/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/051017.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, October 17, 2005, Vol. 9, No. 246 Headlines ABLE LABORATORIES: Wants Court to Okay Asset Sale Procedures ACE SECURITIES: Ample Credit Support Cues S&P to Raise Ratings ADDISON-DAVIS: Independent Auditor Raises Going Concern Doubt ADVANCED COMMS: Weinberg & Company Raises Going Concern Doubt AGING CARE: Case Summary & 20 Largest Unsecured Creditors ANCHOR GLASS: Arkema Wants to Terminate CERTINCOAT Contract ANCHOR GLASS: Hires Cohen & Grigsby as Special Counsel ANDERSON CLARK: Case Summary & Largest Unsecured Creditors AR UTILITY: Exclusive Plan-Filing Period Extended to Nov. 3 ATA AIRLINES: Eliminates Three Routes in Ongoing Business Plan AUSTIN COMPANY: Files Chapter 11 Protection in N.D. Ohio AUSTIN COMPANY: Case Summary & 40 Largest Unsecured Creditors BALL CORP: Completes Debt Refinancing & Calls 2006 Bonds BARAK I.T.C.: Section 304 Petition Summary BEAR STEARNS: Fitch Affirms Low-B Ratings on Six Cert. Classes BRICOLAGE CAPITAL: Voluntary Chapter 11 Case Summary BROOKLYN HOSPITAL: Look for Bankruptcy Schedules on November 29 CALPINE CORP: Completes $225 Million Assets Sale to LS Power CATHOLIC CHURCH: Tort Claimants Want ACRP Order Abated in Spokane CATHOLIC CHURCH: Ct. Okays Stipulation Between Tucson & Claimants CENTEX HOME: Fitch Puts BB+ Rating on $12 Mil Class B Certificates CHARLES LAFASCIANO: Case Summary & 20 Largest Unsecured Creditors CITGO PETROLEUM: Soliciting Consents to Eliminate Defaults COMMERCE ONE: Court Approves Responsible Person Engagement Pact CORNING INC: Retirement Trust Selling 5 Million Common Shares CRC HEALTH: Bain Acquisition Cues S&P's CreditWatch Negative CREDIT SUISSE: S&P Cuts Rating on Class M Loans to BB from A CREDIT SUISSE: Moody's Puts Low-B Ratings on Five Cert. Classes DELPHI CORP: Moody's Expects Impact on CDO's from Bankr. Filing DELPHI CORP: Wants Court Injunction Against Utility Companies DELPHI CORP: Wants Court to Okay Interim Compensation Procedures DELPHI CORP: Gets Order to Grant Priority Status to Vendor Claims DELTA AIR: Comair Subsidiary to File for Chapter 11 Protection DELTA MILLS: KPMG Raises Going Concern Doubt DOMTAR INC: S&P Retains BB Long-Term Corporate Credit Rating DRUGMAX INC: Closes on Wells Fargo's New $65 Mil. Credit Facility EYE CARE: Moody's Cuts Liquidity Rating on Change of Control Fear FIDELITY NATIONAL: Fitch Holds BB- Rating on Subsidiary FLI LEARNING: Case Summary & 20 Largest Unsecured Creditors FOAMEX INT'L: U.S. Trustee Appoints 7-Member Creditors Committee FOAMEX INT'L: Wants Court to Fix December 5 as Claims Bar Date FOAMEX INT'L: Obtains Injunction Against Utility Companies GARDENBURGER INC: Files for Chapter 11 Protection in C.D. Calif. GARDENBURGER INC: Case Summary & 20 Largest Unsecured Creditors GOODYEAR TIRE: Exchanging $400MM Senior Notes for Registered Bonds GRAND TRAVERSE: S&P Puts BB- Rating on Proposed $30.4 Bond Issue HCA INC: Releases Preliminary Third Quarter Results HCA INC: Launches Dutch Auction Tender Offer for 50 Million Shares HCA INC: Strong Cash Flow Cues Fitch to Hold Ratings at BB+ HCA INC: Dutch Auction Cues Moody's to Lower Liquidity Rating HCA INC: $2.5 Bil. Share Repurchase Cues S&P to Affirm BB+ Rating HOST MARRIOTT: Improving Performance Spurs Moody's to Up Ratings HUFFY CORP: Exits Bankruptcy Following Plan Consummation IGIA INC: Posts $2.9 Million Net Loss in Quarter Ended May 31 INDUSTRIAL ENTERPRISES: Auditors Raise Going Concern Doubt INDUSTRIAL ENTERPRISES: Scott Margulis Joins Board of Directors INEX PHARMACEUTICALS: Awaits Court Judgment on Bankruptcy Petition INTERPUBLIC GROUP: Fitch Affirms Issuer Default Rating at B+ INTERSTATE BAKERIES: 18 Creditors Sell $4 Million in Claims ISLE OF CAPRI: Moody's Rates New $225-Mil Secured Bank Loan at B1 JC PENNEY: Debt Reduction Prompts Fitch to Raise Ratings KISCH OIL: Case Summary & 15 Largest Unsecured Creditors LA QUINTA: Successful Baymont Buy-Out Spurs Moody's to Up Ratings MAGRUDER COLOR: Amper Politziner Approved as Tax Accountants MAGRUDER COLOR: Court Approves Daley-Hodkin Corp. as Auctioneer MARY CRIMMEN: Case Summary & 12 Largest Unsecured Creditors MESABA AVIATION: Files Chapter 11 to Expedite Restructuring MESABA AVIATION: Case Summary & 20 Largest Unsecured Creditors MORGAN STANLEY: Fitch Rates Six Certificate Classes at Low-Bs MT. SINAI HOSPITAL: S&P Holds BB Rating on Outstanding Bonds NATEC INC: Case Summary & 20 Largest Unsecured Creditors NC TELECOM: Case Summary & 20 Largest Unsecured Creditors NEIL TYBURK: Case Summary & 13 Largest Unsecured Creditors NORBOURG ASSET: RSM Richter is Trustee in Canadian BIA Assignment NORCROSS SAFETY: Moody's Affirms Low-B Ratings with Stable Outlook NORTHWEST AIRLINES: Files Adversary Proceeding Against AMEX NORTHWEST AIRLINES: Airport Operators Want Debtors to Remit Fees NORTH AMERICAN: Plan Solicitation Period Stretched to Jan. 31 NORTHWEST AIRLINES: Suppliers Want Existing Contracts Unaltered NORTHWEST AIRLINES: Aircraft Lessors Want Adequate Protection NORTHWEST AIRLINES: East Texas Capital Lobbies for Equity Panel NTELOS HOLDINGS: S&P Rates $135MM Planned Sr. Notes Offer at CCC+ NVE INC: Creditors Panel Wants to Hire Brown Rudnick as Counsel O'SULLIVAN INDUSTRIES: Files for Chapter 11 Protection in Georgia O'SULLIVAN INDUSTRIES: Case Summary & 43 Largest Creditors PENTON MEDIA: Improved Performance Prompts S&P to Upgrade Rating PHARMACEUTICAL FORMULATIONS: Prepares to Pay CIT Loan in Full PHOTOCIRCUITS CORP: Files Chapter 11 Petition in E.D. New York PHOTOCIRCUITS CORP: Case Summary & 17 Largest Unsecured Creditors REFCO GROUP: Capital Unit's Woes Prompt Moody's to Junk Ratings REFCO GROUP: S&P Junks Long-Term Counterparty Credit Rating REFOCUS GROUP: Names Douglas Williamson President & CEO RELIANCE NATIONAL: Section 304 Petition Summary REMEDENT INC: Ended Fiscal 2005 With $273,910 Equity Deficit RESIDENTIAL ACCREDIT: Fitch Puts Low-B Ratings on 40 Cert. Classes RICHTER FURNITURE: Apex Offers $3,275,000 to Buy Most Assets ROUNDY'S SUPERMARKETS: Moody's Junks $150-Mil Senior Sub. Notes SHEFFIELD STEEL: Likely Buy-Out Prompts Moody's Developing Outlook SUNDIV CORPORATION: Case Summary & 7 Largest Unsecured Creditors SUPERB SOUND: Case Summary & 20 Largest Unsecured Creditors TOWER AUTOMOTIVE: Consolidating Operations to Other Locations TRACY LACH: Case Summary & 12 Largest Unsecured Creditors TWENTY-FIRST: Case Summary & 11 Largest Unsecured Creditors VARTEC TELECOM: Wants Exclusive Periods Stretched to November 22 WESTPOINT STEVENS: Responds to Funds, et al.'s Fees Objection WORKFLOW MGT: S&P Puts BB- Rating on $340MM Sr. Secured Debt * Former FCC Media Bureau Chief Joins Sheppard Mullin's DC Office * FTI Consulting Names Four New Senior Managing Directors * BOND PRICING: For the week of Oct. 10 - Oct. 14, 2005 ********* ABLE LABORATORIES: Wants Court to Okay Asset Sale Procedures ------------------------------------------------------------ Able Laboratories, Inc., asks the United States Bankruptcy Court for the District of New Jersey to approve auction procedures for the sale of its assets and assumption of its contracts and leases to the highest and best bidder. Aurobindo Pharma USA is the "stalking horse" bidder, and Able had entered into a "nonbonding" letter of intent with Aurobindo Pharma USA. The transaction with Aurobindo Pharma USA is conditioned, among other things: -- on completion of satisfactory due diligence; -- the parties' entering into a definitive asset purchase agreement; -- the bankruptcy court's approval of the terms of the agreement; and -- adoption of a court order approving auction procedures which include: * a required minimum overbid over Aurobindo Pharma USA's offer, and * payment of a break-up fee in the event the assets are sold to another bidder. The Bankruptcy Court will convene a hearing on Wednesday, Oct. 19, 2005, to consider the Debtor's request. Headquartered in Cranbury, New Jersey, Able Laboratories, Inc. -- http://www.ablelabs.com/-- develops and manufactures generic pharmaceutical products in tablet, capsule, liquid and suppository dosage forms. The Company filed for chapter 11 protection on July 18, 2005 (Bankr. D. N.J. Case No. 05-33129) after it halted manufacturing operations and recalled all of its products not meeting FDA regulatory standards. Deborah Piazza, Esq., and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $59.5 million in total assets and $9.5 million in total debts. ACE SECURITIES: Ample Credit Support Cues S&P to Raise Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on various classes from Ace Securities Corp. Home Equity Loan Trust series 2001-HE1, 2001-NC1, and 2002-HE2. Additionally, the rating on class M-4 from series 2002-HE1 is lowered to 'BB+' from 'BBB-'. At the same time, the remaining publicly rated classes from Ace Securities Corp. Home Equity Loan Trust transactions are affirmed. The upgrades reflect sufficient current and projected credit support, in the form of subordination, overcollateralization, and excess spread. All of the upgraded transactions except series 2002-HE2 have reached their overcollateralization targets. Projected credit support percentages are at least 3.19x the loss coverage levels associated with the new ratings. Except in the case of series 2002-HE2, excess spread has been consistently greater than the losses on all the upgraded deals. The lowered rating reflects weak and actual projected credit support percentages that are less than the levels necessary to maintain the current rating. The original credit support for class M-4 from series 2002-HE1 was 7.75%; the current credit support for the class is 6.73%. There has not been enough excess interest to cover the realized losses. The average losses for the past 12 months totaled $488,719, 20.1% more than the average excess interest of $386,451 that was generated for the period. Series 2002-HE1 is below its overcollateralization target, and the current overcollateralization deficiency is $390,095. The affirmed ratings reflect loss coverage percentages that meet or exceed the levels necessary to maintain the current ratings. These transactions benefit from credit enhancement provided by subordination, overcollateralization, and excess spread. Additional credit enhancement for class A-2B from series 2003-HS1 is provided by a financial guaranty insurance policy issued by MBIA Insurance Corp. ('AAA' financial strength rating). As of the August 2005 remittance date, total delinquencies range from .98% (series 2004-HE2) to 41.21% (series 2001-AQ1). The cumulative losses, as a percentage of the original trust balances, range from 0.0% for four of the 24 transactions to a high of 4.01% for series 1999-LB2. The outstanding pool balances of the series that are 18 months or older range from 6.00% to 46.98% of their original sizes. However, the outstanding pool balances of the most recent issues (17 months or newer) range from 34.25% to 97.3% of their original sizes. The collateral for all of the transactions consists of loans that are secured by first liens on one- to four-family residential properties. Series 1999-LB2 consists of two pools with fixed- and adjustable-rate mortgage loans. Series 2001-HEL consists of mortgage loans that are secured by fixed- and adjustable-rate mortgages, while series 2001-AQ1 comprises adjustable-rate mortgage loans. Ratings Raised Ace Securities Corp. Home Equity Loan Trust Rating Series Class To From ------ ----- -- ---- 2001-HE1 M-1 AAA AA 2001-HE1 M-2 AA A 2001-NC1 B AA A- 2002-HE2 M-1 AAA AA Ratings Lowered Ace Securities Corp. Home Equity Loan Trust Rating Series Class To From ------ ----- -- ---- 2002-HE1 M-4 BB+ BBB- Ratings Affirmed Ace Securities Corp. Home Equity Loan Trust Series Class Rating ------ ----- ------- 1999-LB2 A AAA 1999-LB2 M-1 AA 1999-LB2 M-2 A 1999-LB2 B BBB 2001-AQ1 A-IO, M-1 AAA 2001-AQ1 M-2 A 2001-HE1 A AAA 2001-HE1 M-3 BBB 2002-HE1 M-1 AA+ 2002-HE1 M-2 A 2002-HE1 M-3 BBB 2002-HE2 A-IO AAA 2002-HE2 M-2 A 2002-HE2 M-3 BBB 2002-HE2 M-4 BBB- 2002-HE3 A-1, A-2A, A-2C, A-IO AAA 2002-HE3 M-1 AA 2002-HE3 M-2 A 2002-HE3 M-3 BBB 2003-FM1 A-IO AAA 2003-FM1 M-1 AA+ 2003-FM1 M-2 A 2003-FM1 M-3 A- 2003-FM1 M-4 BBB+ 2003-FM1 M-5 BBB 2003-FM1 M-6 BBB- 2003-HE1 A-1, A-2 AAA 2003-HE1 M-1 AA 2003-HE1 M-2 A 2003-HE1 M-3 A- 2003-HE1 M-4 BBB+ 2003-HE1 M-5 BBB 2003-HE1 M-6 BBB- 2003-HS1 A-1, A-2A, A-2B AAA 2003-HS1 M-1 AA 2003-HS1 M-2 A 2003-HS1 M-3 A- 2003-HS1 M-4 BBB+ 2003-HS1 M-5 BBB 2003-HS1 M-6 BBB- 2003-NC1 A-1, A-2A, A-2C AAA 2003-NC1 M-1 AA+ 2003-NC1 M-2 A 2003-NC1 M-3 A- 2003-NC1 M-4 BBB+ 2003-NC1 M-5 BBB 2003-NC1 M-6 BBB- 2003-OP1 A-1, A-2, A-3 AAA 2003-OP1 M-1 AA+ 2003-OP1 M-2 A+ 2003-OP1 M-3 A 2003-OP1 M-4 A- 2003-OP1 M-5 BBB 2003-OP1 M-6 BBB- 2003-TC1 A-1, A-2 AAA 2003-TC1 M-1 AA 2003-TC1 M-2 A 2003-TC1 M-3 A- 2003-TC1 M-4 BBB+ 2004-FM1 A-1A, A-2A, A-2B, A-2C, A-3 AAA 2004-FM1 M-1 AA+ 2004-FM1 M-2 A+ 2004-FM1 M-3 A 2004-FM1 M-4 BBB+ 2004-FM1 M-5 BBB 2004-FM1 M-6 BBB- 2004-FM1 B-1A, B-1B BB 2004-FM2 A-1A, A-1B, A-2A, A-2B, A-2C AAA 2004-FM2 M-1 AA+ 2004-FM2 M-2 AA 2004-FM2 M-3 AA- 2004-FM2 M-4 A 2004-FM2 M-5 A- 2004-FM2 M-6 BBB 2004-FM2 B BBB- 2004-HE1 A-1, A-2B, A-3 AAA 2004-HE1 M-1, M-2 AA 2004-HE1 M-3 A 2004-HE1 M-4 A- 2004-HE1 M-5 BBB+ 2004-HE1 M-6 BBB- 2004-HE1 B BB 2004-HE2 A-1, A-2A, A-2B, A-2C AAA 2004-HE2 M-1 AA+ 2004-HE2 M-2 AA 2004-HE2 M-3 A+ 2004-HE2 M-4, M-5 A 2004-HE2 M-6 A- 2004-HE2 B-1 BBB 2004-HE2 B-2 BBB- 2004-HE3 A-1, A-1B,A-2A,A-2B,A-2C,A-2D,M-1 AAA 2004-HE3 M-2, M-3 AA+ 2004-HE3 M-4, M-5 AA 2004-HE3 M-6 AA- 2004-HE3 M-7 A+ 2004-HE3 M-8 A 2004-HE3 M-9 A- 2004-HE3 M-10 BBB+ 2004-HE3 M-11 BBB- 2004-HE3 B BB+ 2004-HE4 A-1, A-2 AAA 2004-HE4 M-1, M-2 AA+ 2004-HE4 M-3, M-4 AA 2004-HE4 M-5 A+ 2004-HE4 M-6, M-7 A 2004-HE4 M-8 A- 2004-HE4 M-9, M-10 BBB 2004-HE4 M-11 BBB- 2004-HE4 B BB+ 2004-HS1 A-1, A-2, A-3 AAA 2004-HS1 M-1 AA+ 2004-HS1 M-2 AA- 2004-HS1 M-3 A 2004-HS1 M-4 A- 2004-HS1 M-5 BBB+ 2004-HS1 M-6 BBB- 2004-IN1 A-1, A-2A, A-2B AAA 2004-IN1 M-1 AA+ 2004-IN1 M-2 AA 2004-IN1 M-3 AA- 2004-IN1 M-4 A 2004-IN1 M-5 A- 2004-IN1 M-6 BBB+ 2004-IN1 B BBB- 2004-OP1 A-1, A-2A, A-2B, A-2C AAA 2004-OP1 M-1 AA+ 2004-OP1 M-2 AA 2004-OP1 M-3 A+ 2004-OP1 M-4 A 2004-OP1 M-5 A- 2004-OP1 M-6 BBB 2004-OP1 B BB 2004-RM1 A-1A, A-1B, A-2 AAA 2004-RM1 M-1 AA+ 2004-RM1 M-2, M-3 AA 2004-RM1 M-4 AA- 2004-RM1 M-5 A+ 2004-RM1 M-6 A 2004-RM1 B-1 A- 2004-RM1 B-2 BBB- 2004-RM1 B-3 BB+ 2004-RM2 A AAA 2004-RM2 M-1, M-2 AA+ 2004-RM2 M-3, M-4 AA 2004-RM2 M-5, M-6 A+ 2004-RM2 M-7 A 2004-RM2 B-1 A- 2004-RM2 B-2 BBB 2004-RM2 B-3, B-4 BBB- 2004-RM2 B-5 BB 2004-SD1 A-1 AAA 2004-SD1 M-1 AA 2004-SD1 M-2 A 2004-SD1 M-3 BBB 2004-SD1 M-4 BBB- ADDISON-DAVIS: Independent Auditor Raises Going Concern Doubt ------------------------------------------------------------- Armando C. Ibarra, Jr., CPA, expressed substantial doubt about Addison-Davis Diagnostics, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended June 30, 2005. The auditing firm points to the Company's continuing losses from operations. Addison-Davis' former auditor, Corbin & Company, LLP, also raised substantial doubt about the Company's ability to continue as a going concern after auditing its financial statements for the fiscal year ended June 30, 2004. Apart from recurring losses, the auditing firm also pointed to the Company's failure to preserve patent rights on NICOWater(TM), which had been its sole revenue generating product. Fiscal 2005 Results Addison-Davis incurred a net loss of $3,617,527 on revenues of $5,176 for the fiscal year ended June 30, 2005 as compared to a net loss of $7,161,005 on revenues of $192,109 for the fiscal year ended June 30, 2004. The Company attributes the decrease in the net loss to the elimination of costs and expenses associated with its NICOWater(TM) product and patent and cost efficiencies resulting from installation of new management. The Company's balance sheet showed $1,222,919 of assets at June 30, 2005, and liabilities totaling $2,930,293. The Company reports a $20,095,914 accumulated deficit and a $1,092,882 negative working capital as of June 30, 2005. Based in Westlake Village, California, Addison-Davis Diagnostics, Inc. -- http://www.addisondavis.com/-- offers quick response diagnostic tests that are user friendly, produce fast simple results and are less costly, less problematic and less time consuming. The Company is currently focused on bringing fast and reliable "Point-of-care" Diagnostic Testing through the use of its patented technology to Healthcare Professionals, Hospitals, certain branches of the Government and the Workplace environment for drugs-of-abuse and medical conditions and diseases. ADVANCED COMMS: Weinberg & Company Raises Going Concern Doubt ------------------------------------------------------------- Weinberg & Company, PA, expressed substantial doubt about Advanced Communications Technologies, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended June 30, 2005 and 2004. The auditing firm points to the Company's $735,833 net loss and $875,933 of negative cash flow from operations in fiscal 2005 as well as its $139,363 working capital deficiency at June 30, 2005. Advanced Communications' management attributes the net loss incurred in fiscal 2005 to a $1.2 million loss from the discontinued operations of its 62% owned subsidiary, Pacific Magtron International Corporation, Inc. As previously reported in the Troubled Company Reporter, Pacific Magtron filed for Chapter 11 protection (Bankr. D. Nev. Case No. 05-14326) on May 11, 2005. Advanced wrote-off $669,000 on account of its equity interest in PMIC following the chapter 11 filing. Default In January 2004, Advanced Communications entered into a six-month unsecured promissory note with Cornell Capital Partners, LP, in the amount of $3 million. Under the terms of the promissory note, the Company agreed to repay the note either in cash or through the net proceeds to be received by the Company under its Equity Line of Credit facility over a 24-week period commencing February 23, 2004. As of June 30, 2004, the Company repaid $625,000 of the note from proceeds on the issuance of 517,000,360 shares of common stock under its Equity Line of Credit facility. During the fiscal year ended June 30, 2005, the Company repaid a total of $2.1 million of principal on the note, of which $100,000 was repaid by issuing 172,881,526 shares of common stock and $2 million was repaid in cash leaving a balance of $275,000. On February 10, 2005, the note was modified, extended to June 30, 2005, and bears interest at a rate of 10%. The note was not paid when due and is currently in default. About Advanced Communications Based in New York, Advanced Communications Technologies, Inc., specializes in the technology aftermarket service and supply chain, known as reverse logistics. Its wholly owned subsidiary and principal operating unit, Encompass Group Affiliates, Inc., acquires and operates businesses that provide computer and electronics repair and end-of-life cycle services. AGING CARE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Aging Care Home Health, Inc. 101 North Second Street, Suite 101 West Monroe, Louisiana 71291 Bankruptcy Case No.: 05-33407 Type of Business: The Debtor offers nursing care, physical therapy, occupational therapy, speech pathology, medical social and home health aide. Chapter 11 Petition Date: October 14, 2005 Court: Western District of Louisiana (Monroe) Debtor's Counsel: Wade N. Kelly, Esq. 1333 Common Street Lake Charles, Louisiana 70601 Tel: (337) 433-0234 Fax: (337) 433-1274 Total Assets: $655,999 Total Debts: $54,407,440 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ United States of America Alleged improper $54,000,000 Palmetto GBA and HHS as Medicaid payments their interests appear, plus treble damages c/o Alexander 800 Lafayette Street, Suite 2200 Lafayette, LA 70501-6832 Chase Line of credit $125,000 Desiard Street Monroe, LA 71201 Pearson Bernard Legal services $74,226 1224 Highway Avenue Covington, KY 41011 Hibernia National Bank Line of credit $50,000 Department of Treasury-IRS 941 Taxes for third $35,913 Special Procedures Branch quarter Davenport, Files & Kelly Legal services $26,000 First USA Bank Charges $20,979 First USA Visa Charges $17,757 Wells Fargo Charges $17,689 Jack C. Noble, MD Services $8,000 LA Dept. of Revenue Taxation Withholding taxes $7,027 Physician Sales Services $6,326 Linda Ketchel Cleaning services $2,200 Stuarts Supplies $2,183 Gulf South Medical Supply Supplies $1,748 Bank One Charges $1,678 American Express Charges $1,662 The Heritage Company Services $1,311 USBankCorp Goods $1,200 Langlinais & Broussard Services $1,044 ANCHOR GLASS: Arkema Wants to Terminate CERTINCOAT Contract ----------------------------------------------------------- Arkema, Inc., fka ATOFINA Chemicals, Inc., asks the U.S. Bankruptcy Court for the Middle District of Florida to lift the automatic stay so it can terminate the contract allowing Anchor Glass Container Corporation to use its CERTINCOAT glass coating system. Alternatively, Arkema seeks adequate protection of its interests, including: * a requirement that the Debtor pay all postpetition amounts owed immediately; * a requirement that the Debtor pay all future payments within 15 days of being invoiced; * a requirement that the Debtor submit OU's to Arkema for all of its plants not less than once a week; and * a requirement that the Debtor assume or reject the Contract within 30 days. On January 1, 2004, Arkema and Anchor Glass entered into a contract wherein Arkema agreed to impart on the Debtor the handling, processing and manufacturing techniques, abilities and capacities needed to utilize the CERTINCOAT System to apply a coating composition to glass containers. Arkema also agreed to sell to the Debtor the "Formulation" -- organotin chemicals used in the process of depositing a hot tin oxide on glass. Under the Contract, the Debtor was permitted to purchase certain formulation and spare parts, lease necessary equipment, and license certain of Arkema's technology and patents in return for payments specified in a Lease Fee. To the extent that the Debtor does not make the Lease Fee payments to Arkema in accordance with the Contract, the Debtor effectively receives all of the benefits of the Contract, including infringing on Arkema's exclusive property rights, without the required compensation to Arkema. Alfred Villoch, III, Esq., at Buchanan Ingersoll PC, in Tampa, Florida, says that the Contract was executory as of the Petition Date. Arkema supplies the Formulation, Equipment and Spare Parts, and licenses the CERTINCOAT System and technology to the Debtor for use in all of its eight plants. Arkema understands that it is the sole source available to the Debtor for the supply of the chemicals necessary for the glass coating process. The Contract provides for a consignment arrangement to replenish the Formulation and Spare Parts at the Debtor's eight plants. The Debtor is required to report consignment usage to Arkema at least once a month for each of the Debtor's facility. The submission of a consignment usage report -- OU -- triggers the issuance of an invoice to the Debtor, which is to be paid within 45 days. In effect, the Debtor, if it does not act in good faith, can extend Arkema's credit risk by improperly holding and not timely submitting the OU's to Arkema. Mr. Villoch tells the Court that the Debtor has a prepetition debt exceeding $120,000, of which $18,581 is delinquent. The Prepetition Debt was included on the Debtor's schedules of assets and liabilities, although the amount listed was incorrect. Before the Petition Date, the Debtor had defaulted under the Contract by, among other things, failing to pay amounts due to Arkema in a timely fashion. Arkema was listed as one "critical vendor" in the Debtor's request to pay critical vendor claims. Mr. Villoch asserts that the indicated proposed amount to satisfy Arkema's prepetition claim was substantially inaccurate. The Debtor amended the Critical Vendors Motion and increased the proposed payment to Arkema. Arkema, however, still disputes the amended amount. Mr. Villoch tells Judge Paskay that the Debtor continues to order additional Formulation and Spare Parts under the Contract, but has given no assurance of payment. According to Mr. Villoch, despite not being able to receive due postpetition payments, Arkema made repeated efforts to contact the Debtor. Most efforts went without response. The Debtor's only substantive response is that it has recently mailed a $2,000 payment to Arkema. Mr. Villoch denies Arkema's receipt of the payment. ". . . Arkema would prefer not to terminate the Contract with the Debtor; however, the Debtor refuses to comply with its payment and reporting obligations, or to adequately protect Arkema from further loss and exposure", Mr. Villoch says. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Hires Cohen & Grigsby as Special Counsel ------------------------------------------------------ Anchor Glass Container Corporation asks the U.S. Bankruptcy Court for the Middle District of Florida for permission to employ Cohen & Grigsby PC as special counsel to represent it in the litigation commenced by GGC, LLC -- also known as Glenshaw Glass Company -- in the United States Bankruptcy Court for the Western District of Pennsylvania. Robert A. Soriano, Esq., at Carlton Fields PA, in Tampa, Florida, relates that Cohen & Grigsby is particularly well suited for the type of representation required by the Debtor. Cohen & Grigsby has over 100 attorneys with a broad range of expertise in business commercial and business matters, including litigation at the trial and appellate levels, and experience in bankruptcy law and regularly appears before bankruptcy judges in Pennsylvania. Cohen & Grigsby will be paid in accordance with its ordinary and customary hourly rates for the legal services rendered. The firm will also be reimbursed for actual and necessary out-of-pocket expenses. Anchor did not disclose the firm's hourly billing rates. Neil F. Siegel, Esq., a member of Cohen & Grigsby, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Neither Cohen & Grisby nor any of its partners or associates has any connection with the Debtor, its creditors, the United States Trustee or any other interested parties. However, Mr. Siegel informs the Court that Cohen & Grigsby represents E. W. Bowman, Incorporated, which is a fabricator that designs and manufactures annealing or decorating lehrs. E.W. Bowman continues to be a supplier to the Debtor and has a small prepetition claim believed to be less than $10,000. The parties do not anticipate that Cohen & Grigsby would need to enter an appearance in the case on behalf of E. W. Bowman. Moreover, E.W. Bowman's executory contract is not related in any respect to the matter on which Cohen & Grigsby is to be retained as special counsel. Additionally, both E.W. Bowman and the Debtor have waived any actual or potential conflict of interest. Mr. Siegel also points out that it is possible that certain Cohen & Grigsby attorneys or employees hold interests in mutual funds or other investment vehicles that may own the Debtor's securities. Aside from the two instances, Mr. Siegel attests that the firm does not have any clear potential conflicts of interest in Anchor's Chapter 11 cases. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANDERSON CLARK: Case Summary & Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Anderson Clark, Inc. aka BCT Ohio 2700 McKinley Avenue Columbus, Ohio 43204 Bankruptcy Case No.: 05-73524 Type of Business: The Debtor specializes in making and delivering high quality, black ink, thermographed business cards in 24 hours. The Debtor also introduced Orderprinting.com(TM), the proprietary, state-of-the-art Internet Order access system that provides customized Web sites from accounts that will transmit orders for business cards, stationary, rubber stamps and labels 24 hours a day, seven days a week.. See http://www.bctohio.com/ Chapter 11 Petition Date: October 13, 2005 Court: Southern District of Ohio (Columbus) Judge: Donald E. Calhoun Debtor's Counsel: Susan L. Rhiel, Esq. 124 South Washington Avenue Columbus, Ohio 43215 Tel: (614) 221-4670 Total Assets: $306,748 Total Debts: $2,269,773 The Debtor's 11-page List of Largest Unsecured Creditors is available for a fee at: http://www.researcharchives.com/bin/download?id=051015012951 AR UTILITY: Exclusive Plan-Filing Period Extended to Nov. 3 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona entered a bridge order extending, through and including Nov. 3, 2005, the time within which AR Utility Specialists, Inc., has the exclusive right to file a chapter 11 plan. The Debtor's want their exclusive period to file a chapter 11 plan extended until Jan. 15, 2006. The Debtor also wants to retain the exclusive right to solicit acceptances of that plan from their creditors through March 15, 2006. The Debtor gives the Court three reasons supporting the extension: 1) it has been preoccupied for most of its time and efforts during its chapter 11 case in cash collateral negotiations, including obtaining a Court-approved Stipulation with JPMorgan Chase Bank, N.A. and Merchants Bonding Company that extends cash collateral usage through Jan. 15, 2006; 2) its management has devoted significant time and resources to the creation of new business opportunities that will enable it to generate sufficient funds or financing to allow it to confirm a full-pay case and exit its chapter 11 case; 3) it has spent considerable time investigating potential claims against third parties and dealing with issues related to the Reynoso divorce proceeding. While the Debtor does not anticipate that the divorce litigation will lessen any time soon, but it is optimistic that with the Stipulation in place, it will be able to more thoroughly dissect third- party claims and related issues for purposes of providing a full and accurate disclosure statement and confirming a viable plan of reorganization. The Court makes it clear that its bridge order should not be construed as a ruling on or determination of the merits of the Debtor's motion. Objections to the bridge order, if any, must be filed and served by Oct. 27, 2005. The Court will convene a final hearing at 10:00 a.m., on Nov. 3, 2005, to consider the Debtor's request. Headquartered in Phoenix, Arizona, AR Utility Specialists, Inc. -- http://www.arusi.net/-- is an engineering and design firm for utilities serving the metropolitan Phoenix area. The Debtor filed for chapter 11 protection on June 10, 2005 (Bankr. D. Ariz. Case No. 05-10489). J. Henk Taylor, Esq., at Lewis And Roca LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $1 million to $10 million. ATA AIRLINES: Eliminates Three Routes in Ongoing Business Plan -------------------------------------------------------------- As part of ATA Airlines, Inc. will be ending its service from: -- Chicago-Midway to Boston on Oct. 28, 2005; -- Newark, N.J. on Oct. 29, 2005; and -- Minneapolis/St. Paul on Dec. 1, 2005 in efforts to create an even more efficient and cost-competitive operating structure. ATA will also suspend its launch of new service between Chicago- Midway and Miami and Sarasota, Fla. Service to these markets was scheduled to begin on Oct. 29, 2005. According to ATA Senior Vice President and Chief Commercial Officer Subodh Karnik, the decision to eliminate these routes is part of an ongoing effort to create a strategic business plan that best positions the Company for bankruptcy emergence. "All airlines, including ATA, must continually evaluate the future profitability and viability of each route - based on passenger demand, competition, and cost inputs," said Mr. Karnik. "Increased capacity, fluctuating demand and skyrocketing fuel prices created a financial reality we simply could not ignore. Ultimately, it is our responsibility to create an operating plan that leads to predictable long-term profitability and the enhanced financial stability of the Company." ATA Vice President of Strategic Planning and Chief Restructuring Officer Sean Frick agreed. "These schedule changes will improve ATA's cash flow and put the Company on a better footing to attract an investment and emerge from Chapter 11." ATA is in the process of contacting customers affected by this announcement and is putting plans into place to assist those individuals holding tickets beyond the cancellation dates until Jan. 9, 2006, in booking alternative travel on other carriers. Those holding tickets for travel beyond Jan. 9, 2006, on the affected routes will be provided full refunds. All changes will be reflected in the Company's public timetable as of Oct. 16, 2005. Approximately 100 employee positions are affected by the route restructuring. ATA is communicating directly with these individuals regarding the announcement and is committed to doing what is possible to assist all employees during the transition. 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. AUSTIN COMPANY: Files Chapter 11 Protection in N.D. Ohio -------------------------------------------------------- The Austin Company and two affiliates filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court for the Northern District of Ohio on Oct. 14, 2005, in order to facilitate completion of its previously planned strategic restructuring. The restructuring is expected to culminate in the majority of Austin's U.S. operations becoming part of Austin AECOM, a division of AECOM, which conducts its business through a group of operating companies including Austin AECOM. "Although we very much had hoped to accomplish the restructuring outside of bankruptcy, a dispute related to a breach of contract by a client of one of our subsidiaries, and the costs associated with the litigation of it, has created significant financial strain for the company," said Patrick B. Flanagan, president and chief operating officer. "This has forced us to take this step at this time in order to protect our future. Our restructuring will continue under court protection and The Austin Company will maintain normal operations during the process." Mr. Flanagan said The Austin Company will strive to maintain business as usual in the interim and that it expects that employees and vendors will continue to be paid for services performed following the filing in the ordinary course of business. Austin intends to finance continued operations with cash during the Chapter 11 process. Asset Purchase Agreement In its court filings, the company said it has entered into an asset purchase agreement under which the majority of The Austin Company's U.S. operations will be merged with Austin AECOM, which was created in early 2005 when Austin's Southwest and Midwest regional operations joined forces with AECOM's McClier Corporation. The parties plan to consummate the combination under sections 363 and 365 of the bankruptcy code, subject to certain conditions including approval by the Bankruptcy Court, higher and better offers, customary closing conditions and any required governmental approvals. The transaction is expected to close by the end of the fourth quarter. "This important step will complete the strategic combination of these two strong organizations that began earlier this year," Mr. Flanagan added. "The collective experience and expertise that we will now offer will be a tremendous benefit to our clients and the marketplace at large. It also offers our employees significantly expanded opportunities for growth." The company's Austin U.K. subsidiary was not included in the Chapter 11 filing, and there should be no impact on its ability to serve customers, pay employees and fulfill financial obligations to suppliers. About AECOM AECOM -- http://www.aecom.com/-- is a global leader in the transportation, environmental, and facilities markets with projects in more than 60 countries. Named in Forbes magazine's list of the Top 500 Private Companies, AECOM has expected annual revenues of approximately $2.5 billion for fiscal year 2005. AECOM features prominently in ENR's Top 500 Design Firms list in 2005, ranking first in transportation, first in sewer/waste, first in general building and third overall. Headquartered in Cleveland, Ohio, The Austin Company is an international firm offering a comprehensive portfolio of in-house architectural, engineering, design-build, construction management and consulting services. The Company also offers value-added strategic planning services including site location, transportation/ distribution consulting, facility/process audits and more. The Company and two affiliates filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ohio Lead Case No. 05-93363). Christine M. Pierpont, Esq., at Squire, Sanders & Dempsey, L.L.P., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated between $10 million to $50 million in total assets and debts. AUSTIN COMPANY: Case Summary & 40 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: The Austin Company 6095 Parkland Boulevard Cleveland, Ohio 44124 Bankruptcy Case No.: 05-93363 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Austin Holdings, Inc. 05-93295 RB of PA Inc. 05-93422 Type of Business: The Debtor is an international firm offering a comprehensive portfolio of in-house architectural, engineering, design-build, construction management and consulting services. See http://www.theaustin.com/ Chapter 11 Petition Date: October 14, 2005 Court: Northern District of Ohio (Cleveland) Judge: Pat E. Morgenstern-Clarren Debtors' Counsel: Christine M. Pierpont, Esq. Squire, Sanders & Dempsey, L.L.P. 4900 Key Tower 127 Public Square Cleveland, Ohio 44114 Tel: (216) 479-8500 Fax: (216) 479-8776 Estimated Assets Estimated Debts ---------------- --------------- The Austin Company $10 Million to $10 Million to $50 Million $50 Million Austin Holdings, Inc. $0 to $50,000 $1 Million to $10 Million RB of PA Inc. $10 Million to $10 Million to $50 Million $50 Million A. Debtors' Consolidated List of 40 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ St. Paul Travelers Surety on contracts $25,000,000 Attn: Tom Rogers 1 Tower Square, 5PB Hartford, CT 06183 Teton Industrial Subcontractor claim $9,341,047 Construction 1690 Bluegrass Lakes Parkway Alpharetta, GA 30004 Casey Industrial, Inc. Subcontractor claim $4,563,875 P.O. Box 889 Albany, OR 97321-3890 JJ Excavating Subcontractor claim $3,504,782 P.O. Box 610 Los Alamos, NM 87544 Sauer Incorporated Subcontractor claim $2,083,236 P.O. Box 371119 Pittsburgh, PA 15251-7119 Methuen Construction Subcontractor claim $1,037,020 Company, Inc. Consolidated Electrical Subcontractor claim $942,302 Services 661 Pleasant Street Norwood, MA 02062 Jaynes Structures, #6591 Payment on subcontract $828,870 2906 Broadway Northeast Albuquerque, NM 87107 M.L. Young Construction Subcontractor claim $724,055 Corp. 5720 North I-35 Industrial Boulevard Edmond, OK 73034 Baker Concrete Construction Payment on subcontract $722,496 900 North Garver Road Monroe, OH 45050-1277 Kinetic Systems, Inc. Trade debt $608,291 22279 Network Place Chicago, IL 60673-1221 Ryan Incorporated Central Trade debt $580,358 P.O. Box 206 Janesville, WI 53547-0206 Gulf Foundation Inc. Trade debt $533,633 13350 East Highway 92 Dover, FL 33527-4122 Invensys ENE, Inc. Subcontractor claim $533,037 427 Turnpike Street Canton, MA 02021 Chapman Corporation Trade debt $503,341 331 South Main Street Washington, PA 15301 Intec Construction Company Trade debt $503,137 3800 Freemont Avenue Kansas City, MO 64129 Atlantic Millwrights, Inc. Claim $456,546 77 Concord Street North Reading, MA 01864-2601 Mark One Electrical Trade debt $437,840 Company, Inc. 909 Troost Avenue Kansas City, MO 64106 Mosser Construction Trade debt $423,848 6048 Deer Park Court Toledo, OH 43614 Atlantic Projects Company Subcontractor claim $388,000 Inc. 1462 Erie Boulevard Schenectady, NY 12305 American Acoustical Subcontractor claim $338,779 Contractors Corp. 120 Cedar Street Canton, MA 02021 Atlantic Millwrights, Inc. Trade debt $338,089 77 Concord Street North Reading, MA 01864-2601 Precision Concrete Trade debt $316,188 Construction, Inc. 5855 Shiloh Road, Suite 200 Alpharetta, GA 30005 Terra Excavating, Inc. Trade debt $296,975 13400 Pine Street Largo, FL 33774 Sagamore Plumbing & Heating, Subcontractor claim $281,698 Inc. 320 Libbey Industrial Parkway Weymouth, MA 02189 Decco, Inc. Subcontractor claim $273,378 31 Route 13 Brookline, NH 03033 Whitacre Engineering Co. Trade debt $270,297 P.O. Box 8444 Canton, OH 44711 George J. Shaw Construction Trade debt $251,529 Company 1601 Walrond Avenue Kansas City, MO 64127 J.E. Liesfeld Contractor, Trade debt $236,696 Inc. 1851 Bennington Road Rockville, VA 23146 Foley Company Trade debt $211,187 7501 Front Street Kansas City, MO 64120 Atlanta Structural Concrete Trade debt $207,675 Co. P.O. Box 1099 Buchanan, GA 30113 Continental Steel and Trade debt $179,542 Conveyer Cates Sheet Metal Industries Trade debt $171,580 Marsh U.S.A. Trade debt $156,596 Architectural Wall Systems Trade debt $151,843 Mohawk Construction and Trade debt $142,997 Supply, Inc. Gibralter Concrete, Inc. Trade debt $140,481 Mason and Overstreet Trade debt $137,978 LM Construction Trade debt $131,106 Builders Plus, Inc. Trade debt $131,106 BALL CORP: Completes Debt Refinancing & Calls 2006 Bonds -------------------------------------------------------- Ball Corporation (NYSE: BLL) completed the closing of its new senior secured credit facility. The new senior secured credit facility extends debt maturities at lower interest rate spreads and provides Ball with additional borrowing capacity and more flexibility for future growth. Ball redeem all $249 million of its outstanding 7-3/4% Senior Notes due in 2006. This redemption is scheduled for Nov. 14, 2005, and will result in an after-tax, one-time charge of approximately $3.9 million in the fourth quarter relating to payment of the call premium and write off of unamortized debt issuance costs. The refinancing and redemption of notes will result in a reduction of Ball's 2006 interest expense. Ball Corporation supplies 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. * * * As reported in the Troubled Company Reporter on Oct. 5, 2005, Standard & Poor's Ratings Services assigned its 'BB+' bank loan rating to Broomfield, Colorado-based Ball Corp.'s proposed $1.475 billion senior secured credit facilities, based on preliminary terms and conditions. Standard & Poor's also said that it affirmed its 'BB+' corporate credit rating on the company. S&P said the outlook is positive. BARAK I.T.C.: Section 304 Petition Summary ------------------------------------------ Petitioner: Eyal Vardi Chief Financial Officer Debtor: Barak I.T.C. (1995) The International Telecommunications Services Corp. Ltd. aka Barak 013 aka Barak aka Barak I.T.C. aka Barak on-line aka Barak Business aka 013 Barak aka 013 Afeq Industrial Park 15 Hamelacha Street Rosh Ha'ayin 48091 Israel Case No.: 05-46936 Type of Business: The Debtor provides international telecommunications services which include voice, data, Internet and international services to the business and residential markets in Israel. Barak is one of a few companies licensed by the Ministry of Communications of the State of Israel to provide international telecommunications services. All of Barak's issued and outstanding capital stock is currently held by three holders: (a) Dial -- the Israeli Company for International Communications Services Ltd., (b) Clalcom I.S., and (c) Matav. Section 304 Petition Date: October 14, 2005 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Petitioner's Counsel: Brian S. Rosen, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8602 Fax: (212) 310-8007 Financial Condition as of June 30, 2005: Total Assets: US$100 Million Total Debts: US$224 Million BEAR STEARNS: Fitch Affirms Low-B Ratings on Six Cert. Classes -------------------------------------------------------------- Fitch Ratings affirms Bear Stearns commercial mortgage pass- through certificates, series 2004-PWR3: -- $164.6 million class A-1 'AAA'; -- $150 million class A-2 'AAA'; -- $158 million class A-3 'AAA'; -- $469.9 million class A-4 'AAA'; -- Interest only class X-1 'AAA'; -- Interest only class X-2 'AAA' -- $26.3 million class B 'AA'; -- $12.5 million class C 'AA-'; -- $16.6 million class D 'A'; -- $9.7 million class E 'A-'; -- $15.2 million class F 'BBB+'; -- $11.1 million class G 'BBB'; -- $13.9 million class H 'BBB-'; -- $2.8 million class J 'BB+'; -- $5.5 million class K 'BB'; -- $6.9 million class L 'BB-'; -- $5.5 million class M 'B+'; -- $2.8 million class N 'B'; -- $2.8 million class P 'B-'. Fitch does not rate the $12.5 million class Q certificates. The rating affirmations reflect stable transaction performance and minimal paydown since issuance. As of the September 2005 distribution date, the pool's aggregate certificate balance has decreased 2% to $1.086 billion from $1.108 billion at issuance. There are no delinquent or specially serviced loans within the transaction. Fitch reviewed the transaction's three credit assessed loans and their underlying collateral. The Fitch stressed debt service coverage ratio 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. Due to their stable performance, the loans retain their investment grade credit assessments. Lion Industrial Portfolio (8.5% of pool) is the largest loan in the transaction. Since issuance, one property has been released from the portfolio. The loan is secured by a diverse cross- collateralized and cross-defaulted pool of 42 properties. The trust amount is split into a five-year and a seven-year tranche with maturity dates of Jan. 01, 2009 and Jan. 01, 2011, respectively. Principal and interest payments on the seven-year tranche commence on Feb. 01, 2009. Since issuance, occupancy has improved to 79.9% as of year end (YE) 2004 from 67.4% at issuance. The Fitch stressed DSCR as of year-end YE 2004 decreased to 1.65 times (x) compared to 1.71x at issuance. Two Commerce Square (5.6%) is secured by a 40-story class A office building totaling 953,276 square feet located in Philadelphia, PA. As of May 2005, occupancy has increased to 98.7% from 97.4% at issuance. The Fitch stressed DSCR as of year-end YE 2004 increased to 1.77x compared to 1.65x at issuance. The Great Northern Mall (3.7%) is collateralized by 504,743 sf regional mall located in Clay, New York. Occupancy has increased to 94.5% as of March 2005 from 92.1% at issuance. The Fitch stressed DSCR increased to 2.22x as of YE 2004 from 2.06x at issuance. BRICOLAGE CAPITAL: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Bricolage Capital, LLC 570 Lexington Avenue, 25th Floor New York, New York 10022 Bankruptcy Case No.: 05-46914 Chapter 11 Petition Date: October 14, 2005 Court: Southern District of New York (Manhattan) Judge: Stuart M. Bernstein Debtor's Counsel: Schuyler G. Carroll, Esq. Arent Fox PLLC 1675 Broadway New York, New York 10019 Tel: (212) 484-3955 Fax: (212) 484-3990 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million The Debtor did not file its list of 20 Largest Unsecured Creditors. BROOKLYN HOSPITAL: Look for Bankruptcy Schedules on November 29 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York gave The Brooklyn Hospital Center more time to file their Schedules of Assets and Liabilities, Statements of Financial Affairs, Schedules of Current Income and Expenditures, Statements of Executory Contracts and Unexpired Leases and Lists of Equity Security Holders. The Debtor has until Nov. 29, 2005, to file those documents. The Debtors gave the Court three reasons in support of the extension: 1) preparing the needed Schedules and Statements requires them to compile voluminous information from books, records and documents relating to numerous documents and a multitude of transactions; 2) collection of the necessary information for the Schedules and Statements will require an expenditure of substantial time and effort on the part of the Debtors' employees and management involved in preparing those documents; and 3) they are currently mobilizing their employees in working diligently to assemble and prepare the Schedules and Statements. Headquartered in Brooklyn, New York, The Brooklyn Hospital Center -- http://www.tbh.org-- provides a variety of inpatient and outpatient services and education programs to improve the well being of its community. The Debtor, together with Caledonian Health Center, Inc., filed for chapter 11 protection on September 30, 2005 (Bankr. E.D.N.Y. Case No. 05-26990). Lawrence M. Handelsman, Esq., and Eric M. Kay, Esq., at Stroock & Stroock & Lavan LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $233,000,000 in assets and $337,000,000 in debts. CALPINE CORP: Completes $225 Million Assets Sale to LS Power ------------------------------------------------------------ Calpine Corporation [NYSE:CPN] has completed the sale of its 550-megawatt Ontelaunee Energy Center to LS Power Equity Partners for $225 million, less transaction costs. The asset sale is part of Calpine's strategic initiative to reduce debt and optimize its power plant portfolio. Since launching its strategic initiative in May 2005, Calpine has completed more than $2 billion of asset sales. The Ontelaunee sale is the third of four planned power plant sales, which the company announced in June 2005. Net proceeds from the sale of Ontelaunee will be used in accordance with the company's indentures. The company expects to record a non-cash loss on the sale of Ontelaunee of approximately $129 million in the quarter ended September 30, 2005. "The Ontelaunee sale provides Calpine with the resources to concentrate our activities in Calpine's core markets to further optimize our power operations," stated Calpine Executive Vice President and Chief Financial Officer Bob Kelly. "The sale also provides Calpine with the opportunity to expand our energy services business, providing LS Power a broad range of operational and power services for Ontelaunee." Calpine will continue to operate the plant on behalf of LS Power for five years, and provide turbine maintenance and parts services for ten years. Calpine Energy Services, the trading and risk management subsidiary for Calpine, will supply a variety of energy services, including power marketing and coordination of power and fuel scheduling, for a six-month term. The Ontelaunee Energy Center is a natural gas-fired, combined- cycle power plant located in Ontelaunee Township, Pa. The plant entered operations in 2002 and generates electricity for the Pennsylvania-New Jersey-Maryland power market. Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states, three Canadian provinces and the United Kingdom. Its customized products and services include wholesale and retail electricity, natural gas, gas turbine components and services, energy management, and a wide range of power plant engineering, construction and operations services. Calpine was founded in 1984. It is included in the S&P 500 Index and is publicly traded on the New York Stock Exchange under the symbol CPN. CATHOLIC CHURCH: Tort Claimants Want ACRP Order Abated in Spokane ----------------------------------------------------------------- Certain tort claimants ask the U.S. Bankruptcy Court for the District of Oregon to abate the order approving the Archdiocese of Portland in Oregon's Plan of Accelerated Claims Resolution Process entered on February 28, 2005. The Tort Claimants are represented by: * David Slader, * Michael Morey, * Kelly Clark, * Gary Bisaccio, * Daniel Gatti, * Scott Beckstead, * Kenneth Roosa, * John Manly, * Bradley Baker, * William Barton, * Kevin Strever, and * Erin K. Olson The Tort Claimants explain that mandatory mediation of the Stage 1 claims did not prove to be an effective means of resolving the great majority of the claims. "It is apparent that unresolved Stage 1 claims will need to be litigated up to and including trial to solve the claims," Ms. Olson says. "Mediation of Stage 2 claims prior to the liquidation of the Stage 1 claims would not be an effective or efficient use of resources." To facilitate the planning for the claims resolution process going forward, Ms. Olson tells Judge Perris that the Tort Claimants whose state court cases were removed to federal court by Portland will pursue remand of those Actions. The Claimants also seek to lift stay for the removed cases that are the subject of adversary proceedings in Portland's case. The Tort Claimants and their counsel are committed to working cooperatively with one another, with the courts, and with counsel for Portland and co-defendants, to schedule litigation and further discovery as efficiently as possible under the circumstances, Ms. Olson assures Judge Perris. * * * Judge Perris issued a final scheduling order relating to the Tort Claimants' pattern and practice depositions. Judge Perris gives Portland and the deponents until October 21, 2005, to file any objections to the proposed areas of inquiry set out in the topic list for Archbishop Levada, and the topic list for the other deponents, along with any legal argument. With regard to the deposition of Archbishop Levada, Portland may file only any additional objections to the topic list. Judge Perris instructs Portland not to repeat any objections that have been raised in the Archdiocese's initial objection. Any objections to topic areas of inquiry that are not raised by October 21, will be deemed waived. The Tort Claimants, either individually or jointly, may file any responses to the objections no later than November 18, 2005. Portland may file any reply to the Tort Claimants' responses on or before December 5, 2005. A hearing on the objections will be held on December 16, 2005, at 9:30 a.m. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Ct. Okays Stipulation Between Tucson & Claimants ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona approved the stipulations between the Diocese of Tucson and the Tort Claimants. As reported in the Troubled Company Reporter on August 25, 2005, the Diocese of Tucson's confirmed Plan of Reorganization provides that tort claimants have the right to elect to become a Non- Settling Tort Claimant and have their claims determined and liquidated through a trial in a court. Once liquidated, the tort claim will be treated and paid pursuant to the Litigation Trust Agreement. On their ballots, Claimants holding Claim Nos. 29, 79, 216, 3, 14, 138, 2, 80, 253, and 23, elected to become Non-Settling Tort Claimants. In separate stipulations, Tucson and the Claimants stipulate that: (a) the Claimants' election to become Non-Settling Tort Claimants are revoked; and (b) the Claimants will be treated as Settling Tort Claimants and their claims will be determined pursuant to the Plan and, if allowed, paid and treated pursuant to the Settlement Trust Agreement. 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. 44 Bankruptcy Creditors' Service, Inc., 215/945-7000) CENTEX HOME: Fitch Puts BB+ Rating on $12 Mil Class B Certificates ------------------------------------------------------------------ Centex Home Equity Loan Trust's asset-backed certificates, series 2005-D, are rated by Fitch Ratings: -- $796 million publicly offered classes AF-1 - AF-6 and AV-1 and AV-2 'AAA'; -- $47 million class M-1 'AA+'; -- $32.50 million class M-2 'AA'; -- $22.50 million class M-3 'AA-; -- $17 million class M-4 'A+'; -- $17 million class M-5 'A'; -- $15.50 million class M-6 'A-'; -- $16 million class M-7 'BBB+'; -- $14.50 million class B-1 'BBB'; -- $11 million class B-2 'BBB-'; -- $12 million class B-3 'BB+'; Credit enhancement for the 'AAA' rated class A certificates reflects the 23.40% subordination provided by classes M-1 through M-7, B-1 through B-3, monthly excess interest, and overcollateralization starting at 0.40% and growing to a target of 2.90%. Credit enhancement for the 'AA+' rated class M-1 certificates reflects the 18.70% subordination provided by classes M-2 through M-7, B-1 through B-3, monthly excess interest, and target OC. Credit enhancement for the 'AA' rated class M-2 certificates reflects the 15.45% subordination provided by classes M-3 through M-7, B-1 through B-3, monthly excess interest, and target OC. Credit enhancement for the 'AA-' rated class M-3 certificates reflects the 13.20% subordination provided by classes M-4 through M-7, B-1 through B-3, monthly excess interest, and target OC. Credit enhancement for the 'A+' rated class M-4 certificates reflects the 11.50% subordination provided by classes M-5 through M-7, B-1 through B-3, monthly excess interest, and target OC. Credit enhancement for the 'A' rated class M-5 certificates reflects the 9.80% subordination provided by classes M-6 through M-7, B-1 through B-3, monthly excess interest, and target OC. Credit enhancement for the 'A-' rated class M-6 certificates reflects 8.25% subordination provided by classes M-7, B-1 through B-3, monthly excess interest, and target OC. Credit enhancement for the 'BBB+' rated class M-7 certificates reflects the 6.65% subordination provided by class B-1 through B- 2, monthly excess interest, and target OC. Credit enhancement for the 'BBB' rated class B-1 certificates reflects 5.20% subordination provided by class B-2 and B-3, the monthly excess interest and target OC. Credit enhancement for the 'BBB-' rated class B-2 certificates reflects 4.10% credit enhancement provided by the class B-3, the monthly excess interest and target OC. Credit enhancement for the 'BB+' rated class B-3 certificates reflects 2.90% credit enhancement provided by the monthly excess interest and target OC. In addition, the ratings reflect the integrity of the transaction's legal structure, as well as the capabilities of Centex Home Equity Company as the servicer. JPMorgan Chase Bank will act as trustee. As of the cut-off date, the group I mortgage loans have an aggregate balance of $252,869,066. The weighted average loan rate is approximately 9.415%. The weighted average remaining term to maturity (WAM) is 296 months. The average cut-off date principal balance of the mortgage loans is approximately $66,632. The weighted average original loan-to-value ratio is 76.15%, and the weighted average Fair, Isaac & Co. score is 603. The properties are primarily located in Texas (15.89%), California (14.20%), and Florida (12.02%). All other states represent less than 5% of the group I mortgage balance as of the cut-off date. As of the cut-off date, the group II mortgage loans have an aggregate balance of $802,036,759.56. The weighted average loan rate is approximately 7.522%. The WAM is 356 months. The average cut-off date principal balance of the mortgage loans is approximately $154,286. The weighted average OLTV is 80.6%, and the weighted average FICO score is 592. The properties are primarily located in California (23.15%), Florida (10.17%), Texas (6.43%), and Virginia (5.32%). All other states represent less than 5% of the group I mortgage balance as of the cut-off date. The mortgage loans were originated or acquired by Centex Home Equity Company, a specialty finance company engaged in the business of originating, purchasing, and selling retail and wholesale subprime mortgage loans. CHARLES LAFASCIANO: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Charles N. Lafasciano 36 Marietta Drive New City, New York 10956 Bankruptcy Case No.: 05-25234 Chapter 11 Petition Date: October 14, 2005 Court: Southern District of New York (White Plains) Judge: Adlai S. Hardin Jr. Debtor's Counsel: Elizabeth A. Haas, Esq. Barr & Haas, LLP 664 Chestnut Ridge Road P.O.Box 664 Spring Valley, New York 10977 Tel: (845) 352-4080 Fax: (845) 352-6777 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carla Lafasciano Equitable $500,000 One Lucille Boulevard distribution and New City, NY 10956 related awards Jason Lafasciano Confirmation of $227,267 2100 Fieldcrest Drive Judgment on Killeen, TX April 15, 2005 Ellen B. Holtzman $112,533 101 North Middletown Road Nanuet, NY 10954 Richard L. Stallone Promissory Notes $65,000 225 South Congers Avenue Congers, NY 10920 Carla Lafasciano as Custodian $40,000 Evan Lafasciano One Lucille Boulevard New City, NY 10956 Bank One Revolving Consumer $35,941 Cardmember Service Credit and P. O. Box 15153 Possible Wilmington, DE 19886-5153 contingent liability of Carla Lafasciano Fleet National Bank Possible $30,425 4161 Piedmont Parkway NC41050387 contingent Greensboro, NC 27410 liability of Carla Lafasciano Bank of America Possible $25,087 P.O. Box 21846 contingent Greensboro, NC 27420-1846 liability of Tor Terrace Associates, Inc. Fleet Bank NA Possible $25,087 Case Reserve contingent P. O. Box 150462 liability of Hartford, CT 06115-0462 C.N.L. Realty Corporation Amy L. Allard Promissory Note $25,000 96 Crystal Hill Drive Pomona, NY 10970 Bank of America Possible $22,985 c/o Kirschenbaum & Phillips PC contingent 100 East Jericho Turnpike liability of Mineola, NY 11501-3121 Tor Terrace Associates, Inc. Fleet Bank Possible $22,985 Bank of America contingent c/o Kirschenbaum & Phillips PC liability of 106 East Jericho Turnpike Tor Terrace Mineola, NY 11501-3121 Associates, Inc. Bank of America Possible $22,310 NC4 1050295 contingent 4161 Piedmont Parkway liability of Greensboro, NC 27410 Tor Terrace Associates, Inc. Depodwin & Murphy $15,553 c/o Stein & Stein One Railroad Square P.O. Box 30 Haverstraw, NY 10927 American Express Possible $13,194 c/o Mitchell N. Kay, Esq. contingent 7 Penn Plaza liability of New York, NY 10001-3995 Tor Terrace Associates, Inc. Metris/Direct/ Possible $11,339 Sherman Acquisition contingent c/o National Action liability of Financial Service Carla Lafasciano P.O. Box 9027 Buffalo, NY 14231-9027 Capital One Bank Possible $11,039 c/o Zwicker & Associates, PC contingent 800 Federal Street liability of Andover, MA 01810-1041 Tor Terrace Associates, Inc. Capital One Bank Revolving Consumer $10,797 Remittance Process Credit P. O. Box 85147 Richmond, VA 23276 CACV of Colorado, LLC Maryland National $9,646 c/o J.A. Cambece Law Office PC Bank and 8 Bourbon Street Possible Peabody, MA 01960 contingent liability of Tor Terrace Associates, Inc. Maryland National Bank Revolving Consumer $9,646 Midland Credit Management Credit and 8875 Aero Drive Possible San Diego, CA 92123 contingent liability of Carla Lafasciano CITGO PETROLEUM: Soliciting Consents to Eliminate Defaults ---------------------------------------------------------- CITGO Petroleum Corporation has commenced cash tender offers for any and all of its outstanding 7-7/8 percent Senior Notes due 2006 and 6% Senior Notes due 2011. There are currently outstanding approximately $150 million of the 7-7/8 percent Notes and $250 million in aggregate principal amount of the 6% Notes. The tender offers will expire at midnight, Eastern Time, on Wednesday, Nov. 9, 2005, unless extended or terminated by CITGO. Consent Solicitation In conjunction with the tender offers, CITGO is soliciting consents of the holders of the Notes to eliminate substantially all restrictive covenants, certain events of default and certain other related provisions in the indentures governing the Notes. The proposed amendments to each indenture can be adopted with the consent of no less than a majority in aggregate outstanding principal amount of the Notes issued pursuant to such indenture. Holders cannot tender their Notes without delivering a consent and cannot deliver a consent without tendering their Notes. The consent solicitations will each expire at 5:00 p.m., Eastern Time, on Wednesday, Oct. 26, 2005, unless extended. The tender offers and consent solicitations are being made pursuant to an Offer to Purchase and Consent Solicitation Statement, dated Oct. 13, 2005 and related Consent and Letter of Transmittal. As described in more detail in the Offer to Purchase, the total purchase price for each $1,000 principal amount of Notes validly tendered and accepted for purchase by CITGO will be calculated two business days prior to the Expiration Date based upon: (i) for the 7-7/8 percent Notes, a fixed spread of 50 basis points over the yield on the 2% U.S. Treasury Note due May 15, 2006; and (ii) for the 6 percent Notes, a fixed spread of 50 basis points over the yield on the 3.125 percent U.S. Treasury Note due Oct. 15, 2008. The foregoing purchase prices for the 7-7/8 percent Notes and the 6% Notes include a consent payment equal to $25 per $1,000 principal amount of Notes tendered. Holders must validly tender their Notes on or before the Consent Date in order to be eligible to receive the applicable total purchase price, which includes the consent payment. Holders who validly tender their Notes after the Consent Date and before the Expiration Date will only be eligible to receive an amount equal to the applicable total purchase price minus the consent payment. Additionally, holders whose Notes are purchased pursuant to the tender offers will receive any accrued but unpaid interest up to but not including the payment date for their Notes. Consummation of the tender offers and consent solicitations, and payment of the tender offer consideration and consent payment, are subject to the satisfaction or waiver of various conditions, as described in the Offer to Purchase, including the delivery of the requisite consents to the Proposed Amendments and the closing of a new senior secured credit agreement with a syndicate of lenders led by BNP Paribas and JPMorgan Chase Bank, N.A.. The tender offer and consent solicitation for each series of Notes is not conditioned upon the consummation of the tender offer and solicitation for the other series of Notes. CITGO has reserved the right to amend, extend or terminate the tender offers and consent solicitations at any time. It is CITGO's present intention to redeem some or all 6% Notes that remain outstanding following the consummation of the tender offer for such Notes, if any, such redemption to be in accordance with the terms of the indenture governing the 6% Notes. J.P. Morgan Securities Inc. is the Dealer Manager and Solicitation Agent for the tender offers and consent solicitations and may be contacted at 212-834-3424 (call collect) or 866-834-4666 (toll free). Requests for documents may be directed to Global Bondholder Services Corporation, the Information Agent, at 212- 430-3774 (call collect) or 866-470-3700 (toll free). Planned Redemption of Other Notes In addition to these tender offers and consent solicitations, CITGO also disclosed plans to call for redemption its other senior notes and its notes issued under a master shelf agreement in an aggregate principal amount outstanding of approximately $194 million. Each series of Redemption Notes would be redeemed in accordance with the terms of the relevant indenture or agreement governing such notes at prices based on the principal amount redeemed, plus accrued and unpaid interest to the redemption date, and plus the applicable premium or make-whole amount, as the case may be. CITGO will notify holders by delivering redemption notices in accordance with the relevant provisions of the indenture or agreement governing each series of Redemption Notes. CITGO expects to fund the tender offers, consent solicitations and planned redemption of other notes with available cash and borrowings under the New Credit Agreement. Headquartered in Houston, CITGO Petroleum Corporation -- http://www.citgo.com/-- is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals, refined waxes, asphalt and other industrial products. The company is owned by PDV America, Inc., an indirect wholly owned subsidiary of Petroleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela. * * * As reported in the Troubled Company Reporter on Aug. 29, 2005, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on refiner and marketer CITGO Petroleum Corp. S&P said the outlook is stable. As of June 30, the Houston-based company had $1.3 billion in debt outstanding. COMMERCE ONE: Court Approves Responsible Person Engagement Pact --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California approved the request of the Official Committee of Unsecured Creditors of Commerce One, Inc. n/k/a CO Liquidation, Inc., and its debtor-affiliate, COO Liquidation, Inc., to approve the responsible person engagement agreement pursuant to their Disclosure Statement and Plan of Reorganization. The Court confirmed the Plan on July 28, 2005. The confirmation order appoints Paul Warenski as the Debtor's responsible person. Section 13.12.5 of the Plan requires that the Creditor's Committee and the Debtor negotiate and enter into an agreement to govern the amount of compensation to be paid to Mr. Warenski. According to their agreement, the responsible person will receive a rate of $250 per hour. Mr. Warenski will be reimbursed for all reasonable and actual out-of-pocket expenses incurred in performance of his duties as a responsible person. Headquartered in San Francisco, California, Commerce One, Inc. (n/k/a CO Liquidation, Inc.) -- http://www.commerceone.com/-- provides software services that enable businesses to conduct commerce over the Internet. Commerce One, Inc., and its wholly owned subsidiary, Commerce One Operations, Inc., filed for chapter 11 protection on Oct. 6, 2004 (Bankr. N.D. Calif. Case Nos. 04- 32820 and 04-32821). Doris A. Kaelin, Esq., and Lovee Sarenas, Esq., at Murray and Murray, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed $14,531,000 in total assets and $12,442,000 in total debts. As of December 2, 2004, Commerce One estimates that its liabilities owed to creditors total approximately $9.7 million, including approximately $5.1 million owed to ComVest. The Company expects that total liabilities will continue to increase over time. CORNING INC: Retirement Trust Selling 5 Million Common Shares ------------------------------------------------------------- Corning Inc. filed a Prospectus with the Securities and Exchange Commission for the sale of 5 million shares of its common stock by Corning Incorporated Retirement Master Trust. The Company's Board of Directors approved the voluntary contribution of up to 10 million of the Company's common shares to the Trust until December 31, 2005. The common shares will be issued and contributed, from time to time, to the Trust to fund certain of the Company's obligations to the Plan. The Company will make contributions to the Trust from time to time in amounts that are not greater than 10% of the total assets held by the Trust pursuant to the Employee Retirement Income Security Act of 1974, as amended. The Trust is part of Corning Incorporated Pension Plan. It was created to hold certain assets of the Plan's assets in segregated accounts. The Plan and the Trust are intended to be tax-qualified within the meaning of Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as amended. The Trust is funded by individual participants and Corning contributions, which are held for the sole benefit of plan participants and beneficiaries and which pay for proper expenses of plan administration. JP Morgan Chase Bank, N.A., the Trustee, serves as trustee of the segregated accounts in the Trust in accordance with a Trust Agreement dated as of September 6, 1978 and a Master Trust Agreement dated as of January 1, 1986, each as amended. The Company's common stock is listed on the New York Stock Exchange under the symbol "GLW." The Company's share price slid from $19.42 at the start of the month to $17 last week. A full-text copy of the Prospectus is available for free at http://ResearchArchives.com/t/s?252 Headquartered in Corning, New York, Corning Inc. is a global, technology-based corporation that operates in four reportable business segments: Display Technologies, Telecommunications, Environmental Technologies, and Life Sciences. * * * As reported in the Troubled Company Reporter on Sept. 26, 2005, Moody's Investors Service has upgraded the long-term debt rating of Corning Incorporated. The rating action reflects the company's improving profitability, meaningful debt reduction efforts, and strong liquidity position. The rating outlook is stable. Ratings upgraded with a stable outlook: Corning Incorporated * senior unsecured notes, debentures, and IRBs to Baa3 from Ba2; * senior unsecured securities to (P)Baa3 from (P)Ba2; and * preferred stock to (P)Ba2 from (P)B1 issued pursuant to its 415 universal shelf registration. Corning Finance B.V. * senior, unsecured securities issued pursuant to its 415 universal shelf registration to (P)Baa3 from (P)Ba2, guaranteed by Corning. Ratings withdrawn: Corning Incorporated * Ba2 for the corporate family rating; Not Prime short-term debt rating, and SGL-1 for the Speculative Grade Liquidity Rating. CRC HEALTH: Bain Acquisition Cues S&P's CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on CRC Health Corp. (including the 'B+' corporate credit rating) on CreditWatch with negative implications in light of its parent company's (CRC Health Group) agreement to be purchased by Bain Capital for $720 million. This transaction is likely to be largely debt-financed and result in a markedly weaker credit profile. "Resolution of the CreditWatch listing will require an analysis of the financial structure resulting from this transaction," said Standard & Poor's credit analyst David Peknay. "However, the ratings will be withdrawn if the rated loans are repaid with the proceeds of unrated borrowings." CRC Health provides substance abuse treatment through more than 90 centers in 22 states. CREDIT SUISSE: S&P Cuts Rating on Class M Loans to BB from A ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on class II- M-1 from loan group 2 of Credit Suisse First Boston Mortgage Securities Corp.'s series 2002-19 to 'BB' from 'A'. At the same time, ratings are affirmed on the remaining two classes from the same loan group. The lowered rating on class II-M-1 reflects the continued erosion of credit support for the class. Losses continue to exceed excess interest cash flow and have completely eroded the overcollateralization. Moreover, monthly net losses averaged approximately $260,000 over the past six months, whereas monthly excess interest cash flow averaged about $30,000. The class is currently supported mainly by the subordination of the II-M-2 class and, to a lesser extent, excess interest cash flow. Cash flow projections indicate that the credit support can no longer support the 'A' rating. The II-M-1 class was originally rated 'AA' and was lowered to 'A' because adverse collateral performance had caused the II-M-2 class to default. The 'AAA' ratings on the other two classes in loan group 2 are affirmed due to adequate actual and projected credit support percentages provided largely by the subordination of class II-M-1 and class II-M-2. As of the September 2005 remittance period, total delinquencies were 28.72%, and most (27.27%) were severely delinquent (90-plus days, foreclosure, and REO). Cumulative realized losses were approximately 1.28% of the original pool balance. However, the loan group is paid down to approximately 9.56%. Standard & Poor's will continue to closely monitor the performance of this transaction. The collateral consists of fixed- and adjustable-rate prime and Alt-A mortgage loans secured by one- to four-family residential properties. Rating Lowered Credit Suisse First Boston Mortgage Securities Corp. Mortgage pass-through certs series 2002-19, loan group 2 Rating Class To From II-M-1 BB A Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Mortgage pass-through certs series 2002-19, loan group 2 Class Rating II-A-5 AAA II-PP AAA CREDIT SUISSE: Moody's Puts Low-B Ratings on Five Cert. Classes --------------------------------------------------------------- Moody's Investors Service upgraded the ratings of five classes and affirmed the ratings of fourteen classes of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2003-CK2 as follows: * Class A-1, $76,518,762, Fixed, affirmed at Aaa * Class A-2, $196,000,000, Fixed, affirmed at Aaa * Class A-3, $109,000,000, Fixed, affirmed at Aaa * Class A-4, $364,293,000, Fixed, affirmed at Aaa * Class A-X, Notional, affirmed at Aaa * Class A-SP, Notional, affirmed at Aaa * Class B, $32,118,000, Fixed, upgraded to Aa1 from Aa2 * Class C, $12,353,000, Fixed, upgraded to Aa2 from Aa3 * Class D, $29,647,000, Fixed, upgraded to A1 from A2 * Class E, $12,353,000, Fixed, upgraded to A2 from A3 * Class F, $12,353,000, WAC Cap, upgraded to A3 from Baa1 * Class G, $19,764,000, WAC Cap, affirmed at Baa2 * Class H, $14,824,000, WAC, affirmed at Baa3 * Class J, $17,294,000, Fixed, affirmed at Ba1 * Class K, $17,294,000, Fixed, affirmed at Ba2 * Class L, $4,941,000, Fixed, affirmed at Ba3 * Class N, $6,176,000, Fixed, affirmed at B2 * Class O, $4,941,000, Fixed, affirmed at B3 * Class GLC, $3,491,570, Fixed, affirmed at Baa3 As of the September 16, 2005 distribution date, the transaction's aggregate balance has decreased by approximately 2.8% to $978.9 million from $1.0 billion at securitization. The Certificates are collateralized by 101 mortgage loans ranging in size from less than 1.0% to 8.8% of the pool with the top 10 loans representing 47.7% of the pool. The pool consists of two shadow rated loans, representing 12.4% of the pool, and a conduit component, representing 87.6% of the pool. Three loans, representing 2.5% of the pool, have defeased and are collateralized by U.S. Government securities. The Sully Place Loan (3.6%) is in the process of being defeased. There have been no realized losses to the pool to date. Only one loan, representing less than 1.0% of the pool, is in special servicing. Moody's has estimated a loss of approximately $1 million from this specially serviced loan. Eight loans, representing 3.8% of the pool, are on the master servicer's watchlist. Moody's was provided with full year 2004 operating results for 99.0% of the performing loans. Moody's loan to value ratio for the conduit component is 92.7%, compared to 94.0% at securitization. The upgrade of Classes B, C, D, E and F is primarily due to stable pool performance, increased credit support and defeased loans. The largest shadow rated loan is the Great Lakes Crossing Loan ($84.4 million - 8.8%), which represents a 60.0% participation interest in a $145.8 million first mortgage loan. The loan is secured by the borrower's interest in a 1.4 million square foot value oriented shopping center located approximately 30 miles north of Detroit in Auburn Hills, Michigan. The center is also encumbered by a B Note, which is the security for non-pooled Class GLC. The collateral securing the loan consists of 1.14 million square feet of anchor and in-line space. The center is anchored by Burlington Coat Factory, Sportsmart, Bed, Bath & Beyond, Marshalls and TJ Maxx. The center is 88.9% occupied, compared to 91.1% at securitization. The borrower is an affiliate of Taubman Centers, Inc. (Moody's preferred stock rating B1; stable outlook), a publicly traded REIT. Moody's current shadow rating is Baa2, the same as at securitization. The second shadow rated loan is the Sully Place Loan ($34.6 million - 3.6%), which is secured by a 533,000 square foot anchored retail center located approximately 20 miles west of Washington, D.C. in Chantilly, Virginia. The center is anchored by Lowe's Home Improvements (25.6% GLA; lease expiration June 2023; Moody's senior unsecured rating A2; positive outlook) and Kmart (19.6% GLA; lease expiration September 2011). The loan is currently in the process of being defeased. The top three conduit loans represent 17.7% of the pool. The largest conduit loan is the Ritz-Carlton Key Biscayne Loan ($63.5 million - 6.6%), which represents the senior component of a $78.2 million first mortgage loan secured by a 302-room luxury hotel located in Key Biscayne, Florida. The property is also encumbered by a B Note, which is security for non-pooled Class RCKB. Occupancy and RevPAR for the trailing 12-month period ending July 2005 are 69.6% and $231.00, compared to 69.7% and $183.00 at securitization. Moody's LTV is 77.5%, compared to 86.4% at securitization. The second largest conduit loan is the Museum Square Loan ($55.1 million - 5.7%), which is secured by a 522,000 square foot office building located on Wilshire Boulevard in downtown Los Angeles, California. The property is 87.0% occupied, essentially the same as at securitization. The largest tenants are the Screen Actor's Guild (17.0% NRA; lease expiration July 2014), American Federation of Television and Radio Artists (7.8%; lease expiration January 2007) and Virgin Entertainment (7.3%; lease expiration April 2010). Performance has been slightly impacted by increased operating expenses. Moody's LTV is 93.1%, compared to 92.1% at securitization. The third largest conduit loan is the Crescent at Carlye Loan ($52.2 million - 5.4%), which is secured by a 212,900 square foot office building located in Alexandria, Virginia. The property is 100.0% leased, the same as at securitization. The anchor tenant is the law firm Oblon, Spivak, McClelland & Neustadt (97.0% NRA; lease expiration December 2017). The loan has a five-year term and is interest only. Moody's LTV is 97.2%, the same as at securitization. The pool collateral is a mix of: * office (39.3%), * retail (33.3%), * multifamily (9.6%), * lodging (8.0%), * industrial and self storage (4.5%), * mixed use (2.8%), and * U.S. Government securities (2.5%). The collateral properties are located in 31 states and Washington, D.C. The top five state concentrations are: * California (20.0%), * Michigan (14.6%), * Virginia (13.3%), * Florida (10.0%), and * Georgia (5.9%). All of the loans are fixed rate. * * * As reported in the Troubled Company Reporter on June 23, 2005, Standard & Poor's Ratings Services assigned its 'CCC' rating to Calpine Corp.'s (B-/Negative/--) planned $650 million contingent convertible notes due 2015. The proceeds from that convertible debt issue will be used to redeem in full its High Tides III preferred securities. The company will use the remaining net proceeds to repurchase a portion of the outstanding principal amount of its 8.5% senior unsecured notes due 2011. S&P said its rating outlook is negative on Calpine's $18 billion of total debt outstanding. As reported in the Troubled Company Reporter on May 16, 2005, Moody's Investors Service downgraded the debt ratings of Calpine Corporation (Calpine: Senior Implied to B3 from B2) and its subsidiaries, including Calpine Generating Company (CalGen: first priority credit facilities to B2 from B1). DELPHI CORP: Moody's Expects Impact on CDO's from Bankr. Filing --------------------------------------------------------------- New York, October 13, 2005 Moody's Investors Service expects there to be some ratings impact on collateralized debt obligations due to the bankruptcy filing of Delphi Corporation. Although Moody's said that it is too soon to determine which specific deals would be affected or the extent of any rating changes, it said that the impact will depend upon the actual exposures to Delphi and the ultimate recovery values. Moody's also said that synthetic structures were more likely to be affected than cash transactions. Moody's said it has identified 324 Moody's-rated CDO transactions with Delphi exposure, of which 177 are US CDO transactions and 147 are EMEA (Europe, Middle East, and Africa) CDO transactions. Of the Moody's-rated US CDOs, 71 are cash and 106 are synthetic. All of the Moody's-rated EMEA CDOs with Delphi are synthetic. Across the affected US cash CDOs, the proportion of the portfolios comprising Delphi obligations ranges from 0.1 to 3.7 percent. While for the synthetic CDOs the Delphi exposure ranges from less than 0.1 to 1.6 percent for US deals, and from less than 0.1 to 2.0 percent for EMEA deals. On August 5, 2005, Moody's Investors Service announced that it had downgraded Delphi Corporation's Long Term Corporate Family Rating from B2 to Caa1 and Long Term Senior Unsecured Rating from B3 to Ca. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represents the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. DELPHI CORP: Wants Court Injunction Against Utility Companies ------------------------------------------------------------- In the normal conduct of their business operations, Delphi Corporation and its debtor-affiliates obtain natural gas, water, electric, telephone, fuel, sewer, cable, telecommunications, Internet, paging, cellular phone, and other similar services provided by hundreds of utility companies and other providers. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, in Chicago, Illinois, asserts that uninterrupted utility services are essential to the Debtors' ongoing operations and therefore, to the success of the Debtors' reorganization. If the Utility Companies refuse or discontinue service, even for a brief period, the Debtors' business operations would be severely disrupted, Mr. Butler points out. By this motion, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to: (a) prohibit utilities from altering, refusing, or discontinuing services on account of prepetition invoices; and (b) establish procedures for determining requests for additional adequate assurance. Pursuant to Section 366 of the Bankruptcy Code, a utility may not alter, refuse, or discontinue service to, or discriminate against, a debtor solely on the basis of a bankruptcy filing or the non-payment of a prepetition debt. That utility may alter, refuse, or discontinue service within 20 days after the Petition Date, if the debtor does not furnish adequate assurance of payment for postpetition services. Mr. Butler tells the Court that the Debtors' history of consistent and regular payment to the Utility Companies, coupled with their demonstrated ability to pay future utility bills from ongoing operations and postpetition financing, constitute adequate assurance of payment for future utility services. The fact that the Debtors have sufficient assets to pay their postpetition costs of administration on a timely basis, and will continue to pay their utility bills as they become due, provide adequate assurance of future payment without the need to provide additional security deposits, bonds, or any other payments to the Utility Companies, Mr. Butler adds. The Debtors propose that any Utility Company seeking adequate assurance from them in the form of a deposit or other security be required to make that Request in writing, setting forth the location for which utility services were provided. Any Request for adequate assurance must set forth: -- a payment history for the most recent six months; -- a list of any deposits or other security currently held by the Utility Company making the Request on account of the Debtors; and -- a description of any prior material payment delinquency or irregularity. In the ordinary course of their business, the Debtors realize substantial cost savings by purchasing natural gas through the accounts of General Motors Corporation. Pursuant to a Gas Services Agreement between the Debtors and GM dated January 1, 1999, the Debtors agreed to reimburse GM for amounts paid for all natural gas supply, transportation, distribution and storage, including applicable taxes, on the Debtors' behalf. Thus, the Debtors propose that the Utility Companies that provide natural gas to the Debtors through GM accounts have additional adequate assurance through their agreements with GM. This matter will be considered at the Omnibus Hearing on Oct. 27, 2005. The Debtors will serve a copy of the Utility Order on each Utility Company. No Utility Company appeared at the First Day Hearing. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represents the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Wants Court to Okay Interim Compensation Procedures ---------------------------------------------------------------- Pursuant to Sections 105(a) and 331 of the Bankruptcy Code, Delphi Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to establish uniform procedures for paying and reimbursing professionals retained by Court order. The Debtors believe that their proposed Interim Compensation Procedures will enable all parties-in-interest to: -- monitor closely the costs of administration -- maintain a level cash flow; and -- implement efficient cash management procedures. Accordingly, the Debtors ask the Court to adopt these procedures: -- On or before the last day of the month following each month for which compensation is sought, each professional will serve a monthly statement on: (1) Delphi Corporation 5725 Delphi Drive Troy, Michigan 48098 Attn: General Counsel (2) Skadden Arps Slate Meagher & Flom LLP 333 West Wacker Drive, Suite 2100 Chicago, Illinois 60606 Attn: John Wm. Butler, Jr., Esq. (3) The Office of the United States Trustee for the Southern District of New York 33 Whitehall Street, Suite 2100 New York, New York 10044 Attn: Alicia M. Leonhard, Esq. (4) counsel for any official committee appointed in the Debtors' Chapter 11 cases (5) counsel for the agent under the Debtors' prepetition credit facility -- The monthly statement need not be filed with the Court and a courtesy copy need not be delivered to the presiding judge's chambers. The procedures are not intended to later the fee application requirements outlined in Sections 330 and 331, and the Chapter 11 Professionals are still required to serve and file interim and final applications for approval of fees and expenses in accordance with the relevant provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules. -- Each monthly fee statement must contain: (a) a list of the individuals who provided services during the statement period; (b) the professionals' billing rates; (c) the aggregate hours spent by each individual; (d) a reasonably detailed breakdown of the disbursements incurred; and (e) contemporaneously maintained time entries for each individual in increments of 1/10 of an hour. -- Each person receiving a statement will have at least 15 days after its receipt to review it. In the event that an objection to the compensation or reimbursement sought in a particular statement is filed, the objecting party will, by no later than the 45th day following the month for which compensation is sought, serve on the professional whose statement is objected to, and the Notice Parties, a written notice of objection setting forth the nature of the objection and the amount of fees or expenses at issue. -- At the expiration of the 45-day period, the Debtors will promptly pay 80% of the fees and 100% of the expenses identified in each monthly statement to which no objection has been served. Any disbursements from the holdback amount will be made in accordance with the recommendation of a "Fee Committee" or as the Court may determine. -- If the Debtors receive an objection to a particular fee statement, they will withhold payment of that portion of the fee statement to which the objection is directed and promptly pay the remainder of the fees and disbursements. -- Similarly, if the parties to an objection are able to resolve their dispute following the service of a "Notice of Objection to Fee Statement," and if the party whose statement was objected to serves on all of the Notice Parties a statement indicating that the objection is withdrawn and describing in detail the terms of the resolution, then the Debtors will promptly pay that portion of the fee statement which is no longer subject to an objection. -- All objections that are not resolved by the parties will be reserved and presented to the Court at the next interim or final fee application hearing to be heard by the Court. -- The service of an objection will not prejudice the objecting party's right to object to any fee application made to the Court in accordance with the Bankruptcy Code on any ground, whether raised in the objection or not. Furthermore, the decision by any party not to object to a fee statement will not be waiver of any kind or prejudice that party's right to object to any fee application subsequently made to the Court. -- Every 120 days, but not more than 150 days, each of the Chapter 11 Professionals will serve and file with the Court an application for interim or final approval and allowance of the compensation and reimbursement of expenses requested. -- Any professional who fails to file when due an application seeking approval of compensation and expenses previously paid: (a) will be ineligible to receive further monthly payments of fees or expenses until further Court order; and (b) may be required to disgorge any fees paid since that professional's retention or lat fee application, whichever is later. -- The pendency of an application or an order that payment of compensation or reimbursement of expenses was improper as to a particular statement will not disqualify a professional from the future payment of compensation or reimbursement of expenses, unless otherwise ordered by the Court. -- Neither the payment of, nor the failure to pay, in whole or in part, monthly compensation and reimbursement will have any effect on the Court's interim or final allowance of compensation and reimbursement of expenses of any Chapter 11 Professional. -- In the event of the administrative insolvency of the Debtors, the Official Committee of Unsecured Creditors or the U.S. Trustee may seek contribution of any unapplied retainers to fund pro rata payments to retained professionals whose claims are not paid through any carve- out amount that had been established by a financing order in the Debtors' Chapter 11 cases and the rights of all retained professionals holding the retainers will be fully reserved with respect to any application. Joint Fee Review Committee The Debtors also seek the Court's permission to establish a Joint Fee Review Committee in their cases comprised of: (1) the U.S. Trustee; (2) two representatives appointed by the Debtors; and (3) two representatives appointed by the Creditors' Committee. Each constituent group should advise the Debtors, on or prior to November 15, 2005, of the identity of and contact information for its appointee to the Fee Committee. The Fee Committee should then submit a protocol to the Court, on or before December 15, 2005, for its approval. The Debtors ask the Court to allow the Fee Committee to retain an outside fee examiner and separate legal counsel of its choosing to assist in thoroughly reviewing the voluminous fee and expenses requests. