T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, September 13, 2005, Vol. 9, No. 217 Headlines ACE AVIATION: Names B. Dunne as CFO, R. Peterson as Aeroplan CFO ACCESS WORLDWIDE: Appoints Georges Andre Executive VP & COO ADELPHIA COMMS: Court Adjourns Disclosure Statement Hearing ALLEGIANCE TELECOM: Has Until Feb. 12 to Object to Claims ALLIANCE GAMING: S&P Places BB- Corporate Credit Rating on Watch ALOHA AIRGROUP: Court Okays Consulting Agreement With Sabre Inc. AMERICAN TOWER: Moody's Upgrades 4 Note Ratings to B1 from B3 AMERIGAS PARTNERS: Prices 2.3 Million Common Unit Offering ANDROSCOGGIN ENERGY: Court Okays TransCanada and Portland's Probe APPLETON PAPERS: Business Restructuring to Save Up to $10 Million ARTHUR FULLER: Case Summary & 5 Largest Unsecured Creditors ASARCO LLC: Wants to Start Soil Remediation Under Everett Pact ASHTON WOODS: S&P Assigns B+ Corporate Credit Rating ATA AIRLINES: Asks Court to Approve Foothill L/C Facility BALL CORPORATION: Deutsche Bank & JPMorgan Arranging New Facility BATTERSON PARK: Fitch Holds $16.5 Mil. Class B Notes at Junk Level BAYOU OFFSHORE: Section 304 Petition Summary BRILLIANT DIGITAL: To Pay for Copyright Violation, Aus. Ct. Rules BROOKSTONE INC: S&P Rates Proposed $190 Million Unsec. Notes at B CALPINE CORP: Fitch Says Bear Stearns Joint Venture is Favorable CANWEST MEDIA: S&P Places B+ Corporate Credit Rating on Watch CATHOLIC CHURCH: Tucson Gets OK to St. Paul Coverage Issues CHARLES RIVER LABORATORIES: Issues Third Quarter Guidance CHC HELICOPTER: Completes Sale of Interest in Canadian Helicopters CHESAPEAKE ENERGY: Prices $300 Million 4.50% Preferred Stock CHESAPEAKE ENERGY: Prices 8-Mil Share Offering at $32.72 Per Share CREDIT SUISSE: Fitch Retains Low-B Rating on Five Cert. Classes CROWN RESOURCES: Posts $2.2 Million Net Loss in Second Quarter DELPHI CORP: Board Eliminates Quarterly Dividend on Common Stock DOBSON COMMS: Moody's Lifts $420 Million Notes' Ratings to Caa2 EAST 44TH: U.S. Trustee to Meet Creditors on September 23 EAST 44TH: Wants Access to NY Community Bank's Cash Collateral EMERITUS ASSISTED: SHP & Walgreen Venture Results in $1.5-Mil Cash ENESCO GROUP: Receives NYSE Listing Notification ENRON CORP: Amends Brooklyn Union Gas Claims Settlement FACET DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors FHC HEALTH: S&P Places B Credit Rating on Negative Watch FLEETWOOD ENT: Posts $29.6 Million Net Loss in First Quarter 2006 FLINTKOTE COMPANY: Court Extends Removal Period Until Feb. 27 GE COMMERCIAL: Stable Performance Cues Fitch to Hold Low-B Ratings GENERAL MOTORS: Discussing Overseas Production on September 22 GLOBAL CROSSING: Court Clears Microsoft & Softbank in Class Action GLOBAL CROSSING: Ct. Allows Investors to Pursue Claims v. JPMorgan GLOBAL IMAGING: S&P Raises Corporate Credit Rating to BB from BB- GRANITE BROADCASTING: Moody's Affirms Junk Corporate Family Rating HAYES LEMMERZ: S&P Lowers Corporate Credit Rating to B+ from BB- HONEY CREEK: List of 20 Largest Unsecured Creditors INSIGHT HEALTH: Launches $250 Million Private Debt Offering INTEGRATED ELECTRICAL: Sells Florida Units for $7.9 Million INTERSTATE BAKERIES: Committee Taps Shughart Thomson as Co-Counsel INTERSTATE BAKERIES: Wants to Walk Away From 11 Real Estate Leases JO-ANN STORES: Registers 2.6-Mil Shares for Employee Distribution JOHN Q. HAMMONS: 98.83% of Noteholders Agree to Amend Indenture KAISER ALUMINUM: Hires Russell Reynolds to Scout for New Directors KAMPS AG: Fitch Puts BB- Rating on Watch Negative KERASOTES SHOWPLACE: S&P Lowers Corporate Credit Rating to B- KOEN BOOK: Creditors Committee Taps Lowenstein Sandler as Counsel KOEN BOOK: Committee Hires Traxi LLC as Financial Advisor KOEN BOOK: Files Schedules of Assets and Liabilities LIFECARE HOLDINGS: Moody's Affirms $150 Million Notes' Junk Rating LONGFAMILY FARMS: Case Summary & Largest Unsecured Creditor LUIGINO'S INC: S&P Places B+ Corporate Credit Rating on Watch MAD CATZ: Renews $35 Million Asset-Based Credit Facility MARK ORMOND: Case Summary & 20 Largest Unsecured Creditors MAULDIN-DORFMEIER: Wants Cowles & Thompson as Special Counsel MEDIA GROUP: Court Okays Panel's Rule 2004 Probe of Sonny Howard MERIDIAN AUTOMOTIVE: $6.7 Mil. Key Employee Severance Plan Okayed MIRANT: Securities Action Plaintiffs Insist on Troutman Subpoena MIRANT CORP: Disclosure Statement Hearing Rescheduled to Sept. 28 MOOG INC: Prices $50 Million Add-On Senior Sub Debt Offering MUELLER GROUP: Moody's Rates New $1.05 Billion Facilities at B2 NBTY INC: Offering $150 Million of Senior Subordinated Notes NORTHWEST AIRLINES: AMFA Talks Break Down Over Severance Pay NORTHWEST AIRLINES: Freezes Benefit Accruals Under Pension Plan NORTHWEST AIRLINES: Names David Davis SVP-Finance & Controller NVF COMPANY: Taps Forshee & Boardroom as Accounting Consultants OMNI CAPITAL: Case Summary & 12 Largest Unsecured Creditors ONEIDA LTD: July 31 Balance Sheet Upside-Down by $14.6 Million OWENS CORNING: Exterior Unit Wants to Buy Assets for $14.855-Mil PARMALAT GROUP: Preliminary Injunction Continued to November 16 PBI MEDIA: Moody's Rates Proposed $78 Million Loan Facility at B3 PC LANDING: Scope of Pachulski Stang's Services Expanded PC LANDING: Court Approves Services Contract with Lucent Tech. POINT TO POINT: ThyssenKrupp Wants Probe of $10 Mil. Missing Funds POINT TO POINT: Has Access to $3.75 Million Cash Collateral PRIME OUTLETS: Referee Ready to Auction Property on Sept. 14 PRIMUS INT'L: S&P Places B+ Corporate Credit Rating on Watch PROTECTION ONE: Steven Williams Resigns as Executive Vice Pres. RELIANCE GROUP: Wants Court to Bless Settlement Offer with SEC RISK MANAGEMENT: Court Okays Equifax Deal RISK MANAGEMENT: Employs Dixon Hughes as Tax Advisor SAN PASQUAL CASINO: S&P Rates Proposed $180 Million Notes at B+ SMURFIT-STONE: Fitch Affirms BB+ Rating on Senior Secured Debt. SOLUTIA INC: Asks Court to Set Procedures for Retaining Experts SOUTHAVEN POWER: Says Erie Power's Push for a Committee is Flawed SPIRIT AEROSYSTEMS: S&P Places BB- Corporate Rating on Watch STATION CASINOS: Expects 8% to 11% Revenue Growth in 3rd Quarter TEREX CORPORATION: To Restate 2000 to 2003 Financial Statements TFS ELECTRONIC: Hires Greenberg Traurig as Bankruptcy Counsel TFS ELECTRONIC: Wants Claims Bar Date Set for October 24 TFS ELECTRONIC: U.S. Trustee Names 3-Member Creditors' Committee TORCH OFFSHORE: Asks Court to Okay Energy Partners Settlement Pact UAL CORP: U.S. Bank Wants Dist. Ct. to Nix Committee's Appeals UAL CORPORATION: Wants Court to Approve Solicitation Procedures UNISYS CORP: Moody's Rates Proposed $450 Million Notes at Ba3 VARTEC TELECOM: Wants Court to Approve Teleglobe Settlement VIDEOTRON LTEE: Prices $175 Million 6-3/8% Senior Notes VIRBAC CORP: Renegotiates Credit Facility with Major Shareholder VOUGHT AIRCRAFT: S&P Places B+ Corporate Credit Rating on Watch YANG YI: Voluntary Chapter 11 Case Summary W.R. GRACE: New Offices & Service Center in Shanghai & Beijing WALTER INDUSTRIES: Moody's Rates New $625 Mil. Facilities at Ba3 WESTPOINT STEVENS: Settles Fund Dispute With GSC Partners, et al. WILLIAM LIPSKY: Case Summary & 11 Largest Unsecured Creditors WINN-DIXIE: Panel Does Not Oppose Extension of Exclusive Periods WINN-DIXIE: Three Landlords Object to Lease Decision Extension WORLDCOM INC: Court Approves Ebbers Settlement Agreement * Airlines Asking Congress for $600 Million Tax Break * Large Companies with Insolvent Balance Sheets ********* ACE AVIATION: Names B. Dunne as CFO, R. Peterson as Aeroplan CFO ---------------------------------------------------------------- Robert Milton, Chairman, President and CEO of ACE Aviation Holdings Inc. reported the following key executive appointments that support the Corporation's strategic business objectives. Brian Dunne, formerly Chief Financial Officer at Aer Lingus, the national carrier of Ireland, joins ACE as Executive Vice President and Chief Financial Officer. Reporting directly to the CEO of ACE, he will have executive responsibility for the overall financial strategic direction, control and financial monitoring of ACE and its operating companies and will also have responsibility for both the treasury and controller's operations. After having joined the Irish carrier as CFO in 2001, Mr. Dunne played a key role in transforming Aer Lingus into a profitable low fare carrier. He led the carrier's successful cost reduction program and European fleet transformation as well as other initiatives which were instrumental in the carrier's turnaround. Prior to joining Aer Lingus, Mr. Dunne worked for Arthur Andersen where he was a Partner in the business consulting practice with clients in the transportation, energy and communications sectors. Mr. Dunne is a Fellow of the Institute of Chartered Accountants in Ireland and holds a Bachelor of Commerce degree from University College Dublin. His appointment is effective September 6, 2005. Rob Peterson, formerly Executive Vice President and Chief Financial Officer of ACE, will assume the position of Executive Vice President, Finance and Chief Financial Officer at Aeroplan LP. "Rob Peterson's significant contribution to Air Canada over the years has included the responsibility for Aeroplan's finances for more than a decade. His extensive knowledge of Aeroplan's business, together with his strong working relationship with its executive team led by Rupert Duchesne, will be invaluable as Aeroplan evolves its business plan as a newly public company," said Mr. Milton. Greg Cote, formerly Senior Vice President and Partner, Ernst & Young Corporate Finance, joins ACE as Senior Vice President, Corporate Finance and Strategy. Reporting to the Chief Financial Officer of ACE, he will have executive responsibility for developing and implementing financial strategies that create additional value for ACE and its operating companies. He most recently acted as advisor to ACE on plans and strategies leading to its successful completion of an equity raise of approximately $792 million as well as the initial public offering of the Aeroplan Income Fund. He has been a Partner at Ernst &Young since 1997 with a practice focusing on corporate finance, mergers and acquisitions, and corporate reorganization. Prior to joining Ernst &Young Corporate Finance, Mr. Cote was a Senior Manager at Clarkson Gordon. A qualified Chartered Accountant, Mr. Cote holds a Bachelor of Commerce degree from McMaster University. His appointment is effective September 1, 2005. Mr. Milton said, "I am pleased to welcome onboard two highly talented individuals to key financial positions at ACE as we implement our plan to grow our business units into stand alone companies. Moreover, I am delighted that Aeroplan will benefit from Rob's broad industry knowledge and experience as this important unit of ACE implements its business strategy as a publicly held company. The unique expertise and background of all three individuals will further strengthen the ACE management team and build on our strategic focus as we continue to work to realize the inherent value of ACE." ACE Aviation is the parent holding company of Air Canada and ACE's other subsidiaries. Air Canada is Canada's largest domestic and international full-service airline and the largest provider of scheduled passenger services in the domestic market, the transborder market and each of the Canada-Europe, Canada-Pacific, Canada-Caribbean/Central America and Canada-South America markets. Air Canada is a founding member of the Star Alliance network, the world's largest airline alliance group. In addition, the Corporation owns Jazz Air LP, Aeroplan LP and Destina.ca, which is an on-line travel site. The Corporation also provides Technical Services through ACTS LP, Cargo Services through AC Cargo LP and Air Canada, Groundhandling Services through ACGHS LP and Air Canada and tour operator services and leisure