Pearl Street, all located in the financial district of New York City. As of December 2004 the properties were 98.0% leased, compared to 100.0% at securitization. The largest tenant, occupying approximately 88.0% of total area, is The Guardian Life Insurance Company of America (Moody's insurance financial strength rating A2). Guardian Life contributes approximately 93.1% of total base rental revenue with leases expiring in September 2019. The Guardian Life Tower Property serves as Guardian Life's headquarters. The loan sponsor is the Milstein family, a major property owner in New York City. This fixed rate loan has an Anticipated Repayment Date in June 2011. The loan amortizes on the basis of a 30-year schedule. The loan has amortized by approximately 3.8% since securitization. Moody's LTV is 77.9%, compared to 71.8% at last review and compared to 70.6% at securitization. Market rent in the South Ferry Financial District has fallen approximately 27.0% since securitization. According to Torto Wheaton, rents fell from $41.48 PSF in 2002 to $30.41 PSF in the first quarter of 2005. Market vacancy has increased slightly from 11.2% to 12.4% during the same period. Moody's current shadow rating is Baa2, compared to A3 at last review and at securitization. COMMERCIAL FEDERAL: Moody's Reviews Ba2 Rating on Senior Debts -------------------------------------------------------------- Moody's Investors Service affirmed the debt ratings of BancWest Corporation (subordinate debt at A3) and the ratings of its subsidiaries including Bank of the West and First Hawaiian, both of which are rated Aa3 for deposits. In a related action, Moody's placed the ratings of Commercial Federal Bank on review for possible upgrade. The bank is rated Ba1 for long-term deposits. Moody's actions follow the announcement that BancWest, a wholly- owned subsidiary of BNP Paribas, signed a definitive agreement to acquire Commercial Federal in a cash transaction valued at $1.36 billion. The affirmation of BancWest's ratings was based on Moody's view that the Commercial Federal acquisition will improve BancWest's market share in a select number of states such as Colorado, Nebraska, and Iowa. The acquisition will also add Missouri, Oklahoma, and Kansas to BancWest's footprint. Moody's said that overall the acquisition improves BancWest's geographic diversification. The rating agency added that BancWest's leverage will increase because of this acquisition. BancWest's high leverage is offset, in Moody's view, because the entity remains a strategic asset for BNP Paribas. Furthermore, the predictability of equity support from BNP Paribas to BancWest is underpinned by the role of US regulators. Moody's also added that double leverage at the holding company is high, which is incorporated in the rating of the holding company. The subordinated debt at the holding company is rated three notches lower than the senior obligations at its bank subsidiaries as opposed to the more common practice of a two notch distinction. Regarding Commercial Federal, the review will focus on the likelihood that the deal will be completed. If completed, obligations of Commercial Federal Bank will be assumed by Bank of the West. These are the ratings under review: Commercial Federal Bank: * Ba1 for long-term deposits; * Ba2 for other senior obligations; * Not Prime for short-term deposits and other short-term obligations; and * D+ for bank financial strength rating. BancWest's headquarters are in Honolulu, Hawaii and San Francisco, California and its consolidated assets are $51.4 billion. Commercial Federal Corporation is headquartered in Omaha, Nebraska and has consolidated assets of $10.4 billion. CREDIT SUISSE: S&P Puts Low-B Ratings on Six Certificate Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Credit Suisse First Boston Mortgage Securities Corp.'s $1.645 billion commercial mortgage pass-through certificates series 2005-C3. The preliminary ratings are based on information as of June 15, 2005. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Class A-1, A-2, A-3, A- AB, A-4, A-1-A, A-MFL, A-MFX, A-J, B, C, and D are currently being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.97x, a beginning LTV of 93.9%, and an ending LTV of 83.5%. A copy of Standard & Poor's complete presale report for this transaction can be found on RatingsDirect, Standard & Poor's Web- based credit analysis system, at http://www.ratingsdirect.com/ The presale can also be found on the Standard & Poor's Web site at http://www.standardandpoors.com/ PRELIMINARY RATINGS ASSIGNED Credit Suisse First Boston Mortgage Securities Corp. Class Rating Preliminary amount ----- ------ ------------------ A-1 AAA $53,490,000 A-2 AAA $176,827,000 A-3 AAA $79,614,000 A-AB AAA $62,204,000 A-4 AAA $376,932,000 A-1-A AAA $402,724,000 A-MFL AAA $82,271,000 A-MFX AAA $82,271,000 A-J AAA $135,747,000 B AA $34,965,000 C A+ $16,454,000 D A $14,397,000 E A- $16,454,000 F BBB+ $20,568,000 G BBB $16,454,000 H BBB- $18,511,000 J BB+ $6,170,000 K BB $8,228,000 L BB- $6,170,000 M B+ $4,113,000 N B $4,114,000 O B- $6,170,000 P N.R. $20,568,433 A X* AAA $1,645,416,433 A SP* AAA TBD A Y* AAA $184,259,564 RCS IO* N.R. $41,032,293 * Interest-only class with a notional dollar amount. N.R. -- Not rated. TBD -- To be determined. DATALOGIC INTERNATIONAL: Dismisses Kabani & Company as Accountants ------------------------------------------------------------------ DataLogic International, Inc., (OTC Bulletin Board: DLGI; Berlin, Frankfurt Stock Exchange: 779612) dismissed Kabani & Company, Inc., as the Company's independent accountants, effective June 8, 2005. Kabani reported on the Company's financial statements for the years ended December 31, 2004 and 2003. Their opinion did not contain an adverse opinion or a disclaimer of opinion, and was not qualified as to uncertainty, audit scope, or accounting principles but was modified as to a going concern. During the Company's most recent full fiscal years ended Dec. 31, 2004 and 2003, there were no disagreements with Kabani on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Kabani, would have caused them to make reference to the subject matter of such disagreements in connection with their reports; and there were no reportable events, as listed in Item 304 (a)(1)(v) of Regulation S-K. The Company has engaged Corbin & Company, LLP, to act as its independent auditors, effective June 9, 2005. "We thank Kabani and Company for their services in recent years and also look forward to working with Corbin & Company," commented DataLogic International's Chairman and CEO, Keith C. Moore. Going Concern Doubt Kabani expressed substantial doubt about DataLogic's ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004. The auditors point to the Company's $1,403,837 net loss in 2004, and $911,582 in 2003, and a $3,328,978 accumulated deficit and $168,515 stockholders' deficit at Dec. 31, 2004. At March 31, 2005, DataLogic International's balance sheet showed total liabilities exceeding total assets by $237,779. About DataLogic International, Inc. DataLogic International, Inc. -- http://www.dlgi.com/-- is a technology and professional services company providing a wide range of consulting services and communication solutions such as VoIP, GPS based mobile asset tracking, and secured mobile communications. The company also provides Information Technology outsourcing and private label communication solutions. DataLogic's customers include U.S. and international governmental agencies as well as a variety of international commercial organizations. D-BOX TECHNOLOGIES: Solvency is Restored, But Losses Continue ------------------------------------------------------------- D-BOX Technologies Inc. (TSX Venture Exchange: DBO.A) made tremendous progress during the fiscal year ended March 31, 2005. Quest In January 2005, D-Box launched its Quest product, a "plug and play" (easy to install) armchair with a built-in motion simulation system at an affordable price (approximately US$5,000). "The launch of this new product represents a considerable advance for D-Box: on the one hand, its lower price makes it accessible to more people; on the other hand, its ease of installation pleases consumers and retailers alike. The launch of Quest expanded our distribution network, which increased from 60 to 100 points of sale in the United States last year. Specifically, the company has added to our customer list the boutique-concept Tweeter Entertainment Architects of Las Vegas, a member of the Tweeter Home Entertainment Group, one of the leading retail chains specialized in the sale of upscale home theatre products," stated Michel Jacques, President and Chief Executive Officer of D-Box. Industry Recognition In a matter of months, Quest has won the praise of the entertainment industry: -- the Innovation 2005 Award at the Consumer Electronic Show in Las Vegas; -- one of the 50 most promising products, according to TechLiving magazine; -- one of the 39 most promising products, according to Popular Science magazine; -- selected for sale by the Tweeter Home Entertainment chain (160 stores); -- in June 2005, Audio Video Revolution magazine published a highly favourable benchmark test review of the Quest armchair (http://www.avrev.com/equip/dbox/index.html) D-Box's hundred-odd retailers and 13 distributors on the international scene are supervised by the team run by Robert de Bellefeuille, who was appointed Vice-President, Sales and Marketing in September 2004. A former director of D-Box, he brings to the Company some 30 years of experience in the sale and distribution of home audio and home theatre equipment. 2005 Operating Results For the fiscal year ended March 31, 2005, revenues totalled $3,111,967, up 37% over $2,270,364 the previous year. Excluding the revenues of $98,907 and $303,957 respectively generated in 2005 and 2004 by the sale of audio equipment, sales of motion simulators rose 53% from $1,966,413 in 2004 to $3,013,060 in 2005. This performance is noteworthy since Quest, launched in the fourth quarter, will contribute to D-Box's sales growth only as of the summer of 2005. Gross profit amounted to $1,335,241 (43% of sales) in 2005, compared with $857,076 (38% of sales) the previous year. The gross profit margin as a percentage increased thanks to the technological and manufacturing advances made during the year. Selling and marketing expenses totalled $1,587,816 (51% of sales), compared with $681,740 (30% of sales) last year. Administrative expenses stood at $1,154,268, compared with $583,999 the previous year. "Our advertising, promotion, exhibit, entertainment and administrative expenses increased considerably in order to accelerate our sales growth and to strengthen our administrative structure. The many initiatives undertaken in 2005 should have their full impact on our future results," added Mr. Jacques. Research and development expenses stood at $560,333, compared with $365,784 last year. In 2005, R&D efforts were focused primarily on perfecting the Quest motion simulator and developing a controller to offer motion codes online. In fact, since June 2005, customers can get motion codes via the Internet shortly after movies become available for sale or rent. For the year ended March 31, 2005, the Company incurred a net loss of $2,357,248 ($0.0732 per share), compared with a net loss of $1,088,843 ($0.0458 per share) the previous year. Fourth Quarter Operating Results For the quarter ended March 31, 2005, revenues totalled $913,036, up 52% over $598,139 for the same quarter the previous year. Gross profit amounted to $328,818, compared with $222,286 for the same quarter last year. The gross margin was 36%, versus 37% last year. Selling and marketing expenses stood at $649,113 (71% of sales), compared with $218,033 (36% of sales) for the fourth quarter of the previous year. Certain expenses, particularly connected with advertising and promotion, exhibits (five trade shows in 2005 versus three in 2004), and entertainment, increased significantly in order to improve the Company's product profile on the U.S. market. A large proportion of these expenses were accounted for in the last quarter of fiscal 2005. Administrative expenses were $361,495, compared with $222,683 for the fourth quarter of the previous year. This increase was required mainly to set up the administrative structure needed to promote the Company's effective management and growth. All in all, given the abnormally high selling, marketing, and administrative expenses, the net loss amounted to $866,531 or $0.0254 per share in the fourth quarter ended March 31, 2005, compared with $350,928 or $0.0140 per share for the same quarter the previous year. Liquidity and Financial Position Total assets amounted to $3,945,907 as at March 31, 2005, compared with $2,144,220 as at March 31, 2004. This increase is mainly attributable to the higher cash and cash equivalents, accounts receivable, inventories and prepaid expenses arising from the Company's more solid financial position and sales growth. Consequently, working capital rose to $2,329,593 at the end of fiscal 2005, up from $927,491 a year earlier. D-Box issued shares and warrants for total gross proceeds of $3,783,438 during fiscal 2005. At the date of this press release, the Company has sufficient cash to meet its working capital obligations and carry on its business for the next 12 months. As it is currently operating at a deficit, the Company could require the contribution of additional capital to continue developing and marketing its technology. Its future capital needs will thus come from its cash and from the issuance of shares or the sale of debentures and equity securities. Financial Highlights (in thousands, except per-share amounts) Fiscal Years Ended Quarters Ended March 31, March 31, 2005 2004 2005 2004 ---- ---- ---- ---- Revenues $ 3,112 $ 2,270 $ 913 $ 598 Gross profit $ 1,335 $ 857 $ 328 $ 222 Gross profit margin 43% 38% 36% 37% Selling and marketing expenses $ 1,588 $ 682 $ 649 $ 218 Administrative expenses $ 1,154 $ 584 $ 361 $ 223 Financial expenses $ 390 $ 314 $ 96 $ 55 R&D expenses $ 560 $ 366 $ 89 $ 77 Net loss $ 2,357 $ 1,089 $ 867 $ 351 Net loss per share $ 0.07 $ 0.05 $ 0.03 $ 0.01 Weighted average number of shares outstanding 32,224,666 23,755,868 35,337,676 25,498,588 As at As at March 31, March 31, 2005 2004 -------- -------- Cash and cash equivalents plus short-term investments $ 1,654 $ 518 Total assets $ 3,946 $ 2,144 Long-term debt $ 1,644 $ 1,516 Shareholders' equity $ 1,078 $ (276) Outlook Today, D-Box has more advanced and affordable products as well as an expanded distribution network. With the solid foundation built over the years, management is currently focusing on concluding partnership agreements with movie production houses as well as furniture and audiovisual equipment manufacturers. "If our discussions are successful, we should considerably enhance our products' visibility and appeal, which would definitely accelerate our sales growth," concluded Mr. McMaster, Executive Vice- President and Chief Financial Officer. D-Box Technologies Inc. designs, manufactures and markets a motion simulation technology targeted mainly to the home theatre and video game markets. Its products, marketed under the Odyssee(TM) and Quest brand names, provide perfectly synchronized motion with image and sound. Headquartered in Quebec, Canada, D-Box sells its products mainly in North America. The Company's shares are listed on the TSX Venture Exchange under the trading symbol DBO.A. "D-BOX" (R) is a registered trademark. "Odyssee" is a trademark of "D-BOX Technology Inc". As of March 31, 2005, D-Box's shareholders' equity grew to $1,078,000 compared to an $46,424 equity deficit at Dec. 31, 2004. DELPHI CORP: Completes $2.8 Billion Refinancing Plan ---------------------------------------------------- Delphi Corp. (NYSE: DPH) completed its $2.8 billion refinancing plan, which comprised of a $1.8 billion secured revolving credit facility and a $1.0 billion secured term loan. Delphi believes the completion of this refinancing plan provides the company with access to sufficient liquidity to continue to address its U.S. legacy cost issues during the current low GM North American production environment. "We are extremely pleased with this successful refinancing and the high level of support from our lead banks, JP Morgan and Citigroup, and our other lenders and investors. We achieved what we set out to accomplish in securing a financing deal that will provide us the liquidity and flexibility to continue our transformation," said John D Sheehan, Delphi's acting chief financial officer. "Additionally, we made a second contribution of $475 million to fund our U.S. pension plans, bringing our total contributions this quarter to $625 million and fulfilling our minimum 2005 pension contribution requirements." The term loan is due in full on June 14, 2011, while the revolving credit facility is available to the company through June 18, 2009. Upon completion of the refinancing, Delphi terminated its 364-day revolving credit line of $1.5 billion, which was due to expire on June 17, 2005. There were no outstanding borrowings under that facility. Refinancing Plan On June 14, 2005, Delphi Corporation reached an agreement with its syndicate of lenders to amend certain terms of its existing $1.5 billion five-year revolving credit facility. DELPHI CORP. signed a five-year THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 14, 2005, with HSBC Bank USA, National Association, CREDIT SUISSE, Cayman Islands Branch, DEUTSCHE BANK AG NEW YORK BRANCH, CITICORP USA, INC., and JPMORGAN CHASE BANK, N.A., as Lenders. JPMorgan serves as the Administrative Agent. The amendment increased the available credit under Delphi's Revolving Credit Facility to $1.8 billion and added a $1.0 billion six-year term loan. Under the new five-year facility, Delphi promises to comply with a Senior Secured Leverage Ratio covenant. Specifically, Delphi promises that the ratio of (a) Senior Secured Debt (all debt on account of borrowings from the lenders, non-trade payables, tooling and equipment in the ordinary course of business, services in respect of information technology provided in the ordinary course of business, all notes, bonds, debentures or other similar instruments, any conditional sale or other title retention agreement, and all Capital Lease Obligations) to (b) Consolidated EBITDA will not exceed: Maximum For the Fiscal Senior Secured Quarter Ending Leverage Ratio --------------- -------------- June 30, 2005 2.75 to 1.00 September 30, 2005 2.75 to 1.00 December 31, 2005 2.75 to 1.00 March 31, 2006 2.75 to 1.00 June 30, 2006 2.75 to 1.00 September 30, 2006 2.50 to 1.00 December 31, 2006 2.50 to 1.00 March 31, 2007 2.50 to 1.00 June 30, 2007 2.50 to 1.00 September 30, 2007 2.50 to 1.00 December 31, 2007 and thereafter 2.25 to 1.00 Each one-notch downgrade in the company's credit ratings from Moody's Ba1 rating, Standard & Poor's BB+ rating or Fitch's BB+ rating will increase the interest rate payable to the lenders by 0.50%. If Delphi's credit ratings fall below Moody's Ba1 rating, Standard & Poor's BB+ rating or Fitch's BB+ rating, the Commitment Fee payable to the Lenders increases from 0.375% to 0.50%. A full-text copy of the Five-Year Credit Agreement is available at no charge at http://researcharchives.com/t/s?27 As previously announced, upon the effectiveness of the new Facilities, Delphi terminated its 364-day revolving credit facility in the amount of $1.5 billion. As a result of the foregoing refinancing, Delphi has replaced its previous $3.0 billion revolving credit facility with $2.8 billion of available credit, the Term Loan portion of which has been fully funded. Prior to the amendment, there were no amounts outstanding under the $1.5 billion five-year revolving credit facility or the $1.5 billion 364-day facility, nor had these revolving credit facilities been previously borrowed upon. Delphi believes that the completion of this refinancing plan should provide Delphi with access to sufficient liquidity to continue to address its U.S. legacy cost issues during the current low GM North American production environment. As contemplated under the Facilities, on June 14, 2005 Delphi contributed $475 million to its U.S. pension plans, bringing the total contributions for the quarter to $625 million and fulfilling Delphi's 2005 minimum pension funding requirements. * * * As reported in the Troubled Company Reporter on June 15, 2005, Moody's Investors Service has affirmed the ratings of Delphi Corporation, Senior Implied at B2 and Senior Secured Bank Facilities at B1. The rating outlook is Negative. The bank loan rating was initially assigned on May 19, 2005, as part of the company's refinancing plan. The affirmation follows the disclosure by the company in its 8-K filing with the SEC on June 9, 2005 that its Audit Committee had concluded that Delphi "did not accurately disclose to credit rating agencies, analysts, or the Board of Directors the amount of sales of accounts receivable or factoring arrangements from the date of its separation from General Motors until year-end 2004." Moody's ratings on Delphi's existing and new debt instruments to be issued as part of the company's financing plan were based upon representations of Delphi's year-end 2004 financial condition and assessments of Delphi's prospective financial performance and liquidity which incorporated various assumptions. Among these were the existence and availability of both account receivable securitization facilities in the U.S. and Europe as well as factoring lines of credit to Delphi's European subsidiaries. The issues involved with the June 9 filing are not expected to impact the company's access to its current credit commitments, nor plans to close the expected $2.8 billion secured revolvoing credit and term loan facility. Both the existence and availability of the Receivable Financings and closing the $2.8 billion of financing remain critical elements to the ratings. Delphi has represented that it does not expect the June 9 disclosure to affect the availability under its bank credit facilities. Furthermore, Delphi expects to conclude its internal accounting investigation related to other matters, issue restated financial statements as necessary based on the conclusion of that investigation, and become current in its periodic reporting obligations on or before June 30th. Moody's ratings have also assumed the company would be able to do so within indicated time frames. The nature of the disclosures in the June 9 filing underscore concerns resident in the negative outlook. Among these issues are: * the company's ability to achieve sufficient levels of earnings and cash flow from its business over the near term to avoid significant further increases in indebtedness; * its ability to conclude its internal accounting investigation and release current financial information; * its ability to maintain an adequate liquidity profile; and * its ability to address internal control matters that relate to recent accounting and disclosure issues. Since Delphi's June 9th statement regarding the inaccurate disclosure, Moody's has engaged in a series of discussions with the company to re-validate representations and assumptions related to the company's current and projected financial condition and liquidity used to derive the ratings assigned on May 19. At this time no further material deviations from the information utilized in arriving at that rating assignment have been identified. Should any further inaccuracies in the information provided by management be discovered, or any subsequent revelations develop from the accounting investigation or restated financial statements with material adverse implications for creditors, the ratings could be subject to further downgrade. These ratings were affirmed: -- Delphi Corporation * Senior Implied, B2 * Senior Secured Term Loan, B1 * Bank revolving credit facility, B1 (incorporating the granting of security for the facility in conjunction with the new term loan) * Senior Unsecured, B3 * Short term, Not Prime * Shelf ratings: + (P)B3 for senior unsecured; + (P)Caa2 for subordinated; and + (P)Ca for preferred + Issuer rating, B3 -- Delphi Trust(s): * Backed preferred, Caa2 * Shelf ratings, (P)Caa2 EAGLEPICHER INC: Taps Miller Buckfire as Financial Consultant ------------------------------------------------------------- The Official Committee of Unsecured Creditors of EaglePicher Incorporated and its debtor-affiliates asks the United States Bankruptcy Court for the Southern District of Ohio, Western Division, for permission to employ Miller Buckfire & Co., LLC, as its financial advisor, nunc pro tunc to Apr. 29, 2005. Miller Buckfire will: (a) familiarize itself with the business, operations, properties, financial condition and prospects of the Debtors to the extent deemed necessary, appropriate and feasible; (b) advise and assist the Committee in evaluating, structuring, negotiating, implementing or otherwise responding to the financial aspects of any proposed restructurings, financing and/or sales transactions; (c) provide financial advice and assistance to the Committee in the analysis, evaluation, negotiation, confirmation and implementation of a plan of reorganization; (d) render such other financial advisory services in connection with the Plan, including, if requested by the Committee, participating in hearings before the Bankruptcy Court with respect to the matters upon which Miller Buckfire has provided advice and coordinating with the Committee's counsel with respect to testimony (including as to valuation) in connection therewith; (e) provide financial advice and assistance to the Committee in the analysis, evaluation and negotiation of any financing transaction (including any private issuance, sale or placement of equity, equity-linked or debt securities, instruments or obligations of the Debtors) and, as requested by the Committee, assist the Debtors' financial advisors in the identification of potential investors; and (f) provide financial advice and assistance to the Committee in the analysis, evaluation and negotiation of any proposed sale transaction (including the disposition of all or a significant portion of the Debtors' equity securities, assets or businesses)and, as requested by the Committee, assist the Debtors' financial advisors in the identification of potential buyers. The Committee believes that the Firm is well qualified to perform these services due to its extensive experience in providing strategic and financial advisory in corporate restructuring transactions. Marc D. Puntus, Esq., at Miller Buckfire disclosed that his Firm will not charge for its services on an hourly basis but will collect: (a) a $150,000 retainer; (b) a $150,000 monthly financial advisory fee; (c) a transaction fee equal to the greater of (i) $1,000,000; and (ii) 2.65% of the fair market value of all cash, debt, securities and other consideration received by the Debtors' unsecured creditors in excess of 60% of the face value of all unsecured claims, upon the consummation of any restructuring or sale. Mr. Puntus said his Firm did not receive any payments for prepetition services it rendered to the Committee. To the best of the Committee's knowledge, Miller Buckfire & Co., LLC, does not hold any interest