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represents the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Gets Order to Grant Priority Status to Vendor Claims ----------------------------------------------------------------- Delphi Corporation and its debtor-affiliates asked the U.S. Bankruptcy Court for the Southern District of New York, in short, to enter an order saying what the Bankruptcy Code says. Specifically, Delphi asked Judge Drain to enter an order confirming that their subcontractors, suppliers, and vendors have administrative expense priority claims for those undisputed obligations arising from prepetition purchase orders outstanding on the Petition Date relating to materials, supplies, goods, products, and related items that are or will be received and accepted by the Debtors on or subsequent to the Petition Date. Kayalyn A. Marafioti, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York, relates that in the ordinary operation of the Debtors' businesses, numerous Vendors provide them with tens of millions of dollars of Goods on a daily basis. As of the Petition Date, and in the ordinary course of their businesses, the Debtors have a substantial number of Outstanding Orders with the Vendors. Ms. Marafioti anticipates that as a result the Debtors' Chapter 11 filing, many of the Vendors may be concerned that delivery or shipment of Goods after the Petition Date pursuant to a prepetition purchase order will render them as general unsecured creditors of the Debtors' Chapter 11 estates. Thus, without confirmation that claims for Goods shipped pursuant to Outstanding Orders will be entitled to administrative expense priority status, Vendors may decline to ship, or may instruct their shippers not to deliver, Goods destined for the Debtors unless the Debtors issue substitute, postpetition purchase orders, which could impose a significant administrative burden as it could require the Debtors to issue thousands of new purchase orders. Because the Debtors rely so heavily on "sole-source" suppliers and "just in time" inventory, should one of these Vendors decide not to deliver Goods postpetition out of fear that it will not be paid, the Debtors may have to shut down one or more of their manufacturing plants, Ms. Marafioti says. This, in turn, could cause the shutdown of customer plants, resulting in millions of dollars of claims against the Debtors and their estates. By virtue of Section 503(b)(1)(A) of the Bankruptcy Code, which accord administrative status to all obligations arising in connection with the postpetition delivery of Goods, the Debtors assert their authority to make: (a) payment for Goods received postpetition regardless of the time when the orders for the Goods were placed; and (b) progress payments, in their discretion, to ensure the postpetition delivery of Goods, particularly where Vendors threaten to stop shipment of the Goods unless they receive postpetition progress payments. Ms. Marafioti tells the Court that if the Debtors' request were denied, they would be forced to expend substantial time and resources to: (i) convince the Vendors of the Debtors' authority to make certain payments; (ii) reissue the Outstanding Orders; or (iii) establish their right to retain the goods and products. "The attendant disruption to the continuous flow of goods, products, and supplies to the Debtors and their manufacturing facilities would likely result in the rapid deterioration of the Debtors' going concern value and, thus, undermine the Debtors' prospects for a successful reorganization," Ms. Marafioti says. * * * Judge Drain granted the Debtors' request in all respects and gave them the comfort order they asked for. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represents the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Comair Subsidiary to File for Chapter 11 Protection -------------------------------------------------------------- Delta Air Lines' regional airline subsidiary, Comair, disclosed plans to reduce costs by up to $70 million annually as the company makes changes to its business in support of Delta's ongoing transformation. The plan combines savings to be achieved through the Chapter 11 process with changes to Comair's fleet, network and employment costs to align the company's cost structure with the reduced revenues that will be realized in a restructured environment. "Delta's efforts to achieve an additional $3 billion in annual financial benefits by 2007 include amending Comair's Delta Connection agreement to reduce the amount of compensation provided for regional airline feed," said Fred Buttrell, Comair president. "As a result, Comair must adjust its costs to match the cost pressures of a restructured airline industry and to create a commercial solution that will ensure Comair emerges from the restructuring process ready to compete and thrive for the long term." Fleet Ownership & Cost Reduction Comair will use benefits available through the Chapter 11 process to eliminate non-competitive aircraft leases and mortgages to reduce ownership costs and allow the airline to have a more competitive platform. As part of this, Delta plans to remove up to 30 aircraft from Comair's schedule, with 11 aircraft leaving the schedule by December. The initial reductions are associated with Delta's recently announced right-sizing of the Cincinnati hub and predominantly affect 50-seat aircraft, although long-term cost reduction initiatives are targeted for 40- and 70-seat aircraft. Even with these changes, all destinations in the Delta network will continue to be served by Delta or the Delta Connection carriers with the December schedule. In addition to fleet costs, Comair also will continue to improve supply chain practices and streamline other processes to lower what it pays for goods and services. This includes seeking more favorable terms for equipment, supplies, facilities and non- employee overhead costs. Employment Cost Adjustments As a result of a smaller operation and fleet, Comair will reduce up to 1,000 positions throughout the company, including the reduction of approximately 350 positions recently announced as part of the right-sizing of service to and from Cincinnati. At the same time, Comair will adjust compensation and benefits to be more competitive with other regional airlines. Specifically, Comair plans to implement across-the-board pay reductions for officers and directors in the first pay period of November and for non-union employees during the first pay period in December. These reductions, which are designed to achieve at least $5.2 million in annual savings, include: * President: 15% reduction (for 25% total in 2005) * Officers: 10% reduction (for 20% total in 2005 on top of a pay freeze over the last five years) * Directors: 9% (in addition to a pay freeze over the last five years) * Supervisory/ Administrative: 7% for salaried; 4% for hourly (in addition to the pay freeze in two of the last three years) * Customer Service agents: 4% and a revised pay scale structure Union Talks Comair also is scheduled to begin discussions with union representatives to reduce the employment costs for: -- pilots of up to $17.3 million; -- flight attendant of up to $8.9 million; and -- mechanics of up to $1 million. As part of working agreement amendments signed earlier this year, pilots are under a pay freeze that was effective in June, and a new-hire scale is in effect for flight attendants. "We are extremely sensitive to the impact these changes have on our employees, but this is a Comair solution to a very tough problem that threatens the future of our company," Mr. Buttrell said. "We are looking at ways to minimize this impact on our people and to help ease this transition. Our goal is to handle as much of the transition as possible through voluntary means. "These changes, while difficult, are necessary in the current industry environment and are required if we are to emerge from our restructuring ready to compete and win," he continued. As a result of its restructuring, Comair plans to emerge from the Chapter 11 process positioned to compete for more 70-seat flying and to reduce its dependence on flying in the 50-seat market. "We believe that 70-seat flying and, potentially, larger gauge equipment will be in higher demand as the industry continues to restructure," Mr. Buttrell said. "During and after restructuring, Comair's ability to succeed will center on our ability to deliver customer service excellence and to build a cost-competitive platform that makes Comair competitive on all fleet types." Based at Cincinnati/Northern Kentucky International Airport, Comair has been a Delta Connection carrier since 1984. The airline operates 1,155 flights a day to 110 destinations in the United States, Canada and the Bahamas. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. DELTA MILLS: KPMG Raises Going Concern Doubt -------------------------------------------- KPMG LLP expressed substantial doubt about Delta Mills, Inc. and its subsidiaries' ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended July 2, 2005 and 2004. The auditing firm points to the Company's recurring losses and uncertainty over its ability to operate within the covenants established under a revolving credit facility with GMAC Commercial Finance LLC. Fiscal 2005 Results In its annual report the fiscal year ended July 2, 2005, submitted to the Securities and Exchange Commission, Delta Mills reports a $23,576,000 net loss in fiscal 2005 compared to a $5,466,000 net loss a year earlier. The Company attributes the increase in net loss in fiscal 2005 to gross profit deterioration and Impairment and restructuring expenses related to the Company's 2005 Realignment Plan. The Company's balance sheet showed $118,042,000 of assets at July 2, 2005, and liabilities totaling $97,174,000. GMAC Covenants Delta Mills has a revolving credit facility with GMAC with a term lasting until March 2007. Borrowings under this credit facility are limited to the lesser of: -- $38 million less the aggregate amount of undrawn outstanding letter of credit; or -- a "formula amount" equal to: a) 90% of eligible accounts receivable plus 50% of eligible inventories of Delta Mills, minus b) the sum of $7 million plus the aggregate amount of undrawn outstanding letters of credit plus certain reserves. The facility is secured by the Company's accounts receivable, inventories and capital stock. Delta Mills was not in compliance with the revolving credit facility's financial covenants at July 2, 2005. Specifically, the Company had been unable to comply with minimum Earnings before interest, taxes, depreciation and amortization benchmarks for the fourth quarter ended July 2, 2005. On August 9, 2005, the Company entered into a waiver and amendment to its revolving credit agreement with GMAC. The amendment includes: -- a waiver with respect to the Company's noncompliance with the minimum Earnings before interest, taxes, depreciation and amortization covenant for the fourth quarter ended July 2, 2005; -- a stipulation allowing for the payment of the deferred compensation participant account balances, due to termination of the program on Aug. 8, 2005; -- minimum EBITDA levels for each quarter of fiscal year 2006 and provides that it will be an event of default if the Company and GMAC do not enter into a written amendment setting EBITDA requirements for the remainder of the term of the credit facility. -- an increase in the applicable margin on Eurodollar loans from 3% to 4%. The GMAC amendment also provides for a $3.0 million supplement to the allowed asset-based availability. The supplement is available through February of 2006, and the Company will owe a $30,000 fee for any calendar month in which The Company uses, on more than three days, all or part of this supplemental amount. Delta Mills must also meet the August 2007 outstanding $30,941,000 principal balance of Delta Mills' 9.625% Senior Notes. The Company will need to refinance both of these obligations prior to March 2007 in order to be able to continue operations. Realignment Plan On Aug. 11, 2005, Delta Mills began the implementation of its comprehensive fiscal year 2006 business plan that will result in the Company's exit from the woven synthetics business. Management says the plant closures and discontinuance of the woven synthetics business are steps being taken in an effort to stop the dollar hemorrhage the Company has experienced on an ongoing basis. The plan provides for the closure of the Company's Pamplico weaving facility in Pamplico, South Carolina and its Delta #2 finishing facility located in Wallace, South Carolina. The Company expects to complete the closing of these facilities in the second quarter of fiscal year 2006 as production requirements dictate. Upon completion of the business plan, the Company's operations will consist of: a) the manufacture and sale of cotton and cotton/synthetic blend fabrics. b) the manufacture and sale of camouflage print fabrics primarily to apparel manufacturers that contract with the US Government. About Delta Mills, Inc. Delta Mills, Inc., a wholly owned subsidiary of Delta Woodside Industries, Inc. (OTCBB:DLWI) -- http://www.deltawoodside.com/-- produces a broad range of finished apparel fabrics in four manufacturing plants in South Carolina. Delta Mills sells and distributes its fabrics through a marketing office in New York City, with sales agents also operating from Atlanta, Chicago, Dallas, Los Angeles, San Francisco and Mexico. DOMTAR INC: S&P Retains BB Long-Term Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB+' long-term corporate credit rating on paper producer Domtar Inc. At the same time, Standard & Poor's revised the outlook on the company to negative from stable, reflecting heightened concerns regarding the negative effect of an appreciating Canadian dollar and other cost pressures on the company's cash flow generation and earnings. "The sharp appreciation of the Canadian dollar, declining demand for uncoated free sheet, and high energy costs will hurt Domtar's cash generation," said Standard & Poor's credit analyst Daniel Parker. Operating earnings are negatively affected by about C$15 million for every one cent appreciation of the Canadian dollar. The Canadian dollar (currently at about 85 U.S. cents) has appreciated by more than 4 U.S. cents since the end of the second quarter. In addition, uncoated freesheet demand has been weak, which has caused prices to fall. "The weak pricing and currency situation will depress cash flow generation and the company will be hard pressed to improve its credit metrics," Mr. Parker added. The ratings on Montreal, Que.-based Domtar reflect the company's exposure to cyclical paper prices, aggressive debt leverage, and a declining cost position due to a stronger Canadian dollar. These risks are partially offset by good fiber and energy integration, and some revenue diversity. With 50% of its production located in Canada and 75% of its sales to the U.S., Domtar's cost position is materially affected by the foreign exchange rate of the Canadian dollar. The relatively high Canadian dollar hurts export margins; the Canadian dollar averaged about 77 U.S. cents in 2004. In an effort to mitigate the high Canadian dollar, Domtar closed 150,000 tonnes of pulp and 85,000 tonnes of paper capacity in Canada to improve profitability by about C$100 million in 2005. Nevertheless, other cost pressures including fiber, freight, and energy will likely offset the benefit from the restructuring effort. The outlook is negative. The combination of a higher Canadian dollar, high energy costs, and weak uncoated free sheet prices will hurt Domtar's earnings and cash flow. If these factors do not improve in the company's favor in the next several months, and the prospect for debt reduction in 2006 remains marginal at best, the ratings will be lowered. DRUGMAX INC: Closes on Wells Fargo's New $65 Mil. Credit Facility ----------------------------------------------------------------- DrugMax, Inc. (Nasdaq: DMAX) closed on its previously disclosed $65 million Senior Secured Revolving Credit Facility with Wells Fargo Retail Finance, LLC. The new credit facility has a maturity of five years and replaces the Company's previous $65 million Senior Credit Facility. "We are pleased to have closed on this new facility with Wells Fargo and in doing so have successfully completed a $116 million refinancing and recapitalization of the Company," Jim Searson, Chief Financial Officer of DrugMax, said. "Drawing upon our significantly increased financial flexibility, we intend to actively seek opportunities to grow our specialty pharmacy and Worksite Pharmacy(SM) businesses in an effort to create long-term value for the Company and its shareholders." As previously disclosed on Oct. 4, 2005, DrugMax completed private placement investments of common stock and warrants totaling $51.1 million. About Wells Fargo Retail Finance Headquartered in Boston, Wells Fargo Retail Finance - http://www.wellsfargo.com/-- specializes in building relationships and delivering customized, flexible financial solutions to single and multi-channel retailers throughout North America. It is part of Wells Fargo & Company (NYSE: WFC), a diversified financial services company with $435 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 Million customers from more than 6,000 stores and the Internet across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only bank in the United States to receive the highest possible credit rating, "Aaa," from Moody's Investors Service. DrugMax, Inc. -- http://www.drugmax.com/-- is a specialty pharmacy and drug distribution provider formed by the merger on November 12, 2004 of DrugMax, Inc. and Familymeds Group, Inc. DrugMax works closely with doctors, patients, managed care providers, medical centers and employers to improve patient outcomes while delivering low cost and effective healthcare solutions. The Company is focused on building an integrated specialty drug distribution platform through its drug distribution and specialty pharmacy operations. DrugMax operates two drug distribution facilities, under the Valley Drug Company and Valley Drug South names, and 77 specialty pharmacies in 13 states under the Arrow Pharmacy & Nutrition Center and Familymeds Pharmacy brand names. * * * Going Concern Doubt In its Form 10-K filing, Deloitte & Touche LLP, the Company's independent registered certified public accounting firm, issued an unqualified audit report with an explanatory paragraph raising doubt about the Company's ability to continue as a going concern. EYE CARE: Moody's Cuts Liquidity Rating on Change of Control Fear ----------------------------------------------------------------- Moody's Investors Service affirmed all long-term ratings of Eye Care Centers of America and lowered the Speculative grade liquidity rating to SGL-4 from SGL-2. The rating outlook remains negative. Issuers rated SGL-4 possess weak liquidity. They rely on external sources of financing and the availability of that financing is, in Moody's opinion, highly uncertain. This rating is lowered: * Speculative grade liquidity rating to SGL-4 from SGL-2. These ratings are affirmed: * Corporate family rating (previously called the senior implied rating) at B2, * $190 million senior secured bank loan at B2, and the * $152 million 10.75% senior subordinated notes (2015) at Caa1. The lowered liquidity rating is prompted by the pending liquidation of the company's controlling shareholder Moulin International Holdings Ltd. and Moody's concern that the existing debt amortization schedule would accelerate if all rated debt were put to the company per change of control provisions in the bank agreement and bond indenture. The timing for this potential change of control is unknown. The negative rating outlook considers that long-term ratings would decline if the ownership issue is not satisfactorily resolved from the perspective of ECCA's creditors, the challenges in obtaining the anticipated gross margin improvements within a reasonable timeframe now that Moulin no longer will become an important supplier of eyeglass frames, and the high level of optical retailing competition. The inability to immediately repay the bank loan and senior subordinated notes, in the event that this becomes necessary, would cause all ratings to be lowered to default levels. Aside from satisfactory resolution of the ownership issue and cost- effective replacement of Moulin as an eyeglass frame supplier, the rating outlook could stabilize as lease adjusted leverage (funded debt plus 8 times rent to EBITDAR) approaches 6 times, fixed charge coverage exceeds 1.5 times, and the system profitably expands both from new store development and comparable store sales growth. Lease adjusted leverage is expected to equal around 6.5 times for 2005 and to modestly improve in 2006. ECCA's long-term ratings reflect the high financial leverage and weak fixed charge coverage, Moody's belief that competitive pressures will remain strong as larger competitors such as Wal-Mart (senior unsecured rating of Aa2) and Luxottica (unrated; owner of Lenscrafters and Pearle Vision) compete in various price/service niches, and ongoing challenges in replacing Moulin as the primary eyeglass frame supplier. The relatively low operating margins for a specialty retailer and the seasonal nature of optical retailing, in which the first quarter accounts for a disproportionate share of sales and cash flow, also constrain the ratings. The potential for Golden Gate Capital, the other major shareholder of ECCA, to put its preferred stock to Moulin (or presumably its successor) in March 2009 could eventually become a concern. However, the long-term ratings also recognize the potential economies of scale from the company's national position as the third-largest optical retailer, Moody's expectation that the company will use a portion of discretionary free cash flow to pay down debt, and the favorable demographic trends for vision correction as the U.S. population ages. Also benefiting the ratings are revenue diversity from operations in many geographies across the United States, the potential for increased traffic to the most important optical retailing chains as third-party vision care payment plans become more widespread, and the positive contribution from 96% of the company's stores. The B2 rating of the senior secured credit facility (comprised of a $25 million revolving credit facility and a $165 million Term Loan B) recognizes the senior position of this debt class in the company's capital structure and considers that this debt is secured by substantially all of the company's assets. As defined in the bank agreement, an event of default would occur if Moulin ceases to own a majority of ECCA. In a hypothetical default scenario, Moody's believes that the orderly liquidation value of easily monetizable assets such as accounts receivable and inventory would fall well below the existing bank loan commitment. Complete recovery would rely on the less easily predicted valuation for property, plant, and equipment and intangible assets. Moody's expects that the Revolving Credit Facility will mostly be used to bridge temporary cash flow timing differences. As of July 2, 2005, all of the revolving credit facility was available except for $3 million reserved for Letters of Credit. The Caa1 rating on the senior subordinated notes considers the guarantees of the company's non-optometric practice operating subsidiaries, as well as the contractual subordination to significant amounts of more senior obligations. As defined in the bond indenture, noteholders would have the option to put the notes back to ECCA if a change of control was to occur, including if Moulin, Golden Gate, and management collectively cease to own a majority of ECCA. More senior obligations include the bank loan, $2 million of capital leases, and $20 million of trade accounts payable. In a hypothetical default scenario, Moody's believes that recovery for this debt class would completely rely on residual enterprise value. Pro-forma for the capital structure implemented with the March 2005 acquisition by Moulin, lease adjusted leverage equaled 6.6 times (based on gross rent without netting out sub-rental income) and fixed charge coverage was about 1.3 times for the twelve months ending July 2, 2005. Over the past several years, revenue has grown from a combination of healthy comparable store sales increases (up 3.8% in the first half of 2005) and new store openings. With Moulin as an important eyeglass frame supplier, ECCA's gross margin had been expected to improve by about 150 basis points over the next several years. Moody's had also anticipated that new store development would increase under Moulin's ownership and that internally generated cash flow would finance all capital investment. However, these long-term strategies are uncertain in Moody's view. Eye Care Centers of America, Inc., with headquarters in San Antonio, Texas, operates 378 optical retailing stores under EyeMasters and other regional trade names. Sales for the twelve months ending July 2, 2005 were approximately $407 million. FIDELITY NATIONAL: Fitch Holds BB- Rating on Subsidiary ------------------------------------------------------- Fitch Ratings assigned a 'BBB-' senior debt rating to the $300 million bank line of credit for Fidelity National Title Group, Inc. In addition, Fitch affirmed the 'BBB-' senior debt rating of Fidelity National Financial, Inc., as the company replaced its $700 million bank line with a $250 million facility. All ratings have a Stable Rating Outlook. FNT expects to draw $150 million of the $300 million bank debt for a dividend to FNF. FNF has previously announced that FNT will issue $500 million in intercompany notes that would effectively push down FNF's outstanding debt to FNT, and proforma debt-to- total capital as of June 30, 2005 would be 18% and earnings' coverage of interest expense would be approximately 18 times (x). Going forward, Fitch believes ratings could be influenced by acquisitions at FNF and increased financial leverage. The title insurance operations represent the largest business for FNF at approximately 70% of total revenue. Title operations have national scope and industry leading market share at approximately 30% at year-end 2004. The company also has leading market share in the four states that produce the highest title insurance revenue, California, Florida, Texas, and New York. FNT has historically shown better than industry average profitability, which is both a product of strong market share and attention to expense control. The company's expenses as a percentage of premiums are the best among national title insurers. FNF's other subsidiary, Fidelity Information Services, Inc., provides technology solutions, processing services, and information services to the financial services and real estate industries. Favorable considerations in the FIS rating included the company's leading market share in core processing systems to large banks, good retention over a diversified base of customers, and expectations for strong cash flow generation. These ratings are affirmed by Fitch with a Stable Outlook: Fidelity National Financial Inc. -- Long-term issuer at 'BBB-'. Fitch assigns these ratings with a Stable Outlook: Fidelity National Financial Inc. -- $250 million senior bank facility 'BBB-'. Fidelity National Title Group, Inc. -- Long-term issuer 'BBB-'; -- $300 million senior bank facility 'BBB-'. These are rated by Fitch with a Stable Outlook: Fidelity National Information Services, Inc. -- Senior Secured Credit Facility No Action 'BB-'. Fidelity National Title Ins. Co. Ticor Title Ins. Co. of FL Alamo Title Insurance Co. of TX Nations Title Insurance of NY Chicago Title Ins. Co. Chicago Title Ins. Co. of OR Security Union Title Ins. Co. Ticor Title Ins. Co. National Title Ins. Co. of NY -- Insurer financial strength 'A-'. FLI LEARNING: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: FLI Learning Systems, Inc. aka Top Driver, Inc. aka Drive One, Inc. 416 Route 518 Blawenburg, New Jersey 08504 Bankruptcy Case No.: 05-13985 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Top Driver-FLI, Inc. 05-13993 Type of Business: FLI Learning Systems specializes in the production of video, self-instruction and online driver safety programs. FLI's Coaching Series(R) features programs for drivers and operators of lift trucks, cars, vans, buses, trucks, and public works, police, fire and ambulance vehicles. It also includes single-topic videos on specific driving issues such as backing, parking, visibility, road rage, carjacking and winter driving. See http://www.flilearning.com/ Chapter 11 Petition Date: October 14, 2005 Court: District of Delaware Judge: Mary F. Walrath Debtors' Counsel: Mark J. Packel, Esq. Blank Rome LLP 1201 Market Street, Suite 800 Wilmington, DE 19801 Tel: (302) 425-6429 Fax: (302) 425-6464 Estimated Assets Estimated Debts ---------------- --------------- FLI Learning Systems, Inc. Less than $50,000 $1 Million to $10 Million Top Driver-FLI, Inc. $500,000 to $1 Million to $1 Million $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kenneth Underwood Note Payable $2,541,415 1117 Ponte Vedra Boulevard Ponte Vedra Beach, FL 32082 Top Drive Acquisition, LLC Note Payable $443,212 c/o Legato Partners, LLC 227 West Monroe, 42nd Floor Chicago, IL 60606 Michael McGinn Note Payable $154,257 P.O. Box 423 Medinah, IL 60157 Jeffrey McGinn Note Payable $154,257 252 Nordic Road Bloomingdale, IL 60108 Diane McFadden Note Payable $150,770 2724-C Humboldt Avenue S Minneapolis, MN 55408-1029 Sprint Yellow Pages Old Trade Payable $64,319 AT&T Old Trade Payable $53,356 John R. Square, Inc. Old Lease Liability $46,734 Paul Hastings, Janofsky & Walker Legal Fees $46,578 Top Driver Acquisition, LLC $44,583 Verizon Directories Old Trade Payable $43,000 Akin, Gump, Strauss Legal Fees $33,312 Hauer & Feld, LLP Yellow Book Novice Yellow Pages $31,044 Drummer Acquisition, LLC Note Payable $25,981 Evansville Associates, LP Old Lease Liability $25,000 AT&T Novice Driving $21,318 School - Phone Bill JTK Enterprises, Inc. Old Lease Liability $15,250 MCI TDA Phone Bill $14,858 City of Cincinnati Taxes $14,009 Staples Old Trade Payable $12,174 FOAMEX INT'L: U.S. Trustee Appoints 7-Member Creditors Committee ---------------------------------------------------------------- Kelly Beaudin Stapleton, United States Trustee for Region 3, has appointed seven members to the Official Committee of Unsecured Creditors in Foamex International Inc., and its debtor-affiliates' Chapter 11 cases: 1. Stuart Kratter Bank of New York 101 Barclay Street, 8W New York, New York Tel No: (212) 815-5466 Fax No: (212) 815-5131 2. Dana Cann Financial Analyst Pension Benefit Guaranty Corporation 1200 K. Street, NW-Ste 340 Washington, D.C. 20005-4026 Tel No: (202) 326-4020 Fax No: (202) 326-4112 3. Andy Mitchell Cover Wealth Management 740 State Street, Ste. 202 Santa Barbara, California 93101 Tel No: (805) 680-8802 Fax No: (805) 435-1642 4. Mark E. Schwarz Newcastle Partners, LP 300 Crescent Court, Ste. 1110 Dallas, Texas 75201 Tel No: (214) 661-7474 Fax No: (214) 661-7475 5. Donald Hamilton Lyondell Chemical Corporation 1221 McKinney Street One Houston Center, Ste. 700 Houston, Texas 77010 Tel No: (713) 309-4980 Fax No: (713) 652-4542 6. Candida Wolfram Shell Chemical LP 910 Louisiana Street, 1454B Houston, Texas 77002 Tel No: (713) 241-4184 Fax No: (713) 241-0372 7. Donovan Williams 439 Fairview Avenue Coventry, Rhode Island 02816 Tel No: (401) 615-2861 Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945- 7000) FOAMEX INT'L: Wants Court to Fix December 5 as Claims Bar Date -------------------------------------------------------------- In order for Foamex International Inc. and its debtor-affiliates to complete their restructuring and make distributions under any confirmed plan of reorganization, they must obtain complete and accurate information regarding the nature, validity and amount of all claims that will be asserted in their Chapter 11 cases. Pursuant to Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to: (a) establish deadlines for the filing of claims; (b) approve claims filing guidelines; and (c) approve the form and manner of the notice of Bar Dates. Bankruptcy Rule 3003(c)(3) requires that the Court fix a time within which proofs of claim must be filed. The Debtors anticipate to serve, through their proposed claims agent, Bankruptcy Services LLC, the Bar Date Notice and proof of claim forms on all entities holding potential prepetition claims within three days after the Court establishes the Claim Bar Dates. General Bar Date The Debtors ask the Court to establish December 5, 2005, as the last day by which all entities holding prepetition claims, other than governmental units, must file proofs of claim. Government Bar Date Section 502(b)(9) of the Bankruptcy Code provides that a government claim will be timely filed if it is filed before 180 days after Petition Date. Hence, the Debtors ask the Court to establish March 20, 2006, as the date when all governmental units may file claims. Rejection Bar Date The Debtors anticipate that some entities may assert claims in connection with the Debtors' rejection of executory contracts and unexpired leases pursuant to Section 365 of the Bankruptcy Code. The Debtors propose that any person or entity that asserts a Rejection Damages Claim must file a claim on or before: -- the General Bar Date; -- 30 days after the Rejection Order; or -- any other date as the Court may fix. Persons and Entities Not Required to File Claims These persons or entities need not file proofs of claim: (a) Any entity that already properly filed a proof of claim against the Debtors; (b) Any entity: -- whose claims is not described as "disputed", "contingent" or "unliquidated" in the Debtors' Schedules of Liabilities; and -- who does not dispute the amount or classification of its claim. (c) Professionals retained by the Debtors or the Committee who assert administrative claims for payments of fees and expenses; (d) any entity that asserts an administrative expense claim against the Debtors pursuant to Section 503(b); (e) current officers and directors of the Debtors who assert claims for indemnification and contribution as a result of the officers' or directors' services to the Debtors; (f) any Debtor asserting a claim against another Debtor; (g) any direct or indirect non-debtor subsidiary of a Debtor asserting a claim against a Debtor; and (h) any entity whose claim against the Debtors has been allowed by a Court order entered on or before the Bar Date. Any entity holding an interest in the Debtors based exclusively on: -- the ownership of common or preferred stock in a corporation; -- a general or limited partner interest in a limited partnership; -- a membership interest in a limited liability company or warrants or rights to purchase, sell or subscribe to a security or interest, need not file a proof of interest on or before the General Bar Date. However, Interest Holders that wish to assert claims against the Debtors that arise out of the ownership of an Interest must file proof of claim on or before the General Bar Date. Any entity asserting claims against more than one Debtor must file a separate proof of claim to each Debtor and identify on each proof of claim form the particular Debtor against which the claim is asserted. Bar Date Notice Package The Debtors propose to serve on all known entities holding potential prepetition claims with: (a) a notice of the Bar Dates; (b) a proof of claim form substantially in the form of Official Form No. 10. Proofs of claim are to be submitted in person or by courier service, hand delivery or mail. Proofs of claim submitted by facsimile or e-mail will not be accepted. Establishing December 5, 2005, as the General Bar Date in the Debtors' Chapter 11 cases will provide potential claimants with an adequate amount of time after the mailing of the Bar Date Notice to review the Debtors' Schedules and compare them with their own books and records, Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, says. Donovan Williams Objects Donovan Williams, a victim of a February 2003 fire in a club in Rhode Island and a member of the Official Committee of Unsecured Creditors, objects to the application of the General Bar Date to any and all claims arising from the Station fire. The Station fire started when pyrotechnics ignited foam insulation in the club's ceiling. The Station fire resulted in various litigations, some of which name three of the Debtors as defendants. Mr. Williams points out that the Debtors have not yet filed their Schedules and Statement of Financial Affairs. The Debtors are proposing a procedure in which a bar date will be established and a bar date notice will be sent before the filing of the Debtors' schedules. As a result, there is a serious potential for confusion and mischief. Mr. Williams ask the Court to delay the establishment of the General Bar Date until a reasonable time after the Debtors file their Schedules. The establishment of a bar date in connection with the claims from the Station fire is premature and unnecessary at this time, Mr. Williams argues. None of the tort cases from the Station fire have proceeded to trial so most proofs of claim will assert contingent or unliquidated claims. Granting the Court will approve the Motion, Mr. Williams ask the Court to allow for the submission of consolidated proofs of claim on behalf of the claimants from the Station fire. In addition, the consolidated proofs of claim should be executed by an agent for the claimants. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945- 7000) FOAMEX INT'L: Obtains Injunction Against Utility Companies ---------------------------------------------------------- Section 366(a) of the Bankruptcy Code prohibits a utility company from altering, refusing or discontinuing services to a debtor for the first 20 days of a bankruptcy case. Upon expiration of the stay period, however, Section 366(b) provides that a utility company may -- but need not -- terminate services if a debtor has not furnished adequate assurance of payment. Uninterrupted utility services are critical to Foamex International Inc., and its debtor-affiliates' ability to sustain their operations during the pendency of their Chapter 11 cases. In the normal conduct of their business, the Debtors use, among other things, gas, electricity, telephone and other services provided by the Utility Companies. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, asserts that if Utility Companies are permitted to terminate Utility Services on the 21st day after the Petition Date, substantial disruption to the Debtors' operations will occur and the Debtors' business will be irreparably harmed. To avert a potential disaster, the Debtors would then be forced to pay whatever amounts are demanded by the Utility Companies to avoid the cessation of essential Utility Services and, ultimately, the demise of their business, Ms. Morgan adds. Ms. Morgan contends that the Utility Companies are adequately assured of payment for all future services because of: -- the Debtors' satisfactory payment history with respect to prepetition utility bills; -- the Debtors' ability to pay future utility bills, as evidenced by the budget accompanying the Debtors' request for DIP Financing; and -- the administrative expense priority afforded for postpetition Utility Services under Sections 503(b) and 507(a)(1) of the Bankruptcy Code. Consequently, the Debtors ask Judge Walsh to preclude Utility Companies from altering, refusing or discontinuing services on account of unpaid prepetition invoices or prepetition claims on the basis of the Debtors' bankruptcy filing or any outstanding prepetition invoice. The Debtors also propose a procedure for Utility Companies to request adequate assurance of future payment. The Debtors seek authority, but not the obligation, to pay prepetition amounts owing to a Utility Company. If a Utility Company accepts the payment, the Utility Company will be deemed adequately assured of future payment and to have waived any right to seek additional adequate assurance in the form of a deposit or otherwise. If a Utility Company timely and properly requests additional adequate assurance that the Debtors believe is unreasonable, and the Debtors are unable to resolve the request consensually with the Utility Company, then on the request of the Utility Company, the Debtors will file a motion for determination of adequate assurance of payment and set the motion for hearing at the next regularly scheduled omnibus hearing occurring more than 20 days after date of the request, unless another hearing date is agreed to by the parties or ordered by the U.S. Bankruptcy Court for the District of Delaware. Any Utility Company having made a request for additional adequate assurance of payment will be deemed to have adequate assurance of payment until the Court enters a final order in connection with the request finding that the Utility Company is adequately assured of future payment. Any Utility Company, which does not timely and in writing request additional adequate assurance of payment, will be deemed adequately assured of payment under Section 366(b). Constellation Responds Constellation NewEnergy, Inc., sells electricity to Foamex International Inc., pursuant to a Master Retail Energy Supply Agreement. The Supply Agreement will expire in January 2006. David L. Finger, Esq., at Finger & Slanina LLC, in Wilmington, Delaware, informs the Court that the Supply Agreement is a forward contract, and Constellation is a forward contract merchant. The Supply Agreement provides that the commencement of a bankruptcy proceeding or Foamex's insolvency is an "event of default" permitting Constellation to terminate the Supply Agreement. Mr. Finger notes that pursuant to Section 556 of the Bankruptcy Code, the contractual right of a forward contract merchant to cause the liquidation of a forward contract because of a condition of the kind specified in Section 365(e)(1), will not be stayed, avoided or otherwise limited by the Bankruptcy Code or by order of the Court. Accordingly, Mr. Finger asserts, Constellation's contractual right to terminate the Supply Agreement is not stayed, avoided or otherwise limited by any order of the Court. Constellation intends to continue to sell electricity to Foamex until the Supply Agreement expires in January 2006 as long as Foamex continues to perform its obligations under the Supply Agreement, Mr. Finger says. Constellation does not oppose the Debtors' request. It, however, wants to clarify that it is not waiving its rights as a forward contract merchant under Section 566. * * * The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware issued a bridge order prohibiting the Utility Companies from altering, refusing or discontinuing services on account of unpaid prepetition invoices or prepetition claims on the basis of the Debtors' bankruptcy filing or any outstanding prepetition invoice. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945- 7000) GARDENBURGER INC: Files for Chapter 11 Protection in C.D. Calif. ---------------------------------------------------------------- Gardenburger, Inc. (OTCBB:GBUR) filed for chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division. The Company says it will shortly file a proposed Plan of Reorganization and related Disclosure Statement with the Court. Gardenburger will continue to operate its business in the ordinary course as debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with applicable provisions of the United States Bankruptcy Code pending Bankruptcy Court approval of the Plan. The Proposed Plan The proposed Plan, which reflects the outcome of negotiations among Gardenburger and its primary secured and unsecured debt holders, will provide for the reorganization of Gardenburger and includes six treatment of claims and interests: (1) Payment to the holders of general unsecured claims (including all trade and vendor claims) against Gardenburger in the full amount of their allowed claims, in three installments: (i) six months (25% to be paid); (ii) twelve months (25% to be paid); and (iii) eighteen months (50% to be paid) following the effective date of the Plan; (2) Cancellation of the existing equity interests (preferred stock and common stock) in Gardenburger and conversion of Gardenburger from a public company to a private company; (3) Elimination of Gardenburger's debt owing pursuant to an unsecured note, asserted in an amount in excess of $27 million, currently held by Annex Holdings I LP, and issuance of new equity interests in Gardenburger to the Convertible Note holder in full satisfaction of its claim; (4) Payment in full to the holders of allowed administrative expense claims and allowed priority claims on the effective date of the Plan; (5) Full compliance with Gardenburger's pre-confirmation obligations to Gardenburger's secured lenders and conversion of Gardenburger's post-petition credit facilities to exit financing to fund Gardenburger's business operations and the Plan obligations following the effective date of the Plan; and (6) Gardenburger's ongoing operation of its business on a viable basis following confirmation of the Plan. Annex is Gardenburger's largest unsecured creditor. The Company negotiated the Plan with Annex, and Annex supports the Plan. Further, the Company has financing in place, subject to the approval of the Bankruptcy Court, to fund its ongoing operations and working capital needs during the Chapter 11 Case and, upon approval of the Plan, to meet its obligations under the Plan and its working capital needs following the effective date of the Plan. Headquartered in Los Angeles, California, Gardenburger, Inc. -- http://www.gardenburger.com/-- makes original veggie burgers and innovates in meatless, 100% natural, low-fat food products. The company distributes its meatless products to more than 35,000 foodservice outlets throughout the United States and Canada. Retail customers include more than 30,000 grocery, natural food and club stores. The company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. C.D. Calif. Case No. 05-19539). David S. Kupetz, Esq., at SulmeyerKupetz represent the Debtor in its restructuring efforts. As of June 30, 2005, the Company reports $20.2 million in total assets and $40.2 million in total liabilities. GARDENBURGER INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Gardenburger Inc d/b/a Gardenburger Authentic Foods Company 15615 Alton Parkway, Suite 350 Irvine, California 92618 Bankruptcy Case No.: 05-19539 Type of Business: The Debtor makes original veggie burgers and innovates in meatless, 100% natural, low-fat food products. See http://www.gardenburger.com/ Chapter 11 Petition Date: October 14, 2005 Court: Central District of California (Santa Ana) Judge: James N. Barr Debtor's Counsel: David S. Kupezt, Esq. SulmeyerKupetz 300 South Hope Street, 35th Floor Los Angeles, California 90071 Tel: (213) 626-2311 Financial Condition as of June 30, 2005: Total Assets: $20,244,000 Total Debts: $40,191,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Annex Holdings I, LP Convertible $28,000,000 1301 Avenue of the Americas noteholder New York, New York 10019 Millard Transportation Trade debt $89,265 Services P.O. Box 803848 Kansas City, MO 64180-3848 Americold Logistics Unit 94 Trade debt $85,440 P.O. Box 4500 Unit 94 Portland, OR 97208-4500 Utah Paper Box Company Trade debt $75,768 Strategic Staffing Trade debt $73,607 Americold Logistics Trade debt $53,096 Unit 2017 Aerotek Commercial Staffing Trade debt $51,171 Inc. International Flavors & Trade debt $44,612 Packaging Corp. of America Trade debt $37,593 Millard Refrigeration Trade debt $36,713 Givuadan Flavors Corporation Trade debt $36,703 Churny Company Trade debt $36,250 Summit Packaging, Inc. Trade debt $35,610 J Goodman & Associates Trade debt $35,169 Sensient Flavors, Inc. Trade debt $30,299 US Foodservice WR Trade debt $30,221 Calkins & Burke Trade debt $26,928 Ventura Foods Trade debt $26,350 Western Foodservice Trade debt $24,475 Marketing Advantage Pezrow Foxboro Trade debt $22,775 GOODYEAR TIRE: Exchanging $400MM Senior Notes for Registered Bonds ------------------------------------------------------------------ Goodyear Tire & Rubber Company is offering to exchange $400,000,000 aggregate principal amount of registered 9.00% Senior Notes due 2015 for $400,000,000 aggregate principal amount of unregistered 9.00% Senior Notes due 2015. The terms of the exchange notes will be identical in all material respects to the terms of the original notes except that the exchange notes will be registered under the Securities Act of 1933, as amended, and, therefore, the transfer restrictions applicable to the original notes will not be applicable to the exchange notes. Terms of the Notes The Notes will be the Company's unsecured senior obligations of the Company. The Company will be senior in right of payment to all of the Company's future subordinated obligations of the Company will be guaranteed by each Subsidiary Guarantor. The Notes mature on July 1, 2015. Each Note will bear interest at a rate of 9.00% per annum beginning on June 23, 2005, or from the most recent date to which interest has been paid or provided for. The Company will pay interest semiannually to Holders of record at the close of business on the December 15 or June 15 immediately preceding the interest payment date on January 1 and July 1 of each year. The Company will begin paying interest to Holders on January 1, 2006. A full-text copy of the Prospectus is available for free at http://ResearchArchives.com/t/s?253 The Goodyear Tire & Rubber Company (NYSE: GT) is the world's largest tire company. Headquartered in Akron, the company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world. Goodyear employs more than 80,000 people worldwide. * * * As reported in the Troubled Company Reporter on June 23, 2005, Fitch Ratings has assigned an indicative rating of 'CCC+' to Goodyear Tire & Rubber Company's (GT) planned $400 million issue of senior unsecured notes. GT intends to issue $400 million of 10-year notes under Rule 144A. Proceeds will be used to repay $200 million outstanding under the company's first lien revolving credit facility and to replace $190 million of cash balances that were used to pay $516 million of 6.375% Euro notes that matured June 6, 2005. The Rating Outlook is Stable. The rating reflects the substantial amount of senior secured debt relative to the planned notes. It also incorporates Fitch's concerns about GT's high leverage, high-cost structure, and weak profitability and cash flow. In addition, GT's pension plans, which were underfunded by $3.1 billion at the end of 2004, are likely to require substantially higher contributions over the near term. GRAND TRAVERSE: S&P Puts BB- Rating on Proposed $30.4 Bond Issue ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB-' issuer credit rating to the Peshawbestown, Mich.-based Grand Traverse Band of Ottawa and Chippewa Indians. At the same time, Standard & Poor's assigned its 'BB-' rating to the proposed $30.4 million series 2005 limited obligation tribal purpose bonds due 2020. Proceeds from the proposed bonds will refinance the existing letter of credit-backed series 2003 variable-rate bonds of the Grand Traverse Band Economic Development Corp. Ratings on the series 2003 bonds will be withdrawn following the close of the proposed transaction. The outlook is stable. "The ratings reflect GTB's relatively narrow gaming operations, a competitive marketplace that is facing additional intermediate- term gaming supply, and financial flexibility in the business operation that is restricted by a material percentage of cash flow distributed to GTB," said Standard & Poor's credit analyst Emile Courtney. "These factors are somewhat tempered by stable cash flow generation and expectations for low leverage levels, despite potential expansion plans." GTB owns and operates two Native American gaming operations, Turtle Creek Casino and Leelanau Sands Casino, and the Grand Traverse Resort & Spa, near Traverse City in Michigan's northwestern Lower Peninsula. Turtle Creek, nearest Traverse City, is the larger gaming facility, with about 1,200 slot machines and 25 table games, representing about 65% of GTB's total business revenues. The Resort & Spa, located about four miles from Turtle Creek, represents about 20% of GTB's total business revenues and contains more than 400 rooms, 236 condominiums, three golf courses, and various other amenities. Leelanau Sands, representing about 12% of GTB's total business revenues, is about 30 miles north of Turtle Creek. Although GTB's gaming operations and the Resort & Spa benefit from the Traverse City area's outdoor-related tourism, revenues are highly seasonal, occurring largely during warmer months, and the gaming operations attract a majority of local patrons. Income demographics in the Traverse City area are favorable, but competition is increasing. One of GTB's competitors in the region, Little River Casino, has almost completed its expansion and another competitor, Victories Casino, is pursuing a major expansion. Population demographics and win per unit statistics suggest the marketplace may be challenged to absorb a moderate amount of additional supply of slot machines. While asset quality at Turtle Creek is on par, or currently compares favorably, with other facilities in the market, the expansion at Victories Casino could drive the need for additional investment by GTB. GTB's consolidated leverage is low and EBITDA margins compare favorably with other Native American gaming operations. Leverage is expected to remain good for the current ratings, notwithstanding the possibility that GTB may issue debt to fund expansion projects over the next several years. HCA INC: Releases Preliminary Third Quarter Results --------------------------------------------------- HCA Inc. (NYSE: HCA) expects its earnings for the third quarter ended Sept. 30, 2005, to range from approximately $0.61 to $0.63 per diluted share. The quarterly results include an estimated adverse financial impact from hurricanes Katrina and Rita of approximately $33 million pretax. Third quarter results are also expected to include a tax benefit of approximately $22 million from the repatriation of foreign earnings. "HCA management and our Board have undertaken a review of the Company's strategic plan, its use of cash flows from operations for, among other things, capital expenditures, acquisitions, debt repayment, dividends and share repurchases, and a variety of alternatives for using the Company's available financial resources. Based upon its review, the Board determined that increasing the Company's financial leverage to fund the tender offer is a prudent use of our financial resources and an effective means of providing value to our shareholders," stated Jack O. Bovender, Jr., HCA Chairman and CEO. Preliminary Third Quarter Results While the Company expects to report actual results for its third quarter on Oct. 25, 2005, preliminary results indicate that net income per diluted share will range from approximately $0.61 to $0.63 for the quarter ended September 30, 2005, compared to $0.47 per diluted share for the prior year's third quarter. Results for the third quarter of 2004 included an adverse financial impact to certain HCA Florida hospitals from four hurricanes of $0.05 per diluted share, and an asset impairment charge of $0.02 per diluted share. During the third quarter of 2005, certain HCA hospitals in Louisiana, Mississippi and Texas encountered property damage and business disruption associated with hurricanes Katrina and Rita. The Company has incurred costs of approximately $33 million pretax, net of estimated insurance recoveries, as a result of the effects of hurricane- related power outages, flooding and wind damage and physician and patient dislocation and evacuation costs, along with contributions to the HCA Hope Fund ($4 million) for employees in crisis and the American Red Cross ($1 million). Also during the third quarter of 2005, the HCA Board of Directors authorized the repatriation of approximately $190 million of accumulated earnings from HCA's international subsidiaries. A provision of the American Jobs Creation Act allows a one-year reduced tax rate of 5.25 percent on repatriated foreign earnings. HCA expects to report an estimated tax benefit of approximately $22 million in the third quarter of 2005, related to the expected repatriation. For the third quarter of 2005, the Company expects to report revenues of approximately $6 billion. Same facility revenues increased approximately 4.6 percent in the third quarter. Preliminary results indicate same facility revenue per equivalent admission for the third quarter increased approximately 3.4 percent, compared to the prior year's third quarter. Adjusting for discounts provided to uninsured patients of $238 million, same facility revenues increased 8.8 percent and same facility revenue per equivalent admission increased 7.6 percent in the third quarter of 2005 compared to the same period of 2004. Same facility admissions decreased approximately 0.7 percent and same facility equivalent admissions increased approximately 1.1 percent in the third quarter of 2005, as compared to the third quarter of 2004. Admission and equivalent admission levels at certain of the Company's hospitals were impacted by hurricanes in the third quarters of both 2004 and 2005, making it somewhat difficult to compare volumes from year to year. For the nine months ended Sept. 30, 2005, same facility admissions were flat and equivalent admissions increased 1.5 percent. The Company's provision for doubtful accounts for the third quarter of 2005 is expected to approximate $618 million or 10.3 percent of revenues, compared to $688 million or 11.9 percent of revenues in the prior year's third quarter. On a same facility basis, uninsured admissions in the third quarter of 2005 are expected to reflect an increase of approximately 15 percent and emergency room visits an increase of approximately 14 percent over the third quarter of 2004. Uninsured admissions represented 5.6 percent of total same facility admissions in the third quarter of 2005 compared to 5.0 percent in the third quarter of 2004. Same facility uninsured emergency room visits represented 21.5 percent of total same facility emergency room visits in the quarter compared to 19.7 percent in the same period last year. Revised 2005 Earnings Guidance The Company believes that its full year 2005 reported earnings will range from $3.10 to $3.20 per diluted share. This range and the "per diluted share" amount of the following items that are included in the Company's 2005 earnings guidance do not include any potential impact related to the completion of the announced $2.5 billion share repurchase: -- Favorable tax settlement related to the Company's divestiture of certain non-core business units in 1998 and 2001 of $48 million, or $0.11 per diluted share (recorded in the second quarter). -- Recognition of a previously deferred gain on the Company's sale of certain medical office buildings of $29 million pretax, or $0.04 per diluted share (recorded in the second quarter). -- Reduction in the Company's estimated professional liability insurance reserves of $36 million pretax, or $0.05 per diluted share (recorded in the second quarter). -- Additional depreciation expense of $30 million pretax, or $0.04 per diluted share to correct accumulated depreciation and assure a consistent application of the Company's accounting policy relative to certain short-lived medical equipment (recorded in the second quarter). -- Adverse financial impact of $33 million pretax, or $0.05 per diluted share, due to hurricanes Katrina and Rita (recorded in the third quarter). -- Tax benefit of $22 million, or $0.05 per diluted share, from the expected repatriation of foreign earnings (recorded in the third quarter). -- Anticipated gain on the sale of 5 hospitals to Capella Healthcare of approximately $55 million pretax, or $0.05 per diluted share (anticipated in the fourth quarter). -- Anticipated actuarial reduction in the Company's professional liability insurance reserves of approximately $20 million pretax, or $0.03 per diluted share (anticipated in the fourth quarter). There can be no assurances that the sale of the 5 hospitals will be completed by Dec. 31, 2005, nor that the anticipated reduction in professional liability insurance reserves will be realized in the fourth quarter of 2005. HCA expects to report final results for the third quarter on Oct. 25, 2005, before the opening of trading on the New York Stock Exchange. HCA Inc. is the nation's leading provider of healthcare services, composed of locally managed facilities that include approximately 190 hospitals and 91 outpatient surgery centers in 23 states, England and Switzerland. At its founding in 1968, Nashville-based HCA was one of the nation's first hospital companies. * * * As reported in the Troubled Company Reporter on May 11, 2005, Moody's Investors Service upgraded HCA Inc.'s speculative grade liquidity rating to an SGL-1 from SGL-2. The rating upgrade reflects the company's excellent liquidity position with strong cash flows, an undrawn $1.75 billion, five year revolver, and improved cushion in its financial covenants following the repayment of $700 million in debt during the first quarter of 2005. HCA benefits from having a largely unencumbered asset base, and Moody's notes that HCA recently announced plans to divest ten hospitals that are located in non-strategic markets during 2005. HCA's SGL-1 rating incorporates its relatively strong cash flow generating capabilities. Moody's notes that improvements in HCA's equivalent admission growth rate due to increases in outpatient volume, combined with the recent moderation of bad debt expense due to a declining growth rate of uninsured patients contributed to solid operating performance during the first quarter of 2005. The company's senior implied rating is Ba2 with a stable outlook. HCA INC: Launches Dutch Auction Tender Offer for 50 Million Shares ------------------------------------------------------------------ The Board of Directors for HCA Inc. (NYSE: HCA) initiated a modified "Dutch" auction tender offer to purchase up to 50,000,000 shares of its outstanding common stock at a price not greater than $50.00 nor less than $43.00 per share, net to the seller in cash, without interest. The tender offer expires, unless extended, at 5:00 p.m., New York City time, on Nov. 14, 2005. As of Sept. 30, 2005, the Company had approximately 452.7 million shares of common stock outstanding. In the tender offer, shareholders will have the opportunity to tender some or all of their shares at a price within the $43.00 to $50.00 price range. Based on the number of shares tendered and the prices specified by the tendering shareholders, HCA will determine the lowest per share price within the range that will enable it to buy 50,000,000 shares, or such lesser number of shares as are properly tendered. If shareholders holding in the aggregate more than 50,000,000 shares properly tender their shares at or below the determined price per share, HCA will purchase shares tendered by such shareholders, at the determined price per share, on a pro rata basis, as will be specified in the offer to purchase relating to the tender offer that will be distributed to shareholders. Shareholders whose shares are purchased in the tender offer will be paid the determined price per share, net in cash, without interest, promptly following the expiration of the tender offer period, as it may be extended. HCA will return all shares not purchased to the shareholders tendering such shares free of charge after the expiration of the tender offer, as it may be extended. The tender offer will not be contingent upon any minimum number of shares being tendered. The tender offer will be subject to a number of other terms and conditions, including the financing condition described below, as will be specified in the offer to purchase. "The tender offer . . . is consistent with the Company's commitment to enhancing shareholder value and reflects our confidence in the long-term future of HCA," stated Jack O. Bovender, Jr., HCA Chairman and CEO. "The tender offer represents an opportunity for the Company to deliver value to shareholders who elect to tender their shares, while at the same time increasing the proportional ownership of non-tendering shareholders in HCA. We believe the Company possesses the financial strength to successfully complete the tender offer and the related borrowings without jeopardizing future capital investments in our existing hospitals and communities." "With the assistance of management and outside advisors, our Board has undertaken a review of the Company's strategic plan, its use of cash flows from operations for, among other things, capital expenditures, acquisitions, debt repayment, dividends and share repurchases, and a variety of alternatives for using the Company's available financial resources. Based upon its review, the Board determined that increasing the Company's financial leverage to fund the tender offer is a prudent use of our financial resources and an effective means of providing value to our shareholders," Mr. Bovender continued. Credit Facility HCA anticipates that it will obtain the funds necessary to purchase shares tendered in the tender offer by utilizing approximately $500 million of cash on hand and by borrowing approximately $1 billion from the Company's existing revolving credit facility. In addition, the Company has obtained a commitment letter from JPMorgan and Merrill Lynch for a $1 billion short-term loan facility which will also be used to finance the tender offer. In connection with the tender offer, HCA is seeking an amendment to its existing revolving credit facility and the related senior term loan to modify the compliance levels for its required ratio of consolidated total debt to consolidated capitalization. If the Company is unable to obtain the required amendment prior to the expiration of the tender offer, the Company has obtained a commitment letter from JPMorgan and intends to enter into a new $2.425 billion credit facility to replace its existing credit facility. While the Company has obtained commitments for the $1 billion short term loan facility and the new $2.425 billion credit facility, if needed, these commitments are contingent on the satisfaction of various conditions. Accordingly, in addition to other customary conditions, the tender offer will be subject to HCA amending its existing credit facility or refinancing it pursuant to the terms and conditions contained in the commitment letter with JPMorgan and obtaining the $1 billion short term loan facility pursuant to the terms and conditions contained in the commitment letter with JPMorgan and Merrill Lynch. Merrill Lynch & Co. is the Company's financial advisor. The lead dealer manager for the tender offer is Merrill Lynch & Co., the dealer manager is J.P. Morgan Securities Inc., the information agent is Georgeson Shareholder Communications, Inc., and the depositary is National City Bank. The offer to purchase, letter of transmittal and related documents will be mailed to shareholders of record and will also be made available for distribution to beneficial owners of HCA common stock. HCA Inc. is the nation's leading provider of healthcare services, composed of locally managed facilities that include approximately 190 hospitals and 91 outpatient surgery centers in 23 states, England and Switzerland. At its founding in 1968, Nashville-based HCA was one of the nation's first hospital companies. HCA INC: Strong Cash Flow Cues Fitch to Hold Ratings at BB+ ----------------------------------------------------------- Fitch Ratings has affirmed HCA, Inc.'s ratings following the announcement that its Board has approved a share repurchase of up to $2.5 billion in the form of a modified 'Dutch' auction tender offer. The share repurchase will be funded through a $1 billion draw on the company's existing $1.75 billion revolving credit facility, a $1 billion interim term loan and $500 million in cash on hand. Fitch has assigned a 'BB+' rating to the new Interim Term Loan. Fitch affirms these ratings: -- Senior unsecured debt 'BB+'; -- Bank facility ratings 'BB+'; -- Issuer default rating (IDR) 'BB+'. HCA's Rating Outlook is Stable. Fitch has affirmed HCA's ratings despite the size and debt-funded nature of the share repurchase, given the company's still strong cash flow and that the anticipated increase in leverage would bring total debt back to similar levels when the company last made a similar-sized share repurchase in Oct. 2004. Since year-end 2004, HCA has paid down $1.2 billion in debt including $700 million in revolver borrowings and has paid off the 6.91% $500 million senior unsecured notes that matured on June 15, 2005. Fitch's affirmation includes the assumption that cash from pending asset sales and recent option proceeds will be used to reduce leverage by year-end or early first quarter 2006. Additionally, Fitch notes the industry environment the company is operating in, while not materially improved, has mostly stabilized since this time last year. Industry-wide concerns persist, namely still soft volumes and bad debt exposure. Further, third quarter operating performance is likely to be negatively affected by losses, stemming from the recent hurricanes in the Gulf Coast region. However, while some margin erosion is possible due to these issues, Fitch does not anticipate a material decline in margins over the next 12 months. Fitch anticipates that total debt, post share repurchase and related financings, will be $10.8 billion compared with $10.5 billion at Dec. 31, 2004, assuming cash from pending asset sales are used to reduce the interim term loan. Following the share repurchase and related financings, Fitch anticipates that leverage (total debt/EBITDA) will range between 2.5 times (x) and 2.7x with funds from operations adjusted leverage between 3.2x and 3.4x; coverage (EBITDA/Gross Interest) will be between 5.8x and 6.1x with FFO interest coverage between 5.4x and 5.6x. HCA's net cash flow from operations through the last 12 months ended June 30, 2005 was $3.2 billion and free cash flow (after capital expenditures and dividends) was $1 billion. HCA INC: Dutch Auction Cues Moody's to Lower Liquidity Rating ------------------------------------------------------------- Moody's Investors Service affirmed the debt ratings of HCA Inc. (Ba2 corporate family rating) and lowered the company's speculative grade liquidity rating to SGL-2 following HCA's announcement that it will purchase approximately $2.5 billion of its stock in a modified "Dutch" auction tender offer. Issuers rated SGL-1 possess very good liquidity. They are most likely to have the capacity to meet their obligations over the coming 12 months through internal resources without relying on external sources of committed financing. Issuers rated SGL-2 possess good liquidity. They are likely to meet their obligations over the coming 12 months through internal resources but may rely on external sources of committed financing. The issuer's ability to access committed sources of financing is highly likely based on Moody's evaluation of near-term covenant compliance. The affirmation of HCA's existing ratings reflects the company's position as the largest hospital company in the nation. HCA's large portfolio of hospitals provides the company with scale and a relatively high level of market diversity. In addition, despite concentration in Texas and Florida and weaker admissions and EBITDA growth trends in key markets, HCA appears to still maintain generally favorable local inpatient market share. However, similar to last year's $2.5 billion "one-time" buyback plan, we believe that the proposed transaction represents higher risk to creditors because of the company's willingness to increase leverage during a period of less operational certainty. Moody's expects the company to continue to be challenged by sluggish volume trends, as highlighted by recently lowered earnings guidance, continued increases in under and uninsured patients, and competition from both not-for-profit as well as for-profit operators in key markets. The stable outlook reflects management's ability to offset lower admission growth trends with expense management, especially in the areas of salaries, wages and benefits and supply costs. Reimbursement is also expected to remain favorable for the near- term adding a level of stability to expected revenue and cash flow generation. If volume and pricing trends stabilize and the company can continue to improve operating performance through cost reductions, Moody's may consider changing the outlook to positive. If the company was expected to achieve sustainable levels of adjusted cash flow from operations to debt and adjusted free cash flow to debt of approximately 21% and 14%, respectively, the ratings could be upgraded. We believe the company's commitment to maintain or grow shareholder value primarily through share repurchases will constrain and, possibly, create downward pressure on the HCA's ratings if earnings remain sluggish. Furthermore, the ratings could be downgraded if the company were to engage in either a large debt financed acquisition or if recent trends in same facility adjusted admissions and uninsured volumes were to worsen. The ratings and outlook could be downgraded if the ratios of adjusted cash flow from operations to debt and adjusted free cash flow to debt were expected to fall below 18% and 12%, respectively, for an extended period. Moody's expects debt levels to rise significantly again following this tender offer. Moody's estimates pro forma debt to capitalization ratios will increase to over 71%. Free cash flow to adjusted debt ratios are also expected to be weaker at levels below 10%. The lowering of the speculative grade liquidity rating to SGL-2 reflects the expectation that the company will initially fund the proposed share repurchase with short-term debt, including a $1 billion bridge loan and a $1 billion draw on the company's revolving credit facility, thereby reducing available liquidity. Additionally, the company will likely amend the existing credit facility to provide additional cushion in relation to the debt to capitalization covenant as a result of the increased leverage. The SGL-2 rating reflects Moody's expectation that the company will maintain good liquidity over the next twelve months characterized by continued stable cash flow generation. Moody's does expect the company to have to initially fund at least a portion of the proposed share repurchase with the use of its revolver, resulting in a reduction in available external liquidity. Moody's expects the company to be comfortably in compliance with the interest coverage ratio requirement. Under the terms of the company's credit agreement, HCA can sell up to 12% of its consolidated assets, which limits a potential liquidity event to approximately $2.6 billion. Moody's views this amount as enough to consider the company's asset base as largely unencumbered. Ratings affirmed: * Corporate family rating, Ba2 * Senior unsecured bank credit facility, Ba2 * Senior unsecured note ratings, Ba2 * Senior shelf rating, (P) Ba2 Ratings downgraded: * Speculative grade liquidity rating, from SGL-1 to SGL-2 HCA Inc., headquartered in Nashville, Tennessee, is the largest acute care hospital company with 183 hospitals. HCA recognized revenue of approximately $24 billion for the twelve months ended June 30, 2005. HCA INC: $2.5 Bil. Share Repurchase Cues S&P to Affirm BB+ Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on HCA Inc. (BB+/Stable/--) following the company's announcement of (1) its financial expectations for the remainder of 2005 and 2006 and (2) an upcoming repurchase of as much as $2.5 billion of common shares. The speculative-grade rating on HCA Inc. reflects the company's aggressive financial policy, which is not consistent with an investment-grade rating considering the key industry risks the company faces, such as uncertain third-party reimbursement and rising bad debt. These factors are mitigated by the generally strong cash-generating nature of HCA's diverse hospital operations. Total debt outstanding as of June 30, 2005 was $9.4 billion. HCA's recent operating performance has been solid, with operating margins at about 17%, though they would be slightly weaker if the beneficial effect of the company's new discounting policies for uninsured patients was excluded. Though managed care pricing remains good, reimbursement pressure from government sources, stagnant patient volume, and further growth in the number of uninsured patients will continue to threaten future financial results. Return on capital will likely remain in the 17%-18% range. HCA's operating cash flow is significant, and Standard & Poor's expects the company to continue to generate ample funds internally for the next couple of years at a level that is far in excess of ongoing capital needs. Still, given HCA's historically aggressive share repurchase activity, we believe that the company is not committed to achieving an investment-grade financial profile, with its stated financial target of total debt to EBITDA of 2.0x. Instead, we believe that the company's total debt to EBITDA will fluctuate within a range of about 2.2x-2.8x. When the company's leverage is at the lower end of the range, and if its stock price is attractive, another share repurchase is highly likely. By our estimates, this latest share repurchase program will increase leverage to about 2.7x, or slightly below the peak level of 2.8x after the last sizable $2.5 billion share repurchase in late 2004. The company repaid about $1.2 billion of debt in the first half of 2005. Similar patterns of debt repayment, followed by subsequent share repurchase programs, can be expected, so long as cash flow levels remain sufficient to cover all capital needs and provide ample free cash flow. HOST MARRIOTT: Improving Performance Spurs Moody's to Up Ratings ---------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of Host Marriott's senior unsecured debt to Ba2, from Ba3, with a positive outlook. According to Moody's, the rating upgrade of Host Marriott reflects the REIT's recent operating performance, which has been strongly improving, combined with management's commitment to further reduce leverage. The positive outlook reflects Moody's expectation that the REIT will continue to reduce its leverage and secured debt, as well as improve its fully loaded fixed charge coverage as a result of healthier lodging fundamentals and asset quality. In May 2005, Moody's revised Host Marriott's rating outlook to positive, from stable, indicating that an upgrade would require an increase in fixed charge coverage closer to 1.3X, as well as Net Debt to EBITDA below 6.0x. Host Marriott has achieved these metrics, and improvement is expected to continue. Since 2004, business conditions have improved markedly in the lodging sector. This improvement has resulted in Host Marriott's revenue per available room (RevPAR) improving to 7.3% in 2004 and 9.1% for 9M05. Recent improvements are attributed to higher average daily rates (ADR) -- a clear indication that hotel owners are regaining pricing power. Host Marriott's improvement in RevPAR has translated into an improvement in fixed charge coverages, from 0.9X for 2003 to about 1.25X (LTM basis) at September 2005. Moody's expects the REIT's RevPAR and ADR to continue to improve. Operating margins have strengthened 7.7% relative to 9M04. Host Marriott continues to pursue a strategy of acquiring assets on a leverage-reducing basis. The REIT's LTM Net Debt to EBITDA fell to slightly below 6x at September 2005; Moody's expects Net Debt to EBITDA to fall below 5.0x by the end of 2007. Host Marriott continues to maintain strong liquidity, with $402 million of unrestricted cash and $575 million in capacity under its unsecured line of credit at September 9, 2005. The REIT continues to unencumber its portfolio of hotels and resorts. Moody's said that a rating upgrade to Ba1 would require an increase in fixed charge coverage (including capex) closer to 2.0X, Net Debt to EBITDA around 4.5X, and a reduction in its top operator concentration closer to 60%. Though unlikely, should Host Marriott's fixed charge coverage fall close to 1.0X, or leverage exceed 6.0X, negative rating actions would be taken. This negative rating action would only happen should the lodging sector take a sharp and severe downturn, or if Host Marriott made a material change in its funding strategy. These ratings were upgraded: * Host Marriott, L.P. -- senior unsecured debt to Ba2, from Ba3; -- senior unsecured shelf to (P)Ba2, from (P)Ba3; * Host Marriott Corporation -- senior unsecured debt to Ba2, from Ba3, with these rated bonds being obligations of Host Marriott, L.P.; -- industrial revenue bonds to Ba2, from Ba3, with these bonds being obligations of Host Marriott, L.P.; -- preferred stock to B1, from B2; preferred stock shelf to (P)B1, from (P)B2; * HMH Properties, Inc. -- senior unsecured debt to Ba2, from Ba3; -- backed long-term industrial revenue bonds to Ba2, from Ba3; These rated securities of HMH Properties are obligations of Host Marrriott, L.P. * Host Marriott Financial Trust -- preferred stock to Ba3, from B2. Host Marriott Corporation [NYSE: HMT] is a REIT headquartered in Bethesda, Maryland, USA, that owns upscale and luxury full-service hotels and resorts operated primarily under premium brands, such as Marriott, Ritz-Carlton and Hyatt. The REIT, the largest in the lodging sector and one of the largest overall, owns or holds controlling interest in 107 lodging properties. HUFFY CORP: Exits Bankruptcy Following Plan Consummation -------------------------------------------------------- Huffy Corporation and its debtor-affiliates have emerged from their Chapter 11 reorganization process. The Debtors officially concluded the reorganization process Friday after completing all required actions and satisfying all remaining conditions to its Plan of Reorganization which was confirmed by the U.S. Bankruptcy Court for the Southern District of Ohio on Sept. 23, 2005. One of the conditions to Huffy's emergence from Chapter 11 was the receipt of the necessary exit financing. This condition was satisfied with the Company's closing of: -- a $40 million revolving loan facility provided by a syndicate led by Wachovia Capital Finance Corporation (Central) and Wachovia Capital Markets, LLC; and -- a $10 million term loan from Patriarch Partners, LLC. The revolving loan facility is secured by inventory and accounts receivable and a second priority lien on the Company's intellectual property and other assets. The term loan is secured by the Company's intellectual property and a second priority lien on its inventory and accounts receivable. "Huffy Corporation has now successfully completed a very difficult period in its long history," John A. Muskovich, the Company's President and Chief Executive Officer, said. "We have accomplished all of our major objectives for this process and have secured an exit financing package, which along with the support from our trade suppliers will provide assurance to our customers as to the strength of the new Huffy Corporation." Board of Directors The Company's Board of Directors has been reconstituted and, in addition to Mr. Muskovich, now includes: -- Michael Buenzow (Senior Managing Director, FTI Palladium Partners), -- Kenny Chou (Chief Executive Officer, Shenzhen BoAn Bike Co.), -- Douglas Gernert (President and Chief Executive Officer of totes>>ISOTONER Corporation), -- Raymond Kintzley (President, Ramiko Co., Ltd.), -- Zhidong Liang (Executive Vice President of China Export & Credit Insurance Corporation), and -- Barry Metzger (partner, Baker & McKenzie LLP). Mr. Liang, who will serve as the Company's Board Chairman, said, "We congratulate Huffy Corporation upon its emergence from bankruptcy. Huffy Corporation is an important partner for the China-based companies which manufacture its bicycles and we look forward to a long and mutually beneficial working relationship." Added Mr. Muskovich, "Our strong relationships with our suppliers in China were a key factor in our ability to emerge from bankruptcy successfully, and we are grateful for their support. We too look forward to continuing to work with them closely." Plan of Reorganization As provided in the Plan of Reorganization, all previously outstanding shares of Huffy common stock are cancelled as of Oct. 14, 2005. New shares of common stock are being issued to certain creditors of the Company in accordance with the Plan. The Company will have less than 300 shareholders and its shares will no longer be publicly traded. It will no longer be required to file periodic reports with the Securities and Exchange Commission. Headquartered in Miamisburg, Ohio, Huffy Corporation -- http://www.huffy.com/-- designs and supplies wheeled and related products, including bicycles, scooters and tricycles. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 20, 2004 (Bankr. S.D. Ohio Case No. 04-39148). Kim Martin Lewis, Esq., and Donald W. Mallory, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $138,700,000 in total assets and $161,200,000 in total debts. The Court confirmed the Debtors' chapter 11 Plan on Sept. 23, 2005. IGIA INC: Posts $2.9 Million Net Loss in Quarter Ended May 31 ------------------------------------------------------------- IGIA, Inc., delivered its amended financial results for the quarter ended May 31, 2005, to the Securities and Exchange Commission on Sept. 30, 2005. IGIA incurred a $2,894,032 net loss for the three months ended May 31, 2005 compared to $235,867 of net income for the same period in 2004. Management attributes the net loss to lower revenue and gross profit. The $738,371 of expenses incurred in connection with the restructuring and reorganization under Chapter 11 of its subsidiary, Tactica International, Inc., also contributed to the net loss. IGIA's balance sheet showed $5,148,494 of assets at May 31, 2005, and liabilities totaling $20,296,231. As of May 31, 2005, the Company had a $15.1 million working capital deficit and negative net worth of $15.1 million. Going Concern Doubt Russell Bedford Stefanou Mirchandani LLP expressed substantial doubt about IGIA's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended February 28, 2005. The auditing firm points to the Company's recurring losses from operation, net capital deficiency and Tactica's chapter 11 filing. Tactica Bankruptcy Tactica, which accounted for all of IGIA's operations, sought protection from its creditors under chapter 11 of the Bankruptcy Code on Oct. 21, 2004 (Bankr. S.D.N.Y. Case No. 04-16805). Tactica filed a Plan of Reorganization in July 2005. IGIA is Tactica's DIP lender. The Plan proposes to distribute to unsecured creditors a lump sum cash payment and approximately 1.8 million shares of IGIA's common stock, as well as rights to certain legal claims. Innotrac Corporation, Tactica's secured trade creditor, issued a default notice on Jan. 18, 2005, ceased its order processing services and refused to release Tactica's inventory carried at approximately $2.9 million. On June 23, 2005, the Bankruptcy Court approved a settlement with Innotrac, under which Innotrac took the inventory in exchange for full satisfaction of Tactica's $3 million debt. About IGIA Headquartered in New York City, IGIA, Inc., engages in the design, development, import, and distribution of personal care and household products in the United States and Canada through its wholly owned subsidiary. The Company purchases its products from unaffiliated manufacturers most of which are located in the People's Republic of China and the United States. INDUSTRIAL ENTERPRISES: Auditors Raise Going Concern Doubt ---------------------------------------------------------- Beckstead and Watts, LLP, expressed substantial doubt about Industrial Enterprises of America, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended June 30, 2005. The auditors issued the opinion because "the Company has had limited operations and [has] not commenced planned principal operations." In its Form 10-KSB for the fiscal year ended June 30, 2005, submitted to the Securities and Exchange Commission last week, Industrial Enterprises reports a $3.7 million net loss on $3.9 million of revenues. At June 30, 2005, Industrial Enterprises' balance sheet showed a $2,435,521 stockholders' deficit, compared to a $1,681,900 deficit at March 31, 2005. A full-text copy of Industrial Enterprises' 2005 Annual Report is available at no charge at http://ResearchArchives.com/t/s?256 Headquartered in New York, New York, Industrial Enterprises of America, Inc. -- http://www.TheOtherGas.com/-- is one of the largest worldwide providers of refrigerant gases, specializing in converting the hydroflurocarbon gases, R134a and R152a, into branded and private label refrigerant and propellant products. The Company's main product, the "gas duster" is used in a variety of industries including consumer electronics, medical, and the automotive aftermarket. INDUSTRIAL ENTERPRISES: Scott Margulis Joins Board of Directors --------------------------------------------------------------- Industrial Enterprises of America, Inc. (OTCBB: ILNP) appointed Scott Margulis to the Company's Board of Directors. Scott Margulis is currently the Chief Operating Officer of Unifide Industries, LLC, a leading marketer and seller of automotive chemicals and additives, and a wholly owned subsidiary of Industrial Enterprises of America. Scott Margulis joined Unifide in 1999 after spending several years in the Automotive Aftermarket and Chemical Manufacturing Industries. He has been extremely successful in marketing the Unifide product lines to automotive retailers as well as acquiring well established automotive brands and creating new brands. Under Mr. Margulis' guidance, Unifide has experienced an annualized growth rate of 72%, posting revenues of over $12,000,000 in 2004. In conjunction with the recent addition to its Board of Directors, the Company has also undergone a restructuring of its corporate officers. John Mazzuto will shift responsibilities from the Company's Chief Financial Officer to ILNP's President and Chief Executive Officer. Crawford Shaw, the Company's previous CEO will no longer be active in the Company's day-to-day operations but will remain as the Company's Chairman of the Board. According the Crawford Shaw, Chairman of Board of Directors, "ILNP has witnessed tremendous growth this past year, and right now it is important to have a management team in place that has the necessary experience to ensure continued growth and profitability. Our recently released year-end results indicated that our EMC Packaging subsidiary realized strong gross profits and we expect to see steady growth from that unit as well as our automotive aftermarket divisions into the foreseeable future. I am pleased to report that I am leaving the Company's daily operations at a point when business has never been better and have full confidence that this restructuring will result in the continued success of ILNP." Headquartered in New York, New York, Industrial Enterprises of America, Inc. -- http://www.TheOtherGas.com/-- is one of the largest worldwide providers of refrigerant gases, specializing in converting the hydroflurocarbon gases, R134a and R152a, into branded and private label refrigerant and propellant products. The Company's main product, the "gas duster" is used in a variety of industries including consumer electronics, medical, and the automotive aftermarket. * * * Going Concern Doubt Beckstead and Watts, LLP, expressed substantial doubt about Industrial Enterprises of America, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended June 30, 2005. The auditors issued the opinion because "the Company has had limited operations and have not commenced planned principal operations." At June 30, 2005, Industrial Enterprises' balance sheet showed a $2,435,521 stockholders' deficit, compared to a $1,681,900 deficit at March 31, 2005. INEX PHARMACEUTICALS: Awaits Court Judgment on Bankruptcy Petition ------------------------------------------------------------------ The Supreme Court of British Columbia completed the hearing for the bankruptcy petition brought forward by Stark Trading and Shepherd Investments International Ltd. against Inex Pharmaceuticals Corporation (TSX: IEX) on Sept. 27, 2005. The Court has reserved judgment until Oct. 27, 2005. Stark is the majority holder of certain promissory notes issued by Inex International Holdings, a subsidiary of INEX. The promissory notes are not due until April 2007 and can be repaid in cash or in shares, at INEX's option, at maturity. INEX is continuing to operate its business of advancing its products through development to maximize the value of its assets. This includes ongoing partnering discussions for Marqibo and advancing the other products in the Company's pipeline through partnering and internal development. As previously reported in the Troubled Company Reporter, the Company said it received a demand letter from Stark Trading alleging a default under the convertible notes. Stark has demanded repayment in the amount of US$24.6 million to be repaid by Sept. 21, 2005. Since December 2004, INEX has held a number of discussions with Stark, as the majority note holder, to determine if an agreement on a restructuring of the notes could be reached. To date these discussions have been unsuccessful in reaching an agreement to restructure the notes. In its demand letter, Stark has indicated that it believes the notes are in default on the basis that: (a) it has been admitted to Stark in writing that INEX and Inex International are unable to pay or are generally failing to pay their debts as they mature or become due; (b) INEX and Inex International are unable to pay their debts in the normal course of business; and (c) INEX and Inex International are ceasing wholly or substantially to carry on business. At June 30, 2005, INEX had $15.2 million in working capital and is committed to ensuring that this capital will be sufficient to ensure INEX and Inex International can pay all of their debts in the normal course of business past the maturity date of the notes. "Given our current working capital position and the steps we have taken over the past 10 months to reduce our burn rate, we can meet all of our obligations as they become due. The promissory notes are not due until April 2007 and can be repaid in cash or in shares, at INEX's option, at that time," said Mr. Ruane. Inex Pharmaceuticals Corporation -- http://www.inexpharm.com/-- is a Canadian biopharmaceutical company developing and commercializing proprietary drugs and drug delivery systems to improve the treatment of cancer. INTERPUBLIC GROUP: Fitch Affirms Issuer Default Rating at B+ ------------------------------------------------------------ Fitch Ratings has affirmed and removed Interpublic Group from Rating Watch Negative: -- Issuer default rating 'B+'; -- Senior unsecured credit facility 'B+'; -- Senior unsecured notes 'B+'. Fitch has also assigned an 'R4' recovery rating to IPG's credit facility and senior notes. IPG was originally placed on Rating Watch Negative on March 11, 2005. The Rating Outlook is Stable. Approximately $2.2 billion in debt securities are affected by this action. The ratings continue to reflect weak financial performance which has been driven by numerous accounting and operational challenges, continued integration issues from the company's restructuring initiatives which has included major management changes, the ongoing material weaknesses and internal control issues which have yet to be remedied, and ongoing risk of client losses. These risks are balanced against IPG's position in the industry as a leading global advertising holding company, and its diverse client base with long term relationships with key accounts. Also, the strides that the management team has made on its key initiatives of strengthening the balance sheet, improving financial flexibility, the reliability of IPG's financial reporting, and the benefits the company should receive from the attractions of new talent to its agencies despite the associated high compensation costs are viewed favorably. The Stable Rating Outlook reflects Fitch's belief that IPG has some additional room for operational shortfall within its rating category. Fitch believes that credit metrics will be strained through the remainder of 2005, but should improve thereafter. The Stable Outlook is also supported by adequate financial flexibility as IPG has demonstrated continued access to the capital markets during this period of financial stress. IPG amended and renewed its $450 million bank credit facility retaining all ten banks in its previous syndicate. IPG also issued $250 million senior unsecured notes in July 2005 to redeem its $250 million notes due October 2005. IPG spends between $150- 200 million on capital expenditures, but much of that is believed to be discretionary and available as necessary. IPG has minimal debt maturities in 2006 and 2007. Fitch downgraded IPG to 'B+' from 'BB+' and placed the company on Rating Watch Negative in March 2005 due to significant negative event risk associated with its announcement that it would postpone filing of its financial statements with the SEC. At that time, IPG was in the process of receiving waivers and amendments to its credit facilities and indentures due to the breach of its timely filing covenant. Additional concerns related to reliability of IPG's financial reporting, the ability of the company's auditors to provide an 'unqualified' opinion about the company's financial reports and internal controls, IPG's earnings and cash flow outlook, given the company's weak organic growth trends, significant pressures on operating margins, and the impending October 2005 debt maturity. During the period of uncertainty following this announcement, IPG has lost several high profile clients (albeit predominantly lower margin media buying clients), namely, GM, Bank of America, L'Oreal and Lowe's. High profile client losses represent less than 2% of 2004 revenue. While client losses are inherent in the advertising business, Fitch believes client losses highlight increased operational risk stemming at least in part from IPG's inability to file audited financial statements in a timely fashion. Fitch also believes this risk is somewhat diminished with the filing of the statements. In addition, IPG has expended a significant amount on legal, accounting and other professional fees in order to remediate the unreliability and inaccuracies in its financial reporting. These fees are expected to increase significantly in 2005 and decrease but remain high in 2006. At the same time, salary and related costs have escalated, up from 56% of revenue in 2003 to approximately 65% of revenue at June 30, 2005. Management has focused on attracting talent to help offset its financial reporting issues and enhance its financial practices and help deliver its goals of stabilizing the business trends and deliver revenue growth and margin enhancement in future periods. These elevated cost levels, the majority of which will be absorbed in 2005 and 2006, have introduced a degree of financial risk that was not present prior to IPG's financial reporting challenges. IPG's restatement was material and resulted in a charge to equity of $550 million reducing equity approximately 25%. The restatement also included a material cash charge of $250 million, primarily related to inappropriate accounting for vendor credits in international operations. By filing its financial statements and renewing its credit facility Fitch believes that negative event risk has diminished but recognizes challenges still exist as it relates to a pending SEC investigation, remediation of its internal control weaknesses, potential shareholder lawsuits In addition, heightened operational risk, financial risk and execution risk will likely persist for over 12 months. Operationally, IPG needs to generate organic growth more in line with its investment grade rated global advertising holding company peers (whose organic growth exceeded 4% in 2004 compared with 1.2% for IPG). Financial risk, in the form of depressed EBITDA levels, primarily associated with high professional fees will be reduced when the company reaches its run-rate professional fee levels in 2007; with professional fees expected to be significantly lower than in 2005. 2006 will see a reduction in professional fees but they will remain uncharacteristically high while the company pursues Sarbanes Oxley compliance. Having the financial reporting uncertainty in the past should reduce management distraction, however execution risk still remains due to the relatively new management team in place and the number of corporate initiatives they are addressing on the heels of the recent financial reporting difficulties. IPG generated $242 million in free cash flow in 2004 but is expected to be roughly breakeven in 2005, due to high professional fees and related expenses. Fitch believes a significant proportion of capital expenditures are discretionary and could be directed toward debt repayment. Cash balances have been maintained at healthy levels of over $1.5 billion, however Fitch recognizes that payables (and accrued liabilities) exceed receivables (and expenditures due to clients) by over $1.7 billion at June 30, 2005 reducing the availability of cash balances in a liquidity event. Internally generated liquidity is supplemented by IPG's $450 million revolving credit facility, which was fully available at June 30, 2005. Revised financial covenants, namely, minimum interest coverage ratio, debt to EBITDA and minimum EBITDA provide room for credit metrics to deteriorate through LTM June 30, 2006 when levels are 1.45x, 6.65x and $340 million, respectively. In 2008, IPG faces its first meaningful maturity when $250 million senior unsecured notes come due and its $800 million 4.5% convertible senior notes due 2023 are putable by the note holders for cash. Leverage, defined as total adjusted debt to operating EBITDAR was 5.9x at Dec. 31, 2004. The measure is expected to rise above 7.5x for LTM Dec. 31, 2005, and decline sequentially to under 6.0x in 2006 and to under 5.0x in 2007 when professional fees and the cost structure is expected to normalize. The rating or Outlook could be lowered if the company does not achieve anticipated reductions in leverage. In addition, IPG's ratings or Outlook could be lowered if the company does not stabilize and grow its revenue base, receives a material adverse judgment as part of its pending SEC investigation, or is not successful at reducing professional fees and enhancing margins as anticipated. INTERSTATE BAKERIES: 18 Creditors Sell $4 Million in Claims ----------------------------------------------------------- From October 1 to October 12, 2005, the Clerk of the U.S. Bankruptcy Court for the Western District of Missouri recorded 18 claim transfers to: (a) APS Clearing, Inc. Creditor Claim Amount -------- ------------ Debt Acquisition Company of $361,897 America V, LLC Debt Acquisition Company of 20,666 America V, LLC Debt Acquisition Company of 20,666 America V, LLC (b) Argo Partners Creditor Claim Amount -------- ------------ Clarklift Absolute Storage $1,326 Livermore Falls Baking Co. 33,986 Mid-America Contractor 6,610 Waste Industries, Inc. 8,719 (c) Debt Acquisition Company of America V, LLC Creditor Claim Amount -------- ------------ Auto Radiator, Inc. $81 Brighter Image Janitorial 80 Dalmer Cavin 120 TA Suggs Heating & Cooling 954 (d) Deutsche Bank Securities, Inc. Creditor Claim Amount -------- ------------ Pliant Corporation assigns $1,695,240 (e) Harbert Distressed Investment Master Fund, Ltd. Creditor Claim Amount -------- ------------ Deutsche Bank Securities, Inc. $1,695,240 (f) Madison Investment Trust-Series 17 Creditor Claim Amount -------- ------------ Doyle's Office Equipment $1,275 Orbit Software USA, Inc. 16,817 Tandem Staffing Solutions 2,698 (g) Sierra Liquidity Fund, LLC Creditor Claim Amount -------- ------------ APS Clearing, Inc. $178,505 APS Clearing, Inc. 7,979 Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014, on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000) ISLE OF CAPRI: Moody's Rates New $225-Mil Secured Bank Loan at B1 ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Isle of Capri Black Hawk, L.L.C.'s new $225 million secured bank loan. The new facility will consist of a $50 million 5-year revolving credit facility and a $175 million 6-year term loan. Moody's also affirmed ICBH's B1 corporate family rating and B1 existing bank loan rating. The ratings outlook is stable. Proceeds from the new bank facility will be used to refinance the company's existing bank facility and for general corporate purposes. The new facility will be secured and guaranteed on a first priority basis by all existing and future assets. The B1 rating on ICBH's existing bank facility will be withdrawn once the new facility closes. The ratings consider ICBH's dominant market position and expectation that its current expansion efforts will enhance this position as well as generate a level of additional cash flow that will be used to rapidly reduce the company's leverage. As a result of a debt-financed expansion and construction disruption, debt/EBITDA net of management fees is currently at about 5.3 times (x). Despite construction disruption, and a negative earnings impact from a rockslide earlier this year that limited access to the Black Hawk market, revenues and cash flow are showing improvement. ICBH's $93 million expansion, which began in January 2004, is almost 90% complete and its new hotel is expected to open in December 2005, a month ahead of schedule. The ratings also acknowledge that ICBH, an unrestricted, non- recourse subsidiary of Isle of Capri Casino, Inc., only operates in Colorado. Another key concern is Ameristar's significant planned expansion activity. Although Ameristar's presence and expansion activity in the Black Hawk market will improve the market overall, it will also likely add to a higher level of competition over time. The stable ratings outlook considers that the Black Hawk market has a good historical growth rate and is characterized by favorable demographics. Additionally, Moody's considers Colorado a relatively low-risk jurisdiction with respect to gaming legislation. In November 2003, Amendment 33, a Colorado ballot measure that would have allowed video slots at racetracks, was defeated by a significant margin. Ratings upside is limited at this time given ICBH's relatively small size and lack of geographic diversification relative to higher rated gaming issuers. The ratings could go down if returns from the new expansion project are significantly lower than expected and/or leverage remains at or near its current level for any reason. The new bank facility, however, does include maintenance covenants that require ICBH to de-lever over time. These new ratings were assigned: * $50 million 5-year senior secured revolving credit facility -- B1; and * $175 million 6-year senior secured term loan -- B1. These existing ratings were affirmed: * Corporate family rating, at B1; * $40 million senior secured revolving credit facility due 2006, at B1; and * $165 million senior secured term loan C due 2007, at B1. Separately, and in an unrelated ratings action, Moody's recently placed the ratings of Isle of Capri Casinos, Inc., the parent company of ICBH, on review for possible downgrade. The ratings action related to Isle of Capri, Inc. did not impact ICBH's ratings. It only affected the restricted group of Isle of Capri, Inc., that does not include ICBH. Isle of Capri Black Hawk, L.L.C., is a 57% wholly owned, unrestricted subsidiary of Isle of Capri Casinos, Inc. (Ba3/On review for possible downgrade) Nevada Gold & Casinos, Inc., owns the remaining 43% ownership interest in ICBH. JC PENNEY: Debt Reduction Prompts Fitch to Raise Ratings -------------------------------------------------------- Fitch Ratings has upgraded its ratings of J.C. Penney Co., Inc.'s $3.4 billion of senior unsecured notes and debentures and $1.2 billion unsecured bank facility to 'BBB-' from 'BB+'. Fitch has also upgraded Penney's IDR to 'BBB-' from 'BB+'. The Rating Outlook is Stable. The upgrade reflects Penney's solid operating momentum and meaningful debt reduction, which together have yielded significant improvement in the company's credit profile. The upgrade also reflects the expectation that Penney will make continued progress with its turnaround over the medium term and while further reducing debt levels. In addition, the rating considers the competitive retailing environment and the potential negative impact on consumer spending from higher energy costs over the near term. Penney's comparable store sales have been positive over the past four years as the company has employed a consistent strategy designed to update its apparel offerings and refine its assortments in order to reconnect with its core, middle income customer. Improvements to the company's merchandise offerings and ongoing expense control have led to strong improvement in the company's operating margin, which increased to 7.8% in the trailing 12 months ended July 30, 2005 from 4.4% in fiscal 2003. Fitch believes there is additional upside to operating margins as the company refines its merchandise assortments and carefully manages expense levels. Penney has used cash gained from asset sales and operations to reduce debt levels by $1.9 billion over the past 18 months, as well as repurchase shares under a $4.15 billion authorization. This has led to a sharp decline in leverage (adjusted debt/EBITDAR) to 2.8 times (x) in the 12 months ended July 30, 2005 from 4.4x at July 31, 2004. Penney expects to complete its share repurchase authorization this year, after which it should retain sufficient cash to cover seasonal working capital needs and repay debt maturities that total $1.1 billion over the next five years. Looking ahead, operating cash flow should be sufficient to cover Penney's capital expenditures and dividends, with free cash flow available for additional share repurchases. At the same time, the repayment of debt maturities out of existing cash together with further improvements in operating performance should lead to a gradual strengthening of the company's credit measures. KISCH OIL: Case Summary & 15 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Kisch Oil Company 17470 113th Avenue North Maple Grove, Minnesota 55369 Bankruptcy Case No.: 05-49157 Type of Business: The Debtor sells diesel fuel from Shell. Chapter 11 Petition Date: October 13, 2005 Court: District of Minnesota (Minneapolis) Judge: Nancy C. Dreher Debtor's Counsel: Kenneth Corey-Edstrom Larkin Hoffman Daly & Lindgren, Ltd. 7900 Xerxes Avenue South, Suite 1500 Minneapolis, Minnesota 55431 Tel: (952) 835-3800 Total Assets: $1 Million to $10 Million Total Debts: $1 Million to $10 Million Debtor's 15 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Shell Oil Products $573,949 12700 Northborough Drive Houston, TX 77067 Tesoro Petroleum Companies Inc. $250,184 300 Concord Plaza Drive San Antonio, TX 78216 Laurance, Dean $250,000 5340 Whiting Avenue Edina, MN 55439 Western Petroleum $105,097 Federated Insurance $30,504 South Minnesota Oil $27,592 Minnesota Petroleum Service $6,604 Strusinki, Libby & Associates, PA $6,042 Fleet Management $4,507 Diamond Oil $3,232 Transport Parts Inc. $2,494 Determan Brownie Inc. $1,430 Pump and Meter Services Inc. $720 Lub-Tech $706 Xcel Energy $271 LA QUINTA: Successful Baymont Buy-Out Spurs Moody's to Up Ratings ----------------------------------------------------------------- Moody's Investors Service has upgraded the senior unsecured debt and preferred stock ratings of La Quinta to Ba2, from Ba3, and to B1 from B2. The rating outlook is stable. According to Moody's, this rating action is a result of the successful integration of La Quinta's acquisition of the Baymont hotel properties and brand in 2004, growth in size, brand and geographical diversity, and reduction in leverage incurred as part of the Baymont hotel transaction. Moody's placed the ratings on positive outlook in July 2004. According to Moody's, La Quinta's Ba2 senior debt ratings reflect the firm's: * conservative leverage strategy, * wholly unencumbered asset base, * experienced management team, and * success in improving sales and marketing, while boosting operating performance at the hotels its hotels and franchise businesses. Leverage incurred as part of the Baymont portfolio acquisition has declined to 2.7x (net debt/EBITDA) at 6/30/05 from 4.9X at year- end 2004. Moody's notes that La Quinta is currently operating at a leverage range lower than their target of 3.5x to 4.5x net debt to EBIDTA; the rating accounts for this future flexibility. La Quinta continues to demonstrate its commitment to the balance sheet, as evidenced by its recent stock offering in 2Q05. RevPAR increases at both the La Quinta and Baymont brands has lifted the company's fixed charge coverage to a strong level -- 2.1X at 6/30/05 -- which leads many of its peers. La Quinta's liquidity is strong with approximately $295 million in cash on hand at 6/30/05, and $130 million in availability under its unsecured credit facility. Moody's expects that the material adverse change language currently in this facility will be eliminated upon renewal. Moody's expects further progress in La Quinta's operating performance, with La Quinta's growth centering on its franchising program, enhancement of its own hotel portfolio through renovations, redevelopments, rebrandings and operating efficiencies, as well as selective strategic acquisitions of hotels and brands. An upgrade to Ba1 would require substantial growth (closer to $5 billion in gross assets) while operating within the firm's target leverage of 3.5x-4.5x net debt/EBITDA with a recurring EBITDA margin closer to 40%. Moody's would expect that these improvements would be earmarked by deepening of the brand breadth and value of La Quinta and Baymont. Though unlikely, a downgrade would result from material deterioration in the company's long- term leverage (Net Debt to EBITDA of over 5x), most likely driven by an acute drop in property performance due to a severe lodging downturn. Introduction of secured funding into La Quinta's capital structure would also be viewed negatively should secured debt exceed 10% of total assets. These ratings were affected: * La Quinta Properties, Inc. -- senior unsecured debt to Ba2, from Ba3; -- senior unsecured debt shelf to (P)Ba2, from (P)Ba3; -- preferred stock to B1, from B2; -- subordinated debt shelf to (P)Ba3, from (P)B2; -- preferred stock shelf to (P)B1, from (P)B2. * La Quinta Corporation -- senior unsecured debt shelf to (P)B1, from (P)B2; -- subordinated debt shelf to (P)B2, from (P)B3; -- preferred stock shelf affirmed at (P)B3. La Quinta (NYSE: LQI) is a paired-share hospitality firm consisting of a REIT -- La Quinta Properties, Inc. -- and La Quinta Corporation. La Quinta owns, operates or franchises more than 590 hotels in 39 states under the La Quinta Inns, La Quinta Inns & Suites, Baymont Inn & Suites, Woodfield Suites and Budgetel brands. The firm is based in Irving, Texas, USA. MAGRUDER COLOR: Amper Politziner Approved as Tax Accountants ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Jersey approved the retention of Amper, Politziner & Mattia, P.C., as Magruder Color Company and its debtor-affiliates' tax accountants. The Debtors selected Amper Politziner's services to prepare and file the Debtors' 2004 federal and state corporate tax returns as of September 1, 2005. Prior to chapter 11 filing, Amper Politziner was hired as tax accountant for past tax years in the ordinary course of business. Robert F. Keane, Esq., an Amper Politziner officer, disclosed the firm's proposed hourly rates: Designation Hourly Rate ----------- ----------- Officers/Directors $330 - $395 Managers/Senior Managers $240 - $305 Seniors/Supervisors $160 - $220 Staff $120 - $150 Paraprofessionals $80 Mr. Keane assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Elizabeth, New Jersey, Magruder Color Company -- http://www.magruder.com/-- and its affiliates manufacture basic pigment and also supply quality products to the ink, paint, and plastics industries. The Company and its debtor-affiliates filed for chapter 11 protection on June 2, 2005 (Bankr. D.N.J. Case No. 05-28342). Bruce D. Buechler, Esq., at Lowenstein Sandler PC represent the Debtors in their restructuring efforts. When the Debtors filed protection from their creditors, they estimated assets and debts of $10 million to $50 million. MAGRUDER COLOR: Court Approves Daley-Hodkin Corp. as Auctioneer --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey gave Magruder Color Company and its debtor-affiliates ask for permission to retain Daley-Hodkin Corp. as their liquidation consultants and auctioneers to sell some of their assets, nunc pro tunc to Aug. 26, 2005. Daley-Hodkin will: a) take the necessary steps to implement the auction sale of the assets in a manner to maximize the value thereof and to generate the highest and best offers; b) control the sale process, including the public auction of the assets; c) facilitate the dissemination of information to interested parties with respect to an auction sale; d) take any other acts to prepare for, conduct and effectuate the sale and insure the highest possible price and best offer for the assets; and e) provide consulting and appraisal services to the Debtors. Daley-Hodkin will charge each buyer a 10% buyer's premium for all sales consummated through private sale, which will be added to each buyer's invoice and not be considered property of the Debtor's estates. Daley-Hodkin's fee for all sales made by private sale will be 50% of the buyer's premium. The other half of it will be credited towards the firm's expenses. The Firm's professional rates: Designation Daily Rate ----------- ---------- Coordinator $500 Field Supervisor $275 Field Assistant $200 Bookkeeper $225 The Debtors assure the Court thatDaley-Hodkin is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Elizabeth, New Jersey, Magruder Color Company -- http://www.magruder.com/-- and its affiliates manufacture basic pigment and also supply quality products to the ink, paint, and plastics industries. The Company and its debtor-affiliates filed for chapter 11 protection on June 2, 2005 (Bankr. D. N.J. Case No. 05-28342). Bruce D. Buechler, Esq., at Lowenstein Sandler PC represent the Debtors in their restructuring efforts. When the Debtors filed protection from their creditors, they estimated assets and debts of $10 million to $50 million. MARY CRIMMEN: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Mary C. Crimmen 2051 Woodard Road Elma, New York 14059-9372 Bankruptcy Case No.: 05-91534 Type of Business: The Debtor is the Secretary, Shareholder and Director of Twenty-First Century Press, Inc., which filed for chapter 11 protection on October 13, 2005 (Bankr. W.D.N.Y. Case No. 05-91568)(Kaplan, J.). Chapter 11 Petition Date: October 13, 2005 Court: Western District of New York (Buffalo) Judge: Carl L. Bucki Debtor's Counsel: Robert J. Feldman, Esq. Gross, Shuman, Brizdle & Gilfillan, P.C. 600 Lafayette Court 465 Main Street Buffalo, New York 14203 Tel: (716) 854-4300 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 12 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ HSBC $490,950 Special Credits One HSBC Center, 26th Floor Buffalo, NY 14203 The Guerra Press, Inc. $347,500 c/o Thomas Guerra 363 Colvin Avenue Buffalo, NY 14216 HSBC $265,819 Special Credits One HSBC Center, 26th Floor Buffalo, NY 14203 Theodore Majewski $213,750 365 Bell Rock Boulevard Sedona, AZ 86351 Michael Burns $213,750 149 Monroe Drive Williamsville, NY 14221 Buffalo & Erie Co Reg Devt Co $135,618 275 Oak Street Buffalo, NY 14203 HSBC $120,000 Special Credits One HSBC Center, 26th Floor Buffalo, NY 14203 Buffalo Economic Renaissance $118,468 65 Niagara Square 920 City Hall Buffalo, NY 14202 Daniel Guerra $40,000 760 Palo Verde #2 Las Vegas, NV 89119 Thomas Guerra $40,000 363 Colvin Avenue Buffalo, NY 14216 Net Bank Business Finance $12,066 P.O. Box 2579 Colombia, SC 29202 Nissan Motor Acceptance Corp. $9,178 P.O. Box 371447 Pittsburgh, PA 15250-7447 MESABA AVIATION: Files Chapter 11 to Expedite Restructuring ----------------------------------------------------------- Mesaba Aviation, Inc., a subsidiary company of MAIR Holdings, Inc. (NASDAQ:MAIR), filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Minnesota. The company emphasized that it will continue its regular operations to serve customers, honor tickets, and operate its schedule as a Northwest Airlink partner. "This was a difficult but necessary step; Northwest's actions since filing bankruptcy along with the continuing distress affecting the entire industry requires us to change and to do so quickly," said John Spanjers, Mesaba Airlines president and chief operating officer. "The changes imposed on us by Northwest since its filing in September have left us with insufficient revenues to support our cost structure. "This work will be invisible to our passengers," Spanjers continued. "As we go through this process, we will remain focused on delivering the highest levels of safety, reliability and service that our passengers have come to expect from us." Prior to its filing, Northwest on September 12th failed to make a semi-monthly payment of approximately $18.5 million due to Mesaba under the Airline Services Agreement for services rendered in the last half of August. The Company says that Northwest made partial payments on these due dates: * $1.6 million on Sept. 26, 2005; and * $15.7 million on Oct. 11, 2005. As a result, Mesaba has a net unsecured claim of approximately $30 million in the Northwest Chapter 11 case. In addition, Northwest has advised Mesaba that it intends to reduce the number of Avro and Saab aircraft in Mesaba's fleet and that Mesaba should count on receiving only two of the fifteen new CRJ aircraft committed under the ASA. Further, Northwest also has notified Mesaba of Northwest's intent to terminate the sub-leases on all 35 of the Avros. "The combination of the loss of $30 million of revenue and the reduction in our fleet size by at least 28 percent has left us with no choice but to take this difficult step," Spanjers said. "We view bankruptcy as a last resort, but a necessary one because no other alternatives would allow us to change as rapidly as we need to." "We worked hard to avoid Chapter 11, but we firmly believe this action affords us the best opportunity to restructure our finances and to be successful over the long run," Spanjers added. "We have valuable assets, including our dedicated employees who continue to focus on operating a safe, reliable airline. We plan to emerge from this Chapter 11 case as a lean and competitive regional carrier flying for Northwest or other major airlines." MAIR Holdings, Mesaba's parent company, supports the airline's decision to pursue restructuring through the Chapter 11 process and has, in fact, offered to extend debtor-in-possession financing to Mesaba. Mesaba Aviation, Inc., d/b/a Mesaba Airlines,-- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. MESABA AVIATION: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Mesaba Aviation, Inc. dba Mesaba Airlines 1000 Blue Gentian Road Eagan, Minnesota 55121 Bankruptcy Case No.: 05-39258 Type of Business: The Debtor is a subsidiary MAIR Holdings, Inc., and operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. Mesaba Aviation serves 109 cities in 29 states and Canada from Northwest's and Mesaba Aviation's three major hubs: Detroit, Minneapolis/St. Paul, and Memphis. Mesaba Aviation operates an advanced fleet of 98 regional jet and jet-prop aircraft, consisting of the 69-passenger Avro RJ85 and the 30- 34-passenger Saab SF340. See http://www.mesaba.com/ Chapter 11 Petition Date: October 13, 2005 Court: District of Minnesota (St. Paul) Judge: Chief Judge Gregory F. Kishel Debtor's Counsel: Michael L. Meyer Ravich Meyer Kirkman McGrath & Nauman PA 4545 IDS Center 80 South Eight Street Minneapolis, Minnesota 55402-2225 Tel: (612) 332-8511 Fax: (612) 332-8302 Financial Condition as of August 31, 2005: Total Assets: $108,540,000 Total Debts: $87,000,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Allied Signal Engines Goods & Services $3,645,249 1944 East Sky Harbor Circle Phoenix, AZ 85034 Attn: Mike Beazley Tel: (937) 602-1827 British Aerospace - AVRO Goods & Services $1,619,077 13850 McLearen Road Herndon, VA 20171 Attn: David Spears Tel: (703) 736-4300 GE Aircraft Engines Goods & Services $721,794 1 Neumann Way Cincinnati, OH 45215-6301 Attn: Tom Hofer Tel: (513) 552-3173 AVMAX Group Inc. Goods & Services $686,036 380 McTavish Road NE #2 Calgary, Alberta T2E7G5 Canada Attn: Don Parkin Tel: (403) 735-3299 Bombardier Services Corp. Goods & Services $681,144 800 Rene Levesque Boulevard W Montreal, Quebec H3B1Y8 Canada Attn: Faouzi Mokhtar Tel: (514) 7373 Corp. Lodging Consultants Goods & Services $584,402 8110 East 32nd N #200 Wichita, KS 67226 Attn: Ladd Welch Tel: (316) 219-4214 Detroit Metropolitan Airport Goods & Services $509,305 Airport Managers Office LC Smith Terminal Mezzanine Detroit, MI 48242 Attn: Jean Kearney Tel: (734) 942-3566 Messier Services Inc. Goods & Services $501,962 4360 Severn Way Sterling, VA 20166-8910 Attn: Mark McDuffie Tel: (703) 450-8400 AAR Aircraft & Turbine Center Goods & Services $493,030 3312 Paysphere Circle Chicago, IL 60674 Attn: Chris Cooper Tel: (630) 227-2000 Pan Am International Goods & Services $471,518 Flight Academy 5000 NW 36th Street Miami, FL 33122 Attn: Ralph Leach Tel: (703) 433-2201 ext. 8935 BAE Systems Regional Aircraft Goods & Services $338,183 13850 McLearen Road Herndon, VA 20171 Attn: David Spears Tel: (703) 736-4300 Aircraft Braking Systems Goods & Services $289,339 P.O. Box 73252 Cleveland, OH 44193-0165 Embraer Aircraft Goods & Services $236,285 10 Airways Boulevard Nashville, Tennessee 37217 Dunlop Aerospace North America Goods & Services $234,275 5673 Old Dixie Highway, Suite 120 Forest Park, GA 30297 Metro Airport Commission Goods & Services $232,148 6040 28th Avenue South Minneapolis, MN 55450 Dowty Properllers-UK Goods & Services $214,009 Cheltenham Road East Staverton Gloucester GL2 9QN, UK SAAB Aircraft of America Goods & Services $182,280 21300 Ridgetop CR Sterling, VA 20166 Aerospace Composite Tech Goods & Services $177,320 3220 South Grove Street Fort Worth, TX 76110 Dowty Propellers - Americas Goods & Services $165,135 114 Powers Court Sterling, VA 20166-8321 Aramark Facility Service Goods & Services $151,470 22506 Network Place Chicago, IL 60673-1225 MORGAN STANLEY: Fitch Rates Six Certificate Classes at Low-Bs ------------------------------------------------------------- Morgan Stanley Capital I Inc., series 2005-RR6, commercial mortgage-backed securities pass-through certificates are rated by Fitch Ratings: -- $87,000,000 class A-1 'AAA'; -- $85,500,000 class A-2FX 'AAA'; -- $80,000,000 class A-2FL 'AAA'; -- $110,551,000 class A-3FX 'AAA'; -- $60,000,000 class A-3FL 'AAA'; -- $564,068,568 class X* 'AAA'; -- $50,061,000 class A-J 'AAA'; -- $27,498,000 class B 'AA'; -- $14,102,000 class C 'A'; -- $2,115,000 class D 'A-'; -- $8,461,000 class E 'BBB+'; -- $4,231,000 class F 'BBB'; -- $6,346,000 class G 'BBB-'; -- $7,050,000 class H 'BB+'; -- $2,821,000 class J 'BB'; -- $2,820,000 class K 'BB-'; -- $1,410,000 class L 'B+'; -- $2,116,000 class M 'B'; -- $1,410,000 class N 'B-'; -- $1,411,000 class O-1 'NR'; -- $1,412,000 class O-2 'NR'; -- $1,413,000 class O-3 'NR'; -- $1,414,000 class O-4 'NR'; -- $1,415,000 class O-5 'NR'; -- $3,511,568 class O-6 'NR'. * Notional amount and interest only All classes are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are all or a portion of 84 classes of fixed-rate commercial mortgage- backed securities having an aggregate principal balance of approximately $564,068,568, as of the cutoff date. For a detailed description of Fitch's rating analysis, please see the report titled 'Morgan Stanley Capital I Inc., Series 2005-RR6' dated Sept. 21, 2005, available on the Fitch Ratings web site at http://www.fitchratings.com/ MT. SINAI HOSPITAL: S&P Holds BB Rating on Outstanding Bonds ------------------------------------------------------------ (NEW YORK (Standard & Poor's) Oct. 13, 2005) Standard & Poor's Ratings Services revised its rating outlook on New York State Dormitory Authority's outstanding bonds, issued for Mount Sinai NYU Health Obligated Group, to positive from stable based on improved operating results for all three of the obligated group members, particularly Mount Sinai Hospital; measurably higher liquidity; and the disaffiliation of the former NYU Downtown Hospital from the system, reducing the risk of subsidization of the money-losing hospital, although it was not part of the obligated group. Standard & Poor's also affirmed its 'BB' rating on the bonds, which continues to reflect Mount Sinai NYU Health's challenges, including an only brief track record of improved operations; looming capital needs; and the obligated group members' continued need to use off-balance-sheet financing and asset sales to access capital and boost bottom lines. The improved operating results across the board are encouraging, and strength at all three hospitals is a positive factor that has not been present yet in the credit's history. The track record, however, remains a bit short. "Continuation of the current operating trend through at least year-end, along with maintenance of the higher liquidity level and articulation of an affordable multiyear capital plan, could result in the rating being raised in 2006 or 2007," said Standard & Poor's credit analyst Liz Sweeney. "Factors that would derail the ability to achieve a higher rating include failure to maintain positive operating results, a reduction in liquidity, or capital needs that cannot be met without big increases in debt or reductions in balance sheet strength." Results for the first six months of 2005 through June 30 demonstrate measurable improvement in operations, with each of the three obligated group members--Mount Sinai Hospital, NYU Hospitals Center, and the Hospital For Joint Diseases--generating positive income from operations, which, if continuing for the rest of the year, will be the first time that all members were profitable in the five-year rating history of the system. Liquidity also continues to improve, with 72 days' cash on hand as of June 30, 2005, which is the highest level in the obligated group's rated history. Year-to-date through June 30, the obligated group recorded a $16.8 million profit from operations (a 1.6% margin), while excess income, including investment income and philanthropy, totaled $26.1 million (2.5%). The outlook revision affects approximately $635 million of outstanding debt. NATEC INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: NATEC, Inc. 11 Arkansas Street Plattsburgh, New York 12903 Bankruptcy Case No.: 05-18362 Type of Business: The Debtor is the sole manufacturer of patented, high pressure, polymer-cased ammunition. This lightweight cartridge functions in existing weapons; utilizes conventional projectiles, propellants, and primers, and generates similar, if not better, ballistic and performance results to comparable metal-cased products. NATEC polymer-cased rifle ammunition is produced for law enforcement and sporting markets (both target and hunting). See http://www.natec-us.com/ Chapter 11 Petition Date: October 12, 2005 Court: Northern District of New York (Albany) Judge: Robert E. Littlefield Jr. Debtor's Counsel: David J. Moretti, Esq. Mokhiber & Moretti 2100 Reston Parkway #300 Reston, Virginia 20191 Tel: (703) 391-9898 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wael Ojjeh Assumed Loan $370,000 9 Avenue Matignon by NATEC 75008 Paris, France Reed Smith Legal Services $252,873 3110 Fairview Park Falls Church, VA 22042 Al Jaber $250,000 P.O. Box 2175 Abu Dhabi, UAE 3838781 Canada Inc. Advance on $230,000 4400 Kimber Boulevard Investment Saint Hubert, Quebec J3Y8L4 Canada Albany-Colonie Regional Hope Note from $100,000 Chamber of Commerce winning $100,000 1 Computer Drive Business Plan Colonie, NY 12205 Company Morgan, Lewis & Bockius, LLP Legal Services $86,107 Dupont Engineering Polymers Materials Vendor $79,344 United States Treasury Payroll Taxes $64,516 Western Powders Materials Vendor $54,530 Tony Maglione Consultant $43,000 Burns, Doane, Swecker & Mathis Legal Services $41,544 Wilson Sonsini Legal Services $41,031 Goodrich & Rosati Clinton County Treasurer $40,125 