/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/051027.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, October 27, 2005, Vol. 9, No. 255 Headlines AAIPHARMA INC: Acquires Rentschler Clinical Development Team ABLE LAB: Court OKs Auction Protocol on Asset Sale to Aurobindo AGING CARE: Court Approves Robichaux Mize as Bankruptcy Counsel AGING CARE: Section 341(a) Meeting Slated for December 7 ALLIANCE ONE: European Commission's Fines May Be Event of Default ALLIANCE ONE: S&P Reviews Ratings Due to $28.8M EU-Imposed Fines ALTERNATIVE LOAN: S&P Affirms 138 Low-B Ratings on Cert. Classes AMAZON.COM: Earns $30 Million of Net Income in Third Quarter ARLINGTON HOSPITALITY: Court Sets December 15 as Claims Bar Date ASTRATA GROUP: Incurs $2.5 Mil Net Loss in Quarter Ended Aug. 31 ATA AIRLINES: Wants to Walk Away from WSI Subscription Contract ATMEL CORPORATION: Incurs $1.1 Million Net Loss in Third Quarter BIRCH TELECOM: Larry Adelman Named as Chief Restructuring Officer BOYDS COLLECTION: Gets Interim Okay to Obtain $3.5 Mil. DIP Loans BUCKEYE TECHNOLOGIES: Incurs $300K Net Loss in Third Quarter CABLEVISION SYTEMS: Dolan Family Halts Bid to Take Company Private CABLEVISION SYSTEMS: Moody's Reviews Low-B Ratings & May Downgrade CABLEVISION SYSTEMS: Nixed Buy-Out Plans Cue S&P to Review Ratings CAMPBELL RESOURCES: Court Extends CCAA Protection Until Nov. 25 CARDIAC SERVICES: Court Sets November 21 as Claims Bar Date CASH TECHNOLOGIES: Posts $1.3MM Net Loss in Quarter Ended Aug. 31 CONTINENTAL AIRLINES: Completes 18-Mil. Public Equity Placement COVENTRY HEALTH: Earns $133.1 Million of Net Income in 3rd Quarter CREDIT SUISSE: S&P Pares Rating Class III-B Certs. to BB from BBB- CROWN HOLDINGS: S&P Assigns B Rating to $1.1-Bil Sr. Unsec. Notes CSC HOLDINGS: Nixed Going Private Deal Cues Fitch to Review Rating DAY INTERNATIONAL: S&P Assigns Junk Rating to $140 Mil Sec. Loan DEXTERITY SURGICAL: Clear Thinking Named as Panel Representative DOE RUN: Needs to Pay Renco Group $7.5 Million by October 31 DOE RUN: $75-Million Loan Agreement Matures on August 29, 2008 DOMINO'S PIZZA: Sept. 11 Balance Sheet Upside-Down by $552 Million EAGLEPICHER HOLDINGS: Inks Premium Financing Pact with Cananwill EL POLLO: Bondholders Agree to Lift Restrictive Covenants ENRON C0RP: SK Corp. Wants to Buy Up to 5 Million SK Enron Shares ENRON CORP: Reorganized Debtors' 4th Post-Confirmation Report EPICUS COMMS: Pre-Confirmation Balance Sheet Upside-Down by $17MM EPL INTERMEDIATE: 100% of Noteholders Tender 12-1/2% Senior Notes FLEXTRONICS INT'L: Earns $101.3 Million of Net Income in 2nd Qtr. FOREST OIL: Amends Credit Facility to Accommodate Spin-Off GARY ZANDEN: Case Summary & 19 Largest Unsecured Creditors GENTEK INC: Names Andrew P. Hines VP & Chief Financial Officer GS AUTO: S&P Assigns Low-B Ratings to Class D Notes HAPPY KIDS: Has Until December 30 to Make Lease-Related Decisions HIRSH INDUSTRIES: Wants Plan-Filing Period Extended to December 5 HIRSH INDUSTRIES: Wants Stout Risius as Valuation Experts IGENE BIOTECHNOLOGY: Berenson LLP Raises Going Concern Doubt INTERMET CORP: Wants to Retain Ernst & Young as Tax Consultant J.P. MORGAN: S&P Raises Low-B Ratings on 3 Certificate Classes KAISER ALUMINUM: Wants Insurance Claims Estimated at Zero KMART CORP: Ct. Rejects Move to Clarify Right to Prosecute Actions KMART CORP: SunTrust Wants Rights Determined Under Lease Claims KRISPY KREME: KremeKo CCAA Extended to Nov. 15 & DIP Loan Amended LAKEVIEW VILLAGE: S&P Affirms BB+ Rating on $38.165M Revenue Bonds LEVITZ HOME: U.S. Trustee Appoints 7-Member Creditors Committee LEVITZ HOME: Has Until December 26 to File Schedules & Statements LEVITZ HOME: Wants to Continue With Ordinary Course Professionals LEXINGTON CAPITAL: Fitch Rates $5 Million Class E Notes at BB+ MCI INC: Will Release 3rd Quarter 2005 Results on November 3 NEXTEL PARTNERS: Sprint Buy-Out Plans Cue S&P to Review Ratings NORDIC BIOFUELS: Moody's Affirms Sr. Sec. Term Loan's B2 Rating NORDIC BIOFUELS: S&P Assigns B Rating to $90MM Senior Secured Loan NORTHWEST AIRLINES: Court Okays Cadwalader as Chapter 11 Counsel NORTHWEST AIRLINES: Court Approves Groom Law as Benefits Counsel NORTHWEST AIRLINES: Court Grants Interim Okay to Huron Retention NORTHWESTERN CORP: MPPI Disappointed at Cash Offer Rejection NOVA COMMUNICATIONS: Current Debt Load is 5-Times Current Assets O'SULLIVAN IND: Wants to Hire Lamberth Cifelli as Bankr. Counsel O'SULLIVAN INDUSTRIES: Wants to Hire Dechert as General Counsel OWENS CORNING: 3rd Circuit's Consolidation Order Costs $538 Mil. POTLATCH CORP: Moody's Affirms Sr. Subordinated Notes' Ba2 Rating PQ CORP: S&P Affirms B+ Credit Rating & Revises Outlook to Neg. PRIME MORTGAGE: S&P Junks 2 Cert. Classes Due to Delinquencies PRIMEDIA INC: Moody's Affirms $945 Million Notes' B2 Ratings PRIMEDIA INC: S&P Reviews Ratings Due to Management Evolving Plans REFCO INC: November 4 Set as Bid Deadline for Futures Business REFCO INC: TradeLink LLC & Co. Expresses Intention to Join Bidding REFCO INC: Bank of America Gets Interim Adequate Protection ROYAL CARIBBEAN: Moody's Affirms Sr. Unsecured Debt's Ba1 Rating RUSSELL-STANLEY: Court Confirms Prepackaged Chapter 11 Plan SAINTS VINCENTS: Wants Court to Deny Tort Claimants Request SAINT VINCENTS: Backs Out of Proposed Cherry Creek Lease SHC INC: Plan Administrator Wants to Delay Case Closing to June SILICON GRAPHICS: Completes $100 Million Credit Facility SILICON GRAPHICS: Sept. 30 Balance Sheet Upside-Down by $222 Mil. SOUNDVIEW HOME: Fitch Rates $24.7 Million Cert. Classes at Low-B SS&C TECHNOLOGIES: Moody's Rates $205M Senior Sub. Notes at Caa1 STERLING FINANCIAL: Board Accelerates Stock Option Vesting TELTRONICS INC: Settles Litigation with Tri-Link & Hargan-Global THAXTON GROUP: Sues James T. Garrett for Breach of Contract TORCH OFFSHORE: Wants to Allocate Sale Proceeds to Secured Lenders TOWER AUTOMOTIVE: Court Okays Retiree Panel Appointment Process TOWER AUTOMOTIVE: Court Approves HIPAA-Protected Info Disclosure TOWER AUTOMOTIVE: Foley & Lardner Approved as Labor Counsel TRAVERSE BAY: S&P Assigns B Rating to $195 Million Senior Notes TRUDY DEVELOPMENT: Taps Robinson Brog as General & Corp. Counsel USG CORPORATION: Earns $158 Million of Net Income in Third Quarter VARIG S.A.: BNDES Offers Alternative $62 Million Financing VARIG S.A.: GECAS Appeals Court's Order to Return Receivables VITAMIN SHOPPE: S&P Rates Proposed $165M Sr. Sec. Notes at B+ WHITING PETROLEUM: Earns $33.3 Mil. of Net Income in Third Quarter WORLDCOM INC: Asks Court to Disallow Galaxy's $20 Million Claim ********* AAIPHARMA INC: Acquires Rentschler Clinical Development Team ------------------------------------------------------------ aaIPharma Inc. (PINK SHEET:AAIIQ) entered into a strategic agreement with Rentschler Biotechnologie GmbH & Co. KG, a European-based full service contract manufacturer of drugs containing recombinant proteins, through its German subsidiary. Under the terms of the agreement, aaIPharma has acquired the clinical research team of Rentschler's Clinical Development Operation in this field and agreed to carry out certain existing clinical services contracts with Rentschler's customers on a subcontract basis. In addition, Rentschler and AAIPharma through its German subsidiary agreed to cooperate in providing the whole range of their technological and clinical expertise to customers of the pharmaceutical and biotechnology industries. This agreement facilitates the development and management of relationships with biotech customers and provides AAIPharma's clinical development operations with additional experience in the planning, performance and evaluation of clinical studies involving biotechnology drugs. "The addition of this biotech expertise to our clinical development operation is an important step in strengthening our organization in Europe," Dr. Ludo Reynders, President and CEO of AAIPharma, said. "It enhances our overall business plan for the biotechnology sector, and Rentschler's primary and secondary manufacturing capability complements our U.S. sterile manufacturing capability enabling the Company to offer customers both U.S. Food and Drug Administration and European regulatory agencies compliant manufacturing services." Headquartered in Wilmington, North Carolina, aaiPharma Inc. -- http://aaipharma.com/-- provides product development services to the pharmaceutical industry and sells pharmaceutical products which primarily target pain management. AAI operates two divisions: AAI Development Services and Pharmaceuticals Division. The Company and eight of its debtor-affiliates filed for chapter 11 protection on May 10, 2005 (Bankr. D. Del. Case No. 05-11341). Karen McKinley, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L. Kaplan, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and the firm of Robinson, Bradshaw & Hinson, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they reported consolidated assets amounting to $323,323,000 and consolidated debts totaling $446,693,000. ABLE LAB: Court OKs Auction Protocol on Asset Sale to Aurobindo --------------------------------------------------------------- Able Laboratories, Inc. (NASDAQ: ABRXQ), entered into an asset purchase agreement with Aurobindo Pharma USA, Inc., to sell substantially all of its assets to Aurobindo and for Aurobindo to assume the company's unexpired lease for its premises located at 1 Able Drive, Cranbury, New Jersey and a limited number of its executory contracts. The agreement contemplates the company's commencing an auction of its assets. On October 21, 2005, the U.S. Bankruptcy Court for the District of New Jersey, Trenton Division, approved the company's request, among other things, to approve auction procedures for the company to solicit higher and better bids than the bid reflected in the Aurobindo agreement. Bids under the auction are due by the close of business on Oct. 28, 2005. The court scheduled a final hearing to consider the approval of the company's sale of its assets and the assumption and assignment of contracts under sections 363 and 365 of the Bankruptcy Code for Nov. 7, 2005. As reported in the Troubled Company Reporter on Oct. 17, 2005, Able Laboratories, Inc., asked the Court to approve auction procedures for the sale of its assets and assumption of its contracts and leases to the highest and best bidder. Aurobindo Pharma USA is the "stalking horse" bidder, and Able had entered into a "nonbonding" letter of intent with Aurobindo Pharma USA. The transaction with Aurobindo Pharma USA is conditioned, among other things: -- on completion of satisfactory due diligence; -- the parties' entering into a definitive asset purchase agreement; -- the bankruptcy court's approval of the terms of the agreement; and -- adoption of a court order approving auction procedures which include: * a required minimum overbid over Aurobindo Pharma USA's offer, and * payment of a break-up fee in the event the assets are sold to another bidder. Headquartered in Cranbury, New Jersey, Able Laboratories, Inc. -- http://www.ablelabs.com/-- develops and manufactures generic pharmaceutical products in tablet, capsule, liquid and suppository dosage forms. The Company filed for chapter 11 protection on July 18, 2005 (Bankr. D. N.J. Case No. 05-33129) after it halted manufacturing operations and recalled all of its products not meeting FDA regulatory standards. Deborah Piazza, Esq., and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $59.5 million in total assets and $9.5 million in total debts. AGING CARE: Court Approves Robichaux Mize as Bankruptcy Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Louisiana gave Aging Care Home Health, Inc., permission to employ Robichaux, Mize and Wadsack, LLC, as its general bankruptcy counsel. Robichaux Mize will: 1) assist and advise the Debtor with its reorganization proceedings, preparing and filing its Schedules and Statements and in complying with United States Trustee guidelines; 2) assist and advise the Debtor in filing required motions and objections, attending hearings before the Bankruptcy Court and preparing a plan of reorganization and an accompanying disclosure statement; 3) perform all other legal services to the Debtor that are necessary in its chapter 11 case. Wade N. Kelly, Esq., a Member of Robichaux Mize, is one of the lead attorneys for the Debtor. Mr. Kelly discloses that his Firm received a $15,000. Robichaux Mize had not yet submitted the hourly rates of its professionals performing services to the Debtor when the Debtor filed its request with the Court to employ Robichaux Mize as its general bankruptcy counsel. Mr. Kelly assures the Court that it does not represent any interest materially adverse to the Debtor or its estate. Headquartered in West Monroe, Louisiana, Aging Care Home Health, Inc., offers nursing care, physical therapy, occupational therapy, speech pathology, medical social and home health aide. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. W.D. La. Case No. 05-33407). When the Debtor filed for protection from its creditors, it listed total assets of $655,999 and total debts of $54,407,440. AGING CARE: Section 341(a) Meeting Slated for December 7 -------------------------------------------------------- The U.S. Trustee for Region 5 will convene a meeting of Aging Care Home Health, Inc.'s creditors at 2:30 p.m., on Dec. 7, 2005, at U.S. Court House, Room 116B, 201 Jackson Street, Monroe, Louisiana 71201. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in West Monroe, Louisiana, Aging Care Home Health, Inc., offers nursing care, physical therapy, occupational therapy, speech pathology, medical social and home health aide. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. W.D. La. Case No. 05-33407). Wade N. Kelly, Esq., at Robichaux, Mize and Wadsack, LLC represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $655,999 and total debts of $54,407,440. ALLIANCE ONE: European Commission's Fines May Be Event of Default ----------------------------------------------------------------- The European Commission has decided to impose fines on Alliance One International, Inc. (NYSE: AOI) and its present and former Italian subsidiaries, Transcatab and Mindo. The decision came after administrative investigation by the Directorate General for Competition of the European Commission into the Company's tobacco buying and selling practices within the leaf tobacco industry in Italy. The EC imposed fines on the Company and Mindo jointly and severally in the aggregate amount of EUR10 million or US$12 million). The EC imposed fines on the Company and Transcatab, a subsidiary of Standard Commercial prior to its merger into the Company earlier this year, jointly and severally in the aggregate amount of EUR14 million or $16.8 million). Several tobacco processors, growers and agricultural associations that were the subject of the investigation in Italy were assessed fines in various amounts totaling EUR58.1 million ($69.7 million), inclusive of the fines imposed on Alliance One and its subsidiaries. The EC stated that the fines assessed against Alliance One and its Italian subsidiaries were reduced as a result of their cooperation in the investigation. Although a statement of the fines has been released, the full decision of the EC has not yet been issued. Once the full decision is available, Alliance One will assess any grounds it may have to appeal the fine. If not earlier bonded pending appeal, the fines must be paid within three months of the Company's receipt of the full EC decision. Alliance One will establish a reserve for the fines imposed on the Company and Mindo in the quarter ended September 30, 2005 in the amount of $12.0 million. The $16.8 million in fines imposed as a result of conduct of Transcatab and Standard Commercial prior to the merger will be reflected as an increase in goodwill on the Company's balance sheet, as required by purchase accounting. Discussion with Lenders Under Alliance One's senior secured credit facility, any judgment or decree in excess of $15 million becomes an event of default if not paid, discharged, stayed or bonded pending appeal within ten days. Alliance One is discussing with the administrative agent under the senior secured credit facility an amendment to the credit agreement to clarify that the EC's imposition of these fines is not such a judgment or decree and therefore will not result in an event of default if not paid or bonded within ten days. If for any reason the Company cannot obtain this amendment before the expiration of the ten days, the Company has cash available to pay the fines in a manner that does not limit its rights to appeal so that no event of default will occur. As previously reported, the Company continues to face industry challenges in the important Brazilian market. Financial performance from the Company's Brazilian operations has deteriorated due primarily to the inflationary effect on procurement and conversion costs from the increased strength of the Brazilian real against the U.S. dollar and the difficulty in increasing sales prices enough to absorb recently changed local trade taxes. As these conditions have continued, Alliance One is also discussing with the administrative agent under the senior secured credit facility potential amendments to the financial covenants in the credit agreement applicable to future periods. If Alliance One is unable to obtain the necessary amendments or waivers under its senior secured credit facility, the lenders under that facility may have the right to terminate that facility and demand repayment of borrowings thereunder. As of September 30, 2005, there was an aggregate of $345.3 million outstanding under the senior secured credit facility, all of which represents term loan indebtedness. A demand for repayment under the senior secured credit facility would result in a cross default under the indentures governing our senior notes and senior subordinated notes and could impair access to our seasonal operating lines of credit in local jurisdictions. A default under our senior secured credit facility would have a material adverse effect on the liquidity and financial condition of the Company. While the Company is in discussions to obtain amendments that would prevent any such default, there can be no assurance that such amendments or waivers of defaults will be obtained. Alliance One -- http://www.aointl.com/-- is a leading independent leaf tobacco merchant. It selects, purchases, processes, stores, packs and ships tobacco grown in over 45 countries, and serves the world's large multinational cigarette manufacturers in over 90 countries. * * * As reported in the Troubled Company Reporter today, Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating and other ratings on one of the largest independent leaf tobacco processors, Alliance One International, Inc., on CreditWatch with negative implications. ALLIANCE ONE: S&P Reviews Ratings Due to $28.8M EU-Imposed Fines ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating and other ratings on one of the largest independent leaf tobacco processors, Alliance One International, Inc., on CreditWatch with negative implications. At June 30, 2005, Danville, Virginia-based Alliance One had total debt -- adjusted for capitalized operating leases -- of $1.4 billion. The CreditWatch placement reflects Standard & Poor's concerns regarding the continued challenging industry conditions, especially in Brazil, and the company's recent announcement that the EU had imposed a $12 million fine on Alliance One and on its former Italian subsidiaries, and a $16.8 million fine on Standard Commercial, which merged into Alliance One in May 2005. These fines follow completion of the EU's investigation of tobacco buying and selling practices in Italy. Under the terms of the company's senior secured credit facility, any judgment or decree in excess of $15 million becomes an event of default if not paid, stayed, discharged, or bonded pending appeal within 10 days. Alliance One is in discussions to amend the credit agreement to reflect that the imposition of these fines is not a judgment or decree and should not result in an event of default. "The company does have the cash available to pay the fines in a manner that does not restrict Alliance One's right to appeal or result in an event of default," said Standard & Poor's credit analyst Jayne Ross. Alliance One is also in discussions for potential amendments to the financial covenants applicable in future periods under its credit agreement. The company is requesting these changes because of the difficult operating conditions, in the important Brazilian leaf tobacco market. Standard & Poor's will meet with management in the near term and our analysis will focus on management's operating plans and financial strategies given the current EU investigation and difficult industry conditions. ALTERNATIVE LOAN: S&P Affirms 138 Low-B Ratings on Cert. Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on 11 classes of mortgage pass-through certificates of various Alternative Loan Trust transactions, which are serviced by Countrywide Home Loans Inc. The raised ratings reflect current and projected credit support percentages that are greater than the original levels and are sufficient to support the upgrades. Current credit support ranges from 1.55% to 15.72%, amounting to 2x to 3x the loss coverage levels required for the new rating levels. The affirmations reflect the adequate credit support currently available for each rated class. These credit support levels are sufficient to protect the classes from losses on an actual and projected basis. Credit enhancement for most series is provided by subordination. Credit enhancement for series 2004-6CB, 2004- 8CB, 2004-J4, 2004-J5, 2004-J7, 2004-J9, and 2004-J13 is provided by subordination, overcollateralization, and excess spread. As of the September 2005 remittance date, total delinquencies ranged from 1.11% to 22.56%, and cumulative losses, as a percentage of the original trust balances, ranged from 0.0% to 1.02%. The outstanding pool balances of these series are no greater than 95% of their original sizes. The collateral for each series is 30-year conventional fixed-rate residential mortgage loans. If the ratings list below is not complete, you can find the entire list at RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/and on Standard & Poor's Web site at http://www.standardandpoors.com/. Ratings Raised Alternative Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2002-29 M AAA AA+ 2002-29 B-1 AA+ A+ 2002-29 B-2 A BBB 2002-37 M AAA AA 2002-37 B-1 AA A 2002-37 B-2 BBB+ BBB 2003-J12 M AA+ AA 2003-J12 B-1 AA- A 2003-J12 B-2 BBB+ BBB Ratings Affirmed Alternative Loan Trust Series Class Rating ------ ----- ------ 1998-12 I-A-1,II-A-3, II-A-4 AAA 1998-12 PO, X, A-R AAA 1999-13 A-1, A-R, PO, X AAA 2001-1 A-1, A-2, A-3, A-4, A-5 AAA 2001-1 A-R, PO, X AAA 2002-11 1-A-1, 1-A-2, 1-A-3 AAA 2002-11 CB-1, CB-2, CB-3 AAA 2002-11 CB-5, CB-6, CB-7 AAA 2002-11 CB-9, CB-10 AAA 2002-11 PO, A-R AAA 2002-17 A-3, A-4, A-6 AAA 2002-17 PO, AR, M, B-1 AAA 2002-17 B-2 AA+ 2002-20 A-4, A-5, A-6 AAA 2002-20 A-7, A-8, PO, AR AAA 2002-23 A-1, A-2, A-3, A-4, A-5 AAA 2002-23 A-13, A-14, PO, A-R AAA 2002-23 M AA+ 2002-23 B-1 A 2002-23 B-2 BBB 2002-24 A-4, A-5, A-6 AAA 2002-24 PO, A-R, M, B-1 AAA 2002-24 B-2 AA+ 2002-28 A-1, X, PO, A-R AAA 2002-28 M AA 2002-28 B-1 A 2002-28 B-2 BBB 2002-29 A-1, A-2, A-3, A-8, PO AAA 2002-29 A-R AAA 2002-33 A-2, A-3, A-4, A-5, A-6 AAA 2002-33 A-7, A-8, A-14, A-15 AAA 2002-33 A-16, A-17, PO, AAA 2002-33 M AAA 2002-33 B-1 AAA 2002-33 B-2 AA- 2002-37 A-2, A-3, A-4, A-5, A-6 AAA 2002-37 A-7, A-19, A-20, A-21, A-22 AAA 2002-37 A-23, A-24, A-25, A-26 AAA 2002-37 A-29, A-30 A-31, A-32, A-33 AAA 2002-37 PO, A-R AAA 2003-5 A-1, A-2, A-3, A-4 AAA 2003-5 A-7, A-11, A-12, A-13 AAA 2003-5 A-14, PO, A-R AAA 2003-5 M AAA 2003-5 B-1 AA+ 2003-5 B-2 AA 2003-5 B-3 A 2003-5 B-4 BB 2003-6 1-A-1, 2-A-1, PO, AR AAA 2003-6 M AA 2003-6 B-1 A 2003-6 B-2 BBB 2003-6 B-3 BB 2003-6 B-4 B 2003-9 A-1, A-2, A-3, A-4, A-5 AAA 2003-9 A-6, A-7, A-8, A-9, A-10 AAA 2003-9 PO AAA 2003-9 M AAA 2003-9 B-1 AA 2003-9 B-2 A 2003-9 B-3 BB 2003-9 B-4 B 2003-12 1-A-1, 2-A-1, 2-A-2, 2-A-3 AAA 2003-12 A-R, PO AAA 2003-12 M AA 2003-12 B-1 A 2003-12 B-2 BBB 2003-12 B-3 BB 2003-12 B-4 B 2003-13 A-1, A-2, A-3, A-4 AAA 2003-13 A-6, A-8, PO AAA 2003-13 M AAA 2003-13 B-1 AA 2003-13 B-2 BBB 2003-13 B-3 BB 2003-13 B-4 CCC 2003-16 A-1, A-2, A-3, A-4, A-5 AAA 2003-16 A-6, A-7, PO AAA 2003-16 M AAA 2003-16 B-1 AA- 2003-16 B-2 BBB 2003-17 A-1, A-2, A-3, A-4, A-5 AAA 2003-17 PO, A-R AAA 2003-17 M AA 2003-17 B-1 A 2003-17 B-2 BBB 2003-17 B-3 BB 2003-17 B-4 B 2003-19 1-A-1, 2-A-1, PO, A-R AAA 2003-19 M AA 2003-19 B-1 A 2003-19 B-2 BBB 2003-19 B-3 BB 2003-19 B-4 B 2003-22 A-1, A-2, A-3, A-4, A-5 AAA 2003-22 A-6, A-7, PO AAA 2003-22 M AAA 2003-22 B-1 AA+ 2003-22 B-2 A+ 2003-22 B-3 BBB 2003-22 B-4 B 2003-23 1-A-1, 2-A-1, PO, A-R AAA 2003-23 M AA 2003-23 B-1 A 2003-23 B-2 BBB 2003-23 B-3 BB 2003-23 B-4 B 2003-25 A-1, A-2, A-3, A-4, PO AAA 2003-25 M AA+ 2003-25 B-1 AA 2003-25 B-2 BBB 2003-25 B-3 BB 2003-25 B-4 B 2003-30 1-A-1, 2-A-1, PO, A-R AAA 2003-30 M AA 2003-30 B-1 A 2003-30 B-2 BBB 2003-30 B-3 BB 2003-30 B-4 B 2003-31 A-1, A-2, A-3, A-4 AAA 2003-31 A-6, A-7, A-8, A-9, A-10 AAA 2003-31 A-11, A-12, A-13, A-14 AAA 2003-31 A-15, PO AAA 2003-31 M AA+ 2003-31 B-1 AA 2003-31 B-2 BBB 2003-31 B-3 BB 2003-31 B-4 B 2003-32 A-1, A-2, A-3, A-4, A-5 AAA 2003-32 A-6, A-7, A-8, A-9, A-10 AAA 2003-32 A-11, PO, A-R AAA 2003-32 M AA 2003-32 B-1 A 2003-32 B-2 BBB 2003-32 B-3 BB 2003-32 B-4 B 2003-33 A-1, A-2, A-3, A-4, A-5 AAA 2003-33 A-6, A-7, A-8, A-9, A-10 AAA 2003-33 A-11, A-12, A-13, PO AAA 2003-33 M AAA 2003-33 B-1 AA 2003-33 B-2 BBB 2003-33 B-3 BB 2003-36 A-1, A-2, A-3, A-4, A-5 AAA 2003-36 PO, A-R AAA 2003-36 M AA 2003-36 B-1 A 2003-36 B-2 BBB 2003-36 B-3 BB 2003-36 B-4 B 2003-38 A-1, PO, A-R AAA 2003-38 M AA 2003-38 B-1 A 2003-38 B-2 BBB 2003-38 B-3 B 2003-45 1-A-1, 2-A-1, PO, A-R AAA 2003-45 M AA 2003-45 B-1 A 2003-45 B-2 BBB 2003-45 B-3 BB 2003-45 B-4 B 2003-47 1-A-1, 2-A-1, 3-A-1, 3-A-2 AAA 2003-47 3-A-3, PO, A-R AAA 2003-47 M AA 2003-47 B-1 A 2003-47 B-2 BBB 2003-47 B-3 BB 2003-47 B-4 B 2003-51 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2003-51 2-A-1, 3-A-1, PO, A-R AAA 2003-51 M AA 2003-51 B-1 A 2003-51 B-2 BBB 2003-51 B-3 BB 2003-51 B-4 B 2003-55 A-1, A-2, A-3, A-4, A-5, A-6 AAA 2003-55 A-7, A-8, PO, A-R AAA 2003-55 M AA 2003-55 B-1 A 2003-55 B-2 BBB 2003-55 B-3 BB 2003-55 B-4 B 2003-59 1-A-1, 2-A-1, 3-A-1, PO, A-R AAA 2003-59 M AA 2003-59 B-1 A 2003-59 B-2 BBB 2003-59 B-3 BB 2003-59 B-4 B 2003-J11 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2003-J11 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2003-J11 1-A-9, 2-A-1, 2-A-2, 2-A-3 AAA 2003-J11 2-X, 3-A-1, 3-A-2, 3-A-3 AAA 2003-J11 3-X, 4-A-1, 4-X, PO, AR AAA 2003-J11 B-1 A 2003-J11 B-2 BBB 2003-J11 B-3 BB 2003-J11 B-4 B 2003-J12 A-1, X, PO, A-R AAA 2003-J12 B-3 BB 2003-J12 B-4 B 2004-2CB 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-2CB 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2004-2CB 1-A-9, 1-A-10, 1-A-11 AAA 2004-2CB 1-A-12, 2-A-1, 3-A-1, 4-A-1 AAA 2004-2CB PO, A-R AAA 2004-2CB M AA 2004-2CB B-1 A 2004-2CB B-2 BBB 2004-2CB B-3 BB 2004-2CB B-4 B 2004-J14 1-A-1, 1-A-2, 1-A-3, 1-X AAA 2004-J14 2-A-1, 2-X, PO, A-R AAA 2004-J14 M AA 2004-J14 B-1 A 2004-J14 B-2 BBB 2004-J14 B-3 BB 2004-J14 B-4 B 2004-10CB A, A-R AAA 2004-10CB M AA 2004-10CB B-1 A 2004-10CB B-2 BBB 2004-10CB B-3 BB 2004-10CB B-4 B 2004-12CB 1-A-1, 1-A-2, 1-A-3, 2-A-1 AAA 2004-12CB 2-A-2, 3-A-1, PO, A-R AAA 2004-12CB M AA 2004-12CB B-1 A 2004-12CB B-2 BBB 2004-12CB B-3 BB 2004-12CB B-4 B 2004-13CB A-1, A-2, A-3, A-4, A-R, PO AAA 2004-13CB M AA 2004-13CB B-1 A 2004-13CB B-2 BBB 2004-13CB B-3 BB 2004-13CB B-4 B 2004-14T2 A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-14T2 A-7, A-8, A-9, A-10, A-11 AAA 2004-14T2 A-12, A-13, A-14, PO, A-R AAA 2004-14T2 M AA 2004-14T2 B-1 A 2004-14T2 B-2 BBB 2004-14T2 B-3 BB 2004-14T2 B-4 B 2004-15 1-A-1, 1-A-2, 2-A-1, 2-A-3 AAA 2004-15 A-R AAA 2004-15 M AA 2004-15 B-1 A 2004-15 B-2 BBB 2004-15 B-3 BB 2004-15 B-4 B 2004-16CB 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-16CB 1-A-5, 1-A-6, 2-A-1, 2-A-2 AAA 2004-16CB 2-A-3, 2-A-4, 3-A-1, 4-A-1 AAA 2004-16CB 4-A-2, 4-A-3, 4-A-4, 4-A-5 AAA 2004-16CB 5-A-1, PO, A-R AAA 2004-16CB M AA 2004-16CB B-1 A 2004-16CB B-2 BBB 2004-16CB B-3 BB 2004-16CB B-4 B 2004-17CB 1-A-1, 2-A-1, 3-A-1, A-R AAA 2004-17CB A-M AA+ 2004-17CB M AA 2004-17CB B-1 A 2004-17CB B-2 BBB 2004-17CB B-3 BB 2004-17CB B-4 B 2004-18CB 1-A-1, 2-A-1, 2-A-2, 2-A-3 AAA 2004-18CB 2-A-4, 2-A-5, 2-A-6, 2-A-7 AAA 2004-18CB 2-A-8, 2-A-9, 3-A-1, 4-A-1 AAA 2004-18CB 5-A-1, 5-A-2, PO, A-R AAA 2004-18CB M AA 2004-18CB B-1 A 2004-18CB B-2 BBB 2004-18CB B-3 BB 2004-18CB B-4 B 2004-1T1 A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-1T1 PO, A-R AAA 2004-1T1 M AA 2004-1T1 B-1 A 2004-1T1 B-2 BBB 2004-1T1 B-3 BB 2004-1T1 B-4 B 2004-20T1 A-1, A-2, A-3, A-4, PO, AR AAA 2004-20T1 M AA 2004-20T1 B-1 A 2004-20T1 B-2 BBB 2004-20T1 B-3 BB 2004-20T1 B-4 B 2004-22CB 1-A-1, 2-A-1, PO, AR AAA 2004-22CB M AA 2004-22CB B-1 A 2004-22CB B-2 BBB 2004-22CB B-3 BB 2004-22CB B-4 B 2004-24CB 1-A-1, 2-A-1, PO, A-R AAA 2004-24CB M AA 2004-24CB B-1 A 2004-24CB B-2 BBB 2004-24CB B-3 BB 2004-24CB B-4 B 2004-25CB A-1, PO, A-R AAA 2004-25CB M AA 2004-25CB B-1 A 2004-25CB B-2 BBB 2004-25CB B-3 BB 2004-25CB B-4 B 2004-26T1 A-1, PO, A-R AAA 2004-26T1 M AA 2004-26T1 B-1 A 2004-26T1 B-2 BBB 2004-26T1 B-3 BB 2004-26T1 B-4 B 2004-27CB A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-27CB PO, A-R AAA 2004-27CB M AA 2004-27CB B-1 A 2004-27CB B-2 BBB 2004-27CB B-3 BB 2004-27CB B-4 B 2004-28CB 1-A-1, 1-A-2, 1-A-3, 2-A-1 AAA 2004-28CB 2-A-2, 2-A-3, 2-A-4, 2-A-5 AAA 2004-28CB 2-A-6, 2-A-7, 2-A-8, 2-A-9 AAA 2004-28CB 3-A-1, 4-A-1, 5-A-1, 6-A-1 AAA 2004-28CB 7-A-1, PO, A-R AAA 2004-28CB M AA 2004-28CB B-1 A 2004-28CB B-2 BBB 2004-28CB B-3 BB 2004-28CB B-4 B 2004-29CB A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-29CB A-7, A-8, A-9, A-10, A-11 AAA 2004-29CB PO, A-R AAA 2004-29CB M AA 2004-29CB B-1 A 2004-29CB B-2 BBB 2004-29CB B-3 BB 2004-29CB B-4 B 2004-30CB 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-30CB 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2004-30CB 1-A-9, 1-A-10, 1-A-11 AAA 2004-30CB 1-A-12, 1-A-13, 1-A-14 AAA 2004-30CB 1-A-15, 1-A-16, 1-A-17 AAA 2004-30CB 1-A-18, 2-A-1, 2-A-2, 2-A-3 AAA 2004-30CB 2-A-4, 3-A-1, PO, AR AAA 2004-30CB M AA 2004-30CB B-1 A 2004-30CB B-2 BBB 2004-30CB B-3 BB 2004-30CB B-4 B 2004-32CB 1-A-1, 2-A-1, 2-A-2, 2-A-3 AAA 2004-32CB 2-A-4, 2-A-5, A-R, PO AAA 2004-32CB M AA 2004-32CB B-1 A 2004-32CB B-2 BBB 2004-32CB B-3 BB 2004-32CB B-4 B 2004-33 1-A-1, 2-A-1, 3-A-1, 3-A-2 AAA 2004-33 3-A-3, 3-X, 4-A-1, A-R AAA 2004-33 I-M-1, II-M-1 AA 2004-33 I-B-1, II-B-1 A 2004-33 I-B-2, II-B-2 BBB 2004-33 I-B-3, II-B-3 BB 2004-33 I-B-4, II-B-4 B 2004-34T1 A-1, A-2, A-3, A-4, A-5, PO AAA 2004-34T1 A-R AAA 2004-34T1 M AA 2004-34T1 B-1 A 2004-34T1 B-2 BBB 2004-34T1 B-3 BB 2004-34T1 B-4 B 2004-35T2 A-1, A-2, A-3, A-4, A-5, PO AAA 2004-35T2 A-R AAA 2004-35T2 M AA 2004-35T2 B-1 A 2004-35T2 B-2 BBB 2004-35T2 B-3 BB 2004-35T2 B-4 B 2004-36CB 1-A-1, 2-A-1, 2-A-2, 2-A-3 AAA 2004-36CB 2-A-4, PO, A-R AAA 2004-36CB M AA 2004-36CB B-1 A 2004-36CB B-2 BBB 2004-36CB B-3 BB 2004-36CB B-4 B 2004-34T1 A-1, A-2, A-3, A-4, PO, A-R AAA 2004-34T1 M AA 2004-34T1 B-1 A 2004-34T1 B-2 BBB 2004-34T1 B-3 BB 2004-34T1 B-4 B 2004-4CB 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-4CB 1-A-5, 1-A-6, 2-A-1, 3-A-1 AAA 2004-4CB 3-A-2, 3-A-3, 3-A-4, PO, A-R AAA 2004-4CB M AA 2004-4CB B-1 A 2004-4CB B-2 BBB 2004-4CB B-3 BB 2004-4CB B-4 B 2004-5CB 1-A-1, 2-A-1, 3-A-1, PO, A-R AAA 2004-5CB M AA 2004-5CB B-1 A 2004-5CB B-2 BBB 2004-5CB B-3 BB 2004-5CB B-4 B 2004-6CB A, A-R AAA 2004-6CB M-1 AA 2004-6CB M-2 A 2004-6CB M-3 BBB 2004-7T1 A-1, A-2, A-3, A-4, PO, A-R AAA 2004-7T1 M AA 2004-7T1 B-1 A 2004-7T1 B-2 BBB 2004-7T1 B-3 BB 2004-7T1 B-4 B 2004-8CB A, A-R AAA 2004-8CB M-1 AA 2004-8CB M-2 A 2004-8CB M-3 BBB 2004-9T1 A-1, A-2, A-3, A-4, A-5, A-11 AAA 2004-9T1 A-12, A-13, PO, A-R AAA 2004-9T1 M AA 2004-9T1 B-1 A 2004-9T1 B-2 BBB 2004-9T1 B-3 BB 2004-9T1 B-4 B 2004-J1 1-A-1, 1-X, A-R, 2-A-1, 2-X AAA 2004-J1 PO AAA 2004-J1 M AA 2004-J1 B-1 A 2004-J1 B-2 BBB 2004-J1 B-3 BB 2004-J1 B-4 B 2004-J2 1-A-1, 1-X, 2-A-1, 2-X, 3-A-1 AAA 2004-J2 3-A-2, 3-A-3, 3-A-5, 3-A-6 AAA 2004-J2 3-A-7, 3-A-8, 3-X, 4-A-1, 4-X AAA 2004-J2 5-A-1, 5-X, 6-A-1, 6-X, 7-A-1 AAA 2004-J2 7-X, PO, A-R AAA 2004-J2 M AA 2004-J2 B-1 A 2004-J2 B-2 BBB 2004-J2 B-3 BB 2004-J2 B-4 B 2004-J3 1-A-1, 1-X, 2-A-1, 2-X, 3-A-1 AAA 2004-J3 3-X, 4-A-1, 4-X, 5-A-1, 5-X AAA 2004-J3 PO, A-R AAA 2004-J3 M AA 2004-J3 B-1 A 2004-J3 B-2 BBB 2004-J3 B-3 BB 2004-J3 B-4 B 2004-J4 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-J4 1-A-5, 1-A-6, 1-A-7, 1-A-IO AAA 2004-J4 2-A-1, 2-AIO, A-R AAA 2004-J4 M-1 AA+ 2004-J4 M-2 A+ 2004-J4 B BBB+ 2004-J5 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-J5 1-A-5, 1-A-6, 1-A-IO, 2-A-1 AAA 2004-J5 2-A-2, 2-A-3, 2-A-4, 2-A-IO AAA 2004-J5 A-R AAA 2004-J5 M-1 AA 2004-J5 M-2 A 2004-J5 B BBB 2004-J6 1-A-1, 1-X, 2-A-1, 2-X, 3-A-1 AAA 2004-J6 3-X, PO, A-R AAA 2004-J6 M AA 2004-J6 B-1 A 2004-J6 B-2 BBB 2004-J6 B-3 BB 2004-J6 B-4 B 2004-J7 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-J7 1-A-5, 1-A-6, 1-A-IO, 2-A-1 AAA 2004-J7 2-A-IO, 3-A-1, 3-A-IO, A-R AAA 2004-J7 M-1 AA 2004-J7 M-2 A 2004-J7 B BBB 2004-J8 1-A-1, 1-X, 2-A-1, 2-X, 3-A-1 AAA 2004-J8 3-X, 4-A-1, 4-X, PO-A, PO-B AAA 2004-J8 A-R, IO AAA 2004-J8 M AA 2004-J8 B-1 A 2004-J8 B-2 BBB 2004-J8 B-3 BB 2004-J8 B-4 B 2004-J9 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-J9 1-A-5, 1-A-IO, 2-A-1, 2-A-IO AAA 2004-J9 3-A-1, 3-A-2, 3-A-3, 3-A-4 AAA 2004-J9 3-A-5, 3-A-IO, A-R AAA 2004-J9 M-1 AA 2004-J9 M-2 A 2004-J9 B BBB 2004-J10 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-J10 1-A-6, 2-CB-1, 3-A-1, 4-CB-1 AAA 2004-J10 X-A, X-B, X-C, PO, A-R AAA 2004-J10 M AA 2004-J10 B-1 A 2004-J10 B-2 BBB 2004-J10 B-3 BB 2004-J10 B-4 B 2004-J11 1-CB-1, 1-X, 2-CB-1, 2-X AAA 2004-J11 3-A-1, 3-X, PO-A, PO-B, A-R AAA 2004-J11 M AA 2004-J11 B-1 A 2004-J11 B-2 BBB 2004-J11 B-3 BB 2004-J11 B-4 B 2004-J12 A-1, A-2, A-3, A-4, X, PO AAA 2004-J12 A-R AAA 2004-J12 M AA 2004-J12 B-1 A 2004-J12 B-2 BBB 2004-J12 B-3 BB 2004-J12 B-4 B 2004-J13 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-J13 2-A-1, 2-A-2, A-R AAA 2004-J13 M-1 AA 2004-J13 M-2 A 2004-J13 B BBB 2005-2 1-A-1, 2-A-1, 3-A-1, A-R AAA 2005-2 M AA 2005-2 B-1 A 2005-2 B-2 BBB 2005-2 B-3 BB 2005-2 B-4 B 2005-4 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2005-4 1-A-5, 1-A-6, 1-A-7, 2-A-1 AAA 2005-4 2-A-2, 2-A-3, 2-A-4, 2-A-5 AAA 2005-4 2-A-6, 2-A-7, 2-A-8, PO, A-R AAA 2005-4 M AA 2005-4 B-1 A 2005-4 B-2 BBB 2005-4 B-3 BB 2005-4 B-4 B 2005-J1 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2005-J1 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2005-J1 2-A-1, 3-A-1, 4-A-1, 5-A-1 AAA 2005-J1 5-A-2, 5-A-3, 5-A-4, 6-A-1 AAA 2005-J1 7-A-1, X-A, X-B, X-C, X-D AAA 2005-J1 X-E, X-F, PO-A, PO-B, PO-C AAA 2005-J1 PO-D, A-R AAA 2005-J1 M AA 2005-J1 B-1 A 2005-J1 B-2 BBB 2005-J1 B-3 BB 2005-J1 B-4 B 2005-J2 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2005-J2 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2005-J2 1-A-9, 1-A-10, 1-A-11, 1-A-12 AAA 2005-J2 1-A-13, 1-X, PO-A, 2-A-1, 2-X AAA 2005-J2 PO-B, A-R AAA 2005-J2 M AA 2005-J2 B-1 A 2005-J2 B-2 BBB 2005-J2 B-3 BB 2005-J2 B-4 B 2005-1CB 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2005-1CB 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2005-1CB 2-A-1, 2-A-2, 2-A-3, 2-A-4 AAA 2005-1CB 2-A-5, 2-A-6, 2-A-7, PO-A, A-R AAA 2005-1CB 3-A-1, 3-X, PO-B, 4-A-1, 4-A-2 AAA 2005-1CB 4-A-3 AAA 2005-1CB IM, IIM AA 2005-1CB I-B-1, II-B-1 A 2005-1CB I-B-2, II-B-2 BBB 2005-1CB I-B-3, II-B-3 BB 2005-1CB I-B-4, II-B-4 B 2005-3CB 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2005-3CB 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2005-3CB 1-A-9, 1-A10, 1-A-11, 1-A-12 AAA 2005-3CB 1-A-13, 1-A-14, 2-A-1, PO, A-R AAA 2005-3CB M AA 2005-3CB B-1 A 2005-3CB B-2 BBB 2005-3CB B-3 BB 2005-3CB B-4 B 2005-6CB 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2005-6CB 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2005-6CB 1-A-9, 2-A-1, PO, A-R AAA 2005-6CB M AA 2005-6CB B-1 A 2005-6CB B-2 BBB 2005-6CB B-3 BB 2005-6CB B-4 B 2005-7CB 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2005-7CB 1-A-5, 1-A-6, 2-A-1, 2-A-2 AAA 2005-7CB 2-A-3, 2-A-4, 2-A-5, 2-A-6 AAA 2005-7CB 2-A-7, 2-A-8, 2-A-9, PO, A-R AAA 2005-7CB M AA 2005-7CB B-1 A 2005-7CB B-2 BBB 2005-7CB B-3 BB 2005-7CB B-4 B 2005-13CB A-1, A-2, A-3, A-4, A-5, A-6 AAA 2005-13CB A-7, A-8, PO, A-R AAA 2005-13CB M AA 2005-13CB B-1 A 2005-13CB B-2 BBB 2005-13CB B-3 BB 2005-13CB B-4 B 2005-18CB A-1, A-2, A-3, A-4, A-5, A-6 AAA 2005-18CB A-7, A-8, A-9, A-10, PO, A-R AAA 2005-18CB M AA 2005-18CB B-1 A 2005-18CB B-2 BBB 2005-18CB B-3 BB 2005-18CB B-4 B AMAZON.COM: Earns $30 Million of Net Income in Third Quarter ------------------------------------------------------------ Amazon.com, Inc., (NASDAQ: AMZN) reported financial results for its third quarter ended September 30, 2005. Operating cash flow grew 35% to $661 million for the trailing twelve months, compared with $490 million for the trailing twelve months ended September 30, 2004. Free cash flow grew 13% to $475 million for the trailing twelve months, compared with $420 million for the trailing twelve months ended September 30, 2004. As previously announced in August 2005, the Company settled a patent lawsuit on terms including a previously unanticipated one-time payment of $40 million in third quarter 2005. Excluding this payment, free cash flow would have grown 22% to $515 million for the trailing twelve months. Common shares outstanding plus shares underlying stock-based awards outstanding totaled 438 million at September 30, 2005, compared with 434 million a year ago. Net sales increased 27% to $1.86 billion in the third quarter, compared with $1.46 billion in third quarter 2004. Excluding the $7 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 28% compared with third quarter 2004. Operating income decreased 32% to $55 million in the third quarter, compared with $81 million in third quarter 2004. Excluding the negative impact of the $40 million legal settlement, operating income would have increased 17% to $95 million. Net income was $30 million in the third quarter compared with net income of $54 million in third quarter 2004, which includes $21 million in income tax expense, compared with $3 million income tax expense in third quarter 2004. Excluding the negative impact of the $40 million legal settlement - $20 million after tax-net income would have been $50 million. "For $79 a year, Amazon Prime members get 'all-you-can-eat' free express shipping," said Jeff Bezos, founder and CEO of Amazon.com. "Customers continue to join Amazon Prime and we anticipate even higher enrollment rates as we get closer to the holidays." Highlights * North America segment sales, representing the Company's U.S. and Canadian sites, were $1.04 billion, up 28% from third quarter 2004. Segment operating income increased 16% to $66 million in third quarter 2005 from $57 million in third quarter 2004; * North America Other revenue, which includes Amazon Services' Merchant.com program, increased to $53 million in third quarter 2005; * International segment sales, representing the Company's U.K., German, French, Japanese, and Chinese sites, were $817 million, up 26% from third quarter 2004. