/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/051102.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, November 2, 2005, Vol. 9, No. 260 Headlines 21ST CENTURY TECH: Case Summary & 20 Largest Unsecured Creditors ABLE LABORATORIES: Asset Sale Hearing Scheduled for November 7 ACANDS INC: Wants Time to Remove Civil Actions Stretched to Mar. 4 ADELPHIA COMMS: MidOcean & Crestview Complete Cable Acquisition ADVANTA BUSINESS: Moody's Rates $25 Million Class D Notes at Ba2 ALLIED HOLDINGS: Asks Court to Set Feb. 17 as Claims Bar Date ALLIED HOLDINGS: Court OKs Kar-Tainer's Securities Purchase Deal ALLIED HOLDINGS: Wants Plan Filing Period Stretched to April 28 ALLMERICA FINANCIAL: Sale Plan Prompts S&P to Review Ratings AMERICAN HOME: Fitch Puts BB Rating on $1.34 Mil Certificate Class AMERICAN PACIFIC: Moody's Holds Caa1 Rating on Second Lien Loan AMERICAN TOWER: Refinances $2.45 Billion Credit Facilities AMR CORP: S&P Assigns B- Rating to $800-Mil JFK Airport Rev. Bonds APCO LIQUIDATING: Taps A.W. Green as Special Business Consultant ASARCO LLC: Court Lifts TRO to Pay Prepetition Debts to Salt River ASARCO LLC: Court Okays Payment of Disability Benefits ASARCO LLC: Komatsu Wants a Decision on Equipment Lease Agreements ASAT HOLDINGS: Closes $15 Million Preferred Share Financing ASPEON INC: Balance Sheet Upside-Down by $10.98M at Sept. 30, 2003 AT&T CORP: S&P Holds Low-B Rating After DOJ's SBC Merger Approval AUSTIN COMPANY: Section 341(a) Meeting Slated for November 30 AUSTIN COMPANY: Wants to Hire Squire Sanders as Bankruptcy Counsel AVCORP INDUSTRIES: Increases Private Equity Placement to $3.375M BEAR STEARNS: Fitch Rates $21.69 Million Certificate Class at BB BEAZER HOMES: Completes Exchange Offer for 6.875% Senior Notes BIRCH TELECOM: Court Grants Full Use of Lenders' Cash Collateral CAMPBELL RESOURCES: Court Extends CCAA Protection Until Nov. 25 CITIGROUP MORTGAGE: Fitch Rates $4.83 Mil Cert. Classes at Low-B CITY OF GLOVERSVILLE: Moody's Cuts $9.4 Million Debt Rating to Ba1 COMPOSITE TECHNOLOGY: Exits Bankruptcy in Less Than Six Months CORUS ENTERTAINMENT: Posts $9.7 Million Net Income in 4th Quarter CREDIT SUISSE: S&P Puts Low-B Ratings on Five Certificate Classes CROWN HOLDINGS: Earns $181 Million of Net Income in Third Quarter CUMULUS MEDIA: Partners with Three Investors to Buy Susquehanna CUMULUS MEDIA: Susquehanna Buy Cues Moody's to Hold Ba2 Ratings CWALT INC: Fitch Places Low-B Ratings on $5.8-Mil Cert. Classes DECKERS CONSTRUCTION: Case Summary & 27 Largest Unsec. Creditors DELPHI CORP: Gets Court Okay to Continue Honoring Cananwill Pact DELPHI CORP: Gets Permanent Injunction Against Utility Companies DELTA AIR: Asks Court for Open-Ended Lease-Decision Period DELTA AIR: Committee Wants Akin Gump as Bankruptcy Counsel DELTA AIR: Wants Until January 27 to File Schedules DELTA FUNDING: Moody's Junks Rating on Series 2000-3 Class Certs. DSI-VP LTD: Voluntary Chapter 11 Case Summary ECHELON CORPORATION: Posts $10.1 Million Net Loss in Third Quarter ENTERGY NEW ORLEANS: Panel Taps Haynes and Boone as Lead Counsel ENTERGY NEW ORLEANS: Panel Taps Mintz Levin as Special Counsel EXCALIBUR INDUSTRIES: Completes "Out-of-Court" Restructuring FALCON PRODUCTS: Court Okays Termination of Three Pension Plans FOREST OIL: Financial Leverage Cues S&P to Affirm BB- Debt Rating FRASER PAPERS: Operating Losses Prompt Moody's Negative Outlook GB HOLDINGS: U.S. Trustee Will Meet Creditors on Thursday GRANITE VIEW: Voluntary Chapter 11 Case Summary GSI GROUP: Toronto Stock Exchange Listing Withdrawn Yesterday HARBORVIEW MORTGAGE: Fitch Puts BB+ Rating on $5.9 Mil Cert. Class HAWAIIAN AIRLINES: Names Peter Ingram as Chief Financial Officer HORACE GRAVELY: Voluntary Chapter 11 Case Summary IFP LLC: Case Summary & 20 Largest Unsecured Creditors INFOUSA INC: Moody's Holds Ratings and Says Outlook is Stable INTEGRATED SECURITY: Issues Convertible Promissory Notes for $500K INTELSAT LTD: PanAmSat Shareholders Approve $3.2 Billion Merger IPSCO INC: Earns $134 Million of Net Income in Third Quarter ISLETON DEVELOPMENT: Case Summary & 4 Largest Unsecured Creditors KAISER ALUMINUM: Begins $75 Million Trentwood Facility Expansion KAUAI MORTGAGE: Case Summary & 5 Largest Unsecured Creditors LA QUINTA: Earns $14 Million of Net Income in Third Quarter LELAND MEDICAL: Case Summary & 15 Largest Unsecured Creditors M-WAVE INC: Restructuring Talks Continue Amid Loan Default M-WAVE, INC: Appoints Special Committee to Review Options MACGREGOR ELECTRIC: Case Summary & 20 Largest Unsecured Creditors MAIN OFFICE: Case Summary & 17 Largest Unsecured Creditors MCLEODUSA INC: Overview of Prepackaged Plan of Reorganization MCLEODUSA INC: Will Sell Headquarters to Aegon Affiliate METABOLIFE INT'L: Gordon & Rees Approved as Trademark Counsel MMRENTALSPRO LLC: La Salle OKs Use of Cash Collateral to Nov. 10 MORTGAGE ASSET: Fitch Assigns BB Rating to $2.14-Mil Cert. Class NANOMAT INC: Ch. 11 Trustee Taps Debra Parrish as Special Counsel NERVA LTD: Waning Credit Spurs Fitch to Junk $315-Mil Class Notes NESCO INDUSTRIES: Balance Sheet Upside-Down by $4.72M at April 30 NEW WORLD: Walking Away from 128 Unexpired Leases & Contracts NORTHWEST AIRLINES: Interline Pacts Approved on Final Basis NORTHWEST AIRLINES: Parties Balk at Maintenance & Service Fees O'SULLIVAN IND: Court Enjoins Utilities from Suspending Service O'SULLIVAN IND: Wants to Assume AFCO Premium Finance Agreement PARKWAY HOSPITAL: Wants Plan Filing Period Stretched to March 1 PENN NATIONAL: Reports $55.4 Million Net Income in Third Quarter PIZZA INN: Wants Wells Fargo to Waive Covenant Breaches REFCO INC: Wants to Continue Using Cash Management Systems ROGERS COMMS: Reports Financial & Operational Results for 3rd Qtr. ROGERS COMMS: Strong Performance Prompts Moody's to Review Ratings RURAL CELLULAR: Launches Offer for $175 Million Senior Notes RURAL CELLULAR: S&P's Rating on Jr. Preferred Stock Tumbles to D RURAL CELLULAR: Moody's Junks Proposed $175 Million Senior Notes SCHOOL SPECIALTY: S&P Withdraws Low-B Rating After LBW Buy-Out SENIOR HOUSING: Earns $14.1 Million of Net Income in Third Quarter SHERWIN LINDSEY: Case Summary & 20 Largest Unsecured Creditors SHOP FRESH: Case Summary & 9 Largest Unsecured Creditors SILICON GRAPHICS: Can Borrow Up to $100 Mil Under Amended Facility SILICON GRAPHICS: Eyes $26M of Spending Under Restructuring Plan SPORTS CLUB: American Stock Exchange Delists Common Stock SUSQUEHANNA MEDIA: Sale Plan Cues Fitch to Hold BB- Credit Rating SUSQUEHANNA MEDIA: Sale of Divisions Cues Moody's to Hold Ratings TAILORED LAWN: Case Summary & 20 Largest Unsecured Creditors TFS ELECTRONIC: U.S. Trustee Amends Creditors Committee Membership THE PANTRY: Expects FY 2005 Earnings to Exceed Previous Guidance TRAINER WORTHAM: Moody's Junks Ratings on $17.6 Million Notes TRUMP HOTELS: Argues Former Shareowners' Claims are Meritless TRUMP HOTELS: Court Defines World's Fair Sale Expenses UAL CORPORATION: Posts $1.8 Billion Net Loss in Third Quarter UNITED PROPERTIES: Case Summary & 15 Largest Unsecured Creditors UNITED WOOD: Files Schedules of Assets and Liabilities UNITED WOOD: Schwabe Williamson Approved as Bankruptcy Counsel US AIRWAYS: Gets $250 Million Loan from Airbus & Wells Fargo US AIRWAYS: Investors Increase Holdings by $112.5 Million VERILINK CORP: Posts $1.9 Million Net Loss in First Quarter VERILINK CORP: Amends Agreement Terms with Noteholders VISIPHOR CORPORATION: Grant Thornton Replaces KPMG as Auditor W.R. GRACE: Earns $32.1 Million of Net Income in Third Quarter WINN-DIXIE: Wants to Reject Warehouse Lease in Jacksonville, Fla. XFORMITY TECHNOLOGIES: Equity Deficit Narrows to $756k at June 30 * Houlihan Lokey Joins Forces with Tokyo-Based ORIX Corporation * Wilmer Cutler Names Ben W. Heineman Jr. as Senior Counsel * Upcoming Meetings, Conferences and Seminars ********* 21ST CENTURY TECH: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: 21st Century Technologies, Inc. 2700 West Sahara, Suite 440 Las Vegas, Nevada 89102-1703 Bankruptcy Case No.: 05-28185 Type of Business: The Debtor provides long-term debt and equity investment capital to support the expansion of companies in a variety of industries. See http://www.tfctcorp.com/ Chapter 11 Petition Date: November 1, 2005 Court: District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: William Noall, Esq. Gordon & Silver, Ltd. 3960 Howard Hughes Parkway, 9th Floor Las Vegas, Nevada 89109 Tel: (702) 796-5555 Total Assets: $13,489,476 Total Debts: $2,005,224 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Patricia Wilson Lawsuit Settlement $2,750,000 5601 Lindsey Drive Plano, TX 75093 Bike Doctor Lawsuit Settlement $200,000 c/o Law Offices of Randall S. Henderson 1959 Paloma Street Pasadena, CA 91104 West Mowery Promissory Note $86,565 P.O. Box 11543 Fort Worth, TX 76110 Michael Rivera prizeWise, Inc. $24,598 c/o Rinehart stock buyout Somonsen & Fetzer, P.C. 4 Triad Center, Suite 800 Salt Lake City, UT 84180 Brandon Anderson prizeWise, Inc. $24,598 c/o Rinehart stock buyout Somonsen & Fetzer, P.C. 4 Triad Center, Suite 800 Salt Lake City, UT 84180 Steven L. Rinehart prizeWise, Inc. $24,598 c/o Rinehart stock buyout Somonsen & Fetzer, P.C. 4 Triad Center, Suite 800 Salt Lake City, UT 84180 The Hartford Insurance Bond $15,000 Indemnification GE Capital Trade Debt $13,460 Cameron Ford prizeWise, Inc. $10,694 c/o Rinehart stock buyout Somonsen & Fetzer, P.C. Phillip Rinehart prizeWise, Inc. $4,990 c/o Rinehart stock buyout Somonsen & Fetzer, P.C. PLR, LLC prizeWise, Inc. $4,990 c/o Rinehart stock buyout Somonsen & Fetzer, P.C. Charles R. Billings, P.C. Attorney for IRS $4,553 Matters Jason Hall prizeWise, Inc. $3,922 c/o Rinehart stock buyout Somonsen & Fetzer, P.C. Chris Labarbera Consulting Agreement $1,875 Franklin Cardwell & Jones Trade Debt $947 Strasburger & Price, LLP Trade Debt $779 Purchase Power Trade Debt $366 Transfer Online Trade Debt for stock $282 Transfer agent Alcan Trade Debt $279 Qwest Trade Debt $156 ABLE LABORATORIES: Asset Sale Hearing Scheduled for November 7 -------------------------------------------------------------- The United States Bankruptcy Court for the District of New Jersey will convene a hearing on Nov. 7, 2005, at 2:00 p.m. to consider approval of the sale of Able Laboratories, Inc.'s assets and assumption of its contracts and leases to the highest and best bidder. The Court approved the auction procedures for the sale of the Debtor's assets at a hearing on Oct. 19. Aurobindo Pharma USA is the "stalking horse" bidder, and Able had entered into a "nonbonding" letter of intent with Aurobindo. The Aurobindo transaction 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. If the Debtor doesn't receive any qualified overbids, the proposed sale to Aurobindo will be considered on Monday. If another buyer tops Aurobindo's offer, Aurobindo is entitled to a $645,000 break- up fee. Objections to the sale, if any, must be filed with the Court today, and served on: Cadwalader Wickersham & Taft LLP Attn: Mark C. Ellenberg, Esq. 1201 F Street N.W., Suite 1100 Washington, DC 20004 Cadwalader Wickersham & Taft LLP Attn: Deborah Piazza, Esq. One World Financial Center New York, New York 10281 Lowenstein Sandler PC, Attn: Sharon L. Levine, Esq. 65 Livingston Avenue Roseland, NJ 07068 Duane Morris LLP Attn: David Stein, Esq. 744 Broad Street, Suite 1200 Newark, New Jersey 07102 Office of the United States Trustee Attn: Fran Steele, Esq. One Newark Center, Suite 2100 Newark, NJ 07102-5504 Winston & Strawn LLP Attn: Daniel J. McGuire, Esq. 35 W. Wacker Drive Chicago, IL 60601-9703 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. ACANDS INC: Wants Time to Remove Civil Actions Stretched to Mar. 4 ------------------------------------------------------------------ ACandS, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to extend the period within which it may remove civil actions pursuant to 28 U.S.C. Sec. 1452 and Rules 9006 and 9027 of the Federal Rules of Bankruptcy Procedure, through the earlier of March 4, 2006, or the effective date of its pending plan of reorganization. The Debtor tells the Bankruptcy Court that the extension will give it more time to make fully-informed decisions concerning the removal of prepetition actions and will assure that it does not forfeit valuable rights under section 1452 of the Judicial Procedures Code. Curtis A. Hehn, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, PC, explains that the Debtor has been unable to complete the removal process because it has devoted most of its time to: -- various litigation matters; -- compiling information related to approximately 300,000 asbestos claims; and -- securing approval of a disclosure statement and Plan of Reorganization. Headquartered in Lancaster, Pennsylvania, ACandS, Inc., was an insulation contracting company, primarily engaged in the installation of thermal and mechanical insulation. In later years, the Debtor also performed a significant amount of asbestos abatement and other environmental remediation work. The Company filed for chapter 11 protection on September 16, 2002, (Bankr. Del. Case No. 02-12687). Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub, P.C., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $100 million.1 ADELPHIA COMMS: MidOcean & Crestview Complete Cable Acquisition --------------------------------------------------------------- MidOcean Partners, a New York and London-based private equity firm and its partner, Crestview Partners, a New York-based private equity firm, completed the previously-announced acquisition of the San Juan Puerto Rico area cable operations, a joint venture between Adelphia Communications Corporation (OTC: ADELQ) and ML Media Partners, L.P. Under the terms of the transaction entered in June 2005, MidOcean and Crestview will pay $520 million subject to customary purchase price adjustments, which equates to approximately $3,800 per subscriber. The system serves approximately 138,000 customers in the greater San Juan area. As an independent entity managed by locally-based management, the company will continue its focus on improving service in ways that benefit its customers and the community. As part of the new ownership commitment to build the business, a new name and branding initiative will be forthcoming. Tyler Zachem, a Managing Director at MidOcean Partners, said "We are excited to have this process behind us and look forward to working with management and the employees to provide new and enhanced products and services for our customers and to create value for our investors." Cable industry veteran and Crestview Managing Director Jeffrey Marcus said, "Cable television is a core competency for us and we believe that this is a unique asset with opportunities for significant growth. We are excited about the prospects for this company." "This is a great company, with a solid platform and dedicated employees," Ron Dorchester, CEO of the newly independent cable company, said. "We believe that managing this asset locally will result in improved and expanded cable services and programming for customers in the San Juan area." "We are grateful for the work of our employees in Puerto Rico and believe this sale provides the best solution for them, their customers and the parties to this transaction," said Bill Schleyer, chairman and CEO of Adelphia. "The new owners are skilled managers with cable industry knowledge, and that bodes well for the San Juan area cable system." Since Sept. 30, 2002, the joint venture between Adelphia and ML Media Partners that owns and operates the Puerto Rico system has been under Chapter 11 bankruptcy protection. Also co-investing with MidOcean Partners and Crestview Partners are AlpInvest and Northwestern Mutual, two investors from MidOcean's fund. ML Media was advised by Greg Ainsworth of Daniels & Co. and MidOcean and Crestview were advised by Townsend Devereux and Joe Duggan of DH Capital. Adelphia was advised by Lazard. About MidOcean Partners MidOcean Partners -- http://www.midoceanpartners.com/-- is a premier private equity firm focused on the middle market. Based in New York and London, MidOcean is committed to investing in high-quality middle market companies with stable market positions and opportunities for growth. Targeted sectors include consumer and leisure, media and communications, business and financial services and select industrial sectors. MidOcean utilizes a broad foundation of expertise in its focus industries and its transatlantic platform to create value for its investors and partners. About Crestview Crestview Partners is a $1.4 billion private equity fund founded in 2004 by a group of former Goldman Sachs partners and colleagues who had served in leadership roles in the firm's private equity business and senior management. Crestview's founding partners have invested nearly $6 billion in a wide range of industries in North America and Europe, including media, healthcare, building products, chemicals, and real estate-related. The firm can invest in equity or debt, public or private, U.S. or international, and control or non- control investments. About ML Media Partners ML Media Partners, L.P is a public limited partnership raised in 1986 to acquire, finance, hold, develop, improve, maintain, operate, lease, sell, exchange, dispose of and otherwise invest in and deal with media businesses and direct and indirect interests therein. ML Media Partners made direct operating investments in seven cable television systems, eleven radio stations and two network affiliated television stations. ML Media has liquidated all of its holdings with the exception of the cable properties in Puerto Rico. Headquartered in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. ADVANTA BUSINESS: Moody's Rates $25 Million Class D Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned a Aaa-rating to the $250,000,000 AdvantaSeries Class A(2005-A3) Asset Backed Notes and a Ba2-rating to the $25,000,000 AdvantaSeries Class D(2005-D2) Asset Backed Notes issued from the Advanta Business Card Master Trust. The complete ratings action was as follows: Issuer: Advanta Business Card Master Trust, AdvantaSeries * $250,000,000 Class A(2005-A3) Asset Backed Notes, rated Aaa * $25,000,000 Class D(2005-D2) Asset Backed Notes, rated Ba2 The AdvantaSeries consists of Class A notes, Class B notes, Class C notes and Class D notes. Credit enhancement for the Class A(2005-A3) notes is provided by the Class B notes, Class C notes, Class D notes, a cash collateral account sized at 2.25% of the adjusted outstanding principal balance of the AdvantaSeries notes on closing date and a spread account, which is initially unfunded and may increase if excess spread falls below prescribed levels. All Notes benefit from the cash collateral account and spread account. Moody's Aaa rating of the Class A(2005-A3) notes and the Ba2 rating of the Class D(2005-D2) notes are based on the credit quality of the underlying pool of credit card receivables, the transaction's structural protections and the capability of the servicer, Advanta Bank Corp., which is an unrated, wholly owned subsidiary of Advanta Corp. (senior unsecured debt rating of B2, on review for possible upgrade). The assets of the Trust are a pool of MasterCard and, to a limited extent, Visa receivables generated by small businesses and business professional. Under the terms of the cardholder agreement, the card is to be used exclusively for business purposes. Some of the benefits of the card include additional cards for company employees at no additional fee, detailed expense reports, ability to earn rewards and access to valuable products offered by alliance partners. Advanta began originating this product in 1994 and has steadily grown the portfolio to its current size of $3.5 billion in receivables. ALLIED HOLDINGS: Asks Court to Set Feb. 17 as Claims Bar Date ------------------------------------------------------------- Allied Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Georgia to establish Feb. 17, 2006, as the deadline for filing proofs of claim based on prepetition debts or liabilities, including contingent claims, in their Chapter 11 cases. To be valid, a filed Proof of Claim must: (a) substantially conform to the proposed proof of claim form prepared by the Debtors or Official Form No. 10; (b) be written in the English language; (c) be denominated in lawful currency of the United States of America or in lawful currency of Canada, as may be appropriate, as of the Petition Date; (d) indicate the Debtor against which the claim is being asserted; and (e) be signed by the claimant or, if the claimant is not an individual, by an authorized agent of the claimant. Any person or entity holding a claim against more than one Debtor must file a separate Proof of Claim with respect to each Debtor. Any Proofs of Claim delivered by facsimile, telecopy or electronic mail will not be deemed to be valid. The Debtors do not require these persons or entities to file a Proof of Claim on or before the Bar Date: 1. Any person or entity that has already properly filed with the Court a Proof of Claim against the appropriate Debtor or Debtors; 2. Any person or entity whose claim is listed on the Debtors' Bankruptcy Schedules which were filed on September 28, 2005, but only if: (i) the person's or entity's claim is not scheduled on the Bankruptcy Schedules as "disputed," "contingent," or "unliquidated"; (ii) the person's or entity's claim is identified on the Bankruptcy Schedules of the appropriate Debtor; and (iii) the person or entity does not dispute the amount or nature of the claim listed on the Bankruptcy Schedules. 3. Any person or entity having a claim under Sections 503(b) or 507(a) of the Bankruptcy Code as an administrative expense of any of the Debtors' Chapter 11 cases; 4. Any person or entity whose claim has been paid in full by any of the Debtors; 5. Any person or entity that holds an interest in any Debtor, which interest is based exclusively on the ownership of common or preferred stock, membership interests, partnership interests, or warrants or rights to purchase, sell or subscribe to such a security or interest; 6. Any Debtor having a claim against any other Debtor; 7. Any person or entity that holds a claim that has been allowed pursuant to a Court order entered on or before the Bar Date; 8. Any person or entity that holds a claim solely against any of the Debtors' non-debtor affiliates; and 9. Any person or entity that holds a claim exclusively for the repayment of principal, interest or other applicable fees and charges arising from any bond, note or debenture issued by any of the Debtors through the September 30, 1997 issuance of senior notes in the principal amount of $150 million and bearing interest at 8-5/8%, provided, however, that this provision does not apply to these entities which must file Proofs of Claim: (i) the Senior Notes indenture trustee, (ii) any Senior Notes Claimants holding claims not related to the Senior Notes; or (iii) any current or former holder of Senior Notes wishing to assert a claim arising out of or related to the ownership or purchase of Senior Notes, including, but not limited to, claims arising out of or related to the purchase, sale, issuance, or distribution of Senior Notes, any damages claim under applicable securities law or any claim pursuant to Section 510(b). Any person or entity who has or who may have or who may claim to have any right to refund, credit, adjustment, payment or distribution by, or on behalf of or affecting the Debtors which refund, credit, adjustment, payment or distribution has been or could be ordered or determined by any court or regulatory body must file a Proof of Claim on or before the Bar Date. Any person or entity holding a potential claim arising from the rejection of an executory contract or unexpired lease of the Debtors must file a Proof of Claim evidencing the claim by the later of (i) the Bar Date, or (ii) 30 calendar days after the entry of the order providing for the rejection of the executory contract or unexpired lease of the Debtors. If any of the Debtors amend or supplement their Bankruptcy Schedules, the Debtors will give notice of any amendment or supplement to the holders of the claims affected thereby, and the holders will be afforded 20 days from the date on which the notice is given to file Proofs of Claim in respect of their claims or be forever barred from doing so. The Debtors propose that the Indenture Trustee, in its sole discretion, file aggregate Proofs of Claim in each of the Debtors' Chapter 11 cases on behalf of Senior Notes Claimants in respect of the Debtors' obligations under the Senior Notes, including, without limitation, the repayment of principal, interest or other applicable fees and charges arising under the Notes. However, the Indenture Trustee is not authorized to file any Proof of Claim with respect to any claim held by any current or former holder of Senior Notes arising out of or related to the ownership or purchase of Senior Notes, including, but not limited to, claims arising out of or related to the purchase, sale, issuance, or distribution of Senior Notes, any damages claim under applicable securities law or any claim pursuant to Section 510(b). The Debtors will publish notice of the Bar Date once in (i) The Wall Street Journal (National Edition), (ii) USA Today (National Edition) and (iii) The Fulton County Daily Report no later than 30 days prior to the Bar Date. Any person or entity who is required to file a Proof of Claim but fails to do so by the applicable Bar Date will be forever barred from asserting any right or claim against the Debtors and will be barred from participating in any distribution under a plan of reorganization that may be confirmed in the Debtors' cases. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case No. 05-12515). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents 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. (Allied Holdings Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Court OKs Kar-Tainer's Securities Purchase Deal ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia approved the Securities Purchase Agreement, and a related amendment, between Allied Holdings, Inc., its debtor-affiliates and Richard Cox. As previously reported in the Troubled Company Reporter, Allied Holdings, Inc., Axis Group, Inc., and Kar-Tainer International Limited agreed to sell the Debtors' securities in Kar-Tainer to Mr. Cox, an executive at Asean Auto Logistics, which formerly owned Kar-Tainer. The non-core assets to be sold include 100% of the Debtors' issued and outstanding ownership interests in Kar-Tainer together with the Kar-Tainer intellectual property held by Allied Holdings. Mr. Cox proposes to pay $2 million for the securities, subject to other adjustment and conditions. Mr. Cox has paid a portion of the Purchase Price in the form of an earnest money deposit totaling $50,000. Amendment On Oct. 24, 2005, the Debtors and Mr. Cox amended their Securities Purchase Agreement to clarify certain sale terms. The Debtors agree to cause all intercompany indebtedness between an acquired company, on the one hand, and Allied Holdings Inc., Axis Group, Inc., and Kar-Tainer International Ltd. or any affiliate of Allied Holdings, on the other hand, to be forgiven prior to the closing. After the closing, Allied Holdings will seek dismissal of Kar- Tainer International LLC's bankruptcy case. PBGC Concerns The Pension Benefit Guaranty Corporation has indicated to the Debtors that it has concerns regarding the sale transaction as it affects the PBGC's rights as a creditor, under 29 U.S.C. Section 1362, of non-debtor entities involved in the sale. After discussions with the Debtors, the PBGC has agreed not to object to the sale. The Court, however, rules that nothing in the Sale Order or in the PBGC's agreement not to object to the sale will in any way affect the PBGC's rights to object to any future matters involving the sale. After the Closing, the PBGC will not assert any claims against Kar-Tainer International LLC and Kar-Tainer International (Pty) Ltd. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case No. 05-12515). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents 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. (Allied Holdings Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Wants Plan Filing Period Stretched to April 28 --------------------------------------------------------------- Allied Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Georgia to extend their exclusive periods to: a) propose and file plans of reorganization through April 28, 2006; and b) solicit acceptances through June 27, 2006. Harris B. Winsberg, Esq., at Troutman Sanders, LLP, in Atlanta, Georgia, tells the Court that the Debtors' sufficiently large and complex cases warrant an extension of their Exclusive Periods. Mr. Winsberg reports that the Debtors have concentrated on resolving a number of significant issues relating to the estate, including: * successful transition to operating in Chapter 11; * negotiations with various trade vendors regarding postpetition performance; * commencement of proceedings against various trade vendors that refused to perform postpetition; * fulfillment of the various reporting obligations in connection with the commencement of their cases; * analysis of reclamation claims filed by certain trade vendors; * provision of information and continued discussions with the Official Committee of Unsecured Creditors; * review and evaluation of executory contracts and unexpired leases; * development of a key employee retention plan; * commencement of lease agreement rejections; * negotiation of securities purchase agreement for the sale of ownership interests in Kar-Tainer International (Pty) LTD., and Kar-Tainer International LLC; * negotiation of premium financing arrangements and other insurance premium financing; * analysis of various insurance issues in connection with tort claims pending against the Debtors; * negotiation with various equipment lessors regarding equipment lease issues; and * negotiation with customers regarding fuel surcharge relief and increased pay for services provided. Mr. Winsberg further informs the Court that the Debtors are making significant progress toward determining the reorganization value of their businesses and the process of determining distributions to their constituencies. To date, Mr. Winsberg relates, the Debtors have met their financial projections. They have also stabilized their business operations, maintained critical business relationships, maintained the quality of customer service and reduced their cash losses, he adds. Mr. Winsberg notes that an extension of the Exclusive Periods will provide the Debtors with an opportunity to develop a reasoned strategic plan and develop and negotiate a consensual plan of reorganization. The Debtors believe that any proposed plan of reorganization must be based on sound financial analysis. Thus, the Debtors assert that extending the Exclusive Periods will allow them to work toward a resolution of their financial issues and propose a plan of reorganization based on a rational and well-developed business plan. Mr. Winsberg points out that competing plans would present a direct impediment to the Debtors' ability to finalize their financial analysis. Hence, Mr. Winsberg contends, the Debtors should not be faced with the distraction caused by the premature filing of a plan of reorganization by other parties-in-interest and the resulting litigation expense caused by the existence of competing plans. Moreover, Mr. Winsberg assures the Court that the Debtors will keep the Creditors Committee fully informed of their progress, including sharing their financial information. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case No. 05-12515). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents 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. (Allied Holdings Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLMERICA FINANCIAL: Sale Plan Prompts S&P to Review Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services revised the CreditWatch status of its 'BB' counterparty credit on Allmerica Financial Corp. to positive from negative. Standard & Poor's also said that it affirmed its 'BBB+' counterparty credit and financial strength ratings on Hanover Insurance Co., Citizens Insurance Co. of America, Hanover Lloyd's Insurance Co., and Massachusetts Bay Insurance Co. and removed them from CreditWatch negative, where they were placed on Sept. 9, 2005. The outlook on these companies is stable. The CreditWatch status of the ratings on AFC was revised to negative from positive on Sept. 9, 2005, because of concerns about the potential impact of losses from Hurricane Katrina given the company's significant exposure in Louisiana, particularly in the homeowners and commercial multi-peril lines. These ratings had originally been placed on CreditWatch positive on Aug. 22, 2005, following the company's announcement that it had agreed to sell its variable annuity and life business to Goldman Sachs Group Inc. "The placement of the AFC ratings on CreditWatch positive again reflects the beneficial impact of the sale of the variable annuity and life businesses," said Standard & Poor's credit analyst John Iten. This sale will remove the guaranteed minimum death benefit-exposed business that has been Standard & Poor's primary concern on the life side and leave AFC with a much smaller, more stable block of runoff life liabilities -- along with its core property/casualty operations. That transaction is expected to close on or about Nov. 30, 2005. Standard & Poor's anticipates raising its ratings on AFC by one notch following the transaction. The removal of the subsidiaries ratings from CreditWatch negative reflects Standard & Poor's view that the hurricane losses, though substantial, will not have a significant adverse impact on the capitalization of the property/casualty operations. The property/casualty operations had a pretax loss of $128 million in the third quarter of 2005, but they were still able to show a small profit of $24 million for the first nine months of 2005. The full-year profit is expected to be higher assuming a reasonably strong fourth quarter. The rating actions also reflect Standard & Poor's expectation that the flood exclusions in Allmerica's policies will withstand any legal or regulatory pressure to cover uninsured flood losses. AMERICAN HOME: Fitch Puts BB Rating on $1.34 Mil Certificate Class ------------------------------------------------------------------ American Home Mortgage Assets Trust 2005-1 mortgage-backed pass- through certificates, composed of three groups are rated by Fitch Ratings: Groups 1 & 2 -- $315.77 million class A and R 'AAA'; -- $11.07 million class C-B-1 'AA'; -- $2.85 million class C-B-2 'A'; -- $2.18 million class C-B-3 'BBB'; -- $1.34 million privately offered, class C-B-4 'BB'. Group 3 -- $426.75 million class A 'AAA'; -- $19.66 million class 3-M-1 'AA'; -- $9.25 million class 3-M-2 'A'; -- $4.63 million class 3-M-3 'BBB'; -- $2.31 million class 3-M-4 'BBB-'. For Groups 1 & 2 the 'AAA' rating on the senior certificates reflects the 5.85% credit enhancement provided by the 3.30% class C-B-1, 0.85% class C-B-2, 0.65% class C-B-3, 0.40% privately offered class C-B-4, 0.35% privately offered class C-B-5, and 0.30% privately offered class C-B-6. For Group 3 the 'AAA' rating on the senior certificates reflects the 8.25% credit enhancement provided by the 4.25% class 3-M-1, 2.00% class 3-M-2, 1.00% class 3-M-3, 0.50% class 3-M-4, as well as 0.50% target over-collateralization. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults. In addition, the ratings also reflect the quality of the mortgage collateral, strength of the legal, financial structures and the capabilities of Wells Fargo Bank, N.A. as master servicer. Deutsche Bank National Trust Company will act as trustee. The mortgage loans consist of adjustable rate closed-end Prime and Alt-A mortgage loans that are secured by first liens on one- to four-family residential properties. As of the cut-off date, the mortgage loans have an aggregate balance of $797,994,863. The weighted average mortgage rate is approximately 5.50%. The average cut-off date principal balance of the mortgage loans is $368,419. The weighted average original combined loan-to-value ratio is 72.90%. The properties are primarily located in California, Illinois, and Virginia. AMERICAN PACIFIC: Moody's Holds Caa1 Rating on Second Lien Loan --------------------------------------------------------------- Moody's Investors Service affirmed the B2 corporate family rating of American Pacific Corporation. Moody's also affirmed its: * B2 ratings on the company's revised first lien term loan and revolver, * the Caa1 rating on its second lien term loan, and * a speculative grade liquidity rating of SGL-3. The rating outlook remains stable. The affirmation of the ratings follows AMPAC's amendment of its Purchase Agreement with GenCorp Inc. (B2) reflecting a change in sale price and payment terms for the acquisition of the Aerojet Fine Chemicals business. The revised purchase price will be $114 million; the $5 million reduction from the prior purchase price has been converted to a contingent payment. $88.5 million of the purchase price will be paid in cash at the closing utilizing the facilities rated above and a portion of AMPAC's current cash balance. The remaining portion of the purchase price consists of a $19 million subordinated first seller note and a $6.5 million subordinated second seller note. Both the $5 million contingent payment and the $6.5 million subordinated second seller note are payable upon achieving certain financial metrics that would require a significant reduction in leverage (debt/EBITDA). The affirmation of ratings reflects elevated business risk associated with a large step-out acquisition, weak near-term fundamentals of the company's ammonium perchlorate business, and elevated debt levels subsequent to the acquisition. Furthermore, the rating affirmation reflects the combined company's small size, very high customer concentration, limited product diversity, ongoing environmental costs, and elevated intermediate to long- term risk associated with a pharmaceutical business. The stable outlook reflects the lower purchase price and Moody's continued belief that AP demand will remain at or above 8-9 million pounds, near-term sales will grow from AFC's qualifications, and that AMPAC's other businesses will remain modest contributors to EBITDA. Affirmation of AMPAC's speculative grade rating of SGL-3 reflects the small size of the company and the revolver, and moderate headroom under the financial covenants in its credit facilities. The following ratings were affirmed and remain on stable outlook: * Corporate Family Rating -- B2 * Senior Secured Revolver due October 2010 -- B2 * Senior Secured First Lien Term Loan due October 2010 -- B2 * Senior Secured Second Lien Term Loan due October 2011 -- Caa1 * Speculative Grade Liquidity Rating -- SGL-3 American Pacific Corporation, headquartered in Las Vegas, Nevada, is the sole North American provider of ammonium perchlorate, the primary ingredient in solid rocket motors. AMPAC is also a leading supplier of liquid propulsion products and bipropellant thrusters. In July 2005, the company executed an Asset Purchase Agreement with GenCorp Inc. to acquire Aerojet Fine Chemicals. AMERICAN TOWER: Refinances $2.45 Billion Credit Facilities ---------------------------------------------------------- American Tower Corporation (NYSE: AMT) successfully refinanced the credit facilities of the Company's principal operating subsidiaries. The Company refinanced the existing $1.1 billion senior secured credit facility at the American Tower operating company level with a new $1.3 billion facility and refinanced the existing $900 million senior secured credit facility at the SpectraSite operating company level with a new $1.15 billion facility. After repayment of the previous credit facilities, the combined $2.45 billion available under the two new credit facilities provides the Company with up to $977 million of liquidity, net of outstanding undrawn letters of credit. The new AMT OpCo credit facility consists of a $300 million revolving credit facility, a $750 million Term Loan A and a $250 million Delay Draw Term Loan. At closing, the Company drew down the entire Term Loan A and used the net proceeds to repay the principal and interest on the $745 million outstanding under the previous AMT OpCo credit facility. The new SCI OpCo credit facility consists of a $250 million revolving credit facility, a $700 million Term Loan A and a $200 million Delay Draw Term Loan. At closing, the Company drew down the entire Term Loan A and used the net proceeds to repay the principal and interest on the $697 million outstanding under the previous SCI OpCo credit facility. The new credit facilities increase the Company's total liquidity available from its existing credit facilities by $450 million and reduce the Company's current LIBOR margins to 75 bps. Each of the new credit facilities has a term of five years, maturing in full on October 27, 2010. The new credit facilities do not require amortization of payments and may be paid prior to maturity in whole or in part at the borrower's option without penalty or premium. The new credit facilities allow the Company to use borrowings for general corporate purposes and, provided certain conditions are met, permit the use of borrowings and internally generated funds to repurchase the Company's equity securities and repurchase and refinance other indebtedness without additional lender approval. The new AMT OpCo and SCI OpCo senior secured credit facilities are rated BBB by Standard & Poor's, Baa3 and Ba1, respectively, by Moody's, and BBB- by Fitch. As reported in the Troubled Company Reporter on Oct. 7, 2005, the Company's operating subsidiaries sought to refinance the Company's existing credit facilities. The Company is proposing to refinance its existing $1.1 billion senior credit facility at the American Tower operating company level with a new $1.3 billion facility and to refinance its existing $900 million senior secured credit facility at the SpectraSite operating company level with a new $1.15 billion facility. The proposed AMT OpCo facility would consist of: -- a $300 million senior secured revolving credit facility, -- a $750 million senior secured term loan, and -- a $250 million senior secured delayed draw term loan, each maturing in 2010. The proposed SCI OpCo facility would consist of: -- a $250 million senior secured revolving credit facility, -- a $700 million senior secured term loan, and -- a $200 million senior secured delayed draw term loan, each maturing in 2010. American Tower -- http://www.americantower.com/-- is the leading independent owner, operator and developer of broadcast and wireless communications sites in North America. American Tower owns and operates over 22,000 sites in the United States, Mexico, and Brazil. Additionally, American Tower manages approximately 2,000 revenue producing rooftop and tower sites. * * * As reported in the Troubled Company Reporter on Sept. 13, 2005, Moody's Investors Service upgraded the ratings of American Tower Corporation and its subsidiaries. The ratings action is based upon: * the company's track record of good revenue and cash flow growth and free cash flow generation; and * its history of devoting that free cash flow to debt reduction to substantially reduce the company's financial risk profile. Further, American Tower benefits from the acquisition of the less leveraged Spectrasite and its substantial free cash flow generation. The affected ratings are: American Tower Corporation: * Corporate family rating upgraded to Ba2 from B1 * Speculative grade liquidity rating affirmed at SGL-1 * 9.375% Senior Notes due 2009 upgraded to B1 from B3 * 7.5% Senior Notes due 2012 upgraded to B1 from B3 * 7.125% Senior Notes due 2012 upgraded to B1 from B3 * 5% Convertible Notes due 2010 upgraded to B1 from B3 American Towers, Inc. (fka American Tower Escrow Corp.): * 7.25% Senior Subordinated Notes due 2011 upgraded to Ba2 from B2 * 0% Senior Subordinated Discount Notes due 2008 upgraded to Ba2 from B2 American Tower, LP and American Towers, Inc. (co-borrowers): * Senior secured credit facility maturing 2011 upgraded to Baa3 from Ba3 Spectrasite Communications, Inc.: * Senior secured credit facility maturing 2011/2012 upgraded to Ba1 from Ba3 SpectraSite, Inc.: * Corporate family rating withdrawn * 8.25% Senior Notes due 2010 rating withdrawn. AMR CORP: S&P Assigns B- Rating to $800-Mil JFK Airport Rev. Bonds ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' rating to $800 million of New York City Industrial Development Agency special facility revenue bonds, series 2005 -- American Airlines Inc., John F. Kennedy International Airport Project, which mature at various dates. At the same time, the ratings on existing series 2002 bonds were raised to 'B-' from 'CCC', reflecting changes in the security arrangements that apply to those bonds. Both series of bonds will be serviced by payments made by AMR Corp. unit American Airlines Inc. under a lease between the airline and the agency. "The Series 2002 and 2005 JFK Airport bonds are rated at the same level as American's corporate credit rating, and higher than its senior unsecured debt, because bondholders have the benefit of a security package not available to general unsecured creditors," said Standard & Poor's credit analyst Philip Baggaley. "Standard & Poor's believes there is a substantial risk that, if challenged, the facility lease under which the Industrial Development Agency leases the land and facility to American would be recharacterized as a financing in any American bankruptcy reorganization, as occurred in the case of a substantially similar lease and special facility revenue bonds in United Air Lines Inc.'s bankruptcy. In the event of an American bankruptcy, bondholders should nonetheless benefit from guarantees of the bonds by AMR and American, which are secured by American's leasehold interest in the facility lease," the credit analyst continued. The series 2002 special facility revenue bonds gain the benefit of a similar security package upon closing of the new series 2005 bonds. There is a near-term risk that the security package being granted to the series 2002 bondholders would be set aside as a preference, if American were to file for bankruptcy in the next 90 days. In that event, the secured claim available to both the series 2002 and series 2005 bondholders would be reduced by the amount of the series 2002 bonds, with consequent reduced recovery prospects for both series. Given AMR's and American's substantial cash reserves, the limited risk period, and the already low rating being assigned to these bonds, that near-term risk is not considered sufficient to warrant a rating differential relative to the corporate credit rating. The terminal that the bonds are helping to finance will replace American's existing facilities at the airport, and serve as the airline's principal international gateway to Europe. As such, American would very likely wish to preserve access to the terminal in any bankruptcy reorganization and would be unlikely to reject its facility lease. If American affirms the lease, and the one-year debt service reserve is sufficient to cover any missed payments, the bonds could remain current through bankruptcy. Alternatively, and more likely, American may choose to challenge the legal status of the facility lease, seeking to have it recharacterized as a financing. In the United case that relates to substantially similar circumstances at the same airport, the courts recharacterized the facility lease as a financing. Standard & Poor's believes it likely that, if American's facility lease were recharacterized as a financing, it would be treated as secured debt. Standard & Poor's generally views airport special revenue bonds secured by a leasehold interest as the equivalent of secured debt and rated at the level of the corporate credit rating. APCO LIQUIDATING: Taps A.W. Green as Special Business Consultant ---------------------------------------------------------------- APCO Liquidating Trust and APCO Missing Stockholder Trust, ask the U.S. Bankruptcy Court for the District of Delaware for permission to retain A.W. Green as their special business consultant, nunc pro tunc to Aug. 19, 2005. The Debtors selected Mr. Green because of his knowledge regarding their historical operations, books and records when he was employed as the Trustee's consultant in the Debtors' liquidation proceedings. Mr. Green will: (a) maintain the Debtors' books and records; (b) prepare the Debtors' monthly operating reports and other reports required by the Court or the U.S. Trustee; (c) actively involve in the Debtors' chapter 11 cases; (d) assist the Trustee with the continued administration of the Debtors assets; and (e) perform additional duties as may be agreed upon by the Debtors and Mr. Green. Mr. Green will be paid $365 based on an eight-hour day period or a pro-rata portion of his daily rate in the event he works less than eight hours, plus overtime fees, and incurred expenses. The Debtors propose that, for all work performed, Mr. Green be paid 100% of the amount due upon submission of an acceptable invoice to the Debtors. To the best of the Debtors' knowledge, Mr. Green is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Oklahoma City, Oklahoma, APCO Liquidating Trust and APCO Missing Stockholder Trust were created on behalf of the common stockholders of APCO Oil Corporation. The Debtors filed for chapter 11 protection on August 19, 2005 (Bankr. D. Del. Case No. 05-12355). Gregory P. Williams, Esq., John Henry Knight, Esq., and Rebecca L. Booth, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtor filed for protection, they estimated assets and debts between $10 million to $50 million. ASARCO LLC: Court Lifts TRO to Pay Prepetition Debts to Salt River ------------------------------------------------------------------ As reported in the Troubled Company Reporter on Aug. 30, 2005, ASARCO LLC and its debtor-affiliates want to prevent Utility Companies from terminating services or requiring additional deposits in connection with their provision of services. Salt River Project Agricultural Improvement and Power District is an agricultural improvement district and an integrated electric utility. Under the Arizona Constitution and A.R.S. Title 48, SRP is a political subdivision of the State of Arizona governed and regulated by a duly elected board. SRP provides electricity to more than 2 million people in a 2,900-square mile territory located in and around the metropolitan Phoenix area, plus mine loads in an adjacent 2,400-square mile area in Gila and Pina counties. Because ASARCO is SRP's largest customer, ASARCO's failure to make timely postpetition payment will cause irreparable harm and injury to SRP, for which there exists no adequate remedy at law, Mr. Rosenstein says. The restraining order entered by the U.S. Bankruptcy Court for the Southern District of Texas prohibits SRP from discontinuing or refusing service on account of any unpaid prepetition charges. However, the restraining order also provides that any utility company may file a motion for determination of adequate assurance of payment. After arm's-length negotiations, ASARCO LLC and Salt River Project Agricultural Improvement and Power District agree to settle the dispute. In the Order signed by Judge Schmidt, the parties agree that: (a) The Court's order restraining utilities from discontinuing, altering, or refusing service and establishing procedures for determining that adequate assurance has been provided to utilities is terminated, effective immediately, as to SRP. (b) ASARCO will pay SRP $1,674,408 in full for its outstanding bill for electrical service supplied from Aug. 9, 2005, through Aug. 31, 2005. (c) ASARCO will pay SRP $958,293 for all electrical service supplied through Sept. 12, 2005, being the estimated balance of all postpetition utility charges due through midnight of that date. ASARCO will also pay for all unpaid electrical service through Sept. 16, 2005, no later than 5:00 p.m., within two days after the bill is is delivered. (d) ASARCO will pre-pay SRP an amount equivalent to seven days of estimated future electricity usage calculated at $80,000 per day, or a total of each estimated prepayment per week of $560,000. The pre-payment will be made for each successive seven-day period unless modified by a Court order. (d) SRP may not discontinue service to ASARCO for any claimed default unless ASARCO has been given notice of a default by SRP and an opportunity to cure that default within the next five business days. ASARCO will deposit with SRP $560,000 based on an estimated usage of $80,000 per day, to protect SRP for any default by ASARCO as a result of the five-business-day notice of termination period to cure. (e) ASARCO will notify SRP of any anticipated change in usage, including any decision to materially or substantially re-start its mining operations. ASARCO will be required to make corresponding increased weekly pre-payments, and an equivalent increased security deposit in the amount of the estimated level of increased usage, beginning the week of the expected date of increased usage. (f) SRP will periodically, but not less than bi-monthly, reconcile the payments made by ASARCO and the actual usage of ASARCO for the reconciliation period. Any amounts overpaid by ASARCO will be credited against the next weekly pre-payment amount, and any shortage in payments by ASARCO will be paid by ASARCO within three business days of receipt of the accounting and notice of shortage due. (g) Failure to make due payments or deposits will require SRP to give written notice of default five business days before termination of service, and ASARCO will be entitled to cure any default by payment in full of the amount due during the notice period. (h) In the event of a notice given of a default and ASARCO does not cure that default, SRP may terminate service at midnight local time on the first day after the cure period's expiration. (i) At SRP's reconciliation resulting in a shortage for any two consecutive periods, ASARCO will be required to increase the pre-payment amount to equal the new estimated weekly usage based on the past months actual usage, plus a 5% additional amount of the increased usage amount. (j) The Amended Adequate Assurance is without prejudice to SRP or ASARCO to seek further modifications of the required adequate assurances as may be authorized by law or change in circumstances, including increased or decreased electrical usage. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. (ASARCO Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Court Okays Payment of Disability Benefits ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas gave ASARCO LLC authority to resume paying the Disability Benefits. As previously reported in the Troubled Company Reporter on Oct. 13, 2005, ASARCO paid disability benefits to current and former employees in the ordinary course of business. As of the bankruptcy filing, ASARCO provided: (i) short-term disability benefits to 19 current employees, aggregating $23,500 per month; (ii) permanent and total disability benefits to 107 former hourly employees, totaling around $58,000 per month; and (iii) long-term disability payments to 10 former salaried employees, aggregating $11,000 per month. The average monthly payment per recipient is about $680. The Participants receiving short-term disability benefits are expected to return to work in due course, while former employees receiving permanent disability and long-term disability payments are not expected to return to work due to their disabilities. Under the benefit programs, former employees receive monthly payments until the age of 65, at which time the payments cease and the former employees typically make application to the appropriate pension fund. In the event a Participant who was receiving permanent or long-term disability payments dies, the Participant's survivor generally would receive 50% of the benefit until the employee would have turned 65. Since the Petition Date, ASARCO has not paid the Disability Benefits to former employees out of an abundance of caution. In a stipulation, ASARCO, the Official Committee of Unsecured Creditors of ASARCO and certain other parties-in-interest agree to the payment of the Disability Benefits. The parties believe that payment of the Disability Benefits is provided by the order of the U.S. Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, authorizing payment of prepetition employee wage and benefit obligations. Other signatories to the Stipulation are: 1. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union; 2. The Official Committee of Unsecured Creditors of Debtor Subsidiaries Capco & LAQ, et al.; and 3. Robert C. Pate, the legal representative of future asbestos claimants. Furthermore, the United Steelworkers maintains that payments must be paid under Section 1114 of the Bankruptcy Code. In any event, the parties agree that payment of the Disability Benefits should resume in light of the nature of the payments, the relatively small dollar amounts at issue, and the potential negative impact on the Participants if the Disability Benefits are not restored. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. (ASARCO Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Komatsu Wants a Decision on Equipment Lease Agreements ------------------------------------------------------------------ On Aug. 12, 2004, Road Machinery LLC, an affiliate of Komatsu Financial Limited Partnership, entered into equipment and lease agreements for a 60-month lease of two Komatsu 930E-1 Mining Trucks. The Leases contemplated the operation of the 930E-1 trucks at ASARCO LLC's Sahuarita Mine Site located in Pima County, Arizona. Road Machinery's interests under the Leases were subsequently assigned to Komatsu Financial. The 930E-1 trucks are subject to exposure and significant wear and tear by their location and operation in open pit mining in the Arizona desert. In this regard, Komatsu Financial asks the U.S. Bankruptcy Court for the Southern District of Texas to direct the Debtors to immediately elect to assume or reject the Lease Agreements and continue to meet all necessary payments, insurance, and other requirements until and through the election date. Donald L. Gaffney, Esq., at Snell & Wilmer, LLP, in Phoenix, Arizona, tells the Court that while the Komatsu Financial Leases have not yet been left unpaid, the physical setting of the mining trucks presents significant potential and risk for economic losses. That risk, Mr. Gaffney points out, includes the concern of whether ASARCO's postpetition insurance coverage properly covers damages to the equipment. Consistent with the procedures and the severe circumstances of the location of its leased equipment, Komatsu Financial believes that the Debtors should be required to make the decision to assume or reject the 930E-1 mining truck leases no later than 15 days after the Court grants Komatsu Financial's request. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. (ASARCO Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASAT HOLDINGS: Closes $15 Million Preferred Share Financing ----------------------------------------------------------- ASAT Holdings Limited (Nasdaq: ASTT) reported the closing of its $15 million preferred share financing and $15 million purchase money loan commitments. The purchase money loans will be funded if and when the additional capital is needed by the Company to complete the move of the Company's assembly and test facilities to Dongguan, China from Hong Kong, subject to satisfaction of various conditions, some of which are outside of the control of the Company. Both financings involved the issuance of warrants by the Company. The preferred share financing was entered into with three of the Company's principal shareholder groups who together own approximately 84% of the Company's outstanding shares. The purchase money loan commitments have been entered into with one of those principal shareholder groups. The Company also expects to move forward with a rights offering of preferred shares and warrants to the shareholders not participating in the current financing in order to allow those shareholders an opportunity to mitigate the dilutive impact of the preferred share financing. Prior to commencing the rights offering, the Company will have to file a registration statement with the United States Securities and Exchange Commission. "The additional financing improves our financial position and provides us with the capital we need to complete the move of all our assembly and test operations to Dongguan, China by the middle of 2006. Once the move to China is complete, we expect our manufacturing and labor costs will drop significantly, which should improve our competitive position," said Robert J. Gange, president and chief executive officer of ASAT Holdings Limited. "We thank our three primary shareholders for this vote of confidence as we continue to execute on our China strategy." Additional Terms of Financings The preferred share financing provided for the issuance and sale of 300,000 Series A redeemable convertible preferred shares for a total price of $15 million. Each preferred share is convertible at the option of the holder into ordinary shares at a conversion price equal to $0.09 per ordinary share (equivalent to $0.45 per ADS), subject to customary adjustments for share splits, dividends, re-combinations and similar transactions, as well adjustments for certain issuance of equity below the preferred shares' conversion price. The preferred shares are also subject to a potential reset of the conversion price on Oct. 31, 2006 to 80% of the average trading price of the Company's ADSs during the preceding three months, subject to a floor of $0.065 per ordinary share ($0.325 per ADS). The preferred shares accrue dividends at the rate of 13% per annum, payable semi-annually in arrears. Such dividends will be payable, at the Company's option, in cash, subject to certain limitations, or in additional preferred shares or ordinary shares. In addition, upon completion of the preferred share financing, the Company issued five-year warrants for a total of 15 million ordinary shares (equivalent to 3 million ADSs) exercisable at a price of $0.01 per share (equivalent to $0.05 per ADS). These warrants will also be made available on a proportional basis to participants in the expected rights offering. In connection with the closing of the preferred shares financing, the Company issued five-year warrants for a total of 5 million ordinary shares (equivalent to 1 million ADSs) exercisable at a price of $0.01 per share (equivalent to $0.05 per ADS) to the investors in the purchase money loan agreement as an arrangement fee. The purchase money loan agreement provides for up to $15 million of loans, which may be borrowed in two tranches during the 15-month drawdown period starting from the date of the agreement, in the amount of up to $10 million and up to $5 million, respectively. Subject to a number of other conditions, the loans may be borrowed in the event that the Company's cash position falls below $10 million. Each tranche would have a maturity of two years from the time of borrowing and bear interest at the rate of 15% per annum. Net proceeds from the financing are to be used within 90 days of borrowing for the purpose of financing certain capital expenditures, including capital expenditures in connection with the relocation of the Company's assembly and test facilities from Hong Kong to Dongguan, China and the build-out of its new China facilities. Upon borrowing the first tranche, the Company will issue five-year warrants for a total of 15,668,170 ordinary shares (equivalent to 3,133,634 ADSs) exercisable at a price of $0.01 per share (equivalent to $0.05 per ADS), as well as pay a commitment fee of $850,000, on a pro rata basis to the lenders that fund the first tranche. The Company has agreed to file a registration statement with the United States Securities and Exchange Commission covering resale of the ordinary shares underlying the preferred shares and the warrants for both the preferred share financing and the purchase money loan agreement. As reported in the Troubled Company Reporter on June 20, 2005, ASAT Holdings Limited obtained a commitment for $15 million of financing from one of its principal shareholders on June 16, 2005. The other principal shareholder has an option to participate up to 50% of this financing, or $7.5 million of the $15 million. The financing would be in the form of two-year notes bearing an interest at the rate of 5% per annum. In return for the commitment, the company will issue five-year warrants for a total of 25 million ordinary shares, which is the equivalent of 5 million ADSs, exercisable at a price of $0.01 per ordinary share. The commitment is subject to preparation and execution of definitive agreements and fulfillment of various conditions, including receipt by the Board of a fairness opinion with respect to the loan arrangements from an independent investment banking firm. ASAT Holdings Limited -- http://www.asat.com/-- is a global provider of semiconductor package design, assembly and test services. With over 15 years of experience, the Company offers a definitive selection of semiconductor packages and world-class manufacturing lines. ASAT's advanced package portfolio includes standard and high thermal performance ball grid arrays, leadless plastic chip carriers, thin array plastic packages, system-in- package and flip chip. ASAT was the first company to develop moisture sensitive level one capability on standard leaded products. Today the Company has operations in the United States, Asia and Europe. ASAT, Inc. is a wholly owned subsidiary of ASAT Holdings Limited and the exclusive representative of ASAT for services in North America. At Apr. 30, 2005, ASAT Holdings' balance sheet showed a $26,456,000 stockholders' deficit, compared to $10,345,000 of positive equity at Jan. 31, 2005. ASPEON INC: Balance Sheet Upside-Down by $10.98M at Sept. 30, 2003 ------------------------------------------------------------------ Aspeon Inc. delivered its quarterly report on Form 10-QSB for the quarter ending September 30, 2003, to the Securities and Exchange Commission on October 25, 2005. The Company reported $496,915 of net income on $751,691 of net revenues for the quarter ending September 30, 2003. At September 30, 2005, the Company's balance sheet shows $1,210,924 in total assets and a $10,977,287 stockholders deficit. As of September 30, 2003, the Company: * had $114,000 cash on hand, * was in the process of terminating its last operating business and had no other source of income, and * faced an outstanding law suit brought by certain of its shareholders. As of June 30, 2005, the Company had no cash on hand, $26,300 of assets, no operating business or other source of income, outstanding liabilities of approximately $8 million and the an outstanding shareholder lawsuit. Consequently, the Company is now dependent on raising additional equity and debt to fund its ongoing operating expenses and to fund negotiated settlements with its creditors. Bankruptcy Warning Aspeon's management says that if the Company loses the outstanding shareholder lawsuit, it is unlikely that the proceeds from its Directors' and Officers' insurance policy will be sufficient to meet the damages assessed and the Company will have no alternative but to file for bankruptcy. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?2a0 Aspeon Inc. used to manufacture and provide point-of-sale systems, services and enterprise technology solutions for the retail and foodservice markets. AT&T CORP: S&P Holds Low-B Rating After DOJ's SBC Merger Approval ----------------------------------------------------------------- Standard & Poor's Ratings Services' ratings on Bedminster, New Jersey-based long distance telecommunications carrier AT&T Corp. would remain on CreditWatch, with positive implications, including the 'BB+' corporate credit rating, pending the closing of AT&T's acquisition by higher-rated SBC Communications Inc. "This follows the Department of Justice's recent approval of the merger," Said Standard & Poor's credit analyst Catherine Cosentino. The ratings on AT&T Corp. were placed on Credit Watch with positive implications on Feb. 1, 2005. As of June 30, 2005, AT&T had about $7.7 billion of debt and about $1.9 billion of cash. Consideration for the AT&T acquisition is valued at about $22 billion, consisting of $15 billion in SBC shares, a $1 billion special dividend, and the approximate $6 billion of net AT&T debt. The acquisition still requires approval from the California, Ohio and Arizona public utility commissions, as well as the Federal Communications Commission. AT&T shareholders approved the merger in June 2005, and the company expects to close the merger before the end of 2005. S&P views AT&T as having a weaker business profile than SBC, given its declining consumer long-distance business and, more importantly, the ongoing significant competition it faces in the enterprise customer market. The latter has translated into substantial price compression over the past few years, coupled with volume declines. In addition, absent a guarantee, S&P will evaluate the degree to which SBC will explicitly and/or implicitly support AT&T's debt to determine AT&T's rating, given its higher standalone business risk. This will include an assessment of the strategic importance of AT&T to SBC's overall business plans and likelihood to continue to support AT&T, if business conditions materially deteriorate from current levels, especially in the enterprise market. The fact that SBC recently announced that it will adopt the AT&T name upon close of the transaction would suggest a fairly high degree of strategic importance of these assets. AUSTIN COMPANY: Section 341(a) Meeting Slated for November 30 ------------------------------------------------------------- The U.S. Trustee for Region 9 will convene a meeting of The Austin Company and its debtor-affiliates' creditors at 3:00 p.m., on Nov. 30, 2005, at the office of U.S. Trustee, Howard M. Metzenbaum U.S. Courthouse, East - 6th Floor, 201 Superior Ave., Cleveland, Ohio 44114. 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 Cleveland, Ohio, The Austin Company is an international firm offering a comprehensive portfolio of in-house architectural, engineering, design-build, construction management and consulting services. The Company also offers value-added strategic planning services including site location, transportation and distribution consulting, and facility and process audits. The Company and two affiliates filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ohio Lead Case No. 05-93363). Christine M. Pierpont, Esq., and G. Christopher Meyer, Esq., at Squire, Sanders & Dempsey, L.L.P., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated between $10 million to $50 million in total assets and debts. AUSTIN COMPANY: Wants to Hire Squire Sanders as Bankruptcy Counsel ------------------------------------------------------------------ The Austin Company and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Ohio for permission to employ Squire, Sanders & Dempsey, L.L.P., as their general bankruptcy counsel. Squire Sanders will: 1) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their businesses and properties; 2) assist the Debtors in preparing their Schedules of Assets and Liabilities and Statements of Financial Affairs and attend meeting and negotiate with representatives of creditors and other parties-in-interest; 3) advise the Debtors in connection with any contemplated sales of assets or business combinations and advise the Debtors on matters relating to the evaluation of the assumption, rejection or assignment of unexpired leases and executory contracts; 4) advise the Debtors in connection with any post-petition financing arrangements and negotiate and draft documents related to those financing arrangements and advise the Debtors with respect to legal issues arising in or relating to the their ordinary course of business; 5) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on their behalf, the defense of actions commenced against them and the negotiations concerning all litigations in which the Debtors are involved; 6) prepare on behalf of the Debtors all motions, applications, answers, orders and other papers necessary to the administration of their estates and attend meetings with third parties; 7) appear before the Bankruptcy Court, any appellate courts and the U.S. Trustee and protect the interests of the Debtors' estates before those courts and the U.S. Trustee; and 8) perform all other necessary legal services to the Debtors in connection with their chapter 11 cases. G. Christopher Meyer, Esq., a Member of Squire Sanders, is one of the lead attorneys for the Debtors. Mr. Meyer discloses that his Firm received a $125,000 retainer. Mr. Meyer reports Squire Sanders professionals bill: Designation Hourly Rate ----------- ----------- Partners $280 - $675 Associates & Counsel $165 - $425 Legal Assisstants $30 - $220 Squire Sanders assures the Court that it does not represent any interest materially adverse to the Debtors or their estates. Headquartered in Cleveland, Ohio, The Austin Company is an international firm offering a comprehensive portfolio of in-house architectural, engineering, design-build, construction management and consulting services. The Company also offers value-added strategic planning services including site location, transportation and distribution consulting, and facility and process audits. The Company and two affiliates filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ohio Lead Case No. 05-93363). When the Debtors filed for protection from their creditors, they estimated between $10 million to $50 million in total assets and debts. AVCORP INDUSTRIES: Increases Private Equity Placement to $3.375M ---------------------------------------------------------------- Avcorp Industries Inc. disclosed changes in the terms of a non-brokered previously reported private placement. Gross proceeds of up to $3,375,000 will be raised at a price of $0.90 per unit, for a total of 3,750,000 units. As reported in the Troubled Company Reporter on Aug. 31, 2005, the Company has negotiated a non-brokered Private Placement of up to 3,200,000 units at a price of $1.00 per unit, to raise gross proceeds of up to $3,200,000. Each unit of the Private Placement will consist of one common share and one-half non-transferable share purchase warrant. One share purchase warrant will entitle the holder thereof to purchase one common share of the Company at $1.00 per share for a 12-month period, from the closing date. The proceeds of the financing will be used for general working capital purposes. Certain Insiders, Directors and Officers may subscribe for a portion of this placement. The financing is subject to regulatory approval. Avcorp Industries Inc. -- http://www.avcorp.com/-- designs and builds major airframe structures for some of the world's most respected aircraft companies, including Bombardier, Boeing and Cessna. With over 40 years of experience, more than 580 skilled employees and a 300,000 square foot facility near Vancouver, Canada, the company's depth and breadth of capabilities are unique in the aerospace industry for a company of its size. Avcorp is a Canadian public company traded on the Toronto Stock Exchange. At June 30, 2005, Avcorp Industries' equity deficit widened to CDN$42,887,000, from a CDN$37,149,000 deficit at Dec. 31, 2004. BEAR STEARNS: Fitch Rates $21.69 Million Certificate Class at BB ---------------------------------------------------------------- Bear Stearns SACO I Trust's mortgage-backed certificates, series 2005-8, are rated by Fitch Ratings: -- $345.07 million class A 'AAA'; -- $51.76 million class M-1 'AA'; -- $10.85 million class M-2 'AA-'; -- $14.79 million class M-3 'A+'; -- $9.86 million class M-4 'A'; -- $8.38 million class M-5 'A-' ; -- $12.08 million class B-1 'BBB+'; -- $7.89 million class B-2 'BBB'; -- $7.89 million class B-3 'BBB-'; -- $21.69 million privately offered class B-4 'BB'. The mortgage loans consist of fixed-rate, conventional, closed-end subprime and Alt-A mortgage loans that are secured by second liens on one-to four-family residential properties. The 'AAA' rating on the senior certificates reflects the 34.15% credit enhancement provided by the 10.50% class M-1, 2.20% class M-2, 3% class M-3, 2% class M-4, 1.70% class M-5, 2.45% class B-1, 1.60% class B-2, 1.60% class B-3, and 4.40% privately held class B-4, as well as 4.70% target overcollateralization. Additionally, all classes have the benefit of monthly excess cash flow to absorb losses. The ratings also reflect the quality of the mortgage collateral, strength of the legal and financial structures, and EMC Mortgage Corporation's and First Horizon Home Loan Corporation's capabilities as servicer. As of the cut-off date, the mortgage loans have an aggregate balance of $492,959,869. The weighted average mortgage rate is approximately 10.546% and the weighted average remaining term to maturity is 241 months. The average cut-off date principal balance of the mortgage loans is $47,491. The weighted average original loan-to-value ratio is 97.47%. The properties are primarily located in California, Florida, Arizona, and Virginia. The principal originator of the mortgage loans is SouthStar Funding LLC, with respect to 12.74% of the loans. The remainder of the loans was originated by various originators. BEAZER HOMES: Completes Exchange Offer for 6.875% Senior Notes -------------------------------------------------------------- Beazer Homes USA, Inc. (NYSE: BZH), has completed its offer to exchange all of its outstanding 6.875% Senior Notes due 2015 for its 6.875% Senior Notes due 2015 which were registered under the Securities Act of 1933, as amended. The Outstanding Senior Notes were issued pursuant to Rule 144A and Regulation S under the Securities Act on June 8, 2005, and July 19, 2005. All Outstanding Senior Notes, in the aggregate principal amount of $350,000,000, were tendered. The exchange offer expired at 5:00 p.m., New York City time, on Wednesday, October 26, 2005. As reported in the Troubled Company Reporter on Sept. 29, 2005, the New Notes will be freely transferable under the Securities Act by holders who are not restricted holders. The New Notes will be identical in all material respects (including interest rate, maturity and restrictive covenants) to the original notes, with the exception that the new notes will be registered under the Securities Act. Holders of Original Notes who do not exchange their Original Notes for New Notes in the exchange offer will not be able to reoffer, resell or otherwise dispose of their Original Notes unless the Original Notes are subsequently registered under the Securities Act or unless an exemption from the registration requirements of the Securities Act is available. Accordingly, the liquidity of the Original Notes will be adversely affected. Terms of New Notes Maturity The New Notes mature on July 15, 2015. The New Notes will evidence the same debt as the Original Notes. Interest The Notes will bear interest at a rate of 6.875% per annum from June 8, 2005. Interest on the notes will be payable semi-annually in cash on January 15 and July 15 of each year, commencing on January 15, 2006. Guarantees The Notes will be guaranteed by all of the Company's significant subsidiaries. The guarantees will be unsecured obligations of the Company's subsidiaries ranking equally with all their existing and future unsecured debt that is not, by its terms, expressly subordinated in right of payment to the guarantees. Ranking The Original Notes are, and the New Notes will be: * general unsecured senior debt obligations of the Company; * ranked equally in right of payment with all of the Company's existing and future unsecured senior debt; * senior in right of payment to all of the Company's future subordinated debt; and * effectively subordinated to any of the Company's secured debt to the extent of the value of the assets securing such debt. At June 30, 2005, assuming the Company had issued the entire $350 million aggregate principal amount of notes as of such date, it would had, together with the subsidiary guarantors, approximately $1.3 billion of debt, net of unamortized discount of $19.5 million, outstanding. Substantially all of this debt was unsecured senior debt ranking equally in right of payment with these notes and the related subsidiary guarantees. Headquartered in Atlanta, Beazer Homes USA, Inc. -- http://www.beazer.com/-- is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia and also provides mortgage origination and title services to its homebuyers. Beazer Homes, a Fortune 500 company, is listed on the New York Stock Exchange under the ticker symbol "BZH." * * * As reported in the Troubled Company Reporter on June 7, 2005, Fitch Ratings has assigned a 'BB+' rating to Beazer Homes USA, Inc. (NYSE: BZH) $300 million, 6.875% senior unsecured notes due July 15, 2015. The Rating Outlook is Stable. BIRCH TELECOM: Court Grants Full Use of Lenders' Cash Collateral ---------------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware gave his final consent to Birch Telecom, Inc. and its debtor-affiliates' request to use cash collateral securing repayment of pre-petition obligations to certain prepetition lenders and Bank of America, NA, as prepetition agent. The prepetition lenders hold liens and security interests on substantially all of the Debtors' assets as collateral for the prepetition obligations in the principal amount of no less than $100 million, plus accrued interests, fees and costs. As a condition for the use of cash collateral, the Bankruptcy Court orders the Debtors to provide the prepetition lenders with adequate protection in the form of: a) a replacement security interest in and lien upon all property and assets of the Debtors to the extent that the prepetition lenders had liens on such property prior to the petition date; and b) a superpriority claim equal to any diminution resulting from the sale, lease or use by the Debtors of cash collateral pursuant to section 507(b) of the Bankruptcy Code, provided that the claim shall not be paid out of the proceeds of any avoidance actions. Under the terms of the cash collateral agreement, the Debtors are barred from undertaking these actions without prior consent from Bank of America: a) making critical vendor payments in excess of $100,000 to any single vendor; b) providing adequate assurances of payment to any entity requiring payment, deposit or restriction on the use of cash in excess of $250,000; c) returning inventory to any of its creditors for application against any prepetition indebtedness, prepetition trade payables and other prepetition claims, if the transaction results in an aggregate debt setoff of $100,000; and d) making payments on account of prepetition tax and regulatory claims. The Debtors will use the proceeds of the Cash Collateral for the orderly continuation of their businesses and operations, to enable them to reorganize and to preserve the value of their assets and operations. 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. CAMPBELL RESOURCES: Court Extends CCAA Protection Until Nov. 25 --------------------------------------------------------------- The Superior Court of Quebec (Commercial Division) granted Campbell Resources Inc. (TSX: CCH, OTC Bulletin Board: CBLRF) an extension, until Nov. 25, 2005, of the initial order granted June 30th 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, Campbell intends to avail itself of the provisions of the CCAA to prepare and present a plan of arrangement to its stakeholders. Difficulties in the start-up of the Copper Rand mine and a shortage of capital have combined to create a situation where the operations cannot generate enough cash to allow the Company to carry on without a financial restructuring under the Act. Difficulties encountered at Copper Rand in the last year include: -- unstable ground conditions in the development of a critical ventilation raise; -- reduced ore and waste hoisting capacity during repairs to a section of the shaft; and -- mine equipment problems. These difficulties have resulted in development of stopes and workplaces below planned levels and, consequently, lower levels of production. 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. CITIGROUP MORTGAGE: Fitch Rates $4.83 Mil Cert. Classes at Low-B ---------------------------------------------------------------- Fitch rates Citigroup Mortgage Loan Trust Inc. mortgage pass-through certificates, series 2005-8 consisting of three groups each with a separate set of related subordinate certificates -- Group II is not rated by Fitch: -- Classes I-A1A, I-A1B, I-A2A, I-A2B, I-A3A, I-A3B, I-A4A, I-A4B, and I-R $468,011,100 - the Group I senior certificates, III-A1, III-XS, III-PO, and III-R $83,653,020 - the Group III senior certificates, 'AAA'. Group I -- Classes I-B1 ($10,073,000) 'AA'; -- Class I-B2 ($4,668,000) 'A'; -- Class I-B3 ($2,702,000) 'BBB'; -- Privately offered class I-B4 ($2,457,000) 'BB'; -- Privately offered class I-B5 ($1,720,000) 'B'; -- Privately offered class I-B6 ($1,718,734) is not rated by Fitch. Group III -- Classes III-B1 ($1,577,000) 'AA'; -- Class III-B2 ($788,000) 'A'; -- Class III-B3 ($569,000) 'BBB'; -- Privately offered class III-B4 ($394,000) 'BB'; -- Privately offered class III-B5 ($263,000) 'B'; -- Privately offered class III-B6 ($350,438) is not rated by Fitch. The 'AAA' rating on the group I senior certificates reflects the 4.75% enhancement provided by the 2.05% class I-B1, 0.95% class I- B2, 0.55% class I-B3, 0.50% class I-B4, 0.35% class I-B5 and 0.35% class I-B6. The 'AAA' rating on the group III senior certificates reflects the 4.50% enhancement provided by the 1.80% III-B1, 0.90% III-B2, 0.65% III-B3, 0.45% III-B4, 0.30% III-B5, and 0.40% III- B6. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the master servicing capabilities of CitiMortgage, Inc., which is rated 'RMS1-' by Fitch. The trust will be divided in three bond groups. Group I will contain four loan groups and Group III will contain one loan group. All the mortgage loans in Group I and Group III were originated by Countrywide Home Loans, Inc., National City Mortgage Co., Wells Fargo Bank, N.A., Mortgage IT, Inc., Mortgage Access Corp. D/B/A Weichert Financial Services and Quicken Loans Inc. The Group I Mortgage Loans consist of approximately 1,104 adjustable-rate mortgage loans with an initial fixed-rate period of five years, seven years or 10 years and with an aggregate outstanding principal balance of approximately $491,349,834. The average principal balance of the loans in this pool is approximately $445,063. The mortgage pool has a weighted average original loan-to-value ratio of 73.94%. The weighted average FICO score is 737. The states with the largest concentrations are California and New Jersey. Group III consists of 620 conventional, fully amortizing, fixed- rate mortgage loans secured by first liens on single-family residential properties with an aggregate principal of $87,594,457. The average principal balance of the loans in this pool is approximately $141,281. The mortgage pool has a weighted average OLTV of 71.71%. The weighted average FICO score is 750. The states with the largest concentrations are California, Arizona, Texas, Maryland and Virginia. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, please see the press release issued May 1, 2003 entitled 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation', available on the Fitch Ratings Web site at http://www.fitchratings.com/ U.S. Bank National Association will serve as trustee. Citigroup Mortgage Loan Trust Inc., a special purpose corporation, deposited the loans in the trust, which issued the certificates. For federal income tax purposes, an election will be made to treat the trust as multiple real estate mortgage investment conduits. CITY OF GLOVERSVILLE: Moody's Cuts $9.4 Million Debt Rating to Ba1 ------------------------------------------------------------------ Moody's Investors Service has downgraded to Ba1 with a negative outlook from Baa3 the rating on the City of Gloversville's $9.4 million outstanding General Obligation debt. The downgrade to Ba1 from Baa3 reflects the city's: * small, stagnant tax base, trend of negative fund balances, and * lack of plan to improve the financial position. The Ba1 rating also factors the recent interlocal agreement under which Fulton County will guarantee the city's property tax collections, effective Jan. 1, 2005. The negative outlook is based on the city's: * lack of taxing margin, * historically aggressive budgeting practices, and * future expenditure pressures presented by unsettled union contracts, pension obligations, and health insurance costs. Trend of Negative General Fund Balances Moody's expects that the city will face challenges in improving its financial position given the $49 of available taxing margin, exposure to as yet non-quantified salary cost increases, reliance on short-term borrowing for cash flow, and use of one-time benefits from pension cost amortization for the recent operating surpluses. Fiscal 2004 ended with a deficit General Fund balance of $1 million (-8.7% of General Fund revenues), up from a low of negative $1.64 million (-16.1% of revenues) in fiscal 2002. The fiscal 2004 $390,000 operating surplus was facilitated by better than budgeted sales tax revenues (increased $575,000) and pension cost savings resulting from the state-allowed amortization of portion of the liability ($310,000). Property tax collections, $272,000 below budget, partially offset these gains, a result of the low collection rate (95%) and the city's obligation to make Fulton County (G.O. rated A3) and the Gloversville City School District (rated Baa2 Underlying G.O. Rating) property tax collections equal to 100% of their levy. However, city property tax collections should improve going forward as a new interlocal agreement (effective January 1, 2005) between the city and the county transfers the responsibility of guaranteeing taxes (of the city and school district) to the county. Recently, General Fund operations have been supported by annual cash flow borrowing and a loan from the city's Sewer Fund, of which $497,000 remained outstanding at the end of fiscal 2004. The fiscal 2005 General Fund budget was balanced with an $561,000 transfer in that was not realized, but management expects that fiscal 2005 with end with balanced operations after unbudgeted state aid increases ($185,000) and better than expected sales and mortgage tax revenues. Major expenditures are on target with budgeted increases for salaries (12%), health insurance (14%) and pensions (6% after amortization of another $170,000). The city is currently in negotiations to settle the police union contracts which expired in December 2004, but has not estimated a potential cost. In addition, fiscal 2006 expenditure pressures include an anticipated 8% increase in salary costs, not including increases for the Teamsters Union which is currently in negotiation, continued growth in health insurance costs, and pension obligations that will not be moderated by amortization savings. While the city expects that Fulton County's increased sales tax rate will generate an additional $800,000 in revenue, options for raising property tax revenues are limited by the non-existent tax margin. According to fiscal 2004 calculations, the city had additional property tax raising capacity of $49, removing practically all of the city's financial flexibility in this revenue source. The city does not currently have a formalized plan to improve its negative fund balance position, however new management is in the process of identifying areas for cost savings and other benefits. Future credit considerations will factor the city's development of a strategic financial plan and budgeting practices that effectively balance rising expenditures with realizable revenues. Improvements to Tax Base Critical to Recovery Moody's believes that the city's $268 million tax base has suffered from continued declines in its manufacturing base, but may see modest benefits as economic development initiatives continue. The city, located approximately 45 miles southeast of Albany (G.O. rated A3) has felt the ongoing declines in manufacturing throughout the region in its leather tanning and products industries. In recent years, the city has been forced to foreclose on several former tanneries, which ultimately require expensive environmental remediation. As a result, the city did not foreclose on any properties during fiscal 2005, although management estimates that approximately 100 properties, including several tanneries, are in arrears. Over the past five years, average growth in assessed value has been essentially flat at 0.3% per year. Full property valuation has similarly shown 0.6% average growth during the same period, but fiscal 2004 and 2005 values declined 4.2% and 1.8%, respectively. Additionally, population has been declining for the past three decades, with a continued 7.5% decline since 1990. Wealth levels are significantly below state and national medians, with per capita income and median family income at 65% and 67%, respectively. Modest development in the city includes a $6 million mixed-use project coordinated by the Fulton County Economic Development Corporation and current construction of a new office building in the city's business park, and plans to open a Walmart. Full value per capita is low at $17,369 (35% of the state median), reflecting properties in need of redevelopment. Moody's believes that recovery and redevelopment of the economy will be critical to the city's ability to increase its tax margin, generate additional revenues and improve its fiscal health. Moderate Debt Burden Moody's believes that the city's overall debt burden will remain manageable given relatively flat full value growth and no plans for future borrowing. Direct debt burden is high at 3.6% of full value. Including county and school district debt, the overall debt burden is slightly above average at 4.4%. Principal payout is average at 67% within ten years. The city currently has no plans to issue additional debt. Outlook The negative outlook is based on the city's lack of taxing margin, historically aggressive budgeting practices, and future expenditure pressures presented by unsettled union contracts, pension obligations, and health insurance costs. What would make the rating go up (removal of negative outlook): - creation and implementation of a strategic financial plan and budgeting practices that effectively balance rising expenditures with realizable revenues, including quantification and budgeting of salary increases - augmentation of reserves What would make the rating go down: - the failure to adopt a realistic plan to quantify expenditures and to generate additional revenues - continuation and deepening of negative reserves Key Statistics 2000 Population: 15,413 FY 2005 Full Valuation: $267.7 million FY 2005 Full Valuation Per Capita: $17,369 Direct Debt Burden: 3.6% Overall Debt burden: 4.4% Payout of Principal (10 years): 66.9% FY04 General Fund Balance: negative $1.01 million (-8.7% of General Fund revenues) FY04 Undesignated General Fund Balance: negative $1.09 million (- 9.3% of revenues) Parity Debt Outstanding $9.4 million 2000 Per Capita Income as a % of State: 65% 2000 Median Family Income as a % of State: 67.2% COMPOSITE TECHNOLOGY: Exits Bankruptcy in Less Than Six Months -------------------------------------------------------------- Composite Technology Corporation (OTC Bulletin Board: CPTCQ) emerged from bankruptcy, after its Chapter 11 plan of reorganization was confirmed by the Honorable John Ryan of the U.S. Bankruptcy Court for the Central District of California. The plan provides for the payment of 100% of creditors' allowed claims. CTC's confirmation comes less than six months after its bankruptcy was filed on May 5, 2005. Acquvest Parties Claims Just prior to the commencement of the hearing, the Company agreed to a complete settlement of the claims of Acquvest, Inc., Paul R. Koch, Victoria Koch and Patricia Manolis and Michael Tarbox. The Company agreed to transfer 6.5 million shares to settle all of the Acquvest Parties claims. It will be the responsibility of the Acquvest Parties to settle any claims of Michael Tarbox against the Company. The shares will be delivered to Paul Couchot of Winthrop Couchot Professional Corporation within seven days of plan confirmation. One half of the Settlement Shares would be transferred to the Acquvest Parties immediately on delivery with the remaining shares being released 45 days thereafter. "Today was an exceptional ending to an extraordinary process. It is also a beginning as CTC continues to develop, produce and market its innovative and cost effective composite core electrical conductor to the utility industry. We are so pleased that CTC was able to emerge from bankruptcy so quickly," said Leonard M. Shulman of Shulman Hodges & Bastian LLP in Foothill Ranch, California which represented CTC as its reorganization counsel. "This case moved more quickly from commencement to confirmation than any case I have either participated in or heard of for a publicly traded company. From beginning to end, we believe that this bankruptcy served exactly as it was intended -- to resolve successfully the competing claims of various parties," said Shulman's partner Mark Bradshaw. "We are extremely pleased with the bankruptcy court's approval of our Chapter 11 plan of reorganization." CTC's Chairman and CEO, Benton Wilcoxon, stated yesterday. "Our ACCC cable product is designed, manufactured and marketed to an industry that is conservative by nature, which makes the commercialization process a slow and careful one," Mr. Wilcoxon commented, "As we entered 2005, a potential hindrance to the successful commercialization of ACCC cable was a variety of pending lawsuits. We entered into our Chapter 11 reorganization to enable us to resolve our litigation liabilities and to send a clear signal to our customers that as we look beyond today's hearing, the past liabilities of the Company have been predominantly clarified. We believe that our customers can now be confident that CTC has the ability to satisfy their needs with a product that we believe exceeds expectations. We also believe that product sales will move forward and allow us to achieve our objectives. The industry is in great need for a good economical solution to an overloaded electrical grid system and we believe that ACCC cable achieves this end. Our relationship with our customers, suppliers, strategic partners, and shareholders remains our primary focus. We are very thankful for all their support throughout this process." Headquartered in Irvine, California, Composite Technology Corporation -- http://www.compositetechcorp.com/-- provides high performance advanced composite core conductor cables for electric transmission and distribution lines. The proprietary new ACCC cable transmits two times more power than comparably sized conventional cables in use today. ACCC can solve high-temperature line sag problems, can create energy savings through less line losses, and can easily be retrofitted on existing towers to upgrade energy throughput. ACCC cables allow transmission owners, utility companies, and power producers to easily replace transmission lines without modification to the towers using standard installation techniques and equipment, thereby avoiding the deployment of new towers and establishment of new rights-of- way that are costly, time consuming, controversial and may impact the environment. The Company filed for chapter 11 protection on May 5, 2005 (Bankr. C.D. Calif. Case No. 05-13107). Leonard M. Shulman, Esq., at Shulman Hodges & Bastian LLP, represents the Debtor in its restructuring efforts. As of March 31, 2005, the Debtors reported $13,440,720 in total assets and $13,645,199 in total liabilities. CORUS ENTERTAINMENT: Posts $9.7 Million Net Income in 4th Quarter ----------------------------------------------------------------- Corus Entertainment Inc. reported its financial results for the fourth quarter. Net income for the quarter was $9.7 million on revenues of $175.3 million, compared to $14.0 on revenues of $163 million in the prior year. Consolidated results were negatively impacted by a charge for the increase in the performing rights tariff retroactive to fiscal 2003. Television delivered segment profit growth of 7%, while Content contributed another quarter of positive segment profit. Revenues Revenues for the fourth quarter were $175.3 million, an increase of 8% over $163.0 million last year. Radio and Television experienced increases of 12% and 7% respectively driven by exceptionally strong advertising sales growth, while Content revenues were up 1% from the prior year. Direct Cost of Sales, General and Administrative expenses Direct cost of sales, general and administrative expenses for the fourth quarter were $132.7 million, up 10% from $120.1 million in the prior year. Radio expenses were up 18% as the ex-Astral stations acquired at the beginning of the quarter were integrated into the Quebec cluster. Corporate expenses were up by $3.4 million as a result of incentive- and stock-based compensation and the costs of regulatory compliance associated with the Sarbanes-Oxley Act. Depreciation Depreciation expense for the fourth quarter was $5.9 million, a decrease of $0.5 million from last year. This decrease reflects a lower capital cost base. Amortization Amortization expense for the fourth quarter was $1.1 million, down from $1.3 million last year. The decrease is a result of certain deferred start-up and reformatting costs becoming fully amortized. Interest on Long-Term Debt Interest expense for the fourth quarter was $14.3 million, up from $13.6 million last year. The increase results from the fact that the Company terminated its fixed-to-floating interest rate swap agreement in the third quarter of fiscal 2005. The effective interest rate for the fourth quarter was 9.4% compared to 8.5% in the prior year reflecting the absence of interest savings from the fixed-to-floating interest rate swap. Other Expense (Income), Net Other expense for the fourth quarter was $5.3 million, compared to income of $3.2 million in the prior year. The fourth quarter includes a realized contingent consideration gain of $4.1 million, a broadcast license impairment of $4.1 million and the retroactive portion of a performing rights tariff increase in the amount of $3.8 million, while the prior year includes an unrealized derivative transaction gain of $2.5 million and foreign exchange gains of $1.4 million. Income Taxes The effective tax rate for the fourth quarter was 36%, compared to the statutory rate of 36.3%. This difference reflects the geographical allocation of the Company's taxable income. Net income Net income for the fourth quarter was $9.7 million, down from $14 million last year. Earnings per share for the fourth quarter were $0.23 basic and $0.22 diluted, compared with $0.33 basic and diluted last year. Liquidity and Capital Resources Cash flows Overall, the Company's cash and cash equivalents position increased by $28.5 million in the fourth quarter, and increased by $42.9 million in the twelve months ended August 31, 2005. Cash provided by operating activities for the fourth quarter was $41.3 million, compared to $24.8 million last year. An increase in net income adjusted for non-cash items of $1.9 million and decrease of $20.2 million in change to non-cash working capital was offset by an increase in film expenditures of $6.7 million. Cash provided by operating activities for the year was $102.4 million compared to $84.9 million in the prior year. An increase in net income adjusted for non-cash items of $5.8 million and reduced non-cash working capital of $20.6 million were offset by an increase of $7.1 million in program rights expenditures. Cash used in investing activities was $11.5 million for the fourth quarter compared to $10.9 million last year. Cash used in investing activities for the year was $22.5 million, compared to $32.4 million in the prior year, as there were reduced requirements for cash for investments, as well as proceeds from the sale of non-core assets. Cash used in financing activities in the fourth quarter was $1.4 million compared to a source of $1.3 million last year. Cash used in financing activities for the year was $37.1 million, compared to $1.1 million in the prior year, as the Company paid down its U.S. dollar denominated bank loan balance of $34 million in the first quarter of fiscal 2005. Corus Entertainment Inc. -- http://www.corusentertainment.com/-- is a Canadian-based media and entertainment company. Corus is a market leader in both specialty TV and Radio. Corus also owns Nelvana Limited, a leading international producer and distributor of children's programming and products. The company's other interests include publishing, television broadcasting and advertising services. A publicly traded company, Corus is listed on the Toronto (CJR.NV.B) and New York (CJR) Exchanges. * * * As reported in the Troubled Company Reporter on June 16, 2005, Standard & Poor's Ratings Services revised its outlook on Corus Entertainment Inc. to stable from negative and affirmed its 'BB' long-term corporate credit rating on the company. Total debt outstanding was C$604 million at Feb. 28, 2005. CREDIT SUISSE: S&P Puts Low-B Ratings on Five Certificate Classes ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on 11 classes of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates from series 2002-CP5. At the same time, ratings are affirmed on seven other classes from the same transaction. The raised and affirmed ratings reflect credit enhancement levels that adequately support the ratings, as well as loan defeasance and the stable performance of the transaction. As of the remittance report dated Oct. 17, 2005, the collateral pool consisted of 141 loans with an aggregate balance of $1.15 billion, compared with 141 loans with a balance of $1.19 billion at issuance. Excluding defeased loans, the master servicer, Midland Loan Services Inc., provided year-end 2004 net cash flow debt service coverage figures for 88% of the pool. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.81x for the pool, a slight decrease from 1.84x at issuance. All of the loans in the pool are current with the exception of two loans that are 90-plus days delinquent and two assets that are real estate owned. The two delinquent loans total $1.5 million, and the two REO loans total $15.8 million. Two appraisal reduction amounts totaling $3.7 million are in effect related to the REO loans. These loans are discussed further below. To date, the trust has not experienced a loss. Excluding the defeased loans, the top 10 exposures in the pool have an aggregate outstanding balance of $517.4 million and a weighted average DSC of 2.33x for year-end 2004, compared with a DSC of 2.32x at issuance. The third-largest exposure is on the watchlist and is discussed below. Standard & Poor's reviewed property inspections provided by Midland for all of the assets underlying the top 10 exposures, and all were characterized as "good" or "excellent" with the exception of one property in the Maryland Industrial portfolio, which was characterized as "fair." At issuance, the two largest loans in the pool had credit characteristics consistent with investment-grade obligations in the context of their inclusion in the pool. Both loans have maintained credit characteristics consistent with those at issuance. Midland reported a watchlist of 39 loans with an aggregate outstanding balance of $227.2 million. The largest loan on the watchlist is the Village of Rochester Hills, which is secured by a 254,392-sq.-ft. retail property in Rochester Hills, Michigan that was built in 2002. The loan was placed on the watchlist due to the possible closure of one tenant, Farmer Jack. On May 10, 2005, the parent company of Farmer Jack, Great Atlantic & Pacific Tea Co. Inc., announced its intentions to divest its Canadian and Midwest retail operations, including Farmer Jack. To date, the borrower has not been contacted regarding a lease termination. Year-end 2004 DSC and occupancy were 1.67x and 98%, respectively. There are five assets with the special servicer, GMAC Commercial Mortgage Corp. The largest, Brockbank Apartments, is REO and is secured by a 355-unit apartment complex in Dallas, Texas, that was built in 1974 and renovated in 2000. The related loan was transferred to GMACCM in May 2004 due to imminent default. The most recent appraisal indicates a substantial loss on the loan at the eventual disposition of the asset. The other REO asset is secured by the Premier on Woodfair Apartments, a 410-unit apartment complex also in Dallas, Texas, that was built in 1977 and renovated in 2000. The related loan was originally transferred to the special servicer in May 2005 due to imminent default. Standard & Poor's estimates a moderate loss at the eventual disposition of this property. The Barclay House is a 33-unit multifamily property built in 1965 in Westland, Michigan, that secures a loan for $901,061. The loan is 90-plus days delinquent, but GMACCM has consented to an assumption that will bring all debt service payments current. GMACCM is holding approximately $90,000 in escrow and replacement reserve accounts, which includes the expected assumption fee. The loan will be returned to Midland after the assumption has closed and the loan is current. A $614,152 loan secured by 106 Crescent - Kirkwood, a 30-unit apartment building built in 1970 outside of Binghamton, New York, was transferred to the special servicer in March when it became more than 90 days delinquent. Foreclosure proceedings have commenced. The borrower requested a loan payoff following two separate inquiries to purchase the collateral. GMACCM will continue with foreclosure if the asset is not sold. The 128-room AmeriSuites Houston, a limited-service hotel built in 1996 in Houston, Texas, secures a $5.5 million loan. The loan was transferred to the special servicer due to imminent default, but the borrower has kept the loan current. Hyatt purchased the AmeriSuites brand in January 2005, and this property has been reflagged. A six-month forbearance agreement was approved in February 2005. The loan will be transferred back to the master servicer following timely payment of next month's debt service payment. Standard & Poor's stressed the loans on the watchlist, along with other loans with credit issues, as part of its pool analysis. Two loans are secured by properties in and around Fort Lauderdale, Florida that were potentially damaged by Hurricane Wilma. The insurance policies for and potential damage to the respective properties were considered in the pool analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2002-CP5 Rating Class To From Credit enhancement (%) ----- -- ---- ---------------------- B AAA AA 14.88 C AAA A+ 12.94 D AA+ A 11.64 E AA- A- 10.09 F A+ BBB+ 9.31 G A- BBB 7.89 H BBB+ BBB- 6.60 J BBB- BB+ 4.66 K BB+ BB 4.14 L BB BB- 3.36 M BB- B+ 2.72 Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2002-CP5 Class Rating Credit enhancement (%) ----- ------ ---------------------- A-1 AAA 18.50 A-2 AAA 18.50 N B 2.33 O B- 1.92 P CCC 1.29 A-X AAA N/A A-SP AAA N/A N/A -- Not applicable CROWN HOLDINGS: Earns $181 Million of Net Income in Third Quarter ----------------------------------------------------------------- Crown Holdings, Inc., delivered its quarterly report on Form 10-Q for the quarter ending September 30, 2005, to the Securities and Exchange Commission on October 28, 2005. Net sales in the third quarter of 2005 were $1.928 billion -- an increase of $102 million or 5.6% compared to net sales of $1.826 billion for the same period in 2004. Cost of products sold, excluding depreciation and amortization, was $1.593 billion the three nine months ended September 30, 2005, increases of $83 million compared to $1.51 billion for the same periods in 2004. Selling and administrative expense was $88 million in the third quarter of 2005 compared to $77 million for the same period in 2004. Consolidated segment income was $181 million in the third quarter compared to $172 million ended September 30, 2004. At September 30, 2005, the Company's balance sheet shows $7.728 billion in total assets and $7.521 billion in total debts. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?2a4 Crown Holdings, Inc., through its affiliated companies, is a leading supplier of packaging products to consumer marketing companies around the world. World headquarters are located in Philadelphia, Pennsylvania. * * * As reported in the Troubled Company Reporter on Oct. 28, 2005, 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. Standard & Poor's assigned its 'B' rating to the $500 million of senior unsecured notes due 2013 and $600 million of senior unsecured notes due 2015 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 $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, ratings and recovery prospects will be reevaluated. Moody's Investors Service upgraded the ratings of Crown Cork & Seal, Inc. and its subsidiaries and concurrently assigned Ba2 ratings to US$1.3 billion in senior secured credit facilities and B1 ratings to US$1.1 billion in senior unsecured notes associated with a refinancing plan announced by Crown Holdings, Inc., its ultimate parent holding company. With these ratings actions, the ratings outlook was also changed to stable from positive. Moody's has assigned these ratings: (a) US$410 million proposed US Revolving Credit Facility due 2011, assigned Ba2; (b) US$350 million proposed European Revolving Credit Facility due 2011, assigned Ba2; (c) US$40 million proposed Canadian Revolving Credit Facility due 2011, assigned Ba2; (d) US$250 million proposed U.S. Term Loan B due 2012, assigned Ba2; (e) US$250 million proposed Euro Term Loan B due 2012, assigned Ba2; (f) US$500 million proposed Crown Americas senior notes due 2013, assigned B1; and (g) US$600 million proposed Crown Americas senior notes due 2015, assigned B1. Moody's also has taken these actions on existing ratings: (a) Corporate Family Rating at Crown Cork & Seal Company, Inc., rating raised from B2 to Ba3; (b) EUR460 million (US$557 million) European Holdings 6.25% First Lien Notes due Sep 1, 2011, rating raised from Ba3 to Ba2; (c) US$200 million Crown Cork & Seal Company, Inc. 8.00% Senior Unsecured Notes due April 15, 2023, rating raised from B3 to B2; (d) US$350 million Crown Cork & Seal 7.375% Senior Unsecured Notes due December 15, 2026, rating raised from B3 to B2l; (e) US$150 million Crown Cork & Seal 7.50% Senior Unsecured Notes due December 15, 2096, rating raised from B3 to B2; (f) US$156 million (originally US$300 million) Crown Cork & Seal Finance PLC Senior Unsecured Notes, due December 15, 2006, rating raised from B3 to B2; (g) US$200 million Crown Americas first lien revolver due February 15, 2010, Ba3 rating prospectively withdrawn; (h) US$200 million European Holdings first lien revolver due February 15, 2010, Ba3 rating prospectively withdrawn; (i) US$100 million Crown Americas first lien letter of credit facility due February 15, 2010, Ba3 rating prospectively withdrawn; (j) US$1.1 billion European Holdings 9.5% Senior Secured Second Lien Notes due March 1, 2011, B1 rating affirmed until execution of tender and then withdrawn; (k) EUR285 million (US$345 million) European Holdings 10.25% Senior Secured 2nd Lien Notes due March 1, 2011, B1 rating affirmed until execution of tender and then withdrawn; and (l) US$725 million European Holdings 10.875% Senior Secured 3rd Lien Notes due March 1, 2013, B2 rating affirmed until execution of tender and then withdrawn CUMULUS MEDIA: Partners with Three Investors to Buy Susquehanna --------------------------------------------------------------- Cumulus Media Inc. (NASDAQ: CMLS) disclosed the formation of Cumulus Media Partners, LLC, a newly formed private partnership created by: * Cumulus Media Inc., * Bain Capital, * The Blackstone Group, and * Thomas H. Lee Partners, to acquire the radio broadcasting business of Susquehanna Pfaltzgraff Co. Cumulus Media Partners has entered into a definitive agreement to acquire Susquehanna Radio for approximately $1.2 billion. Cumulus Media Inc. will provide management services to the partnership. The transaction is expected to be completed in the first half of 2006. Susquehanna Radio is the largest privately owned radio broadcasting company in the United States and the 11th largest radio station operator in terms of revenue. The group consists of 33 radio stations in 8 markets including: * San Francisco, * Dallas, * Houston, * Atlanta, * Cincinnati, * Kansas City, * Indianapolis and * York, Pennsylvania. Cumulus Media Inc. will contribute its two FM stations in Houston and two FM stations in Kansas City, in return for its membership interest in the partnership. Cumulus Media Inc. will initially own approximately 25% of Cumulus Media Partners, with performance incentives that can increase that stake up to approximately 40%. Pursuant to a management agreement, Cumulus Media Inc. will be paid a quarterly management fee. Cumulus Media Inc. Chairman and CEO, Lew Dickey stated, "Susquehanna is one of the radio industry's most admired companies because of the quality of its assets and the quality of its people. We look forward to partnering with the management and employees of Susquehanna to continue their great tradition of serving listeners, advertisers and communities. The formation of Cumulus Media Partners has also helped us accomplish our goals of monetizing our station assets in Houston and Kansas City and enabling our shareholders to benefit from the next wave of industry consolidation." Cumulus Media Partners is receiving debt financing for the acquisition from: * Deutsche Bank, * Merrill Lynch, * Goldman Sachs, and * UBS. Additionally, Deutsche Bank Securities Inc. acted as exclusive financial advisor to Cumulus Media Inc. Deutsche Bank Securities and Goldman Sachs acted as financial advisors to Cumulus Media Partners. Jones Day acted as legal counsel for Cumulus Media Inc. and Cumulus Media Partners in connection with the transaction, and Simpson Thacher & Bartlett LLP acted as legal counsel for the investor group. UBS Investment Bank acted as exclusive financial advisor to Susquehanna Pfaltzgraff. Susquehanna Pfaltzgraff Co. also agreed to sell Susquehanna Communications, the Cable Television and Broadband services division of Susquehanna Pfaltzgraff, to Comcast Corporation. About Bain Capital Bain Capital -- http://www.baincapital.com/-- is a global private investment firm that manages several pools of capital including private equity, high-yield assets, mezzanine capital, venture capital and public equity with more than $26 billion in assets under management. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in over 230 companies in a variety of industries around the world, including such leading media and communications companies as Warner Music Group, ProSiebenSat.1 Media AG, and Houghton Mifflin. Headquartered in Boston, Bain Capital has offices in New York, London and Munich. About The Blackstone Group The Blackstone Group -- http://www.blackstone.com/-- a global investment and advisory firm with offices in New York, Atlanta, Boston, Los Angeles, London, Hamburg, Paris and Mumbai, was founded in 1985. The firm has raised a total of approximately $34 billion for alternative asset investing since its formation. Over $14 billion of that has been for private equity investing, including Blackstone Capital Partners IV, one of the largest institutional private equity funds ever raised at $6.45 billion. About Thomas H. Lee Partners Thomas H. Lee Partners, L.P., is a Boston-based private equity firm focused on identifying and acquiring substantial ownership positions in growth companies. Founded in 1974, Thomas H. Lee Partners currently manages approximately $12 billion of committed capital, including its most recent fund, the $6.1 billion Thomas H. Lee Equity Fund V. Notable transactions sponsored by the firm include American Media Inc., Grupo Corporativo Ono, Houghton Mifflin, Michael Foods, National Waterworks, Nortek, ProSiebanSat.1 Media, Rayovac, Simmons Company, Transwestern Publishing, Warner Chilcott and Warner Music. About Cumulus Media Cumulus Media Inc. is the second largest radio company in the United States based on station count. Giving effect to the completion of all announced pending acquisitions and divestitures, Cumulus Media Inc. will own and operate 310 radio stations in 61 mid-size and smaller U.S. media markets. The Company's headquarters are in Atlanta, Georgia, and its web site is http://www.cumulus.com/ Cumulus Media Inc. shares are traded on the NASDAQ National Market under the symbol CMLS. * * * As reported in the Troubled Company Reporter on Dec. 3, 2004, Moody's Investors Service assigned Ba3 ratings to Cumulus Media's $75 million senior secured term loan F and $75 million increase to its existing revolving credit facility. Moody's also assigned Ba3 ratings to $415 million in senior secured term loans. This rating assignment incorporates Cumulus' amendment to its bank credit facilities, which redistributed debt between existing term loans. Moody's affirmed all existing ratings, and changed the outlook to positive. As reported in the Troubled Company Reporter on Nov. 9, 2004, Standard & Poor's Ratings Services assigned a 'B+' rating to Cumulus Media Inc.'s $150 million increase to its bank credit facility, consisting of a $75 million addition to its existing revolving credit loan maturing March 2009 and a $75 million term loan F maturing March 2010. Borrowings under the loans will be used to fund the company's $100 million share buyback program. A recovery rating of '3' was also assigned to the company's proposed and existing credit facilities, indicating the likelihood of a meaningful recovery of principal (50%-80%) in the event of bankruptcy or default. At the same time, Standard & Poor's affirmed its 'B+' long-term corporate credit rating on Cumulus. S&P says the outlook is stable. CUMULUS MEDIA: Susquehanna Buy Cues Moody's to Hold Ba2 Ratings --------------------------------------------------------------- Moody's Investors Service affirmed the existing debt ratings and stable rating outlook of Cumulus Media, Inc. following the company's announcement of the formation of Cumulus Media Partners, LLC with a group of private equity sponsors (Bain Capital, The Blackstone Group and Thomas H. Lee Partners) to acquire the radio broadcasting division of Susquehanna Pfaltzgraff Co. for approximately $1.2 billion. The affirmation reflects Moody's expectation that Cumulus will not take on any incremental leverage as a result of its participation in the acquisition of Susquehanna's radio division and instead the company will gain a 25% equity interest in the venture in return for radio assets that are not complementary to Cumulus' current portfolio (2 FM stations in Houston and 2 FM Stations in Kansas City). Additionally, it is Moody's view that the transaction strengthens Cumulus' strategic position in the radio sector by expanding the company's appeal to national advertisers and providing the company with opportunities to reduce costs through economies of scale. The ratings continue to reflect Cumulus' dominant market presence and mid-market focus (top 50-250 markets) which garner more stable local advertising revenues, balanced by our belief that Cumulus will continue to return cash to shareholders in the form of share repurchases instead of paying down debt. The following ratings are affirmed: (i) a Ba2 on the $400 million senior secured revolving credit facility due 2012, (ii) a Ba2 on the $400 million senior secured term loan facility due 2012, and (iii) the company's Ba2 Corporate Family rating. The outlook is stable. Cumulus Media, Inc., with 305 stations in 61 mid-size markets, is the second largest radio broadcaster in the U.S. based on station count, and the eighth largest based on revenues. CWALT INC: Fitch Places Low-B Ratings on $5.8-Mil Cert. Classes --------------------------------------------------------------- Fitch rates CWALT, Inc.'s mortgage pass-through certificates, Alternative Loan Trust 2005-57CB: -- $793.8 million classes 1-A-1, 1-A-2, 3-A-1 through 3-A-8, 4-A-1 through 4-A-8, 1-X, 3-X, 4-X, PO, and A-R certificates senior certificates 'AAA'; -- $12.8 million class M certificates 'AA'; -- $6.6 million class B-1 certificates 'A'; -- $5.0 million class B-2 certificates 'BBB'; -- $3.3 million class B-3 certificates 'BB'; -- $2.5 million class B-4 certificates 'B'. The 'AAA' rating on the senior certificates reflects the 3.90% subordination provided by the 1.55% class M, the 0.80% class B-1, the 0.60% class B-2, the 0.40% privately offered class B-3, the 0.30% privately offered class B-4 and the 0.25% privately offered class B-5, which are not rated by Fitch. Classes M, B-1, B-2, B-3 and B-4 are rated 'AA', 'A', 'BBB', 'BB' and 'B' based on their respective subordination only. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures and the master servicing capabilities of Countrywide Home Loans Servicing LP, rated 'RMS2+' by Fitch, a direct wholly owned subsidiary of Countrywide Home Loans, Inc. The mortgage pool consists of three loans groups. Loan group 1 consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $187,997,234 as of the cut-off date, Oct. 1, 2005, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average original loan-to- value ratio of 79.03%. The weighted average FICO credit score is approximately 733. The average loan balance is $146,758. The three states that represent the largest portion of mortgage loans are Arizona, Texas, and Colorado. Loan Group 3 consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $296,340,422 as of the cut-off date, Oct. 1, 2005, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average OLTV of 71.84%. The weighted average FICO credit score is approximately 726. Cash-out refinance loans represent 38.57% of the mortgage pool and second homes 6.14%. The average loan balance is $210,021. The three states that represent the largest portion of mortgage loans are California, Arizona and Florida. Loan Group 4 consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $318,717,700 as of the cut-off date, Oct. 1, 2005, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average OLTV of 70.88%. The weighted average FICO credit score is approximately 727. Cash-out refinance loans represent 39.69% of the mortgage pool and second homes 7.06%. The average loan balance is $229,624. The three states that represent the largest portion of mortgage loans are California, Arizona and Florida. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, please see the press release issued May 1, 2003 entitled 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation' available at http://www.fitchratings.com/ Approximately 78.62% and 21.38% of the Group 1 mortgage loans, 76.35% and 23.65% of the Group 3 mortgage loans, and 76.03% and 23.97% of the Group 4 mortgage loans were originated under CHL's Standard Underwriting Guidelines and Expanded Underwriting Guidelines, respectively. Mortgage loans underwritten pursuant to the Expanded Underwriting Guidelines may have higher loan-to-value ratios, higher loan amounts, higher debt-to-income ratios and different documentation requirements than those associated with the Standard Underwriting Guidelines. In analyzing the collateral pool, Fitch adjusted its frequency of foreclosure and loss assumptions to account for the presence of these attributes. CWALT purchased the mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. The Bank of New York will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. DECKERS CONSTRUCTION: Case Summary & 27 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Deckers Construction Inc. dba RJA Group Inc. P.O. Box 10179 Ponce, Puerto Rico 00732 Bankruptcy Case No.: 05-12871 Type of Business: The Debtor is a contractor. Chapter 11 Petition Date: October 31, 2005 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Felix A. Toro, Esq. Hector R. Cuprill Law Offices Apartado 1104 Ponce, Puerto Rico 00733 Tel: (787) 844-5770 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 27 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ P.V. Construction Electrical $412,757 P.O. Box 3270 Subcontractor Mayaguez, PR 00681 WesternBank Income Tax $221,109 [Address Not Provided] Central Industrial Remocion toxic $152,327 PMB 131 material P.O. Box 2020 Barcelona, PR 00617 Ace Forming System Rent and sale of $147,248 P.O. Box 363707 scaffolds & San Juan, PR 00936-3707 frameworks Sigari Corporation Electrical $125,848 P.O. Box 330627 Engineering Ponce, PR 00733-0627 Services Puerto Rico Wire Equipment rental $117,124 P.O. Box 363167 San Juan, PR 00936-3167 Secretario de Hacienda Government Agency $113,677 Seguro por Incapacidad For Insurance Centro Gubernamental Ponce, PR 00731 Imaginacion Sale of promeria $112,778 P.O. Box 1771 accessories Juncos, PR 00777-1717 Southern Fabricators Subcontractor $111,739 P.O. Box 1559 Villalba, PR 00766 SECR 143 Deductions for $93,187 Professional Services B.I.W. Gavinete Manufactures $86,240 Cabinets Lausell Fabricates doors $77,938 and windows Intaco Rent and sale of $60,584 scaffolds & frameworks Halco Sales Rent and sale of $58,694 scaffolds & frameworks Trujillo Alto Metal Manufactures steel $56,506 Envirorecycling Remocion Services $53,750 Pittsburg Paints Sells paints $48,573 Reichard Santiago Auditor services $39,145 Easy Rental Rent $38,000 H.Q.J. Plumbing Sale of plomeria $37,517 Materials Compresores Y Equipos Rent of Construction $32,721 Equipment Andamios de PR, Inc. Rent and sale of $31,696 scaffolds & frameworks Velazquez Plumbing Subcontractor $30,084 Maytag Sells appliances $28,356 Autoridad de Energia Provides power $27,874 Roger Electric Sells electrical $36,214 Materials Tropical Concrete $23,411 DELPHI CORP: Gets Court Okay to Continue Honoring Cananwill Pact ---------------------------------------------------------------- John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, relates that since February 5, 2005, Delphi Corporation has financed certain of its fiduciary, directors and officers, and employment practices liability insurance policies pursuant to a Commercial Insurance Premium Finance and Security Agreement with Cananwill, Inc. Mr. Butler notes that the Insurance Policies are essential to the preservation of Delphi Corporation and its debtor-affiliates' businesses, properties, and assets. In some cases, the coverage is required by regulations, laws, and contracts that govern the Debtors' business obligations. In total, Delphi is financing approximately 20 Insurance Policies under the Finance Agreement. Delphi has financed the Insurance Policies to take advantage of favorable interest rates under the Finance Agreement and to increase liquidity. Pursuant to the Finance Agreement, Cananwill agreed to pay in advance to Delphi's insurance carriers $6,099,340, which constitutes the full annual insurance premium for each of the Insurance Policies. In exchange, the Finance Agreement required Delphi to pay Cananwill a $564,992 cash down payment and to make 11 monthly payments, each in a similar amount starting March 1, 2005. The Finance Agreement further provided for Cananwill to receive a $115,574 finance charge. In addition, the Finance Agreement includes a security agreement which grants Cananwill a security interest in all sums payable to Delphi under the Insurance Policies, including any gross return premiums that would be payable in the event of cancellation of the Insurance Policies and loss payments that reduce the Unearned Premiums. Thus, Cananwill likely is entitled to adequate protection in the form of payment under the Finance Agreement. As of the Petition Date, Delphi owed Cananwill $1,700,000 under the Finance Agreement. In the Debtors' business judgment, the terms of the Finance Agreement represent the best possible terms for financing the premiums of the Insurance Policies. Under the Finance Agreement, the annual interest rate is 3.77%. The Debtors' estates will benefit by maintaining the low-cost financing from Cananwill, Mr. Butler says. Moreover, any interruption of payments might adversely affect the Debtors' ability to obtain financing for future policies on favorable terms. Although the Insurance Policies cover some of their foreign, non- debtor affiliates, the Debtors do not allocate any of the premiums to those affiliates. The Debtors base their allocation of their insurance costs on exposure or past losses. The vast majority of the exposure resides in the U.S. Debtors, and there is no history of a non-U.S. claim being made under the Insurance Policies in an amount that approaches the amount of the Debtors' deductible. By this motion, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to permit them to continue honoring their obligations under the Finance Agreement. Mr. Butler explains that security interests created by premium finance agreements generally are recognized as secured claims in bankruptcy to the extent of the amount of unearned premiums financed pursuant to those agreements. Section 361 of the Bankruptcy Code specifically contemplates providing adequate protection to the extent of the diminution in value of a secured creditor's collateral, and the security interests under the Finance Agreement warrant adequate protection in the form of periodic payments pursuant to the Finance Agreement's terms. According to Mr. Butler, the Debtors' continued use of the Insurance Policies decreases the value of the Unearned Premiums that serve as the collateral for Cananwill. This loss in value is replaced through the Debtors' payment of the monthly finance charges and related payments under the Finance Agreement. Thus, Cananwill is entitled to continued payment of these amounts as adequate protection. The Debtors also believe that financing the premiums on the Insurance Policies pursuant to the Finance Agreement enables them to maintain critical insurance coverage. * * * The Court grants the Debtors' motion to continue honoring their obligations under the Cananwill Finance Agreement. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represents the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Gets Permanent Injunction Against Utility Companies ---------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Oct. 25, 2005, on an interim basis, The Honorable Robert D. Drain of the Southern District of New York Bankruptcy Court: (a) prohibits utilities from altering, refusing, or discontinuing services on account of prepetition invoices; and (b) approves the proposed procedures for determining requests for additional adequate assurance. Objections of Utility Companies (1) SBC Darryl S. Laddin, Esq., on behalf of SBC Communications, Inc., asserts that the Debtors offer virtually no support for their conclusory contention that the particular circumstances of their Chapter 11 cases warrant a finding by the Court that the minimal provisions they have proposed constitute adequate assurance of payment for postpetition utility services. SBC suggests that: (a) the Debtors be required to make weekly pre-payments, in amounts equal to the estimated net charges for all services and products provided by SBC, subject to a quarterly true-up and adjustment of the pre-payment based on actual usage for the preceding period; (b) to the extent that the Debtors order additional services or products from SBC, the Debtors must be required to make additional pre-payments for those services and products; (c) in the event that the Debtors fail to make any of the required pre-payments, SBC should be authorized to terminate service to the Debtors after a three-day notice and cure period; and (d) the Debtors be required to provide weekly flash reports with respect to their available cash and administrative liabilities, subject to reasonable confidentiality restrictions. "The procedures proposed by the Debtors for the utility companies to seek adequate assurance simply would impose requirements on the utility companies that are not contained in Section 366 [of the Bankruptcy Code]," Mr. Laddin contends. For instance, Mr. Laddin says, the procedures would substantially extend the 20-day period of Section 366(b) while the Debtors took their time in deciding whether to take advantage of the "permission" -- which obviously is not needed -- to file a determination motion. "The requirement for any request for adequate assurance to include the payment history (over 6 months, no less) and a description of any material delinquency also is not something contained within Section 366," Ms. Laddin adds. SBC, hence, asks the Court to deny the Debtors' request. (2) Six Utilities Six utility companies demand further adequate assurance of payment for their postpetition utility services. The Six Utilities are: (1) American Electric Power, (2) Dominion East Ohio, (3) New York State Electric and Gas Corporation, (4) Niagara Mohawk Power Corporation, (5) Public Service Electric and Gas Company, and (6) Rochester Gas & Electric Corporation The Utilities assert that further adequate assurance of payment is warranted because: (a) Delphi admits that it will have significant negative EBITDAR until at least the end of August 2005; (b) Delphi is faced with significant organized labor issues that threaten its very existence as a going concern in the future; (c) Delphi admits that it has been suffering losses since 2003; (d) Delphi admits that its financial condition had deteriorated further in the first six months of 2005, with net operating losses of $608,000,000 for the first six months of calendar year 2005 on six-month net sales of $13,900,000,000, which is approximately $1,000,000,000 less in sales than during the same time period in calendar year 2004. Reported net losses in calendar year 2004 were $4,800,000,000; (e) Although the Debtors' U.S. hourly workforce was reduced by 15% over the 15-month period ended December 31, 2004, as of June 30, 2005, approximately 12% of Delphi's U.S. hourly workforce was in a non-productive status. In 2004, this cost Delphi more than $170 million, including wages and benefits; (f) The Debtors' Chapter 11 petitions listed consolidated global assets and liabilities, as of August 31, 2005, of approximately $17,100,000,000 and $22,200,000,000. Delphi had $3,900,000,000 in outstanding debt as of June 30, 2005, of which $3,400,000,000 was long-term debt; (g) The Debtors assert that they are facing considerable challenges due to revenue decreases and related pricing pressures stemming from a substantial slowdown in General Motor's North America vehicle production. GM currently comprises approximately 49% of Delphi's sales, and GM sales for the first six months of 2005 were down approximately $1,600,000,0000, an 18% year-over-year decline, thereby adversely affecting Delphi's financial performance; and (h) During the first six months of 2005, the Debtors incurred substantial commodity cost increases, most notably for steel and petroleum-based resin products. Although the Debtors intend to pass cost increases to its customers, the Debtors claim that if they are not successful, their income in future periods will be further adversely affected. Moreover, the Debtors will also be facing increasing energy prices this fall and winter. "In light of the Debtors' admitted severe financial and liquidity problems, the uncertainty as to whether the Debtors will even be able to successfully reorganize, and the exposure presented by the Utilities' state law billing cycles, any further delay in reaching an initial determination of what the Debtors should provide as adequate assurance of payment is highly prejudicial to the Utilities," Thomas R. Slome, Esq., at Rosen Slome Marder LLP, in Uniondale, New York, tells the Court. As adequate assurance of payment, the Utilities request two-month postpetition deposits from the Debtors: Utility No. of Accounts Deposit Request ------- --------------- --------------- AEP 5 $575,625 NYSEG 13 219,631 Niagara 2 125,450 PSEG 2 222,000 RG&E 7 607,173 (3) Entergy Entergy Mississippi, Inc., asserts that the Debtors have failed to provide adequate assurance of payment for its postpetition utility services. Entergy believes that approval of the Debtors' request will place it at an even greater risk and for an even longer period of time until the issue of adequate assurance and its rights under Section 366 of the Bankruptcy Code may be resolved. Thus, Entergy asks the Court to compel the Debtors to immediately furnish it with sufficient cash of $1,500,000 to replenish its soon-to-be-depleted Security to a total of $1,500,000, as adequate assurance of payment of services pursuant to Section 366(b). Should the Debtors fail to furnish the deposit immediately, Entergy also seeks the Court's permission to unilaterally terminate all services to the Debtors. (4) Constellation Timothy W. Walsh, Esq., at DLA Piper Rudnick Gray Cary US LLP, in New York, tells Judge Drain that Constellation NewEnergy, Inc., and the Debtors are parties to three forward contracts: (1) an Electricity Supply Agreement in New York; (2) a Master Electricity Supply Agreement in Illinois; and (3) a Gas Sale, Transportation, and Management Contract, Contract No. AEM03002. Constellation, Mr. Walsh says, does not oppose the Debtors' request, but wishes to preserve its rights as a forward contract merchant under Section 556 of the Bankruptcy Code. Section 556 provides that the commencement of a bankruptcy proceeding or Delphi's insolvency is an "event of default" permitting Constellation to terminate the Supply Agreements. (5) AT&T AT&T Corp. argues that the proposed adequate assurances are insufficient to adequately assure payment of monthly invoices to AT&T. AT&T does not believe adequate assurance is satisfied by the Debtors' mere acknowledgment of an administrative expense claim. Therefore, AT&T asks the Court for authority to: (a) direct the Debtors to post a security deposit equal to three months of anticipated AT&T Services totaling $2,656,500, and prepay its monthly invoices, subject to the Debtors' right to subsequently dispute any actual charges; (b) direct the Debtors to implement a procedure by which disputes are resolved in an expedited manner, to the extent that the Debtors dispute any charges for AT&T Services; (c) in the event the Debtors default on any of their postpetition obligations, suspend or terminate all services rendered to the Debtors unless, within five business days after written notice of the default, the Debtors cure the default; and (d) enter into a postpetition set-off arrangement with the Debtors whereby any amounts owed to AT&T on a monthly basis for AT&T Services may be set off against any amounts owed to the Debtors by AT&T on a monthly basis for the switched access services that the Debtors provide to AT&T. * * * Except with respect to the Objecting Utilities, Judge Drain grants the Debtors' request on a final basis. Judge Drain notes that to the extent that the Electricity Supply Agreement in New York, Master Electricity Supply Agreement in Illinois, and Gas Sale, Transportation, and Management Contract, Contract No. AEM03002, between the Debtors and Constellation NewEnergy, Inc., are "forward contracts" and Constellation is a "forward contract merchant," as the terms are defined in Sections 101(25) and (26) of the Bankruptcy Code, nothing is intended to limit or impair Constellation's rights under Section 556 of the Bankruptcy Code as a forward contract merchant, nor will the Final Order limit or impair the Debtors' right to argue that: -- Constellation is not a forward contract merchant; -- the Supply Agreements are not forward contracts; or -- Constellation is not entitled to exercise any rights it may have under Section 556, or otherwise. The hearing with respect these Objecting Utilities is continued to November 29, 2005: * AT&T, * Entergy Mississippi, Inc., * SBC Communications Inc., * American Electric Power, * Dominion East Ohio, * New York State Electric And Gas Corporation, * Niagara Mohawk Power Corporation, * Public Services And Electric Gas Company, and * Rochester Gas & Electric Corporation The Debtors have until November 28, 2005, at 12:00 p.m., to respond to the objections. If the hearing is further continued, the Debtors must file their response on or before 12:00 p.m., on the day prior to the applicable hearing date. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represents the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Asks Court for Open-Ended Lease-Decision Period ---------------------------------------------------------- Pursuant to Section 365(d)(4) of the Bankruptcy Code, Delta Air Lines Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to extend the time within which they may assume approximately 415 unexpired leases of nonresidential property to and including the date of confirmation of a plan of reorganization. Having filed for bankruptcy less than six weeks ago, the Debtors have not yet had an opportunity to identify or make final determinations regarding the assumption or rejection of many of the Leases, Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, explains. According to Mr. Huebner, in light of the size, complexity and demands of the Debtors' Chapter 11 cases, it would not be realistic to require them to make final determinations regarding the assumption or rejection of the Leases by November 13, 2005. Furthermore, until their exit strategy is further developed, the Debtors need to retain financial, operational, network and fleet planning flexibility and the results of future decisions in those areas is expected to affect whether to assume or reject certain Leases. Mr. Huebner tells Judge Beatty that, absent an extension, the Debtors might be forced to prematurely assume Leases, which would lead to unnecessary administrative claims against their estates if assumed Leases were later deemed unhelpful to the Debtors' reorganization. Conversely, if the Debtors precipitously rejected Leases, or were deemed to reject Leases by operation of Section 365(d)(4), they would be giving up property interests that might later prove important to their reorganization. On the other hand, the requested extension would not unduly prejudice lessors under the Leases, Mr. Huebner maintains. Because of the postpetition financing from General Electric Capital Corporation, and the revenues they continue to realize from their ongoing operations, the Debtors will have no problem timely performing all of the postpetition lease obligations required to be performed until the Leases are assumed or rejected. Furthermore, any lessor under a Lease would retain the right to petition the Court to fix an earlier date by which the Debtors would have to decide to assume or reject that Lease. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Committee Wants Akin Gump as Bankruptcy Counsel ---------------------------------------------------------- Pursuant to Sections 1103(a) and 328(a) of the Bankruptcy Code, and Rule 2014 of the Federal Rules of Bankruptcy Procedure, the Official Committee of Unsecured Creditors seeks the U.S. Bankruptcy Court for the Southern District of New York's consent to retain Akin Gump Strauss Hauer & Feld LLP as its counsel, effective September 28, 2005. Jordan S. Weltman, senior managing director - Americas Region of Boeing Capital Corp., relates that that the Creditors Committee selected Akin Gump because of its considerable experience in representing unsecured creditors' committees in Chapter 11 reorganization cases and other debt restructurings. Akin Gump will: (a) advise the Creditors Committee with respect to its rights, duties and powers in the Debtors' Chapter 11 cases; (b) assist and advise the Committee in its consultations with the Debtors relative to the administration of their Chapter 11 cases; (c) assist the Committee in analyzing the claims of the Debtors' creditors and the Debtors' capital structure, and in negotiating with holders of claims and equity interests; (d) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of their businesses; (e) assist the Committee in its analysis of, and negotiations with, the Debtors or any third-party concerning matters related to, among other things, the assumption or rejection of certain leases of non-residential real property and executory contracts, asset dispositions, financing of other transactions and the terms of one or more plans of reorganization for the Debtors and accompanying disclosure statements and related plan documents; (f) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in the Debtors' Chapter 11 cases; (g) represent the Committee at all hearings and other proceedings; (h) review and analyze applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety and, to the extent deemed appropriate by the Committee, support, join or object thereto; (i) advise and assist the Committee with respect to any legislative or governmental activities; (j) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; (k) assist the Committee in its review and analysis of all of the Debtors' various aircraft agreements and fleet restructuring process pursuant to Section 1110 of the Bankruptcy Code; (l) prepare, on behalf of the Committee, any pleadings, including without limitation, motions, memoranda, complaints, adversary complaints, objections or comments; (m) investigate and analyze any claims against the Debtors' non-debtor affiliates; and (n) perform other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with its powers and duties as set forth in the Bankruptcy Code, Bankruptcy Rules or other applicable law. The Creditors Committee requests that all fees and related costs and expenses it incurs on account of services rendered by Akin Gump be paid as administrative expenses of the estates pursuant to Sections 328, 330(a), 331, 503(b) and 507(a)(1). Akin Gump's current hourly rates are: Professional Hourly Rate ------------ ----------- Partners $475 to $795 Special Counsel and Counsel $385 to $735 Associates $230 to $450 Paraprofessionals $65 to $195 The attorneys who will primarily provide services to the Creditors Committee are: Partner Rate ------- ---- Daniel H. Golden, Esq. $790 Lisa G. Beckerman, Esq. $715 David H. Botter, Esq. $625 Michael Mandel, Esq. $580 David P. Simonds, Esq. $530 Mr. Golden, a member of Akin Gump, assures the Court that the firm is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. Mr. Golden discloses that Akin Gump represented these parties-in- interest and their affiliates, which representation accounted for more than 1% of the Firm's revenues: -- American International Group; -- AT&T Corporation; -- State Farm Insurance Company; -- UPS Supply Chain Solutions, Inc., and -- Wyndham International, Inc. Mr. Golden adds that, in June 2001, Akin Gump represented Delta Air Lines, Inc., with respect to a certain tax matter. The Firm also represented Pan American World Airways, Inc., with respect to matters in connection with American Airlines, Inc. Moreover, Akin Gump previously represented current members of the Creditors Committee: (i) U.S. Bank National Association and U.S. Bank Trust, (ii) Pension Benefit Guaranty Corporation, (iii) Air Line Pilots Association, International, (iv) Fidelity Advisor Series II: Fidelity Advisor High Income, (v) MacKay Shields, L.L.C., and (vi) Bank of New York. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Wants Until January 27 to File Schedules --------------------------------------------------- Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, tells the U.S. Bankruptcy Court for the Southern District of New York that the Delta Air Lines Inc. and its debtor-affiliates' employees and professionals have been working diligently to prepare the Debtors': (i) schedules of assets and liabilities, (ii) schedules of current income and expenditures, (iii) schedules of executory contracts and unexpired leases, and (iv) statements of financial affairs. However, in view of the amount of work entailed in completing the Schedules and the competing demands upon their employees' and professionals' time during this initial postpetition period, the Debtors will unlikely be able to properly and accurately complete the Schedules by November 28, 2005. After consulting with their professionals and the various employee teams assigned to the task of preparing the Schedules, the Debtors believe that a 60-day extension of the deadline to file the Schedules may provide sufficient time to finish preparing and reviewing the Schedules. Pursuant to Rules 1007(a)(4) and 1007(c) of the Federal Rules of Bankruptcy Procedure, the Debtors ask the Court to extend the deadline to file the Schedules through and including January 27, 2006. As reported in the Troubled Company Reporter on Sept. 29, 2005, the Debtors asked the Court to: (i) extend the fifteen-day period to file the Schedules for an additional 90 days, without prejudice to their ability to request additional time should it become necessary, and (ii) waive the requirement to file the List and the requirement to give notice of the order for relief to all equity security holders. Judge Beatty gave the Debtors 60 more days to file their Schedules. Specifically, the Court extended the Debtors' schedules filing deadline through Nov. 28, 2005, without prejudice to the Debtors' right to seek further extensions upon a showing of cause. Judge Beatty waived the requirement to file the List and to give notice to all equity holders of the orders for relief. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA FUNDING: Moody's Junks Rating on Series 2000-3 Class Certs. ----------------------------------------------------------------- Moody's Investors Service has downgraded two classes of certificates issued by Delta Funding Home Equity Loan Trust. The classes on review were issued out of Delta Funding's 1998-2 and 2000-3 transactions, both of which are primarily backed by first lien adjustable and fixed rate subprime mortgage loans. The subordinate certificates of both transactions are being downgraded based upon the diminishing credit enhancement levels relative to the current projected losses on the underlying pools. The 2000-3 transaction, in particular, has experienced rapid deterioration of overcollateralization and has been written down in recent months. Complete rating actions are as follows: Issuer: Delta Funding Home Equity Loan Trust Series 1998-2; Class B-1A, Downgraded to B2; previously Ba3. Series 2000-3; Class B, Downgraded to C; previously B1. DSI-VP LTD: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: DSI-VP, Ltd. c/o William Foster 155 Maple Street, Suite 402 Springfield, Massachusetts 01105 Bankruptcy Case No.: 05-95081 Chapter 11 Petition Date: October 31, 2005 Court: Southern District of Texas (Houston) Judge: Letitia Z. Clark Debtor's Counsel: Karla A. Lyon, Esq. DLA Piper Rudnick Gray Cary US LLP 401 B Street, Suite 1700 San Diego, California 92101 Tel: (619) 699-6740 Fax: (619) 699-2701 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. ECHELON CORPORATION: Posts $10.1 Million Net Loss in Third Quarter ------------------------------------------------------------------ Echelon Corporation (NASDAQ:ELON) reported financial results for the third quarter ended Sept. 30, 2005. For the quarter ended Sept. 30, 2005, revenues were $16.3 million, compared to $22.7 million for the same period in 2004. LonWorks(R) infrastructure revenue was $11.7 million in the third quarter of 2005 versus $11.1 million for the same period in 2004, while Enel revenue was $4.4 million in the third quarter of 2005 versus $11.6 million in 2004. The GAAP net loss for the quarter ended Sept. 30, 2005 was $10.1 million compared to a GAAP net loss of $400,000 for the third quarter of 2004. The non-GAAP net loss for the quarter, which excludes a one-time charge of approximately $5.2 million related to the previously announced Enel arbitration decision, as well as stock-based compensation expenses and amortization of previously purchased technology, was $4.8 million, compared to a non-GAAP net loss of $325,000 for the same period in 2004. Gross margin for the third quarter of 2005 was 53.2%, compared with 56.6% for the same period in 2004. Total operating expenses during the third quarter, including the expenses for arbitration, stock-based compensation and purchased technology, were $19.9 million, compared to $13.9 million for the same period in 2004. For the nine-month period ended Sept. 30, 2005, revenues were $55.4 million compared to revenues of $78.1 million for the same period one year ago. GAAP net loss for the nine-month period ended Sept. 30, 2004 was $17.0 million compared to GAAP net income of $2.3 million for the same period in 2004. For the nine months ended Sept. 30, 2005, the non-GAAP net loss was $11.4 million compared to non-GAAP net income of $2.7 million for the same period in 2004. Gross margin for the nine-month period was 55.4%, compared with 56.2% for the same period in 2004. Total operating expenses for the nine-month period were $50.9 million, compared to $43.1 million for the same period in 2004. "One of the highlights of this quarter was to finally have a resolution in our dispute with Enel," said Ken Oshman, chairman and CEO of Echelon Corporation. "The lack of a decision created a great deal of uncertainty in the markets and to have this behind us is a great relief. While we adamantly believe that we met every condition of the contract, the arbitrators did award Enel a relatively small sum compared to what they were asking. The small size of the award and the fact that the arbitrators ruled in our favor on the very important issue of on-going supply was a great victory for us. But, most importantly, we're very pleased that it's over and we can get on with more productive business activities." "Overall, while I believe we can and should do better, our performance for the quarter was in line with our guidance," continued Mr. Oshman. "The softness in EMEA was greater than the expected summer lull, making the region's performance an area of particular focus for the coming quarters. I'm quite pleased with the reception we received with the introduction of a number of products at our recent LonWorld(R) 2005 event outside Paris, France. Just as we pioneered the capability to connect devices to one another with our LonWorks platform, with our new Pyxos(TM) embedded control networking platform and the first Pyxos products introduced just last week, the Pyxos FT chips, Echelon has positioned itself to lead the market in extending networks inside of the devices themselves. The embedded control networking market is complementary to our existing market for the LonWorks platform and potentially enormous." "This quarter we also introduced increased power and features in key infrastructure products like our i.LON(R) 100 Internet Server line and LonMaker(R) installation tools. Our NES offering continues to lead the market in reliability and innovation. The newest version of NES that we've been supplying to various trials has been enthusiastically received by our partners and prospects. I believe that no other company has such a reliable and advanced metering infrastructure - especially one that incorporates a meter with such a sleek design." "Taken together our new products, platforms, and product enhancements embody our commitment to a strategy of lowering cost barriers, making control networking easier to use, and creating innovative technology to enable a world where all electronic things are on a network," said Mr. Oshman. Internal Control Review at Japanese Subsidiary Subsequent to Sept. 30, 2005, management identified a deficiency in the Company's internal controls over revenue recognition related to procedures in place at its Japanese subsidiary. In conjunction with Echelon's audit committee, management has determined that the deficiency constitutes a "material weakness" as defined by the Public Company Accounting Oversight Board's Auditing Standard No. 2, although the financial impact of this deficiency was not material to the Company's historical financial statements. Once identified, management immediately began implementing corrective actions to remediate the problem, including more thorough reviews of orders processed by the Japanese subsidiary. "While we are clearly disappointed in finding that a material weakness existed in our internal controls," said Chris Stanfield, Echelon's Executive Vice President and Chief Financial Officer, "we believe that this deficiency caused no material errors in our previously issued financial statements and although management's review of the situation continues, we feel confident that it will be completely remediated before the end of the year." Echelon Corporation -- http://www.echelon.com/-- is a pioneer and world leader in control networking -- networks that connect machines and other electronic devices -- for the purpose of sensing, monitoring and controlling the world around us. Echelon's LonWorks platform for control networking was released in 1990 and has become a worldwide standard in the building, industrial, transportation, and home automation markets. Launched in 2003, Echelon's Networked Energy Services system is an open, extensible, advanced metering infrastructure that can bring benefits to every aspect of a utility's operation, from metering and customer services to distribution operations and value-added business. In 2005 Echelon released the world's first embedded control network infrastructure, the Pyxos platform, extending the benefits of networking inside machines to the sensors and actuators that make them function. Echelon is based in San Jose, California, with international offices in China, France, Germany, Italy, Hong Kong, Japan, Korea, The Netherlands, and the United Kingdom. ENTERGY NEW ORLEANS: Panel Taps Haynes and Boone as Lead Counsel ---------------------------------------------------------------- The Interim Official Committee of Unsecured Creditors appointed in Entergy New Orleans, Inc.'s case seeks the U.S. Bankruptcy Court for the Eastern District of Louisiana's authority to retain Haynes and Boone, LLP, as its bankruptcy counsel effective October 12, 2005. The Committee has selected Haynes and Boone because of the firm's extensive experience in bankruptcy and reorganization matters. As attorneys, Haynes and Boone will: a. advise the Committee of its powers and duties in the Debtor's bankruptcy proceeding; b. assist the Committee in analyzing and preparing all applications, motions, objections, responses, orders filed in the Debtor's bankruptcy case, and any related adversary proceedings; c. appear and represent the Committee at all hearings; d. assist the Committee and its other professionals in matters relating to the administration of the Debtor's Chapter 11 case and the formulation and confirmation of a plan of reorganization; e. assist the Committee with interactions with regulators, including the City of New Orleans, regarding the Debtor's rate schedule and other regulated matters; f. assist the Committee with analyzing issues related to insurance recoveries; and g. perform other legal services for the Committee as may be necessary and required. Haynes and Boone's professionals that will primarily represent the Committee and their standard hourly rates are: Professional Position Hourly Rate ------------ -------- ----------- Robert D. Albergotti Partner $575 Stacey G.C. Jernigan Partner $450 Mark J. Elmore Associate $275 Dian Gwinnup Paralegal $170 The Committee discloses that from time to time, other attorneys and paralegals from Haynes and Boone may also serve in the case. In this regard, Haynes and Boone has agreed to offer a $380 overall blended rate. Haynes and Boone has additionally agreed not to bill the Committee for travel time fees to and from hearings in the Debtor's case. The Committee further discloses that Mr. Albergotti and Ms. Jernigan's hourly rates including the Blended Rate are a substantial discount of their standard hourly rates for the nature of their work. The proposed rates were negotiated with a view toward cost-effective representation. Aside from the service fees, the firm will be reimbursed for out- of-pocket expenses. Robert D. Albergotti, Esq., a partner at Haynes and Boone, confirms that Haynes and Boone have no connection with the Debtor, creditors, any other party-in-interest, their attorneys and accountants, the United States Trustee, or any person employed in the office of the United States Trustee. "Haynes and Boone is a 'disinterested person' as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code," Mr. Albergotti notes. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENTERGY NEW ORLEANS: Panel Taps Mintz Levin as Special Counsel -------------------------------------------------------------- The Interim Official Committee of Unsecured Creditors appointed in Entergy New Orleans, Inc.'s case requires the services of special counsel to handle certain matters. By this application, the Committee seeks the U.S. Bankruptcy Court for the Eastern District of Louisiana's authority to engage Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo, PC. Initially, Mintz Levin will be the Committee's special litigation counsel in connection with the: -- proposed DIP financing, including disputes with the holders of Senior Notes over priming; and -- collateral valuation to the extent of priority holders' claims and related issues. In addition, Mintz Levin will: * handle all discovery and all hearings relating to the matters; * attend depositions or participate in any material way in the discovery process; * handle all hearings relating to any disputes involving the priming issues arising out of the proposed DIP financing and the issues surrounding the claims of the Senior Noteholders; and * handle certain legislation or lobbying issues on behalf of the Committee. The Committee attests that Mintz Levin has extensive experience handling litigation of secured creditor valuation and claim issues as well as addressing legislative matters. Specifically, certain pending legislation may significantly impact the outcome of the Debtor's Chapter 11 proceedings. Thus, given that Mintz Levin has a Washington, D.C. office with extensive legislative expertise, the Committee believes it is appropriate to designate Mintz Levin to handle the matter. The Committee did not disclose the compensation terms for Mintz Levin as well as the primary professionals that will render service in the case. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXCALIBUR INDUSTRIES: Completes "Out-of-Court" Restructuring ------------------------------------------------------------ Excalibur Industries, Inc., nka Shumate Industries, Inc., completed its "out-of-court" restructuring. As reported in the Troubled Company Reporter on Oct. 3, 2005, the Company signed a loan commitment with its senior lender, Stillwater National Bank and Trust Company, for a restructuring of its secured debt. The restructuring consists of: -- an agreement to amend and restate a series of notes issued to Stillwater National Bank, or Stillwater, into one $3.5 million term note; -- an agreement to issue a new note to Stillwater for settlement of a lien; -- the extension of Excalibur's current revolving $1 million line of credit with Stillwater; -- the issuance of a $2.5 million convertible note to Stillwater; -- the purchase of 250,000 shares of Excalibur's common stock (post reverse stock split) for $250,000 in cash by its Chief Financial Officer; -- the conversion of a portion of our debt to Stillwater into 20% of our then-outstanding common stock after giving effect to the restructuring, resulting in $2.368 million purchasing 2.368 million shares of Excalibur's common stock (post-split); -- a release from Stillwater for any indebtedness not covered above; -- the exchange of outstanding unsecured notes, including principal and accrued interest, for common stock at $1.00 per share post-split; and, -- the issuance of a note to Excalibur's Chief Financial Officer to advance funds to purchase shares of common stock. Excalibur Industries, Inc., serves the energy field services market through its Shumate Machine Works operating subsidiary. With its roots going back more than 25 years, Shumate is a contract machining and manufacturing company that makes products, parts, components, assemblies and sub-assemblies for its customers designed to their specifications. The Company's state-of-the-art 3-D modeling software, computer numeric controlled machinery and manufacturing expertise are contracted by its customers' research and development, engineering and manufacturing departments to ensure optimization and timely desired results for their products. The diverse line of products Shumate manufactures includes expandable tubular launchers and liner hangers for oil & gas field service applications, blow-out preventers, top drive assemblies, directional drilling products, natural gas measurement equipment, control & check valves and sub-sea control equipment used in energy field service. The Company employs about 35 people at its 23,000 square foot plant in Conroe, Texas, north of Houston. As of June 30, 2005, Excalibur Industries' total liabilities exceed its total assets by $14,128,939. FALCON PRODUCTS: Court Okays Termination of Three Pension Plans --------------------------------------------------------------- The Honorable Barry S. Schermer the U.S. Bankruptcy Court for the Eastern District of Missouri put his stamp of approval on Falcon Products, Inc., and its debtor-affiliates' request for authority to terminate three employee retirement income plans. The Court granted the request after it determined that the Debtors satisfy the financial requirements for a distress termination of pension plans under section 4041(c)(2)(B)(ii)(IV) of the Employee Retirement Income Security Act of 1974. The Debtors will terminate: 1) the Falcon Products, Inc., Retirement Plan; 2) the Shelby Williams Industries, Inc., Employees' Pension Plan; and 3) the Sellers & Josephson, Inc., Employees' Pension Plan. ERISA permits bankrupt companies to terminate underfunded pension plans if they are unable to pay their debts pursuant to a plan of reorganization and will be unable to continue in business unless the pension plans are terminated, and the termination is duly approved by the Bankruptcy Court. As previously reported, the Debtors said that the minimum cost of maintaining the pension plans over the next seven years, even assuming that they are frozen, is approximately $18.9 million. Currently, the pension plans are underfunded by $33.8 million. The success of the Debtors' Amended Chapter 11 Plan of Reorganization is largely dependent on a $30 million exit facility that Whipporwill Associates, Inc., and Oaktree Capital Management, LLC, will provide. The exit lenders however, will only loan the money provided that the Debtors will eliminate its underfunding obligation to the Pension Plans. Headquartered in Saint Louis, Missouri, Falcon Products, Inc. -- http://www.falconproducts.com/-- designs, manufactures, and markets an extensive line of furniture for the food service, hospitality and lodging, office, healthcare and education segments of the commercial furniture market. The Debtor and its eight debtor-affiliates filed for chapter 11 protection on January 31, 2005 (Bankr. E.D. Mo. Lead Case No. 05-41108). Brian Wade Hockett, Esq., and Mark V. Bossi, Esq., at Thompson Coburn LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $264,042,000 in assets and $252,027,000 in debts. The Debtors' Plan of Reorganization was confirmed on October 18, 2005. FOREST OIL: Financial Leverage Cues S&P to Affirm BB- Debt Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' long-term corporate credit rating and 'B-2' short-term rating on oil and gas exploration and production company Forest Oil Corp. and removed the ratings from CreditWatch with negative implications, where they were placed on Sept. 12, 2005, following the company's announced spin-off of its offshore Gulf of Mexico reserves to Mariner Energy Inc. The outlook is negative. As of June 30, 2005, Denver, Colorado-based Forest had $884 million in principal debt outstanding. The spin-off could have favorable implications for Forest's business risk profile over the intermediate term. The offshore Gulf of Mexico assets are short lived, and significant future capital spending is required to maintain current production levels. "Although the company should continue to benefit from a high commodity price environment, Standard & Poor's has concerns regarding the company's relatively high cost structure and aggressive financial leverage," said Standard & Poor's credit analyst David Lundberg. "For the outlook to change to stable from negative, the company will need to demonstrate improvement in operational metrics and reduce financial leverage; conversely, any future leveraging acquisitions or worse than expected operating performance could lead to a negative ratings action," he continued. FRASER PAPERS: Operating Losses Prompt Moody's Negative Outlook --------------------------------------------------------------- Moody's Investors Service changed the outlook on Fraser Papers Inc.'s B3 senior unsecured rating to negative from stable and affirmed the B3 senior unsecured rating. The Speculative Grade Liquidity Rating is affirmed at SGL-3. The negative outlook reflects the company's ongoing incurrence of operating losses and negative free cash flow, and the uncertainty as to when these may improve given the difficult market conditions that the company continues to face. The negative outlook also reflects the uncertainty surrounding the possibility that the company may exercise its option to acquire the Katahdin mill and the impact this would have on the company's operating profile and liquidity. The company has been negatively impacted by the strong Canadian dollar and higher input costs for energy and fiber, in particular, at a time of weaker lumber and pulp prices and soft paper prices. The B3 rating is supported by the company's cash position. Ratings affirmed: * U.S. $150 million senior unsecured at B3, * Corporate family rating at B2. The negative outlook reflects Moody's concerns about Fraser Paper's ability to return to profitability given difficult market conditions for its products, the negative impact of the strong Canadian dollar, and ongoing input costs cost pressures. The negative outlook also reflects the potential negative impact of the purchase of the Katahdin mill on Fraser Papers' liquidity and operating performance. If this acquisition occurs in a manner that utilizes a significant portion of the company's cash position or increases its debt position, and does not have an appreciable positive impact on Fraser Papers' operating earnings and cash flow, Moody's would be concerned about the company's ability to fund ongoing operating losses and it is likely that the B3 senior unsecured rating would be lowered. The B2 corporate family rating reflects Fraser Papers' weak earnings performance over the past few years, its historically weak cash flow, and its disparate collection of assets in a number of pulp and paper and lumber segments. The rating also considers the susceptibility of the company to cyclicality in the forest products industry, the impact of changes in the U.S./Canadian dollar exchange rate and exposure to high raw material costs. The company's paper and pulp businesses are modest players operating in competitive sectors that continue to have excess market capacity. Meaningful improvements in operating income will depend on a sustained period of higher market prices, which Moody's does not view as likely. The rating favorably reflects the company's September 30, 2005 cash of $83 million and the value of its New Brunswick timberland assets. The rating could be lowered if Fraser Papers undertakes acquisitions that significantly deplete its cash position or are debt financed or if the company suffers further erosion in its operating earnings and cash flow. The outlook could be changed to stable if the company is able to demonstrate that it can generate consistently positive operating earnings and free cash flow. Given the company's current position and negative outlook it is unlikely the rating will be raised in the near to intermediate term. The SGL-3 speculative grade liquidity rating reflects adequate liquidity. This rating is currently supported by the company's cash position, alternative liquidity provided by the company's timberlands holdings and availability of $19 million under its borrowing base revolver. If these assets positions are materially reduced, the SGL-3 rating could be lowered. Fraser Papers is engaged in the pulp and paper and lumber segments of the forest products industry and had sales of $996 million for the year ended December 31, 2004. Fraser Papers is headquartered in Toronto, Canada. GB HOLDINGS: U.S. Trustee Will Meet Creditors on Thursday --------------------------------------------------------- The United States Trustee for Region 3 will convene a meeting of GB Holdings, Inc.'s creditors at 1:00 p.m., on Nov. 3, 2005, at Bridge View Building, Suite 102, 800 Cooper Street in Camden, New Jersey. 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 Atlantic City, New Jersey, GB Holdings, Inc., primarily generates revenues from gaming operations in Atlantic Coast Entertainment Holdings, which owns and operates The Sands Hotel and Casino in Atlantic City, New Jersey. The Debtor also provides rooms, entertainment, retail store and food and beverage operations. These operations generate nominal revenues in comparison to the casino operations. The Debtor filed for chapter 11 protection on September 29, 2005 (Bankr. D. N.J. Case No. 05-42736). Peter D. Wolfson, Esq., Andrew P. Lederman, Esq., and Mark A. Fink, Esq., at Sonnenschein Nath & Rosenthal LLP represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. GRANITE VIEW: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Granite View Resort LLC 300 East Willis, Suite G Prescott, Arizona 86301 Bankruptcy Case No.: 05-27959 Type of Business: The Debtor operates a resort. Chapter 11 Petition Date: November 1, 2005 Court: District of Arizona (Phoenix) Debtor's Counsel: Robert J. Berens, Esq. Mann, Berens & Wisner, LLP 2929 North Central Avenue, #1600 Phoenix, Arizona 85012-2760 Tel: (602) 258-6200 Fax: (602)-258-6212 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. GSI GROUP: Toronto Stock Exchange Listing Withdrawn Yesterday ------------------------------------------------------------- GSI Group Inc. voluntarily withdrew the listing of its stock under the ticker symbol GSI, from the Toronto Stock Exchange. The delisting was effective as of the close of trading yesterday, November 1, 2005. The move was prompted by the recent cost containment initiative and the fact that the company no longer maintains offices, division personnel or operations in Canada. GSI Group Inc. will remain as a Canadian domiciled company and shares will continue to be able to be purchased and sold on the Nasdaq exchange under the existing ticker symbol GSIG. Based in Assumption, Illinois, GSI Group Inc. is one of the largest global manufacturers of grain storage bins and related drying and handling systems, as well as capital equipment for swine and poultry producers. GSI markets its products in approximately 75 countries through a network of more than 2,500 independent dealers to grain, protein producers and large commercial businesses. In May 2005, GSI was acquired by Charlesbank Capital Partners, a Boston-based private equity firm known for partnering with experienced management teams to grow fundamentally strong businesses. * * * As reported in the Troubled Company Reporter on May 3, 2005, Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to GSI Group Inc. At the same time, Standard & Poor's assigned its 'B-' senior secured rating to the proposed $125 million senior unsecured notes due in 2013, issued to redeem GSI's existing senior subordinated notes and other debt. GSI is the primary operating company. All of the company's subsidiaries will be designated restricted subsidiaries. S&P says the outlook is stable. As reported in the Troubled Company Reporter on May 2, 2005, Moody's Investors Service has assigned a B3 rating to the proposed senior notes of The GSI Group, Inc., which will be used to refinance existing indebtedness in connection with the company's pending acquisition by GSI Holdings Corp. (an affiliate of Charlesbank Capital Partners, LLC). In addition, Moody's has affirmed GSI's existing ratings, including its B2 senior implied rating, and assigned a speculative grade liquidity rating of SGL-2. Approximately $125 Million of rated debt is affected. Moody's says the rating outlook is stable. These ratings were assigned: * $125 million senior notes due 2013, at B3; * Speculative grade liquidity rating, at SGL-2. These ratings were affirmed: * Senior implied, at B2; * $100 million senior subordinated notes, at Caa1; * Senior unsecured issuer rating, at B3. HARBORVIEW MORTGAGE: Fitch Puts BB+ Rating on $5.9 Mil Cert. Class ------------------------------------------------------------------ Fitch rates Harborview Mortgage Loan Trust mortgage pass-through certificates, series 2005-14: -- $853.6 million classes 1-A-1A, 1-A-1B, 2-A-1A, 2-A-1B, 3-A-1A, 3-A-1B, 4-A-1A, 4-A-1B, 5-A-1A, 5-A-1B and A-R senior certificates 'AAA'; -- $21.0 million class B-1 'AA'; -- $13.6 million class B-2 'A'; -- $8.2 million class B-3 'BBB'; -- $5.9 million class B-4 'BB+'. The 'AAA' rating on the senior certificates reflects the 6.50% subordination provided by the 2.30% class B-1 certificates, the 1.50% class B-2 certificates, the 0.90% class B-3 certificates, the privately offered 0.65% class B-4 certificates, the privately offered 0.75% class B-5 certificates, which are not rated by Fitch and the 0.40% privately offered class B-6 certificates, which are not rated by Fitch. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures and the master servicing capabilities of Wells Fargo Bank, N.A., rated 'RMS1' by Fitch. The certificates represent an ownership interest in a group of hybrid and adjustable rate mortgage loans totaling $913,022,185, as of the cut-off date, Oct. 1, 2005, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average loan-to-value ratio of 72.82%. The weighted average FICO credit score is approximately 722. Cash-out refinance loans represent 26.73% of the mortgage pool and second homes 10.48%. The average loan balance is $266,888. The three states that represent the largest portion of mortgage loans are California, Florida, and Arizona. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, please see the press release issued May 1, 2003 entitled 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation,' available on the Fitch Ratings Web site at http://www.fitchratings.com/ The certificates are issued pursuant to a pooling and servicing agreement dated Oct. 1, 2005 among Greenwich Capital Acceptance, Inc., as depositor, Wells Fargo Bank, N.A. as master servicer, and Deutsche Bank National Trust Company as trustee. For federal income tax purposes, elections will be made to treat the trust as separate multiple real estate mortgage investment conduits. HAWAIIAN AIRLINES: Names Peter Ingram as Chief Financial Officer ---------------------------------------------------------------- Hawaiian Airlines appointed Peter Ingram as the company's chief financial officer, effective Dec. 1, 2005. Mr. Ingram succeeds interim CFO Steve Jackson, who has filled that role since August 2004. "Steve has been a valued leader during his time here, and we thank him for his many contributions," Mark Dunkerley, Hawaiian's president and CEO, said. "In Peter Ingram, Hawaiian gains another strong leader whose wealth of airline experience in financial planning makes him ideally suited to navigating the increasingly dynamic business environment in our industry." Mr. Ingram is joining Hawaiian after spending the past 11 years with AMR Corporation, parent company of American Airlines and American Eagle Airlines. Since 2002, he has served as vice president of finance and CFO for American Eagle Airlines. Before that, he spent eight years in finance-related management and director positions for American Airlines. Mr. Ingram earned a Masters of Business Administration from Duke University in 1994, graduating in the top 10 percent of his class. He did his undergraduate studies at the University of Western Ontario, earning a Bachelor of Arts in Business Administration in 1988. Hawaiian Airlines, Inc. -- http://www.HawaiianAir.com/-- filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Hawaii (Case No. 03-00827) on March 21, 2003. Joshua Gotbaum serves as the chapter 11 trustee for Hawaiian Airlines, Inc. Mr. Gotbaum is represented by Tom E. Roesser, Esq., and Katherine G. Leonard, Esq., at Carlsmith Ball LLP and Bruce Bennett, Esq., Sidney P. Levinson, Esq., Joshua D. Morse, Esq., and John L. Jones, II, Esq., at Hennigan, Bennett & Dorman LLP. The Bankruptcy Court confirmed the Chapter 11 Trustee's Plan of Reorganization on March 10, 2005. The Plan took effect on June 2, 2005. HORACE GRAVELY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Horace Clyde Gravely P.O. Box 343 Gaylesville, Alabama 35973 Bankruptcy Case No.: 05-44773 Chapter 11 Petition Date: October 31, 2005 Court: Northern District of Alabama (Anniston) Judge: Thomas B. Bennett Debtor's Counsel: Harry P. Long, Esq. P.O. Box 1468 Anniston, Alabama 36202 Tel: (256) 237-3266 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of his 20 largest unsecured creditors. IFP LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: I.F.P. LLC P.O. Box 53395 Cincinnati, Ohio 45253-0395 Bankruptcy Case No.: 05-24703 Chapter 11 Petition Date: October 16, 2005 Court: Southern District of Ohio (Cincinnati) Judge: Jeffery P. Hopkins Debtor's Counsel: Raymond J. Pikna, Esq. Wood & Lamping LLP 600 Vine Street, Suite 2500 Cincinnati, Ohio 45202-2491 Tel: (513) 852-6039 Fax: (513) 852-6087 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Walter P. Dolle Insurance Insurance $21,964 Agency, Inc. 201 E. Fifth Street, Suite 1000 Cincinnati, OH 45202 McSwain Carpets Carpeting $12,309 2430 East Kemper Road Cincinnati, OH 45241-1812 Harrison Utilities Water & Sewer $8,313 112 North Walnut Street Harrison, OH 45030 Home Depot Credit Services Credit Card $6,283 P.O. Box 9121 Account Des Moines, IA 50368-9121 Rumpke Trash hauling $3,654 10795 Struble Road Cincinnati, OH 45251 Smalls Pro Hardware Supplies $2,379 109 South Wayne Avenue Cincinnati, OH 45215 Cincinnati Apartment Advertising $2,265 HPC Publications Guide P.O. Box 402039 Atlanta, GA 30384-2039 Recker & Boerger Appliances $2,250 10115 Transportation Way Cincinnati, OH 45246 TruGreen Chemlawn Lawn Care $1,712 P.O. Box 488 Florence, KY 41022-0488 United Cleaning Co., LLC Cleaning $905 207 East Clifton Avenue Cincinnati, OH 45210 Lauren Wood Security deposit $675 232 Lyness Avenue #137 Harrison, OH 45030 Claire Booker Security deposit $665 238 Lyness Avenue #177 Harrison, OH 45030 Jeremy & Christina Hank Security deposit $665 234 Lyness Avenue #147 Harrison, OH 45030 Mary Blomer Security deposit $665 236 Lyness Avenue #170 Harrison, OH 45030 Nick & Tracey Meyer Security deposit $665 234 Lyness Avenue #157 Harrison, OH 45030 Sergiu Podbereschi Security deposit $665 234 Lyness Avenue #158 Harrison, OH 45030 Steven Pappas Security deposit $665 242 Lyness Avenue #205 Harrison, OH 45030 Becky Mitter Security deposit $645 242 Lyness Avenue #202 Harrison, OH 45030 Gordan Beasley Security deposit $645 242 Lyness Avenue #200 Harrison, OH 45030 Kenneth Flowers Security deposit $645 242 Lyness Avenue #206 Harrison, OH 45030 INFOUSA INC: Moody's Holds Ratings and Says Outlook is Stable ------------------------------------------------------------- Moody's Investors Service affirmed all of InfoUSA Inc.'s credit ratings and changed the outlook to stable. Moody's placed the company on negative outlook on June 21, 2005 in connection with an offer by Vin Gupta, chairman and CEO of the company, to acquire all of the publicly held common shares of InfoUSA in a debt financed transaction. Although the offer was subsequently rejected by a special committee of the board of directors and withdrawn, the negative outlook reflected the heightened risk of a capital structure transaction that could significantly increase leverage. The change in outlook to stable reflects Moody's belief that InfoUSA is not considering a transaction that will significantly increase leverage and anticipates a conservative financial profile over the intermediate term. Moody's affirmed the following ratings: * Corporate family rating, Ba3 * $50 million senior secured revolving credit facility due 2007, Ba3 * $94 million senior secured first lien term loan A due 2009, Ba3 * $69 million senior secured term loan B due 2010, Ba3 Headquartered in Omaha, Nebraska, InfoUSA Inc. is a leading provider of business and consumer information, data processing and database marketing services. Revenues for the twelve months ended June 30, 2005 were approximately $369 million. INTEGRATED SECURITY: Issues Convertible Promissory Notes for $500K ------------------------------------------------------------------ Integrated Security Systems, Inc.'s Board of Directors ratified the issuance of two convertible promissory notes to Frost National Bank FBO Renaissance US Growth Investment Trust PLC and Frost National Bank FBO BFS US Special Opportunities Trust PLC in exchange for an aggregate $500,000 cash investment. Each of the convertible promissory notes is in the original principal amount of $250,000, has an annual interest rate of 8% and is payable in monthly installments on the first day of each month. The convertible promissory notes, plus interest, are due on July 29, 2008. The convertible promissory notes are convertible at the option of Renaissance US and BFS US into shares Integrated Security's common stock at a conversion price of $0.25 per share. Integrated Security has the right to call the convertible promissory notes if the market price of Integrated Security's common stock exceeds $0.60 per share for a period of 60 days. In connection with the issuance of the convertible promissory notes, Integrated Security's Board of Directors also ratified the issuance a stock purchase warrant to each of Renaissance US and BFS US. The stock purchase warrants entitle each of Renaissance US and BFS US to purchase up to 350,000 shares of Integrated Security's common stock for $0.25 per share. Also as a part of this transaction, Integrated Security's Board of Directors ratified the issuance of a registration rights agreement to each of Renaissance US and BFS US. Under the registration rights agreement, Integrated Security agreed to file a registration statement with the Securities and Exchange Commission to register for resale the shares of common stock issuable upon conversion and exercise of the convertible promissory notes and warrants. Full-text copies of the documents in the deal are available for free at: Documents Links --------- ----- Convertible Promissory http://ResearchArchives.com/t/s?2ac Notes Stock Purchase Warrant http://ResearchArchives.com/t/s?2ad Registration Rights http://ResearchArchives.com/t/s?2ae Agreement Headquartered in Irving, Texas, Integrated Security Systems, Inc. -- http://www.integratedsecurity.com/-- is a technology company that provides products and services for homeland security needs. ISSI also designs, develops and markets safety equipment and security software to the commercial, industrial and governmental marketplaces. ISSI's Intelli-Site(R) provides users with a software solution that integrates existing subsystems from multiple vendors without incurring the additional costs associated with upgrades or replacement. As of June 30, 2005, the Company's balance sheet reflects a $3,541,147 stockholders' deficit compared to a $171,948 in positive equity at June 30, 2004. INTELSAT LTD: PanAmSat Shareholders Approve $3.2 Billion Merger --------------------------------------------------------------- PanAmSat Holding Corporation's shareholders have approved and adopted the Merger Agreement, dated as of August 28, 2005, by and among PanAmSat, Intelsat (Bermuda), Ltd., and Proton Acquisition Corporation pursuant to which Proton Acquisition will be merged with and into PanAmSat. As reported in the Troubled Company Reporter on Aug. 31, 2005, Intelsat, Ltd., and PanAmSat signed a definitive merger agreement under which Intelsat will acquire PanAmSat for $25 per share in cash, or $3.2 billion. Financing Intelsat has received financing commitments for the full amount of the purchase price from a group of financial institutions led by: * Deutsche Bank Securities Inc., * Citigroup Global Markets Inc., * Credit Suisse First Boston LLC, and * Lehman Brothers Inc. Professionals Credit Suisse First Boston LLC is serving as Intelsat's financial advisor, and Wachtell, Lipton, Rosen & Katz, Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Milbank, Tweed, Hadley & McCloy LLP are serving as Intelsat's legal advisors. Morgan Stanley is serving as PanAmSat's financial advisor, and Simpson Thacher & Bartlett LLP is serving as PanAmSat's legal advisor. Also on October 26, 2005, Intelsat Holdings Ltd. received a request from the United States Department of Justice for additional information and documentary materials in connection with the Merger. The effect of this request is to extend the waiting period imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, until 30 days after the parties have substantially complied with the request, unless that period is terminated earlier by the DOJ or extended voluntarily. About PanAmSat Through its owned and operated fleet of 25 satellites, PanAmSat Holding Corp. (NYSE: PA) -- http://www.panamsat.com/-- is a leading global provider of video, broadcasting and network distribution and delivery services. It transmits 1,991 television channels worldwide and, as such, is the leading carrier of standard and high-definition signals. In total, the Company's in- orbit fleet is capable of reaching over 98 percent of the world's population through cable television systems, broadcast affiliates, direct-to-home operators, Internet service providers and telecommunications companies. In addition, PanAmSat supports satellite-based business networks in the U.S., as well as specialized communications services in remote areas throughout the world. About Intelsat, Ltd. Intelsat, Ltd. offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat's global satellite, teleport and fiber network for high-quality connections, global reach and reliability. * * * As reported in the Troubled Company Reporter on Sept. 1, 2005, Moody's Investors Service has affirmed Intelsat, Ltd.'s ratings and changed the outlook for all ratings to developing from negative following the company's announcement that it is acquiring PanAmSat for $3.2 billion plus the assumption of PanAmSat's debt ($3.2 billion). The transaction, which Moody's expects to be largely, if not entirely, financed with new debt, would significantly increase Intelsat's pro forma leverage thereby increasing credit risk for Intelsat debt holders and pressuring the rating downwards. Therefore, Moody's anticipates placing all ratings on review for possible downgrade or lowering the ratings once the timing and structure of the transaction and resolution of regulatory review becomes more certain. Moody's has affirmed these ratings: Intelsat: * Corporate family rating -- B2 * $400 Million 5.25% Global notes due in 2008 -- Caa1 * $600 Million 7.625% Sr. Notes due in 2012 -- Caa1 * $700 Million 6.5% Global Notes due in 2013 -- Caa1 Intelsat Subsidiary Holding Company Ltd.: * $300 Million Sr. Secured Revolver due in 2011 -- B1 * $350 Million Sr. Secured T/L B due in 2011 -- B1 * $1 Billion Sr. Floating Rate Notes due in 2012 -- B2 * $875 Million Sr. 8.25% Notes due in 2013 -- B2 * $675 Million Sr. 8.625% Notes due in 2015 -- B2 Intelsat (Bermuda) Ltd.: * $478.7 Million Sr. Unsecured Discount Notes due 2015 -- B3 Moody's has changed the outlook to developing from negative. As reported in the Troubled Company Reporter on Sept. 1, 2005, Fitch has placed the ratings of Intelsat, Ltd., wholly owned subsidiary Intelsat (Bermuda), Ltd., and operating subsidiary Intelsat Subsidiary Holding Company Ltd. on Rating Watch Negative following Intelsat's announcement that it has signed a definitive agreement to acquire PanAmSat Holding Corporation for $3.2 billion, or $25 per share of PanAmSat common stock, plus the assumption of $3.2 billion of PanAmSat debt. The acquisition would create the largest satellite communications company in the world, with a total of 53 satellites and combined annual revenues of approximately $1.9 billion. Fitch currently rates Intelsat's debt: Intelsat, Ltd. -- Issuer default rating 'B-'; -- Senior unsecured notes 'CCC'; recovery rating 'R6'. Intelsat (Bermuda), Ltd. -- Senior unsecured discount notes 'B-'; recovery rating 'R4'. Intelsat Subsidiary Holding Company Ltd. -- Senior unsecured notes at 'B+'; recovery rating 'R2'; -- Senior secured credit facilities at 'BB-'; recovery rating 'R1'. IPSCO INC: Earns $134 Million of Net Income in Third Quarter ------------------------------------------------------------ IPSCO Inc. (NYSE: IPS; Toronto) reported third quarter sales for the quarter of $705 million, an increase of 10% or $63 million over the same quarter last year and 6% or $38 million over the prior quarter. Income before tax was $216 million, 8% higher than the third quarter of 2004 and 9% higher than the prior quarter. The third quarter 2005 tax rate was 38% compared to an unusually low rate of 28% in the prior year. As a result, net income of $134 million was less than the 2004 third quarter net income of $144 million. IPSCO's favorable sales performance versus the prior year and prior quarter was driven by record energy tubular sales volumes partially offset by declines in steel mill product sales related to a planned maintenance outage at the Montpelier Steelworks and unplanned outages at the Mobile Steelworks due to Hurricanes Dennis and Katrina. Several events had a significant impact on the net income for the Company in the quarter. During the third quarter of 2005 the Canadian dollar strengthened 5% against the U.S. dollar. The subsequent foreign exchange gain on the translation of cumulative inter-company obligations incurred to fund stock buyback and debt redemption efforts contributed $18.1 million to pretax earnings for the quarter. Outage expenses negatively impacted pretax earnings by $10.4 million. The change in the effective tax rate from 36% to 38% in the third quarter reduced net income by $4.6 million. Total third quarter shipments were 848,000 tons, virtually flat compared to last year but 44,000 tons greater than the prior quarter due to record energy tubular shipments of 216,000 tons and large diameter pipe shipments of 45,000 tons. Energy tubular shipments increased 46% and 39% respectively over last year and prior quarter. IPSCO's average third quarter product price was $832 per ton, inclusive of surcharge, comparable to $760 per ton a year ago and $830 in the second quarter. The impact of higher energy and large diameter pipe shipments offset a decline in steel mill product pricing. "IPSCO withstood the impact of planned and unplanned outages at our U.S. steelworks as well as a temporary decline in demand from service centers early in the quarter. Our third quarter operating income of $235 per ton remains among the highest in the industry," said David Sutherland, President and Chief Executive Officer. "We are well positioned to take advantage of strong end user demand for our steel mill products and anticipated record activity in the energy tubular sector in the fourth quarter. As mentioned last quarter, large diameter pipe shipments in the fourth quarter are expected to increase significantly. We anticipate our shipment volumes for the fourth quarter will increase in all of these product lines." During the quarter ended September 30, 2005, the Company repurchased 258,500 shares at an average cost of U.S. $44.73 (CDN $54.69) for a total cost of U.S. $12 million. On October 4, 2005, the Company gave notice to the holders of its 7.8% debentures, due December 1, 2006, that it will redeem the outstanding debentures on November 4, 2005 for a total of CDN $106 million, including accrued interest and redemption premium. Through September 2005, sales totaled a record $2.1 billion, an increase of 27% over the first nine months of 2004. Gross margin of 34% in the first nine months of 2005 improved from 26% during the same time period of 2004. Steel mill product sales of $1.3 billion increased $257 million from a year earlier. Steel mill average pricing increased $176 per ton, while tons shipped declined 83,000 or 5%. Tubular product sales, inclusive of energy tubular, large diameter pipe and non-energy tubular product lines, increased $188 million from the first nine months of 2004. The average selling price for these products increased $313 per ton while shipments declined 75,000 tons or 9%. Net income was $414 million for the first nine months of 2005. This compares to net income of $242 million. Common shares and equivalents used in the calculation of diluted earnings per share were 49.3 million and 55.4 million for the nine months ended September 30, 2005 and 2004. Outlook The Company believes that end user demand for its steel mill products will remain strong throughout the year and into 2006. Steel mill product orders increased rapidly in September and October due to continued strength in orders from end users, including several large project orders, and also as service centers returned to buying at higher levels. The Company's order books are fully committed for the remainder of the year. All steelworks have successfully completed required annual maintenance programs and are poised to satisfy the increased demand. IPSCO's North American energy tubular goods shipments are expected to meet or exceed the record levels reached in the third quarter. In addition, large diameter pipe production has increased and will continue through this year and well into 2006 producing for the larger numbers of orders on hand. Fourth quarter large diameter shipments and recognized revenues are anticipated to exceed levels achieved in the third quarter. Higher costs due to increases in energy, transportation, alloys, and other input costs will result in margin compression in the fourth quarter compared to third quarter results. Foreign exchange fluctuations and their impact on inter-company obligations resulting from funding the debt retirement and the share repurchase program may or may not impact fourth quarter net income and earnings per share. Excluding the impact of any foreign exchange gains or losses, the Company forecasts fourth quarter diluted earnings per share to be in the range of $2.70 to $2.90. IPSCO Inc. operates steel mills at three locations and pipe mills at six locations in Canada and the United States. As a low cost North American steel producer, IPSCO has a combined annual steel making capacity of 3,500,000 tons and provides further processing at its five cut-to-length lines located in both the U.S. and Canada. The Company's tubular facilities produce a wide range of tubular products including line pipe, oil and gas well casing and tubing, standard pipe and hollow structurals. * * * As reported in the Troubled Company Reporter on July 19, 2005, Standard & Poor's Ratings Services raised its long-term corporate credit and senior unsecured debt rating on IPSCO Inc. to 'BB+' from 'BB'. The outlook is currently stable. As reported in the Troubled Company Reporter on June 13, 2005, Moody's Investors Service upgraded its senior implied rating for IPSCO Inc. to Ba1 from Ba2. The upgrade reflects IPSCO's strong financial performance, a cash balance greater than gross debt, and a favorable near-term outlook for its primary products, steel plate and energy tubulars. The rating outlook remains positive. These ratings were upgraded: * $200 million of 8.75% guaranteed senior unsecured notes due 2013 -- to Ba1 from Ba2; * senior implied rating -- to Ba1 from Ba2; and * senior unsecured issuer rating -- to Ba2 from Ba3. ISLETON DEVELOPMENT: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Isleton Development Company LLC 150 Lombard Street San Francisco, California 94111 Bankruptcy Case No.: 05-35360 Chapter 11 Petition Date: November 1, 2005 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: K. Keith McAllister, Esq. Law Offices of K. Keith McAllister P.O. Box 864 Tiburon, California 94920 Tel: (415) 435-2338 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million Debtor's 4 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Piper Rudnick Gray Cary $9,580 P.O. Box 64029 Baltimore, MD 21264 Blue Design Studios, Inc. $1,012 1314 Coldwell Avenue, Suite B Modesto, CA 95350 Ravix Group Inc. $490 2109 Landing Drive Mountain View, CA 94043 Ravix Group Inc. $341 2109 Landing Drive Mountain View, CA 94043 KAISER ALUMINUM: Begins $75 Million Trentwood Facility Expansion ---------------------------------------------------------------- Kaiser Aluminum reported a major expansion at its Trentwood, Washington, rolling mill to address the significant growth in demand for fabricated aluminum products. The $75 million expansion is slated to proceed over the next three years with full online capacity available in 2008. "This is an important expansion to meet a growing worldwide demand in our major markets for high-quality fabricated aluminum products," said Jack A. Hockema, president and CEO. "The investment demonstrates our commitment to serving our customers' changing needs while equipping the company to benefit from the continuing growth and currently strong demand cycle of the global aerospace industry and other manufacturing sectors." The expansion includes the addition of a state-of-the-art thick plate stretcher, horizontal heat treat furnaces, an ultrasonic inspection system and other ancillary equipment to complement existing capabilities for light gauge plate and sheet at the facility. The new equipment will enable Kaiser to supply heavy gauge heat treat stretched plate in thicknesses of up to 8-10 inches to the aerospace and general engineering markets worldwide. The capital spending for this project is expected to span the period of 2005 through 2007, with the most significant expenditures occurring in 2006. This spending is reflected in the financial projections included in the Disclosure Statement dated Sept. 7, 2005 recently distributed by the company in connection with the solicitation of acceptances of its Second Amended Plan of Reorganization from its creditors as part of the company's chapter 11 reorganization. Also, this investment comprises a portion of the anticipated capital expenditures discussed in the company's most recent quarterly report on Form 10-Q. Kaiser Aluminum's Trentwood facility provides heat treat aluminum sheet and plate to major manufacturers worldwide. The plant employs approximately 600 people. 