vacation packages through Touram LP. (Air Canada Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Oct. 5, 2004, Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit rating to Montreal, Quebec-based ACE Aviation Holdings Inc. and its wholly owned subsidiary, Air Canada. S&P says the outlook is stable. ACCESS WORLDWIDE: Appoints Georges Andre Executive VP & COO ----------------------------------------------------------- Access Worldwide Communications, Inc. (OTC Bulletin Board: AWWC) appointed Georges Andre to the position of Executive Vice President and Chief Operations Officer of Access Worldwide, effective September 2, 2005. In the newly created position, Mr. Andre, a ten-year veteran of Access Worldwide Communications, Inc., will be responsible for providing leadership, strategic direction and oversight to Access Worldwide's communication centers. Mr. Andre's elevation to EVP and COO is a move to streamline the Company's best practices by maximizing utilization of the Company's existing communications centers. Mr. Andre worked his way up the organization from Account Manager to President and CEO of the TelAc Teleservices group. In this capacity, Mr. Andre managed three of Access Worldwide's communication centers located in the U.S. and one in Manila, Philippines. Further management changes include Guy Amato's resignation from his position as President and CEO of Access Worldwide's TMS Professional Services group to pursue other professional opportunities. "Guy was a terrific member of the executive team during his tenure at Access and I wish him luck in his future pursuits. I have no doubt he will be successful wherever he may go," stated Shawkat Raslan, Chairman and CEO of Access Worldwide. Mr. Raslan went on to say, "We are very pleased and excited to have Georges serve the Company in his capacity as EVP & COO. He has demonstrated strong leadership and operational skills and is the ideal candidate to maximize the synergies of the Company's Pharmaceutical and Business Services divisions. I am confident Georges will successfully expand the Pharmaceutical programs to our other communication centers." Access Worldwide Communications, Inc. -- http://www.accessww.com/ -- is an outsourced marketing services company that provides a variety of sales, education and communication programs to clients in the medical, pharmaceutical, telecommunications, financial services, insurance and consumer products industries. As of June 30, 2005, Access Worldwide's balance sheet reflected a $3,864,961 equity deficit, compared to a $3,865,118 deficit at Dec. 31, 2004. ADELPHIA COMMS: Court Adjourns Disclosure Statement Hearing ----------------------------------------------------------- In a notice filed with the U.S. Bankruptcy Court for the Southern District of New York, Adelphia Communications Corporation and its debtor-affiliates disclosed that Judge Gerber adjourned to "a date to be determined" the hearing to consider the: (i) approval of the Disclosure Statement explaining the ACOM Debtors' Second Amended Plan of Reorganization; (ii) voting record date; (iii) approval of the related solicitation packages and procedures for distribution; (iv) approval of forms of ballots and establishment of procedures for voting on the Second Amended Plan; and (v) establishment of procedures to determine cure amounts and deadlines for objections for certain executory contracts and unexpired leases to be retained, assumed or assigned by the ACOM Debtors. "This is a complex bankruptcy and it's taking longer than expected to prepare for the hearing, but we do not view this event as material to the bankruptcy process," ACOM spokesman Paul Jacobson told Bloomberg News. The ACOM Debtors tell Judge Gerber they'll file and serve a notice setting forth the adjourned hearing date and the related objection deadline. 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. 105; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLEGIANCE TELECOM: Has Until Feb. 12 to Object to Claims --------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York gave Eugene I. Davis, the Plan Administrator for Allegiance Telecom Liquidating Trust, successor to Allegiance Telecom, Inc., an extension until Feb. 12, 2006, of the deadline to file objections to: -- Administrative Expense Claims, -- Priority Non-Tax Claims, -- Priority Tax Claims, and -- Secured Claims. Kenneth A. Davis, Esq., at Akin Gump Strauss Hauer & Feld LLP in Manhattan tells the Court the Trust wants to extend the Claims Objection Deadline in order to preserve its right to object to some claims in the event that ongoing negotiations concerning these claims fail to result in a consensual resolution. Allegiance Telecom, Inc. -- http://www.algx.com/-- is a facilities-based national local exchange carrier headquartered in Dallas, Texas. As the leader in competitive local service for medium and small businesses, Allegiance offers "One source for business telecom(TM)" -- a complete telecommunications package, including local, long distance, international calling, high-speed data transmission and Internet services and a full suite of customer premise communications equipment and service offerings. Allegiance serves 36 major metropolitan areas in the U.S. with its single source approach. Allegiance's common stock is traded on the Over The Counter Bulletin Board under the ALGXQ ticker symbol. It announced financial restructuring plans under Chapter 11 of the U.S. Bankruptcy Code on May 14, 2003. Ira S. Dizengoff, Esq., Philip C. Dublin, Esq., and Kenneth A. Davis, Esq., at Akin Gump Strauss Hauer & Feld represent Allegiance Telecom Liquidating Trust. On June 10, 2004, the Court confirmed the Debtor's Third Amended Joint Plan of Reorganization and that Plan became effective on June 23, 2004. ALLIANCE GAMING: S&P Places BB- Corporate Credit Rating on Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on gaming equipment manufacturer Alliance Gaming Corp., including its 'BB-' corporate credit rating, on CreditWatch with negative implications. The CreditWatch listing follows the Las Vegas, Nevada-based company's announcement on September 8, 2005, that it has not completed its accounting and financial reporting process for the company's fiscal year ended June 30, 2005. Several transactions came under review with respect to the timing of revenue recognition, which has led Alliance, with the assistance of consultants, to undertake a broader review of the company's sales contracts and revenue recognition practices. This is the second time that the year-end earnings release has been postponed, and Alliance has indicated that it will be unable to file its 10K by its required date, September 13, 2005. If Alliance's audited financial statements and accompanying compliance certificates are not delivered by the 15-day calendar extension filing date of September 28, 2005, the company will be in default under its credit agreement. Still, there are notice and cure provisions under the credit agreement, which allow the company until to November 4, 2005, to deliver the required information. "We expect to comment further on the situation by the end of September. Rating implications vary considerably depending on the outcome of our review, ranging from an affirmation to a multiple notch downgrade," said Standard & Poor's credit analyst Peggy Hwan. ALOHA AIRGROUP: Court Okays Consulting Agreement With Sabre Inc. ---------------------------------------------------------------- The Honorable Robert J. Faris of the U.S. Bankruptcy Court for the District of Hawaii gave Aloha Airgroup, Inc., and Aloha Airlines, Inc., permission to assume a Master Agreement for System Usage and Professional Services with Sabre Inc. As previously reported in the Troubled Company Reporter on June 8, 2005, Sabre will continue to assist the Debtors in implementing their business plan for improved profitability. The scope of consulting services provided by Sabre under the agreement is defined in various work orders. Aloha Airlines has executed six work orders. Under the agreement and the six work orders, Aloha will pay Sabre $154,000. Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc. -- http://www.alohaairlines.com/-- provides air carrier service connecting the five major airports in the State of Hawaii. Aloha Airgroup and its subsidiary Aloha Airlines, Inc., filed for chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063). Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., and Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky represent the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors it listed more than $50 million in estimated assets and debts. AMERICAN TOWER: Moody's Upgrades 4 Note Ratings to B1 from B3 ------------------------------------------------------------- Moody's Investors Service upgraded the ratings of American Tower Corporation and its subsidiaries. The ratings action is based upon: * the company's track record of good revenue and cash flow growth and free cash flow generation; and * its history of devoting that free cash flow to debt reduction to substantially reduce the company's financial risk profile. Further, American Tower benefits from the acquisition of the less leveraged Spectrasite and its substantial free cash flow generation. The affected ratings are: American Tower Corporation: * Corporate family rating upgraded to Ba2 from B1 * Speculative grade liquidity rating affirmed at SGL-1 * 9.375% Senior Notes due 2009 upgraded to B1 from B3 * 7.5% Senior Notes due 2012 upgraded to B1 from B3 * 7.125% Senior Notes due 2012 upgraded to B1 from B3 * 5% Convertible Notes due 2010 upgraded to B1 from B3 American Towers, Inc. (fka American Tower Escrow Corp.): * 7.25% Senior Subordinated Notes due 2011 upgraded to Ba2 from B2 * 0% Senior Subordinated Discount Notes due 2008 upgraded to Ba2 from B2 American Tower, LP and American Towers, Inc. (co-borrowers): * Senior secured credit facility maturing 2011 upgraded to Baa3 from Ba3 Spectrasite Communications, Inc.: * Senior secured credit facility maturing 2011/2012 upgraded to Ba1 from Ba3 SpectraSite, Inc.: * Corporate family rating withdrawn * 8.25% Senior Notes due 2010 rating withdrawn The Ba2 corporate family rating reflects the solid financial performance of American Tower, and Moody's expectation that the company will continue to post revenue growth in excess of 6% per year with EBITDA and cash provided by operations growing faster due the company's fixed expense base. The Ba2 rating is constrained by the company's more modest but still high leverage. Measured on an as reported basis, with the acquisition of Spectrasite, American Tower is now within its target leverage rating of 4 to 6 times net debt/EBITDA. On an adjusted basis, using Moody's global standard adjustments, this ratio increases to 5 to 7 times, with expected 4Q05 adjusted debt to adjusted EBITDA of 7.1 times. While this is a high ratio for the rating category, Moody's takes comfort that mitigating this financial risk measure is the company's stable, contracted revenue stream of lease payments from its predominantly investment grade-rated customers. The stable outlook reflects Moody's opinion that the company is well positioned in the Ba2 rating category; having achieved management's target leverage level, further material debt reduction is unlikely, and the company will look to begin returning cash to its shareholders. The ratings could be upgraded if the company sustained leverage at the lower boundary of its target range (4 times debt/EBITDA on an as reported basis, or 5 times on an adjusted basis). The ratings are likely to face downward pressure should American Tower alter its leverage target to a higher range. Both American Tower and Spectrasite posted strong revenue growth in the first half of 2005 (9% for American Tower and 11% for