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales growth was 28%. Segment operating income increased 46% to $55 million in third quarter 2005 from $38 million in third quarter 2004. * International segment sales increased to 45% of worldwide net sales on a trailing twelve-month basis, up from 43% for the twelve months ended September 30, 2004; * Worldwide Electronics & Other General Merchandise sales grew 43% to $491 million in third quarter 2005, and increased to 26% of worldwide net sales, compared with 24% for third quarter 2004; * The Company sold over 1.6 million copies of Harry Potter and the Half-Blood Prince worldwide in third quarter 2005, making it Amazon.com's largest new product release; * A9.com, a subsidiary of Amazon.com, launched A9.com Maps, a new service that shows users an interactive map and over 35 million corresponding street-level images in a single interface in 24 cities; * Customers shopping at www.amazon.co.uk now qualify for free shipping on orders of EUR15 or more, down from the prior threshold of EUR19; * In the aftermath of Hurricane Katrina, Amazon customers used the Company's 1-click(R) technology to contribute more than $12 million for American Red Cross relief efforts. Financial Guidance Fourth Quarter 2005 Guidance Net sales are expected to be between $2.86 billion and $3.16 billion, or grow between 13% and 24%, compared with fourth quarter 2004. Operating income is expected to be between $135 million and $210 million, or between (17%) decline and 29% growth, compared with fourth quarter 2004. This guidance includes $30 million for stock-based compensation and amortization of intangible assets, and assumes, among other things, that no additional intangible assets are recorded, and that there are no further revisions to stock-based compensation or restructuring-related estimates. Full Year 2005 Guidance Net sales are expected to be between $8.373 billion and $8.673 billion, or grow between 21% and 25%, compared with 2004. Operating income is expected to be between $403 million and $478 million, or between (9%) decline and 8% growth, compared with 2004. This guidance includes $144 million for stock-based compensation, amortization of intangible assets and the $40 million legal settlement, and assumes, among other things, that no additional intangible assets are recorded and that there are no changes to stock-based compensation or restructuring-related estimates. Amazon.com (NASDAQ: AMZN), a Fortune 500 company based in Seattle, opened its virtual doors on the World Wide Web in July 1995 and today offers Earth's Biggest Selection. Amazon.com seeks to be Earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer customers the lowest possible prices. Amazon.com and third-party sellers offer millions of unique new, refurbished, and used items in categories such as health and personal care, jewelry and watches, gourmet food, sports and outdoors, apparel and accessories, books, music, DVDs, electronics and office, toys and baby, and home and garden. Amazon.com and its affiliates operate seven retail websites: http://www.amazon.com/http://www.amazon.co.uk/ http://www.amazon.de/http://www.amazon.co.jp/ http://www.amazon.fr/http://www.amazon.ca/and http://www.joyo.com/ * * * As reported in the Troubled Company Reporter on Sept. 19, 2005, Standard & Poor's Ratings Services raised its ratings on Internet retailer Amazon.com, including raising its corporate credit rating to 'BB-' from 'B+'. At the same time, Standard & Poor's affirmed its 'B-1' short-term rating on the company. The outlook is stable. As reported in the Troubled Company Reporter on Dec. 8, 2004, Moody's Investors Service upgraded the long-term debt ratings of Amazon.com and assigned a positive rating outlook as a result of the company's consistent improvement in operating margins, reduction in funded debt levels, and strengthening operating cash flow. These ratings are upgraded: * Senior implied of B1, * Issuer rating of B2, * Various convertible subordinated notes issues maturing 2009 thru 2010 of B3, * Multiple shelf ratings of (P) B2, (P) B3, and (P) Caa1. This rating is affirmed: * Speculative grade liquidity rating of SGL-2. ARLINGTON HOSPITALITY: Court Sets December 15 as Claims Bar Date ---------------------------------------------------------------- The Hon. A. Benjamin Goldgar of the U.S. Bankruptcy Court for the Northern District of Illinois established Dec. 15, 2005, as the deadline for all creditors owed money on account of claims arising prior to Aug. 31, 2005, by Arlington Hospitality, Inc., and its debtor-affiliates to file formal written proofs of claim. Governmental Units have until Dec. 19, 2005, to file proofs of claim in the Arlington Inns, Inc., case and until Feb. 28, 2006, to file proofs of claim in all of the other Debtors' cases. Original proofs of claims must be delivered to: U.S. Bankruptcy Court for the Northern District of Illinois Everett McKinley Dirksen United States Courthouse Clerk of the Bankruptcy Court -- Room 710 219 South Dearborn Street Chicago, Illinois 60604 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. ASTRATA GROUP: Incurs $2.5 Mil Net Loss in Quarter Ended Aug. 31 ---------------------------------------------------------------- Astrata Group Inc. delivered its financial results for the quarter ended Aug. 31, 2005, to the Securities and Exchange Commission on Oct. 17, 2005. For the three months ended Aug. 31, 2005, Astrata Group incurred a $2,555,396 net loss on $4,791,340 of net sales compared to a $910,195 net loss on $3,671,642 of net sales for the same period in 2004. The Company's balance sheet showed $13,977,443 of assets at Aug. 31, 2005, and liabilities totaling $14,800,012. In addition, the Company had a working capital deficit of approximately $5.3 million as of Aug. 31, 2005. Going Concern Astrata Group's latest 10-QSB states that the Company's independent accountants, Squar, Milner, Reehl & Williamson, LLP, will be adding a going concern paragraph to their re-issued audit report on Astrata's fiscal year 2005 consolidated financial statements. The going concern paragraph, expressing substantial doubt about the Company's ability to continue as a going concern, will be included in the second amendment of the Company's registration statement on Form SB-2 to be filed with the SEC. Astrata Group's quarterly report did not discuss the reasons behind the auditing firm's negative going concern opinion. Squar Milner had previously issued a clean and unqualified opinion after auditing the Company's financial statements for the fiscal year ended Feb. 28, 2005. Debt Extensions Astrata Group has failed to pay these notes on their respective due dates and is currently negotiating new payment terms with the holders: -- unsecured notes totaling $1.5 million, due June 30, 2005, bearing a 15% fixed interest rate due and payable concurrently with the principal; -- unsecured credit due Sept. 30, 2005, with a $351,000 outstanding balance at Aug. 31, 2005, bearing interest at 3% above the U.S. prime rate. -- unsecured note due June 30. 2005, with a $384,000 outstanding balance at Aug. 31, 2005, bearing a 15% fixed interest rate due and payable concurrently with the principal; About Astrata Group Astrata Group Inc., -- http://www.astratagroup.com/-- engaged in the telematics and Global Positioning System industry, is focused on advanced location-based IT products and services that combine positioning, wireless communications, and information technologies. The Company provides advanced positioning products, as well as monitoring and airtime services to industrial, commercial, governmental entities, academic/research institutions, and professional customers in a number of markets including surveying, utility, construction, homeland security, military, intelligence, mining, agriculture, marine, public safety, and transportation. ATA AIRLINES: Wants to Walk Away from WSI Subscription Contract --------------------------------------------------------------- ATA Airlines, Inc., and WSI Corporation are parties to a Net Subscription Agreement, effective November 1, 2005, pursuant to which WSI provided the Debtors with access to its Internet Aviation Weather Briefing Services for 48 months. The system allows the Debtors' employees to view worldwide weather data. The Debtors agreed to pay $1,000 per month for the first two years and $1,600 per month thereafter. Pursuant to Section 365(a) of the Bankruptcy Code, the Debtors ask the U.S. Bankruptcy Court for the Southern District of Indiana for permission to reject the Contract effective on the date notice of the rejection is served to WSI. Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis, explains that substantially similar services provided under the Contract to the Debtors are being provided at no charge by another vendor, thus rendering the services provided under the Contract unnecessary to the estate Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATMEL CORPORATION: Incurs $1.1 Million Net Loss in Third Quarter ---------------------------------------------------------------- Atmel Corporation (Nasdaq: ATML) reported financial results for the third quarter ended September 30, 2005. Revenues for the third quarter of 2005 totaled $418.6 million, versus $412.2 million in the second quarter of 2005 and $413.2 million in the third quarter of 2004. Net loss for the third quarter of 2005 totaled $1.1 million. The third quarter results include a restructuring charge of $2.8 million related to headcount reductions. Also included in the third quarter results is $12 million of tax benefit resulting from the settlement of a tax audit related to one of the Company's foreign entities. These results compare to a net loss of $42.6 million for the second quarter of 2005, as well as a net loss of $18.0 million for the third quarter of 2004. "In the third quarter, we significantly lowered our manufacturing costs, leading to over 5 percentage points of gross margin improvement," stated George Perlegos, Atmel's President and Chief Executive Officer. "We expect to continue steadily reducing manufacturing and research and development spending, which should lead to further improvements in our operating profits. "Our ASIC revenues grew about 7% sequentially in the third quarter. During the quarter, we increased the percentage of our smart card ICs produced on 0.18-micron line width to over 80%, which contributed to the improved operating results of the ASIC business. "During the third quarter of 2005, our Microcontroller operating segment sales were down 4% sequentially, due mainly to the seasonal impact of our European military and aerospace business. However, we again saw growth in our proprietary AVR microcontroller products, which also enjoyed strong design win activity. Additionally, we shipped our first AVR units into the US automotive sector during the quarter. "Sales in our RF and Automotive operating segment in the third quarter were down 5% sequentially. Although our RF BiCMOS business was down during the quarter, we expect to ramp up new designs for CDMA phones during the fourth quarter. "During the third quarter, our Non Volatile Memory business increased by 4% sequentially, mainly due to increased sales of our serial based products. Both our serial EEPROM and serial DataFlash(R) business enjoyed stronger demand late in the third quarter," concluded Mr. Perlegos. Outlook The Company anticipates that for the fourth quarter of 2005, revenues should increase about 1-3%, while gross margin should increase approximately 1 percentage point as compared to the third quarter of 2005. Additionally, R&D is expected to be approximately $67-$70 million, while SG&A is expected to be between $46-$50 million. Net interest expense for the quarter is expected to be approximately $6 to $7 million, while income taxes are expected to be approximately $1 to $3 million. The Company anticipates that depreciation and amortization will be approximately $67-$70 million. Atmel Corporation designs, develops, manufactures, and markets nonvolatile memory and logic integrated circuits using its proprietary complementary metal-oxide semiconductor technologies. * * * Standard & Poor's Rating Services assigned its single-B long-term foreign issuer and long-term local issuer credit ratings to Atmel Corp. on Oct. 24, 2001, and said the outlook, at that time, was negative. Atmel's Zero Coupon Convertible Subordinated Debentures due 2018 ($36,575,500 of which are outstanding) currently trade around 33 and Atmel's Zero Coupon Convertible Subordinated Debentures due 2021 ($511,500,000 of which are outstanding) currently trade around 47. BIRCH TELECOM: Larry Adelman Named as Chief Restructuring Officer ----------------------------------------------------------------- Members of AEG Partners have assumed key management positions at Birch Telecom Inc. Larry Adelman, principal of AEG Partners, has been appointed Chief Restructuring Officer, Steve Kunkel, Managing Director, has been appointed Assistant Chief Restructuring Officer, and AEG is providing an interim CFO. "While Chapter 11 situations are always a difficult undertaking and the CLEC industry has had its share of issues, our experience with such restructurings and our background in the telecom industry are perfectly suited for the challenges ahead," said Larry Adelman, Principal of AEG Partners . "We look forward to helping Birch navigate through this process." AEG Partners has been involved in numerous restructuring engagements over a broad range of industries. The firm's telecom practice is led by Michael Friduss and Charles Hempfling, each with over 30 years of experience as senior executives in the Bell System and as advisors to CLECs and the Department of Justice. As reported in the Troubled Company Reporter on Aug. 29, 2005, Birch Telecom, Inc., and its debtor-affiliates asked the U.S. Bankruptcy Court for the District of Delaware for permission to continue their engagement of AEG Partners LLC. The Debtors and AEG Partners entered into a pre-petition Engagement Agreement whereby AEG Partners provides certain temporary employees to assist the Debtors' restructuring efforts, including persons to fill the positions of Chief Restructuring Officer, Assistant Restructuring Officer and Chief Financial Officer. The AEG staff who have assumed management positions with the Debtors are: Individual Designation ---------- ----------- Lawrence M. Adelman Chief Restructuring Officer Michael Goldman Chief Financial Officer Stephen Kunkel Assistant Restructuring Officer Mr. Adelman will: 1) assist in preparing the Debtors' business plans, cash flow forecasts and financial projections, challenge the Debtors' critical assumptions, identify opportunities for improvement and assist management in the implementation of those programs; 2) assist in projecting and managing the Debtors' cash position and trade credit, reports, budgets and analyses as maybe required by the Debtors' lenders or investors; 3) assist in assuring suitable productivity of the working group of professionals who are assisting the Debtors in their reorganization process and in negotiations with stakeholders and their representatives; 4) assist in negotiations with potential acquirers of the Debtors' assets, evaluate the Debtors' businesses and dispositions of any non-core assets or operations, and in developing alternative strategies for improving liquidity; and 5) provide the Debtors with all other services that fall within his duties as Chief Restructuring Officer and as mutually agreed by the Debtors' Board of Directors and AEG Partners. Mr. Goldman will: 1) assist the Debtors' core financial function and existing financial organization and competencies, including cash management and general accounting and reporting skills; and 2) provide the Debtors with all services that fall within his duties as Chief Financial Officer and as mutually agreed by the Debtors' Board of Directors and AEG Partners. Mr. Kunkel will assist Mr. Adelman in the performance of his duties and will work collaboratively with the Debtors' counsel and their other professionals. Mr. Adelman disclosed that pursuant to the Engagement Agreement, his Firm received a $250,000 retainer and will be paid with a Weekly Fee of $50,000. About AEG Partners AEG Partners -- http://www.aegpartners.com/-- is the premier strategic and turnaround advisory firm to distressed middle market companies. The firm provides reliable, independent, senior-level counsel that quickly secures the support of key decision makers. AEG combines seasoned operational expertise with a strong results focus to accurately identify and implement the recovery and re- capitalization strategies necessary to improve performance and drive stakeholder value. About Birch Telecom Headquartered in Kansas City, Missouri, Birch Telecom, Inc. and its subsidiaries -- http://www.birch.com/-- owns and operates an integrated voice and data network, and offers a broad portfolio of local, long distance and Internet services. The Debtors provide local telephone service, long-distance, DSL, T1, ISDN, dial-up Internet access, web hosting, VPN and phone system equipment for small- and mid-sized businesses. Birch Telecom and 28 affiliates filed for chapter 11 protection on Aug. 12, 2005 (Bankr. D. Del. Case Nos. 05-12237 through 05-12265). When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. About AEG Partners BOYDS COLLECTION: Gets Interim Okay to Obtain $3.5 Mil. DIP Loans ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland gave The Boyds Collection, Ltd., and its debtor-affiliates permission, on an interim basis to: a) obtain Letters of Credit from Bank of America, N.A, as the Letter of Credit Issuer and as Administrative Agent for the DIP Lenders pursuant to the terms of the Debtor-in- Possession Credit and Guaranty Agreement and all other Loan Documents related to the Letters of Credit; and b) grant adequate protection to Bank of America acting on behalf of itself and the DIP Lenders. Use of Loan Proceeds The Court authorizes the Debtors to enter into the DIP Credit Agreement and the Loan Documents and perform their obligations subject to the terms of the Credit Agreement, the Loan Documents and the Court's Interim DIP Financing Order. The Debtors are authorized to obtain Letters of Credit of up to $3,500,000. The Debtors will use the loan proceeds for working capital financing for the orderly continuation of the operation of their businesses. The Debtors' ability to post Letters of Credit is vital to the confidence of their vendors and suppliers of other goods and services, to their customers and employees and to the preservation and maintenance of the going concern value of the their estates. The Debtors' interim use of the proceeds of the Letters of Credit will be in compliance with a 13-week Budget, covering the period from Oct. 13, to Jan. 8, 2005. A copy of the 105-page DIP Credit and Guaranty Agreement is available for a fee at: http://www.researcharchives.com/bin/download?id=051026224933 A full-text of the 13-week Budget is available for free at http://ResearchArchives.com/t/s?28d Adequate Protection As security for the Letters of Credit, Bank of America and the DIP Lenders are granted valid, binding, enforceable and perfected liens in any cash pledged by the Debtors as collateral for the Letter of Credits that are senior and superior pursuant to Section 364(d)(1) of the Bankruptcy Code to any liens or claims encumbering the Collateral, including the Pre-Petition Liens and the Adequate Protection Liens. The Court will convene a hearing at 10:00 a.m., on Oct. 31, 2005, to consider the Debtors' request to obtain DIP financing on a final basis. Headquartered in McSherrystown, Pennsylvania, 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 and its debtor-affiliates filed for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case No. 05-43793). Matthew A. 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. BUCKEYE TECHNOLOGIES: Incurs $300K Net Loss in Third Quarter ------------------------------------------------------------ Buckeye Technologies Inc. (NYSE:BKI) incurred a net loss of $0.3 million after tax in the quarter ended September 30, 2005. The Company's results include $1.3 million after tax in early extinguishment of debt costs and restructuring expenses associated with the previously announced plan to close the Glueckstadt, Germany cotton linter pulp plant at the end of calendar year 2005. During the same quarter of the prior year, the Company earned $4.4 million after tax, which included $0.8 million after tax in restructuring costs primarily related to the closure of its Cork, Ireland nonwovens manufacturing facility. Net sales in the just completed quarter were $165.5 million, 1% below the $167.3 million in the same quarter of the prior year. Buckeye Chairman David B. Ferraro commented, "The just completed quarter was a very difficult one for Buckeye. Hurricane Katrina, followed by Hurricane Rita, drove already high energy and chemical costs even higher and forced transportation providers to increase their pricing. Our energy, chemical, and transportation costs were about $8 million more in the quarter ending September 30, 2005, than they were in the same period of the prior year." Mr. Ferraro went on to say, "In addition to these high costs, transportation disruptions and lower sales of fluff pulp resulted in our revenue being slightly below the previous year. As a result of the extraordinary and unprecedented high costs, we have implemented price surcharges of up to 5% on most products effective October 1st. We are also working to mitigate rising costs and believe that the combination of cost savings, the price surcharges and volume growth in the seasonally stronger second quarter will enable us to be profitable in October-December 2005." Buckeye Technologies, a leading manufacturer and marketer of specialty fibers and nonwoven materials, is headquartered in Memphis, Tennessee, USA. The Company currently operates facilities in the United States, Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods. * * * As reported in the Troubled Company Reporter on Feb 2, 2005, Moody's Investors Service assigns a B1 rating to Buckeye Technologies Inc.'s (Buckeye) $85 million increase of its senior secured term loan B, affirms all other ratings, and changes outlook to stable from negative. Moody's also affirmed these ratings: * Senior implied rated B2 * Senior unsecured issuer rating rated Caa1 * US$150 million, guaranteed senior secured term loan B, due October 15, 2008, rated B1 * US$70 million, guaranteed senior secured revolver, due September 15, 2008, rated B1 * US$200 million, 8.5%, guaranteed senior unsecured notes, due 2013, rated B3 * US$100 million, 9.25% senior subordinated notes, due 2008, rated Caa1 * US$150 million, 8.0% senior subordinated notes, due 2010, rated Caa1 As reported in the Troubled Company Reporter on Feb. 1, 2005, Standard & Poor's Ratings Services assigned its 'BB-' secured bank loan rating to specialty pulp producer Buckeye Technologies Inc.'s proposed $85 million term loan B add-on, based on preliminary terms and conditions. All other ratings were affirmed. S&P says the outlook is stable. CABLEVISION SYTEMS: Dolan Family Halts Bid to Take Company Private ------------------------------------------------------------------ Charles F. and James L. Dolan, on behalf of the Dolan Family Group, withdrew its proposal to acquire the outstanding, publicly held interests in Cablevision Systems Corporation (NYSE: CVC) following a pro rata distribution of Rainbow Media Holdings. The Dolan family previously submitted a $7.9 billion bid to take the company private in June 2005. David M. Ewalt of Forbes relates that the Dolan family couldn't make a deal with the committee charged by the company to evaluate the offer. The family, which controls 71 percent of the vote and 22 percent of the Company's equity, also recommended that Cablevision's Board of Directors consider the declaration of a $3 billion one-time, special dividend payable pro rata to all shareholders. "The Board of Directors is considering the proposal," Cablevision said in a press statement this week. "No decision with respect to a dividend has been made at this time." "We continue to have full faith and confidence in the near and long-term prospects of the Company and remain committed to the goal of providing value to all shareholders," the Dolans said in their letter to the Board. "In addition, we recognize from the strength of the financing commitments received in connection with our proposal that the credit markets currently value the Company's growing cash flow to a greater extent than the equity markets. This recommendation is driven by a desire to treat all shareholders equally, to provide clarity for the Company's security holders and to take advantage of the robust credit markets and attractive interest rate environment." A dividend would net the Dolan family $600 million, Geraldine Fabrikant writes for The New York Times. Cablevision Systems Corporation -- http://www.cablevision.com/-- is one of the nation's leading entertainment, media and telecommunications companies. In addition to its cable, Internet, and voice offerings, the company owns and operates Rainbow Media Holdings LLC and its networks; Madison Square Garden and its teams; and, Clearview Cinemas. In addition, Cablevision operates New York's Radio City Music Hall. At June 30, 2005, Cablevision Systems' balance sheet showed a $2,481,149 stockholders' deficit, compared to a $2,630,334 deficit at Dec. 31, 2004. CABLEVISION SYSTEMS: Moody's Reviews Low-B Ratings & May Downgrade ------------------------------------------------------------------ Moody's Investors Service reported that all ratings for Cablevision Systems Corporation and CSC Holdings, Inc., a wholly owned subsidiary of CVC, remain on review for downgrade following the Dolan family's proposal to declare a $3 billion special dividend, which would result in a meaningful deterioration of credit metrics. Concurrently, the Dolan family withdrew its proposal to acquire Cablevision's cable assets. Moody's estimates a $3 billion debt funded dividend would increase debt of the cable operations to approximately 8 times EBITDA from slightly under 6 times EBITDA. These ratings remain on review: Cablevision Systems Corporation -- Corporate Family Rating -- Ba3 -- $500 Million New Floating Rate Notes due 2009 - B3 -- $1 Billion New Senior Unsecured Notes due 2012 - B3 CSC Holdings, Inc. -- $4.2 billion aggregate senior unsecured notes -- B1 -- $250 Million of 10.5% Senior Subordinated Debentures due 2016 - B2 Moody's will evaluate the effect of the proposed dividend, specifically the increase in leverage and the composition of the debt. Moody's estimates debt will increase to approximately 8 times EBITDA pro forma for the special dividend and based on trailing 12 months EBITDA through June 30, 2005, from approximately 5.7 times. In analyzing Cablevision's cable operations, Moody's focuses on the debt currently called Restricted Group debt (which excludes the debt at Rainbow National Services) and the bonds at CVC. Cash flow from the consumer and business (Lightpath) cable assets service this debt. Cablevision Systems Corporation, through its wholly owned subsidiary CSC Holdings, Inc., serves approximately 3 million cable subscribers in and around the New York metropolitan area. The company maintains its headquarters in Bethpage, New York. CABLEVISION SYSTEMS: Nixed Buy-Out Plans Cue S&P to Review Ratings ------------------------------------------------------------------ On Oct. 25, 2005, Standard & Poor's Ratings Services announced that its long-term ratings for Bethpage, Long Island-based cable TV operator Cablevision Systems Corp. and related entities -- including the 'BB' long-term corporate credit rating -- remain on CreditWatch with negative implications. Standard & Poor's 'B-2' short-term rating on the company remains on CreditWatch with developing implications. This CreditWatch update follows the announcement by the Dolan family that it is withdrawing its buyout offer for the Cablevision cable TV properties. Instead, the Dolans are recommending that the board declare a $3 billion shareholder special dividend. This dividend would result in a comparable level of debt relative to the buyout proposal -- about $11.8 billion with the dividend plan, versus an estimated $12.5 billion with the buyout plan, and these levels are materially higher than the company's current $8.8 billion. However, maintenance of the current corporate ownership structure under the dividend plan gives the company continued access to the non-cable assets, including valuable programming assets American Movie Classics, WE: Women's Entertainment, and the Independent Film Channel. Pro forma for a potential debt-financed special dividend payment, the company's consolidated leverage for the second quarter of 2005 would be about 8.2x on an operating lease-adjusted basis including purchase commitments, versus around 9.0x for the cable business under the buyout plan. So, while the dividend scenario is at least initially less leveraging than the buyout plan, it would still increase leverage materially from the current 6.2x. "Along with considering the incremental debt, we will also assess Cablevision's future financial policy and business strategy in resolving the CreditWatch listing, especially given the Dolan family's continued strong influence on the company," noted Standard & Poor's credit analyst Catherine Cosentino. In their notice to withdraw their offer, the Dolans indicated that "there has been a decline in communications sector valuations and an increased competitive environment." Given this sentiment, the company may be more inclined to aggressively return cash to shareholders or to lever up to levels that may not provide sufficient cushion to support the current 'BB' rating. CAMPBELL RESOURCES: Court Extends CCAA Protection Until Nov. 25 --------------------------------------------------------------- Campbell Resources Inc. (TSX: CCH, OTC Bulletin Board: CBLRF) has been granted an extension to Nov. 25, 2005, of the initial order granted June 30 under the Companies' Creditors Arrangement Act. Operations at the Copper Rand and Joe Mann mines are continuing as well as exploration on the Corner Bay property. AS reported in the Troubled Company Reporter on July 4, 2005, the Superior Court of Quebec (Commercial Division) granted Campbell Resources Inc. an initial order under the Companies' Creditors Arrangement Act. Campbell Resources Inc. is a mining company focusing mainly in the Chibougamau region of Quebec, holding interests in gold and gold- copper exploration and mining properties. CARDIAC SERVICES: Court Sets November 21 as Claims Bar Date ----------------------------------------------------------- The Honorable Keith M. Lundin of the U.S. Bankruptcy Court for the Middle District of Tennessee set November 21, 2005, at 4:00 p.m., as the deadline for all creditors owed money on account of claims arising prior to March 8, 2005, against Cardiac Services, Inc., to file a proof of claim. Creditors must file written proofs of claim on or before the November 21 Claims Bar Date and those forms must be sent to: Paul E. Jennings, Esq. Paul E. Jennings Law Offices, P.C. 805 South Church Street, Suite 3 Murfreesboro, TN 37130 Headquartered in Nashville, Tennessee, Cardiac Services, Inc., provides surgical services, mobile catherization and peripheral vascular labs, and associated equipment. The Company filed for chapter 11 protection on March 8, 2005 (Bankr. M.D. Tenn. Case No. 05-02813). Paul E. Jennings, Esq., at Paul E. Jennings Law Offices, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. CASH TECHNOLOGIES: Posts $1.3MM Net Loss in Quarter Ended Aug. 31 ----------------------------------------------------------------- Cash Technologies Inc. delivered its financial results for the quarter ended Aug. 31, 2005, to the Securities and Exchange Commission on Oct. 17, 2005. For the three months ended Aug. 31, 2005, Cash Technologies incurred a $1,286,589 net loss on $1,877,501 of revenues compared to a $943,064 net loss on $14,764 of revenues for the same period in 2004. The Company has incurred losses since its inception prior to the fiscal year ended May 31, 2005. For the last two fiscal years ended May 31, 2004, and 2005, the Company realized a net loss of $4,382,532 and net income of $3,655,760 respectively. At Aug. 31, 2005, the Company's balances sheet showed $13,747,000 of assets and liabilities totaling $9,309,803. Approximately $478,142 of the Company's liabilities is not being paid as agreed. Default On Senior Securities As of Aug. 31, 2005, Cash Technologies owes approximately $478,142 in principal and interest to the noteholders pursuant to a private placement offering of convertible notes and warrants completed in Jan. 2000. The notes, secured by a first priority lien on all of the Company's assets, were originally due and payable on July 31, 2001. Going Concern Doubt Cash Technologies' limited revenues and history of losses have prompted its independent accountants to issue opinions containing doubts about the Company's ability to continue as a going concern. In its audit report accompanying the Company's audited financial statement for the fiscal years ended May 31, 2005, Vasquez & Company LLP, of Los Angeles, California, expressed substantial doubt about the Company's ability to continue as a going concern, The auditing firm pointed to the Company's recurring losses, substantial debt service requirements and working capital needs. About Cash Technologies Cash Technologies, Inc. -- http://www.cashtechnologies.com/and http://www.heuristictech.com/-- develops and markets innovative data processing systems, including the BONUS(TM) and MFS(TM) financial services systems and EMMA (TM) transaction processing software. Its Heuristic subsidiary creates and markets healthcare and employee benefits data processing solutions and debit card programs. CONTINENTAL AIRLINES: Completes 18-Mil. Public Equity Placement --------------------------------------------------------------- Continental Airlines, Inc. (NYSE: CAL) completed its previously announced public offering of 18 million shares of its Class B Common Stock at a price to the public of $11.35 per share. UBS Investment Bank, the sole underwriter for the offering, has a 30-day option to purchase an additional 2.7 million shares of common stock to cover over-allotments, if any. Copies of the prospectus supplement and prospectus relating to the offering may be obtained from UBS Investment Bank, 299 Park Ave., New York, New York 10171. Continental Airlines -- http://continental.com/-- is the world's sixth-largest airline, serving 128 domestic and 111 international destinations -- more than any other airline in the world -- and serving nearly 200 additional points via codeshare partner airlines. With 42,000 mainline employees, the airline has hubs serving New York, Houston, Cleveland and Guam, and carries approximately 51 million passengers per year. FORTUNE ranks Continental one of the 100 Best Companies to Work For in America, an honor it has earned for six consecutive years. FORTUNE also ranks Continental as the top airline in its Most Admired Global Companies in 2004. * * * As reported in the Troubled Company Reporter on Sept. 15, 2005, Moody's Investors Service assigned a Ba2 rating to the proposed Series 2005-ERJ1 Class A Pass Through Certificates of Continental Airlines, Inc. and affirmed Continental's long-term debt ratings (corporate family rating at B3). Moody's said the rating outlook is negative. COVENTRY HEALTH: Earns $133.1 Million of Net Income in 3rd Quarter ------------------------------------------------------------------ Coventry Health Care, Inc. (NYSE: CVH) reported operating results for the quarter ended September 30, 2005. Operating revenues totaled $1.67 billion for the quarter, a 25.9% increase over the third quarter of 2004. Net earnings were $133.1 million, a 52.9% increase over net earnings for the third quarter of 2004 and a 26.6% increase on a per diluted share basis. These results are reported on the basis of Coventry's recently effective three-for-two stock split which was distributed to shareholders on October 17, 2005. "I am delighted to announce another quarter of strong financial results. The Health Plan business continues to perform well, including growth of 39,000 members during the quarter, and First Health continues to perform well both financially and operationally," said Dale B. Wolf, chief executive officer of Coventry. "We are also very proud of our employees in the New Orleans region who serve our Louisiana members in the aftermath of Hurricane Katrina. Overall, the parts are in place for a strong finish to 2005 and the prospects for 2006 look promising." Third Quarter Highlights * Revenues up 25.9% over the prior year quarter * Diluted EPS up 26.6% over the prior year quarter * Operating Margin of 12.5%, up 290 basis points from prior year quarter * First Health accretion of $0.07 per share in Q3 2005 * Cash flow from operations of $247.2 million or $194.8 million when adjusted for one extra Medicare payment in the quarter from CMS, representing 146% of net income. * Paydown of $117.5 million of bank debt in July 2005 * Debt to Capital Ratio dropped to 24.1% as of September 30, 2005 Consolidated Guidance Details Q4 2005 Guidance * Total Revenues of $1.66 billion to $1.70 billion * Earnings per share on a diluted basis of $0.81 to $0.82 before the impact of Katrina * Possible loss of ($0.03) to ($0.05) in Louisiana operations due to Katrina; 2006 Full Year Guidance * Total Revenues of $7.7 billion to $7.9 billion, including $500 million to $700 million of Part D revenue; * Health Plan membership growth of 1% to 3%, adjusted for anticipated membership losses in Louisiana; * Part D end of year membership of 600,000 to 800,000; * Before Part D and FAS123R, earnings per share (EPS) on a diluted basis of $3.54 to $3.59; * Louisiana operations are expected to contribute $.05 less than pre-Katrina estimates; * Incremental EPS of $0.02 from the net impact of Part D; * Reflects anticipated quota share arrangements with two distribution partners; * Reflects impact on First Health revenue: loss of $31 million of fee based revenue relating to dual eligible administration and senior pharmacy discount card business; * The diluted EPS impact of FAS123R is expected to be ($0.13) to ($0.14). Coventry Health Care -- http://www.coventryhealth.com/-- is a managed health care company based in Bethesda, Maryland operating health plans and insurance companies under the names Coventry Health Care, Coventry Health and Life, Altius Health Plans, Carelink Health Plans, Group Health Plan, HealthAmerica, HealthAssurance, HealthCare USA, OmniCare, PersonalCare, SouthCare, Southern Health and WellPath. Coventry provides a full range of managed care products and services, including HMO, PPO, POS, Medicare+Choice, Medicaid, and Network Rental to 3.1 million members in a broad cross section of employer and government-funded groups in 15 markets throughout the Midwest, Mid-Atlantic and Southeast United States. * * * As reported in the Troubled Company Reporter on July 5, 2005, Moody's Investors Service assigned a Ba1 senior unsecured debt rating to Coventry Health Care, Inc.'s $450 million credit facility. Rating assigned with a negative outlook: Coventry Health Care, Inc.: * senior unsecured credit facility rating of Ba1. Ratings affirmed with a negative outlook: Coventry Health Care, Inc.: * corporate family rating of Ba1; * senior unsecured debt rating of Ba1; and * long-term issuer rating of Ba1. As reported in the Troubled Company Reporter on Jan. 31, 2005, Fitch Ratings assigned a 'BB' rating to Coventry Health Care Inc.'s issuance of $500 million of senior unsecured notes and $450 million credit facility. Concurrently, Fitch has affirmed the company's existing debt and long-term issuer rating of 'BB' and removed it from Rating Watch Negative. The Rating Outlook is Stable. CREDIT SUISSE: S&P Pares Rating Class III-B Certs. to BB from BBB- ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on the class III-B fixed-rate prime/Alt-A collateral-backed certificates issued by Credit Suisse First Boston Mortgage Securities Corp.'s series 2002-26 to 'BB' from 'BBB-'. Concurrently, ratings on five other classes from loan group III are affirmed. The lowered rating on class III-B is based on unfavorable collateral performance, which has led to projected credit support levels that do not support the former 'BBB-' rating. The rating on this class, originally 'A-', was previously lowered to 'BBB' in May 2005. This class is supported by overcollateralization and excess interest. Based on the structure of this transaction, principal is being paid sequentially. As result, class III-B is locked out and 100% of the principal balance remains outstanding. As of the September 2005 distribution period, the transaction has recently been generating greater amounts of excess interest. However, losses have followed the same trend. Net losses have continued to exceed excess interest cash flow, eroding o/c for all of the recent 12 months. This o/c deficiency has depleted o/c from its original and current target of $6,015,434 to $2,384,431. As of the September 2005 distribution date, cumulative realized losses for loan group III were $6.34 million -- 0.84% of the original pool balance, while total delinquencies were 30.18%. Serious delinquencies were 24.41%. While the mortgage pool has paid down to approximately 12.35% of its original balance, net losses continue to heighten, causing further erosion to the class' credit support percentage. Given the high delinquency trend and increasing cumulative net losses, Standard & Poor's will continue to monitor the transaction accordingly. The rating on this class may be adjusted accordingly to reflect available credit support. The affirmed ratings on the five remaining classes in the fixed-rate prime/Alt-A loan group III reflect sufficient levels of credit support provided by subordination, and to a lesser extent, excess spread and overcollateralization, despite the moderate delinquencies and net losses. The collateral consists of 30-year fixed-rate, prime/Alt-A mortgage loans secured by one-to-four-family residential properties. Rating Lowered Credit Suisse First Boston Mortgage Securities Corp. Mortgage-Backed P/T Certificates Series 2002-26 Rating Class To From ----- -- ---- III-B BB BBB- Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Mortgage-Backed P/T Certificates Series 2002-26 Class Rating ----- ------ III-A-4 AAA III-A-5 AAA III-M-1 AA III-M-2 A+ III-M-3 A CROWN HOLDINGS: S&P Assigns B Rating to $1.1-Bil Sr. Unsec. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Crown Holdings Inc. The outlook is stable. At the same time, Standard & Poor's lowered its senior secured debt rating on EUR460 million of first-priority senior secured notes due 2011 issued by wholly owned subsidiary Crown European Holdings S.A. to 'BB-' from 'BB'. The recovery rating on these notes was lowered to '2' from '1', now indicating expectations for substantial, not full, recovery in the event of a payment default. The downgrade and the change in the recovery rating reflect the significant increase in senior secured debt that results from the group's proposed bank credit facilities. Failure to complete the refinancing as currently contemplated could lead to a reassessment of the recovery prospects for senior secured creditors. Standard & Poor's assigned its 'B' rating to the proposed $500 million of senior unsecured notes due 2013 and $600 million of senior unsecured notes due 2015 to be issued by Crown Americas LLC and Crown Americas Capital Corp., wholly owned subsidiaries of Crown Holdings. In addition, based on preliminary terms and conditions, Standard & Poor's assigned its 'BB-' rating and a recovery rating of '2' to Crown's proposed $1.3 billion senior secured credit facilities. These ratings indicate Standard & Poor's assessment that bank lenders and senior secured noteholders will receive substantial recovery in a payment default. If the company exercises its option to increase the credit facility by $500 million subject to lender approval, ratings and recovery prospects will be reevaluated. Proceeds from the new notes and the new credit facility, together with proceeds from the recent sale of the company's plastic closures business, will be used to refinance existing bank debt and high-coupon junior debt, make additional pension contributions, and pay tender premiums and other transaction-related expenses. Ratings on the debt that is being refinanced will be withdrawn upon completion of the refinancing. "If completed as currently contemplated, the refinancing will result in significantly lower interest expense, reduced pension obligations, and a smoother debt maturity schedule," said Standard & Poor's credit analyst Cynthia Werneth. "In addition, the financial profile should continue to strengthen through good operating performance, cash generation, and debt reduction." The ratings continue to reflect Crown's satisfactory business risk profile, characterized by market leadership, global operations, and relative earnings stability. Nevertheless, the financial profile remains aggressive, and the company continues to face risks associated with asbestos litigation. With annual sales of more than $7 billion, Philadelphia, Pennsylvania-based Crown is primarily a metal container manufacturer. The company benefits from a broad geographic presence, a well-diversified customer base, and leading market positions in food, beverage, and aerosol cans. CSC HOLDINGS: Nixed Going Private Deal Cues Fitch to Review Rating ------------------------------------------------------------------ The ratings for the restricted group of CSC Holdings, Inc., remain on Rating Watch Negative by Fitch Ratings following the announcement by controlling CVC shareholders to withdraw their June 19, 2005, proposal to take CSC's cable and Lightpath businesses private while distributing CVC's equity interest in its wholly-owned subsidiary Rainbow Media Holdings, LLC to CVC shareholders. CSC is a wholly owned subsidiary of Cablevision Systems Corporation. In addition to withdrawing the proposal the controlling shareholders recommended to CVC's board of directors that the company declare a $3 billion special cash dividend. On June 20, 2005, Fitch placed these ratings for CSC on Rating Watch Negative: -- Issuer default rating (IDR) 'BB-'; -- Senior unsecured debt 'BB-'; -- Senior subordinated debt 'B+'; -- $2.4 billion guaranteed senior unsecured credit facility 'BB'. In the absence of a material asset sale, Fitch believes that the special dividend, if approved by CVC's board of directors, will be a leveraging transaction. Fitch estimates that on a consolidated basis CVC's leverage pro forma for a debt financed $3 billion special dividend would increase to approximately 8.3 times based on adjusted total debt of approximately $12.1 billion and LTM EBITDA of approximately $1.46 billion. In Fitch's opinion, the restricted group could contribute to funding of the special dividend, which has the potential to place downward pressure on the existing ratings. For instance, if the restricted group funded the entire special dividend Fitch estimates that pro forma leverage would increase to approximately 6.4x from actual leverage of 4.1x at the end of the second quarter. Depending on the final financing structure, Fitch believes that the restricted group has the capacity within its existing ratings to fund part of the special dividend. In resolving the Rating Watch, Fitch will consider the final capital structure, credit profile and recovery prospects of CSC's restricted group as well as the business and operational risks of the company going forward. Fitch's current ratings for CSC's restricted group reflect the operating advantages derived from the company's technologically upgraded network and its tightly clustered subscriber base. Fitch's ratings also incorporate the growth and continuing diversification of CSC's revenue generating units, positive basic subscriber trends and the increasing business risk and the potential negative impact on subscriber metrics, revenue growth, and margin performance stemming from the persistent competition for video subscribers from the DBS operators and for broadband subscribers primarily from the regional bell operating companies. Longer term credit risks are centered on the increased competition for video business resulting from the RBOCs entering into the video business and CSC's commitment to its credit profile. DAY INTERNATIONAL: S&P Assigns Junk Rating to $140 Mil Sec. Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Day International Group Inc. At the same time, Standard & Poor's assigned its 'B' senior secured bank loan rating and a recovery rating of '2' to Day's proposed $275 million first-lien secured credit facility. S&P also assigned a 'CCC+' senior secured bank loan rating and a recovery rating of '5' to Day's proposed $140 million second-lien secured credit facility, and revised our rating on the company's 12.25% exchangeable preferred stock to 'CCC' from 'D'. The outlook is stable. Day will use proceeds from the proposed term loans to repay the current $126 million term loan D due 2009; to redeem $115 million in existing 9.5% senior subordinated notes due 2008; to redeem all of its 18% convertible preferred stock; to redeem $30.8 million of its 12.25% preferred shares, including an accrued dividend; and to pay transaction fees and other expenses. After the transaction, the Dayton, Ohio-based company will have total pro forma balance sheet debt of about $390 million. "The ratings on Day International Group Inc. reflect its aggressive financial profile, partly offset by its leading position in highly fragmented, competitive, and small niche markets serving the commercial printing and textile industries," said Standard & Poor's credit analyst Natalia Bruslanova. Geographic and customer diversity is good. About 85% of Day's revenues are derived from its image-transfer products, which include consumable rubber-surface printing blankets and sleeves, and from pressroom chemicals such as roller and blanket washes, fountain solutions, and dampeners. The remaining 15% of Day's sales are generated through its textile division, a global producer of high-end yarn-spinning cots and a maker of aprons used in textile machinery. The company's well-established customer base and distribution channels provide moderate barriers to entry, and they have enabled Day to sustain positions in the markets it serves. These markets are moderately cyclical and very mature, and they are expected to grow only 1%-2% per year. Still, the company's premium pricing scheme generates strong EBITDA margins, at about 20%, and relatively stable revenue streams because of the consumable nature of the products. Sales from the image-transfer segment rose slightly because of increased sales volumes in Europe and because of the positive impact of foreign currency exchange rates, though these factors were partially offset by the segment's lower sales volumes in the U.S. Image-transfer products have been affected by the higher raw material prices of solvents, though these have been partially mitigated by Day's price increases. Meanwhile, sales in the company's textile products segment have declined as the U.S. and European textile sectors continue to contract. DEXTERITY SURGICAL: Clear Thinking Named as Panel Representative ---------------------------------------------------------------- Clear Thinking Group, LLC, and Joseph E. Myers, a partner and managing director in the firm, have been appointed to be the representative of the Unsecured Creditors Committee of Dexterity Surgical, Inc. The appointment became effective with the confirmation of the company's amended Plan of Liquidation, prepared pursuant to a Chapter 11 Plan of Reorganization filed last year. Under terms of the engagement agreement, Mr. Myers and select staff from Clear Thinking's Creditors Rights Practice Group will represent the Unsecured Creditors interests. This role includes reviewing creditor claims and determining whether to pursue objections or litigation related to such claims. The firm will also make determinations as to the manner and timing of distributions executed to satisfy Dexterity's general unsecured claims. Clear Thinking Group -- http://www.clearthinkinggrp.com/-- provides a wide range of strategic consulting services to retail companies, consumer product manufacturers/distributors and industrial companies. The national advisory organization specializes in assisting small- to mid-sized companies during times of growth, opportunity, strategic change, acquisition, and crisis. Headquartered in Houston, Texas, Dexterity Surgical, Inc., is engaged in the distribution of instruments, equipment and surgical supplies, primarily used in hand-assisted laproscopic surgery. The Company filed for chapter 11 protection on April 19, 2004 (Bankr. S.D. Tex. Case No. 04-35817). Robert Andrew Black, Esq., at Fulbright & Jaworski represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $3,639,923 in total assets and $8,715,167 in total debts. DOE RUN: Needs to Pay Renco Group $7.5 Million by October 31 ------------------------------------------------------------ The Doe Run Resources Corporation amended its Amended and Restated Credit Agreement with the Renco Group, Inc. The most recent amendment extended the maturity date of the Credit Agreement. A $7,500,000 payment is due October 31, 2005, and the balance of $8,000,000 is due November 30, 2005. All of the issued and outstanding common and preferred stock of the Company is owned directly or indirectly by Renco. A full-text copy of the Amended and Restated Credit Agreement is available for free at http://ResearchArchives.com/t/s?286 The Doe Run Resources Corporation is one of the world's leading providers of premium lead and associated metals and services. At July 31, 2005, the Company's balance sheet shows $481,824,000 in total assets and a $178,981,000 stockholders deficit. DOE RUN: $75-Million Loan Agreement Matures on August 29, 2008 -------------------------------------------------------------- The Doe Run Resources Corporation amended its Amended and Restated Loan and Security Agreement, dated as of October 29, 2002, with: * The Buick Resource Recycling Facility, as borrower; * Fabricated Products, Inc. as borrower; * DR Land Holdings, LLC, as guarantor; * Wachovia Bank, National Association, as agent; and * The CIT Group/Business Credit, Inc., as co-agent. The Amendment extends the maturity date of the $75-million Credit Agreement to August 29, 2008. A full-text copy of the Amended and Restated Loan and Security Agreement is available for free at: http://ResearchArchives.com/t/s?285 The Doe Run Resources Corporation is one of the world's leading providers of premium lead and associated metals and services. At July 31, 2005, the Company's balance sheet shows $481,824,000 in total assets and a $178,981,000 stockholders deficit. DOMINO'S PIZZA: Sept. 11 Balance Sheet Upside-Down by $552 Million ------------------------------------------------------------------ Domino's Pizza, Inc. (NYSE: DPZ), reported financial results for the third quarter and first three quarters of 2005, which ended Sept. 11, 2005. Global retail sales were up 7.8% for the quarter versus the prior year period, driven by domestic and international same store sales and unit growth. Domestic same store sales increased 1.1% for the quarter, while international same store sales increased 4.5%, on a constant dollar basis, for the same period. Domestic and international same store sales increased 8.0% and 5.9%, respectively, for the same periods last year. The Company added 67 net stores worldwide during the quarter, and increased worldwide store counts by 342 net stores over the past four fiscal quarters. Net income increased $19.8 million to $20.8 million during the third quarter of 2005 versus the prior year period, and increased $33.9 million to $69.2 million during the first three quarters of 2005 versus the prior year period. These increases were due primarily to the aforementioned increases in income from operations as well as the reductions in interest expense and other expense. Additionally, net income for the year-to-date period was positively impacted by lower income taxes resulting from the reversal of valuation allowances related to net operating loss deferred tax assets from certain of our foreign operations. Domino's Pizza Chairman and CEO David A. Brandon, commented, "I am very pleased with the way we performed against our business plan for the third quarter. Both our domestic and international businesses drove positive same store sales growth, which was particularly noteworthy, considering our extremely strong sales performance in the same period last year. Together with lower cheese costs and healthy store growth, we were pleased to drive EPS growth of more than 30%." "I would also like to highlight the strength and character of our team members and franchisees in the wake of hurricanes Katrina and Rita," Mr. Brandon continued. "Our largest domestic franchisee, RPM Pizza, is located in the center of Katrina's devastation, and many of our franchisees and team members displayed incredible acts of selflessness by traveling to RPM Pizza locations throughout Mississippi and Louisiana and helping them get most of their stores reopened in a remarkably short period of time. In addition, we were privileged to provide free, hot food to thousands of evacuees and rescue workers during the weeks immediately following the storms. I am very proud of the resiliency of the Domino's Pizza system and our ability to come together as a team during trying times to provide needed support to the communities we serve." Income from operations increased $17 million, or 59.9%, during the third quarter of 2005 versus the prior year period, and increased $31.3 million, or 28.1%, during the first three quarters of 2005 versus the prior year period. Income from operations was positively impacted by higher royalty revenues from domestic and international franchise stores, increases resulting from higher domestic Company-owned same store sales, lower food and insurance costs, and higher volumes in our distribution business. Additionally, income from operations was positively impacted by the aforementioned decreases in general and administrative expenses. The third quarter and year-to-date 2004 other amount of $9.8 million was comprised of losses incurred in connection with debt retirements, including $9 million incurred in connection with the redemption of $109.1 million of Domino's, Inc.'s senior subordinated notes in Aug. 2004. Board Declares Third Quarter Dividend The Company's third quarter dividend, in the amount of 10 cents per share, will be paid on December 30, 2005, to shareholders of record as of the close of business on December 15, 2005. On an annualized basis, our third quarter dividend equates to an approximate 1.9% dividend yield, based on the Company's closing stock price of $21.31 on Oct. 21, 2005. Impact of Hurricanes Katrina and Rita The Company's overall operations and financial condition were not significantly impacted by hurricanes Katrina or Rita. However, 14 franchise stores in Louisiana and Mississippi suffered significant damage and are not expected to re-open in the near term. These stores have been designated as closed stores for store count purposes. The Company-owned distribution center in Louisiana suffered only minor damage and continues to be fully operational. Liquidity As of Sept. 11, 2005, the Company had $755.2 million in total debt and $21.9 million of cash and cash equivalents. Including the effect of interest rate derivatives, approximately 70% of outstanding borrowings were contractually fixed at the end of the third quarter. The Company voluntarily repaid $25 million of senior credit facility borrowings in the first quarter of 2005. During the second and third quarters of 2005, the Company repaid $25.1 million and $15.1 million of outstanding borrowings, respectively, which consisted primarily of repayments of the $40 million of borrowings on our revolving credit facility that were used to repurchase approximately 4.4 million shares of the Company's common stock during the second quarter of 2005. The Company is currently not required to pay down principal on its senior subordinated notes until 2011. The next scheduled principal amortization payment of $1.2 million on its senior credit facility is due on Mar. 31, 2006. As of Sept. 11, 2005, the Company had no borrowings under its $125.0 million revolving credit facility. Letters of credit issued under the revolving credit facility were $28.9 million at Sept. 11, 2005. Low-B Ratings Additionally, during the third quarter of 2005, the Company received credit rating upgrades from Standard and Poor's. The rating on its senior secured debt improved to BB- from B+, while the rating on its senior subordinated debt improved to B from B-. According to Standard and Poor's, these rating upgrades were given due to the Company's leading market position, improving operating performance and a history of de-leveraging. The Company does not have any material commitments for capital expenditures as of Sept. 11, 2005. The Company currently expects its full year 2005 capital expenditures to total between $28 million and $38 million, including approximately $8 million relating to the completion of the renovation of its world headquarters. Founded in 1960, Domino's Pizza -- http://www.dominos.com/-- is the recognized world leader in pizza delivery. Domino's is listed on the NYSE under the symbol "DPZ." Through its primarily franchised system, Domino's operates a network of 7,945 franchised and Company-owned stores in the United States and more than 50 countries. The Domino's Pizza(R) brand, named a Megabrand by Advertising Age magazine, had global retail sales of more than $4.6 billion in 2004, comprised of nearly $3.2 billion domestically and more than $1.4 billion internationally. Domino's Pizza was named "Chain of the Year" by Pizza Today magazine, the leading publication of the pizza industry and is the "Official Pizza of NASCAR(R)." At Sept. 11, 2005, Domino's Pizza, Inc.'s balance sheet showed a $552,567,000 stockholders' deficit compared to a $549,880,000 deficit at Jan. 2, 2005. EAGLEPICHER HOLDINGS: Inks Premium Financing Pact with Cananwill ---------------------------------------------------------------- EaglePicher Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy for the Southern District of Ohio, Western Division, for authority to enter into an insurance premium financing agreement with Cananwill, Inc. The premium financing agreement will allow the Debtors to maintain policies necessary to keep the business operations and assets of their estates insured for the benefit of their creditors. The agreement provides for a cash down payment of $332,490 and a financed amount totaling $775,811. The Debtors will pay the financed amount in eight monthly payments of $99,064, for a total payment to Cananwill of $792,515. Cananwill will hold a security interest in unearned or returned premiums and other amounts due to the Debtors under the Policies, to secure repayment of its loan. The Debtors also allow Cananwill to cancel any policy financed under the agreement in case of a payment default. Headquartered in Phoenix, Arizona, EaglePicher Incorporated -- http://www.eaglepicher.com/-- is a diversified manufacturer and marketer of innovative advanced technology and industrial products for space, defense, automotive, filtration, pharmaceutical, environmental and commercial applications worldwide. The company along with its affiliates and parent company, EaglePicher Holdings, Inc., filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P. represents the Debtors. When the Debtors filed for protection from their creditors, they listed $585 million in consolidated assets and $730 in consolidated debts. EL POLLO: Bondholders Agree to Lift Restrictive Covenants --------------------------------------------------------- El Pollo Loco, Inc., had received valid tenders and consents from holders of approximately $107,750,000 in aggregate principal amount of the Company's 9-1/4% Senior Secured Notes due 2009 representing approximately 97.95% of the outstanding Notes, in connection with its previously announced cash tender offer and consent solicitation for the Notes, which satisfies the "Requisite Consents," as defined in the Company's Offer to Purchase and Consent Solicitation Statement dated Oct. 12, 2005 and the accompanying Letter of Transmittal and Consent. With the receipt of the Requisite Consents, the Company will execute a supplemental indenture governing the Notes to eliminate substantially all of the restrictive covenants and events of default in the indenture. The amendments to the supplemental indenture will not become operative until all validly tendered Notes are accepted for purchase by the Company. Consummation of the Company's tender offer remains conditioned on, among other things, that all of the conditions to the Acquisition (as defined in the Offer to Purchase and Consent Solicitation Statement dated Oct. 12, 2005), other than the successful completion of the Tender Offer and the Consent Solicitation, shall have been satisfied, or waived by the Company's acquirer, and the Company shall have received applicable financing proceeds to pay the consideration for the Notes purchased in the tender offer. There can be no assurance that any of such conditions will be met. Notes may be tendered pursuant to the tender offer until 9:00 a.m., New York City time, on Wednesday, Nov. 9, 2005 or such later date and time to which the Expiration Time is extended, unless the tender offer is earlier terminated by the Company. The total consideration to be paid for each validly tendered Note (which shall include an amount paid in respect of the consent), subject to the terms and conditions of the tender offer and consent solicitation, will be paid in cash and calculated based in part on the 3.0% U.S. Treasury Note due Dec. 31, 2006. The total consideration for each Note will be equal to the sum of the present value of scheduled payments on such Note based on a fixed spread pricing formula utilizing a yield equal to the Reference Treasury Note, plus 50 basis points. The detailed methodology for calculating the total consideration for Notes is outlined in the Offer to Purchase and Consent Solicitation Statement dated Oct. 12, 2005 relating to the tender offer and the consent solicitation. Holders who validly tender their Notes by the Consent Time will be eligible to receive the total consideration. Holders who validly tender their Notes after the Consent Time, but on or prior to the Expiration Time, will be eligible to receive the total consideration less $50 per $1,000 principal amount. Any Notes not tendered and purchased pursuant to the tender offer will remain outstanding and the holders thereof will be bound by the amendments contained in the supplemental indenture eliminating substantially all of the restrictive covenants in the indenture even though they have not consented to the amendments. Holders who tender their Notes must consent to the proposed amendments. Tendered Notes may not be withdrawn and consents may not be revoked after the Consent Time. The Company has retained Merrill Lynch & Co. to act as sole Dealer Manager for the tender offer and as the Solicitation Agent for the consent solicitation and can be contacted at 212-449-4914 (collect) or 888-ML4-TNDR (toll free). Global Bondholder Services Corporation is the Information Agent and can be contacted at 212-430-3774 (collect) or 866-387-1500 (toll free). Copies of the Offer Documents and other related documents may be obtained from the Information Agent. El Pollo Loco (pronounced "L Po-yo Lo-co" and Spanish for "The Crazy Chicken") -- http://www.elpolloloco.com/-- is the nation's leading quick-service restaurant chain specializing in flame- grilled chicken and Mexican-inspired entrees. Founded in Guasave, Mexico, in 1975, El Pollo Loco's long-term success stems from the unique preparation of its award-winning "pollo" -- fresh chicken marinated in a special recipe of herbs, spices and citrus juices passed down from the founding family. The marinated chicken is then flame-grilled, hand cut and served hot off the grill with warm tortillas, a wide assortment of side dishes and salsas prepared fresh every day. Rounding out the menu are fresh flavorful entrees inspired by the kitchens of Mexico, including grilled burritos, the original Pollo Bowl(R), Pollo Salads, Tacos al Carbon and Quesadillas. * * * As reported in the Troubled Company Reporter on Oct. 4, 2005, Standard & Poor's Ratings Services placed its ratings on El Pollo Loco Inc. (B/Watch Neg/--) on CreditWatch with negative implications, following the announcement that Trimaran Capital Partners LLC has entered into a definitive agreement to purchase the company from American Securities Capital Partners L.P. for an undisclosed value. The company had $123.5 million of outstanding debt, plus $70 million in step-up notes, as of June 30, 2005. "Because the transaction is likely to result in an increase in debt to an already highly leveraged capital structure, the company's credit profile is expected to deteriorate," said Standard & Poor's credit analyst Robert Lichtenstein. Standard & Poor's will monitor developments of the transaction, including the structure of the proposed financing. ENRON C0RP: SK Corp. Wants to Buy Up to 5 Million SK Enron Shares ----------------------------------------------------------------- South Korea's largest oil refiner, SK Corp., disclosed that it plans to buy back shares in SK Enron Co., its 50-50 joint venture with Enron Corp. According to Bloomberg News, SK Corp.'s Board of Directors has decided to buy as many as 5,000,000 shares for $57.20 each, or up to $286 million. The purchase is still to be finalized. 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. 161; Bankruptcy Creditors' Service, Inc., 15/945-7000) ENRON CORP: Reorganized Debtors' 4th Post-Confirmation Report ------------------------------------------------------------- Reorganized Enron Corp. and its reorganized debtor-affiliates filed with the U.S. Bankruptcy Court for the Southern District of New York their Fourth Post-Confirmation Report on Oct. 14, 2005. Since the filing of their third post-confirmation status report, the Reorganized Debtors took additional actions to consummate their Chapter 11 Plan of Reorganization: A. Distributions In August and October 2005, holders of Allowed Administrative, Priority, Secured and General Unsecured Claims received cash distributions aggregating more than $415,000,000, of which $400,000,000 represents distributions to Allowed General Unsecured Claims. As of October 14, 2005, the aggregate net amount of distributions to creditors exceeds $1,000,000,000. B. Claims Resolution Process As of October 14, 2005, 12,200 claims have been disallowed, 2,800 claims have been allowed, 2,400 claims have been deemed allowed under Section 502(a), 1,200 claims have been subordinated and 2,300 claims have been withdrawn. C. Denial of PGE Sale In March 2005, the Public Utility Commission of Oregon denied the approval of the proposed sale of Portland General Electric Company. The Reorganized Debtors considered, and continue to consider, the options available to them in light of the OPUC's ruling and have determined that distribution of New PGE Common Stock to holders of Allowed Claims entitled to receive the New PGE Common Stock is the most beneficial option available at this time. The Reorganized Debtors will file applications for the various regulatory approvals required before the issuance of the New PGE Common Stock. They anticipate distributing the New PGE Common Stock in April 2006. If circumstances change and the Reorganized Debtors determine not to distribute New PGE Common Stock, a notice will be filed with the Court. D. Motion to Dismiss Chapter 11 Cases of PGH & PTR On July 28, 2005, Portland General Holdings, Inc., and Portland Transition Company, Inc., as debtors and debtors-in-possession, filed a motion to dismiss their Chapter 11 cases. 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. 161; Bankruptcy Creditors' Service, Inc., 15/945-7000) EPICUS COMMS: Pre-Confirmation Balance Sheet Upside-Down by $17MM ----------------------------------------------------------------- Epicus Communications Group Inc. delivered its financial results for the quarter ended Aug. 31, 2005, to the Securities and Exchange Commission on Oct. 13, 2005. For the three months ended Aug 31, 2005, Epicus reports a $676,056 net loss on $3,909,247 of revenues compared to $3,443,008 net loss on $6,060,810 of revenues for the same period in 2004. A significant component of the net loss for the three months ended Aug. 31, 2005, and 2004, respectively, are charges to operations recognizing bad debts of approximately $536,000 and $2,873,000. Epicus' balance sheet showed $2,912,318 of assets at Aug. 31, 2005, and liabilities totaling $19,856,946, resulting in a stockholders' deficit of $16,944,628. As of Aug. 31, 2005, May 31, 2005, and Aug. 31, 2004, the Company had approximately $139,000, $164,000 and $922,000 in available cash on hand. Chapter 11 Plan Confirmed The Hon. Paul G. Hyman, Jr., of the U.S. Bankruptcy Court, for the Southern District of Florida confirmed Epicus' Plan of Reorganization on Sept. 30, 2005. The Company had been operating under the protection of chapter 11 of the Bankruptcy Code since Oct. 25, 2004. Going Concern Doubt S.W. Hatfield, CPA, expressed substantial doubt about Epicus' ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended May 31, 2005. The auditing firm pointed to the Company's operating losses and negative cash flow from operations. At May 31, 2005, the Company's balance sheet showed a $16,271,072 stockholders' deficit, compared to a $9,284,572 deficit in fiscal year 2004. Headquartered in West Palm Beach, Florida, Epicus Group is a holding company with a primary goal of investing in its current telecommunications assets. Epicus, Inc., it's a wholly-owned subsidiary is an integrated communications provider with voice and data service in the continuous 48 states, international long distance in 240 countries with local exchange services in 7 southeastern states. The Debtors filed for chapter 11 protection on Oct. 25, 2004 (Bankr. S.D. Fla Case Nos. 04-34915 and 04-34916). Alvin S Goldstein, Esq., represents the Debtors in their restructuring efforts. EPL INTERMEDIATE: 100% of Noteholders Tender 12-1/2% Senior Notes ----------------------------------------------------------------- EPL Intermediate, Inc., had received valid tenders and consents from holders of approximately $70 million in aggregate principal amount of the Company's 12-1/2% Senior Discount Notes due 2010, representing approximately 100% of the outstanding Notes, in connection with its previously announced cash tender offer and consent solicitation for the Notes, which satisfies the "Requisite Consents," as defined in the Company's Offer to Purchase and Consent Solicitation Statement dated Oct. 12, 2005 and the accompanying Letter of Transmittal and Consent. With the receipt of the Requisite Consents, the Company will execute a supplemental indenture governing the Notes to eliminate substantially all of the restrictive covenants and events of default in the indenture. The amendments to the supplemental indenture will not become operative until all validly tendered Notes are accepted for purchase by the Company. Consummation of the Company's tender offer remains conditioned on, among other things, that all of the conditions to the Acquisition (as defined in the Offer to Purchase and Consent Solicitation Statement dated Oct. 12, 2005), other than the successful completion of the Tender Offer and the Consent Solicitation, shall have been satisfied, or waived by the Company's acquirer, and the Company shall have received applicable financing proceeds to pay the consideration for the Notes purchased in the tender offer. There can be no assurance that any of such conditions will be met. As previously announced, the total consideration to be paid for each validly tendered Note (which shall include an amount paid in respect of the consent), subject to the terms and conditions of the tender offer and consent solicitation, will be paid in cash at a price equal to 112.50% of the accreted value of the Notes as of the thirtieth day following the settlement date plus a premium of $2.50 per $1,000 principal amount at maturity of Notes. With a settlement date of November 10, 2005, the total consideration shall be $759.83 per $1,000 principal amount of Notes at maturity. Holders who validly tender their Notes by the Consent Time will be eligible to receive the total consideration. Holders who tender their Notes must consent to the proposed amendments. Tendered Notes may not be withdrawn and consents may not be revoked after the Consent Time. The Company has retained Merrill Lynch & Co. to act as sole Dealer Manager for the tender offer and as the Solicitation Agent for the consent solicitation and can be contacted at (212) 449-4914 (collect) or (888) ML4-TNDR (toll free). Global Bondholder Services Corporation is the Information Agent and can be contacted at (212) 430-3774 (collect) or (866) 387-1500 (toll free). Copies of the Offer Documents and other related documents may be obtained from the Information Agent. EPL Intermediate is the parent company of El Pollo Loco, Inc. El Pollo Loco (pronounced "L Po-yo Lo-co" and Spanish for "The Crazy Chicken") -- http://www.elpolloloco.com/-- is the nation's leading quick-service restaurant chain specializing in flame- grilled chicken and Mexican-inspired entrees. Founded in Guasave, Mexico in 1975, El Pollo Loco's long-term success stems from the unique preparation of its award-winning "pollo" -- fresh chicken marinated in a special recipe of herbs, spices and citrus juices passed down from the founding family. The marinated chicken is then flame-grilled, hand cut and served hot off the grill with warm tortillas, a wide assortment of side dishes and salsas prepared fresh every day. Rounding out the menu are fresh flavorful entrees inspired by the kitchens of Mexico, including grilled burritos, the original Pollo Bowl(R), Pollo Salads, Tacos al Carbon and Quesadillas. * * * As reported in the Troubled Company Reporter on Oct. 4, 2005, Moody's Investors Service placed the ratings of EPL Intermediate, Inc., the holding company, and El Pollo Loco, Inc. under review for possible downgrade following the announcement that Trimaran Capital Partners' has signed a definitive agreement to purchase El Pollo from American Securities Capital Partners L.P. The transaction, valued at approximately $400 million, is expected to close in the fourth quarter. The review is prompted by the likelihood of the new ownership further levering up the capital structure and the ultimate impact the proposed financing will have on current credit metrics. Moody's commented that El Pollo's $110 million senior secured notes, currently rated B2, include standard change of control provisions allowing noteholders the right to put the notes back to the company at a price equal to 101% plus accrued and unpaid interest. FLEXTRONICS INT'L: Earns $101.3 Million of Net Income in 2nd Qtr. ----------------------------------------------------------------- Flextronics (Nasdaq: FLEX) reported results for its second quarter ended Sept. 30, 2005. Net sales for the second quarter ended Sept. 30, 2005, were $3.9 billion compared to $4.1 billion in the year ago quarter. Excluding intangibles amortization, restructuring and other charges, net income for the second quarter ended Sept. 30, 2005, increased 3% to $101.3 million compared with $98.5 million in the year ago quarter. After-tax amortization, restructuring and other charges