adverse to the Debtors and their estates. Headquartered in Phoenix, Arizona, EaglePicher Incorporated -- http://www.eaglepicher.com/-- is a diversified manufacturer and marketer of innovative advanced technology and industrial products for space, defense, automotive, filtration, pharmaceutical, environmental and commercial applications worldwide. The company along with its affiliates and parent company, EaglePicher Holdings, Inc., filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P., represents the Company. When the Debtors filed for protection from their creditors, they listed $535 million in consolidated assets and $730 million in consolidated debts. EES COKE: Moody's Upgrades Series B Senior Secured Notes to Ba2 --------------------------------------------------------------- Moody's Investors Service upgraded the rating for EES Coke Battery Company, Inc.'s Series B Senior Secured Notes due 2007 to Ba2 from Ba3. The rating outlook is stable. The rating upgrade reflects an improved credit profile of EES Coke's primary customer International Steel Group, Inc. (ISG: senior unsecured Ba2) due in large part to its recently completed merger with Mittal Steel Co. NV (Mittal: Ba1 senior unsecured). The majority of the project's coking production is provided to five ISG steel facilities under existing long-term contractual arrangements maturing post the 2007 due date of the Notes. Collectively, these five steel facilities represent the bulk of ISG's manufacturing capacity. Their payment obligations however are without parental support from ISG. The rating is supported by continued improvement in the project's cash flow. Robust demand for coke has resulted in advantageous contractual pricing and Moody's expects the project's annual debt service coverage in all remaining years to exceed two times. The stable rating outlook reflects the EES Coke's strong operating performance. Bondholders benefit from an unconditional, irrevocable guarantee from DTE Energy Company (senior unsecured Baa2) equal to six months of debt service. EES Coke Battery Company Inc. is an indirect wholly-owned subsidiary of DTE Energy Services and is based in Ann Arbor, Michigan. ENRON CORP: Inks Pact to Settle SPA Claims with Mirant for $12M --------------------------------------------------------------- Prior to the commencement of Enron Corp. and its debtor- affiliates' Chapter 11 cases, Enron Asset Holdings, LLC, entered into a Stock Purchase Agreement with Mirant Corporation, Mirant EcoElectrica Investments I, Ltd., and Puerto Rico Power Investments, Ltd., dated July 25, 2001. The Mirant Entities agreed to purchase EAH's ownership in an electric generation facility in Puerto Rico, under the SPA terms and conditions. EAH is managed by Enron Finance Management, LLC, which, in turn, is controlled by Reorganized Debtor Enron Corp. On December 31, 2001, the Mirant Entities notified Enron that it was terminating the SPA due to an alleged failure of certain closing conditions caused by Enron's bankruptcy filing. On July 14, 2003, and various dates thereafter, Mirant Corp. and certain of its affiliated entities filed for bankruptcy in the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division. Mirant SPA Claims On October 15, 2002, the Mirant Entities filed Claim Nos. 13016, 13086, and 13098 against Enron seeking in part damages allegedly arising from the failed SPA Transaction. Enron objected to the Mirant SPA Claims asserting that no amounts were due. To supplement its objection, Enron asked for declaratory relief with respect to the Mirant SPA Claims. Enron SPA Claims On December 16, 2003, Enron filed Claim Nos. 6862, 6863, 6864, 6865, 6866 and 6867 in Mirant's Chapter 11 cases seeking damages arising from the failed SPA. Mirant sought to estimate the Enron SPA Claims in the U.S. Bankruptcy Court for the Northern District of Texas, where Mirant's cases are pending. SPA Claims Consolidation On November 22, 2004, the Texas Bankruptcy Court transferred the litigation concerning the Enron SPA Claims to Enron's Bankruptcy Court for trial in conjunction with the Mirant SPA Claims. On January 27, 2005, Mirant and Enron reached an agreement to, among others, settle the SPA Claims. By letter dated January 28, 2005, the attorneys for Mirant and Enron informed both Bankruptcy Courts that they had reached a settlement. By this motion, the Enron Debtors ask Judge Gonzalez to approve the Settlement Agreement. The salient terms of the Settlement are: A. Effective Date of Settlement Agreement The Settlement will only become effective when it is: -- executed by the Parties, and -- approved by the Mirant and Enron Bankruptcy Courts. B. Resolution of Enron SPA Claims Enron Claim No. 6862 will be allowed as a general unsecured claim against the Mirant Corp. Chapter 11 estate for $12,250,000. The rest of the Enron SPA Claims will be disallowed and expunged in their entirety. C. Resolution of the Mirant SPA Claims The Mirant SPA Claims will be disallowed and expunged in their entirety. D. Resolution of Pending Litigation Enron and Mirant will take all necessary steps to dismiss or withdraw the objections, the estimation application and the request for declaratory relief. E. Mutual Releases The Parties will mutually release each other from all claims, obligations, demands, actions, causes of action and liabilities relating to the Pending Litigation. Melanie Gray, Esq., at Weil, Gotshal & Manges, LLP, in New York, assures the Court that the Settlement Agreement is the product of arm's-length bargaining, without fraud or collusion. "If Enron and Mirant do not enter into the Settlement Agreement, or if [Judge Gonzalez] does not approve it, the Reorganized Debtors will be forced to expend significant estate resources litigating the [disputes], including pursuit of the Enron SPA Claims in Mirant's Chapter 11 cases," Ms. Gray adds. 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. The Confirmed Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. (Enron Bankruptcy News, Issue No. 146; Bankruptcy Creditors' Service, Inc., 15/945-7000) ENTERPRISE PRODUCTS: New Debt Prompts S&P's Stable Outlook ---------------------------------------------------------- Standard & Poor's Rating Services affirmed its 'BB+' corporate credit ratings on Enterprise Products Operating L.P. and Enterprise Products Partners L.P. and revised the outlook on the companies to stable from positive. As of March 31, 2005, Houston, Texas-based Enterprise Products Operating had about $4.2 billion of debt outstanding. Enterprise Products Partners does not issue debt but does guarantee Enterprise Products Operating's debt. "The outlook revision reflects our reassessment of Enterprise Products' business strategy in relation to new debt raised by parent Enterprise Products Co. Inc. (EPCO; unrated) and expectations that the partnership will likely seek growth opportunities at a pace that will be more aggressive than previously anticipated," said Standard & Poor's credit analyst Aneesh Prabhu. In addition to the pace of growth, the scale of some large and higher-risk projects, such as the Independence Hub has resulted in a change in Enterprise's business position to '7' (weak) from '6' (satisfactory). Business profiles are categorized from '1' (excellent) to '10' (vulnerable). The stable outlook on Enterprise Products reflects the expectation that its improved financial performance will continue. Standard & Poor's will continue to monitor the relationships between EPCO, Enterprise Products Partners, and TEPPCO Partners L.P. to determine whether or not the anticipated separateness is maintained and if there are any changes to the overall creditworthiness of the Duncan family businesses. EXIDE TECH: Amends Senior Credit Facility Agreement --------------------------------------------------- Exide Technologies obtained amendments to its senior credit facility. The amendments provide, among other things, for waivers of existing covenant defaults, relaxed EBITDA and leverage ratio covenants for fiscal 2006, an increase in the interest rate under the facility and an extension for three years of the Company's obligation to pay fees to the lenders upon a refinancing of the credit facility debt, as well as an expansion of the circumstances in which those fees are payable upon asset sales. "We appreciate the continued support of our lenders. Our new leadership team is committed to taking the appropriate actions to ensure that Exide continues to be a competitive organization," Gordon A. Ulsh, President and Chief Executive Officer said in a press release dated June 13, 2005. Specifically, under the Fourth Amendment to the senior credit facility, the Letter of Credit cap is increased to $50,000,000, from $40,000,000. Among other things, the Fourth Amendment also provides that: -- the Consolidated Interest Coverage Ratio should not be less than: Fiscal Quarter Ending closest to Ratio --------------------- ----- June 30, 2005 1.70:1.0 September 30, 2005 1.70:1.0 December 31, 2005 1.35:1.0 March 31, 2006 1.90:1.0 June 30, 2006 2.50:1.0 September 30, 2006 2.50:1.0 December 31, 2006 2.75:1.0 March 31, 2007 3.00:1.0 June 30, 2007 3.00:1.0 September 30, 2007 3.00:1.0 December 31, 2007 3.25:1.0 March 31, 2008 3.50:1.0 June 30, 2008 3.50:1.0 September 30, 2008 3.50:1.0 December 31, 2008 3.50:1.0 March 31, 2009 3.50:1.0 June 30, 2009 3.50:1.0 September 30, 2009 3.50:1.0 December 31, 2009 3.50:1.0 Each Fiscal Quarter ended thereafter 3.50:1.0 -- the Leverage Ratio at any time during a period should not be greater than: Period Ratio ------ ----- Last day of the 1st Fiscal Quarter of Fiscal Year 2006 to and including the day occurring prior to the last day of 2nd Fiscal Quarter of Fiscal Year 2006 7.40:1.0 Last day of the 2nd Fiscal Quarter of Fiscal Year 2006 to and including the day occurring prior to the last day of 3rd Fiscal Quarter of Fiscal Year 2006 7.20:1.0 Last day of the 3rd Fiscal Quarter of Fiscal Year 2006 to and including the day occurring prior to the last day of 4th Fiscal Quarter of Fiscal Year 2006 7.90:1.0 Last day of the 4th Fiscal Quarter of Fiscal Year 2006 to and including the day occurring prior to the last day of 1st Fiscal Quarter of Fiscal Year 2007 5.10:1.0 Last day of the 1st Fiscal Quarter of Fiscal Year 2007 to and including the day occurring prior to the last day of 2nd Fiscal Quarter of Fiscal Year 2007 4.50:1.0 Last day of the 2nd Fiscal Quarter of Fiscal Year 2007 to and including the day occurring prior to the last day of 3rd Fiscal Quarter of Fiscal Year 2007 4.25:1.0 Last day of the 3rd Fiscal Quarter of Fiscal Year 2007 to and including the day occurring prior to the last day of 4th Fiscal Quarter of Fiscal Year 2007 4.00:1.0 Last day of the 4th Fiscal Quarter of Fiscal Year 2007 to and including the day occurring prior to the last day of 2nd Fiscal Quarter of Fiscal Year 2008 3.75:1.0 Last day of the 2nd Fiscal Quarter of Fiscal Year 2008 to and including the day occurring prior to the last day of 3rd Fiscal Quarter of Fiscal Year 2008 3.50:1.0 Last day of the 3rd Fiscal Quarter of Fiscal Year 2008 to and including the day occurring prior to the last day of 4th Fiscal Quarter of Fiscal Year 2008 3.25:1.0 Last day of the 4th Fiscal Quarter of Fiscal Year 2008 to and including the day occurring prior to the last day of 3rd Fiscal Quarter of Fiscal Year 2009 3.00:1.0 Last day of the 3rd Fiscal Quarter of Fiscal Year 2009 to and including the day occurring prior to the last day of 4th Fiscal Quarter of Fiscal Year 2009 2.75:1.0 Last day of the 4th Fiscal Quarter of Fiscal Year 2009 and thereafter 2.50:1.0 -- the Adjusted Secured Debt Leverage Ratio at any time during a certain period should not be greater than: Period Ratio ------ ----- Last day of the 1st Fiscal Quarter of Fiscal Year 2006 to and including the day occurring prior to the last day of the 3rd Fiscal Quarter of Fiscal Year 2006 4.00:1.0 Last day of the 3rd Fiscal Quarter of Fiscal Year 2006 to and including the day occurring prior to the last day of 4th Fiscal Quarter of Fiscal Year 2006 4.25:1.0 Last day of the 4th Fiscal Quarter of Fiscal Year 2006 to and including the day occurring prior to the last day of 1st Fiscal Quarter of Fiscal Year 2007 2.75:1.0 Last day of the 1st Fiscal Quarter of Fiscal Year 2007 to and including the day occurring prior to the last day of 3rd Fiscal Quarter of Fiscal Year 2007 2.25:1.0 Last day of the 3rd Fiscal Quarter of Fiscal Year 2007 to and including the day occurring prior to the last day of 4th Fiscal Quarter of Fiscal Year 2007 2.00:1.0 Last day of the 4th Fiscal Quarter of Fiscal Year 2007 to and including the day occurring prior to the last day of 3rd Fiscal Quarter of Fiscal Year 2008 1.75:1.0 Last day of the 3rd Fiscal Quarter of Fiscal Year 2008 to and including the day occurring prior to the last day of 4th Fiscal Quarter of Fiscal Year 2008 1.50:1.0 Last day of the 4th Fiscal Quarter of Fiscal Year 2008 to and including the day occurring prior to the last day of 4th Fiscal Quarter of Fiscal Year 2009 1.25:1.0 Last day of 4th Fiscal Quarter of Fiscal Year 2009 and thereafter 1.00:1.0 -- the Consolidated EBITDA for any period ending on the last day of a Fiscal Quarter is significantly reduced and should not be less than: Fiscal Quarter Ending Closest to Amount --------------------- ------ March 31, 2005 $97,000,000 June 30, 2005 88,000,000 September 30, 2005 90,000,000 December 31, 2005 85,000,000 March 31, 2006 123,000,000 June 30, 2006 150,000,000 September 30, 2006 155,000,000 December 31, 2006 165,000,000 March 31, 2007 175,000,000 June 30, 2007 175,000,000 September 30, 2007 175,000,000 December 31, 2007 175,000,000 March 31, 2008 200,000,000 June 30, 2008 200,000,000 September 30, 2008 200,000,000 December 31, 2008 200,000,000 March 31, 2009 220,000,000 Each Fiscal Quarter ended thereafter 220,000,000 A full-text copy of the Fourth Amendment to Credit Agreement, among Exide Technologies, Exide Global Holding Netherlands C.V., the Lenders from time to time party hereto and Deutsche Bank AG New York Branch, as Administrative Agent, is available for free at http://ResearchArchives.com/t/s?22 A full-text copy of the Intercreditor Agreement dated as of March 18, 2005, reflecting changes from First Amendment to Intercreditor Agreement dated as of June 10, 2005, among Exide Technologies, the administrative agent under the senior credit facility, the trustee for the Company's two series of notes and the Pension Benefit Guaranty Corporation, is available for free at http://ResearchArchives.com/t/s?23 Headquartered in Princeton, New Jersey, Exide Technologies is the worldwide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. * * * As reported in the Troubled Company Reporter on May 23, 2005, Moody's Investors Service placed the ratings for Exide Technologies, Inc. and its foreign subsidiary Exide Global Holdings Netherlands CV on review for possible downgrade. Management announced that a preliminary evaluation of Exide's results for the fourth quarter ended March 2005 strongly indicates that the company will be in violation of its consolidated adjusted EBITDA and leverage ratios as of fiscal year end. Moody's considers this is a significant event, given that these covenants were all very recently reset during February 2005 in connection with Exide's partial refinancing of its balance sheet. The company has initiated amendment negotiations with its lenders, but will not have access to any portion of the $69 million of unused availability under its revolving credit facility until the amendment process is completed. Exide had approximately $76.7 million of cash on hand as of the March 31, 2005 fiscal year end reporting date. However, this amount had declined to about $42 million as of May 17, 2005 due to the company's use of cash to fund seasonally high first quarter working capital needs, as well as approximately $8 million in pension contributions and a required $12 million payment related to a hedge Exide has in effect. These ratings were placed on review for possible downgrade: -- Caa1 rating for Exide Technologies' $290 million of proposed unguaranteed senior unsecured notes due March 2013; -- B1 ratings for approximately $265 million of remaining guaranteed senior secured credit facilities for Exide Technologies and Exide Global Holdings Netherlands CV, consisting of: * $100 million multi-currency Exide Technologies, Inc. shared US and foreign bank revolving credit facility due May 2009; * $89.5 million remaining term loan due May 2010 at Exide Technologies, Inc.; * $89.5 million remaining term loan due May 2010 at Exide Global Holdings Netherlands CV.; * Euro 67.5 million remaining term loan due May 2010 at Exide Global Holdings Netherlands CV.; -- B2 senior implied rating for Exide Technologies, Inc.; -- Caa1 senior unsecured issuer rating for Exide Technologies, Inc. As reported in the Troubled Company Reporter on May 19, 2005, Standard & Poor's Ratings Services lowered its corporate credit rating on Exide Technologies to 'B-' from 'B+', and placed the rating on CreditWatch with negative implications. The rating action follows Exide's announcement that it likely violated bank financial covenants for the fiscal year ended March 31, 2005. Lawrenceville, New Jersey-based Exide, a manufacturer of automotive and industrial batteries, has total debt of about $750 million. The covenant violations would be a result of lower-than-expected earnings. Exide estimates that its adjusted EBITDA for the fiscal year ended March 31, 2005, will be only $100 million to $107 million, which is substantially below the company's forecast and 40% below the previous year. The EBITDA shortfall stemmed from high lead costs, low overhead absorption due to an inventory reduction initiative, other inventory valuation adjustments, and costs associated with accounting compliance under the Sarbanes- Oxley Act. Exide is working with its bank lenders to secure amendments to its covenants. "The company continues to be challenged by the dramatic rise in the cost of lead, a key component in battery production that now makes up about one-third of Exide's cost of sales," said Standard & Poor's credit analyst Martin King. FEDERAL-MOGUL: Has Until October 1 to Remove State Court Actions ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Federal-Mogul Corporation and its debtor-affiliates until October 1, 2005, to file notices to remove civil actions pending as of their bankruptcy petition date. According to Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., in Wilmington, Delaware, the extension will give the Debtors more time to determine which might be suitable for removal. Ms. McFarland says that with respect to actions unrelated to asbestos, the analysis is largely complete. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some US$6 billion. The Company filed for chapter 11 protection on October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed US$10.15 billion in assets and US$8.86 billion in liabilities. At Dec. 31, 2004, Federal-Mogul's balance sheet showed a US$1.925 billion stockholders' deficit. At Mar. 31, 2005, Federal-Mogul's balance sheet showed a US$2.048 billion stockholders' deficit, compared to a US$1.926 billion deficit at Dec. 31, 2004. (Federal-Mogul Bankruptcy News, Issue No. 81; Bankruptcy Creditors' Service, Inc., 215/945-7000) GE CAPITAL: Moody's Junks $20 Million Classes L & M Certificates ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes, downgraded the ratings of three classes and affirmed the ratings of ten classes of GE Capital Commercial Mortgage Corporation, Commercial Mortgage Pass-Through Certificates, Series 2001-2 as: -- Class A-2, $68,426,180, Fixed, affirmed at Aaa -- Class A-3, $107,961,958, Fixed, affirmed at Aaa -- Class A-4, $519,456,000, Fixed, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class B, $40,115,000, Fixed, upgraded to Aa1 from Aa2 -- Class C, $45,129,000, Fixed, upgraded to A1 from A2 -- Class D, $12,537,000, Fixed, upgraded to A2 from A3 -- Class E, $10,028,000, Fixed, upgraded to A3 from Baa1 -- Class F, $18,804,000, Fixed, affirmed at Baa2 -- Class G, $11,283,000, Fixed, affirmed at Baa3 -- Class H, $21,311,000, Fixed, affirmed at Ba1 -- Class I, $18,804,000, Fixed, affirmed at Ba2 -- Class J, $5,014,000, Fixed, affirmed at Ba3 -- Class K, $7,522,000, Fixed, downgraded to B2 from B1 -- Class L, $12,536,000, Fixed, downgraded to Caa1 from B2 -- Class M, $7,521,000, Fixed downgraded to Caa2 from B3 As of the June 13, 2005 distribution date, the transaction's aggregate balance has decreased by approximately 8.2% to $920.2 million from $1.0 billion at securitization. The Certificates are collateralized by 123 mortgage loans secured by commercial and multifamily properties. The loans range in size from less than 1.0% to 4.5% of the pool, with the top ten loans representing 24.8% of the pool. The pool consists of two shadow rated loans, representing 6.5% of the pool, and a conduit component, representing 93.5% of the pool. Three loans, representing 3.6% of the pool, have defeased and have been replaced with U.S. Government securities. One loan has been liquidated from the trust resulting in a realized loss of approximately $1.4 million. Six loans, representing 4.5% of the pool, are in special servicing. Moody's has estimated aggregate losses of $12.7 million for all of the specially serviced loans. Thirty-one loans, including six of the top ten loans, are on the master servicer's watchlist. The watchlisted loans represent 30.5% of the pool. Moody's was provided with partial or full year 2004 operating results for 93.4% of the performing loans. Moody's loan to value ratio for the conduit component is 90.4%, compared to 82.9% at securitization. The upgrade of Classes B, C, D and E is primarily due to increased subordination levels. The downgrade of Classes K, L and M is due to LTV dispersion and anticipated realized losses from the specially serviced loans. Based on Moody's analysis, 23.8% of the pool has a LTV greater than 100.0%, compared to 0.0% at securitization. Eleven loans, representing 8.6% of the pool, have debt service coverage of 0.9x or less based on the borrowers' reported operating performance and the actual loan constant. The largest shadow rated loan is the Holiday Inn -- 57th Street Loan ($41.8 million - 4.5%), which is secured by a 596-room full service hotel located in midtown Manhattan. The loan is on the master servicer's watchlist due to low debt service coverage. Occupancy and RevPAR for calendar year 2004 were 84.9% and $117.00 respectively, compared to 87.7% and $134.03 at securitization. Net cash flow for calendar year 2004 was $6.4 million, compared to $8.9 million at securitization. Moody's current shadow rating is Baa3, compared to A3 at securitization. The second shadow rated loan is the Lake Buena Vista Stores Loan ($18.2 million - 2.0%), which is secured by a 179,400 square foot factory outlet center located in Orlando, Florida. Although occupancy has remained stable since securitization at approximately 93.0%, the center has experienced a decline in rental income. Tenants occupying approximately 12.0% of the center are paying percentage rent in lieu of base rent. The largest tenant is Vanity Fair Factory Outlet (14.5% GLA - lease expiration July 2006). Net operating income for the first nine months of 2004 annualized is $2.4 million, compared to $3.2 million at securitization. The loan sponsor is Chelsea Property Group (Moody's senior unsecured rating Baa2), a publicly traded REIT. Moody's current shadow rating is Baa3, compared to A3 at securitization. The top three conduit loans represent 7.8% of the outstanding pool balance. The largest conduit loan is the One Capital Loan ($27.0 million - 2.9%), which is secured by two office buildings totaling 201,700 square feet located in downtown Sacramento, California. The loan is on the master servicer's watchlist due to a decrease in occupancy and low debt service coverage. At securitization, the two largest tenants were the State of California -- Parks & Recreation (32.2% NRA - lease expiration February 2011) and CalPERS (24.5% NRA). CalPERS vacated at lease expiration in July 2002. Only 7,409 square feet of the former CalPERS space has been released thus far. The property is currently 74.0% leased, compared to 94.0% at securitization. Moody's LTV is in excess of 100.0%, compared to 95.7% at securitization. The second largest conduit loan is the Meadowbrook Commons Loan ($25.1 million -- 2.7%), which is secured by a 173,000 square foot anchored retail center located in Freeport (Nassau County), New York. The property is 100.0% occupied, the same as at securitization. Major tenants include: * Stop N Shop (27.0% GLA - lease expiration October 2025); * Toys R Us (21.6% GLA - lease expiration January 2020); and * Marshalls (15.9% GLA - lease expiration January 2006). Moody's LTV is 85.8%, compared to 88.5% at securitization. The third largest conduit loan is the Dreamland Shopping Center & Lowe's Loan ($20.2 million -- 2.2%), which is secured by a Lowe's Home Improvement store and an adjacent 126,800 square foot anchored retail center located in Asheville, North Carolina. The loan is on the master servicer's watchlist for low debt service coverage. Although the property has maintained a stable occupancy of approximately 97.0%, rental income is lower than original projections. Major tenants include: * Lowe's Companies, Inc. (51.6% GLA - lease expiration October 2019; Moody's senior unsecured rating A2); * Best Buy Stores, LP (17.8% GLA - lease expiration January 2021); and * Bed Bath & Beyond, Inc. (14.8% GLA - lease expiration January 2016). Moody's LTV is 98.5%, compared to 91.3% at securitization. The pool's collateral is a mix of: * retail (28.1%), * multifamily (24.6%), * office and mixed use (24.0%), * industrial and self storage (13.1%), * lodging (6.6%), and * U.S. Government securities (3.6%). The collateral properties are located in 29 states. The highest state concentrations are: * California (21.2%), * New York (14.5%), * Florida (10.1%), * Texas (6.7%), and * Georgia (5.2%). All of the loans are fixed rate. GEERTSON LLC: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Geertson, LLC 1665 Burroughs Road Adrian, Oregon 97901 Bankruptcy Case No.: 05-02343 Chapter 11 Petition Date: June 16, 2005 Court: District of Idaho Debtor's Counsel: Howard R. Foley, Esq. Foley, Freeman, Borton & Stern, Chartered Heritage Building, Suite 100, 77 East Idaho, P.O. Box 10 Meridian, Idaho 83680 Tel: (208) 888-9111 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 2 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Washington Mutual Bank Real property of $4,800,000 199 North Capitol Boulevard Geertson, LLC Suite 501 Boise, ID 83702 Money Life Insurance Co. Real property of $485,710 Home Office Geertson, LLC 1740 Broadway New York, NY 10019 GENERAL MOTORS: Workers Has Until June 30 to Agree to Benefit Cuts ------------------------------------------------------------------ General Motors Corporation's board of directors gave the United Automobile Workers union until month-end to agree to cuts in its members' health care benefits. The board's move came on the heels of Chief Executive Officer Rick Wagoner's disclosure to cut 25,000 jobs by 2008 during the company's annual shareholders' meeting. Some local union leaders are willing to make