Nixon Peabody LLP $38,762 3838781 Canada Inc. Consulting W [sic.] $36,677 State Insurance Fund $31,966 First Insurance Funding Corp. $31,219 X-Plo/E-Zesto $27,239 AFRC Auditors $26,716 Sierra Bullets Materials Vendor $24,295 NC TELECOM: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: NC Telecom P.O. Box 1230 Meeker, Colorado 81641 Bankruptcy Case No.: 05-47275 Type of Business: The Debtor offers Internet connection services. See http://www.nctelecom.net/ Chapter 11 Petition Date: October 14, 2005 Court: District of Colorado (Denver) Judge: Howard R. Tallman Debtor's Counsel: Duncan E. Barber, Esq. Bieging Shapiro & Burrus LLP 4582 South Ulster Street Parkway, Suite 1650 Denver, Colorado 80237 Tel: (720) 488-0220 Fax: (720) 488-7711 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rural Utilities Service Loan $12,163,848 United States Department of Agriculture Washington, DC 20250 Rio Blanco County Prepaid outstanding $1,180,088 P.O. Box G Meeker, CO 81641 Moffat County Prepaid outstanding $507,767 221 Victory Way P.O. Box 6 Craig, CO 81626 Yampa Valley Economic Prepaid outstanding $186,463 Development Council White River Electric Loan $173,235 Qwest Phone services $61,101 Frying Pan Trade debt $5,450 Shughart Thomson & Kilroy PC Legal fees $2,850 Falcon Trade debt $2,580 PCS Technologies Trade debt $1,762 Zoom $1,271 White River Electric Utilities $794 City of Steamboat Trade debt $728 Kum & Go W E Fleet Trade debt $668 JSC Inc Trade debt $575 Codale Electric Supply Utilities $542 Moon Lake Trade debt $409 Dell-Payment Processing Computers $330 Center Utility Notification Center Utilities $324 of Colorado Sprint Phone services $278 NEIL TYBURK: Case Summary & 13 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Neil Raedon Tyburk 1250 Grenada Drive Northeast Canton, Ohio 44714 Bankruptcy Case No.: 05-67951 Chapter 11 Petition Date: October 13, 2005 Court: Northern District of Ohio (Canton) Judge: Russ Kendig Debtor's Counsel: Edwin H. Breyfogle, Esq. 11 Lincoln Way West Lincoln Professional Building, #2B Massillon, Ohio 44647 Tel: (330) 837-9735 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 13 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Capital Crossing Bank $1,297,447 101 Summer Street Boston, MA 02110 FirstMerit $141,960 Attn: Bankruptcy Department III Cascade Plaza Akron, OH 44308 KeyBank $115,994 P.O. Box 94920 Cleveland, OH 44101 BP Visa $23,833 P.O. Box 15153 Wilmington, DE 19886-5153 Sears Gold Master Card $19,733 P.O. Box 182156 Columbus, OH 43218-2156 Discover $13,268 P.O. Box 15251 Wilmington, DE 19886-5251 Bank of America $13,127 P.O. Box 1758 Newark, NJ 07101 Disney Visa $12,348 Cardmember Services P.O. Box 15153 Wilmington, DE 19886 Key Bank $5,981 P.O. Box 183067 Columbus, OH 43218 JB Robinson Jewelers $4,893 P.O. Box 740425 Cincinnati, OH 45274 Jaguar Credit $1 [Address Not Provided] First Merit $1 Attn: Bankruptcy Department III Cascade Plaza Akron, OH 44308 Morgan Bank $1 10 West Streetsboro Road Hudson, OH 44236 NORBOURG ASSET: RSM Richter is Trustee in Canadian BIA Assignment ----------------------------------------------------------------- Vincent Lacroix advises that Norbourg Asset Management Inc., Norbourg Financial Group Inc., Evolution Funds Inc., Perfolio Asset Management Inc. as well as Norbourg International Inc. made an assignment of their assets pursuant to the provisions of the Bankruptcy and Insolvency Act with the Trustee Firm RSM Richter Inc. Mr. Lacroix believes that this measure was necessary given the present circumstances and was the appropriate means of protecting the interests of the investors and other creditors of the Norbourg Group and constitutes the appropriate forum for the realisation of the assets of the entities of the Norbourg Group. Mr. Lacroix will fully cooperate with the Trustee. Norbourg Asset Management is a wealth management firm. NORCROSS SAFETY: Moody's Affirms Low-B Ratings with Stable Outlook ------------------------------------------------------------------ Moody's Investors Service has affirmed Norcross Safety Products L.L.C. ratings. The company's proposed $65 million increase to its term loan B, in connection with the announced Fibre-Metal Products acquisition, was included in the affirmation. The rating outlook remains stable. The ratings reflect the company's: * high leverage, relatively weak balance sheet with significant goodwill; * potential integration risks related to the acquisition; and * aggressive financial policy driven by its private equity ownership. The ratings also consider the stable revenue and diverse customer base, favorable industry dynamics, and a track record of solid operating performance and cash flow generation. The ratings are subject to review of the final documentation. Moody's has affirmed these ratings for Norcross Safety Products L.L.C.: * B1 Corporate family rating (formerly senior implied rating); * B1 for the US $50 million senior secured revolving credit facility, due 2010; * B1 for the US $152.8 million senior secured term loan (upsized from $87.8 million), due 2012; * B3 for the US $151.6 million 9.875% senior subordinated notes, due 2011. These ratings have been affirmed at Safety Products Holdings, Inc: * Caa1 for the US $134.5 million 11.75% senior fixed rate pay in kind notes, due 2012. The rating outlook is stable. Norcross is acquiring Fibre-Metal, a leading designer and manufacturer of head protection equipment, for a purchase price of $70 million. Proceeds from the incremental term loan (increased by $65 million) will be applied towards funding the $70 million purchase price, including related fees and expenses. Norcross was acquired in July 2005 by Odyssey Investment Partners LLC, a private equity firm. The ratings are constrained by Norcross' increased debt load and high financial leverage, expected continuation of its acquisitive growth strategy, the associated integration and execution risks as well as the relatively low amount of tangible assets on its balance sheet due to significant goodwill. Pro forma for the acquisition, Norcross will have total debt of over $400 million. Tangible book equity will be a substantial deficit. Despite the purchase premium, the acquisition of Fibre-Metal will significantly enhance Norcross' core personal protection equipment business and expand the company's product portfolio. The Fibre- Metal acquisition will also expand Norcross end-market industry coverage into construction, welding, agriculture and ship building as well as add significant customers and distributors. Given the fragmented nature of the personal protection equipment (PPE) market, going forward, it is likely that Norcross will continue to actively pursue acquisition opportunities to stimulate growth. The ratings are supported by Norcross's leading market position in the PPE market, highly diversified end-markets and broad product offerings, favorable industry dynamics, and a track record of solid operating results and cash flow generation. Norcross has historically generated good margins, with EBITDA margins of 14% and 15% in fiscal year 2004 and LTM 7/2/2005, respectively. The company's good earnings and low capital expenditure requirement have led to relatively moderate free cash flow generation in the past. Moody's expects the combined company to generate free cash flow to total debt of 7-8% for 2006. Over the medium term, positive rating momentum may develop if good financial performance is sustained, integration of Fibre-Metal is successful and free cash flow is used to reduce leverage under 5 times. However, the ratings or outlook could be pressured by the pursuit of large-sized debt-financed acquisitions as well as by any potential shareholder-friendly transaction. The ratings may also be pressured if leverage increases materially over 5.8 times post any future acquisition, if the company is unable to reduce its leverage under 5.5 times within next eighteen months of any acquisition, or if expectations for the company's free cash flow to debt declines below 7% per annum on a projected basis for any extended period of time. The company's liquidity is expected to remain adequate after the acquisition with almost $45 million of availability under its $50 million revolving credit facility (after $5.0 million of borrowings to facilitate the FibreMetal acquisition) but with virtually no cash on hand. Moody's expects Norcross to remain comfortably in compliance with all of its bank financial covenants over the next 12 months. The B1 rating on the $153 million ($65 million incremental) term loan B reflects its senior secured status in the debt structure. The facility will be secured by a first priority lien on the capital stock as well as all assets of Norcross and subsidiaries, and will be guaranteed by all material domestic subsidiaries and its parent, Safety Products Holdings, Inc. Norcross Safety Products L.L.C., headquartered in Oak Brook, Illinois, is a leading manufacturer of personal protection equipment. Moody's estimates 2005 revenues, proforma for the Fibre-Metal acquisition, to be in the area of $500 million. NORTHWEST AIRLINES: Files Adversary Proceeding Against AMEX ----------------------------------------------------------- Northwest Airlines, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to prevent American Express Travel Related Services, Inc., from unlawfully: -- withholding performance under their Airline Card Services Agreement dated January 1, 2004; and -- exercising possession or control over payments by Northwest customers using AMEX cards for travel on Northwest flights. The Card Services Agreement facilitates the purchase of tickets for air travel and related goods/services from the Debtors. Northwest Airlines asserts that the funds indisputably are the property of its estate. To date, AMEX has withheld a total of $63.4 million otherwise due and owing to Northwest Airlines under the Agreement. Jason M. Halper, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, tells the Court that the Agreement is critical to Northwest Airlines' business, as payments made on AMEX cards represent 30% of its revenues from credit card transactions, or around $3 billion annually. A failure by AMEX to remit amounts to Northwest Airlines will severely affect Northwest Airlines' cash flow and will impede its ability to reorganize. On September 14, 2005, AMEX sent Northwest Airlines a letter stating that "until further notice" it would withhold 100% of all charges on AMEX cards and would not make any payments to Northwest Airlines. Northwest Airlines informed AMEX that the conduct threatened in its September 14 letter would violate the automatic stay and the Automatic Stay Order. Neal S. Cohen, the Executive Vice President and Chief Financial Officer of NWA Corp. and Northwest Airlines, asked AMEX to continue performing its obligations under the Agreement as in the prepetition period and not withhold funds otherwise due to Northwest Airlines, and comply with the Court's Automatic Stay Order. However, AMEX still withheld amounts due and owing to Northwest Airlines under the Agreement: Amount Withheld Date of Invoice --------------- --------------- $11,800,000 September 9, 2005 $19,100,000 September 19, 2005 $10,400,000 September 20, 2005 $11,700,000 September 21, 2005 $5,100,000 September 22, 2005 $5,300,000 September 23, 2005 AMEX also asked U.S. Bank to debit Northwest Airlines' account and credit to AMEX over $22 million consisting of Cardmember charges invoiced on September 7 and 8, 2005, for Northwest services and goods -- fund due and owing to Northwest Airlines. AMEX, however, was unsuccessful. On September 22, 2005, AMEX unilaterally reduced the amount it would withhold to 50% of all charges on AMEX cards. Mr. Halper asserts that AMEX's unlawful resort to self-help as a means to establish a Reserve of potentially hundreds of millions of dollars in violation of the automatic stay and the Automatic Stay Order is wholly without justification. Mr. Halper explains that a Reserve would only be necessary in the unlikely event that Northwest Airlines ceases operations and liquidates, requiring AMEX to credit Cardmembers' accounts in connection with cancelled travel. However, Northwest Airlines still operates, there is no foreseeable plan or reason to believe that it will cease doing business and liquidate, and it has on hand cash and cash equivalents of $1.6 billion. Mr. Halper notes that AMEX would still have the right to seek an order to modify the stay if a situation were to arise where a severe disruption of Northwest Airlines' business triggered a dramatic increase in customer refunds. Mr. Halper tells the Court that the only ground invoked by AMEX for withholding "until further notice" all amounts due under the Agreement is the Reserve Provision section of the Agreement, which states five circumstances under which AMEX may claim the ability to establish a Reserve for Cardmember chargebacks or to terminate the Agreement. According to Mr. Halper, AMEX has never indicated which of the five circumstances it believes is applicable. Nonetheless, three of the circumstances indisputably are not applicable because: (1) Northwest has not ceased a significant part of its operations or commenced a liquidation of its business; (2) no lien has been asserted on, nor has any claim been made, to any money or amounts subject to AMEX's rights of chargeback or setoff; and (3) Northwest Airlines has not been subject to execution, attachment, foreclosure or repossession on all or a majority of its assets. The other two circumstances are "a material adverse change to Carrier's business" or if Northwest Airlines "enters bankruptcy." Reliance on either of these two provisions would clearly violate Section 365 of the Bankruptcy Code, Mr. Halper says. Northwest Airlines asks Judge Gropper for declaratory judgment, a temporary restraining order, and preliminary and permanent injunctive relief, including: (i) enforcing the automatic stay and ordering the turn over of debts that are owed to Northwest Airlines and that constitute property of its estate pursuant to Sections 362 and 542; (ii) declaring that AMEX's threat to exercise possession or control over additional funds owed to Northwest Airlines to establish the Reserve, if acted on, would violate the automatic stay; (iii) declaring that the provisions in the Agreement relating to AMEX's creation of a Reserve are either not applicable or are unenforceable ipso facto or penalty clauses; and (iv) prohibiting AMEX from exercising possession or control over additional amounts owed to Northwest Airlines or from terminating the Agreement. Northwest Airlines also asks the Court to declare that: (a) the Agreement is not applicable and is unenforceable; (b) termination of the Agreement would constitute an impermissible violation of the automatic stay and the Automatic Stay Order; and (c) AMEX is prohibited by the automatic stay from terminating, withholding or modifying performance under the Agreement and from exercising possession or control over any monies that will become due, owing and payable to Northwest Airlines under the Agreement. Northwest Airlines seeks an award of damages and sanctions in an amount to be determined by the Court for AMEX's violation of Section 362. Northwest Airlines has sought and obtained the Court's authority to file the Agreement under seal. Mr. Halper explains that certain of the information contained in the Agreement is highly confidential and proprietary to Northwest Airlines and AMEX. Disclosure would give the airline's competitors access to highly confidential and proprietary information, particularly about the rates and fees contained in the Agreement, which are central to its business operations. Disclosure would also put Northwest Airlines at a substantial commercial and competitive disadvantage in the future when renegotiating or entering into new agreements with other credit card processors. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Airport Operators Want Debtors to Remit Fees ---------------------------------------------------------------- A dozen airport operators ask the U.S. Bankruptcy Court for the Southern District of New York to compel Northwest Airlines, Inc., to segregate and remit passenger facility charges the Debtor collected on their behalf. The Airport Authorities are: (1) The Greater Orlando Aviation Authority; (2) San Francisco Airport Commission; (3) The Indianapolis Airport Authority; (4) The Port Authority of New York and New Jersey; (5) Denver International Airport; (6) The Allegheny County Airport Authority; (7) The Massachusetts Port Authority; (8) The City of Charlotte, North Carolina; (9) The Metro Nashville Airport Authority; (10) The City of Los Angeles; (11) Raleigh-Durham Airport Authority; and (12) The City of Philadelphia Department of Commerce, Division of Aviation PFCs are charges added to the price of each ticket sold. The Airport Authorities inform the Court that Northwest and its agents are required under Section 40117 of the United States Transportation Code and Section 158 of Title 14 of the Code of Federal Regulations to collect PFCs, hold them in trust, account for them, and remit them, less handling costs, on a timely basis to approved airports. The Airport Authorities use the proceeds for airport development. The Airport Authorities note that the Debtors have used airport facilities in the operation of their businesses by, among other things: (a) causing passenger aircraft to land and takeoff from the airports; (b) using terminal space, including gates, offices, baggage and ramp areas; (c) using non-terminal space, like cargo area and aircraft parking spaces; and (d) using equipment, including common use baggage handling equipment and check-in equipment. The PFC charges per ticket and the average monthly obligations due to the Airport Authorities are: Operator Monthly Dues PFC Charge -------- ------------ ---------- Orlando Undisclosed $3.00 San Francisco $216,000 $4.50 Port Authority of NY/NJ Undisclosed $3.00 Indianapolis $366,602 Undisclosed Denver $228,000 $4.50 Allegheny $80,000 Undisclosed Massachusetts $157,000 Undisclosed Metro Nashville $71,000 $3.00 Charlotte Undisclosed Undisclosed Los Angeles $430,000 $3.00 Raleigh-Durham $125,200 $4.50 Philadelphia $166,000 Undisclosed The GOAA and the IAA inform the Court that they have not received the accrued PFCs collected by the Debtors for August 2005. Representing GOAA, Richard S. Kanowitz, Esq., at Kronish Lieb Weiner & Hellman LLP, in New York, reminds the Court that PFCs, like excise taxes, are not property of the estate, but rather property held in trust. The air carriers, including Northwest, have no equitable or legal interest in the PFCs and thus, they are not property of the estate pursuant to Section 541 of the Bankruptcy Code. The Airport Authorities want the Debtors to: (i) open a bank account, separate and apart from all other accounts, to deposit all PFCs as and when collected; (ii) remit the PFCs to the appropriate airport monthly; and (iii) comply with all accounting and remittance requirements provided by Title 14 of the Code of Federal Regulations. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTH AMERICAN: Plan Solicitation Period Stretched to Jan. 31 ------------------------------------------------------------- North American Refractories Company has until Jan. 31, 2006, to solicit acceptances for its proposed Amended Reorganization Plan. The U.S. Bankruptcy Court for the Western District of Pennsylvania extended the Debtor's exclusive plan solicitation period to finalize the negotiation, revisions, and solicitation of the Plan that has been agreed to in principle by the Debtor's major creditor constituencies. The Debtor's exclusive period to solicit plan acceptances has been extended nine times since the Plan was filed on July 31, 2003. The Debtor sought bankruptcy protection in early 2002 after suffering a slump in the domestic economy and encountering an overwhelming number of claims from individuals asserting injuries or illnesses caused by exposure to asbestos containing products it manufactured. Headquartered in Pittsburgh, Pennsylvania, North American Refractories Company, was engaged in the manufacture and non- retail sale of refractory bricks and related products. The Company filed for chapter 11 protection on January 4, 2002 (Bankr. W.D. Pa. Case No. 02-20198). Paul M. Singer, Esq., of Pittsburgh represents the Debtor. When the Debtor filed for protection from its creditors, it listed $27,559,000,000 in assets and $18,634,000,000 in debts. NORTHWEST AIRLINES: Suppliers Want Existing Contracts Unaltered --------------------------------------------------------------- As previously reported, Northwest Airlines Corp. and its debtor- affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York for authority to pay their fuel suppliers' prepetition claims. 2 Suppliers Seek Reconsideration ConocoPhillips Company and Valero Marketing and Supply Company ask the Court to amend the Fuel Order to provide that the terms of existing agreements between Fuel Related Vendors and the Debtors are not altered, amended, or annulled in any way by other provisions of the Fuel Order or the Fuel Motion, and the Fuel Order and Fuel Motion will not have the effect of imposing or creating any additional terms to the existing agreements. (A) ConocoPhillips ConocoPhillips provides aviation fuel to the Debtors pursuant to an existing purchase and sale agreement. ConocoPhillips complains that certain language in the Fuel Order could be construed to allow modification of the terms of its Fuel Supply Agreement with Northwest Airlines, Inc. ConocoPhillips is concerned that the language of the Fuel Order may be construed to allow unilateral modification of the terms and conditions, in two ways: (1) The definition of "On-Going Obligations/Terms" is so loose and vague that it could be construed to allow unilateral modification of the terms and conditions of the Fuel Supply Agreement; and (2) The Fuel Order requires fuel suppliers to comply with the "On-Going Obligations/Terms" during "the pendency of these cases." ConocoPhillips believes that the provision could modify the duration and term of supply agreements like the Fuel Supply Agreement. ConocoPhillips asserts that its agreement with the Debtors is a forward contract for the sale of a commodity for delivery at future dates, and as such, may be terminated under Section 556 of the Bankruptcy Code without regard to the automatic stay. To the extent that the Fuel Supply Agreement is an executory contract, ConocoPhillips contends that the Debtors cannot unilaterally alter the terms of that contract. The Debtors may only assume or reject the contract. ConocoPhillips has continued, postpetition, to ship aviation fuel to the Debtors, in the quantities requested by the Debtors. Adam L. Rosen, Esq., at Rosen Slome Marder LLP, Uniondale, New York, relates that ConocoPhillips has attempted to confirm with the Debtors that the Fuel Order would not be used to modify the terms of the their Fuel Supply Agreement. ConocoPhillips submitted on September 20, 2005, a letter agreement to the Debtors which, if executed, would have confirmed that understanding and eliminated the need for the reconsideration request. However, the Debtors have declined to execute the letter agreement. (B) Valero Valero supplies commodities like aviation fuel to the Debtors pursuant to existing forward contracts. Mr. Rosen, who also represents Valero, informs the Court that the Debtors advance weekly preliminary settlement payments to Valero prior to purchasing fuel. Each month, the Debtors purchase commodities from Valero under the Valero Forward Contracts, and the settlement payments are applied against the commodity obtained. At the end of the month, a net settlement is conducted by netting the preliminary settlement payments to the commodities obtained, and the Debtors are notified of their preliminary settlement credit going into the following month. Mr. Rosen asserts that Valero holds prepetition settlement payments to secure the Debtors' commodities obtained prepetition. In addition, Valero has possession of prepetition settlement payments in excess of the amounts owed for commodities obtained prepetition. It also has received postpetition settlement payments and continues to sell commodities to the Debtors postpetition under the existing Valero Forward Contracts. Valero shares ConocoPhillips' concern. Valero also believes that the Fuel Order could result in the diminution of the value of its prepetition collateral. According to Mr. Rosen, the Fuel Order allows the Debtors unilaterally to apply all or part of Valero's collateral to the Debtors' postpetition indebtedness, potentially rendering Valero's prepetition claims unsecured or undersecured. In effect, the Debtors are attempting to strip Valero of its lien position without providing adequate protection for the use of Valero's collateral, Mr. Rosen asserts. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Aircraft Lessors Want Adequate Protection ------------------------------------------------------------- Several lessors of aircraft and engines appeared before the U.S. Bankruptcy Court for the Southern District of New York seeking adequate protection for Northwest Airlines Corp. and its debtor- affiliates' postpetition use of their equipment. The Lessors complain that Northwest has neither agreed to perform its existing obligations nor offered adequate protection for its postpetition use of their Aircraft Equipment. Northwest, like substantially all other U.S. airlines, acquires its fleet through a variety of financing and leasing techniques and vehicles. Among other structures, Northwest utilizes privately placed leveraged leased, single-investor leased and owned aircraft transactions. The Lessors tell the Court that they are secured under the financial or leasing transactions by a lien on or other interest in the aircraft, airframes, jet engines and related property, equipment and documents. The Lessors relate that the Aircraft Equipment remain in service in Northwest's operating fleet and are being flown on its scheduled routes in the ordinary course of the airline's business. The Lessors contend that Northwest's continued use of the Aircraft Equipment will depreciate its value. Even if Northwest is performing maintenance as it comes due, the accrual of days, hours and cycles by itself also diminishes the Aircraft Equipment's value. As a result, the Lessors note, their interest in the Equipment is exposed to the risk of diminution in value. An additional risk of diminution in value of the Aircraft Equipment exists due to the failure of Northwest to make certain rent and other payments when due with respect to the Aircraft Equipment. If the Aircraft Equipment is not presently in use in revenue- producing service, the value of the Aircraft Equipment is still at risk if Northwest has not made commercially reasonable arrangements for its storage and maintenance. The Lessors explain that standard industry practice requires that storage of aircraft and engines and associated equipment meet certain commercial standards, including standards established by the manufacturers of the airframes, engines and associated equipment. Failure to comply with the standards puts the Aircraft Equipment at serious risk of diminution in value. The Lessors assert that, as secured creditors, they are entitled to adequate protection, as a matter of right, not merely as a matter of discretion, when the estate proposes to use, sell or lease property in which they have an interest. To provide adequate protection of their interest in the Aircraft Equipment, the Lessors want Northwest: -- to comply with the requirements of the regulations issued under the Federal Aviation Act and any other laws with respect to the Aircraft Equipment; all provisions of the Operative Documents concerning the operation, maintenance, and use of the Aircraft Equipment; and all rights of inspection granted under the Operative Documents; -- to continue to carry and maintain, at its own expense, valid and collectible hull and liability insurance with respect to the Aircraft Equipment in amounts not less than the amounts required under the Operative Documents; -- enjoined from removing or replacing any component parts except in accordance with the Operative Documents; -- to pay cash payments equal in amount to the regular fully amortized payments or rent under the Operative Documents; -- to confirm whether the Aircraft Equipment continues to be used in the airline's revenue service, and if not, provide evidence that the storage, insurance and maintenance of the Aircraft Equipment is consistent with commercially reasonable industry practices; -- to pay on a monthly basis cash maintenance reserves to the Lessors in respect of the operation of the Aircraft Equipment from the Petition Date; and -- to pay the Lessors' fees and expenses in accordance with the terms of the Operative Documents. The Lessors also ask the Court to grant them a "superpriority" administrative claim pursuant to Section 507(b) of the Bankruptcy Code, higher in priority than any and all administrative claims to Northwest's assets, to the fullest extent necessary to protect them from any postpetition decline in value of the Aircraft Equipment stemming from Northwest's postpetition use. Wilbur F. Foster, Jr., Esq., and Robert E. Winter, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent eight aircraft lessors in the Debtors' cases: 1. ING Capital LLC, as lender and agent; 2. Fortis Bank (Nederland); 3. BNP Paribas; 4. IIB Bank Limited, IFSC Branch, as agent; 5. DekaBank Deutsche Girozentrale; 6. CIT Leasing Corp.; 7. Newcourt Capital USA Inc.; and 8. Kreditanstalt fur Wiederaufbau Nine lessors are represented by John I. Karesh, Esq., at Vedder, Price, Kaufman & Kammholz, P.C.: 1. Goldman Sachs Credit Partners; 2. GS Leasing Engines I, LLC; 3. Bank of America; 4. MBIA Insurance Company; 5. Sumitomo Bank; 6. Transamerica Aviation LLC; 7. DVB Bank AG; 8. HSH Nordbank AG; and 9. Halifax Bank plc U.S. Bank National Association and U.S. Bank Trust National Association, as indenture trustees, are represented by Elizabeth Page Smith, Esq., and Allison H. Weiss, Esq., at LeBoeuf, Lamb, Greene & MacRae, LLP, and Richard Hiersteiner, Esq., and Jeanne P. Darcey, Esq., at Palmer & Dodge LLP. Leo T. Crowley, Esq., at Pillsbury Winthrop Shaw Pittman LLP, represents Marubeni America Corporation, as collateral agent, and Public Service Resources Corporation. Jason H. Watson, Esq., at Alston & Bird LLP, represents Wachovia Bank, National Association, in its capacity as trustee under equipment trust agreements dated January 15, 1989, and April 15, 1989, with the Debtors and U.S. Bank. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: East Texas Capital Lobbies for Equity Panel --------------------------------------------------------------- East Texas Capital Partners, LLC, has asked the U.S. Trustee for Region 2 to appoint an official committee of equity security holders in Northwest Airlines Corporation's Chapter 11 cases. East Texas Capital argues, "NWA's bankruptcy is, at best, technical and opportunistic in nature, apparently solely motivated by NWA's desire to speed concession talks with its unions and modify certain company financial arrangements." East Texas Capital believes that NWA's bankruptcy filing was unnecessary because the carrier had US$1.5 billion in unrestricted cash on hand at the time of filing (more than US Airways and Delta Airlines), had labor concessions pending from over half its unionized work force at the time, and pension law reform favorable to NWA was also moving through the U.S. Congress at the time of filing. Furthermore, East Texas Capital suggests, "the true asset value of the bankruptcy estate appears understated as NWA's filing does not account for the company's valuable route structure, the future tax savings from the accumulated net operating losses ('NOL's') in any reorganized entity and other valuable assets." East Texas Capital "believes there are recoveries unique to the common stockholders' that will be available should it be proven that . . . NWA's board of directors acted inappropriately by failing to discharge their duties to shareholders by acting specifically contrary to their interests, by its members failing to properly file legally required Securities and Exchange Commission paperwork on a timely basis and other failures of disclosure. " East Texas Capital says it privately estimates that, under certain scenarios apart from potential shareholder specific damage claims, Northwest Airlines' common stockholders could be entitled to as much as US$250 million or almost US$3 per common share in recovery in any reorganization. The appointment of an Equity Securities committee will assure that common stockholders have a chance of this recovery and, by its oversight in the bankruptcy process, will limit what appears to be an unchecked pattern of disregard for the common stockholders, the actual business owners of NWA, by NWA's Board of Directors to date. Lastly ETCP, LLC believes that the appointment of an Equity Securities Committee will not interfere with any future Unsecured Creditor Committee activities and will speed NW's reorganization process by giving an organized voice to the stockholders' interests in the case. East Texas Capital Partners, LLC, is a Pennsylvania Limited Liability Company specializing in real estate and distressed security investments, and can be reached at: Ronald Gledhill Communications Director East Texas Capital Partners, LLC 4789 Route 309 Center Valley, PA 18034 Telephone (877) 791-5291 Fax (610) 289-2143 easttexascapital@yahoo.com East Texas Capital says it is acting on behalf of its principals who own Northwest Airlines Corporation common stock. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) NTELOS HOLDINGS: S&P Rates $135MM Planned Sr. Notes Offer at CCC+ ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to Waynesboro, Va.-based NTELOS Holdings Corporation. The outlook is negative. Simultaneously, Standard & Poor's assigned its 'CCC+' rating to the company's proposed offering of $135 million floating rate senior notes due 2013. "The notes are rated two notches below the corporate credit rating because of the company's holding-company status with no direct operations and the significant first and second priority secured debt and other obligations that must be serviced by its subsidiary NTELOS, Inc., a diversified telecommunications provider," said Standard & Poor's credit analyst Susan Madison. Net proceeds from the issue will be used to pay a $125 million dividend to the private equity sponsors. The notes will be issued under Rule 144A with registration rights upon the occurrence of a "Registrable Event," such as the issuance of additional debt or equity securities that requires registration with the SEC. The company will have the option to defer cash interest payments on the notes 2009. Standard & Poor's also affirmed all ratings, including the 'B' corporate credit rating, for NTELOS Inc., a wholly owned subsidiary of NTELOS Holding Corporation. The outlook is negative. Pro forma for the proposed offering, total debt outstanding was $760 million at June 30, 2005. Although the addition of $135 million of debt is material, the impact partly is offset by recent improvements in operating performance and cash flow growth for NTELOS' wireless business. Accordingly, while the new notes will defer credit improvement, the company should be able to maintain credit metrics consistent with a 'B' corporate credit rating. In addition, credit measures may further improve, following the successful completion of a recently announced initial public offering if a sizeable portion of the proceeds are used to reduce debt. The ratings reflect a highly leveraged capital structure that includes significant amounts of high-yield bank debt with restrictive financial covenants; the highly competitive nature of the wireless industry (the primary cash growth producer for NTELOS); geographic concentration; and the limited size and scale of the company's operations. In addition, in its core wireless segment, NTELOS competes against much larger, well-financed incumbents, for which scale economies and national footprints offer significant competitive advantages. These risks partly are mitigated by expected growth in the wireless segment, relatively stable cash flows from the company's wireline operations and adequate near-term liquidity. NVE INC: Creditors Panel Wants to Hire Brown Rudnick as Counsel --------------------------------------------------------------- The Official Committee Of Unsecured Creditors of NVE Inc., ask the U.S. Bankruptcy Court for the District of New Jersey for permission to employ Brown Rudnick Berlack Israels LLP as its counsel. Brown Rudnick will: 1) develop and negotiate the procedures to govern the allowance of claims of ephedra claimants and the distribution of proceeds to ephedra claimants in accordance with provisions of any plans of reorganization that may be submitted in the Debtors' bankruptcy proceedings; 2) develop and negotiate the procedural structure of an appropriate trial on causation, if necessary, and participate that trial solely to insure that the approved procedures are followed and not modified without the participation of the Committee; 3) protect the Committee's interest with respect to confirmation and consummation of any plans of reorganization that may be submitted in the Debtors' chapter 11 case; 4) appear in Court and at various meetings to represent the interests of the Committee and attend meetings and negotiate with the representatives of the Debtors, the Creditors' Committee and other parties-in-interst; 5) advise the Committee with respect to its rights, duties and powers in the Debtor's chapter 11 case and prepare for the Committee all necessary applications, motions, answers, memoranda, orders, reports and other legal papers in support of positions take by the Committee; 6) investigate transactions and claims and causes of action against the Debtor's shareholder and CEO and commence and prosecute those actions, if necessary; and 7) perform all other legal services for the Committee in connection with the Debtor's chapter 11 case in accordance with the scope of the Committee's duties and as required under the Bankruptcy Code and the Bankruptcy Rules. B David J. Molton, Esq., a Member of Brown Rudnick, is one of the lead attorneys for the Committee. Mr. Molton charges $600 per hour for his services. Mr. Molton reports Brown Rudnick's professionals bill: Professional Hourly Rate ------------ ----------- William R. Baldiga $685 Steven B. Smith $445 Designation Hourly Rate ----------- ----------- Partners $400 - $790 Associates $200 - $480 Paralegals $175 - $240 Brown Rudnick assures the Court that it does not represent any interest materially adverse to the Committee, the Debtor or its estate. Headquartered in Andover, New Jersey, NVE Inc., dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now-banned herbal stimulant, Ephedra. The Company filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J. Case No. 05-35692). When the Debtor filed for protection from its creditors, it listed $10,966,522 in total assets and $14,745,605 in total debts. O'SULLIVAN INDUSTRIES: Files for Chapter 11 Protection in Georgia ----------------------------------------------------------------- O'Sullivan Industries, Inc., and three affiliates filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court for the Northern District of Georgia in Atlanta on Oct. 14, 2005. The Debtors said they will file a plan of reorganization and a disclosure statement shortly with the Bankruptcy Court to expedite their chapter 11 proceedings. The Debtors disclosed that 83% of its senior secured notes support the material economic terms that underpin a Plan delivering nothing to unsecured creditors. DIP Financing O'Sullivan received a commitment for up to $35 million of debtor- in-possession financing from CIT Group/Business Credit, Inc. The DIP facility, together with funds from operations, will provide the liquidity necessary to enable O'Sullivan to meet its obligations to its suppliers, customers and employees during the Chapter 11 reorganization process. Robert S. Parker, president and chief executive officer of O'Sullivan Industries, said the filing would not cause a reduction in O'Sullivan's 1,300-person workforce and that O'Sullivan would ask the court to protect employees' wages and benefits. He assured the Company's customers that it has sufficient inventory to keep them supplied and intends to provide uninterrupted service throughout the reorganization process. Mr. Parker said the bankruptcy filing is an essential and necessary step in the turnaround that has been underway since the new management team began to come on board in June 2004. "We are taking this step to deal with O'Sullivan's debt burden and not because of operational issues," he said. "This will ultimately be a positive step in O'Sullivan's efforts to become an even stronger leader in the ready-to-assemble furniture industry. As a result of obtaining the support of a clear majority of our senior secured note holders in advance of the filing, we are in a position to complete the reorganization process in less time than is customary in many Chapter 11 proceedings. "While we would have liked to achieve a consensual restructuring outside of Chapter 11, O'Sullivan's debt burden and complex capital structure left us no choice but to take this step. We regret the impact this action will have on our suppliers and other impaired creditors." He continued, "O'Sullivan has a skilled and dedicated workforce, an expanding line of competitive products, and an established brand name available through the top retailers across the United States. We are well positioned to continue to provide product to our customers during the reorganization process, and we are confident that this process will not affect our ongoing delivery of outstanding customer service. New Leadership is Rebuilding Company "Since we began assembling the new management team at O'Sullivan 15 months ago, our focus has been on turning this company around," said Mr. Parker. "The company has made tremendous strides in accomplishing that goal. We believe we have turned the corner operationally, and there are signs of progress with respect to our sales." Mr. Parker cited seven key initiatives and accomplishments: -- Transforming the sales organization to work in closer partnership with retailers; -- Aligning the sales and marketing strategy with specific product categories; -- Implementing a disciplined consumer-focused new product development process; -- Expanding into new product categories; -- Improving operating efficiency, cutting waste, and reducing spending; -- Reducing inventory by $13 million; and -- Establishing a talented sourcing organization. He said, "Our customers, vendors and employees know that O'Sullivan's new leadership has already improved the company and its ways of doing business. There will be more improvements to come, but to get there O'Sullivan has had to address its capital structure." The Proposed Plan The plan of reorganization to be filed with the court will describe how the various classes of creditors would be treated in the reorganization. The plan is subject to review and approval by the U.S. Bankruptcy Court. Under the proposed plan: -- Holders of O'Sullivan Industries 10.63% senior secured notes would receive, in full satisfaction of their claims, their pro rata share of 10 million shares of new O'Sullivan Holdings common stock and $10 million in principal amount of new secured notes. -- General unsecured creditors of O'Sullivan Industries Holdings, Inc., and its subsidiaries, including holders of O'Sullivan Industries, Inc., 13.375% senior subordinated notes, would receive no payment for their claims. All outstanding obligations of O'Sullivan Industries Holdings, Inc., would be cancelled under the proposed plan and would receive no distribution of any kind. All outstanding shares of O'Sullivan Industries Holdings preferred stock, common stock, warrants and options would be cancelled under the proposed plan and would receive no distribution of any kind. While O'Sullivan is in Chapter 11 reorganization, investments in its securities will be highly speculative. Shares of O'Sullivan Industries Holdings, Inc.'s currently outstanding preferred stock and common stock almost certainly will have no value after the restructuring. As a result of the bankruptcy filing, O'Sullivan did not file its annual report on Form 10-K Friday. It expects to file these reports upon completion of the documents. has been in business since 1954. The company designs, manufactures and distributes ready-to-assemble furniture and related products, including a growing line of desks, computer work centers, home entertainment centers, bookcases, shelving, stands for televisions and audio equipment, bedroom furniture pieces, garage storage units and commercial furniture. The majority of O'Sullivan products are sold through large retailers and office supply stores. O'Sullivan employs approximately 1,300 people, primarily at production facilities in Lamar, Missouri, and South Boston, Virginia. The company has its headquarters in the Atlanta suburb of Roswell. Headquartered in Roswell, Georgia, O'Sullivan Industries, Inc., designs, manufactures