amounted to $103.8 million in the second quarter ended September 30, 2005, compared to $5.9 million in the year ago quarter, resulting in a GAAP net loss of $2.4 million as compared to net income of $92.6 million. Return on Invested Tangible Capital increased to 27% in the second quarter ended September 30, 2005, from 24% in the year ago quarter. The Company's cash conversion cycle decreased to 16 days in the second quarter ended September 30, 2005 from 20 days in the previous sequential quarter. Excluding intangibles amortization, restructuring and other charges, operating margin increased 20 basis points to 3.4% in the second quarter ended Sept. 30, 2005, from 3.2% in the year ago quarter, representing the 8th consecutive quarter of year-over-year operating margin improvement. The Company ended the quarter with a record high $1.2 billion in cash, up from $830 million at the end of the previous sequential quarter. Total debt has decreased by $197 million since the end of the previous sequential quarter. Net debt amounted to $439 million at the end of the September 2005 quarter and has been reduced by $517 million since the end of the previous sequential quarter. Free cash flow, which is cash flow from operations less capital expenditures, generated $327 million in the second quarter ended September 30, 2005, which closely approximated the $339 million used to fund acquisitions during the quarter. The previously announced divestitures of the Network Services and Semiconductor divisions generated $519 million, which closely approximated the $197 million reduction in debt and the $320 million increase in cash in the second quarter ended September 30, 2005. With regard to the September quarter operating results, Michael E. Marks, Chief Executive of Flextronics stated, "We are extremely pleased with our working capital management and cash flows for the quarter. To this end, we are pleased that we were able to reduce our cash conversion cycle to 16 days from 20 days in the previous quarter. Our cash also increased by $320 million and our debt decreased by $197 million from the end of the previous quarter while our cash flow from operations of $381 million was sufficient to fund our capital expansion and acquisition activity during the quarter. We were also able to increase operating margins for the eighth consecutive quarter on a year-over-year basis." As previously announced, Flextronics merged its Network Services division with Telavie, a company wholly-owned by Altor 2003 Fund, a Nordic private equity firm. Flextronics received an upfront cash payment along with deferred and contingent payments, and has retained a 30% ownership stake in the merged company. Flextronics has also sold its semiconductor division to AMIS Holdings, the parent company of AMI Semiconductor. Both divestitures closed during the September 2005 quarter. Flextronics received cash payments of $519 million in the quarter for these divestitures, which resulted in a pretax gain of $71 million. In connection with these divestitures, the Company recognized a non-cash tax expense of $99 million associated with the utilization of deferred tax assets, resulting in an after-tax non-cash loss of $28 million. Mr. Marks concluded by saying, "Our year-over-year revenue comparisons are adversely impacted by the divestitures of our Network Services and Semiconductor divisions along with the impact from two European OEM customers divesting their cell phone businesses during the past year. We expect the December 2005 quarter revenue comparison to be the last quarter adversely impacted by these customer actions." Headquartered in Singapore (Singapore Reg. No. 199002645H), Flextronics -- http://www.flextronics.com/-- is a leading Electronics Manufacturing Services (EMS) provider focused on delivering innovative design and manufacturing services to technology companies. With fiscal year 2005 revenues of USD$15.9 billion, Flextronics is a major global operating company that helps customers design, build, ship, and service electronics products through a network of facilities in 32 countries on five continents. This global presence provides customers with complete design, engineering, and manufacturing resources that are vertically integrated with component capabilities to optimize their operations by lowering their costs and reducing their time to market. * * * AS reported in the Troubled Company Reporter on Aug. 23, 2005, Fitch Ratings has affirmed Flextronics International, Ltd.'s 'BB+' senior subordinated debt and assigned a 'BBB-' rating for the company's senior unsecured bank credit facility. The Rating Outlook is Stable. Fitch's action affects approximately $1.6 billion of debt. The ratings and Outlook reflect Flextronics' relatively consistent operating performance over the last several years, which has been driven by greater exposure to more stable consumer electronics end-markets; industry-leading cash conversion cycle, which has contributed to annual free cash flow; and one of the industry's best-positioned low-cost manufacturing footprints. Also considered is the company's organic revenue growth, which has partially mitigated meaningful customer share erosion in Flextronics' wireless handset segment. FOREST OIL: Amends Credit Facility to Accommodate Spin-Off ---------------------------------------------------------- Forest Oil Corporation (NYSE:FST) reached an agreement with its commercial banks to amend its credit facility to accommodate the spin-off of its Gulf of Mexico operation and subsequent merger between Spinco and Mariner Energy, Inc. Pro forma for the transaction, there was no negative impact to Forest's restricted payments covenant. The Borrowing Base will be $600 million upon close of the transaction. As of Sept. 30, 2005, Forest estimates $119 million was drawn on its credit facility. Pro forma for the transaction, no amount would be drawn on the facility. Forest was not required to pay a fee in order to obtain the amendments to its credit facility. Forest Oil Corporation -- http://www.forestoil.com/-- is engaged in the acquisition, exploration, development, and production of natural gas and crude oil in North America and selected international locations. Forest's principal reserves and producing properties are located in the United States in the Gulf of Mexico, Alaska, Louisiana, Oklahoma, Texas, Utah, and Wyoming, and in Canada. Forest's common stock trades on the New York Stock Exchange under the symbol FST. * * * As reported in the Troubled Company Reporter on Sept. 14, 2005, Moody's Investors Service affirmed Forest Oil's Ba3 senior unsecured note rating, its Ba3 Corporate Family Rating, and its SGL-2 liquidity rating. The rating outlook remains negative. These actions follow FST's announcement today of a pending: 1) spin-off of FST's Gulf of Mexico (GOM) reserves to Spinco and Spinco's subsequent immediate acquisition by Mariner Energy (unrated); and 2) FST's pending $200 million debt reduction with cash distributed by Spinco upon its borrowing a like amount from third-party lenders. GARY ZANDEN: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Gary Francis Vander Zanden P.O. Box 1004 Campbell, California Bankruptcy Case No.: 05-58578 Chapter 11 Petition Date: October 14, 2005 Court: Northern District of California (San Jose) Judge: Marilyn Morgan Debtor's Counsel: Henry G. Rendler, Esq. Law Offices of Henry G. Rendler 1550 The Alameda, Suite# 308 San Jose, California 95126 Tel: (408) 293-5112 Fax: (408) 293-4939 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Marie C. Bechtel Debtor's Former $106,518 Attorney at Law Attorney in Santa Hoover & Bechtel LLP Clara County family 1570 The Alameda, #315 court matter San Jose, CA 95126 Baxter Credit Union Credit Card $30,000 400 North Lakeview Parkway Vernon Hills, IL 60061 James Butera, CPA Accountancy Services $16,662 McCahan Helfrick Thiercof & Butera Accountancy Corporation 1655 Willow Street, San Jose, CA 95125 David T. Constant, DDS Dental Bill $8,000 ACI Distribution Vendor Claim $6,479 Sun Valley Products, Inc. Trade Debt $5,428 Internal Revenue Service Form 1040 Income Tax $4,703 Debt for Period 12/31/04 Hoskin & Muir Trade Debt $2,983 Western States Glass Corp. Trade Debt $2,918 Lee Neidleman Tax Preparation Services $1,230 Home Depot Credit Card $1,184 C.R. Laurence Co., Inc. Vendor Debt $1,149 Vistawall Trade Debt $732 William A. Vainer, DDS Dental Bill $594 Winchester Auto Supply Vendor Claim $453 Sommer & Maca Industries, Trade Debt $449 Inc. United Glass Company Trade Debt $441 Western Window Tinting, Inc. Trade Debt $229 All Frameless MFG Vendor $81 GENTEK INC: Names Andrew P. Hines VP & Chief Financial Officer -------------------------------------------------------------- GenTek Inc. (NASDAQ: GETI) reported two changes in its Senior Leadership Team. Andrew P. Hines has been appointed Vice President and Chief Financial Officer of GenTek Inc., effective immediately. Since June 2000, Mr. Hines, 65, has been a principal of Hines and Associates, a strategic and financial consulting firm. During 2004 and 2005, Mr. Hines provided financial consulting services to GenTek. From October 2000 to October 2001, Mr. Hines was Executive Vice President and Chief Financial Officer of Ardent Communications, Inc., a provider of broadband access and bundled data services. From October 1997 to June 2000, Mr. Hines was Executive Vice President and Chief Financial Officer, and then Executive Vice President, Strategic Planning and Business Development of Outboard Marine Corporation, a manufacturer of recreational boats and marine engines. Since November 2003, Mr. Hines has served as a member of the board of directors of Superior Essex, Inc. (NASDAQ: SPSX), a global manufacture of wire and cable products where he is chairman of the audit committee. In welcoming Mr. Hines to GenTek, William E. Redmond, Jr., President and Chief Executive Officer of the Company, noted that "GenTek is fortunate to have Andy join our Senior Leadership Team given his deep financial background, strategic experience and his knowledge of our Company." Matthew M. Walsh, formerly Vice President and Chief Financial Officer of the Company will be departing the Company later this year to pursue other business opportunities. In the interim, Mr. Walsh, as Vice President Corporate Development, will lead the Company's efforts on a number of special projects, including transition matters. Commenting on Mr. Walsh's departure from the Company, Mr. Redmond stated: "We thank Matt for his contributions and sincerely wish him well in all his future endeavors." The Company also reported the appointment of Maximo M.Vargas as Vice President and General Manager of GenTek's Noma Wire Harness business. Vargas, 49, will lead the Company's wire harness business, as it expands to become a global manufacturer, with production facilities in Canada, Mexico and India." Mr. Vargas has been employed by Visteon Corporation since 2000, where he most recently was Director of the company's Technical Center in Chihuahua, Mexico. Prior to joining Visteon Corporation, Mr. Vargas was employed by Lear Corporation as Director of Operations based in Juarez, Mexico, where he was responsible for managing and directing four wire harness plants with approximately 14,000 employees in Mexico, Argentina and Honduras. In welcoming Mr. Vargas to GenTek, Mr. Redmond noted that "the appointment of Max Vargas as leader of our global wire harness business clearly demonstrates GenTek's commitment to growth in this critical segment of the Company." Michael Murphy, previously Vice President of Noma Wire Harness, recently informed the company of his intention to resign, effective November 1, 2005, in order to take to a senior level position with a new employer. Mr. Murphy will assist with the transition of his responsibilities prior to his departure. Headquartered in Hampton, New Hampshire, GenTek Inc. (NASDAQ:GETI) -- http://www.gentek-global.com/-- is a technology-driven manufacturer of communications products, automotive and industrial components, and performance chemicals. The Company filed for Chapter 11 protection on October 11, 2002 (Bankr. D. Del. Case No. 02-12986) and emerged on Nov. 10, 2003 under the terms of a confirmed plan that eliminated $670 million of debt and delivered 94% of the equity in Reorganized GenTek to the Company's secured lenders. Old subordinated bondholders took a 4% slice of the equity pie and prepetition unsecured creditors shared a 2% stake in the Reorganized Company. Old Equity Interests were wiped out. Mark S. Chehi, Esq., and D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring. When the Debtors filed for protection from its creditors, they listed $1,219,554,000 in assets and $1,456,000,000 in liabilities. * * * As reported in the Troubled Company Reporter on Feb. 24, 2005, Moody's Investors Service has assigned the following new ratings to GenTek Inc., a diversified industrial company. The rating outlook is stable. The ratings and outlook are subject to review of the final documentation of the financing transaction. The new ratings assigned are: * B2 for the $60 million senior secured revolving credit facility, due 2010, * B2 for the $235 million senior secured term loan B, due 2011, * Caa1 for the $135 million second-lien term loan, due 2012, * B2 senior implied rating, and * Caa2 issuer rating. GS AUTO: S&P Assigns Low-B Ratings to Class D Notes --------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class B, C, and D notes issued by GS Auto Loan Trust 2003-1 and GS Auto Loan Trust 2004-1 on CreditWatch with positive implications. The CreditWatch placements reflect the strong collateral performance of the underlying pools of prime auto loans and low expected remaining cumulative losses. As of the October 2005 distribution date, cumulative net losses for both deals remained below Standard & Poor's initial expectations. The class B, C, and D notes from both series benefit from a concurrent pay structure that maintains hard credit support for the notes at target levels. In addition, for series 2004-1, the master servicing fee is subordinated to interest and principal payments on all classes as long as Goldman Sachs Mortgage Corp. remains the master servicer. Over the next two months, Standard & Poor's will conduct a detailed review of the credit performance and remaining credit support for each transaction and determine whether any rating action is warranted. The ratings for each class could be raised approximately one to two rating categories. Ratings Placed On CreditWatch Positive GS Auto Loan Trust 2003-1 Rating Class To From ----- -- ---- B A/Watch Pos A C BBB/Watch Pos BBB D BB/Watch Pos BB GS Auto Loan Trust 2004-1 Rating Class To From ----- -- ---- B A/Watch Pos A C BBB/Watch Pos BBB D BB-/Watch Pos BB- HAPPY KIDS: Has Until December 30 to Make Lease-Related Decisions ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended, until December 31, 2005, the period within which Happy Kids, Inc. and its debtor-affiliates can assume, assume and assign, or reject unexpired non-residential real property leases. The Debtors are current on their postpetition payment obligations under the property leases. The leases are necessary for their operations and include their headquarters, showroom and warehouse. The extension will provide them more time to make a determination whether to reject or to assume each of these leases: Address Landlord ------- -------- 100 West 33rd St., 11th Floor Manmall LLC New York, NY 10001 100 West 33rd Street New York, NY 10001 -- and -- Manmall LLC c/o Litman & Jacobs Attn.: Alfred Litman, Esq. 276 Fifth Ave., Ste. 604 New York, NY 10001 152 Ridge Road Hawk Warehouse LLC Dayton, NJ 08810 c/o Eliott Horowitz & Co. 675 Third Avenue New York, NY 10017 909 B South Walton Blvd., Ste. 7 SH&S Partnership LLC Bentonville, AK 72712 210 N. Walton Blvd., Ste. 30 Bentonville, AK 72712 Headquartered in New York, New York, Happy Kids Inc. and its affiliates are leading designers and marketers of licensed, branded and private label garments in the children's apparel industry. The Debtors' current portfolio of licenses includes Izod (TM), Calvin Klein (TM) and And1 (TM). The Company and its debtor-affiliates filed for chapter 11 protection on Jan. 3, 2005 (Bankr. S.D.N.Y. Case No. 05-10016). Sheldon I. Hirshon, Esq., at Proskauer Rose LLP, represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $54,719,000 and total debts of $82,108,000. HIRSH INDUSTRIES: Wants Plan-Filing Period Extended to December 5 ----------------------------------------------------------------- Hirsh Industries, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Indiana to extend until Dec. 5, 2005, the time within which they have the exclusive right to file a chapter 11 plan. The Debtors also want their exclusive right to solicit plan acceptances extended through Feb. 1, 2006. The Debtors tell the Court that they have worked diligently over the past three and one-half months to arrive at a consensual plan of reorganization or, barring that, a plan that satisfies the 13 confirmation requirements under Section 1129 of the Bankruptcy Code. The Debtors disclose that they have been especially attentive to attempting to reach a settlement with the Creditors' Committee. The Debtors say that Oct. 19, 2005, they engaged in a five-hour settlement conference with their Creditors' Committee in an attempt to arrive at a consensual plan. They held a follow-up meeting the next day too. The Debtors tell the Court that they had intended to file a plan within the first 120 days of their chapter 11 cases. Based on the progress of negotiations with the Creditors' Committee, the Debtors say they may hold off on filing a plan until the conclusion of these discussions, which may not occur until after the expiration of plan exclusivity on Nov. 3, 2005. Accordingly, the Debtors request a short extension of the exclusive periods to preserve the status quo so that they will have the opportunity to continue the negotiations before filing a plan and without prejudice to their rights under Bankruptcy Code Section 1121. Headquartered in Des Moines, Iowa, Hirsh Industries, Inc., manufactures storage and organizational products. Hirsh Industries' products include metal filing cabinets, metal shelving, wooden ready-to-assemble organizers and workshop accessories and retail store fixtures. The Company and two affiliates filed for chapter 11 protection on July 6, 2005 (Bankr. S.D. Ind. Case Nos. 05-12743 through 05-12745). Paul V. Possinger, Esq., at Jenner & Block LLP represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated between $1 million to $10 million in assets and between $50 million to $100 million in debts. HIRSH INDUSTRIES: Wants Stout Risius as Valuation Experts --------------------------------------------------------- Hirsh Industries, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Indiana for permission to employ Stout Risius Ross as their valuation experts. The Debtors tell the Court that in order to file and prosecute a plan of reorganization, the Debtors' going concern value must be established so that a plan complying with the Bankruptcy Code can fairly allocate that value among constituents. Stout Risius will: (a) provide business enterprise valuation of the Debtors; (b) provide related consulting in connection with the valuation as required; and (c) expert witness services in connection with the valuation, as required. The Debtors disclose that the Firm's professionals bill: Professionals Hourly Rates ------------- ------------ Managing Director $275-400 Director $225-275 Manager $175-225 Senior Analyst $140-175 Analyst $100-140 Para-professional $80 To the best of the Debtors' knowledge, the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Des Moines, Iowa, Hirsh Industries, Inc., manufactures storage and organizational products. Hirsh Industries' products include metal filing cabinets, metal shelving, wooden ready-to-assemble organizers and workshop accessories and retail store fixtures. The Company and two affiliates filed for chapter 11 protection on July 6, 2005 (Bankr. S.D. Ind. Case Nos. 05-12743 through 05-12745). Paul V. Possinger, Esq., at Jenner & Block LLP represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated between $1 million to $10 million in assets and between $50 million to $100 million in debts. IGENE BIOTECHNOLOGY: Berenson LLP Raises Going Concern Doubt ------------------------------------------------------------ Berenson LLP expressed substantial doubt about Igene Biotechnology, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004. The auditing firm points to the Company's recurring losses, production limitations and limited capitalization. Igene reported net losses of $1,309,965 and $2,170,893 for the years ended Dec. 31, 2004 and 2003, respectively. The Company has incurred net losses in each year of its existence, aggregating approximately $44.4 million from inception to Dec. 31, 2004. At Dec. 31, 2004, the Company had $495,661 of assets and liabilities totaling $14,940,948. As of Dec. 31, 2004, Igene had a negative working capital of $500,572, and cash and cash equivalents of $204,248. 2003 and 2004 Restatements As reported in the Troubled Company Reporter on Sept. 27, 2005, Igene needed to complete the restatement of its 2003 and 2004 Financials before it can file its 2004 Annual Report or its quarterly reports for the quarters ending March 31, 2005, and June 30, 2005. The Company was required to amend six prior regulatory filings because of errors related the accounting treatment of its 50% participation in a joint venture with Tate & Lyle Fermentation Products Ltd. Berenson advised the Company that its investment in the joint venture should have been recorded with a book value of zero; not the $12,000,000 initially recorded in the erroneous financial statements. This adjustment materially eroded Igene's asset base. Tate & Lyle Joint Venture To develop a dependable source of production, Igene and Tate & Lyle entered, in March 2003, into a 50:50 joint venture to produce AstaXin(R) for the aquaculture industry. The joint venture will utilize Tate & Lyle's fermentation capability in tandem with the unique technology developed by Igene. Tate & Lyle contributed $24.6 million in cash to the joint venture, while the Company contributed its technology relating to the production of Astaxanthin and other related assets. From March 18, 2003 through Dec. 31, 2004, Igene's portion of the joint venture net loss was $4,887,500. Because the Company accounts for its investment in the joint venture under the equity method of accounting, it would ordinarily recognize it's 50% equity interest in the loss of the joint venture. However, losses in the joint venture are recognized only to the extent of the investment in and advances to the joint venture. About Igene Biotechnology Based in Columbia, Maryland, Igene Biotechnology, Inc., -- http://www.igene.com/-- is engaged in developing, marketing, and manufacturing specialty ingredients for human and animal nutrition. The Company supplies natural astaxanthin, an essential nutrient in different feed applications and as a source of pigment for coloring farmed salmon species. Igene also supplies nutraceutical ingredients, including astaxanthin. Igene has focused on fermentation technology, nutrition and health in its marketing of products and applications worldwide. INTERMET CORP: Wants to Retain Ernst & Young as Tax Consultant -------------------------------------------------------------- Intermet Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan for permission to retain Ernst & Young LLP as their tax consultant, nunc pro tunc to Sept. 9, 2005. The Debtors want Ernst & Young's services to evaluate state and local tax issues relating to their domestic restructuring that will help them align their tax strategy with their business strategy and allow for more effective management of the tax compliance function. Ernst & Young will: a) evaluate the Debtors' state and local tax issues relating to their domestic reorganization; and b) assist with the Debtors' 2004 U.S. tax filings. The firm's professionals current hourly rates: Designation Hourly Rate ----------- ----------- Partners, Principals & Directors $663 - $766 Senior Managers $572 - $663 Managers $457 Seniors $241 - $398 Staff $161 - $241 Intern $161 Client Service Administrator $161 Ernst & Young will charge a flat fee for tax compliance services of $33,500 plus out-of-pocket expenses. To the best of the Debtors' knowledge, Ernst & Young does not hold any interest adverse to the Debtors' bankruptcy estates. Headquartered in Troy, Michigan, Intermet Corporation -- http://www.intermet.com/-- provides machining and tooling services for the automotive and industrial markets specializing in the design and manufacture of highly engineered, cast automotive components for the global light truck, passenger car, light vehicle and heavy-duty vehicle markets. Intermet, along with its debtor-affiliates, filed for chapter 11 protection on Sept. 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP represents the Debtors. When the Debtors filed for protection from their creditors, they listed $735,821,000 in total assets and $592,816,000 in total debts. On Sept. 26, 2005, Judge McIvor confirmed the Debtors' Amended Plan of Reorganization. J.P. MORGAN: S&P Raises Low-B Ratings on 3 Certificate Classes -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on classes B, C, D, E, F, G, H, and J of J.P. Morgan Chase Commercial Mortgage Securities Corp.'s commercial mortgage pass-through certificates from series 2001-CIBC3. Concurrently, the ratings on all other classes from this transaction are affirmed. The raised and affirmed ratings reflect the steady performance and seasoning of the collateral, as well as credit enhancement levels that provide adequate support through various stress scenarios. As of October 2005, the trust collateral consisted of 124 commercial mortgages with an outstanding balance of $818.1 million, down 5.7% since issuance. To date, there has been one realized loss totaling $1.4 million -- 0.16% of the initial pool balance. There is one delinquent loan in the pool -- 0.67% of the pool balance. There are no specially serviced loans. The master servicer, Wachovia Bank N.A., reported full-year 2004 net cash flow debt service coverage ratios for 98.46% of the pool. Based on this information and excluding defeasance, Standard & Poor's calculated a weighted average DSCR for the pool of 1.43x, compared to 1.42x at issuance. The current weighted average DSCR for the top 10 exposures, which constitute 42.4% of the pool, is 1.51x, flat since issuance. The DSCRs for six of the top 10 exposures have improved since issuance. The top two loans, Franklin Park Mall and Kings Plaza, have reported improved net cash flows since issuance and both continue to exhibit credit characteristics consistent with high investment-grade obligations. The 10th-largest loan appears on the watchlist because of occupancy declines. The most recent inspection reports provided by Wachovia indicated that the top 10 properties are in "good" or "excellent" condition. The servicer's watchlist includes 39 loans totaling $148.8 million, or 18.2%. The 10th-largest loan, Bullfinch Triangle, has a balance of $16.6 million and poses concerns because of declining occupancy at the Boston, Massachusetts, office building securing the loan. Two loans secured by Winn Dixie stores appear on the watchlist due to exposure to Hurricane Katrina. The store in Metairie is open for business, but the one in Meraux is closed; flooding from the hurricane destroyed the surrounding St. Bernard Parish neighborhood. Most other loans on the watchlist appear there because of low occupancies, low DSCRs, or upcoming lease expirations, and were stressed accordingly by Standard & Poor's. Standard & Poor's stressed various loans in the mortgage pool, paying closer attention to the watchlisted loans and those with low DSCRs. The expected losses and resultant credit enhancement levels adequately support the raised and affirmed ratings. Ratings Raised J.P. Morgan Chase Commercial Mortgage Securities Corp. Commercial Mortgage P/T Certs Series 2001-CIBC3 Rating Class To From Credit enhancement (%) ----- -- ---- ---------------------- B AAA AA 17.85 C AA+ A 13.35 D AA A- 12.16 E A- BBB 8.84 F BBB+ BBB- 7.52 G BBB- BB+ 5.40 H BB+ BB 4.60 J BB BB- 3.80 Ratings Affirmed J.P. Morgan Chase Commercial Mortgage Securities Corp. Commercial Mortgage P/T Certs Series 2001-CIBC3 Class Rating Credit enhancement (%) ----- ------ ---------------------- A-1 AAA 22.36 A-2 AAA 22.36 A-3 AAA 22.36 K B+ 2.88 L B 2.35 M B- 1.82 X-1 AAA N/A X-2 AAA N/A N/A -- Not Applicable KAISER ALUMINUM: Wants Insurance Claims Estimated at Zero --------------------------------------------------------- In January 2003, ACE Property and Casualty Company, Century Indemnity Company, Industrial Underwriters Insurance Company, Pacific Employers Insurance Company, St. Paul Mercury Insurance Company and Industrial Indemnity Company filed Claim Nos. 7159 to 7161 and Claim Nos. 7163 to 7175 against 15 Debtors. ACE Companies also filed Claim Nos. 7517 to 7524 against six Debtors in May 2003. The Insurance Claims assert identical contingent and unliquidated claims against each of Kaiser Aluminum Corporation and its debtor- affiliates for any amounts potentially owing under 30 separate insurance policies issued to Kaiser Aluminum & Chemical Corporation, including any additional premium payments, deductibles or other expenses that may become due under the Policies. The Policies cover periods from the 1960s to the mid-1980s and provide coverage for product and premises liability. The Policies are the subject of litigation between KACC and the ACE Companies and other insurers in California relating to coverage for asbestos, noise-induced hearing loss, and coal tar pitch volatiles claims. In particular, KACC commenced two actions in the Superior Court of California, San Francisco County, relating to coverage for asbestos claims and for asbestos and other bodily injury claim arising out of premises formerly owned by KACC. The ACE Companies assert that they may in the future have some right to payment against the Debtors in respect of deductibles, retrospective premium adjustments or other amounts as a result of KACC's claims for coverage in the Products Coverage Litigation and the Premises Coverage Litigation. By this motion, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to estimate the Insurance Claims at $0, pursuant to Section 502(c)(1) of the Bankruptcy Code, and disallow the Insurance Claims for voting purposes. Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, contends that under any methodology, the Insurance Claims should be estimated at zero because the ACE Companies denied any obligation to even provide coverage to the Debtors under the Policies in the Coverage Litigation. "The ACE Companies cannot possibly have any claim against the [Debtors], whether for deductibles, retrospective premium payments or other amounts, if the ACE Companies have no obligation to provide coverage under the Policies." Furthermore, Ms. Newmarch asserts, if the ACE Companies are determined to have an obligation to provide coverage, the ACE Companies have asserted that they are entitled to offset any amounts they might be determined to owe against any retrospective premiums, deductibles or other amounts owed in any event. Moreover, there is no basis for any obligations in respect of deductibles or retrospective premiums or other rights to payment in any event, Ms. Newmarch points out. With respect to product coverage, there could never be a basis for the ACE Companies to assert a claim against the Debtors. The only Policies that contain any provisions providing for retrospective premiums or deductibles are the Policies that provide first-layer coverage. Ms. Newmarch relates that in the Products Coverage Litigation, KACC resolved the obligations of certain of the First-Layer Policies by entering into a settlement agreement with the ACE Companies pursuant to which the ACE Companies made a payment and released any right to reimbursement or recovery. The remaining First-Layer Policies that were not addressed by the settlement agreement have been deemed exhausted in the Products Coverage Litigation. KACC exhausted the Policies through allocation of claims without any payment by the ACE Companies, Ms. Newmarch says. "Accordingly, the ACE Companies have no basis for claiming any right to reimbursement or offset as to these Policies. Any other Policies that provide coverage for product claims lack provisions for retrospective premium adjustments or deductibles," Ms. Newmarch tells Judge Fitzgerald. There is also no basis for the ACE Companies to assert a claim against the Debtors with respect to the disputed coverage in the Premises Coverage Litigation, Ms. Newmarch maintains. The Debtors have not commenced litigation to establish that any of the Policies containing retrospective premiums provide coverage to the Debtors for premises claims. "While KACC has sought to establish that certain of the Policies provide coverage for premises claims, these Policies all cover periods prior to 1978 and do not contain deductibles or retrospective premiums adjustments," Ms. Newmarch notes. Based on these facts, it is not surprising that the ACE Companies have failed to articulate any scenario under which, let alone provide any proof that, they could ever have a right to payment against the Debtors, Ms. Newmarch tells the Court. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 81; Bankruptcy Creditors' Service, Inc., 215/945-7000) KMART CORP: Ct. Rejects Move to Clarify Right to Prosecute Actions ------------------------------------------------------------------ Kmart Corporation asks the U.S. Bankruptcy Court for the Northern District of Illinois to clarify and implement certain provisions of its confirmed Plan of Reorganization, as amended. Specifically, Kmart wants Judge Sonderby to clarify that it retains its right under the Plan to prosecute the Debtors' claims and causes of action post-confirmation and that it is not barred from doing so. William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP, in Chicago, Illinois, explains that pursuing the Retained Actions post-confirmation can maximize the value of Kmart's estates. He notes that, collectively, the Retained Actions are worth potentially hundreds of millions of dollars, and any recoveries from them would benefit the vast majority of Kmart's creditors -- who are now Kmart shareholders by virtue of the stock they received under the Plan. Mr. Barrett recounts that since the Plan was confirmed, Kmart has begun the prosecution of two sets of Retained Actions, one against i2 Technologies, Inc., and other related defendants in the Texas state court, and another against Capital One Bank and other related defendants in the Michigan state court. It is also likely that Kmart will commence other similar lawsuits in the coming months. Mr. Barrett informs the Court that the Defendants in both the i2 Technologies and Capital One Litigations are seeking dismissal of Kmart's Action, arguing that Kmart is barred from prosecuting its claims because it did not: (a) specifically list the defendants by name and claim, or the causes of action, in its Plan or in its bankruptcy schedules; and (b) prosecute the affirmative claims as part of the claims reconciliation process or as part of the contract assumption/rejection process. The Defendants asserted that they obtained a discharge when the Court confirmed Kmart's Plan, entitling them to a "free pass" from litigation. "It is not the law," Mr. Barrett argues. In their Dismissal Requests, the Defendants either failed to inform the Presiding Courts that the Bankruptcy Court has already ruled that Kmart retained the right under its Plan to prosecute the Retained Actions, thus rejecting the suggestion that Kmart was required to list every claim by target defendant name in the Plan or in the Schedules. Kmart seeks clarification that it is entitled to prosecute the Retained Actions post-confirmation to avoid the prospect of having to litigate similar issues in virtually every Retained Action it prosecutes. Mr. Barrett notes that the Court has retained jurisdiction to interpret and clarify the Plan. The Court, which presided over Kmart's bankruptcy proceedings, is in the best position to determine whether Kmart is barred from prosecuting the Retained Actions preserved by the Plan. For reasons stated in open court, Judge Sonderby dismisses Kmart's request for lack of subject matter jurisdiction. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., 215/945-7000) KMART CORP: SunTrust Wants Rights Determined Under Lease Claims --------------------------------------------------------------- Pia N. Thompson, Esq., at Sonnenschein Nath & Rosenthal LLP, in Chicago, Illinois, relates that Kmart Corporation leased the premises located in Grandview, Missouri, from Grandview Properties Limited Partnership pursuant to a written lease dated December 1, 1982. The premises were designated as Kmart Store No. 7585. According to Ms. Thompson, Grandview was obligated to SunTrust Bank -- as trustee under an indenture for bond financing which was secured, inter alia, by a Deed of Trust on the real property where the Kmart Store was situated, the rents, issues, leases, and profits of the real property, the Lease, and Kmart's guaranty. Pursuant to the documents that evidenced and governed the bond financing, Grandview had assigned the Lease to SunTrust. On its bankruptcy petition date, Kmart was obligated to Grandview for certain amounts due under the Lease. On April 30, 2003, Kmart rejected the Lease under Section 365(a) of the Bankruptcy Code. As a consequence, Kmart was further obligated to Grandview for the resulting damages subject to the statutory cap provided in Section 502(d)(6). Grandview filed Claim Nos. 48879 and 53779 with respect to the Lease. Claim No. 48879 amends and supersedes a previously filed claim filed on July 31, 2002. SunTrust Bank also filed separate claims. Claim No. 36528 predicated on Kmart's guaranty and Claim No. 52976 is an administrative expense claim. On September 30, 2004, SunTrust Bank conducted a foreclosure sale because of Grandview's breach of its obligations to SunTrust. At the foreclosure sale, SunTrust sold the Missouri Property and all other personal property that had been pledged by Grandview. Moreover, at the foreclosure sale, SunTrust Bank was the successful bidder on all of the property sold, including all rights, title, and interest in and to any and all claims for rent arising out of or from the Lease, including those rights that may not have been transferred by Grandview to SunTrust as a result of the assignment of rents and leases. Therefore, SunTrust owns the claims that were filed arising from the Lease. Ms. Thompson contends that Grandview has no right to any distribution under the Lease Claims because it has assigned its right and interest to the Lease and the rents, profits, and benefits to SunTrust Bank. As a result of the assignment, SunTrust Bank "steps into the shoes" of Grandview and is the proper party to maintain the Lease Claims as stated in Grandview's Proof of Claim. Thus, at SunTrust's request, Judge Sonderby of the U.S. Bankruptcy Court for the Illinois District of Indiana finds that it is the rightful holder of the Lease Claims. Judge Sonderby directs Kmart to pay all dividends on or other distributions made on account of Grandview's Claims to SunTrust, subject to any subsequent transfer and its compliance by a transferee with Rule 3001(e)(2) of the Federal Rules of Bankruptcy Procedure. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., 215/945-7000) KRISPY KREME: KremeKo CCAA Extended to Nov. 15 & DIP Loan Amended ----------------------------------------------------------------- The Ontario Superior Court of Justice extended KremeKo, Inc.'s protection under the Companies' Creditors Arrangement Act through Nov. 15, 2005. The extension will permit KremeKo and Krispy Kreme Doughnut Corporation to conclude a restructuring plan whereby a subsidiary of KKDC would acquire substantially all of KremeKo's assets. The CCAA stay expired on May 13, 2005, and was subsequently extended until Oct. 21, 2005, to allow the Company an opportunity to restructure without disruption. Krispy Kreme Becomes Largest Creditor On Aug. 5, the Court partially lifted KremeKo's stay of proceedings to allow GE Canada to take possession of the collateral pledged by the Company with respect to the Hillcrest store. The remaining security held by GE Canada related to the Heartland store, which KremeKo continues to operate. On Sept. 28, 2005, KKDC acquired the remaining indebtedness owed by KremeKo to GE Canada. As a result, Krispy Kreme became KremeKo's largest creditor following its purchase of KremeKo's indebtedness owed to the Bank of Nova Scotia on Aug. 30, and GE Canada Equipment Financing G.P., on Sept. 28. KremeKo now owes Krispy Kreme $26 million claim of which $17 million is secured. Although its efforts to sell all or part of its assets to a third party were unsuccessful, KremeKo and Krispy Kreme continued negotiations with the secured lenders in order to formulate an alternative to the sale of the business. Restructuring Plan Under the Restructuring Plan, Robert Pajor, KremeKo's Chief Restructuring Officer, proposes that a new wholly owned Canadian subsidiary of Krispy Kreme, Newco, acquire KremeKo's assets. As part of the capitalization of Newco, Krispy Kreme will transfer the secured lenders' indebtedness and related security that was acquired through the BNS and GE Canada transactions as well as the DIP financing facility to Newco. Newco will then purchase substantially all of KremeKo's assets as well as KremeKo's interest in certain contracts in order to continue the Krispy Kreme business in Canada. Asset Sale KremeKo and Krispy Kreme have agreed upon the major business terms of the planned sale of assets to Krispy Kreme or its assignee, Newco. KremeKo and Krispy Kreme are working towards finalizing and executing the Sale Agreement. Major terms and conditions reflected in the draft Sale Agreement are: (a) The purchase price will be satisfied by the cancellation of the Secured Lenders' indebtedness, the cancellation of the indebtedness under the DIP financing facility, and the assumption of certain other liabilities of KremeKo. The Secured Lenders' indebtedness totals approximately $17 million; (b) KremeKo's postpetition accounts payable will be assumed; (c) Krispy Kreme's $9 million unsecured debt will remain KremeKo's liability; (d) Employees will be offered similar employment terms as that of KremeKo. The Sale Agreement permits up to four employees not to be offered employment; (e) Excluded assets include an amount of cash to be determined as necessary to complete the administration of the CCAA proceedings; (f) The closing date will be the later of Nov. 1, 2005, and the third business day following the satisfaction or waiver of the conditions precedent, which include: (i) the Court's approval and vesting order; (ii) landlord consent to the assignment of store leases being obtained; and (iii) Krispy Kreme's lender consenting to the proposed transaction. DIP Loan On Oct. 11, 2005, KremeKo further amended a term sheet with Krispy Kreme extending the DIP loan maturity date to Nov. 30, 2005. The amendment allows the Company to borrow a maximum of CDN$1.5 million in three tranches of CDN$500,000 each. The availability of the tranches under the Amended Term Sheet is as follows: Tranche 1 - Available and committed from the beginning of the CCAA proceedings until Aug. 5, 2005, or any later date as may be agreed to from time to time between Krispy Kreme and KremeKo; Tranche 2 - Available and committed from the Tranche 1 Termination Date to the Maturity Date; and Tranche 3 - Available on the same basis as Tranche 2, although not as a committed facility but rather at Krispy Kreme's sole option. KremeKo projects negative cash flows for the six-week period ending Nov. 20, 2005: Kremeko, Inc. Revised Cash Flow Forecast For the Six-Week Period Ending Nov. 20, 2005 Receipts $2,278,000 Disbursements 2,465,000 ---------- Net Cash Flow ($187,000) Opening Cash Balance 296,000 ---------- Closing Cash Balance ($209,000) The Revised Cash Flow Forecast indicates that KremeKo expects to have negative cash flow of approximately $187,000 through Nov. 20, 2005, and, consequently, will require additional DIP funds. Krispy Kreme confirmed that it will advance $300,000 from the third tranche through Nov. 30, 2005. Advances under the DIP facility are repayable on the date which is the earliest of: * Nov. 30, 2005; * the completion of the sale of all or substantially all of KremeKo's assets; * the occurrence of an event of default; and * other date as Krispy Kreme may agree to. As of Oct. 13, 2005, KremeKo has drawn $850,000 in DIP advances -- $500,000 from the first tranche and $350,000 from the second tranche. KremeKo, Inc., a Krispy Kreme Doughnuts, Inc. franchisee, filed an application with the Ontario Superior Court of Justice to restructure under the Companies' Creditors Arrangement Act, on Apr. 15, 2005. Pursuant to the Court's Initial Order, Ernst & Young Inc. was appointed as Monitor in KremeKo's CCAA proceedings. Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme 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. Krispy Kreme can be found on the World Wide Web at http://www.krispykreme.com/ LAKEVIEW VILLAGE: S&P Affirms BB+ Rating on $38.165M Revenue Bonds ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook to positive from stable on Lakeview Village Inc., a continuing care retirement community, based on Lakeview's improved financial operations and occupancy, and its strengthened balance sheet. Additionally, Standard & Poor's affirmed its 'BB+' rating on Lenexa, Kansas' outstanding $38.165 million series 1997B, 2002A, and 2002C health care facilities revenue bonds, issued for Lakeview. Standard & Poor's analysis reflects Lakeview as a whole; however, Lakeview's two HUD senior apartment projects and the foundation are not part of the obligated group. "Lakeview has shown an improvement in sales for its Southridge units, and has strengthened balance sheet to levels consistent with an investment grade credit," Standard & Poor's credit analyst Suzie Desai said. "However, any future positive rating action will be reliant upon Lakeview showing a couple of more years of audited financial performance consistent with interim fiscal 2005, maintaining solid liquidity levels, and having project construction and fill-up that do not negatively impact the credit." Offsetting factors include greater-than-routine capital expenditures for a campus enhancement project that will cost $15 million over the next four years and will be funded out of internal cash and entrance fees, as well as Lakeview's very high debt burden of 22%. Additionally, Lakeview is located in competitive area, though occupancy has remained stable. Lakeview Village, a Type A continuing care retirement community, operates a 120-bed nursing facility, 347 independent living apartments, and 273 independent living cottages. In addition, parent corporation Lakeview has a foundation and manages two related senior apartment projects under a HUD subsidy program, with a total of 107 units. Lakeview Village's service area consists of Lenexa and other neighboring communities in Johnson County, Kansas. LEVITZ HOME: U.S. Trustee Appoints 7-Member Creditors Committee --------------------------------------------------------------- Pursuant to Section 1102 of the Bankruptcy Code, Deirdre A. Martini, the United States Trustee for Region 2, appoints seven creditors to the Official Committee of Unsecured Creditors in the Levitz Home Furnishings, Inc., and its debtor-affiliates' Chapter 11 cases. The Creditors Committee consists of: (1) U.S. Bank National Association 2300 W. Sahara, Suite 200 Las Vegas, NV 89102 Attn: Sandra Spivey, Vice President Tel: (702) 386-7053 (2) Decoro U.S.A. 1403 Eastchester Drive, Suite 104 High Point, NC 27265 Attn: Laurence A. Crink, Executive Vice President (3) Lise Style Furniture Co. Box 146, 102 Mabry Street Okolona, MS 38860 Attn: William C. Stewart, Jr., Chief Finance Officer Tel: (662) 447-3878 (4) Klaussner Furniture Ind., Inc. P.O. Drawer 220 Ahseboro, NC 27205 Attn: Kim W. Cockerham, Director of Credit Services Tel: (336) 625-6175, ext. 8110 (5) Serta International 5401 Trillium Boulevard Hoffman Estates, IL 60192-3411 Attn: Kevin M. Bayer, Director of Accounting Services Tel: (847) 747-0862 (6) Palliser Furniture Ltd. 55 Furniture Park Winnipeg, Manitoba R2G 1B9 Attn: J. Reginals Kliewer, Sr. Vice President, Finance Tel: (204) 988-5600 (7) Louise Partners, LP 919 Conestoga Road, Suite 106, Building 2 Rosemont, PA 19010 Attn: Richard E. Caruso, President Tel: (610) 520-2010 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. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEVITZ HOME: Has Until December 26 to File Schedules & Statements ----------------------------------------------------------------- A debtor is required under Rule 1007(c) of the Federal Rules of Bankruptcy Procedure to file its schedules of assets and liabilities, schedule of executory contracts and unexpired leases, and statement of financial affairs within 15 days after the Petition Date. Rule 1007(c), however, provides a bankruptcy court with the ability to extend the debtor's time to file its schedules and statements "for cause." Richard H. Engman, Esq., at Jones Day, in New York, relates that completing the Schedules and Statements for each of Levitz Home Furnishings, Inc., and its debtor-affiliates require the collection, review, and assembly of a substantial amount of information. Given the size and complexity of the Debtors' business and financial affairs, and the critical matters that the Debtors' management and professionals were required to address before the Petition Date, the Debtors were not in a position to complete the Schedules and Statements as of the Petition Date. Recognizing the importance of assembling the information, the Debtors intend to complete the Schedules and Statements as quickly as possible under the circumstances. The Debtors believe that rushing to complete the Schedules and Statements soon after the Petition Date instead will likely compromise the completeness and accuracy of the Schedules and Statements produced within a short time frame. At the Debtors' request, the Honorable Burton R. Lifland of the Southern District of New York Bankruptcy Court extends their deadline to file the Schedules and Statements to Dec. 26, 2005. 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. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEVITZ HOME: Wants to Continue With Ordinary Course Professionals ----------------------------------------------------------------- Levitz Home Furnishings, Inc., and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York permission to continue to employ professionals in the ordinary course of business without the submission of separate retention applications and the issuance of separate retention orders for each individual professional. The Debtors need the Ordinary Course Professionals to render a wide variety of services to their estates, including: (a) legal services with regard to specialized areas of the law; (b) financial advisory services; (c) accounting services; (d) tax services; (e) real estate appraisals; (f) brokerage services; and (g) leasing agents. Richard H. Engman, Esq., at Jones Day, in New York, relates that the employment of the Ordinary Course Professionals -- many of whom are already familiar with the Debtors' business and affairs -- must be continued to avoid disruption of the Debtors' normal business operations. The Debtors also seek permission to pay each Ordinary Course Professional, without prior application to the Court, 100% of the fees and disbursements incurred, upon the submission to, and approval by, the Debtors of an appropriate invoice stating in reasonable detail the nature of the services rendered and disbursements actually incurred after the Petition Date, up to the lesser of: (a) $30,000 per month per Ordinary Course Professional; or (b) $360,000, in the aggregate, per Ordinary Course Professional until the Chapter 11 cases end. Within 30 days after the later of the entry of a final order granting the Motion or the date on which the Ordinary Course Professional commences services for the Debtors, each Ordinary Course Professional will serve upon the Debtors' attorneys by first class mail: (a) an affidavit certifying that the professional does not represent or hold any interest adverse to the Debtors or their estates with respect to the matter on which the professional is to be employed; and (b) a completed retention questionnaire. The Debtors' attorneys will then file the Affidavit and Retention Questionnaire with the Court and serve them upon the U.S. Trustee. The U.S. Trustee will then have 15 days following service to notify the Debtors in writing of any objection to the retention stemming from the contents of the Ordinary Course Professional Affidavit or Retention Questionnaire. If after 15 days no objection is filed, then the retention of the Professional will be deemed approved and the Ordinary Course Professional may be paid 100% of fees and 100% of expenses without the need to file fee applications. The Debtors propose that no Ordinary Course Professional be paid any amounts for invoiced fees and expense reimbursement until the Affidavit and Retention Questionnaire have been filed with the Court. A non-exclusive schedule of the Debtors' Ordinary Course Professionals is available at no charge at: http://bankrupt.com/misc/16_14prof_list.pdf The Debtors may supplement the list of Ordinary Course Professionals from time to time as necessary. Although certain of the Ordinary Course professionals may hold unsecured claims against them for prepetition services rendered, the Debtors do not believe that any of the Professionals have an interest adverse to the Debtors, their creditors, or other parties-in-interest on the matters for which they would be employed. Thus all of the Ordinary Course Professionals meet the special counsel retention requirement under Section 327(e) of the Bankruptcy Code. Mr. Engman notes that the proposed procedures for employing and paying the Ordinary Course Professionals will save the Debtors' estates the burden and costs associated with the applying separately for the retention of each professional. It will also relieve the Court, the U.S. Trustee, and the Official Committee of Unsecured Creditors if the burden of reviewing numerous fee applications involving relatively small amounts of fees and expenses. 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. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEXINGTON CAPITAL: Fitch Rates $5 Million Class E Notes at BB+ -------------------------------------------------------------- Fitch Ratings assigns these ratings to Lexington Capital Funding, Ltd. and Lexington Capital Funding, Inc.: -- $135,000,000 class A-1AV first priority senior secured voting floating-rate notes due May 6, 2042 'AAA'; -- $199,750,000 class A-1ANV first priority senior secured non-voting floating-rate notes due May 6, 2042 'AAA'; -- $250,000 class A-1B first priority senior secured floating-rate notes due May 6, 2042 'AAA'; -- $72,000,000 class A-2 second priority senior secured floating-rate notes due May 6, 2042 'AAA'; -- $44,000,000 class B third priority senior secured floating-rate notes due May 6, 2042 'AA'; -- $10,000,000 class C fourth priority senior deferrable secured floating-rate notes due May 6, 2042 'A'; -- $19,000,000 class D fifth priority senior deferrable secured floating-rate notes due May 6, 2042 'BBB'; -- $5,000,000 class E sixth priority mezzanine deferrable secured floating-rate notes due May 6, 2042 'BB+'; Lexington Capital is an arbitrage cash flow collateralized debt obligation managed by Maxim Advisory, LLC. Maxim is an indirect wholly owned subsidiary of Maxim Partners, also the owner of Maxim Group, a broker dealer with equity, fixed-income and options trading desks. To date, Maxim has closed three CDOs: Jupiter High-Grade CDO I, a $750 million cash flow CDO, Jupiter High-Grade CDO II, a $1 billion cash flow CDO, and Jupiter High Grade CDO III, a $2 billion cash flow CDO. Lexington Capital Funding is Maxim's first mezzanine grade cash flow CDO. The ratings of the class A-1, class A-2 and class B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class C, class D and class E notes address the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings are based upon the credit quality of the underlying assets, 80% of which will be purchased by the transaction's close, in addition to credit enhancement provided by support from subordination, excess spread, and protections incorporated in the structure. Proceeds from the issuance will be invested primarily in a portfolio of residential mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, and collateralized debt obligations. The collateral supporting the capital structure will have a maximum Fitch weighted average rating factor of 6.05. Lexington Capital Funding CDO will have a three-year substitution period, during which Maxim may trade the collateral portfolio, subject to certain limitations. Principal payments will be used to pay down notes immediately. Sale proceeds may be used to purchase substitute collateral or pay down notes. Lexington Capital has entered into an interest rate swap to hedge the risk arising from a mismatch between floating-rate liabilities and assets. Lexington Capital Funding, Inc. is a special purpose company, incorporated under the laws of the State of Delaware. Lexington Capital Funding, Ltd. is a Cayman Islands limited-liability company. MCI INC: Will Release 3rd Quarter 2005 Results on November 3 ------------------------------------------------------------ MCI, Inc. (NASDAQ: MCIP), will announce its third quarter 2005 financial results before market open on Thursday, Nov. 3, 2005. The Company will host a conference call that day at 8:30 a.m. EST to discuss its results. A live webcast of the conference call will be available at http://www.mci.com/investor/ An archive of the presentation will be available for replay for 30 days. Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 22, 2005, Standard & Poor's Ratings Services placed its ratings of Ashburn, Virginia-based MCI Corp., including the 'B+' corporate credit rating, on CreditWatch with positive implications. The action affects approximately $6 billion of MCI debt. NEXTEL PARTNERS: Sprint Buy-Out Plans Cue S&P to Review Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB' corporate credit rating and all other ratings on wireless carrier Nextel Partners Inc. on CreditWatch with positive implications. "The action follows the vote by the company's class A shareholders to exercise the put right requiring Sprint Nextel Corp. to purchase the roughly 68% of Partners not already owned by Sprint Nextel's subsidiary Nextel Communications Inc.," said Standard & Poor's credit analyst Eric Geil. The value of the put will be determined through a fair market value appraisal process involving appraisers appointed by Sprint Nextel, Partners, and a third party. The process could consume several months and a transaction is unlikely to close until at least mid-2006. Partners' share price suggests a deal value of about $6.7 billion, assuming conversion of $300 million in convertible notes and including about $945 billion in Partners' net debt. However, this may not be indicative of value to be determined by the appraisal process. Absent guarantees from Sprint Nextel, S&P expects to raise the corporate credit rating on Partners to at least 'BBB-', based on our assessment of Partners' strategic importance to Nextel's nationwide Integrated Digital Enhanced Network. S&P's final determination of the ratings on Partners will consider Sprint Nextel's integration plans for the company and any further support of Partners' debt. S&P might impute from Sprint Nextel. Partners serve more than 1.9 million customers in regions representing about 22% of Nextel's Communications' total population equivalents. The company continues to generate industry-leading customer and revenue growth nearly double that of Nextel Communications. In the 12 months, which ended Sept. 30, 2005, Partners' subscribers increased a strong 27%, fueling 32% year over year service revenue growth in the third quarter. NORDIC BIOFUELS: Moody's Affirms Sr. Sec. Term Loan's B2 Rating --------------------------------------------------------------- Moody's Investors Service affirmed its B2 rating for the senior secured term loan to be issued by Nordic Biofuels of Ravenna, L.L.C., a special purpose company doing business as Abengoa Bioenergy of Ravenna following a change in its proposed capital structure. The B2 rating affirmation incorporates proposed changes in the capital structure of ABR whereby the senior secured term loan will be reduced to approximately $90 million from $120 million and ABR will issue approximately $32 million of subordinated notes to its parent, Abengoa Bioenergy Corporation (unrated) or an affiliate. Moody's believes the proposed structural changes positions ABR more strongly within the B2 rating category and notes that there has been improvement in the prospects for recovery for the senior lenders in a default scenario. Moody's also notes that the interest payment obligation associated with the subordinated notes is expected to be substantial, increasing total overall interest burden and reducing the amount of cash available to be swept to repay the senior notes. Proceeds of the term loan will be used to partially finance the construction of an 88 million gallon per year ethanol facility in Ravenna, Nebraska. The rating outlook remains stable. Nordic Biofuels of Ravenna, L.L.C, is a limited liability company, doing business as Abengoa Bioenergy of Ravenna, formed to develop, own and operate an 88 MGPY ethanol facility in Ravenna, Nebraska. Headquartered in St. Louis, Missouri, ABR is 100% owned by Abengoa Bioenergy Corporation, an indirect subsidiary of Abengoa S.A., a Spanish industrial and technology company with consolidated 2004 revenues of 1.7 billion euros. NORDIC BIOFUELS: S&P Assigns B Rating to $90MM Senior Secured Loan ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' rating and '4' recovery rating to Nordic Biofuels of Ravenna LLC's $90 million senior secured credit facility due 2013. The outlook is stable. Nordic is a unit of Abengoa BioEnergy Corp., an energy holding company based in Seville, Spain. Nordic will construct and operate an 88 million gallons per year dry-mill ethanol plant in Ravenna, Nebraska. The 'B' rating and '4' recovery rating indicate the expectation of marginal recovery of principal in the event of payment default. "We expect the project to support the required debt service under a variety of commodity price scenarios," said Standard & Poor's credit analyst Jeffrey Wolinsky. "Over the next few years, the rating could be negatively pressured if a substantial overbuild of ethanol facilities occurs in the U.S. and the ethanol/corn price spreads drop substantially below 1996 levels," said Mr. Wolinsky. In the longer term, the project could be at risk for the renewal of the federal excise tax subsidy in 2010. NORTHWEST AIRLINES: Court Okays Cadwalader as Chapter 11 Counsel ---------------------------------------------------------------- Northwest Airlines Corp. and its debtor-affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Cadwalader, Wickersham & Taft LLP as their general bankruptcy counsel. Barry Simon, executive vice president and general counsel for Northwest Airlines Corporation, told the Court that Cadwalader has extensive experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code, including airline bankruptcies. Accordingly, Cadwalader is both well qualified and uniquely able to represent the Debtors in the Chapter 11 cases in an efficient and timely manner. The firm is an international law firm with its principal offices at One World Financial Center, New York, regional offices in Washington, D.C. and Charlotte, North Carolina, and international offices in London, United Kingdom and Beijing, China. As counsel, Cadwalader will: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties; (b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; (c) take all necessary action to protect and preserve the Debtors' estates, including: * the prosecution of actions on the Debtors' behalf; * the defense of any action commenced against the Debtors; * negotiations concerning all litigation in which the Debtors are involved; and * objections to claims filed against the estates; (d) on behalf of the Debtors, prepare all motions, answers, orders, reports, and papers necessary to the administration of the estates; (e) negotiate and prepare, on the Debtors' behalf, a plan of reorganization, disclosure statement, and all related agreements and documents, and take any necessary action on behalf of the Debtors to obtain confirmation of the plan; (f) represent the Debtors in connection with obtaining postpetition loans; (g) advise the Debtors in connection with any potential sale of assets; (h) appear before the Court, any appellate courts, and the United States Trustee, and protect the interests of the Debtors' estates before the Courts and the United States Trustee; (i) consult with the Debtors regarding tax matters; and (j) perform all other necessary legal services and provide all other necessary legal advice to the Debtors in connection with the Debtors' Chapter 11 cases. The Debtors will compensate Cadwalader for its services on an hourly basis. They will also reimburse the firm for actual, necessary expenses and other charges incurred. Cadwalader's current hourly rates are: Professional Rate ------------ ---- Partners $590 to $800 Attorneys $245 to $645 Legal assistants $140 to $220 Bruce R. Zirinsky, a member of Cadwalader, assured the Court that the firm has not represented any known creditors of the estates, equity security holders, or any other parties-in-interest, or their attorneys and accountants, the United States Trustee or any person employed in the office of the United States Trustee, in any matter relating to the Debtors or their estates. Cadwalader is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b), in that its members, of counsel, and associates: (a) are not creditors, equity security holders, or insiders of the Debtors; (b) are not and were not investment bankers for any outstanding security of the Debtors; (c) have not been, within three years before the Petition Date: * investment bankers for a security of the Debtors; or * an attorney for an investment banker in connection with the offer, sale or issuance of a security of the Debtors; (d) are not and were not, within two years before the Petition Date, a director, officer, or employee of the Debtors or an investment banker; and (e) have not represented any party in connection with matters relating to the Debtors, although it has certain relationships with other parties-in-interest and other professionals in connection with unrelated matters. Mr. Zirinsky, however, disclosed that Cadwalader has received $5,600,000 for its prepetition services since September 14, 2004, which has been applied against prepetition services. As of the Petition Date, Cadwalader held a $1 million retainer for its services and expenses to be rendered or incurred for or on behalf of the Debtors. The advance payment retainer will be applied against postpetition bills and will not be placed in a segregated account. Mr. Zirinsky also informed the Court that: (a) various Cadwalader attorneys are or may be participants in WorldPerks, the Debtors' frequent flyer program; and (b) a number of the firm's attorneys hold or may hold unused airplane tickets issued by the Debtors. Refunds may be due to them. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Court Approves Groom Law as Benefits Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York Approved, on an interim basis, the retention of The Groom Law Group, Chartered, as Northwest Airlines Corp. and its debtor- affiliates' benefits counsel. Barry Simon, executive vice president and general counsel for Northwest Airlines Corporation, told the Court that the Debtors have used The Groom Law Group, for more than 10 years to handle employee benefits matters, particularly matters concerning the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. Sections 1001 et seq., and the Pension Benefit Guaranty Corporation. In representing the Debtors prepetition on benefits issues, Groom has become familiar with the Debtors' business and affairs and is aware of any potential benefits issues that may arise in these cases. Thus, Groom is both well qualified and able to represent the Debtors in their Chapter 11 cases in an efficient and timely manner, Mr. Simon said. Groom will: (a) provide legal advice concerning the Debtors' employee benefit plans, including, but not limited to, the application of the ERISA and relevant provisions of the Internal Revenue Code; (b) represent the Debtors in connection with any information inquiries, investigations, or proceedings brought by the PBGC, the Department of Labor, or the Internal Revenue Service -- the three federal agencies with regulatory authority over the Debtors' employee benefit plans; (c) attend meetings and negotiate with representatives of the employees in administering the employee benefits plans; and (d) appear on behalf of the Debtors before the Court, any appellate court, and the United States Trustee in connection with matters relating to the Debtors' employee benefits plan. Gary M. Ford, principal at Groom, assured Judge Gropper that his Firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). Groom its partners, counsel and associates: (a) are not creditors, equity security holders or insiders of the Debtors; (b) are not and were not investment bankers for any outstanding security of the Debtors; (c) have not been, within three years before the Petition Date: * investment bankers for a security of the Debtors; or * an attorney for an investment banker in connection with the offer, sale, or issuance of a security of the Debtors; (d) are not and were not within two years before the Petition Date, a director, officer, or employee of the Debtors or of any investment banker; and (e) do not have an interest materially adverse to the interests of the Debtors' estates or any class of creditors or equity security holders, by reason of any direct or indirect relationship to, in connection with or interest in, the Debtors or an investment banker. The Debtors will compensate Groom in accordance with its customary hourly rates: Professional Rate ------------ ---- Partners $455 to $695 Associates $330 to $455 Paralegals $130 to $170 The principal attorneys and paralegals designated to represent the Debtors and their current standard hourly rates are: Professional Rate ------------ ---- Gary M. Ford $695 Lonie A. Hassel $535 Thomas S. Gigot $535 Elena C. Barone $420 Sarah A. Huck $380 Groom will also be reimbursed for its out-of-pocket expenses. Mr. Ford disclosed that prior to the Petition Date, Groom was paid a retainer on behalf of all the Debtors. The retainer was paid for services to be rendered and expenses to be incurred in connection with the Debtors' prepetition and postpetition cases. After crediting against the retainer all fees and expenses incurred prepetition, a $60,000 balance remains as a general retainer for postpetition services. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Court Grants Interim Okay to Huron Retention ---------------------------------------------------------------- U.S. Bankruptcy Court for the Southern District of New York grant interim approval to Northwest Airlines Corp. and its debtor- affiliates' application to employ Huron Consulting Group, subject to modifications in the Engagement Agreement. To the extent accrued during the interim employment, the firm may only receive payment for monthly compensation and reimbursement of expenses as specified in the Engagement Agreement. The United States Trustee retains all rights to object to Huron's interim and final fee applications on all grounds, including but not limited to the reasonableness standard provided for in Section 330 of the Bankruptcy Code. Since July 2005, Huron has worked with the Debtors' personnel and supported the Debtors' legal and other advisors. Pursuant to the parties' engagement letter, Huron will continue to: (a) assist the Debtors in the implementation of "Play Books" that would facilitate the process of the restructuring; (b) assist management, as requested, in addressing information requests from various parties related to the restructuring; (c) assist management, as requested, with financial reporting matters in preparation for and resulting from a restructuring; (d) review financial and other information as necessary to assist with the matters noted above; and (e) provide additional services as may be requested from time to time by the Debtors and agreed to by Huron including, among other things, assistance with valuation issues, claims management and reconciliation, analyses required for reporting to the Court and other parties including any official committees appointed by the U.S. Trustee. The professionals at Huron will be paid at these hourly rates: Professional Rate ------------ ---- Managing Directors $600 Directors $460 Managers $360 Associates $270 Analysts $195 The Debtors agree to reimburse Huron for reasonable out-of- pocket expenses in conjunction with its monthly professional fee statements. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWESTERN CORP: MPPI Disappointed at Cash Offer Rejection ------------------------------------------------------------ Montana Public Power, Incorporated (NASDAQ: NWEC), issued a statement in response to NorthWestern Corporation's announcement that its Board of Directors has recommended that NorthWestern shareholders reject MPPI's offer to acquire 100% of NorthWestern's outstanding common stock for $32.50 per share in cash. MPPI is disappointed that NorthWestern's Board has defied the wishes of shareholders owning more than 50% of NorthWestern's stock. Since MPPI made its offer for NorthWestern public on June 30, 2005, MPPI and NorthWestern's shareholders and their advisors have had detailed and fruitful discussions concerning the merits of the MPPI offer and what must be done to complete a transaction. As a result of these discussions, last week, Harbert Distressed Investment Master Fund, Ltd., NorthWestern's largest shareholder, stated that MPPI's offer reflects an attractive valuation for NorthWestern and concluded that it could be successfully consummated. In addition, MPPI has received expressions of support for the MPPI offer from other NorthWestern shareholders that, together with Harbert, represent more than 50% of NorthWestern's outstanding shares. In the same four months that MPPI has engaged in serious and substantial discussions with NorthWestern shareholders, NorthWestern's Board and its advisors have shown no interest in meeting with MPPI and have failed to perform the same level of due diligence. Nevertheless, and with disconcerting haste following their receipt of Harbert's letter, NorthWestern's Board has again rejected MPPI's offer - citing old arguments and reasons that were debunked months ago. Indeed, the objections raised by NorthWestern's Board were the subject of, and successfully addressed in, MPPI's detailed discussions with Harbert and other NorthWestern shareholders. Mike Kadas, Chair of MPPI and the Mayor of Missoula, Montana said: "The NorthWestern Board's response to MPPI's offer flies in the face of fiduciary duty and shareholder value. Nevertheless, we remain committed to working with the Company's shareholders to make this transaction happen." Relative to objective, market-based measures, MPPI's offer represents compelling value and near-term liquidity for NorthWestern's shareholders. The offer represents: -- 17% premium to NorthWestern's unaffected closing stock price on April 28, 2005, the day before MPPI's intentions to purchase NorthWestern were first made public; -- 36% premium to the average P/E multiples of comparable publicly traded electricity transmission and distribution companies. MPPI notes that P/E multiples for the sector have declined by approximately 1x since June 30, 2005; and -- 52% premium to the average P/E multiples implied by recent precedent utility transactions. In addition, MPPI finds it difficult to reconcile the NorthWestern Board's current views on valuation with those expressed by its own financial advisor during bankruptcy. In the Company's Second Amended and Restated Disclosure Statement dated Aug. 18, 2004, its financial advisor valued the Company between $17.61 to $22.39 per share, and argued that NorthWestern should be valued at a 10% discount to its peer group on account of its low growth market, challenging regulatory environment, and small market capitalization. MPPI - and NorthWestern's shareholders - continue to wait for any evidence to support the Company's assertion that "MPPI's offer is far below our value on a stand-alone basis". This assertion is directly contrary to the views expressed by NorthWestern's Chairman in a meeting with representatives of MPPI in March 2005. Since that time, NorthWestern's EPS guidance for 2005 has remained constant as recently reiterated in the Company's press release dated October 21, 2005. Furthermore, NorthWestern is scheduled to file for a rate case in Montana in 2006, the outcome of which cannot be predicted with confidence. MPPI is convinced that its offer represents full and fair value, and is clearly in the best interests of NorthWestern shareholders and customers. MPPI noted that it has developed a term sheet detailing its offer. A copy of the term sheet can be found on MPPI's website at http://www.montanapublicpower.org/ MPPI's mergers & acquisitions advisors are Citigroup Global Markets Inc. and Rothschild Inc. Nixon Peabody LLP is acting as mergers & acquisitions counsel and as co-bond counsel with Koegen Edwards LLP. Luxan & Murfitt, PLLP; Bullock Law Firm, PLLC; Woods, Fuller, Shultz & Smith P.C.; and Danforth & Meierhenry, LLP are also providing legal counsel. Montana Public Power, Incorporated -- http:// www.montanapublicpower.org -- is a non-profit corporation formed in 2004 for the purpose of bringing NorthWestern's utility businesses under public ownership. MPPI's sole member is The Montana Public Power Authority, which is comprised of the cities of Bozeman, Great Falls, Helena and Missoula, along with the consolidated city/county government of Butte-Silver Bow, Montana. South Dakota Power Company is a non-profit corporation formed in 2005 for the purpose of acquiring NorthWestern's electrical and gas transmission facilities in South Dakota and natural gas transmission and distribution facilities in three cities in Nebraska. SDP represents the interests of municipalities in South Dakota, which comprise 70% of NorthWestern's service territory in South Dakota. Headquartered in Sioux Falls, South Dakota, NorthWestern Corporation (Pink Sheets: NTHWQ) -- http://www.northwestern.com/ -- provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 608,000 customers in Montana, South Dakota and Nebraska. The Debtors filed for chapter 11 protection on September 14, 2003 (Bankr. Del. Case No. 03-12872). Scott D. Cousins, Esq., Victoria Watson Counihan, Esq., and William E. Chipman, Jr., Esq., at Greenberg Traurig, LLP, and Jesse H. Austin, III, Esq., and Karol K. Denniston, Esq., at Paul, Hastings, Janofsky & Walker, LLP, represent the Debtors in their restructuring efforts. On the Petition Date, the Debtors reported $2,624,886,000 in assets and liabilities totaling $2,758,578,000. The Court entered a written order confirming the Debtors' Second Amended and Restated Plan of Reorganization, which took effect on Nov. 1, 2004. * * * As reported in the Troubled Company Reporter on July 5, 2005, Standard & Poor's Ratings Services placed its 'BB' corporate credit rating on NorthWestern Corp. on CreditWatch with negative implications pending clarity on Montana Public Power Inc.'s June 30, 2005, offer to buy NorthWestern for $1.18 billion plus the assumption of $825 million in debt. Montana Public Power is a newly formed single-purpose entity organized to purchase NorthWestern and is ultimately composed of the Montana cities of Bozeman, Great Falls, Helena, Missoula, and Butte. "The CreditWatch listing reflects Standard & Poor's lack of information about Montana Public Power and the financing and legal structure of its bid for NorthWestern," said Standard & Poor's credit analyst Gerrit Jepsen. NOVA COMMUNICATIONS: Current Debt Load is 5-Times Current Assets ---------------------------------------------------------------- Nova Communications Ltd. delivered its annual report on Form 10-KSB for the year ending June 30, 2005, to the Securities and Exchange Commission on October 24, 2005. The Company reported a $5,557,858 net loss on $1,316,697 of net revenues for the year ending June 30, 2005. At June 30, 2005, the Company's balance sheet shows $11,506,829 in total assets and $4,150,275 of stockholders equity. Strained Liquidity Timothy L. Steers, CPA, LLC, the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern pointing to the Company's significant operating losses and working capital deficit. The Company has $924,167 in current assets to pay for $4,745,708 for current debts. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?287 Nova Communications Ltd. develops and distributes recreational water sports products and managing its high-speed Internet access and enterprise server facilities. O'SULLIVAN IND: Wants to Hire Lamberth Cifelli as Bankr. Counsel ---------------------------------------------------------------- O'Sullivan Industries Holdings, Inc., and its debtor-affiliates seek the U.S. Bankruptcy Court for the Northern District of Goergia's authority to employ Lamberth, Cifelli, Stokes & Stout, P.A., as their local bankruptcy and restructuring counsel. Lamberth Cifelli assist Dechert LLP, the Debtors' general corporate, bankruptcy, and restructuring counsel, in: (a) providing legal advice with respect to their powers and duties as debtors-in-possession in the continued operation of their business and management of their properties; (b) taking all necessary action to protect and preserve their estates, including the prosecution of actions on their behalf, the defense of any actions commenced against them, the negotiations of disputes in which they are involved, and the preparation of objections to claims filed against their estates; (c) preparing on their behalf as debtors-in-possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of their estates; (d) negotiating and drafting any agreements for the sale or purchase of any of their assets, if appropriate; (e) negotiating and providing input with respect to the Plan of Reorganization and all related documents, including, but not limited to, the disclosure statements and ballots for voting; (f) taking all steps necessary to confirm and implement the Plan, including, if necessary, its modifications and negotiating its financing; and (g) performing all other necessary and appropriate legal services in connection with the prosecution of their cases. In addition to its charges for out-of-pocket expenses, the firm's current hourly rates for its professional's legal services are: Professional Hourly Rate ------------ ----------- Attorneys $125 - $350 Paralegals $75 - $130 James C. Cifelli, Esq., a member of Lamberth Cifelli, tells the Court that the firm's partners, associates, and other professionals have no relationship to the Debtors or to any other party-in-interest. Lamberth Cifelli is a "disinterested person," as referenced in Section 327 and as defined in Section 101(14) of the Bankruptcy Code, he notes. Mr. Cifelli discloses that Lamberth Cifelli has received from the Debtors a $132,500 retainer. The retainer will be applied to fees and expenses incurred before the Petition Date and is subject to continuing reconciliation for the prepetition fees and expenses, he says. Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). On September 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) O'SULLIVAN INDUSTRIES: Wants to Hire Dechert as General Counsel --------------------------------------------------------------- O'Sullivan Industries Holdings, Inc., and its debtor-affiliates need bankruptcy lawyers to represent them in connection with all matters relating to their Chapter 11 case. By this application, the Debtors seek the U.S. Bankruptcy Court for the Northern District of Georgia's authority to employ Dechert, LLP, as their general corporate, bankruptcy, and restructuring attorneys. The Debtors have selected Dechert because of the firm's knowledge and experience in numerous areas of the law, which they believe will facilitate the successful completion of their Chapter 11 cases. Accordingly, the Debtors expect Dechert to: (a) provide legal advice with respect to their powers and duties as debtors-in-possession in the continued operation of their business and management of their properties; (b) take all necessary action to protect and preserve their estates, including the prosecution of actions on their behalf, the defense of any actions commenced against them, the negotiations of disputes in which they are involved, and the preparation of objections to claims filed against their estates; (c) preparing on their behalf as debtors-in-possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of their estates; (d) negotiate and draft any agreements for the sale or purchase of any of their assets, if appropriate; (e) negotiate and draft the Plan of Reorganization and all related documents, including, but not limited to, the disclosure statements and ballots for voting; (f) take all steps necessary to confirm and implement the Plan, including, if necessary, its modifications and negotiating exit financing; and (g) perform all other necessary and appropriate legal services in connection with the prosecution of their cases. The Debtors will pay Dechert in accordance with the firm's customary hourly rates: Professional Hourly Rate ------------ ----------- Attorneys $235 - $750 Paralegals $100 - $190 Joel H. Levitin, Esq., a partner at Dechert, tells the Court that the Debtors have many creditors and, accordingly, Dechert may have rendered and may continue to render professional services to certain of the creditors and other parties-in-interest. However, Mr. Levitin assures the Court that Dechert has not and will not represent the separate interests of any creditor or other party- in-interest in the Debtors' Chapter 11 cases. Dechert is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b), he notes. Mr. Levitin discloses that Dechert received $1,549,398 from the Debtors within the 12 months before the Petition Date, including amounts intended to constitute as postpetition retainer. Of the amounts, Dechert received $1,299,398 within 90 days before the Petition Date. Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). On September 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) OWENS CORNING: 3rd Circuit's Consolidation Order Costs $538 Mil. ---------------------------------------------------------------- Owens Corning will record $538 million in expenses relating to its prepetition credit facility, for the period from Oct. 5, 2000 (the day it filed for bankruptcy protection) to Sept. 30, 2005. The $538 million of expenses include: * $531 million on account of postpetition interest; and * $7 million on account of postpetition fees. The expense recording is a result of the August 1, 2005, reversal by the United States Court of Appeals for the Third Circuit of the U.S. District Court for the District of Delaware's order for substantive consolidation. In the Substantive Consolidation Order, the District Court granted the motion of Owens Corning and certain of its subsidiaries for substantive consolidation. Following the Third Circuit's reversal, the Legal Representative for the class of future asbestos personal injury claimants and certain designated members of the Official Committee of Unsecured Creditors filed petitions for rehearing en banc. The Third Circuit denied the petitions on September 28, 2005. The Third Circuit's reversal, unless reversed by the United States Supreme Court (if an appeal from the Third Circuit's decision is filed), is expected to result in significant modifications of Owens Corning's current plan of reorganization and may impact the relative amounts ultimately payable to Owens Corning's various creditor classes, including the extent to which postpetition interest and certain other postpetition fees may be payable on Owens Corning's primary prepetition bank credit facility. The expenses have been accrued at this time because Owens Corning has determined that, based upon the Third Circuit's reversal and Owens Corning's resulting evaluation of the distributable values (considered on a non-substantively consolidated basis) of Owens Corning and certain of its debtor and non-debtor subsidiaries, it is probable that such expenses will be payable by certain of the debtors and non-debtor subsidiaries which are either obligors under, or guarantors of, the Prepetition Credit Facility. 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. POTLATCH CORP: Moody's Affirms Sr. Subordinated Notes' Ba2 Rating ----------------------------------------------------------------- Moody's Investors Service affirmed Potlatch Corporation's Ba1 senior unsecured and Ba2 senior subordinated debt ratings. The rating action follows a comprehensive review of the company's: * strategy and business plan, * position in its markets, * capital and debt structure, * liquidity arrangements, * dividend plans, * anticipated performance, and * asset values, that was prompted, in turn, by the company's announcement of plans to convert to a REIT. Other than: * decreasing the company's income tax burden; and * increasing periodic dividends, the REIT conversion has no impact; the company's assets, operations and pre-tax cash flow are not affected. Moody's concluded that the combination of pre-existing expected improvements in operating cash flow and the collateral value provided by the company's 1.5 million acre timberland position adequately off-set concerns that internally generated cash flow would not always be able to cover the increased dividend resulting from the REIT conversion. Given the asset value coverage and expectations of improved cash flow from operations, the outlook is stable. Ratings affirmed: * Corporate family rating: Ba1 * Senior unsecured notes and debentures: Ba1 * 10.00% senior subordinated notes due 2011: Ba2 Outlook: Stable Potlatch's 1.5 million acre timberland position likely provides approximately 3x coverage for senior unsecured debt obligations (including both drawn and un-drawn amounts). As well, future levels of cash flow are expected to be greater and more stable than those observed in the past. This results from: 1) increased timber harvest levels; 2) profits from a recently completely tissue-making machine; 3) sustained improvement in output from bleached paperboard manufacturing operations; 4) sales of hybrid poplar timber from a recently developed plantation; 5) decreased pension contributions; and 6) cash from the periodic exercise of stock options, all of which are to occur irrespective of the REIT conversion. In combination, the asset value coverage and cash flow improvements off-set concerns that internally generated cash flow would not always be able to cover the company's ongoing obligations. Accordingly, Potlatch's Ba1 corporate family rating is supported by: a) An ability to repay debt by monetizing some or all of its substantial timberland position; b) Fiber supply integration in the core wood products segment that supports the company's ability to control raw material and logistics costs and, in turn, profit margins; c) Modest product line diversity that helps to limit variability in the cash flow stream; d) Asset value of the paper-making operations also provides debt repayment potential; and e) Good liquidity arrangements (pending completion; expected to occur concurrent with the REIT conversion) help to provide an ability to manage extraneous shocks. Offsetting these factors are: a) The historic magnitude and volatility of the company's cash flow indicates there may be periods where internally generated cash flow is insufficient to fund the planned dividend; b) Pulp, bleached paperboard and tissue operations suffer from relatively poor competitive positioning in their relative markets, and may not be consistent contributors of positive free cash flow (after accounting for capital expenditures and unallocated SG&A); c) Margins are under pressure as a consequence of elevated input prices; d) Wood products' cash flow generation susceptible to a decline in housing starts; and e) and risks related to the magnitude and sustainability of the commodity price recovery that may limit upside to profitability. It is contemplated that the bank credit facility and the company's bonds and debentures will benefit from a system of inter-company guarantees, such that despite the bank facility and the bonds being booked in different legal entities, they will rank pari passu. Consequently, there is no need to notch the unsecured rating from the corporate family rating. With only a nominal amount of senior subordinated notes outstanding, a one notch differential for their rating continues to be appropriate. Potlatch is in the process of replacing its existing $125 million unsecured revolving credit facility with a similar facility of $175 million. It is expected the facility will be committed for a 3 year term and that it will be unsecured. Financial covenants are expected to be patterned from prevailing covenants (Maximum Debt/Cap and Minimum Interest Coverage), with adjustments related to the capital and cash flow structure resulting from the REIT conversion. Drawings at closing are expected to be nominal, and accordingly, near term covenant compliance and access to the facility is not expected to be problematic. The outlook is stable. This is predicated on the 3x asset value coverage provided by timberlands, and expectations of improved cash flow that will allow the company to generally fund its operations, capital expenditures and dividend, all from internal sources. Given a number of factors, it is unlikely that the rating will be upgraded over the near-to-mid term. These factors include: a) the company's relatively modest size; b) the relative concentration of its timberland position; c) the as yet unproven ability to consistently generate positive cash flow from either of its paper-making businesses; d) the sustainability of cash flow from increased timber harvest levels; e) the sustainability of cash savings from reduced pension contributions; f) the as yet unproven viability of hybrid poplar timber/lumber as a saleable commodity; g) concern that cash flow will continue to be volatile; and h) risks that margin expansion will be limited. Downwards pressure on the ratings and outlook could develop given a significant diminution in the existing 3x asset value coverage afforded by the company's timberlands. This could result from: * market value changes, * the sale of significant acreage, * increases in debt, or * modifications in security arrangements. Rating pressure could also occur should management not be able to deliver planned cash flow improvements. Depending on the magnitude of any shortfall, ratings' pressure could develop over a one-to-two year period should Funds From Operations not be sufficient to cover the dividend and maintenance capital expenditures (estimated at $45 million per annum). Headquartered in Spokane, Washington, Potlatch is a diversified forest products company with timberlands in: * Arkansas, * Idaho, and * Minnesota. PQ CORP: S&P Affirms B+ Credit Rating & Revises Outlook to Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on PQ Corp. to negative from stable. All ratings, including the 'B+' corporate credit rating, are affirmed. The outlook revision follows PQ's announcement of a plan to distribute a $110 million dividend to its shareholder JP Morgan Partners LLC. The Berwyn, Pennsylvania-based company plans to fund the dividend with debt and current cash balances. The dividend is subject to the successful amendment of the company's existing credit facilities to permit the transaction. "The outlook revision reflects our concerns regarding the company's shift to a more aggressive financial policy," said Standard & Poor's credit analyst Paul Kurias. The transaction will result in a higher debt level than previously anticipated and brings into question PQ's commitment to reduce debt in order to support credit quality. There will now be less room at the current ratings should profitability be lower than expected, or if other strategic or financial decisions result in deterioration to the financial profile. The increase in financial risk is only partly offset by an improvement in operating performance. The ratings reflect a weak business position as a specialty chemical producer with approximately $600 million in annual sales. PQ manufactures and markets inorganic specialty chemicals and engineered glass materials through two divisions. In the chemicals division, the company offers sodium silicate, magnesium sulfate, zeolite, catalytic zeolites and zeolite-based catalysts, polyolefin catalysts, specialty adsorbents, and other industrial chemicals. The Potters division offers engineered glass materials such as solid glass spheres and hollow glass microspheres for use in reflective materials for highway safety and in applications for metal finishing, polymer additives, and conductive materials. PQ's credit quality reflects its well-established market positions; the company has the No. 1 market position in product lines that make up more than 80% of sales. PQ holds approximately 66% of the North American sodium silicate market and 30% of the global market. In the highway safety market for engineered glass spheres, PQ has at least 50% of the market. Although the company is focused on two primary product chains, silicates and engineered glass materials, a range of downstream products and diverse end markets lend stability to earnings and cash flow generation, and temper the exposure to larger end markets such as highway safety and detergents. Exposure to consumer detergents is also limited by the relatively small contribution of these products to profits and cash flow. PRIME MORTGAGE: S&P Junks 2 Cert. Classes Due to Delinquencies -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on classes B-4 and B-5 from Prime Mortgage Trust series 2004-CL1 and 2004- CL2. At the same time, ratings are affirmed on 108 classes from seven transactions issued by Prime Mortgage Trust. The lowered ratings reflect reduced projected credit support due to high delinquencies and adverse collateral performance. Projected credit support reflects actual credit support reduced by projected losses on present delinquencies. As of the September 2005 distribution date, total delinquencies for series 2004-CL1 were 7.85%, with 2.46% categorized as seriously delinquent -- 90-plus-days, foreclosure, and REO. Using Standard & Poor's foreclosure frequency and loss severity assumptions, current delinquencies could translate into approximately $794,000 in losses. Should the projected losses occur, classes B-4 and B-5 would no longer have sufficient support to maintain the current ratings. Total delinquencies for series 2004-CL2 were 9.17%, with 1.72% being serious delinquent. Standard & Poor's anticipates that current delinquencies will translate into approximately $366,000 in losses. Similar to series 2004-CL1, the projected credit support for classes B-4 and B-5 for series 2004-CL2 will no longer be sufficient to maintain their current ratings. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. Total delinquencies for these transactions ranged from 0.15% to 9.17% of the current pool balances. Cumulative realized losses ranged from 0.00% to 0.04% of the original pool balances. Credit support for these transactions is provided by subordination. The underlying collateral consists of conventional, fully amortizing, 15- and 30-year, fixed-rate mortgage loans, which are secured by first-liens on one- to four-family residential properties. Ratings Lowered Prime Mortgage Trust Rating Series Class To From ------ ----- -- ---- 2004-CL1 B-4 B BB 2004-CL1 B-5 CCC B 2004-CL2 B-4 B BB 2004-CL2 B-5 CCC B Ratings Affirmed Prime Mortgage Trust Series Class Rating ------ ----- ------ 2003-1 A-2, A-3, A-4, A-5, A-7, A-8, A-9 AAA 2003-1 A-11, A-14, A-15, PO, X AAA 2003-1 B-1 AA 2003-1 B-2 A 2003-1 B-3 BBB 2003-1 B-4 BB 2003-1 B-5 B 2003-2 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5 AAA 2003-2 I-A-6, I-A-7, I-A-8, I-A-9, I-A-10 AAA 2003-2 I-A-11, I-PO, II-A-1, II-A-2, II-PO AAA 2003-2 II-IO AAA 2003-2 B-1 AA 2003-2 B-2 A 2003-2 B-3 BBB 2003-2 B-4 BB 2003-2 B-5 B 2003-3 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA 2003-3 A-8, A-9, PO AAA 2003-3 B-1 AA 2003-3 B-2 A 2003-3 B-3 BBB 2003-3 B-4 BB 2003-3 B-5 B 2004-1 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5 AAA 2004-1 I-A-6, I-A-7, I-A-8, I-PO, II-A-1 AAA 2004-1 II-A-2, II-A-3, II-PO, II-X-1 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-CL1 I-A-1, I-A-2, I-A-3, I-A-4, I-X AAA 2004-CL1 I-PO, II-A-1, II-A-2, II-A-3, II-PO AAA 2004-CL1 II-X, II-PO, III-A-1 AAA 2004-CL1 B-1 AA 2004-CL1 B-2 A 2004-CL1 B-3 BBB 2004-CL2 A, XB AAA 2004-CL2 B-1 AA 2004-CL2 B-2 A 2004-CL2 B-3 BBB 2005-1 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5 AAA 2005-1 I-A-6, I-A-7, I-A-8, I-PO, II-A-1 AAA 2005-1 II-A-2, II-A-3, II-A-4, II-A-5 AAA PRIMEDIA INC: Moody's Affirms $945 Million Notes' B2 Ratings ------------------------------------------------------------ Moody's Investors Service affirmed PRIMEDIA Inc.'s B2 Corporate Family rating and changed the rating outlook to developing from stable following the company's announcement that it is exploring the possible separation of its businesses, via a spin-off, into two separate publicly-traded companies. The ratings affirmed comprise: * $300 million of 8.0% senior notes due 2013 -- B2 * $470 million of 8.875% senior notes due 2011 -- B2 * $175 million of floating rate notes due 2010 -- B2 * Corporate Family rating -- B2 * Speculative grade liquidity rating -- SGL - 2 Ratings affirmed, subject to withdrawal upon refinancing: * $146 million of 7.625% senior notes due 2008 -- B2 * $212 million of Series H 8.625% exchangeable preferred stock -- Caa2 Moody's does not rate PRIMEDIA's $777 million senior secured credit facility. Management considers that the spin-off would take six to nine months to conclude. Moody's expects to refresh its ratings once it has assessed the business opportunities, growth potential, and likely capital structure of the two separate entities: * the Enthusiast Media/ Education segment; and * the Consumer Guides segment. In addition, Moody's will consider the amount of debt which will be allocated to each company and the level of cash flow and asset value available to support debt post spin-off. New York City-based PRIMEDIA Inc. is a targeted media company which owns more than 200 brands that connect buyers and sellers through: * print publications, * web sites, * events, * newsletters, and * video programs. PRIMEDIA INC: S&P Reviews Ratings Due to Management Evolving Plans ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on PRIMEDIA Inc., including the 'B' corporate credit rating, on CreditWatch with negative implications following the company's announcement that it is exploring the possible separation of its businesses -- the specialty magazine and education segment, and consumer Guides -- into two separate companies. PRIMEDIA also announced that its CEO has resigned as the company explores the possible split. New York City-based publisher PRIMEDIA has total debt of about $1.35 billion, pro forma for recent asset sales. Management has also revised its guidance downward and expects 2005 EBITDA will fall in the high-single-digit to low-double-digit percentage range largely because of poor performance in its automotive magazines. Print advertising revenue was hurt by an unexpectedly large pullback in advertising by large automotive clients in the second half of 2005. Also, PRIMEDIA expects that its EBITDA for its consumer guides segment will drop in 2005 because of $15 million-$20 million of investments associated with distribution renewals, distribution expansion, and new-publication launches. Standard & Poor's estimates that the company's debt to EBITDA will be slightly above 7x in the full year 2005 as a result of its guidance revision. "In reassessing the ratings, Standard & Poor's will consider management's evolving plans to separate into two companies, which would lessen business diversity, and S&P will monitor the companies' operating outlook and capital structures," said Standard & Poor's credit analyst Hal F. Diamond. REFCO INC: November 4 Set as Bid Deadline for Futures Business -------------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York set November 4, 2005, as the Bid Deadline for bidders to submit bids for all of the capital stock and operations of Refco, LLC, Refco Overseas Limited, and Refco Singapore, from Refco, Inc., and Refco Global Futures LLC. The auction for those assets has been tentatively scheduled on Nov. 9, 2005. Refco Overseas and Refco Singapore, which are engaged in the regulated futures and commodities trading activities, are not included in Refco Inc., and its debtor-affiliates' chapter 11 filing, but its sale is being governed by the U.S. Bankruptcy Court for the Southern District of New York. Judge Drain set the bid deadline for the assets of the Debtors' entities engaged in regulated futures and commodities trading activities at a hearing in Manhattan on Oct. 24, 2005. In that hearing, FGS Refco Acquisition Co., LLC, the company organized by J.C. Flowers to acquire Refco's Futures Business, withdrew its $768 million bid for the assets and dropped out of the bidding after the Court struck down some provisions that J.C. Flowers negotiated with the Debtors. Specifically, The Wall Street Journal reports, Judge Drain eliminated an option for J.C. Flowers to bid on other assets besides Refco's futures and commodities arm. Judge Drain ruled that the break-up fee is capped at $5,000,000. Remaining Bidders for the Auction Tom Becker, writing for Bloomberg News, reports that Interactive Brokers Group LLC raised its offer for Refco Inc.'s regulated brokerage unit from $790,000,000 to $858,000,000 -- currently the highest bid disclosed. According to The Wall Street Journal, Leon Black's Apollo Capital Management LLC, is interested in bidding for Refco's assets. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton LLP, told Judge Drain at the hearing last October 24 that Merrill Lynch & Co. is very interested in participating in the bidding process. Warburg Pincus LLC is reportedly interested in kicking the tires too. Headquartered in New York, New York, Refco Inc. -- 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. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. REFCO INC: TradeLink LLC & Co. Expresses Intention to Join Bidding ------------------------------------------------------------------ TradeLink LLC, a Chicago-based futures commission merchant, its co-founder, Walt K. Weissman, and an affiliate, Nickolas J. Neubauer, disclosed that they are forming an investor group to consider the purchase of some or all of the business and assets of Refco, LLC, and the other entities described in the acquisition agreement filed by Refco Inc. with the U.S. Bankruptcy Court for the Southern District of New York last week. TradeLink LLC is a clearing member of the Chicago Board of Trade, Chicago Mercantile Exchange and Chicago Board Options Exchange for proprietary trading as well as a commodity and futures-based hedge fund. TradeLink LLC enjoys an excellent regulatory and business reputation and brings significant management expertise and capital to the prospective investor group. TradeLink and its subsidiaries maintain offices in Chicago, London, Hawaii and San Francisco and trade virtually all major markets across the globe. Walt K. Weissman, co-Chairman of TradeLink LLC, has extensive trading experience and formerly served as a member of the board of directors of the CBOT. Nickolas J. Neubauer is a current member of the CBOT board of directors and a former chairman of the board of the CBOT. As reported in the Troubled Company Reporter on Oct. 26, 2005, An investor group led by former Goldman Sachs Group Inc. banker Christopher Flowers withdrew its bid for all of the capital stock and operations of Refco, LLC, Refco Overseas Limited, and Refco Singapore, from Refco, Inc., and Refco Global Futures LLC on Monday, Oct. 24. J.C. Flowers withdrew its $768 million bid after the Hon. Robert D. Drain ruled that he would only approve a $5 million break-up fee. J.C. Flowers had previously agreed to a fee of 2.8% of the purchase price. "We are disappointed by certain aspects of the Bankruptcy Court's decision [Mon]day, but we respect the Court's view," Mr. Flowers said. "Under the circumstances, we are not prepared to commit at this time to purchase Refco LLC and related assets, as we would have been had the Court granted Refco's Bid Procedures motion. We have not made a decision whether we will participate in the bankruptcy auction, but we continue to think Refco is a great business, and we wish the employees and customers of Refco the best." Headquartered in New York, New York, Refco Inc. -- 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. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Refco reported $16.5 billion in assets and $16.8 billion to the Bankruptcy Court on the first day of its chapter 11 cases. REFCO INC: Bank of America Gets Interim Adequate Protection ----------------------------------------------------------- Debtor Refco Group Ltd., LLC, borrowed money under a Credit Agreement dated August 5, 2004, with Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and a consortium of lenders. The Credit Agreement provided for term loans of up to $800,000,000 and a $75,000,000 revolving credit facility. As of the Petition Date, there was approximately $648,000,000 outstanding under the Credit Agreement. Debtor New Refco Group Ltd., LLC, and some affiliates of Refco Group guaranteed the Borrower's obligations. To secure their obligations, Refco Group and the Guarantors entered into a Security Agreement, dated August 5, 2005, with Bank of America. Bank of America was granted a security interest in substantially all of the assets of Refco Group and the Guarantors. The Security Agreement did not grant a security interest in some excluded property, including any deposit and security accounts of a Grantor. Donald S. Bernstein, Esq., at Davis Polk & Wardwell, in New York, notes that Refco Inc. has entered into a memorandum of understanding with a group of investors led by J.C. Flowers & Co., LLC, for the sale of the Company's futures brokerage business conducted through Refco LLC, Refco Overseas Ltd., Refco Singapore Ltd. and certain related subsidiaries and other assets for $768 million. Refco LLC, Refco Overseas Ltd., and Refco Singapore Ltd. are all direct or indirect subsidiaries of Debtor Refco Global Futures LLC. Mr. Bernstein points out that the Secured Lenders have a security interest in 100% of the equity interests in Refco LLC and 65% of the equity interests of Refco Singapore Ltd. In addition, the Secured Lenders have been granted a security interest in 65% of the equity interests in Refco Europe Ltd., the direct parent of Refco Overseas Ltd., as well as 100% of the equity interests of Debtor Refco Global Holdings, LLC, the direct parent of Refco Europe Ltd. "A secured creditor is entitled to adequate protection -- as a matter of right, not merely as a matter of discretion -- when the estate proposed to use, sell or lease property in which it has an interest," Mr. Bernstein says. "This protection is provided both as a matter of policy and, arguably, as a matter of constitutional law." Mr. Bernstein notes that because of the unique nature of cash, cash collateral receives special consideration under the Bankruptcy Code. Specifically, the Bankruptcy Code provides a debtor may only use cash collateral if it first obtains consent of the secured creditor or establishes to the court's satisfaction that the secured creditor is adequately protected. Mr. Bernstein tells the Court that the Secured Lenders do not consent to the Debtors' use of the Collateral, including the Cash Collateral. According to Mr. Bernstein, the Debtors are using the Secured Lenders' Collateral to continue to operate their businesses. Thus, the Secured Lenders' Collateral is subject to diminution. The Secured Lenders are also concerned that the value of the Equity Interests may be diminished should the assets of that entity be transferred to another entity. Accordingly, Bank of America asserts that the Debtors should provide adequate protection of the Secured Lenders' interests in the Collateral. Specifically, Bank of America wants the Honorable Robert D. Drain of the Southern District of New York Bankruptcy Court to enter an interim order providing that: (a) The Debtors will use their best efforts to preserve the value of the Collateral; (b) Bank of America, as administrative agent for the Secured Lenders, is granted: * a first priority security interest and lien on all of the Debtors' assets to the extent of the aggregate diminution in value of the Collateral from and after the Petition Date, subject to certain liens and encumbrances; and * a "super priority" administrative claim to the fullest extent necessary to protect the Secured Lenders from any diminution of the value of the Collateral from and after the Petition Date; (c) The Debtors will make cash payments to Bank of America of all its reasonable out-of-pocket expenses; (d) The Debtors will segregate and account for all Cash Collateral, and will be prohibited from using or transferring the Cash Collateral without prior Court approval; provided that if Bank of America consents, the Debtors will be permitted to use or transfer up to $10,000,000 of Cash Collateral to pay for allowable administration expenses payable on or before November 4, 2005; (e) The Debtors will provide to Bank of America and its representatives and professionals, starting on October 26, 2005, and on every Wednesday thereafter, a disbursement forecast for the following calendar week and, at Bank of America's request, allow immediate access to the books and records related to the Collateral; (f) The liens created by the Loan Documents will attach to any proceeds of Collateral, and all proceeds will be paid to Bank of America for application to the Debtors' obligations; and (g) Bank of America for the benefit of the Secured Lenders will have the right at any time to seek further or different adequate protection. Judge Drain grants Bank of America's request on an interim basis. For the avoidance of doubt, Judge Drain emphasized that the relief granted, including any replacement lien, extends only to property of the Refco Inc., and its debtor-affiliates' estates under Section 541 of the Bankruptcy Code, and is subject to the rights and claims of any person or entity that any claimed Collateral and, therefore, any property purportedly subject to any replacement lien, is not property of any of the Debtors' estates or is subject to Section 541(d) of the Bankruptcy Code. The Court will convene a final hearing on the use of Collateral and adequate protection on the earlier of: (a) November 14, 2005, at 10:00 a.m.; or (b) the date of any hearing on any motion seeking approval for the transfer or sale of any Collateral, including the Equity Interests. Headquartered in New York, New York, Refco Inc. -- 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. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Refco reported $16.5 billion in assets and $16.8 billion to the Bankruptcy Court on the first day of its chapter 11 cases. (Refco Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) ROYAL CARIBBEAN: Moody's Affirms Sr. Unsecured Debt's Ba1 Rating ---------------------------------------------------------------- Moody's Investors Service changed to positive from stable the ratings outlook of Royal Caribbean Cruises Ltd. The existing ratings of the corporate family, senior unsecured, preferred shelf, and speculative grade liquidity have been affirmed. The positive outlook reflects: 1. A decline in RCL's adjusted leverage to 4.0x for the last twelve months ended June 30, 2005 period from around 5.0x at the end of 2004. The leverage reduction reflects improved occupancy and pricing levels coupled with lower capex spending and debt reductions. During the first half of 2005 RCL reduced debt by about $1 billion. 2. Moody's expectation that RCL will reduce debt further by the end 2005. 