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. KAUAI MORTGAGE: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Kauai Mortgage Investors, Inc. Post Office Box 770-#370 Park City, Utah 84060 Bankruptcy Case No.: 05-39426 Chapter 11 Petition Date: October 14, 2005 Court: District of Utah (Salt Lake City) Judge: Glen E. Clark Debtors' Counsel: Michael F. Thomson, Esq. Durham Jones & Pinegar 111 East Broadway, Suite 900 Post Office Box 4050 Salt Lake City, Utah 84110-4050 Tel: (801) 359-3500 Fax: (801) 415-3500 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 5 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kilauea Bay Consortium Promissory Note $800,000 Sawyer, Orr & Sawyer, LLP 6700 East Pacific Coast Hwy Suite 260 Long Beach, CA 90803 Gaines & Stacey Legal Fees $57,903 16633 Ventura Boulevard Suite 1150 Encino, CA 91436 Levy Mosse & Co. Accounting Work $17,255 11400 West Olympic Blvd. Suite 330 Los Angeles, CA 90064-1550 Anderson & Karrenberg Legal $250 50 West Broadway, Suite 700 Salt Lake City, UT 84101 Kilauea Bay Consortium Claims for: Recission Unknown Sawyer, Orr & Sawyer, LLP of Written Agreements, 6700 East Pacific Coast Hwy Restitution of Suite 260 Partnership Interest, Long Beach, CA 90803 and Constructive Trust; Dissolution and Accounting of Limited Liability Company; Damages Based Upon Alleged Fraud; Damages Based Upon Alleged Breach of Fiduciary Duty and Conspiracy; and Recovery on Promissory Note LA QUINTA: Earns $14 Million of Net Income in Third Quarter ----------------------------------------------------------- La Quinta Corporation (NYSE: LQI) reported financial results for the third quarter ended Sept. 30, 2005. "We are very pleased with our excellent third quarter financial results," stated Francis W. "Butch" Cash, chairman and chief executive officer. "For the quarter, RevPAR growth for total company owned hotels exceeded the upper end of our guidance by three percentage points and adjusted EBITDA exceeded our guidance by $5 million. Our July and August results were ahead of our expectations, followed by very strong occupancy increases in September due in part to Hurricanes Katrina and Rita. As a result, both our La Quinta and Baymont brands provided strong operating results. "We continue to be impressed by the talents and compassion our people displayed in the aftermath of the devastating hurricanes we have experienced. "The third quarter marks the one-year anniversary of our ownership of Baymont. We are very pleased that we are already producing results at the anticipated levels of return on our original investment, a year earlier than we expected. "Our business fundamentals continue to improve and we are encouraged by the healthy operating environment for the lodging industry with favorable pricing trends and limited increases in supply. Our development activities will be focused on central business district and airport locations because of the returns we can realize and the ability to display our brands ever more prominently to help stimulate growth for our franchisees and ourselves. We anticipate commencing at least three such projects in 2006. "While we continue to explore acquisition opportunities, we recognize the competitive market for hotel assets. As a result, in addition to using our capital for our central business district projects, we are also looking more actively at other uses of our balance sheet capacity including redeeming the $200 million of preferred stock," concluded Mr. Cash. Third Quarter Financial Results Total revenues for the third quarter 2005 increased 32% over the third quarter 2004. Franchise fees increased 88% for the third quarter 2005. Other revenue (including healthcare interest income and restaurant rental income) increased 4% for the third quarter 2005. Approximately 60% of the total revenue increase was attributable to the Baymont acquisition while approximately 30% of the total revenue increase was due to the 12% increase in company owned La Quinta branded RevPAR. The remaining revenue increase was primarily due to an increase in franchise fees. For the third quarter 2005, net income was $14 million versus a net loss of $12 million for the third quarter 2004. The improvement from 2004 to 2005 was primarily the result of the Baymont acquisition, improved operating performance at La Quinta owned hotels, an increase in franchise income and a loss of approximately $21 million in the prior year period related to the early retirement of debt. Third quarter 2005 financial results include income of $0.2 million from hotels classified as discontinued operations. Debt Repayment During the third quarter, the Company repaid $116 million of debt, including $100 million of 7.40% Senior Notes and $16 million of medium term notes. After the repayment of these Notes, the Company's total indebtedness at September 30, 2005 was $810 million. At Sept. 30, 2005, the Company had $213 million in cash and cash equivalents and no borrowings under its $150 million credit facility, other than $16.5 million in letters of credit. The Company's net debt (total indebtedness less cash and cash equivalents) was $597 million at September 30, 2005. In addition, the Company has $200 million of 9% preferred stock outstanding which is currently redeemable at the Company's option. Finally, the Company had approximately 203 million fully diluted equivalent paired shares outstanding during the third quarter. Third Quarter Year-to-Date Financial Results Revenues for the nine months ended Sept. 30, 2005 increased 34% over the same period in 2004. Approximately 70% of the total revenue increase was attributable to the Baymont acquisition while approximately 25% was due to a 10% increase in company owned La Quinta branded RevPAR. The remaining revenue increase was primarily due to an increase in franchise fees, partially offset by reduced interest income from a healthcare note receivable, which was paid off in 2004. Net income was $14 million for the nine months ended September 30, 2005, versus a net loss of $31 million for the same period in 2004. The improvement from 2004 to 2005 was primarily the result of the Baymont acquisition, improved operating performance at La Quinta owned hotels, an increase in franchise income and a loss of approximately $21 million related to the early retirement of debt and an impairment charge of approximately $13 million, each in the prior-year period. The year-to-date financial results include income of approximately $1 million from hotels classified as discontinued operations. Operating Results The 10% RevPAR growth for company owned hotels for the third quarter was driven by a 12% RevPAR growth for La Quinta branded hotels. The RevPAR growth for the La Quinta branded hotels was due to an occupancy increase of 2.4 percentage points and an average rate increase of 8%. Prior to September, which was impacted by Hurricanes Katrina and Rita, company owned La Quinta branded hotels were already trending at 9% RevPAR growth with particular strength in the Northwest with 13% RevPAR growth. After the hurricanes, occupancy at hotels in Texas and the Gulf Coast significantly increased. RevPAR for La Quinta owned hotels in Dallas, Austin, San Antonio and Houston metropolitan areas were up 20% for the quarter in part due to evacuees from the New Orleans area as well as evacuees from Hurricane Rita. RevPAR for company owned Baymont branded hotels increased approximately 7% during the quarter and also contributed to improved adjusted EBITDA margin. "Prior to the hurricanes, our results were tracking above the top end of our RevPAR and Adjusted EBITDA expectations for the quarter due to continuing improvements in our business," added David L. Rea, president and chief operating officer. "In addition, the hurricanes brought significant increases in occupancy at our properties in Texas and the Gulf Coast during the months of September and October. As a result of our strong RevPAR growth and the positive impact of the Baymont acquisition, Adjusted EBITDA and profit margins continued to improve." During the third quarter, the Company added seven La Quinta and eight Baymont franchise hotels to its system. As of Sept. 30, 2005, the Company had 11,443 La Quinta branded franchise rooms (139 hotels) and 9,239 Baymont branded franchise rooms (106 hotels). In addition, the Company also executed a record number of franchise agreements (39 agreements) during the quarter. System-wide La Quinta branded hotel RevPAR, which includes the results of our La Quinta franchisees, increased 13% in the third quarter. This performance is yet another indicator of the very positive momentum and success of our franchising program. Asset Sales and Assets Held for Sale During the quarter, the Company sold four hotels, three of which were classified as continuing operations and one in discontinued operations, for gross proceeds of approximately $12 million and recognized gains on sales of approximately $4 million. At Sept. 30, 2005, the Company had 12 hotels classified as held for sale. Eight hotels are included in discontinued operations while four are in continuing operations as we expect the buyer to convert the hotels to the Baymont brand. The net book value of assets held for sale is approximately $32 million. Hurricanes Impact The Company has eight company owned hotels (2% of total company owned properties) in the greater New Orleans area that were affected by Hurricane Katrina. Two properties suffered severe damage and may not be restored to service. The six remaining hotels suffered significant damage, however, the Company believes these six properties will be substantially returned to service by year-end. In addition to the eight New Orleans hotels, 14 company owned hotels in Texas, Louisiana, Mississippi, Alabama and Florida experienced varying degrees of damage due to Hurricanes Katrina and Rita. Most of these hotels were substantially returned to service by September 30, 2005. Based on preliminary assessments, the Company estimates property damage as a result of the hurricanes will approximate $30 million to $40 million. The Company believes these damages will be substantially recovered from insurance proceeds. Third quarter net income reflects charges related to the hurricanes of approximately $2 million. Revenues include an estimated $5 million due to increased occupancy attributable to the aftermath of the hurricanes, which compares with approximately $2 million of additional revenue due to hurricanes in third quarter 2004. The amount and timing of business interruption recoveries are uncertain and will be recorded in future periods, in addition to potential property gains and losses, as claims are settled with insurance carriers. In addition to the company owned hotels damaged by the hurricanes, 11 of the Company's franchises, including five under construction, were damaged. Damage to the units under construction will likely affect those properties' scheduled opening dates. La Quinta Corporation (NYSE: LQI) -- http://www.LQ.com/-- is one of the largest owner/operators of limited-service hotels in the United States. Based in Dallas, Texas, the Company owns, operates or franchises more than 600 hotels in 39 states under the La Quinta Inns, La Quinta Inn & Suites(R), Baymont Inn & Suites(R), Woodfield Suites(R) and Budgetel(R) brands. * * * As reported in the Troubled Company Reporter on Oct. 28, 2005, Fitch Ratings has affirmed La Quinta Corp.'s issuer default rating at 'BB-', its senior unsecured notes at 'BB-', and its preferred stock at 'B'. Additionally, Fitch has assigned a 'BB' rating to the senior secured credit facility. The Rating Outlook has been revised to Positive from Stable. The one notch difference in the rating of the senior secured credit facility and the IDR is due to the guarantee provided to the credit lenders by La Quinta Corp.'s subsidiaries. Additionally, the credit facility has a stronger covenant package than any of the senior unsecured notes, which are currently rated 'BB-'. La Quinta's ratings reflect the company's solid market position as a leading limited service lodging provider, its high quality asset portfolio, an improved credit profile, robust lodging fundamentals, and Fitch's expectation for a strong 2006. LELAND MEDICAL: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Leland Medical Centers, Inc. Post Office Box 251548 Plano, Texas 75025 Bankruptcy Case No.: 05-47913 Type of Business: The Debtor designs, constructs and manages short-stay hospitals. See http://lelandmedical.com Chapter 11 Petition Date: October 14, 2005 Court: Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Jennifer P. Burnham, Esq. The Zisman Law Firm, PC 1412 Main, Twenty-Third Floor Dallas, Texas 75202 Tel: (214) 745-1300 Fax: (214) 720-0748 Total Assets: $12,446 Total Debts: $9,774,433 Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Paul Gresk, As Trustee Judgment $3,667,200 United States District Court Southern District of Indiana 46 East Ohio Street Indianapolis, IN 46204 Siemens Medical Solutions Promisory Note/ Loan $1,685,213 170 Wood Avenue South Iselin, NJ 08807 General Electric Capital Contingency Claim $1,059,331 Corporation c/o Robert Nader 324 Hyde Park Avenue Tampa, FL 33606 Regions Bank Loans $820,600 Elmer Murphey III Strasburger & Price, LLP 2801 Network Boulevard Suite 600 Frisco, TX 75034 Meridian Healthcare Finance Line of Credit $675,484 4320 La Jolla Village Drive Suite 250 San Diego, CA 92122 Sterling Bank Unpaid Jugdment $499,000 c/o Jeffrey Sandburg McGuire, Craddock & Strother 3550 Lincoln Plaza 500 N. Akard Dallas, TX 75201 Affiliated Corporate Equipment Lease $465,099 Services, Inc. c/o Loyd Ward 5644 LBJ Freeway, Suite 201 Dallas, TX 75240 Leaf Financial/ Creekside Unpaid Judgment $163,020 Capital Whitaker, Chalk, Swindle & Legal Services $80,600 Sawyer Whitaker, Chalk, Swindle & Loan $78,474 Sawyer Goodwin, Gruber LLP Professional Fees $64,566 Carestaff of Dallas Contingent Lawsuit $62,876 Philo & Wilke Architects, LLP Unpaid Services $42,088 DVI Financial Services Equipment Fees $38,236 PricewaterhouseCoopers Accounting Services $18,150 M-WAVE INC: Restructuring Talks Continue Amid Loan Default ---------------------------------------------------------- M-Wave, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission that it is in discussions with third party investors to restructure, acquire or reissue its debt from Silicon Valley Bank and to provide financing to the Company. M-Wave received a notice of default from Silicon Valley under its loan and security agreement. Silicon Valley agreed not to exercise its rights and remedies resulting from the default until the earlier of Oct. 31, 2005, or the occurrence and continuance of any other event of default. By that agreement, the Company also agreed to deliver additional security to SVB in the form of: -- a deed of trust with respect to a property at 544 Pine Street, Bensenville, Illinois; and -- a pledge of 1,500,000 shares of common stock that the Company owns in Integrated Performance Systems, Inc. As of Oct. 31, 2005, the Company owed approximately $1.9 million outstanding under the agreement. Without the extension, Silicon Valley would have the right to request acceleration of the said amount. M-Wave, Inc. -- http://www.mwav.com/-- provides supply chain services and sources printed circuit boards, custom electronic components and direct broadcasting satellite parts domestically and from Asia. M-Wave's Electro-Mechanical Group division (EMG) sources high-performance printed circuit boards and custom and engineered electronic components from original equipment manufacturers and contract manufacturers in Asia and the US. M-WAVE, INC: Appoints Special Committee to Review Options --------------------------------------------------------- M-Wave, Inc. (NasdaqSC:MWAV) appointed a Special Committee of the Board of Directors to immediately review strategic options including the sale or merger of all or part of the Company. In connection with this action, the Board appointed Jim Mayer, its former Chief Executive Officer as the Interim CEO and Chief Restructuring Officer, replacing Joe Turek, the firm's current CEO who now assumes the role of Chief Operating Officer, but continues as Chairman of the Board. "Jim and I have worked well together in the past, and this now allows us to concentrate on the areas where we can best serve the company and its shareholders," remarked Joe Turek. The Special Committee of the Board is composed of independent directors that include: -- Bruce Nelson, also M-Wave's chairman of its audit committee; -- Glenn Norem, who is chairman of its compensation committee and -- Gary Castagna, the former chairman of the audit committee. The Special Committee will be tasked with hiring the requisite third party professionals to effectuate the goals of a sale, merger, or other strategic option; vetting proposals brought forward by outsiders or insiders; reviewing alternative financing options and assuring fairness in any transaction effectuated. "We are committed as a company to achieving shareholder value, and these steps we're taking are an indication that the status quo is no longer acceptable. We now have committed, engaged directors and an action-oriented management ready to take appropriate measures to streamline and boldly move the Company forward," stated Jim Mayer. M-Wave, Inc. -- http://www.mwav.com/-- provides supply chain services and sources printed circuit boards, custom electronic components and direct broadcasting satellite parts domestically and from Asia. M-Wave's Electro-Mechanical Group division (EMG) sources high-performance printed circuit boards and custom and engineered electronic components from original equipment manufacturers and contract manufacturers in Asia and the US. MACGREGOR ELECTRIC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: MacGregor Electric, SE Post Office Box 71325, Apartado 105 San Juan, Puerto Rico 00936 Bankruptcy Case No.: 05-11884 Type of Business: The Debtor operates an electrical engineering firm. Chapter 11 Petition Date: October 14, 2005 Court: District of Puerto Rico (Old San Juan) Judge: Enrique S. Lamoutte Inclan Debtor's Counsel: Winston Vidal, Esq. Winston Vidal Law Office Post Office Box 193673 San Juan, Puerto Rico 00919-3673 Tel: (787) 751-2864 Fax: (787) 763-6114 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Roger Electric Trade Debt $108,468 P.O. Box 3166 Bayamon, PR 00960 Internal Revenue Service FICA $82,255 2 Ponce de Leon Avenue Mercantile Plaza Building Ninth Floor San Juan, PR 00918 First Bank Puerto Rico Commercial Bank Loan $49,233 Commercial Credit Division P.O. Box 9146 San Juan, PR 00908 Secretario de Hacienda SUTA $29,977 West India Machinery & Trade Debt $25,850 Supply Company General Electric del Caribe Trade Debt $19,788 Ponte Inc. Trade Debt $14,919 Powerlines Manufacturing Trade Debt $13,957 Corporation Marina Electric, Inc. Trade Debt $12,470 Landa, Umpierre & Co. Trade Debt $10,972 First Bank Puerto Rico Corporate Credit Card $10,350 Omaf Electrical Supplies Trade Debt $9,894 Zona Electrica Trade Debt $9,018 WESCO Trade Debt $7,680 Secretario de Hacienda PR Income Tax $7,236 Withholding Bright Point Trade Debt $7,214 San Juan Lighting Corp. Trade Debt $7,000 FS Lighting World Trade Debt $6,250 Ignacio Vega Car Allowance $4,800 Sandra Rodriguez Car Allowance $4,226 MAIN OFFICE: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Main Office Supply Co. 504 Main Street Coshocton, Ohio 43812 Bankruptcy Case No.: 05-78024 Type of Business: The Debtor sells office supplies and owns real property. Chapter 11 Petition Date: October 16, 2005 Court: Southern District of Ohio (Columbus) Judge: Charles M. Caldwell Debtor's Counsel: Robert E. Bardwell, Esq. 995 South High Street Columbus, Ohio 43206 Tel: (614) 445-6757 Fax: (614) 224-4870 Financial Condition as of September 30, 2005: Total Assets: $531,000 Total Debts: $1,151,446 Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Konica Business Tech, Inc. Trade debt $127,715 500 Day Hill Road Unionville, CT 06085 SP Richards Trade debt $110,816 P.O. Box 409818 Atlanta, GA 30384 National City Bank Lien of Credit $34,582 P.O. Box 3038KA161J Kalamazoo, MI 49003 Ohio Heritage Bank Credit card $9,320 P.O. Box 77046 purchases Madison, WI 53707 Chase Bank Credit card $8,109 P.O. Box 15298 purchases Wilmington, DE 19850 Iceberg Trade debt $2,205 310 Wendy Point Drive Glendale Heights, IL 60139 Electronic Business Machines Trade debt $2,159 1408 Versailles Road Lexington, KY 40504 Action Trade debt $826 4120 Brockton Drive Grand Rapids, MI 49512 Doane Keyes Trade debt $695 P.O. Box 297 Peru, IN 46970 COE Trade debt $476 1020 Franklin Drive Smock, PA 15480 Arlington Trade debt $432 1001 Technology Way Libertyville, IL 60048 Lang Trade debt $323 P.O. Box 162 Delafield, WI 53018 TransCon Trade debt $252 P.O. Box 5062 Chatsworth, CA 91313 Educators Resource Trade debt $250 2575 Schillinger Road Semmes, AL 36575 Latham Trade debt $165 200 Selig Drive Southwest Atlanta, GA 30336 Lawrence Binding Trade debt $115 19970 Ingersoll Drive Rocky River, OH 44116 Wilmer Trade debt $22 515 West Sycamore Street Coldwater, OH 45828 MCLEODUSA INC: Overview of Prepackaged Plan of Reorganization ------------------------------------------------------------- McLeodUSA Incorporated and its five debtor-affiliates delivered to the Bankruptcy Court their Joint Prepackaged Plan of Reorganization and Disclosure Statement on Oct. 28, 2005. The principal economic terms of the Plan, Stanford Springel, chief restructuring officer of McLeodUSA, relates, provide for the Company's balance sheet to be restructured by: (a) converting Senior Prepetition Lender Claims into New Term Loan Notes; (b) converting Junior Prepetition Lender Claims into 100% of the New Common Stock, subject to dilution by the Management Stock Plan Awards; and (c) canceling the Company's existing Preferred Stock and Common Stock. Importantly, Mr. Springel says, all other unsecured claims, except for the claims held by landlords of a designated group of leases of non-residential real property that the Debtors intend to reject, are unimpaired under the Plan. Under the Plan, holders of the Rejected Lease Claims will be paid 100% of the allowed amount of their claims as determined by Section 502(b)(6) of the Bankruptcy Code. Under the Plan, there are three classes of Impaired Claims: -- Class 4 Senior Prepetition Lender Claims, -- Class 5 Junior Prepetition Lender Claims, and -- Class 6 Lease Rejection Claims There are two classes of Impaired Interests: -- Class 8 Old Preferred Stock Interests and Subordinated Claims, and -- Class 9 Old Common Stock Interests and Subordinated Claims. All other Claims and Interests are Unimpaired: -- Class 1 Non-Tax Priority Claims, -- Class 2 Other Secured Claims, -- Class 3 General Unsecured Claims, and -- Class 7 Equity Interests in Debtors' Subsidiaries Holders of unimpaired claims and interests will be unaffected by the Plan. According to Mr. Springel, the value of the Company is significantly less than the aggregate amount of the Claims held by the Prepetition Lenders, which Claims are secured by substantially all assets of the Company. The Plan essentially provides for the transfer of ownership of the Company to the Junior Prepetition Lenders. At the Debtors' request, Miller Buckfire performed a valuation analysis of Reorganized McLeodUSA. The total enterprise value of Reorganized McLeodUSA was assumed for the purposes of the Plan by the Debtors, based on advice from Miller Buckfire, to be between approximately $255,000,000 to $345,000,000 as of an assumed Effective Date of October 31, 2005. Based on the total enterprise value of Reorganized McLeodUSA's business and an assumed total debt of approximately $125,200,000, cash on hand of $20,000,000 and potential asset sale proceeds as estimated by the Debtors of $61,000,000, the Debtors have employed an assumed range of equity values for Reorganized McLeodUSA of approximately $210,800,000 to $300,800,000. The values are based on information available to, and analyses undertaken by, Miller Buckfire as of September 6, 2005. The Company, with the assistance of Alvarez & Marsal, LLC, conducted a Liquidation Analysis to determine the dollar amount that would be generated from the liquidation of the Company's assets and properties in the context of a Chapter 7 liquidation case. After consideration of the effects that a Chapter 7 liquidation would have on the ultimate proceeds available for distribution to creditors, including: (i) the increased costs and expenses of a liquidation under Chapter 7 arising from fees payable to a trustee in a bankruptcy and professional advisors to that trustee, (ii) the erosion in value of assets in a Chapter 7 case in the context of the expeditious liquidation required under Chapter 7 and the "forced sale" atmosphere that would likely prevail, and (iii) the substantial increase in claims, which would need to be satisfied on a priority basis, McLeodUSA has determined that confirmation of the plan will provide each creditor and equity holder with a recovery that is not less than it would receive pursuant to a liquidation of the company under chapter 7 of the bankruptcy code. McLeodUSA Liquidation Analysis As of June 30, 2005 (in thousands of dollars) Net Book Estimated Proceeds Value Recovery -------- ----- --------- Cash $33,391 $33,391 Accounts Receivable - Net 54,856 41,156 Prepaid Expenses 14,744 - Property, Plant & Equipment - Net 410,412 72,040 Headquarters Sale 28,627 27,300 ATS Sale 15,386 20,500 Other Long term Assets 116,587 7,360 -------- --------- Total Proceeds $674,002 $201,746 -------- --------- Costs & Fees Wind Down Operating Costs 4,393 Trustees Fees 3,367 Professional Fees 8,500 Employee Retention Bonuses 8,278 Total Costs & Fees 24,538 --------- Proceeds Available for Payment of Claims $177,208 ========= Claim Estimated Value Recovery % ---------- --------- ---- Secured Claims: Senior Pre-Petition Lender Claims Exit Facility $108,355 $108,355 100% Junior Pre-Petition Lender Claims Revolver (includes accrued interest) 155,842 15,230 10% Tranche A (includes accrued interest) 156,677 15,312 10% Tranche B (includes accrued interest) 392,003 38,311 10% -------- -------- Total $704,522 $68,853 10% Proceeds Available for Payment of General Unsecured Creditors $0 ======== General Unsecured Claims: Severance 6,837 - 0% Trade Payables 36,706 - 0% Customer Deposits 2,900 - 0% Lease Rejection Claims 65,911 - 0% Asset Retirement Obligations 62,300 - 0% Other Current Liabilities 85,700 - 0% -------- -------- $260,354 - 0% Proceeds Available for Payment of Equity Holders $0 0% ======== The Debtors have already sent a copy of the Disclosure Statement describing, among other things, the proposed reorganization and its effects on holders of claims against and interests in the Debtors, the Plan, and ballots, to each known creditor that was entitled to vote on the Plan. The Debtors established October 28, 2005, as the deadline for receipt of votes to accept or reject the Plan. "The solicitation was an overwhelming success. With respect to Class 4 (Senior Prepetition Lender Claims), approximately 100% in amount and 100% in number voted to accept the Plan. With respect to Class 5 (Junior Prepetition Lender Claims), approximately 97.0% in amount and 97.3% in number voted to accept the Plan," Mr. Springel relates. A full-text copy of the Joint Prepackaged Plan is available for free at http://bankrupt.com/misc/McLeodUSAPLAN.pdf A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/McLeodUSADisclosureStatement.pdf Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated -- http://www.mcleodusa.com/-- provides integrated communications services, including local services in 25 Midwest, Southwest, Northwest and Rocky Mountain states. The Debtor and its affiliates filed for chapter 11 protection on Oct. 28, 2005 (Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234). Peter Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate, Meagher and Flom, represent the Debtors in their restructuring efforts. As of June 30, 2005, McLeodUSA Incorporated reported $674,000,000 in total assets and $1,011,000,000 in total debts. McLeodUSA Inc. previously filed for chapter 11 protection on January 30, 2002 (Bankr. D. Del. Case No. 02-10288). The Court confirmed the Debtor's chapter 11 plan on April 5, 2003, and that Plan took effect on April 16, 2002. The Court formally closed the case on May 20, 2005. (McLeodUSA Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 215/945-7000). MCLEODUSA INC: Will Sell Headquarters to Aegon Affiliate -------------------------------------------------------- McLeodUSA Incorporated, one of the nation's largest independent, competitive telecommunications services providers, has reached an agreement to sell its Technology Park corporate headquarters at 6400 C Street SW in Cedar Rapids to Life Investors Insurance Company of America, an AEGON USA Inc. affiliate. The transaction, valued at approximately $27 million, is expected to close by the end of the year, subject to customary closing conditions and receipt by McLeodUSA of required bankruptcy court approvals. McLeodUSA employees currently working at its Technology Park campus will relocate to a leased facility owned by AEGON and located at One Martha's Way in Hiawatha, Iowa. The relocation is expected to be completed during second quarter 2006. "Based on our current business strategy, a smaller facility that continues to provide a professional business environment for our employees simply makes good economic sense," stated Joe Ceryanec, acting Chief Financial Officer of McLeodUSA. "Proceeds from the sale of our headquarters building will be used to pay down a portion of the $100 million term debt facility the Company intends to enter into upon completion of its restructuring." Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated -- http://www.mcleodusa.com/-- provides integrated communications services, including local services in 25 Midwest, Southwest, Northwest and Rocky Mountain states. The Debtor and its affiliates filed for chapter 11 protection on Oct. 28, 2005 (Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234). Peter Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate, Meagher and Flom, represent the Debtors in their restructuring efforts. As of June 30, 2005, McLeodUSA Incorporated reported $674,000,000 in total assets and $1,011,000,000 in total debts. McLeodUSA Inc. previously filed for chapter 11 protection on January 30, 2002 (Bankr. D. Del. Case No. 02-10288). The Court confirmed the Debtor's chapter 11 plan on April 5, 2003, and that Plan took effect on April 16, 2002. The Court formally closed the case on May 20, 2005. (McLeodUSA Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 215/945-7000). METABOLIFE INT'L: Gordon & Rees Approved as Trademark Counsel ------------------------------------------------------------- The U.S Bankruptcy Court for the Southern District of California authorized Metabolife International, Inc., and its subsidiary, Alpine Health Products, LLC, to employ the law firm of Gordon & Rees, LLP, as their trademark counsel. The Debtors chose Gordon & Rees as their trademark counsel because of the Firm's extensive experience and knowledge of intellectual property issues, including federal, state, and international prosecution, compliance and enforcement requirements. John L. Haller, Esq., the lead attorney in this engagement, has acted as the Debtors' special trademark and intellectual property counsel for over 10 years. Gordon & Rees will render legal services relating to maintaining the Debtors' trademark and other intellectual property rights, including: a) prosecution of state, federal, and international trademark, copyrights and patents; b) maintaining records and file of applications and registrations; c) providing representation with respect to oppositions and cancellations of trademark applications and registrations in Federal and International jurisdictions; and d) retaining associates to assist in the prosecution of International Applications and Registrations in respective countries. Gordon & Rees' attorneys and professionals expected to be primarily involved in the Debtors' chapter 11 cases and their hourly rates are: Professional Hourly Rate ------------ ----------- John L. Haller, Esq. $350 Kelly Solomon, Paraprofessional $175 Gordon & Rees will bill its services and costs to Metabolife, the parent company. The billings will include costs and fees of necessary foreign Associates retained to assist in prosecution of International Applications and Registrations in their respective countries. The Debtors estimate unbilled services from the foreign Associates at $32,400. A list of the Debtors' pending foreign trademark cases is available for a fee at http://ResearchArchives.com/t/s?162 The Debtors assured the Bankruptcy Court that Gordon & Rees does not hold any interest adverse to the Debtors or their estates and is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. Founded in 1974 in San Francisco, Gordon & Rees -- http://www.gordonrees.com/-- has become a dynamic presence in the West with more than 265 attorneys in nine offices. The Firm's growth has been fueled by a reputation for success and an unfailing commitment to excellence. The Firm's attorneys have successfully litigated through trial, arbitration and appeal and enjoy a national reputation for coordinating, managing and trying multi-party and multi-case litigation. Headquartered in San Diego, California, Metabolife International, Inc. -- http://www.metabolife.com/-- sells dietary supplements and management products in grocery, drug and mass retail locations nationwide. The Company and its subsidiary, Alpine Health Products, LLC, filed for chapter 11 protection on June 30, 2005 (Jointly Administrated Under Bankr. S.D. Calif. Case No. 05-06040). David L. Osias, Esq., and Deb Riley, Esq., at Allen Matkins Leck Gamble & Mallory LLP, represent the Debtors in their chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $23,983,112 in total assets and $12,214,304 in total debts. MMRENTALSPRO LLC: La Salle OKs Use of Cash Collateral to Nov. 10 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District Of Tennessee, Southern Division, approved LaSalle Bank National Association' request to extend, until Nov. 10, 2005, the terms of the Third Interim Cash Collateral Order allowing MMRentalsPro, LLC, to access its cash collateral. LaSalle Bank serves as Trustee for holders of Morgan Stanley Capital I Inc. Commercial Mortgage Pass-Through Certificates Series 2004-HQ4. GMAC Commercial Mortgage Corporation acts as LaSalle Bank's special servicer. Nelwyn Inman, Esq., at Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, asked for the extension after the Bankruptcy Court postponed the Oct. 27 final hearing to consider the Debtor's cash collateral motion. The Bankruptcy Court moved the hearing after Richard C. Kennedy, Esq., at Kennedy, Fulton & Koontz withdrew as the Debtor's counsel. The hearing for a final order allowing the Debtor's use of cash collateral is scheduled at 2:30 p.m., on Nov. 10, 2005. Third Interim Cash Collateral Order The Hon. R. Thomas Stinnett issued the third interim order allowing the Debtor to access LaSalle Bank's cash collateral on Sept. 16, 2005. LaSalle Bank holds a first priority perfected security interest in certain of the Debtor's assets pursuant to a prepetition loan originally issued by CW Capital, LLC. As of the petition date, the outstanding principal balance and accrued interest due and owing under the loan was approximately $13.5 million. The loan is secured by, among other things, a Deed to Secure Debt, Assignment of Rents and Security Agreements dated Aug. 4, 2004. The properties secured by the deed include three apartment complexes located in Whitfield County, Georgia. The Bankruptcy Court limited the use of cash collateral for payments to Lincoln Apartment Management LP and other necessary costs and expenses outlined in an approved budget. Lincoln manages the Debtors apartment complex. As adequate protection for use of the cash collateral, La Salle was granted: a) continuing liens and security interests under the terms and conditions of the original loan agreement; and b) a replacement first priority perfected security interest in all collateral generated post petition pursuant to Section 361(2) of the Bankruptcy Code. The Debtor was also required to deposit to an escrow account held by GMAC all amounts due but not yet payable for property taxes, insurance, licenses and permits. Headquartered in Chattanooga, Tennessee, MMRentalsPro, LLC, and its owner, Roy Michael Malone, Sr., filed for chapter 11 protection on June 17, 2005 (Bankr. E.D. Tenn. Case No 05-13814). Richard C. Kennedy, Esq., at Kennedy, Fulton & Koontz, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated less than $50,000 in assets and between $10 million to $50 million in debts. MORTGAGE ASSET: Fitch Assigns BB Rating to $2.14-Mil Cert. Class ---------------------------------------------------------------- Mortgage Asset Securitization Transactions, Inc. $113.4 million MASTR Specialized Loan Trust 2005-03, mortgage pass-through certificates, is rated by Fitch Ratings: -- $93,761,494 class A-1 and A-2 senior certificates 'AAA'; -- $8,346,000 class M-1 'AA'; -- $4,462,000 class M-2 'A'; -- $2,318,000 class M-3 'BBB+'; -- $1,275,000 class M-4 'BBB'; -- $1,101,000 class M-5 'BBB-'; -- $2,144,000 class B 'BB'. Credit enhancement for the 'AAA' class A-1 and A-2 certificates reflects the 19.58% subordination provided by classes M-1, M-2, M-3, M-4, M-5 and B, as well as initial overcollateralization and monthly excess interest. Credit enhancement for the 'AA' class M-1 certificates reflects the 12.34% subordination provided by classes M-2, M-3, M-4, M-5 and B, initial OC and monthly excess interest. Credit enhancement for the 'A' class M-2 certificates reflects the 8.48% subordination provided by classes M-3, M-4, M-5 and B, initial OC and monthly excess interest. Additionally, credit enhancement for the 'BBB+' class M-3 certificates reflects the 6.47% subordination provided by classes M-4, M-5 and B, initial OC and monthly excess interest. Credit enhancement for the 'BBB' class M-4 certificates reflects the 5.36% subordination provided by classes M-5 and B, initial OC and monthly excess interest. Furthermore, credit enhancement for the 'BBB-' class M-5 certificates reflects the 4.41% subordination provided by class B, initial OC and monthly excess interest. Credit enhancement for the 'BB' class B certificates reflects the 2.55% subordination provided by initial OC and monthly excess interest. In addition, the ratings on the certificates reflect the quality of the underlying collateral, and Fitch's level of confidence in the integrity of the legal and financial structure of the transaction. The mortgage pool consists of fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties, with an aggregate principal balance of $115,380,829. As of the cut-off date, Oct. 1, 2005, the mortgage loans had a weighted average original loan-to-value ratio of 82.33%, current loan-to-value ratio of 77.25%, weighted average current FICO score of 623, weighted average coupon of 6.995%, and an average principal balance of $124,065. Single-family properties account for approximately 74.27% of the mortgage pool, two- to four-family properties 9.27%, and condos 7.03%. Owner occupied properties make up 89.05% of the pool. The three largest state concentrations are California, New York, and Texas. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, please see the press release issued May 1, 2003 entitled 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation' and Feb. 23, 2005 entitled 'Fitch Revises RMBS Guidelines for Antipredatory Lending Laws', available on the Fitch Ratings Web site at http://www.fitchratings.com/ Mortgage Asset Securitization Transactions, Inc. deposited the loans into the trust, which issued the certificates, representing beneficial ownership in the trust. For federal income tax purposes, the Trust Fund will consist of multiple real estate mortgage investment conduits. Deutsche Bank National Trust Company will act as trustee. GMAC Mortgage Corporation, rated 'RSS1-' by Fitch, and Wells Fargo Bank N.A., rated 'RSS2', will act as servicers for this transaction, with Wells Fargo Bank N.A., rated 'RMS1,' acting as master servicer. NANOMAT INC: Ch. 11 Trustee Taps Debra Parrish as Special Counsel ----------------------------------------------------------------- Joseph L. Cosetti, the chapter 11 Trustee in Nanomat, Inc.'s chapter 11 case, asks the U.S. Bankruptcy Court for the Western District of Pennsylvania for permission to employ Debra M. Parrish, Esq., as his special counsel. Ms. Parrish will litigate and pursue patent applications and file all documents necessary to preserve the Debtor's patents. She will continue to respond to questions posed by [Nanomat's co- founder,] Dr. [Srikanth] Ragunathan, and will help to assess tasks that need to be done to maximize the value of the portfolio. Ms. Parrish will be paid $250 per hour for her services, while her paralegal will bill $75 per hour. Mr. Cosetti believes that Ms. Parrish does not have any interest materially adverse to the Debtor's estate. Headquartered in North Huntingdon, Pennsylvania, Nanomat, Inc. -- http://www.nanomat.com/-- is a leading manufacturer of nanomaterials, powders, and technologies. Nanomat filed for chapter 11 protection on March 18, 2005 (Bankr. W.D. Pa. Case No. 05-23245). Donald R. Calaiaro, Esq., at Calaiaro, Corbett & Brungo, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, its estimated assets and debts from $10 million to $50 million. NERVA LTD: Waning Credit Spurs Fitch to Junk $315-Mil Class Notes ----------------------------------------------------------------- Fitch Ratings downgrades one class of notes issued by Nerva Ltd. In addition, the class A notes have been removed from Rating Watch Negative. This downgrade is effective immediately: -- $315,446,337 class A notes to 'CC' from 'CCC'. This rating action is a result of declining credit enhancement stemming from increasing diversions of principal dollars to pay interest to the class A noteholders. Over the last four payment periods approximately $2.1 million of interest shortfalls to the class A noteholders was paid with principal dollars received from amortizing reference assets. Although the class A noteholders will continue to receive interest for the foreseeable future, the principal diversions will further impair ultimate recovery. Regarding the remaining reference assets, the credit quality has generally stabilized; however, Nerva does have exposure to a Northwest Airlines equipment trust, which composes approximately 6% of the remaining $201 million reference portfolio. In addition, the portfolio has amortized considerably, resulting in approximately $100 million in principal redemption of the class A notes since the last rating action. No credit events have been called since the last rating action. Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch Ratings Web site at http://www.fitchratings.com/ For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Sept. 13, 2004, also available at http://www.fitchratings.com/ NESCO INDUSTRIES: Balance Sheet Upside-Down by $4.72M at April 30 ----------------------------------------------------------------- Nesco Industries, Inc., delivered its annual report on Form 10-KSB for the fiscal year ending April 30, 2005, to the Securities and Exchange Commission on October 24, 2005. The Company reported a $7,884,018 net loss on $738,498 of net revenues for the year ending April 30, 2005. At April 30, 2005, the Company's balance sheet shows $1,707,374 in total assets and a $4,718,722 stockholders deficit. Rothstein, Kass & Company, P.C., the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern, pointing to: * cumulative losses of approximately $18,569,000 since inception; * a working capital deficit of approximately $6,048,000; and * a stockholders' deficit of approximately $4,719,000 as of April 30, 2005. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?2a3 Nesco Industries, Inc., develops, manufactures and markets high water content, electron beam cross-linked, aqueous polymer hydrogels used for wound care, medical diagnostics, transdermal drug delivery and cosmetics. NEW WORLD: Walking Away from 128 Unexpired Leases & Contracts ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District Of Pennsylvania gave New World Pasta Company and its debtor-affiliates authority to reject 128 executory contracts and unexpired non-residential real property leases, effective Sept. 16, 2005. The Debtors' counsel, Robert J. Bein, Esq., at Saul Ewing LLP, told the Bankruptcy Court that the proposed rejection will advance the Debtors' reorganization and is in the best interests of their estates. The Court has set the supplemental bar date for the filing of rejection damages claims for Nov. 6, 2005. A list of the executory contracts and unexpired leases to be rejected is available for free at: http://researcharchives.com/t/s?1a9 Headquartered in Harrisburg, Pennsylvania, New World Pasta Company -- http://www.nwpasta.com/-- is a pasta manufacturer in the United States. The Company, along with its debtor-affiliates, filed for chapter 11 protection (Bankr. M.D. Penn. Case No. 04- 02817) on May 10, 2004. Eric L. Brossman, Esq., and Robert Bein, Esq., at Saul Ewing LLP, in Harrisburg, serve as the Debtors' local counsel. Bonnie Steingart, Esq., and Vivek Melwani, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP, represent the Creditors' Committee. In its latest Form 10-Q for the period ended June 29, 2002, New World Pasta reported $445,579,000 in total assets and $451,816,000 in total liabilities. NORTHWEST AIRLINES: Interline Pacts Approved on Final Basis ----------------------------------------------------------- As previously reported, the U.S. Bankruptcy Court for the Southern District of New York gave Northwest Airlines Corporation and its debtor-affiliates authority, on an interim basis, to assume certain interline traffic agreements, industry-standard agreements and related clearinghouse agreements, and immediately satisfy certain prepetition obligations pending assumption of these agreements. The Debtors also sought permission to satisfy certain obligations to other airlines that are settled through airline clearinghouses and certain prepetition frequent flyer obligations to other airlines. Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, told Judge Gropper that the Debtors' Interline Traffic Agreements with other carriers are an essential part of their transportation services. These arrangements facilitate cooperation among airlines with respect to critical activities as making reservations and transferring passengers, freight, baggage and mail between airlines. The Interline Traffic Agreements are the most basic level of inter-airline coordination and cooperation agreements. They do not cover other relationships among airlines, like code sharing, mutual acceptance of frequent flyer programs or other marketing arrangements. A non-exclusive list of the Debtors' Interline Traffic Agreements is available at no charge at http://ResearchArchives.com/t/s?1d3 The Debtors' Industry Agreements facilitate transactions under the Interline Traffic Agreements and also provide for fare publication, appointment of travel agencies, and foreign currency clearing procedures. The Related Clearinghouse Agreements allow the Debtors to effectuate transactions under the Interline Traffic Agreements and certain other agreements. The Debtors have a number of relationships with other airlines under which obligations are settled through the Clearinghouses. These relationships include, but are not limited to, the SkyTeam Alliance, certain aspects of the Debtors' alliance agreements with KLM, the Debtors' alliance agreements with Delta and Continental Airlines, and various code share agreements with other airlines. A non-exclusive list of the Debtors' Industry Agreements and Related Clearinghouse Agreements is available at no charge at http://ResearchArchives.com/t/s?1d4 Mr. Zirinsky contended that any interruption or cessation of the Debtors' ability to make and receive payments through the Clearinghouses could precipitate a disruption in performance under the Interline Traffic Agreements, and thus could have a material adverse effect on the Debtors' businesses and jeopardize their prospects for successful reorganization. According to Mr. Zirinsky, certain services under the Interline Traffic Agreements, Industry Agreements, and Related Clearinghouse Agreements are the equivalent of industry wide "utility" services for which there is no readily available alternative. Debtors Will Pay Obligations The Debtors believe that they are current with respect to payments under the agreements to be assumed and, therefore, are not required to provide adequate assurances of their future performance under the agreements. However, out of an abundance of caution, the Debtors need authority, but not the direction, to pay any prepetition amounts owed under these agreements pending the Court's approval of the assumption of the agreements. The Debtors want to ensure a seamless transition into Chapter 11 for their customers, whose traveling experience in many instances depends on the cooperation of the airlines under the Interline Traffic Agreements, Industry Agreements and Related Clearinghouse Agreements. The Debtors' estimated net obligations owed to other airlines as of the Petition Date: Agreement Net Obligations --------- --------------- SkyTeam Agreements $57,000,000 Code share Agreements $22,000,000 Frequent Flyer Agreements $38,000 Without the discretion to pay certain undisputed prepetition obligations to other airlines, the Debtors believe that: (i) their future revenue could suffer and their ability to serve their customers' needs and continue to operate within the airline industry and, thus, reorganize, could be in jeopardy; and (ii) the counterparties may not have any incentive to continue to provide services to the Debtors or may attempt unilateral self-help measures, including set-off or recoupment, to protect their interests. Regardless of whether those actions are legally proper, Mr. Zirinsky told Judge Gropper that any disruption in the Debtors' businesses, even for a short time, could be harmful to the necessary goodwill of their customers. 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Parties Balk at Maintenance & Service Fees -------------------------------------------------------------- As previously reported, Judge Gropper of U.S. Bankruptcy Court for the Southern District of New York authorized Northwest Airlines Corp. and its debtor-affiliates to: 1. pay any undisputed prepetition claims that have given or could give rise to Liens or Interests against the Debtors' property, regardless of whether the Outside Maintenance and Service Providers, Shippers, or Contractors already have perfected the Liens or Interests; and 2. honor Maintenance Contracts and Pass Through Projects in the ordinary course of their business. Parties Object A. Wells Fargo Wells Fargo Bank, National Association, is the indenture trustee under a Trust Indenture dated as of June 1, 2001, with Metropolitan Airports Commission, as amended by the First Supplemental Trust Indenture dated as of January 1, 2005, pursuant to which $136,355,000 in Series 2001A and 2001B bonds, and $26,500,000 in Series 2005A bonds were issued for the construction and development of certain special facilities at the Minneapolis-St. Paul International Airport. Pursuant to the terms of the Trust Indenture, MAC delivered and pledged certain proceeds of the Special Facilities Bonds to Wells Fargo, which proceeds were placed in a construction account. Wells Fargo has a first priority, perfected security interest in and lien on the Construction Account and its proceeds. The Construction Account currently contains $6.4 million, Eric A. Schaffer, Esq., at Reed Smith LLP, in Pittsburgh, Pennsylvania informs the Court. According to Mr. Schaffer, the parties have agreed that the Debtors have no interest in the Construction Funds, and the Funds are not property of the estate. Wells Fargo is concerned that the construction and development of the Special Facilities may be a Pass Through Project; the Debtors are not clear on this. If so, Wells Fargo would be compelled to pay contractors working on the Special Facilities from the Construction Fund. Wells Fargo contends that it cannot and should not be compelled to fund the construction of the Special Facilities from the Construction Fund because: (a) pursuant to Section 363 of the Bankruptcy Code: * the Debtors have no interest in the Construction Fund, therefore, cannot use the funds; and * were the Court to hold that the Construction Funds are cash collateral, Wells Fargo has not consented to its use, and the Debtors have not offered any adequate protection for the use of it; (b) pursuant to Section 365(c)(2), to the extent that the transactions may be characterized as a financial accommodation, they cannot be assumed by the Debtors; and (c) pursuant to the terms of the Trust Indenture and related bond documents, MAC is in default, inter alia, because of failure to pay the October 1, 2005 payment in full, and the filing of the Debtors' bankruptcy cases. As a result, Wells Fargo is not required to release funds from the Construction Fund. B. AeroThrust Corporation Before the Petition Date, AeroThrust Corporation and Northwest Airlines, Inc., entered into a contract pursuant to which AeroThrust agreed to repair certain jet engines Northwest delivers to AeroThrust. Steven R. Popofsky, Esq., at Gersten Savage, LLP, in New York, tells the Court that Northwest owes AeroThrust in excess of $2,000,000 under the Contract on account of prepetition and postpetition repairs. AeroThrust asserts perfected mechanics' liens against certain of the engines under applicable Florida law. Mr. Popofsky notes that business realities and financial hardships could cause a service provider to fail in its compliance with on-going obligations to Northwest. Hence, AeroThrust asks the Court not to invalidate a payment made to it by Northwest merely because AeroThrust validly and legally fails to comply with or withholds services under a pending executory contract. AeroThrust also seeks clarification that, if a payment were somehow recoverable as an unauthorized postpetition transfer: -- a service provider does not sacrifice its valid secured claim if it had that claim prior to payment. -- the amount recoverable is only the prepetition portion of the payment. Moreover, AeroThrust seeks permission to retain possession of the remaining engines pending payment, without forfeiting the payment it received from Northwest in respect of other engines. * * * The Court grants the Debtors' request on a final basis. The Court, however, clarifies that: -- to the extent the Debtors later seek to avoid and recover a payment made, the payment is only recoverable from the applicable Outside Maintenance & Service Provider, Shipper or Contractor and only to the extent that it was made on account of a prepetition claim; -- to the extent the Debtors redeem property claimed to be subject to a lien, the Final Order will not be deemed to: * impair the Maintenance Provider's right to continue asserting a secured claim over the assets remaining in its possession; or * prejudice the Maintenance Provider for continuing to assert the claim; and -- nothing in the Final Order compels Wells Fargo Bank and U.S. Bank, National Association, as indenture trustees, or any other third party to make any payment or to release or disburse any funds from any construction funds or other funds in its possession or control. 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) O'SULLIVAN IND: Court Enjoins Utilities from Suspending Service --------------------------------------------------------------- Section 366 of the Bankruptcy Code provides that within 20 days after the commencement of a bankruptcy case, a utility may not alter, refuse, or discontinue service to, or discriminate against, a debtor solely on the basis of the commencement of its bankruptcy case or the failure of the debtor to pay a prepetition utility bill. Following the 20-day period, however, utility companies arguably may discontinue service if the debtor does not provide adequate assurance of its future performance of postpetition obligations to them. In this regard, O'Sullivan Industries Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Georgia to: a) prohibit the Utility Companies from altering, refusing, or discontinuing Utility Services solely on account of prepetition invoices; b) deem the Utility Companies adequately assured, without the need for payment of additional deposits or security; c) establish procedures for determining requests for additional adequate assurance; d) provide that, if a Utility Company timely requests additional adequate assurance that the Debtors believe is unreasonable, then, at the request of the Utility Company, the Debtors will promptly file a motion for determination of adequate assurance of payment and set the motion for a hearing; e) provide that any Utility Company that does not timely request additional adequate assurance, will be deemed to be adequately assured; and f) provide that, in the event that a Determination Motion is filed or a Determination Hearing is scheduled, any objecting Utility Company will be deemed to have adequate assurance of payment under Section 366, without the need for payment of additional deposits or other securities unless a Court order to the contrary is entered in connection with the applicable Determination Motion or Determination Hearing. "Permitting the Utility Companies to terminate Utility Services on the 21st day after the Petition Date would be severely disruptive to the Debtors' business and substantially harm the Debtors' efforts to expeditiously restructure their business affairs," James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, P.A., in Atlanta, Georgia, contends. "To avert such harm, the Debtors could be required unnecessarily to pay potentially substantial sums demanded by the Utility Companies to avoid the cessation of necessary Utility Services." Mr. Cifelli attests that the Debtors have had an excellent payment history with the Utility Companies. There are no material, ongoing defaults or arrearages with respect to any Utility Service invoices, he says. Furthermore, Mr. Cifelli assures the Court that the Debtors will continue to pay all postpetition obligations, including utility bills, as billed and when due. Before the Petition Date, the average monthly cost of the Debtors' Utility Services was $300,000. The Debtors expect that there will be no material deviations from the monthly figures in the future. Thus, Mr. Cifelli notes that adequate assurance of payment to the Utility Companies is evident in the Debtors' Chapter 11 cases, as the Debtors have sufficient availability of funds with which to pay all postpetition utility charges. Mr. Cifelli assures the Court that Adequate Assurance will not prejudice the right of any Utility Company to request in writing additional assurance within a given period, and that any burden of proof will remain unaffected by the Court's initial approval of the Debtors' proposal. * * * The Court grants the Debtors' request. 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. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) O'SULLIVAN IND: Wants to Assume AFCO Premium Finance Agreement -------------------------------------------------------------- In the ordinary course of business, O'Sullivan Industries Holdings, Inc., and its debtor-affiliates maintain insurance coverage, including policies covering workers' compensation and employer's liability, general liability, employee benefit liability, and pollution legal liability. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, P.A., in Atlanta, Georgia, tells the U.S. Bankruptcy Court for the Northern District of Georgia that maintaining the Insurance Policies is necessary to ensure the continued operation of the Debtors' business and to protect the value of their assets. "It is not uncommon for a large company to enter into premium financing arrangements as a cost-spreading measure to ensure the maintenance of adequate business insurance coverage," Mr. Cifelli relates. To reduce the burden of funding the premiums of the Insurance Policies in advance and to allow for better management of the costs of the Insurance Policies, the Debtors entered into a premium finance agreement with AFCO Premium Credit LLC. Under the Premium Finance Agreement, the Debtors financed $3,790,049 in insurance premiums for the Insurance Policies, payable by an advance payment of $758,010 and nine monthly installments of $343,919. The payments commenced on July 30, 2005. Interest rate under the Premium Finance Agreement is 4.978% Mr. Cifelli attests that the Debtors are current on their obligation under the Premium Finance Agreement and expect to have sufficient liquidity to make all future payments. As of October 2, 2005, Mr. Cifelli notes that the outstanding balance under the Premium Financing Agreement was $2,063,515. As security for the total amount payable under the Premium Finance Agreement, the Debtors assigned to AFCO a security interest in the unearned premiums and dividends that may become payable under the Insurance Policies and any interest that may arise under any state insurance guaranty fund relating to any of the Insurance Policies. AFCO may cancel the Premium Finance Agreement and the Insurance Policies in the event the Debtors fail to make any required payments under it. By this motion, the Debtors seek the Court's authority to assume the Premium Finance Agreement with AFCO effective as of the Petition Date. The Debtors believe that the Premium Finance Agreement is favorable and that, were they to reject the Premium Finance Agreement, they would not be able to enter into another premium finance agreement on materially better terms. Mr. Cifelli assures the Court that assuming the Premium Finance Agreement would not submit any of the Debtors' creditors or other parties-in-interest to any economic or other risks different than those that have previously been accepted by the creditors and parties, as the Premium Financing Agreement is merely a mechanism to finance the Debtors' extensive business insurance requirements. By contrast, Mr. Cifelli notes, if the Debtors were to discontinue payments under the Premium Finance Agreement, they would risk possible cancellation of the Insurance Policies. "In the event of such cancellation, the Debtors' business operations and the Debtors' creditors and other parties-in- interest would face significant risks, including potentially the cessation of the Debtors' operations," he maintains. 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. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARKWAY HOSPITAL: Wants Plan Filing Period Stretched to March 1 --------------------------------------------------------------- The Parkway Hospital, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to extend the time within which it has the exclusive right to file a plan of reorganization and solicit acceptances of that plan. The Debtor wants its exclusive plan-filing period extended to March 1, 2006, and its exclusive period to solicit plan acceptances to May 1, 2006. The Debtor tells the Bankruptcy Court that it has been unable to formulate a plan of reorganization because of the demands dealt by: a) significant employee issues, including negotiations with the union and certain benefit issues; b) negotiations with its Official Committee of Unsecured Creditors c) executory contract and lease issues; d) negotiations with certain significant government litigation creditors; and f) negotiations with potential lenders. At present, the Debtor is continuing the administration of its chapter 11 case and the negotiations with various creditor constituencies for a consensual plan of reorganization. The extension will also give the Debtor sufficient time to analyze the claims asserted against the estate. The Parkway Hospital, Inc., operates a 251-bed proprietary, acute care community hospital located in Forest Hills, New York. The Company filed for chapter 11 protection on July 1, 2005 (Bankr. S.D.N.Y. Case No. 05-14876). Timothy W. Walsh, Esq., at DLA Piper Rudnick Gray Cary US LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $28,859,000 in total assets and $47,566,000 in total debts. PENN NATIONAL: Reports $55.4 Million Net Income in Third Quarter ---------------------------------------------------------------- Penn National Gaming, Inc. (PENN: Nasdaq) reported third quarter $19.1 million of pre-tax expenses related to the impact of Hurricane Katrina on two gulf coast properties and an after-tax gain of $35.6 million comprised of a loss from discontinued operations ($2.3 million) and a gain on the sale of Hollywood Casino Shreveport ($37.9 million). Excluding these expenses and gains, Penn National Gaming reported adjusted diluted earnings per share of $0.37 for the three months ended September 30, 2005. For the third quarter, the company reports $294.6 million in net revenues, $78.6 million in EBITDA, and $55.4 million in net income. Commenting on the results, Peter M. Carlino, Chief Executive Officer of Penn National said, "We entered the third quarter focused on moving forward our plans for growth and expansion. While we were successful in this effort, responding to the impact of Hurricane Katrina on our gulf coast employees and properties became our immediate priority. In the wake of the storm, we quickly launched efforts to locate and provide assistance to our nearly 2,000 employees and their families who were affected by this natural disaster. I am extremely proud of the results Penn National employees achieved on this front. Through their tireless efforts and generosity we were able to address the immediate needs -- such as financial aid, food, clothing, counseling and job placement assistance -- of those affected. "Fortunately, with a broad portfolio of regionally diversified properties, despite Hurricane Katrina, Penn National generated record third quarter net revenues, EBITDA and adjusted diluted EPS. Penn National's Baton Rouge property delivered particularly strong third quarter results as property management and employees accommodated increased traffic in the aftermath of the hurricane. In addition, Charles Town, Hollywood Casino-Aurora and the Casino Rama Management contract each posted double digit percentage increases in EBITDA compared to the same period last year. "Near the close of the quarter, Penn National secured the final regulatory approvals required to complete its acquisition of Argosy Gaming Company and completed the acquisition on the first business day of the fourth quarter. While we would have preferred to have secured regulatory approvals without divesting any properties, we remain enthusiastic about the financial and strategic benefits of completing this acquisition. Taking into account the potential sale of two Illinois properties and the recently completed sale of Argosy Casino-Baton Rouge, this accretive transaction further diversifies the Company's regional operating base as well as its sources of revenue and cash flow and brings two additional growth opportunities to the three expansion initiatives already being pursued by Penn National. "Penn has established an outstanding, multi-year, multi-jurisdictional visible pipeline of growth opportunities. These projects, outlined below, adhere to our return on investment criteria as well as our preference to invest in lower-penetrated, higher growth markets." Mr. Carlino concluded, "Provided we don't identify additional accretive development or expansion projects and factoring in prudent maintenance cap-ex spending, Penn National plans to be in a position to generate prodigious amounts of free cash flow in early 2007, which can be applied to debt reduction. As such, and despite the impact of the hurricane, we remain extremely confident in our ability to continue delivering financial growth in upcoming periods as well as longer-term. We are initiating 2005 fourth quarter guidance today based on our existing continuing operations." Financial Guidance * Casino Magic - Bay St. Louis and Boomtown Biloxi remain closed throughout the fourth quarter of 2005 and will have no impact on reported EBIDTA; * Although Penn National Gaming will receive insurance proceeds resulting from the hurricane damage incurred at Casino Magic - Bay St. Louis and Boomtown Biloxi, the Company can not presently predict the amount or the timing of such payments and as such these proceeds are excluded from guidance; * The results of the five recently acquired Argosy Gaming properties will be included in continuing operations as the accounting standards for treating properties as "assets held for sale" will not be met in the fourth quarter of 2005; * The opening of Hollywood Slots-Bangor in early November 2005; * The company will take a $1.4M charge for early extinguishment of debt related to the termination of the Company's previous senior credit facility which was replaced by the financing used to fund the Argosy Gaming Company acquisition; * Includes $960 million in LIBOR swaps at a blended rate of 4.71%; * Assumes the LIBOR spread on the Company's new $1.65 billion Senior Credit Term B facility will step down to 175bps from 200 bps in November based on the terms of its credit facility; * The Company will take a 2005 fourth quarter non-cash pre-tax charge of $4.3 million relative to pre-construction activities at Penn National Race Course. The after tax effect of the charge is expected to approximate $2.7 million; * Anticipated results do not include any charges for future or prior stock option grants, although it is expected that the Company will incur such charges, when the Company adopts FASB 123R in the first quarter of 2006; * The Company will have approximately 86.4 million diluted shares outstanding as of December 31, 2005; * The reported net proceeds from the recently completed sale of Argosy Casino-Baton Rouge reflect taxes and transaction costs; therefore, the financial guidance does not include an impact or benefit from this transaction; * The effective tax rate for federal, state and local income taxes for the fourth quarter 2005 and full year 2005 will be 39% and 37.1%; and, * There will be no material changes in economic conditions, applicable legislation or regulation, world events or other circumstances beyond our control that may adversely affect the Company's results of operations. Argosy Gaming Company Operating Results for Three Months Ended September 30, 2005 On October 3, 2005, Penn National Gaming completed the acquisition of Argosy Gaming Company with the transaction treated for accounting purposes as effective October 1, 2005. The tables below summarize the operating performance of the Argosy Gaming Company properties during the three-month period ended September 30, 2005. Although Penn National Gaming did not own Argosy Gaming Company during the three month period ended September 30, 2005, the Company believes this data is useful to investors in considering the value this transaction brings to Penn National. As previously disclosed, Penn National Gaming completed the sale of Argosy Casino-Baton Rouge on October 25 and is currently required by the Illinois Gaming Board to have definitive sales agreements for Argosy Casino-Alton and the Empress Casino Joliet by December 31, 2006. Penn National Gaming owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The Company presently operates fifteen facilities in thirteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's facilities feature over 17,500 slot machines, over 400 table games, over 2,000 hotel rooms and approximately 575,000 square feet of gaming floor space. Although the Company's Casino Magic -- Bay St. Louis, in Bay St. Louis, Mississippi and the Boomtown Biloxi casino in Biloxi, Mississippi remain closed following extensive damage incurred as a result of Hurricane Katrina all property statistics in this announcement are inclusive of these properties. * * * As reported in the Troubled Company Reporter on Feb. 28, 2005, Moody's Investors Service confirmed the ratings of Penn National Gaming, Inc., and assigned a stable ratings outlook. At the same time, Moody's assigned a B3 to Penn National's new $200 million senior subordinated notes due 2015, and a Ba3 to Penn National's new $2.725 billion senior secured bank facility that consists of a $750 million 5-year revolver, a $325 million 6-year term loan A, and a $1.65 billion 7-year term loan B. PIZZA INN: Wants Wells Fargo to Waive Covenant Breaches ------------------------------------------------------- Pizza Inn, Inc. (Nasdaq:PZZI) believes it has failed to comply with certain financial ratio covenants contained in its credit agreement with Wells Fargo Bank, N.A., as of the close of the company's fiscal quarter on Sept. 25, 2005. Upon the occurrence of an event of default, Wells Fargo may elect to: -- terminate the revolving credit commitment under the loan agreement; or -- declare all outstanding principal of and accrued and unpaid interest on the Company's obligations under the loan agreement immediately due and payable. The Company has requested that Wells Fargo agree to waive the event of default, though Wells is not obligated to grant the waiver. As of Oct. 24, 2005, Wells Fargo has not exercised any of the rights or remedies available to it under the Loan Agreement in these circumstances. The Company entered into a $6 million revolving credit agreement with Wells Fargo on Aug. 29, which allows the Company to obtain more favorable interest rates as financial results improve. Headquartered in The Colony, Texas, Pizza Inn, Inc. -- http://www.pizzainn.com/-- franchises approximately 400 restaurants with annual chain wide sales of over $160 million. REFCO INC: Wants to Continue Using Cash Management Systems ---------------------------------------------------------- By this motion, Refco Inc., and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's authority to continue to use their existing cash management systems in the ordinary course of their businesses, to use the property of their estates, and to ensure an orderly transition into Chapter 11 proceedings. The Debtors use a centralized cash management system to fund their operational needs. Richard B. Levin, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that Debtor Refco Capital LLC holds at least five bank accounts, including a concentration account at Harris Bank. Funds were transferred into the Concentration Account, on an as needed basis, from a number of sources, including from accounts held by Debtor Refco Capital Markets, Ltd. In addition, funds were deposited into the Concentration Account from wire transfers and from a deposit account that is manually swept into the Concentration Account. Funds were also disbursed from the Concentration Account into a separate payroll account. A third party service provider then coordinates disbursements from the Payroll Account to fund salary, wages, taxes and other employee related expenses. Mr. Levin relates that a regular payroll disbursement was made to salaried and hourly employees on October 14, 2005. Disbursements were also made from the Concentration Account via wire transfers or through a separate checking account. Mr. Levin notes that Refco Capital funded substantially all of the Debtors' operational needs, and historically provided liquidity to customers of certain regulated, non-debtor affiliates, for use in their business. Those intercompany transactions are recorded in the Debtors' and their non-Debtor affiliates' books and records. Refco Capital also acts as paying agent for any Debtor or non-Debtor in the Refco family. Mr. Levin tells Judge Drain that the Debtors' integrated cash management system is complex, highly automated, and computerized. Nonetheless, the cash management procedures employed by the Debtors constitute essential business practices. Mr. Levin explains that the integrated cash management system provides significant benefits to all of the Debtors, including the ability to: (a) control corporate funds centrally; (b) invest idle cash; (c) ensure availability of funds when necessary; and (d) reduce administrative expenses by facilitating the movement of funds. The Debtors' business operation requires that the cash management systems continue during the pendency of their Chapter 11 cases. "Requiring the Debtors to adopt new, segmented cash management systems at this early and critical stage of these cases would be expensive, would create unnecessary administrative problems, and would be much more disruptive than productive," Mr. Levin asserts. "Any disruption could have a severe and adverse impact [on] the Debtors' ability to reorganize." Moreover, because of the Debtors' complex corporate and financial structure, Mr. Levin contends that it would not be possible to establish a new system of accounts and a new cash management and disbursement system without substantial additional costs and expenses to the Debtors' bankruptcy estates and a significant disruption of the Debtors' business operations. 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 Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) ROGERS COMMS: Reports Financial & Operational Results for 3rd Qtr. ------------------------------------------------------------------ Rogers Communications Inc. reported its consolidated financial and operating results for the third quarter and nine months ended September 30, 2005. Highlights of the third quarter of 2005 include: * Operating revenue increased 42.8% for the quarter, with all four operating companies contributing to the year-over-year growth, including 48.2% growth at Rogers Wireless Inc., 4.8% growth at Rogers Cable Inc., 14.3% growth at Rogers Media Inc. and the inclusion of $212.6 million at Rogers Telecom Holdings Inc., which was acquired July 1, 2005. * Consolidated quarterly operating profit grew 29.3% year-over-year, with 41.5% growth at Wireless, a 0.6% decline at Cable, 123.5% growth at Media and the inclusion of $23.1 million at Telecom, which was acquired July 1, 2005. * Wireless ended the quarter with a total of 5,951,700 retail wireless voice and data subscribers, reflecting postpaid net additions in the quarter of 194,900 and prepaid net additions of 18,100. Postpaid churn decreased year-over-year to 1.50% as a result of proactive and targeted customer retention activities as well as from the increased network density and coverage quality resulting from the integration of the Fido (formerly Microcell) GSM network. * Coinciding with the 20th anniversary of Rogers' launch of wireless services, on July 1, 2005, the Company introduced Rogers Home Phone voice-over-cable local telephony service in the Greater Toronto Area and also successfully completed the acquisition of Call-Net Enterprises Inc. (now Rogers Telecom Holdings Inc.), a national provider of voice and data communications services. * The integration of Fido continued to progress as planned, with the integration of the two GSM networks and prepaid billing platforms now complete and conversion of the Fido postpaid subscriber base to Rogers' billing system underway. The integration of Call-Net began during the quarter, including its rebranding to Rogers Telecom, and a dedicated integration team has made significant progress in the development of the structure and plan that will be executed over the coming quarters. * On a pro forma basis, quarterly operating revenue increased by 13.3% on a consolidated basis and by 19.5% at Wireless; quarterly operating profit increased by 13.0% on a consolidated basis and by 27.4% at Wireless. * Adjusted for the change in our practice as to when a subscriber is deactivated, Cable increased its number of revenue generating units by 167,870 in the quarter, driven by an increase of 53,300 Internet subscribers, 65,500 digital cable subscribers (households), 900 basic cable subscribers and 18,100 cable telephony subscribers. * Wireless announced a wholesale agreement with Vid,otron under which Videotron will operate as a mobile virtual network operator, or MVNO, reselling Rogers' wireless voice and data services to its extensive customer base in markets across Quebec. * Subsequent to the end of the quarter, Media launched three new radio stations in Moncton, Saint John and Halifax while its 680News station in Toronto was again ranked the most listened to radio station in Canada. * Rogers and Bell Canada announced a joint venture that will build and manage a Canada-wide wireless broadband network utilizing the two companies' extensive fixed wireless spectrum holdings and existing network of cellular tower and backhaul assets. * Further to the June 30, 2005, notice of redemption for the Company's approximately US$225 million face amount of 5.75% convertible debentures due November 26, 2005, debenture holders converted US$224.5 million of the debentures into 7,715,417 Rogers Class B Non-Voting shares. * The Company successfully redeemed approximately $200.9 million of Telecom's 10.625% Senior Secured Notes due 2008 leaving approximately $22.0 million in aggregate principal amount outstanding. The Company also entered into an agreement during the quarter to terminate Telecom's $55 million accounts receivable securitization program. * Telecom acquired most of the Group Telecom and 360 Networks CLEC assets in New Brunswick and Nova Scotia from Bell Canada for $12.6 million. Telecom also acquired Group Telecom and 360 Networks multi-stranded regional fibre in Ontario and Qu,bec from Bell Canada for an additional $12 million. * On October 11, 2005, the Company issued a notice to Microsoft Corporation of its intention to redeem the $600 million aggregate principal amount of 5-1/2% Convertible Preferred Securities due August 2009. On October 17, 2005, the Company received notice that Microsoft had elected to convert these securities, and, pursuant to this notice of conversion, the Company issued 17,142,857 shares of our Class B Non-Voting stock to Microsoft on October 24, 2005 at the exercise price of $35 per share. "This was a significant quarter for Rogers during which we launched cable telephony service, completed the acquisition of Call-Net which is now rebranded as Rogers Telecom, and made solid progress integrating Microcell and Call-Net, while at the same time delivering strong results in our core businesses and continuing our balance sheet deleveraging," said Ted Rogers, President and CEO of Rogers Communications Inc. "We remain focused across the company on execution and integration, and are committed to our core strategy of profitable growth and to driving innovation to create value for our customers." Rogers Communications Inc. (TSX: RCI; NYSE: RG) -- http://www.rogers.com/-- is a diversified Canadian communications and media company engaged in three primary lines of business. Rogers Wireless Inc. is Canada's largest wireless voice and data communications services provider and the country's only carrier operating on the world standard GSM/GPRS technology platform; Rogers Cable Inc. is Canada's largest cable television provider offering cable television, high-speed Internet access, voice-over- cable telephony services and video retailing; and Rogers Media Inc. is Canada's premier collection of category leading media assets with businesses in radio and television broadcasting, televised shopping, publishing and sports entertainment. On July 1, 2005, Rogers completed the acquisition of Call-Net Enterprises Inc. (now Rogers Telecom Holdings Inc.), a national provider of voice and data communications services. * * * As reported in the Troubled Company Reporter today, Moody's Investors Service placed all long-term ratings of Rogers Communications Inc., Rogers Cable Inc. and Rogers Wireless Inc under review for possible upgrade. Rogers Communications Inc. -- Corporate Family Rating, Ba3 -- Senior Unsecured, rated B3: * Notes 10.5% due February 2006 C$75 million Rogers Cable Inc. -- Senior Secured, rated Ba3: -- Second Priority Notes * 7.60% due February 2007 C$450 million * 7.25% due December 2011 C$175 million * 7.875% due May 2012 $350 million * 6.25% due June 2013 $350 million * 5.50% due March 2014 $350 million * 6.75% due March 2015 $280 million -- Second Priority Debentures * 8.75% due May 2032 $200 million -- Senior Subordinated, rated B2: * Gteed Debentures 11% due December 2015 $114 million Rogers Wireless Inc. -- Senior Secured Notes, rated Ba3 * 10.5% due June 2006 C$160 million -- Floating rate, due December 2010 $550 million * 9.625% due May 2011 $490 million * 7.625%, due December 2011 C$460 million * 7.25%, due November 2012 $470 million * 6.375%, due March 2014 $750 million * 7.50%, due March 2015 $550 million -- Senior Secured Debentures, rated Ba3 * 9.75% due June 2016 $155 million -- Senior Subordinated Notes, rated B2: * 8%, due December 2012 US$400 million Rogers Telecom Holdings Inc. (formerly Call-Net Enterprises Inc.) -- Corporate Family Rating: withdrawn -- Senior Secured rating: B3 * 10.625% Notes due December 31, 2008 (callable January 1, 2006) $22 million As reported in the Troubled Company Reporter on Oct. 31, 2005, Standard & Poor's Ratings Services revised its outlook to positive from stable on Rogers Communications Inc., Rogers Wireless Inc., and Rogers Cable Inc. At the same time, Standard & Poor's affirmed the 'BB' long-term corporate credit rating on each of RCI, RWI, and Rogers Cable. As reported in the Troubled Company Reporter on June 14, 2005, Fitch Ratings has initiated coverage of Rogers Telecom Holdings Inc. (formerly Call-Net Enterprises Inc.) and assigned a 'B-' rating to its senior secured notes. Fitch also places the ratings of Call-Net on Rating Watch Positive due to the CDN$330 million all-stock acquisition of Call-Net by Rogers Communications Inc. (rated 'BB-' by Fitch). Approximately $223 million of debt securities are affected by these actions. ROGERS COMMS: Strong Performance Prompts Moody's to Review Ratings ------------------------------------------------------------------ Moody's Investors Service placed all long term ratings of Rogers Communications Inc., Rogers Cable Inc. and Rogers Wireless Inc under review for possible upgrade. The corporate family rating of Rogers Telecom Holdings Inc. is withdrawn, as it is now part of the RCI family of companies, and the senior secured rating of Telecom remains under review for possible upgrade. The review has been prompted by the strong operating performance of the now-dominant Wireless subsidiary, which has exceeded Moody's expectations, and by the conversion of nearly C$900 million of debt and debt-like preferred securities into equity of RCI. The review will focus on: 1) Wireless' future revenue growth rate and potential for further margin expansion as wireless industry subscriber growth decelerates, 2) the potential for Cable's future capital expenditures to be reduced from very high current levels within the context of management's strategy of investing to rapidly move most subscribers to digital TV and to roll out a robust telephony product for both revenue growth and reduced overall customer churn, and 3) capital structure within the context of possible future opportunistic acquisitions in the largely family-controlled Canadian media industry. Debt ratings affected by this action: Rogers Communications Inc. -------------------------- Corporate Family Rating, Ba3 Senior Unsecured, rated B3: * Notes 10.5% due February 2006 C$75 million Rogers Cable Inc. ----------------- Senior Secured, rated Ba3: Second Priority Notes * 7.60% due February 2007 C$450 million * 7.25% due December 2011 C$175 million * 7.875% due May 2012 $350 million * 6.25% due June 2013 $350 million * 5.50% due March 2014 $350 million * 6.75% due March 2015 $280 million Second Priority Debentures * 8.75% due May 2032 $200 million Senior Subordinated, rated B2: * Gteed Debentures 11% due December 2015 $114 million Rogers Wireless Inc. -------------------- Senior Secured Notes, rated Ba3 * 10.5% due June 2006 C$160 million Floating rate, due December 2010 $550 million * 9.625% due May 2011 $490 million * 7.625%, due December 2011 C$460 million * 7.25%, due November 2012 $470 million * 6.375%, due March 2014 $750 million * 7.50%, due March 2015 $550 million Senior Secured Debentures, rated Ba3 * 9.75% due June 2016 $155 million Senior Subordinated Notes, rated B2: * 8%, due December 2012 US$400 million Rogers Telecom Holdings Inc. (formerly Call-Net Enterprises Inc.) ------------------------------------ Corporate Family Rating: withdrawn Senior Secured rating: B3 * 10.625% Notes due December 31, 2008 (callable January 1, 2006) $22 million Rogers Communications Inc. is a media holding company that owns Rogers Cable Inc., the largest cable company in Canada, Rogers Wireless Inc., the largest wireless operator in Canada, Rogers Media Inc., which owns radio, TV and publishing assets, and Rogers Telecom Holdings Inc. (formerly Call-Net Enterprises Inc.), a local, data and long-distance telecommunications company. All companies are based in Toronto, Ontario, Canada. RURAL CELLULAR: Launches Offer for $175 Million Senior Notes ------------------------------------------------------------ Rural Cellular Corporation (NASDAQ: RCCC) reported that it will be offering $175 million of Senior Subordinated Floating Rate Notes due 2012. The Company intends to use the proceeds of this offering to redeem all of its outstanding 9-5/8% Senior Subordinated Notes due 2008 and for general corporate purposes, including without limitation replenishing cash used to pay preferred stock dividends and repurchasing preferred securities. The Company said that completion of the notes offering is subject to market conditions. Rural Cellular Corporation, based in Alexandria, Minnesota, provides wireless communication services to Midwest, Northeast, South and Northwest markets located in 15 states. * * * As reported in today's Troubled Company Reporter, Moody's Investors Service assigned a Caa2 rating to the proposed offering of $175 million Senior Subordinated Notes due 2012 by Rural Cellular Corporation. Moody's also affirmed the other ratings, but the rating outlook, has been changed to negative from stable. Standard & Poor's Ratings Services assigned its 'CCC' rating to Alexandria, Minnesota-based regional wireless carrier Rural Cellular Corp.'s proposed $175 million senior subordinated floating rate notes due 2012. These are being issued under Rule 144A with registration rights. Proceeds from this new debt issue primarily will be used to call the company's $125 million of 9 5/8% senior subordinated notes due 2008. RURAL CELLULAR: S&P's Rating on Jr. Preferred Stock Tumbles to D ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC' rating to Alexandria, Minnesota-based regional wireless carrier Rural Cellular Corp.'s proposed $175 million senior subordinated floating rate notes due 2012. These are being issued under Rule 144A with registration rights. Proceeds from this new debt issue primarily will be used to call the company's $125 million of 9-5/8% senior subordinated notes due 2008. At the same time, S&P affirmed our 'B-' corporate credit rating on Rural Cellular. S&P also lowered the $267 million of 12.25% junior preferred stock to 'D' from 'CCC-' to reflect the fact that the company has elected to defer payment of cash dividends, which are required under terms of the instrument, effective May 2005. In addition, we raised the rating on the company's approximate $172 million 11 3/8% senior exchangeable preferred stock issue -- pro forma for the recent dividend payments and some stock exchanges -- to 'C' from 'D' because they recently paid four of the last nine cash dividends on this issue, including the most recent due in August 2005. The outlook is negative. Pro forma for the refinancing and preferred stock dividend payments, the company will have $1.4 billion of total debt outstanding and about $600 million of preferred stock. "The ratings reflect the company's vulnerable business position as a regional wireless provider with only 716,755 subscribers competing against both the national wireless carriers as well as other entrenched regional cellular carriers, such as Alltel and US Cellular, coupled with its highly leveraged financial profile," said Standard & Poor's credit analyst Catherine Cosentino. The company has been losing subscribers over the past six months, with the losses totaling nearly 10,000 for the second quarter of 2005 on a sequential basis, and accompanying churn for the quarter totaling a high 2.7%. Competitive losses have been exacerbated by some operational challenges, including billing and customer-care issues the company currently is addressing. In addition, the company's roaming business is vulnerable to pricing pressures and the potential for future overbuild by its roaming partners. Rural Cellular provides services in various markets in the U.S. including portions of five states in the Northeast, four states in the Midwest, and three states in the South, focused on subscribers with local usage needs. It also relies on roaming for about 20% of its revenue base, with Verizon Wireless and Cingular representing its largest roaming partners. In order to better serve both its retail customers and roaming partners, the company has recently completed the upgrade of its networks to code division multiple access and global standard for mobile communications. This upgrade should better position the company for further growth in roaming minutes. Yet, the company's longer-term prospects remain highly uncertain, given the increasingly less expensive national plans offered by the larger carriers. RURAL CELLULAR: Moody's Junks Proposed $175 Million Senior Notes ---------------------------------------------------------------- Moody's Investors Service assigned a Caa2 rating to the proposed offering of $175 million Senior Subordinated Notes due 2012 by Rural Cellular Corporation. Moody's also affirmed the other ratings, but the rating outlook, has been changed to negative from stable. The affected ratings are: * Corporate family rating affirmed at B3; * $60 million 1st lien revolving credit maturing 2010 affirmed at B1; * $160 million senior secured (2nd lien) floating rate notes due 2010 affirmed at B2; * $350 million 2nd lien 8.25% senior secured (2nd lien) notes due 2012 affirmed at B2; * $325 million 9.875% senior notes due 2010 affirmed at Caa1; * New $175 million senior subordinated floating rate notes due 2012 assigned Caa2; * $300 million 9.75% senior subordinated notes due 2010 affirmed at Caa2; * $125 million 9.625% senior subordinated notes due 2008 Caa2 rating to be withdrawn; * 11.375% senior exchangeable preferred stock due 2010 affirmed at Ca; and * 12.25% junior exchangeable preferred stock due 2011 affirmed at C. The B3 corporate family rating reflects the very modest free cash flow generating capacity of the company, which is currently negative due to higher than normal capital spending to overlay CDMA and GSM technologies throughout its networks. The ratings also reflects the company's very high leverage with over $1.3 billion of straight debt on its balance sheet and another $640 million of redeemable preferred stock outstanding, with total debt representing 6.5 times LTM EBITDA, or 9.5 times including preferred stock as debt. The negative outlook reflects Rural Cellular Corp's difficulty in retaining its subscriber base and growing its cash flows. At the end of 2Q05, Rural Cellular Corp's subscriber base (excluding wholesale subscribers) was 631,849, down 30,305 or 4.6% from 2Q04. EBITDA has also declined with company guidance for 2005 EBITDA of approximately $210 million, down 6.6% form the $225.2 million generated in 2004. Subscriber growth has been challenging for Rural Cellular Corp as its markets, while less competitive, appear to be more mature and have less growth potential. Further, customer retention rates have deteriorated as Rural Cellular migrates its subscribers from its TDMA networks to CDMA or GSM. Only 25% of Rural Cellular subscribers have been migrated so far. Still, Rural Cellular has benefited from its network overlays as roaming revenues volumes have increased. The proposed refinancing of the company's $125 million 9.625% subordinated notes with $175 million of new subordinated notes, along with drawing $58 million under the company's $60 million senior secured revolving credit facility, does increase the company's financial flexibility. Pro forma for the new offering, Rural Cellular Corp. will have approximately $120 million of cash. The payment of four dividend payments on the 11.375% senior exchangeable preferred stock that had been in arrears, eliminates a Voting Rights Triggering Event that could prohibit Rural Cellular from refinancing its debt and drawing from its revolver. Even after the payment of those four dividends, five are still left in arrears and the non-payment of six dividends would reinstate this Voting Rights Triggering Event. The negative outlook for