concessions, but not to the extent that the company is asking, the New York Time reports. Absent an agreement by the end of the month, the Company will make a unilateral move to cut the worker's benefits on its own. Financial analysts says a cut on the Company's $6 billion annual health care contribution can help turn-around the company's finances. The company's labor contract will expire on 2007. About UAW The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America is one of the largest and most diverse unions in North America, with members in every sector of the economy. UAW-represented workplaces range from multinational corporations, small manufacturers and state and local governments to colleges and universities, hospitals and private non-profit organizations. The UAW has approximately 710,000 active members and over 500,000 retired members in the United States, Canada and Puerto Rico. There are more than 950 local unions in the UAW. About General Motors General Motors Corporation, the world's largest auto manufacturer, designs, manufactures, and markets vehicles primarily in North America under these nameplates: Chevrolet, Pontiac, GMC, Oldsmobile, Buick, Cadillac, Saturn, and HUMMER. * * * As reported in the Troubled Company Reporter on May 25, 2005, Fitch Ratings has downgraded the senior unsecured ratings of General Motors, GMAC and the majority of affiliated entities to 'BB+' from 'BBB-'. Fitch says the Rating Outlook for GM remains Negative. As reported in the Troubled Company Reporter on May 6, 2005, Standard & Poor's Ratings Services lowered its long- and short- term corporate credit ratings on General Motors Corp., General Motors Acceptance Corp., and all related entities to 'BB/B-1' from 'BBB-/A-3'. S&P says the rating outlook is negative. As reported in the Troubled Company Reporter on Apr. 11, 2005, Moody's Investors Service lowered the long-term and short-term ratings of General Motors Corporation to Baa3 and Prime-3 from Baa2 and Prime-2, and also lowered the long-term rating of General Motors Acceptance Corporation to Baa2 from Baa1. GMAC's short- term rating is affirmed at Prime-2. Moody's says the rating outlook for both companies is negative. These rating actions conclude Moody's review for downgrade that commenced on March 16 following GM's announcement of a significant negative revision of its 2005 earnings and cash flow outlook. HEALTHSOUTH CORP: Closes $200 Million Senior Unsecured Facility --------------------------------------------------------------- HealthSouth Corporation (OTC: HLSH) closed a $200 million senior unsecured term loan facility, the net proceeds of which, together with available cash, were used to repay the Company's $245 million 6.875% senior notes due June 15, 2005. This transaction allowed the Company to reduce its overall level of outstanding indebtedness. J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. acted as joint-lead arrangers and joint-bookrunners for the syndication of the new term loan facility. The facility, which was launched in late May, was increased from $150 million to $200 million based on strong investor demand. "We are very pleased with the strong, continued show of support from our existing lenders and the commitment of our new investors," said HealthSouth CFO John Workman. "The new term loan facility and the repayment of the 6.875% senior notes represent important steps in the continued improvement of our cost of capital, available liquidity and financial flexibility." About the Company HealthSouth Corp. -- http://www.healthsouth.com/-- is one of the nation's largest providers of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, operating facilities nationwide. * * * Notice of Late Filing HealthSouth filed a Form 12b-25 with the Securities and Exchange Commission saying that it will not be filing its 2004 Form 10-K on time due to the company's ongoing accounting reconstruction and restatement efforts. The company is currently targeting the filing of its 2004 Form 10-K in the fourth quarter of 2005. The company says it plans to file a comprehensive Form 10-K for the years ended Dec. 31, 2000, through Dec. 31, 2003, by the middle of the second quarter 2005. This comprehensive Form 10-K will contain restated financial statements for periods which previously had been reported and initial financial statements for the other periods covered by the report. "Our external auditor is now auditing these documents and is taking steps to ensure a thorough review," said HealthSouth CFO John Workman. "We have been working extensively with external resources to ensure that our accounting records are reconstructed thoroughly and our financial statements and other disclosures are prepared properly. This process has consumed more than 500 man- years of external labor resources and required millions of lines of adjusting journal entries. It is our intention to not rush a process of this importance to reach an earlier, self-imposed deadline." HEARTLAND TECH: Files for Chapter 11 Protection in N.D. Illinois ---------------------------------------------------------------- Heartland Technology, Inc., and four debtor-affiliates -- Solder Station-One, Inc., HTI P.G. Design Electronics, Inc., HTI Z Corporation and Zecal Technology, LLC -- filed for chapter 11 protection in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division. After exhausting all other restructuring alternatives, the Debtors determined that a chapter 11 filing is appropriate to maximize the value of their assets for the benefit of creditors. As of Jan. 31, 2005, the Debtors owed their lenders $14,351,822 debts and $3.3 million under some subordinated notes. DIP Financing The Debtors do not have any operating businesses. In order to meet their obligations without being forced to convert to a chapter 7 liquidation proceeding, the Debtors ask the Court for permission to borrow up to $175,000 from Heartland Partners. The new borrowings must be secured by post-petition super-priority liens under 11 U.S.C. Sec. 364 because, the Debtors tell the Court, their only tangible asset -- the Class B limited partnership interests in Heartland Partners -- is fully encumbered by the debt owed to Heartland Partners under the Heartland Partners Line of Credit and the Oldco Notes. Plan of Liquidation Along with its bankruptcy petition, the Debtors delivered their Joint Plan of Liquidation to the Bankruptcy Court. The Liquidating Plan contemplates the liquidation or other dispositions of the Debtors' assets. The Plan provides for a comprehensive settlement of all issues between the Debtors, Heartland Partners and CMC Heartland Partners. The Debtors' remaining assets and the funds received from the Heartland Partners Settlement Payments will fund distributions to the Debtors' creditors. The Plan also provides for the transfer of the Debtors' assets on the effective date of the Plan to a liquidating trust to be administered by a liquidating trustee. The Liquidating Trustee will liquidate any remaining assets of the Debtors including causes of action, administer claims, and make distributions on account of allowed claims. Headquartered in Chicago, Illinois, Heartland Technology Inc. -- fka Milwaukee Land Company -- acquired and managed land used in the railroad operations. The Company and its affiliates filed for chapter 11 protection on June 15, 2005 (Bankr. N.D. Ill. Case No. 05-23747). Geoffrey S. Goodman, Esq., at Foley & Lardner LLP represents the Debtors in their liquidation efforts. When the Debtors filed for protection from their creditors, they estimated between $10,000,000 in total assets and $34,000,000 in total debts. HEARTLAND TECHNOLOGY: Case Summary & Known Creditors ---------------------------------------------------- Lead Debtor: Heartland Technology Inc. fka Milwaukee Land Company 53 West Jackson Boulevard, Suite 1150 Chicago, Illinois 60604 Bankruptcy Case No.: 05-23747 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- HTI PG Design Electronics Inc. 05-23750 HTI Z Corporation 05-23752 Solder Station One Inc. 05-23755 Zecal Technology LLC 05-23759 Type of Business: Heartland Technology Inc. fka Milwaukee Land Company acquired and managed land used in railroad operations. PG Design Electronics Inc. designed and manufactured electronic assemblies for computer and computer printer equipment. Solder Station One Inc. provided hot-air solder leveling, precious metal plating, and solder mask services primarily to printed circuit board makers. Zecal Technology incorporated copper- plated circuits onto ceramic substrates. Chapter 11 Petition Date: June 15, 2005 Court: Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtors' Counsel: Geoffrey S. Goodman, Esq. Foley & Lardner LLP 321 North Clark Street, Suite 2800 Chicago, Illinois 60610 Tel: (312) 832-4514 Fax: (312) 832-4700 Debtors Chief Restructuring Officer: William Kaye JLL Consultants Financial Condition as of January 31, 2005: Estimated Assets: $10,000,000 Estimated Debts: $34,000,000 A full-text copy of the 25-page list of the Debtors' largest known creditors is available for a fee at: http://www.researcharchives.com/bin/download?id=050616035649 HOLLYWOOD CASINO: Wants Black Diamond's Arguments Excluded ---------------------------------------------------------- Hollywood Casino Shreveport and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Louisiana to exclude evidence and argument at the hearing to confirm their chapter 11 plan regarding: (1) the proposal of any competing plan by Black Diamond Capital Management, L.L.C.; (2) any comparison of valuation between the Black Diamond Plan Proposal and the Debtors' Plan; (3) any proposal related to a tender offer for the bonds; and (4) the failure to re-negotiate the signed Investment Agreement dated October 18, 2004, with Eldorado Resorts, LLC. Seth Goldman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Los Angeles, California, asserts that the evidence is irrelevant under Federal Rule of Evidence 402. Disputes with Black Diamond Black Diamond initiated the involuntary chapter 11 petition against the Debtors. Creditors Paddlewheels and Greenwich later joined in the petition. Black Diamond also sought the appointment of an examiner and questioned the prepetition auction process in the Debtor's effort to sell their business. Black Diamond believes another auction process within a chapter 11 proceeding will yield better benefits for the Debtors. Black Diamond lost to Eldorado Resorts LLC on that prepetition auction process. Black Diamond expects Hollywood Casino to have $35 million in cash at the expected closing date. Eldorado calculates that around $23.3 million in cash will remain with Hollywood Casino once their transaction closes. Both bids propose to assume and reorganize all of the Debtors' debts. Black Diamond and Broadmoor/Roy's Confirmation Objections Black Diamond and Broadmoor/Roy Anderson Corporation argued during the confirmation hearing that the Plan couldn't be confirmed under Sec. 1129(a)(2) of the Bankruptcy Code because the Plan proponents did not comply with a Bankruptcy Code "provision": a duty to maximize value of the estates. Black Diamond and Broadmoor/Roy claimed that the Plan proponents breached this duty by not: (i) accepting Black Diamond's various proposals for an alternative plan, which Black Diamond asserts and may attempt to prove are "higher and better" than the transaction proposed in the Plan; or (ii) re-trading the Investment Agreement that HCS had signed with Eldorado. Section 1129(a)(2), however, contains no general "duty to maximize value" in the context of negotiating and pursuing confirmation of a plan, nor any duty to re-trade a signed agreement for a plan, Mr. Goldman contends. According to Mr. Goldman, the Objectors attempt to impose this duty by characterizing the Plan as a sale and engrafting the requirements of Sec. 363 to Sec. 1129 of the Bankruptcy Code, where they do not belong. A sale under Sec. 363 is subject to greater scrutiny than a debtor's plan because Sec. 363 sales are not subject to the formalities of the plan confirmation process, including the voting, disclosure and confirmation requirements of the Bankruptcy Code, Mr. Goldman argues. Mr. Goldman points out that the proposition that the existence of a potentially higher or better plan makes the Plan unconfirmable is without support in the statute or in the case law. Rather, the limited case law on the subject holds that a plan under which creditors receive equity, regardless of form, is not a sale and is not subject to any duty to market assets. Terms of Hollywood Casino's Plan Under the proposed restructuring, holders of the Company's existing secured notes are to receive $140 million of new first mortgage notes, $20 million of PIK Preferred Equity Securities, a 25% non-voting equity interest in the reorganized company, and cash in an amount to be determined, in exchange for existing secured notes in the principal face amount of $189 million plus accrued interest. Headquartered in Shreveport, Louisiana, Hollywood Casino Shreveport operates a casino hotel and resort featuring riverboat gambling. Its creditors led by Black Diamond Capital Management filed an involuntary chapter 11 protection on September 10, 2004 (Bankr. W.D. La. Case No. 04-13259). Robert W. Raley, Esq. at 290 Benton Road Spur, Bossier City, LA 71111 and Timothy W. Wilhite, Esq. at Downer, Hammond & Wilhite, LLC, represent the petitioners in their involuntary petition against the Debtor. Richard Levin, Esq., Glenn Walter, Esq., and Seth Goldman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors. The Company owed $34,958,113 to the petitioners. HUFFY CORP: Steven Lipton to Replace Robert Lafferty as CFO ----------------------------------------------------------- Robert Lafferty, Huffy Corporation's Vice President, Finance, Chief Financial Officer and Treasurer, is leaving the Company effective Aug. 31, 2005. Steven Lipton, currently Senior Vice President and Controller of Huffy Corporation, will assume the Chief Financial Officer position upon Mr. Lafferty's departure. Prior to joining Huffy Corporation, Mr. Lipton served as Senior Vice President Controller of Elder-Beerman, a regional department store chain that is owned by The Bon-Ton Stores, Inc., and has approximately 69 stores located in the Midwest and Northeast United States. Headquartered in Miamisburg, Ohio, Huffy Corporation -- http://www.huffy.com/-- designs and supplies wheeled and related products, including bicycles, scooters and tricycles. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 20, 2004 (Bankr. S.D. Ohio Case No. 04-39148). Kim Martin Lewis, Esq., and Donald W. Mallory, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $138,700,000 in total assets and $161,200,000 in total debts. INTELIDATA TECH: Faces Possible Delisting from Nasdaq ----------------------------------------------------- InteliData Technologies Corp. (NASDAQ:INTD) received a Nasdaq Staff determination on June 14, 2005, indicating that the Company has failed to comply with Nasdaq's minimum bid price requirement of $1.00 per share for continued listing of the Company's common stock on the Nasdaq SmallCap Market as set forth in Marketplace Rule 4310(c)(4). As a result, the Company's common stock is subject to delisting from the Nasdaq SmallCap Market on June 23, 2005. Following procedures set forth in the Nasdaq Marketplace Rule 4800 series, the Company plans to request a hearing before a Nasdaq Listing Qualifications Panel to review the Staff determination. The hearing request is expected to stay the delisting of the Company's common stock, pending the Panel's decision, allowing it to continue to trade on the Nasdaq SmallCap Market. There can be no assurance, however, that the Panel will grant the Company's request for continued listing. In the event the Panel denies the Company's request for continued listing on the Nasdaq Small Cap Market, InteliData's common stock would cease to be listed on the Nasdaq SmallCap Market and the common stock could publicly trade over-the-counter. In such an event, an investor could find it more difficult to dispose of, or to obtain accurate quotations as to the market value of, InteliData's common stock. In addition, if InteliData's common stock were to be delisted from trading on the Nasdaq SmallCap Market and the trading price of the common stock were to remain below $5.00 per share, trading of InteliData's common stock could also be subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934, as amended, which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a "penny stock". The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in InteliData's common stock, which could severely limit the market liquidity of InteliData's common stock and the ability of investors to trade InteliData's common stock. Many brokerage firms are reluctant to recommend lower price stocks for their clients, and the policies and practices of a number of brokerage houses tend to discourage individual brokers within those firms from dealing in lower price stocks. Also, the brokerage commission on the purchase or sale of a stock with a relatively low per share price generally tends to represent a higher percentage of the sales price than the brokerage commission charged on a stock with a relatively higher per share price, to the detriment of InteliData's stockholders and the market for InteliData's common stock. About the Company With over a decade of experience, InteliData Technologies Corporation -- http://www.InteliData.com/-- provides online banking and electronic bill payment and presentment technologies and services to leading banks, credit unions, financial institution processors and credit card issuers. The Company develops and markets software products that offer proven scalability, flexibility and security in supplying real-time, Internet-based banking services to its customers. Going Concern Doubt Cash and cash equivalents as of March 31, 2005 totaled $1,253,000, compared to $3,223,000 as of year-end 2004. Because the Company has recurring losses from operations and is experiencing difficulty in generating cash flow, there is substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are described in the quarterly report on Form 10-Q. J.P. MORGAN: Fitch Affirms Low-B Ratings on Six Mortgage Certs. --------------------------------------------------------------- Fitch Ratings affirms J.P. Morgan Chase Commercial Mortgage Securities 2004-C2: -- $86.2 million class A-1 at 'AAA'; -- $100.0 million class A-2 at 'AAA'; -- $431.4 million class A-3 at 'AAA'; -- $272.2 million class A-1A at 'AAA'; -- Interest-only (IO) class X at 'AAA'; -- $24.6 million class B at 'AA'; -- $10.4 million class C at 'AA-'; -- $24.6 million class D at 'A'; -- $9.1 million class E at 'A-'; -- $11.6 million class F at 'BBB+'; -- $7.8 million class G at 'BBB'; -- $11.6 million class H at 'BBB-'; -- $6.5 million class J at 'BB+'; -- $5.2 million class K at 'BB'; -- $2.6 million class L at 'BB-'; -- $3.9 million class M at 'B+'; -- $2.6 million class N at 'B'; -- $2.6 million class P at 'B-'; -- $5.8 million class RP-1 'A'; -- $4.5 million class RP-2 'A-'; -- $4.8 million class RP-3 'BBB+'; -- $5.2 million class RP-4 'BBB'; -- $7.8 million class RP-5 'BBB-'. Fitch does not rate the $14.2 million NR class. The RP certificates represent an interest in a subordinate note secured by the Republic Plaza property. The affirmations are the result of stable performance and scheduled amortization. As of the May 2005 distribution date, the pool's aggregate principal balance has decreased 1.7% to $1.05 billion from $1.07 billion at issuance. There is one loan (0.1%) in special servicing. The one specially serviced loan is a multifamily property located in Chattanooga, TN. The special servicer is currently pursuing foreclosure. Based on recent appraisal values on the property, Fitch expects a loss will occur at the time the asset is liquidated from the trust. Fitch maintains credit assessments on two loans in the trust: the Somerset Collection (12.0%) and Republic Plaza (10.2%) loans. Somerset Collection, a regional mall located in Troy, MI, reported that October 2004 occupancy had declined to 94.2%, versus 98.8% at issuance. Due to the decrease in occupancy, the property's servicer reported net operating income as of year-end 2004 declined to $31.1 million from $33.6 million at issuance. Republic Plaza is a 1.29 million square foot office property located in Denver, CO. Average occupancy at the property has been consistent since issuance, with YE 2004 occupancy at 81.2% versus 79.9% at issuance. The property also benefits from having a strong sponsor in Brookfield Properties. Based on their stable occupancy levels and net operating incomes since issuance, these loans maintain investment-grade credit assessments. J.P. MORGAN: Fitch Places Low-B Ratings on 4 Mortgage Certificates ------------------------------------------------------------------ J.P. Morgan Mortgage Trust $1.891 billion mortgage pass-through certificates, series 2005-A3: Aggregate pool I -- $1,016,055,370 classes 1-A-1, 1-A-2, 2-A-1, 3-A-1, 3-A-2, 3-A-3, 3-A-4, 4-A-1, 4-A-2, 5-A-1, 5-A-2 5-A-3, 6-A-1 through 6-A-7, senior classes 'AAA'; -- $15,277,990 class I-B-1 certificates 'AA'; -- $7,351,300 class I-B-2 certificates 'A'; -- $3,150,560 class I-B-3 certificates 'BBB'; -- $3,675,650 privately offered class I-B-4 certificates 'BB'; -- $2,625,460 privately offered class I-B-5 certificates 'B'; -- $2,100,395 privately offered class I-B-6 certificates are not rated by Fitch. Aggregate pool II -- $411,906,900 classes 7CA1, 7CA2, 8JA1, 8JA2, 9CA1, 9CA2, 10-J-1, 10-J-2, senior classes 'AAA'; -- $11,144,580 class II-BA-1 certificates 'AA', -- $4,588,880 class II-BA-2 certificates 'A', -- $3,277,770 class II-BA-3 certificates 'BBB', -- $2,622,210 privately offered class II-BA-4 certificates 'BB'; -- $1,092,590 privately offered class II-BA-5 certificates 'B'. -- $2,403,732 privately offered class II-BA-6 certificates are not rated by Fitch. Pool 11 -- $399,789,400 11-A-1 through 11-A-4, and A-R, senior classes 'AAA'; -- $3,881,470 class III-B-1 certificates 'AA'; -- $1,383,580 class III-B-2 certificates 'A'; -- $1,021,430 class III-B-3 certificates 'BBB'; -- $1,021,430 privately offered class III-B-4 certificates 'BB'; -- $408,570 privately offered class III-B-5 certificates 'B'; -- $612,882 privately offered class III-B-6 certificates are not rated by Fitch. The 'AAA' rating on the aggregate pool I senior classes reflects the 3.25% subordination provided by the 1.45% class I-B-1, the 0.70% class I-B-2, the 0.30% class I-B-3, the 0.35% privately offered class I-B-4, the 0.25% privately offered class I-B-5, and the 0.20% privately offered class I-B-6 certificates. The 'AAA' rating on the aggregate pool II senior classes reflects the 5.75% subordination provided by the 2.55% class II-BA-1, the 1.05% class II-BA-2, the 0.75% class II-BA-3, the 0.60% privately offered class II-BA-4, the 0.25% privately offered class II-BA-5, and the 0.55% privately offered class II-BA-6 certificates. The 'AAA' rating on the pool 11 senior classes reflects the 2.15% subordination provided by the 0.95% class III-B-1, the 0.45% class III-B-2, the 0.25% class III-B-3, the 0.25% privately offered class III-B-4, the 0.25% privately offered class III-B-5, and the 0.15% privately offered class III-B-6 certificates. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud, and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, the primary servicing capabilities of PHH Mortgage Corporation, Countrywide Home Loans Servicing LP and J.P. Morgan Chase Bank, N.A., and Wells Fargo Bank, N.A. (all rated 'RPS1' by Fitch), and the master servicing capabilities of Wells Fargo Bank, N.A., which is rated 'RMS1' by Fitch. As of the cut-off date (May 1, 2005) the assets of the trust consisted of 11 mortgage pools. These pools have further been aggregated into two groups, aggregate pool I, consisting of mortgage pools 1 through 6; aggregate pool II, consisting of mortgage pools 7 through 10; and pool 11. Each of the aggregate pools and pool 11 has their respective subordination. Wachovia Bank, N.A. will serve as trustee. J.P. Morgan Acceptance Corporation I, a special purpose corporation, deposited the loans in the trust that issued the certificates. For federal income tax purposes, the trustee will elect to treat all or portion of the assets of the trust funds as comprising multiple real estate mortgage investment conduits. KANEB PIPE: Moody's Confirms $250 Mil. Sr. Unsec. Notes Ba1 Rating ------------------------------------------------------------------ Moody's Investors Service confirmed with a developing outlook the Ba1 rating of Kaneb Pipe Line Operating Partnership, L.P.'s $250 million senior unsecured notes due 2012. The rating action ends a review for possible upgrade of KPOP's rating that was prompted by Valero L.P.'s announcement in November 2004 of its planned acquisition of Kaneb Pipe Line Partners, L.P., a publicly traded master limited partnership and 100% owner of KPOP, its principal operating subsidiary. The rating action reflects Moody's expectation that KPP's merger with VLI will close by July 1, 2005. The merger received antitrust clearance today. Under the post-merger partnership structure, VLI will guarantee KPP's debt, and KPP and Valero Logistics Operations, L.P. (VLOLP, rated Baa3 sr. unsecured), a wholly owned operating subsidiary of VLI, and KPP will cross-guarantee each other's debt. Normally, on this basis, Moody's would rate KPP's debt at the same level as VLOLP's debt. In fact, Moody's had previously indicated to the market that it would most likely upgrade KPOP's senior unsecured rating to Baa3 with a negative outlook once the merger transaction closed. However, on April 25, 2005, Moody's placed VLOLP's Baa3 debt rating under review for possible downgrade in conjunction with Moody's review for possible downgrade of the ratings of Valero Energy Corporation, the general partner of VLI. Moody's considers the ratings of KPOP and VLOLP to be closely linked to Valero Energy's ratings. KPOP's Ba1 rating and developing outlook therefore reflect the possibility for different rating outcomes for KPOP, depending on the outcome of the Valero Energy rating review. Moody's believes that confirmation of Valero Energy's ratings would most likely result in an upgrade of KPOP's rating to Baa3. A downgrade of Valero Energy's ratings could result in either a downgrade of KPOP's ratings or an affirmation of KPOP's rating at Ba1. Kaneb Pipe Line Operating Partnership, L.P. is a subsidiary of Kaneb Pipe Line Partners, L.P. Headquartered in Richardson, Texas, Kaneb Pipe Line Partners, L.P. is a publicly traded master limited partnership. KARLUS ARTIS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Karlus C. Artis 2513 Bradford Place Goldsboro, North Carolina 27530 Bankruptcy Case No.: 05-04672 Type of Business: The Debtor owns Physicians Theracare, Inc. Chapter 11 Petition Date: June 15, 2005 Court: Eastern District of North Carolina (Wilson) Debtor's Counsel: John G. Rhyne, Esq. Hinson & Rhyne, P.A. P.O. BOX 7479 Wilson, North Carolina 27895-7479 Tel: (252) 291-1746 Total Assets: $1,185,400 Total Debts: $1,464,960 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Homecomings Financial House & lot located at $409,708 Attn: Managing Agent 2513 Bradford Place, 2711 North Haskell Avenue, Goldsboro, NC 27530 Southwest 1 (debtor's residence) Dallas, TX 75204 Value of security: $405,000 Affiliated Corporate $130,535 Services, Inc. c/o Lloyd Ward 5644 LBJ Freeway, Suite 201 Dallas, TX 75240 Geraldine Daniels Lot 4, B.F. Adams $85,000 175 Sheridan Forest Road Subdivison. Geraldine Goldsboro, NC 27534 and Hazel Daniels are co-obligees Value of security: $69,000 First Citizens Bank & Trust 15 waiting room $56,459 Company chairs, 2 executive Attn: Ms. Patricia A. Sims style desks, 6 medical P.O. Box 25187 exam tables, EKG Raleigh, NC 27611 Machine, 2 medical cabinets, HP Computer system, lounge table and chairs RBC Centura Bank $44,880 Attn: Richard Ramsay P.O. Box 1220 Rocky Mount, NC 278021220 MBNA America $25,700 Attn: Managing Agent P.O. Box 15026 Wilmington, DE 198505026 Federated Financial Corp. $25,000 Managing Agent P.O. Box 2034 Farmington, MI 48333 Mazda America 2002 Maxda Tribute. $18,660 Attn: Managing Agent Value is an estimate. 