3. Moody's expectation that demand and pricing should remain strong through 2006 resulting in improving credit metrics (and which will also allow planned capacity additions to be economically absorbed). Absent event risk, the ratings could go up if the company's retained cash flow to debt, on an adjusted basis (adjusted for operating leases), which was 18% for the twelve months ended June 2005, were to approximate 25% and if it appears likely that: 1. future capital spending will be substantially funded with internally generated cash flow; 2. the likelihood of net yield increases over the intermediate term remains strong with EBITDA margin improvements accompanying the higher net yields; 3. an expectation that total secured debt, on an adjusted basis, to 6x EBITDA would decrease from about 13% currently and decline to approximately 10% over the next 12 month to 18 month timeframe; and 4. the company will not be pursuing any acquisitions or significant share repurchase activities. RCL's Ba1 senior unsecured rating reflects: * the company's scale, * strong market position, * brand equity, and * customer satisfaction scores. Additionally, the rating reflects: * likelihood of continued penetration of the vacation market by the cruise segment due to favorable demographic trends; and * the value proposition of cruise versus non-cruise vacation alternatives. The company's next ship will be delivered in the second quarter of 2006 and RCL has agreed to purchase three more ships for delivery between mid-2007 and late 2008. The company has an option, exercisable through March 2006, for a fifth ship to be delivered in 2009. The aggregate price of the four ships on order approximates $3.1 billion. Moody's notes that secured debt comprises 20% of total adjusted debt, including the operating lease on Brilliance of the Seas and other capitalized operating leases. Asset coverage for the unsecured debt remains adequate in a downside scenario. However, an increase in secured debt would likely result in a ratings notching between the secured and unsecured debt classes. Ratings affirmed: * Senior unsecured shelf registration at (P)Ba1. * Senior unsecured debt at Ba1. * Preferred stock shelf registration at (P)Ba3. * Corporate Family at Ba1. * Speculative Grade Liquidity at SGL-2 Royal Caribbean Cruises Ltd., headquartered in Miami, Florida, operates a cruise line under the brand names: * Royal Caribbean International, and * Celebrity Cruises. For the fiscal year ended 2004, RCL had revenues of $4.6 billion. RUSSELL-STANLEY: Court Confirms Prepackaged Chapter 11 Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware confirmed on October 25, 2005, Russell-Stanley Holdings, Inc.'s Joint Prepackaged Plan of Reorganization. The Debtor's Disclosure Statement explaining its Plan was approved on October 20. The Debtor filed a prepackaged chapter 11 plan in order to effectuate an asset purchase agreement with an affiliate of Mauser-Werke GmbH & Co. KG and One Equity Partners. Pursuant to that agreement, Russell-Stanley and certain of its subsidiaries will sell substantially all of their assets to Mauser. Prior to the filings, Russell-Stanley obtained 100% acceptance of the Plan from voting creditors. This unanimous support is expected to minimize the duration of the Chapter 11 cases. Under the proposed plan, Russell-Stanley's existing subordinated debt and equity will be cancelled, and bondholders will receive their pro rata share of the sale proceeds that remain after secured claims, unsecured claims other than bond claims, and Chapter 11 expenses have been paid or reserved. The proposed plan of reorganization contemplates the payment in full of any allowed pre-petition vendor claims that remain unpaid upon consummation of the Plan. Moreover, as part of the transaction, Mauser has agreed, upon the closing, to assume and pay valid and accrued trade payables that are not otherwise paid when due as a result of the filing and that are reflected on the Company's books. A full-text copy of the Debtor's prepackaged chapter 11 plan is available at no charge at http://ResearchArchives.com/t/s?f9 A full-text copy of the Disclosure Statement explaining the Plan is available at no charge at http://ResearchArchives.com/t/s?fa Russell-Stanley expects to emerge from Chapter 11 and close the transaction with Mauser within the next few months subject to customary closing conditions contained in the Purchase Agreement, including receipt of all necessary bankruptcy court and other approvals. Mauser-Werke GmbH Co. KG -- http://www.mauser-werke.com/-- is a global leader in industrial packaging, with its headquarters in Bruehl, Germany. Headquartered in Bridgewater, New Jersey, Russell-Stanley Holdings, Inc. -- http://www.russell-stanley.com/-- is North America's largest plastic drum manufacturer, second largest steel drum manufacturer, and a leading industrial container supply chain management company. The Company and its affiliates filed for chapter 11 protection on Aug. 19, 2005 (Bankr. D. Del. Case No. 05-12339). Mark S. Chehi, Esq., and Sarah E. Pierce, Esq., Kayalyn A. Marafioti, Esq., Frederick D. Morris, Esq., and Bennett S. Silverberg, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. SAINTS VINCENTS: Wants Court to Deny Tort Claimants Request ----------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to deny the request of Bradley Zimmerman, Esq., on behalf of 12 tort claimants, to: a) modify the automatic stay to: (i) allow the Actions to proceed in their respective forums to judgment or settlement; and (ii) permit the plaintiff in each of the Actions to execute on any judgment or collect on any settlement against available insurance proceeds without further Bankruptcy Court order; and (b) permit the plaintiff in each of the Actions to participate in the bankruptcy proceeding as an unsecured creditor to the extent of any unsatisfied claim. The Debtors explain that they need to assess and analyze the scope of their potential malpractice obligations, the options and the approach they will use in the liquidation of the claims, as well as the impact on the insurance trusts on the satisfaction of those claims. Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that to the extent Mr. Zimmerman seeks recovery from the Debtors' Self-Insurance, on behalf of his clients, use of the Self-Insurance funds might well amount to a depletion of the Debtors' assets -- or a subset of those assets available for only a particular purpose -- before a determination is made about the general availability of Self-Insurance funds to malpractice claimants. Mr. Troop says that the Debtors objection is without prejudice to re-filing of the request at later date. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, represent the Debtors in their restructuring efforts. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Backs Out of Proposed Cherry Creek Lease -------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates withdrew their request to enter into a Master Lease Agreement with Cherry Creek Capital Partners, LLC. Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, informs the U.S. Bankruptcy Court for the Southern District of New York that the Debtors withdrew their request without prejudice. As reported in the Troubled Company Reporter on Sept. 8, 2005, the Debtors sought to enter into the lease agreement with Cherry Creek for new medical equipment intended to help increase the hospital's revenue. Under the agreement, the Debtors had the option to buy the leased equipment, worth up to $4.7 million, at the end of the 60 month lease term. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, represent the Debtors in their restructuring efforts. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) SHC INC: Plan Administrator Wants to Delay Case Closing to June --------------------------------------------------------------- Walker Truesdell & Associates, Inc., the Plan Administrator appointed pursuant to the confirmed Plan of SHC, Inc., and its debtor-affiliates, asks the U.S. Bankruptcy Court for the District of Delaware to further delay entry of a Final Decree pursuant to Local Rule 5009-1(a) and to further extend the deadline for the filing of a Final Report and Accounting under Local Rule 5009-1(c). Walker Truesdell wants to delay the entry of a Final Decree, through and including June 30, 2006, and wants until May 1, 2006, to file a Final Report and Accounting for the Debtors' chapter 11 cases. The Court's approval of Walker Truesdell previous request for extensions of these deadlines was reported in the Troubled Company Reporter on June 17, 2005. Walker Truesdell tells the Court that significant progress was made in prosecuting the post-confirmation Debtors' chapter 11 cases since the confirmation of the Plan and the date of the previous motion for extension. Walker Truesdell, in coordination with Carroll Services, LLC, the Liquidation Trustee, says that it filed and successfully prosecuted two omnibus objections to claims. Walker Truesdell also says that together with the Liquidation Trustee, it has filed and resolved a joint objection to the claims filed by the U.S. Customs and Border Protection and Customs' response, pending the submission of a proposed form of order that is acceptable to the parties. Walker Truesdell further says that along with the Liquidation Trustee, it has resolved the claims of the Pension Benefit and Guaranty Corporation and successfully prosecuted a motion seeking approval of that settlement. Walker Truesdell tells the Court that it has also filed several notices of satisfaction with respect to certain priority unsecured claims. Walker Truesdell says that the extension is needed because the claims administration and distribution processes have not yet concluded due to the recent discovery that certain general unsecured creditors may not have received adequate notice in the Debtors' chapter 11 cases or the bar date for claims in those cases. Walker Truesdell says that in coordination with the Liquidating Trustee, they have determined that these creditors should receive, after the Debtors' schedules are amended, notice and an opportunity to file claims. Walker Truesdell discloses that it will need more time to determine the most appropriate and practicable course of action for drafting, filing and prosecuting future objections to these potential claims. Walker Truesdell tells the Court that delaying the entry of a final decree will help ensure that any distributions made under the Plan are only made to those actual creditors and in such amounts as appropriate. Walker Truesdell also says that a final report and accounting would be inaccurate until the claims administration process and other pending disputes are brought to a conclusion. Headquartered in Chicopee, Massachusetts, SHC, Inc., is a manufacturer of golf balls and clubs and other sporting goods. The Company and its debtor-affiliates filed for chapter 11 protection on June 30, 2003 (Bankr. Del. Case No. 03-12002). Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors. When the Debtors filed for chapter 11 protection, they listed estimated assets of more than $50,000 and estimated debts of more than $100 million. The Court confirmed the Debtors' Joint Plan on July 8, 2004, and the Plan took effect on Aug. 2, 2004. Walker Truesdell & Associates, Inc., is the Plan Administrator pursuant to the confirmed Plan. SILICON GRAPHICS: Completes $100 Million Credit Facility -------------------------------------------------------- Silicon Graphics (NYSE: SGI) completed a new two-year asset-backed credit facility with Wells Fargo Foothill, part of Wells Fargo & Company (NYSE: WFC), and Ableco Finance LLC. The new facility provides for increased credit of up to $100 million, consisting of: * a $50 million revolving line of credit, and * a $50 million term loan. The previous facility provided availability of up to $50 million, but was subject to a minimum cash collateral requirement of $20 million. "Securing this increased credit facility is an important step in our turnaround and, to us, represents a vote of confidence that we are on the right path," said Jeff Zellmer, SGI's chief financial officer. "Unlike the prior credit facility, which we used solely for letters of credit to support lease obligations, the new facility also provides for cash borrowings that will significantly improve our liquidity." The borrowing base under the new credit facility will be determined weekly based on the value of working capital items, real estate and intellectual property. The new facility does not require the permanent deposit of cash collateral, which is a significant change from the prior credit facility. The new facility is secured by substantially all of the assets of SGI and its domestic subsidiaries and includes customary terms and conditions, including covenants for minimum levels of EBITDA, minimum levels of cash and cash equivalents, and limits on capital expenditures. Silicon Graphics, Inc. -- http://www.sgi.com/-- is a leader in high-performance computing, visualization and storage. SGI's vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense or enabling the transition from analog to digital broadcasting, SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. At Sept. 30, 2005, Silicon Graphics, Inc.'s balance sheet showed a $222,501,000 stockholders' deficit. SILICON GRAPHICS: Sept. 30 Balance Sheet Upside-Down by $222 Mil. ----------------------------------------------------------------- At Sept. 30, 2005, Silicon Graphics, Inc.'s balance sheet showed a $222,501,000 stockholders' deficit. This week, Silicon Graphics (NYSE: SGI) reported results for its first fiscal quarter ended Sept. 30, 2005. Revenue for the first quarter fiscal year 2006 was $170 million, gross margin was 37.8% and the operating loss was $26 million. For comparison, in the first quarter fiscal year 2005, revenue was $175 million, gross margin was 35.9% and the operating loss was $26 million. The first quarter fiscal year 2006 net loss was $32 million compared with a net loss of $28 million. GAAP operating expenses for the first fiscal quarter were $90 million compared with $89 million in the same quarter last year. Non-GAAP operating expenses were $83 million in the first quarter compared with $86 million the same quarter last year excluding restructuring charges of $7 million and $3 million, respectively. "We achieved several important goals in the first quarter," said Bob Bishop, chairman and chief executive officer. "We grew revenue from core products year over year, exceeded our margin targets, secured new financing and are on-track with our restructuring plans. We still have work to do, but we are making progress." Unrestricted cash, cash equivalents and marketable investments on September 30, 2005 were $77 million as compared with $64 million at the end of fiscal 2005. Silicon Graphics, Inc. -- http://www.sgi.com/-- is a leader in high-performance computing, visualization and storage. SGI's vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense or enabling the transition from analog to digital broadcasting, SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. SOUNDVIEW HOME: Fitch Rates $24.7 Million Cert. Classes at Low-B ---------------------------------------------------------------- Soundview Home Loan Trust asset-backed certificates, series 2005-B, is rated by Fitch: -- $309.8 million class A 'AAA'; -- $26.9 million class M-1 'AA+'; -- $23.4 million class M-2 'AA+'; -- $14.7 million class M-3 'AA+'; -- $13.2 million class M-4 'AA'; -- $11.7 million class M-5 'AA-'; -- $10.9 million class M-6 'A+'; -- $11.2 million class M-7 'A'; -- $10.4 million class M-8 'A-'; -- $9.7 million class M-9 'A-'; -- $11.9 million class M-10 'BBB+' (144A); -- $8.2 million class M-11 'BBB' (144A); -- $11.2 million class M-12 'BBB-' (144A); -- $9.9 million class M-13 'BB+' (144A); -- $9.9 million class M-14 'BB-' (144A); -- $4.9 million class M-15 'B+' (144A). The 'AAA' rating on the senior certificates reflects the 42.25% total credit enhancement provided by the 5.40% class M-1, the 4.70% class M-2, the 2.95% class M-3, the 2.65% class M-4, the 2.35% class M-5, the 2.20% class M-6, the 2.25% class M-7, the 2.10% class M-8, the 1.95% class M-9, the 2.40% privately offered class M-10, the 1.65% privately offered class M-11, the 2.25% privately offered class M-12, the 2.00% privately offered class M- 13, the 2.00% privately offered class M-14, the 1.00% privately offered class M-15, and the 4.40% initial and target overcollateralization. All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the quality of the loans, the integrity of the transaction's legal structure, as well as the capabilities of Countrywide Home Loans Servicing, LP and GMAC Mortgage Corporation as servicers and Deutsche Bank National Trust Company, as Trustee. The mortgage pool consists of fixed-rate, second lien, fully amortizing and balloon payment mortgage loans with a cut-off date pool balance of $498,588,323. The weighted average loan rate is approximately 10.411%. The weighted average remaining term to maturity is 270 months. The average principal balance of the loans is $47,584. The weighted average combined loan-to-value ratio is 99.30% and the weighted average Fair, Isaac & Co. score is 642. The properties are primarily located in California, Florida and Texas. All of the mortgage loans were purchased by Financial Asset Securities Corp., the depositor, from Greenwich Capital Financial Products, Inc., who previously acquired the mortgage loans from Long Beach Mortgage Company, Countrywide Home Loans, Inc., New Century Mortgage Corporation, WMC Mortgage Corp., Aames Capital Corporation, Fremont Investment & Loan, and Meritage Mortgage Corporation. SS&C TECHNOLOGIES: Moody's Rates $205M Senior Sub. Notes at Caa1 ---------------------------------------------------------------- Moody's Investors Service assigned to SS&C Technologies, Inc., a B2 corporate family rating, B2 rating to its senior secured credit facilities, and a Caa1 rating to its $205 million senior subordinated notes. Moody's also assigned an SGL-2 speculative grade liquidity rating. The ratings outlook is stable. The net proceeds of the $275 million term loan and $205 million senior subordinated notes offering, along with $10 million of the senior secured revolver, will be used to finance the $942 million leveraged buyout of SS&C. The transaction, pending shareholder approval, also includes a relatively substantial $380 million cash equity investment from the private equity investor group as well as $165 million roll over equity from the company's founder and CEO. The B2 corporate family rating reflects SS&C's: * high debt leverage (6.6x 2005 pro forma EBITDA leverage ratio); * the modest size of its approximate $200 million pro forma revenue base; * its limited track record as a company of its current size and business composition; and * a competitive financial software landscape. However, the rating also reflects the company's stability provided by recurring revenues from: * long term software maintenance and outsourcing service contracts; * maintenance contract revenue retention rates in excess of 90%; * modest single client revenue concentration; * high operating margins; and * low requirements for working capital or capital expenditures. The rating also considers the company's relatively good cash flow generation and the expectation for moderate deleveraging in the near term. The B2 rating assigned to $350 million senior secured credit facilities of SS&C Technologies, Inc. (U.S. borrower) and SS&C Technologies Canada Corp (Canadian borrower) reflects the senior position of the bank facilities (approximately $285 million bank facilities will be outstanding following the transaction's closing, comprised of $275 million term loan and $10 million revolver) in the company's capital structure. The B2 rating also considers the significant proportion of the bank facilities in the company's debt structure. The Canadian facilities ($75 million term loan and up to $10 million revolver) benefit from a secured debt guarantee from both Canadian (domicile of FMC intellectual property) and U.S. subsidiaries whereas the U.S. facilities receive a secured guarantee from U.S. subsidiaries only. The assigned Caa1 rating for the proposed $205 million senior subordinated notes offering incorporates the contractual subordination of the notes to the senior secured bank facilities. The Caa1 senior subordinated rating reflects the likelihood that this junior class of creditors would likely absorb a disproportionately larger share of any credit losses in a distress scenario. Moody's evaluated SS&C in the context of its principal performance and ratings drivers, including: 1) Market Position. SS&C is a small, financial institution software and outsourcing services provider, specializing in asset management solutions with fixed income, equity hedge fund, money market instruments, and other financial applications. The company's competition from financial institutions and independent software vendors with significantly greater revenues and financial resources, in Moody's view, challenges SS&C's growing niche position as a provider of specialized services. Through its recent $150 million acquisition of the Financial Models Company in June 2005, SS&C has the opportunity to extend its core asset management software product, CAMRA, into broader institutional money management markets from its traditional application as a fixed income asset management tool for insurance companies. 2) Revenue Concentration. The company has low client concentration and moderate product concentration; its largest client provides approximately 4% of revenues and the ten largest clients collectively provide only about 20%. The company's CAMRA, equity hedge fund software, money market instrument software, and related services provide a majority of its revenues. 3) Acquisition Strategy. Since fiscal year end 2003, primarily through acquisitions, the company has more than doubled its revenues and thus has a short track record as a company of its current size and composition. Moody's expects SS&C will continue to augment its growth through acquisition. The credit facilities allow for incremental borrowings, which, coupled with the company's free cash flows, should enable flexibility for further acquisitions. The company has made seven acquisitions since January of 2002. 4) Recurring Revenue. A healthy 75% of the company's revenues come from recurring software maintenance and outsourcing revenues. Because the company's maintenance contract retention rates have exceeded 90% for at least the past three years and outsourcing revenues by client are growing overall, the company is positioned to achieve continued organic revenue growth (currently approximating 10%). 5) Debt Leverage. The leveraged buyout results in substantial debt leverage, as measured by pro forma debt to EBITDA approximating 6.6x. Because of the company's relatively modest requirements for capital expenditures, pro forma debt to EBITDA less capital expenditures is modestly higher at 7.1x. 6) Liquidity. The SGL-2 speculative grade liquidity rating recognizes the company's good liquidity provided by its secured revolving credit facilities, free cash flow, and its modest cash balance. EBITDA, as defined in the credit facilities, includes pro forma expected acquisition earnings, adding headroom to the company's financial covenant requirements, enabling the company to draw up to the full amount of the revolver ($75 million less $10 million drawn at closing) if necessary. The company's high operating margins of about 30%, low capital expenditures, and modest working capital, support its relatively strong free cash flow; the company has generated between approximately $20 million and $30 million free cash flow per year since 2003. The stable rating outlook anticipates continued organic revenue and cash flow growth, with a potential for small acquisition spending. Upward rating pressure could result from continued evidence of sustained organic revenue growth and high revenue retention rates for the company from its current size and composition, such that debt leverage as measured by debt to EBITDA less capital expenditures falls below 5.0x. Conversely, weakened organic revenue growth, revenue retention rates, or a significant increase in acquisition spending leading to debt to EBITDA exceeding 7.5x could result in negative ratings pressure. These ratings are assigned: * B2 Corporate Family Rating * B2 Rating for $350M Senior Secured Term Loan B and Revolving Credit Facilities due 2011 ($75M revolver) and 2012 ($275M Term Loan B) * Caa1 for $205M Senior Subordinated Notes due 2013 Headquartered in Windsor, Connecticut, SS&C Technologies, Inc. provides software and outsourcing solutions for the financial services industry. STERLING FINANCIAL: Board Accelerates Stock Option Vesting ---------------------------------------------------------- Sterling Financial Corporation reported that the Management Development and Compensation Committee of the Sterling Board of Directors, at a meeting on Oct. 18, 2005, accelerated the vesting of all unvested stock options granted to Sterling's employees in 2003 and 2004 under its 1996 Stock Incentive Plan. In light of new accounting regulations relating to stock options that will take effect in January 2006, the committee took this action because it will result in lower compensation expense in future periods. As a result of the acceleration of vesting of these options, compensation expense totaling approximately $70,000 will be included in Sterling's fourth quarter results of operations. Under the recently issued Financial Accounting Standard Board Statement No. 123, Share-Based Payment, as revised, Sterling will be required to apply the expense recognition provisions under FAS 123R beginning with the first quarter of 2006. As a result of the acceleration, Sterling estimates that it will not be required to recognize anticipated compensation expense relating to stock options, net of taxes, of approximately $800,000 in 2006 and approximately $100,000 in 2007. In addition, later this quarter, Sterling will consider the vesting of the remainder of its employees' unvested stock options awarded in 2005 under its 1996 Stock Incentive Plan, after plan mandated minimum vesting requirements have been met. Such action will depend upon market conditions, Sterling's stock price and other factors. At that time, the Management Development and Compensation Committee may vote to accelerate the vesting of the remaining 841,000 options, which have an average exercise price of $20.94. Sterling Financial Corporation of Spokane, Washington is a bank holding company, which owns Sterling Savings Bank. Sterling Savings Bank is a Washington State-chartered, federally insured commercial bank, which opened in April 1983 as a stock savings and loan association. Sterling Savings Bank, based in Spokane, Washington, has financial service centers throughout Washington, Oregon, Idaho and Montana. Through Sterling Saving Bank's wholly owned subsidiaries, Action Mortgage Company and INTERVEST-Mortgage Investment Company, it operates loan production offices in Washington, Oregon, Idaho, Montana, Arizona and California. Sterling Savings Bank's subsidiary Harbor Financial Services provides non-bank investments, including mutual funds, variable annuities and tax-deferred annuities and other investment products through regional representatives throughout Sterling Savings Bank's branch network. * * * As reported in the Troubled Company Reporter on June 22, 2005, Fitch Ratings has revised the Rating Outlook for Sterling Financial Corporation and Sterling Savings Bank to Positive from Stable. The Outlook change reflects the continued progress that STSA has made improving both its franchise as well as its balance sheet structure. Through acquisitions, as well as organic growth, STSA has created a Pacific Northwest franchise with approximately $7.0 billion in assets and 138 branches in four states. Additionally, the company has been transforming itself from a thrift to a more community banking oriented entity and, highlighting this transformation, has recently applied to change to a Washington state-chartered commercial bank charter. An improving level of earnings, strong asset quality, and stable levels of capitalization are the drivers of Fitch's Outlook revision. The successful continuation of these trends and the additional accumulation of capital, specifically tangible common equity, remains an opportunity for a change in ratings. These ratings are affirmed by Fitch: Sterling Financial Corporation -- Long-term issuer 'BB+'; -- Short-term issuer 'B'; -- Individual rating 'C'; -- Support '5'; -- Outlook to Positive. Sterling Savings Bank -- Long-term deposit 'BBB-'; -- Short-term deposit 'F3'; -- Long-term issuer 'BB+'; -- Short-term issuer 'B'; -- Individual 'C'; -- Support '5'; -- Outlook to Positive. TELTRONICS INC: Settles Litigation with Tri-Link & Hargan-Global ---------------------------------------------------------------- Teltronics, Inc., inked a settlement agreement with: * Tri-Link Technologies Inc., a Canadian corporation; and * Hargan-Global Ventures Inc., a Canadian corporation under which (i) arbitration proceedings between the Company and Tri-Link are resolved, (ii) litigation between the Company and Hargan comes to an end, and (iii) the parties exchange mutual releases. The Litigation arose out of the development of certain software assets and purchase of the Software by the Company in 2003 for cash and delivery by the Company of its promissory note in the original principal amount of $2,250,000. Pursuant to the Settlement Agreement: (1) the litigation was discontinued with prejudice; (2) the Company delivered to Tri-Link its promissory note in the principal amount of $750,000; (3) the Company paid Tri-Link $1,000,000; (4) the Company issued to Tri-Link an aggregate of 750,000 restricted shares of its Common Stock, $0.001 par value; and (5) Tri-Link agreed to return the Original Note to the Company. The Stock was not registered in reliance upon an exemption from registration under Regulation D promulgated under the Securities Act of 1933, as amended. The cash delivered to Tri-Link by the Company was financed from a $750,000 letter of credit previously delivered in February 2005 in favor of Tri-Link as part of the Litigation and the proceeds of a $250,000 borrowing by the Company from an affiliate controlled by one of its director. The New Note delivered to Tri-Link: -- requires monthly payments of principal and interest at an annual rate of eight percent; -- matures in October 2008; -- may be prepaid by the Company at any time; and -- is secured by a first lien on the Software. The $250,000 Note: -- is unsecured; -- requires no payments of principal or interest until November 2008 at which time interest accrued from October 2005 at the annual rate of 15% and the principal are due and payable; -- may be prepaid by the Company beginning in October 2006; and -- is convertible, at the option of the holder, into shares of the Company's common stock and shares of any existing or future preferred stock. Teltronics, Inc. -- http://www.teltronics.com/-- is a leading global provider of communications solutions and services that help businesses excel. The Company manufactures telephone switching systems and software for small-to-large size businesses, government, and 911 public safety communications centers. Teltronics offers a full suite of Contact Center solutions -- software, services and support -- to help their clients satisfy customer interactions. Teltronics also provides remote maintenance hardware and software solutions to help large organizations and regional telephone companies effectively monitor and maintain their voice and data networks. The Company serves as an electronic contract-manufacturing partner to customers in the U.S. and overseas. As of June 30, 2005, Teltronics' equity deficit narrowed to $5,440,000 compared to a $6,044,000 deficit at Dec. 31, 2004. THAXTON GROUP: Sues James T. Garrett for Breach of Contract ----------------------------------------------------------- The Thaxton Group, Inc., and its debtor-affiliates launched an adversary proceeding against Carolinas First Investments, Inc., and its principal shareholder, James T. Garrett, Jr., seeking to avoid preferential transfers pursuant to section 547 and 550 of the Bankruptcy Code and to recover damages from breaches of contracts and torts. The Debtors had historically relied on Carolinas and Mr. Garret to conduct various note offerings because their own management lacked any significant knowledge and experience of securities law. Form 1998 to 2003, Carolinas served as the independent selling agent for the notes offering and was obliged to ensure that the offerings were conducted in compliance with applicable state and federal laws. Carolinas' responsibilities included monitoring all sale activities related to the notes offering, conducting independent suitability analyses of prospective purchasers and approving note purchasers. Breach of Contract The Debtors allege that Carolinas and Mr. Garrett failed to meet their obligations as independent contractors and breached their representations in many material respects. The Debtors blame Carolinas and Mr. Garrett for the numerous federal and state investigations and charges they have faced in connection with the note offerings. The Debtors claim that Carolinas and Mr. Garrett breached their contractual obligations by: -- making statements about the Debtor that were unauthorized and were not contained in the offering documents; and -- failing to develop and implement a plan to determine and document suitability satisfactory to certain regulators, and failing to monitor the suitability of individual note purchasers; Insider Trading Apart from accusations of misrepresentation and negligence, the Debtors also accuse Mr. Garrett of relying on insider information to redeem notes immediately prior to suspension of the 2002 notes offering. The Debtors further claim that Mr. Garrett passed on the same information to his friends and business associates, allowing these individuals to recover their money prior to the suspension to the disadvantage of other creditors. Carolinas and Mr. Garrett's actions violate the South Carolina Unfair Trade Practices Act, and because the conduct was willful, the Debtors say that they are entitled to an award three times the actual damages proved at trial. Carolinas' Claims Carolinas and Mr. Garrett had asserted several claims, aggregating approximately $120,000, against the Debtors' estates. The Debtors say the Bankruptcy Court should disallows these claims because both Carolinas and Mr. Garrett are persons from which property is recoverable under the Bankruptcy Code. In addition, the Debtors also want to avoid and recover alleged preferential transfers made to Carolinas itemized on lists available at no charge at http://bankrupt.com/misc/ExA.pdfand http://bankrupt.com/misc/ExB.pdf Headquartered in Lancaster, South Carolina, The Thaxton Group, Inc., is a diversified consumer financial services company. The Company and its debtor-affiliates filed for Chapter 11 protection on October 17, 2003 (Bankr. Del. Case No. 03-13183). Michael G. Busenkell, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $206 million in assets and $242 million in debts. TORCH OFFSHORE: Wants to Allocate Sale Proceeds to Secured Lenders ------------------------------------------------------------------ Torch Offshore, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for approval to allocate the sale proceeds of their vessels to Cal Dive International, Inc., to their secured lenders less the amount for payment of possibly priming liens and secured claims against the proceeds. As previously reported in the Troubled Company Reporter on September 2, 2005, both parties entered an asset purchase agreement. Under the terms of the purchase agreement Cal Dive paid a consideration of $85 million for: -- two shelf pipelay barges; -- four shelf diving vessels; -- the deepwater pipelay vessel Midnight Express; and -- a portable saturation diving system, together with all equipment, inventory, intellectual property and other assets related to the operations of the vessels. The Debtors and their secured lenders, Regions Bank and Export Development Canada, believe that few, if any, of the maritime lien and related claims against the vessels sold to Cal Dive prime the claims and interests of the secured lenders. However, the Debtors and their professionals have not been able to conduct a review of the asserted liens and secured interests to determine whether said liens and secured interests prime the claims and interests of the secured lenders. Accordingly, the Debtors further ask the Court: a) to estimate the necessary escrow for payment of possibly priming liens and secured claims against the proceeds is no more than $7.5 million; and b) for permission to retain the escrow amount for payment of possibly priming liens and secured claims against the proceeds in the existing debtor-in-possession account at Regions Bank and Export Development Canada until the asserted liens and secured claims are resolved. Maritime Lien Holders' Objection Abdon Callais Offshore, LLC, International Paint, Inc., and O.W.I., Limited objects to the Debtors' requests. The lien holders relate to the Court that although the Debtor estimates the total amount of maritime lien claims is approximately $7.5 million, there is no showing of how the Debtors arrived at that figure and no evidence the estimate is accurate. The Court, the lien holders say, should not risk disbursing any funds to the conventional secured lenders, Regions Bank, whose claims are junior to certain of the maritime lien claimants. Accordingly, they ask the Court to reject the distribution of any sale proceeds until all maritime claims have been compromised, tired or resolved. As an alternative, the Court should require the Debtor to introduce evidence for its estimate of maritime lien claims. Headquartered in Gretna, Louisiana, Torch Offshore, Inc., provides integrated pipeline installation, sub-sea construction and support services to the offshore oil and gas industry, primarily in the Gulf of Mexico. The Company and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. La. Case No. 05-10137) on Jan. 7, 2005. When the Debtors filed for protection from their creditors, they listed $201,692,648 in total assets and $145,355,898 in total debts. TOWER AUTOMOTIVE: Court Okays Retiree Panel Appointment Process --------------------------------------------------------------- As previously reported, Tower Automotive Inc. and its debtor- affiliates have recently completed a long-term business plan that seeks to address many of the issues that plague their ongoing operations. However, to ensure that the business plan is successful, the Debtors have determined that they must significantly reduce the cost of medical benefits for their 2,180 retirees who are receiving benefits under company-sponsored plans and collective bargaining agreements. The Debtors asked U.S. Bankruptcy Court for the Southern District of New York to approve these procedures for the appointment of the Retiree Committee: (1) Within three days of the entry of a Court order approving the proposed procedures for the establishment of the Retiree Committee, the Debtors will contact retired employees to solicit those who would be interested in serving on the Retiree Committee through any means necessary. Those who are interested in serving on the Retiree Committee should complete a questionnaire and submit it no later than October 26, 2005; (2) No later than October 31, 2005, the Debtors, in consultation with the U.S. Trustee, will file a report listing all those retired individuals who have volunteered to serve on the Retiree Committee, together with the questionnaires completed by those individuals. The Report will be served on the Creditors' Committee, the Debtors' unions, and all individuals who have volunteered to serve on the Retiree Committee; (3) No later than November 4, 2005, the parties may file a response to the Report and take any position that they deem appropriate, including their views on the propriety of the size, composition, and membership of the Retiree Committee, or the individuals who are more or less appropriate to serve on it; and (4) On November 8, 2005, or at the Court's earliest convenience, the Court will conduct a follow-up hearing on the Debtors' request and appoint the members of the Retiree Committee, after which the Debtors will immediately begin the negotiation process under Section 1114 by distributing their proposed modifications as well as the information relevant to evaluate its proposals to the Retiree Committee. Judge Gropper directs the Debtors to immediately contact the retired employees to solicit those who would be interested in serving on the Retiree Committee. Any interested retirees are required to complete the questionnaire provided to them and submit it to the Debtors by October 26, 2005. Judge Gropper further directs the Debtors to prepare and file by October 31, 2005, a report of all retired employees who have volunteered to serve on the Retiree Committee. The Court will convene a hearing on November 8, 2005, at 11:00 a.m., to determine which of the retirees will be appointed on the Retiree Committee. The Retiree Committee will serve as the sole authorized representative under Section 1114 of the Bankruptcy Code of those persons receiving any retiree benefits: * not covered by the Debtors' collective bargaining agreement; or * covered by any collective bargaining agreement where the labor organization that is a signatory to that CBA elects not to serve as the authorized representative. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) TOWER AUTOMOTIVE: Court Approves HIPAA-Protected Info Disclosure ---------------------------------------------------------------- Tower Automotive Inc. and its debtor-affiliates plan to commence negotiations in the near future with the authorized representatives of their various retiree constituencies pursuant to Sections 1114(c) and (d) of the Bankruptcy Code. As part of this process, the Debtors are required to provide the Authorized Retiree Representatives with relevant information that is necessary to evaluate the Debtors' proposal to modify retiree benefits. However, some of the relevant information the Debtors may provide to the Authorized Retiree Representatives may be private, confidential, and protected from disclosure under the Health Insurance Portability and Accountability Act of 1996, but which may be relevant to the Authorized Retiree Representatives' consideration of the Debtors' proposed changes to the retiree health benefits. James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in New York, notes that the Debtors and third-party administrators of the Debtors' benefit programs generally cannot disclose "protected health information" without the individual participants' authorization. Nonetheless, HIPAA Privacy Regulations permit discovery of PHI so long as the Court prohibits disclosure of the Requested Information outside of the litigation and requires its return once the judicial proceedings are concluded. The U.S. Bankruptcy Court for the Southern District of New York permitted the Debtors to disclose the Requested Information to the Authorized Retiree Representatives to the extent necessary to preserve the privacy interests of the participants in the information, and without unduly impairing the public's right to be informed of the proceedings. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) TOWER AUTOMOTIVE: Foley & Lardner Approved as Labor Counsel ----------------------------------------------------------- As previously reported, Tower Automotive Inc. and its debtor-affiliates intend to engage in negotiations with various constituents regarding labor-related concessions that they believe are necessary to increase the probability of a successful reorganization of their businesses. Accordingly, the Debtors sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Foley & Lardner LLP as special labor negotiation counsel, effective as of September 9, 2005. Foley & Lardner will perform certain targeted and limited legal services in the form of direct support to the Debtors' ongoing labor negotiations during their Chapter 11 cases. James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in New York, informs the Court that Foley & Lardner has significant experience in all aspects of labor and employment law and related labor negotiations, and has been engaged to provide similar advice to that requested by the Debtors in other large and complex matters. Thus, the Debtors believe that the firm is well qualified to act on their behalf given its extensive knowledge and expertise in the specific field in which it is to be employed. In exchange for its services, the Debtors will pay Foley & Lardner in accordance with its customary hourly rates: Partners $760 Junior Associates $215 Paraprofessionals $65 - $250 The Debtors will also reimburse Foley & Lardner for necessary costs and expenses incurred in connection with its services. The Debtors believe that Foley & Lardner may constitute an ordinary course professional. However, the Debtors have decided to employ the firm under Section 327(e) of the Bankruptcy Code due, in part, to the expected concentration of the firm's services over a short period of time, which may result in monthly fees that exceed the monthly fee cap prescribed by the Court's March 16, 2005, order authorizing the Debtors to employ and compensate professionals utilized in the ordinary course of businesses. Nevertheless, the Debtors expect that, despite the expected short-term concentration of Foley & Lardner's services, the firm's aggregate fees will not exceed the overall case cap under the OCP Order. Steven H. Hilfinger, Esq., a partner at Foley & Lardner, assured Judge Gropper that the firm does not: -- hold or represent any interest adverse to the Debtors or their Chapter 11 estates with respect to labor negotiation matters for which the firm is to be employed; and -- have any connection with the United States Trustee, or any of its employees. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) TRAVERSE BAY: S&P Assigns B Rating to $195 Million Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating to Harbor Springs, Michigan-based Little Traverse Bay Band of Odawa Indians' $195 million senior notes due 2013. At the same time, Standard & Poor's assigned its 'B' issuer credit rating to the Tribe. The outlook is negative. The ratings on the Tribe reflect very high leverage during the construction period of the Tribe's expansion project, a narrow gaming operation, a competitive marketplace that is facing additional intermediate-term gaming supply, and challenges managing a larger gaming facility. These are only partially tempered by the escrowing of the first four interest payments on the notes, totaling $33 million, and stable cash flow from the existing gaming facility. The Tribe owns and operates Victories Casino in Michigan's northwest Lower Peninsula, in Petoskey. Victories has about 1,080 slot machines, 14 table games, about 850 parking spaces and other amenities, and serves predominately local patrons from the surrounding area. The Tribe also owns Victories Hotel, which represents a small percentage of the Tribe's total revenues. Gaming revenues totaled $58 million in the 12 months ended June 2005 and represented a high percentage of the Tribe's total revenues. The Tribe is spending about $200 million to build a new Victories gaming and entertainment resort, which will expand the gaming space to 50,000 sq. ft., the slot machine count to 1,500, add an 11-story luxury hotel tower with 227 rooms, including 37 suites, and add a new parking structure, restaurants and other amenities. Standard & Poor's expects the quality of the new Victories facility to exceed that of other facilities in the surrounding market, and that there would be no disruption to existing gaming operations from the expansion. The new Victories resort is expected to open in the second quarter of 2007. "Population demographics and win per unit statistics suggest that it may be difficult for Victories' marketplace to absorb a moderate amount of additional supply of slot machines. Given the size of the Tribe's investment, returns on investment could be challenged," said Standard & Poor's credit analyst Emile Courtney. Success of the expansion will rely on the property attracting additional visitors beyond the primary market, which is within 25 miles of the facility. TRUDY DEVELOPMENT: Taps Robinson Brog as General & Corp. Counsel ---------------------------------------------------------------- Trudy Development LLC asks the Hon. Allan L. Gropper of the United States Bankruptcy Court Southern District of New York for permission to retain Robinson Brog Leinwand Greene Genovese & Gluck P.C. as its general and corporate counsel. Robinson Brog will: (a) provide advice to the Debtor with respect to its powers and duties under the Bankruptcy Code in the continued operation of its business and the management of its property; (b) negotiate with the Debtor's creditors, preparing a plan of reorganization and taking the necessary legal steps to consummate a plan, including, if necessary, negotiations with respect to financing a plan; (c) appear before the various taxing authorities to work out a plan to pay taxes owing in installments; (d) prepare on the Debtor's behalf necessary applications, motions, answers, replies, discovery requests, forms of orders, reports and other pleadings and legal documents; (e) appear before this Court to protect the interests of the Debtor and its estate, and representing the Debtor in all matters pending before this Court; and (f) perform all other necessary legal services for the Debtor. Robert R. Leinwand, Esq., disclosed his Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partner $240 - $445 Associate $190 - $280 Paralegal $125 The Firm received a $25,000 prepetition retainer from Starr Road Development LLC, an equity security holder of the Debtor. To the best of the Debtor's knowledge, Robinson Brog is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. Headquartered in New York City, New York, Trudy Development LLC, aka Roxanne Development LLC, filed for chapter 11 protection on Sept. 16, 2005 (Bankr. S.D.N.Y Case No. 05-18135). When the Debtor filed for protection from its creditors, it listed total assets of $83,402,206 and total debts of $3,175,000. USG CORPORATION: Earns $158 Million of Net Income in Third Quarter ------------------------------------------------------------------ USG Corporation (NYSE: USG) reported third quarter 2005 net sales of $1.34 billion, a record for any quarter in USG's history, and net earnings of $158 million. Net sales increased $169 million while net earnings increased $68 million compared with the third quarter of last year. Results were stronger in all business segments, with record product shipments in the domestic wallboard business, higher profits in the worldwide ceilings business and double-digit percentage increases in sales and profits in the distribution business. "We are pleased with the solid results achieved by all our businesses," said William C. Foote, USG Corporation Chairman, CEO and President. "Demand for our products remains strong and our strategic initiatives are succeeding. Our new capacity and products will better serve our customers as they strengthen and expand our operations. Combined with our cost reduction programs, these initiatives should position us for continued profitable growth. "For the balance of the year, we are optimistic that conditions will remain positive for housing, our largest market; however, the operating environment still poses challenges, including persistent energy and raw material cost pressures," Mr. Foote explained. "We will continue to manage these challenges and implement our strategies. "In keeping with our strategy of profitable growth," Mr. Foote continued, "in the third quarter, United States Gypsum Company announced plans to build a new low-cost gypsum wallboard plant in Washingtonville, Pennsylvania. When construction is completed in 2008, the new plant will enable the company to keep pace with strong customer demand and strengthen the company's leadership position in the growing Northeast market." Net sales for the first nine months of 2005 were $3.80 billion, a record for any nine-month period in the Corporation's history, versus net sales of $3.34 billion for the same period in 2004. Net earnings for the first nine months were $345 million, compared with $227 million for that period last year. North American Gypsum USG's North American Gypsum business recorded net sales of $842 million in the third quarter of 2005, an increase of $134 million over the same period a year ago. Operating profit rose 43% to $179 million in the third quarter, compared with $125 million in last year's third quarter. United States Gypsum Company realized third quarter 2005 net sales of $755 million and operating profit of $153 million. This strong performance compares with third quarter 2004 net sales of $638 million operating profit of $103 million. The increased profitability was largely due to higher selling prices and record shipments for Sheetrock(R) Brand gypsum wallboard. Record shipments and higher selling prices were also realized for Sheetrock Brand joint treatment products and for Fiberock(R) Brand gypsum fiber panels. These results were partially offset by higher manufacturing costs. U.S. Gypsum's nationwide average realized price for Sheetrock Brand gypsum wallboard was $147.85 per thousand square feet during the third quarter, an increase of 15% compared with the $128.65 attained in third quarter last year and $9.57 higher than in the second quarter of this year. The higher third quarter selling prices reflect strong demand for gypsum wallboard and high company and industry capacity utilization rates. U.S. Gypsum's Sheetrock Brand gypsum wallboard shipments were at a record level for any quarter in U.S. Gypsum's history. U.S. Gypsum shipped 2.9 billion square feet of wallboard, 7% higher than the previous record of 2.7 billion square feet shipped in the third quarter last year. For the first nine months of 2005, shipments totaled 8.5 billion square feet, up 3% from the same period last year. Shipments are expected to remain at relatively high levels through the remainder of the year. U.S. Gypsum's operating profit in the quarter was negatively affected by higher manufacturing costs driven by higher prices for energy and raw materials. Recent hurricanes in the Gulf Coast region caused a minor disruption to U.S. Gypsum's operations. Its New Orleans, Louisiana, facility, which produces gypsum wallboard and cement board products, has been temporarily closed due to damage sustained as a result of Hurricane Katrina. Currently, the company is unable to estimate when the New Orleans plant will resume full operations. In the interim, wallboard manufacturing facilities in Alabama and Texas will help make up for the idled wallboard production capacity at the New Orleans facility. Similarly, facilities in California, Michigan and Maryland will help alleviate the shortfall in production of Durock(R) Brand cement board products. The gypsum business of Canada-based CGC Inc. reported third quarter 2005 net sales of $81 million, which was $8 million higher than last year's third quarter. Operating profit of $12 million was the same as in the third quarter of 2004. Improvements in gypsum wallboard pricing, as well as the favorable effects of currency translation, were offset by higher manufacturing costs related to energy and raw material prices. Worldwide Ceilings USG's worldwide ceilings business recorded net sales of $181 million and operating profit of $18 million in the third quarter. This compared with net sales and operating profit of $168 million and $14 million, respectively, in the third quarter of 2004. USG Interiors, Inc., USG's domestic ceilings business, reported third quarter sales of $124 million and operating profit of $13 million. Net sales increased $6 million, while operating profit improved $4 million compared with the third quarter last year. Factors contributing to the improvement in USG Interiors' results include higher selling prices for ceiling tile and higher shipments of ceiling grid. These improvements were partially offset by higher energy and raw material costs. USG International reported net sales of $56 million and operating profit of $3 million in the third quarter of 2005. This compared with net sales of $50 million and operating profit of $4 million for the same period a year ago. Net sales increased 12% primarily due to increased demand in the Pacific region, Europe and Latin America. The decline in operating profit primarily reflects higher prices for steel used in manufacturing ceiling grid in Europe. The ceilings division of Canada-based CGC Inc. reported net sales of $13 million and operating profit of $2 million in the quarter. For the same period a year ago, net sales were $12 million and operating profit was $1 million. These results primarily reflect improved pricing and increased shipments of ceiling grid, as well as the favorable effects of currency translation. Building Products Distribution Third quarter 2005 net sales and operating profit for L&W Supply Corporation, USG's building products distribution business, were the highest for any quarter in its history. Net sales of $544 million represented a 16% increase versus the third quarter of 2004, while operating profit rose 32% to $41 million. These results were primarily attributable to record shipments of gypsum wallboard, which were up 12% versus the third quarter of 2004. Third quarter results also reflected improved selling prices for gypsum wallboard, which increased 16%. Other Consolidated Information Third quarter 2005 selling and administrative expenses totaled $88 million, an increase of $6 million versus the third quarter of 2004. The increase primarily reflects higher compensation and benefits, including retention and incentive compensation, and higher funding for marketing and growth initiatives. Selling and administrative expenses totaled $264 million for the first nine months of 2005, compared to $238 million for the same period a year ago. Selling expenses was 6.5% of net sales in the third quarter of 2005 and administrative expenses was 6.9 % of net sales in the first nine months of 2005. This compares with 7.0% of net sales in the third quarter of 2004 and 7.1% of net sales in the first nine months of 2004. USG reported Chapter 11 reorganization expenses of $2 million in the third quarter of 2005, compared with $4 million in last year's third quarter, a favorable change of $2 million. For the third quarter of 2005, this consisted of $11 million of legal and financial advisory fees, partially offset by $9 million of interest income earned by the USG entities in Chapter 11. In the same period a year ago, USG incurred $7 million in legal and financial advisory fees, partially offset by $3 million in bankruptcy-related interest income. Under SOP 90-7, interest income on USG's bankruptcy-related cash is offset against Chapter 11 reorganization expenses. Interest expense of $1 million was reported in the third quarter of 2005, compared with $2 million in the same period a year ago. Interest expense for the first nine months of 2005 was unchanged at $4 million, compared with the same period last year. Under AICPA Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code," virtually all of USG's outstanding debt is classified as liabilities subject to compromise, and interest expense on this debt has not been accrued or recorded since USG's bankruptcy filing. As previously disclosed, during the third quarter of 2005, the Internal Revenue Service completed its audit of the Corporation's federal income tax returns for the years 2000 through 2002. As a result of the audit, the Corporation's income tax provision was reduced and consolidated net income net income increased by $25 million in the third quarter. As of September 30, 2005, USG had $1.48 billion of cash, cash equivalents, restricted cash and marketable securities on a consolidated basis, up from $1.29 billion as of June 30, 2005, and $1.25 billion as of December 31, 2004. Capital expenditures for the third quarter and first nine months of 2005 were $49 million and $125 million, respectively. Expenditures for the same periods last year were $33 million and $80 million, respectively. Chapter 11 Reorganization Update USG Corporation and its principal domestic subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code on June 25, 2001. This action was taken to resolve asbestos claims in a fair and equitable manner, protect the long-term value of the businesses and maintain their market leadership positions. At a hearing on October 6, 2005, U.S. District Court Judge Joy Flowers Conti, who is hearing the asbestos personal injury estimation matters in the Debtors' bankruptcy cases, set a discovery cutoff date of June 30, 2006 for fact discovery related to the estimation of asbestos liabilities. This cutoff will be followed by a period for discovery of expert witnesses and an estimation hearing. A date for the estimation hearing has not been set. Additional information regarding the progress of the bankruptcy as well as the risks, uncertainties and possible consequences for creditors and investors, is disclosed by USG on forms 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission. 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. VARIG S.A.: BNDES Offers Alternative $62 Million Financing ---------------------------------------------------------- Banco Nacional de Desenvolvimento Economico e Social, Brazil's government-run national development bank, submitted an alternate financing proposal that will provide VARIG S.A., with at least $62,000,000 in immediate financing, VARIG's counsel, Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, reports. The BNDES Proposal was presented at a meeting of VARIG creditors on October 19, 2005, in Rio de Janeiro, Brazil. Upon approval by creditors, BNDES will provide the Foreign Debtors immediate access to at least $62,000,000 in the form of a loan secured by VARIG's interest in Varig Logistica S.A. and Varig Engineering and Maintenance. Mr. Antonoff says the amount will be earmarked to cure VARIG's postpetition lease arrearages on aircraft retained by the Foreign Debtors. BNDES will conduct due diligence to determine the precise value of VarigLog and VEM. Should the ascertained value exceed the $62,000,000, BNDES will provide the necessary additional funding. VARIG and UBS Investment Bank, the airline's financial advisor, estimate that as of October 20, 2005, the aggregate amount of VARIG' post-June 17, 2005 arrearages on aircraft and engine leases is approximately $62,000,000. VARIG is presently analyzing whether to terminate certain aircraft leases. The airline believes the BNDES financing will be sufficient to cure arrearages on retained aircraft. Mr. Antonoff relates that the October 19 meeting has been adjourned until October 26, 2005, to permit creditors to consider the BNDES Proposal prior to making a recommendation to the Brazilian Reorganization Court. VARIG expects the Brazilian Court to rule on its financing transaction with MatlinPatterson Global Advisors LLC and the BNDES Proposal shortly after the creditor meeting. Creditors Shun Matlin Deal Mr. Antonoff also discloses that the Matlin Transaction has been extended through October 22, 2005. VARIG informed creditors at the October 19 meeting that it paid $2,500,000 to extend the drop-dead date of the Matlin deal. The Matlin deal, however, has not gained substantial support from creditors due to "politically motivated opposition" by certain government and labor creditor constituencies, Mr. Antonoff says. "It is anticipated that one or more investors will be incorporated as part of the BNDES Proposal, and that the proposal will enjoy substantial creditor support. . . . A number of investors have expressed an interest in the BNDES Proposal over the past several days," according to Mr. Antonoff. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) VARIG S.A.: GECAS Appeals Court's Order to Return Receivables ------------------------------------------------------------- As reported in the Troubled Company Reporter on Oct. 11, 2005, Vicente Cervo and Eduardo Zerwes, the Foreign Representatives appointed in the reorganization proceedings of VARIG S.A. and its debtor-affiliates, alleged that GE Commercial Aviation Services, LLC, wrongfully instructed JPMorgan Chase Bank, NA, to distribute funds out of the Foreign Debtors' JPMorgan account as accelerated payment of a prepetition debt. In accordance with the instructions in the Default Notice from GECAS, yet without notice to the Foreign Debtors, JPMorgan wired $5,076,961 to GE Commercial. The total amount disbursed by JPMorgan constituted the proceeds of the Foreign Debtors' accounts receivable In response to the Debtors' complaint, Judge Luiz Roberto Ayoub of the 8th Corporate Court of the District of Rio de Janeiro, Brazil, directed GECAS to abstain from transferring the amounts derived from the liquidation of the VARIG group's receivables and to return the amounts transferred as of the Petition Date GE Responds GECAS, contends that the process followed by the Brazilian Reorganization Court violated several basic constitutional principles and federal statutory provisions of the Brazilian legal system, which are designed to guaranty a party due process of the law. Accordingly, GECAS took an appeal from the Brazilian Court order to the State of Rio de Janeiro Court of Justice on October 6, 2005. GECAS wants the Appellate Court to overturn the Reorganization Court's Decision as null and void on these grounds: 1. Once GECAS requested the opportunity to file its opposition and the request was granted by the Brazilian Court, no decision may be validly rendered without giving appropriate consideration to the responsive pleading. Luis Fernando Valente de Paiva, Esq., at Pinheiro Neto Advogados, notes that notwithstanding Judge Macedo's involvement in the VARIG case, Judge Luiz Roberto Ayoub, one of the three additional judges appointed to assist Judge Macedo, issued an ex parte decision granting the Foreign Debtors' request. Judge Ayoub disregarded (i) clarifications by the IATA/BSP Brazil that it has no relationship to the agreements among GECAS, the Creditors and the Foreign Debtors, and as a result any notice should be sent to the appropriate IATA entity; (ii) his previous ruling that the relevant case records be sent to the Public Prosecutor Office for opinion prior to the issuance of any judgment; and (iii) GECAS' opposition. Mr. Paiva says Brazilian courts are supposed to make reference to all responsive pleadings considered when issuing a decision. Article 458 of the Brazilian Code of Civil Procedure sets forth that a judgment must report the names of the parties, a summary of the pleading and the opposition of the defendant, as well as the governing facts and events that have occurred in order to be enforceable. The Decision is devoid of any reference to GECAS' opposition and arguments. 2. The parties should have received equal treatment by the Brazilian Reorganization Court and the constitutional guaranty of the equal distribution of rights and privileges. GECAS wasn't notified that the Foreign Debtors filed petitions on September 9 and 20. Mr. Paiva also contends it is clear that the Reorganization Court reviewed the petitions filed by Foreign Debtors, but did not provide the same treatment to GECAS and the Creditors insofar as GECAS' opposition was apparently not considered by Judge Ayoub in rendering the Decision. 3. Pursuant to Article 398 of the Brazilian Code of Civil Procedure, whenever a party files any document or evidence in court, the presiding judge must necessarily permit the other party as regards the document to file a response and evidence within five days. According to Mr. Paiva, GECAS was already a party to the Reorganization Proceedings by means of the petition filed on September 13 and opposition filed on September 20. Hence, the Reorganization Court certainly was aware of GECAS' involvement in the case and was obliged to hear GECAS within five days before rendering the Decision, which was not what occurred. 4. The Public Prosecutor Office was ordered to render an opinion on the Foreign Debtors' request. Not only has no PPO opinion been issued, but the case records have never been remitted to the PPO, a violation of Judge Ayoub's previous ruling. Consequently, Mr. Paiva asserts, an error in procedendo has occurred in violation of the Reorganization Court's decree to the detriment of GECAS and Creditors, and constitutes grounds for nullity of the Decision. 5. Although governed by four different judges, the Foreign Debtors' Reorganization Proceedings is processed before the Reorganization Court, which is unique and indivisible pursuant to Article 132 of the CCP. Therefore, one judge must necessarily obey and comply with any and all orders issued by another judge ruling on the same case, it being understood that any judges cannot revisit issues that have already been decided by another judge, pursuant to Articles 471 and 473 of the CCP. Mr. Paiva says the constitutional rights of due process of law, full defense and adversary proceeding assured to GECAS cannot be violated and GECAS cannot be penalized and prejudiced by the judges' lack of communication or the lack of organization by the Court Office or Officers. 6. Under Articles 88 and 89 of the CCP, the Brazilian Judiciary Branch does not have jurisdiction to consider the Foreign Debtors' request as (i) the defendants are not domiciled in Brazil -- as under Brazilian law doing business in Brazil does not subject an entity to the jurisdiction local courts; (ii) the obligation is not governed by Brazilian law under the terms of the contract; and (iii) the pleading does not arise from fact or act that took place in Brazil. Accordingly, the provisions of the CCP and Article 5th, LII of the Brazilian Constitution -- no one will be sued or sentenced except for the competent authority -- have been violated by the Decision. 7. The Foreign Debtors commenced a turnover action improperly. The Foreign Debtors are required to file a separate ordinary autonomous motion or law suits contemplating the turnover of funds received by GECAS from JPMorgan Chase Bank, N.A., whereupon the defendants would be summoned to present proper defense and evidence. Mr. Paiva observes that the Foreign Debtors submitted merely a petition in the Reorganization Proceedings, and GECAS was not granted any opportunity to file a defense. * * * The Brazilian Appellate Court denies GECAS' request to stay the Decision pending appeal. Judge Paulo Mauricio Pereira finds that there was no risk of damages that are "serious and difficult to repair" to the Appellants since the Reorganization Court's Decision did not order JPMorgan to turnover any cash collateral currently in its possession to the Foreign Debtors. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) VITAMIN SHOPPE: S&P Rates Proposed $165M Sr. Sec. Notes at B+ ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating and a recovery rating of '2' to Vitamin Shoppe Industries Inc.'s proposed $165 million second-lien senior secured notes due 2012, to be issued privately under Rule 144A with registration rights. "These ratings indicate Standard & Poor's expectations for substantial recovery in the event of payment default," said Standard & Poor's credit analyst Kristi Broderick. Proceeds from the offering, along with a portion of a new $50 million asset- based revolving facility, will be used to refinance existing debt. When the transaction is complete, the 'B+' rating on Vitamin Shoppe's existing bank loan will be withdrawn. Standard & Poor's also affirmed its 'B+' corporate credit rating on North Bergen, New Jersey-based Vitamin Shoppe. The outlook is negative. The ratings on Vitamin Shoppe reflect the company's small size in the highly competitive and fragmented retail vitamin industry, its narrow product focus, its high leverage, and the risks associated with its rapid store expansion. With about 270 retail stores across 27 states, a nationally circulated catalog and a Web site, Vitamin Shoppe is a small but growing player in the highly competitive and fragmented $20 billion U.S. dietary supplements industry. The company competes directly with specialty retailers General Nutrition Centers Inc. and Vitamin World; local health food stores, which also target sophisticated vitamin, mineral, and supplements users; drugstores; supermarkets; mass merchants; direct-sales companies; and catalog and Internet companies. WHITING PETROLEUM: Earns $33.3 Mil. of Net Income in Third Quarter ------------------------------------------------------------------ Whiting Petroleum Corporation (NYSE: WLL) reported record quarterly net income of $33.3 million on total revenues of $139.8 million for the three months ended September 30, 2005. This compares to third quarter 2004 net income of $14.3 million on total revenues of $67.3 million. The improvements were primarily due to greater production volumes as a result of the Company's active acquisition program during the past 12 months as well as to higher commodity price realizations. Discretionary cash flow in the third quarter of 2005 totaled $80.0 million, representing a 114% increase over the $37.4 million reported for the same period in 2004. James J. Volker, Whiting's Chairman, President and CEO, commented, "We're pleased with our third quarter results, and we expect to have a strong fourth quarter finish to 2005. The recent Celero property acquisitions helped us meet one of our intermediate goals of establishing a five-year-plus inventory of drilling opportunities. We believe we are now in a position to capitalize on these opportunities to grow our production through the drill bit. For example, due to drilling activities, production from the North Ward Estes field and ancillary properties has increased 62% over the past nine months to an average of 5,780 barrels of oil equivalent per day in September 2005. At the same time, we will continue to look at potential acquisitions that would strengthen our position in areas where we have established operations." Third quarter earnings brought net income in the first nine months of 2005 to a record $83.6 million, a 124% increase over $37.4 million in the comparable 2004 period. Total revenues in the first nine months of 2005 were $354.5 million, more than double the $168.7 million generated in the first nine months of 2004. Discretionary cash flow in the first nine months of 2005 was up 116% to $210.2 million from $97.2 million in the same period in 2004. Whiting Petroleum Corporation -- http://www.whiting.com/-- is a growing energy company based in Denver, Colorado. Whiting Petroleum Corporation is a holding company engaged in oil and natural gas acquisition, exploitation, exploration and production activities primarily in the Rocky Mountains, Permian Basin, Gulf Coast, Michigan and Mid-Continent regions of the United States. The Company trades publicly under the symbol WLL on the New York Stock Exchange. * * * As reported in the Troubled Company Reporter on Sept. 30, 2005, Moody's assigned a B2 rating to Whiting Petroleum's pending $250 million senior subordinated note offering. Together with a pending common equity offering that could net up to more than $275 million if the underwriters' over-allotment option is exercised, note and equity proceeds would either directly fund, or repay the majority of secured bank debt that was incurred to fund, Whiting's $802 million acquisition of oil and gas reserves from private Celero Energy. Moody's also confirmed Whiting Petroleum's Ba3 Corporate Family rating, B2 senior subordinated ratings, and SGL-2 liquidity rating. The rating outlook is stable. WORLDCOM INC: Asks Court to Disallow Galaxy's $20 Million Claim --------------------------------------------------------------- Before the filed for bankruptcy, WorldCom, Inc., and its debtor-affiliates filed a lawsuit against Galaxy Long Distance, Inc., in United States District Court for the Middle District of Florida, styled as WorldCom Network Services, Inc., v. Galaxy Long Distance, Inc. Galaxy filed Claim No. 12138 for $20,000,000 in the Debtors' Chapter 11 case. The Debtors objected to Galaxy's Claim, thereby bringing the parties' dispute before the Bankruptcy Court. The parties agreed that the Bankruptcy Court would treat all pre-trial activities including discovery that occurred in the District Court Litigation as if they occurred before the Bankruptcy Court in the context of the objection to the Claim. The Bankruptcy Court also extended certain discovery deadlines that had expired in the District Court Litigation, including deadlines by which Galaxy must answer certain interrogatories and requests for admissions that the Debtors propounded a few years ago in the District Court Litigation. Philip V. Martino, Esq., at DLA Piper Rudnick Gray Cary US, LLP, in Tampa, Florida, points out that Galaxy has willfully failed to follow two discovery orders in the District Court Litigation: a) Fulfillment of its obligations under the April 12, 2002, Joint Stipulation and implementing Order to produce documents, provide complete interrogatory answers, and deliver a detailed privilege log to Debtor; and b) Production of a competent witness under Rule 30(b)(6) of the Federal Rules of Civil Procedure as mandated by an omnibus discovery order entered on July 24, 2002. "This violation warrants sanctions pursuant to Rule 37, specifically, disallowance of the Claim or, at a minimum, an order prohibiting Galaxy from introducing at trial any evidence that could contradict or expand the Rule 30(b)(6) deposition testimony," Mr. Martino argues. In this regard, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to: a) disallow Galaxy's Claim No. 12138 for $20 million, in its entirety; or, in the alternative b) bar the use at trial of any evidence that could contradict or expand Galaxy's Rule 30(b)(6) deposition testimony. Over three years ago, Mr. Martino recounts, the Court forewarned Galaxy that sanctions were on the horizon if it did not take advantage of the final chance to remedy its discovery abuses. However, Galaxy recently confirmed that it will not, and cannot, produce a competent Rule 30(b)(6) witness for deposition, Mr. Martino notes. In addition, Mr. Martino points out that Galaxy's key fact witness William Z. Geiger, III -- its former president and holder of 85% of the company's shares -- was not even familiar with the company's financial documents. Galaxy took no action to prepare Mr. Geiger. The Court should presume that Galaxy has no information reasonably available to it that would support its Claim, Mr. Martino says. He adds that "given Galaxy's repeated and abject failure to participate meaningfully in the discovery process, and the critical importance of Galaxy's 30(b)(6) witness to Debtors, no lesser penalty will suffice." Mr. Geiger's Convictions The Debtors also ask the Court for permission to offer into evidence three prior felony convictions of Mr. Geiger for the purpose of impeachment. "The evidence is probative of the credibility of the witness, since one who has committed a crime is more likely to lie than is a person with a spotless record," Mr. Martino tells Judge Gonzalez. Mr. Martino discloses that Mr. Geiger is no stranger to the federal and Florida criminal justice systems having been convicted of three felonies. In 1988, Mr. Martino relates that Mr. Geiger was charged for organized fraud in the case captioned as State of Florida v. William Geiger III, filed in the Circuit Court for the Eighth Judicial Circuit, Alachua County, Florida and bearing case no. 87-2103-CF-A. The court sentenced Mr. Geiger to 18 months in prison, to be followed by 10 years probation. In 1992, Mr. Martino continues, while on probation for the First Fraud Conviction, Mr. Geiger appeared before the United States District Court for the Western District of Michigan to face these charges: * possession of cocaine with intent to distribute; * distribution of cocaine; and * possession of cocaine. Mr. Geiger was sentenced to 46 months for the Drug Conviction. The case was United States v. Geiger, case no. G89-160-01 CR. Furthermore, in 2003, Mr. Geiger pleaded guilty to conspiracy to commit bank fraud, via a check-kiting scheme, captioned as United States v. William Z. Geiger, filed in the United States District Court for the Middle District of Florida, Tampa Division, and bearing case no. 02-CR-389-T-30EAJ. Mr. Geiger was sentenced to 46 months in prison for the second fraud conviction. Mr. Martino argues that the very existence of the convictions, combined with the fact that they were for primarily veracity- related crimes, calls into question the credibility of Mr. Geiger as a witness. "Surely Geiger is a witness whose credibility must be tested and whom Debtors should have the opportunity to impeach," Mr. Martino says. "The probative value of admitting evidence of his prior convictions, therefore, outweighs any unfair prejudice to him." Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., 215/945-7000) ********* 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. 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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., Tara Marie Martin, 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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