and distributes ready-to-assemble furniture and related products, including a growing line of desks, computer work centers, home entertainment centers, bookcases, shelving, stands for televisions and audio equipment, bedroom furniture pieces, garage storage units and commercial furniture. The Company and three affiliates filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Lead Case No. 05-83049). James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes and Stout, PA, represents the Debtors in their restructuring efforts. As of Sept. 30, 2005, O'Sullivan reports $161.3 million in total assets and $254.2 million in total liabilities. O'SULLIVAN INDUSTRIES: Case Summary & 43 Largest Creditors ---------------------------------------------------------- Lead Debtor: O'Sullivan Industries, Inc. a/k/a O'Sullivan Furniture 10 Mansell Court E, Suite 100 Roswell, Georgia 30076 Bankruptcy Case No.: 05-83049 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- O'Sullivan Industries Holdings, Inc. 05-83076 O'Sullivan Industries-Virginia, Inc. 05-83087 O'Sullivan Furniture Outlet, Inc. 05-83102 Type of Business: The Debtor designs, manufactures and distributes ready-to-assemble furniture and related products, including a growing line of desks, computer work centers, home entertainment centers, bookcases, shelving, stands for televisions and audio equipment, bedroom furniture pieces, garage storage units and commercial furniture. Chapter 11 Petition Date: October 14, 2005 Court: Northern District of Georgia (Atlanta) Judge: C. Ray Mullins Debtors' Counsel: James C. Cifelli, Esq. Gregory D. Ellis, Esq. Lamberth, Cifelli, Stokes & Stout, PA East Tower, Suite 550 3343 Peachtree Road, Northeast Atlanta, Georgia 30326 Tel: (404) 262-7373 Financial Condition of O'Sullivan Industries, Inc. at Sept. 30, 2005: Total Assets: $161,335,000 Total Debts: $254,178,000 Financial Condition of O'Sullivan Industries Holdings, Inc. at Sept. 30, 2005: Total Assets: $158,433 Total Debts: $132,151,000 O'Sullivan Industries-Virginia, Inc.: Estimated Assets: $50 Million to $100 Million Estimated Debts: More than $100 Million O'Sullivan Furniture Outlet, Inc.: Estimated Assets: $100,000 to $500,000 Estimated Debts: More than $100 Million A. O'Sullivan Industries, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Senior Subordinated Notes Bond debt $102,420,000 Sixth & Marquette Minneapolis, MN 55479 Sun Container Trade debt $792,208 515 South First Street Mount Vernon, IL 62864 Haffle America Company Trade debt $397,311 3901 Cheyenne Drive Archdale, NC 27263 Yellow Freight System Inc. Trade debt $347,656 10990 Roe Avenue Overland Parks, KS 66211 Fibre Converters Inc. Trade debt $319,064 37450 Schoolcraft Road Livonia, MI 48150 Nickander Assocaites Trade debt $299,022 112 park 32 West Nobleville, IN 46061 DNP America LLC Trade debt $235,802 Hendren Plastics Trade debt $226,197 Federal Express Corp. Trade debt $225,674 Guardian Industries Trade debt $187,034 Temple Inland Corp Trade debt $180,607 Impact Resource Group Trade debt $151,429 G L Resources (Comtrad) Trade debt $139,938 Toppan Printing Company Trade debt $134,901 Sealed Air Corporation Trade debt $130,344 Woodcraft Industries Inc. Trade debt $126,719 National Marketing Service Trade debt $114,137 Collins Products Trade debt $104,213 Supreme Screw Products, Inc. Trade debt $84,571 Flakeboard Company Ltd. Trade debt $83,769 B. O'Sullivan Industries Holdings, Inc.'s 2 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bancboston Investments, Inc. Debt $29,755,832 100 Federal Street 19th Floor Boston, MA 02110 Radio Shack/Tandy Agreement Unknown 1800 One Tandy Center Forth Worth, TX 76102 C. O'Sullivan Industries-Virginia, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Senior Subordinated Notes Bond debt $102,420,000 Sixth & Marquette Minneapolis, MN 55479 Fibre Converters Inc Trade debt $232,579 37450 Schoolcraft Road Livonia, MI 48150 Haffle America Company Trade debt $206,660 3901 Cheyenne Drive Archdale, NC 27263 Aconcagua Timber Corp Trade debt $197,117 Nickander Associates Trade debt $189,392 Stone Container Corp Trade debt $130,274 Toppan Printing Company Trade debt $126,567 Sealed Air Corp Trade debt $79,890 Sierrapine Ltd Trade debt $76,230 Packaging Corporation of Trade debt $74,965 America Tri State Foam Trade debt $73,046 Pallet-One Trade debt $71,838 Sun Container Trade debt $71,831 Akzo Nobel Coatings Inc Trade debt $53,957 Supreme Screw Products, Inc Trade debt $42,893 Jowat Corporation Trade debt $41,388 Overnite Transportation Trade debt $38,791 Flakeboard Company LTd. Trade debt $38,312 CDM Lamines Inc. Trade debt $34,558 Tarheel Paper & Supply Co Trade debt $32,710 D. O'Sullivan Furniture Outlet, Inc.'s Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Senior Subordinated Notes Bond debt $102,420,000 Sixth & Marquette Minneapolis, MN 55479 PENTON MEDIA: Improved Performance Prompts S&P to Upgrade Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its ratings on Penton Media Inc., including raising its corporate credit rating to 'CCC+' from 'CCC'. The outlook is developing. The Cleveland, Ohio-based advertising-driven business-to-business magazine and trade show firm had $328 million in debt as of June 30, 2005. "The upgrade is based on Penton's improving ability to support its near-term operating and capital needs in light of its recovering profitability, narrowing discretionary cash flow deficits, continued borrowing availability on its line of credit, and lack of debt maturities until August 2007," said Standard & Poor's credit analyst Tulip Lim. Even so, the very low speculative-grade credit rating reflects Penton's limited liquidity and its uncertain ability to generate positive discretionary cash flow or support its operating and financial obligations over the intermediate-to-long term. Penton's profitability has rebounded somewhat over the past two years from severely depressed levels that resulted from the collapse of certain technology markets it served and from difficult conditions in the trade magazine and event industry. The improvement was driven by major cost reductions, the discontinuation or sale of unprofitable publications and events, the solid performance of certain portions of its portfolio, and some success in easing publishing revenue pressure by launching online and event initiatives. However, Penton's ability to increase its EBITDA to support its capital structure in the long term continues to be uncertain. Penton's revenue remains flat and is not expected to grow, being burdened by soft advertising conditions; ongoing weak industry operating conditions, especially in publishing, which accounts for two-thirds of Penton's revenue; and an uncertain economy. Moreover, Penton's ability to meaningfully cut costs further is questionable, given the severe cost reductions already taken. PHARMACEUTICAL FORMULATIONS: Prepares to Pay CIT Loan in Full ------------------------------------------------------------- Pharmaceutical Formulations, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to approve its general release agreement with CIT Group/Business Credit, Inc., providing for: a) the full payment of all obligations owed to CIT; b) the assignment of CIT's rights, claims and obligations to ICC Industries Inc. pursuant to a junior participation agreement; and c) the Debtors release of any prepetition and postpetition claims and causes of action against CIT. The Debtor is obliged to repay all of its outstanding obligations to CIT under the terms of the $14 million debtor-in-possession financing approved by the Bankruptcy Court on July 13, 2005. Concurrent with the DIP financing order, the Bankruptcy Court authorized the Debtor to sign the Ratification and Amendment Agreement. The ratification agreement extended and amended the Debtor's existing prepetition financing agreements with CIT. CIT and ICC Debts The Debtor's primary indebtedness consists of borrowings under a revolving credit facility and term loan with CIT. CIT partly financed the Debtor's acquisition of Konsyl Pharmaceuticals, Inc., in May 2003 through a $3.7 million term loan. ICC contributed another $1,627,000 in loans and $595,000 in equipment financing in connection with the Konsyl purchase. In addition, ICC obtained several loans from ICC from Dec. 2004 until March 2005. The principal loan outstanding under the ICC loans as of March 31, 2005, total approximately $24.8 million. CIT holds a first priority lien on substantially all of the Debtor's assets while ICC holds a junior lien on the same assets. Junior Participation Agreement ICC purchased approximately $4.6 million of junior participations in the post petition financing extended by CIT. Pursuant to the junior participation agreement, CIT agreed to assign all of its rights, claims, entitlements and obligations under the DIP and prepetition financing agreements with the Debtor to ICC. The total amount of the junior participations acquired by ICC will be deducted from the payments to be made to CIT. The Debtor tells the Bankruptcy Court that the indefeasible payment of all obligations to CIT as well as the general release from ensuing claims and causes of action is in the best interest of the estate. According to the Debtor, it could not have secured the DIP financing from CIT without these provisions. The Debtor adds that the assignment of CIT's rights and claims under the to ICC is necessary since the junior participations will remain unpaid and outstanding obligations of the Debtor. The payment to CIT will come from the proceeds of the sale of substantially all of the Debtor's assets to Leiner Health Products, LLC. As reported in the Troubled Company Reporter, the Debtor closed the sale of its assets to Leiner Health for approximately $23 million, plus certain assumed trade liabilities, on Sept. 20, 2005. Headquartered in Edison, New Jersey, Pharmaceutical Formulations, Inc. -- http://www.pfiotc.com/-- is a publicly traded private label manufacturer and distributor of nonprescription over-the- counter solid dose generic pharmaceutical products in the United States. The Company filed for chapter 11 protection on July 11, 2005 (Bankr. Del. Case No. 05-11910). Matthew Barry Lunn, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtor in its chapter 11 proceeding. As of Apr. 30, 2005, the Debtor reported $40,860,000 in total assets and $44,195,000 in total debts. PHOTOCIRCUITS CORP: Files Chapter 11 Petition in E.D. New York -------------------------------------------------------------- Photocircuits Corporation filed a voluntary chapter 11 petition in the U.S. Bankruptcy for Eastern District of New York on Oct. 14, 2005, to pursue its financial and operational restructuring. The Debtor, which manufactures printed circuit boards, suffered from a decline in revenues brought about by a major drop in demands and substantial pricing pressure in the market. The Company had defaulted on various financial covenants under its secured credit agreements with its senior bank lenders by early 2004. The lenders were pushing for an orderly liquidation of all of the Company's assets. Following talks with its lenders, the Company's prior management agreed to the appointment of a committee to lead in the Company's restructuring. This includes efforts to sell non-core assets, including its facility in the Philippines, in order to satisfy the term loan that is part of its credit obligations. During this time, the lenders reached an agreement with Stairway Capital Management, L.P., under which Stairway acquired all of the lenders' financial interests in and obligations due from the Company. The transaction between Stairway and the lenders was completed at the end of July 2004. Stairway Capital, as successor in interest to the lenders, required the Company to honor its commitment to form a three- member restructuring committee. The members of the Committee are: -- Rick McNamee of Quadrus Consulting (a printed circuit board industry veteran who has assumed the title of CEO); -- Tim Boates (an independent turnaround professional); and -- Jim Zerby (the Company's CFO). Mr. Zerby was recently replaced on the Committee by a group of members of the Company's senior management. Restructuring Plan The Committee developed a restructuring plan, which focused on: -- reductions in the Company's domestic operations; -- expansion of its offshore manufacturing relationships; and -- restructuring of its secured and unsecured financial obligations. At this time, Stairway committed to advance funding required to meet the cash requirements of the Company's restructuring/sale process and provide the Company with a period of time to market the Debtor's business for sale rather than engage in liquidation of the Company's assets. The Debtor has obligations due to secured and trade creditors which are in default. The Debtor tells the Court that it will attempt to reduce expenses, continue its operations around its more profitable operations, and market its business for sale. The Debtor believes that, under court protection, it will be able to marshal and preserve its assets and position itself for new equity investment or a sale of its assets to an entity that will continue the company's operations and propose a meaningful plan of reorganization or liquidation for its creditors. Headquartered in Glen Cove, New York, Photocircuits Corporation -- http://www.photocircuits.com/-- was the first independent printed circuit board fabricator in the world. Its worldwide reach comprises facilities in Peachtree City, Georgia; Monterrey, Mexico; Heredia, Costa Rica; and Batangas, Philippines. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. E.D.N.Y. Case No. 05-89022). Gerard R Luckman, Esq., at Silverman Perlstein & Acampora LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated more than $100 million in assets and debts. PHOTOCIRCUITS CORP: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Photocircuits Corporation 31 Sea Cliff Avenue Glen Cove, New York 11542 Bankruptcy Case No.: 05-89022 Type of Business: The Debtor was the first independent printed circuit board fabricator in the world. Its worldwide reach comprises facilities in Peachtree City, Georgia; Monterrey, Mexico; Heredia, Costa Rica; and Batangas, Philippines. See http://www.photocircuits.com/ Chapter 11 Petition Date: October 14, 2005 Court: Eastern District of New York (Central Islip) Debtor's Counsel: Gerard R Luckman, Esq. Silverman Perlstein & Acampora LLP 100 Jericho Quadrangle, Suite 300 Jericho, New York 11753 Tel: (516) 479-6300 Fax: (516) 479-6301 Estimated Assets: More than $100 Million Estimated Debts: More than $100 Million Debtor's 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ General Electric Corporation $5,302,000 1301 Virginia Drive, Suite 200 Fort Washington, PA 19034 Chase Equipment Leasing $4,702,000 1111 Polaris Parkway, Suite A-3 Columbus, OH 43420 Endee Family 1999 Dynasty Trust $4,695,037 c/o Anthony V. Curto, Esq. Forchelli, Curto, Schwartz, Mineo 333 Old Country Road Mineola, NY 11501 Chase Equipment Leasing $3,902,400 1111 Polaris Parkway, Suite A-3 Columbus, OH 43420 LIPA $2,567,063 P.O. Box 888 Hicksville, NY 11815-0001 CMKC $2,158,206 Unit 407, 4th Floor, Tower A New Mandarin Plaza 14 Science Museum Road TST East Kowloon, Hong Kong CIT Financial USA, Inc. $1,416,600 1540 West Fountainhead Parkway Tempe, AZ 85282 City of Glen Cove $1,237,534 Water Department City Hall Glen Cove, NY 11542 Polyclad Laminates $1,190,729 3571 Collection Center Drive Chicago, IL 60693 Isola USA Corporation $1,014,546 c/o Deutsche Bank 515 Union Boulevard Lockbox 13379 Totowa, NJ 07512 PAL Copper Panel Plate Line $1,000,000 c/o Peter Aguinick, Esq. Peter M. Aguinick, PC 321 Broadway, 2nd Floor New York, NY 10007 Rohm & Haas Electronic Materials $889,314 P.O. Box 60896 Charlotte, NC 28260 City of Glen Cove $851,614 Sewer Department City Hall Glen Cove, NY 11542 LaSalle National Leasing Corporation $790,500 One West Pennsylvania Avenue, Suite 1000 Towson, MD 21204 City School District Finance Department $686,951 For the City of Glen Cove 9 Glen Street Glen Cove, NY 11542 Kolon Scena, Inc. $602,989 3 Sperry Road Fairfield, NJ 07004 Keyspan Energy $523,811 175 East Old Country Road Hicksville, NY 11801 REFCO GROUP: Capital Unit's Woes Prompt Moody's to Junk Ratings --------------------------------------------------------------- Moody's Investors Service downgraded all ratings of Refco Group Ltd., LLC (corporate family rating downgraded to Caa2 from B2). The ratings remain on review for downgrade. The rating action follows Refco's announcement that its non- regulated subsidiary, Refco Capital Markets Ltd., no longer has sufficient liquidity to maintain operations and that the company has instituted a 15 day moratorium on all activities of the subsidiary. In Moody's opinion, these actions are likely to lead to substantial erosion in the franchise value and earnings capacity of the company. As a result, Moody's believes that the likelihood of default has risen sharply. If Refco avoids default, the weakened earnings outlook for the firm will make it more difficult for the company to service existing debt and generate capital to absorb potential future litigation charges in Moody's view. During the review, Moody's will seek to monitor the liquidity of Refco's operations, the retention of its customer relationships and its remaining business flows. These ratings of Refco Group Ltd., LLC were downgraded: * Long-term Corporate Family Rating to Caa2 from B2 * Senior Secured Bank Credit Facility Rating to Caa2 from B2 * Senior Subordinated Debt to Ca from Caa1 All ratings remain on review for downgrade. Refco Finance Inc., which is a wholly owned special purpose finance subsidiary of Refco, and is co-issuer of the Senior Subordinated Debt was also downgraded to Ca from Caa1. Refco is an independent brokerage and clearing firm. REFCO GROUP: S&P Junks Long-Term Counterparty Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its long- term counterparty credit rating on Refco Group Ltd. LLC to 'B-' from 'B+'. At the same time, the subordinated debt rating on Refco was lowered to 'CCC' from 'B-'. The ratings remain on CreditWatch Negative where they were placed Oct. 10, 2005. "These rating actions are in response to the company's announcement that it has placed a moratorium on withdrawals of customer funds from its nonregulated subsidiary, Refco Capital Markets Ltd.," said Standard & Poor's credit analyst Tom Foley. The company also announced that the regulatory capital and excess regulatory capital of Refco LLC, its regulated Futures Commission Merchant, and Refco Securities LLC, its regulated broker dealer, have been "substantially unaffected" by the company's announcement this past Monday of a previously undisclosed receivable of $430 million owed by entities controlled by the company's former CEO, Phillip Bennett. Mr. Bennett has been arrested and charged with securities fraud. Although Mr. Bennett repaid the $430 million receivable in cash, the funds may not be available to Refco, which is a holding company that relied on its operating subsidiaries to upstream dividends to meet debt service requirements. Based on Refco's public announcements and the regulator's goal of safeguarding customer accounts, Standard & Poor's believes that there is substantial doubt concerning the liquidity of Refco. The company's operating subsidiaries either may not have sufficient liquidity or capital to upstream cash to Refco, or may be prohibited from doing so by regulators. REFOCUS GROUP: Names Douglas Williamson President & CEO ------------------------------------------------------- Refocus Group, Inc. (OTC: RFCG.OB) appointed Douglas C. Williamson, a Refocus Group director and vice chairman of the board, as the Company's president and chief executive officer. He replaces Terence A. Walts, who resigned from his positions as president and chief executive officer, and a director, effective Oct. 10. Mr. Walts will remain a consultant to the company over the next year. "We thank Terry for his leadership and vision during an important period in the development of our Surgical Spacing Procedure for the treatment of presbyopia and for successfully transitioning Refocus Group to where it is today," Mr. Williamson said. "We will continue to benefit from his insight and expertise as a consultant." Mr. Williamson will remain president and chief executive officer of The Williamson Group, which is engaged in private equity and debt investments, as well as consulting for companies in early stage development. He has served as a director and vice chairman of Refocus Group since Mar. 1, 2005, and was instrumental in arranging the significant financial investment by Medcare Investment Fund III, Ltd. of San Antonio, Texas, which closed on that date. Refocus Group previously filed preliminary consent solicitation materials to seek stockholder approval to amend the company's Certificate of Incorporation to effect a transaction to take the company private. These preliminary materials are subject to the SEC review process. Refocus Group -- http://www.refocus-group.com/-- is a Dallas- based medical device company engaged in the research and development of treatments for eye disorders. Refocus holds over 90 domestic and international pending applications and issued patents, the vast majority directed to methods, devices and systems for the treatment of presbyopia, ocular hypertension and primary open-angle glaucoma. The company's most mature device is its patented scleral implant and related automated scleral incision handpiece and system, used in the Scleral Spacing Procedure for the surgical treatment of presbyopia, primary open- angle glaucoma and ocular hypertension in the human eye. At June 30, 2005, Refocus Group's balance sheet showed a $3,846,713 stockholders' deficit, compared to a $2,253,161 deficit at Dec. 31, 2004. RELIANCE NATIONAL: Section 304 Petition Summary --------------------------------------------- Petitioner: Richard Paul Whatton Foreign Representative Debtor: Reliance National Insurance Company (Europe) Limited 33 Creechurch Lane London, England, EC3A 5EB Case No.: 05-46232 Type of Business: The Debtor is a wholly owned subsidiary of Omni Whittington Investments (Guernsey) Limited. Whittington is an indirect, wholly owned subsidiary of Omni Whittington Group BV. The Debtor underwrote insurance business primarily in Europe. The Debtor did not write business directly in the U.S., however, it has more than 700 U.S. policy holders. The Debtor provided insurance and reinsurance to corporate entities and insurance companies. The classes of insurance underwritten by the company includes accident & health, aviation, construction, credit insurance, excess casualty, fidelity, marine and property. Section 304 Petition Date: October 13, 2005 Court: Southern District of New York (Manhattan) Petitioner's Counsel: Kenneth P. Coleman, Esq. Stephen Doody, Esq. Kelle Gagne, Esq. Allen & Overy LLP 1221 Avenue of Americas New York, New York 10022 Tel: (212) 610-6300 Fax: (212) 610-6399 Financial Condition as of December 31, 2004: Total Assets: GBP184,015,000 Total Debts: GBP165,011,000 REMEDENT INC: Ended Fiscal 2005 With $273,910 Equity Deficit ------------------------------------------------------------ Remedent, Inc., delivered its amended annual report on Form 10- KSB/A for the fiscal year ended March 31, 2005, to the Securities and Exchange Commission on Sept. 30, 2005. In Aug. 2005, the SEC raised questions and comments related to Remedent's presentation of the effect of exchange rate changes on cash and cash equivalents and the Company's compliance with SFAS 95 that discusses presentation of foreign currency exchange rate changes on the Statement of Cash Flows in its annual report for fiscal 2005. Following investigation, Remedent determined that the Company had not properly presented the effect of exchange rate changes on cash and cash equivalents for the year ended March 31, 2005 resulting in an overstatement of the effect of exchange rate changes on cash and cash equivalents of $34,991. The revised financial statement for the fiscal year ended March 31, 2005, showed: - $2,712,615 of assets at March 31, 2005, and liabilities totaling $2,986,525, causing a $273,910 stockholders' deficit. - a $103,428 net loss on $7,072,300 of net sales for fiscal 2005 compared to $16,149 of net income on $5,234,855 of net sales for fiscal 2004. Based in Deurle, Belgium, Remedent Inc. -- http://www.remedent.be/ -- develops and manufactures oral care and cosmetic dentistry products. 99% of the Company's sales for the fiscal year end March 31, 2005 were generated from customers outside of the United States. The Company's products are now distributed in more then 35 countries worldwide. RESIDENTIAL ACCREDIT: Fitch Puts Low-B Ratings on 40 Cert. Classes ------------------------------------------------------------------ Fitch Ratings has taken action on the following Residential Accredit Loan, Inc., mortgage-pass through certificates: RALI mortgage asset backed pass-through certificates, series 1999-QS4 -- Classes A and R affirmed at 'AAA'; -- Class M-1 affirmed at 'AAA'; -- Class M-2 affirmed at 'AAA'; -- Class M-3 upgraded to 'AA' from 'AA-'; -- Class B-1 upgraded to 'A' from 'BBB+'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2001-QS13 -- Classes A and R affirmed at 'AAA'; -- Class M-1 affirmed at 'AAA'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'A'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2001-QS16 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AAA'; -- Class M-2 upgraded to 'AAA' from 'AA'; -- Class M-3 upgraded to 'AA' from 'A'; -- Class B-1 affirmed at 'BBB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2001-QS18 -- Classes A and R affirmed at 'AAA'; -- Class M-1 upgraded to 'AAA' from 'AA'; -- Class M-2 upgraded to 'AA' from 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2001-QS19 -- Classes A and R affirmed at 'AAA'; -- Class M-1 affirmed at 'AAA'; -- Class M-2 affirmed at 'AA+'; -- Class M-3 affirmed at 'A+'; -- Class B-1 affirmed at 'BB+'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2002-QS1 -- Classes A and R affirmed at 'AAA'; -- Class M-1 upgraded to 'AAA' from 'AA+'; -- Class M-2 upgraded to 'AA' from 'A'; -- Class M-3 upgraded to 'A' from 'BBB'; -- Class B-1 upgraded to 'BBB' from 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2002-QS2 -- Classes A and R affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2002-QS3 -- Class A affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2002-QS4 -- Classes A and R affirmed at 'AAA'; -- Class M-1 upgraded to 'AA+' from 'AA'; -- Class M-2 upgraded to 'A+' from 'A'; -- Class M-3 upgraded to 'BBB+' from 'BBB'; -- Class B-1 upgraded to 'BB+' from 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2002-QS5 -- Classes A and R affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2002-QS6 -- Classes A and R affirmed at 'AAA'; -- Class M-1 upgraded to 'AA+' from 'AA'; -- Class M-2 upgraded to 'A+' from 'A'; -- Class M-3 upgraded to 'BBB+' from 'BBB'; -- Class B-1 upgraded to 'BB+' from 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2002-QS8 -- Classes A and R affirmed at 'AAA'; -- Class M-1 upgraded to 'AA+' from 'AA'; -- Class M-2 upgraded to 'A+' from 'A'; -- Class M-3 upgraded to 'BBB+' from 'BBB'; -- Class B-1 upgraded to 'BB+' from 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2002-QS11 -- Class A affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2002-QS12 -- Class A affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2002-QS13 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2002-QS15 -- Classes CB, NB, and A affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2002-QS16 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2002-QS17 -- Classes CB, NB, A, and R affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2002-QS18 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2002-QS19 -- Class A affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2003-QS2 -- Classes A and R affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2003-QS3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2003-QS4 -- Classes A and R affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2003-QS6 -- Class A affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2003-QS7 -- Classes A and R affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2003-QS8 -- Classes A and R affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2003-QS9 -- Classes A and R affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2003-QS12 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2003-QS14 -- Classes A and R affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2003-QS16 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2003-QS18 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI mortgage asset backed pass-through certificates, series 2003-QS21 -- Class A affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2003-QS22 -- Class A affirmed at 'AAA'. RALI mortgage asset backed pass-through certificates, series 2003-QS23 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. The mortgage loans in the aforementioned transactions consist of both 30-year fixed-rate and 15-year fixed-rate mortgages extended to both Prime and Alt-A borrowers which are secured by first and second liens, primarily on one- to four-family residential properties. As of the September 2005 distribution date, the transactions are seasoned from a range of 21 (2003-QS23) to 78 (1999-QS4) months and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) ranges from approximately 10% (1999-QS4) to 70% (2003-QS23). The master servicer for all of aforementioned RALI deals is Residential Funding Corporation, which is rated 'RMS1' by Fitch. The affirmations reflect satisfactory credit enhancement relationships to future loss expectations and affect approximately $2.92 billion outstanding certificates as detailed above. The upgrades reflect an improvement in the relationship of Credit Enhancement to future loss expectations and affect approximately $67.92 million of certificates. As of September 2005 distribution date, the affected certificates have pool factors ranging from approximately 10% (1999-QS4) to 20% (2002-QS4 and 2002-QS8). The CE levels for all the classes affected by the upgrades have more than quadrupled their original enhancement levels at closing date. Fitch will continue to monitor these deals. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Ratings web site at http://www.fitchratings.com/ RICHTER FURNITURE: Apex Offers $3,275,000 to Buy Most Assets ------------------------------------------------------------ Richter Furniture Manufacturing asks the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, for authority to sell substantially all of its assets to Apex Design Group, LLC for $3,275,000. The Debtor further asks the Court's permission to assume and assign executory contracts and unexpired leases to Apex pursuant to the Asset Purchase Agreement dated as of October 12, 2005 between the Debtor and Apex. A list of the Debtor's executory contracts and unexpired leases is available for a fee at: http://bankrupt.com/misc/RichterManufacturingContractsandLeases.pdf Without the going concern sale, the Debtor's business will be forced to close permanently. The Debtor's board of directors has decided that the Apex offer is beneficial to the Debtor's estate. Secured Claims Against Debtor's Assets The Debtor owed $3,275,000 on account of a prepetition loan to The CIT Group/Commercial Services, Inc. The Debtor projects that as of the projected sale closing date, CIT will be owed approximately $6.5 million. Bel-Cal Properties, Inc. asserts a $1 million claim against the Debtor. The debt is disputed by the Debtor and is allegedly secured by a junior security interest in all of the Debtor's assets. The Debtor tells the Court that if the sale is approved, CIT will be paid in full. Whether or not there will be additional funds available for other creditors depends on whether or not there are overbids and the level of any other overbids. If the Buyer elects to purchase the secondary assets for $40,000, the portion of the purchase price will be payable directly to Bel-Cal at sale closing, in consideration of the release and termination of its security interest in the secondary assets. The auction for the Debtor's assets will be held at the offices of: Ezra Brutzkus Gubner LLP 16830 Ventura Blvd., Suite 310 Encino, Califonia 91436 The Court will convene a hearing to approve the asset sale on October 31, 2005 at 1:00 p.m. Headquartered in Los Angeles, California, Richter Furniture Manufacturing manufactures mid- to high- end upholstered furniture in Los Angeles. The Company filed for chapter 11 protection on October 5, 2005 (Bankr. C.D. Calif. Case No. 05-35558). David M. Poitras, Esq., at Jeffer, Mangels, Butler & Marmaro LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from their creditors, it estimated between $1 million to $10 million in assets and debts. ROUNDY'S SUPERMARKETS: Moody's Junks $150-Mil Senior Sub. Notes --------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of Roundy's Supermarkets, Inc., to B2 from Ba3 and assigned ratings to proposed new debts including B2 to a $825 million bank loan, B3 to a $175 million senior note issue, and Caa1 to a $150 million senior subordinated note issue. The rating outlook is stable. Net proceeds will pay a $550 million dividend distribution to the shareholders in addition to refinancing the existing $118 million term loan and $300 million senior subordinated notes. The lower Corporate Family Rating reflects the less flexible post-transaction capital structure with respect to liquidity and credit metrics, Moody's opinion that supermarket retailing competition in the company's trade area will intensify, and the ongoing challenges as the company completes the transition from a grocery wholesaler to a supermarket operator. This rating is downgraded: * Corporate Family Rating (previously called the Senior Implied Rating) to B2 from Ba3. These ratings are assigned (subject to review of final documentation): * $825 million secured bank loan at B2, * $175 million seven-year senior unsecured notes at B3, and the * $150 million eight-year senior subordinated notes at Caa1. The rating outlook is stable. The current Ba3 rating on the $243 million secured bank loan and the B2 rating on the 8.875% senior subordinated notes (2012) will be withdrawn following completion of this transaction. The ratings are constrained by the limited cash flow available for balance sheet improvement following the proposed transaction, Moody's belief that competitive pressures will intensify as well-regarded competitors like Wal-Mart (senior unsecured rating of Aa2) continue to develop supercenters in Roundy's trade areas, and the company's high financial leverage and weak fixed charge coverage. The ongoing challenges as the company transitions to a grocery retailer from a wholesaler, the scale of the company's operations relative to competitors in the consolidating supermarket industry, and the exposure to economic conditions of a narrow geographic region (Wisconsin and contiguous areas) also affect Moody's views of the challenges facing the company. However, the ratings also recognize the company's position as the leading supermarket operator in Wisconsin, substantial progress in the multi-year plan to transition from a grocery wholesaler to a grocery retailer, and the steady, if low-margin, revenue stream from the remaining wholesale distribution segment. The relatively modern condition of the company's store base, the long-term stability of operating management, and the established relationships with and knowledge of its remaining wholesale customers, many of whom may eventually be acquisition targets, also somewhat mitigate the business risks as the company continues reducing its external wholesale segment. Moody's believes that the company has been able to maintain sales momentum and operating margins, in spite of the adverse impact on many midsize supermarket companies from non-traditional grocery retailers, because of Roundy's still solid position within its core markets. The B2 rating on the proposed bank loan (to be comprised of a $125 million Revolving Credit Facility commitment and a $700 million Term Loan B), while recognizing the collateral value of all tangible and intangible assets of the company and its subsidiaries as well as the equity shares and guarantees of material operating subsidiaries, reflects that secured debt will account for about 70% of long-term debt. In a hypothetical distressed scenario, Moody's believes that the orderly liquidation value of easily monetizable assets such as accounts receivable and inventory would fall below the bank loan commitment. Complete recovery would rely on the less easily predicted valuation for property, plant, and equipment and intangible assets. Moody's expects that the Revolving Credit Facility will mostly be used to bridge temporary cash flow timing differences. Pro-forma as if the transaction closed in June 2005, all of the revolving credit facility was available except for $17 million reserved for Letters of Credit. The B3 rating on the proposed seven-year floating rate senior unsecured notes considers that this debt is guaranteed by the company's operating subsidiaries. This class of debt is effectively subordinated to the $825 million Bank Loan to the extent of collateral and $56 million of Capital Lease Obligations. This senior class of debt also ranks pari passu with about $238 million of accounts payable. In a hypothetical distressed scenario, Moody's believes that recovery for this class of debt would substantially rely on residual enterprise value. The Caa1 rating on the proposed eight-year fixed rate senior subordinated notes considers the guarantees of the company's operating subsidiaries, as well as the contractual subordination to significant amounts of more senior obligations. In a hypothetical distressed scenario, Moody's believes that recovery for this class of debt would completely rely on residual enterprise value. The stable outlook anticipates that the company will modestly improve its financial profile as revenue slowly grows. In addition, Moody's also expects that the company will maintain a solid liquidity position if operating results fall below expectation through moderating capital expenditures and the occasional acquisition of a few stores. The assigned ratings anticipate that debt protection measures will not remain stagnant at post-transaction levels. Ratings would be negatively impacted if retail operating performance does not improve from current levels, the system begins to lose market share to supercenter or national supermarket operators, or discretionary cash flow is overspent for capital investment. In particular, ratings would fall if EBITDAR was not able to cover interest expense, rent, and capital expenditures, liquidity tightened from permanent borrowings on the revolving credit facility, or free cash flow to debt remains below 3%. Over the longer term, ratings could move upward as financial flexibility strengthens (such as EBITDAR consistently covering interest expense, rent, and capital expenditures by more than 1.5 times), leverage sustainably falls below 5.5 times, and free cash flow to debt exceeds 5%, average unit volume and operating profit grow even as competitors open additional stores, and the company achieves satisfactory returns on investment with the planned remodel and development program. Pro-forma for the recent divestitures of several distribution centers, retail sales have grown to about 87% of company revenue as compared to 12% of company revenue five years ago. This growth in retail revenue is primarily attributable to the purchase of wholesale customers in core trade areas within Wisconsin and the divestiture of distribution centers and wholesale customers in peripheral markets. With a higher proportion of revenue from retail, overall gross margins have improved to 25% for the June 2005 quarter compared to 10% prior to wider expansion into grocery retailing. Leverage (pro-forma for the transition to retail and the new debt) was about 6 times and EBITDAR just covered cash interest expense, rent, and capital investment. Moody's anticipates that operating improvements in both the retail and wholesale segments, newly developed supermarkets, and the occasional accretive acquisition will lead to moderately better debt protection measures. However, Moody's expects that ratio improvement will largely come from increased operating cash flow in contrast to rapid principal amortization. Roundy's Supermarkets, Inc., with headquarters in Milwaukee, Wisconsin, operates 132 retail grocery stores primarily under the Pick 'n Save, Copps, and Rainbow banners. The company also distributes food and consumer products to independent supermarkets in Wisconsin and contiguous states. The company generated revenue of $4.2 billion over the twelve months ending July 2, 2005. SHEFFIELD STEEL: Likely Buy-Out Prompts Moody's Developing Outlook ------------------------------------------------------------------ Moody's Investors Service changed its rating outlook for Sheffield Steel Corporation to developing from stable following the announcement that Sheffield has received unsolicited indications of interest from two potential acquirors. Sheffield's Board of Directors has established a special committee of three independent directors to review and evaluate the proposals and any other proposals that may be received and the special committee has retained legal counsel and financial advisors. Moody's developing outlook will remain in place until there is a discernible outcome regarding a sale of the company and, if that outcome includes a sale, the expected impact of that sale on the company's capitalization, liquidity, and strategic direction. As of July 31, 2005, Sheffield had approximately $80 million of debt. It has been doing quite well in the current favorable steel market and reported EBITDA of $37.9 million for the 12 months ended July 31. Moody's noted that, under the indenture to Sheffield's $77.3 million of 11.375% senior secured notes, a change of control is not deemed to have occurred if the consolidated leverage (total debt divided by LTM EBITDA, as defined) of the company is less than 3.0x on a pro forma basis and no default or event of default has occurred. The note indenture also allows additional debt as long as the pro forma fixed charge coverage ratio remains greater than 2.1 to 1.0. Therefore, it appears that the company or any new owners could increase Sheffield's debt. Moody's does not know how the two interested parties, or others that may emerge, would finance a purchase of Sheffield and will maintain the following ratings and the developing outlook until such time as there is a discernible outcome: * B3 corporate family rating, * B3 for the $77.3 million of 11.375% senior secured notes due 2011, and * SGL-3 speculative grade liquidity rating. Sheffield Steel Corporation, headquartered in Sand Springs, Oklahoma, is a regional mini-mill producer of hot rolled steel bar, concrete reinforcing bar, and fabricated products. Sheffield had sales of $297 million in the fiscal year ended April 30, 2005. SUNDIV CORPORATION: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Sundiv Corporation 14665 Midway Road, Suite 157 Addison, Texas 75001 Bankruptcy Case No.: 05-84246 Chapter 11 Petition Date: October 13, 2005 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Aamer Ravji, Esq. The Ravji Law Firm 4801 Arapaho Road, Suite 300 Addison, Texas 75001 Tel: (972) 233-4190 Fax: (972) 233-5105 Total Assets: $35,357 Total Debts: $1,309,246 Debtor's 7 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gulf South Medical Supply Trade Debt $29,738 E. 510 N. Peachtree Road Mesquite, TX 75149 Mobility Medical Equipment Trade Debt $23,285 4009 Lindbergh Addison, TX 75001 Quality Pharmaceuticals Trade Debt $5,000 837 Tohuacona Highway Maxia, TX 76667 Chest Diagnostic Trade Debt $3,458 Therapeutic Services Maximum Medical, Inc. Trade Debt $1,830 Apria Pharmacy Network Trade Debt $732 Physician Laboratory Trade Debt $338 Services LLC SUPERB SOUND: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Superb Sound, Inc. d/b/a Ovation d/b/a Ovation Audio/Video d/b/a Ovation Home 2750 Tobey Drive Indianapolis, Indiana 46219 Bankruptcy Case No.: 05-29137 Type of Business: The Debtor is an audio, video and mobile electronics specialist. See http://www.ovation-av.com/ Chapter 11 Petition Date: October 14, 2005 Court: Southern District of Indiana (Indianapolis) Judge: Frank J. Otte Debtor's Counsel: William J. Tucker, Esq. William J. Tucker & Associates, LLC 429 North Pennsylvania Street #400 Indianapolis, Indiana 46204-1816 Tel: (317) 833-3030 Fax: (317) 833-3031 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Monster Cable Products Business trade debt $243,080 455 Valley Drive Brisbane, CA 94005 Sony Corporation Business trade debt $200,991 1200 N Arlington Heights Road Itasca, IL 60143 Klipsch, LLC Business trade debt $181,658 3502 Woodview Trace Suite 200 Indianapolis, IN 46268 LG Electronics Business trade debt $156,664 Denon Electronics, LLC Business trade debt $154,593 JL Audio Business trade debt $149,768 Fifth Third Bank Business trade debt $139,006 Definitive Technology Business trade debt $107,946 Crestron Business trade debt $90,302 Pioneer Electronics of Business trade debt $84,897 America Bose Corporation Business trade debt $72,498 Marion County Treasurer Business trade debt $69,338 Brown Noltemeyer Business trade debt $68,593 Alpine Electronics of Business trade debt $64,163 America Niles Audio Corporation Business trade debt $63,575 Audiostream/Paradigm Business trade debt $63,039 Samsung Electronics Business trade debt $57,773 Infinity Software Systems Business trade debt $55,809 Universal Remote Control Business trade debt $55,012 Wire Supplies, Inc. Business trade debt $52,178 TOWER AUTOMOTIVE: Consolidating Operations to Other Locations ------------------------------------------------------------- Tower Automotive (OTC BB: TWRAQ) will consolidate the operations of its Granite City, Illinois and Milan, Tennessee facilities into other Tower facilities in North America in a further move to reduce excess manufacturing capacity and overall facility, operational and manufacturing costs, and to enhance operational efficiency. "Over the past several months, we have developed a strategy to improve Tower's operational efficiency, cost competitiveness and ability to respond effectively to changing market forces," Bill Pumphrey, Tower Automotive's President of North American operations, said. "These actions are an important and necessary part of that strategy, and we will continue to examine all aspects of our operations and make the necessary changes to help ensure Tower's success now and in the future. Although these are difficult decisions, as they affect our hardworking colleagues, we must do what is right to strengthen Tower." Tower's Granite City facility currently produces stampings, control arms, and subassemblies for Ford, Nissan, and General Motors; the Milan facility produces stampings and subassemblies for Nissan, Toyota and other Tower business units. The Company said that it would immediately begin a phased consolidation of these operations into several other Tower facilities in North America. Tower expects that the consolidation will be complete by the end of 2006, at which point production at both facilities will cease. Approximately 300 employees of Granite City and 290 employees of Milan will be affected by this action. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. TRACY LACH: Case Summary & 12 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Tracy B. Lach 22 Partridge Walk Lancaster, New York 14086-3227 Bankruptcy Case No.: 05-91529 Type of Business: The Debtor is the President, Shareholder and Director of Twenty-First Century Press, Inc., which filed for chapter 11 protection on October 13, 2005 (Bankr. W.D.N.Y. Case No. 05-91568)(Kaplan, J.). Chapter 11 Petition Date: October 13, 2005 Court: Western District of New York (Buffalo) Judge: Michael J. Kaplan Debtor's Counsel: Robert J. Feldman, Esq. Gross, Shuman, Brizdle & Gilfillan, P.C. 600 Lafayette Court 465 Main Street Buffalo, New York 14203 Tel: (716) 854-4300 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 12 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ HSBC $490,950 Special Credits One HSBC Center, 26th Floor Buffalo, NY 14203 The Guerra Press, Inc. $347,500 c/o Thomas Guerra 363 Colvin Avenue Buffalo, NY 14216 HSBC $265,819 Special Credits One HSBC Center, 26th Floor Buffalo, NY 14203 Theodore Majewski $213,750 365 Bell Rock Boulevard Sedona, AZ 86351 Michael Burns $213,750 149 Monroe Drive Williamsville, NY 14221 Buffalo & Erie Co. Reg. Development Co. $135,618 275 Oak Street Buffalo, NY 14203 HSBC $120,000 Special Credits One HSBC Center, 26th Floor Buffalo, NY 14203 Buffalo Economic Renaissance $118,468 65 Niagara Square 920 City Hall Buffalo, NY 14202 Daniel Guerra $40,000 760 Palo Verde #2 Las Vegas, NV 89119 Thomas Guerra $40,000 363 Colvin Avenue Buffalo, NY 14216 American Honda Finance Corp. $13,972 P.O. Box 7858 Philadelphia, PA 19101-7658 Net Bank Business Finance $12,066 P.O. Box 2579 Colombia, SC 29202 TWENTY-FIRST: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Twenty-First Century Press, Inc. 501 Cornwall Avenue Buffalo, New York 14215 Bankruptcy Case No.: 05-91568 Type of Business: The Debtor's President, Tracy B. Lach, filed for chapter 11 protection on October 13, 2005 (Bankr. W.D.N.Y. Case No. 05-91529)(Kaplan, J.). The Debtor's Secretary, Mary C. Crimmen, filed for chapter 11 protection on October 13, 2005 (Bankr. W.D.N.Y. Case No. 05-91534)(Bucki, J.). Chapter 11 Petition Date: October 13, 2005 Court: Western District of New York (Buffalo) Judge: Michael J. Kaplan Debtor's Counsel: Janet G. Burhyte, Esq. Robert J. Feldman, Esq. Gross, Shuman, Brizdle & Gilfillan, P.C. 465 Main Street, Suite 600 Buffalo, New York 14203 Tel: (716) 854-4300 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ HSBC Loans $490,950 Special Credits One HSBC Center, 26th Floor Buffalo, NY 14203 The Guerra Press, Inc. $347,500 c/o Thomas Guerra 363 Colvin Avenue Buffalo, NY 14216 HSBC $265,819 Special Credits One HSBC Center, 26th Floor Buffalo, NY 14203 Theodore Majewski $213,750 365 Bell Rock Boulevard Sedona, AZ 86351 Michael Burns $213,750 149 Monroe Drive Williamsville, NY 14221 IKON Financial Services $199,962 P.O. Box 9115 Macon, GA 31208-9115 Buffalo & Erie Co Reg Devt Co $135,618 275 Oak Street Buffalo, NY 14203 HSBC $120,000 Special Credits One HSBC Center, 26th Floor Buffalo, NY 14203 Buffalo Economic Renaissance $118,468 65 Niagara Square 920 City Hall Buffalo, NY 14202 Daniel Guerra $40,000 760 Palo Verde #2 Las Vegas, NV 89119 Thomas Guerra $40,000 363 Colvin Avenue Buffalo, NY 14216 VARTEC TELECOM: Wants Exclusive Periods Stretched to November 22 ---------------------------------------------------------------- VarTec Telecom Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas to further extend until November 22, 2005, the time within which they have the exclusive right to file a plan of reorganization. The Debtors also ask the Court to extend their exclusive right to solicit acceptances of that plan from their creditors to January 26, 2006. As previously reported in the Troubled Company Reporter on September 12, 2005, the Debtors gave the Court five reasons in support of the extension: 1) their chapter 11 cases are large and complex, with identified assets of more than $800,000,000, liabilities of more than $590,000,000 and 14,000 creditors; 2) they have shown good faith progress towards their reorganization efforts, including completing the sale of substantially all of their assets to Comtel Investments, L.L.C., and obtaining DIP financing on a going forward basis; 3) they have been working diligently with the Official Committee of Unsecured Creditors, the Rural Telephone Finance Cooperative, the Official Committee of Excel Independent Representatives, their carriers, and other parties-in-interest in formulating a consensual plan; 4) they are paying obligations to their employees, carriers, vendors, landlords, and utility providers in the ordinary course of business as those obligations become due; and 5) the extension will not prejudice their creditors and other parties-in-interest and it is not meant to pressure their creditors into accepting an objectionable plan. Headquartered in Dallas, Texas, VarTec Telecom Inc. -- http://www.vartec.com/-- provides local and long distance service and is considered a pioneer in promoting 10-10 calling plans. The Company and its affiliates filed for chapter 11 protection on November 1, 2004 (Bankr. N.D. Tex. Case No. 04-81694). Daniel C. Stewart, Esq., William L. Wallander, Esq., and Richard H. London, Esq., at Vinson & Elkins LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed more than $100 million in assets and debts. WESTPOINT STEVENS: Responds to Funds, et al.'s Fees Objection ------------------------------------------------------------- R2 Top Hat Ltd. contends that Aretex LLC, WestPoint International, Inc., and WestPoint Home, Inc., filed their objection without any meaningful attempt to consensually resolve their concerns. As previously reported, R2 filed with the U.S. Bankruptcy Court for the Southern District of New York an application for interim professional compensation, and the Purchaser objected to that Application. Dennis C. O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, in New York, points out that the Objection contains numerous unfounded legal and factual arguments, which fall into three general categories: (1) R2 seeks compensation for services that are not within the scope of the First Lien Credit Agreement's expense provision. Mr. O'Donnell argues that R2 Professionals are outside the scope of the First Lien Credit Agreement's expense provision. According to Mr. O'Donnell, Section 11.5(a) of the First Lien Credit Agreement is broadly drafted and belies no intent to limit the scope of compensable services. Far from seeking to narrowly circumscribe compensable expenses, he notes that this provision provides for the payment of all "costs and expenses" of any First Lien Lender so long as these are expenses incurred in connection with the "enforcement" of any aspect of the First Lien Credit Agreement and related documents. Mr. O'Donnell points out that all of the services for which compensation is sought were directed solely and exclusively at "enforcement" of R2's own and the rights of other First Lien Lenders. While none of the actions undertaken by R2's Professionals were calculated or likely to result in immediate collection of its outstanding principal, all of these were carefully calculated to further the collection of R2's first lien principal or the realization of security interest. (2) The fees and expenses for which R2 seeks compensation or reimbursement are not "reasonable" within the meaning of Section 506(b) and applicable precedent. In assessing reasonableness under Section 506(b), Mr. O'Donnell explains that courts have to determine whether the work was necessary or reasonably calculated to protect the secured creditor rights. Mr. O'Donnell asserts that as the largest of the First Lien Lenders, R2 had every reason for concern about the slow progress of the Chapter 11 cases and to believe that the legal, financial advisory, and due diligence fees and expenses for which it seeks were necessary for the protection and enforcement of R2's rights in connection with the First Lien Credit Agreement. (3) To the extent that the fees and expense are granted, they can and should only be paid out of the Adequate Protection Escrow or the proceeds of assets that are excluded in the Purchaser's Sale. Mr. O'Donnell contends that the fees, to the extent granted, must be paid by the Purchaser in full, in cash, regardless or whether the Adequate Protection Escrow or any proceeds of Excluded Assets are available to fund those payments. This must be done for a number of reasons, Mr. O'Donnell says, not the least of which is that the Sale Order is predicated on the finding that the First Lien Lender Claims will be "satisfied in full" by the distributions made to the First Lien Lenders at the Sale Closing or to be made to the Second Lien Lenders on the disposition of the pending appeal from the Sale Order. As previously reported, the Steering Committee seeks $725,131,000 in fees and $73,947 in expenses for September 2004 through July 2005, plus any additional fees and expenses incurred after August 1, 2005, that have not yet been invoiced. Likewise, on August 1, 2005, R2 Top Hat Ltd. filed with the Court an application for interim professional compensation for $1,038,823 in fees and $92,425 in expenses from June 2003 through September 2004. The Steering Committee and R2 Top Hat both assert that they are entitled to reimbursement by the Debtors pursuant to the First Lien Credit Agreement Headquartered in West Point, Georgia, WestPoint Stevens, Inc., -- http://www.westpointstevens.com/-- is the #1 US maker of bed linens and bath towels and also makes comforters, blankets, pillows, table covers, and window trimmings. It makes the Martex, Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux brands, as well as the Martha Stewart bed and bath lines; other licensed brands include Ralph Lauren, Disney, and Joe Boxer. Department stores, mass retailers, and bed and bath stores are its main customers. (Federated, J.C. Penney, Kmart, Sears, and Target account for more than half of sales.) It also has nearly 60 outlet stores. Chairman and CEO Holcombe Green controls 8% of WestPoint Stevens. The Company filed for chapter 11 protection on June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. (WestPoint Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) WORKFLOW MGT: S&P Puts BB- Rating on $340MM Sr. Secured Debt ------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned its 'BB-' corporate credit rating to Greenwich, Conn.-based print management company Workflow Management Inc. At the same time, Standard & Poor's assigned its 'BB-' rating and recovery rating of '3' to Workflow's proposed $340 million senior secured first-lien credit facilities, indicating expectation of a meaningful (50%-80%) recovery of principal in the event of a payment default. The facilities consist of a $40 million five- year revolving credit facility and a $300 million six-year term loan facility. Standard & Poor's also assigned its 'B' rating and recovery rating of '5' to the company's planned $115 million seven-year senior secured second-lien term loan facility, indicating expectation of a negligible (0%-25%) recovery of principal in the event of a payment default. The outlook is negative. Standard & Poor's affirmed its 'BB-' corporate credit and senior secured debt ratings on The Relizon Co. (BB-/Negative/--) and removed them from CreditWatch, where they were listed on Sept. 16, 2005, with negative implications. The outlook is negative. Proceeds from the credit facilities, together with a small amount of seller's pay-in-kind (PIK) notes to be issued by WF Holdings Inc. (the holding company parent of Workflow) and equity contributed by Perseus LLC and other equity investors of WF Holdings, will be used to complete the acquisition of Relizon and to refinance all the outstanding bank debt of both Workflow and Relizon. Upon consummation of the transaction, Relizon will become a wholly-owned subsidiary of Workflow and the ratings on Relizon will be withdrawn. Pro forma for the acquisition, total bank debt outstanding is expected to be $415 million. "The ratings reflect Workflow's high debt leverage, moderate-size cash flow base, competitive market conditions, and expected ongoing external growth strategy," said Standard & Poor's credit analyst Sherry Cai. "These factors are partially offset by the company's good market position in the niche print management segment and its adequate liquidity." Upon completion of the Relizon acquisition, Workflow will meaningfully increase its scale as a provider of print products and end-to-end print solutions for document outsourcing, billing, and marketing. The print management business will contribute a significant portion of the company's revenues and EBITDA. Workflow also has a small envelope division that produces specialty envelopes for customers' specific advertising and marketing needs. Workflow's print management business benefits from a sizable and diversified customer base, long-standing customer relationships, substantial recurring revenues, and high retention rates. The Relizon acquisition should provide Workflow with cross-selling opportunities and cost synergies from increased purchasing power and consolidation of redundant facilities. Still, the print management segment is highly fragmented, which leads to competitive business conditions and pricing pressures in a number of Workflow's product lines. * Former FCC Media Bureau Chief Joins Sheppard Mullin's DC Office ----------------------------------------------------------------- W. Kenneth Ferree has joined Sheppard, Mullin, Richter & Hampton LLP, as a member of the Entertainment and Media group to lead the firm's new communications practice in Washington, D.C. Mr. Ferree previously served as Chief of the Media Bureau at the Federal Communications Commission. At the FCC, Mr. Ferree developed and administered the policy and licensing programs relating to electronic media, including cable television, broadcast television and radio, and broadband services. He also steered four major FCC merger reviews: EchoStar/DirectTV, Comcast/AT&T, HBC/Univision, and NewsCorp./DirecTV, and was credited with adding rigor to the review process while resolving each matter in the timely fashion required by Congress and the markets. Mr. Ferree is noted for having played a key role in advancing the DTV transition, developing a watershed plan to end the transition. Mr. Ferree also managed the FCC's entry into anti-piracy and copy protection matters, helped create the FCC's Media Security and Reliability Council, directed the first comprehensive overhaul of media ownership rules in decades, and oversaw the creation of a regulatory framework for terrestrial digital radio. "Ken's prominence at the FCC and reputation in the entertainment and media industry is exceptional," said Guy Halgren, managing partner of the firm. "We will be looking to Ken to build on our existing strengths in entertainment law by creating a top-notch FCC team." "I look forward to building a communications practice at Sheppard Mullin," Mr. Ferree said. "The firm already has the premier entertainment and media group in the country, but stay tuned... together we will build a team over the next few months that will have a broad range of communications law experience and expertise. It will dovetail perfectly with the firm's existing corporate and litigation practices so that our clients will be able to enjoy seamless representation with respect to any and all communications matters." Bob Darwell and Marty Katz, co-chairs of the firm's Entertainment & Media practice, are delighted by Ferree's decision to join the firm. "We have a far reaching vision for the Entertainment & Media group, and Ken brings a prominent FCC practice to the mix," said Darwell. Mr. Katz agreed, "We are looking for opportunities to expand our practice, but only with A players. Ken is an FCC star -- exactly what we needed, and exactly what our clients want." "This is a real coup for the D.C. office," said Edward Schiff, managing partner of the firm's Washington, D.C. office. "Ken's specialization is a natural fit for us, as the office has a strong regulatory focus in areas such as the Government Contracts, Antitrust and Labor & Employment practice areas." Mr. Ferree previously practiced at Goldberg, Godles, Weiner & Wright in Washington, D.C., specializing in communications-related litigation, including FCC complaint and rulemaking proceedings. Most recently, he served as Executive Vice President and Chief Operating Officer of the Corporation for Public Broadcasting. Mr. Ferree earned his law degree, summa cum laude, from Georgetown University Law Center in 1992, graduated from San Jose State University with an MBA in 1988 and Dartmouth College with a BA in 1983. Sheppard Mullin's national Entertainment & Media practice now includes over fifty attorneys. In addition to Mr. Ferree, Kevin Goering joined the firm's New York office in August as a partner in the Business Trial Practice Group. Mr. Goering, most recently head of Coudert Brothers Litigation Group in New York, specializes in media law. Sheppard, Mullin, Richter & Hampton LLP -- http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm with more than 450 attorneys in nine offices located throughout California and in New York and Washington, D.C. The firm's California offices are located in Los Angeles, San Francisco, Santa Barbara, Century City, Orange County, Del Mar Heights and San Diego. Sheppard Mullin provides legal expertise and counsel to U.S. and international clients in a wide range of practice areas, including Antitrust, Corporate and Securities; Entertainment and Media; Finance and Bankruptcy; Government Contracts; Intellectual Property; Labor and Employment; Litigation; Real Estate/Land Use; Tax/Employee Benefits/Trusts & Estates; and White Collar Defense. The firm was founded in 1927. * FTI Consulting Names Four New Senior Managing Directors --------------------------------------------------------- FTI Consulting, Inc. (NYSE: FCN) appointed four new senior managing directors. Mark Belanger joins FTI Capital Advisors, LLC; Daniel Galante joins the Transaction Advisory Services group; and Richard Hershman and Lisa Troe join the Forensic and Litigation Consulting practice. Commenting on the new appointments, Dominic DiNapoli, FTI's chief operating officer, said, "The interests of our clients are at the core of every hiring decision we make. Our priority is to continue to deliver the value and innovation our clients expect from FTI Consulting. To that end, Mark, Dan, Richard and Lisa are leaders in their respective fields and it is with great pleasure that we welcome them to our team." New Appointments Mark Belanger joins FTI Capital Advisors, LLC, the company's wholly owned investment banking subsidiary, as senior managing director in the New York office. He will lead the team's energy and natural resources effort. Mr. Belanger, who has more than 13 years experience in the investment banking field, will advise clients in mergers and acquisition transactions and on raising debt and equity capital in the private and public sector. Prior to joining FTI, Mr. Belanger held senior banking positions at both Credit Suisse First Boston and Banc of America Securities, where he was responsible for client coverage as well as origination and execution of merger and acquisition mandates for the power, utilities, gas pipeline and midstream sectors. He has acted as senior banker on transactions exceeding $25 billion, serving clients across a broad spectrum of energy and natural resource-based sectors including power, utilities, gas pipeline, midstream processing, oil and gas oilfield services, forest products and chemicals. In addition, Mr. Belanger served as a consultant to Chanin Capital Partners where he provided advice to clients on energy related matters. Mr. Belanger holds a BA in Economics from the University of Toronto and an MBA from the University of Western Ontario. Daniel Galante joins as senior managing director in FTI's Transaction Advisory Service within the Corporate Finance/Restructuring practice, and will reside in the Chicago office. In his new role, Mr. Galante will advise clients on financial, operational and commercial issues relating to acquisition and divestiture transactions, with a particular emphasis on middle-market companies. With 17 years experience, Mr. Galante was most previously a partner in the transaction advisory services group at a Big 4 accounting firm where he was responsible for developing relationships with middle-market financial investors including private equity funds, hedge funds and senior lenders. In his career, he has actively led more than 300 transaction diligence engagements for private equity and strategic corporate acquirers of middle-market businesses. He has experience with multiple investment approaches including stand-alone acquisitions, corporate carve-outs, bankruptcy auctions, mergers and industry consolidations in almost every non-regulated industry. Mr. Galante also held a leadership position in the accounting firm's Chicago office focusing on increasing relationships in the venture capital and private equity markets. Previously, Mr. Galante spent two years in London in the strategic growth markets advisory group where he managed a client portfolio and provided audit, diligence and other advisory services to US companies investing in Europe. Mr. Galante is an alumni of the Harvard Business School and holds a Masters and Bachelors in accountancy from DePaul University. He is a CPA and member of the Chicago Chapter's Association for Corporate Growth, the American Institute of Certified Public Accountants and the Illinois CPA Society. Richard Hershman joins as senior managing director in FTI's Forensic and Litigation Consulting practice, and will be based in the New York office. Mr. Hershman has more than 30 years of experience with an extensive background in the insurance industry with particular emphasis in the property casualty arena. In his new role, Mr. Hershman will lead the FLC segment's insurance industry services. Mr. Hershman has experience in accounting, auditing, financial investigations, and complex financial matters involving financial reporting and the application of generally accepted accounting principles and statutory accounting principles. Prior to joining FTI, Mr. Hershman was managing partner of Allegent Growth Strategies International, a financial consulting firm. Clients covered the full spectrum of the insurance industry including brokers, agents, carriers and technology companies. Mr. Hershman also served as CEO of Allegent Technology Group, a start- up network security company with proprietary technology which was used during the Olympic Games in Athens. Previously, Mr. Hershman was executive vice president, chief financial and administrative officer at Decision Strategies Fairfax International, an international intelligence, investigations and security consulting firm, where he also served the company's insurance industry clients. Mr. Hershman's career includes service as an audit partner at a large national accounting firm specializing in the insurance industry. In addition, he was an executive vice president, chief financial officer and member of the board of Home Insurance through its contract with Risk Enterprise Management Limited, the Zurich entity formed to administer the Home run-off. He has also sat on the board and audit committees of several other insurance companies. Mr. Hershman is a CPA and received a BS in accounting from SUNY at Buffalo and a MBA in taxation from Barnard Baruch College. He a member of the AICPA, New York State Society of Certified Public Accountants, Society of Insurance Financial Management and the Insurance Federation of New York. Lisa Troe joins as senior managing director in FTI's Forensic and Litigation Consulting practice. Ms. Troe will be based in FTI's Los Angeles office and in her new role will focus on client engagements involving GAAP/GAAS matters. Ms. Troe comes to FTI after a distinguished ten-year career with the SEC where, most recently, she was the regional chief enforcement accountant and branch chief, Office of Enforcement, for the SEC's Pacific regional office. In this dual role, her responsibilities included evaluating possible new cases to determine whether to initiate investigations, and developing case theories, designing investigation plans and supervising investigative work. Prior to her 10 years with the SEC, Ms. Troe was a senior accountant for Santa Fe Pacific Pipelines, the general partner of Santa Fe Pacific Partners, a $200 million pipeline common carrier, where her responsibilities included preparing SEC and other regulatory filings. Before joining Santa Fe Pacific Pipelines, she spent four years in the Los Angeles office of Deloitte & Touche supervising teams on high risk audit and due diligence engagements and providing support to clients in mergers and acquisitions, IPOs and other transactions. Ms. Troe holds a Bachelor of Science, Business Administration from the University of Colorado where she majored in accounting. She is a CPA and a member of the AICPA. FTI Consulting -- http://www.fticonsulting.com/-- is a premier provider of problem-solving consulting and technology services to major corporations, financial institutions and law firms when confronting critical issues that shape their future and the future of their clients, such as financial and operational improvement, major litigation, mergers and acquisitions and regulatory issues. Strategically located in 24 of the major US cities, London and Melbourne, FTI's total workforce of more than 1,100 employees includes numerous PhDs, MBAs, CPAs, CIRAs and CFEs, who are committed to delivering the highest level of service to clients. * BOND PRICING: For the week of Oct. 10 - Oct. 14, 2005 --------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- Adelphia Comm. 3.250% 05/01/21 4 Adelphia Comm. 6.000% 02/15/06 4 Adelphia Comm. 7.500% 01/15/04 75 Adelphia Comm. 7.750% 01/15/09 66 Adelphia Comm. 7.875% 05/01/09 62 Adelphia Comm. 8.125% 07/15/03 71 Adelphia Comm. 8.375% 02/01/08 64 Adelphia Comm. 9.250% 10/01/02 64 Adelphia Comm. 9.375% 11/15/09 65 Adelphia Comm. 9.500% 02/15/04 58 Adelphia Comm. 9.875% 03/01/05 64 Adelphia Comm. 9.875% 03/01/07 68 Adelphia Comm. 10.250% 11/01/06 69 Adelphia Comm. 10.250% 06/15/11 67 Adelphia Comm. 10.875% 10/01/10 63 AHI-DFLT 07/05 8.625% 10/01/07 55 Allegiance Tel. 11.750% 02/15/08 26 Allegiance Tel. 12.875% 05/15/08 28 Amer Color Graph 10.000% 06/15/10 73 Amer Comm LLC 11.250% 01/01/08 24 Amer & Forgn PWR 5.000% 03/01/30 72 American Airline 7.377% 05/23/19 69 American Airline 8.390% 01/02/17 72 American Airline 8.800% 09/16/15 65 American Airline 10.200% 03/15/20 66 American Airline 10.850% 03/15/09 65 Ames True Temper 10.000% 07/15/12 74 AMR Corp. 4.500% 02/15/24 72 AMR Corp. 9.000% 08/01/12 74 AMR Corp. 9.000% 09/15/16 70 AMR Corp. 9.750% 08/15/21 56 AMR Corp. 9.800% 10/01/21 63 AMR Corp. 9.880% 06/15/20 56 AMR Corp. 10.000% 04/15/21 48 AMR Corp. 10.125% 06/01/21 63 AMR Corp. 10.130% 06/15/11 67 AMR Corp. 10.150% 05/15/20 53 AMR Corp. 10.200% 03/15/20 66 AMR Corp. 10.550% 03/12/21 63 Amtran Inc. 9.625% 12/15/05 16 Anchor Glass 11.000% 02/15/13 67 Antigenics 5.250% 02/01/25 55 Anvil Knitwear 10.875% 03/15/07 53 Apple South Inc. 9.750% 06/01/06 4 Armstrong World 6.350% 08/15/03 73 Armstrong World 6.500% 08/15/05 72 Armstrong World 7.450% 05/15/29 74 ATA Holdings 12.125% 06/15/10 20 ATA Holdings 13.000% 02/01/09 15 At Home Corp. 4.750% 12/15/06 0 Atlantic Coast 6.000% 02/15/34 6 Autocam Corp. 10.875% 06/15/14 66 Bank New England 8.750% 04/01/99 9 Budget Group Inc. 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 58 Burlington Inds 7.250% 09/15/05 2 Burlington Inds 7.250% 08/01/25 2 Calpine Corp. 4.000% 12/26/03 65 Calpine Corp. 4.750% 11/15/23 51 Calpine Corp. 7.750% 04/15/09 54 Calpine Corp. 7.875% 04/01/08 63 Calpine Corp. 8.500% 07/15/10 73 Calpine Corp. 8.500% 02/15/11 54 Calpine Corp. 8.625% 08/15/10 55 Calpine Corp. 8.750% 07/15/13 66 Calpine Corp. 8.750% 07/15/13 72 Cell Therapeutic 5.750% 06/15/08 53 Cell Therapeutic 5.750% 06/15/08 73 Cellstar Corp. 12.000% 01/15/07 0 Cendant Corp 4.890% 08/17/06 50 CIH 10.000% 05/15/14 69 Charter Comm HLD 10.000% 05/15/11 67 Charter Comm HLD 11.125% 01/15/11 71 Ciphergen 4.500% 09/01/08 75 CHS Electronics 9.875% 04/15/05 0 Classic Cable 9.375 08/01/09 0 Collins & Aikman 10.750% 12/31/11 46 Comcast Corp. 2.000% 10/15/29 40 Contl Airlines 8.312% 04/02/11 72 Constar Intl 11.000% 12/01/12 62 Cons Container 10.125% 07/15/09 64 Covad Communication 3.000% 03/15/24 66 Cray Inc. 3.000% 12/01/24 55 Cray Research 6.125% 02/01/11 40 Curative Health 10.750% 05/01/11 69 DAL-DFLT09/05 9.000% 05/15/16 18 Dana Corp 5.850% 01/15/15 68 Dana Corp 7.000% 03/15/28 66 Dana Corp 7.000% 03/01/29 67 Delco Remy Intl 9.375% 04/15/12 52 Delco Remy Intl 11.000% 05/01/09 50 Delta Air Lines 2.875% 02/18/24 16 Delta Air Lines 7.299% 09/18/06 62 Delta Air Lines 7.541% 10/11/11 36 Delta Air Lines 7.700% 12/15/05 18 Delta Air Lines 7.711% 09/18/11 66 Delta Air Lines 7.779% 11/18/05 60 Delta Air Lines 7.779% 01/02/12 59 Delta Air Lines 7.900% 12/15/09 18 Delta Air Lines 7.920% 11/18/10 70 Delta Air Lines 8.000% 06/03/23 18 Delta Air Lines 8.300% 12/15/29 18 Delta Air Lines 8.540% 01/02/07 28 Delta Air Lines 8.540% 01/02/07 27 Delta Air Lines 8.540% 01/02/07 28 Delta Air Lines 8.540% 01/02/07 28 Delta Air Lines 8.540% 01/02/07 26 Delta Air Lines 8.950% 01/12/12 43 Delta Air Lines 9.200% 09/23/14 20 Delta Air Lines 9.250% 03/15/22 16 Delta Air Lines 9.320% 01/02/09 40 Delta Air Lines 9.375% 09/11/07 48 Delta Air Lines 9.590% 01/02/17 42 Delta Air Lines 9.750% 05/15/21 16 Delta Air Lines 9.875% 04/30/08 49 Delta Air Lines 10.000% 08/15/08 19 Delta Air Lines 10.000% 05/17/09 39 Delta Air Lines 10.000% 05/17/09 25 Delta Air Lines 10.000% 05/17/09 39 Delta Air Lines 10.000% 06/01/09 45 Delta Air Lines 10.000% 06/01/10 13 Delta Air Lines 10.000% 12/05/14 19 Delta Air Lines 10.060% 01/02/16 49 Delta Air Lines 10.080% 06/16/07 44 Delta Air Lines 10.125% 05/15/10 16 Delta Air Lines 10.125% 06/16/10 44 Delta Air Lines 10.140% 08/14/11 59 Delta Air Lines 10.330% 03/26/06 36 Delta Air Lines 10.375% 02/01/11 18 Delta Air Lines 10.375% 12/15/22 17 Delta Air Lines 10.430% 01/02/11 20 Delta Air Lines 10.430% 01/02/11 20 Delta Air Lines 10.500% 04/30/16 49 Delta Air Lines 10.790% 03/26/14 19 Delphi Auto Syst 6.500% 05/01/09 57 Delphi Auto Syst 7.125% 05/01/29 57 Delphi Corp 6.500% 08/15/13 57 Delphi Trust II 6.197% 11/15/33 27 Diamond Brands 12.875% 04/15/09 0 Duane Reade Inc 9.750% 08/01/11 74 Dura Operating 9.000% 05/01/09 64 Edison Brothers 11.000% 09/26/07 0 Eagle-Picher Inc. 9.750% 09/01/13 74 Emergent Group 10.750% 09/15/04 0 Empire Gas Corp. 9.000% 12/31/07 0 Epix Medical Inc. 3.000% 06/15/24 67 Exodus Comm. Inc. 5.250% 02/15/08 0 Falcon Products 11.375% 06/15/09 0 Family Golf Ctrs 5.750% 10/15/04 0 Fedders North AM 9.875% 03/01/14 74 Federal-Mogul Co. 7.375% 01/15/06 33 Federal-Mogul Co. 7.500% 01/15/09 35 Federal-Mogul Co. 8.250% 03/03/05 33 Federal-Mogul Co. 8.370% 11/15/01 30 Federal-Mogul Co. 8.800% 04/15/07 33 Federated Group 7.500% 04/15/10 1 Fibermark Inc. 10.750% 04/15/11 70 Finova Group 7.500% 11/15/09 39 FMXIQ-DFLT09/05 13.500% 08/15/05 7 Foamex L.P. 9.875% 06/15/07 3 Foamex L.P. 10.750% 04/01/09 73 Ford Motor Co. 6.625% 02/15/28 73 Ford Motor Co. 7.400% 11/01/46 65 Ford Motor Co. 7.500% 08/01/26 74 Ford Motor Co. 7.700% 05/15/97 73 Ford Motor Co. 7.750% 06/15/43 71 Ford Motor Cred 5.000% 01/20/11 65 Ford Motor Cred 5.250% 02/22/11 75 Ford Motor Cred 5.250% 03/21/11 70 Ford Motor Cred 5.250% 09/20/11 73 Ford Motor Cred 5.650% 08/22/11 73 Ford Motor Cred 5.650% 01/21/14 68 Ford Motor Cred 5.750% 01/21/14 72 Ford Motor Cred 5.700% 12/20/11 72 Ford Motor Cred 5.800% 11/21/10 74 Ford Motor Cred 5.900% 07/20/11 72 Ford Motor Cred 5.900% 02/20/14 74 Ford Motor Cred 6.000% 01/21/14 72 Ford Motor Cred 6.000% 03/20/14 65 Ford Motor Cred 6.000% 03/20/14 69 Ford Motor Cred 6.000% 11/20/14 71 Ford Motor Cred 6.000% 11/20/14 66 Ford Motor Cred 6.000% 11/20/14 74 Ford Motor Cred 6.050% 02/20/14 70 Ford Motor Cred 6.050% 03/20/14 74 Ford Motor Cred 6.050% 04/21/14 65 Ford Motor Cred 6.050% 12/22/14 68 Ford Motor Cred 6.050% 12/22/14 69 Ford Motor Cred 6.150% 12/22/14 65 Ford Motor Cred 6.150% 01/20/15 71 Ford Motor Cred 6.200% 04/21/14 67 Ford Motor Cred 6.250% 12/20/13 70 Ford Motor Cred 6.250% 04/21/14 69 Ford Motor Cred 6.250% 01/20/15 68 Ford Motor Cred 6.300% 05/20/14 73 Ford Motor Cred 6.300% 05/20/14 67 Ford Motor Cred 6.500% 03/20/15 72 Ford Motor Cred 6.500% 08/01/18 69 Ford Motor Cred 6.650% 10/21/13 72 Ford Motor Cred 6.650% 06/20/14 70 Ford Motor Cred 6.750% 10/21/13 70 Ford Motor Cred 7.100% 09/20/13 75 Ford Motor Cred 7.400% 08/21/17 73 Ford Motor Cred 6.600% 10/21/13 68 Ford Motor Cred 7.500% 08/20/32 70 Fruit of the Loom 8.875% 04/15/06 0 Gateway Inc. 1.500% 12/31/09 73 Gateway Inc. 2.000% 12/31/11 68 General Motors 7.400% 09/01/25 62 General Motors 7.700% 04/15/16 70 General Motors 8.100% 06/15/24 73 General Motors 8.250% 07/15/23 71 General Motors 8.375% 07/15/23 72 General Motors 8.800% 03/01/21 73 GMAC 4.900% 10/15/09 75 GMAC 5.250% 01/15/14 64 GMAC 5.350% 01/15/14 61 GMAC 5.500% 01/15/10 75 GMAC 5.700% 06/15/13 69 GMAC 5.700% 10/15/13 64 GMAC 5.700% 12/15/13 64 GMAC 5.750% 01/15/14 74 GMAC 5.850% 06/15/13 66 GMAC 5.850% 06/15/13 67 GMAC 5.900% 12/15/13 72 GMAC 5.900% 12/15/13 67 GMAC 5.900% 01/15/19 53 GMAC 5.900% 01/15/19 55 GMAC 5.900% 02/15/19 55 GMAC 5.900% 10/15/19 61 GMAC 6.000% 07/15/13 74 GMAC 6.000% 11/15/11 66 GMAC 6.000% 12/15/13 73 GMAC 6.000% 02/15/19 56 GMAC 6.000% 02/15/19 59 GMAC 6.000% 02/15/19 59 GMAC 6.000% 03/15/19 59 GMAC 6.000% 03/15/19 59 GMAC 6.000% 03/15/19 54 GMAC 6.000% 03/15/19 62 GMAC 6.000% 03/15/19 56 GMAC 6.000% 04/15/19 61 GMAC 6.000% 09/15/19 56 GMAC 6.000% 09/15/19 58 GMAC 6.050% 08/15/19 57 GMAC 6.050% 08/15/19 47 GMAC 6.050% 10/15/19 49 GMAC 6.100% 09/15/19 59 GMAC 6.125% 10/15/19 57 GMAC 6.150% 08/15/19 58 GMAC 6.150% 10/15/19 57 GMAC 6.200% 11/15/13 67 GMAC 6.200% 04/15/19 59 GMAC 6.250% 03/15/13 67 GMAC 6.250% 10/15/18 69 GMAC 6.250% 11/15/13 70 GMAC 6.250% 12/15/18 61 GMAC 6.250% 01/15/19 67 GMAC 6.250% 04/15/19 58 GMAC 6.250% 05/15/19 61 GMAC 6.250% 07/15/19 58 GMAC 6.300% 03/15/13 70 GMAC 6.300% 10/15/13 70 GMAC 6.300% 11/15/13 67 GMAC 6.300% 08/15/19 58 GMAC 6.300% 08/15/19 64 GMAC 6.350% 05/15/13 71 GMAC 6.350% 04/15/19 61 GMAC 6.350% 07/15/19 60 GMAC 6.350% 07/15/19 59 GMAC 6.400% 03/15/13 73 GMAC 6.400% 12/15/18 59 GMAC 6.400% 11/15/19 61 GMAC 6.400% 15/15/19 63 GMAC 6.500% 06/15/18 62 GMAC 6.500% 11/15/18 62 GMAC 6.500% 12/15/18 60 GMAC 6.500% 12/15/18 59 GMAC 6.500% 05/15/19 60 GMAC 6.500% 01/15/20 61 GMAC 6.500% 02/15/20 68 GMAC 6.500% 06/15/18 62 GMAC 6.500% 11/15/18 62 GMAC 6.500% 12/15/18 60 GMAC 6.500% 12/15/18 59 GMAC 6.500% 05/15/19 60 GMAC 6.500% 02/15/20 61 GMAC 6.550% 12/15/19 60 GMAC 6.600% 08/15/16 63 GMAC 6.600% 05/15/18 59 GMAC 6.600% 06/15/19 67 GMAC 6.600% 06/15/19 61 GMAC 6.650% 10/15/11 74 GMAC 6.650% 06/15/18 62 GMAC 6.650% 10/15/18 62 GMAC 6.650% 10/15/18 60 GMAC 6.650% 02/15/20 74 GMAC 6.700% 07/15/12 70 GMAC 6.700% 05/14/14 69 GMAC 6.700% 05/15/14 67 GMAC 6.700% 06/15/14 70 GMAC 6.700% 08/15/16 61 GMAC 6.700% 06/15/18 62 GMAC 6.700% 06/15/18 64 GMAC 6.700% 11/15/18 58 GMAC 6.700% 06/15/19 69 GMAC 6.700% 12/15/19 63 GMAC 6.700% 07/15/12 73 GMAC 6.700% 07/15/12 73 GMAC 6.700% 09/15/12 72 GMAC 6.750% 10/15/12 74 GMAC 6.750% 04/15/13 69 GMAC 6.750% 04/15/13 72 GMAC 6.750% 06/15/14 70 GMAC 6.750% 06/15/14 69 GMAC 6.750% 07/15/16 64 GMAC 6.750% 08/15/16 64 GMAC 6.750% 09/15/16 67 GMAC 6.750% 06/15/17 63 GMAC 6.750% 03/15/18 67 GMAC 6.750% 07/15/18 67 GMAC 6.750% 09/15/18 63 GMAC 6.750% 10/15/18 64 GMAC 6.750% 11/15/18 56 GMAC 6.750% 05/15/19 62 GMAC 6.750% 05/15/19 64 GMAC 6.750% 06/15/19 63 GMAC 6.750% 06/15/19 61 GMAC 6.750% 03/15/20 74 GMAC 6.800% 02/15/13 70 GMAC 6.800% 09/15/18 59 GMAC 6.800% 10/15/18 65 GMAC 6.850% 05/15/18 70 GMAC 6.800% 10/15/12 72 GMAC 6.875% 08/15/16 65 GMAC 6.875% 07/15/18 65 GMAC 6.900% 06/15/17 68 GMAC 6.900% 07/15/18 63 GMAC 6.900% 08/15/18 66 GMAC 6.950% 06/15/17 64 GMAC 7.000% 09/15/12 73 GMAC 7.000% 12/15/12 75 GMAC 7.000% 01/15/13 73 GMAC 7.000% 06/15/16 68 GMAC 7.000% 06/15/16 63 GMAC 7.000% 07/15/16 69 GMAC 7.000% 09/15/16 69 GMAC 7.000% 05/15/17 66 GMAC 7.000% 05/15/17 68 GMAC 7.000% 06/15/17 71 GMAC 7.000% 07/15/17 68 GMAC 7.000% 07/15/17 65 GMAC 7.000% 02/15/18 62 GMAC 7.000% 02/15/18 61 GMAC 7.000% 02/15/18 64 GMAC 7.000% 03/15/18 66 GMAC 7.000% 05/15/18 69 GMAC 7.000% 05/15/18 65 GMAC 7.000% 08/15/18 65 GMAC 7.000% 09/15/18 63 GMAC 7.000% 02/15/21 64 GMAC 7.000% 09/15/21 58 GMAC 7.000% 09/15/21 57 GMAC 7.000% 06/15/22 59 GMAC 7.000% 11/15/23 62 GMAC 7.000% 11/15/24 60 GMAC 7.000% 11/15/24 60 GMAC 7.000% 11/15/24 62 GMAC 7.050% 05/15/17 67 GMAC 7.050% 03/15/18 61 GMAC 7.050% 03/15/18 63 GMAC 7.050% 04/15/18 65 GMAC 7.125% 09/15/12 72 GMAC 7.125% 01/15/13 72 GMAC 7.125% 01/15/13 74 GMAC 7.125% 12/15/11 73 GMAC 7.125% 04/15/17 70 GMAC 7.125% 10/15/17 64 GMAC 7.150% 11/15/12 74 GMAC 7.150% 07/15/17 68 GMAC 7.150% 09/15/18 64 GMAC 7.150% 01/15/25 59 GMAC 7.150% 03/15/25 63 GMAC 7.200% 10/15/17 67 GMAC 7.200% 10/15/17 63 GMAC 7.250% 12/15/12 71 GMAC 7.250% 12/15/12 71 GMAC 7.250% 03/15/17 67 GMAC 7.250% 05/15/17 69 GMAC 7.250% 07/15/17 68 GMAC 7.250% 09/15/17 69 GMAC 7.250% 09/15/17 67 GMAC 7.250% 09/15/17 73 GMAC 7.250% 09/15/17 69 GMAC 7.250% 01/15/18 68 GMAC 7.250% 04/15/18 67 GMAC 7.250% 04/15/18 66 GMAC 7.250% 08/15/18 67 GMAC 7.250% 08/15/18 64 GMAC 7.250% 09/15/18 69 GMAC 7.250% 01/15/25 61 GMAC 7.250% 02/15/25 70 GMAC 7.250% 03/15/25 60 GMAC 7.375% 11/15/16 70 GMAC 7.375% 04/15/17 68 GMAC 7.375% 04/15/18 63 GMAC 7.350% 03/15/17 71 GMAC 7.400% 12/15/17 66 GMAC 7.400% 02/15/21 60 GMAC 7.450% 04/15/17 66 GMAC 7.500% 11/15/16 65 GMAC 7.500% 12/15/16 70 GMAC 7.500% 04/15/17 71 GMAC 7.500% 08/15/17 67 GMAC 7.500% 11/15/17 72 GMAC 7.500% 11/15/17 70 GMAC 7.500% 12/15/17 64 GMAC 7.500% 12/15/17 69 GMAC 7.500% 03/15/25 58 GMAC 7.625% 11/15/12 75 GMAC 7.750% 10/15/17 66 GMAC 7.950% 05/15/17 74 GMAC 8.000% 10/15/17 73 GMAC 8.000% 11/15/17 73 GMAC 8.125% 11/15/17 68 Graftech Int'l 1.625% 01/15/24 75 Gulf States STL 13.500% 04/15/03 0 Home Interiors 10.125% 06/01/08 65 Human Genome 2.250% 08/15/12 74 Huntsman Packag 13.000% 06/01/10 35 Imperial Credit 9.875% 01/15/07 0 Incyte Corp 3.500% 02/15/11 73 Inland Fiber 9.625% 11/15/07 44 Intermet Corp. 9.750% 06/15/09 24 Iridium LLC/CAP 10.875% 07/15/05 21 Iridium LLC/CAP 11.250% 07/15/05 21 Iridium LLC/CAP 13.000% 07/15/05 21 Iridium LLC/CAP 14.000% 07/15/05 22 Isolagen Inc. 3.500% 11/01/24 50 Isolagen Inc. 3.500% 11/01/24 48 Jacobson's 6.750% 12/15/11 3 Kaiser Aluminum & Chem. 12.750% 02/01/03 8 Kmart Corp. 6.000% 01/01/08 25 Kmart Corp. 8.990% 07/05/10 51 Kmart Funding 8.880% 07/01/10 50 Kmart Funding 9.440% 07/01/18 68 Kulicke & Soffa 0.500% 11/30/08 72 Kulicke & Soffa 1.000% 06/30/10 72 Lehman Bros Hldg 0.750% 06/21/10 52 Level 3 Comm. Inc. 2.875% 07/15/10 57 Level 3 Comm. Inc. 5.250% 12/15/11 72 Level 3 Comm. Inc. 6.000% 09/15/09 53 Level 3 Comm. Inc. 6.000% 03/15/10 51 Liberty Media 3.750% 02/15/30 57 Liberty Media 4.000% 11/15/29 60 Mcms Inc. 9.750 03/01/08 0 Metaldyne Corp. 11.000% 06/15/12 63 Mississippi Chem 7.250% 11/15/17 4 MSX Int'l Inc. 11.375% 01/15/08 69 Muzak LLC 9.875% 03/15/09 49 New Orl Grt N RR 5.000% 07/01/32 72 New World Pasta 9.250% 02/15/09 5 Northern Pacific RY 3.000% 01/01/47 57 Northern Pacific RY 3.000% 01/01/47 57 Northwest Airlines 6.625% 05/15/23 23 Northwest Airlines 7.068% 01/02/16 65 Northwest Airlines 7.248% 01/02/12 18 Northwest Airlines 7.360% 02/01/20 52 Northwest Airlines 7.625% 11/15/23 27 Northwest Airlines 7.691% 04/01/17 74 Northwest Airlines 7.875% 03/15/08 28 Northwest Airlines 8.070% 01/02/15 18 Northwest Airlines 8.130% 02/01/14 17 Northwest Airlines 8.304% 09/01/10 70 Northwest Airlines 8.700% 03/15/07 27 Northwest Airlines 8.875% 06/01/06 28 Northwest Airlines 8.970% 01/02/15 17 Northwest Airlines 9.179% 04/01/10 43 Northwest Airlines 9.360% 03/10/06 40 Northwest Airlines 9.875% 03/15/07 28 Northwest Airlines 10.000% 02/01/09 28 Northwest Airlines 10.000% 04/01/09 25 Northwest Stl & Wir 9.500% 06/15/01 0 NTK Holdings Inc. 10.750% 03/01/14 55 Nutritional Src. 10.125% 08/01/09 74 NWA Trust 9.360% 03/10/06 40 Oakwood Homes 7.875% 03/01/04 10 Oakwood Homes 8.125% 03/01/09 10 O'Sullivan Ind. 10.630% 10/01/08 69 O'Sullivan Ind. 13.375% 10/15/09 5 Orion Network 11.250% 01/15/07 50 Orion Network 12.500% 01/15/07 35 PCA LLC/PCA Fin 11.875 08/01/09 27 Pegasus Satellite 9.625% 10/15/05 32 Pen Holdings Inc. 9.875% 06/15/08 65 Pinnacle Airline 3.250% 02/15/25 63 Pixelworks Inc. 1.750% 05/15/24 67 Pliant Corp. 13.000% 06/01/10 40 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 7.250% 01/15/07 0 Polaroid Corp. 11.500% 02/15/06 0 Portola Packagin 8.250% 02/01/12 67 Primedex Health 11.500% 06/30/08 50 Primedex Health 11.500% 06/30/08 40 Primus Telecom 3.750% 09/15/10 34 Primus Telecom 5.750% 02/15/07 64 Primus Telecom 8.000% 01/15/14 62 Primus Telecom 12.750% 10/15/09 51 Radnor Holdings 11.000% 03/15/10 67 Read-Rite Corp. 6.500% 09/01/04 20 Reliance Group Holdings 9.000% 11/15/00 22 Reliance Group Holdings 9.750% 11/15/03 0 Safety-Kleen Corp. 9.250% 06/01/08 0 Salton Inc. 12.250% 04/15/08 52 Solectron Corp. 0.500% 02/15/34 68 Tekni-Plex Inc. 12.750% 06/15/10 54 Teligent Inc. 11.500% 12/01/07 0 Tom's Foods Inc. 10.500% 11/01/04 68 Trans Mfg Oper 11.250% 05/01/09 63 TransTexas Gas 15.000% 03/15/05 1 Tropical Sportsw 11.000% 06/15/08 0 United Air Lines 6.831% 09/01/08 60 United Air Lines 7.270% 01/30/13 43 United Air Lines 7.371% 09/01/06 20 United Air Lines 7.762% 10/01/05 50 United Air Lines 7.811% 10/01/09 73 United Air Lines 8.030% 07/01/11 59 United Air Lines 9.000% 12/15/03 13 United Air Lines 9.020% 04/19/12 40 United Air Lines 9.125% 01/15/12 13 United Air Lines 9.200% 03/22/08 45 United Air Lines 9.300% 03/22/08 27 United Air Lines 9.350% 04/07/16 60 United Air Lines 9.560% 10/19/18 40 United Air Lines 9.750% 08/15/21 14 United Air Lines 10.020% 03/22/14 45 United Air Lines 10.250% 07/15/21 14 United Air Lines 10.670% 05/01/04 13 United Air Lines 11.210% 05/01/14 12 Univ. Health Services 0.426% 06/23/20 58 US Air Inc. 10.250% 01/15/07 4 US Air Inc. 10.250% 01/15/07 4 US Air Inc. 10.300% 07/15/49 8 US Air Inc. 10.550% 01/15/06 28 US Air Inc. 10.700% 01/15/07 27 US Air Inc. 10.700% 01/15/49 6 US Air Inc. 10.750% 01/15/49 6 UTSTARCOM 0.875% 03/01/08 71 Vitesse Semicond 1.500% 10/01/24 74 WCI Steel Inc. 10.000% 12/01/04 55 Werner Holdings 10.000% 11/15/07 55 Westpoint Steven 7.875% 06/15/08 0 Wheeling-Pitt St 5.000% 08/01/11 75 Wheeling-Pitt St 6.000% 08/01/10 70 Windsor Woodmont 13.000% 03/15/05 1 Winn-Dixie Store 8.875% 04/01/08 69 Winstar Comm 14.000% 10/15/05 0 Wise Metals Grp 10.250% 05/15/12 71 WMG Holdings 9.500% 12/15/14 74 World Access Inc. 14.000% 10/15/05 0 Xerox Corp 0.570% 01/21/18 41 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili, Jr., and Peter A. Chapman, Editors. Copyright 2005. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***