9009 Caruthers Parkway Debtor has not Franklin, TN 37067 performed or commissioned an appraisal Value of security: $14,550 Household Finance Co. $13,404 Managing Agent P.O. Box 8633 Elmhurst, IL 60126 Branch Banking & Trust $13,083 Company Attn: Jack R. Hayes P.O. Box 1847 Wilson, NC 278941847 Branch Banking & Trust $8,920 Company Attn: Jack R. Hayes P.O. Box 1847 Wilson, NC 278941847 GMAC Deficiency from $8,000 Attn: Managing Agent repossession P.O. Box 30788 Charlotte, NC 28230 RBC Centura Bank $7,923 Attn: Richard Ramsay P.O. Box 1220 Rocky Mount, NC 278021220 MBNA America $6,079 Attn: Managing Agent P.O. Box 15026 Wilmington, DE 198865102 GMAC $5,378 P.O. Box 78369 Phoenix, AZ 85062 Spiegel $5,090 Managing Agent 101 Crossway Park West Woodbury, NY 11797 First Citizens Bank & Trust $4,792 Company Attn: Ms. Patricia A. Sims P.O. Box 25187 Raleigh, NC 27611 Wayne County Tax Collector Ad valorem taxes $4,300 P.O. Box 1495 Goldsboro, NC 27533 Federated Financial Corp. $3,764 Managing Agent P.O. Box 2034 Farmington, MI 48333 Chase Manhattan $2,357 c/o Weinstein & Riley 2101 4th Avenue, Suite 900 Seattle, WA 98121 KEY ENERGY: Moody's Continues $425M Debt Securities Ratings Review ------------------------------------------------------------------ Moody's Investors Service continues to leave Key Energy Services' ratings on review for downgrade pending the filing of its 2003, 2004 and 2005 financial statements. Though receiving a notice of default on June 7, 2005 from the trustees on behalf of both the 6.375% and the 8.375% noteholders, Moody's is currently not taking any ratings action as the company has procured a commitment for a new financing package from Lehman Brothers which, combined with the company's cash balances, appears sufficient to refinance essentially all of Key's existing debt. The notice of default stems from the company not meeting its recent waiver from the bondholders and bank lenders to file its 2003 Form 10-K by May 31, 2005. Under the terms of the indenture, the company now has 60 days to cure the default (by August 5, 2005, at which time the trustee or 25% of each class of noteholders will have the right to accelerate each series of notes. However, the company announced on June 1, 2005 that it had received a commitment from Lehman Brothers to provide $550 million in loan facilities in the event it elects to refinance its existing bank debt and/or senior notes. The facilities are comprised of a $400 million term loan, a $65 million revolving credit facility, and an $85 million Letter of Credit facility. The commitment expires December 31, 2005 and is subject to pre- funding conditions such as meeting a trailing twelve month EBITDA test of $175 million and that no new material developments transpire that have not been already disclosed. These facilities, together with the more than $100 million of cash on hand, gives the company the capacity to refinance all of the existing debt. In the meantime, the cash is more than sufficient to cover ongoing operating needs and coupon payments. These ratings for Key remain under review for downgrade: 1) B1 -- Key's senior implied rating 2) B2 -- Key's senior unsecured issuer rating 3) B1 -- $150 million 6.375% Sen. Unsec. notes due 2013 4) B1 -- $175 million 8.375% Sen. Unsec. notes due 2008 5) B1 -- $100 million add-on to 8.375% Sen. Unsec notes, due 2008 Moody's ongoing review of the ratings will entail a review of Key's yet to be filed 2003, 2004 and 2005 financial statements as well as discussions with Key's management regarding their future financing and operating plans and an assessment of the corrective actions taken by management to rectify the underlying audit issues. While Key has certainly felt a near-term financial impact from the delayed filings, the underlying operations of the company appear largely unaffected and the outlook for Key's business continues to benefit from the strength in drilling activity and the need for Key's services in the production of oil and gas in the mature onshore U.S. market. Due to the highly complicated nature of Key's restatement process, the auditors have been unable to bring the audit to a close in the timeframe they anticipated. The complications have primarily arisen due to the poor manner in which the company's financial records had have been kept compounded by the effects of completing many acquisitions over the past eight years. Audit issues remaining for the company include: * finalizing depreciable lives for its drilling rigs and other assets; * calculating impairment for long-lived assets; and * reconciling work-in progress accounts despite managements determination that, prior to the restatement process, some items were incorrectly booked as work-in-progress and many items that were accounted for as work-in-progress they were not reconciled for in a timely manner. Earlier this month, Key announced that the lenders under its senior secured credit facility had amended the terms of the facility to provide additional waivers of the information delivery covenants in the facility until July 31, 2005. The existing lenders have also extended to October 31, 2005 the date by which the company must deliver quarterly financial statements and audited financial statements for 2004 and to December 31, 2005 the date by which the company must deliver quarterly financial statements for the first three quarters of 2005. Accordingly, the company continues to be able to borrow under the revolving credit facility and to obtain letters of credit, providing the company with additional liquidity if needed. Key Energy Services, Inc. is headquartered in Midland, Texas. KMART CORP: Sears Relates HQ Relocation Cost & Benefit Estimates ---------------------------------------------------------------- As previously reported in the Troubled Company Reporter on May 12, 2005, Sears Holdings Corporation's wholly owned subsidiaries, Sears, Roebuck and Co., in Hoffman Estates, Illinois, and Kmart Holding Corporation in Troy, Michigan, have commenced organizational restructurings related to functions at their home offices, as a result of their business combination. Sears Holdings Discloses Cost Estimates In a filing with the Securities and Exchange Commission on June 2, 2005, William K. Phelan, vice president and controller of Sears Holdings Corporation, disclosed that Sears Holdings has determined the total relocation costs and termination benefits related to the relocation or termination of affected Kmart employees. Mr. Phelan said the total relocation costs and termination benefits is estimated to be $60 million with: * $30 million for relocation-related costs; and * $30 million for termination-related benefits. Sears Holdings estimates that cash expenditures will be incurred in the full amount of the charge. 300 Employees to be Relocated Sears Holdings reported in a separate filing with the SEC on June 7, 2005, that approximately 70 individuals had been notified prior to April 30, 2005, that their positions would be eliminated by June 2005. Subsequent to the end of the first quarter, Sears Holdings notified approximately 1,400 additional Kmart employees that either their positions would be eliminated or their positions would be relocated to Sears Holdings' headquarters in Hoffman Estates, Illinois, or its transaction processing center in Dallas, Texas. Approximately 300 have accepted the relocation offer. The total cost related to the relocation or severance, benefits and outplacement services associated with the 1,400 individuals is currently estimated to be $57 million. According to Mr. Phelan, the actual costs are dependent on the number of associates who ultimately accept the relocation offers and the number of associates who remain with Sears Holdings through a transition period. During the first quarter 2005, Sears Holdings recorded a $3 million pretax charge related to employee termination costs associated with former Kmart employees impacted by its home office integration efforts. The balance of the charge will be recorded over the next several months in accordance with the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 146, Accounting for Costs Associated with Exit or Disposal Activities. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service, Inc., 215/945-7000) LACLEDE STEEL: Administrative Claims Bar Date Is July 1 ------------------------------------------------------- The Honorable Barry S. Schermer of the U.S. Bankruptcy Court for the Eastern District of Missouri confirmed the Second Amended Liquidating Plan of Reorganization proposed by Laclede Steel Company and its Official Committee of Unsecured Creditors on May 19, 2005. The Plan took effect by its own terms on May 30, 2005. As reported in the Troubled Company Reporter on May 24, 2005, the Plan transfers the Debtor's assets to a Plan Committee consisting of the members of the Official Committee of Unsecured Creditors. The Plan Committee will complete the liquidation and will administer all Distributions to be made under the Plan. The Plan Committee will also file objections to Claims. The Official Unsecured Creditors Committee is currently comprised of: * Terry L. Freeman of Metals USA, Inc.; * Mike Horn of Ameren UE; * David R. Jury of the United Steelworkers of America; * Daniel Brennen of PSC Metals, Inc.; * David J. Krozier of Sharon Tube Company; and * Joseph Kerola of P.I.I. Motor Express, Inc. Mr. Freeman chairs the Committee. Under Section 5.1 of the Plan, the Plan Committee may add members or remove members in its reasonable discretion. Unless the Plan Committee otherwise elects, it will continue to be represented by Steven Goldstein, Esq., and Robert A. Breidenbach, Esq., at the law firm of Goldstein & Pressman, P.C., which currently serves as counsel to the Official Committee of Unsecured Creditors. From and after the Effective Date of the Plan, the Debtor will remain in existence only to the extent necessary to allow the Plan Committee to liquidate the Debtor's remaining estate, make Distributions under the Plan, and wind up the Debtor's affairs. Upon confirmation of the Plan, all of the Debtor's outstanding stock will be cancelled. The Debtor will be dissolved. Creditor Recoveries & Treatment of Claims Holders of general unsecured claims will receive a pro rata share of what's left of the Debtor's estate after: * administrative claims, * secured claims, and * unsecured priority claims are paid in full. Holders of equity interests will not receive anything. Because the Debtor is liquidating rather than reorganizing, it will not receive a discharge under 11 U.S.C. Sec. 1141. However, creditor' recoveries against the Debtor will be limited to the amounts recovered under the Plan. Administrative Bar Date Requests for payment of any Administrative Claims must be filed and served by July 1, 2005. The Professionals must file and serve their Final Fee Applications by July 31, 2005. One of only three full-line producers of continuous-weld pipe in the United States at the time, Laclede Steel Company sought chapter 11 protection for a second time on July 27, 2001 (Bankr. E.D. Mo. Case No. 01-48321). The company disclosed more and $100 million in assets and liabilities at the time of the filing. Over the past three and half years, the Company has closed its facilities, conducted going concern sales and liquidated most of its real property and other assets for the benefit of its creditors. Lloyd A. Palans, Esq., Christopher J. Lawhorn, Esq., David M. Unseth, Esq., and Cullen K. Kuhn, Esq., at Bryan Cave LLP, represented the Debtor. LIFEPOINT HOSPITALS: Inks $192 Million Credit Pact with Lenders --------------------------------------------------------------- LifePoint Hospitals, Inc. (NASDAQ: LPNT), as Borrower, entered into a new $192 million SENIOR SUBORDINATED CREDIT AGREEMENT, dated as of June 15, 2005, with CITICORP NORTH AMERICA, INC., as Administrative Agent and Lender, and CITIGROUP GLOBAL MARKETS INC., as Sole Lead Arranger and Sole Bookrunner. The proceeds of the borrowing were loaned to LifePoint Hospitals' wholly owned subsidiary, Historic LifePoint Hospitals, Inc., and are being used by Historic LifePoint to pay the redemption price for $185,126,000 outstanding principal amount of its 4-1/2% Convertible Subordinated Notes due 2009. As previously announced, the notes were called for redemption at a redemption price of 102.571% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, which is June 15, 2005. Prior to the redemption date, holders of approximately $35,874,000 in aggregate principal amount of the 4-1/2% Convertible Senior Notes Due 2009 of Historic LifePoint have elected to convert their notes into an aggregate of 757,482 shares of common stock, par value $0.01 per share, of LifePoint Hospitals. After giving effect to such elections to convert, the aggregate total redemption price to be paid to holders of such notes is $190,209,559.96, including $323,970.50 of accrued and unpaid interest to, but excluding, the redemption date. The senior subordinated credit agreement matures in 2013 without amortization and bears interest, at LifePoint Hospitals' option, initially at a rate of ABR plus 2.50% or LIBOR plus 3.50%, in each case plus 0.50% after each quarter, with a maximum rate of 9% (for ABR) and 10% (for LIBOR). The senior subordinated credit facility is guaranteed on a senior subordinated basis by all subsidiaries of LifePoint Hospitals, which guaranty its obligations under the existing senior credit agreement. LifePoint presently intends, depending on market and general economic conditions and other relevant factors, to refinance this facility with other subordinated or senior subordinated financing, which may include securities convertible into LifePoint Hospitals common stock. Lawyers at Cahill Gordon & Reindel LLP represent the Lenders in this transaction. About the Company LifePoint Hospitals, Inc., is a leading hospital company focused on providing healthcare services in non-urban communities, with 50 hospitals, approximately 5,285 licensed beds and combined revenues of approximately $1.9 billion in 2004. Of the combined 50 hospitals, 46 are in markets where LifePoint Hospitals is the sole community hospital provider. LifePoint Hospitals' non-urban operating strategy offers continued operational improvement by focusing on its five core values: delivering high quality patient care, supporting physicians, creating excellent workplaces for its employees, providing community value and ensuring fiscal responsibility. Headquartered in Brentwood, Tennessee, LifePoint Hospitals is affiliated with approximately 18,000 employees. * * * As reported in the Troubled Company Reporter on Apr. 8, 2005, Moody's Investors Service affirmed the ratings of LifePoint Hospitals, Inc.'s proposed offering of a $1.550 million senior secured credit facility in connection with its proposed acquisition of Province Healthcare Company. The ratings follow an announcement by the company that the originally proposed senior secured Term Loan B of $1,100 million would be increased to $1,250 million. The originally proposed $300 million revolving credit facility will remain in place and undrawn. Moody's also affirmed the company's other ratings; the outlook remains stable. Moody's had anticipated that LifePoint Hospitals, Inc., would complete a second phase of financing in order to fund the acquisition of Province. Moody's now expects the financing of the acquisition to be completed the through the increased credit facility and cash on hand. Below is a summary of Moody's actions: LifePoint Hospitals, Inc. (parent): Affirmed Ba3 rating to proposed $1,250 million senior secured Term Loan B (originally proposed at $1,100 million) Affirmed Ba3 rating on proposed $300 million senior secured revolving credit facility Affirmed Ba3 senior implied rating Affirmed B2 senior unsecured issuer rating LifePoint (former parent): Affirmed B3 rating on $221 million ($250 million prior to the repurchase of $29 million of notes during 2004) 4.50% convertible subordinated notes due 2009, rated B3 Moody's said the ratings outlook is stable. MAGNOLIA LLC: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Magnolia LLC c/o Robert C. Heifner 437 East State Street Newcomerstown, Ohio 43832 Bankruptcy Case No.: 05-63443 Chapter 11 Petition Date: June 15, 2005 Court: Northern District of Ohio (Canton) Judge: Russ Kendig Debtor's Counsel: Edwin H. Breyfogle, Esq. 11 Lincoln Way West Lincoln Professional Building, #2B Massillon, Ohio 44647 Tel: (330) 837-9735 Total Assets: $1,802,370 Total Debts: $420,208 Debtor's 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Sky Bank $225,000 4767 Munson Street Northwest Canton, OH 44718 First National Bank of Dennison $65,066 105 Grant Street Dennison, OH 44621 Allen Milarcik $41,000 2754 Pine Drive Northeast New Philadelphia, OH 44663 Ben Cookson $40,000 Kaufman Realty $17,000 Charlotte Heifner $11,000 Civil Design Association $10,000 Dutch Valley $9,300 Bair Goodie & Association $1,092 Charles Snyder Company $500 Robert Weiler Company $250 MASTR REPERFORMING: Moody's Rates $985,000 Class B4 Certs. at Ba2 ----------------------------------------------------------------- Moody's Investors Service has assigned Aaa to B2 ratings to the senior and subordinate classes of the MASTR Reperforming Loan Trust 2005-1 Mortgage Pass-Through Certificates, Series 2005-1. The transaction consists of the securitization of FHA insured and VA guaranteed reperforming loans virtually all of which were repurchased from GNMA pools. The credit quality of the mortgage loans underlying the securitization is comparable to that of mortgage loans underlying subprime securitizations. However, after the FHA and VA insurance is applied to the loans, the credit enhancement levels are comparable to the credit enhancement levels for prime-quality residential mortgage loan securitizations. The insurance covers a large percent of any losses incurred as a result of borrower defaults. The Federal Housing Administration is a federal agency within the Department of Housing and Urban Development whose mission is to expand opportunities for affordable home ownership, rental housing, and healthcare facilities. The Department of Veterans Affairs, formerly known as the Veterans Administration, is a cabinet-level agency of the federal government. The rating of this pool is based on the credit quality of the underlying loans and the insurance provided by FHA and the guarantee provided by VA Specifically, about 79.8% of the loans have insurance provided by FHA, 19.6% from the VA, and 0.6% from the Rural Housing Service. The rating is also based on the structural and legal integrity of the transaction. The complete rating action is: MASTR Reperforming Loan Trust 2005-1 Class Amount Rating * 1A1 $86,487,000 Aaa * 1A2 $85,691,000 Aaa * 1A3 $71,663,000 Aaa * 1A4 $32,783,000 Aaa * 1A5 $24,406,000 Aaa * PO $2,281,114 Aaa * AX Notional Aaa * 2A1 $15,474,000 Aaa * B1 $2,957,000 Aa2 * B2 $1,806,000 A2 * B3 $1,971,000 Baa2 * B4 $985,000 Ba2 * B5 $822,000 B2 MCI INC: Shareholders Commence Proxy Battle Against Verizon Deal ---------------------------------------------------------------- Deephaven Capital Management LLC is soliciting proxy statements from MCI, Inc.'s shareholders to vote against MCI's $26-a-share deal with Verizon when the Company will seek the shareholders' votes. This is not the first time shareholders rooted for Qwest Communications to go back to the negotiating table to revive its bid. As reported in the Troubled Company Reporter on May 11, 2005, the Company's largest shareholders want Qwest Communications International, Inc., to continue its pursuit to acquire MCI. These shareholders include Fairholme Capital Management LLC, Elliot Associates LP and Omega Advisors, Inc. Verizon took away the Company's yes vote after a heated bidding war that started early this year. But some of the shareholders did not like the board's decision and took legal action against the Company, its Board, and Verizon. The Class Action Reporter reported on June 9, 2005, an individual shareholder filed a putative class action on behalf of himself and all shareholders of the Company against the Company and all of the individual members of the Board of Directors in Chancery Court in the State of Delaware. The lawsuit also names Verizon as a defendant. The lawsuit alleges that the Company and the Board of Directors breached their fiduciary duties to shareholders in entering into the Merger Agreement with Verizon rather than accepting the merger proposal propounded by Qwest. As a remedy, the shareholder wants the Court to issue an injunction prohibiting consummation of the Merger Agreement. Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on March 1, 2005, Standard & Poor's Ratings Services placed its ratings on Denver, Co.-based diversified telecommunications carrier Qwest Communications International, Inc., and subsidiaries, including the 'BB-' corporate credit rating, on CreditWatch with negative implications. This follows the company's counter bid to Verizon Communications, Inc., for long-distance carrier MCI, Inc., for $3 billion in cash and $5 billion in stock. MCI also has about $6 billion of debt outstanding. The ratings on MCI, including the 'B+' corporate credit rating, remain on CreditWatch with positive implications, where they were placed Feb. 14, 2005 following Verizon's announced agreement to acquire the company. The positive CreditWatch listing for the MCI ratings reflects the company's potential acquisition by either Verizon or Qwest, both of which are more creditworthy entities. However, the positive CreditWatch listing of the 'B+' rating on MCI's senior unsecured debt assumes no change to the current MCI corporate and capital structure under an assumed acquisition by Qwest, such that this debt would become structurally junior to other material obligations. "The negative CreditWatch listing of the Qwest ratings reflects the higher business risk at MCI if its bid is ultimately successful," explained Standard & Poor's credit analyst Catherine Cosentino. As a long-distance carrier, MCI is facing ongoing stiff competition from other carriers, especially AT&T Corp. Moreover, MCI is considered to be competitively disadvantaged relative to AT&T in terms of its materially smaller presence in the enterprise segment and fewer local points of presence -- POPs. The latter, in particular, results in higher access costs relative to AT&T. Qwest also faces the challenge of integrating and strengthening MCI's operations while improving its own underperforming, net free cash flow negative long-distance business. These issues overshadow the positive aspects of Qwest's incumbent local exchange carrier business that were encompassed in the former developing outlook. As reported in the Troubled Company Reporter on Feb. 22, 2005, Moody's Investors Service has placed the long-term ratings of MCI, Inc., on review for possible upgrade based on Verizon's plan to acquire MCI for about $8.9 billion in cash, stock and assumed debt. These MCI ratings were placed on review for possible upgrade: * B2 Senior Implied * B2 Senior Unsecured Rating * B3 Issuer rating Moody's also affirmed MCI's speculative grade liquidity rating at SGL-1, as near term, MCI's liquidity profile is unchanged. As reported in the Troubled Company Reporter on Feb. 22, 2005, Standard & Poor's Ratings Services placed its ratings of Ashburn, Virginia-based MCI Corp., including the 'B+' corporate credit rating, on CreditWatch with positive implications. The action affects approximately $6 billion of MCI debt. As reported in the Troubled Company Reporter on Feb. 16, 2005, Fitch Ratings has placed the 'A+' rating on Verizon Global Funding's outstanding long-term debt securities on Rating Watch Negative, and the 'B' senior unsecured debt rating of MCI, Inc., on Rating Watch Positive following the announcement that Verizon Communications will acquire MCI for approximately $4.8 billion in common stock and $488 million in cash. MERIDIAN AUTOMOTIVE: Court Okays $10 Mil. Advance to Foreign Units ------------------------------------------------------------------ Judge Walrath authorizes Meridian Automotive Systems, Inc., and its debtor-affiliates to advance funds to: * Meridian Mexico, in an amount up to, but not more than, $8,500,000; * Volpex, in amount up to, but not more than, $200,000; and * Meridian Brazil, in an amount up to, but not more than $1,000,000. The Official Committee of Unsecured Creditors will have 20 days from the date of delivery of any report, indicating that any of the funds were advanced by a Debtor to a Foreign Subsidiary in the prior month, to object to the propriety of any advance, including, without limitation, on the grounds of lack of reasonably equivalent value. Judge Walrath requires the Debtors to, within 10 business days following the end of each calendar month, provide the Committee's financial advisors with a report that will: -- show all transfers made between any Debtor and any Foreign Subsidiary to any other Foreign Subsidiary during the prior month; -- disclose any transfer made by any Foreign Subsidiary to any other Foreign Subsidiary during the prior month; -- reveal all Intercompany Claims and Intercompany Transactions among the Debtors arising during the prior month; -- identify all the transfers on an aggregate, net basis; and -- identify the type and purpose of any transfer. Judge Walrath grants administrative priority status to Intercompany Claims arising as a result of Intercompany Transactions among the Debtors; provided that: (a) any interest, fees or other charges pertaining to the Intercompany Claims will not be afforded administrative priority status; and (b) the Committee will have 20 business days from the delivery of any Report to object to the granting of administrative priority status. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Court Says Utilities Adequately Assured ------------------------------------------------------------ Meridian Automotive Systems, Inc., and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to prohibit Utility Companies from: -- discontinuing, altering, or refusing service to the Debtors on account of any unpaid prepetition charges; or -- requiring the payment of a deposit or receipt of another security from the Debtors in connection with any unpaid prepetition charges. As previously reported in the Troubled Company Reporter on May 5, 2005, the Debtors seek permission not to provide any deposits or any other forms of security to the Utility Companies because: (x) their history of timely payment of prepetition invoices received from the Utility Companies and their current and projected available funds, (y) the security deposits they provided to many of the Utility Companies prior to the Petition Date, and (z) the administrative expense priority afforded to the Utility Companies for any unpaid postpetition services together constitute adequate assurance of payment. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: MERI Withdraws Objections With Prejudice ------------------------------------------------------------- MERI (NC) LLC leases a non-residential real property in Salisbury, North Carolina, to Meridian Automotive Systems, Inc. In 2002, Meridian assigned the lease to Debtor Meridian Automotive Systems - Heavy Truck Operations, Inc. MERI objected to Meridian Automotive Systems, Inc., and its debtor-affiliates' requests to: (i) obtain postpetition financing, and (ii) advance funds to non-debtor foreign subsidiaries because they adversely affect MERI's interests in the Salisbury Lease. To resolve the objections, the Debtors and MERI agree that: (1) MERI will receive a $197,000 security deposit with respect to any of its postpetition claims arising out of the Debtors' postpetition payment defaults under the Salisbury Lease; (2) the Debtors will receive a refund of the Security Deposit in full less the amount used to satisfy uncured postpetition payment arrearages under the Salisbury Lease at the earliest of the time (x) the Salisbury Lease is assumed and all cure amounts due and owing paid to MERI or (y) the Salisbury Lease is rejected; (3) the Debtors will have 45 days from the receipt of a written notice of postpetition lease payment default to assume or reject the Salisbury Lease; (4) other than a possible $10,000 prepetition claim, there are no payments due and owing to MERI; and (5) MERI's objections are deemed withdrawn with prejudice. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000). METALFORMING TECH: Files for Chapter 11 Protection in Delaware -------------------------------------------------------------- Metalforming Technologies, Inc., and eight affiliates filed for chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware in order to: -- further stabilize their day-to-day operations and finances; -- obtain a moratorium of their indebtedness; -- preserve the going concern value of their businesses; and -- avail themselves of the financing provisions of the Bankruptcy Code, while implementing the contemplated marketing and sale of their businesses within a chapter 11 proceeding. The Debtors experienced liquidity shortfalls as a result of specific industry conditions, including reduced demand in the automotive industry, and increased costs. Consequently, the Debtors' profitability has declined over the past three fiscal years with the most pronounced reductions occurring in 2004. The Debtors' owe $44 million under a senior secured term loan facility with the Canadian Imperial Bank of Commerce as administrative agent for a group of lenders. The Debtors also have miscellaneous unsecured debt in excess of $52 million. Patriarch Partners, LLC, and its affiliates hold approximately 52% outstanding common equity interest of MTI, 55% of the Debtors' outstanding indebtedness under the Prepetition Term Loans and 75% of the Debtors' indebtedness under the Prepetition Revolving Credit Facility. Asset Sale The Debtors ask the Bankruptcy Court to approve certain bidding procedures for a proposed sale of their assets. The Debtors intend to sell MTI, Crescive Die & Tool, Inc., Northern Tube, Inc., and Metalform Industries, Inc., to Zohar Tubular Acquisition, LLC, an affiliate of Patriarch Partners, LLC, for $25 million in cash and the assumption of certain liabilities. Headquartered in Chicago, Illinois, Metalforming Technologies, Inc., and its debtor-affiliates manufacture seating components, stamped and welded powertrain components, closure systems, airbag housings and charge air tubing assemblies for automobiles and light trucks. The Company and eight of its affiliates, filed for chapter 11 protection on June 16, 2005 (Bankr. D. Del. Case Nos. 05-11697 through 05-11705). Joel A. Waite, Esq., Robert S. Brady, Esq., and Sean Matthew Beach, Esq., at Young Conaway Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of May 1, 2005, the Debtors reported $108 million in total assets and $111 million in total debts. METALFORMING TECH: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Metalforming Technologies, Inc. 980 North Michigan Avenue, Suite 1000 Chicago, Illinois 60611 Bankruptcy Case No.: 05-11697 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- MTI Holding Corporation 05-11698 Metalform Industries, Inc. 05-11699 Crescive Die & Tool, Inc. 05-11700 Northern Tube, Inc. 05-11701 Flint Manufacturing Company 05-11702 Johnson Stamping, Inc. 05-11703 MTI - Indiana, Inc. 05-11704 Metalforming Technologies De Mexico, S De R.L. De C.V. 05-11705 Type of Business: The Debtors manufacture complex metal formed subsystems and assemblies, including, but not limited to, seating components, stamped and welded powertrain components, closure systems, HVAC components, safety components like airbag housings, complex tubing components, including structural frame components and charge air tubing assemblies for automobiles and light trucks. Chapter 11 Petition Date: June 16, 2005 Court: District of Delaware Judge: Peter J. Walsh Debtors' Bankruptcy Counsel: Proskauer Rose LLP Debtors' Local Counsel: Joel A. Waite, Esq. Robert S. Brady, Esq. Sean Matthew Beach, Esq. Young Conaway Stargatt & Taylor The Brandywine Building 1000 West Street, 17th Floor P.O. Box 391 Wilmington, Delaware 19899-0391 Tel: (302) 571-6600 Fax: (302) 571-0453 Debtors' Investment Banker: Conway, Del Genio, Gries & Company, LLC Debtors' Financial Advisors: W.Y. Campbell & Company Debtors' Claims & Noticing Agent: Bankruptcy Services LLC Consolidated Financial Condition as of May 1, 2005: Total Assets: $108,000,000 Total Debts: $111,000,000 Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chrysler Corporation Trade Debt $2,764,771 800 Chrysler Drive East Auburn Hills, MI 48326-2757 Attn: Dan DeMare Tel: (248) 376-3514 Olympic Steel Lafayette, Inc. Trade Debt $1,246,369 3600 North Military Street Detroit, MI 48210 Attn: Dave Frink Tel: (313) 894-4552 Thermopol Inc. Trade Debt $1,152,810 13 Interstate Drive Somersworth, NH 03878-1235 Attn: Gail Wilson Bill McDill Tel: (603) 692-6300 Aluminum Company of America Trade Debt $1,099,044 36555 Corporate Drive Suite 185 MD2W Farmington Hill, MI 48331 Attn: Colleen Spillard Tel: (248) 489-4372 ORCA Steel Processing Trade Debt $1,138,417 19800 Gibraltar Road Gibraltar, MI 48173 Attn: Bill Brody Tel: (734) 675-0771 Rebel Steel, Inc. Trade Debt $541,041 1720 J.P. Hennessy Drive Lavergne, TN 37086 Attn: Jim Nichols Tel: (615) 641-9841 Future Tool & Die, Inc. Trade Debt $518,130 3115 Dixie Southwest Grandville, MI 49418 Attn: Dennis Bosch Tel: (616) 534-1194 MST Steel Corporation Trade Debt $457,745 24417 Groesbeck Highway Warren, MI 48089 Attn: Joe Heilbronn Tel: (586) 773-5460 LG International (America) Inc. Trade Debt $410,625 17777 Center Court Drive Suite 600 Cerritos, CA 90703 Attn: AR Department Tel: (562) 483-8000 Kerry Steel Trade Debt $402,866 31731 Northwestern Highway Suite 200 Farmington Hills, MI 48334 Attn: Kerry Nagle Tel: (248) 352-0000 Clinton Machine Inc. Trade Debt $353,522 1300 South Main Street Ovid, MI 48866 Attn: Terry Loznak Tel: (989) 834-2235 Southwestern Ohio Steel Inc. Trade Debt $333,286 9050 Centere Point Drive Suite 200 P.O. Box 8712 West Chester, OH 45071-5712 Attn: Joan Noble-Chuhak Tel: (800) 424-5178 ext. 2771 Dayton Steel Service Inc. Trade Debt $326,690 3911 Dayton Park Drive Dayton, OH 45414 Attn: Dave Berie Tel: (800) 968-6940 The Worthington Steel Company Trade Debt $311,068 1152 Industrial Boulevard Louisville, KY 40219 Attn: Shawn Mayhew Tel: (859) 258-9818 Brampton Foundries Ltd. Trade Debt $279,697 246 Rutherford Road South Brampton, Ontario L6W 3N3 CANADA Attn: Graham Thayer Tel: (905) 453-6044 Hydrodynamic Technologies Trade Debt $252,200 30 Silverdome Industrial Park Pontiac, MI 48342 Attn: Kevin Webb Tel: (248) 332-5108 Nara Mold & Die/Woori Bank Trade Debt $249,423 50-1 Sung Ju-Dong Changwon City Gyeong Nam, Korea Midwest Products Finishing Inc. Trade Debt $247,562 6194 Section Road Ottawa Lake, MI 49267 Pinecrest Engineering Inc. Trade Debt $247,250 1555 M-37 South Traverse City, MI 49684 Steel Technologies Trade Debt $239,354 15415 Shelbyville Road Louisville, KY 40253 City of Milan Trade Debt $222,671 147 Wabash Street Milan, MI 48160 Horizon Steel Company Trade Debt $219,434 50390 Utica Drive Shelby Township, MI 48315 City of Saline Trade Debt $185,971 100 North Harris Saline, MI 48176 Marubeni-Itochu Steel AM Trade Debt $185,150 450 Lexington Avenue New York, NY 10017 Trimline Tool Inc. Trade Debt $178,848 4621 Spartan Industrial Drive Grandville, MI 49418 Gibraltar Steel Corporation Trade Debt $173,340 2601 Cambridge Auburn Hills, MI 48326 Aisin Corporation Trade Debt $162,435 46501 Commerce Center Drive Plymouth, MI 48170 Bon L. Canada Inc. Trade Debt $157,465 500 Edward Avenue Richmond Hill, Ontario L4C 4Y9 Fabricated Materials Trade Debt $156,256 2554 South Rochester Road Rochester Hills, MI 48307 Eclipse Tool & Die Trade Debt $145,110 4713 Circuit Court Wayland, MI 49348 METRIS COMPANIES: Plans a $30 Million Prepayment of Senior Notes ---------------------------------------------------------------- Metris Companies Inc. (NYSE:MXT) notified the Trustee of its unsecured 10-1/8% senior notes, which are due July 2006, that Metris intends to make an optional principal prepayment of $30 million. The payment is expected to be made on July 15, 2005. The remaining principal outstanding on the original unsecured senior notes will be $49.1 million as a result of this prepayment. About the Company Metris Companies Inc. (NYSE:MXT) -- http://www.metriscompanies.com/-- based in Minnetonka, Minn, is one of the largest bankcard issuers in the United States. The Company issues credit cards through Direct Merchants Credit Card Bank, N.A., a wholly owned subsidiary headquartered in Phoenix, Arizona. * * * As reported in the Troubled Company Reporter on Apr. 15, 2005, Moody's Investors Service raised the ratings of Metris Companies, Inc. (senior unsecured to B3 from Caa2) and its bank subsidiary Direct Merchants Credit Card Bank NA (issuer to Ba3 from B1). The rating outlook is stable. The rating agency said the upgrade reflects the improvements in Metris's asset quality. These improvements have led to positive earnings at the company as well as the release of trapped cash from its securitization conduits, and have also bolstered ABS investor confidence, giving the company improved access to the securitization market and greater funding flexibility. The ratings action concludes a ratings review begun on January 13, 2005. These ratings were upgraded: Metris Companies Inc.: * the rating for the senior unsecured notes due July 2006 to B3 from Caa2. Direct Merchants Credit Card Bank, N.A.: * the rating of the bank for long-term deposits to Ba2 from Ba3; * the issuerrating and rating for other senior long-term obligations to Ba3 from B1; and * the financial strength rating to D from D-. MID-STATE RACEWAY: Jeffrey Gural & TrackPower File Chapter 11 Plan ------------------------------------------------------------------ TrackPower, Inc. (OTCBB:TPWR) joined with Jeffrey Gural, Chairman of international real estate management firm Newmark & Company Real Estate Inc., to form Vernon Downs Acquisition, LLC, as a vehicle to purchase Vernon Downs Racetrack out of Bankruptcy. TrackPower and Mr. Gural have jointly filed a Chapter 11 Plan of Reorganization together with Mid-State Raceway, Inc., the owner of Vernon Downs, in the U.S. Bankruptcy Court for the Northern District of New York. The Chapter 11 Plan provides that Vernon Downs Acquisition, LLC, will become the sole shareholder of Vernon Downs, but that prior shareholders will be offered the opportunity to purchase ten (10%) per cent of the membership interests in Vernon Downs Acquisition, LLC. If the Plan of Reorganization is approved by the Bankruptcy Court, TrackPower and Mr. Gural will each contribute one-half of the funding required and each will hold a one-half interest in the track upon confirmation, subject to the 10% buy-back for former shareholders. Jeffrey Gural has previously been the Bankruptcy Court approved lender to the Mid-State Raceway for $1,200,000 to meet its on- going operating costs while the Bankruptcy is pending. Pursuant to the agreement between TrackPower and Mr. Gural, Trackpower has provided one-half of the funds necessary for this lending facility. As part of the Reorganization, Mid-State Raceway has reached a settlement with the Harness Horse Association of Central New York, Inc., which is the Horsemen's Association. Under the Agreement approved by Bankruptcy Court, Mid-State will pay certain outstanding debts to unpaid Horsemen, fund the Purse Reserve Account $384,313 and pay certain administrative expenses to the Association. This settlement clears a major obstacle to resuming racing at Vernon Downs. The Bankruptcy Court approved the funding of this settlement on June 15, 2005. Vernon Downs Raceway is the oldest harness track in the State of New York. Mr. Gural is a major owner and breeder of Standardbred racehorses and has a breeding farm in Stanfordville, New York. TrackPower has already partnered with Mr. Gural in the acquisition of Tioga Downs Racetrack located in Nichols, New York. Renovations of the track and buildings at Tioga Downs are underway and the developers expect to engage in harness racing in April of 2006. Tioga Downs currently has a Track and a Simulcast License application pending before the New York State Racing and Wagering Board. TrackPower also disclosed that the County of Tioga legislature has authorized racing and gaming at the Tioga Downs property. Under New York State Law video lottery terminals have not previously been approved at Tioga Downs. In a vote of eight to one, the local representatives passed the enabling legislation to allow horse racing and gaming in the form of VLTs on the Tioga Downs property. John Simmonds, Chairman of TrackPower, and Jeffrey Gural expressed enthusiasm for the concept of operating two tracks in Central New York. The two tracks are approximately 140 miles apart and serve different markets. Yet, these tracks are close enough to share resources of management, horses and horsemen, resulting in significant savings for all parties. It is anticipated that the tracks will develop complimentary schedules which will allow the horsemen a greater number of racing days without traveling to other parts of the country. As part of the development of these two tracks, Mr. Gural has spearheaded the passage of legislation which provides for a greater participation of the Tracks in the takeout share of VLT proceeds and should allow for greater promotional activities which, in turn, will increase revenue for the State of New York. About TrackPower, Inc. TrackPower, upon completion of this transaction will own Tioga Downs. Tioga Downs is located in Nichols, N.Y. on the new Interstate 86 between Binghamton and Corning. Tioga Downs is situated on 130 acres and was home to a state-sanctioned Quarter Horse racetrack. This facility is being redeveloped into a harness track and a 750-machine VLT casino. Headquartered in Vernon, New York, Mid-State Raceway, Inc., dba Vernon Downs -- http://www.vernondowns.com/-- operates a racetrack, restaurant and gaming resort. The Company and its debtor-affiliate filed for chapter 11 protection on August 11, 2004 (Bankr. N.D.N.Y. Case No. 04-65746). Lee E. Woodard, Esq., at Harris Beach LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection, they listed estimated debts of $10 million to $50 million but did not disclose its assets. MIRANT CORP: Court OKs $85M Wrightsville Sale to Arkansas Electric ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas allows Mirant Corporation and its debtor-affiliates to sell their Wrightsville Assets to Arkansas Electric Cooperative Corporation for $85 million Wrightsville Assets Mirant Corporation, Mirant Wrightsville Management, Inc., and Mirant Wrightsville Investment, Inc., are parties to a joint development venture with Kinder Morgan Power Company. The parties agreed to construct and operate a nominal 548 megawatt gas-fired combined cycle power generating facility located in Wrightsville, Arkansas. The development, construction and operation of the Facility were organized through Wrightsville Power Facility, LLC, while funding for the Facility was organized through Wrightsville Development Funding LLC. Wrightsville Management and Wrightsville Investment own a 51% interest in both WPF and WDF, while Kinder owns a 49% interest in each entity. Mirant Americas, Inc. owns 100% of the common stock of each of Wrightsville Management and Wrightsville Investment. On October 15, 2004, the parties executed a letter of intent. After extensive negotiations, the parties entered into an Asset Purchase and Sale Agreement, with a purchase price of $85,000,000 for the Assets. AECC will assume certain liabilities arising out of the ownership or operation of the Facility, excluding real and personal property taxes for any period prior to January 1, 2006. The Sale Agreement supersedes and replaces the LOI in its entirety. Pay Which Debtor? Judge Lynn orders Wrightsville Power Facility, LLC, Wrightsville Development Funding LLC, Mirant Wrightsville Management, Inc., and Mirant Wrightsville Investment, Inc., to designate which of the Debtors is to be paid the Purchase Price by Arkansas Electric Cooperative Corporation. In the event that the Asset Sale occurs prior to consummation of a confirmed Chapter 11 plan, and the proceeds are to be allocated to any entity other than Wrightsville Development, then the Debtors will provide to Deutsche Bank Securities, Inc., notice designating which of the Debtors is to be paid the Purchase Price by Arkansas Electric, on or prior to the Closing Date. On the Closing Date, all liens, claims, encumbrances and interests against the Scheduled Assets will be removed and stricken as against the Scheduled Assets, without Court's Order or act of any party, provided that the Entergy Substation Agreements and the Entergy Substation Rights will not be stricken or removed. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., 215/945-7000) MORGAN STANLEY: Moody's Affirms C Rating on $8.73MM Class H Certs. ------------------------------------------------------------------ Moody's Investors Service affirmed or confirmed nine classes of Morgan Stanley Capital I, Inc., Commercial Mortgage Pass-Through Certificates, Series 1997-XL1 as: -- Class A-2, $54,309,678, Fixed, affirmed at Aaa -- Class A-3, $226,171,000, Fixed, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $22,636,000, affirmed at Aaa -- Class C, $22,636,000, WAC, affirmed at Aaa -- Class D, $45,271,000, WAC, affirmed at Aa1 -- Class E, $45,271,000, WAC confirmed at A2 -- Class G, $26,408,000, WAC affirmed at Caa2 -- Class H, $8,737,205, WAC, affirmed at C As of the June 6, 2005 distribution date, the transaction's aggregate certificate balance has decreased by approximately 34.7% to $492.9 million from $754.5 million at closing as a result of the payoff of three loans, the liquidation of the Westgate Mall Loan and amortization. The five remaining loans range in size from 3.9% to 24.3% of the pool based on current principal balances. Three of the eight remaining loans, which comprise 52.8% of the aggregate certificate balance, have defeased in their entirety -- 605 Third Avenue, Edens & Avant Pool and FGS Pool (Ashford Financial). Three of the five non-defeased properties (Mansion Grove Apartments, Fashion Mall and Mark Centers Pool) have exhibited stable performance since Moody's last full review in April 2004. The Grand Kempinski Hotel Loan has experienced deterioration in cash flow and the mortgage securing the Westshore Mall Loan was foreclosed in March 2005. Moody's current loan to value ratio for the non-defeased portion of the pool is 70.6%, compared to 71.0% at last review and compared to 56.6% as of Moody's June 2001 review. Class E was placed on review for possible downgrade on January 26, 2005 pending the outcome of the two specially serviced loans and a full review of all the loans in the pool. Westgate Mall was liquidated with a $13.9 million loss and the loss on the Westshore Mall is expected to amount to approximately $6.0 million. Moody's is confirming Class E and affirming the remaining classes as the ratings are appropriate given current pool performance and the expected loss on the Westshore Mall. The Mansion Grove Apartments Loan ($66.9 million - 13.6%) is secured by an 876-unit multifamily property located in Santa Clara, California. The property has maintained occupancy levels in excess of 94.0% for the past two years; however, the vacancy rate for multifamily properties in the Santa Clara/North San Jose submarket has increased from 3.6% to 4.3% since Moody's last full review in April 2004. Rental rates have decreased 1.8% during the same period and have decreased 14.4% since Moody's July 2001 review. The decrease in market rent is due primarily to weakness in the technology sector, the primary economic engine for the region. Moody's LTV is 74.8%, compared to 76.0% at last review. Moody's current shadow rating is Ba3, the same as at last review. The Fashion Mall Loan ($59.1 million - 12.0%) is secured by a leasehold interest in Keystone at the Crossing Fashion Mall, an enclosed two-anchor regional mall located in the northern suburbs of Indianapolis, Indiana. The property is anchored by Saks Fifth Avenue (Moody's senior unsecured rating B1; on review direction uncertain) and Parisian (parent Saks Inc.) and contains approximately 682,912 square feet, of which 349,222 square feet is mall shop gross leasable area. Saks Fifth Avenue replaced Jacobson's in September 2003. Property performance has been stable. In-line tenant sales for calendar year 2004 were in excess of $500 per square foot. The loan sponsor is Simon Property Group, Inc. (Moody's senior unsecured rating Baa2; positive outlook). Moody's LTV is 43.4%, compared to 46.4% at last review. Moody's current shadow rating is Aa1, the same as at last review. The Grand Kempinski Hotel Loan ($48.2 million - 9.8%) is secured by a 528-room hotel currently flagged as the Hotel Intercontinental Dallas. The hotel features extensive meeting and banquet facilities and is located in north Dallas, Texas. The property has performed significantly below expectations and is currently on the master servicer's watchlist. For the 12-month period ending December 2004, occupancy was 49.3% with RevPAR of $52.66. The borrower has been funding shortfalls for an extended period of time. Moody's LTV is in excess of 100.0%. Moody's current shadow rating is Caa2, the same as at last review. The Mark Centers Trust Portfolio Loan ($39.5 million - 8.0%) is secured by 17 community and neighborhood retail shopping centers located in tertiary markets in Pennsylvania, Alabama, South Carolina, New York, Virginia, Georgia and Florida. The Mark Centers properties consist of approximately 2.3 million square feet of gross leasable area. The portfolio has performed as expected despite declining occupancy. As of the third quarter of 2004 the portfolio was 87.0% occupied, compared to 82.0% at last review. The decline in occupancy since securitization is due in part to Ames having vacated approximately 184,000 square feet in four separate locations. Re-leasing progress has been made. Moody's LTV is 67.6%, compared to 70.8% at last review. Moody's current shadow rating is Ba3, the same as at last review. The Westshore Mall Loan ($19.1 million - 3.9%) is secured by an enclosed four-anchor regional mall located in Holland, Michigan, approximately 35 minutes south of Grand Rapids. The mall is anchored by Younkers (parent Saks Incorporated), Sears (Moody's senior unsecured shelf (P)Ba1; stable outlook) and J.C. Penney (Moody's senior unsecured rating Ba1; stable outlook) and contains 143,034 square feet of in-line shop space, 26,087 square feet of community shopping center space and 11,011 square feet of out parcels. The mortgage was foreclosed in March 2005 and a court appointed receiver is in place. The borrowers are affiliates of Ivanhoe, Inc. (85.0% - Caisse de Depot et Placement du Quebec) and Wilmorite, Inc. (15.0%). Wilmorite was recently acquired by The Macerich Company. The borrower has a six month right of redemption from the foreclosure date, delaying the ultimate liquidation. A recent appraisal indicates an as-is property value in the range of $13.0 to $14.0 million. Expert opinion has indicated conversion to a big box format as the highest and best use. NEW MEXICO: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: New Mexico Motor Speedway, Inc. 5801 Mimosa Place Northeast Albuquerque, New Mexico 87111 Bankruptcy Case No.: 05-14845 Type of Business: The Debtor is a land developer. The Debtor also owns and operates a raceway. James Michael Jones, the Debtor's president, filed for chapter 7 liquidation on March 28, 2005, and his case is pending before the Hon. Mark B. McFeeley (Bankr. D. N.M. Case No. 05-12357). Chapter 11 Petition Date: June 14, 2005 Court: District of New Mexico Judge: James S. Starzynski Debtor's Counsel: George 'Dave' Giddens, Esq. Law Office of George 'Dave' Giddens, P.C. 10400 Academy Northeast, Suite 350 Albuquerque, New Mexico 87111 Tel: (505) 271-1053 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. NORTHWEST AIRLINES: Reorganizes Marketing & Sales Functions ----------------------------------------------------------- Northwest Airlines (Nasdaq: NWAC) disclosed a reorganization of its marketing and sales functions in order to better reflect the airline's renewed commitment to developing travel products that best serve the needs of its business and leisure customers. Thomas J. Bach, vice president-market planning and Airlink, has been named to the new position of vice president-network planning & revenue management. Mr. Bach will be responsible for the airline's worldwide route planning and scheduling for Northwest and Northwest Airlink. In addition, he will be responsible for the revenue management group including North American pricing, revenue analysis and yield management optimization. In this role, he will lead the development and implementation of pricing strategies, automated systems and marketing programs to maximize the revenue contribution of the airline's North American route network including Northwest Airlink. Jim Cron, vice president-domestic pricing and yield management, has been named vice president-passenger marketing and sales. Mr. Cron has also been named chief executive officer of MLT Vacations, a wholly owned subsidiary of Northwest. Mr. Cron will now be responsible for the company's passenger and airline partner marketing, marketing and loyalty