/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/051018.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, October 18, 2005, Vol. 9, No. 247 Headlines 2427 RESTAURANT: Case Summary & 21 Largest Unsecured Creditors ADAVANCE REHAB: Case Summary & 20 Largest Unsecured Creditors ALLIANCE IMAGING: Posts Preliminary Third Quarter 2005 Results ALLIANCE LAUNDRY: Merges Marianna, Fla., & Ripon, Wis., Operations ALLIANCE PHARMACEUTICAL: Corbin & Co. Raises Going Concern Doubt ARLINGTON HOSPITALITY: Public Auction Set for Nov. 14 ASARCO INC: Fitch Downgrades Sr. Unsecured Debt Rating to D AURA SYSTEMS: Hires O'Connor and Kay as Tax Accountant AVNET INC: Amended Credit Facility Increases Loan to $500 Million BARBARA FIELDS: Case Summary & 2 Largest Unsecured Creditors BOYDS COLLECTION: Files for Chapter 11 Protection in Maryland BOYDS COLLECTION: Case Summary & 44 Largest Unsecured Creditors CANYON STATE: Case Summary & 39 Largest Unsecured Creditors CAPE HAZE: Case Summary & 12 Largest Unsecured Creditors CAPITOL ROOFING: Voluntary Chapter 11 Case Summary CETROM INC: Case Summary & 20 Largest Unsecured Creditors CHRISTOPHER MAHER: Case Summary & 8 Largest Unsecured Creditors CHRISTOPHER TODINO: Voluntary Chapter 11 Case Summary CINRAM INTERNATIONAL: Amaranth Entities Holds 14.8% Equity Stake CITYSCAPE HOME: Fitch Puts Low-B Ratings on Three Cert. Classes COLONIAL EXETER: Court Dismisses Chapter 11 Case COMM SOUTH: Chapter 7 Trustee Can Enter Into Replacement ICAs CONMED CORP: Expects Third Quarter Earnings at $7.5M to $7.7M COUNTRYWIDE HOME: Fitch Holds Low-B Rating on 27 Cert. Classes CYBERCARE INC: Case Summary & 16 Largest Unsecured Creditors DELPHI FURUKAWA: Case Summary & 50 Largest Unsecured Creditors DELTA AIR: Wants Stay on Class Action Settlement Lifted DELTA AIR: Objects to Interface's Motion To Compel Assumption DETIENNE ASSOCIATES: Case Summary & 12 Largest Unsecured Creditors DOANE PET: Prices $152 Million Private Debt Placement DOUGLAS DYNAMICS: S&P Puts BB- Rating on $40M Sr. Sec. Term Loan EMIDIO WOODWORKING: Case Summary & 42 Largest Unsecured Creditors ENRON CORP: Gets Court Nod to Settle with ANP Entities ENRON CORP: Agrees to Allow Hazelwood Power Claim for $3 Million EVERGREEN INT'L: S&P Reviews Junk Corporate Credit Rating EXCO RESOURCES: S&P Slices Corporate Credit Rating to B from B+ FLAGSHIP REALTY: Voluntary Chapter 11 Case Summary FOAMEX INT'L: Court Gives Final Okay to $320 Million DIP Financing FREEDOM RINGS: Files for Chapter 11 Protection in Delaware FREEDOM RINGS: Case Summary & 20 Largest Unsecured Creditors FRESENIUS MEDICAL: S&P Still Reviewing BB+ Rating & May Downgrade GE CAPITAL: Fitch Holds Low-B Ratings on Five Certificate Classes GENERAL STEEL: Case Summary & 20 Largest Unsecured Creditors HORIZON NATURAL: Wants A.T. Massey to Produce Lease Documents INSIGHT COMMS: Obtains Noteholders' Consent to Indenture Waiver IVOW INC: Completed 1-for-10 Reverse Stock Split on Oct. 10 JAMESTOWN HOUSING: S&P Pares Revenue Bond Rating to B from BB JETBLUE AIRWAYS: Fitch Puts B- Rating on Convertible Notes K-SEA TRANSPO: S&P Rates Proposed $150M Senior Unsec. Notes at B+ KRISPY KREME: Franchisee Files Chapter 11 Petition in Delaware KUECKER EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors LA RISA: Case Summary & 15 Largest Unsecured Creditors LEVITZ HOME: Judge Lifland Approves Joint Administration of Cases LEVITZ HOME: Judge Lifland Permits Interim Use of Cash Collateral LEVITZ HOME: Judge Lifland Permits Access to $80 Mil. of DIP Loans LEVITZ: Prepares for Rapid Sec. 363 Sale to Prentice Capital LORAL SPACE: Sells Cyberstar's Shares & Claims to Sasani for $385K MARKS PAPER: Voluntary Chapter 11 Case Summary MAYTAG CORP: Fitch Cuts Issuer Default Rating Two Notches to B+ MESABA AVIATION: Wants Access to MAIR's $35 Million DIP Facility METROPOLITAN MORTGAGE: Reed & Giesa Approved as Special Counsel MIRANT CORP: Asks Court to Approve Deutsche Bank Consent Order MIRANT CORP: Court Approves Metromedia Stipulation on Sale Dispute MIRANT CORPORATION: CARE Withdraws $469.8 Million Claim N. CAROLINA MEDICAL: S&P Pares Revenue Bond Rating to BB from BBB- NEXEN INC: Earns $615 Million of Net Income in Third Quarter NORTEL NETWORKS: Board Declares Dividend on Preferred Shares O'CONNOR'S ALEXANDER: Case Summary & 20 Largest Unsec. Creditors OAK CREEK: Wants to Employ Gibson Dunn as Bankruptcy Counsel OAK CREEK: Taps David Dowdney as Responsible Person OAK CREEK: Gets Interim Okay to Use GMAC's Cash Collateral ODYSSEY RE: S&P Assigns BB Rating to $100M Preferred Stock OWENS CORNING: Status Report on Commercial Committee's Advisors OWENS CORNING: Contrarian Capital Settles AT&T Claim for $357,618 PENNSYLVANIA REAL: Fitch Holds B+ Rating on Preferred Stock PHILADELPHIA GAS: Fitch Places BB+ Rated Jr. Bonds on Neg. Watch PLYMOUTH RUBBER: Taps O'Conor Wright as Investment Bankers PLYMOUTH RUBBER: Selling Canton Plant to Conroy for $8.9 Million POINT TO POINT: Wants to Hire Gary Hostetler as Special Counsel POINT TO POINT: Wants to Hire Kyle Brant as Special Patent Counsel POINT TO POINT: Jack Weiss Wants Chapter 11 Trustee Appointed POPE & TALBOT: S&P Lowers Sr. Unsec. Debt Rating to B- from BB- QUALITY FINANCIAL: Case Summary & 3 Largest Unsecured Creditors REFCO GROUP: Wind-Down Plans Prompt S&P to Junk Ratings REFCO INC: In Advanced Talks with J.C. Flowers for Asset Sale REFCO INC: Grant Thornton Named in Securities Law Suit RESIDENTIAL ASSET: Fitch Puts Low-B Ratings on 11 Cert. Classes SAGOMA PLASTICS: Case Summary & 20 Largest Unsecured Creditors SEQUOIA MORTGAGE: Credit Enhancement Cues Fitch to Lift Ratings SKYWAY COMMUNICATIONS: Doesn't Want Case Dismissed or Converted SPILLMAN DEVELOPMENT: Wants General Partners to File Schedules TIFFANY ASSOCIATES: Case Summary & 10 Largest Unsecured Creditors TROPICAL SPORTSWEAR: Agrees to Negotiate Class Action Settlement UAL CORP: Panel Doesn't Want Verizon to Intervene in Disney Claim UAL CORP: PBGC Seeks Support From Court on FA Plan Termination US AIRWAYS: Inks New $583 Million Loan Agreement with ATSB Lenders US AIRWAYS: Pacific Exchange Begins Trading Options US AIRWAYS: American Stock Exchange Trades Options USG CORP: Equity Committee Gets Court Okay to Hire Morris Nichols VIDEO WITHOUT BOUNDARIES: Net Loss Rises Following Restatement VINTAGE PETROLEUM: S&P Reviews BB- Corporate Credit Rating WELLS FARGO: S&P Puts Low-B Ratings on 126 Certificate Classes WESTON NURSERIES: Case Summary & 20 Largest Unsecured Creditors WHITEHALL JEWELLERS: Appoints Daniel Levy as Interim CEO WINDSWEPT ENVIRONMENTAL: Auditor Raises Going Concern Doubt W.R. GRACE: Files Asset Sales Report for Second Quarter of 2005 * Large Companies with Insolvent Balance Sheets ********* 2427 RESTAURANT: Case Summary & 21 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: 2427 Restaurant Corporation dba Eugene's dba Gypsy Tea 27 West 24th Street New York, New York 10010 Bankruptcy Case No.: 05-48722 Type of Business: The Debtor owns and operates a nightclub and lounge known as Gypsy Tea located in Manhattan. Chapter 11 Petition Date: October 16, 2005 Court: Southern District of New York (Manhattan) Debtor's Counsel: Kenneth M. Lewis, Esq. Sanford Philip Rosen, Esq. Sanford P. Rosen & Associates, P.C. 747 Third Avenue New York, New York 10017-2803 Tel: (212) 223-1100 Fax: (212) 223-1102 Total Assets: $3,061,786 Total Debts: $5,599,174 Debtor's 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bronx Store Equipment Co. Inc. Construction $798,191 dba Bronx Builders services c/o MG & Co. 230 West 17th Street 5th Floor New York, NY 10011 Attn: Marc Goldberg Tel: (212) 691-6613 27 West 24th Street Corp. Rent $419,136 420 Lexington Ave., Suite #331 New York, NY 10170 Attn: Bill Cummings Tel: (212) 661-6805 Fax: (212) 661-6240 Gerard Maccioli Loan $175,000 11443 West Palmetto Park Road Suite D Boca Raton, FL 33428 Attn: Gerard Maccioli Tel: (516) 441-7080 Bruce Miller Loan $169,565 1344 Ocean Avenue Del Mar, CA 92014 Tel: (585) 905-1451 Perfectaire Co., Inc. HVAC services $90,641 Munrod Interiors Services rendered $64,427 Upholstery, Inc. Peerless Importers, Inc. Liquor $54,104 Charmer Industries Liquor $47,294 RIP Construction Consulting services $40,000 Consultants, Inc. Bragman Nyman Cafarelli Public relations $33,406 services Met Tech Corp. Construction $26,000 services AFA Protective Services, Inc. Monitor services $15,351 Con Edison Utilities $11,557 Arnhold & S. Bleichroeder Refund payable $11,175 Advisers, Inc. Durite Concepts, Inc. Construction $9,400 services Paramount Brands Liquor $9,132 BMI Music license fee $6,670 Grimaldi & Nelkin CPA's Accounting $6,351 services Custom Lighting Lighting equipment $6,000 Glendale Awning Co. Services rendered $5,654 City Thermographers N.Y. Printing services $5,197 ADAVANCE REHAB: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Advanced Rehabilitation Technologies f/d/b/a Home Medical Services, Inc. 7950 Dunbrook Road San Diego, California 92126 Bankruptcy Case No.: 05-13292 Chapter 11 Petition Date: October 14, 2005 Court: Southern District of California (San Diego) Judge: Peter W. Bowie Debtor's Counsel: Margaret M. Mann, Esq. Heller Ehrman White & McAuliffe LLP 4350 La Jolla Village Drive, 7th Floor San Diego, California 92122 Tel: (858) 450-8400 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 ------ --------------- ------------ Electronic Waveform Lab, Inc $7,172,902 c/o Blakely, Sokoloff, Taylor 12400 Wilshire Blvd., 7th Fl Los Angeles, CA 90025 Cliff Glassman Independent $474,000 621 East Cypress Avenue Glendora, CA 91741 Frank Gomez Independent $304,000 8741 Ardendale Avenue Contractor Bryan Harris Independent $262,000 1473 Glencrest Drive Contractor San Marcos, CA 92126 Erica Marasco Independent $186,000 Contractor Liz Gravelle Independent $173,000 Contractor David Diredo Independent $171,000 Contractor Brandy Murinchack Independent $147,000 Contractor Union Bank of California Fixed loans on $140,000 credit line subject to potential offset. Barbee Noll Independent $103,000 Contractor Rick Harris Promissory Note $63,441 Wilber S. Dunlap Promissory note $62,500 Added $12,500 from original amount for 10/14/05 potential retainer. Charity Bedell Independent $45,000 Contractor Diane Lewis Independent $44,000 Contractor Sid Glover Independent $35,000 Contractor Kevin Helmer Independent $33,000 Contactor Jerry Palmisano Independent $30,000 Contractor Kathie Austin Independent $27,000 Contractor Florita Lause Independent $26,000 Contractor James Polka Independent $25,000 Contractor ALLIANCE IMAGING: Posts Preliminary Third Quarter 2005 Results -------------------------------------------------------------- Alliance Imaging, Inc. (NYSE:AIQ) reported preliminary revenue and Adjusted EBITDA for the third quarter of 2005, and updated its guidance for the 2005 full-year ending Dec. 31, 2005. "Greater-than-anticipated softness in scan volumes during the third quarter, the effect of Hurricanes Katrina and Rita, which have disrupted operations of several of our mobile and fixed-site facilities in the south central and southeast regions of the country, and rising fuel and transportation costs have had an impact on our business," stated Paul S. Viviano, Chairman of the Board and Chief Executive Officer of Alliance Imaging. Mr. Viviano also commented, "While we expect diagnostic imaging scan volumes to continue to increase in the near to mid-term, the rate of increase will be constrained by the increasing prevalence of utilization review and additional patient-related cost-sharing programs. Alliance's business is also impacted by the difference in relative growth between total market scan volumes and overcapacity of imaging equipment in the marketplace, especially relating to medical groups adding imaging capacity within their practice setting. These pressures, along with the continued disruption of operations caused by Hurricanes Katrina and Rita, will impact our business for the remainder of 2005 and into 2006." Third Quarter 2005 Acquisition During the third quarter, effective Sept. 1, 2005, Alliance purchased certain assets associated with six established multi- modality fixed-sites and three recently established fixed-sites for an aggregate purchase price of $7.7 million in cash, which was financed through internally generated funds of the company. This acquisition is expected to generate approximately $6 million in annualized revenue for Alliance. Preliminary Third Quarter 2005 Revenue and Adjusted EBITDA Revenues for the third quarter of 2005 are expected to total approximately $106 million, compared to the Company's previously announced guidance range of $107 million to $110 million. Alliance's Adjusted EBITDA (earnings before interest expense, net of interest income; income taxes; depreciation expense; amortization expense; minority interest expense and non-cash stock-based compensation), is expected to range from $39.0 million to $39.5 million in the third quarter of 2005, below the guidance range of $41.5 million to $43.5 million. Mr. Viviano stated, "We continue to focus on implementing our strategic initiatives to stabilize our core mobile MRI business and expand our PET and PET/CT business. Our recent acquisition of nine imaging centers is in line with our strategy of expanding the company's fixed-site business." The Company will provide further commentary on final quarterly results on its third quarter earnings call and webcast scheduled on Thursday, Nov. 3, 2005 at 1:00 p.m. Eastern time. Third quarter 2005 financial results are scheduled to be released after the market closes on Wednesday, Nov. 2, 2005. 2005 Guidance As a result of greater-than-historical softness in scan volumes during the third quarter, the continuing effects of the recent hurricanes, and rising transportation costs, the Company is revising guidance for full year 2005. Revenue is now expected to range from $424.5 million to $428.5 million. Adjusted EBITDA is expected to range from $156.5 million to $161.0 million. Capital expenditures are now expected to range between $70 million and $75 million. The Company now expects to open approximately 10 to 12 new fixed-sites during 2005. Two fixed-site openings, which were scheduled for the fourth quarter 2005, have been delayed into the first half of 2006 due to the effects of Hurricanes Katrina and Rita. Alliance Imaging is a leading national provider of shared-service and fixed-site diagnostic imaging services, based upon annual revenue and number of systems deployed. Alliance provides imaging services primarily to hospitals and other healthcare providers on a shared and full-time service basis, in addition to operating a growing number of fixed-site imaging centers. The Company had 465 diagnostic imaging systems, including 352 MRI systems and 57 PET or PET/CT systems, and over 1,000 clients in 43 states at June 30, 2005. Alliance Imaging -- http://www.allianceimaging.com/-- is a leading national provider of shared-service and fixed-site diagnostic imaging services, based upon annual revenue and number of systems deployed. Alliance provides imaging services primarily to hospitals and other healthcare providers on a shared and full- time service basis, in addition to operating a growing number of fixed-site imaging centers. The Company had 465 diagnostic imaging systems, including 352 MRI systems and 57 PET or PET/CT systems, and over 1,000 clients in 43 states at June 30, 2005. As of June 30, 2005, Alliance Imaging's balance sheet showed a $51,622,000 stockholders' deficit, compared to a $67,528,000 deficit at Dec. 31, 2004. ALLIANCE LAUNDRY: Merges Marianna, Fla., & Ripon, Wis., Operations ------------------------------------------------------------------ Alliance Laundry Holdings LLC, parent company of Alliance Laundry Systems LLC, is consolidating its Marianna, Florida and Ripon, Wisconsin operations. Alliance will be moving the manufacture and design of product lines from its Marianna, Florida manufacturing facility to its existing Ripon, Wisconsin operation. The transition is expected to be completed by the end of the third quarter of 2006. Approximately 400 employees will be affected by the closure of the Marianna facility. Tom L'Esperance, CEO for Alliance Laundry Systems LLC stated, "The decision as to where to manufacture these products was based on a careful analysis of manufacturing capabilities as well as the continuing investment requirements for each of the locations. Efficiencies will be gained with the consolidation of the design and manufacturing of all of our product lines within one operation." Company spokesperson, Patti Andresen-Shew stated, "To assist affected employees in finding new employment, Alliance will be arranging for outplacement services for all affected employees." Alliance expects that it will add approximately 200 manufacturing jobs to its Ripon operations and another 50 engineering, supervisory and technical service positions to its Ripon staff. Alliance Laundry Systems LLC currently employs 1300 employees worldwide. Alliance Laundry Holdings LLC is the parent company of Alliance Laundry Systems LLC -- http://www.comlaundry.com/-- a leading North American manufacturer of commercial laundry products and provider of services for laundromats, multi-housing laundries, on- premise laundries and drycleaners. Alliance offers a full line of washers and dryers for light commercial use as well as large frontloading washers, heavy duty tumbler dryers, and presses and finishing equipment for heavy commercial use. The Company's products are sold under the well known brand names Speed Queen(R), UniMac(R), Huebsch(R) and Ajax(R). * * * As reported in the Troubled Company Reporter on Jan. 7, 2005, Moody's Investors Service assigned a B3 rating to Alliance Laundry Systems LLC's proposed guaranteed senior subordinated notes (the notes will be co-issued by Alliance Laundry Corporation) and a B1 rating to Alliance Laundry Systems LLC's proposed senior secured revolving credit facility and senior secured term loan. Additionally, Moody's assigned a B1 senior implied rating to Alliance Laundry Systems LLC and withdrew the B2 senior implied rating of Alliance Laundry Holdings, Inc. Ratings assigned: * $150 million guaranteed senior subordinated notes, due 2013 -- B3 * $50 million guaranteed senior secured revolver, due 2011 -- B1 * $200 million guaranteed senior secured term loan B, due 2012 -- B1 * Senior implied rating -- B1 * Senior unsecured issuer rating -- B2 Ratings to be withdrawn: * $110 million senior subordinated notes, due 2008 -- B3 * $45 million senior secured revolver, due 2007 -- B1 * $136 million senior secured term loan, due 2007 -- B1 ALLIANCE PHARMACEUTICAL: Corbin & Co. Raises Going Concern Doubt ---------------------------------------------------------------- Corbin & Company LLP expressed substantial doubt about Alliance Pharmaceutical Corp.'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 lack of sufficient working capital to service its debts and to fund its operations through fiscal 2006. At June 30, 2005, Alliance Pharmaceutical had a working capital deficit of $8.1 million, compared to net working capital of $5.9 million at June 30, 2004. Alliance Pharmaceutical reports a $5,743,000 net loss for fiscal 2005 compared to a $10,016,000 net income fiscal 2004. The Company's balance sheet showed $7,974,000 of assets at June 30, 2005, and liabilities totaling $16,194,000. As of June 30, 2005, Alliance had an accumulated deficit of $484.1 million. Senior Note Purchase In September 2004, the Company entered into a Senior Note Purchase Agreement with certain investors pursuant to which it issued its Senior Notes in the approximate principal amount of $10.7 million. As of September 15, 2005, the Company owes the holders of the Senior Notes approximately $11 million in principal and accrued interest. The Senior Notes mature in March 2006. Management says the Company does not have the resources to repay the Senior Notes. Capitalization From inception to June 30, 2005, Alliance Pharmaceutical had received $243 million in net proceeds from sales of its equity securities, $260.5 million in payments from collaboration agreements and $74.3 million in debt financing of which $37.4 million of such debt has been converted into equity and $25.9 million of such debt has been retired through the restructuring of various agreements and the issuance of warrants to purchase its common stock. About Alliance Pharmaceutical Alliance Pharmaceutical -- http://www.allp.com/-- is a pharmaceutical research and development company that is currently focused on developing its lead product, OXYGENT(TM), an intravascular oxygen carrier designed to augment oxygen delivery in surgical patients. It is a product development company with no current revenue from product sales. Its revenue is derived primarily from collaborations with corporate partners, including research and development, milestone and royalty payments. ARLINGTON HOSPITALITY: Public Auction Set for Nov. 14 ----------------------------------------------------- Arlington Hospitality, Inc. (HOST.PK) obtained court approval for the bidding guidelines and procedures for the Chapter 11 auction sale of substantially all of the company's assets. The U.S. Bankruptcy Court for the Northern District of Illinois scheduled Nov. 14, 2005, at 11:00 a.m. Central Time as the date and time for the auction to sell the company's assets to the qualified bidder, or bidders, submitting the highest and best acceptable and binding bid(s). The sale approval hearing was set for Nov. 17, 2005, at 9:30 a.m. Central Time. As previously announced, Arlington Hospitality, Inc. has retained Chanin Capital, L.L.C., an affiliate of Chanin Capital Partners, to maximize the value of the company's assets for all stakeholders by conducting an auction pursuant to section 363 of Chapter 11 of the U.S. Bankruptcy Code. Pursuant to the sale order entered Oct. 12, 2005, "stalking horse" bids for the company are due by Oct. 21, 2005. The company may select a "stalking horse" from bids submitted by that initial deadline and provide the "stalking horse" bidder(s) with the protections of a break-up fee should the bidder(s) not be successful at the auction. The bid deadline to participate in the auction is Nov. 10, 2005. The auction will be held on Nov. 14, 2005. Parties interested in participating in the sale process as a "stalking horse" or as a bidder at the final auction should contact Richard Morgner, managing director and head of mergers & acquisitions for Chanin, at (212) 758-2629 or via e-mail at rmorgner@chanin.com or David MacGreevey, vice president for Chanin, at (212) 758-2629 or via e-mail at dmacgreevey@chanin.com A full-text copy of the Bidding Procedures Order is available for free at http://ResearchArchives.com/t/s?258 Headquartered in Arlington Heights, Illinois, Arlington Hospitality, Inc., and its affiliates develop and construct limited service hotels and own, operate, manage and sell those hotels. The Debtors operate 15 AmeriHost Inn Hotels under leases from PMC Commercial Trust. Arlington Hospitality, Inc., serves as a guarantor under these leases. Arlington Inns Inc., an affiliate, filed for bankruptcy protection on June 22, 2005 (Bankr. N.D. Ill. Case No. 05-24749), the Honorable A. Benjamin Goldgar presiding. Arlington Hospitality and additional debtor- affiliates filed for chapter 11 protection on Aug. 31, 2005 (Bankr. N.D. Ill. Lead Case No. 05-34885). Catherine L. Steege, Esq., at Jenner & Block LLP, provides the Debtors with legal advice and Chanin Capital LLC serves as the company's investment banker. As of March 31, 2005, Arlington Hospitality reported $99 million in total assets and $94 million in total debts. ASARCO INC: Fitch Downgrades Sr. Unsecured Debt Rating to D ----------------------------------------------------------- Fitch Ratings has downgraded the long-term senior unsecured corporate credit rating of Asarco Inc. from 'C' to 'D'. The company's notes due in 2013 and 2025 for face values of US$100 million and US$150 million, respectively, have also been downgraded to 'D' from 'C.' These rating actions are a result of the company's failure to make interest payments due in October 2005 on its tax-exempt obligations and the notes due in 2013. Nonpayment was expected after Asarco filed a voluntary petition in August 2005 for Chapter 11 reorganization under the United States Bankruptcy Court in Corpus Christi, Texas. Asarco's challenges include negotiating with state and federal authorities over environmental liabilities, with plaintiffs filing asbestos-related personal injury claims, as well as with the company's own labor force which has been on strike since early July 2005. The company also has high production costs relative to its peers within the copper industry. Asarco is 100% owned by of Americas Mining Corporation, a direct subsidiary of Grupo Mexico, S.A. de C.V. The company's mining operations are located in the United States and consist of three open-pit copper mines, Ray, Mission and Silver Bell, in the state of Arizona. Asarco also operates a custom smelter in Hayden, Arizona, a refinery in Amarillo, Texas, and two SX/EW plants. In 2004, the company produced 155,000 tons of copper. AURA SYSTEMS: Hires O'Connor and Kay as Tax Accountant ------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California in Los Angeles gave Aura Systems, Inc., permission to retain O'Connor and Kay, Inc., as its Tax Accountant, nunc pro tunc to Aug. 23, 2005. O'Connor and Kay will: a) Complete the preparation of the Debtor's federal, and California, Minnesota, and Missouri income tax returns for the fiscal years ended Feb. 28, 2005 and 2004; b) perform any bookkeeping necessary for the preparation of the fiscal 2005 and 2004 income tax returns; c) prepare all schedules and forms and other documents required in connection with the tax returns; and d) perform any other tax or accounting services as agreed to with the Debtor. John A. Kay and John E. Connor, the Firm's principals, will be primarily responsible for this engagement. O'Connor and Kay will be receive a flat fee of $6,500 for work performed on the 2004 income tax returns and $16,500 in connection with the 2005 income tax returns. The Debtor assures the Bankruptcy Court that O'Connor and Kay does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in Section 10(14) of the Bankruptcy Code. O'Connor and Kay, Inc. -- http://okadvisors.com/-- offers entrepreneurial and tax services. The Firm assists clients in areas such as shareholder agreements, buy-sell agreements, operational cash flow issues, marketing alternatives, growth management, business sales dissolutions and taxes. Headquartered in El Segundo, California, Aura Systems, Inc. -- http://www.aurasystems.com/-- develops and sells AuraGen(R) mobile induction power systems to the industrial, commercial and defense mobile power generation markets. The Company filed for chapter 11 protection on June 24, 2005 (Bankr. C.D. Calif. Case No. 05-24550). Ron Bender, Esq., at Levene Neale Bender Rankin & Brill LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it reported $18,036,502 in assets and $28,919,987 in debts. AVNET INC: Amended Credit Facility Increases Loan to $500 Million ----------------------------------------------------------------- Avnet Inc. (NYSE:AVT) amended and restated its existing credit facility to both increase the size of the facility and extend the term. The amended and restated credit facility is a five-year $500 million unsecured revolving credit facility with a $50 million accordion feature, allowing Avnet to increase its borrowing capacity to up to $550 million, subject to obtaining commitments for the incremental capacity from existing or new lenders. The amendment and restatement extends the maturity date from June 7, 2007, to Oct. 13, 2010, and also immediately increases Avnet's borrowing capacity from $350 million to $500 million. Bank of America, N.A., will act as administrative agent, swing line lender and letter of credit issuer; Banc of America Securities LLC acted as joint lead arranger and sole book manager; ABN AMRO Inc. acted as joint lead arranger, and Credit Suisse First Boston, the Bank of Nova Scotia and BNP Paribas acted as co- documentation agents. A total of 17 lenders participated in the facility. "We appreciate the continued commitment from our long-term banking partners and are pleased to welcome new lenders into our bank group," stated Raymond Sadowski, Avnet's chief financial officer. "There was significant demand for participation in the facility and this strong sponsorship demonstrates confidence by the financial community in Avnet's future and its solid financial condition." Mr. Sadowski continued, "This new credit facility, the recent $250 million 6% Senior Notes offering, the recent increase in our Accounts Receivable Securitization program to $450 million, and the debt reductions accomplished over the last several years, have significantly improved the company's balance sheet and strengthened its liquidity. As a result, Avnet is well positioned to finance future growth." Avnet Inc. -- http://www.avnet.com/-- enables success from the center of the technology industry, providing cost-effective services and solutions vital to a broad base of more than 100,000 customers and 300 suppliers. The company markets, distributes and adds value to a wide variety of electronic components, enterprise computer products and embedded subsystems. Through its premier market position, Avnet brings a breadth and depth of capabilities that help its trading partners accelerate growth and realize cost efficiencies. For fiscal year ended July 2, 2005, Avnet and Memec (acquired by Avnet on July 5, 2005) generated combined revenue in excess of $13 billion in the past year through sales in approximately 70 countries. * * * As reported in the Troubled Company Reporter on Aug. 19, 2005, Fitch Ratings has revised the Rating Outlook on Avnet, Inc., to Positive from Stable. The company's senior unsecured notes are affirmed at 'BB', and Fitch has assigned a 'BB' rating to the company's senior unsecured bank credit facility. Fitch's action affects approximately $1.2 billion of debt. The change in the Rating Outlook reflects Avnet's continued positive momentum in credit protection measures, driven primarily by improved and more consistent operating performance over the past two years and, to a lesser extent, debt reduction. While recognizing that Avnet's operating performance continues to lag that of its direct competitor, Arrow Electronics, Inc., Fitch believes Avnet's ongoing successful cost-restructuring activities and increasing share of sales from its technology solutions segment should lower future earnings volatility. The Positive Rating Outlook also considers Avnet's recent refinancing of $250 million of 8% senior notes due Nov. 15, 2006, which the company will fund primarily with net proceeds from its $250 million issuance of 6% senior notes due 2015. Fitch believes that meaningful debt reduction and the resultant further improvement in credit metrics, as well as exhibiting greater operational consistency through the semiconductor cycle, will enable Avnet to maintain adjusted leverage below 4 times (x) and could result in positive rating action. BARBARA FIELDS: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Barbara S. Fields aka Barbara Sylvia Fields 13 Village Green Port Chester, New York 10573 Bankruptcy Case No.: 05-25465 Type of Business: The Debtor is a retired schoolteacher. Chapter 11 Petition Date: October 15, 2005 Court: Southern District of New York (White Plains) Judge: Adlai S. Hardin Jr. Debtor's Counsel: Arlene Gordon Oliver, Esq. Rattet & Pasternak, LLP 550 Mamaroneck Avenue, Suite 510 Harrison, New York 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 Financial Condition as of October 14, 2005: Total Assets: $531,400 Total Debts: $4,777,709 Debtor's 2 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ New York State Department $2,000 Taxation and Finance W.A. Harriman Campus State Building A Albany, NY 12227 Kohl's Department Store $375 P.O. Box 293 Milwaukee, WI 53201-2983 BOYDS COLLECTION: Files for Chapter 11 Protection in Maryland ------------------------------------------------------------- The Boyds Collection, Ltd. (OTCBB:BOYD) and eight affiliates filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Maryland. The company said it is taking this action in an effort to restore its financial stability and ensure its long-term success without any disruption to the day-to-day operation of its business. Boyds has received a commitment from D.E. Shaw Laminar Lending, Inc., for up to $8 million in debtor-in-possession financing which, upon bankruptcy court approval, will provide funding for the company's ongoing operations. "After considering all available options, we have concluded that reorganization is the best course for Boyds," said Jan Murley, Chief Executive Officer and Director. "With the burden of our debt leverage and weakness in several of our distribution channels, Boyds' action will enable the company to realize the strong potential of our premium quality brand and core businesses." "At present we are working cooperatively with our lenders and holders of senior subordinated notes to develop a Reorganization Plan, which will address outstanding issues and provide a roadmap for the company's profitability. We are negotiating the terms of a restructuring plan with our secured lenders and intend to continue these negotiations with other creditor constituencies in the near term. In the meantime, there are no short term liquidity issues, and we are hopeful that once the Plan is filed and accepted, we can exit from Chapter 11 quickly," added Mr. Murley. Boyds' operations will not be impacted by the reorganization; it will continue to conduct its business in the usual manner. The company said that it is asking for Bankruptcy Court approval to, among other things continue payment of pre-petition and post- petition wages, salaries, incentive plans, medical, disability, severance, vacation and other benefits. The company also said it will pay vendors, suppliers and other business partners under normal terms for goods and services they provide during the reorganization process. "The dedication and hard work of our employees is critical to our success, and for that I thank them. We appreciate the support our vendors and customers have shown us in the past, and continue to ensure that Boyds remains a viable and important partner to them. We will continue to provide the high quality Boyds products for which our loyal and passionate consumers have come to know us. Our management team and I are committed to leading the company through this difficult time and towards a brighter future," Jan Murley concluded. DIP Financing D.E. Shaw Laminar Lending, Inc., has committed up to $8 million in debtor-in-possession financing to the Debtors which, upon bankruptcy court approval, will allow the Debtors to fund their operations going forwards and give them more than sufficient capital to pay all of their obligations including wages and benefits. Houlihan Lokey Howard & Zukin Capital, Inc., is the financial advisory firm for The Boyds Collection and Kirkland & Ellis, LLP is the legal counsel. Waiver As reported in the Troubled Company Reporter on Oct. 6, 2005, Boyds entered into a waiver agreement in connection with the Credit Agreement dated as of Feb. 23, 2005, as amended, with D.E. Shaw Laminar Portfolios, L.L.C. and Bank of America, N.A., and Bank of America, N.A., as initial L/C Issuer and administrative agent. D.E. Shaw Laminar Portfolios, L.L.C. became a Lender under the Credit Agreement pursuant to assignment agreements. The Company confirmed that events of default have occurred under the Credit Agreement and are continuing, or will occur at some time in the future as a result of the Company's inability to comply with the financial covenants of the Credit Agreement. Delisting On Oct. 11, 2005, the New York Stock Exchange suspended the trading of the Company's shares. Boyds said it will not appeal the decision of the NYSE and will explore the possibility of listing its shares on another exchange. Headquartered in McSherrystown, Pa., The Boyds Collection, Ltd. -- http://www.boydsstuff.com/-- designs and manufactures unique, whimsical and "Folksy with Attitude(SM)" gifts and collectibles, known for their high quality and affordable pricing. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case No. 05-43793). Matthew A. Prohac Cantor, Esq., at Kirkland Ellis LLP, represents the Debtors in their restructuring efforts. As of June 30, 2005, Boyds reported $66.9 million in total assets and $101.7 million in total debts. BOYDS COLLECTION: Case Summary & 44 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: The Boyds Collection, Ltd. 350 South Street McSherrystown, Pennsylvania 17344 Bankruptcy Case No.: 05-43793 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- The Boyds Collection, Ltd., LP 05-43805 Boyds Operations Inc. 05-43816 The Boyds Collection - Pigeon Forge, LLC 05-43824 The Boyds Collection - Myrtle Beach, LLC 05-43833 The Boyds Collection - Branson, LLC 05-43838 J&T Designs and Imaginations Inc. 05-43848 HC Accents & Associates, Inc. 05-43857 Boyds Bear and Company, LP 05-43863 Type of Business: The Debtor designs and manufactures unique, whimsical and "Folksy with Attitude(SM)" gifts and collectibles, known for their high quality and affordable pricing. See http://www.boydsstuff.com/ Chapter 11 Petition Date: October 16, 2005 Court: District of Maryland (Baltimore) Judge: Duncan W. Keir Debtors' Counsel: Matthew A. Prohac Cantor, Esq. Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, New York 10022-4611 Tel: (212) 446-4800 Financial Condition of The Boyds Collection, Ltd. as of June 30, 2005: Total Assets: $66,900,000 Total Debts: $101,700,000 Estimated Assets Estimated Debts ---------------- --------------- The Boyds Collection, Ltd., More than More than LP $100 Million $100 Million Boyds Operations Inc. $1 Million to $50 Million to $10 Million $100 Million The Boyds Collection - $10 Million to $50 Million to Pigeon Forge, LLC $50 Million $100 Million The Boyds Collection - $1 Million to $50 Million to Myrtle Beach, LLC $10 Million $100 Million The Boyds Collection - $100,000 to $50 Million to Branson, LLC $500,000 $100 Million J&T Designs and Imaginations Less than $50,000 $50 Million to Inc. $100 Million HC Accents & Associates, Less than $50,000 $50 Million to Inc. $100 Million Boyds Bear and Company, LP Less than $50,000 $50 Million to $100 Million A. The Boyds Collection, Ltd.'s Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Bank of New York $34,392,000 101 Barclay Street, Floor 21 West Attn: Corp. Trust Admin., Boyds New York, NY 10286 B. The Boyds Collection, Ltd., LP's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ United Parcel Service $389,938 P.O. Box 7247-0244 Philadelphia, PA 19170-0001 Taiwan Merchants $229,938 140-42 Austin Road, Tsim Sha Tsui Kowloo, Hong Kong Capital Blue Cross $165,546 P.O. Box 779516 Harrisburg, PA 17177-9516 Hanover Terminal, Inc. $97,270 AFC Worldwide Express $96,211 C.I.T. Group/Commercial Services Inc. $76,681 UPS Canada Ltd. $58,087 Pelican Bay, Ltd. $53,540 Containerport Group, Inc. $53,088 Banta Direct Marketing Group $50,490 PA Department of Community $50,000 Packaging Corp. of America $46,822 Merchandise Testing Lab, Ltd. $43,433 Grossman Law Offices $42,471 Kuehne & Nagel, Inc. $40,266 AmericaSmart Real Estate LLC $40,059 All-Size Corrugated Products $37,642 Small Small World Enterprises $35,404 H.G. Rotz Associates Inc. $31,918 The Lamar Companies $28,900 C. The Boyds Collection - Pigeon Forge, LLC's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Sysco Food Services $55,212 Robert Orr-Sysco P.O. Box 305138 Nashville, TN 37230 Dolly, Inc. $22,238 P.O. Box 931174 Cleveland, OH 44193 J.B. Hunt Transport, Inc. $20,692 File 98545 P.O. Box 1067 Charlotte, NC 28201-1067 Alpha Marketing Resources LLC $19,920 Knoxville News - Sentinel Co. $19,794 Oki Wear Inc. $18,879 Sevier County Electric System $13,895 Sunny Day Guide $12,409 Best Real Guide $12,060 Thinkmedia $10,800 Calico Cottage Inc. $8,134 Effern Direct Incorporated $8,108 Cintas Corporation #407 $6,389 The Tennessean $3,844 Sevier County Utility District $3,675 Brochure Distribution Services $3,613 Shoreline Creations Ltd. $3,562 The Herald Newspaper $3,278 Kelsan, Inc. $3,273 Admobile of Knoxville $3,250 D. The Boyds Collection - Myrtle Beach, LLC's 3 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Kinsley Construction Inc. $159,794 2700 Water Street P.O. Box 2886 York, PA 17405 Lumpkin Oxner & Stacy PA $820 90 Wall Street Pawsley Island, SC 29585 John. F. Freet, Jr. $240 2268 Sutton Road York, PA 17403 CANYON STATE: Case Summary & 39 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: Canyon State Courier, Inc. 4110 East Wood Street, Suite 50 Phoenix, Arizona 85036-0866 Bankruptcy Case No.: 05-25399 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Pro Courier, Inc. 05-25524 Type of Business: The Debtor operates a courier service. Canyon State operates routes within the Phoenix Metro area, Tucson Metro area, Greater Las Vegas Metro area, and the Albuquerque Metro area. Canyon State's long distance routes run to various locations throughout the States of Arizona, Nevada and New Mexico. Chapter 11 Petition Date: October 14, 2005 Court: District of Arizona (Phoenix) Debtors' Counsel: Jeffrey A. McKee, Esq. Davis McKee & Forshey, P.C. 1650 North First Avenue Phoenix, Arizona 85003-1124 Tel: (602) 266-7667 Fax: (602) 277-9839 Total Assets Total Debts ------------ ----------- Canyon State Courier, Inc. $453 $2,652,472 Pro Courier, Inc. $192 $65,732 A. Canyon State Courier, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Scully Transportation $346,297 Services, Inc. P.O. Box 51858 Los Angeles, CA 90051-6158 Cocchia, William D. Loan $342,684 6041 E Freiss Scottsdale, AZ Department of Treasury Payroll taxes $150,469 Internal Revenue Service Ogden, UT 84201-0039 BeavEx $150,000 IntelliQuick Delivery $150,000 Terbest, Troy $150,000 Contractor Management $141,705 M-7 Investment Company $101,884 Cocchia, Timothy L. Loans $98,700 Cocchia, Williams D. Accrued wages $56,085 Scully Distribution $52,362 Bank of America, N.A. $50,000 Cocchia, George Loan $50,000 RAC Industries, Inc. $41,404 CFC Network, Inc. $39,496 State Compensation $37,541 Gardner, Dan $30,000 AmeriFlight $29,519 Dex Media West $29,488 TRL Solutions, Inc. $24,900 B. Pro Courier, Inc.'s 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cocchia, Timothy L. $40,000 6041 E. Friess Scottsdale, AZ 85254 Cocchia, William D. $7,098 6041 E. Friess Scottsdale, AZ 85254 Dex Media West $6,015 P.O. Box 79167 Phoenix, AZ 85062-9167 Qwest Communications $2,815 CXT Sotfware $1,971 Dex Media West $1,723 Lawrence, Robert V. $846 Nee, Robert $846 Department of Treasury 941 $803 Internal Revenue Service Unifirst Corporation $661 Curosh & Williams, Ltd $559 Department of Treasury 941 $530 Internal Revenue Service Melissa Data $483 Arizona Republic Customer $452 Accounting Services Sprint $310 Aqua Chill, Inc. #4 $227 United Parcel Service $173 Greenway Forms & Systems $156 Far West Communications $65 CAPE HAZE: Case Summary & 12 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Cape Haze Windward Partners, Inc. 10035 Link Lane Cape Haze, Florida 33947 Bankruptcy Case No.: 05-28339 Type of Business: The Debtor is a land developer. The Debtor also builds and sells condominiums and townhouses on the gulf coast of Florida. Chapter 11 Petition Date: October 15, 2005 Court: Middle District of Florida (Fort Myers) Judge: Alexander L. Paskay Debtor's Counsel: Herbert R. Donica, Esq. Donica Law Firm PA 106 South Tampania Avenue #250 Tampa, Florida 33609 Tel: (813) 878-9790 Fax: (813) 878-9746 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Daniel A. Lane, CPA $60,000 4166 Tamiami Trail Port Charlotte, FL 33952 Charlotte Cnty Tax Collector $37,500 18500 Murdocl Circle Port Charlotte, FL 33948-1075 Diez & Floyd, P.A. $20,000 737 South Indiana Avenue Englewood, FL 34233 GMAC 2002 Chevrolet $18,200 Trailblazer Value of security: $16,000 Bacon's Furniture $14,337 Alert Fire Sprinklers, Inc. $9,985 City Electric Supply Co. $5,506 Cast Systems, LLC $2,642 Coastal Constr. Products Inc $1,687 Breeze News $880 Affordable Concrete Plumbing $866 Archer Janitorial & Paper $117 CAPITOL ROOFING: Voluntary Chapter 11 Case Summary -------------------------------------------------- Lead Debtor: Capitol Roofing Contractors, Inc. 709 Barrett Street Springfield, Illinois 92703 Bankruptcy Case No.: 05-77291 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- CRCO, Inc. 05-77307 Robert E. Sidener 05-77272 Type of Business: The Debtor is a roofing contractor. Chapter 11 Petition Date: October 14, 2005 Court: Central District of Illinois (Springfield) Judge: Mary P. Gorman Debtors' Counsel: James R. Enlow, Esq. Scott & Scott, P.C. 611 East Monroe Street #200 Springfield, Illinois 62701 Tel: (217) 753-8200 Estimated Assets Estimated Debts ---------------- --------------- Capitol Roofing Contractors, $1 Million to $1 Million to Inc. $10 Million $10 Million CRCO, Inc. $100,000 to $1 Million to $500,000 $10 Million Robert E. Sidener $500,000 to $1 Million to $1 Million $10 Million The Debtors did not file list of their 20 Largest Unsecured Creditors. CETROM INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Cetrom, Inc. f/k/a Cetrom Consulting Engineering Services, Inc. 818 West Diamond Avenue, Suite 300 Gaithersburg, Maryland 20878 Bankruptcy Case No.: 05-39891 Type of Business: The Debtor is a full service architecture, engineering and construction firm. See http://www.cetrom.com/ Chapter 11 Petition Date: October 14, 2005 Court: District of Maryland (Greenbelt) Judge: Nancy V. Alquist Debtor's Counsel: Christopher L. Rogan, Esq. Wickwire Gavin 8100 Boone Boulevard, Suite 700 Vienna, Virginia 22182 Tel: (703) 790-8750 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 ------ --------------- ------------ L.H. Cranston, Inc. Trade debt $412,005 1965 Greenspring Drive Lutherville Timonium, MD 21093 Facchina Construction Trade debt $273,356 508 McCormick Drive, Suite K Glen Burnie, MD 21061 Durable Steel Trade debt $265,438 P.O. Box 403 Monkton, MD 21111 View Engineer (fka Chester) Trade debt $230,300 Pavex Incorporated Trade debt $147,523 Management Solutions Inc. Teaming agreement $100,000 The Keystone Group Trade debt $67,149 Harland Shoemaker Trade debt $55,363 Holbert Apple Associates Trade debt $53,255 Byron S. Waggoner Const. Trade debt $48,824 Retro Environmental Trade debt $45,776 Rasmussen Construction Trade debt $41,684 Tech Roofing Systems Trade debt $39,933 Gretchen Ludgate Bonus $39,602 Oudens & Knoop Architects Trade debt $38,575 Best Access Systems Trade debt $38,165 Warner Construction Trade debt $37,000 Henry J. Knott Masonry Trade debt $30,071 Steel Products Trade debt $27,195 Phoenix Fire Protection Trade debt $26,550 CHRISTOPHER MAHER: Case Summary & 8 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Christopher X. Maher 105 Gleneida Avenue Carmel, New York 10512 Bankruptcy Case No.: 05-39169 Chapter 11 Petition Date: October 15, 2005 Court: Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtor's Counsel: Lewis D. Wrobel, Esq. 12 Raymond Avenue Poughkeepsie, New York 12603 Tel: (845) 473-5411 Fax: (845) 473-3430 Estimated Assets: Not Provided Estimated Debts: $10 Million to $50 Million Debtor's 8 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Maria Salvemini $20,000,000 Successor Administratrix Estate of Cosmo Salvemini c/o Michael Wiseberg, Esq. 345 Route 17 South Upper Saddle River, NJ 07458 Vincenzo Lopes $20,000,000 93-20 Albert Road Ozone Park, NY 11417 Dolly Maass $125,000 4408 Theall Road Rye, NY 10580 Internal Revenue Service $87,000 Attn: Special Procedures P.O. Box 266 Room 309 Buffalo, NY 14201 John P. Keegan, Esq. $40,000 81 Main Street White Plains, NY 10601 ISAC $15,000 1755 Lake Cook Road Attn: President Deerfield, IL 60015 Card Processing $4,000 P.O. Box 5811 Attn: President Hicksville, NY 11802 Citibank $2,200 P.O. Box 6500 Attn: President Sioux Falls, SD 57117 CHRISTOPHER TODINO: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Christopher Todino 1533 Robertson Place Bronx, New York 10465 Bankruptcy Case No.: 05-47103 Chapter 11 Petition Date: October 14, 2005 Court: Southern District of New York (Manhattan) Debtor's Counsel: Scott S. Markowitz, Esq. Todtman, Nachamie, Spizz & Johns, P.C. 425 Park Avenue, 5th Floor New York, New York 10022 Tel: (212) 754-9400 Fax: (212) 754-6262 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million A list of the Debtor's 20 Largest Unsecured Creditors was not available at press time. CINRAM INTERNATIONAL: Amaranth Entities Holds 14.8% Equity Stake ---------------------------------------------------------------- Amaranth LLC has purchased 190,000 common shares of Cinram International Inc. at a price of $24.50 per share. In addition, Amaranth Global Equities Master Fund Limited purchased 10,000 common shares of Cinram at the same price. Following settlement of these trades, Amaranth will own 7,954,800 Cinram common shares, representing approximately 13.9% of the outstanding common shares, and AGEMF will own 492,900 Cinram common shares, representing approximately 0.9% of the outstanding common shares. Collectively, Amaranth and AGEMF own 8,447,700 common shares, representing approximately 14.8% of the outstanding common shares of Cinram. Amaranth holds the securities of Cinram for investment purposes only, with a view to maximizing the value of its investment. Amaranth may from time to time, subject to market conditions and other relevant factors, make additional investments in or dispositions of securities of Cinram in the future, including additional purchases of shares. The Company's shares trade at Toronto Stock Exchange under the symbol "CRW.TO". The Company's shares trade between $24.60 and $25.08 this month. About Amaranth Amaranth LLC is a private investment fund founded in 2000. Amaranth Global Equities Master Fund Limited is a private investment fund founded in 2003. Both Amaranth and AGEMF's investors include sophisticated institutions and high net worth individuals. Amaranth and AGEMF each invest on a global basis, both with a view to identifying and capturing disparities between value and price in financial markets worldwide. Amaranth Advisors (Canada) ULC acts as investment manager in Canada in respect of all Cinram securities owned by Amaranth and AGEMF. About Cinram Cinram International provides DVDs, CDs, and other products for movie studios, music labels, publishers, and software firms in North America and Europe. * * * As reported in the Troubled Company Reporter on Aug. 15, 2005, Standard & Poor's Ratings Services revised its outlook on Cinram International Inc. to negative from stable. At the same time, Standard & Poor's affirmed its 'BB' long-term corporate credit and bank loan ratings on Cinram. CITYSCAPE HOME: Fitch Puts Low-B Ratings on Three Cert. Classes --------------------------------------------------------------- Fitch Ratings takes rating action on these Cityscape Home Equity Loan Trust home equity loan pass-through certificates: Cityscape 1997-B Group I: -- Class A-7 affirmed at 'AAA'; -- Class M1-F affirmed at 'AA'; -- Class M2-F downgraded to 'BBB' from 'A'; -- Class B1-F downgraded to 'BB' from 'BBB'. Cityscape 1997-B Group II: -- Class M2-A affirmed at 'AA'; -- Class B1-A downgraded to 'C' from 'BBB'. Cityscape 1997-C Group I: -- Class A-4 affirmed at 'AAA'; -- Class M1-F affirmed at 'AA'; -- Class M2-F affirmed at 'BBB'; -- Class B1-F downgraded to 'C' from 'CCC'. Cityscape 1997-C Group II: -- Class M1-A affirmed at 'AA'; -- Class M2-A affirmed at 'A'; -- Class B1-A affirmed at 'BBB'. The affirmations affect approximately $14.1 million in outstanding principal, while the downgrades affect $2.6 million. The underlying collateral for these transactions consist of mix of fixed- and adjustable-rate sub-prime mortgages. It is important to note that all the pools have less than 10% of their original principal remaining. Pools with low balance can exhibit higher volatility concerning defaults and liquidations. The downgrades to series 1997-B are due to elevated levels of losses and a forecast of continued poor collateral performance. In both groups, the overcollateralization is not at target and over 60% of both pools are more than 60 days delinquent. Additionally, class B-1A has suffered a reduction in the certificate's principal balance due to realized losses. The OC of the fixed-rate portion of series 1997-C is also below its specified level and the level of loans more than 60 days delinquent is over 30%. Class B-1F has experienced a principal writedown. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch web site at http://www.fitchratings.com/ COLONIAL EXETER: Court Dismisses Chapter 11 Case ------------------------------------------------ The U.S. Bankruptcy Court for the District of Arizona dismissed the chapter 11 proceeding of Colonial Exeter, LLC, at the Debtor's behest. The Debtor explained that: (1) there is no pending motion to convert the case to a chapter 7 liquidation; (2) on Jan. 13, 2005, the Court lifted the automatic stay allowing a lender to take action against a real property which was the Debtor's only asset; (3) most of the debts were secured by the assets subject to the real property; and (4) moving forward with a disclosure statement and plan is moot. The Debtor also assured the Court that as a condition to its case's dismissal, it will pay any fees owed to the U.S. Trustee. Headquartered in Phoenix, Arizona, Colonial Exeter filed for chapter 11 protection on August 17, 2004 (Bankr. Ariz. Case No. 04-14545). Dennis J. Wortman, Esq., represents the Debtor. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. COMM SOUTH: Chapter 7 Trustee Can Enter Into Replacement ICAs ------------------------------------------------------------- Marla C. Reynolds, the chapter 7 Trustee appointed in Comm South Companies, Inc., and its debtor-affiliates' liquidation proceedings, sought and obtained permission from the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, to enter into Replacement Interconnection Agreements with SBC Texas, SBC Missouri and SBC Kansas. The Court authorized Ms. Reynolds to enter into: (1) the CLEC Joint Petitioners ICA in Texas; (2) the Prairie Stream ICA in Kansas; and (3) the XO Communications ICA in Missouri. The Trustee is in the process of transferring the Debtors' customers to Davel Communications, Inc., and dPi Teleconnect, Inc., pursuant to bankruptcy court orders. Ms. Reynolds told the Court that she needed to enter into a replacement ICA to maintain interconnection services for the Debtors' customers in Texas, Kansas and Missouri, since it is anticipated that the transfer won't be completed by the ICAs' expiration dates. The Texas and Kansas ICAs prohibited an extension of the agreement from the Sept. 26, 2005 expiration date. The Missouri ICA, on the other hand, has already expired, but is currently the subject of an injunction entered by the U.S. District Court for the Eastern District of Missouri and additional orders, which require SBC Missouri to continue to provide interconnection services to competitive local exchange carriers (CLECs) until further Court order. Successor ICAs Ms. Reynolds has elected to enter into the CLEC Joint Petitioners ICA in Texas since dPi has elected to be a party to the Joint Petitioners ICA. The Trustee believes that is in the best interests of the Debtors' customers, dPi, and the creditors to be governed by the same agreement in Texas. The Trustee has chosen the default ICA for Kansas, which SBC has designated as the Prairie Stream ICA. Although neither dPi nor Davel selected the Praire Stream, Ms. Reynolds said the agreement contains the same 60-day termination provision and the same limitation on liabilities contained in the Texas agreements. Davel has elected the Navigator ICA for Kansas, but that agreement is only terminable upon default by SBC after a 45-day cure period, along with additional terms, which might create liability to the Debtors' estate. In addition, dPi has elected to enter into the 13 State Local Wholesale Commercial Agreement, which, Ms. Reynolds said, is believed to be a private agreement not governed by any regulatory agency in Kansas. Ms. Reynolds related that it is not suitable for the Trustee's purpose in transferring the remaining residential customers to dPi in Kansas. Thus, the Prairie Stream ICA is the best option available, the Trustee noted. Ms. Reynolds has chosen the XO Communications ICA over the Sprint ICA for Missouri, following Davel's election to be a party of the agreement. The Trustee does not anticipate any additional administrative costs or penalties will result from these agreements other than those normal costs associated with interconnection services. The interconnection services, she disclosed, are necessary to complete the transition of the Debtors' customer accounts to Davel, dPi, or other carrier, and therefore is in the best interests of the Debtors' estates to enter these agreements. Headquartered in Dallas, Texas, Comm South Companies, Inc., is a telecommunications company providing local and long distance telephone service for both residential and commercial users. The Company and its debtor-affiliates filed for chapter 11 protection on September 19, 2003 (Bankr. N.D. Tex. Case No. 03-39496). Terrance Ponsford, Esq., at Sheppard Mullin Richter and Hampton, LLP, represents the Debtors. When the Company filed for protection from its creditors, it estimated assets of $1 million to &10 million and debts of $50 million to $100 million. Marla C. Reynolds is the chapter 11 Trustee for the Debtors. CONMED CORP: Expects Third Quarter Earnings at $7.5M to $7.7M ------------------------------------------------------------- CONMED Corporation (Nasdaq: CNMD) reported that sales for the third quarter of 2005 are expected to be approximately $150 million, an increase of 13% over the third quarter of 2004. This is below the Company's previously announced third quarter estimate of $153 to $156 million. As a consequence, management believes that the third quarter Non-GAAP net income and diluted earnings per share, which exclude previously disclosed transition charges for the Endoscopic Technologies acquisition, will approximate $9.3 to $9.6 million and $0.31 to $0.32. GAAP net income and diluted earnings per share are expected to be $7.5 to $7.7 million and $0.25 to $0.26. The Company anticipates release of final third quarter results on October 25, 2005. "While the third quarter sales tend to be our weakest due to the seasonal nature of elective surgeries, our reports from the field suggest that this quarter was especially weak. We are aware of anecdotal information that elective surgeries in many geographic regions of the United States have been less in the summer of 2005 than the previous summer. Further, sales of capital equipment have been slowed as hospital customers appear to be taking longer to conclude the buying process. Outside the United States, we are pleased with our continued international momentum," said Joseph J. Corasanti, President and Chief Operating Officer. The Company's overall sales increase for the quarter ending September 30, 2005 is primarily due to the effects of the Endoscopic Technologies acquisition completed in 2004. Excluding the sales derived from the acquisition, single-use product sales in the United States generally had flat growth, while certain capital products such as video systems experienced a decline compared to the third quarter of 2004 due to a difficult comparison with a particularly strong quarter in the prior year. While year-to-date sales growth for the Arthroscopy and Powered Surgical Instruments product lines of 5.9% and 5.0% approached the Company's internal growth targets, sales in these product lines were flat in the third quarter of 2005 as compared to 2004. Sales of products outside of the United States generally met the Company's expectations with organic growth of 11% (excluding the effects of the Endoscopic Technologies acquisition and foreign currency exchange changes) over the third quarter of 2004. From a cost standpoint, CONMED continues to experience significant rising raw material pricing on petroleum based plastics and increased distribution costs. This has caused the profit margin to decline on many of our products. Also, legal expense related to the Company's antitrust lawsuit against a competitor is increasing. The Company anticipates that slower growing surgical procedure trends and the longer closing process for capital equipment experienced in the third quarter of 2005 will continue throughout the remainder of the year. Therefore, management projects limited fourth quarter domestic sales growth coupled with solid international sales improvement of approximately 11%. This growth mix, as well as higher petroleum based plastic raw materials and litigation costs, are expected to result in estimated sales of $163 to $166 million and Non-GAAP diluted earnings per share of $0.36- $0.40. Looking ahead to 2006, CONMED believes that a number of factors will have a positive effect on the Company's growth rate, including the anticipated new product pipe-line, improved sales- force performance, and return to normal elective procedure rates. The Company expects that with these underlying factors, CONMED will achieve top-line organic growth of approximately 6% for 2006 over 2005, an improvement from the expected 4% organic growth in 2005. It is the Company's intention to provide net income and earnings per share guidance for 2006 in the near future once raw material costs and litigation expenses associated with our antitrust lawsuit against a competitor are better known for the next year. Mr. Corasanti concluded, "While we are disappointed that our anticipated results for 2005 do not meet our original expectations, we have accomplished much in the last nine months and remain optimistic about our business prospects in 2006. With respect to the Endoscopic Technologies product line, we are well on our way to completing the manufacturing transition. We remain pleased with our ability to reduce our debt levels continuously with cash generated each quarter. Lastly, we believe that the number of recently released products and the additional products scheduled to be released in the coming months will help fuel our future growth." CONMED expects that the final results for the third quarter of 2005 will be made available on Tuesday, October 25, 2005, before the market opens. It will also broadcast a conference call to further discuss the results and projections live over the Internet on the same date at 10:00 a.m. Eastern Time. This broadcast can be accessed from CONMED's web site at http://www.conmed.com/ Replays of the call will be made available through November 1, 2005. Conmed Corp. -- http://www.conmed.com/-- is a medical technology company with an emphasis on surgical devices and equipment for minimally invasive procedures and monitoring. The Company's products serve the clinical areas of arthroscopy, powered surgical instruments, electrosurgery, cardiac monitoring disposables, endosurgery and endoscopic technologies. They are used by surgeons and physicians in a variety of specialties including orthopedics, general surgery, gynecology, neurosurgery, and gastroenterology. Headquartered in Utica, New York, the Company's 2,800 employees distribute its products worldwide from eleven manufacturing locations. * * * As reported in the Troubled Company Reporter on Nov. 19, 2004, Moody's Investors Service assigned a rating of B2 for ConMed Corporation's $150 million senior subordinated convertible notes, due 2024. Moody's also affirmed ConMed's existing ratings. The ratings outlook remains stable. Moody's took these rating actions: (i) assign a B2 rating on ConMed's $150 million senior subordinated convertible notes, due 2024 (ii) affirm the Ba3 rating on ConMed's $240 million guaranteed senior secured credit facility consisting of a $100 million revolving credit facility, due 2007, and a $140 million Term Loan B, due in 2009; (iii) affirm ConMed's Senior Implied Rating of Ba3; (iv) affirm ConMed's Senior Unsecured (non-guaranteed exposure) Issuer Rating of B1; and (v) affirm a stable ratings outlook. COUNTRYWIDE HOME: Fitch Holds Low-B Rating on 27 Cert. Classes -------------------------------------------------------------- Fitch Ratings has upgraded 3 and affirmed 81 classes from CWMBS -- Countrywide Home Loans, Inc. residential mortgage-backed certificates: CWMBS series 2002-22 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B1 upgraded to 'AA' from 'A+'; -- Class B2 upgraded to 'A' from 'BBB+' -- Class B3 upgraded to 'BBB' from 'BB+'; -- Class B4 affirmed at 'B'. CWMBS series 2003-4 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-7 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-14 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-18 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-24 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-26 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-28 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-29 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-34 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-39 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-44 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-50 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. CWMBS series 2003-57 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. The affirmations on the above classes reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $3.74 billion of certificates. The upgrades of series 2002-22 reflect an improvement in the relationship of CE to future loss expectations and affect $7.22 million of certificates. Currently, the classes B-1, B-2, and B-3 are benefiting from 7.30%, 4.29%, and 2.78% CE -- originally 1%, 0.60%, and 0.40% -- in the form of subordination. The above deals have pool factors -- i.e. current mortgage loans outstanding as a percentage of the initial pool -- ranging from 13% to 72%. The underlying collateral for all the transactions consists of conventional, fully amortizing 15- to 30-year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties. The mortgage loans are master serviced by Countrywide Home Loans, Inc., which is rated 'RMS2+. Further information regarding delinquencies, losses and credit enhancement is available on the Fitch Ratings web site at http://www.fitchratings.com/. CYBERCARE INC: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: CyberCare, Inc. f/k/a Cyber-Care, Inc. f/k/a Medical Industries of America, Inc. 3110 Flakenberg Road Tampa, Florida 33619-0950 Bankruptcy Case No.: 05-27268 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- CyberCare Technologies, Inc. 05-27331 Type of Business: The Debtor is a holding company that owns service businesses, including a physical therapy and rehabilitation business, a pharmacy business and a healthcare technology solutions business. American Enterprise Solutions, Inc. (n/k/a Cast-Crete Corporation) is a creditor and proposed plan proponent for the Debtors. The transactions contemplated in CyberCare's chapter 11 case will be in furtherance of American Enterprise's confirmed chapter 11 plan. American Enterprise filed for chapter 11 protection on Mar. 28, 2001 (Bankr. M.D. Fla. Case No. 01-05371) (Williamson, J.). Chapter 11 Petition Date: October 14, 2005 Court: Middle District of Florida (Tampa) Debtors' Counsel: Scott A. Stichter, Esq. Stichter, Riedel, Blain & Prosser 110 East Madison Street, Suite 200 Tampa, Florida 33602-4700 Tel: (813) 229-0144 Fax: (813) 229-1811 Estimated Assets Estimated Debts ---------------- --------------- CyberCare, Inc. $500,000 to $50 Million to $1 Million $100 Million CyberCare Technologies, Inc. $100,000 to $50 Million to $500,000 $100 Million A. CyberCare, Inc.'s 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Health Hero Network $3,388,750 2570 West El Camino Real Suite 111 Mountain View, CA 94040 Cast-Crete Corporation Loan $1,161,400 P.O. Box 24567 Tampa, FL 33623 Amerisource, Bergen $472,532 Brunswick 2100 Director's Row Orlando, FL 32809 Ernst & Young $252,900 250 South Australian Avenue Suite 900 West Palm Beach, FL 33401 Hartford Fire Insurance $182,582 Equileap, Inc. $182,540 Broad and Cassel $147,666 Mintz & Fraade $123,422 Adorno & Yoss $68,531 AFLAC $27,300 B. CyberCare Technologies, Inc.'s 6 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ CyberCare, Inc. $50,570,409 3110 Falkenberg Road Tampa, FL 3361-90950 Georgia Institute of Technology GTRC/MCG $2,011,115 Atlanta, GA 30332 MCI Telecommunications $172,244 34 Peachtree Street Northwest Atlanta, GA 30303 GE Commercial Finance $127,490 124 Broad Street Stanford, CT Business Management $79,920 Searflow, Sweden Magpies Pytron $37,100 Washington Ltd. DELPHI FURUKAWA: Case Summary & 50 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Delphi Furukawa Wiring Systems LLC 5725 Delphi Drive Troy, Michigan 48098-2815 Bankruptcy Case No.: 05-47452 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Delphi Receivables LLC 05-47459 MobileAria, Inc. 05-47474 Type of Business: The Debtors are affiliates of Delphi Corporation, which filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). Chapter 11 Petition Date: October 14, 2005 Court: Southern District of New York (Manhattan) Debtors' Counsel: John Wm. Butler, Jr. Skadden Arps Slate Meagher & Flom 333 West Wacker Drive Chicago, Illinois 60606-1285 Tel: (312) 407-0730 Fax: (312) 407-0411 Estimated Assets Estimated Debts ---------------- --------------- Delphi Furukawa Wiring $500,000 to Less than $50,000 Systems LLC $1 Million Delphi Receivables LLC Less than $50,000 Less than $50,000 MobileAria, Inc. $1 Million to $10 Million to $10 Million $50 Million Consolidated List of Debtors' 50 Largest Unsecured Creditors: Nature of Entity Claim Claim Amount ------ --------- ------------ General Motors Corporation 300 Renaissance Center P.O. Box 300 Detroit, MI 48265-3000 Tel: 313-665-4898 (Legal) Trade Tel: 313-556-5000 (Main) Warranty Fax: 517-272-3709 and Attn: Attn: John Devine, CFO Other Unknown International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers - Communications Workers of America 501 3rd Street N.W., 6th Floor Washington, D.C. 20001 Tel: 202-434-1156 Wages Fax: 202-434-1343 and Attn: James D. Clark, Benefits Unknown Pension Benefit Guaranty Corp. 1200 K Street, N.W. Washington, D.C. 20005 Tel: 202-326-4020 Fax: 202-326-4112 AttnL Jeffrey Cohen, Pension Chief Counsel Guaranty Unknown United Auto Workers 8000 E. Jefferson Detroit, MI 48214 Tel: 313-926-5000 Fax: 313-823-6016 Wages Attn: Richard Shoemaker, Vice and President & Director GM Dept. Benefits Unknown United Steel Workers 5 Gateway Center Pittsburgh, PA 15222 Tel: 412-562-2400 Wages Fax: 412-562-2484 and Attn: Leo W. Gerard, President Benefits Unknown Wilmington Trust Company Corporate Trust Office 6.55% Notes 1100 North Market Street due 2006 $500,000,000 Rodney Square North 6.50% Notes Wilmington, DE 19890 due 2009 $500,000,000 Tel: 302-636-6058 6.50% Notes Fax: 302-636-4143 due 2013 $500,000,000 Steven M. Cimalore, 7.125% Notes Vice President due 2029 $500,000,000 Law Debenture Trust Company of New York Corporate Trust Office 780 Third Ave, 31st Floor New York, NY 10017 Tel: 212-750-6474 Fax: 212-750-1361 - and - Wilmington Trust Company Corporate Trust Office 1100 North Market Street Rodney Square North Wilmington, DE 19890 Tel: 302-636-6058 Fax: 302-636-4143 Junior Attn: Patrick Healy, VP Subordinated and Steven M. Cimalore, VP Notes $412,371,975 Flextronics Int'l Asia Pacific 2 Robbins Road Westford, MA 01886 Tel: 978-392-3015 Fax: 978-392-3011 Attn: Joe Minville, Sr. Director, Business Development, Global Automotive Markets Trade $40,781,535 Freescale Semiconductor Inc 6501 William Cannon Drive West Austin, TX 78735-8598 Tel: 512-895-2093 Fax: 512-895-8746 Attn: Paul Grimme, Senior Vice President and General Manager, Transportation and Standard Products Group Trade $22,710,027 Robert Bosch Corporation 38000 Hills Tech Drive Farmington Hills, MI 48331-3417 Tel: 248-848-2555 Fax: 248-848-6505 Attn: Linda Lynch, Sales Manager, General Motors N.A. Trade $15,069,265 Siemens Automotive Ltd 2400 Executive Hill Blvd. Auburn Hills, MI 48326-2980 Tel: 248-209-5874 Fax: 248-209-7877 Attn: Peter H. Huizinga, Sales Manager, North American Sales Trade $13,619,300 PBR Automotive USA Pacific Group Ltd 140 Ellen Drive Orion Township, MI 48359 Tel: 248-340-1290 Fax: 248-377-4939 Attn: Gordon Diag, VP Trade $10,542,285 DMC 2 Canada Corporation 2347 Commercial Drive Auburn Hills, MI 48326 Tel: 248-292-2261 Fax: 248-340-2471 Bill Staron, Senior VP Trade $8,976,696 NEC Electronics Inc Three Galleria Tower 13155 Noel Road, Ste 1100 Dallas, TX 75240 Tel: 972-855-5126 Fax: 972-655-5133 Attn: Jim Trent, General Manager, Automotive SBU Trade $8,896,819 HSS LLC 5446 Dixie Highway Saginaw, MI 48601 Tel: 989-777-2983 Fax: 989-777-4818 Attn: David Bader, President Trade $8,296,550 Tyco Electronics Corp Amperestrabe 12-14 Bensheim, Germany D-64625 Tel: 49-0-62-51-133-1-202 Fax: 49-0-62-51-133-1-548 - and - Tyco Electronics Corp P.O. Box 3608 Harrisburg, PA 17105-3608 Tel: 717-592-2298 Fax: 717-592-7555 Attn: Dr. Jurgen W. Gromer, Vice President Tyco International Ltd., President and CEO Tyco Electronics Corp. Trade $8,278,304 Molex Inc 222 Wellington Court Lisle, IL 60532-1682 Tel: 630-718-5888 Fax: 630-813-5888 Attn: Ron Schubel, Executive Vice President, President Americas Region Trade $8,014,656 Panasonic Automotive 26455 American Drive Southfield, MI 48034 Tel: 248-447-7111 Fax: 248-447-7008 Attn: Vince Sarrecchia, President, Headquarters Trade $7,429,854 Olin Corp 427 N Shamrock Street East Alton, IL 62024-1174 Tel: 618-258-26664 Fax: 618-258-3481 Attn: Devin Denner, Sales Manager Trade $7,231,721 Methode Electronics Inc 7401 W. Wilson Chicago, IL 60706 Tel: 708-867-6777 Fax: 708-867-3288 Attn: Don Duda, President Trade $6,397,471 SGS Thompson Victor Park West 19575 Victor Parkway Livonia, MI 48152 Tel: 734-953-1711 Fax: 734-462-4034 Scott Shilling, Sales Director Trade $6,386,126 Philips Semiconductors 1817 Dogwood Drive Kokomo, IN 46902 Tel: 765-868-3861 Fax: 765-452-9915 Attn: Sam L. Trency, Global Account Manager, Kokomo Trade $6,242,258 Infineon Technologies P.O. Box 80 09 49 Munich, Germany 81609 Tel: 49-0-89-234-8-52-00 Fax: 49-0-89-234-8-52-02 - and - Infineon Technologies St.