Spectrasite), while reported EBITDA grew 13.8% for American Tower in 2Q05 over 2Q04, and 19% for Spectrasite. Importantly, the two companies generated a total of $308 million of free cash flow on a pro forma combined basis over the last twelve months (cash provided by operations less capital expenditures) or roughly 8% of the combined balance sheet debt of the two companies. Adjusting for their substantial operating lease commitments, primarily long term leases on the land underneath their towers, Moody's calculates this ratio to be 5.7% for the LTM June 30, 2005. Due to expected continued cash flow growth and lower interest rates, Moody's expects this ratio to improve to over 8% (on an adjusted basis) in 2006. While this figure is low for the rating category, Moody's believes that tower companies can support relatively low free cash flow ratios (and associated higher leverage ratios) due to the relatively low business risk of the industry. Further, as the largest tower company, with over 20,000 towers in the US, Moody's believes American Tower is well positioned to capitalize on the favorable industry economics as the combined company enjoys better economies of scale and becomes even more important to its wireless carrier customers. The Baa3 rating on the senior secured debt of American Towers, LP reflects the benefits these lenders to the operating companies enjoy due to their collateral and guarantee package, their structural priority in the combined company's capital structure, and the substantial free cash flow generation of the over 14,000 towers securing these obligations. The Ba1 rating on the secured debt of Spectrasite Communications also reflects its strong collateral and guarantee package, but with roughly $700 million of secured debt supported by approximately $200 million of Spectrasite EBITDA from roughly 7800 towers and in-building systems, these lenders are not as over-collateralized as the secured lenders to American Towers, LP where roughly the same amount of secured debt is supported by over twice as much EBITDA. The Ba2 rating on the subordinated debt of American Towers, Inc. reflects the relatively senior position of these obligations and the benefit of upstream guarantees from American Tower's primary operating subsidiaries. The B1 rating on the senior unsecured debt of American Tower Corporation reflects the junior ranking of these obligations behind the debt of its subsidiaries which represent approximately 54% of the total reported debt of the company. The affirmation of American Tower's SGL-1 liquidity rating reflects Moody's opinion that the company continues to posses a very good liquidity profile. Moody's expects the company to continue to generate significant levels of free cash flow, and near term debt maturities are modest. Further, American Tower has access to two large undrawn revolving credit facilities, and there is substantial covenant cushion to assure continued access to those facilities. Headquartered in Boston, American Tower Corporation owns and operates over 22,000 sites in the US, Mexico and Brazil and had LTM revenues (pro forma for the recent acquisition of Spectrasite) of $1.1 billion. AMERIGAS PARTNERS: Prices 2.3 Million Common Unit Offering ---------------------------------------------------------- AmeriGas Propane, Inc. said that AmeriGas Partners agreed to sell 2,300,000 common units, representing limited partner interests, at a public offering price of $33.00 per unit, in an underwritten offering being managed by Citigroup Global Markets Inc. and Wachovia Capital Markets, LLC that is scheduled to close on September 13, 2005. AmeriGas Partners also has granted to the underwriters an option to purchase up to an additional 345,000 common units to cover over-allotments at $33.00 per unit, less the underwriting discount. The net proceeds to AmeriGas Partners of approximately $72.4 million, or $83.3 million if the over-allotment option is exercised, will be used to reduce indebtedness under its bank credit agreement and for general partnership purposes. Copies of the final prospectus relating to this offering may be obtained from the offices of Citigroup Global Markets Inc., 140 58th Street, Brooklyn, NY 11220, Attention: Prospectus Dept., Floor 8-I, or from Wachovia Capital Markets, LLC, 7 St. Paul Street, 1st Floor, Baltimore, MD 21202, Attention: Syndicate Department. AmeriGas Partners is the nation's largest retail propane distributor, serving nearly 1.3 million customers from over 650 locations in 46 states. UGI Corp. (NYSE: UGI), through its subsidiaries, will own approximately 44 percent of the Partnership and individual unitholders will own the remaining 56 percent assuming that the over-allotment option is not exercised. Through its subsidiaries, AmeriGas Partners, L.P. (NYSE:APU) is the largest retail propane distributor in the United States. The Partnership serves residential, commercial, industrial, agricultural and motor fuel customers from over 650 retail locations in 46 states. * * * As reported in the Troubled Company Reporter on Apr. 15, 2005, AmeriGas Partners, L.P.'s -- APU -- $400 million senior notes due 2015, issued jointly and severally with its special purpose financing subsidiary Amerigas Finance Corp., are rated 'BB+' by Fitch Ratings. The Rating Outlook is Stable. An indirect subsidiary of UGI Corp. is the general partner and 44% limited partner for APU, which, in turn, is a master limited partnership - - MLP -- for AmeriGas Propane, L.P. -- AGP, an operating limited partnership. Proceeds from the new senior notes will be utilized to repurchase outstanding 8.875% APU senior notes pursuant to an ongoing tender offer. ANDROSCOGGIN ENERGY: Court Okays TransCanada and Portland's Probe ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maine gave TransCanada Gas Services, Inc., and Portland Natural Gas Transmission System authority to examine Androscoggin Energy LLC under Rule 2004 of the Federal Rules of Bankruptcy Procedures. As previously reported in the Troubled Company Reporter on July 19, 2005, TransCanada and Portland want to validate their claims and compel the Debtor's production of financial and other relevant documents. TransCanada and Portland charged that the Debtor is depleting the value of the estate. Androscoggin's Plant, despite being not operational, is burning cash. The Debtor is also spending $130,000 monthly for payroll and hundreds of thousands of dollar for professional fees. The parties note that Berstein, Shur, Sawyer & Nelson, Quinlan & Carroll, Ltd., and Mesirow Financial Consulting, LLC's fees for April 2005 were $790,064. Headquartered in Boston, Massachusetts, Androscoggin Energy LLC, owns, operates, and maintains an approximately 150-megawatt, natural gas-fired cogeneration facility in Jay, Maine. The Company filed for chapter 11 protection on November 26, 2004 (Bankr. D. Me. Case No. 04-12221). Michael A. Fagone, Esq., at Bernstein, Shur, Sawyer & Nelson represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $207,000,000 and total debts of $157,000,000. APPLETON PAPERS: Business Restructuring to Save Up to $10 Million ----------------------------------------------------------------- Appleton Papers Inc. reported a restructuring plan for its business segments aimed at improving the company's market focus, streamlining its organizational structure, reducing costs, and positioning the company to pursue international growth opportunities. The company will be organized into three divisions: * technical papers, * flexible packaging, and * international. The new organizational structure will result in the elimination of approximately 40 jobs, primarily at the company's Appleton, Wisconsin, headquarters. The company expects that this restructuring combined with the benefits of other cost reduction efforts already in place to result in savings of $8 to $10 million in 2006. Appleton will take a charge of $3.7 million for the restructuring. "Our restructuring is part of an ongoing effort to align our business priorities and to increase value for our customers and shareholders," said Mark Richards, Appleton's chief executive officer. "To achieve those goals, we created a new division structure and aligned our technology resources to increase market focus and operating efficiencies and accelerate our product development and growth efforts." Appleton will continue to pursue growth opportunities through a balanced framework of maximizing its core businesses and extending those core businesses into complimentary markets and products. "We will use market insight and leverage our strengths in coating and encapsulation technologies to be better than anyone else at providing technically advanced papers, films and services for communication and packaging to businesses around the world," said Richards. Technical Papers Division The most significant part of the restructuring will combine into a technical papers division Appleton's carbonless, thermal and security papers businesses. Sales from those businesses in the U.S. and Canada accounted for more than $780 million of Appleton's $990 million of sales in 2004. Appleton is the world's largest producer of carbonless paper and the largest North American producer of thermal paper. Richards said that creating a technical papers division reaffirms Appleton's commitment as the market leader in the carbonless and thermal businesses and will enable the company to continue to provide its customers with the innovative products and superior service and value they expect from Appleton. Appleton will name a person to fill the new position of president of its new technical papers division. Until that appointment is made, John Depies, Appleton's vice president and general manager of thermal and advanced technical products, Jim McDermott, vice president and general manager of Appleton's coated solutions business, and Todd Downey, manufacturing director, will continue to manage those businesses. Flexible Packaging Division The flexible packaging division will contain Appleton's packaging subsidiaries, American Plastics and C&H Packaging in Wisconsin and New England Extrusion in Massachusetts and Wisconsin. Steve Sakai will continue to serve as the division's vice president and general manager. In April 2003, Appleton purchased C&H Packaging and American Plastics to enter the flexible packaging market and leverage its expertise in coating applications and microencapsulation. C&H Packaging prints and converts flexible plastic packaging materials for companies in the food processing, household and industrial products industries. American Plastics produces high- quality, custom multilayered films and commercial packaging. In January 2005, Appleton acquired New England Extrusion, a company that produces single and multilayer polyethylene films for packaging applications. New England Extrusion's polyethylene films complement the high barrier coextruded films American Plastics produces. By sharing their capabilities, American Plastics and New England Extrusion are expanding their abilities to design and produce film products with customer-specified properties. The addition of New England Extrusion is expected to increase sales from Appleton's flexible packaging division to approximately $100 million for 2005. International Division Appleton sells its carbonless and thermal products into approximately 60 countries and international sales accounted for more than 20 percent of Appleton's 2004 sales. Appleton expects to name a vice president and general manager for its new international division and create a team dedicated solely to increasing the company's international sales through focused sales and marketing efforts and exploring partnerships, strategic alliances, and supply agreement options. The international division will include BemroseBooth, a provider of secure