programs and sales organizations. At MLT, Mr. Cron will be responsible for marketing Northwest's WorldVacations products, as well as other leisure travel packages sold under the Worry-Free Vacations brand. Crystal Knotek, vice president-reservations sales and services, has been named vice president-reservations and customer care. Ms. Knotek continues to be responsible for the management of the airline's five domestic call centers. In addition, she will now lead Northwest's customer care organization that works with the airline's customers to understand their needs and address any of their concerns. Messrs. Bach and Cron and Ms. Knotek will continue to report to Tim Griffin, executive vice president-marketing and distribution. "This consolidation of our marketing and sales activities under the leadership of three long-serving Northwest executives is a testament to their talent and their understanding of the changing marketplace," Mr. Griffin said. "Tom, Jim and Crystal have very strong teams to support them as they work to ensure that we continue to provide our customers with a strong route network that offers a convenient schedule and competitive prices." Northwest is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,600 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The carrier's reported losses since 2001. It lost about $458 million in the first quarter of 2005 and $878 million during 2004. Northwest's junk-rated 7-7/8% Notes due March 15, 2008, trade for less than 50-cents-on-the-dollar today. Northwest Airlines Corp.'s common shares are trading below $6 this week. The stock was at $11 per share in December. PACIFIC MAGTRON: Inks Interim Management Pact with Micro Tech. -------------------------------------------------------------- Advanced Communications Technologies, Inc. (OTC Bulletin Board: ADVC) and its majority owned subsidiary, Pacific Magtron International Corporation (OTC Bulletin Board: PMIC), disclosed that effective June 7, 2005, Pacific Magtron, Inc., an operating subsidiary of Pacific Magtron International Corporation, has signed a definitive Interim Management Agreement with Micro Technology Concepts, Inc. Micro Technology is a wholly owned subsidiary of MTC Direct and a privately held California-based distributor of storage and media products. As a result, Pacific Magtron, who is currently under Chapter 11 bankruptcy protection, will be able to continue operations distributing computers, peripherals and components to customers from its current location in Milpitas, California. Under the terms of the agreement, which was approved by the U.S. Bankruptcy Court for the District of Nevada on June 15, 2005, Micro Technology Concepts will, for a period of 60 days, or upon earlier approval by the court of a proposed joint venture, manage the operations of Pacific Magtron's business and supply the company with merchandise to ensure ample inventory and uninterrupted service to Pacific Magtron's customers. In return, Micro Technology Concepts will receive a fee in the form of a percentage of the gross margin generated by Pacific Magtron's sales. Micro Technology Concepts is Pacific Magtron's largest vendor and secured creditor, and has been the company's supplier for several years. The signed agreement provides an opportunity for Micro Technology Concepts to expand its U.S. customer base. Additionally, and subject to approval by the court, both parties have agreed to enter into a binding joint venture, to be named Pacific Connections, LLC. Under the terms of the joint venture, Pacific Magtron will receive 50% of the profits generated by Pacific Connections during its first two years of operations in return for its trademarks, goodwill, customer relationships and access to staff. Pacific Magtron's profits generated by Pacific Connections will be used to satisfy creditors of Pacific Magtron. In addition, Pacific Connections will assist in selling Pacific Magtron's remaining inventory and collecting its accounts receivables without additional fees. Martin Nielson, chairman and chief executive officer of PMIC, stated, "This new relationship with Micro Technology is an important first step in the re-launch of the company and provides the basis for a solution for Pacific Magtron's creditors." Mr. Nielson continued, "When the company filed for voluntary bankruptcy because it could not continue operations, we were determined to find an operating partner to manage our legacy business and protect our creditors. I am confident that Roy Han, president of Micro Technology, and his team of motivated seasoned professionals will prove to be a productive partner in serving our customers while we work together to secure approval for Pacific Magtron's reorganization plan." "I believe that we are a superior fit for Pacific Magtron's computer, peripheral and software distribution business," said Mr. Han, adding, "I have been doing business with this company for over ten years, so we already know that we can work well together, which gives us an immediate advantage in making this effort successful. Restoring Pacific Magtron's customer service and creating future value for our businesses under one company name once the joint venture is consummated will be our collective goal." Mr. Han said, "We are committed to supporting Pacific Magtron's reorganization and look forward to working more closely with their team." Wayne Danson, president and chief executive officer of Advanced Communications, said, "We have been working very closely with PMIC's management and with Roy Han to bring this planned joint venture to a proper conclusion. This represents the first in a series of new strategies that we intend to execute in support of our overall plan and investment in PMIC." About Advanced Communications Advanced Communications Technologies, Inc. -- http://www.advancedcomtech.net/-- is a publicly traded New York City-based technology and services holding company that, through its majority owned subsidiary, Pacific Magtron International Corporation, is a distributor of hardware components, computer systems and software products and, through its wholly owned subsidiary and principal operating unit Encompass Group Affiliates, Inc., is a provider of board-level repair of technical products to third-party warranty companies, OEMs, national retailers and national office equipment dealers. Service options include advance exchange, depot repair, call center support, parts and warranty management for office equipment, fax machines, printers, scanners, laptop computers, monitors and multi-function units, including high-end consumer electronics such as PDAs and digital cameras. Additionally, through its wholly owned investment subsidiary Hudson Street Investments, Inc., Advanced Communications makes strategic minority investments in public and private companies. Headquartered in Milpitas, California, Pacific Magtron International Corp. -- http://www.pacificmagtron.com/-- distributes some 1,800 computer hardware, software, peripheral, and accessory items that it buys directly from 30 manufacturers like Creative Labs, Logitech, and Yamaha. The Company, along with its subsidiaries, filed for chapter 11 protection on May 11, 2005 (Bankr. D. Nev. Case No. 05-14326). Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, represents the Debtors in their restructuring efforts. As of Dec. 31, 2004, the Company reported $11,740,700 in total assets and $11,105,200 in total debts. PEGASUS SATELLITE: Can Assume Fox TV Executory Contracts -------------------------------------------------------- Pegasus Satellite Communications, Inc. and its debtor-affiliates' Broadcast Assets include television stations they owned and operated. Three television stations are currently affiliates of the Fox television network pursuant to certain Standard Network Affiliation Agreements between Pegasus Broadcast Television, Inc., and Fox Broadcasting Company or Fox News Network, LLC: (a) WOLF-TV (Channel 56) located in Scranton, Pennsylvania; (b) WDSI-TV (Channel 61) located in Chattanooga, Tennessee; and (c) WTLH-TV (Channel 49) located in Tallahassee, Florida. PBT and Fox also entered into Corollary Agreements for each television station: Proposed Contract Cure Amount -------- ----------- Station Affiliation Agreement (WDSI) - Station Affiliation Agreement (WOLF) - Station Affiliation Agreement (WTLH) - 1998 NFL Supplemental Agreement (WDSI) $5,226 1998 NFL Supplemental Agreement (WOLF) 5,788 1998 NFL Supplemental Agreement (WTLH) 4,651 Prime-Time Inventory Purchase (WDSI) - Prime-Time Inventory Purchase (WOLF) - Prime-Time Inventory Purchase (WTLH) - News Service Agreement (WDSI) 185 News Service Agreement (WOLF) 293 News Service Agreement (WTLH) 120 By this motion, the Debtors and Ocean Ridge Capital Advisors, LLC, the Liquidating Trustee of The PSC Liquidating Trust established under the Plan, seek the U.S. Bankruptcy Court for the District of Maine's authority to assume the Fox Affiliation Agreements. The Debtors and the Liquidating Trustee intend to pay the cure amounts related to the Fox Affiliation Agreements. John P. McVeigh, Esq., at Preti, Flaherty, Beliveau, Pachios & Haley, LLP, in Portland, Maine, tells the Court that the Stations' continued relationship with Fox pursuant to the Fox Affiliation Agreements is vital to the marketable value of the Stations. * * * Judge Haines authorizes the Debtors to assume the Fox Affiliation Agreements effective as of June 10, 2005. In a stipulated order signed by the Court, the parties agree that: (a) the Cure Amount relating to Fox News will be $17,074, which includes amounts owed pursuant to the invoices payable for May and June 2005. (b) the Cure Amounts will be paid by July 25, 2005; (c) the Fox Entities will be forever barred from asserting any claims against the Debtors, the Reorganized Debtors or the Liquidating Trustee, or their successors or assigns, with respect to the Fox Affiliation Agreements; and (d) the Fox Affiliation Agreements will expire by their terms on June 30, 2005. Any agreements entered into between the Fox Entities and the Reorganized Debtors after June 10, 2005, will be deemed to be new agreements and will not be deemed to relate to, modify, amend, arise from, or have any relationship or affiliation to or with the current Agreements. Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite Communications, Inc. -- http://www.pgtv.com/-- is a leading independent provider of direct broadcast satellite (DBS) television. The Company, along with its affiliates, filed for chapter 11 protection (Bankr. D. Maine Case No. 04-20889) on June 2, 2004. Larry J. Nyhan, Esq., James F. Conlan, Esq., and Paul S. Caruso, Esq., at Sidley Austin Brown & Wood, LLP, and Leonard M. Gulino, Esq., and Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,762,883,000 in assets and $1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) PHEASANT BROOK: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Pheasant Brook, LLC 3125 South 4100 West Malad City, Idaho 83252 Bankruptcy Case No.: 05-41305 Chapter 11 Petition Date: June 16, 2005 Court: District of Idaho Debtor's Counsel: Brent T. Robinson, Esq. Ling, Robinson & Walker 615 H. Street, P.O. Box 396 Rupert, Idaho 83350 Tel: (208) 436-4717 Total Assets: $2,839,028 Total Debts: $2,507,721 Debtor's 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Target Limited Real property $700,000 Lorne House Castleton, Isle of Man British Isles 1M91AZ Lookout Point Crops $60,000 Subdivision LLC 476 heritage Park Blvd. #200 Layton, UT 84041 American Pump Co. Trade debt - pump $15,058 P.O. Box 267 and pivot repairs, Ucon, ID 83454-0267 hand lines Hess Building Contractors Trade debt - dozer $1,245 Work and gravel K.C. Oil Trade debt - fuel $1,100 Hess Pumice Products Trade debt - equipment $945 repairs Todd Hyde Trade debt - hand lines $468 and parts Hess Lumber Services charges on $174 bills for materials that have been paid Stro's Electric, Inc. Trade debt - well repairs $122 PSYCHIATRIC SOLUTIONS: S&P Rates Proposed $325MM Term Loan at B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' bank loan rating to Psychiatric Solutions Inc.'s proposed $325 million term loan B due in 2012 and $150 million revolving credit facility due in 2009. A recovery rating of '3' also was assigned to the secured loan, indicating the expectation for meaningful (50%-80%) recovery of principal in the event of a payment default. In addition, Standard & Poor's assigned its 'B-' rating to the company's proposed $150 million senior subordinated notes due in 2013. Existing ratings on PSI, including the 'B+' corporate credit rating, were affirmed. All ratings were removed from CreditWatch, where they were placed with negative implications March 11, 2005, following the company's announcement of its intention to predominantly debt finance its $560 million acquisition of Ardent Health Services' portfolio of 20 behavioral hospitals. The rating outlook is negative. "The negative outlook reflects our concern regarding the substantial debt burden PSI will face following the Ardent transaction, and our belief that this will continue to be a key rating factor for the next couple of years," said Standard & Poor's credit analyst Jesse Juliano. The company intends to use the proceeds from the term loan B and subordinated notes, $35 million of additional draw on the revolving credit facility, $10 million of cash on hand, and $60 million of new PSI equity to finance the $560 million acquisition and $20 million of related fees and expenses. The ratings on behavioral health care provider PSI reflect the company's significant debt burden, the risks associated with its aggressive acquisition strategy (such as the effective operation of new assets), and the challenge of managing a much larger entity. PSI is also exposed to potential government reimbursement changes. These concerns are partially offset by the company's position as one of the largest providers in the highly fragmented behavioral health industry, its history of successful acquisitions since 2003, and its record of exceeding Standard & Poor's performance expectations. After the transaction, PSI will provide behavioral health programs through 54 owned or leased in-patient psychiatric facilities, which will have more than 6,300 licensed beds. The company also provides management services for 42 psychiatric in-patient units in acute care hospitals and in eight freestanding facilities. R.F. CUNNINGHAM: Taps Holtz Rubenstein as Accountants ----------------------------------------------------- R.F. Cunningham & Co., Inc., asks the U.S. Bankruptcy Court for the Eastern District of New York for permission to employ Holtz Rubenstein Reminick LLP as its accountants. Holtz Rubenstein is familiar with the Debtor's financial history and corporate make up because of its prepetition work for the Debtor. Holtz Rubenstein is expected to: a) prepare Federal and various state corporate tax returns of the Debtor; b) assist the Debtor in the preparation of monthly operating statements; c) review the Debtor's existing operating and accounting controls over billings, collections, purchase and cash disbursements and other matters as deemed necessary; and d) render other accounting, tax and consulting assistance as the Debtor deems necessary and appropriate. Barry H. Garfield, at Holtz Rubenstein, discloses that the Debtor paid his Firm a $50,000 retainer. Mr. Garfield adds that his current billing rate is $100 to $350 per hour. To the best of the Debtor's knowledge, Holtz Rubenstein is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Smithtown, New York, R.F. Cunningham & Company, is a grain dealer, licensed under the Agriculture and Markets Law of New York. The company filed for chapter 11 protection on June 13, 2005 (Bankr. E.D.N.Y. Case No. 05-84105). Harold S. Berzow, Esq., at Ruskin Moscou Faltischek, P.C., represents the Debtor in its restructuring efforts. When The Debtor filed for protection from its creditors, it listed $8,416,240 in total assets and $10,218,229 in total debts. SALOMON BROTHERS: Fitch Junks Ratings on 3 Mortgage Certificates ---------------------------------------------------------------- Fitch Ratings has taken rating actions on Salomon Brothers Mortgage Securities VII, Inc., mortgage pass-through certificates: Series 2000-UP1 -- Class A1, A2, PO affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA+'; -- Class B-3 affirmed at 'BBB+'; -- Class B-4 affirmed at 'BB'; -- Class B-5 downgraded to 'CC' from 'CCC'. Series 2001-UP1 group 1 -- Class AF affirmed at 'AAA'; -- Class BF-1 affirmed at 'AAA'; -- Class BF-2 upgraded to 'AA' from 'A+'; -- Class BF-3 upgraded to 'A' from 'BBB'; -- Class BF-4 affirmed at 'BB'; -- Class BF-5 affirmed at 'B'. Series 2001-UP1 group 2 -- Class AV affirmed at 'AAA' -- Class BV-1 affirmed at 'AAA' -- Class BV-2 upgraded to 'AAA' from 'AA' -- Class BV-3 upgraded to 'AA' from 'A' -- Class BV-4 upgraded to 'BBB' from 'BB+' -- Class BV-5 upgraded to 'BB' from 'B' Series 2001-UP2 group 1 pool 1 -- Class AF-1 and PO affirmed at 'AAA'; -- Class BF-1 affirmed at 'AAA'; -- Class BF-2 affirmed at 'AA'; -- Class BF-3 affirmed at 'BBB'; -- Class BF-4 affirmed at 'BB-'; -- Class BF-5 remains at 'C'. Series 2001-UP2 group 1 pool 2 -- Class AF-2 affirmed at 'AAA'. Series 2001-UP2 group 2 -- Class AV affirmed at 'AAA'; -- Class BV-1 affirmed at 'AA'; -- Class BV-2 affirmed at 'A'; -- Class BV-3 downgraded to 'BBB-' from 'BBB'; -- Class BV-4 downgraded to 'CCC' from 'B+'; -- Class BV-5 downgraded to 'CC' from 'CCC'. The upgrades, affecting $6.51 million of outstanding certificates, reflect increased credit enhancement relative to future loss expectations. The affirmations, affecting $126.56 million of debt, reflect credit enhancement consistent with future loss expectations. The negative rating actions are the result of poor collateral performance and the deterioration of asset quality beyond original expectations and affect $1.07 million of outstanding certificates The series 2000-UP1 transaction is collateralized by 30-year fixed-rate mortgage loans. As of the May 2005 distribution, the pool factor (current mortgage loans outstanding as a % of the initial pool) is 12.79%. The mortgage pool is currently 56 months seasoned. The current pool balance is $74,211,214, and there are 1,875 mortgage loans remaining. The 90 plus delinquencies represent 7.61% of the mortgage pool, and foreclosures and REO represent 1.96% and 2.56%, respectively. The series 2001-UP1 (groups 1 and 2) transaction is collateralized by 30-year fixed-rate and adjustable-rate fully amortizing mortgage loans. As of the May 2005 distribution, the pool factor for group 1 and group 2 is 14.55% and 14.84%, respectively. The mortgage pool is currently 49 months seasoned. Groups 1 and 2 are not cross-collateralized. Series 2001-UP2 (groups 1 and 2) comprise 30-year fixed-rate and 15-year adjustable-rate, fully amortizing mortgage loans. As of the May 2005 distribution, the 2001-UP2 mortgage pool is 44 months seasoned. The current pool factor for group 1 and group 2 is 11.4% and 32%, respectively. The current pool balance of group 1 is $35,411,033, and there are 642 mortgage loans remaining. The 90 plus delinquencies represent 7.42% of the mortgage pool, foreclosures, and REO represent 0.91% and 2.04%, respectively. The current pool balance of group 2 is $6,531,921 and there are 131 loans remaining. The 90+ delinquencies represent 1.81% of the mortgage pool, foreclosures represent 1.29%. There are no loans in the REO bucket. Groups 1 and 2 are not cross-collateralized. The group 1 pool is further subdivided into two subgroups IA and IB, which are not fully cross-collateralized but do in certain circumstances provide limited cross-support. The mortgage loans are being serviced by Union Planters PMAC, Inc. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Ratings web site at http://www.fitchratings.com/ SALTON INC: Fails to Make Interest Payment on $6.7M Sr. Sub. Notes ------------------------------------------------------------------ Salton, Inc. (NYSE:SFP) did not make the interest payment of approximately $6.7 million due on June 15 under its outstanding 10-3/4% senior subordinated notes. The indenture governing the notes provides for a 30-day grace period with respect to the payment of this interest. The Company believes that it is prudent to utilize this grace period while it continues to pursue various strategic options to refinance the 10-3/4% senior subordinated notes due December 15, 2005. The Company intends to operate in the normal course of business during this period and to maintain its high level of responsiveness to its customers and vendors. There can be no assurance that the Company will make the interest payment during the grace period. Salton continues to pursue various previously disclosed strategic options to raise funds required to satisfy the $125 million of outstanding 10-3/4% senior subordinated notes due December 15, 2005 and allow the Company to satisfy its liquidity needs. These strategic options may include, among other things, incurring additional debt, issuing debt or equity securities, sales of assets or businesses, reducing expenditures for new product development and/or cutting other costs, repurchasing outstanding debt securities, exchange offers and/or consent solicitations of outstanding securities. There can be no assurance that any of these options can be effected or that these options would enable the Company to repay the outstanding 10-3/4% senior subordinated notes or satisfy the Company's liquidity needs. These announcements prompt Standard & Poor's Ratings Services to lower its corporate credit rating on Salton Inc. to 'D' from 'CCC'. At the same time, Salton's subordinated debt rating was lowered to 'D' from 'CC'. Lenders & Professionals Silver Point Finance LLC provides the company with working capital financing under the terms of an Amended and Restated Credit Agreement, dated as of May 9, 2003. Salton Europe, Limited, the Company's wholly owned subsidiary, obtains working capital financing under an agreement with Hong Kong Shanghai Bank. Salton has retained Houlihan Lokey Howard & Zukin for financial advice. Third Point LLC, a large holder of Salton debt, has joined with other bondholders, and retained legal counsel and financial advisors, according to a report from Harris Rubinroit at Bloomberg News. About the Company Salton, Inc. is a leading designer, marketer and distributor of branded, high quality small appliances, electronics, home decor and personal care products. Its product mix includes a broad range of small kitchen and home appliances, electronics for the home, tabletop products, time products, lighting products, picture frames and personal care and wellness products. The company sells its products under a portfolio of well recognized brand names such as Salton(R), George Foreman(R), Westinghouse (TM), Toastmaster(R), Mellitta(R), Russell Hobbs(R), Farberware(R), Ingraham(R) and Stiffel(R). It believes its strong market position results from its well-known brand names, high quality and innovative products, strong relationships with its customers base and its focused outsourcing strategy. SALTON INC: S&P Assigns D Ratings After Missing Interest Payment ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Salton Inc. to 'D' from 'CCC'. At the same time, Salton's subordinated debt rating was lowered to 'D' from 'CC'. These actions reflect the announcement by Lake Forest, Illinois- based Salton that it will not make its interest payment due June 15, 2005, on its senior subordinated notes that mature on Dec. 15, 2005. Salton is a designer and marketer of kitchen and household appliances and personal care products. In addition to its own brand name, the company markets products under the George Foreman(TM), Juiceman(TM), Toastmaster(TM), Farberware(TM), Westinghouse(TM), and Melitta(TM) brands. SAKS INC: Moody's Downgrades Senior Implied Rating From B1 to B2 ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Saks Inc. and left the ratings on review for further possible downgrade following the company's announcement that it has received notice of a default under its $230 million senior convertible notes. The notice of default was triggered by the company's delay in filing its financial statements for the last fiscal year and for the first quarter of the current fiscal year as a result of the ongoing investigation into accounting and other financial matters. Moody's rating action reflects: (1) the high likelihood that the company will not file its financial statements before the 60 day cure-period under the indenture has elapsed, which would accelerate the maturity of some or all of the company's $1.22 billion of funded debt; (2) the risk that the sale of certain assets to Belk, Inc. may not close on a timely basis, which would impact the liquidity available to repay the senior notes in the event that they were accelerated; and (3) the ongoing uncertainty regarding the response of vendors and other constituencies to the notice of default. Moody's notes that the company has a variety of liquidity sources that it could use to repay its $1.22 billion of funded debt if it were to be accelerated, as well as to meet its peak working capital needs. Saks has potentially $1.575 billion of liquidity from three sources: 1) $324 million of cash on hand in excess of the cash that it needs to operate its businesses; 2) $650 million available under its $800 million revolving credit facility; and 3) approximatley $620 million of potential proceeds from the sale of its Proffitt's and McRae's stores to Belk, which is anticipated to close on July 5. The bank lenders under the company's credit agreement have waived any event of default that could occur under this agreement due to Saks' failure to file financial statements for the last fiscal year and for the first quarter of the current fiscal year on a timely basis. The sale of its Proffitt's and McRae's stores to Belk has received FTC approval and there currently are no other conditions that need to be met for the transaction to close on July 5th. Additionally, the company currently has its Northern Group up for sale and has sizable real estate holdings that could be monetized in the longer term. In the ongoing review for possible downgrade, Moody's will monitor carefully the: * company's liquidity profile; * prospects for a timely closing of the transaction with Belk; * progress in resolving the internal investigation and preparing the delayed financial statements; and * the response of vendors and other constituencies to the notice of default. Ratings could be further downgraded should the Belk transaction not close as anticipated, should the company's liquidity position otherwise deteriorate such that it would be unlikely to be able to repay its funded debt in the event of acceleration or should the supplemental investigation uncover more significant irregularities. These ratings are downgraded: Saks, Inc.: * Senior implied from B1 to B2; * Senior unsecured debt guaranteed by operating subsidiaries from B1 to B2; * Senior unsecured long term issuer rating from B2 to B3; * Prospective ratings for prospective senior unsecured debt, subordinated debt and preferred stock issued from the company's shelf registration from (P) B1; (P) B3, (P) B3 to (P) B2; (P) Caa1, (P) Caa1. Proffit's