-Martin-Strasse 53 Munich, Germany 81669 Attn: Peter Bauer, Executive Vice President Trade $5,582,352 Aw Transmission Engineering Aisin Seiki Co Ltd Metro West Industrial Park 14933 Keel St Plymouth, MI 48170 Tel: 734-416-1162 Fax: 734-416-3844 Ryo Ishibashi, Sales Contact - and - Kenji Ito, VP - and - Larry Khaykin, Sr. Sales Manager Trade $5,509,700 Applied Bio Systems 850 Lincoln Centre Drive Foster City, CA 94404 Tel: 650-638-6431 Fax: 650-638-5998 Attn: Ann Wagoner Trade $5,491,366 Alps Automotive Inc 1500 Atlantic Blvd. Auburn Hills, MI 48326 Tel: 248-393-7626 Fax: 248-391-1564 Attn: Muneki Ishida, General Sales Manager Trade $5,182,441 Texas Instruments Inc 12900 North Meridian Street Suite 175 Ms 4070 Carmel, IN 46032 Tel: 317-574-2626 Fax: 317-573-6410 Attn: Brent Mewhinney, US Automotive Sales Manager Trade $5,041,608 Hitachi Automotive 955 Warwick Rd Harrodsburg, KY 40330 Tel: 248-482-0085 Fax: 248-474-5097 - and - Hitachi Automotive 34500 Grand River Avenue Farmington Hills, MI 48335 Attn: Darrell Seitz, Senior Account Manager Trade $4,979,093 Sharp Electronics Corp 2613-1, Chinomoto, Cho, Tenri Nara, Japan 632-8567 Tel: 81-743-65-4317 Fax: 81-743-65-2809 Attn: Akihiko Imaya, Group Deputy General Manager Trade $4,974,247 Semiconductor Components 2000 S County Trail East Greenwich, RI 02818 Tel: 734-953-6848 Fax: 734-953-6860 Attn: Lance Williams, Director of Sales Trade $4,865,672 TRW Automotive 12000 Tech Center Drive Livonia, MI 48150 Tel: 734-266-3507 Fax: 734-266-5704 Attn: John Nielsen, Director, Sales Trade $4,821,907 ISI of Indiana Inc 1212 East Michigan St. Indianapolis, IN 46202 Tel: 317-631-7980 Fax: 317-631-7981 Attn: Brad Countryman Trade $4,760,039 Traxle Manufacturing Ltd 25300 Telegraph Rd. Ste 450 Raleigh Office Center Southfield, MI 48034 Tel: 248-355-3533 Fax: 248-355-3558 Attn: Russ Pollack, Director of Sales Trade $4,744,747 Waupaca Foundry Inc 311 S Tower Rd Waupaca, WI 54981-0249 Tel: 715-258-6611 Fax: 715-258-1712 Gary Thoe, Chairman Trade $4,684,195 Hitachi Chemical Asia Pacific Bedok Plant: 20, Bedock South Road Singapore, Singapore 469277 Tel: 6241-9811 Fax: 5455-407 - and - Hitachi Chemical Asia Pacific Loyang Plant: 32, Loyang Way Singapore, Singapore 508730 Tel: 6542-8511 Attn: Y. Yokoya, Deputy Managing Director Trade $4,562,688 American Axle & Manufacturing Inc. One Dauch Drive Detroit, MI 48211-1198 Tel: 313-758-4217 Fax: 313-974-2870 Attn: Joel Robinson, President - and - Bob Finn, CEO Trade $4,525,561 TDK Corporation Of America 1221 Business Center Drive Mount Prospect, IL 60056 Tel: 847-803-6100 Fax: 847-803-1125 Attn: Frank H. Avant, President Trade $4,466,206 Pioneer Industrial Components (Pioneer Automotive Electronics Sales, Inc.) 22630 Haggerty Road Farmington, MI 48335 Tel: 248-449-6799 Fax: 248-449-1940 Attn: Kevin M. Martin Senior VP, Sales Trade $4,189,855 Fujitsu Ten Corporation 46029 Five Mile Road Plymouth, MI 48170 Tel: 734-414-6651 Fax: 734-414-6660 Attn: Chet Korzeniewski, V.P., Sales and Marketing Trade $4,156,580 Solectron De Mexico SA de CV Solectron Invotronics 26525 American Drive Southfield, MI 48034 Tel: 248-263-8714 Fax: 248-263-8701 Attn: Ed Mike, Sales Manager Trade $4,129,744 TI Group Automotive System 12345 E Nine Mile Warren, MI 48090 Tel: 586-755-8312 Fax: 586-427-3175 Attn: Tim Kuppler, Vice President Trade $3,990,388 Timken Company 31100 Telegraph Road, Suite 270 Bingham Farms, MI 48025 Tel: 248-554-4882 Fax: 248-433-2253 Attn: Brian Ruel, Director, Sales Trade $3,619,957 Engelhard Corporation 101 Wood Ave Iselin, NJ 08830 Tel: 732-205-6497 Fax: 732-906-0337 Attn: Barry Perry, Chairman & CEO Trade $3,577,915 Cataler North America Corp. 7800 Chihama Kakegawa-City Shizuoka, Japan Tel: 81-537-72-3131 Fax: 81-537-72-2829 Attn: Hironobu Ono, President Trade $3,462,855 Pechiney Rolled Products 39111 W Six Mile Rd. Livonia, MI 48152 Tel: 734-632-8484 Fax: 734-632-8483 Attn: Jim Offer, Sales Manager Trade $3,393,879 Autocam Corporation East Paris Avenue Kentwood, MI 49512 Tel: 616-541-8551 Fax: 616-698-6876 Attn: Scott Dekoker, Customer Manager Trade $3,352,518 Futaba Corp Of America 2865 Wall Triana Hwy Huntsville, AL 35824 Tel: 256-461-7348 Fax: 256-461-7741 Attn: Joe M. Dorris, President Trade $3,350,622 Victory Packaging 3555 Timmons Lane, Suite 1440 Houston, TX 77027 Tel: 713-961-3299 Fax: 713-961-3824 Attn: Robert Egan, President Trade $3,327,441 Murata Electronics North 2200 Lake Park Drive Smyrna, GA 30080-7604 Tel: 770-433-7846 Fax: 678-842-6625 Attn: David M. McGinnis, Director Automotive Sales Trade $3,234,841 Niles USA Inc 41129 Jo Drive Novi, MI 48375 Tel: 248-427-9700 Fax: 248-427-9701 Attn: Michael Rudnicki, Account Manager - and - Scot McColl, Business Unit Manager Trade $3,171,181 DELTA AIR: Wants Stay on Class Action Settlement Lifted ------------------------------------------------------- In 2003, a putative class of active and retired pilots of Delta Air Lines, Inc., filed four separate class action lawsuits in federal courts in New York, Boston, Cincinnati, and New Mexico against Delta, the Delta Pilots Supplemental Plan, the Pilots Plan, the Delta Pilots Bridge Plan, and the Administrative Committee of Delta Air Lines, Inc. The cases were subsequently transferred to the United States District Court for the Northern District of Georgia for coordinated pretrial proceedings under the caption of In re Delta Air Lines, Inc. ERISA Litigation, MDL. In the Pilot Pension Litigation, the plaintiffs alleged that the Pilots Plan violated ERISA by: (i) failing to pay lump sum benefits that included the value associated with the variable annuity received by pilots who do not elect lump sum distributions; (ii) freezing the value of benefit units used to calculate benefits under the Pilot Plan's minimum benefit formula in an amendment dated July 1, 1996; (iii) failing to furnish notice of the reduction in the earnings multiplier in the July 1, 1996 Amendment; (iv) failing to value benefit units as of participants' normal retirement dates; and (v) applying the Pilot Plan's joint and survivor annuity factor in the calculation of the minimum benefit formula for married pilots. Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, notes that, if any of the principal claims asserted by the plaintiffs are resolved in their favor, the benefits payable under the Pilots Plan, which, if the Plan is not terminated, Delta is required to fund prior to emergence, would increase by hundreds of millions of dollars. Additionally, the benefits payable under the non-qualified Bridge Plan and Supplemental Plan, which are paid directly by Delta, would increase by hundreds of millions of dollars. In the spring of 2005, the Delta Parties and the plaintiffs negotiated a settlement resolving all claims in the Pilots Pension Litigation. Pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, the settlement of a class action must be approved by the court, in Delta's case the District Court. Mr. Huebner recounts that, on May 24, 2005, the District Court entered an order: (i) preliminarily approving the Settlement; (ii) conditionally certifying the Settlement Class; (iii) conditionally approving Robert D. Berger, the Estate of Mac Braun, Samuel O. Gamble, and William G. Macaulay -- the Named Plaintiffs -- as the representatives of the Settlement Class; (iv) approving the plaintiffs' counsel as counsel to the Settlement Class; (v) establishing uniform settlement objection procedures for members of the Settlement Class to follow; (vi) preliminarily approving the terms of the Settlement; (vii) approving the notice to the Settlement Class; and (viii) setting September 6, 2005, for a hearing on the final approval of the Settlement. Following the entry of the Preliminary Order, Delta deposited $500,000 into escrow and the Pilots Plan segregated $15,500,000 in cash into an account held by the JPMorgan Chase Bank, N.A. for distribution pursuant to the allocation provisions of the Settlement. The Delta Parties provided the Notice of Class Action Settlement to all persons who were members of these two groups: (a) The Lump Sum Subclass, which consists of: (1) all Delta pilots who retired on or before January 1, 2005, and elected a lump sum distribution of pension benefits since that option was first made available effective March 2, 1989, or, if deceased, their respective beneficiaries; (2) all Delta pilots who Delta employed on January 1, 2005; (3) alternate payees who were not receiving any benefits from the Pilots Plan as of January 1, 2005; and (4) alternate payees who were receiving benefits from the Pilots Plan as of January 1, 2005, and elected a lump sum distribution; and (b) The Minimum Benefit Subclass, which consists of: (i) all Delta pilots who Delta employed on February 1, 1972, and who retired on or after January 1, 1990, or, if deceased, their beneficiaries, and (ii) alternate payees of any pilot in (i). Following service of notice to the Settlement Class, Judson W. Holmes, Jr., an active Delta Pilot, filed an objection, asserting that the Settlement should not be approved as the claims asserted by the plaintiffs are without merit and, as a result, the Delta Parties should pay nothing in respect of the Pilots Pension Litigation. On September 6, 2005, the District Court approved the Settlement. The settlement is not final until any appeals are resolved or the time to appeal has expired. Pursuant to Section 362(d) of the Bankruptcy Court, Delta Air Lines Inc. asks the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to permit the commencement or continuation of any appeal from the District Court Order. Delta also seeks permission to perform all actions necessary to complete the Settlement in the event the Order becomes final due to the passage of time or the favorable determination of any and all appeals. In particular, Delta wants to: (i) direct the escrow agent to distribute the escrow funds pursuant to the allocation provisions of the Settlement, (ii) issue warrants as required by the Settlement, and (iii) allow the releases contemplated by the Settlement to become effective. Mr. Huebner asserts that the termination of the Pilots Pension Litigation pursuant to the Settlement will result in the resolution of claims that could total hundreds of millions of dollars against the Delta Parties. He notes that the $500,000 distribution is not a part of Delta's bankruptcy estate. Pursuant to the terms of the Escrow Agreement executed in connection with the Settlement, the escrow is irrevocable subject only to the contingencies specified in the escrow agreement, and thus, the escrow funds are not property of the Delta bankruptcy estate as defined by Section 541(a) of the Bankruptcy Code. The $15.5 million segregated and to be paid from the Pilots Plan are not property of the estate, Mr. Huebner adds. The issuance of Warrants and the release of the Delta Parties from the ERISA- related claims represent minimal cost to Delta. Mr. Huebner says that not consummating the Settlement would result in significant uncertainty and enormous potential costs to Delta. In the event the settlement is not consummated, the Litigation might proceed in the District Court. While Delta is not a defendant in the Litigation, the Litigation could nonetheless give rise to significant additional liabilities for the plans, which would in turn create additional liability for Delta. In the event that the Pilots Plan is not terminated prior to the effective date of any bankruptcy reorganization plan in their cases, Delta will be required to continue to perform under the terms of the Pilots Plan and the terms of ERISA. Thus, the potentially increased liabilities that might arise if the Litigation continues would be obligations of Delta that would be required to be paid either at exit from bankruptcy or as a part of Delta's ongoing post-effective date obligations, Mr. Huebner asserts. Functionally, the unsecured creditors of Delta would be subordinated to the plaintiffs' claims. In the alternative, in the event that the plaintiffs prevail and Delta subsequently elects to seek, and obtains, distress terminations of the Plans under ERISA, the underfunding claims of the Pension Benefit Guaranty Corporation arising upon distress termination may be significantly increased. Thus, the potential exists for significant adverse consequences to unsecured creditors regardless of whether or not the Pilots Plan is terminated, Mr. Huebner says. 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 Air Lines Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Objects to Interface's Motion To Compel Assumption ------------------------------------------------------------- As reported in Troubled Company Reporter on Oct. 14, 2005, Interface LLC asked the U.S. Bankruptcy Court for the Southern District of New York to compel the Debtors to either assume or reject the Interface Agreement. Delta Air Lines Inc. and its debtor-affiliates note that Interface LLC's request, if granted, would allow Delta Air Lines, Inc., only five days to: -- evaluate the Integrated System Supply and Handling Agreement for Hazardous and Non-Hazardous Products, dated September 1, 1998, -- consider available options, and -- make a decision within which to assume or reject that agreement. James I. McClammy, Esq., at Davis Polk & Wardwell, in New York, argues that five days is a wholly insufficient and unreasonable amount of time to make a determination, especially in the context of the Debtors' complex cases. Citing In re Enron Corp., 279 B.R. at 702, Mr. McClammy notes that the law requires, in all circumstances, that a debtor be given a reasonable time to decide whether to assume or reject an executory. According to Mr. McClammy, at the early stages of their bankruptcy cases, the Debtors need to focus on, among others, the preparation of the necessary schedules of assets and liabilities and statements of financial affairs, formulation of a business plan, responding to scores of daily requests and pleadings, and the daily operations of a complex, international business. Mr. McClammy also notes that the Debtors' bankruptcy cases have been pending for less than 30 days and the number of executory contracts that the Debtors must evaluate is in the thousands. The Debtors have not had sufficient time to appraise the value of these contracts or to be able to make an informed decision with respect to assumption or rejection. Responding to Interface's assertions that its only hope for survival will be for Delta to promptly decide on the Supply Agreement, Mr. McClammy avers that Interface offers only unsupported and conclusory statements in support of this claim. The Debtors, however, assure the Court that denial of Interface's request will not unduly prejudice Interface as they intend to make ally postpetition payments to the supplier as required under the Supply Agreement. As noted by Interface, the hazardous nature of many of the products provided by Interface will require care to be taken in considering alternatives for the provision of these products. Delta believes that it needs the breathing space provided by the Bankruptcy Code to adequately evaluate the terms and conditions of the Supply Agreement, and explore alternatives. Hence, it should not be forced to make a premature decision about assuming or rejecting the Agreement, Mr. McClammy asserts. Creditors Committee Responds The Official Committee of Unsecured Creditors believes that it is unreasonable to impose on the Debtors the heavy burden of making decisions regarding whether to assume or reject executory contracts, including the Supply Agreement, at this juncture in their large and complex Chapter 11 cases. The Creditors Committee asserts that the Court should permit these decisions to be delayed until a plan of reorganization in the Debtors' cases is confirmed. David H. Botter, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, argues that improvident decisions, compelled within an unreasonably short time, can have tremendous repercussions for the Debtors' reorganization efforts. 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 Air Lines Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) DETIENNE ASSOCIATES: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Detienne Associates Limited Partnership 22 North Last Chance Gulch Helena, Montana 59601 Bankruptcy Case No.: 05-64797 Type of Business: The Debtor is a property holding company. Chapter 11 Petition Date: October 14, 2005 Court: District of Montana (Butte) Judge: Ralph B. Kirscher Debtor's Counsel: James A. Patten, Esq. Suite 300, The Fratt Building 2817 2nd Avenue North Billings, Montana 59101 Tel: (406) 252-8500 Fax: (406) 294-9500 Total Assets: $5,124,553 Total Debts: $4,726,017 Debtor's 12 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Kevin Detienne $263,571 40 West Norris Road Helena, MT 59602 Charles W. Broun, III $48,993 Intercontinental Hotels Three Ravinia Drive, Suite 100 Atlanta, GA 30346 Kevin Detienne $40,000 40 West Norris Road Helena, MT 59602 First City Servicing Corp Of Minnesota $32,006 Internal Revenue Service $21,922 Vibeke Detienne $10,107 Luxan & Murfit $4,011 Gough Shanahan $1,000 Daniels County Treasurer $774 Montana State Funds $279 Galusha Higgins $224 A-1 Rental $36 DOANE PET: Prices $152 Million Private Debt Placement ----------------------------------------------------- Doane Pet Care Company has priced a private placement of $152 million of senior subordinated notes due 2015. The senior subordinated notes will bear interest at a rate of 10-5/8% per annum and have a maturity date of Nov. 15, 2015. The senior subordinated notes were priced at 99.226% and are expected to be eligible for resale under Rule 144A. The Company intends to use the proceeds from the offering, together with investments of Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan Board, and Doane senior management and borrowings under a new senior credit facility, to fund certain transactions in connection with OTPP's acquisition of beneficial ownership of substantially all of the capital stock of the Company's parent corporation, Doane Pet Care Enterprises, Inc. The senior subordinated notes will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The private offering is being made within the United States only to qualified institutional buyers and outside the United States only to non- U.S. investors under Regulation S of the Securities Act. Doane Pet Care Company -- http://www.doanepetcare.com/-- based in Brentwood, Tennessee, is the largest manufacturer of private label pet food and the second largest manufacturer of dry pet food overall in the United States. The Company sells to approximately 550 customers around the world and serves many of the top pet food retailers in the United States, Europe and Japan. The Company offers its customers a full range of pet food products for both dogs and cats, including dry, semi-moist, soft-dry, wet, treats and dog biscuits. * * * As reported in the Troubled Company Reporter on Oct. 11, 2005, Moody's Investors Service concluded its review of Doane Pet Care, Inc. for possible upgrade that commenced on August 25th by upgrading Doane's corporate family rating and existing $213 million 10.75% senior unsecured notes to B2 from B3. In addition, Moody's assigned a B1 rating to Doane's new proposed senior secured credit facilities, and a Caa1 rating to its new proposed senior subordinated notes. Moody's also upgraded Doane's existing senior secured bank facilities to B1 from B2, its existing senior subordinated notes to Caa1 from Caa2, and its existing mandatory redeemable preferred stock from Ca to Caa3. Ratings on the existing bank facilities and preferred stock will be withdrawn when the expected acquisition transaction closes. Moody's said the outlook on the ratings is stable. DOUGLAS DYNAMICS: S&P Puts BB- Rating on $40M Sr. Sec. Term Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating and other ratings on Douglas Dynamics LLC, a maker of snow- and ice-control products. At the same time, S&P assigned its 'BB-' senior secured debt rating and '1' recovery rating to the company's proposed senior secured $40 million tack-on term loan, which will mature in 2010. Proceeds from the transaction will be used to fund growth initiatives. The outlook is stable. With the new debt issue, we estimate that Douglas Dynamics had approximately $271 million of pro forma total debt at Sept. 30, 2005. "A favorable outlook or rating change would in part hinge on the company's pursuit of a less aggressive financial policy at the same time Douglas Dynamics was broadening its earnings and cash flow base," said Standard & Poor's credit analyst Joel Levington. "A negative outlook or rating change could occur if the financial sponsors were to pursue an aggressive dividend plan, if warm weather persisted -- leading to a meaningful decline in sales and earnings -- or if liquidity were to substantially weaken." Snow- and ice-control equipment is a niche segment of the winter- related products industry. Still, the company has leading market positions in these niche businesses with its Western and Fisher brands. Its good and highly variable cost structure, technical capabilities, and limited customer concentration are credit strengths that allow the company to achieve high operating margins. The company sells its product mainly in the U.S. -- a modest amount is also sold in Canada -- and has only a nominal amount of export sales, so its geographic diversity is limited. Demand for the company's products very much depends on snowfall, and this creates a significant credit risk beyond the control of the company. Demand also depends somewhat on light-truck sales and the health of the overall economy. S&P expects 2005 to be a good year for the company's financial results, albeit somewhat less robust than 2004, which had an abnormally strong first quarter. The growth opportunities the company is pursuing will expand its technologies and product breadth. This growth should further strengthen the company's market position, as the company is acquiring technology that has already become accepted within certain pockets of the snow removal marketplace and is used by competitors against some of Douglas Dynamics' product lines. Douglas Dynamics is a privately held company, principally owned by Aurora Capital Group and Ares Management LLC. The sponsors are viewed as having very aggressive financial policies, as reflected in the company's highly leveraged balance sheet, poor asset quality, and willingness to fund both dividends and acquisitions with debt. Douglas Dynamics' gross margins are strong, and variable costs, including raw materials and labor, are flexible. The strong brands and leading market positions have enabled the company to offset higher raw material costs with surcharges and price increases -- some of which may stick as steel prices decline. At the moment, the availability of raw materials has not been an issue. EMIDIO WOODWORKING: Case Summary & 42 Largest Unsecured Creditors ----------------------------------------------------------------- Lead Debtor: Emidio Woodworking & Son's, Inc. 105 Day Street Newington, Connecticut 06111 Bankruptcy Case No.: 05-24611 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Zavarella Family Partnership LLC 05-24616 Emidio & Anna Zavarella 05-24605 Type of Business: The Debtor is in the business of architectural woodworking. Emidio Zavarella is the owner while Anna Zavarella is president of Emidio Woodworking & Son's, Inc. Chapter 11 Petition Date: October 14, 2005 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtors' Counsel: Jeffrey M. Sklarz, Esq. Louis J. Testa, Esq. Zeisler & Zeisler 558 Clinton Avenue P.O. Box 3186 Bridgeport, Connecticut 06605 Tel: (203) 368-4234 Fax: (203) 367-9678 Financial Condition of Emidio Woodworking & Son's, Inc., as of Oct. 14, 2005: Total Assets: $433,992 Total Debts: $781,945 Financial Condition of Zavarella Family Partnership LLC as of Oct. 14, 2005: Total Assets: $1,520,000 Total Debts: $1,729,564 Financial condition of Emidio & Anna Zavarella as of Oct. 14, 2005: Total Assets: $1,560,000 Total Debts: $466,239 A. Emidio Woodworking & Son's, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Rex Lumber $240,000 c/o Howard Kantrovitz, Esq. 1 Bradley Road, Suite 305 New Haven, CT 06525 Department of Labor $87,202 State of Connecticut 200 Folly Brook Boulevard Wethersfield, CT 06109 CT Plywood $68,131 c/o Howard Kantrovitz, Esq. 1 Bradley Road, Suite 305 New Haven, CT 06525 Carpenters Union $35,074 Department of Revenue $34,876 State of Connecticut Department of Revenue $34,876 State of Connecticut Levy & Droney, P.C. $30,730 Anthem Health Plans, Inc. $30,000 Internal Revenue Service $25,513 CT Natural Gas $23,131 Welco $22,163 Murtha Cullina LLP $14,063 Town of Newington $12,198 Tax Collector Perfectemp $11,178 AMGRO $11,125 SBC/SNET Yellow Pages $9,991 People's Bank $8,575 Sheptoff, Reuber & Company, P. $8,038 CL&P $7,819 Numbers By Nan $6,954 B. Zavarella Family Partnership LLC's 2 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Town of Newington $22,711 Tax Collector 131 Cedar Street Newington, CT 06111 Levy & Droney, P.C. $802 Attn: Pres., Gen. Partner or Managing Member 74 Batterson Park Road Farmington, CT 06032 C. Emidio & Anna Zavarella's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hartford Hospital $11,160 Attn: Pres., Gen. Partner or Managing Member 80 Seymore Street Hartford, CT 06102 MDC Assessment bill $4,328 Attn: Pres., Gen. Partner or Managing Member 555 Main Street Hartford, CT 06199 Sovereign Bank $3,012 Attn: Pres., Gen. Partner or Managing Member 525 Lancaster Avenue Reading, PA 19611 Town of Newington $2,204 Tax Collector MDC $2,086 CL&P $1,241 MDC $1,201 American Express $1,198 CT Medical Financial $976 CT Multispecialty Group $610 Capital One Services $478 Connecticut Pest & Wildlife $450 CNG $391 Alliance One $338 CT Multispecialty Group $320 Orthopedic Association $278 American Medical Collection $249 Nathan Cipriano $213 CT Multispecialty Group $205 SBC $188 ENRON CORP: Gets Court Nod to Settle with ANP Entities ------------------------------------------------------ Prior to filing for bankruptcy, Debtors Enron North America Corp., Enron Power Marketing Inc. and LOA, Inc., entered into one or more contracts with ANP Marketing Company and ANP Midlothian Energy Co. for the sale of products or services. On June 20, 2001, International Power plc issued a guaranty for the benefit of ENA and EPMI as collateral for the obligations of ANPMC under various transactions among the parties. On May 26, 2000, American National Power Inc. issued a guaranty letter for the benefit of ENA, EPMI and the predecessor-in- interest to LOA as collateral for the obligations of ANPMC under various transactions between the parties. On May 26, 2001, American National Power Inc. issued a guaranty for the benefit of ENA, EPMI and the predecessor-in-interest to LOA as collateral for the obligations of ANPMC under various transactions between the parties. ANPMC filed Claim No. 13948 against EPMI for amounts due under the Contract. After engaging in negotiations, the Debtors and the ANP Entities entered into a settlement agreement. Pursuant to the Settlement, the parties agree that: (1) The ANP Entities will pay the Debtors payments due under the Contract as agreed to by the parties; (2) they will exchange a mutual release of claims related to the Contract and the Guaranties; (3) Claim no. 13948 will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable expunged and disallowed in its entirety; and (4) Each liability scheduled by the Debtors related to the ANP Entities will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable expunged and disallowed in its entirety. The Court approves the Settlement. Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. Enron filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Confirmed Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. (Enron Bankruptcy News, Issue No. 160; Bankruptcy Creditors' Service, Inc., 15/945-7000) ENRON CORP: Agrees to Allow Hazelwood Power Claim for $3 Million ---------------------------------------------------------------- On Oct. 15, 2002, Hazelwood Power filed Claim No. 20336 for $3,069,521 in Enron Corp.'s Chapter 11 case. The claim arises from a guaranty, dated as of May 1, 2001, given by Enron to Hazelwood in respect of the obligations of Enron Australia Finance Pty Ltd under certain business transactions with Hazelwood. EAF is a company incorporated in New South Wales, Australia, currently in liquidation proceedings under Chapter 5 of the Corporations Act 2001. Hazelwood is a creditor of EAF in the Liquidation Proceedings. On March 11, 2005, the Reorganized Debtors filed their 91st Omnibus Claims Objection, pursuant to which the Debtors sought to have Claim No. 20336 disallowed and expunged. After extensive negotiations, the parties drafted a stipulation. The terms of the Court-approved stipulation are: -- Claim No. 20336 will be allowed as a Class 4 general unsecured claim for $3,069,521, to be paid in accordance with the Plan; -- All scheduled liabilities in favor of Hazelwood will be deemed disallowed in their entirety and replaced by the Allowed Claim; -- Enron's liability in respect of the Allowed Claim will not be reduced or otherwise affected by any distribution received by Hazelwood in the Liquidation Proceedings, provided however, that if the aggregate amount received by Hazelwood in connection with (a) its claims against EAF in the Liquidation Proceedings and (b) any Distributions on the Allowed Claim, exceeds the total Australian dollar amount of the principal debt owed by EAF to Hazelwood, including related interest and out-of-pocket expenses incurred by Hazelwood in respect of the Liquidation Proceedings, Hazelwood will pay to Enron the amount equal to the excess in U.S. dollars as soon as practical after receipt of those excess amounts; and -- Each of the parties waives all of its rights under Section 502(j) of the Bankruptcy Code and agrees not to seek any reconsideration or amendment of the Allowed Claim. Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. Enron filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Confirmed Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. (Enron Bankruptcy News, Issue No. 160; Bankruptcy Creditors' Service, Inc., 15/945-7000) EVERGREEN INT'L: S&P Reviews Junk Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'CCC' corporate credit rating, on Evergreen International Aviation Inc. on CreditWatch with positive implications. The CreditWatch placement reflects an improvement in Evergreen's liquidity position resulting from healthy market conditions and the receipt of $16.6 million awarded to Evergreen in a lawsuit involving Asiana Airlines. McMinnville, Ore.-based Evergreen has about $340 million of lease-adjusted debt. "Ratings could be raised if it appears that the company will be able to sustain its improved liquidity position and financial profile, although the magnitude of an upgrade would likely be limited by the company's onerous debt service requirements," said Standard & Poor's credit analyst Lisa Jenkins. Favorable market conditions have enabled the company to significantly increase its operating earnings and cash flow in the first six months of the fiscal year ending Feb. 28, 2006, from the year-earlier period. To resolve the CreditWatch action, Standard & Poor's will assess Evergreen's operating outlook with a particular focus on cash flow generation and funding requirements over the next two years. Evergreen derives most of its revenues and operating profits from Evergreen International Airlines, its airfreight transportation subsidiary. Evergreen also provides ground logistics services, aircraft maintenance and repair services, helicopter and small aircraft services, and aviation sales and leasing. Demand for most of Evergreen's services has been healthy in recent months and is expected to remain so over the near to intermediate term. This should enable the company to sustain its improved operating earnings trend. However, Evergreen continues to face significant debt service requirements. Evergreen's credit risk is heightened also by the cyclical and competitive nature of the industry in which it competes, the capital intensity of its airline operations, its private ownership -- which limits capital raising options -- and its financial history -- which includes various financial restructurings and covenant defaults. EXCO RESOURCES: S&P Slices Corporate Credit Rating to B from B+ --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on oil and gas exploration and production company EXCO Resources Inc. to 'B' from 'B+'. Standard & Poor's also affirmed its 'B' rating on the company's $450 million in senior unsecured notes due to EXCO's limited ability to incur senior secured debt under its current financing arrangements. Standard & Poor's removed the ratings on EXCO from CreditWatch with negative implications where they were placed on Jan. 20, 2005. The outlook is developing. As of June 30, 2005, Dallas, Texas-based EXCO had approximately $450 million in long-term debt outstanding. The developing outlook on EXCO reflects the potential for the ratings to be raised, affirmed, or lowered in the intermediate term. "If the equity offering is executed as outlined, it is likely the rating on EXCO would either be affirmed or raised given that the expected oil and gas reserves, business profile, and capital structure would be similar to EXCO's position before sale of its Addison properties in Canada," said Standard & Poor's credit analyst Jeffrey Morrison. On the other hand, Standard & Poor's said that if the equity offering is not executed as outlined, the ratings could be affirmed or lowered, given that the expected leverage and credit measures relative to its asset base without the TXOK Acquisition Inc. properties would be significantly worse. Standard & Poor's expects to review the ratings as the timing and execution of an equity offering become more certain. FLAGSHIP REALTY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Flagship Realty Group, Inc. 167 Washington Street Norwell, Massachusetts 02061 Bankruptcy Case No.: 05-22372 Type of Business: With offices in Norwell, Quincy, and Hull, the Debtor offers a one-stop shopping for real estate. See http://www.flagshiprealtygroup.com/ Chapter 11 Petition Date: October 14, 2005 Court: District of Massachusetts (Boston) Judge: Robert Somma Debtor's Counsel: Leonard Ullian, Esq. The Law Office Of Ullian & Associates 220 Forbes Road, Suite 106 Braintree, Massachusetts 02184 Tel: (781) 848-5980 Estimated Assets: Not Provided Estimated Debts: Not Provided The Debtor did not file a list of its 20 largest unsecured creditors. FOAMEX INT'L: Court Gives Final Okay to $320 Million DIP Financing ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has granted final approval for Foamex International Inc.'s $320 million debtor-in-possession financing, including a $240 million credit facility and an $80 million term loan arranged for the Company by its existing Agents, Bank of America N.A., and Silver Point Finance, LLC, respectively. "We are very pleased with [yester]day's bankruptcy court decision," Tom Chorman, Foamex's President and Chief Executive Officer, said. "Receiving final approval of the DIP financing is another important step in the reorganization process and will allow us to fund our business operations and remain focused on meeting the needs of our customers." 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. FREEDOM RINGS: Files for Chapter 11 Protection in Delaware ---------------------------------------------------------- Freedom Rings, LLC, Krispy Kreme Doughnuts, Inc.'s majority-owned subsidiary and franchisee partner in the Philadelphia region, has filed a voluntary petition for Chapter 11 bankruptcy with the U.S. Bankruptcy Court for the District of Delaware. In connection with this petition, Krispy Kreme Doughnut Corporation has agreed to provide funding to Freedom Rings during the restructuring process. "This is a difficult but necessary process for Freedom Rings and we believe it is in the best interest of the Krispy Kreme brand in the Philadelphia region in the long term," said Steve Cooper, Chief Executive Officer for Krispy Kreme Doughnuts, Inc. "We believe that this process allows us to continue to serve our customers in the Philadelphia region while simultaneously restructuring our local operations." Prior to the filing, Krispy Kreme, which previously owned 70% of Freedom Rings, acquired the 30% minority interest for a nominal consideration. Freedom Rings owes Krispy Kreme approximately $24.1 million which, excluding lease obligations, constitutes substantially all of its indebtedness. To date, for financial reporting purposes, amounts owed by Freedom Rings to Krispy Kreme have been eliminated in consolidation. As a result of the bankruptcy filing, Krispy Kreme expects to deconsolidate Freedom Rings. As part of its previously announced review of the financial difficulties of certain of its franchisees, Krispy Kreme will determine the amount of impairment charge necessary in connection with Freedom Rings. Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme -- http://www.krispykreme.com/-- is a leading branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. Krispy Kreme currently operates approximately 400 stores in 45 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United Kingdom. Headquartered in Winston-Salem, North Carolina, Freedom Rings operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. Del. Case No. 05-14268). M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated between $10 million to $50 million in assets and debts. FREEDOM RINGS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Freedom Rings, LLC 370 Knollwood Street, Suite 500 Winston-Salem, North Carolina 27103 Bankruptcy Case No.: 05-14268 Type of Business: The Debtor, Krispy Kreme Doughnuts, Inc.'s majority-owned subsidiary and franchisee partner in the Philadelphia region, operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. Chapter 11 Petition Date: October 16, 2005 Court: District of Delaware Judge: Peter J. Walsh Debtor's Counsel: M. Blake Cleary, Esq. Margaret B. Whiteman, Esq. Matthew Barry Lunn, Esq. Young Conaway Stargatt & Taylor, LLP 1000 West Street, 17th Floor P.O. Box 391 Wilmington, Delaware 19899-0391 Tel: (302) 571-6600 Fax: (302) 571-1253 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ ExxonMobil Fleet/GECC Trade $28,573 P.O. Box 530988 Atlanta, GA 30353-0988 Lockton Companies Inc. Trade $23,763 P.O. Box 802707 Kansas City, MO 64180-2707 Avista Advantage Trade $11,058 1313 North Atlantic, 5th Floor Spokane, WA 99201-2327 Milk Industry Management Corp. Trade $10,287 dba Balford Farms P.O. Box 827228 Philadelphia, PA 19182-7228 Elliot-Lewis Corporation Trade $10,227 2900 Black Lake Place Philadelphia, PA 19154 Lincoln Plaza Associates Real Estate Tax $7,012 P.O. Box 829431 Payment Philadelphia, PA 19182 John Beck's Auto Body Trade $6,680 Company Inc. Township of Brick-Tax Collector Real Estate Tax $5,963 Onyx Waste Services Inc. Trade $5,780 Clover Mechanical Concepts, Inc. Trade $3,816 Ryder Integrated Logistics, Inc. Truck Leases $2,807 Strath Haven High School Commission $2,673 Pennsylvania Department of Sales and Use Taxes $4,614 Revenue City of Philadelphia Franchise Tax $2,500 Payment M & M Displays Inc. Trade $2,485 Aramark Uniform Service Trade $2,098 Fleet Grease II, Inc. Trade $1,796 Nelbud Services Group Trade $1,688 Bob's Electric Trade $1,653 Eagle Maintenance Supply Trade $1,132 FRESENIUS MEDICAL: S&P Still Reviewing BB+ Rating & May Downgrade ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its long-term corporate credit ratings on the world's leading dialysis provider, Germany-based Fresenius Medical Care AG and its parent, Fresenius AG, remain at 'BB+' and on CreditWatch with negative implications, despite Fresenius' plans to acquire the Germany-based hospital operating Helios Kliniken GmbH. The ratings on FMC and Fresenius were originally placed on CreditWatch with negative implications on May 4, 2005, after it announced in a separate deal that it had agreed to acquire North America's third-largest dialysis services provider, Renal Care Group Inc. In related action, Standard & Poor's placed its 'BB+' long-term corporate credit rating on the Germany-based hospital operating Helios Kliniken GmbH on CreditWatch with negative implications, following the Fresenius bid. Fresenius plans to acquire a 94% stake in Helios. The control of Helios by Fresenius will constrain the rating on Helios to that of its future parent. Standard & Poor's intends to resolve the CreditWatch placement and to lower the corporate credit ratings on both entities, as well as those on Helios, to 'BB' on completion of the $4 billion -- including $500 million of assumed debt -- debt-financed RCG acquisition. The outlook on all entities will then be negative. "Today's announcement by Fresenius to acquire Helios does not significantly change the underlying scenario, as the financing structure chosen is in line with Standard & Poor's financial ratio requirements for the future ratings," said Standard & Poor's credit analyst Olaf Toelke. "While the acquisition of Helios would be slightly positive for the business profile, as evidenced by the 'BB+' corporate credit rating on Helios, the likely impact on the financial profile is neutral." This follows Fresenius management's decision to partly finance the acquisition through a ?800 million rights issue. As a result, the company should be able to achieve the financial targets required for this rating level; that is, to reach net debt to EBITDA of 3.5x-3.8x and funds from operations to net debt, both lease- and pension-adjusted, of 17% by financial year-end 2007. GE CAPITAL: Fitch Holds Low-B Ratings on Five Certificate Classes ----------------------------------------------------------------- Fitch Ratings affirms GE Capital Corp's commercial mortgage pass- through certificates, series 2001-2: -- $58.6 million class A-2 at 'AAA'; -- $92.4 million class A-3 at 'AAA'; -- $519.5 million class A-4 at 'AAA'; -- Interest-only classes X-1 and X-2 at 'AAA'; -- $40.1 million class B at 'AAA'; -- $45.1 million class C at 'AA-'; -- $12.5 million class D at 'A+'; -- $10 million class E at 'A'; -- $18.8 million class F at 'BBB+'; -- $11.3 million class G at 'BBB'; -- $21.3 million class H at 'BB+'; -- $18.8 million class I at 'BB'; -- $5 million class J at 'BB-'; -- $7.5 million class K at 'B+'; -- $12.5 million class L at 'B'. Fitch does not rate classes M or N. Class A-1 has paid off in full. The rating affirmations are a result of loan paydown and defeasance, and the subsequent increase in credit enhancement offset by an increase in Fitch loans of concern. Since Fitch's last rating action there have been three loan payoffs and an additional four loans have defeased. Loans of concern have increased from 7.5% to 12.2% of the transaction. As of the September 2005 distribution date, the pool's aggregate certificate balance has decreased 14% to $888.2 million from $1,002.9 million. One loan of concern is located in LA and has experienced minor wind damage from Hurricane Katrina. The property's operations have not been disrupted and damages are expected to be covered by the property's insurance policy. Fitch is closely monitoring this loan. Fitch reviewed the credit assessment of the Holiday Inn West 57th loan, a 596-room full service hotel located in New York, NY. Based on the loan's deteriorating performance since issuance, the loan remains below investment grade. The Fitch stressed debt service coverage ratio for year-end 2004 increased to 1.16 times compared to 0.96x YE 2003 but is remains lower than 1.77x at issuance. Increases in real estate taxes and insurance, coupled with reduced revenue per available room have contributed to a decrease of 34% in Fitch stressed net cash flow since issuance. The performance deterioration was reviewed in context with the entire pool and the ratings reflect this concern. The Fitch stressed DSCR is calculated using borrower provided net operating income less required reserves divided by debt service payments based on the current balance using a Fitch stressed refinance constant. GENERAL STEEL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: General Steel Fabricators, Inc. c/o Law Office of Robert J. Rock 60 South Swan Street Albany, New York 12210 Bankruptcy Case No.: 05-20181 Type of Business: The Debtor is a steel fabricator. Chapter 11 Petition Date: October 16, 2005 Court: Northern District of New York (Albany) Debtor's Counsel: Robert J. Rock, Esq. Law Office of Robert J. Rock 60 South Swan Street Albany, New York 12210 Tel: (518) 463-5700 Fax: (518) 434-6140 Total Assets: $0 Total Debts: $1,018,861 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ James F. Stearns Company $365,553 c/o Mickey Long P.O. Box E-1 193 Old Colony Avenue Boston, MA 02127 Horst Schuster $300,000 c/o Burke Scolamiero Mortati & Hurd P.O. Box 15085 Albany, NY 12212-5085 Liberty Mutual Insurance Company $137,000 Interchange Corporate Center 450 Plymouth Road, Suite 400 Plymouth Meeting, PA 19462 Infra-Metals Company $78,199 c/o Tracy J. Murphy, Esq. P.O. Box 370 169 Myers Corners Road, Suite 115 Wappingers Falls, NY 12590 Safety Kleen $42,693 Nolan & Heller, LLP $17,488 BST Advisors, LLC $17,475 Northeast Gas Technologies, Ltd $8,518 Waste Management $5,915 Oxford Associates, LLP $5,900 NYS Workers Compensation Board $5,500 c/o Receivables Management Services Schwartz Heslin Group, Inc. $4,524 Polsnello Fuels $4,521 c/o Wilhelm Law Firm, PLLC Pitney Bowes Credit Corporation $3,915 c/o Dyne, Friedland & Omrami IKG Industries, Harsco Corporation $1,638 Illinois National Insurance Company $1,550 Corporation Service Company $1,354 Curbell, Inc. $1,332 c/o CCC od NY Pitney Bowes Credit Corporation $1,318 c/o LTD Financial Services, LP Hudson Valley Paper Co. $1,295 HORIZON NATURAL: Wants A.T. Massey to Produce Lease Documents ------------------------------------------------------------- Horizon Natural Resources Company and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Kentucky, Ashland Division, for authority to conduct examination pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. The Debtors want A.T. Massey Coal Company, Inc., to produce documents that will clarify a disputed cure claim. Pursuant to the Debtors' confirmed liquidation plan, leases associated with sold assets were rejected. Boone East Development Co. objected to the Debtors' proposed cure amount for its rejected lease. Boone asserted that the cure amount should be $923,945.32. The lessor also says minimum surface royalties for 2002 and 2003 of $337,046 and $507,276 respectively, were not included in the proposed cure amount. The Debtors disagree with Boone's asserted cure claim. The lease that is the subject of Boone's cure claim was assigned to A.T. Massey Coal Company, Inc. The Debtors want to support its objections to payment of minimum royalties whether additional grounds exist to object to the disputed cure claim of Boone East. A list of the documents the Debtors want A.T. Massey to produce is available for free at: http://bankrupt.com/misc/Horizon_Rule2004-Lease.pdf Headquartered in Ashland, Kentucky, Horizon Natural Resources f/k/a AEI Resources Holding, is one of the United States' largest producers of steam (bituminous) coal. The Company filed for chapter 11 protection on February 28, 2002 (Bankr. E.D. Ky. Case No. 02-14261). Ronald E. Gold, Esq., at Frost Brown Todd LLC, represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed over $100 million in total assets and total debts. On Sept. 16, 2005, the Court confirmed the Debtors' Plan of Liquidation. INSIGHT COMMS: Obtains Noteholders' Consent to Indenture Waiver --------------------------------------------------------------- Insight Communications Company, Inc. (NASDAQ: ICCI) has successfully completed its consent solicitation of holders of its outstanding 12-1/4% senior discount notes due 2011 for a proposed waiver of an indenture provision relating to its merger agreement with Insight Acquisition Corp. and related transactions. The concurrent consent solicitations by Insight Midwest, L.P. and Insight Capital, Inc., 50% owned subsidiaries of Insight Communications, in respect of their 9-3/4% senior notes due 2009 and 10-1/2% senior notes due 2010, with respect to the waiver of a substantially similar provision in each indenture governing those notes, also have been successfully completed. The solicitations of consents commenced on September 28, 2005, and expired at 5:00 p.m., New York City time, on October 12, 2005. A majority of the aggregate principal amount of each series of notes consented to the proposed waivers. Insight Communications will pay consenting holders 0.125% of the accreted value of their 12-1/4% notes on the consent payment date and 0.125% of the principal amount of their Insight Midwest notes on the consent payment date, subject to the terms and conditions of the solicitations, which conditions include consummation of the merger with Insight Acquisition Corp. J.P. Morgan Securities Inc. and Banc of America Securities LLC were the consent solicitation agents. Insight Communications (NASDAQ: ICCI) is the 9th largest cable operator in the United States, serving approximately 1.3 million customers in the four contiguous states of Illinois, Indiana, Ohio, and Kentucky. Insight specializes in offering bundled, state-of-the-art services in mid-sized communities, delivering analog and digital video, high-speed Internet, and voice telephony in selected markets to its customers. * * * As reported in the Troubled Company Reporter on Oct. 5, 2005, Fitch Ratings has affirmed the 'B+' Issuer Default Rating and the Stable Rating Outlook assigned to Insight Communications Company, Inc. Specifically, Fitch affirms the 'BB+' senior secured rating and 'R1' Recovery Rating assigned to Insight Midwest Holdings, LLC's senior secured credit facility, and the 'B+' senior unsecured debt rating and 'R4' Recovery Rating assigned to the senior unsecured notes issued by Insight Midwest, LP. Also, Fitch affirms the 'CCC+' senior unsecured rating and 'R6' Recovery Rating assigned to ICCI's senior discount notes. Approximately $2.8 billion of debt is affected by Fitch's action. As reported in the Troubled Company Reporter on July 12, 2005, Standard & Poor's Ratings Services revised its outlook on New York City, New York-based cable TV operator Insight Midwest L.P. to stable from negative. At the same time, Standard & Poor's affirmed its ratings on Insight Midwest, including the 'BB-' corporate credit rating. Standard & Poor's also assigned its 'BB-' rating to intermediate holding company Insight Midwest Holdings LLC's new $1.108 billion term loan C due December 2009. Proceeds from the new bank loan will be used to repay the previous term loan B facility. IVOW INC: Completed 1-for-10 Reverse Stock Split on Oct. 10 ----------------------------------------------------------- The Board of Directors for iVOW, Inc. (Nasdaq: IVOW) has determined that it is in the best interests of the Company and its stockholders to effect a one-for-ten reverse stock split of iVOW's common stock. The reverse stock split took effect after the close of trading on Oct. 10, 2005. iVOW's common stock began trading, as adjusted for the reverse stock split, on Tuesday, Oct. 11, 2005. As a result of the reverse stock split, each 10 shares of common stock will be exchanged for one share of common stock, and the total number of shares outstanding will be reduced from approximately 21.2 million shares to approximately 2.1 million shares. Stockholders will receive cash in lieu of iVOW common stock for any fraction of a share that the stockholder would otherwise be entitled to receive as a result of the reverse stock split. iVOW's common stock will trade under the symbol "IVOWD" for 20 trading days beginning on Oct. 11, 2005, to designate that it is trading on a post-reverse split basis. The common stock will resume trading under the symbol "IVOW" after the 20-day period (i.e., Nov. 8, 2005). At a special meeting of stockholders held on July 19, 2005, the Company's stockholders granted authority to the Board of Directors to file an amendment to the Company's existing Certificate of Incorporation to effect the reverse stock split. "The Board of Directors authorized the reverse stock split to assist our efforts to maintain compliance with the continued listing requirements of the Nasdaq Capital Market," said Dr. Michael Owens, President and CEO of iVOW. "Following the announcement of our plans to acquire Sound Health Solutions earlier today, we are optimistic about the opportunities we have to grow the business through our combined medical and surgical models for the treatment of obesity, and believe it is important for both the Company and our stockholders to maintain our listing on the Nasdaq Capital Market." iVOW, Inc. -- http://www.ivow.com/-- f/k/a Vista Medical Technologies, Inc., is focused exclusively on the disease state management of chronic and morbid obesity. They provide program management, operational consulting and clinical training services to physicians and hospitals involved in the medical and surgical treatment of morbidly obese patients. They also provide specialized vitamins to patients who have undergone obesity surgery. * * * As reported in the Troubled Company Reporter on Apr. 25, 2005, J. H. Cohn LLP says there's substantial doubt about iVOW, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended Dec. 31, 2004. As of Dec. 31, 2004, the Company had an accumulated deficit, and management believes that the Company will require additional financing to fund its operations beyond June 2005. Management isn't sure that such financing will be available. At Dec. 31, 2004, the Company had cash and cash equivalents of $1.97 million. JAMESTOWN HOUSING: S&P Pares Revenue Bond Rating to B from BB ------------------------------------------------------------- Standard & Poor's Rating Services lowered its rating on Jamestown Housing Authority, N.Y.'s $2.66 million Section 8 assisted mortgage revenue -- Bradmar Village Apartments -- series 1994 bonds to 'B' from 'BB'. The outlook is stable. The bonds are secured by a Section 8 subsidized mortgage loan, which is coterminous with the bond maturity in 2010. "The stable outlook reflects the project's ability to perform at this 'B' rating level," said Standard & Poor's credit analyst Renee Berson. She added: "It is unlikely that the financial performance of the project will change in the near future. The likelihood of the property receiving rental increases is remote due to the rent being above the Fair Market Rent and given the condition of the property. The expenses are not expected to decline, limiting the ability of the debt service coverage to increase." The 'B' rating reflects the continued decline in debt service coverage to below 1.0x maximum annual debt service; contract rents above the FMR, making the project susceptible to rent freezes; no rental increase since 1995; and increasing annual expenses. Offsetting these weaknesses are strong occupancy, which is in line with other Section 8 properties and Debt Service Reserve Fund fully funded at 12 months maximum annual debt service funded at 12 months' MADS. The project's debt service coverage has declined continuously over the years. The latest audited financial results for the year ended Sept. 31, 2004, indicate that the debt service coverage declined to 0.84x MADS from 0.86x in 2003. However, the year-to- date financial statement as of July 31, 2005, reflects a slight improvement in the debt service coverage ratio. Standard & Poor's reviews these bonds on an annual basis. Bradmar Village Apartments is a 100-unit garden-style family property, of which 99 units are subsidized. JETBLUE AIRWAYS: Fitch Puts B- Rating on Convertible Notes ---------------------------------------------------------- Fitch Ratings has initiated coverage of JetBlue Airways Corp. with the assignment of an issuer default rating of 'B+'. Fitch is also assigning a senior unsecured rating of 'B-' and a recovery rating of 'R6' to JetBlue's convertible notes. The unsecured rating applies to approximately $425 million of outstanding debt obligations. The Rating Outlook for JetBlue is 'Stable'. Ratings for JetBlue reflect the low-cost carrier's demonstrated ability to generate industry-leading profit margins and substantial operating cash flow during a period of extreme stress in the U.S. airline industry. These factors are offset by the carrier's highly leveraged capital structure and heavy capital spending commitments tied to fleet expansion over the next few years. Since 2001, JetBlue has reported 18 consecutive quarters of profitability and led all U.S. carriers in profit margin performance during 2004. Extreme fuel cost pressure is undermining margins and cash flow generation in 2005, but JetBlue remains well positioned to exploit its low cost structure to gain domestic market share as the U.S. legacy carriers pull back scheduled capacity. Despite its high leverage, JetBlue retains sufficient flexibility in its financial profile to weather an extended period of extreme fuel cost pressure and the inevitable industry restructuring that will ensue in such a scenario. Although capital has poured into the industry over the last four years to shore up liquidity and fund operating losses at the distressed airlines, capacity is gradually coming out of the domestic system and is generally lifting average fares and unit revenue at a time when jet fuel prices are soaring. This is likely to offset some of the cash flow pressure that JetBlue and the other carriers would face in 2006 should jet fuel prices remain at or above their current levels. Moreover, JetBlue has adequate cash on hand -- 562 million in unrestricted cash and short-term investments at June 30, 2005 -- and extensive access to the capital markets to cope with a prolonged downturn in its operating performance. The spike in jet fuel prices, seen since the Gulf Coast hurricanes disrupted refined products supply, has put the entire industry under renewed cash flow pressure. As of June 30, 2005, JetBlue had 20% of fuel purchases for the second half of this year hedged at crude oil prices of just under $30 per barrel. However, like most other U.S. airlines (excluding Southwest), JetBlue has no material fuel price hedge in place for 2006. As a result, the carrier faces the risk of reduced operating cash flow generation over the next several quarters. Fuel costs represented 29% of total operating expenses in the second quarter - up from 21% in second quarter 2004 -- and the carrier paid 55% more per gallon for fuel in the second quarter than it did in the year-earlier period. Fitch estimates that a 10-cent change in the price of jet fuel would lead to a change of approximately $40 million in operating income during 2006. The follow-on effects of an extended high energy cost scenario, however, could bolster JetBlue's market share position and support unit revenue growth by accelerating the process of legacy carrier down-sizing. The September bankruptcy filings of Delta and Northwest, together with the potential liquidation of Independence Air, will likely lead to substantial domestic schedule cuts and some moderation of the industry overcapacity problem beginning this winter. Low costs and high levels of aircraft utilization lie at the heart of the JetBlue operating model, and non-fuel cost per available seat mile levels are expected to remain very competitive over the next few years. For the second quarter, fuel-neutralized CASM increased by 3.0% to 6.08 cents. Although a maturing Airbus A320 fleet will drive higher unit maintenance costs in future periods, unit labor rates are not expected to move significantly higher as the company grows. Importantly, JetBlue's workforce is not unionized, and the company has no defined benefit pension plans. The introduction of new, 100-seat Embraer E190 jets will tend to pressure unit costs in future periods, but offsetting revenue per available seat mile (RASM) improvement is expected on E190 routes as passenger yields improve. With respect to revenue performance, strong demand patterns, and better pricing have been translated into improved unit revenue results. In the second quarter, passenger yields grew by 2.1% year-over-year and RASM was better by 5.9%. These results were achieved even with 25.5% growth in scheduled capacity. The airline appears well positioned to deliver continued RASM growth through the remainder of 2005 and into 2006 as other carriers reduce domestic available seat mile capacity. JetBlue's RASM performance will also be helped over time by the launch of the 100-seat E190 jet. The airline has announced plans to deploy these aircraft in less dense, medium-sized New York and Boston markets where considerable low-fare demand stimulation can take place. Following the introduction of the E190 this quarter, JetBlue expects to have 26 E190s in service by the end of next year. The rapid growth of the A320 and E190 fleets will continue to drive substantial capital spending needs in 2006 and beyond. The airline is scheduled to take delivery of 17 A320s and 18 E190s next year. Estimated 2006 capital spending in excess of $1 billion will exceed net cash from operations by a wide margin and drive secured debt levels higher. As a result, recovery prospects for unsecured convertible bondholders will be reduced further. Fitch's 'R6' recovery rating on JetBlue's two convertible issues reflects the fact that virtually all enterprise value in a default scenario would be allocated to meet secured claims -- notably enhanced equipment trust certificates and other aircraft-backed obligations. As of June 30, 2005, JetBlue reported $1.99 billion of debt on its balance sheet, and it had substantial lease commitments for 25 A320s. On an LTM basis, total aircraft and facilities lease expense stood at an estimated $120 million as of June 30, 2005. Most of JetBlue's debt is secured by A320 aircraft via EETCs and other aircraft-backed notes. Total secured debt of $1.6 billion is expected to move higher as new debt-financed aircraft enter the fleet. Without a bank credit facility in place, liquidity adequacy could become an issue if the openness of the capital markets is compromised. JetBlue has virtually no unencumbered assets, and is therefore reliant on the debt and equity markets to retain strong liquidity should a larger fuel or demand shock destabilize the industry further. As a large customer of both Airbus and Embraer, however, JetBlue would likely be in a position to cut fleet capital spending and extend aircraft deliveries if such a shock were to occur. K-SEA TRANSPO: S&P Rates Proposed $150M Senior Unsec. Notes at B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to K-Sea Transportation Partners L.P. At the same time, Standard & Poor's assigned its 'B+' rating to the company's proposed $150 million senior unsecured notes due 2012. The notes are being co-issued by K-Sea Transportation Finance Corp., a wholly owned subsidiary of K-Sea Transportation Partners L.P. Proceeds from the notes offering are expected to be used to finance the acquisition of Sea Coast Towing Inc. -- a West Coast provider of marine transportation for the oil industry -- and to refinance existing debt. Following the acquisition of Sea Coast, Staten Island, N.Y.-based K-Sea Transportation will have approximately $190 million in lease-adjusted debt. The outlook is stable. "The ratings on K-Sea reflect its aggressive financial profile, limited free cash flow after partnership distributions, and the company's aggressive growth strategy," said Standard & Poor's credit analyst Eric Ballantine. In addition, the company competes in the highly fragmented and the capital-intensive shipping industry. Partly mitigating these concerns are the company's relatively solid market position -- which improves as a result of the Sea Coast acquisition -- a significant fixed-rate business that helps stabilize its cash flows, and a significant number of double-hulled vessels. In addition, K-Sea operates under the Jones Act, which requires cargo shipments between U.S. ports to be carried on U.S.-built vessels registered in the U.S. and crewed by U.S. citizens. The Jones Act provides a barrier to entry by prohibiting direct competition from foreign-flagged vessels. K-Sea Transportation is a leading provider of marine transportation for refined petroleum in the Eastern U.S and Gulf Coast. The company has 44 tank barges, 2 tankers, and 25 tugboats, with over 2.6 million-barrel capacities. Approximately 75% of its revenue is based on long-term contracts. Upon completion of the Sea Coast acquisition, K-Sea will have over 3.3 million barrels of capacity and will be one of the largest coastwise tank barge operators in the U.S. K-Sea transports both clean and black petroleum product. K-Sea operates under the Jones Act and the Oil Pollution Act of 1990, which requires the phase-out of non-double-hulled tankers carrying petroleum products entering U.S. ports by 2015. Over 70% of K-Sea's vessels have double hulls, compared with the industry average of approximately 40%. Several of K-Sea's vessels are not double-hulled and face mandatory phase-out under OPA 90 by 2015. Standard & Poor's expects K-Sea to either retire or retrofit these vessels. Cash generation is expected to remain good over the near term. An outlook change to positive is not expected, as significant improvement to the credit profile will be restricted by the company's commitment to distribute a majority of its cash flow after committed capital expenditures and drydocking costs to unitholders under the MLP structure. An outlook revision to negative is also not expected, as solid demand for the company's vessels, combined with a good percentage of fixed-rate business, should keep cash flows relatively steady. KRISPY KREME: Franchisee Files Chapter 11 Petition in Delaware -------------------------------------------------------------- Freedom Rings, LLC, Krispy Kreme Doughnuts, Inc.'s majority-owned subsidiary and franchisee partner in the Philadelphia region, has filed a voluntary petition for Chapter 11 bankruptcy with the U.S. Bankruptcy Court for the District of Delaware. In connection with this petition, Krispy Kreme Doughnut Corporation has agreed to provide funding to Freedom Rings during the restructuring process. "This is a difficult but necessary process for Freedom Rings and we believe it is in the best interest of the Krispy Kreme brand in the Philadelphia region in the long term," said Steve Cooper, Chief Executive Officer for Krispy Kreme Doughnuts, Inc. "We believe that this process allows us to continue to serve our customers in the Philadelphia region while simultaneously restructuring our local operations." Prior to the filing, Krispy Kreme, which previously owned 70% of Freedom Rings, acquired the 30% minority interest for a nominal consideration. Freedom Rings owes Krispy Kreme approximately $24.1 million which, excluding lease obligations, constitutes substantially all of its indebtedness. To date, for financial reporting purposes, amounts owed by Freedom Rings to Krispy Kreme have been eliminated in consolidation. As a result of the bankruptcy filing, Krispy Kreme expects to deconsolidate Freedom Rings. As part of its previously announced review of the financial difficulties of certain of its franchisees, Krispy Kreme will determine the amount of impairment charge necessary in connection with Freedom Rings. Headquartered in Winston-Salem, North Carolina, Freedom Rings operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. Del. Case No. 05-14268). M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated between $10 million to $50 million in assets and debts. KremeKo, Inc., Krispy Kreme's Canadian franchisee, is currently restructuring under the Companies' Creditors Arrangement Act. Pursuant to the Court's Initial Order, Ernst & Young Inc. was appointed as Monitor in KremeKo's CCAA proceedings. The Monitor is attempting to sell the KremeKo business. Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme -- http://www.krispykreme.com/-- is a leading branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. Krispy Kreme currently operates approximately 400 stores in 45 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United Kingdom. * * * Financial Restatements As reported in the Troubled Company Reporter on Aug. 12, 2005, the Special Committee of the Board of Directors completed a 10-month independent investigation into Krispy Kreme's corporate governance, compliance and internal controls. A full-text copy of the Special Committee's Summary of Independent Investigation is available for free at: http://ResearchArchives.com/t/s?bd The Company is also working to complete its financial restatement, as well as the preparation of its annual financial statements for the fiscal year ended Jan. 31, 2005. The adjustments are currently expected to have the effect of decreasing pre-tax income for periods through the third quarter of fiscal 2005 by an estimated cumulative $25.6 million. The adjustments are currently estimated to decrease pre-tax income by $1.1 million, $1.9 million, $2.1 million, $13.9 million and $3.2 million for fiscal 2001, 2002, 2003 and 2004 and the first nine months of fiscal 2005, respectively, as well as by $3.4 million for periods prior to fiscal 2001. The estimates remain subject to revision and the results of the audit of the Company's annual financial statements. Material Weakness Although the Company has not yet completed its assessment of internal control over financial reporting, management has concluded that material weaknesses existed as of Jan. 30, 2005. A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The material weaknesses identified to date relate to four broad internal control issues: * The Company failed to maintain an effective control environment, including failure of former senior management to set the appropriate tone at the top of the organization and to ensure adequate controls were designed and operating effectively * The Company failed to maintain a sufficient complement of personnel with a level of accounting knowledge, experience and training in the application of generally accepted accounting principles commensurate with the Company's financial reporting requirements and the complexity of the Company's operations and transactions * The Company failed to maintain effective controls over the documentation and analysis of acquisitions to ensure they were accounted for in accordance with GAAP * The Company failed to maintain effective controls over the selection and application of accounting policies related to leases and leasehold improvements to ensure they were accounted for in accordance with GAAP Because management has not completed its testing and evaluation of the Company's internal control over financial reporting and its evaluation of the control deficiencies identified to date, the Company may identify additional material weaknesses. Based on the material weaknesses identified to date, management believes it will conclude in "Management's Report on Internal Control over Financial Reporting" in its fiscal 2005 Form 10-K that the Company's internal control over financial reporting was not effective as of January 30, 2005. Also, as a result of these material weaknesses, management believes that the report of the Company's independent registered public accounting firm will contain an adverse opinion with respect to the effectiveness of the Company's internal control over financial reporting as of January 30, 2005. The Company plans to provide a more detailed description of material weaknesses, including its plan for remediating such weaknesses, in its annual report on Form 10-K for fiscal 2005. KUECKER EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Kuecker Equipment Co., Inc. 323 Main Street Belton, Missouri 64012 Tel: (816) 331-7070 Bankruptcy Case No.: 05-49715 Type of Business: The Debtor designs, installs, and manufactures metal products for structural, shelving, and rack uses. Chapter 11 Petition Date: October 14, 2005 Court: Western District of Missouri (Kansas City) Judge: Arthur B. Federman Debtor's Counsel: Jonathan A. Margolies, Esq. McDowell, Rice, Smith & Buchanan PC 605 West 47th Street, Suite 350 Kansas City, Missouri 64112-1905 Tel: (816) 753-5400 Fax: (816) 753-9996 Estimated Assets: Not Provided Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Tom Garvey $2,331,336 c/o Robert Schultz Schultz & Little, LLP 640 Cepi Drive, Suite A Chesterfield, MO 63005-1221 The Buschman Co. $470,334 P.O. Box 60627 Charlotte, NC 28260-0627 Truline Wire Guidance Installation, Inc. $22,876 7095 Shaffer Drive Downs, IL 61736 Installation Services $19,500 R/S Electric Corporation $18,334 Sun Capital, Inc. $15,300 Cirrus Tech, Inc. $15,000 Accu-Sort Systems, Inc. $12,731 Intelligent Packing Systems $12,382 Autostak Systems, Inc. $9,195 Air Technical Industries $7,733 Bruhl Electric, LLC $7,426 Inventory Sales Company $5,223 Labor Ready Northeast, Inc. $4,324 Automated Conveyer Systems, Inc. $3,962 Manpower KC/Chicago $3,927 Transnorm System, Inc. $3,731 Intelligent Systems, LLC $3,190 Modern Equipment Company, Inc. $2,100 Lift, Inc. $2,014 LA RISA: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------ Debtor: La Risa Development Co., LLC. 2424 Curlew Road Palm Harbor, Florida 34683 Bankruptcy Case No.: 05-25090 Type of Business: The Debtor has purchased six lots near the Bay Esplandade on Clearwater Beach and has developed the property to construct condominiums. Chapter 11 Petition Date: October 13, 2005 Court: Middle District of Florida (Tampa) Debtor's Counsel: Buddy D. Ford, Esq. Buddy D. Ford, P.A. 115 North MacDill Avenue Tampa, Florida 33609 Tel: (813) 877-4669 Total Assets: $12,443,000 Total Debts: $6,167,286 Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Virginia B. Franks Note $315,000 4 Belleview Boulevard Apartment 102 Bellaire, FL 33756 Julie Gunn Executory contract $185,000 6740 Ridgewood Avenue Cocoa Beach, FL 32931 Robert L. Flynt Unpaid development $158,191 2424 Curlew Road fees Palm Harbor, FL 34683 Plan A Ventures, LLC Executory contract $122,530 14201 Banbury Way Tampa, FL 33624 Helen Biddle Executory contract $105,000 1620 Oak Hill Trail Kissimmee, FL 34747 Virginia B. Franks Trust Executory contract $92,500 4 Belleview Boulevard Apartmnet 102 Clearwater, FL 33756 EEI Properties, Inc. Executory contract $81,350 6527 Hutchison Road Odessa, FL 33556 Nighat Naseer Executory contract $71,357 9600 SW 122 Avenue Miami, FL 33186 Ronald E. Plymale Loan $70,000 495 South High Street Columbus, OH 43215 The Formula, Inc. Executory contract $40,399 10234 SW 26th Street Fort Lauderdale, FL 33324 Brenda & George Williams Executory contract $40,314 2686 Edgewater Court Fort Lauderdale, FL 33332 Anthony L. Johnson Executory contract $37,338 100 South Birch Road, #1603 Fort Lauderdale, FL 33316 Ellen J. Diamond Executory contract $36,588 4110 Georges Way Boca Raton, FL 33434 T.I.B.T. Corp Executory contract $33,307 3350 SW 137th Avenue Hollywood, FL 33027 Roger A. Knauf Executory contract $10,000 671 Woodreidge Drive Chaska, MN 55318 LEVITZ HOME: Judge Lifland Approves Joint Administration of Cases ----------------------------------------------------------------- Levitz Home Furnishings, Inc., and 12 of its direct and indirect subsidiaries seek joint administration of their bankruptcy cases for procedural purposes only. Joint administration will eliminate the need for duplicative notices, applications, and orders, thereby saving the Debtors from time and expense that would otherwise be far too burdensome on the Debtors' estates, David G. Heiman, Esq., at Jones Day, in Cleveland, Ohio, explains. The Court also will be relieved of the burden of entering duplicative orders and maintaining redundant files in thousands of cases. Joint administration will also simplify supervision of the administrative aspects of the Chapter 11 cases by the Office of the United States Trustee. Mr. Heiman clarifies that the Debtors are not seeking substantive consolidation of their cases. Hence, the rights of creditors will not be adversely affected, Mr. Heiman says. Each creditor may still file its claim against a particular estate. The Honorable the Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York approved the Debtors' request. Judge Lifland directs that all pleadings and papers filed in the Debtors' cases be captioned: UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------------x : In re : Chapter 11 : Levitz Home Furnishings, Inc., et al., : Case No. 05-45189 (BRL) : Debtors. : (Jointly Administered) : ---------------------------------------x Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. (Levitz Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEVITZ HOME: Judge Lifland Permits Interim Use of Cash Collateral ----------------------------------------------------------------- Prior to the Petition Date, Levitz Home Furnishings, Inc., and its debtor-affiliates had obtained two primary forms of secured financing: (a) Pre-Petition Credit Agreement Levitz Furniture, LLC, and Seaman Furniture Company, Inc., were borrowers under an Amended and Restated Credit Agreement dated as of May 20, 2005. General Electric Capital Corporation served as agent, Fleet Retail Group, LLC, served as documentation agent, and Wells Fargo Retail Finance, LLC, served as syndication agent for a consortium of financial institutions. (b) Pre-Petition Secured Indenture LHFI entered into an Indenture dated as of November 9, 2004, with Wells Fargo Bank National Association as trustee and collateral agent, who was subsequently replaced by U.S. Bank National Association, pursuant to which LHFI issued 12% Senior Secured Class A Notes due 2011 and 15% Senior Secured Class B Notes due 2011. To secured their obligations, the Debtors grants liens and security interests to the lenders and agents, in substantially all of their assets. As of October 6, 2005, the Debtors had outstanding borrowings under the Pre-Petition Credit Agreement of $55,266,212. As of the Petition Date, the Debtors had outstanding borrowings under the Senior Secured Indenture of $130,000,000. In the months before the Petition Date, the Debtors used borrowings under the Credit Agreement to fund their working capital needs. The Debtors are now in dire need of cash to pay their insurance policies, their employees, their landlords, and buy new furniture from their vendors. Because the Debtors filed for bankruptcy, absent court authority pursuant to 11 U.S.C. Sec. 363(c), the Debtors can't touch their lenders' cash collateral. The Debtors must use the Cash Collateral to continue operating their business, according to Coleen Colreavy, the company's chief financial officer. The Debtors propose to provide replacement liens as adequate protection in connection with their use of the cash collateral. * * * At a hearing in Manhattan on Oct. 13, 2005, the Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York permitted the Debtors on an interim basis to use their prepetition lenders' cash collateral in accordance with a budget introduced into evidence at the Interim Hearing. Judge Lifland didn't send his copy to the file room for public access. The Debtors will use the Cash Collateral to meet their payroll obligations and pay expenses essential to the preservation of their estates. To the extent that their prepetition lenders' interest in the Cash Collateral, the Debtors will provide adequate protection in the form of additional and replacement security interests and liens. The Court will convene a final cash collateral hearing on November 8, 2005, at 10:00 a.m. Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. (Levitz Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEVITZ HOME: Judge Lifland Permits Access to $80 Mil. of DIP Loans ------------------------------------------------------------------ Without immediate access to fresh financing, Levitz Home Furnishings, Inc., and its debtor-affiliates say that they will be forced to cease business operations. "This cessation of operations would likely destroy the going-concern value of the Debtors' businesses and result in it being impossible for administrative or unsecured creditors to experience any meaningful recovery in [the Debtors'] cases," Coleen Colreavy, Levitz's chief financial officer, relates. The Debtors surveyed various sources of postpetition financing. No entity the Debtors contacted was willing to provide postpetition financing on an unsecured basis. The Debtors ultimately selected a financing proposal made by General Electric Capital Corporation and Prentice Capital Management, LP. These negotiations culminated in an agreement under which the DIP Lenders will provide postpetition financing to the Debtors. The salient terms of the DIP Credit Agreement are: Borrowers: Levitz Furniture and Seaman Furniture Guarantors: Each of the other Debtors Administrative Agents: GE Capital as DIP Agent and PCM as Tranche C Agent Loan Amount: The DIP Credit Facility will consist of: (i) a $60,000,000 senior revolving credit facility, which includes: (A) a sublimit for letters of credit of up to $5,000,000, and (B) a sublimit for swingline loans of $10,000,000; (ii) a $20,000,000 senior Tranche B term loan; and (iii) a $25,000,000 senior Tranche C facility, to be provided by PCM or its assigns. The DIP Term Loan, the outstanding DIP Revolving Loans and $15,000,000 of the Tranche C DIP Facility will be available on an interim basis. The remaining $10,000,000 of the Tranche C DIP Facility will be available upon entry of a Final Order. Maturity Date: The DIP Facility matures on the earliest of July 11, 2006, the effective date of a Chapter 11 plan for any of the Debtors, or consummation of a sale of all or substantially all of the Debtors' assets. Priority and Liens: Subject to the Carve-Out, all amounts owed under the DIP Credit Facility, will: (i) be administrative claims entitled to superiority administrative claim status; and (ii) be secured by first priority, continuing, valid, binding, enforceable, non-avoidable, and automatically perfected postpetition security interests in and liens, senior and superior in priority to all other secured and unsecured creditors of the Debtors' estates, provided, however, that those liens will be subject to Prior Liens, and the liens of the Senior Noteholders in any Pre-Petition Indenture Collateral. Carve-Out:. The DIP Lenders agree to a $1,000,000 carve-out from their lien to permit payment of fees owed to the professionals, the U.S. Trustee and the bankruptcy court clerk. Pre-Petition Agent's Consent to Priming Liens: The Pre-Petition Agent has consented and agreed to the priming of its liens in the Pre-Petition Credit Collateral. DIP Lenders' Consent to Pre-Petition Agent's Subordinated Lien: The DIP Lenders have agreed that the subordinated and junior lien in favor of the Pre-Petition Agent upon the Pre-Petition Credit Collateral is a permitted lien under the DIP Credit Agreement. Repayment and Termination of Pre-Petition Debt; Adequate Protection: As adequate protection in connection with the priming of the Pre-Petition Agent's Liens: (i) the Debtors will use a portion of the proceeds from the DIP Facility to repay the Pre-Petition Lender Debt in full; and (ii) the Pre-Petition Agent will continue to hold Pre-Petition Agent Junior Liens on Pre-Petition Credit Collateral, which liens will be junior and subordinate in right of payment to all Obligations under the DIP Credit Agreement. Interest Rate: The Debtors will pay interest monthly in arrears on the DIP Loan at a rate equal to: (i) for DIP Revolving Loans which constitute swingline loans an interest rate equal to, at the borrower's option, either: (A) the base rate on corporate loans quoted by at least 75% of the nation's 30 largest banks plus 1.50%, or (B) the offered rate for the applicable LIBOR Period on Telerate Page 3750 divided by a number equal to 1.0 minus the aggregate of the rates of reserve requirements in effect two LIBOR Business Days prior to the beginning of that LIBOR Period for Eurocurrency funding plus 3.25%; (ii) for DIP Revolving Loans which are included in the letter of credit facility, 3.25% plus the applicable Base Rate or LIBOR Rate; (iii) for the DIP Term Loan, the applicable LIBOR Rate plus 6.00%; and (iv) 20% for loans under the Tranche C DIP Facility. The relevant Applicable Margins are: Applicable Revolver Index Margin 1.50% Applicable Revolver LIBOR Margin 3.25% Applicable Tranche B Loan LIBOR Margin 6.00% Applicable L/C Margin 2.00% Applicable Unused Line Fee Margin 0.375% Fees: The Debtors are required to pay: (i) to GE Capital a revolving credit facility closing fee equal to $225,000 and a $200,000 Tranche B loan closing fee; (ii) to PCM a $750,000 commitment fee; (iii) to PCM a $750,000 facility fee; (iv) to GE Capital an administrative agent fee equal to $50,000; (v) an unused facility fee on the Tranche C DIP Facility of 5.00% per annum; and (vi) $1,000,000 expense deposit to cover the reimbursement of reasonable out-of- pocket expenses of the Administrative Agent and PCM. Purpose: The Borrowers are authorized to borrow the DIP Loan under the DIP Credit Facility solely for: (a) the repayment in full of the Pre-Petition Debt on Oct. 12, 2005, subject to disgorgement in connection with a successful lien challenge; (b) working capital and letters of credit; (c) other general corporate purposes of the Borrowers, including payment of prepetition sales tax; (d) payment of the costs of administration; (e) payment of fees and amounts due under the DIP Credit Agreement; and (f) payment of prepetition obligations as the Court will allow. Closing Date: October 12, 2005. Pursuant to the DIP Credit Agreement, the Debtors will seek Bankruptcy Court approval to employ: (a) The Blackstone Group, LP as restructuring advisers and Alix Partners LLC as business consultants and crisis managers; and (b) Paul Traub's Asset Disposition Group to assist with the marketing and liquidation of the Inventory Collateral. The Lenders require the Debtors to negotiate in good faith towards a purchase agreement with Prentice on or before October 31, 2005, in a form satisfactory to the Lenders. Prentice will, subject to the approval of the Bankruptcy Court, purchase substantially all of the Debtors' assets under Section 363 of the Bankruptcy Code. The Debtors will prepare bid packages with respect to the liquidation of the full chain of store locations. A full-text copy of the 155-page DIP Credit Agreement is available for free at: http://bankrupt.com/misc/levitzDIPAgreement.pdf According to Ms. Colreavy, the proposed DIP Credit Facility will provide adequate funds to insure the proper administration of the Debtors' cases and therefore protects the value of the Debtors' assets. The DIP Credit Facility therefore meets the standard of Section 364(c) of the Bankruptcy Code. Interim Approval The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York at a hearing on Oct. 13, 2005, in Manhattan, authorized the Debtors to borrow under the DIP Credit Agreement up to $80,000,000 composed of three facilities, which may in aggregate principal amount exceed $80,000,000, but under which availability will never exceed $80,000,000, including: (1) a senior revolving credit facility not to exceed $60,000,000 in aggregate principal amount, which includes: (i) a sublimit for letters of credit up to $30,000,000, and (ii) a sublimit for swingline loans up to $10,000,000 to be provided by the DIP Agent and the DIP Lenders, (2) a senior Tranche B term loan not to exceed $20,000,000 in aggregate principal amount, and (3) a senior Tranche C facility not to exceed $25,000,000 in aggregate principal amount; provided, however, the aggregate principal amount borrowed under the Tranche C DIP Facility during the Interim Period will not exceed $15,000,000 outstanding at any one time. A copy of the Interim DIP Financing Order is available for free at http://bankrupt.com/misc/levitzDIPInterimOrder.pdf Judge Lifland will convene a Final DIP Financing Hearing on November 8, 2005, at 10:00 a.m. Objections, if any, must be filed and served not later than November 4, 2005, to: (i) the Borrowers c/o Richard H. Engman, Esq. Jones Day 222 E. 41st Street New York, NY 10017 -- and -- David Heiman, Esq. Jones Day 901 Lakeside Ave. Cleveland, OH 44114 (ii) the DIP Agent and the DIP Lenders c/o the DIP Agent's counsel Tina L. Brozman, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022 Patrick J. Trostle, Esq. Bingham McCutchen LLP One State Street Hartford, CT 06103 -- and -- Robert A. J. Barry, Esq. Bingham McCutchen LLP 150 Federal Street Boston, MA 02110 (iii) counsel for Prentice Capital Management, LP, as Tranche C Agent under the Tranche C DIP Facility D.J. Baker, Esq. Alexandra Margolis, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036-6522 (iv) the United States Trustee's Office 33 Whitehall Street, 21st Floor New York, New York 100040 Attn: Greg W. Zipes, Esq. Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. (Levitz Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEVITZ: Prepares for Rapid Sec. 363 Sale to Prentice Capital ------------------------------------------------------------ Levitz Home Furnishings, Inc., and its debtor-affiliates have agreed to prepare bid packages with respect to the liquidation of the retail furniture store chain within the next ten days and negotiate in good faith to enter into a purchase agreement with Prentice Capital Management LP on or before Oct. 31, 2005, that, subject to higher and better offers under the auspices of the U.S. Bankruptcy Court, provides for the sale of substantially all of Levitz's assets to Prentice under Section 363 of the Bankruptcy Code. No proposed purchase price is disclosed in the papers delivered to the U.S. Bankruptcy Court for the Southern District of New York. Levitz has said it will continue to operate its retail furniture stores in the ordinary course of business while these negotiations proceed. Prentice Capital can be reached at: Prentice Capital Management, LP 623 Fifth Avenue, 32nd Floor New York, NY 10022 Attention: Michael Zimmerman Prentice is represented by: Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036-6522 Attention: Peter J. Neckles, Esq. Skadden Arps represented Levitz in its first chapter 11 restructuring. Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. LORAL SPACE: Sells Cyberstar's Shares & Claims to Sasani for $385K ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved Loral Space & Communications Ltd. and its debtor- affiliates' request for a private sale to Sasani Limited of: a) 50 ordinary shares of stock held by Cyberstar L.P., in Global Access Telecommunications Services South Africa Holdings (Pty) Ltd., and b) any claims that Cyberstar L.P., or any of its subsidiaries have against GA Holdings, free and clear of any liens, claims and encumbrances, pursuant to section 363(b), (f) and (m) of the Bankruptcy Code and Bankruptcy Rules 2002 and 6004. Cyberstar is a debtor-affiliate of Loral Space. The Court approved the asset sale on Sept. 30, 2005. The Debtors explain that following good faith, arms-length negotiations that have been ongoing since September 2003 between them and Cyberstar, they entered into an Agreement for the Sale of Shares and Claims, calling for the sale of Cyberstar's shares or equity interests and claims in GA Holdings for a total amount of $385,000. The Debtors relate that a private sale of Cyberstar's equity interest and claims in GA Holdings was appropriate because a market for a minority interest in GA Holdings did not exist. The Debtors determined that the purchase price of 385,000 paid by Sasani under the Sale Agreement is fair value, reasonable and in fact greater than could otherwise be obtained through a public sale of the Equity Interest and Claims. Summary of the Sale Agreement The Sale Agreement states that: 1) the Purchase Price of $385,000 is comprised of $56,000 for the equity interests and $329,000 for the claims; 2) Sasani will assign and transfer all of its rights and obligations under the Sale Agreement to any company or other legal entity controlled or substantially controlled by Sasani, provided however, that Sasani must provide written notice Cyberstar and substituted purchaser must agree in writing to be bound to all the terms and conditions imposed on Sasani under the Sale Agreement; and 3) all costs and taxes regarding the transfer and registration of the Shares by Cyberstar to Sasani, including all sales, stamp, documentary, use, filing, transfer and other taxes and fees will be borne by Sasani. Loral Space & Communications -- http://www.loral.com/-- is a satellite communications company. It owns and operates a fleet of telecommunications satellites used to broadcast video entertainment programming, distribute broadband data, and provide access to Internet services and other value-added communications services. Loral also is a world-class leader in the design and manufacture of satellites and satellite systems for commercial and government applications including direct-to-home television, broadband communications, wireless telephony, weather monitoring and air traffic management. The Company and various affiliates filed for chapter 11 protection (Bankr. S.D.N.Y. Case No. 03-41710) on July 15, 2003. Stephen Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. As of Dec. 31, 2004, the Company listed assets totaling approximately $1.2 billion and liabilities totaling approximately $2.3 billion. The Court confirmed the Debtors' chapter 11 Plan on Aug. 1, 2005. MARKS PAPER: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Marks Paper Company, Inc. P.O. Box 427 Metairie, Louisiana 70001 Bankruptcy Case No.: 05-20537 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Allen Marks 05-19960 Type of Business: The Debtor is the oldest family-owned paper distributorship in Louisiana. See http://www.markspaper.com/ Chapter 11 Petition Date: October 14, 2005 Court: Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtors' Counsel: Jan Marie Hayden, Esq. Heller, Draper, Hayden, Patrick & Horn, L.L.C. 650 Poydras Street, Suite 2500 New Orleans, Louisiana 70130 Tel: (504) 581-9595 Fax: (504) 522-0949 - and - T. Randolph Richardson, Esq. 1010 Common Street, Suite 300 New Orleans, Louisiana 70112 Tel: (504) 581-7070 Fax: (504) 581-7083 Estimated Assets Estimated Debts ---------------- --------------- Marks Paper Company, Inc. $1 Million to $1 Million to $10 Million $10 Million Allen Marks $1 Million to $1 Million to $10 Million $10 Million The Debtors did not file lists of their 20 Largest Unsecured Creditors. MAYTAG CORP: Fitch Cuts Issuer Default Rating Two Notches to B+ --------------------------------------------------------------- Fitch Ratings has downgraded the issuer default rating of Maytag Corp. to 'B+' from 'BB' and has assigned a recovery rating of 'R2' to MYG's unsecured credit facility and its senior unsecured notes. The existing 'BB' ratings on the unsecured credit facility and the unsecured notes have not changed because of their superior recovery prospects. After completion of a new asset-based, senior secured facility, which will replace the existing facility, Fitch expects to withdraw its ratings on the existing facility and lower the rating and recovery rating on MYG's senior unsecured notes to 'B+' and 'R4', respectively. All ratings remain on Rating Watch Evolving, where they were placed on July 19, 2005. MYG's definitive merger agreement with Whirlpool Corp. remains subject to Department of Justice and the company's stockholder approvals. On July 2, 2005, MYG had approximately $976 million of notes outstanding. Fitch has lowered these ratings: -- IDR to 'B+' from 'BB'. Fitch also assigns these recovery ratings: -- $300 million revolving credit facility 'R2'; -- Senior unsecured notes 'R2'. Expected rating actions by Fitch include: -- $300 million revolving credit facility - withdrawn; -- Senior unsecured notes to 'B+/R4'. The downgrade primarily reflects a weaker operating performance than Fitch had anticipated with MYG's statement that results for the third quarter of 2005 and full year will be significantly lower than the guidance previously provided, and MYG would report a net loss in the third quarter before any restructuring charges - - MYG reported $7.5 million of net income in the third quarter of 2004 including restructuring charges. Contributing to these poor results are high costs driven by high manufacturing overhead, increasing distribution and fuel expenses, rising raw material costs, and an unfavorable product pricing/mix, primarily in floor care. In addition, MYG will establish a new asset-based $600 million five-year revolving credit facility secured by accounts receivable and inventory of certain Maytag subsidiaries. This will subordinate the unsecured note holders and lessen their recovery in a distressed situation. The facility, which is unrated by Fitch, will replace the current $300 million unsecured credit facility and is expected to be completed early in the fourth quarter of 2005. A successful acquisition by Whirlpool Corp. could lead to a ratings upgrade for MYG. If the acquisition is not completed, MYG's performance declines beyond current expectations, and/or the position of unsecured note holders within the capital structure weakens, MYG's ratings could fall further. Fitch's current issuer default rating on Whirlpool Corp. is 'BBB+', Rating Watch Negative. For additional information, see Fitch's press release on Whirlpool Corp. dated Oct. 13, 2005 and available on the Fitch Ratings web site at http://www.fitchratings.com/ MESABA AVIATION: Wants Access to MAIR's $35 Million DIP Facility ---------------------------------------------------------------- Mesaba Aviation, Inc., asks the U.S. Bankruptcy Court for the District of Minnesota to approve its DIP credit facility with MAIR Holdings. John Spanjers, president and chief operating officer of Mesaba, tells the Court that without access to financing, Mesaba will be unable to meet its postpetition working capital needs and operate its business in the normal course. Mesaba engaged in good faith, extensive arm's-length negotiations with MAIR Holdings, Inc., to put together a debtor-in-possession financing facility that would provide the company with post- petition working capital financing. On October 12, 2005, Mesaba and MAIR entered into a commitment letter. MAIR Holdings agrees to provide up to $35,000,000 in secured financing to Mesaba. Mesaba agrees to pay the money back, pay fees, and abide by a number of typical, but restrictive, covenants. The DIP Credit Facility consists of: (1) a $15,000,000 Tranche A revolving credit facility (with a $6,000,000 sublimit to back standby letters of credit); and (2) a $20,000,000 Tranche B revolving facility. Mr. Spanjers tells Judge Kishel, Mesaba has been unable to obtain postpetition financing from any other lender on terms and conditions more favorable than those set forth in the Commitment Letter. Mesaba also seeks permission to grant MAIR Holdings a first priority lien on all of Mesaba's assets to secure its obligations to MAIR under or with respect to the DIP Credit Facility. The salient terms of the DIP Credit Facility are: Use of Proceeds: Proceeds of the Loans will be used for general corporate purposes, including working capital and capital expenditures, professional fees and other payments or expenditures authorized by the Court, in each instance, to the extant permitted under the Agreement. Term: Borrowings will be repaid in full, and the Credit Facility will terminate, at the earliest of: * 18 months after the date of signing of the Agreement -- the Maturity Date; * the substantial consummation of a plan of reorganization that is confirmed by the Court pursuant to an order reasonably satisfactory to MAIR; and * the acceleration of the Loans and the termination of the Credit Facility in accordance with the Agreement. Letters of Credit: Upon Mesaba's request, MAIR will cause Letters of Credit to be issued for Mesaba's account by Wells Fargo Bank, N.A. or another bank, each of which will be reasonably satisfactory to the Parties. All Letters of Credit will expire no later than 15 days prior to the Maturity Date. Closing Date: Closing Date will occur promptly upon, but no later than 10 days after, the entry of the DIP Financing Order. Priority & Liens: All borrowings and reimbursement obligations under Letters of Credit and other obligations with respect to the Credit Facility, will at all times be: * entitled to superpriority claim status; * secured by a perfected first priority lien on, among others, Mesaba's present and future accounts receivable, customer contracts, intercompany receivables, spare parts inventory, routes, slots, QEC kits, ground service equipment, flight simulators, airport gate leaseholds, and all their proceeds, and on all other property that is not subject to valid, perfected and non-avoidable liens as of the Petition Date, and on all cash and cash equivalents; * secured by a perfected junior lien on all tangible and intangible property of Mesaba's estate that is subject to valid, perfected and non-avoidable liens existing as of the Petition Date or to valid liens in existence at that time that are perfected subsequent to the Petition Date as permitted by Section 546(b) of the Bankruptcy Code. Carve-out: MAIR agrees to a carve-out from its superpriority lien to permit payment of up to $1,500,000 to professionals retained by the company and any official committees plus all fees payable to the U.S. Trustee or the Court Clerk pursuant to 28 U.S.C. Sec. 1930 The Carve-Out may not be used in connection with the investigation, initiation or prosecution of any claims, causes of action, adversary proceedings or other litigation against MAIR. Fees payable to MAIR: (1) a $350,000 Facility Fee; (2) an Unused Line Fee equal to 0.05% per annum for each dollar not borrowed from MAIR; (3) Customary letter of credit fees to any Fronting Bank fees for fronting, issuance, amendments and processing of Letters of Credit; (4) a $100,000 Work Fee (refundable if the DIP Facility doesn't close); and (5) a $75,000 Commitment Fee (which will be credited against he Facility Fee to the extent MAIR's expenses are less than $75,000). Interest rate: Interest on the Loans will be computed and payable monthly, in arrears, at a rate equivalent to (x) the Base Rate plus the Applicable Margin or (y) at Mesaba's option, LIBOR plus the Applicable Margin. The "Applicable Margin" means, from time to time, the percentages per annum: Loan LIBOR plus Base Rate plus ---- -------- -------------- Tranche A Loan 4.00% 3.00% Tranche B Loan 6.00% 5.00% Reporting: Mesaba will furnish MAIR: -- on a weekly basis, Mesaba's rolling 13-week cash flow projections; and -- within 30 days after the beginning of each fiscal year, an operating budget for that fiscal year. Disposition of Assets: Mesaba promises MAIR that it will not sell or otherwise dispose of any assets except for: -- sales in arm's-length transactions, at fair market value and for cash in an aggregate amount not to exceed $50,000; and -- other disposals to be mutually agree upon. Financial Covenants: Mesaba covenants that it will not make capital expenditures during the fiscal quarter ending December 31, 2005, greater than $1,500,000. The DIP Loan may be extended, subject to certain conditions. An outline of the terms and conditions for the parties' DIP Credit Facility is available at no charge at: http://bankrupt.com/misc/mesabadipfacility.pdf MAIR is represented by Haynes and Boone, LLP, in Mesaba's case. The Court will convene a hearing on November 29, 2005, at 9:30 a.m. to consider the Debtor's request. Any response to the request must be filed and delivered not later than November 23. Unless a response opposing the Motion is timely filed, the Court may grant the Debtor's request without a hearing. 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 Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 215/945-7000) METROPOLITAN MORTGAGE: Reed & Giesa Approved as Special Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Washington gave Metropolitan Mortgage & Securities Co., Inc., and its debtor-affiliate, Summit Securities Inc., permission to employ Reed & Giesa, P.S., as its special litigation counsel for Avoidance Actions Representation. The Court approved the Debtors' request on Oct. 12, 2005. Reed & Giesa will counsel, advise and represent the Debtors in connection with any potential or actual disputes, claims, or formal or informal dispute resolution proceedings including mediation, arbitration, negotiation, lawsuit, litigation, case or other proceedings in connection with Avoidance Actions Representation. John P. Giesa, Esq., a Member of Reed & Giesa, is one of the lead attorneys of the Firm performing services to the Debtors. Mr. Giesa charges $240 per hour for his services. Mr. Giesa reports Reed & Giesa's professionals bill: Professional Hourly Rate ------------ ----------- D. Roger Reed $240 Thomas A. Wolf $215 Timothy J. Giesa $205 Aaron D. Goforth $165 Designation Hourly Rate ----------- ----------- Legal Assistants $90 Legal 9 Intern $85 Law Clerks $80 Reed & Giesa assures the Court that it does not represent any interest materially adverse to the Debtors or their estates. Headquartered in Spokane, Washington, Metropolitan Mortgage & Securities Co., Inc., owns insurance businesses. Metropolitan filed for Chapter 11 protection (Bankr. E.D. Wash. Case No. 04- 00757), along with Summit Securities Inc., on Feb. 4, 2004. Bruce W. Leaverton, Esq., at Lane Powell Spears Lubersky LLP and Doug B. Marks, Esq., at Elsaesser, Jarzabek, Anderson, Marks, Elliot & McHugh represent the Debtors in their restructuring efforts. When Metropolitan Mortgage filed for chapter 11 protection, it listed total assets of $420,815,186 and total debts of $415,252,120. MIRANT CORP: Asks Court to Approve Deutsche Bank Consent Order -------------------------------------------------------------- Mesquite Investors, L.L.C., and Shady Hills Holding Company, L.L.C., two of El Paso North America's affiliates, asserted eight proofs of claim against either Mirant Corporation, Mirant Americas, Inc., or Mirant Americas Generation LLC: Claimant Claim No. Claim Amount Debtor Asserted -------- --------- ------------ --------------- Mesquite 7250 $29,250,000 MAGi Mesquite 7251 29,250,000 Mirant Corp. Mesquite 7252 29,250,000 Mirant Corp. Mesquite 7254 29,250,000 MAI Shady Hills 7255 15,750,000 MAI Shady Hills 7257 15,750,000 MAG Shady Hills 7258 15,750,000 Mirant Corp. Shady Hills 7259 15,750,000 Mirant Corp. Ian T. Peck, Esq., at Haynes and Boone, LLP, in Dallas, Texas, relates that the Claims arose out of two purchase and sale agreements that Mesquite and Shady Hills entered into with MAI. The Purchase and Sale Agreements contemplated that MAI would assign to MAGi its obligations under the Purchase and Sale Agreements and the two wholly owned subsidiaries. But MAI assigned neither. Mirant guaranteed MAI's obligations under the Purchase and Sale Agreements. Mesquite and Shady Hills subsequently assigned their Claims to Deutsche Bank Securities, Inc. The Debtors objected to Deutsche Bank's Claims. The Debtors asked the U.S. Bankruptcy Court for the Northern District of Texas to disallow and expunge the Claims against: -- Mirant as fraudulent transfers; and -- MAGi because Deutsche Bank Securities failed to allege facts sufficient to support the Claims. On July 13, 2005, the Debtors commenced Adversary Case No. 05-04143 against Mesquite, Shady Hills and Deutsche Bank. The Debtors also asked the Court to compel Deutsche Bank to produce certain documents in relation to the adversary proceeding. Barely a month after, the Bankruptcy Court stayed the Debtors' Objection and the Adversary Proceeding. As assignee of the Claims, Deutsche Bank filed and served informal and formal objections to the Debtors' Disclosure Statement. After the Debtors and certain parties entered into the Mirant Plan Term Sheet dated September 7, 2005, Deutsche Bank and the Debtors entered into a stipulation and consent order to avoid the cost and expense of litigation. The general terms of the Court-approved Stipulation and Consent Order are: a. Under the terms of the Amended Plan, Deutsche Bank or its assigns will have a single Allowed Mirant Debtor Class 3 Unsecured Claim for $53,000,000 against MAI on the Effective Date of the Plan. The Allowed Amount includes both principal and interest at a floating rate equal to the sum of the Prime Rate plus 200 basis points from the Petition Date through December 31, 2005; b. In the event the Effective Date has not occurred by December 31, 2005, the Allowed Claim will continue to accrue interest through and including the Effective Date at a floating rate equal to the sum of the Prime Rate plus 200 basis points, to be reset and compounded quarterly in accordance with the Purchase Agreements; c. If a holder of a claim similar to the Deutsche Bank's Claims receives treatment that is more favorable than the treatment afforded to Deutsche Bank on account of the Allowed Claim, then Deutsche Bank will also receive that more favorable treatment on a ratable basis, including additional consideration, if applicable; d. If the Debtors' Amended Disclosure Statement and Plan do not alter the treatment of the Deutsche Bank's Claims as provided under the Consent Order, then Deutsche Bank agrees to withdraw, without prejudice, the Disclosure Statement Objections and agrees to support the Amended Disclosure Statement and confirmation of the Amended Plan; e. Deutsche Bank Securities will withdraw Claim Nos. 7250 7251, 7252, 7258 and 7259, with prejudice, on the Effective Date of the Amended Plan; f. The Debtors will withdraw, without prejudice, their Objection to the Claims and the Motion to Compel on the Effective Date of the Amended Plan; and g. The parties will submit an order dismissing the Adversary Proceeding, with prejudice, after the Effective Date of the Amended Plan. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 80; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORP: Court Approves Metromedia Stipulation on Sale Dispute ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas approved a stipulation inked between Mirant Americas Energy Marketing and Metromedia Energy, Inc., resolving their disputes regarding their fiduciary duties under a Master Aggregator Sale/Purchase Agreement dated Nov. 2, 2001, and a related Security and Lockbox Agreement. As reported in the Troubled Company Reporter on Sept. 6, 2005, Mirant Corporation and its debtor-affiliates filed a complaint against Metromedia Energy alleging breaches of fiduciary duties under a Master Aggregator Sale/Purchase Agreement and a related Security and Lockbox Agreement. The Debtors asked the U.S. Bankruptcy Court for the Northern District of Texas for compensatory damages totaling $33,604,778, plus prejudgment interest, and attorneys' fees and costs. The Debtors later dismissed their complaint against Metromedia without prejudice. Michelle C. Campbell, Esq., at Haynes and Boone, LLP, in Dallas, Texas, relates that on September 11, 2003, Metromedia filed a Demand for Arbitration before the American Arbitration Association. "MAEM and Metromedia have been involved in the Arbitration for almost two years. The Arbitration between the parties has been extremely contentious and the parties continue to disagree as to what amounts are owed to MAEM by Metromedia." But prior to the scheduled arbitration hearing, Ms. Campbell tells the Court that the parties agreed to an arbitration award and judgment. The material terms of the Stipulation are: 1. MAEM and Metromedia will jointly instruct the three arbitrators assigned to the Arbitration to enter a $25 million arbitration award to MAEM; 2. Unless otherwise agreed by the parties, MAEM will observe a 60-day standstill on any attempts to execute on the Agreed Award, other than its commencement of a proceeding in the United States District Court for the Northern District of Texas, in which the Arbitration was brought to confirm the Agreed Award and obtain a judgment; and 3. Upon the approval of the Stipulation by MAEM's senior management and the Court, MAEM will commence the Confirmation Case. Metromedia agrees to facilitate in MAEM's swift obtaining of the Confirmation Judgment. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORPORATION: CARE Withdraws $469.8 Million Claim ------------------------------------------------------- Californians for Renewable Energy, Inc., sought and obtained U.S. Bankruptcy Court for the Northern District of Texas' approval to withdraw its claim for $469.8 million, in Mirant Corporation and its debtor-affiliates' chapter 11 cases. Hence, the claim is disallowed and expunged in its entirety with prejudice. As reported in the Troubled Company Reporter on Aug. 17, 2004, the Debtors asked the Court to disallow and expunge in its entirety CARE's claim for $469,854,000 since: (a) CARE is not a creditor of the Debtors and has no standing to assert the Claim; (b) the Claim is entirely duplicative of the claims filed by the California Department of Water Resources, the party who would have the real economic and legal interest in the Claim; and (c) the Claim was not filed against any particular Debtor. Michelle C. Campbell, Esq., at White & Case, LLP, in Miami, Florida, explained that CARE is a private non-profit corporation. CARE has no role in administering or regulating California's energy markets, and is not a participant in any of California's wholesale energy markets. CARE describes its core function as that of "educating" the public about alternative forms of renewable energy. "Its modus operandi, however, consists of little more than pursuing frivolous litigation at [the Federal Energy Regulatory Commission] against energy sellers, including the Debtors," Ms. Campbell remarked. "The Debtors estimate that, since October 6, 2000, CARE has cost the Debtors tens, if not hundreds, of thousands of dollars in unnecessary legal fees alone," Ms. Campbell told the Court. "The Claim constitutes but one further example of CARE's penchant for meritless litigation and should be disallowed in its entirety." Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 75 Bankruptcy Creditors' Service, Inc., 215/945-7000) N. CAROLINA MEDICAL: S&P Pares Revenue Bond Rating to BB from BBB- ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its standard long-term rating and underlying rating on North Carolina Medical Care Commission's revenue debt outstanding two notches to 'BB' from 'BBB-', issued for Maria Parham Medical Center. The outlook is negative. The ratings and outlook reflect the hospital's precipitous decline in profitability and liquidity over the past three years; failure to meet original feasibility projections and an inability to make the required adjustments to financial operations; sharp volume decline; turnover of senior management in 2005; and limited local economy, which has experienced a recent downturn. Factors supporting the ratings include the expectation that the replacement facility that opened in May 2005 will improve the hospital's business position and attract new physicians and patients, the hospital's pricing flexibility due to its market niche as a low-cost provider, and the hospital's leading market share in the primary service area. "We presume Maria Parham's losses will continue in fiscal 2006, but its volume and business operations should benefit from the newly constructed replacement facility's being open for a full year in 2006," said Standard & Poor's credit analyst Anita Varghese. "If management fails to articulate and implement a turnaround plan, however, we will likely lower the rating again." Maria Parham's financial results over the past three years have been disappointing and far behind management's original projections. Operating performance has declined since fiscal 2002 due to an increase in bad debt, decreased governmental reimbursement, volume declines, and the departure of a few physicians. Operating performance declined to a $1.2 million, or negative 1.6%, operating loss in fiscal 2004 from a $2.7 million, or 4.2%, operating profit in fiscal 2002. Excess income declined to break even in fiscal 2004 from $3.2 million, or 5%, in fiscal 2002. In the nine months year-to-date through June 30, 2005, Maria Parham posted operating and excess income losses of $2.0 million, or a negative 3.7%, and $1.3 million, or a negative 2.5%, respectively. Management is budgeting to end fiscals 2005 and 2006 with losses of $3.0 million and $3.3 million, respectively. Management and the board are currently reviewing cost-savings initiatives in concept, but no turnaround plan has been formalized or implemented yet. Management plans to price more competitively now that the replacement facility has been completed, and it will implement an 8.5% overall price increase for fiscal 2006. Liquidity was expected to grow during the hospital's capitalized interest period over the past couple of years. Instead, weaker financial results drove unrestricted cash and investments down to $9.3 million, or 48 days' cash on hand, as of June 30, 2005, from $15.7 million, or 99 days, at fiscal year-end 2002, which is sharply lower than the worst-case scenario projections in the hospital's feasibility study. The rating action affects roughly $50.8 million of revenue debt outstanding. NEXEN INC: Earns $615 Million of Net Income in Third Quarter ------------------------------------------------------------ Nexen Inc. delivered strong financial results with cash flow of $488 million and net income of $615 million in the third quarter of 2005. Strong oil and gas commodity prices, improving product price differentials and gains on dispositions helped generate these results. The Company accomplished these results even after our marketing division recorded a loss of $162 million in the third quarter. As a marketer of natural gas, the Company actively holds natural gas in storage and pipeline capacity to transport gas from Alberta to eastern markets. The Company uses financial instruments to preserve the economic value of these physical assets. During the quarter, Hurricanes Katrina and Rita caused unprecedented volatility in the market. This resulted in a significant increase in the value of these physical assets. At the same time, the value of the financial instruments protecting the value of these assets decreased. While accounting rules require us to recognize the loss on the financial instruments, they do not allow the Company to recognize the gain on the offsetting physical assets until the gas is delivered and sold. Had the Company been able to recognize the economic value of these offsetting assets, marketing would have reported income of $33 million rather than a loss of $162 million for the quarter. The Company expects to recognize this difference of $195 million in income over the next two quarters as the gas is delivered and sold in eastern markets. Income was further reduced by $260 million related to stock-based compensation. The Company has a broad stock-based compensation plan to attract and retain quality employees in a highly competitive environment and have recognized stock-based compensation expense since 2003. The Company's common shares appreciated 49% during the quarter, adding approximately $5 billion in shareholder value. Cash flow was reduced by $33 million as a result of this charge. Income was increased by $418 million as a result of gains on dispositions. The Company sold Canadian conventional oil and gas properties for proceeds of $946 million (before closing adjustments) during the quarter. The properties contributed approximately 18,300 boe/d and $56 million of cash flow in the second quarter and 6,500 boe/d and $23 million of cash flow in the third quarter. The Company recognized gains totaling approximately $225 million from these sales. During the quarter, the Company also raised $500 million from the sale of approximately 39% of our chemical business to Canexus Income Fund. The Company also recognized a gain of $193 million on this disposition. Quarterly Dividend The Board of Directors has declared the regular quarterly dividend of $0.05 per common share payable January 1, 2006, to shareholders of record on December 9, 2005. Nexen Inc. is an independent, Canadian-based global energy and chemicals company, listed on the Toronto and New York stock exchanges under the symbol NXY. The company is uniquely positioned for growth in the UK North Sea, the deep-water Gulf of Mexico, the Athabasca oil sands of Alberta, the Middle East and offshore West Africa. Tristone Capital and TD Securities acted as advisors to Nexen on this transaction. * * * As reported in the Troubled Company Reporter on Mar. 10, 2005, Standard & Poor's Ratings Services assigned its 'BBB-' senior unsecured debt rating to Nexen Inc.'s two-tranche US$1.040 billion bond issue. Proceeds from the 10-year US$250 million issue, maturing in 2015, and 30-year US$790 million issue, maturing in 2035, will be used to repay a portion of the company's existing US$1.5 billion acquisition bridge facility. At the same time, Standard & Poor's affirmed its 'BBB-' corporate credit and senior unsecured debt ratings and its 'BB+' subordinated debt rating on the company. S&P says the outlook is stable. NORTEL NETWORKS: Board Declares Dividend on Preferred Shares ------------------------------------------------------------ Nortel Networks Limited's board of directors declared a dividend on each of the outstanding Cumulative Redeemable Class A Preferred Shares Series 5 (TSX:NTL.PR.F) and the outstanding Non-cumulative Redeemable Class A Preferred Shares Series 7 (TSX:NTL.PR.G). The dividend amount for each series is calculated in accordance with the terms and conditions applicable to each respective series, as set out in the Company's articles. The annual dividend rate for each series floats in relation to changes in the average of the prime rate of Royal Bank of Canada and The Toronto-Dominion Bank during the preceding month and is adjusted upwards or downwards on a monthly basis by an adjustment factor which is based on the weighted average daily trading price of each of the series for the preceding month, respectively. The maximum monthly adjustment for changes in the weighted average daily trading price of each of the series will be plus or minus 4.0% of Prime. The annual floating dividend rate applicable for a month will in no event be less than 50% of Prime or greater than Prime. The dividend on each series is payable on December 12, 2005, to shareholders of record of such series at the close of business on November 30, 2005. Nortel Networks -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on July 8, 2005, Moody's Investors Service confirmed the ratings of Nortel Networks Corporation (holding company) and Nortel Networks Limited (principal operating subsidiary and debt guarantor). The ratings confirmation concludes a ratings review for possible downgrade under effect since April 28, 2004. Moody's also assigned a new Speculative Grade Liquidity rating of SGL-3 to Nortel, reflecting adequate liquidity to fund debt maturities and other cash outflows over the next 12 months. The ratings outlook is negative. The ratings confirmed include: Nortel Networks Corporation: -- Senior Secured rating at B3 (guaranteed by Nortel Networks Limited) Nortel Networks Limited: -- Corporate Family Rating (formerly known as the Senior Implied rating) at B3 -- Senior Secured rating at B3 -- Issuer rating (senior unsecured) at Caa1 -- Preferred Stock rating at Caa3 Nortel Networks Capital Corporation: -- Senior Secured rating at B3 (guaranteed by Nortel Networks Limited). This new rating was assigned: -- Speculative Grade Liquidity rating of SGL-3. As reported in the Troubled Company Reporter on Jan. 31, 2005, Standard & Poor's Ratings Services affirmed its 'B-' credit rating on Nortel Networks Lease Pass-Through Trust certificates series 2001-1 and removed it from CreditWatch with negative implications, where it was placed Dec. 8, 2004. The affirmation was based on a valuation analysis of properties that provide security for the two notes that serve as collateral for the pass through trust certificates. The initial rating on the securities relied upon the ratings assigned to both Nortel Networks Ltd. and ZC Specialty Insurance Co. The Dec. 8, 2004, CreditWatch placement followed the Dec. 3, 2004 withdrawal of the rating assigned to ZC. O'CONNOR'S ALEXANDER: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: O'Connor's Alexander Hamilton Inn, Inc. 21 West Park Row Clinton, New York 13323 Bankruptcy Case No.: 05-72195 Type of Business: The Debtor operates a restaurant and bar and offers catering services. Chapter 11 Petition Date: October 14, 2005 Court: Northern District of New York (Utica) Judge: Chief Judge Stephen D. Gerling Debtor's Counsel: Michael E. Basile, Esq. Higgins, Roberts, Beyerl & Coen, P.C. 1430 Balltown Road Schenectady, New York 12309-4332 Tel: (518) 374-3399 Total Assets: $23,400 Total Debts: $1,586,326 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Withholding & FICA $778,532 Insolvency Group 1 Taxes since 2001 Niagara Center, 2nd Floor including interest & 130 South Elmwood Avenue penalties Buffalo, NY 14202 New York State Department of Warrants issued $375,305 Taxation & Finance for withholding TSRD - Business taxes with Withholding Tax interest and W.A. Harriman State Campus penalties Albany, NY 12237-0001 New York State Department of Warrants issued $375,305 Taxation & Finance for withholding TSRD - Business taxes with Withholding Tax interest and W.A. Harriman State Campus penalties Albany, NY 12237-0001 Select Energy New York, Inc. $11,942 Nexstar Broadcasting, Inc. Advertising $6,423 ACC Operations Inc. $5,436 dba Adelphia Media NYSEG Solutions, Inc. $5,365 Sugartown Worldwide, Inc. $5,313 NYSIF $4,644 MVP Health Care, Inc. $3,697 CE Bardusch & Son Inc. $3,438 dba Taylor Rental Voce & Iles, CPA's $2,868 Niagara Mohawk Power Corp. $2,502 Village of Clinton $2,253 Steffen Publishing $1,247 WLZW FM $1,240 Adelphia Media $418 Verizon $319 Feher Rubbish Removal, Inc. $42 Personnel Concepts $40 OAK CREEK: Wants to Employ Gibson Dunn as Bankruptcy Counsel ------------------------------------------------------------ Oak Creek Park, LLC, asks the U.S. Bankruptcy Court for the Northern District of California for permission to employ Gibson, Dunn & Crutcher LLP as its general bankruptcy counsel. Gibson Dunn will: a) advise the Debtor of its rights, powers and duties as debtor-in-possession under chapter 11 of the Bankruptcy Code; b) prepare, on behalf of the Debtor, all necessary and appropriate applications, motions, proposed orders, other pleadings, notices, schedules, and other documents and review all financial and other reports to be filed in this chapter 11 case; c) advise the Debtor concerning and preparing responses to, applications, motions, other pleadings, notices, and other papers that may be filed and served in this chapter 11 case; d) advise the Debtor with respect to assistance in the negotiation and documentation of, financing agreements and related transactions; e) review the nature and validity of any liens asserted against the Debtor's property and advise the Debtor concerning the enforceability of such liens; f) advise the Debtor regarding its ability to initiate actions to collect and recover property for the benefit of its estate; g) counsel the Debtor in connection with the formulation, negotiation and promulgation of a plan of reorganization and related documents; h) advise and assist the Debtor in connection with any potential property dispositions; i) advise the Debtor concerning executory contract and unexpired lease assumptions, assignments and rejections and lease restructurings and recharacterizations; j) assist the Debtor in reviewing, estimating, and resolving claims asserted against the Debtor's estate; k) commence and conduct any and all litigation necessary or appropriate to assert rights held by the Debtor, protect assets of the Debtor's chapter 11 estate, or otherwise further the goal of completing the Debtor's successful reorganization; l) provide corporate, real estate and other general nonbankruptcy services to the Debtor to the extent requested by the Debtor; and m) perform all other necessary or appropriate legal services in connection with this chapter 11 case for or on behalf of the Debtor. Desmond Cussen, Esq., a Gibson Dunn associate, discloses his firm's professionals current hourly rates: Attorney Designation Hourly Rate -------- ----------- ----------- Fred Pillon Partner $675 Oscar Garza Partner $595 Desmond Cussen Associate $495 Eric J. Fromme Associate $475 Kenneth A. Glowacki Associate $395 Helen Canafax Paralegal $225 To the best of the Debtor's knowledge, Gibson Dunn does not represent any interest adverse to the Debtor's estate. Headquartered in San Francisco, California, Oak Creek Park, LLC filed for chapter 11 protection on Sept. 21, 2005 (Bankr. N.D. Calif. Case No. 05-56102). When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. OAK CREEK: Taps David Dowdney as Responsible Person --------------------------------------------------- Oak Creek Park, LLC, asks the U.S. Bankruptcy Court for the Northern District of California, San Jose Division, to designate David Dowdney as a Court-appointed Responsible Person. Mr. Dowdney is the vice president of Portfolio Management for Divco West Group, LLC. Divco West provides employees and support to Divco West Property Services, LLC, which is the property manager of the real property located at 1820 McCarthy Boulevard, 1840 McCarthy Boulevard and 1860 Barber Lane. The Debtor is the owner of the three properties with Mr. Dowdney acting as the asset manager. Court documents didn't disclose how much Mr. Dowdney will be paid. Headquartered in San Francisco, California, Oak Creek Park, LLC filed for chapter 11 protection on Sept. 21, 2005 (Bankr. N.D. Calif. Case No. 05-56102). Desmond J. Cussen, Esq., at Gibson, Dunn and Crutcher represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. OAK CREEK: Gets Interim Okay to Use GMAC's Cash Collateral ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California, San Jose Division, gave Oak Creek Park, LLC, interim approval to use cash collateral securing repayment of indebtedness to GMAC Commercial Mortgage Corporation. The Debtor issued a fixed rate note in the original principal sum of $19,250,000. GMAC acquired the Note in January 2005. The current oustanding balance of the loan is approximately $18.6 million. The Note is secured by a lien on the Debtor's real property comprised of three fully-occupied commercial office buildings. The Debtor's property is valued at $15 million, making GMAC's interest undersecured. The Debtor believes that GMAC's interest in the cash collateral is adequately protected pursuant to Section 361 of the Bankruptcy Code because the encumbered fund will be used to preserve and maintain the going concern value of Oak Creek's property. The Court will convene a hearing on October 25, 2005, at 1:30 p.m., to consider final approval of the cash collateral use. The Debtor's use of the cash collateral is in accordance with an approved monthly budget, projecting: October November December ------- -------- -------- Operating Revenue $195,506 $195,506 $195,506 Total Expenses 22,663 96,525 151,046 Headquartered in San Francisco, California, Oak Creek Park, LLC filed for chapter 11 protection on Sept. 21, 2005 (Bankr. N.D. Calif. Case No. 05-56102). Desmond J. Cussen, Esq., at Gibson, Dunn and Crutcher represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. ODYSSEY RE: S&P Assigns BB Rating to $100M Preferred Stock ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' preferred stock rating to Odyssey Re Holding Corp.'s $50 million Series A and $50 million Series B perpetual preferred stock issue. This is an update to the proposed $100 million Series A issue rated on Oct. 11, 2005. At the same time, Standard & Poor's affirmed its 'BBB-' counterparty credit rating on ORH and affirmed its 'A-' counterparty credit and financial strength ratings on ORH's operating subsidiaries: Odyssey America Reinsurance Corp., Clearwater Insurance Co., and Hudson Specialty Insurance Co. The outlook is stable. "The ratings are based on the operating companies' -- collectively referred to as Odyssey Re -- strong competitive position, improved operating performance, and strong liquidity," said Standard & Poor's credit analyst Steven Ader. "Partially offsetting these factors are the group's capital adequacy -- though improving -- asset risk that is high relative to similarly rated peers, a relatively short track record of strong operating earnings since its IPO in 2001, and 81% ownership by lower-rated Fairfax Financial Holdings Ltd." As the 18th-largest reinsurer in the world based on 2004 reinsurance premiums, Odyssey Re continues to realize the benefits of its opportunistic strategy as demonstrated by strong revenue growth in a favorable premium environment and much-improved underwriting results in the past four years. During this period, the group's business-mix diversification improved significantly, not only geographically, but also by line of business and distribution source. Standard & Poor's expects premiums to flatten in 2005, reflective of declining premium rates and management's desire to adhere to strict underwriting guidelines. Earnings, materially impacted by Hurricane Katrina and Rita losses, are expected to be consistent with other diversified peers with a combined ratio approximating 10% and a pretax ROR -- before investment gains -- of negative 2% as continued strong current accident year results are offset by hurricane losses and continued modest reserve additions for prior years. Capital adequacy, reflecting the $100 million October common equity and $100 million preferred equity issuance, is expected to improve to a strong level by year-end 2005, with continued modest improvement in 2006. Financial leverage -- as measured by debt plus preferred to total capital -- subsequent to the fourth quarter 2005 equity and hybrid issuances and redemption of $109.1 million of convertible bonds, is expected to increase to 23% -- 18% debt/total capital -- with double leverage approaching 120% by year-end 2005. Although the current rating and outlook is partially tied to lower rated Fairfax Financial Holdings Ltd. -- FFH owns 81% of ORH -- the potential for a revision to a positive outlook exists if Odyssey is successful in posting strong operating performance in 2006 and if capital adequacy continues to improve well into the strong level following our ongoing assessment of reserve adequacy. Alternatively, if Odyssey is unsuccessful in meeting our expectations or if FFH's financial strength was to materially diminish, Standard & Poor's will consider adverse ratings actions. OWENS CORNING: Status Report on Commercial Committee's Advisors --------------------------------------------------------------- On behalf of Credit Suisse, Richard S. Cobb, Esq., at Landis, Rath & Cobb LLP, in Wilmington, Delaware, reports that the commercial creditor constituencies' advisors continue to perform separate, non-duplicative roles in Owens Corning's Chapter 11 cases. "[T]he need for such ongoing separate representation has only been heightened now that the United States Court of Appeals for the Third Circuit has issued an opinion reversing the lower court and denying the Debtors' motion to substantively consolidate." Different Interests In the wake of the Third Circuit's substantive consolidation decision, the prepetition bank lenders and the subcommittee of bondholders continue to have distinct and largely opposing interests, Mr. Cobb relates. The Bondholders continue to press for substantive consolidation and have recently filed a petition for rehearing en banc of the Court of Appeals' decision. The Third Circuit directed the Banks to respond to that petition and the Banks have now done so. "Should the petition be granted," Mr. Cobb continues, "the two groups would need to brief and argue the opposite sides of the substantive consolidation issue before the full circuit court." And if the Bondholders file a petition for certiorari with the United States Supreme Court, the Banks will of course oppose it, Mr. Cobb says. As noted in the Initial Report, the Official Committee of Unsecured Creditors' professionals have not participated in the dispute and that neutrality, necessitated by the conflict between the Banks and the Bondholders, will continue, Mr. Cobb notes. The Banks and Bondholders remain apart on other issues as well, Mr. Cobb adds. "Notable among them is the pending fraudulent conveyance adversary proceeding that seeks to void the subsidiaries' guarantees of the Bank debt." The Bondholders participated actively in that action, prior to the stay imposed by Judge Wolin, and opposed the Banks' motion to dismiss, Mr. Cobb relates. Unless the Banks' motion is granted, the prosecution and defense of that action, on which the Bondholders and the Banks will be on opposite sides, will require extensive discovery centering on, among other things, the solvency of the Debtors -- discovery that the parties and Judge Wolin had agreed to postpone until substantive consolidation was resolved -- and, ultimately, a trial, Mr. Cobb says. Given the nature of the issues, he continues, it will be necessary for the Banks' and Bondholders' financial advisors, as well as their counsel, to participate actively in the discovery process and in the trial of the fraudulent conveyance claims. In addition, Mr. Cobb emphasizes that in any contested plan of reorganization, the Banks and the Bondholders will have diametrically opposed interests with respect to the question of allocating value between Owens Corning and its subsidiaries and related disputes over the amount, seniority and enforceability of various intercompany claims. "As was the case with the fraudulent conveyance claims, Judge Wolin had postponed discovery regarding these issues pending resolution of the substantive consolidation proceeding." In the event the Banks are entitled to postpetition interest, there may also be disputes between the Banks and Bondholders as to the rate at which that interest is calculated, Mr. Cobb says. As the Debtors have indicated to the Court during the August 29, 2005 Omnibus Hearing, in the period since the Third Circuit issued its decision denying substantive consolidation, the parties have engaged in discussions regarding a possible consensual plan of reorganization. These ongoing negotiations require investigation and analysis of the same disputed issues that will otherwise have to be litigated: * The value and solvency of the subsidiaries, * The amount and character of intercompany claims, and * The manner of computing the amount of postpetition interest that may be due to the Banks. Mr. Cobb points out that the Banks and the Bondholders have conflicting interests and an ongoing need for separate advisors on all these issues. Furthermore, he says, the Committee professionals cannot participate in these issues. Committee Professionals Take the Lead The Advisors continue to monitor the Debtors' ongoing business activities, including the day-to-day administration of their estates and other areas as to which there is no conflict of interest among the members of the Committee, Mr. Cobb apprises the Court. The Debtors have monitored closely the fees of the Committee's professionals and, with rare exception, have found them to be reasonable and necessary, according to Mr. Cobb. "The commercial creditors and their advisors, who share the Debtors' interests in a rational allocation of work, remain sensitive to the costs imposed on the estate and will continue their efforts to avoid unnecessary duplication of effort." The Committee believes that the process is well served by the current arrangement and urges that it be continued. Headquartered in Toledo, Ohio, Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. The Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the Debtors in their restructuring efforts. At Sept. 30, 2004, the Company's balance sheet shows $7.5 billion in assets and a $4.2 billion stockholders' deficit. The company reported $132 million of net income in the nine-month period ending Sept. 30, 2004. (Owens Corning Bankruptcy News, Issue No. 117; Bankruptcy Creditors' Service, Inc., 215/945-7000) OWENS CORNING: Contrarian Capital Settles AT&T Claim for $357,618 ----------------------------------------------------------------- Contrarian Capital Trade Claims, LP, as Assignee of AT&T Corp., asserts against Owens Corning and its debtor-affiliates Claim No. 12489 for $1,025,471. The Debtors and Contrarian Capital have held certain discussions concerning the Claim. The parties agreed that the Claim will be allowed as a general unsecured non-priority claim against: Debtor Entity Allowed Amount ------------- -------------- Owens Corning $332,990 Exterior Systems 24,563 Soltech 65 Judge Fitzgerald approves the parties' stipulation. Headquartered in Toledo, Ohio, Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. The Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the Debtors in their restructuring efforts. At Sept. 30, 2004, the Company's balance sheet shows $7.5 billion in assets and a $4.2 billion stockholders' deficit. The company reported $132 million of net income in the nine-month period ending Sept. 30, 2004. (Owens Corning Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service, Inc., 215/945-7000) PENNSYLVANIA REAL: Fitch Holds B+ Rating on Preferred Stock ----------------------------------------------------------- Fitch Ratings has affirmed the preferred stock rating of 'B+' on Pennsylvania Real Estate Investment Trust. Fitch has also established an issuer rating of 'BB' for P-REIT and revises its Outlook to Positive from Stable. The ratings reflect P-REIT's ability to maintain solid coverage and leverage metrics throughout the market cycle. For a primarily secured borrower, P-REIT does have some degree of financial flexibility through relatively reasonable use of leverage and an unencumbered asset pool, which represents approximately 26% of total assets. In addition, the company also has a manageable lease expiration schedule, with an average of 10% of annual base rents expiring over the next three years. The company's debt maturity schedule is acceptable in the next two years with 4% of total debt maturing in the second half of 2005 and 7% in 2006. As of June 30, 2005, P-REIT had $431 million outstanding on its $500 million bank credit facility, which matures in 2007 and has a 14-month extension provision. However, proceeds received from recently announced mortgage refinancing will be used to pay down the line of credit considerably. The ratings are balanced by P-REIT's geographic concentration in the mid-Atlantic and Pennsylvania region, which, while less than in previous years, still accounts for approximately 77% and 52% of annualized base rent, respectively. Same-store property level net operating income decreased 2.4% in the second quarter of 2005 after six prior quarters of positive same-store NOI growth. This decline is at least partially due to 11 properties currently undergoing various phases of redevelopment, which has served to lower occupancy at these properties by, on average, 4% over the last year. These projects represent about $170 million of commitments and are expected to be completed within the next two years. There is also concern with regard to asset concentration risk as P-REIT only has 51 total properties with the five largest properties by investment constituting 29% of total assets. Moreover, the average age of the portfolio is fairly old at 26 years. However, P-REIT has done a solid job of updating their properties to keep them competitive, and 34 of the 51 properties have undergone a major rehabilitation within the last ten years. Further, P-REIT has minimal sources of unsecured capital and no demonstrated access to the public bond market, which limits its potential financial flexibility relative to more highly rated peers. Interest coverage and fixed charge coverage ratios of 2.7 times and 2.0x, respectively, are positive in comparison with similarly rated real estate investment trusts. Debt leverage stood at 55.3% of undepreciated book capitalization and debt plus preferred was 59.6% of undepreciated book at the end of second quarter 2005, which is also in line with comparably rated REITs. As of June 30, 2005, the company had modest, unencumbered asset coverage of unsecured debt of 1.6x, although estimated unencumbered NOI covered unsecured interest expense by a healthier 4.2x. Since Fitch initially rated the preferred stock on Crown American Realty Trust, which was then subsequently purchased by P-REIT, the company has improved its credit profile significantly. It has more than doubled in size, decreased its leverage to 55% from 65%, created an unencumbered asset pool now representing approximately 26% of total assets, and reduced its reliance on Pennsylvania to 52% from 62% of total assets. Given these changed parameters, we are revising our Outlook to Positive. Fitch anticipates resolving this Outlook over the next 18 months. Two primary factors will ultimately determine whether this revision brings about an upgrade for P-REIT. One is more complete evidence that PEI's refinancing strategy will effectively reduce its reliance on its line of credit, while simultaneously allowing it to maintain its coverage and leverage levels. The other is the successful completion of its current redevelopment projects to the point where it is apparent that property operating performance has been stabilized and enhanced as a result of these projects. Pennsylvania Real Estate Investment Trust, headquartered in Philadelphia, is a $2.8 billion -- total assets as of June 30, 2005 -- owner, manager, and developer of regional malls and community shopping centers located predominantly throughout the Mid-Atlantic United States. The portfolio consists of 52 properties containing approximately 33 million square feet, including 38 shopping malls, 13 power and strip centers, and one office property. PHILADELPHIA GAS: Fitch Places BB+ Rated Jr. Bonds on Neg. Watch ---------------------------------------------------------------- Fitch Ratings places the underlying 'BBB-' rating on the City of Philadelphia, PA's approximately $360 million outstanding gas works revenue bonds senior lien bonds and $734.7 million gas works revenue bonds senior lien bonds, as well as the 'BB+' rating on $15.5 million subordinated gas works revenue bonds junior lien bonds on Rating Watch Negative. The 'BBB-' rating chiefly reflects Philadelphia Gas Works' constrained liquidity position, which has not been significantly bolstered by improvements in collections of outstanding accounts receivable in fiscal 2004 and 2005. Fulfillment of operating commitments, including debt service, continues to rely heavily on external sources of liquidity. The Rating Watch Negative reflects Fitch's uncertainty that improved collection rates can be sustained during winter 2005- 2006, given the anticipated large increase in monthly bills due to the increased cost of gas. Liquidity is projected to remain constrained during fiscal 2006, and the budget assumes a 94.5% collection rate, which is high compared to historical rates. A drop in collection rates could further exacerbate the liquidity problem, jeopardizing the system's ability to operate without seeking further outside sources of funding. The state-regulated public utility commission has demonstrated willingness to approve large increases in PGW's gas cost rate to offset the rising cost of the commodity, recently approving a 29% increase in the gas cost rate that will increase retail customer bills by an average of $335 a year. Removal of the Negative Watch could be achieved by sustained improvement in revenue collection procedures to boost the utility's liquidity position. The passage of Act 201 provides PGW with tools to make solid improvements in this area. In addition, a strengthening of the city's weakened financial position -- Philadelphia's GO bonds rated 'BBB+' with a Negative Outlook by Fitch -- would be viewed favorably. Fitch believes that threats to sustained financial improvement include the high cost of gas coupled with the difficulties in implementing the Act 201 provision that allows the utility to shut off service to delinquent accounts during winter months, as well as the stressed financial position of the city. Fitch will continue to monitor the development of a recent proposal by the governor to transfer the utility to state authority and would view such a transfer favorably. A major contributor to PGW's recent financial difficulties was a dramatic rise in accounts receivable. Following a substantial rate increase, net receivables jumped 39% to $93 million in fiscal 2003 and remained at $93 million in fiscal 2004. Due to improved collection efforts during fiscal 2005, accounts receivable declined somewhat to $85 million. The fiscal 2005 collection rate of 94.8% was much improved from a low 87% for fiscal 2003. Despite expanded gas shut-off capabilities, Fitch remains concerned that PGW will not meet collection rates assumed in the fiscal 2006 budget given the impact of rising commodity prices on monthly bills for a fairly low-income customer base. A decline in collections would further stress the utility's already constrained liquidity position. Reflecting low revenue yield, PGW continues to rely heavily on external liquidity, including cash flow support from the city and an expanded $100 million commercial paper credit. The utility was able to renew its credit line in August 2005 for a 21-month period. PGW's owner, the City of Philadelphia, is likely to post a third consecutive year of accumulated general fund deficits in fiscal 2005, making it less able to support the utility as it has in the past. Nevertheless, the city has adopted a five year operating plan that defers a $45 million PGW loan repayment and grants back the utility's annual $18 million return on investment payment through fiscal 2009. Debt service coverage declined somewhat in fiscal 2004 compared with fiscal 2003. Aggregate coverage, inclusive of all long-term debt, was 1.18 times (x) in fiscal 2004 compared with 1.28x in fiscal 2003. Combined coverage in fiscal 2005 is estimated to be 1.49x, based on 10 months of actual results. Fitch notes that coverage using the ordinance methodology is based on billed charges, or consumption, not on actual cash received. Fitch calculates that cash generated from operations in fiscal 2004 provided weak coverage of slightly less than 1.0x on all debt service obligations. PLYMOUTH RUBBER: Taps O'Conor Wright as Investment Bankers ---------------------------------------------------------- Plymouth Rubber Company, Inc., and its debtor-affiliate, Brite- Line Technologies, Inc., ask the U.S. Bankruptcy Court for the District of Massachusetts for permission to employ O'Conor Wright Wyman, Inc., as their investment bankers. O'Conor Wright will: 1) assist the Debtors in the reevaluation and exploration of refinancing, restructuring and reorganization alternatives; 2) assist the Debtors to obtain letter or commitment letters for debt and equity financing in connection with a plan of reorganization; and 3) provide all other investment banking services to the Debtors that are necessary in their chapter 11 cases. John M. Wright, the President of O'Conor Wright, disclosed that his Firm did not receive any retainer relative to the Debtors' chapter 11 cases. Mr. Wright reports that O'Conor Wright will be paid a Monthly Fee of $5,000 and a Success Fee in the event of any direct or indirect sale of the Debtors' assets or securities to a party introduced to the Debtors by O'Conor Wright. Mr. Wright relates that the Firm's anticipated Success Fees over the next three to five months will likely range from $15,000 to $25,000. O'Conor Wright assures the Court that it does not represent any interest materially adverse to the Debtors or their estates. Headquartered in Canton, Massachusetts, Plymouth Rubber, Inc., manufactures and distributes plastic and rubber products, including automotive tapes, insulating tapes, and other industrial tapes, mastics and films. Through its Brite-Line Technologies subsidiary, Plymouth manufactures and supplies highway marking products. The Company and its subsidiary filed for chapter 11 protection on July 5, 2005 (Bankr. D. Mass. Case Nos. 05-16088 through 05-16089). Victor Bass, Esq., at Burns & Levinson LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated $10 million to $50 million in assets and debts. PLYMOUTH RUBBER: Selling Canton Plant to Conroy for $8.9 Million ---------------------------------------------------------------- Plymouth Rubber Company, Inc., and Brite-Line Technologies, Inc., ask the U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, for authority to sell its Canton, Massachusetts, real estate to Conroy Development Corporation for $8.9 million. The Debtors' property is comprised of: * 40 acres of land housing Plymouth's manufacturing plant (zoned industrial), * 262 acres of Reservoir Pond, * 16 acres of Upper Forge Pond, and * 16 acres of Lower Forge Pond. The sale of the property is expected to close by December 31, 2005. The Pond, which comes along with the plant, will be donated to the Town of Canton. PRC believes that the proposed sale to Conroy is the best it can get for the property, given that the rezoning of the plant is dependent on the approval of Canton's Selectmen (council) -- which may be influenced by the reputation of the proposed developer. Conroy is headquartered in Canton and enjoys good relationships with Town leaders. Headquartered in Canton, Massachusetts, Plymouth Rubber, Inc., manufactures and distributes plastic and rubber products, including automotive tapes, insulating tapes, and other industrial tapes, mastics and films. Through its Brite-Line Technologies subsidiary, Plymouth manufactures and supplies highway marking products. The Company and its subsidiary filed for chapter 11 protection on July 5, 2005 (Bankr. D. Mass. Case Nos. 05-16088 and 05-16089). Victor Bass, Esq., at Burns & Levinson LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated $1 million to $50 million in assets and debts. POINT TO POINT: Wants to Hire Gary Hostetler as Special Counsel --------------------------------------------------------------- Point to Point Business Development, Inc., asks the U.S. Bankruptcy Court for the Western District of Missouri for permission to employ Gary L. Hostetler, Esq., and his firm Hostetler and Kowalik, PC, as its special counsel. Mr. Hostetler is expected to: a) work independent of regular counsel to the estate, whose retention has already been approved herein, investigate and pursue any actions on behalf of the estate in order to recover assets for or best enable this estate to reorganize fairly, in general, and specifically investigate any issues raised by the Motion for Appointment of Examiner filed on August 31, 2005; b) further investigate and pursue any actions on behalf of the