and specialized print services based in Derby, United Kingdom, that Appleton acquired in December 2003. Graham Bennington will continue to serve as the chief executive officer of BemroseBooth. Appleton Papers Inc. -- http://www.appletonideas.com/-- uses ideas that make a difference to create product solutions through its development and use of coating formulations and applications, encapsulation technology, and specialized and secure print services. The Company produces carbonless, thermal, security and performance packaging products. Appleton is headquartered in Appleton, Wisconsin, and has manufacturing operations in Wisconsin, Ohio, Pennsylvania, Massachusetts and the United Kingdom, employs approximately 3,400 people, and is 100 percent employee owned. * * * As reported in the Troubled Company Reporter on June 13, 2005, Standard & Poor's Ratings Services revised its outlook on specialty paper producer Appleton Papers Inc. to negative from stable. At the same time, it affirmed all ratings, including the 'BB' corporate credit rating. "The rating action reflects credit measures that remain somewhat weaker than we had been expecting Appleton to achieve," said Standard & Poor's credit analyst Pamela Rice. "Although we had expected that Appleton would need to pursue growth opportunities to replace shrinking carbonless paper volumes, we had anticipated a greater portion to be generated internally. However, revenue growth of thermal products has been less robust than originally projected. In addition, the operating margins of acquired businesses are below expectations." ARTHUR FULLER: Case Summary & 5 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Arthur B. E. & Wendy Fuller Five School House Hill Newton, Connecticut 06470 Bankruptcy Case No.: 05-51169 Type of Business: Chapter 11 Petition Date: September 12, 2005 Court: District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Matthew K. Beatman, Esq. Zeisler and Zeisler 558 Clinton Avenue P.O. Box 3186 Bridgeport, Connecticut 06605 Tel: (203) 368-4234 Total Assets: $500,000 to $1 Million Total Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Value of security: $499,094 Andover, MA 05501 $498,000 Chrysler Financial $23,802 Attn: Pres, GP or Mang. Memb. P.O. Box 1728 Newark, NJ 07101 GMAC Security agreement $7,000 Attn: Pres, GP or Value of security: Mang. Memb. $28,000 P.O. Box 78234 Phoenix, AZ 85062 State of Connecticut $6,000 Dept. of Revenue Services 25 Sigourney Street Hartford, CT 06103 Roadloans Security agreement $5,000 Attn: Pres, GP or Value of security: Mang. Memb. $30,000 Dept. CH 10104 Palatine, IL 60055 ASARCO LLC: Wants to Start Soil Remediation Under Everett Pact -------------------------------------------------------------- ASARCO, LLC, seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas to enter into an Agreement for Acceptance of Soil with the Everett Housing Authority. James R. Prince, Esq., at Baker Botts, LLP, in Dallas, Texas, recounts that ASARCO was scheduled to perform remediation of certain residential yards and adjoining rights-of-way in Everett, Washington, in 2005, but is unable to do so as a result of its bankruptcy filing. The EHA wants to hire contractors and subcontractors to complete the remediation work. Completing the remediation work of the yards will result in the removal of soil from the yards and placement of the soil at the site of the former ASARCO smelter in Tacoma, Washington. ASARCO owns the Site. ASARCO is willing to accept the soil at the Site under the terms set forth in the Agreement. ASARCO agrees to accept, at no cost to the EHA except as specifically provided for in the Agreement, soil at the Site, estimated to total approximately 30,000 cubic yards, generated by the EHA's contractor in 2005 in the course of completing the remediation work. Mr. Prince tells the Court that the Site on which the contaminated soil will be deposited already contains contaminated soil, because of ASARCO's prepetition remediation work. While the Agreement will increase the amount of soil that ASARCO needs to address on its own property, the Agreement will not change the remedy that ASARCO will utilize regarding the property. That remedy will be designed to cap and contain the contaminated soil. The EHA and its contractors will be solely responsible for: (i) changes to an approved plan for transporting soil to the Site; (ii) paying the cost of transporting soil to the Site; (iii) providing the equipment necessary for transport; and (iv) complying with all laws and regulations applicable to the transport. The EHA will coordinate with the City of Tacoma and the Town of Ruston to re-initiate transportation of soil to the Site and to maintain or modify the approved Transportation Plan. The EHA agrees that any personnel entering the Site to implement the Agreement will comply with all of ASARCO's environmental, health and safety policies. Moreover, the EHA will indemnify and defend ASARCO against all claims it may sustain, arising from the EHA's performance under the Agreement. The Environmental Protection Agency and the State of Washington have approved the transfer of soil from the residential properties in Everett to the Site. A full-text copy of the Agreement for Acceptance of Soil and the Transportation Plan is available at no charge at: http://bankrupt.com/misc/EHAagreement.pdf Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 thru 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos Of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos- driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. ASARCO has asked that the five subsidiary cases be jointly administered with its chapter 11 case. (ASARCO Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASHTON WOODS: S&P Assigns B+ Corporate Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Ashton Woods USA LLC and its subsidiary, Ashton Woods Finance Co. In addition, a preliminary rating of 'B-' is assigned to the company's proposed $125 million senior subordinated debt issuance. The outlook is stable. "The ratings reflect this moderately sized homebuilder's conservative growth strategy and disciplined land acquisition and inventory management," explained Standard & Poor's credit analyst George Skoufis. "The company is somewhat concentrated, but is methodically diversifying its markets and product offerings. Credit considerations include an adequate liquidity position, modestly weaker, but improving, margins relative to its peers, and a meaningful component of projected variable-rate bank debt." The stable outlook is supported by the company's measured and conservative growth strategy. Although this strategy is a drag on profitability, it should yield fairly stable performance, and may be more defensible in a less robust housing market. ATA AIRLINES: Asks Court to Approve Foothill L/C Facility --------------------------------------------------------- As previously reported, the U.S. Bankruptcy Court for the Southern District of Indiana authorized ATA Airlines, Inc. and its debtor- affiliates to obtain postpetition financing from the National City Bank of Indiana in the form of extensions and renewals and extension of 40 letters of credit issued prepetition by NCBI to the Debtors' lessors and vendors. NCBI issued the L/Cs on account of the Debtors under a credit agreement, dated December 2, 2004, and last modified November 2004. The Debtors' reimbursement obligations to NCBI are secured by various depository accounts held by NCBI. The NCBI Credit Agreement expires on August 31, 2006. According to Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis, Indiana, certain of the L/Cs are in need of renewal and the renewal terms may extend beyond the expiration date of the NCBI Credit Agreement. The Debtors have decided not to renew the NCBI L/C Facility. ATA Airlines, Inc., has negotiated at length with Wells Fargo Foothill, Inc., as agent for certain financial institutions to procure a new letter of credit facility. The proposed New L/C Facility provides that: * the Lenders would issue or procure the issuance of one or more back-up letters of credit to NCBI; * NCBI will transfer the NCBI Collateral applicable to the issued back-up L/C to an account with Wells Fargo Bank, National Association, which account will be subject to a security interest in favor of the Lenders, free and clear of any other lien or interest except the liens permitted under the New L/C Facility; and * the existing L/Cs issued by NCBI subsequently will be replaced with L/Cs issued by the Lenders under the terms of a DIP credit agreement between ATA Airlines and Foothill. The DIP Agreement still needs to be finalized. Pursuant to Sections 105(a) and 364(c) of the Bankruptcy Code, the Debtors ask the Court to approve the New L/C Facility with Foothill. The issuance of replacement letters of credit and the issuance of new letters of credit would be secured by a first priority security interest in the NCBI Collateral and any other funds or other property pledged in the future to satisfy the requirements of the Credit Agreement, as modified. Foothill and the Lenders also will be granted a superpriority administrative expense claim for any deficiency subject only to the Carve Out, and the administrative priority claims granted pursuant to previous court orders. * * * ATA Airlines advises Judge Lorch that the DIP Credit Agreement contains confidential information and should have been redacted. Accordingly, the Debtors sought and obtained a Court order: (i) blocking or removing access to the DIP Credit Agreement from the Court's docket; and (ii) directing all parties who have obtained a copy of the Agreement to hold it as confidential information. The Court will convene a hearing on September 19, 2005, at 10:30 a.m. to consider the Debtors' request. Objections must be filed and served by September 16, 2005. 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. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000) BALL CORPORATION: Deutsche Bank & JPMorgan Arranging New Facility ----------------------------------------------------------------- Ball Corporation (NYSE: BLL) said it intends to pursue a new senior secured credit facility to refinance its existing senior secured credit facility. Deutsche Bank Securities, Inc. and JPMorgan Securities, Inc. will arrange a syndicate of lenders for the new credit facility. Ball expects to close on the new senior credit facility in the fourth quarter of 2005. This action will result in an after-tax charge of approximately $7 million in the fourth quarter of 2005 related to unamortized financing costs on the existing senior secured credit facility. The new credit facility will extend maturities at more favorable rates and provide the company with additional funds for various corporate purposes. "This action will provide Ball with greater flexibility for future growth," said R. David Hoover, the company's chairman, president and chief executive officer. Ball Corporation is a supplier of metal and plastic packaging products, primarily for the beverage and food industries. The company also owns Ball Aerospace & Technologies Corp., which develops sensors, spacecraft, systems and components for government and commercial markets. Ball Corporation employs more than 13,500 people and reported 2004 sales of $5.4 billion. * * * Standard & Poor's Ratings Services rates the Company's 7-3/4% Senior Notes due 2006 at BB. BATTERSON PARK: Fitch Holds $16.5 Mil. Class B Notes at Junk Level ------------------------------------------------------------------ Fitch Ratings affirms three classes of notes issued by Batterson Park CBO I, Ltd. These affirmations are the result of Fitch's annual review process and are effective immediately: -- $17,270,544 class A-3 notes affirmed at 'AAA'; -- $3,205,669 class A-4 notes affirmed at 'AAA'; -- $34,500,000 class A-5 notes affirmed at 'BB+'; -- $16,500,000 class B notes remain at 'C'. Batterson Park is a collateralized debt obligation managed by General Re/New England Asset Management, which closed Nov. 17, 1998. Batterson Park is composed of 88% high yield bonds and 12% high yield loans. Included in this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward. In addition, Fitch conducted cash flow modeling utilizing various default timing and interest-rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. Overcollateralization levels have improved due to the deleveraging of the liabilities; however, this improvement is offset by the increased obligor concentration within the portfolio. The average performing obligor size is 2.7% of the portfolio, with 37 obligors in total. According to the trustee report dated July 26, 2005, the weighted average rating remains at 'B/B-' with 31.7% of the portfolio rated below 'CCC+', excluding defaulted and distressed securities. Defaulted securities comprise 11.3% of the aggregate principal amount. Since the last review on Sept. 1, 2004, 23.9% of the original balance of the classes A-3 and A-4 notes has been redeemed. Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch web site at http://www.fitchratings.com/ For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralized Debt Obligations,' dated Sept. 13, 2004, also available at http://www.fitchratings.com/ BAYOU OFFSHORE: Section 304 Petition Summary -------------------------------------------- Petitioner: Gordon I. MacRae and G. James Cleaver Joint Provisional Liquidators Debtors: Bayou Offshore Master Fund, Ltd. Bayou Offshore Fund A, Ltd. Bayou Offshore Fund B, Ltd. Bayou Offshore Fund C, Ltd. Bayou Offshore Fund D, Ltd. Bayou Offshore Fund E, Ltd. Bayou Offshore Fund F, Ltd. P.O. Box 1102 GT George Town, Grand Cayman Cayman Islands Case Nos.: 05-51154 through 05-51160, inclusive Type of Business: The Debtor manages a hedge fund. Walkers SPV Limited is the holder of management shares of the Company as trustee with Samuel Israel III and Daniel Marino as directors. During the July-August 2005 timeframe, Mr. Israel informed investors that the Funds were to be closed and distributions to investors in the Funds were to be made. The Petitioners tell the Court that distributions were not forthcoming. In August 2005, The Wall Street Journal, the Financial Times and other news agencies began to report that: (a) U.S. state and federal officials were investigating alleged disappearances of assets under management of Bayou Management LLC; and (b) Arizona state officials had seized approximately $102 million of funds in which Bayou Management and various related entities may have or assert an interest. Walkers SPV, on Sept. 1, 2005, passed resolutions directing the Master Fund to present a petition for winding-up to the Grand Court in Caymans Islands and seek appointment of the Liquidators. On Sept. 2, 2005, the Grand Court entered an order and appointed the Petitioners as the Joint Provisional Liquidators of the Master Fund. Section 304 Petition Date: September 9, 2005 Court: District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Petitioner's Counsel: James Berman, Esq. Zeisler and Zeisler 558 Clinton Avenue P.O. Box 3186 Bridgeport, Connecticut 06605 Tel: (202) 368-4234 BRILLIANT DIGITAL: To Pay for Copyright Violation, Aus. Ct. Rules ----------------------------------------------------------------- The Federal Court of Australia, New South Wales District Registry declared that these defendants: * Sharman Networks Ltd., * Altnet Inc., * Brilliant Digital Entertainment, Inc., * Kevin Glen Bermeister, Brilliant Digital's CEO, * Anthony Rose, Brilliant Digital's Chief Technology Officer, and * certain other defendants are liable for copyright infringement for illegal distribution of sound recordings owned by Universal Music Australia Pty. Ltd. using the Kazaa Media Desktop file sharing software application. The suit was filed in March 2004. The Court handed down the judgment on September 5, 2005. The Court ordered the infringing respondents to pay Universal Music Australia 90% of the costs incurred in relation to the proceeding. As reported in the Troubled Company Reporter on Aug. 24, 2005, Brilliant Digital said a judgment on the copyright suit against the Company has material adverse effects on its ability to continue as going concern. The plaintiffs alleged that due to the Company's business dealings with Sharman, it is integrally involved in the operation of the Kazaa Media Desktop and is therefore liable for the alleged copyright infringement occasioned by its development and distribution. Brilliant Digital Entertainment, Inc., is a company which, through its Altnet, Inc., subsidiary, operates a peer-to-peer-based content distribution network that allows us to securely and efficiently distribute a content owner's music, video, software and other digital files to computer users via the Internet. As of June 30, 2005, Brilliant Digital's balance sheet reflected a $3,383,000 stockholders' deficit. BROOKSTONE INC: S&P Rates Proposed $190 Million Unsec. Notes at B ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to specialty retailer Brookstone Inc. At the same time, Standard & Poor's assigned a 'B' rating to Brookstone Company Inc.'s proposed $190 million senior unsecured notes due 2012 to be issued under rule 144A. The outlook is stable. Proceeds from the notes, along with about $240 million in preferred and common equity contribution, will fund the buyout of Merrimack, New Hampshire-based Brookstone for about $433 million. Brookstone is expected to have about $200 million in outstanding debt following the completion of the buyout by a consortium led by OSIM International Inc. "Ratings for Brookstone reflect its participation in the highly competitive and fragmented specialty gift retail industry, dependency on successful new product development, and significant debt leverage pro forma for the transaction," said Standard & Poor's credit analyst Ana Lai. These risks are tempered by the company's recognized brand and healthy profitability. Brookstone competes in the $79 billion U.S. sports and hobby specialty retail industry, which is highly competitive and has caused product life cycles to shorten. As a result, the company's success will be heavily dependent on its ability to maintain a steady stream of new products. Competition includes not only other specialty gift retailers such as Sharper Image Corp., but also department stores and specialty retailers that focus on selling gifts. Also, Brookstone's business is subject to discretionary consumer spending and exhibits high seasonality. The fourth-quarter holiday season and Father's Day in the second quarter are the primary selling periods, accounting for the majority of profits. Still, Brookstone benefits from a significant proportion of sales from private-label offerings, diversified distribution channels, and an established brand position. About 70% of the product offering is Brookstone-branded, allowing the company to limit product-level competition, while achieving higher margins. Brookstone has achieved a relatively consistent history of generating positive earnings and revenue growth. Comparable-store sales have been positive over the past several years, except for 2001. The company's good profitability is attributable to its high gross margins and few markdowns. Lease-adjusted EBITDA margins are healthy, from a low of 13.8% in 2001 to 17.1% in the fiscal year ended January 2005. However, comparable-store sales decreased 7.3% for the six months ended July 30, 2005, on the decreased performance of the: * personal care, * bedding, * home comfort, and * games categories. Certain products in these categories entered the mature stage of the product life cycle after achieving strong sales a year earlier. Following the completion of the buyout, Brookstone plans to leverage its relationship with OSIM International, its new majority owner, by broadening its offerings with OSIM products and leveraging OSIM's sourcing network. These initiatives, and the expected sale of the unprofitable Gardeners Eden business, are expected to result in operating profit margin improvements. CALPINE CORP: Fitch Says Bear Stearns Joint Venture is Favorable ---------------------------------------------------------------- The announcement that Calpine Corp. and The Bear Stearns Companies Inc. have agreed to form CalBear Energy LP, a new energy marketing and trading venture, is a favorable credit development for CPN, according to Fitch Ratings, though no immediate rating change is expected. Fitch rates CPN and Bears Stearns: CPN -- Senior unsecured notes 'CCC+'; -- Second priority senior secured notes 'B+'; -- First priority senior secured notes 'BB-'; -- Rating Watch Evolving (in place since May 25, 2005). Bear Stearns -- Senior unsecured 'A+'; -- Rating Outlook Stable. On balance, Fitch views the establishment of the CalBear structure as a positive credit development for CPN. CPN, through CalBear and its 'A+' equivalent guarantee from Bear Stearns, should ultimately be able to realize higher spark spreads as well as broaden its counterparty base and range of products and services. From a liquidity standpoint, the establishment of a $350 million credit intermediation agreement between CalBear and CPN affiliate Calpine Energy Services should result in the return of previously posted cash collateral and letters of credit and alleviate the working capital strain CPN has been experiencing due to the mismatch of gas prepayments and the collection of proceeds from power sales. Fitch continues to maintain its Rating Watch Evolving status for CPN while it monitors the company's progress in achieving previously stated debt and operating cost reduction targets. While the CalBear venture appears to be a positive step toward improving CPN's liquidity position and enhancing returns from CPN's growing unhedged power plant portfolio, near-term challenges remain - the most prominent being CPN's ability to achieve a meaningful improvement in consolidated leverage measures in advance of the company's 2007-2008 debt maturities. CalBear, an indirect wholly-owned subsidiary of Bear Stearns, will trade natural gas and power contracts as well as create structured products for sales and trading to hedge funds and other underlying institutional and municipal clients of Bear Stearns. As part of the arrangement, CPN has formed its own wholly-owned subsidiary, Calpine Merchant Services Company, Inc., which will utilize CPN's existing energy trading infrastructure to perform exclusive natural gas and power trading and various back office support functions on behalf of CalBear. Risk management will be governed by Bear Stearns. In exchange for providing these services, CPN will receive 50% of the venture's ongoing profits generated from third party energy services. CANWEST MEDIA: S&P Places B+ Corporate Credit Rating on Watch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B+' long-term corporate credit rating, on Winnipeg, Man.