Capital Trust I, II, III, IV, and V: * Preferred Stock Shelf from (P) B3 to (P) Caa1. Saks Inc., headquartered in Birmingham, Alabama, operates about 381 department stores and specialty stores under the names: * Saks, * Proffit's, * Parisian, * McRae's, * Carson Pirie Scott, * Bergners, * Off 5th, and * Club Libby Lu. Revenues for fiscal year 2004 were $6.4 billion. SIERRAS INC: Voluntary Chapter 11 Case Summary ---------------------------------------------- Lead Debtor: Sierras, Inc. 470 North Road Sudbury, Massachusetts 01776 Bankruptcy Case No.: 05-44099 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- JACQ, Inc. 05-44098 Samuel Joseph & Erica Sybil Cannarozzi 05-44102 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: June 16, 2005 Court: District of Massachusetts (Worcester) Judge: Joel B. Rosenthal Debtors' Counsel: Thomas J. Raftery, Esq. P.O. Box 550 Carlisle, Massachusetts 01741-0550 Tel: (978) 369-4404 Fax: (978) 369-7816 Total Assets Total Debts ------------ ----------- Sierras Inc. $50,000 $1,500,000 JACQ, Inc. $100,000 $150,000 Estimated Assets Estimated Debts ---------------- --------------- Samuel Joseph & $500,000 to $1 Million to Erica Sybil Cannarozzi $1 Million $10 Million The Debtors' did not file a list of their 20 Largest Unsecured Creditors. SINCLAIR BROADCAST: Completes Debt-for-Equity Swap -------------------------------------------------- Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) completed its exchange of the $3 Series D Convertible Exchangeable Preferred Stock (Nasdaq: SBGIP) into Exchange Debentures effective June 15, 2005. Pursuant to the terms of the Preferred Stock, a holder of the Preferred Stock received $1,000 principal amount of Exchange Debentures for each $1,000 of liquidation preference of Preferred Stock held by such holder at the Exchange Date, plus accrued but unpaid dividends thereon on the Exchange Date. The Exchange Debentures mature September 15, 2012, and bear interest at a rate of 6% per annum, payable quarterly on each March 15, June 15, September 15 and December 15, beginning September 15, 2005. The Exchange Debentures are convertible into Class A Common Stock on substantially the same conversion terms as the Preferred Stock. About the Company Sinclair Broadcast Group, Inc. -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, owns and operates, programs or provides sales services to 61 television stations in 38 markets. Sinclair's television group includes FOX, WB, ABC, CBS, NBC, and UPN affiliates and reaches approximately 23.0% of all U.S. television households. * * * As reported in the Troubled Company Reporter on April 18, 2005, Standard & Poor's Ratings Services assigned its 'BB' rating to Sinclair Television Group Inc.'s proposed $555 million secured credit facilities. A recovery rating of '1' was also assigned, indicating a high expectation of a full (100%) recovery of principal in the event of a payment default. Borrowings are being used to refinance the company's credit facility. At the same time, Standard & Poor's affirmed its 'BB-' long-term corporate credit rating on parent company Sinclair Broadcast Group Inc. The outlook is negative. Hunt Valley, Maryland-based Sinclair had total debt outstanding of approximately $1.6 billion at Dec. 31, 2004. The effect of the proposed transaction is to lower the company's interest expense. "The rating on Sinclair continues to reflect high financial risk from aggressive, debt-financed TV station acquisitions, a portfolio of generally lower ranked stations, and television advertising's mature revenue growth prospects," said Standard & Poor's credit analyst Alyse Michaelson Kelly. These factors are partially offset by the company's large television audience reach, television broadcasting's good margin and discretionary cash flow potential, and resilient station asset values. The negative outlook recognizes that leverage is high for the 'BB-' rating level. There is modest debt capacity at the current rating to withstand operating shortfalls, share repurchases, or acquisitions. Reducing leverage by using cash flow to lower debt, in both political and nonpolitical years, will be important in any consideration of an outlook revision to stable. SYNAGRO TECHNOLOGIES: Prices 9-1/2% Senior Sub. Debt Tender Offer ----------------------------------------------------------------- Synagro Technologies, Inc. (Nasdaq Small Cap:SYGR) disclosed the pricing terms of its previously announced cash tender offer and consent solicitation for all $150 million of its outstanding 9-1/2% Senior Subordinated Notes due 2009. The Offer is fully subscribed and withdrawal rights expired on June 7, 2005. The total consideration for each $1,000 principal amount of Notes validly tendered and not revoked prior to 5:00 p.m. Eastern Daylight Time (EDT), on Thursday, June 9, 2005 is $1,087.64, which includes a consent payment of $30.00. The total consideration was determined by reference to a fixed spread of 50 basis points over the yield of the 1-1/2 percent U.S. Treasury Note due March 31, 2006, which yield was calculated at 2:00 p.m. EDT, on June 15, 2005. The reference yield and the tender offer yield are 3.501% and 4.001%, respectively. Holders of Notes tendered on or prior to the Consent Payment Deadline will also receive accrued and unpaid interest on the Notes up to, but not including, the initial payment date for the Offer, which is currently expected to be on or about June 21, 2005. The tender offer is scheduled to expire at 5:00 p.m. EDT, on June 29, 2005, unless extended or earlier terminated. The tender offer and consent solicitation continue to be subject to the satisfaction or waiver of certain conditions, including the satisfaction of the Transactions Condition and the General Conditions, each as further described in the Offer to Purchase. There can be no assurance that any of such conditions will be met. The complete terms and conditions of the tender offer and consent solicitation are described in the Offer to Purchase, copies of which may be obtained by contacting D. F. King & Co., Inc., the depositary and information agent for the offer, at 212-269-5550 (collect) or 800-659-5550 (U.S. toll-free). Banc of America Securities LLC and Lehman Brothers Inc. are the dealer managers and solicitation agents for the tender offer and consent solicitation. Additional information concerning the tender offer and consent solicitation may be obtained by contacting Banc of America Securities LLC, High Yield Special Products, at 704-388- 9217 (collect) or 888-292-0070 (U.S. toll-free) or Lehman Brothers Inc., Liability Management Group, at 212-528-7581 (collect) or 800-438-3242 (U.S. toll-free). This announcement is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of consents with respect to any securities. The tender offer and consent solicitation are being made solely by the Offer to Purchase. About the Company Synagro offers a broad range of water and wastewater residuals management services focusing on the beneficial reuse of organic, nonhazardous residuals resulting from the wastewater treatment process, including drying and pelletization, composting, product marketing, incineration, alkaline stabilization, land application, collection and transportation, regulatory compliance, dewatering, and facility cleanout services. * * * Synagro's 9-1/2 % senior subordinated notes due Apr. 1, 2009, carry Moody's Investors Service's Caa1 rating and Standard & Poor's single-B rating. TRICN INC: MOSAID Tech Withdraws $3.1 Million Acquisition Offer --------------------------------------------------------------- MOSAID Technologies Incorporated (TSX:MSD) disclosed that as a result of its due diligence, it has elected not to proceed with the proposed acquisition of TriCN, Inc. As reported in the Troubled Company Reporter on May 20, 2005, MOSAID said it signed a non-binding letter of intent to acquire substantially all of the assets of bankrupt TriCN for a purchase price of $3.1 million. MOSAID has also offered to pay up to $900,000 based on the achievement of certain performance objectives. MOSAID's offer and the subsequent purchase agreement remained subject to a variety of conditions, including satisfactory due diligence, the absence of any material adverse change to the business, the approval of MOSAID's Board and any necessary regulatory and other approvals including that of the United States Bankruptcy Court for the Northern District of California. About MOSAID MOSAID Technologies Incorporated -- http://www.mosaid.com/-- makes memory better through the development and licensing of intellectual property and the supply of memory test and analysis systems to semiconductor manufacturers, foundries and fabless semiconductor companies around the world. Founded in 1975, MOSAID is based in Ottawa, Ontario, Canada, with offices in Santa Clara, California; Newcastle upon Tyne, U.K; and Tokyo, Japan. Headquartered in San Francisco, California, TriCN, Inc., is a leading developer of high-performance semiconductor interface intellectual property (IP) products. The Company filed for chapter 11 protection on December 30, 2004 (Bankr. N.D. Calif. Case No. 04-33651). Eric A. Nyberg, Esq., at Kornfield,Paul and Nyberg represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $10 million. TRI-NATIONAL DEV'T: Hires Mexico Retail as Real Estate Broker ------------------------------------------------------------- Douglas P. Wilson, the chapter 11 Trustee of the bankruptcy estate of Tri-National Development Corporation, sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of California to employ Mexico Retail Advisors, LLC, as its real estate broker. Mexico Retail Advisors is a full service brokerage and consulting company focused on developing the most critical elements of real estate in Mexico. The Firm's principals and managers are experts in site selection, development, construction management, and retail leasing, in both the U.S. and Mexico. The Firm's headquarter is located at: 2550 Fifth Avenue, Suite 405 San Diego, CA 92103 Mexico Retail will assist the trustee and Capital Trust, Inc., the Debtor's largest secured creditor, in: a) researching and resolving various issues regarding title to each of the Debtor's Mexican properties; c) preparing marketing material for the Mexican properties; d) locating, contacting and qualifying potential buyers; e) marketing and presenting the Mexico properties to potential buyers; and f) closing the sale of the Mexican properties. Tri-National's Mexico assets include parcels of real property located in Rosarito Beach, Baja California Norte and land located in Bajamar, Municipality of Ensenada. James P. Hill, Esq., the Trustee's counsel, discloses that Mexico Retail will receive a commission equal to 1% to 6% of the total purchase price for each piece of real property sold. In the event that a sale does not close and Mexico Retail consequently does not receive commission, the broker will be paid an hourly fee for services rendered outside the scope of commercially accepted brokerage and marketing services. These services include: a) assisting with procuring title to Rosarito properties, including forensic discovery such as locating documents and interviewing witnesses; b) negotiating with Mexican governmental entities to minimize fees, costs and taxes involved in any transfer and to obtain permits or approvals necessary for improving any Rosarito Property prior to transfer; and c) advancing interim funds to pay for appraisals; Mexican title reports; and security for the Rosarito Properties, including fencing, removal of squatters, demolition of structures, repairs to property conditions that are deemed a public hazard, and other work that preserves and enhances property values. To the best to the Trustee's knowledge, MRA does not hold any interest adverse to the Debtor or its estate. Headquartered in San Diego, California, Tri-National Development Corp is an international real estate development, sales and management company. The Debtor filed for chapter 11 protection on October 23, 2001. (Bankr. S.D. Cal. Case Nos. 01-10964-JH) Colin W. Wied, Esq., at C. W. Wied Professional Corporation represents the Debtor. When the Debtor filed for protection from its creditors, it estimated $50 million to $100 million in assets and $10 million to $50 million in debts. US AIRWAYS: Wants Court to Approve America West Merger M.O.U. ------------------------------------------------------------- US Airways, Inc., and its debtor-affiliates tell the U.S. Bankruptcy Court for the Eastern District of Virginia that they have commenced the final step of their Chapter 11 cases through a merger agreement with America West Holdings Corporation to create the first nationwide full-service, low-cost airline. To facilitate the merger, the Debtors have been engaged in discussions with a number of their most significant aircraft creditors regarding the restructuring of existing agreements, and the entry into new agreements. The Debtors believe that the restructured agreements will, inter alia, shape and rationalize the Debtors' and America West's combined fleet in connection with the merger, and will also allow the Debtors to realize additional cost savings and liquidity. Accordingly, the Debtors have endeavored to recast certain agreements with the GE Entities in a manner that will foster the merger and thus enhance the Debtors' successful emergence from bankruptcy. The Debtors seek the Court's authority to enter into a Master Merger Memorandum of Understanding with America West Holdings, America West Airlines, Inc., and General Electric Capital Corporation -- acting through GE Commercial Aviation Services LLC, GE Engine Services, Inc., GE Engine Services - Dallas, LP, General Electric Company, and GE Transportation Component. The Debtors explain that the series of agreements reached with the GE Entities and reflected in the Merger MOU, and the related term sheets, amend and supplement certain terms of the global settlement contemplated by the Amended and Restated Master Memorandum of Understanding dated as of November 24, 2004, among the Debtors and the GE Entities. As previously reported, the transactions contemplated by the Global Settlement were divided into: * Phase I Transactions, which included those transactions scheduled to occur on or about December 20, 2004; * Phase II Transactions, which include those transactions scheduled to occur prior to the Debtors' emergence from bankruptcy; and * Exit Transactions, which include those transactions that were intended to be implemented in connection with or on the consummation of the Debtors' plan of reorganization and their emergence from bankruptcy. The key aspects of the Global Settlement included, among other things, the implementation of certain agreements relative to the Debtors' continued use of certain Airbus, Boeing and regional jet aircraft, and GECC's return of certain other Airbus and Boeing planes. Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado, tells Judge Mitchell that the Merger MOU provides for: (1) the Debtors' early return of certain mainline aircraft to GECC; (2) the accelerated reduction in rental rates and the assumption of Boeing SIL Aircraft Leases as per the GE Global Settlement; (3) the restructured timing of lease rental payments for certain of the Debtors' regional jet aircraft, with no reduction in aggregate rental obligations; (4) the modification of certain regional jet financing agreements; (5) the modification of certain Phase II Transactions as per the GE Global Settlement; and (6) the modification of the Debtors' engine maintenance agreements with GE Transportation and its affiliates. Mr. Leitch notes that to benefit from the Merger MOU Transactions, the Debtors must achieve certain milestones. By June 30, 2005, the Debtors must file a plan of reorganization and disclosure statement that is acceptable to GE. The Debtors are also required to emerge from bankruptcy and consummate the America West merger by October 31, 2005. The Debtors' failure to comply with those milestones will give rise to a "Merger Event of Default" for purposes of the Merger MOU and a "Global Event of Default" under the Global Settlement. Mr. Leitch outlines the key aspects of the Merger MOU: (A) Aircraft Early Removal (1) US Airways: (a) The leases for six A319/320 aircraft subject to the Sale/Leaseback Transaction in the Global Settlement and one B737-300 aircraft, will be terminated early and the aircraft will be returned to the applicable GE Entity. The Transaction is independent of the status of the Merger; (b) The leases for five B737-300 aircraft will be terminated early and the aircraft will be returned between July 2005 and the Emergence/Merger Deadline; and (c) The Debtors' Leases for 38 Boeing aircraft will be terminated early and the aircraft will be returned to the applicable GE Entity between 2005 and 2009, subject to consummation of the Merger. However, for 11 of the Boeing aircraft scheduled for removal from service during 2009, the Debtors will grant the applicable GE Entity an option exercisable on October 31, 2006, to accelerate the removal of the aircraft from July 2007 through to July 2008. The option may not be exercised if the Debtors have, as of September 30, 2006, achieved an agreed corporate credit rating or satisfied financial covenant tests. (2) US Airways Spare Engines: In connection with the removal of the Boeing aircraft, the Debtors may terminate a certain number of spare engine leases related to the Sale/Leaseback Transaction. (3) Return Condition Concessions: For the Debtors' early redelivery of certain Airbus aircraft, GECC will grant certain return condition concessions. Prior to the Debtors' emergence, the applicable GE Entities and the Debtors will net: -- any redelivery payment obligations of a GE Entity to the Debtors against -- any redelivery payment obligations of the Debtors to a GE Entity, and if the GE Entity owes the Debtors a net balance, the amount will be payable on the Debtors' emergence. (B) US Airways Aircraft Rental Amendments The parties will accelerate rental reductions for the Boeing Single Investor Leases, which are leases for certain B737- 300 aircraft, B757-200 aircraft and B737-400 aircraft, effective July 1, 2005. For the B737-400 aircraft leases, the Debtors will not be required to either pay a lump sum in cash or issue convertible notes, as per the Global Settlement. The Debtors will assume the modified Boeing Single Investor Leases. If the Debtors fail to emerge, only rent, return conditions and deferred rent payable through the later of the Emergence/ Merger Deadline or return of the aircraft, will be entitled to administrative expense status. All other claims under the Leases will amount to unsecured prepetition claims. If the Debtors do not complete the America West merger, the Boeing Single Investor Leases will revert to their original terms. The timing of certain rental payments under the leases for 23 CRJ-200s will be restructured without reducing the aggregate amount of rental obligations. For 14 of the CRJ-200 aircraft, the lease term will be extended by three months. For 16 CRJ aircraft subject to short-term leases under the Global Settlement, the Debtors will enter into long-term leases by the end of July 2005. The leases will be postpetition agreements subject to administrative expense status for rent payable through the later of the Emergence/Merger Deadline and the return of the aircraft and return conditions. All other claims under the leases, including rejection damages, will be unsecured prepetition claims. (C) Regional Jet Leasing Transactions GECC is no longer obligated to provide regional jet financing directly to the Debtors, as per the Global Settlement. GECC will provide regional jet financing for the benefit of the Debtors: (1) GECC will lease three EMB-170 aircraft to Republic Airways Holdings Inc. The subject aircraft are committed to be delivered by Embraer to the Debtors; (2) For future growth aircraft, the GE Entities will provide single investor or operating lease financing to other carriers for up to 10 EMB-170/190/195 aircraft for delivery between 2007 and 2008; and (3) The GE Entities will consent to the assignment to Republic of up to 15 EMB-170 leases, subject to manufacturer support and other conditions acceptable to GECC. (D) Phase II Sale/Leaseback Transactions The Phase II Transactions will be modified to provide that: (1) Upon consummation of the Merger, the scheduled amortization of the loan balance under the 2001 Credit Facility will be modified so that amortization will begin in September 2006, rather than September 2005; and (2) Under the mortgage, if the Debtors elect to sell the four CRJ-170 aircraft that secure their obligations under the Restated 2001 Credit Facility, GECC will release its liens on the aircraft when the Debtors make a principal repayment. (E) MCPH Agreements The Debtors and America West will modify their engine maintenance agreements with the relevant GE Entities. The transactions include the agreement of GE Transportation and its affiliates to: (1) forgive certain removal charges for CFM56-3 engines; (2) allow the Debtors to remove certain CFM56-5 engines, with removal credits owing to the Debtors to be applied against outstanding amounts owing to GE Engine Services under the Term Note issued to GE Engine Services under the Global Settlement; (3) modify the Debtors' Deferred Obligations under the Global Settlement to provide that the obligations will be payable in two installments, one due on June 30, 2005, and the other on September 30,2005; (4) extend the Debtors' CFM56-5 engine maintenance agreement with GE Engine Services, with the Debtors' waiving certain conversion rights; and (5) modify the Debtors' CFM56-3 engine maintenance agreement to include a minimum monthly payment based on accrued engine flight hours. In exchange, the Debtors will: -- grant a last right of offer to GE Engine Services for a follow-on CF6-80C2 engine maintenance agreement; -- grant certain arrangements for engine selection if the Debtors assume an A320 aircraft purchase agreement with Airbus upon emergence; and -- grant certain arrangements for engine selection if the Debtors, following the Merger, take delivery of certain A350 aircraft from Airbus. The Debtors and America West are working to determine the appropriate composition of the combined fleet post-merger, Mr. Leitch informs the Court. The Transactions contemplated in the Merger MOU will facilitate the fleet rationalization effort. Mr. Leitch adds that the Merger MOU is confidential; distribution of information contained in the Debtors' request is restricted. Accordingly, the Merger MOU and its Exhibits are filed in redacted form. The Official Committee of Unsecured Creditors and certain parties having a legitimate interest will be provided with the non-redacted versions of the exhibits, subject to signed confidentiality agreements. 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. 94; Bankruptcy Creditors' Service, Inc., 215/945-7000) W.R. GRACE: Wants to Contribute $1.3MM to Chattanooga Pension Plan ------------------------------------------------------------------ At its production site in Chattanooga, Tennessee, W.R. Grace & Co.-Conn., Grace Davison, manufactures raney catalyst, rare earth chemicals and other products. The rare earth chemicals produced at Chattanooga are used as raw materials in the manufacture of fluid cracking catalysts and additives at the Debtors' Davison plants in Lake Charles, Curtis Bay and Valleyfield (Canada). The Chattanooga site employs 80 hourly and salaried employees, which is approximately 8.5% of Davison's workforce in the United States. United Steelworkers of America, Local 14087, currently represents 50 of the hourly employees at Chattanooga. The Chattanooga Union has represented the hourly workforce since the late 1950s. The Debtors seek the U.S. Bankruptcy Court for the District of Delaware's authority to make a $1,306,615 one-time contribution to meet their obligations to amend and increase benefits under the Chattanooga Union Pension Plan, in accordance with a "reopener clause" that is part of their collective bargaining agreement with the Chattanooga Union. Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., in Wilmington, Delaware, explains that the Chattanooga Union Pension Plan is a defined-benefit pension plan, which satisfies the qualification requirements under Section 410(a) of the Internal Revenue Code. The "plan year" applicable to the Plan is a calendar year. The Chattanooga Plan is funded with employer contributions, in accordance with Section 412 of the Internal Revenue Code, and therefore does not require employee contributions. Moreover, the Plan is a "flat-dollar unit benefit plan," which provides a specific dollar amount for each year of service, commencing at age 62, which is paid in the form of an annuity over the life of the retired employee. As of January 1, 2005, the estimated "current liability" under the Chattanooga Union Pension Plan totaled $3,629,000, and the "actuarial value" of plan assets totaled $2,790,000. In addition, the "market value" of plan assets totaled $2,960,000. Ms. Jones states that under the currently applicable benefit formula, an eligible Chattanooga Employee would be entitled to a $38 lifetime annuity, commencing at age 62, for each year of eligible service under the Chattanooga Union Pension Plan. Ms. Jones relates that while negotiating with the Chattanooga Union in May 2004, the Debtors realized that the Union was unlikely to enter into a final agreement with them that would preclude the possibility of a strike, unless they committed to increase pension benefits under the Chattanooga Union Pension Plan. The Debtors did not wish to agree to increase pension benefits at Chattanooga at that time, but they also wanted to reach a final agreement that would eliminate the possibility of a strike. The Debtors addressed the Union's pension demand by agreeing to the Chattanooga Reopener, without any commitment to increase pensions at that time. The final result was the 2004 Chattanooga Union Agreement, which is a four-year agreement that includes a "no strike" clause and the Chattanooga Reopener. Under the Chattanooga Reopener, the Chattanooga Union has the authority to require an increase in the monthly pension benefits from $38 to $50 per year of service under the Chattanooga Union Pension Plan, representing a 31.5% increase in exchange for a simultaneous decrease in hourly wages equal to $0.89 per hour. The Debtors estimate that the Wage Reductions will save them approximately $130,000 per year in wages. The Chattanooga Union has already informed the Debtors of its intention to exercise its authority under the Chattanooga Reopener. For them to implement the pension increases under the Chattanooga Reopener, the Debtors are required to make a contribution to the Chattanooga Union Pension Plan for $1,306,615, not later than September 15, 2005, pursuant to Section 401(a)(33) of the Internal Revenue Code. Ms. Jones informs the Court that the exact amount of the Required Contribution was calculated by the actuary of the Chattanooga Union Pension Plan. At this time, the actuary of the Chattanooga Pension Plan estimates that, to comply with the funding requirements, the Debtors will not be required to make any additional minimum contributions during 2005 or 2006, if the $1,306,615 Contribution is made on a timely basis during 2005. The funds that will be used to pay the Required Contribution will not be drawn from the Debtors' DIP Credit Facility, but rather from currently available cash and from non-debtor affiliates. The Debtors believe that failing to implement the pension benefit increases under the Chattanooga Reopener, in exchange for the Wage Reductions, would result in labor discord and morale problems at Chattanooga, which in turn would result in lost productivity. Ms. Jones points out that Section 401(a)(33) of the Internal Revenue Code generally prohibits the adoption of any amendment to increase or enhance benefits under a defined benefit pension plan, during the period that the employer is a debtor in a bankruptcy case, unless the amendment would have a funded current liability percentage of 100% or more. The Funded Exception would apply to the pension increases under the Chattanooga Reopener if the Debtors make the Required Contribution on time. In that case, under Section 412(c)(10) of the Internal Revenue Code, the Required Contributions would be deemed to have been made on December 31, 2004, for purposes of calculating the "funded current liability percentage" under the Funded Exception, for the 2004 plan year. The pension increases under Chattanooga Reopener would be adopted effective on or after January 1, 2005, and, as of adoption, the Funded Exception would be satisfied for the Chattanooga Union Pension 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, P.C., represent the Debtors in their restructuring efforts. (W.R. Grace Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Service, Inc., 215/945-7000) WEIGHT WATCHERS: Moody's Affirms $350 Mil. Facility's Ba1 Rating ---------------------------------------------------------------- Moody's Investors Service affirmed all the credit ratings of Weight Watchers International, Inc., following its announcement that it has signed definitive agreements that will result in WeightWatchers.com, Inc. (WeightWatchers.com) becoming a wholly owned subsidiary of Weight Watchers. Weight Watchers currently owns 38% of WeightWatchers.com on a fully diluted basis and expects to acquire the remaining equity interest in a two step transaction. On July 2, 2005 Weight Watchers will exercise its existing warrants to purchase WeightWatchers.com stock and will concurrently acquire all of the equity interest in WeightWatchers.com not owned by Artal Luxembourg S.A. On December 31, 2005, WeightWatchers.com is scheduled to redeem all the shares currently owned by Artal Luxembourg S.A. At that time, Weight Watchers will own 100% of WeightWatchers.com. The cost to acquire and redeem all of the interest not currently owned by Weight Watchers is $389 million in cash and is based on an enterprise valuation of $552 million for the WeightWatchers.com business. Weight Watchers expects to utilize a combination of available cash and debt to finance the transactions, including a new term loan of $220 million by WeightWatchers.com. Although the transactions are expected to substantially increase consolidated debt levels, Moody's expects Weight Watchers consolidated credit metrics to remain solidly within the Ba1 senior implied rating category. Debt to EBITDA levels are expected to remain below 2 times and free cash flow to debt is expected to exceed 30% in 2005. WeightWatchers.com reported strong sales and earnings growth over the last few years as subscriber levels increased to 563,000 at March 31, 2005. LTM March 31, 2005 revenues and EBITDA were $97 million and $27 million, respectively. Pro forma for the acquisition, WeightWatchers.com will represent less than 10% of the revenues, profitability and cash flow of the combined entity. Weight Watchers ratings continue to reflect: * the company's leading market position and strong brand recognition; * the expected growth of the weight loss industry; * impressive operating margins; and * strong free cash flow generation. However, the ratings remain constrained by the lack of product diversification and competition from alternate weight loss programs and products. The stable ratings outlook continues to reflect Moody's expectation of modest revenue growth in 2005 as the company's North American attendance stabilizes. Revenues should benefit from an apparent slow down in demand for low carbohydrate diets and products, the launch of a new diet program by the company in September 2004 and continued strong international attendance. Moody's expects the company to utilize free cash flow to reduce debt levels, to continue acquiring franchisees and to fund the company's share repurchase program. An upgrade in the outlook or ratings is unlikely in the near term due to the company's lack of product diversification and the risks to the company's market position from alternative diet plans or potential weight loss drugs. A downgrade in the outlook or ratings in the near term is also unlikely given the strong credit metrics and cash flow generation of the company. Over the longer term, the outlook or ratings could come under pressure if attendance levels and operating margins decline for an extended period of time and result in a significant reduction in free cash flow. Moody's affirmed these ratings: * $350 million senior secured revolving credit facility, due 2009, rated Ba1; * $297 million senior secured term loan B, due 2010, rated Ba1; * Senior Implied, rated Ba1; and * Senior Unsecured Issuer, rated Ba2. Headquartered in Woodbury, New York, Weight Watchers is one of the world's leading providers of weight control programs, operating in 30 countries through a network of company owned and franchised operations. Revenues for the year ended January 1, 2005 were about $1 billion. WEIGHT WATCHERS: WW.com Acquisition Cues S&P to Affirm Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on commercial weight-loss service provider Weight Watchers International Inc., including its 'BB' corporate credit rating. The outlook is stable. Woodbury, New York-based WWI had about $391 million of total debt outstanding at April 2, 2005, excluding operating leases. The affirmation follows WWI's recent announcement that it will acquire the remaining portion of WeightWatchers.com, a licensee that is currently 20%-owned (38% on a fully-diluted basis), pending board approval of WWI and WW.com. In July 2005, WWI will acquire majority control of WW.com for $83 million, which will be financed using cash and the revolving credit facility. At the end of 2005, WWI will redeem financial sponsor Artal's remaining WW.com shares for $308 million. WWI plans to finance this acquisition with a new term loan, in addition to cash and utilization of its revolver. Following the completion of the acquisition, WW.com will become a wholly owned operating subsidiary of WWI, and Artal will retain its 61% ownership stake of WWI. Because WWI already consolidates WW.com's financials under FIN 46R, Standard & Poor's had already incorporated consolidated financials into its calculations of the company's credit measures. "Although this acquisition will significantly increase WWI's debt levels to well over $600 million, we believe that there is substantial debt capacity in the existing rating prior to this transaction, given WWI's very strong credit measures," said Standard & Poor's credit analyst Mark Salierno. "However, following the transaction, WWI will have limited additional debt capacity within its existing outlook and/or ratings for further sizable debt-financed acquisitions, share repurchases, or dividends until the company reduces these increased debt levels and restores its credit measures closer to current levels," added Mr. Salierno. WESTPOINT STEVENS: Disclosure Statement Hearing Set for July 12 --------------------------------------------------------------- Judge Drain will consider approval of the Disclosure Statement explaining the Debtors' Amended Joint Plan of Reorganization at 10:00 a.m. on July 12, 2005, or as soon as thereafter as counsel may be heard. The Disclosure Statement Hearing may be adjourned from time to time without notice to parties-in-interest other than an announcement at the Disclosure Statement Hearing or at an adjourned Disclosure Statement Hearing. At the hearing, the Court will review whether the Amended Disclosure Statement contains "adequate information" as defined in Section 1125 of the Bankruptcy Code to enable a hypothetical reasonable investor typical of holders of claims or interests of the relevant class to make an informed judgment about the Plan. Responses, objections, and proposed modifications, if any, to the Disclosure Statement must be filed by July 6, 2005. Headquartered in West Point, Georgia, WestPoint Stevens, Inc., -- http://www.westpointstevens.com/-- is the #1 US maker of bed linens and bath towels and also makes comforters, blankets, pillows, table covers, and window trimmings. It makes the Martex, Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux brands, as well as the Martha Stewart bed and bath lines; other licensed brands include Ralph Lauren, Disney, and Joe Boxer. Department stores, mass retailers, and bed and bath stores are its main customers. (Federated, J.C. Penney, Kmart, Sears, and Target account for more than half of sales.) It also has nearly 60 outlet stores. Chairman and CEO Holcombe Green controls 8% of WestPoint Stevens. The Company filed for chapter 11 protection on June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. (WestPoint Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000) WESTPOINT STEVENS: Wants to Enter Into Clemson Office Space Lease ----------------------------------------------------------------- WestPoint Stevens, Inc. and its debtor-affiliates operated an integrated sheet manufacturing complex in Clemson, South Carolina. In accordance with the rationalization of their businesses, the Debtors announced their intention to close the Clemson Complex. The Debtors are in the process of winding down the operations and marketing the property. John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New York, discloses that the Debtors currently employ about 150 administrative employees at the Clemson Complex whose continued employment remains necessary to the Debtors' ongoing business operations, notwithstanding the closure of the Clemson Complex. In light of the closure of the Clemson Complex and the fact that the real property is being marketed for immediate sale, the Clemson Employees must be re-located. Unfortunately, the Debtors' current office space in West Point, Georgia, is not large enough to accommodate the relocation of 150 employees. Accordingly, the Debtors, with the assistance of their real estate broker, Galaxy Partners, Inc., initiated a search for a suitable location within close proximity of the Clemson Complex to relocate the Clemson Employees. After an extensive search of the surrounding area, the Debtors located a 24,263-square foot office space on the first four floors of the Clemson Centre at 391 College Avenue, in Clemson, South Carolina. Following arm's-length negotiations, the Debtors and Clemson Downtown Properties LLC agreed on the terms of a two-year lease of the Premises. Pursuant to the Clemson Lease, the Debtors will pay $31,583 per month for a term of two years commencing on July 1, 2005. The Debtors will have the option to renew the lease for an additional three-year period. Taxes and costs to operate and maintain the property are included in the lease and will be borne by the Landlord. In addition, the Clemson Lease contains a cap on the Landlord's damages, if any, which would arise from a breach of the Debtors' obligations under the lease. The Clemson Lease also permits the Debtors to assign the lease to a purchaser of substantially all of their assets pursuant to Section 363(b) of the Bankruptcy Code or a Chapter 11 plan. By this motion, the Debtors seek the U.S. Bankruptcy Court for the Southern District of New York's authority to enter into the Clemson Lease. The Debtors have been advised by Galaxy Partners that the terms of the Clemson Lease are extremely competitive with market value. Headquartered in West Point, Georgia, WestPoint Stevens, Inc., -- http://www.westpointstevens.com/-- is the #1 US maker of bed linens and bath towels and also makes comforters, blankets, pillows, table covers, and window trimmings. It makes the Martex, Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux brands, as well as the Martha Stewart bed and bath lines; other licensed brands include Ralph Lauren, Disney, and Joe Boxer. Department stores, mass retailers, and bed and bath stores are its main customers. (Federated, J.C. Penney, Kmart, Sears, and Target account for more than half of sales.) It also has nearly 60 outlet stores. Chairman and CEO Holcombe Green controls 8% of WestPoint Stevens. The Company filed for chapter 11 protection on June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. (WestPoint Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000) WINN-DIXIE: Court Approves De Minimis Asset Sale Procedures ----------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida gave Winn-Dixie Stores, Inc., and its debtor-affiliates: (a) approval for the Miscellaneous Assets sales in accordance with the disposition procedures; (b) authority to the Debtors to sell the Miscellaneous Assets free and clear of any liens, claims and encumbrances; and (c) the Section 1146(c) exemption applicable to all dispositions made. As previously reported in the Troubled Company Reporter on May 19, 2005, to the extent that the Miscellaneous Assets have a value equal to or less than $75,000, the Debtors will sell them free of any liens, claims or interest and without Court approval. For assets with a value between $75,00.01 and $150,000, the Debtors will sell them free of any liens, claims, interests or encumbrances without Court approval. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063). The Honorable Judge Robert D. Drain ordered the transfer of Winn-Dixie's chapter 11 cases from Manhattan to Jacksonville. On April 14, 2005, Winn- Dixie and its debtor-affiliates filed for chapter 11 protection in M.D. Florida (Case No. 05-03817 to 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Court Overrules JEA's Request for Security Deposit -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida overrules Jacksonville Electric Authority's objection to Winn-Dixie Stores, Inc., and its debtor-affiliates' motion to set procedures resolving requests for additional assurance. The Debtors are not required to provide a postpetition security deposit to JEA at this time, Judge Funk says. JEA may renew its request for a security deposit should circumstances warrant it. As previously reported, JEA wants a $1,300,000 cash deposit as adequate assurance of future payment by the Debtors. The deposit is equal to about two times the average monthly billings by JEA to the Debtors during the 12-month period prior to the Petition Date and is in an amount that is consistent with the anticipated electricity consumption by the Debtors and the minimum period of time that the Debtors could continue to receive electricity from JEA before service could be terminated for non-payment of postpetition bills. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063). The Honorable Judge Robert D. Drain ordered the transfer of Winn-Dixie's chapter 11 cases from Manhattan to Jacksonville. On April 14, 2005, Winn-Dixie and its debtor- affiliates filed for chapter 11 protection in M.D. Florida (Case No. 05-03817 to 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000). WYNDHAM INT'L: Moody's Affirms Junk Senior Unsecured Issuer Rating ------------------------------------------------------------------ Moody's Investors Service affirmed all ratings of Wyndham International, Inc. In addition, Moody's changed the outlook to developing from stable. Ratings Affirmed: * Senior implied - B3 * Senior unsecured issuer rating - Ca * $50 million guaranteed senior secured letter of credit facility, due May 10, 2011, rated B3 * $530 million guaranteed first lien senior secured term loan B, due May 10, 2011, rated B3 * $175 million guaranteed first lien senior secured revolver, due May 10, 2011, rated B3 * $140 million guaranteed second priority term loan, due December 10, 2011, rated Caa1 * Speculative Grade Liquidity rating rated SGL-3 The ratings outlook has been changed to developing from stable. The change in outlook was prompted by the recent announcement that Wyndham has agreed to be acquired by an affiliate of the Blackstone Group for approximately $3.2 billion. The outlook reflects the uncertainty surrounding the timing of the transaction and how the acquisition will be financed, in addition to the ultimate impact it will have on current lenders. Wyndham International, headquartered in Dallas Texas, owns, leases, manages, and franchises hotels primarily in the upper- upscale and luxury segments of the hotel and resorts industry in: * North America, * Mexico, * the Caribbean, and * Europe. YUKOS OIL: Seeks to Recover $3 Billion from Sibneft --------------------------------------------------- Yukos Oil Company filed a complaint in London against entities related to OAO Sibneft's main shareholders, Interfax reports, citing a source close to Yukos shareholders. Yukos seeks to recover over $3 billion from the Sibneft-related entities. According to Interfax, Yukos and Sibneft previously agreed to a merger transaction to form the world's sixth biggest publicly traded oil company. In October 2003, Yukos paid $3 billion for a 20% stake in Sibneft. Sibneft backed out from the deal after the Russian government commenced a probe on Yukos for tax evasion and fraud. Headquartered in Houston, Texas, Yukos Oil Company 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. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) * ROCG Launches New Global Consulting Firm ------------------------------------------ ROCG, a new global consulting firm, announced its launching at a meeting of the firm's US and international partners in San Francisco. The company's vision is to strengthen the profits, growth and value of privately-owned businesses. ROCG has over 100 consultants in 41 cities in North America, Europe and Asia Pacific. "Privately-owned businesses are the source of much innovation and contribute significantly to most western economies," said ROCG international chairman and founder Jim McKerlie. "ROCG allows privately-owned businesses to access and leverage the international knowledge pool that larger companies have enjoyed through their size and scale. Now, through ROCG, they can share experience that is relevant to them." The firm evolved from a network of like-minded consultants with experience addressing the challenges facing privately owned businesses. ROCG consultants came together in late 2004 to develop the first international consulting firm specializing in the strategy, finance and operations of these businesses. "ROCG harnesses the collective knowledge and experience of our offices around the globe to ensure we bring the best solutions for local, privately-owned businesses," said Ronen Shefer, CEO of ROCG's North American operations. "ROCG partners, together, have seen -- and solved -- a given business challenge many times already." The firm's offices in United States include Chicago, Coeur d'Alene (Idaho), Denver, Des Moines, Grand Rapids, Jacksonville (Fla.), Los Angeles, Midland (Texas), Minneapolis, Norfolk (Va.), Oakland, Orange (Calif.), Reno, San Francisco, Spokane, and West Palm Beach (Fla.). Canadian offices are in Montreal, Toronto, Vancouver, Prince George, and Vancouver Island (BC) and Guelph (Ont). ROCG has 19 additional offices across the UK, Ireland, Italy and Australia. "ROCG's local consultants go beyond delivering advice," said Shefer. "We know business owners often want and need help with implementing change on the way to achieving greatness. We can do that; and we deliver tangible value by leveraging our global reach and combining it with local delivery." The firm's core services focus on improving business performance, including sales and cash flow management, performance management, strategic pathfinding, business valuation and transition planning -- all central to ROCG's service to privately-owned businesses. For more information on the firm and its global resources, visit: http://www.rocg.com/ * BOOK REVIEW: Dynamics of Institutional Change ----------------------------------------------- Authors: Milton Greenblatt, Myron R. Sharaf and Evelyn M. Stone Publisher: Beard Books Softcover: 292 pages List Price: $34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587981815/internetbankrupt Like many other private-sector and public institutions in modern society, hospitals are regularly undergoing change. The three authors of this volume have been leaders in change at Boston State Hospital, a large public mental hospital, that serves as the test case for the experienced advice and hard-earned lessons found in this work. With their academic and professional backgrounds, the three authors combined offer an incomparable fund of knowledge and experience for the reader. In keeping with their positions, they focus on the position and the role of the leaders of institutional change. They do not recommend any particular choices, direction, or outcome. They do not presume to know what is the best for all institutions, or to understand the culture, realities, goals, or values of all institutions. They do not even presume to know what is best or desirable for hospitals, the institution with which they are most familiar. Instead, the authors direct their attention to "the problems hampering change and the gains and losses of one or another strategy of change." In relation to this, they are "more concerned with the study of process than with outcome." By not recommending specific policies or arguing for specific values or goals, the authors make their book relevant to all institutions involved in change, but particularly public- health institutions. All of the subjects are dealt with from the perspective of top executives and administrators. Among the subjects taken up are not only the staff and structure of the institution, specifically the medical institution, but also consultants, volunteers, local communities, and state and federal government agencies. The detail given to each subject goes beyond the administrator's relationship to it to discussion concerning the relationship of lower-level employees with the subject. This relationship of lower-level employees has everything to do with how change occurs within the institution, and often whether it occurs. The authors go into such detail because they understand that the performance and goals of top administrators are affected by everything that goes on within their institution, and often by much that goes on outside of it. For example, the authors begin the subject of volunteers by defining three types of volunteers: volunteers from organizations, student or independent volunteers, and government-appointed or statutory volunteers. Volunteers of whatever type can cause anxiety, resistance, and even resentment among regular staff of an institution. Volunteers are not simply "free help," but require administration, training, and oversight - which can distract regular employees from work they consider more important and interesting, and use up departments' resources. The transitional nature of volunteers, their ignorance of institutional and occupational concerns of the regular staff, and their lack of professionalism can cause disruptions and personnel problems in parts of an institution. The authors advise the top administrators, "The intrusive evangelism of student volunteers can be threatening not only to professional supervisors, but to the entire hospital staff as well, from the attendant to the top administrator." While recognizing the problems which may be caused by volunteers, especially younger ones, the authors point out the worth of volunteers to the hospital despite the potential problems they bring. Overall, the different types of volunteers "improve the physical and social environment" of the workplace, "make direct and beneficial contacts with chronic patients," and often "establish true innovations." After discussing the pros and cons of volunteers and providing detailed guidance on how to manage volunteers so as to minimize potential problems, the authors advise the administrator and his or her staff how to regard volunteers. "Both staff and administrator must constantly keep in mind that volunteers are not personally helping them [word in italics in original], but are helping the patients or the community." Along with the technical management and administrative guidance, such counsel is clearly relevant and important in keeping perspective on the matter of volunteers. The treatment of volunteers in a medical institution exemplifies the comprehensive, empathetic, and experienced treatment of all the subjects. Personnel - whether professional, clerical, service, or volunteer - is obviously a major concern of any institution and change in it. The structure of an institution is another crucial concern. This is addressed under the heading "decentralization through unitization." In the context of a large public medical facility, decentralization "involves breaking up the institution into semiautonomous units...; each of which is like a small community health center in that it is responsible for serving a specific part of the community." As with the subject of volunteers, the authors treat this subject of the structure of the institution by examining its various sides, discussing related personnel and administrative matters, relating instructive anecdotes from their own experience, and in the end, offering relevant and practical advice and actions whose sense is apparent to the reader by this point. Recognizing that the authors have faced many of the same situations, decisions, pressures, challenges, and aims as they have, top hospital and public-health administrators will no doubt adopt many of the authors' recommendations for managing the process of change. The content of the book as well as its style (which is obviously meant to be helpful, sympathetic, and realistic) offers the reader not only resolutions, but also encouragement. The top hospital administrators and their staffs, who are the main audience for "Dynamics of Institutional Change," will not find a better study and handbook to help them through the changes their institutions are being called upon to undergo to deal with the health concerns and problems of today's society. Milton Greenblatt served as Commissioner of the Massachusetts Department of Mental Health, and also was a Professor of Psychiatry at Tufts University School of Medicine. Myron Sharaf was Associate Area Director of the Boston State Hospital, and also a professor at Tufts. Evelyn M. Stone is a former Executive Editor for the Massachusetts Department of Mental Health. ********* 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, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Junior M. Pinili, 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 ***