estate any issues by the Objection to Cash Collateral Agreement filed on September 6, 2005; and c) perform such other legal services as may be required and in the interest of the estate. Mr. Hostetler will bill the Debtor at $275 per hour for his performed services. The Debtor assures the Court that Gary Hostetler does not hold any interest adverse to its estate. Based in Liberty, Missouri, Point to Point Business Development, Inc. -- http://www.P2PMRO.com/-- says it helps clients lower costs through its maintenance, repair and operating (MRO) Web platform which enables manufacturers to streamline the process of supply ordering, reduce excess in inventory management, and more efficiently manage supply chains. Point to Point filed for chapter 11 protection (Bankr. W.D. Mo. Case No. 05-44642) on July 7, 2005. The Debtor estimated at the time of the chapter 11 filing that it had less than $50,000 in assets and more than $1 million of debt. POINT TO POINT: Wants to Hire Kyle Brant as Special Patent Counsel ------------------------------------------------------------------ Point to Point Business Development, Inc., asks the U.S. Bankruptcy Court for the Western District of Missouri for permission to employ Kyle S. Brant, as its special patent counsel. Mr. Brant will: a) work independent of regular counsel to the estate, research competing patent and copyright registrations for the software platform, related code, web architecture and functionality and protect and enhance the value of such assets by filing appropriate patent and copyright applications; and b) perform other legal services as may be required and in the interest of the estate. Kyle Brant will bill the Debtor at $175 per hour for his performed services. Mr. Brant will also receive a $3000 retainer for expenses, filing fees, and services to be rendered. To the best of the Debtor's knowledge, Kyle Brant is a "disinterested person" as that term is defined by section 101(14) Bankruptcy Code. Based in Liberty, Missouri, Point to Point Business Development, Inc. -- http://www.P2PMRO.com/-- says it helps clients lower costs through its maintenance, repair and operating (MRO) Web platform which enables manufacturers to streamline the process of supply ordering, reduce excess in inventory management, and more efficiently manage supply chains. Point to Point filed for chapter 11 protection (Bankr. W.D. Mo. Case No. 05-44642) on July 7, 2005. The Debtor estimated at the time of the chapter 11 filing that it had less than $50,000 in assets and more than $1 million of debt. POINT TO POINT: Jack Weiss Wants Chapter 11 Trustee Appointed ------------------------------------------------------------- Jack Weiss and the law firm of Frank, Rosen, Snyder & Moss, L.L.P., ask the U.S. Bankruptcy Court for the Western District of Missouri, Kansas City Division, to appoint a chapter 11 Trustee for Point to Point Business Development, Inc.'s chapter 11 proceedings. The movants tell the Court that the Debtor's postpetition management is not sufficiently familiar with the operations of the Debtor's business since it has only taken control of the Debtor during the several-day period leading up to the filing of the chapter 11 case. The movants charge that the individuals responsible for the Debtor's operations are grossly mismanaging its affairs and that they currently operate a competitive business. The movants believe that management is using cash collateral without required authorization under Sec. 363 of the Bankruptcy Code, which could substantially harmful creditors and other parties-in-interest. In the alternative, the movants ask the Court to convert the Debtor's chapter 11 proceeding to a chapter 7 liquidation. Based in Liberty, Missouri, Point to Point Business Development, Inc. -- http://www.P2PMRO.com/-- says it helps clients lower costs through its maintenance, repair and operating (MRO) Web platform which enables manufacturers to streamline the process of supply ordering, reduce excess in inventory management, and more efficiently manage supply chains. Point to Point filed for chapter 11 protection (Bankr. W.D. Mo. Case No. 05-44642) on July 7, 2005. The Debtor estimated at the time of the chapter 11 filing that it had less than $50,000 in assets and more than $1 million of debt. POPE & TALBOT: S&P Lowers Sr. Unsec. Debt Rating to B- from BB- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on pulp and lumber producer Pope & Talbot Inc. to 'B+' from 'BB-' and its senior unsecured debt rating to 'B-' from 'BB-'. The ratings were removed from CreditWatch where they were placed with negative implications on June 9, 2005. The senior unsecured notes are rated two notches below the corporate credit rating, reflecting the substantially disadvantaged position that unsecured lenders have in the capital structure. The outlook is negative. "The downgrade of the corporate credit rating reflects our expectation of continued high financial leverage and weak-to- negative free cash flow," said Standard & Poor's credit analyst Dominick D'Ascoli. Despite relatively good pulp and lumber market conditions over the past year, Pope & Talbot's debt increased by $43 million, to $318 million at June 30, 2005, in part to finance its C$39 million acquisition of the Fort St. James sawmill in April 2005. Moreover, the appreciation of the Canadian dollar versus the U.S. dollar will likely lead to weak-to-negative free cash flow in 2005 and 2006, limiting the potential for any debt reduction from operating cash flow. The steady increases in the Canadian dollar and the meaningful duties paid on softwood lumber exported to the U.S. during the past three years have put significant negative pressure on the company's margins and cash flow. In addition, we are concerned about the long-term impact on pulp prices from the additional low-cost capacity that has begun to ramp up outside North America. The senior unsecured debt rating downgrade reflects Standard & Poor's revised expectations regarding the future amount of priority liabilities because of: -- a possible increase in current secured debt levels due to negative free cash flow during the next 12 months compared to previous expectations that secured debt would be repaid through cash flow generation; -- Pope & Talbot's hesitancy to issue equity to reduce revolving credit facility borrowings; and -- the recent increase in the size of their bank facilities. Secured debt ranking ahead of unsecured lenders includes amounts outstanding under a U.S. revolving credit facility, two Canadian revolving credit facilities, an accounts receivable securitization facility, and capital lease obligations. Mr. D'Ascoli said, "Ratings could be lowered further if the Canadian dollar remains strong and pulp or lumber prices decline, resulting in significant negative free cash flow. Ratings could also be lowered if the Canadian dollar appreciates meaningfully or liquidity declines significantly. The outlook could be revised to stable if the company reduces debt meaningfully by using proceeds from an equity issuance or from the return of softwood lumber duties paid. The outlook could also be revised to stable if the softwood lumber duties are eliminated, all else being equal." QUALITY FINANCIAL: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Quality Financial Services, Inc. 3065 North College Avenue, Suite 113 Fayetteville, Arizona 72703 Bankruptcy Case No.: 05-80012 Chapter 11 Petition Date: October 14, 2005 Court: Western District of Arkansas (Fayetteville) Judge: Richard D. Taylor Debtor's Counsel: Lucketta McMahon, Esq. 2705 Chapman Avenue Springdale, Arizona 72762 Tel: (479) 445-3170 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 3 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Charles Wilkerson Unknown 3065 North College Avenue, Suite 113 Fayetteville, AR 72703 The Company Corporation Unknown 2711 Centerville Road, Suite 400 Wilmington, DE 19808 East Side Abstract Unknown P.O. Box 166 Stillwell, OK 74960 REFCO GROUP: Wind-Down Plans Prompt S&P to Junk Ratings ------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on Refco Group Ltd. LLC to 'CC' from 'B-'. At the same time, the senior secured debt rating was lowered to 'CC' from 'B-', and the subordinated debt rating was lowered to 'C' from 'CCC'. The ratings remain on CreditWatch Negative where they were placed Oct. 10, 2005. "These rating actions are in response to the announcement by the Depository Trust & Clearing Corp. that Refco Securities LLC -- a wholly owned regulated securities broker-dealer subsidiary of Refco Group -- will wind down its proprietary and customer positions," said Standard & Poor's credit analyst Tom Foley. Additionally, The Chicago Mercantile Exchange Inc. is prohibiting Refco LLC -- a wholly owned regulated futures broker subsidiary of the Refco Group -- from withdrawing capital -- including current excess capital -- without the CME's permission. These announcements indicate that a technical default by Refco Group on its rated debt is almost certain to occur and that a payment default is highly likely due to Refco Group's negative tangible net worth and the deterioration of its franchise. The 'CC' rating indicates a high vulnerability to nonpayment. The one rating category notching between the senior debt rating of 'CC' and the subordinated debt rating of 'C' indicates that we believe the senior creditors have prospects for a higher recovery than do the subordinated creditors. REFCO INC: In Advanced Talks with J.C. Flowers for Asset Sale ------------------------------------------------------------- Refco, Inc., disclosed that it is in advanced negotiations with a group of investors led by J.C. Flowers & Co. for the sale of the Company's futures brokerage business conducted through Refco LLC, Refco Overseas Ltd., Refco Singapore Pte. Ltd., and certain related subsidiaries and other assets. The Company expects that it will reach a memorandum of understanding with The J.C. Flowers & Co. Group shortly and will execute definitive agreements soon thereafter. There can be no assurance that any agreement ultimately will be reached or that the sale will be completed. Unwinding Positions The Company disclosed on Friday that, in light of recent developments, its regulated Broker Dealer, Refco Securities, LLC, has initiated the process of unwinding proprietary and client positions. At this time, Refco Securities, LLC, will only be engaging in security transactions to the extent necessary to offset and effectively liquidate outstanding long and short customer and proprietary positions. Refco Securities, LLC, is initiating this step to facilitate an orderly wind-down of positions. Refco Securities, LLC is a regulated broker-dealer and is in compliance with its regulatory capital requirements. Financial Advisor The Company has retained Arthur Levitt, formerly Chairman of the Securities and Exchange Commission and Chairman of the American Stock Exchange, and Eugene A. Ludwig, formerly U.S. Comptroller of the Currency, and currently Chief Executive Officer of Promontory Financial Group LLC, and Promontory Financial Group LLC as special advisors to its board of directors. Refco also disclosed that it has retained Goldman, Sachs & Co., as its financial advisor. The Company stated 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 events of last week. The business at these subsidiaries is being conducted in the ordinary course including customer deposit and withdrawal of segregated funds. In light of recent events, the liquidity within the Company's non- regulated subsidiary Refco Capital Markets, Ltd., which represents a material portion of the business of the Company, is no longer sufficient to continue operations. The Company has therefore imposed a 15-day moratorium on all activities of Refco Capital Markets, Ltd., to protect the value of the enterprise. About J.C. Flowers Group J. C. Flowers & Co. is an investment firm specializing in financial services. Mr. Flowers is the largest shareholder of Shinsei Bank Ltd and The Enstar Group Inc. Refco Inc. (NYSE: RFX) -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. * * * As reported in the Troubled Company Reporter on Oct. 17, 2005, 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. REFCO INC: Grant Thornton Named in Securities Law Suit ------------------------------------------------------ Shalov Stone & Bonner LLP commenced a securities class action on behalf of purchasers of the securities of Refco, Inc. (NYSE: RFX), in the period between Aug. 10, 2005, and Oct. 7, 2005. The complaint names as a defendant, among others, Grant Thornton LLP. Grant Thornton was at all relevant times Refco's principal outside accounting firm and auditor. The complaint alleges that the Firm certified as fair and accurate the false financial statements of Refco that were included in the company's Registration Statement and Prospectus. According to the complaint, the financial statements violated Generally Accepted Accounting Principles and Grant Thornton's certifications falsely stated that it had performed its audits in conformity with Generally Accepted Auditing Standards. The complaint further alleges, among other things, that, just two months after its initial public offering, Refco announced that Phillip R. Bennett, Chief Executive Officer and Chairman of the Board of Directors, was being placed on a leave of absence and that the company had discovered (ostensibly through an internal review) a receivable of $430 million owed by Bennett to the company. The company also revealed that, based on the undisclosed related party transaction, its prior financial statements should not be relied upon. The plaintiffs are represented by the law firm of Shalov Stone & Bonner LLP, which has extensive experience in the prosecution of class actions on behalf of investors. Refco Inc. (NYSE: RFX) -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. RESIDENTIAL ASSET: Fitch Puts Low-B Ratings on 11 Cert. Classes --------------------------------------------------------------- Fitch Ratings has taken rating actions on these Residential Asset Mortgage Products, Inc. issues: RAMP series 2002-RM1 Group 1: -- Classes A-I-1 to A-I-3, AP-1, AV-1 affirmed at 'AAA'; -- Class M-I-1 upgraded to 'AAA' from 'AA+'; -- Class M-I-2 upgraded to 'AA' from 'A'; -- Class M-I-3 upgraded to 'A' from 'BBB'; -- Class B-I-1 upgraded to 'BBB' from 'BB+'; -- Class B-I-2 upgraded to 'B+' from 'B'. RAMP series 2002-RM1 Group 2: -- Classes A-II, AP-II, AV-II affirmed at 'AAA'; -- Class M-II-1 upgraded to 'AAA' from 'AA+'; -- Class M-II-2 upgraded to 'AA' from 'A+'; -- Class M-II-3 upgraded to 'A' from 'BBB'; -- Class B-II-1 upgraded to 'BB+' from 'BB'; -- Class B-II-2 affirmed at 'B'. RAMP series 2002-SL1 Group 1: -- Classes A-I-3, A-I-IO affirmed at 'AAA'. RAMP series 2002-SL1 Group 2: -- Classes A-II-1 to A-II-4 affirmed at 'AAA'; -- Class M-II-1 affirmed at 'AA'; -- Class M-II-2 affirmed at 'A'; -- Class M-II-3 affirmed at 'BBB'; -- Class B-II-1 affirmed at 'BB'; -- Class B-II-2 affirmed at 'B'. RAMP series 2003-RM1: -- Classes A-2 to A-8, A-8A, A-P, A-V affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 upgraded to 'AA' from 'A+'; -- Class M-3 upgraded to 'A' from 'BBB+'; -- Class B-1 upgraded to 'BB+' from 'BB'; -- Class B-2 upgraded to 'B+' from 'B'. RAMP series 2003-RM2 Groups 1 & 2: -- Classes A-I-1 to A-I-6, AP-I, AV-I, A-II, AP-II, AV-II 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'. RAMP series 2003-RM2 Group 3: -- Classes A-III, AP-III, AV-III affirmed at 'AAA'; -- Class M-III-1 affirmed at 'AA+'; -- Class M-III-2 affirmed at 'A+'; -- Class M-III-3 upgraded to 'A-' from 'BBB+'; -- Class B-III-1 upgraded to 'BBB' from 'BB'; -- Class B-III-2 upgraded to 'B+' from 'B'. The upgrades reflect increase in credit enhancement relative to future loss expectations and affect about $12.5 million of outstanding certificates. The affirmations reflect credit enhancement consistent with future loss expectations and affect about $433 million of outstanding certificates. The collateral in the 2002-RM1 series consists of fixed-rate and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. The collateral in the 2002- SL1 series consists of seasoned fixed-rate and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. The collateral in the 2003-RM1 and 2003- RM2 series consist of fixed-rate mortgage loans secured by first liens on one- to four-family residential properties. As of the Sept. 26, 2005 distribution date, the pools factors -- current principal balance as a percentage of original balance -- on these deals ranged from 11% to 48%. The upgraded classes benefit from credit enhancement three to four times the original levels. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch web site at http://www.fitchratings.com/ SAGOMA PLASTICS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Sagoma Plastics, Inc. 16 Landry Street Biddeford, Maine 04005 Bankruptcy Case No.: 05-22727 Type of Business: The Debtor designs and manufactures plastic products. See http://www.sagomaplastics.com/ Chapter 11 Petition Date: October 14, 2005 Court: District of Maine (Portland) Debtor's Counsel: Benjamin E. Marcus, Esq. Drummond Woodsum & MacMahon 245 Commercial Street P.O. Box 9781 Portland, Maine 04104-5081 Tel: (207) 772-1941 Fax: (207) 772-3627 Total Assets: $2,917,387 Total Debts: $4,251,550 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Polyone Corporation $373,886 c/o Plastice One, Inc. 12 Capitol Drive Wallingford, CT 06492 Northern Design $61,694 48 Water Street Kennebunk, ME 04043 AGI Media $50,000 c/o MeadWestvaco Corporation 299 Park Avenue New York, NY 10171 Kelly Services, Inc. $47,747 Project Staffing, Inc. $44,420 Channel Prime Alliance, LLC $43,853 Savcor Coatings Ltd. $43,125 Aetna Inc. $41,379 Bearings Specialty Co., Inc. $40,471 Industrial Automation Supply $35,780 H. Muehlstein & Co., Inc. $34,146 Cammy Magnetech Co. Ltd. $32,800 Central Maine Power Co. $30,738 Verrill & Dana, LLP $28,186 Circle Products Co., Inc. $26,151 GE Polymerland $24,376 LaPlante Electric $23,512 Freeport Manufacturing Company $22,714 City of Biddeford $20,984 Control Solutions $19,642 SEQUOIA MORTGAGE: Credit Enhancement Cues Fitch to Lift Ratings --------------------------------------------------------------- Fitch Ratings has taken rating actions on these Sequoia Mortgage Trust pass-through certificates: Sequoia Mortgage Trust, Trust 11 -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA'; -- Class B-2 upgraded to 'AA' from 'A'; -- Class B-3 upgraded to 'A' from 'BBB'; -- Class B-4 upgraded to 'BBB' from 'BB'; -- Class B-5 upgraded to 'BB' from 'B'. Sequoia Mortgage Trust, Trust 12 -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA'; -- Class B-2 upgraded to 'AA' from 'A'; -- Class B-3 upgraded to 'A' from 'BBB'; -- Class B-4 upgraded to 'BBB' from 'BB'; -- Class B-5 upgraded to 'BB' from 'B'. Sequoia Mortgage Trust, 2003-1 -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA'; -- Class B-2 upgraded to 'AA' from 'A'; -- Class B-3 upgraded to 'A' from 'BBB'; -- Class B-4 upgraded to 'BBB' from 'BB'; -- Class B-5 upgraded to 'BB' from 'B'. Sequoia Mortgage Trust, 2003-3 -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA'; -- Class B-2 upgraded to 'AA' from 'A'; -- Class B-3 upgraded to 'A' from 'BBB'; -- Class B-4 upgraded to 'BBB' from 'BB'; -- Class B-5 upgraded to 'BB' from 'B'. Sequoia Mortgage Trust, 2003-8 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. The underlying collateral for the Sequoia Mortgage transactions consist of both 30-year adjustable-rates mortgages and 30-year fixed-rate mortgages extended to prime borrowers. As of September 2005 distribution date, the transactions aforementioned are seasoned from a range of 21 to 35 months and the pool factors -- current mortgage loan principle outstanding as a percentage of the initial pool -- ranges from approximately 49% to 60%. The Sequoia Mortgage Trust loans are acquired from various originators by a subsidiary of Redwood Trust Inc., a mortgage real estate investment trust that invests in Residential real estate loans and securities. The master servicer for the deals above is Wells Fargo Bank Minnesota, which is currently rated 'RPS1' by Fitch. The affirmations reflect satisfactory credit enhancement relationships to future loss expectations and affect approximately $2.12 billion outstanding certificate as detailed above. The upgrades reflect an improvement in the relationship of credit enhancement to future loss expectations and affect approximately $111.3 million of certificates. The CE levels for all the classes affected by the upgrades have doubled their original enhancement levels since closing date. Fitch will continue to monitor these details. Further information regarding current delinquency, loss and credit enhancement statistics is available on the Fitch Ratings web site at http://www.fitchratings.com/. SKYWAY COMMUNICATIONS: Doesn't Want Case Dismissed or Converted --------------------------------------------------------------- As previously reported, a consortium of lenders known as the Talib Parties asked the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, to dismiss or appoint a chapter 11 trustee in the chapter 11 case of SkyWay Communications Holding Corp. fka I-Telecom, Inc., fka Mastertel Communications Corp. The Talib Parties' allegations included: a) alleged prepetition mismanagement by the Debtor's officers; b) alleged prepetition misrepresentations by the Debtor's officers concerning the viability of Skyway's technology and the status of development; c) the alleged filing of public documents containing false representations; and d) alleged excessive expenditures by the Debtor's officers. The Debtor contends that despite the Talib Parties' extensive discovery, there is no admissible evidence to support any of the allegations they made against Skyway's officers. The Debtor adds that the Talib Parties are equity security holders, not creditors of the estate. The Debtor alleges that the Talib Parties have attempted to alleviate their status from equity holders to creditors by making unsubstantiated allegations of fraud and misrepresentation in connection with their investment in the company. According to Skyway, it has claims against the Talib Parties far exceeding their claims against the company. Nick Talib, as agent for the Talib Parties, committed a $43 million equity investment sufficient to fund the company's business plan, the Debtor says. Nick Talib, the Debtor relates, repeatedly represented to prospective and current investors and other entities doing business with the company that the Talib Parties would be funding the company's business plan. Instead, the Talib Parties ceased providing equity funding to the Debtor after providing only $12 million. The Debtor asserts that any failure of the company to meet its contractual obligations or complete development of its technology resulted from the Talib Parties' breach of their funding obligation, not from fraud or mismanagement of the officers. Furthermore, Skyway tells the Court that despite the Talib Parties campaign to defame and publicly disparage the company, its management and technology, the Debtor and its management are actively engaged in negotiating with potential investors, purchasers or merger partners. If successful, will result in a plan of reorganization that will yield greater returns to the estate's creditors and equity holders than a conversion or dismissal, the Debtor asserts. The Talib group is comprised of: * Nuwave Limited, * Omar S. Bangaitah, * Ahmed Salem Bugshan, * Ahmad M. Al Ajlan, * Ali Al Sabah, * Castle Bridge Investors Ltd., * Ibrahim Al Therban, * International Financial Advisors K.S.C.C., * Khalid Al Attal, * Kuwait Investment Company, * Kuwait Real Estate Company, * Q Invest Inc., * Madi M. Haider, * Mohammad H. Al Dall, * Nedal Al Massoud, * Osama A Al Abduljaleel, * Mahmoud H. Haider, * Pearl of Kuwait Real Estate Co., * Saleh Al Salmi * Taiba Group, Inc., * Therfield Holdings, * Waleed A. Al Essa, * Yasser Zakaria Al Nahhas, * Yousef Al Saleh, and * Nazar F. Talib. The Talib group is represented by: Stanford R. Solomon The Solomon Tropp Law Group, P.A. 400 North Ashley Plaza, Suite 3000 Tampa, Florida 33602-4331 Tel: 813-225-1818 Fax: 813-225-1050 Headquartered in Clearwater, Florida, SkyWay Communications Holding Corp. fka I-Teleco.com, Inc., fka Mastertel Communications Corp. -- http://www.skywaynet.us/-- develops ground to air in- flight aircraft communication. The Debtor filed for chapter 11 protection on June 14, 2005 (Bankr. M.D. Fla. Case No. 05-11953). When the Debtor filed for protection from its creditors, it listed $1 million to $10 million in assets and $10 million to $50 million in debts. SPILLMAN DEVELOPMENT: Wants General Partners to File Schedules -------------------------------------------------------------- Fire Eagle, LLC, asks the U.S. Bankruptcy Court for the Western District of Texas, Austin Division, to compel Spillman Development Group, Ltd.'s general partners to file schedules and statements of financial affairs in accordance with Rule 1007(g) of the Bankruptcy Procedure. The Debtor's original partners were SDG Management, Inc., as general partner, and Stephen W. Gurasich, Jr., and Donalad C. Walden as limited partners. In 2001, SDG Golf Management LLC replaced SDG Management as a general partner of Oak Creek. The Debtor owes Fire Eagle $4.1 million on account of the commercial development of 200 acres of real property. The Debtor's obligation to Fire Eagle is secured by a Deed of Trust and Security Agreement under which the lender was given a lien on the ground lease, the fee simple acreage, and substantially all of the Debtor's personal property. The Debtor listed in its Schedules of Assets and Liabilities, a $7,588,543 assets and $16,118,709 liabilities. Under the Texas Uniform Partnership & Limited Partnership Acts, the Debtor's general partner is liable to satisfy any deficiency in the payment of debts. In accordance with Rule 1007(b) of the Bankruptcy Rules of Procedure, Fire Eagle wants SDG Management and SDG Golf to file schedules and statements of affairs. Fire Eagle is represented by: Raymond W. Battaglia, Esq. Oppenheimer, Blend, Harrison & Tate, Inc. 711 Navarro, Sixth Floor San Antonio, Texas 78205 Tel: 210-224-2000, Fax: 210-224-7540 Spillman Development Group, Ltd. -- http://www.falconheadaustin.com/-- operates a golf course in Austin, Texas. The Debtor filed for chapter 11 protection on August 1, 2005 (Bankr. W.D. Tex. Case No. 05-14415). Eric J. Taube, Esq., at Hohmann, Taube & Summers, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $7,588,543 in assets and $16,118,709 in liabilities. TIFFANY ASSOCIATES: Case Summary & 10 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Tiffany Associates, Inc. 766 Drew Street Brooklyn, New York 11208 Bankruptcy Case No.: 05-32381 Chapter 11 Petition Date: October 14, 2005 Court: Eastern District of New York (Brooklyn) Judge: Dennis E. Milton Debtor's Counsel: Mark A. Frankel, Esq. Backenroth Frankel & Krinsky LLP 489 Fifth Avenue, 28th Floor New York, New York 10017 Tel: (212) 593-1100 Fax: (212) 644-0544 Total Assets: $2,500,100 Total Debts: $18,466,610 Debtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ JE Roberts 783 Eldert Lane, $17,452,000 6 Divine Street Block 4469, Lot 1, North Haven, CT 06473 54 Brooklyn, NY 11208; Acct. # 031-71114 ($17,000,000); Acct. #041-19549 ($184,000); Acct. #051-35389 ($268,000) Darshan Shah Loan $500,000 796-A Drew Street Brooklyn, NY 11208 Jay Arthur Goldberg Legal Services $315,000 30 Bay Street Staten Island, NY 10301 New York City 783 Eldert Lane, $179,284 Department of Finance Block 4469, Lot 1, P.O. Box 32 54 Brooklyn, New York, NY 10008 NY 11208 Metropolitan Realty Water Charge $16,230 Exemptions Inc. Reduction 118 Middleton Street Brooklyn, NY 11206 New York State Tax Department Franchise Tax $3,896 W.A. Harriman Campus Room 958, Building 8 Albany, NY 12227 Raymond Zutell Legal Services $200 4348 Katonah Avenue Bronx, NY 10470 Environmental Control Board Violations Unknown P.O. Box 2307 Peck Slip Station New York, NY 10272 Robert Prignoli Unknown 475 Bement Avenue Staten Island, NY 10310 Skyview Realty Associates Lessor damage Unknown c/o Suslovich & Klein claim 1507 Avenue M Brooklyn, NY 11230 TROPICAL SPORTSWEAR: Agrees to Negotiate Class Action Settlement ---------------------------------------------------------------- TSLC I, Inc., as successor to Tropical Sportswear Int'l, Inc., agreed to negotiate a global settlement agreement with its shareholders in the securities litigation pending in the U.S. District Court for the Middle District of Florida. The settlement is subject to definitive documentation, the District Court's approval and the approval of the U.S. Bankruptcy Court for the Middle District of Florida. The former officers and directors named as defendants in the Shareholders' Action along with the plaintiff shareholders have agreed to the settlement. The settlement will also resolve similar claims and causes of action asserted by the Liquidating Trustee in the Bankruptcy Court. The settlement is not to be construed or deemed to be evidence of an admission or concession by the former officers and directors of any liability, wrongdoing, or breach of any duty. The settlement provides for, among other things: -- the plaintiffs in the Shareholder Action to receive a payment of $8 million; and -- the TSLC I, Inc. Liquidating Trust to receive a payment of $4.5 million. The class action suit was initiated by Richard R. Reina on behalf of himself and all other similarly situated shareholders (Case No. 8:03-CV-1958-T-23TGW). Headquartered in Tampa, Florida, Tropical Sportswear Int'l Corp. -- http://www.savane.com/-- designs, produces and markets branded branded apparel products that are sold to major retailers in all levels and channels of distribution. The Company and its debtor-affiliates filed for chapter 11 protection on Dec. 16, 2004 (Bankr. M.D. Fla. Case No. 04-24134). David E. Bane, Esq., and Denise D. Dell-Powell, Esq., at Akerman Senterfitt, represent the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $247,129,867 and total debts of $142,082,756. UAL CORP: Panel Doesn't Want Verizon to Intervene in Disney Claim ----------------------------------------------------------------- Walt Disney Pictures and Television is the Owner Participant in the U.S. Leveraged Lease for a Boeing 747-422 Aircraft with Tail No. N183UA. UAL Corporation and its debtor-affiliates rejected the lease for Tail No. N183UA as of Oct. 24, 2003. Walt Disney filed Claim No. 37718 for indemnification of the loss of certain benefits based on a Tax Indemnity Agreement with United Air Lines, Inc. The Debtors object to Claim No. 37718. David R. Seligman, Esq., at Kirkland & Ellis, in Chicago, Illinois, explains that the Tax Indemnity Agreement explicitly states that Walt Disney has no claim if the Debtors owe or will owe liquidated damages, also known as the Stipulated Loss Value, or if the Debtors will make payments to the lenders based on the SLV. Walt Disney has no claim because U.S. Bank, as Indenture Trustee, has filed a claim for the SLV. Mr. Seligman states that U.S. Bank, not Walt Disney, is the proper party to assert a claim under the Leveraged Lease. Even if Walt Disney could demonstrate a contractual right to assert a claim under the Tax Indemnity Agreement, any related distribution would produce a windfall to Walt Disney because it would duplicate distributions to U.S. Bank for its SLV claim. Mr. Seligman explains that this scenario would produce a double recovery since the formula for calculating SLV incorporates a component for Walt Disney's tax losses. The Leveraged Lease was structured so that the SLV includes Walt Disney's Tax Indemnity Agreement claim. That way, in the event of a casualty or default by the Debtors, there would be a single liquidated damages claim capturing all liabilities. Mr. Seligman asserts that the Tax Indemnity Agreement Claim should be disallowed in full. Walt Disney must look to U.S. Bank, not the Debtors, to recover its tax-related damages. Committee Supports Objection The Official Committee of Unsecured Creditors supports the Debtors' objection to Claim No. 37718. Carole Neville, Esq., at Sonnenschein, Nath & Rosenthal, in New York City, says the Committee reserves its right to object to the Tax Indemnity Claim or any claim asserted by U.S. Bank. Verizon Wants to Intervene Verizon Capital Corp. seeks Judge Wedoff's permission to intervene in the Debtors' objection to Walt Disney Pictures and Television's Claim No. 37718. "Without disclosure to the Court or dozens of similarly situated creditors whose interest will be vitally affected, the Debtors filed a seemingly innocuous objection to a single aircraft equity claim that is a test case to determine the allowance of several billion dollars in claims," alleges William J. Rochelle, III, Esq., at Fulbright & Jaworski, in New York City. Verizon is the beneficial owner of the equity interest in 17 aircraft. Like Disney, Verizon has asserted substantial tax indemnity claims. The holders of equity interests in the Debtors' aircraft fleet constitute the single largest group of claims in the proceedings, aside from the Pension Benefit Guaranty Corporation. The claims of aircraft equity holders "amount to several billion dollars," notes Mr. Rochelle. Mr. Rochelle argues that the Debtors "cobbled together their argument by selectively quoting from documents and not showing the Court important provisions leading to the opposite conclusion." Disney Should Not Represent Tax Claims Each equity holder should be afforded an opportunity to submit papers, compare operative documents and appear at hearings, Mr. Rochelle asserts. The Disney Claim should not represent all tax indemnity claims when other equity holders with more aircraft have greater amounts of money at risk. Due process and fundamental fairness require precluding the Debtors from proceeding with the Disney Objection until the entire class of affected creditors is given an opportunity to be heard. Mr. Rochelle says the Debtors should be required to file an objection to every Tax Indemnity Claim under dispute, because operative documents are not identical among aircraft financings. "Some have subtle yet potentially significant differences in language," states Mr. Rochelle. The Debtors should not be permitted to select a test case based on documentation that may be more likely to produce a favorable result. Court Should Halt Proceedings Additionally, the Court should halt the proceedings on Claim No. 37718 until the Debtors have initiated objections to every Tax Indemnity Claim in dispute, Mr. Rochelle tells the Court. The Debtors have known the identity of every claimant for 27 months. The Debtors have allowed over two years to pass without filing an objection. Accordingly, the Court should allow the creditor class to organize and explore a joint defense. Committee Doesn't Want Verizon to Intervene The Official Committee of Unsecured Creditors asks the Court to overrule and deny Verizon's request for intervention. Verizon has no direct involvement in Disney's Claim or the Debtors' objection, Robert R. Richards, Esq., at Sonnenschein, Nath & Rosenthal, in Chicago, Illinois, argues. Furthermore, Verizon comes to the Court with myriad, disjointed demands and requests. For instance, Mr. Richards says, Verizon argues -- without reference to the actual language in the Disney agreements -- that the Debtors should honor the Tax Indemnity Claims from equity owners. Verizon also asks the Court to adjudicate the claims of all equity owners in a single proceeding. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 102; Bankruptcy Creditors' Service, Inc., 215/945-7000) UAL CORP: PBGC Seeks Support From Court on FA Plan Termination -------------------------------------------------------------- On June 23, 2005, the Pension Benefit Guaranty Corporation determined that the United Airlines Flight Attendant Defined Benefit Pension Plan should be terminated. The PBGC issued a notice of determination to UAL Corporation and its debtor- affiliates and the Association of Flight Attendants-CWA, AFL-CIO. The next day, the Debtors and the PBGC entered into a Trusteeship Agreement for termination of the FA Plan and appointment of the PBGC as trustee. The Trusteeship Agreement obligated the PBGC to pay $1,700,000,000 in underfunded benefits to plan participants. Against this backdrop, the PBGC asks the U.S. Bankruptcy Court for the Northern District of Illinois to issue a summary judgment declaring that the PBGC did not act arbitrarily and capriciously in terminating the FA Plan. Jeffrey B. Cohen, Esq., Chief Counsel at the PBGC in Washington, D.C., explains that the PBGC terminated the FA Plan as soon as possible to prevent the accrual of additional costs. By contesting termination, the Flight Attendants seek to shift financial responsibility for additional payments onto the PBGC and its premium-payers. The "PBGC was fully justified, and far from arbitrary and capricious, when it determined that the facts and circumstances of this case presented an unreasonable risk of loss," Mr. Cohen explains. With a deficit of over $23,000,000,000 in 2005, the PBGC must protect its financial interest and the related interests of its stakeholders. The AFA's actions would further jeopardize the health of the nation's pension insurer. Mr. Cohen further notes that summary judgment will facilitate resolution of the pertinent question of law -- whether the administrative record supports the PBGC's determination or shows that it was arbitrary and capricious. The issue in the case "is not whether there are contested fact questions in the underlying administrative record, but rather the legal question of whether the agency action was arbitrary and capricious or not supported by substantial evidence," Mr. Cohen says. Mr. Cohen asserts that the administrative record fully supports the PBGC's determination that the FA Plan will not be able to pay benefits when due. The PBGC's potential long-run loss will increase if the FA Plan is not terminated. The PBGC examined the underfunding of the Plan and its escalating underfunding. At the time of the termination recommendation, the Plan was underfunded by over $2,000,000,000 with a funded ratio of 39.8%. In addition, the Debtors did not make required minimum funding contributions over the last year and have no plans to make any funding contributions in the future. Therefore, the PBGC rationally determined that the FA Plan would be unable to pay benefits when due. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 102; Bankruptcy Creditors' Service, Inc., 215/945-7000) US AIRWAYS: Inks New $583 Million Loan Agreement with ATSB Lenders ------------------------------------------------------------------ In connection with the consummation of its merger with America West Airlines, on September 27, 2005, US Airways, Inc., as borrower, entered into a $583 million Amended and Restated Loan Agreement with: -- the Air Transportation Stabilization Board; -- the lenders party to the agreement from time to time; -- Citibank, N.A., as Agent; -- Wilmington Trust Company, as Collateral Agent; -- Citicorp North America, Inc. as Govco Administrative Agent. America West Airlines also entered into a separate Amended and Restated Loan Agreement with the ATSB. The ATSB Loans amend and restate the previously outstanding loans of both US Airways and AWA, each guaranteed in part by the ATSB. Under the US Airways Loan, $525 million is guaranteed by the ATSB under the Air Transportation Safety and System Stabilization Act. The US Airways ATSB Loan bears interest: 1. 90% of the US Airways ATSB Loan (Tranche A) -- the guaranteed portion of the loan -- was funded through a participating lender's commercial paper conduit program and bears interest at a rate equal to the conduit provider's weighted average cost related to the issuance of certain commercial paper notes and other short term borrowings plus 0.30%, provided that portions of Tranche A that are held by the ATSB or by an assignee and no longer subject to the commercial paper conduit program bear interest at LIBOR plus 40 basis points, and portions of Tranche A that are under certain circumstances assigned free of the ATSB guarantee bear interest at LIBOR plus 6.0%; and 2. 10% of the US Airways ATSB Loan (Tranche B) bears interest at the greater of the Tranche A interest rate plus 6.0% and LIBOR plus 6.0% from a current rate of LIBOR plus 4.0%. US Airways is charged an annual guarantee fee in respect of the ATSB guarantee equal to 6.0% of the guaranteed amount (initially $525 million). The US Airways loan reschedules amortization payments for US Airways with semi-annual payments beginning on March 31, 2007, and continuing through September 30, 2010. The US Airways Loan is guaranteed by US Airways Group and all of its domestic subsidiaries, with certain limited exceptions. It is secured by a first priority lien on substantially all of the present and future assets of US Airways Group and the other loan parties not otherwise encumbered, other than certain specified assets, including assets which are subject to other financing agreements (subject to an increased amortization requirement if US Airways is unable to pledge or grant a perfected lien in its leasehold interest in certain airport facilities). US Airways Group is required to maintain consolidated unrestricted cash and cash equivalents, less: (a) the amount of all outstanding advances by credit card processors and clearing houses in excess of 20% of the air traffic liabilities; (b) $250 million presumed necessary to fund a subsequent tax trust (to the extent not otherwise funded by US Airways Group); (c) $35 million presumed necessary to post collateral to clearing houses (to the extent not posted); and (d) any unrestricted cash or cash equivalents held in unperfected accounts; in an amount -- subject to partial reduction under certain circumstances upon mandatory prepayments made with the net proceeds of future borrowings and issuances of capital stock -- not less than: * $525 million through March 2006; * $500 million through September 2006; * $475 million through March 2007; * $450 million through September 2007; * $400 million through March 2008; * $350 million through September 2008; and * $300 million through September 2010. US Airways must pay down the principal of its loan with the first $125 million of net proceeds from specified asset sales identified in connection with its Chapter 11 proceedings, whether completed before or after emergence. US Airways then retains the next $83 million of net proceeds from specified assets sales, and must pay 60% of net proceeds in excess of an aggregate of $208 million from specified asset sales to the ATSB. Any asset sales proceeds up to $275 million are to be applied in order of maturity, and any asset sales proceeds in excess of $275 million are to be applied pro rata across all maturities in accordance with the loan's early amortization provisions. US Airways completed in excess of $125 million in asset sales prior to emergence from the Chapter 11 proceedings, satisfying the minimum prepayment requirement. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Oct. 4, 2005, Fitch Ratings has affirmed the issuer default rating of 'CCC' and the senior unsecured rating of 'CC' on the debt obligations of America West Airlines, Inc. Fitch has also initiated coverage of US Airways Group, Inc., (NYSE: LCC) with an IDR of 'CCC' and a senior unsecured rating of 'CC'. The recovery ratings for the senior unsecured obligations of both US Airways Group and AWA are 'R6', indicating an expected recovery of less than 10% in a default scenario. US AIRWAYS: Pacific Exchange Begins Trading Options --------------------------------------------------- The Pacific Exchange, Inc., commenced trading options on US Airways Group Inc. equity securities on October 3, 2005. The PCX trades in all expiration months and strike prices, including E-FLEX and LEAPS, currently in the marketplace. US Airways Group, Inc., trades on the March expiration cycle with exercise limits set at 2,500,000 shares. The issue trades by lead market makers Mark Krommenhoek and Julia Overs of Citigroup Derivatives Markets, Inc. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Oct. 4, 2005, Fitch Ratings has affirmed the issuer default rating of 'CCC' and the senior unsecured rating of 'CC' on the debt obligations of America West Airlines, Inc. Fitch has also initiated coverage of US Airways Group, Inc., (NYSE: LCC) with an IDR of 'CCC' and a senior unsecured rating of 'CC'. The recovery ratings for the senior unsecured obligations of both US Airways Group and AWA are 'R6', indicating an expected recovery of less than 10% in a default scenario. US AIRWAYS: American Stock Exchange Trades Options -------------------------------------------------- The American Stock Exchange launched trading in options on the New York Stock Exchange listed stock of US Airways Group, Inc., on September 29, 2005. US Airways Group options opened with strike prices of 17-1/2 to 20 to 22-1/2 and position limits of 2,500,000 shares. The options will trade on the March expiration cycle with initial expirations in October, November, December and March. The specialist is Group One Trading, LP. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Oct. 4, 2005, Fitch Ratings has affirmed the issuer default rating of 'CCC' and the senior unsecured rating of 'CC' on the debt obligations of America West Airlines, Inc. Fitch has also initiated coverage of US Airways Group, Inc., (NYSE: LCC) with an IDR of 'CCC' and a senior unsecured rating of 'CC'. The recovery ratings for the senior unsecured obligations of both US Airways Group and AWA are 'R6', indicating an expected recovery of less than 10% in a default scenario. USG CORP: Equity Committee Gets Court Okay to Hire Morris Nichols ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave the USG Corporation and its debtor-affiliates' chapter 11 cases permission to retain Morris, Nichols, Arsht and Tunnell as its local counsel, nunc pro tunc to May 14, 2005. As the Equity Committee's counsel, Morris Nichols will: (a) take all necessary actions to protect the Equity Committee's rights and interest with respect to the Debtors' Chapter 11 cases; (b) assist the Equity Committee with respect to its organization, the conduct of its business and meetings, the dissemination of information to its constituency, and other matters deemed necessary to facilitate the administrative activities; (c) attend the Equity Committee's meetings; (d) prepare all necessary documents in connection with the Debtors' cases; (e) represent and advise the Equity Committee in connection with any Chapter 11 plan and related matters; (f) confer with the Debtors, the statutory committees and their counsel, and other professionals engaged by the Equity Committee; (g) review the Debtors' activities and matters concerning the treatment of their equity interests; (h) attend to the inquiries of the Equity Committee members; (i) perform all necessary legal services in connection with the pending asbestos claims estimation litigation in the Debtors' cases, and other litigation as may be directed by the Equity Committee; and (j) represent the Equity Committee in any contested matter or adversary proceeding in the Debtors' cases affecting or concerning: -- the treatment of equity interests, whether under a Chapter 11 plan or otherwise; -- the Equity Committee's power and duties; and -- the application for and payment of the expenses incurred by the Equity Committee members. Morris Nichols will be paid in accordance with its customary hourly rates in effect from time to time: Partners $400 to $585 Associates $220 to $380 Paraprofessionals $165 Case clerks $100 The firm will also be reimbursed for necessary out-of-pocket expenses incurred. The attorneys principally responsible for the Equity Committee's representation and their current hourly rates are: Robert J. Dehney (partner) $550 Daniel B. Butz (associate) 260 Curtis S. Miller (associate) 245 Joanna F. Newdeck (associate) 220 Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., at Jones Day represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 94; Bankruptcy Creditors' Service, Inc., 215/945-7000) VIDEO WITHOUT BOUNDARIES: Net Loss Rises Following Restatement -------------------------------------------------------------- Video Without Boundaries, Inc., filed an Amended Form 10-QSB with the Securities and Exchange Commission to restate its Quarterly Report for the period ended March 31, 2004, originally filed on May 14, 2004. The restated financials were delivered to the SEC earlier this month. The overall result of the restatement was to increase the net loss suffered by the Company to $509,589 from the originally reported net loss of $183,408 for the first quarter of 2004. The restatement corrects the accounting of these transactions: a) correction for amounts incorrectly recorded as cash in transit; b) reduction of inventory to correct carrying amount; c) reclassification of the purchase of a web portal and media ready software to property and equipment; d) increase in depreciation expense on property and equipment; e) reclassification of a loan receivable to investments and subsequent provision for decline in value; f) booking of additional invoices to accounts payable; g) conversion of additional amounts from shareholder loans to common stock; h) recording of interest on shareholder loans; i) accrual for salary to president; j) booking of accrued expenses; and k) reversal of a sale and related cost of sales. The most noteworthy adjustments were to accounts receivable which fell from the originally reported $302,064 to $1,725; property and equipment which registered $97,427 prior to restatement, and $462,448 after restatement; accounts payable with an increase from originally reported $44,292 to a restated $62,499; and an accumulated deficit which rose from $3,614,158 to a restated $4,565,785. Revenues fell from $86,563 to $2,553 restated, with a consequent drop in cost of sales from $68,310 to $3,310. The Company has generated minimal revenue since its inception and has incurred net losses of approximately $4.6 million. Going Concern Doubt Baum & Company, PA, expressed substantial doubt about Video Without Boundaries, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2003 and 2002. The auditing firm pointed to the Company's recurring losses from operations and net capital deficiency. Video Without Boundaries has not submitted its annual report on Form 10-K with the Securities and Exchange Commission for the year ended Dec. 31, 2004. In a report filed in March 2005, Management informed the SEC that the Company's financial statements have not yet been completed. About Video Without Boundaries Video Without Boundaries -- http://www.vwbinc.com/-- provides products and services in the converging digital media on demand, enhanced home entertainment and emerging interactive consumer electronics markets. The Company is focused on home entertainment media products and solutions that enhance the consumer experience, while providing new revenue opportunities for online music and movie content providers. The Company is becoming a supplier of broadband products, services and content including its ability to deliver broadcast quality digital video and web interactivity at transfer rates as low as 56K. VINTAGE PETROLEUM: S&P Reviews BB- Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'A-/A-2' corporate credit rating on exploration and production company Occidental Petroleum Corp. following the company's announced acquisition of Vintage Petroleum Inc. for $3.8 billion. In addition, Standard & Poor's placed its 'BB-/B-2' corporate credit rating on Vintage on CreditWatch with positive implications. At the close of the transaction, which is expected to occur in the first quarter of 2006, the ratings on Vintage are expected to be equalized with the ratings on Occidental, reflecting Occidental's guaranty of Vintage's debt. The outlook on Occidental is stable. Pro forma for the proposed transaction, Los Angeles, Calif.-based Occidental had total outstanding debt of about $3.6 billion as of Sept. 30, 2005. "The affirmation reflects the company's prudent financing of the proposed transaction," said Standard & Poor's credit analyst Brian Janiak. Occidental is financing the transaction primarily with common equity of about $2.2 billion, cash on hand of about $1.4 billion, and the assumption of $550 million of Vintage debt and $225 million of Vintage's cash on hand. Standard & Poor's affirmation reflects the continued strides Occidental's management has taken over the past two years to improve the company's financial profile to levels commensurate for 'A-' rating. Occidental has increased its production levels through organic and acquisition growth while maintaining a competitive cost structure compared with other similarly rated E&P companies," said Mr. Janiak. The stable outlook reflects the expectation that Occidental will continue to fund its operations and growth initiatives in a conservative manner. WELLS FARGO: S&P Puts Low-B Ratings on 126 Certificate Classes -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on 41 classes from 13 series issued by Wells Fargo Mortgage Backed Securities Trust. At the same time, ratings are affirmed on the remaining classes from the same transactions and from various other Wells Fargo Mortgage Backed Securities Trust series. The raised ratings reflect: -- credit support percentages that are at least 1.72x the loss coverage levels associated with the higher ratings; -- remaining collateral balances that are less than 44.96% of their original sizes -- and less than 30% for the majority; and -- excellent collateral pool performance, as demonstrated by low cumulative losses of no more than 3 basis points. Sixteen classes from four series backed by 15-year, fixed-rate mortgage loans were among those that were upgraded. As of the September 2005 distribution date, no series in this group had any seriously delinquent loans. Furthermore, all of these series experienced low or no realized losses. The average amount of mortgage seasoning for the 15-year, fixed-rate group is 39 months. In addition, 26 classes from 11 series backed by 30-year, fixed- rate mortgage loans were among those that were upgraded. Serious delinquencies ranged between 0.00% -- for five series -- and 1.89% -- for series 2002-19. Cumulative realized losses were no greater than 2 bps for these 11 series. The average amount of mortgage seasoning for the 30-year, fixed-rate group is 39 months. The rating affirmations reflect credit enhancement percentages that are sufficient to support the current ratings. As with the upgraded certificates, the mortgage pools backing the certificates with affirmed ratings have experienced excellent collateral performance with low delinquencies and low or no realized losses. The collateral backing the certificates consists of prime, first- lien mortgage loans secured by one- to four-family residential properties. Ratings Raised Wells Fargo Mortgage Backed Securities Trust Mortgage Pass-Through Certs Rating Series Class To From ------ ----- -- ---- 2002-1 B-2 AAA AA+ 2002-1 B-3 AA+ AA- 2002-17 B-3 AAA AA+ 2002-18 B-2 AAA AA+ 2002-18 B-3 AA+ AA- 2002-19 B-3 AA+ AA 2002-20 B-2 AAA AA+ 2002-20 B-3 AA+ AA- 2002-22 B-3 AAA AA+ 2003-1 I-B-1 AAA AA+ 2003-1 I-B-2 AA AA- 2003-1 I-B-3 A A- 2003-1 I-B-4 BBB BBB- 2003-1 I-B-5 BB BB- 2003-1 II-B-1 AAA AA+ 2003-1 II-B-2 AA AA- 2003-1 II-B-3 A+ A 2003-1 II-B-4 BBB+ BBB- 2003-2 B-1 AAA AA+ 2003-2 B-2 AA AA- 2003-2 B-3 A BBB+ 2003-2 B-4 BBB BB+ 2003-2 B-5 BB B+ 2003-3 I-B-2 AA- A+ 2003-3 II-B-2 AA- A+ 2003-3 II-B-3 BBB+ BBB 2003-3 II-B-4 BB+ BB 2003-3 II-B-5 B+ B 2003-A B-1 AAA AA+ 2003-A B-2 AA AA- 2003-A B-3 A A- 2003-A B-4 BBB BBB- 2003-C B-1 AAA AA+ 2003-C B-2 AA AA- 2003-C B-3 A+ A- 2003-C B-4 BBB BB+ 2003-C B-5 BB B+ 2003-D B-2 AA- A+ 2003-D B-3 A- BBB+ 2003-F B-1 AA+ AA 2003-F B-3 BBB+ BBB Ratings Affirmed Wells Fargo Mortgage Backed Securities Trust Mortgage Pass-Through Certs Series Class Rating 2002-1 A-2,A-PO,B-1 AAA 2002-17 A-1,A-2,A-3,A-PO,B-1,B-2 AAA 2002-17 B-5 BBB 2002-18 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-8 AAA 2002-18 I-A-16,I-A-17 AAA 2002-18 II-A-4,II-A-5,II-A-18,II-A-WIO,A-PO,B-1 AAA 2002-19 I-A-5,I-A-7,I-A-8,I-A-9,I-A-PO AAA 2002-19 II-A-5,II-A-7,II-A-PO,B-1,B-2 AAA 2002-20 A-3,A-4,A-5,A-PO,B-1 AAA 2002-22 I-A-9,I-A-12,II-A-4,II-A-10 AAA 2002-22 II-A-PO,I-A-WIO,II-A-WIO,B-1,B-2 AAA 2003-1 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA 2003-1 I-A-8,I-A-9,I-A-10 AAA 2003-1 II-A-6,II-A-7,II-A-8,II-A-9,A-PO AAA 2003-1 II-A-7,II-A-8,II-A-9,A-PO AAA 2003-1 II-B-5 B 2003-2 A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9,A-10 AAA 2003-2 A-11,A-PO AAA 2003-3 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA 2003-3 I-A-8,I-A-9,I-A-10,I-A-11,I-A-12,I-A-13 AAA 2003-3 I-A-14,I-A-15,I-A-16,I-A-17,I-A-18,I-A-19 AAA 2003-3 I-A-20,I-A-21,I-A-22,I-A-23,I-A-24 AAA 2003-3 II-A-1,A-PO AAA 2003-3 I-B-1,II-B-1 AA+ 2003-3 I-B-3 BBB+ 2003-3 I-B-4 BB 2003-3 I-B-5 B 2003-6 I-A-1,I-A-PO,II-A-1,II-A-2,II-A-3,II-A-PO AAA 2003-6 B-1 AA 2003-6 B-2 A 2003-6 B-3 BBB 2003-6 B-4 BB 2003-6 B-5 B 2003-7 A-1,A-2,A-3,A-4,A-PO AAA 2003-7 B-1 AA 2003-7 B-2 A 2003-7 B-3 BBB 2003-7 B-4 BB 2003-7 B-5 B 2003-8 A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-9,A-PO AAA 2003-8 B-1 AA 2003-8 B-2 A 2003-8 B-3 BBB 2003-8 B-4 BB 2003-8 B-5 B 2003-9 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA 2003-9 I-A-8,I-A-9,I-A-10,I-A-11,I-A-12,I-A-13 AAA 2003-9 I-A-14,I-A-15,I-A-16,A-PO,II-A-1 AAA 2003-10 A-1,A-2,A-3,A-4,A-PO AAA 2003-10 B-1 AA 2003-10 B-2 A 2003-10 B-3 BBB 2003-10 B-4 BB 2003-10 B-5 B 2003-11 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-8 AAA 2003-11 I-A-9,I-A-10,I-A-11,I-A-12,I-A-13,I-A-PO AAA 2003-11 II-A-1,II-A-PO AAA 2003-11 B-1 AA 2003-11 B-2 A 2003-11 B-3 BBB 2003-11 B-4 BB 2003-11 B-5 B 2003-12 A-1,A-2,A-3,A-PO AAA 2003-12 B-1 AA 2003-12 B-2 A 2003-12 B-3 BBB 2003-12 B-4 BB 2003-12 B-5 B 2003-13 A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-PO AAA 2003-13 B-1 AA 2003-13 B-2 A 2003-13 B-3 BBB 2003-13 B-4 BB 2003-13 B-5 B 2003-14 I-A-1,I-A-2,I-A-3,I-A-4,II-A-1,II-A-2,A-PO AAA 2003-14 B-1 AA 2003-14 B-2 A 2003-14 B-3 BBB 2003-14 B-4 BB 2003-14 B-5 B 2003-15 I-A-1,I-A-2,I-A-3,II-A-1,A-PO AAA 2003-15 B-1 AA 2003-15 B-2 A 2003-15 B-3 BBB 2003-15 B-4 BB 2003-15 B-5 B 2003-16 I-A-1,II-A-1,II-A-2,II-A-3,II-A-4,II-A-IO AAA 2003-16 III-A-1,III-A-2,A-PO AAA 2003-16 B-1 AA 2003-16 B-2 A 2003-16 B-3 BBB 2003-16 B-4 BB 2003-16 B-5 B 2003-17 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA 2003-17 I-A-8,I-A-9,I-A-10,I-A-11,I-A-12,I-A-13 AAA 2003-17 I-A-14,I-A-IO,II-A-1,II-A-2,II-A-3,II-A-4 AAA 2003-17 II-A-5,II-A-6,II-A-7,II-A-8,II-A-9,II-A-10 AAA 2003-17 II-A-11,A-PO AAA 2003-17 B-1 AA 2003-17 B-2 A 2003-17 B-3 BBB 2003-17 B-4 BB 2003-17 B-5 B 2003-18 A-1,A-2,A-3,A-4,A-5,A-PO,A-R AAA 2003-18 B-1 AA 2003-18 B-2 A 2003-18 B-3 BBB 2003-18 B-4 BB 2003-18 B-5 B 2003-19 A-1,A-2,A-3,A-4,A-PO AAA 2003-19 B-1 AA 2003-19 B-2 A 2003-19 B-3 BBB 2003-19 B-4 BB 2003-19 B-5 B 2003-A A-5,A-6,A-7 AAA 2003-C A-4,A-5,A-6,A-7,A-8,A-9 AAA 2003-D A-1 AAA 2003-D B-1 AA+ 2003-D B-4 BB+ 2003-D B-5 B 2003-E A-1,A-2,A-3,A-4,A-WIO AAA 2003-E B-1 AA 2003-E B-2 A 2003-E B-3 BBB 2003-E B-4 BB 2003-E B-5 B 2003-G A-1,A-IO AAA 2003-G B-1 AA 2003-G B-2 A 2003-G B-3 BBB 2003-G B-4 BB 2003-G B-5 B 2003-H A-1 AAA 2003-H B-1 AA 2003-H B-2 A 2003-H B-3 BBB 2003-H B-4 BB 2003-H B-5 B 2003-J I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA 2003-J I-A-8,I-A-9,I-A-10,I-A-11,I-A-12 AAA 2003-J II-A-1,II-A-2,II-A-3,II-A-4,II-A-5,II-A-6 AAA 2003-J II-A-7,III-A-1,III-A-2,III-A-3 AAA 2003-J IV-A-1,IV-A-2,IV-A-3,V-A-1 AAA 2003-J B-1 AA 2003-J B-2 A 2003-J B-3 BBB 2003-J B-4 BB 2003-J B-5 B 2003-K I-A-1,I-A-2,I-A-3,I-A-4,I-A-5 AAA 2003-K II-A-1,II-A-2,II-A-3,II-A-4,II-A-5,II-A-6 AAA 2003-K II-A-7,III-A-1,III-A-2,III-A-3,III-A-4 AAA 2003-K IV-A-1 AAA 2003-K B-1 AA 2003-K B-2 A 2003-K B-3 BBB 2003-K B-4 BB 2003-K B-5 B 2003-L I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,II-A-1 AAA 2003-L B-1 AA 2003-L B-2 A 2003-L B-3 BBB 2003-L B-4 BB 2003-L B-5 B 2003-M A-1,A-2,A-3 AAA 2003-M B-1 AA 2003-M B-2 A 2003-M B-3 BBB 2003-M B-4 BB 2003-M B-5 B 2003-N I-A-1, I-A-2,I-A-3,I-A-4,I-A-4,I-A-5,I-A-6 AAA 2003-N I-A-R,I-A-LR,II-A-1,II-A-2,II-A-3,II-A-4 AAA 2003-N III-A-1,III-A-2,III-A-3,III-A-4 AAA 2003-N B-1 AA 2003-N B-2 A 2003-N B-3 BBB 2003-N B-4 BB 2003-N B-5 B 2003-O I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6 AAA 2003-O I-A-7,I-A-8,I-A-9,I-A-10,I-A-11 AAA 2003-O II-A-1,II-A-2,II-A-3,III-A-1,III-A-2 AAA 2003-O III-A-3,IV-A-1,IV-A-2,V-A-1 AAA 2003-O B-1 AA 2003-O B-2 A 2003-O B-3 BBB 2003-O B-4 BB 2003-O B-5 B 2004-1 A-1,A-2,*A-3,A-4,A-5,A-6,A-7,A-8,A-9 AAA 2004-1 A-10,A-11,A-12,A-13,A-14,A-15,A-16,A-17 AAA 2004-1 A-18,A-19,A-20,A-21,A-22,A-23,A-24,A-25 AAA 2004-1 A-26,A-27,A-28,A-29,A-30,A-31,A-32,A-33 AAA 2004-1 A-34,A-35,A-36,A-37,A-39,A-PO,A-WIO AAA 2004-1 B-1 AA 2004-1 B-2 A 2004-1 B-3 BBB 2004-1 B-4 BB 2004-1 B-5 B 2004-2 A-1,A-PO AAA 2004-2 B-1 AA 2004-2 B-2 A 2004-2 B-3 BBB 2004-2 B-4 BB 2004-2 B-5 B 2004-3 A-1,A-PO AAA 2004-3 B-1 AA 2004-3 B-2 A 2004-3 B-3 BBB 2004-3 B-4 BB 2004-3 B-5 B 2004-5 I-A-1,I-A-PO,II-A-1,II-A-R,II-A-LR,II-A-PO AAA 2004-5 B-1 AA 2004-5 B-2 A 2004-5 B-3 BBB 2004-5 B-4 BB 2004-5 B-5 B 2004-6 A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9,A-10 AAA 2004-6 A-11,A-12,A-13,A-14,A-15,A-15,A-16,A-PO AAA 2004-6 B-1 AA 2004-6 B-2 A 2004-6 B-3 BBB 2004-6 B-4 BB 2004-6 B-5 B 2004-7 I-A-1,I-A-IO,I-A-R,I-A-LR,II-A-1,II-A-2,A-PO AAA 2004-7 B-1 AA 2004-7 B-2 A 2004-7 B-3 BBB 2004-7 B-4 BB 2004-7 B-5 B 2004-8 A-1,A-2,A-3,A-4,A-5,A-R,A-PO AAA 2004-8 B-1 AA 2004-8 B-2 A 2004-8 B-3 BBB 2004-8 B-4 BB 2004-8 B-5 B 2004-A A-1 AAA 2004-A B-1 AA 2004-A B-2 A 2004-A B-3 BBB 2004-A B-4 BB 2004-A B-5 B 2004-B A-1 AAA 2004-B B-1 AA 2004-B B-2 A 2004-B B-3 BBB 2004-B B-4 BB 2004-B B-5 B 2004-C A-1 AAA 2004-C B-1 AA 2004-C B-2 A 2004-C B-3 BBB 2004-C B-4 BB 2004-C B-5 B 2004-CC A-1,A-R AAA 2004-CC B-1 AA 2004-CC B-2 A 2004-CC B-3 BBB 2004-CC B-4 BB 2004-CC B-5 B 2004-D A-1,A-2,A-IO AAA 2004-D B-1 AA 2004-D B-2 A 2004-D B-3 BBB 2004-D B-4 BB 2004-D B-5 B 2004-E A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9 AAA 2004-E A-10,A-11 AAA 2004-E B-1 AA 2004-E B-2 A 2004-E B-3 BBB 2004-E B-4 BB 2004-E B-5 B 2004-EE I-A-1,II-A-1,II-A-2,II-A-3,II-A-R,II-A-LR AAA 2004-EE III-A-1,III-A-2,III-A-3 AAA 2004-EE B-1 AA 2004-EE B-2 A 2004-EE B-3 BBB 2004-EE B-4 BB 2004-EE B-5 B 2004-F A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9 AAA 2004-F A-10,A-11 AAA 2004-F B-1 AA 2004-F B-2 A 2004-F B-3 BBB 2004-F B-4 BB 2004-F B-5 B 2004-G A-1,A-2,A-3,A-4 AAA 2004-G B-1 AA 2004-G B-2 A 2004-G B-3 BBB 2004-G B-4 BB 2004-G B-5 B 2004-H A-1,A-2 AAA 2004-H B-1 AA 2004-H B-2 A 2004-H B-3 BBB 2004-H B-4 BB 2004-H B-5 B 2004-I I-A-1,I-A-2,II-A-1,II-A-R,II-A-LR AAA 2004-I B-1 AA 2004-I B-2 A 2004-I B-3 BBB 2004-I B-4 BB 2004-I B-5 B 2004-J A-1,A-R AAA 2004-J B-1 AA 2004-J B-2 A 2004-J B-3 BBB 2004-J B-4 BB 2004-J B-5 B 2004-K I-A-1,I-A-2,I-A-3,I-A-R,I-A-LR,II-A-1 AAA 2004-K II-A-2,II-A-3,II-A-4,II-A-5,II-A-6,II-A-7 AAA 2004-K II-A-8,II-9,II-A-10,II-A-11,II-A-12 AAA 2004-K B-1 AA 2004-K B-2 A 2004-K B-3 BBB 2004-K B-4 BB 2004-K B-5 B 2004-L A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9,A-R AAA 2004-L B-1 AA 2004-L B-2 A 2004-L B-3 BBB 2004-L B-4 BB 2004-L B-5 B 2004-M A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-R,A-LR AAA 2004-M B-1 AA 2004-M B-2 A 2004-M B-3 BBB 2004-M B-4 BB 2004-M B-5 B 2004-N A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9,A-10 AAA 2004-N A-R,A-LR AAA 2004-N B-1 AA 2004-N B-2 A 2004-N B-3 BBB 2004-N B-4 BB 2004-N B-5 B 2004-O A-1,A-R AAA 2004-O B-1 AA 2004-O B-2 A 2004-O B-3 BBB 2004-O B-4 BB 2004-O B-5 B 2004-P I-A-1,II-A-1,II-A-R,II-A-LR AAA 2004-P B-1 AA 2004-P B-2 A 2004-P B-3 BBB 2004-P B-4 BB 2004-P B-5 B 2004-Q I-A-1,I-A-2,I-A-3,I-A-R,I-A-LR,II-A-1 AAA 2004-Q II-A-2 AAA 2004-Q B-1 AA 2004-Q B-2 A 2004-Q B-3 BBB 2004-Q B-4 BB 2004-Q B-5 B 2004-R I-A-1,I-A-2,II-A-1,II-A-R,II-A-LR AAA 2004-R B-1 AA 2004-R B-2 A 2004-R B-3 BBB 2004-R B-4 BB 2004-R B-5 B 2004-S A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-R AAA 2004-S B-1 AA 2004-S B-2 A 2004-S B-3 BBB 2004-S B-4 BB 2004-S B-5 B 2004-T A-1,A-R AAA 2004-T B-1 AA 2004-T B-2 A 2004-T B-3 BBB 2004-T B-4 BB 2004-T B-5 B 2004-U A-1,A-R AAA 2004-U B-1 AA 2004-U B-2 A 2004-U B-3 BBB 2004-U B-4 BB 2004-U B-5 B 2004-V I-A-1,I-A-2,I-A-3,I-A-R,I-A-LR,II-A-1 AAA 2004-V B-1 AA 2004-V B-2 A 2004-V B-3 BBB 2004-V B-4 BB 2004-V B-5 B 2004-X I-A-1,1-A-2,I-A-3,I-A-4,I-A-5,I-A-R AAA 2004-X I-A-LR,II-A-1,II-A-2 AAA 2004-X B-1 AA 2004-X B-2 A 2004-X B-3 BBB 2004-X B-4 BB 2004-X B-5 B 2004-Y I-A-1,1-A-2,I-A-3,II-A-1,II-A-R,III-A-1 AAA 2004-Y III-A-2,III-A-3,III-A-4,III-A-5 AAA 2004-Y B-1 AA 2004-Y B-2 A 2004-Y B-3 BBB 2004-Y B-4 BB 2004-Y B-5 B 2004-Z I-A-1,1-A-2,II-A-1,II-A-2,II-A-IO,II-A-R AAA 2004-Z B-1 AA 2004-Z B-2 A 2004-Z B-3 BBB 2005-1 I-A-1,I-A-R,I-A-LR,II-A-1,III-A-1,A-WIO AAA 2005-1 A-PO AAA 2005-1 B-1 AA 2005-1 B-2 A 2005-1 B-3 BBB 2005-1 B-4 BB 2005-1 B-5 B 2005-AR1 I-A-1,1-A-2,I-A-R,I-A-LR,I-A-IO,II-A-1 AAA 2005-AR1 II-A-IO AAA 2005-AR1 I-B-1,II-B-1 AA 2005-AR1 I-B-2,II-B-2 A 2005-AR1 I-B-3,II-B-3 BBB 2005-AR1 I-B-4,II-B-4 BB 2005-AR1 I-B-5,II-B-5 B 2005-AR3 I-A-1,1-A-2,II-A-1,II-A-R,II-A-LR AAA 2005-AR3 B-1 AA 2005-AR3 B-2 A 2005-AR3 B-3 BBB 2005-AR3 B-4 BB 2005-AR3 B-5 B WESTON NURSERIES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Weston Nurseries, Inc. 30 Phipps Street P.O. Box 186 Hopkinton, Massachusetts 01748 Bankruptcy Case No.: 05-49884 Type of Business: The Debtor is central New England's premier resource in designing, creating, and enjoying outdoor living areas. Weston Nurseries, Inc., grows and sells quality plants, trees, shrubs, and perennials. See http://www.westonnurseries.com/ Chapter 11 Petition Date: October 14, 2005 Court: District of Massachusetts (Worcester) Judge: Joel B. Rosenthal Debtor's Counsel: Alan L. Braunstein, Esq. Riemer & Braunstein, LLP Three Center Plaza Boston, MA 02108 Tel: (617) 880-3516 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ McHutchinson LLC Vendor supplies $80,392 P.O. Box 92170 Elk Grove Village, IL 60009 NTE Software Services Computer integration $40,413 900 East Eight Avenue Suite 300 King of Prussia, PA 19406 Chesapeake Nurseries, Inc. Nursery inventory $31,681 P.O. Box 64319 Baltimore, MD 21264-4139 Griffin Greenhouse & Nursery Vendor supplies $30,803 Supply Commerce Corporation, Inc. Hard goods inventory $25,609 Pride Printers, Inc. Printing $22,506 Birnbaum & Godkin, LLP Legal services $19,181 Prides Corner Farms, Inc. Nursery inventory $17,730 NYP Corp. Vendor supplies $17,684 Turco Nursery, Inc. Nursery inventory $17,277 Quansett Nurseries Nursery inventory $15,795 M&G/Van Eeden Bros. Inc. Hard goods inventory $15,744 Hopewell Nursery, Inc. Nursery inventory $14,928 North Country Mulch, Inc. Hard goods inventory $13,375 The Conard Pyle Co. Nursery inventory $11,219 Darwin Plants Nursery inventory $10,634 Boston University Advertising $10,619 WMJX 106.7 FM Advertising $10,405 Dayton Bag & Burlap Vendor supplies $10,385 All-Pro Cleaning Systems Vendor services $9,900 WHITEHALL JEWELLERS: Appoints Daniel Levy as Interim CEO -------------------------------------------------------- The Board of Directors for Whitehall Jewellers, Inc. (NYSE:JWL) elected Daniel H. Levy to serve as interim Chief Executive Officer, effective immediately, while the Company conducts a search to find a permanent Chief Executive Officer. Mr. Levy has served as a director of the Company since Jan. 7, 1997 (and had served as a director from March 1996 until May 1996). Mr. Levy, 62, has a long and distinguished career in the retail industry. The Company also disclosed the resignation of Lucinda M. Baier as President and Chief Operating Officer on Oct. 11, 2005. Mr. Levy commented, "The Company owes a great debt of gratitude to Cindy for her steadfast service as President and Chief Operating Officer. In addition, during very challenging times following the death of former Chairman and Chief Executive Officer Hugh Patinkin, Cindy graciously undertook the duties and responsibilities of Chief Executive Officer of the Company. The Company wishes her the best in all of her future endeavors." Arbitration Proceeding The Company commenced an arbitration proceeding relating to Beryl Raff's employment with the Company. Ms. Raff resigned all positions in the Company on Sept. 8, 2005. She had previously been named as Chief Executive Officer and was expected to commence full-time employment with the Company and join its board of directors in mid-September. She also indicated in the letter that she will be returning compensation previously paid to her by the Company. Whitehall Jewellers, Inc., is a national specialty retailer of fine jewelry, operating 387 stores in 38 states. The Company operates stores in regional and super regional shopping malls under the names Whitehall Co. Jewellers, Lundstrom Jewelers and Marks Bros. Jewelers. * * * Needs Additional Capital As previously reported, Whitehall is reviewing its financial situation in light of current and forecasted operating results and management changes. The Company believes it needs additional capital to support its operations. The Company is evaluating various alternatives to meet these needs, including the raising of additional debt or equity financing. The Company has requested temporary extensions of payment terms from some of its key suppliers in order to manage liquidity and has also slowed its accounts payable schedules generally. In addition, the Company plans to retain restructuring professionals to assist it. Lender Talks The Company is actively engaged in discussing alternatives with its bank lenders and other parties. There is no assurance that the discussions will result in additional financing or that an alternative transaction will be available. If the Company is not able to procure additional financing or otherwise able to obtain additional liquidity, it may be forced to pursue other alternatives, such as a restructuring of its obligations. 10-Q Filing Delay The Company does not expect to be in a position to file its Quarterly Report on Form 10-Q, including financial results for its second fiscal quarter, on a timely basis. The Company expects to report a net loss for its second fiscal quarter. WINDSWEPT ENVIRONMENTAL: Auditor Raises Going Concern Doubt ----------------------------------------------------------- Massella & Associates, CPA, PLLC, expressed substantial doubt about Windswept Environmental Group, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended June 28, 2005. The auditing firm points to the Company's: -- recurring losses from operations; -- working capital deficit and stockholders' deficit; and -- difficulty in generating sufficient cash flow to meet its obligations and sustain operations. The same concerns also prompted Deloitte & Touche LLP, Windswept Environmental's former auditors, to raise substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the years ended June 29, 2004 and July 1, 2003. Massella & Associates replaced Deloitte & Touche as the Company's independent accountants on June 30, 2005. Fiscal 2005 Results In its Form 10-K for the fiscal year ended June 28, 2005, submitted to the Securities and Exchange Commission, Windswept Environmental reports a $ $82,441 net income compared to a $3,535,000 net loss for the fiscal year ended June 29, 2004. The Company's balance sheet showed $10,056,538 of assets at June 28, 2005, and liabilities totaling $10,840,052, causing a $783,514 stockholders' deficit. As of June 28, 2005, the Company had accumulated deficit of approximately $636,800. Recapitalization In its audit report, Massella & Associates also mentioned that Windswept Environmental was recapitalized through the issuance of a secured convertible term note. The financing transaction resulted in the repayment of Windswept Environmental's secured note payable-related party and a change of control of the Company. As of September 9, 2005, the Company owed Laurus $6 million pursuant to the restated convertible senior secured note, the proceeds of which the Company utilized: -- to repay all of its outstanding obligations to Spotless Plastics (USA), Inc., -- to pay transaction expenses; and -- for working capital. Laurus holds a senior security interest in the Company and the Company's subsidiaries assets collateralizing such note. In addition, Spotless holds a subordinated security interest collateralizing the Company's $500,000 note issued to Spotless. Windswept Environmental Group, Inc., through its wholly owned subsidiary, Trade-Winds Environmental Restoration, Inc., -- http://www.tradewindsenvironmental.com/-- provides a full array of emergency response, remediation, disaster restoration and commercial drying services to a broad range of clients. W.R. GRACE: Files Asset Sales Report for Second Quarter of 2005 --------------------------------------------------------------- Pursuant to an order establishing procedures for the sale or abandonment of certain de minimis assets dated August 2, 2001, W.R. Grace & Co. and its debtor-affiliates are required to file with the Court a list of: (a) the sales of the Debtors' assets outside the ordinary course of business for consideration not to exceed $250,000, from April 1, 2005, through June 30, 2005; and (b) the aggregate dollar amount of the sales of the Debtors' assets during the Sale Period for consideration less than or equal to $25,000. David W. Carickhoff, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., in Wilmington, Delaware, reports that on April 22, 2005, Debtor Del Taco Restaurants, Inc., sold to La Vista Property Management, Inc., 0.43 acres of land located on La Vista Road, in DeKalb County, Georgia, for $41,250, with a $34,973 net price. Mr. Carickhoff says that the Debtors may have sold assets during the Sale Period, which inadvertently were not yet included in the Report. Those asset sales will be disclosed in future reports filed with the Court. Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. (W.R. Grace Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- ACCO Brands Corp ABD (28) 878 (364) Abraxas Petro ABP (43) 106 (5) AFC Enterprises AFCE (44) 216 52 Alliance Imaging AIQ (52) 621 43 Amazon.com Inc. AMZN (64) 2,601 782 AMR Corp. AMR (615) 29,494 (2,230) Atherogenics Inc. AGIX (76) 235 213 Bally Total Fitn BFT (172) 1,461 (290) Biomarin Pharmac BMRN (110) 167 (4) Blount International BLT (220) 446 126 CableVision System CVC (2,430) 10,111 (1,607) CCC Information CCCG (107) 96 20 Centennial Comm CYCL (463) 1,456 85 Choice Hotels CHH (185) 283 (36) Cincinnati Bell CBB (625) 1,891 (18) Clorox Co. CLX (553) 3,617 (258) Columbia Laborat CBRX (12) 18 11 Coley Pharma COLY (5) 71 30 Compass Minerals CMP (81) 667 129 Crown Media HL CRWN (34) 1,289 (130) Deluxe Corp DLX (124) 1,508 (276) Denny's Corporation DENN (260) 494 (73) Domino's Pizza DPZ (574) 420 (21) Echostar Comm DISH (972) 7,281 269 Emeritus Corp. ESC (123) 720 (43) Foster Wheeler FWLT (490) 2,012 (175) Guilford Pharm GLFD (20) 136 60 Graftech International GTI (34) 1,006 264 I2 Technologies ITWO (153) 386 124 ICOS Corp ICOS (57) 243 160 IMAX Corp IMAX (38) 241 27 Immersion Corp. IMMR (11) 46 30 Intermune Inc. ITMN (7) 219 133 Investools Inc. IED (22) 56 (47) Isis Pharm. ISIS (124) 147 46 Kulicke & Soffa KLIC (44) 365 182 Lodgenet Entertainment LNET (72) 275 15 Lucent Tech Inc. LU (70) 16,437 2,517 Maxxam Inc. MXM (681) 1,024 103 Maytag Corp. MYG (77) 3,019 398 McDermott Int'l MDR (140) 1,489 123 McMoran Exploration MMR (39) 377 135 NPS Pharm Inc. NPSP (98) 310 215 ON Semiconductor ONNN (346) 1,132 270 Owens Corning OWENQ (8,225) 7,766 1,391 Primedia Inc. PRM (771) 1,506 16 Quality Distrubu QLTY (26) 380 18 Qwest Communication Q (2,663) 24,070 1,248 RBC Bearings Inc. ROLL (5) 247 125 Riviera Holdings RIV (27) 216 5 Rural/Metro Corp. RURL (184) 221 18 Rural Cellular RCCC (465) 1,376 30 Ruth's Chris Stk RUTH (49) 110 (22) SBA Comm. Corp. SBAC (50) 857 19 Sepracor Inc. SEPR (201) 1,175 717 St. John Knits Inc. SJKI (52) 213 80 Tiger Telematics TGTL (16) 17 (23) US Unwired Inc. UNWR (76) 414 56 Vector Group Ltd. VGR (33) 527 173 Verifone Holding PAY (36) 248 48 Vertrue Inc. VTRU (48) 447 (96) Weight Watchers WTW (36) 938 (266) Worldspace Inc. WRSP (1,720) 560 (1,786) WR Grace & Co. GRA (605) 3,423 811 ********* 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. 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