- based CanWest Media Inc. on CreditWatch with developing implications. Developing implications mean that the ratings could be raised, lowered, or affirmed, depending on the outcome of Standard & Poor's review. The CreditWatch placement comes after CanWest Media filed a registration statement with the Canadian Regulatory Securities Authorities for an initial public offering of the company's Canadian newspaper (excluding the National Post) and interactive media businesses, which are to be structured as an income fund. The main group of assets to be included in the IPO will include: * several Canadian daily newspapers, * nondaily newspapers, * free-distribution papers, and * certain online editions and classified web sites. The company will retain 78% ownership of the CanWest MediaWorks Income Fund, while the remaining 28% will be publicly held. Total proceeds from the sale are expected to be about C$1.45 billion, which combined with a new C$500 million revolving credit facility at CanWest Media, will be used to retire a significant portion of the company's current debt. "Although this proposed action is expected to positively affect the company's credit protection measures, we believe the income trust structure exhibits an aggressive financial policy and reduces a company's financial flexibility," said Standard & Poor's credit analyst Lori Harris. Standard & Poor's will meet with management to discuss the financial and business impact of this proposed transaction and to evaluate its effect on credit quality and the company's business risk profile before taking further rating action. CATHOLIC CHURCH: Tucson Gets OK to St. Paul Coverage Issues ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona approved the Diocese of Tucson's settlement and insurance policy repurchase agreement and release with St. Paul. As previously reported in the Troubled Company Reporter on July 25, 2005, the salient terms of the Agreement are: (1) St. Paul will purchase the Policies for $1 million to be paid to the Estate; (2) The Diocese and Other Releasing Parties will provide a full release to St. Paul with respect to and in connection with the St. Paul policies that includes any other unknown insurance policies issued by St. Paul, under which the bankruptcy estate may have insurance coverage. The release represents fair consideration for the purchase price paid by St. Paul to buy back the Policies in view of the various disputes between the parties, and in no way constitutes an annulment of the Policies within the meaning of A.R.S. Section 20-1123; and (3) St. Paul will provide full releases to the Diocese and the Other Releasing Parties with respect to and in connection with any claims in connection with the Policies. 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. 41 Bankruptcy Creditors' Service, Inc., 215/945-7000) CHARLES RIVER LABORATORIES: Issues Third Quarter Guidance --------------------------------------------------------- Charles River Laboratories International, Inc., (NYSE:CRL) expects that for the third quarter ending September 24, 2005, at current exchange rates, its net sales growth and earnings per diluted share will be at the low end, or slightly below, its previous guidance. The Company had stated that it expected net sales growth to be in a range of 58-61%, earnings per diluted share in a range of $0.44 to $0.46, and non-GAAP earnings per diluted share in a range of $0.58 to $0.60. Non-GAAP guidance excludes acquisition-related amortization of intangibles of $13.1 million and compensation charges of $1.3 million. The Company will provide updated guidance for full-year 2005 when it reports third- quarter earnings on October 27, 2005, once September and third- quarter results have been finalized. James C. Foster, Chairman, President and Chief Executive Officer said, "Our updated guidance for the third quarter reflects continued softness in demand for Transgenic Services in the United States, increased seasonality in the research models business, particularly in Europe, several preclinical study delays and continued weakness in Interventional and Surgical Services. We are evaluating initiatives to improve operations in some of these businesses." Mr. Foster added, "We are pleased that our integration of Inveresk has proceeded on schedule and right in line with our expectations. In addition, our preclinical toxicology business is performing well and our clinical business continues to improve. From a long-term perspective, we continue to see our business strongly positioned as a leading provider to the pharmaceutical and biotechnology industries. Our portfolio of businesses provides pharmaceutical and biotechnology companies the products and services which are essential to their drug discovery and development effort." Charles River Laboratories International, Inc., sells pathogen-free, fertilized chicken eggs to poultry vaccine makers. It also offers contract staffing, preclinical drug candidate testing, and other drug development services. It also markets research models--rats and mice bred for preclinical experiments, including transgenic "knock out" mice--to the pharmaceutical and biotech industries. It sells its products in more than 50 countries to drug and biotech companies, hospitals, and government entities. * * * Moody's Investors Service assigned Ba1 ratings to the credit facilities of Charles River Laboratories International, Inc. Moody's also assigned a Ba1 Senior Implied Rating, a Ba2 Senior Unsecured Issuer Rating, and a Speculative Grade Liquidity Rating of SGL-1 to the company. Moody's said the rating outlook for the company is stable. Assigned Ratings: * $150 Million Revolving Credit Facility -- Ba1 * $400 Million Term Loan A -- Ba1 * Senior Implied Rating -- Ba1 * Senior Unsecured Issuer Rating -- Ba2 * Speculative Grade Liquidity Rating -- SGL-1 * Outlook - stable Standard & Poor's Ratings Services assigned a BB+ corporate credit rating for Charles River Laboratories International Inc. At the same time, Standard & Poor's placed a BB senior unsecured debt rating on the company. S&P said the outlook is stable. CHC HELICOPTER: Completes Sale of Interest in Canadian Helicopters ------------------------------------------------------------------ CHC Helicopter Corporation (TSX: FLY.SV.A and FLY.MV.B; NYSE: FLI) completed the sale of its remaining 45 percent interest in Canadian Helicopters Limited to the Canadian Helicopters Income Fund. CHC's net proceeds from this sale are C$48,403,825. CHC expects to record a combined pre-tax gain and dividend income of approximately $20 million, based on the value of CHC's investment in CHL as of July 31, 2005. CHC Helicopter Corporation -- http://www.chc.ca/-- is the world's largest provider of helicopter services to the global offshore oil and gas industry, with aircraft operating in more than 30 countries worldwide. * * * As reported in the Troubled Company Reporter on Mar. 17, 2005, Moody's Investors Service assigned a B2 rating to CHC Helicopter Corporation's proposed US$100 million senior subordinated note add-on to the existing 7.375% senior subordinated notes issue while affirming the Ba3 senior implied rating. However, the outlook is changed to stable from positive to accommodate the company's growth leverage back to historical levels and that is considered full for the Ba3 senior implied rating and no longer supportive of a positive outlook. Moody's notes that the increased debt beyond what was utilized for the strategic Schreiner acquisition has funded the company's aircraft fleet expansion and growth of its repair and overhaul business. Moody's rating actions for CHC Helicopter are: * assigned B2 -- CHC's proposed US$100 million add-on senior sub notes * affirmed B2 -- CHC's existing US $250 million senior sub. notes due 2014 * affirmed Ba3 -- CHC's senior implied rating * affirmed B1 -- CHC's issuer rating CHESAPEAKE ENERGY: Prices $300 Million 4.50% Preferred Stock ------------------------------------------------------------ Chesapeake Energy Corporation (NYSE: CHK) priced a public offering of $300 million of its 4.50% cumulative convertible preferred stock at its liquidation preference of $100 per share. Chesapeake expects the issuance and delivery of the shares to occur on September 14, 2005. Chesapeake has also granted the underwriters a 30-day option to purchase up to $45.0 million in additional shares of the preferred stock solely to cover over-allotments, if any. The offering is being made under the company's existing shelf registration statement. The annual dividend on each share of preferred stock will be $4.50 and will be payable quarterly in cash, common stock or a combination thereof, when, as and if declared by the company's board of directors, on the fifteenth day of each March, June, September and December, to holders of record as of the first day of the payment month, commencing on December 15, 2005. The preferred stock will not be redeemable. Each share of preferred stock will be convertible at any time at the option of the holder into 2.2639 shares of Chesapeake common stock, which is based on an initial conversion price of $44.17 per common share. The conversion price is subject to customary adjustments in certain circumstances. The preferred shares will be subject to mandatory conversion on or after September 15, 2010 into Chesapeake common stock, at the option of the company, if the closing price of Chesapeake's common stock exceeds 130% of the conversion price for 20 trading days during any consecutive 30 trading day period. Chesapeake intends to use the net proceeds of the offering, together with the proceeds from a concurrent offering of common stock, to repay debt under its bank credit facility and for general corporate purposes. Lehman Brothers, Banc of America Securities LLC, Credit Suisse First Boston, Morgan Stanley and Wachovia Securities acted as joint book-running managers for the offering. Copies of the prospectus supplement and accompanying base prospectus relating to the offering may be obtained from the offices of Lehman Brothers Inc., c/o ADP Financial Services, Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, NY 11717; Banc of America Securities LLC, Attn: Prospectus Department, 100 West 33rd Street, New York, NY 10001, 646-733-4166; Credit Suisse First Boston, One Madison Avenue, Level 1B, New York, NY 10010, 212-325- 2580; Morgan Stanley, Prospectus Department, 1585 Broadway, LLB, New York, NY 10036; Wachovia Securities Capital Markets, LLC, Equity Capital Markets, 7 St. Paul Street, 1st Floor, Baltimore, MD 21202. An electronic copy of the prospectus supplement and accompanying base prospectus will be available on the website of the Securities and Exchange Commission at http://www.sec.gov/ Chesapeake Energy Corporation is the third largest independent producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent, Permian Basin, South Texas, Texas Gulf Coast, Barnett Shale and Ark-La-Tex regions of the United States. * * * As reported in the Troubled Company Reporter Aug. 19, 2005, Moody's assigned a Ba3 rating to Chesapeake Energy's (CHK) new $600 million issue of 12 year 6.5% senior unsecured notes and to CHK's existing $600 million issue of 13 year 6.25% senior unsecured notes. Moody's affirmed CHK's Ba3 corporate family rating, existing Ba3 senior unsecured note ratings, and B3 preferred stock rating. Moody's said the outlook remains positive. The new note proceeds will be used to repay outstanding borrowings under the revolving bank credit facility (unrated), which was partially tapped to fund four recent transactions costing $410 million. CHK had approximately $455 million of bank debt outstanding as of June 2005. CHESAPEAKE ENERGY: Prices 8-Mil Share Offering at $32.72 Per Share ------------------------------------------------------------------ Chesapeake Energy Corporation (NYSE: CHK) priced a public offering of 8.0 million shares of its common stock at $32.72 per share. All shares are being sold by Chesapeake. Chesapeake also has granted the underwriters a 30-day option to purchase up to 1.2 million additional shares of its common stock solely to cover over-allotments, if any. The offering is being made under the company's existing shelf registration statement. Chesapeake expects the issuance and delivery of the shares to occur on September 14, 2005, subject to satisfaction of customary closing conditions. Chesapeake intends to use the net proceeds of the offering, together with the proceeds from a concurrent offering of preferred stock, to repay debt under its bank credit facility and for general corporate purposes. Lehman Brothers, Banc of America Securities LLC, Credit Suisse First Boston, Deutsche Bank Securities and Raymond James acted as joint book-running managers for the offering. Copies of the prospectus supplement and accompanying base prospectus relating to the offering may be obtained from the offices of Lehman Brothers Inc., c/o ADP Financial Services, Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, NY 11717; Banc of America Securities LLC, Attn: Prospectus Department, 100 West 33rd Street, New York, NY 10001, 646-733-4166; Credit Suisse First Boston, One Madison Avenue, Level 1B, New York, NY 10010, 212-325- 2580; Deutsche Bank Securities, Attn: Prospectus Department 1290 Avenue of Americas, New York, NY 10019, fax 212-468-5333; Raymond James & Associates, 880 Carillon Parkway, St. Petersburg, FL 33716, 727-567-2400. An electronic copy of the prospectus supplement and accompanying base prospectus will be available on the website of the Securities and Exchange Commission at http://www.sec.gov/ Chesapeake Energy Corporation is the third largest independent producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent, Permian Basin, South Texas, Texas Gulf Coast, Barnett Shale and Ark-La-Tex regions of the United States. * * * As reported in the Troubled Company Reporter Aug. 19, 2005, Moody's assigned a Ba3 rating to Chesapeake Energy's (CHK) new $600 million issue of 12 year 6.5% senior unsecured notes and to CHK's existing $600 million issue of 13 year 6.25% senior unsecured notes. Moody's affirmed CHK's Ba3 corporate family rating, existing Ba3 senior unsecured note ratings, and B3 preferred stock rating. Moody's said the outlook remains positive. The new note proceeds will be used to repay outstanding borrowings under the revolving bank credit facility (unrated), which was partially tapped to fund four recent transactions costing $410 million. CHK had approximately $455 million of bank debt outstanding as of June 2005. CREDIT SUISSE: Fitch Retains Low-B Rating on Five Cert. Classes --------------------------------------------------------------- Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2004-C3, are affirmed by Fitch Ratings: --$923,127 class A-1 'AAA'; --$62.1 million class A-2 'AAA'; --$209.4 million class A-3 'AAA'; --$102.9 million class A-4 'AAA'; --$694.5 million class A-5 'AAA'; --$338.1 million class A-1-A 'AAA'; --Interest-only class A-X 'AAA'; --Interest-only class A-SP 'AAA'; --$45.1 million class B 'AA'; --$14.3 million class C 'AA-'; --$28.7 million class D 'A'; --$16.4 million class E 'A-'; --$20.5 million class F 'BBB+'; --$16.4 million class G 'BBB'; --$22.5 million class H 'BBB-'; --$8.2 million class J 'BB+'; --$6.1 million class K 'BB'; --$8.2 million class L 'BB-'; --$6.1 million class M 'B+'; --$2.1 million class O 'B-'. The $6.1 million class N and $22.5 million class P are not rated by Fitch. The rating affirmations reflect the stable pool performance and minimal paydown since issuance. As of the August 2005 distribution date, the pool's aggregate certificate balance has decreased 0.76% to $1.63 billion from $1.64 billion at issuance. To date, there have been no loan payoffs or realized losses within the transaction. No loans are delinquent or in special servicing. Fitch has reviewed credit assessments of One Park Avenue (9.5%) and the Mizner Park building (3.2%). The debt service coverage ratio for each loan is calculated using servicer provided net operating income less required reserves divided by debt service payments based on the current balance using a Fitch stressed refinance constant. Both loans maintain investment-grade credit assessments. One Park Avenue, the largest loan in the pool, is secured by a 926,453 square foot office building in New York. The loan consists of A, B, C, and D notes. The normalized 2004 DSCR (based on eight months ending August 2004), for the A note only, was 1.31 times (x) compared to 1.51x at issuance. The occupancy was 97% versus 94% during the same period. As of July 31, 2005, due to the new leases in place, the base rent has increased by 13% since 2004. The Mizner Park loan is secured by six mixed-use buildings (50% office, 50% retail) in Boca Raton, FL. The loan contains A and B notes, with just the A note included in the trust. As of year-end 2004, the Fitch stressed DSCR, for the A note only, has declined to 1.37x from 1.49x at issuance. Occupancy was 86% compared to 89% at issuance. CROWN RESOURCES: Posts $2.2 Million Net Loss in Second Quarter -------------------------------------------------------------- Crown Resources Corporation reported its financial results for the quarter ending June 30, 2005, in a Form 10-Q delivered to the Securities and Exchange Commission. Crown Resources' net loss for the three-month period ended June 30, 2005, totaled $2,199,000 compared with $341,000 net income for the same period in 2004. Liquidity and Capital Resources Crown has historically derived its revenues principally from interest income and the option and sale of property interests. The Company currently has no revenue because it needs to complete the permitting process for development of the Buckhorn Mountain Project. On Nov. 20, 2003 Crown executed a definitive agreement to merge with Kinross Gold Corporation, a Canadian corporation. The Merger is subject to the approval of Crown's shareholders and customary closing conditions. Crown currently has no source of recurring revenue and Crown anticipates any future recurring revenue would only occur after the successful development of its Buckhorn Mountain Project. The successful development of the Buckhorn Mountain Project is dependent on several factors, many of which are beyond the control of Crown. Crown cannot provide any assurance that the Merger with Kinross will be completed as planned, or that it will be able to successfully permit and develop the Buckhorn Mountain Project in the event the Merger is not completed If the Merger is not consummated, Crown will need significant additional financial resources to develop the Buckhorn Mountain Project. There is no assurance that it will be able to obtain other financial resources. Crown currently estimates the initial capital cost for the Buckhorn Mountain Project will require up to $32.6 million. Based upon Crown's current business plan, Crown estimates its current financial resources are sufficient to fund its operations through the end of 2006. A full-text copy of Crown Resources Corporation's form 10Q for Second Quarter ending June 30, 2005, is available for free at http://ResearchArchives.com/t/s?171 Headquartered in Wheat Ridge, Colorado, Crown Resources Corporation -- http://www.crownresources.com/-- acquires, explores and develops mineral interests in the western United States. The Company owns the Buckhorn Mountain project in Washington state. The Company filed for chapter 11 protection on March 8, 2002 (Bankr. D. Colo. Case No. 02-12949). Joel Laufer, Esq., at Rubner Padjen and Laufer LLC represented the Debtor. On May 30, 2002, the Honorable Donald E. Cordova confirmed the Debtor's Plan of Reorganization and that Plan became effective on June 11, 2002. DELPHI CORP: Board Eliminates Quarterly Dividend on Common Stock ---------------------------------------------------------------- The Delphi Corp. (NYSE: DPH) Board of Directors disclosed the elimination of its quarterly dividend of $0.015 per share on Delphi $0.01 par value common stock for the remainder of the year. The Board determined that the elimination of the dividend is the prudent course of action at this time to conserve liquidity during the company's current restructuring discussions surrounding its U.S. legacy liabilities and the challenging U.S. production volumes from Delphi's largest customer. Delphi Corp. -- http://www.delphi.com/-- is the world's largest automotive component supplier with annual revenues topping $25 billion. Delphi is a world leader in mobile electronics and transportation components and systems technology. Multi-national Delphi conducts its business operations through various subsidiaries and has headquarters in Troy, Michigan, USA, Paris, Tokyo and Sao Paulo, Brazil. Delphi's two business sectors -- Dynamics, Propulsion, Thermal & Interior Sector and Electrical, Electronics & Safety Sector -- provide comprehensive product solutions to complex customer needs. Delphi has approximately 186,500 employees and operates 171 wholly owned manufacturing sites, 42 joint ventures, 53 customer centers and sales offices and 34 technical centers in 41 countries. At June 30, 2005, Delphi Corporation's balance sheet showed a $4.56 billion stockholders' deficit, compared to a $3.54 billion deficit at Dec. 31, 2004. Delphi is rated by the three major rating agencies: Senior Senior Preferred Secured Unsecured Stock Rating Agency Rating Rating Rating ------------- -------- --------- --------- Standard & Poor's B- CCC- CC Moody's B3 Ca C Fitch Ratings B CCC CCC- As a result of recent downgrades, Delphi's facility fee and borrowing costs under its credit facilities increased. DOBSON COMMS: Moody's Lifts $420 Million Notes' Ratings to Caa2 --------------------------------------------------------------- Moody's Investors Service upgraded the corporate family and other ratings of Dobson Communications Corp. and its subsidiaries. The ratings action is based upon the much improved forecast for revenue and cash flow growth since Moody's last rating action in October 2004. The ratings outlook is stable. The affected ratings are: Dobson Communications Corp.: * Corporate family rating upgraded to B3 from Caa1 * Speculative grade liquidity rating affirmed at SGL-3 * $150 million Senior Floating Rate Notes due 2012 assigned Caa2 * $150 million Senior Convertible Debentures due 2025 assigned Caa2 * $420 million 8.875% Senior Notes due 2013 upgraded to Caa2 from Ca * 10.875% Senior Notes due 2010 ratings withdrawn Dobson Cellular Systems, Inc.: * $75 million senior secured revolving credit due 2008 upgraded to Ba3 from B1 * $250 million First Priority Floating Rate Senior Secured Notes due 2011 upgraded to B1 from B2 * $250 million 8.375% First Priority Senior Secured Notes due 2011 upgraded to B1 from B2 * $325 million 9.875% Second Priority Senior Secured Notes due 2012 upgraded to B2 from B3 American Cellular Corporation: * $900 million 10% Senior Notes due 2011 upgraded to B3 from Caa1 The Dobson corporate family rating upgrade to B3 reflects the much stronger cash flow forecast of the company, with 2005 EBITDA guidance increased 15% from Moody's previous expectation. Nonetheless, the B3 corporate family rating reflects the still high leverage of the company and Moody's expectation for only modest free cash flow generation over the medium term, and Dobson's soft operating performance with higher churn and postpaid subscriber losses. Due to restrictions in American Cellular Corp's 10% Senior Note, American Cellular cannot make restricted payments to Dobson Communications currently and Moody's forecasts this prohibition to continue for at least the next 18 months. Consequently, Moody's looks only to the cash flows generated by the Dobson Cellular Systems ('DCS') group of subsidiaries to gauge Dobson's ability to meet these obligations. Excluding American Cellular debt and EBITDA, total debt of Dobson (excluding preferred stock) of $1.54 billion represented 6.95 times DCS LTM EBITDA of $221.9 million (7.91 times including preferred stock, pro forma for the recent exchange offer), levels Moody's considers too high to be sustainable long term. Financial performance of DCS and American Cellular has exceeded Moody's expectations due to much higher roaming revenues and higher subscriber ARPUs. However, Dobson lost 78 thousand postpaid subscribers over the last twelve months, or 3.6% of its base. Dobson's new roaming agreement with Cingular will lower roaming revenues Dobson receives from Cingular, which Dobson hopes to make up on reduced roaming payments to Cingular when Dobson's customers travel off-network. Thus for Dobson to sustain or improve its higher level of cash flow, it must successfully convert roaming profits to local profits. This will require Dobson to maintain or increase subscriber ARPUs while growing its postpaid subscriber base. Moody's notes that postpaid subscriber losses have subsided in 2Q05, and ARPUs continue to improve. The challenge will be to materially grow its postpaid subscriber base in order to generate the local profits required to offset the expected loss of roaming revenue from Cingular. While the ratings outlook is currently stable, the ratings could move higher should Dobson be able to generate meaningful subscriber growth while attaining a ratio of free cash flow to total debt (as adjusted by Moody's primarily to capitalize operating leases) to 5% or higher. The ratings are likely to move lower should churn remain elevated for more than the next few quarters, subscriber growth not materialize, and should free cash flow subside diminishing Dobson's liquidity. The upgrade to Caa2 for the senior unsecured debt of Dobson Communications Corporation reflects the improved recovery prospects for this layer of the company's capital structure from the expected higher amounts of cash flow generated by DCS. The Ba3 rating on the $75 million revolving credit facility at DCS reflects its priority position in the company's capital structure with the only first lien claim on the accounts receivable, inventory and other working capital assets of DCS and its subsidiaries, and a shared first lien claim (shared with the B1 rated notes discussed below) on all other assets. The B1 rating on the first priority secured notes due 2011 reflects their good position in the consolidated company's capital structure, ranking behind only any outstandings under the $75 million revolving credit available to DCS. The B2 rating on the second priority secured notes due 2012 reflects their more junior position behind the DCS revolving credit and the first priority secured notes. The upgrade of the American Cellular Corp's 10% Senior Notes reflects the improved cash flow expectations for this subsidiary and the resulting lower leverage, which is now below 6 times debt/EBITDA and expected to continue to improve. The affirmation of Dobson's SGL-3 liquidity rating reflects Moody's opinion that the company's liquidity remains adequate. While the tower sale improved liquidity, the cash portion of the recently completed preferred stock exchange as well as premiums and expenses to refinance the 10.875% senior notes have consumed much of that cash. Moody's expects Dobson to generate modest amounts of free cash flow and there are no near term debt amortization requirements. The SGL rating could be improved if cash flow continues to grow such that Dobson gains access to a substantial portion of the DCS $75 million revolver. Headquartered in Oklahoma City, Dobson Communications Corp. provides wireless service in rural and suburban areas of the US to approximately 1.6 million subscribers with LTM revenues of $1.1 billion. EAST 44TH: U.S. Trustee to Meet Creditors on September 23 --------------------------------------------------------- The United States Trustee for Region 2 will convene a meeting of East 44th Realty LLC 's creditors at 3:00 P.m., on Sept. 23, 3005, at 80 Broad Street, 2nd Floor in New York. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in New York, East 44th Realty, LLC, is a tenant of a building located at 228-238 East 44th Street in Manhattan. The building is comprised of 164 residential units and three commercial spaces. The Debtor is the sub-lessor of the premises, collects rents from its subtenants and manages the premises. The Debtor is the tenant under a net-lease dated as of Dec. 9, 1960. The Debtor filed for chapter 11 protection on August 5, 2005 (Bankr. S.D.N.Y. Case No. 05-16167). Warren R. Graham, Esq., at Davidoff Malito & Hutcher LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $25,737,873 in assets and $13,128,560 in debts. EAST 44TH: Wants Access to NY Community Bank's Cash Collateral -------------------------------------------------------------- East 44th Realty LLC asks the U.S. Bankruptcy Court for the Southern District of New York for authority to dip into cash collateral securing repayment of indebtedness to the New York Community Bank. The Debtor owes the Bank $12,516,692 on account of loans and other advances. The debt is secured by valid and perfected first priority security interests and liens upon substantially all of the Debtor's assets. Use of the cash collateral will enable the Debtor to continue operating its business in accordance with a budget through September 30, 2005 that projects $296,000 in income and $315,200 in expenses. To provide the lender with adequate protection required under 11 U.S.C. Sec. 363 for any diminution in the value of its collateral, the Debtor will grant the Bank a replacement lien to the same extent, validity and priority as the prepetition lien. In addition, the Debtor proposes to reimburse $75,000 of the lender's legal fees in six monthly installments. Headquartered in New York, East 44th Realty, LLC, is a tenant of a building located at 228-238 East 44th Street in Manhattan. The building is comprised of 164 residential units and three commercial spaces. The Debtor is the sub-lessor of the premises, collects rents from its subtenants and manages the premises. The Debtor is the tenant under a net-lease dated as of Dec. 9, 1960. The Debtor filed for chapter 11 protection on August 5, 2005 (Bankr. S.D.N.Y. Case No. 05-16167). Warren R. Graham, Esq., at Davidoff Malito & Hutcher LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $25,737,873 in assets and $13,128,560 in debts. EMERITUS ASSISTED: SHP & Walgreen Venture Results in $1.5-Mil Cash ------------------------------------------------------------------ Emeritus Assisted Living (AMEX:ESC) disclosed that Senior Healthcare Partners, LLC, has closed on a new joint venture transaction with Walgreen Co. (NYSE, Nasdaq: WAG). The transaction between Walgreen and Senior Healthcare will result in Emeritus receiving an initial cash payment of $1.5 million. Walgreen entered into the joint venture to extend its pharmacy services to the senior and assisted living marketplace. The joint venture will form a new company called SeniorMed LLC. SeniorMed will continue providing prescription services to residents in assisted living, specialty care and independent communities across the country. "We're excited about combining both companies' expertise and experience to serve these patients," said Greg Wasson, president of Walgreens Health Services. "This new joint venture allows both of us to expand into the fast-growing senior assisted living pharmacy market. Most importantly, the new company will improve the way these seniors' pharmaceutical needs are met." Emeritus expects to record a gain of approximately $2.2 million in its third quarter results. The Company expects additional cash payments of up to $1 million resulting directly from this transaction. The Company will continue to have an interest of approximately 9 percent in the new SHP venture. Emeritus Assisted Living -- http://www.emeritus.com/-- is a national provider of assisted living and related services to seniors. Emeritus is one of the largest developers and operators of freestanding assisted living communities throughout the United States. These communities provide a residential housing alternative for senior citizens who need help with the activities of daily living with an emphasis on assistance with personal care services to provide residents with an opportunity for support in the aging process. Emeritus currently holds interests in 182 communities representing capacity for approximately 18,400 residents in 34 states. As of June 30, 2005, Emeritus Assisted's equity deficit narrowed to $122,990,000 from a $128,319,000 deficit at Dec. 31, 2004. ENESCO GROUP: Receives NYSE Listing Notification ------------------------------------------------ Enesco Group, Inc. (NYSE:ENC) received notification from the New York Stock Exchange on September 1, 2005, that the Company was not in compliance with the NYSE's continued listing standards. Enesco is considered "below criteria" by the NYSE because the Company's total market capitalization was less than $75 million over a consecutive 30 trading-day period and its shareholders' equity was less than $75 million. While Enesco was in compliance with previous continued listing standards set forth by the NYSE, the NYSE adopted new continued listing standards, effective in June 2005. In accordance with the continued listing criteria set forth by the NYSE, the Company intends to present a plan to the NYSE within 45 days of its receipt of the notice, demonstrating how it intends to comply with the continued listing standards within 18 months of its receipt of the notice. The NYSE may take up to 45 days to review and evaluate the plan after it is submitted. If the plan is accepted, the Company will be subject to quarterly monitoring for compliance by the NYSE. If the NYSE does not accept the plan or if the Company is unable to achieve compliance with the NYSE's continued listing criteria through its implementation of the plan, the Company will be subject to NYSE trading suspension and delisting, at which time the Company would intend to apply to have its shares listed on another stock exchange or quotation system. Beginning last Friday, Sept. 9, 2005, the NYSE will make available on its consolidated tape, a ".BC" indicator transmitted with the Company's listing symbol to identify that the Company is below the NYSE's quantitative continued listing standards. Enesco Group, Inc. -- http://www.enesco.com/-- distributes products to a wide variety of specialty card and gift retailers, home decor boutiques as well as mass-market chains and direct mail retailers. Internationally, Enesco serves markets operating in Europe, Canada, Australia, Mexico, Asia and the Pacific Rim. With subsidiaries located in Europe and Canada, and a business unit in Hong Kong, Enesco's international distribution network is a leader in the industry. The Company's product lines include some of the world's most recognizable brands, including Heartwood Creek, Walt Disney Company, Walt Disney Classics Collection, Pooh & Friends, Jim Shore, Foundations, Circle of Love, Nickelodeon, Bratz, Halcyon Days, Lilliput Lane and Border Fine Arts, among others. At June 30, 2005, Enesco's balance sheet showed $156.7 million in assets and liabilities totaling $85.7 million. * * * As reported in the Troubled Company Reporter on Sept. 2, 2005, Enesco Group, Inc. amended its current U.S. credit facility, effective as of Aug. 31, 2005. The ninth amendment reset the Company's minimum EBITDA and capital expenditure covenants through the facility termination date, Dec. 31, 2005, based on the Company's reforecast and long-term partnership with Bank of America, as successor to Fleet National Bank, and LaSalle Bank. The Company is aggressively pursuing a replacement senior credit facility. What Happened to Precious Moments? On May 17, 2005, pursuant to a Seventh Amendment and Termination Agreement, Enesco, Inc., terminated its license agreement with Precious Moments, Inc. to sell Precious Moments licensed products. As part of the PM Termination Agreement, the Company also entered into a Transitional Services Agreement with PMI in which the Company agreed to provide transitional services to PMI related to its licensed inventory for a period of time, but ending not later than December 31, 2006. ENRON CORP: Amends Brooklyn Union Gas Claims Se