the ratings reflects Moody's opinion that Rural Cellular Corp's ratings are likely to be lowered in the next 12 to 18 months should the company not be able to improve its cash flows and subscriber retention. Should subscriber losses not moderate and EBITDA not grow materially, the ratings are likely to be lowered. Additional ratings pressure would arise should Rural Cellular make additional cash dividend payments on its preferred stock, thereby consuming the additional liquidity generated by the proposed new financing. If Rural Cellular can improve retention and achieve sustainable free cash flow, the ratings outlook could be stabilized. The B1 rating on the $60 million senior secured revolving credit facility reflects its priority position in the company's capital structure with a first lien upon all the company's assets. The B2 rating on the $510 million of new senior second lien notes reflects the strong claim these noteholders will have upon the company's assets and cash flows as these notes will have a second- priority lien, behind the undrawn revolver, and upstream guarantees from all the company's subsidiaries. The Caa1 rating on the 9.875% senior notes due 2010 reflects their effective subordination behind the claims of the new noteholders and other secured obligations of the company and its subsidiaries. The Caa2 rating on the 9.625% subordinated notes and the 9.75% subordinated notes reflect their contractual subordination to the aforementioned obligations. The Ca rating on the 11.375% senior exchangeable preferred stock and the C rating on the 12.25% junior exchangeable preferred stock reflect their relative position in the capital structure, and the poor expected recovery prospects for holders of these obligations in an event of default. Based in Alexandria, Minnesota, Rural Cellular Corporation provides wireless communications services to approximately 662,000 retail subscribers at June 30, 2005 in rural markets across the United States. SCHOOL SPECIALTY: S&P Withdraws Low-B Rating After LBW Buy-Out -------------------------------------------------------------- Standard & Poor's Ratings Services reported that it withdrew its ratings, including its 'B' corporate credit rating, on School Specialty Inc. The rating action follows the announcement that LBW Holdings Inc., an affiliate of Bain Capital Partners LLC, ended its agreement to purchase the company. The ratings were based on the completion of the transaction. They had been listed on CreditWatch with negative implications on Oct. 3, 2005. SENIOR HOUSING: Earns $14.1 Million of Net Income in Third Quarter ------------------------------------------------------------------ Senior Housing Properties Trust (NYSE: SNH) reported its financial results for the quarter ended September 30, 2005. Results for the Quarter Ended September 30, 2005 Income from continuing operations and net income was $14.1 million for the quarter ended September 30, 2005, compared to $12.9 million for the quarter ended September 30, 2004. Funds from operations for the quarter ended September 30, 2005, were $25.9 million. This compares to FFO for the quarter ended September 30, 2004, of $23.4 million. The weighted average number of common shares outstanding totaled 68.5 million and 63.5 million for the quarters ended September 30, 2005 and 2004. Results for the Nine Months Ended September 30, 2005 Income from continuing operations was $42.3 million for the nine months ended September 30, 2005, compared to $39 million for the nine months ended September 30, 2004. Net income was $43 million for the nine months ended September 30, 2005, compared to $40.2 million, or $0.64 per share, for the same period last year. Funds from operations for the nine months ended Sept. 30, 2005, were $77.1 million. This compares to FFO for the nine months ended September 30, 2004 of $70.4 million. The weighted average number of common shares outstanding totaled 68.5 million and 63.1 million for the nine months ended September 30, 2005 and 2004. Senior Housing Properties Trust is a real estate investment trust, or REIT, which invests in senior housing properties, including apartment buildings for aged residents, independent living properties, assisted living facilities and nursing homes. * * * As reported in the Troubled Company Reporter on June 16, 2005, Fitch Ratings has affirmed the 'BB+' senior unsecured debt rating of Senior Housing Properties Trust. Fitch also affirms the 'BB-' rating of trust preferred securities issued by SNH Capital Trust I, a wholly owned financing subsidiary of SNH. Fitch said the outlook remains stable. SHERWIN LINDSEY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Sherwin Woodrow Lindsey dba Lindsey Quarter Horses 3470 Highway 414 Landrum, South Carolina 29356 Bankruptcy Case No.: 05-44955 Type of Business: The Debtor breeds horses. Chapter 11 Petition Date: October 31, 2005 Court: District of South Carolina (Spartanburg) Judge: John E. Waites Debtor's Counsel: Robert H. Cooper, Esq. The Cooper Law Firm 3523 Pelham Road, Suite B Greenville, South Carolina 29615 Tel: (864) 271-9911 Fax: (864) 232-5236 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citizen Building and Loan Corporate debt $3,003,361 P.O. Box 388 with personal Greer, SC 29652-0388 guarantee Greer State Bank Corporate debt $799,540 1111 West Poinsett Street with personal Greer, SC 29650-1395 guarantee, this debt will be paid in full through the sale of the facility. First Citizen Bank Corporate debt $666,750 325 West McBee with personal Greenville, SC 29610 guarantee Wachovia Corporate debt $616,518 401 South Tryon Street with personal Charlotte, NC 28288 guarantee NBSC Corporate debt $560,666 201 East McBee Street with personal Greenville, SC 29601 guarantee Certified Development Corp of SC Corporate debt $515,888 P.O. Box 21823 with personal Columbia, SC 29221 guarantee, this debt will be paid in full through the sale of the facility. Grand South Partnership debt $400,000 325 South Main Street with personal Greenville, SC 29607 guarantee A. Glenn Hunter Corporate debt $380,000 c/o Stoudemire & Sprouse PA with personal P.O. Box 99 guarantee Seneca, SC 29679-0099 First Savers Partnership debt $185,000 8599 Pelham Road with personal Greenville, SC 29615 guarantee Wachovia Corporate debt $174,000 401 South Tryon Street with personal Charlotte, NC 28288 guarantee Ann Stewart Corporate debt $104,214 c/o Roy Oates with personal 609 East Main Street guarantee Duncan, SC 29334 First Citizen Bank Corporate debt $100,806 325 West McBee with personal Greenville, SC 29610 guarantee Palmetto Bank Corporate debt $100,000 101 West Main Street with personal Laurens, SC 29360 guarantee Wachovia Partnership debt $84,500 401 South Tryon Street with personal Charlotte, NC 28288 guarantee New Commerce Partnership debt $75,000 501 New Commerce Court with personal Greenville, SC 29607 guarantee Southtrust Partnership debt $65,000 1614 Woodruff Road with personal Greenville, SC 29607 guarantee Palmetto Bank Partnership debt $44,000 101 West Main Street with personal Laurens, SC 29360 guarantee Greer State Bank Secured by a truck, $17,533 1111 West Poinsett Street which is titled in Greer, SC 29650-1395 the name of a corporation Greenville First Partnership debt $16,000 112 Haywood Road with personal Greenville, SC 29607 guarantee NBSC Corporate debt $12,115 201 East McBee Street with personal Greenville, SC 29601 guarantee SHOP FRESH: Case Summary & 9 Largest Unsecured Creditors -------------------------------------------------------- Lead Debtor: Shop Fresh, LLC 155 Thomaston Avenue, Suite 20A Waterbury, Connecticut 06702 Bankruptcy Case No.: 05-37611 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- HABA, LLC 05-37612 Type of Business: The Debtor operates a supermarket. Chapter 11 Petition Date: October 31, 2005 Court: District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtors' Counsel: James Berman, Esq. Zeisler and Zeisler 558 Clinton Avenue P.O. Box 3186 Bridgeport, Connecticut 06605 Tel: (203) 368-4234 Estimated Assets Estimated Debts ---------------- --------------- Shop Fresh, LLC $1 Mil. to $10 Mil. $1 Mil. to $10 Mil. HABA, LLC $1 Mil. to $10 Mil. $50,000 to $100,000 A. Shop Fresh, LLC's 8 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Thomaston Avenue Center, LLC $270,000 1720 Post Road Fairfield, CT 06824 AAA Refrigeration Services Inc. $95,000 26 Hotchkiss Street Naugatuck, CT 06770 Connecticut Light & Power $65,000 P.O. Box 2960 Hartford, CT 06104 C. Kenneth Imports Co. Inc. $30,000 150 Street & Exterior Street Building #S-1 Bronx, NY 10451 Omaha Beef $22,000 9 Maple Avenue Danbury, CT 06810 Space Sign Inc. $9,000 15-25 132 Street, Second Floor College Point, NY 11356 JFC $4,500 40 Barrick Avenue Brooklyn, NY 11237 Guidas Milk & Ice Cream $2,000 433 Park Street New Britain, CT 06051 B. HABA, LLC's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Thomaston Avenue Center, LLC $100,000 1720 Post Road Fairfield, CT 06824 SILICON GRAPHICS: Can Borrow Up to $100 Mil Under Amended Facility ------------------------------------------------------------------ Silicon Graphics, Inc., and its wholly owned subsidiaries, Silicon Graphics Federal, Inc., and Silicon Graphics World Trade Corporation, as borrowers, entered into a Third Amended and Restated Credit Agreement with Wells Fargo Foothill, Inc., and Ableco Finance LLC on October 24, 2005. The Third Amended and Restated Credit Agreement amends the Company's existing asset-based credit facility with Wells Fargo Foothill, Inc. The Credit Agreement provides for a new, increased credit facility 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. Under the terms of the Credit Agreement: * the new credit facility is secured by substantially all the assets of the borrowers; * the borrowing base will be determined weekly based on the value of working capital items, real estate and intellectual property; * the permanent deposit of cash collateral, is no longer required. The Credit Agreement expires on October 24, 2007. It includes financial covenants and other terms and conditions customary to credit facilities of this type. Among other things, these financial covenants provide for minimum levels of EBITDA (earnings before interest, taxes, depreciation and amortization), minimum levels of cash and cash equivalents, and limits on capital expenditures. Subject to certain specified exceptions, the Credit Agreement also limits the ability of Borrowers and their subsidiaries to incur additional indebtedness, create liens on their assets, enter into certain transactions (including mergers, consolidations and reorganizations), dispose of certain assets, pay dividends or other distributions on capital stock, repurchase capital stock or prepay or repurchase debt obligations. The Credit Agreement is subject to acceleration upon various customary events of default. The Company has historically used the credit facility solely to support letters of credit, including the $44 million in letters of credit required under the Company's lease obligations for the Crittenden and Amphitheatre Technology Center campuses in Mountain View, CA. The Company intends to use the additional capacity under the credit facility for cash borrowings to support its current operations. The Borrowers have also entered into a Security Agreement, an Intellectual Property Security Agreement, a Copyright Security Agreement, a Patent Security Agreement and a Trademark Security Agreement, each dated as of October 24, 2005, under which the obligations of the Borrowers under the Credit Agreement are secured by certain intellectual property and other assets of the Borrowers. Copies of the documents inked are available for free at: Filing Link ------ ---- Third Amended and Restated http://ResearchArchives.com/t/s?2a5 Credit Agreement Security Agreement http://ResearchArchives.com/t/s?2a6 Intellectual Property http://ResearchArchives.com/t/s?2a7 Security Agreement Copyright Security http://ResearchArchives.com/t/s?2a8 Agreement Patent Security Agreement http://ResearchArchives.com/t/s?2a9 Trademark Security http://ResearchArchives.com/t/s?2aa Agreement 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: Eyes $26M of Spending Under Restructuring Plan ---------------------------------------------------------------- Silicon Graphics, Inc., expects to spend between $24 million and $26 million, in relation to its restructuring. As reported in the Troubled Company Reporter on Sept. 28, 2005, the Company approved a restructuring plan and began to implement a reduction in its workforce with notifications to affected employees in North America and certain other locations on Sept. 1, 2005. The balance of the notifications will follow over a reasonable period, consistent with business and local legal requirements in other parts of the world. The goal of the Company's fiscal 2006 restructuring plan is to achieve $80 to $100 million in annualized cost savings when fully realized. Of the total expected restructuring costs, the Company estimates that between $10 million and $12 million principally relates to severance benefits, and approximately $14 million represents facilities-related charges. Substantially all of these costs will require the outlay of cash, although the Company's severance programs provide wherever practical for payments to be made over the same period in which the payroll expenses otherwise would have been incurred, with the objective of minimizing incremental cash expense. The timing of payments relating to leased facilities will be unchanged by the restructuring. The Company's financial results for the quarter ending September 30, 2005 reflected $5 million in restructuring charges for the new restructuring actions, primarily for severance benefits. The Company continues to expect the majority of the remaining charges for severance benefits to be reflected in its financial results for the quarter ending December 30, 2005, and the restructuring to be principally completed by the end of the fiscal quarter ending March 31, 2006. 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. SPORTS CLUB: American Stock Exchange Delists Common Stock --------------------------------------------------------- The Sports Club Company's stock is no longer traded at the American Stock Exchange starting October 27, 2005, due to its failure to comply with the continued listing standards, including shareholders' equity of less than $2 million and losses from continuing operations and net losses in two out of three most recent fiscal years pursuant to Section 1003(a)(i) of the AMEX Company Guide. As reported in the Troubled Company Reporter on Oct. 19, 2005, the Company reported a $302,000 net loss on $12,070,000 of net revenues for the quarter ending June 30, 2005. At June 30, 2005, the Company's balance sheet shows $230,080,000 in total assets and $225,772,000 in total debts. As of June 30, 2005, the Company's equity deficit widened to $11,005,000 from a $9,258,000 deficit at December 31, 2004. The Company's stock will be eligible for quotation on the OTC Bulletin Board maintained by the National Association of Securities Dealers, Inc. The Sports Club Company, based in Los Angeles, California, owns and operates luxury sports and fitness complexes nationwide under the brand name "The Sports Club/LA." * * * Going Concern Doubt As reported in the Troubled Company Reporter on October 7, 2005, Stonefield Josephson, Inc., the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern pointing to the Company's: * recurring net losses, * $12.3 working capital deficiency as of December 31, 2004, * $107 million accumulated deficit as of December 31, 2004, and * $100 million senior debt maturing by March 2006. SUSQUEHANNA MEDIA: Sale Plan Cues Fitch to Hold BB- Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services reported that the ratings on Susquehanna Media Co., including the 'BB-' corporate credit rating, remain on CreditWatch with negative implications following the company's announcement of planned sales of its radio and cable assets. All ratings were placed on CreditWatch on April 26, 2005. "We had viewed a split of the company's radio and cable businesses as likely, given that these assets are not operationally integrated and are likely to appeal to different potential buyers," said Standard & Poor's credit analyst Alyse Michaelson Kelly. Susquehanna Media announced that it agreed to sell its radio assets to a group led by Cumulus Media Inc. for $1.2 billion. At the same time, the company announced it agreed to sell its cable assets to Comcast Corp. for approximately $750 million. The transactions are expected to close in the first half of 2006. The CreditWatch listing continues to reflect concerns that Susquehanna Media's debt or leverage could be increased by a potential buyer to help finance the purchase of the company, or that its operating and cash flow diversity could be reduced by the breakup of its two main businesses or sale of some of its assets, if the recent deals with Cumulus and Comcast are derailed. Standard & Poor's will monitor the progress of these two pending transactions. In resolving the CreditWatch listing, S&P will consider the use of asset sale proceeds and will evaluate the business diversity, capital structure, and strategic focus of any surviving entity. SUSQUEHANNA MEDIA: Sale of Divisions Cues Moody's to Hold Ratings ----------------------------------------------------------------- Moody's Investors Service affirmed the existing debt ratings of Susquehanna Media Co. and changed the outlook to positive from stable upon the company's announcement that its parent, Susquehanna Pfaltzgraff Co., has agreed to sell: * its cable and broadband services division to Comcast Corporation for $775 million; and * its radio division to a group led by Cumulus Media Inc. for $1.2 billion. Moody's anticipates initiating a review for upgrade or upgrading the ratings once the timing of the transaction and resolution of regulatory reviews become more certain. The following ratings are affected: (i) Ba2 rating on the $600 million of senior secured credit facilities, (ii) the B1 rating on $150 million of 7.375% senior subordinated notes due 2013, and (iii) the company's Ba2 Corporate Family rating. The positive outlook reflects Moody's anticipation that the parent company will use the proceeds from the proposed divestiture of cable and radio assets to retire Susquehanna's outstanding debt pursuant to its bank and bond agreements. Headquartered in York, Pennsylvania, Susquehanna Media Co. owns 33 radio stations in eight markets and operates nine cable systems with aggregate cable subscribers totaling 238,000 pro forma for the Carmel acquisition. It is a wholly-owned subsidiary of Susquehanna Pfaltzgraff Co. TAILORED LAWN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Tailored Lawn Service Corp. dba Evolution Power Boats 141 South Columbus Street Sunbury, Ohio 43074 Bankruptcy Case No.: 05-78349 Type of Business: The Debtor offers landscaping and lawn maintenance services and manufactures pontoon boats. Chapter 11 Petition Date: October 31, 2005 Court: Southern District of Ohio (Columbus) Debtor's Counsel: Robert E. Bardwell, Esq. 995 South High Street Columbus, Ohio 43206 Tel: (614) 445-6757 Fax: (614) 224-4870 Financial Condition as of October 31, 2005: Total Assets: $137,080 Total Debts: $1,389,395 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mercury Marine Trade debt $155,000 P.O. Box 96964 Chicago, IL 60693 Advanta Bank Corp. Credit card $51,400 P.O. Box 8088 purchases Philadelphia, PA 19101-8088 Wells Fargo Financial Credit card $42,400 P.O. Box 29746 purchases Phoenix, AZ 85038-9746 American Express Credit card $37,750 P.O. Box 740640 purchases Atlanta, GA 30374-0640 Citibank Credit card $33,000 P.O. Box 6575 purchases The Lakes, NV 88901-6575 MBNA America Credit card $32,450 P.O. Box 15102 purchases Wilmington, DE 19886-5102 Spreuer & Son, Inc. Trade debt $21,500 115 East Main Street Lagrange, IN 46761 Keyston Brothers Trade debt $21,270 1549 Coining Drive Toledo, OH 43612 Laird Plastics Trade debt $20,000 P.O. Box 751298 Charlotte, NC 28275-1298 Indiana Marine Trade debt $19,950 409 Growth Parkway Angola, IN 46703 Hot Boat Trade debt $16,800 8484 Wilshire Boulevard Suite 900 Beverly Hills, CA 90211 SBC Advertising fees $16,310 Bill Payment Center Saginaw, MI 48663-0003 John Boyle Trade debt $15,500 P.O. Box 791 1803 Salisbury Highway Statesville, NC 28687 Stainless & Aluminum Fab. Trade debt $15,000 P.O. Box 126 Galion, OH 44833 Central Aluminum Trade debt $14,100 2045 Broehm Columbus, OH 43207 BP Oil Trade debt $14,000 P.O. Box 9076 Des Moines, IA 50368-9076 Bank of America Credit card $12,600 P.O. Box 1758 purchases Newark, NJ 07101-1758 Home Depot Credit card $12,600 P.O. Box 6029 purchases The Lakes, NV 88901-6029 TriState Aluminum Trade debt $12,550 P.O. Box 504 Toledo, OH 43697 GM Card Credit card $11,760 Department 9600 purchases Carol Stream, IL 60128-9600 TFS ELECTRONIC: U.S. Trustee Amends Creditors Committee Membership ------------------------------------------------------------------ Ilene J. Lashinsky, the United States Trustee for Region 14, amended the appointment of creditors to serve on the Official Committee of Unsecured Creditors in TFS Electronic Manufacturing Services, Inc.'s chapter 11 case. Due to additional creditor interest, Globtek, Inc., is added to the Committee. The Creditors' Committee's current members are: 1. Arrow Electronics Attn: Geri Lawrence 3000 Bowers Avenue Santa Clara, CA 95051 Tel: (408) 330-4194 Fax: (408) 330-4190 2. Avnet, Inc. Attn: Mary Pacini 2211 South 47th Street Phoenix, AZ 85034 Tel: (480) 643-8143 Fax: (480) 794-9819 3. TTM Technologies, Inc. Attn: David Felsenthal 2630 South Harbor Boulevard Santa Ana, CA 92704 Tel: (714) 327-3010 Fax: (714) 241-9723 4. Globtek, Inc. Attn: Anna Kaplan 186 Veterans Drive Northvale, NJ 07647 Tel: (201) 784-1000 local 223 Fax: (201) 784-0111 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Redmond, Washington, TFS Electronic Manufacturing Services, Inc., is an electronics manufacturing services facility that specializes in New Product Introduction services, prototype Development and low to medium-volume manufacturing. The Company filed for chapter 11 protection on August 19, 2005 (Bankr. D. Ariz. Case No. 05-15403). John R. Clemency, Esq., Koriann M. Atencio, Esq., and Tajudeen O. Oladiran, Esq., at Greenberg Traurig LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protections from its creditors, it estimated assets between $1 million to $10 million and estimated debts between $10 million to $50 million. THE PANTRY: Expects FY 2005 Earnings to Exceed Previous Guidance ---------------------------------------------------------------- The Pantry, Inc. (NASDAQ: PTRY) expects fiscal 2005 earnings per share to substantially exceed its previous guidance. Based on preliminary, unaudited data, the Company expects to report diluted earnings per share for its fiscal year ended September 29, 2005, in a range between $2.55 and $2.60, including charges of approximately $0.22 per share related to store closings, impairment charges, and uninsured losses associated with Hurricane Katrina, compared with the previous guidance range of $2.10 to $2.15. Diluted earnings per share for fiscal 2004, excluding a number of financing-related charges, were $1.54. Comparable store merchandise sales and gasoline gallons sold for fiscal 2005 increased 5.3% and 4.7%, respectively. President and Chief Executive Officer Peter J. Sodini said, "These excellent preliminary annual results reflect the success of our strategies implemented over the past few years to better diversify and secure our gasoline supply, rebrand and reimage our stores, and enhance our merchandising offerings with private label and expanded food services. In addition, our fourth fiscal quarter benefited from the acquisitions we completed in the latter half of the year and an exceptionally strong contribution from our gasoline segment in a very volatile market. These benefits were partially offset by charges related to our decision to close 19 underperforming stores." Mr. Sodini continued, "For fiscal 2006, assuming that gasoline margins approximate about 12.5 cents per gallon, we currently expect fiscal 2006 earnings per share in a range between $2.55 and $2.65. On the plus side, we are looking forward to continued growth in our merchandise business and achieving the expected accretion from acquisitions completed in 2005. However, a number of financial items, including expensing stock options for the first time, an increase in shares outstanding and a higher tax rate, will also affect our reported results by a total of $0.15 to $0.20 per share in fiscal 2006." Headquartered in Sanford, North Carolina, The Pantry, Inc. -- http://www.thepantry.com/-- is the leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated convenience store chains in the country, with net sales for fiscal 2004 of approximately $3.5 billion. As of June 30, 2005, the Company operated 1,386 stores in 11 states under a number of banners including Kangaroo Express(SM), The Pantry(R), Golden Gallon(R), Cowboys and Lil Champ Food Store(R). The Pantry's stores offer a broad selection of merchandise, as well as gasoline and other ancillary services designed to appeal to the convenience needs of its customers. As reported in the Troubled Company Reporter on Aug. 10, 2005, Standard & Poor's Ratings Services raised its ratings on The Pantry Inc. and removed them from CreditWatch where they had been placed with developing implications on July 28. Both the corporate credit rating and the senior secured bank loan ratings were raised to 'B+' from 'B-', while the senior subordinated debt rating was raised to 'B-' from 'CCC'. The outlook, S&P said at that time, is stable. TRAINER WORTHAM: Moody's Junks Ratings on $17.6 Million Notes ------------------------------------------------------------- Moody's Investors Service lowered the ratings of: * three classes of notes and the preference shares issued by Trainer Wortham First Republic CBO II, Ltd.: to Baa2 (from A2 on review for downgrade), * the $23,000,000 Class A-2L Floating Rate Notes Due April 2037; to Caa2 (from Ba3 on review for downgrade), * the $10,000,000 Class A-3L Floating Rate Notes Due April 2037; to C (from Caa3 on review for downgrade), * the $7,600,000 Class B-1L Floating Rate Notes Due April 2037; to C from B3 the U.S. $18,000,000 Preference Shares. This transaction closed on Feb. 28, 2002. According to Moody's, its rating action results primarily from significant deterioration in the par coverage of the collateral pool. Rating Action: Downgrade Issuer: Trainer Wortham First Republic CBO II, Ltd. Class Descriptions: * $295,000,000 Class A-1L Floating Rate Notes Due April 2037 - Previous Rating: Aaa - New Rating: Aaa * $23,000,000 Class A-2L Floating Rate Notes Due April 2037 - Previous Rating: A2 On Watch for possible Downgrade - New Rating: Baa2 * $10,000,000 Class A-3L Floating Rate Notes Due April 2037 - Previous Rating: Ba3 On Watch for possible Downgrade - New Rating: Caa2 * $7,600,000 Class B-1L Floating Rate Notes Due April 2037 - Previous Rating: Caa3 On Watch for possible Downgrade - New Rating: C * U.S. $18,000,000 Preference Shares - Previous Rating: B3 - New Rating: C TRUMP HOTELS: Argues Former Shareowners' Claims are Meritless ------------------------------------------------------------- As previously reported in the Troubled Company Reporter on July 18, 2005, 19 former owners of shares in Trump Hotels & Casino Resorts, Inc.'s common stock asked the U.S. Bankruptcy Court for the District of New Jersey to compel Trump Hotels & Casino Resorts, Inc. nka Trump Entertainment Resorts, Inc., and its debtor-affiliate to comply with the terms of the Second Amended Plan of Reorganization and the Confirmation Order. Michael J. Viscount, Jr., Esq., at Fox Rothschild LLP, in Atlantic City, New Jersey, relates that these parties were record owners of the THCR common stock as of March 28, 2005. Under the Plan, the warrants, the cash and the proceeds from the sale of the World's Fair Site are to be distributed to the owners of the Old Equity Shares as of March 28, 2005, the Record Date, Mr. Viscount notes. Former Shareowners' Claims are Meritless Reorganized Debtors Assert The Federal Law, through the Uniform Practice Code, prescribes specific rules clarifying when and how the right to receive a distribution attaches to a given security. According to the UPC, the proper recipient of a distribution is determined by first establishing two "dates" in relation to the distribution -- the "record date" and the "ex-date". Charles A. Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney & Carpenter, LLP, in Newark, New Jersey, asserts that the Court's Order confirming the Debtors' Plan of Reorganization operated seamlessly and appropriately with the regulatory requirements under Federal Law. Hence, Mr. Stanziale concludes, the process by which the Debtors paid the distribution under the Plan demonstrates that the Former Shareowners' claim for relief is without merit. The Plan and the market operated exactly as they were supposed to with respect to the Debtors' distributions under the Plan, Mr. Stanziale says. Although 8,000,000 shares of Old THCR Common Stock traded after the record date and before the ex-date, and the National Association of Securities Dealers and The Depository Trust Company determined the distribution allocation process, only the Former Shareowners have found fault with the result, Mr. Stanziale observes. All of the beneficial owners of Old THCR Common Stock on the record date received the distributions, Mr. Stanziale adds. If those beneficial owners sold their shares after the record date in NASD regulated markets, they received the benefit of the distributions in the purchase price that reflected their legal obligation to transfer the distribution to the purchasers of their Old THCR Common Stock, the Reorganized Debtors assert. Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino Resorts, Inc., nka Trump Entertainment Resorts, Inc. -- http://www.thcrrecap.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The Company and its debtor-affiliates filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A., represent the Debtors in their successful chapter 11 restructuring. When the Debtors filed for protection from their creditors, they listed more than $500 million in total assets and more than $1 billion in total debts. The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005, and the plan took effect on May 20, 2005. (Trump Hotels Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000). TRUMP HOTELS: Court Defines World's Fair Sale Expenses ------------------------------------------------------ The Official Committee of Equity Security Holders in Trump Hotels & Casino Resorts, Inc., nka Trump Entertainment Resorts, Inc.'s bankruptcy cases understands that an order approving the sale of the World's Fair Site will provide for the allocation of the cash purchase price to be paid by the successful bidder at closing. Pursuant to the Debtors' Plan of Reorganization, certain expenses may be deducted from the Purchase Price, with the net proceeds to be distributed to the Debtors' non-insider shareholders. The Equity Committee also understands that the expenses to be deducted from the purchase price would be limited to: * the fees and costs of Cushman & Wakefield of Pennsylvania, Inc., the broker employed to market the Site; * the pro-rated, pre-closing, portion of any sale, transfer or document taxes associated with the sale; and * customary closing costs associated with the sale. Daniel K. Astin, Esq., at The Bayard Firm, in Wilmington, Delaware, relates that the Equity Committee understands that the World's Fair Sale Expenses would exclude any professional fees and costs, whether incurred on behalf of the Equity Committee, the Debtors, or any other party. As provided in the Plan, Mr. Astin notes, C&W's fees and costs will be treated as World's Fair Expenses. The Plan makes no mention of any other professional's fees and costs being similarly included. Therefore, the Equity Committee concludes, the Plan excludes professional fees and costs, other than C&W, from being treated as World's Fair Expenses. In addition, Mr. Astin points out, the Plan did not indicate any professional fees and expenses being paid from any other source, including the World's Fair Sale Proceeds. Therefore, other than C&W's Fees, the default under the Plan is that all professional fees and costs will be paid by the Reorganized Debtors, Mr. Astin contends. The Plan does not provide any mechanism for professional fees and expenses to be reviewed for reasonableness by the Equity Committee, Mr. Astin observes. While the portion of the Reorganized Debtors' fees and costs related to the sale should be minimal, the Equity Committee notes it does not have any opportunity to assess the extent to which the Debtors' post- Effective Date fees and costs relate to the sale of the World's Fair Site, much less whether they are reasonable. The Plan's omission of any review mechanism confirms that those fees and costs must be excluded from the World's Fair Sale Expenses, Mr. Astin insists. Accordingly, the Equity Committee asks the Court to clarify in the Sale Order that the World's Fair Sale Expenses will exclude fees and costs incurred by any professional other than C&W, whether incurred on behalf of the Equity Committee, the Debtors, or any other party. Debtors Respond The Reorganized Debtors assert that the Equity Committee is attempting to foist their postpetition fees and expenses on them. The Equity Committee's attempt cannot find support in the Plan or any other Court order, Charles A. Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney & Carpenter, LLP, in Newark, New Jersey, argues. While the issue of what fees and expenses they must bear is not before the Court, the Reorganized Debtors did not want the Court to make any rulings on the issue in connection with the World's Fair Site sale hearing. Moreover, the Reorganized Debtors believe that the Equity Committee has misread certain provisions of the Plan. Mr. Stanziale tells the Court that a provision in the Plan on the "Payment of Professional Fees" applies only to fees and expenses incurred by the Debtors -- not some other entity. Therefore, he concludes, the Equity Committee's bald statement that "the default under the Plan is that all professional fees and costs will be paid by the Debtors" finds no support in the Plan or elsewhere. The Reorganized Debtors insist that the definition of "World's Fair Sale Expenses" is not limited solely to costs of a broker and the Debtors' portion of sale, transfer and document taxes. Mr. Stanziale attests that the lead-in to the definition provides that expenses "may include" broker fees and the Debtors' taxes. The definition does not state that World's Fair Sale Expenses "only" include broker fees and the Debtors' taxes. In contrast, the only express exclusion to World's Fair Sale Expenses in the definition is for "obligation of the Debtors to any income taxing authorities arising from the sale of the World's Fair Site," Mr. Stanziale adds. Since there is no exclusion for the fees and expenses of professionals associated with the Sale of the World's Fair Site, the fees and expenses should be added to the World's Fair Expenses, the Reorganized Debtors conclude. The Reorganized Debtors contend that they should not independently bear the fees and expenses of the Equity Committee's professionals when all the work associated with the World's Fair Site is for the benefit of the Equity Committee's constituents. By a Court order, Mr. Stanziale says, the World's Fair Site Sale proceeds will be escrowed pending resolution of the motion by certain shareholders to compel further distributions under the Plan. Therefore, he continues, the Equity Committee will have sufficient time after the hearing on the sale to assert whatever rights exist vis-a-vis the sale proceeds. Nonetheless, the Equity Committee wants a specific finding in the Sale Order that the World's Fair Sale Expenses should exclude fees and costs incurred by any professional other than C&W. That finding, Mr. Stanziale says, is at odds with the Plan. Moreover, the Reorganized Debtors reserve their rights to challenge any attempt to compel them to pay the fees and expenses of the Equity Committee professionals beyond what was expressly provided in the Plan. Court Defines World's Fair Sale Expenses Judge Wizmur defines the World's Fair Sale Expenses as to include all fees and expenses incurred by any professional other than Cushman & Wakefield of Pennsylvania, Inc., whether incurred on behalf of the Official Committee of Equity Security Holders, the Debtors, the Reorganized Debtors or any other party. Consistent with the Plan of Reorganization, Judge Wizmur directs the Reorganized Debtors to pay all reasonable fees and expenses incurred by counsel for the Equity Committee subsequent to the Effective Date. Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino Resorts, Inc., nka Trump Entertainment Resorts, Inc. -- http://www.thcrrecap.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The Company and its debtor-affiliates filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A., represent the Debtors in their successful chapter 11 restructuring. When the Debtors filed for protection from their creditors, they listed more than $500 million in total assets and more than $1 billion in total debts. The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005, and the plan took effect on May 20, 2005. (Trump Hotels Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000). UAL CORPORATION: Posts $1.8 Billion Net Loss in Third Quarter ------------------------------------------------------------- UAL Corporation (OTC Bulletin Board: UALAQ), the holding company whose primary subsidiary is United Airlines, reported its third- quarter 2005 financial results. UAL reported third-quarter operating earnings of $165 million, $245 million better than the same quarter last year, despite higher fuel prices for the mainline and regional affiliates negatively impacting fuel expense by $405 million year-over-year. UAL reported a net loss of $1.8 billion, which includes $1.8 billion in reorganization items. The company believes the best indicator of United's post-reorganization financial performance is provided by reviewing operating and net earnings excluding restructuring charges. Excluding the reorganization items, UAL earned a net profit for the third quarter totaling $68 million. Reorganization items were primarily driven by $1.7 billion in non- cash aircraft rejection charges. It is common for the results of operations of companies progressing through Chapter 11 to be impacted by non-cash charges related to their reorganization, especially as restructuring work nears completion. Charges based on the claims of the Company's creditors are recorded at the amount expected to be allowed by the court. However, as shown in the Company's Plan of Reorganization, these claims are expected to be settled at exit for a minor fraction of the amount of the charges recorded. Looking forward, the Company is expected to record a large gain at exit in 2006 when these claims are settled for less than the amounts originally recorded. It is important to note that this is a matter of accurate accounting, and that neither the aircraft rejection charges recorded at this time nor the gain expected to be recorded at exit in 2006 have any significant impact on the company's cash position. "United is a fundamentally better company today with sustainable improvements across the business and solid operational performance. The results we are reporting make it clear that we have done well this quarter in overall cost control, especially given the significant reduction in capacity," said Glenn Tilton, United's chairman, CEO and president. "There is more work to do - - and opportunity to be gained -- as United becomes even more vigorously competitive in generating revenue and reducing costs." United's Restructuring Builds Momentum towards Exit In the third quarter of 2005, United achieved significant milestones in its restructuring activities. As part of the recent restructuring efforts, United: -- Filed the Plan of Reorganization detailing the company's new structure and business plan; -- Set a schedule, agreed by the Creditors' Committee and the Court, which results in an exit from bankruptcy in February, 2006; -- Finalized a commitment for $3 billion in all-debt exit financing with JP Morgan and Citibank; and -- Received Disclosure Statement approval by the Court allowing the plan solicitation process to begin. "This quarter, United has accomplished a great deal and our restructuring is largely complete. This success demonstrates that we have become adept at meeting the challenges of a changing industry," said Jake Brace, United's executive vice president and chief financial officer. "Third quarter results are strong, despite a $405 million impact from higher fuel prices year-over- year." Mainline Revenue Results During the quarter, mainline passenger unit revenue increased 11% and yield increased 9%, compared to third quarter last year. System load factor increased 2 points to 84%. Results for the third quarter of 2005 reflect a 3% reduction in traffic on a 5% reduction in system capacity compared with the same period last year. United achieved one of the highest system length-of-haul adjusted passenger unit revenues in the industry. During the third quarter, reallocation of aircraft capacity to international markets and further optimization of United's domestic schedule contributed to an increase in fleet utilization of 4% compared to the same period last year. As a result, year- over-year the company reduced the number of aircraft in its fleet by 10 percent, while reducing system available seat miles by only 5%. During the quarter the company introduced its new explus United Express flights, featuring United First Class, Economy Plus and United Economy seating on 70-seat regional jets and expanded the scope of the company's unparalleled route network. Customer- focused initiatives include: -- United's Business 1 program which will make travel more convenient for business customers traveling in and out of Chicago O'Hare International Airport, including the convenience of dedicated and close-in departure gates and an on-time arrival guarantee on all Business 1 flights; -- Expanded redemption choices for customers' travel awards through the company's Mileage Plus loyalty program; and -- Completed code share agreements with new Star Alliance members TAP and South African Airways. "Third quarter results show that our revenue continues to improve faster than the industry, and performance trends are encouraging," said John Tague, executive vice president -- marketing, sales and revenue. "However, they do not fully reflect United's potential and we see additional opportunities to improve revenue generation, as industry domestic capacity continues to decline, and our own international growth moderates." United continues to be committed to enhancing the customer experience with industry-leading products, including United Economy Plus service, the introduction of explus premium service on 70-seat regional jets for United Express, and the success of United's p.s., premium transcontinental service between New York and Los Angeles or San Francisco. United also continues to transform and optimize all areas of revenue execution, including its business-to-business sales efforts, loyalty programs, revenue management and all areas of network optimization. "These efforts clearly place us on a course to make United the leader in revenue performance," Tague said. Mainline Operating Expenses Mainline operating expense per available seat mile was up only 5 percent from the year-ago quarter, despite a 5 percent decrease in capacity and a 46 percent increase in mainline fuel price. Salaries and related costs were down 21 percent, or $270 million, primarily reflecting recent labor and management cost reductions and an 8 percent reduction in manpower. Mainline fuel expense was $301 million higher than in the third quarter 2004. Fuel expense is now the company's single largest expense item, surpassing salaries and related expenses. Average mainline fuel price for the quarter was $1.90 per gallon (including taxes). Excluding fuel, mainline operating expenses per available seat mile decreased 5%. The company had an effective tax rate of zero for all periods presented, which makes UAL's pre-tax loss the same as its net loss. Cash The company ended the quarter with an unrestricted cash balance of $1.7 billion, and a restricted cash balance of $954 million, for a total cash balance of $2.7 billion. The unrestricted cash balance increased by $35 million during the quarter. Operations In the most recent data available from the U.S. Department of Transportation, United was ranked Number 1 for the last 12 months in on-time performance and ranked second in the least mishandled baggage among the six major network carriers. In addition, employee productivity (available seat miles divided by employee equivalents) was up 2% for the quarter compared to the same period in 2004. "United's employees continue to earn some of the highest customer satisfaction ratings in company history and are outpacing the industry in on-time performance," said Pete McDonald, United's chief operating officer. "We will focus on consistent delivery of quality service, as we continue to optimize our resources, shortening aircraft turn times and increasing facility utilization." Fuel costs remain a concern for the industry as a whole, but because of United's self-supply strategy, the company has insulated itself from supply shocks resulting from problems along the supply chain. United experienced no fuel related supply or operational problems due to either hurricane Katrina or Rita. Outlook United expects fourth-quarter system mainline capacity to be down about 3% year-over-year. System mainline capacity for 2005 is expected to be about 3% lower than 2004. The company has entered into hedge agreements for heating oil for the equivalent of 9% of its expected fuel consumption for the fourth quarter at an average of $1.32 per gallon, including taxes. To the extent the jet fuel crack spread is higher than the heating oil crack spread, the company's jet fuel expense could be negatively impacted. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. UNITED PROPERTIES: Case Summary & 15 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: United Properties & Investments, LLC 588 Cowan Road Temple, Georgia 30179 Bankruptcy Case No.: 05-15021 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Terry Fernander Construction & Development, Inc. 05-15022 Terry L. Fernander 05-15024 Type of Business: The Debtors are contractors. Chapter 11 Petition Date: October 31, 2005 Court: Northern District of Georgia (Newnan) Debtor's Counsel: Robert A. Chambers, Esq. Donovan Chambers, PC 8440 Courthouse Square Douglasville, Georgia 30134 Tel: (770) 947-3540 Total Assets Total Debts ------------ ----------- United Properties & $1,212,625 $768,077 Investments, LLC Terry Fernander Construction $2,800 $3,190,649 and Development, Inc. Terry L. Fernander $0 $992,813 A. United Properties & Investments, LLC's 5 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Taylor, Bean & Whittaker Bank loan $339,648 c/o McCalla, Raymer, Padrick, Cobb 1544 Old Alabama Road Roswell, GA 30076 Citizens Bank & Trust Bank loan $343,716 P.O.Box 2127 Carrollton, GA 30117 Carroll County Tax Commissioner Taxes $7,766 423 College Street, Room 401 Carrollton, GA 30117 Home Depot Credit Services Trade debt $1,902 P.O. Box 6029 The Lakes, NV 88901-6029 Duron Paints & Wall Coverings Trade debt $845 2551 East Highway 166 Carrollton, GA 30116 B. Terry Fernander Construction & Development's 5 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ CB&T Bank loan $2,525,690 O. Box 105555 Atlanta, GA 30348 West Georgia National Bank Bank loan $290,399 201 Maple Street Carrollton, GA 30117 Unity National Bank $156,800 P.O. Bank 200308 Cartersville, GA 30120 Granite State Ins. Co. $129,990 c/o Lerner & Weiss 16000 Ventura Boulevard Encino, CA 91436-2730 New Holland Credit Bank loan $50,722 P.O. Box 0507 Carol Stream, IL 60132-0507 C. Terry L. Fernander's 5 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ GMAC Bank Loan $645,512 c/o McCalla, Raymer, Padrick, Cobb 1544 Old Alabama Road Roswell, GA 30076 Taylor, Bean & Whittaker Bank loan $222,118 c/o McCalla, Raymer, Padrick, Cobb 1544 Old Alabama Road Roswell, GA 30076 CB&T Bank loan $58,900 O. Box 105555 Atlanta, GA 30348 State Farm Bank $33,651 P.O. Box 3299 Milwaukee, WI 53201-3299 New Holland Credit $12,646 P.O. Box 0507 Carol Stream, IL 60132-0507 UNITED WOOD: Files Schedules of Assets and Liabilities ------------------------------------------------------ United Wood Products Company, aka United Oil Company, delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the District of Oregon, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $58,622,000 C. Property Claimed As Exempt D. Creditor Holding $1,563,211 Secured Claim E. Creditors Holding Unsecured 4,056 Priority Claims F. Creditors Holding Unsecured 1,613,858 Nonpriority Claims G. Executory Contracts and Unexpired Leases H. Codebtors I. Current Income of Individual Debtor(s) J. Current Expenditures of Individual Debtor(s) ----------- ---------- Total $58,622,000 $3,181,125 Headquartered in Portland, Oregon, United Wood Products Company, aka United Oil Company, filed for chapter 11 protection on Sept. 19, 2005 (Bankr. D. Ore. Case No. 05-41285). John G. Crawford, Jr., Esq., at Schwabe, Williamson & Wyatt represents the Debtor in its restructuring efforts. As of Sept. 30, 2005, the Debtor listed total assets of $58,622,000 and total debts of $3,181,125. UNITED WOOD: Schwabe Williamson Approved as Bankruptcy Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon gave United Wood Products Company permission to employ Schwabe, Williamson & Wyatt as its general bankruptcy counsel. Schwabe Williamson will: 1) to assist and advise the Debtor in the administration of its bankruptcy case; 2) assist and advise the Debtor of its functions and duties as a debtor-in-possession under the Bankruptcy Code, including, but not limited to those duties pursuant to 11 U.S.C. Section 1107; 3) assist the Debtor in the investigation and prosecution of claims belonging to the estate; 4) advise the Debtor concerning alternatives for restructuring its debts and financial affairs and liquidating its assets pursuant to a possible plan of reorganization; and 5) perform all other necessary legal services to the Debtor that are in the interests of its estate. John G. Crawford, Esq., a Shareholder of Schwabe Williamson, is one of the lead attorneys for the Debtor. Mr. Crawford discloses that his Firm received a $75,000 retainer. Mr. Crawford charges $320 per hour for his services. Mr. Crawford reports Schwabe Williamson's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Alex I. Poust Shareholder $290 Craig G. Russilo Associate $215 Michael D. Furlong Associate $190 Ryan P. Steen Associate $175 Tina S. Granados Paralegal $140 Schwabe Williamson assures the Court that it does not represent any interest materially adverse to the Debtor or its estate. Headquartered in Portland, Oregon, United Wood Products Company, aka United Oil Company, filed for chapter 11 protection on Sept. 19, 2005 (Bankr. D. Ore. Case No. 05-41285). As of Sept. 30, 2005, the Debtor listed total assets of $58,622,000 and total debts of $3,181,125. US AIRWAYS: Gets $250 Million Loan from Airbus & Wells Fargo ------------------------------------------------------------ US Airways, Inc., and America West Airlines on Sept. 27, 2005, entered into two loan agreements with Airbus Financial Services, as Initial Lender and Loan Agent, and Wells Fargo Bank Northwest, National Association, as Collateral Agent, US Airways Group, Inc., discloses in a regulatory filing with the Securities and Exchange Commission. AFS and Wells Fargo have committed to provide up to $161,000,000 and up to $89,000,000 in loans. The Airbus Loans bear interest at a rate of LIBOR plus a margin, subject to adjustment. On September 27, all of the Airbus $161 Million Loan and $14,000,000 of the Airbus $89 Million Loan were drawn and are available for use for general corporate purposes. The remaining portion of the Airbus Loans is payable in multiple draws upon the occurrence of certain conditions, including the taking of delivery of certain aircraft, on the due dates for certain amounts owing to AFS or its affiliates to refinance the amounts, after payment of certain invoices for goods and services provided by AFS or its affiliates, or upon receipt by AFS of certain amounts payable in respect of existing aircraft financing transactions. The full amount of the Airbus Loans is expected to be available by the end of 2006. Amounts drawn upon the Airbus Loans are drawn first upon the Airbus $161 Million Loan until it has been drawn in its full amount, in which event the remaining portion of the $250 million total commitment will be drawn upon the Airbus $89 Million Loan. The amortization payments under the Airbus $161 Million Loan will become due in equal quarterly installments of $13 million beginning on March 26, 2008, with the final installment due on December 31, 2010. The outstanding principal amount of Airbus $89 Million Loan will be forgiven in writing December 31, 2010, or an earlier date, if on that date the outstanding principal amount of, accrued interest on, and all other amounts due under the Airbus $161 Million Loan have been paid in full. The Airbus Loans are secured by: -- a lien on spare parts and certain engines of AWA, which lien has second priority upon the spare parts and engines behind AWA's existing spare parts and engine loan agreements with General Electric Capital Corporation; -- a lien on five Airbus A321 aircraft previously financed by an affiliate of AFS; and -- predelivery payments and other deposits held in respect of certain purchase agreements with AWA, US Airways or US Airways Group. The Airbus Loans guaranteed by US Airways Group. The Airbus Loans also: 1. require certain prepayments (payable with respect to the Airbus $161 Million Loan and, if principal and interest has otherwise become due, the $89 Million Loan) from the proceeds of sales of assets constituting collateral for the Airbus Loans; 2. contain customary affirmative covenants and these negative covenants -- restrictions on liens, mergers or consolidations, and restriction on certain approvals under the US Airways ATSB Loan and the AWA ATSB Loan; and 3. contain customary events of default, including payment defaults, cross-defaults to certain specified obligations, breach of covenants and bankruptcy and insolvency defaults. In connection with a transfer or sale, the transferred portion of the loans may, upon the request of AFS, be amended to add prepayment premiums, make-whole amounts or other prepayment terms and conditions which are at the time customary for comparable financings in the relevant markets, as determined by review of up to three investment banks. US Airways, AWA and US Airways Group have agreed, upon request, to cooperate with AFS to effect a sale or transfer of the loans. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 109; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Oct. 4, 2005, Fitch Ratings has affirmed the issuer default rating of 'CCC' and the senior unsecured rating of 'CC' on the debt obligations of America West Airlines, Inc. Fitch has also initiated coverage of US Airways Group, Inc., (NYSE: LCC) with an IDR of 'CCC' and a senior unsecured rating of 'CC'. The recovery ratings for the senior unsecured obligations of both US Airways Group and AWA are 'R6', indicating an expected recovery of less than 10% in a default scenario. US AIRWAYS: Investors Increase Holdings by $112.5 Million --------------------------------------------------------- US Airways Group, Inc.'s (NYSE: LCC) investors have exercised all of their options to purchase additional shares of US Airways Group common stock at $15 per share. The investors, which include Par Investment Partners, L.P., Peninsula Investment Partners, L.P., a group of investors under the management of Wellington Management Company, LLP, and Tudor Proprietary Trading, L.L.C. and a group of investors for which Tudor Investment Corp. acts as investment adviser, exercised the first two-thirds of their options, which totaled approximately 5 million shares, on Sept. 28, 2005, resulting in aggregate proceeds to US Airways Group of approximately $75 million. The remaining one-third of the options, exercisable for approximately 2.5 million shares, were scheduled to expire on Oct. 13, 2005. These options were exercised in full, which resulted in an additional $38 million in aggregate proceeds to US Airways Group. When combined with other equity raised in connection with the merger, US Airways Group has now raised $867 million in new equity, which is the most new equity ever raised by a U.S. airline. Total cash on hand, including restricted cash, is now over $2.5 billion despite post-merger transactions of $116 million to repurchase warrants from the Air Transportation Stabilization Board and $125 million, which was used to retire certain debt to General Electric Capital Corporation. US Airways Group Chairman, President and CEO Doug Parker said, "The market's confidence in the new US Airways is extremely gratifying, and is evidenced by today's announcement and backed further by the recent sale of our former government-backed loans. While we have much work to do to successfully complete the integration of our two airlines, we are confident that we have taken the right steps to adequately fund a firm foundation for our new airline." With all merger-related equity transactions now closed, the estimated ownership breakout of US Airways Group is: Primary Shares Entity (in thousands) Percentage ------ ------------- ---------- Equity Investors Wellington Management 11,091 14% PAR Investment Partners 10,769 14% Eastshore Aviation 8,333 11% ACE Aviation Holdings 5,000 6% Tudor Investment 4,806 6% Peninsula Investment Partners 4,000 5% Other Public Equity Former America West Shareholders 15,109 20% Former US Airways Creditors 8,212 11% Post Merger Public Offering 9,775 13% Total Shares 77,095 100% The Company anticipates shares on a fully diluted basis will approximate 78.5 million, which assumes the buy back of warrants. Fully diluted shares represent the primary shares outstanding plus potential common stock including options, warrants and restricted stock units. Convertible notes are not included in this fully diluted share count. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 109; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Oct. 4, 2005, Fitch Ratings has affirmed the issuer default rating of 'CCC' and the senior unsecured rating of 'CC' on the debt obligations of America West Airlines, Inc. Fitch has also initiated coverage of US Airways Group, Inc., (NYSE: LCC) with an IDR of 'CCC' and a senior unsecured rating of 'CC'. The recovery ratings for the senior unsecured obligations of both US Airways Group and AWA are 'R6', indicating an expected recovery of less than 10% in a default scenario. VERILINK CORP: Posts $1.9 Million Net Loss in First Quarter ----------------------------------------------------------- Verilink Corporation (NASDAQ: VRLK) reported financial results for the first fiscal quarter ended Sept. 30, 2005. Net sales were $11.0 million, a decrease of 11% year over year from $12.3 million in the same period of fiscal 2005. Net loss computed in accordance with generally accepted accounting principles for the first quarter of fiscal 2006 was $1.9 million compared to net loss of $24.5 million in the first quarter of fiscal 2005. First quarter GAAP results included acquisition-related and other items totaling $1.1 million, which includes stock based compensation of $552,000 due to our adoption of SFAS No. 123R, Share Based Payment, as of July 2, 2005 and intangible assets amortization of $564,000. Excluding the effects of these items, non-GAAP loss was $815,000 compared to a non-GAAP loss for the first quarter of fiscal 2005 of $3 million. For the year-ago quarter, the net adjustment to reconcile to the GAAP net loss totaled $21.5 million, which included a $20 million charge for impairment of goodwill, intangible assets amortization of $572,000, restructuring charges of $443,000, compensation expense of $233,000 related to restricted stock awards, and direct acquisition costs paid and expensed of $287,000. "Revenues were down sequentially due to various factors, primarily the timing of orders from a large carrier customer and our focus to improve gross margins, which resulted in our decision to forego lower-margin business," stated Leigh S. Belden, President and CEO of Verilink. "Despite the lower revenues, we were able to improve gross margins by 350 basis points, reduce non-GAAP operating expenses by $1.3 million and substantially narrow our non-GAAP operating loss on a sequential basis as a result of actions we took to accelerate our return to profitability. From a business development standpoint, we acquired the ArcaDACSTM Digital Cross Connect and SechtorTM 300 Multiservice Edge Concentrator product lines from Zhone to ensure continuity and expansion of our footprint with our largest customer, as well as to extend our offering across the "last mile" from the customer premise to the network edge." Verilink Corporation -- http://www.verilink.com-- is a leading provider of next-generation broadband access solutions for today's and tomorrow's networks. The company develops, manufactures and markets a broad suite of products that enable carriers (ILECs, CLECs, IXCs, and IOCs) and enterprises to build converged access networks to deliver cost-effective next-generation communications services to their end customers. The company's products include a complete line of VoIP, VoATM, VoDSL and TDM-based integrated access devices (IADs), optical access products, wireless access devices, and bandwidth aggregation solutions including CSU/DSUs, multiplexers and DACS. The company also provides turnkey professional services to help carriers plan, manage and accelerate the deployment of new services. Verilink is headquartered in Centennial, CO (metro Denver area) with operations in Madison, AL and Newark, CA and sales offices in the U.S. and Europe. * * * Going Concern Doubt Ehrhardt Keefe Steiner & Hottman PC of Denver, Colorado, expressed substantial doubt about Verilink Corporation's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended July 1, 2005. The auditing firm cites the Company's working capital deficiency, operating loss and negative cash flow from operations. VERILINK CORP: Amends Agreement Terms with Noteholders ------------------------------------------------------ Verilink Corporation and the holders of its senior secured convertible notes issued Mar. 21, 2005 agreed to reduce the "target working capital" amounts under the terms of the notes to $6.5 million for the quarter ended Sept. 30, 2005, and for subsequent quarters, to $6.8 million less 80% of the principal amount of any notes redeemed or converted subsequent to the date of the amendment plus 80% of the principal amount of any newly issued notes from the exercise of the holders' right to purchase additional notes. Under the terms of the notes, if the Company's tested working capital as of the end of a fiscal quarter does not meet the target working capital amount, the holders of the notes may require the Company to make certain additional principal payments on the notes. Verilink has also agreed to apply 50% of the net proceeds (after satisfaction of the first mortgage commissions, and closing costs) from a sale of its Explorer Boulevard property in Huntsville, Alabama to reduce the outstanding principal amount of the notes. Verilink has agreed to reduce the exercise price of the warrants for 830,563 shares of common stock issued in connection with the initial issuance of the notes to $.93 per share of common stock. As part of the initial purchase of these notes and warrants in March 2005, the holders acquired additional investment rights to purchase up to an aggregate of $5 million in principal amount of additional notes. The Company has agreed to reduce the conversion price of the additional notes that would be issued if the holders exercise their additional investment rights to $1.00 per share of common stock, and to extend the expiration of the holders' right to exercise their additional investment rights to June 29, 2006. The conversion price of the currently outstanding $8 million principal amount of notes is $3.01 per share and has not been amended. The amendments also include revisions to the default and restricted payment provisions of the notes and certain other changes to the transaction documents. Verilink Corporation -- http://www.verilink.com-- is a leading provider of next-generation broadband access solutions for today's and tomorrow's networks. The company develops, manufactures and markets a broad suite of products that enable carriers (ILECs, CLECs, IXCs, and IOCs) and enterprises to build converged access networks to deliver cost-effective next-generation communications services to their end customers. The company's products include a complete line of VoIP, VoATM, VoDSL and TDM-based integrated access devices (IADs), optical access products, wireless access devices, and bandwidth aggregation solutions including CSU/DSUs, multiplexers and DACS. The company also provides turnkey professional services to help carriers plan, manage and accelerate the deployment of new services. Verilink is headquartered in Centennial, CO (metro Denver area) with operations in Madison, AL and Newark, CA and sales offices in the U.S. and Europe. * * * Going Concern Doubt Ehrhardt Keefe Steiner & Hottman PC of Denver, Colorado, expressed substantial doubt about Verilink Corporation's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended July 1, 2005. The auditing firm cites the Company's working capital deficiency, operating loss and negative cash flow from operations. VISIPHOR CORPORATION: Grant Thornton Replaces KPMG as Auditor ------------------------------------------------------------- Visiphor Corporation reported that Grant Thornton LLP, Chartered Accountants has accepted appointment as the Company's auditor. KPMG LLP, Chartered Accountants has resigned as the Company's auditor at the Company's request. The Audit Committee and management of the Company made the change decision following a careful cost-benefit analysis of services offered by the two firms, and taking into account the escalating costs associated with retaining KPMG as the Company's auditor. KPMG, in its audit report on the Company's December 31, 2004 financial statements, said that the financial statements are affected by conditions and events that cast substantial doubt on the Company's ability to continue as a going concern. For the six-months ended June 30, 2005, the Company had incurred a loss from operations of $3,016,481 and a deficiency in operating cash flow of $1,788,221. In addition, the Company has incurred significant operating losses and net utilization of cash in operations in all prior periods. At June 30, 2005, the Company has a working capital deficiency of $54,290. Based in Vancouver, British Columbia, Visiphor Corporation specializes in developing and marketing software products that enable integrated access to applications and databases. The company also develops solutions that automate law enforcement procedures and evidence handling. These solutions often incorporate Visiphor's proprietary facial recognition algorithms and tools. Using industry standard "Web Services", Visiphor delivers a secure and economical approach to true, real-time application interoperability. The corresponding product suite is referred to as the Briyante Integration Environment. W.R. GRACE: Earns $32.1 Million of Net Income in Third Quarter -------------------------------------------------------------- W. R. Grace & Co. (NYSE:GRA) reported financial results for the third quarter and nine-month period ended Sept. 30, 2005. Sales for the third quarter of 2005 were $653.4 million compared with $579.9 million in the prior year quarter, a 12.7% increase. The increase was attributable to higher sales volume in all geographic regions, improved product mix, selling price increases in response to cost inflation and, to a lesser degree, acquisitions and favorable currency translation. Sales increased 11.4% for the Davison Chemicals segment and 14.1% for the Performance Chemicals segment. Net income in the third quarter 2005 was $32.1 million compared with $48.0 million in the prior year quarter. Net income in the 2004 third quarter included a $50.0 million pre-tax gain ($32.5 million after tax) from a litigation settlement. The 2005 third quarter includes a $16.0 million favorable change in estimated liabilities for tax exposures. Pre-tax income from core operations was $59.1 million, 2.4% higher than the third quarter of last year. Pre-tax operating income of the Performance Chemicals segment was $45.5 million, up 15.2% compared with the 2004 third quarter, attributable principally to higher sales volume, partially offset by higher raw material costs, which exceeded the effect of selling price increases. Pre- tax operating income of the Davison Chemicals segment was $36.8 million, down 13.6% compared with the third quarter last year, primarily due to lost sales and extra costs related to Hurricanes Katrina and Rita in the Gulf of Mexico region of the United States, as well as higher costs of energy and certain raw materials. Grace's production facility for refining catalysts in Lake Charles, Louisiana, was shutdown for two weeks by Hurricane Rita. Grace satisfied customer demand from its other catalysts plants, incurring added production and distribution costs, and added expenses to support its displaced workers in Lake Charles. Sales for the nine months ended September 30, 2005 were $1,933.1 million compared with $1,670.8 million for the first nine months of 2004, a 15.7% increase. Net income for the same periods was $67.9 million compared with $85.1 million. The decline in net income is principally associated with the one-time gain from the settlement of litigation in the 2004 third quarter. Pre-tax income from core operations amounted to $155.4 million for the first nine months of 2005, a 6.8% increase over the same period last year, primarily attributable to higher sales. "We continued to deliver solid sales growth in the third quarter despite the impact of the hurricanes in the Gulf of Mexico," said Grace's President and Chief Executive Officer Fred Festa. "Operating income from our Performance Chemicals segment benefited from good construction markets and the success of growth initiatives, more than offsetting the difficulties faced by our Davison Chemicals segment from the hurricanes. All of our workers at our Lake Charles, Louisiana site are safe and the facility is back to full production after being off-line for two weeks. The hurricanes have caused reduced production at certain customer sites, added costs for support of workers and customers through the recovery period, and higher energy costs caused by supply dislocation. We will continue to work with our customers to balance our selling prices with an unprecedented increase in energy and material costs." Core Operations Davison Chemicals Third quarter sales for the Davison Chemicals segment were $338.3 million, up 11.4% from the prior year quarter, mainly reflecting strong global demand for reduced-sulfur transportation fuels and higher selling prices to partially offset increases in raw material costs. Currency translation was not a significant factor in the third quarter. Sales of refining technologies products, which include fluid cracking catalysts, hydroprocessing catalysts and performance additives used in petroleum refining, were $197.7 million in the third quarter, up 16.9% compared with the prior year quarter. The increase resulted from higher volume of hydroprocessing catalysts in response to worldwide demand for cleaner fuels, and added revenue from the contractual pass-through of metals costs. Hurricanes Katrina and Rita, which caused shut- downs of a number of refineries in the United States, negatively affected sales of fluid cracking catalysts in the third quarter and is likely to continue to have some negative effect in the fourth quarter. Grace is evaluating the potential insurance recovery for business interruption costs. Sales of specialty materials products, which include silica-based engineered materials, specialty catalysts, and products used for drug discovery and purification, were $140.6 million, up 4.4% compared with the third quarter of 2004. The increase was primarily attributable to sales from the acquisition of Alltech International Holdings, Inc., completed in August 2004, increases in selling prices to address raw material cost inflation, and a better product sales mix; offset by lower sales of engineered materials in Europe as a result of lower economic activity in parts of that region. Operating income of the Davison Chemicals segment for the third quarter of 2005 was $36.8 million compared with $42.6 million in the 2004 third quarter, a 13.6% decrease. Operating margin was 10.9%, about 3.1 percentage points lower than the prior year quarter. The decrease in operating income was primarily attributable to the loss of sales and added costs related to Hurricanes Katrina and Rita. These losses, together with higher energy and raw material costs, more than offset improvements in operating income of Davison operations not affected by the hurricanes. Sales of the Davison Chemicals segment for the first nine months of 2005 were $1,031.9 million, up 18.3% from the same period of 2004 (16.6% excluding the favorable effects of currency translation). Year-to-date operating income was $117.6 million, compared with $112.1 million for the prior year, a 4.9% increase, with operating margins at 11.4% compared with 12.8% last year. Year-to-date operating results reflect higher sales in all regions and major product lines offset by the negative effects of the hurricanes in the Gulf of Mexico, higher raw material and energy costs and costs associated with integrating business functions and processes. Performance Chemicals Third quarter sales for the Performance Chemicals segment were $315.1 million, up 14.1% from the prior year quarter, primarily as a result of strong growth in sales volume worldwide and increases in selling prices, which partially offset higher raw material costs. Currency translation was not a significant factor in the third quarter. Sales of specialty construction chemicals, which include concrete admixtures, cement additives and masonry products, were $161.2 million, up 17.9% compared with the prior year quarter. Sales were up in all regions, mainly reflecting geographic expansion and other growth initiatives, as well as strong construction activity, primarily in North America. Sales of specialty building materials, which include waterproofing and fire protection products, were $77.9 million, up 13.6% compared with the third quarter of 2004. The increase reflects higher sales of roofing underlayments to the residential segment in North America, added sales from the acquisition of the TRI-FLEX 30(R) synthetic roofing underlayment product line in December 2004, and higher sales of specialty below-grade commercial waterproofing worldwide. Sales of Darex(R) specialty sealants and coatings, used in rigid food and beverage packaging, were $76.0 million, up 7.3% compared with the third quarter of 2004. Sales were up in all geographic regions as a result of the continued commercial success of Daraform(R) closure sealants and specialty can coatings, as well as selling price increases, which partially offset higher raw material costs. Operating income for the Performance Chemicals segment was $45.5 million in the third quarter of 2005 compared with $39.5 million for third quarter of 2004, a 15.2% increase. Operating margin of 14.4% was slightly higher than the third quarter of last year. Higher operating income and margins were primarily a result of sales volume growth, offset by raw material inflation, which exceeded the effect of selling price increases. Sales of the Performance Chemicals segment for the nine months ended September 2005 were $901.2 million, up 12.9% from 2004 (11.0% excluding the favorable effects of currency translation). Year-to-date operating income was $118.5 million compared with $106.0 million for the first nine months of the prior year, a 11.8% increase, reflecting higher sales volume and positive results from productivity and cost containment initiatives, offset by raw material cost inflation, which exceeded the impact of selling price increases. Operating margin of 13.1% was about even with the first nine months of last year. Corporate Costs Third quarter corporate costs related to core operations were $23.2 million compared with $24.4 million in the prior year quarter, and $80.7 million for the first nine months in 2005 compared with $72.6 million for the first nine months of last year. The year-to-date increase was attributable primarily to higher pension expense, resulting from updated assumptions for expected life-spans, the longevity of Grace's active work force and amortization of deferred costs related to capital market returns in recent years, which were factored into corporate costs by the third quarter of last year. Other Matters During the third quarter of 2005, Grace lowered its liability estimates for continuing tax exposures by $16 million to account for resolution in the quarter of previously considered risks in prior period tax returns. The benefit of this change in estimate is reflected as an offset to normal income tax expense in the quarter. As previously disclosed, Grace and current and former employees are defendants in a criminal proceeding related to former vermiculite mining operations in Montana, and Grace and two employees are defendants in a civil lawsuit which was filed in the second quarter of 2005 related to the clean-up of a former vermiculite processing site in New Jersey. Grace's third quarter and year-to-date financial statements include $5.5 million and $14.5 million, respectively, of legal costs for the defense of Grace and the named individuals with respect to these lawsuits. At this time, Grace cannot predict the outcome of these lawsuits nor the extent of any financial impact. Defense costs are being expensed as incurred. Also as previously disclosed, Grace's amended proposed plan of reorganization provides for interest on general unsecured claims (not payable until a plan is confirmed) at rates that generally range from 4.19% to 6.09%. Such rates were applied to Grace's estimate of eligible claims for the three-month and nine-month periods ended Sept. 30, 2005, increasing third quarter and year- to-date interest expense by approximately $9 million and $29 million, respectively. Cash Flow and Liquidity Grace's net cash flow from operating activities was $5.8 million for the first nine months of 2005, compared with $167.4 million for the comparable period of 2004. In addition to an increase in working capital in response to higher sales, the year-to-date 2005 cash flow includes payments aggregating $130.2 million to resolve U.S. federal tax return audits and an environmental contingency at a formerly owned site and for the roll-forward of dollar-to-euro currency contracts. Year-to-date 2005 pre-tax income from core operations before depreciation and amortization was $241.5 million, 6.9% higher than the first nine months of 2004, a result of the higher income from core operations described above. Cash used for investing activities was $31.3 million for the first nine months of 2005, primarily reflecting capital replacements, partially offset by proceeds from the termination of life insurance policies. At Sept. 30, 2005, Grace had available liquidity in the form of: * cash ($463.5 million), * net cash value of life insurance ($83.0 million), and * available credit under its debtor-in-possession facility ($211.6 million). Grace believes that these sources and amounts of liquidity are sufficient to support its business operations, strategic initiatives and Chapter 11 proceedings for the foreseeable future. Chapter 11 Proceedings On Apr. 2, 2001, Grace and 61 of its United States subsidiaries and affiliates, including its primary U.S. operating subsidiary W. R. Grace & Co.-Conn., filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Grace's non-U.S. subsidiaries and certain of its U.S. subsidiaries were not part of the Filing. Since the Filing, all motions necessary to conduct normal business activities have been approved by the Bankruptcy Court. On Nov. 13, 2004, Grace filed a plan of reorganization, as well as several associated documents, including a disclosure statement, with the Bankruptcy Court. On Jan. 13, 2005, Grace filed an amended plan of reorganization and related documents to address certain objections of creditors and other interested parties. The amended Plan is supported by committees representing general unsecured creditors and equity holders, but is not supported by committees representing asbestos personal injury claimants and asbestos property damage claimants. The Bankruptcy Court proceedings are currently focused on the estimation of Grace's asbestos-related liabilities. The Bankruptcy Court has approved a process and timeline for the estimation of asbestos-related property damage and personal injury claims, with estimation hearings targeted for September 2006. Most of Grace's noncore liabilities and contingencies (including asbestos-related litigation, environmental claims, tax matters and other obligations) are subject to compromise under the Chapter 11 process. The Chapter 11 proceedings, including related litigation and the claims valuation process, could result in allowable claims that differ materially from recorded amounts. Grace will adjust its estimates of allowable claims as facts come to light during the Chapter 11 process that justify a change, and as Chapter 11 proceedings establish court-accepted measures of Grace's noncore liabilities. Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. WINN-DIXIE: Wants to Reject Warehouse Lease in Jacksonville, Fla. ----------------------------------------------------------------- As part of their restructuring plans, Winn-Dixie Stores, Inc., and its debtor-affiliates sought to reduce or eliminate their liability under many leases. The Debtors want to reject a 573,884-square foot of warehouse property in Jacksonville, Florida. Their current annual rental obligation under the Lease is $1,463,690. The Lease will expire on June 2011. D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, explains that because of the Debtors' closure of certain of their facilities, they no longer use the warehouse at the same level as they had previously. In addition, Mr. Baker reveals that the Debtors now have other available facilities in close proximity to the warehouse that will allow them to economically relocate and maintain any items or operations that are currently located at the warehouse. Furthermore, through previous marketing activities, the Debtors entered into a sublease with Jefferson Smurfit Corporation on January 23, 2004, pursuant to which the Subtenant subleases 174,000 square feet of the warehouse premises. The Debtors receive annual rental income under the Sublease for $354,149. Mr. Baker points out that the rent paid by the Subtenant to the Debtors is substantially less than the rent the Debtors must pay to the Landlord under the related Lease. However, the Debtors have needed the space, and this arrangement was both operationally and financially acceptable. The continuing subsidy costs the Debtors over $1 million annually. By this motion, the Debtors seek the authority of the U.S. Bankruptcy Court for the Middle District of Florida to reject the Lease and the Sublease. The Debtors have concluded that the Lease constitutes a burden on their estates and is not necessary for an effective reorganization. This determination regarding the Lease drove the Debtors' decision that the Sublease should also be rejected, Mr. Baker says. To the extent any of the Debtors' personal property remains in the property that is the subject of the Lease, it is of little or no value to their estates. In this regard, the Debtors ask the Court to deeming any of their interest in that property abandoned pursuant to Section 554(a) of the Bankruptcy Code. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063). The Honorable Judge Robert D. Drain ordered the transfer of Winn-Dixie's chapter 11 cases from Manhattan to Jacksonville. On April 14, 2005, Winn- Dixie and its debtor-affiliates filed for chapter 11 protection in M.D. Florida (Case No. 05-03817 to 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000). XFORMITY TECHNOLOGIES: Equity Deficit Narrows to $756k at June 30 ----------------------------------------------------------------- XFormity Technologies, Inc., fka XML-Global Technologies, Inc., delivered its annual report on Form 10-KSB for the year ending June 30, 2005, to the Securities and Exchange Commission on October 26, 2005. The Company reported a $2,167,272 net loss on $457,261 of net revenues for the year ending June 30, 2005. At June 30, 2005, the Company's balance sheet shows $253,555 in total assets and $1,010,491 in total debts. At June 30, 2005, the Company's equity deficit narrowed to $756,936 from a $787,857 deficit at June 40, 2004. Altschuler, Melvoin and Glasser LLP, the Company's auditor, expressed substantial doubt on the Company's ability to continue as a going concern, pointing to the Company's recurring losses from operations and net capital deficiency. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?2a2 Based in Dallas, Texas, XFormity Technologies, Inc., designs and implements business intelligence software for large and mid-size companies, with a focus in the quick service restaurant industry. * Houlihan Lokey Joins Forces with Tokyo-Based ORIX Corporation --------------------------------------------------------------- Houlihan Lokey Howard & Zukin, an international investment bank, announced that it has agreed to join forces with ORIX Corporation (NYSE: IX, TSE: 8591), a leading integrated financial services group headquartered in Tokyo, in a move that will expand Houlihan Lokey's financing strength and global capabilities. Under the agreement, the two firms will establish a holding company that will own the business of Houlihan Lokey and the corporate lending operations of ORIX USA Corporation, a wholly owned subsidiary of ORIX. ORIX USA will own approximately 70% of the holding company, with Houlihan Lokey's current shareholders owning the remaining share. Houlihan Lokey will continue to operate under its current name and its existing management and board structure will remain in place. The combination between Houlihan Lokey and ORIX forms a uniquely attractive and complementary business platform. "Houlihan Lokey has had another record year of accomplishments in 2005, with continued strong performances in each of our product and industry lines, extension of our service offerings, and office expansion within Europe," said Jeffrey Werbalowsky, Co-CEO of Houlihan Lokey. "In light of the substantial growth in our corporate finance practice and the growing international demand for our services, this is the ideal time for us to join forces with ORIX, which will allow us to expand our presence around the world and specifically in Asia." Scott Beiser, Co-CEO of Houlihan Lokey, said, "Houlihan Lokey and ORIX form a great strategic fit. Our complementary business lines will be made even more valuable by the structured financing solutions and capital resources that ORIX has to offer, and we look forward to new opportunities to better serve our clients. In addition, we will continue to maintain our own strong identity and professional independence, focusing on providing the dedicated client services that we consider the core of our franchise." Yoshihiko Miyauchi, CEO of ORIX Corporation, said, "As a leading international investment bank, Houlihan Lokey's combination with ORIX will further strengthen our existing leadership in our core business areas. Working together with ORIX USA, Houlihan Lokey will be a dynamic vehicle in our strategy to enhance our U.S. presence, and we look forward to leveraging the respective strengths and natural synergies between the two organizations." The combined enterprise is expected to begin operations in the first quarter of 2006, with Houlihan Lokey and the ORIX USA Corporate Finance Group operating independently under their respective brand names. The holding company established to own the two entities will initially have approximately $2.5 billion in total assets. The new enterprise will have approximately 800 employees and operate from 10 locations in the United States and Europe. Houlihan Lokey was established in 1970 primarily as a provider of valuation services and has grown since that time to become the leading advisor in middle-market M&A transactions, one of the largest financial advisory firms in the United States, and a dominant global force in financial restructuring. The firm this year advised M&A clients such as MidAmerican Energy Holdings Co. in its acquisition of PacifiCorp and Mammoth Mountain Ski Area in its sale to Starwood Capital Group. Houlihan Lokey has also advised the official creditors' committees in the three largest bankruptcies of all time: Enron, WorldCom and Conseco. The firm this year opened a Paris office, its 10th worldwide location. ORIX Corporation is a publicly traded international financial services company with operations in 24 countries and regions worldwide. Its U.S. subsidiary, ORIX USA, is headquartered in Dallas and provides corporate lending, leasing and real estate services. Since beginning its operations over 20 years ago, ORIX USA has expanded its activities to virtually all aspects of middle-market commercial and real estate financing. About Orix Corporation ORIX Corporation (NYSE: IX, TSE: 8591) -- www.orix.co.jp -- is an integrated financial services group based in Tokyo, Japan, providing innovative value-added products and services to both corporate and retail customers. With operations in 24 countries and regions worldwide, ORIX's activities include corporate financial services, such as leases and loans, as well as automobile operations, rental operations, real estate-related finance, real estate, life insurance, and investment banking. About Houlihan Lokey Houlihan Lokey Howard & Zukin -- http://www.hlhz.com/-- an international investment bank, provides a wide range of services, including mergers and acquisitions, financing, financial opinions and advisory services, and financial restructuring. Houlihan Lokey has ranked among the top 10 M&A advisors in the U.S. for the past five years, has been the No. 1 provider of M&A fairness opinions for five consecutive years, and has one of the largest worldwide financial restructuring practices of any investment bank. Established in 1970, the firm has over 700 employees in 10 offices in the United States and Europe. * Wilmer Cutler Names Ben W. Heineman Jr. as Senior Counsel ----------------------------------------------------------- Wilmer Cutler Pickering Hale and Dorr LLP reported that Ben W. Heineman, Jr., Esq., Senior Vice President for Law and Public Affairs at General Electric Company, will become Senior Counsel to the firm, effective Feb. 1, 2006. Mr. Heineman, who was GE's Senior Vice President-General Counsel from 1987-2003, will work on a wide range of issues: * globalization; * public policy; * corporate citizenship and governance; and * mediation and arbitration. Mr. Heineman will retire from GE at the end of this year. On Feb. 1, 2006, Mr. Heineman will also become a Senior Fellow at the Belfer Center for Science and International Affairs at Harvard University's John F. Kennedy School of Government, Distinguished Senior Fellow at the Program on the Legal Profession at the Harvard Law School and a Senior Advisor to the Center for Strategic and International Studies. Mr. Heineman will research and write on a variety of topics, including globalization, anticorruption, corporate citizenship, dispute resolution and the legal profession. "We are thrilled to welcome a legend to the firm. Ben's wealth of experience and keen insight into complex legal issues will serve as an invaluable resource to our clients around the world," said Jamie Gorelick, Partner and Co-chair of both the Public Policy and Strategy Practice and the Defense, National Security and Government Contracts Practice at WilmerHale. As GE's General Counsel, Mr. Heineman was responsible for managing a team of more than 1,000 in-house lawyers in over 100 countries around the world. As the premier corporate general counsel in the world, Mr. Heineman helped create a culture of integrity and compliance where lawyers also play a key role in business and management. Under Mr. Heineman's leadership, the GE law department has become world-renowned for its excellence. A number of former GE corporate counsels now head law departments at other Fortune 500 companies. Prior to joining GE, Mr. Heineman was Managing Partner at Sidley & Austin's Washington office focusing on Supreme Court and test case litigation. Prior to that, Mr. Heineman served as Assistant Secretary for Planning and Evaluation with the U.S. Department of Health, Education, and Welfare under President Carter. "It's a pleasure to join such a deep team of accomplished lawyers. I look forward to this new opportunity and new chapter in my legal career," noted Mr. Heineman. Mr. Heineman is a graduate of Harvard College, Oxford University and Yale Law School. A Rhodes scholar, Editor in Chief of the Yale Law Journal, and Law Clerk to Supreme Court Justice Potter Stewart, Mr. Heineman started his career as a Staff Attorney for the Center for Law & Social Policy in Washington, D.C. and then as a litigator at Williams & Connolly. Mr. Heineman serves on the boards of the Center for Strategic and International Studies, Memorial Sloan Kettering Cancer Center, Transparency International-USA and The National Constitution Center. Mr. Heineman is the author of books on British race relations and the American presidency. Mr. Heineman received The American Lawyer's Lifetime Achievement Award in 2005. About Wilmer Cutler Pickering Hale and Dorr LLP Wilmer Cutler Pickering Hale and Dorr LLP -- http://www.wilmerhale.com/-- is nationally and internationally recognized for its premier practices in antitrust and competition; aviation; bankruptcy; civil and criminal trial and appellate litigation (including white collar defense); communications; corporate (including public offerings, public company counseling, start-up companies, venture capital, mergers and acquisitions, and licensing); defense and national security; financial institutions; intellectual property counseling and litigation; international arbitration; life sciences; securities regulation, enforcement and litigation; tax; and trade. WilmerHale was formed in May 2004 through the merger of two of the nation's leading law firms, Hale and Dorr LLP and Wilmer Cutler Pickering LLP. With a staunch commitment to public service, the firm is renowned as a national leader in pro bono representation. The firm has more than 1,000 lawyers and offices in Baltimore, Beijing, Berlin, Boston, Brussels, London, Munich, New York, Northern Virginia, Oxford, Palo Alto, Waltham and Washington, DC. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- November 2-4, 2005 PRACTISING LAW INSTITUTE Tax Strategies for Corporate Acquisitions, Dispositions, Spin-Offs, Joint Ventures, Financings, Reorganizations & Restructurings Beverly Hills, California Contact: http://www.pli.edu/ November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, Texas Contact: http://www.ncbj.org/ November 3-4, 2005 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Second Annual Conference on Physician Agreements and Ventures Successful Strategies for Negotiating Medical Transactions and Investments The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ November 7-8, 2005 STRATEGIC RESEARCH INSTITUTE Seventh Annual Distressed Debt Investing Forum West Venetian Resort Hotel Casino, Las Vegas, Nevada Contact: http://www.srinstitute.com/ November 9, 2005 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting The Center Club, Baltimore, Maryland Contact: 703-912-3309; http://www.turnaround.org/ November 10, 2005 TURNAROUND MANAGEMENT ASSOCIATION Second Annual Australian TMA Conference Sebel Pier One, Sydney, Australia Contact: http://www.turnaround.org/ November 10, 2005 TURNAROUND MANAGEMENT ASSOCIATION Second Annual Australian TMA Conference Sydney, Australia Contact: 9299-8477; http://www.turnaround.org/ November 11, 2005 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Workshop Wayne State University, Detroit, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ November 11-13, 2005 AMERICAN BANKRUPTCY INSTITUTE Corporate Restructuring Competition Kellogg School of Management, NWU, Evanston, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/ November 14, 2005 TURNAROUND MANAGEMENT ASSOCIATION Workout Workshop Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/ November 14-15, 2005 AMERICAN CONFERENCE INSTITUTE Insurance Insolvency The Warwick, New York, New York Contact: http://www.americanconference.com/ November 15, 2005 TURNAROUND MANAGEMENT ASSOCIATION Bankruptcy Judges Panel Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/ November 15, 2005 TURNAROUND MANAGEMENT ASSOCIATION Speaker/Dinner Event Fairmont Royal York Hotel, Toronto, ON Contact: http://www.turnaround.org/ November 16, 2005 STRATEGIC RESEARCH INSTITUTE The Bankruptcy Reform Act of 2005: Practical Business Implication for Creditors Doubletree Metropolitan Hotel, New York, New York Contact: http://www.srinstitute.com/ November 17, 2005 TURNAROUND MANAGEMENT ASSOCIATION TBA [Upstate New York] Buffalo, New York Contact: 716-440-6615; http://www.turnaround.org/ November 17, 2005 TURNAROUND MANAGEMENT ASSOCIATION Colorado TMA Breakfast The Oxford Hotel, Denver, Colorado Contact: 303-457-2119; http://www.turnaround.org/ November 17, 2005 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS Networking Cocktail Reception New York, New York Contact: 541-858-1665 or http://www.airacira.org/ November 28-29, 2005 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Twelfth Annual Conference on Distressed Investing Maximizing Profits in the Distressed Debt Market The Essex House, New York, New York Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ November 29, 2005 TURNAROUND MANAGEMENT ASSOCIATION State of Banking 2006 and Beyond - Economy, Climate for Turnaround Industry, Banking Relationships Tournament Players Club at Jasna Polana, Princeton, New Jersey Contact: 312-578-6900; http://www.turnaround.org/ November 29, 2005 TURNAROUND MANAGEMENT ASSOCIATION Orlando Luncheon Citrus Club, Orlando, Florida Contact: http://www.turnaround.org/ December 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Fundamentals: Nuts & Bolts for Young Practitioners Hyatt Grand Champions Resort, Indian Wells, California Contact: 1-703-739-0800; http://www.abiworld.org/ December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, California Contact: 1-703-739-0800; http://www.abiworld.org/ December 5-6, 2005 MEALEYS PUBLICATIONS Asbestos Bankruptcy Conference Ritz-Carlton, Battery Park, New York, New York Contact: http://www.mealeys.com/ December 8, 2005 TURNAROUND MANAGEMENT ASSOCIATION TMA/CFA Holiday Party J.W. Marriott, Atlanta, Georgia Contact: 678-795-8103 or http://www.turnaround.org/ December 8, 2005 TURNAROUND MANAGEMENT ASSOCIATION Holiday Gathering & Help for the Needy *FREE to Members* Mack Hall at Hofstra University, Hempstead, New York Contact: 516-465-2356; http://www.turnaround.org/ December 8, 2005 TURNAROUND MANAGEMENT ASSOCIATION Annual Board of Directors Meeting Rochester, New York Contact: 716-440-6615; http://www.turnaround.org/ December 12-13, 2005 PRACTISING LAW INSTITUTE Understanding the Basics of Bankruptcy & Reorganization New York, New York Contact: http://www.pli.edu/ December 14, 2005 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Hotel, Tyson's Corner, Virginia Contact: 703-912-3309; http://www.turnaround.org/ January 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION NJTMA Holiday Party Iberia Tavern & Restaurant, Newark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ January 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION PowerPlay - TMA Night at the Thrashers Philips Arena, Atlanta, Georgia Contact: 678-795-8103 or http://www.turnaround.org/ January 26-28, 2006 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ February 9-10, 2006 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Eden Roc, Miami, Florida Contact: 1-703-739-0800; http://www.abiworld.org/ March 2-3, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS Legal and Financial Perspectives on Business Valuations & Restructuring (VALCON) Four Seasons Hotel, Las Vegas, Nevada Contact: http://www.airacira.org/ March 2-5, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES 2006 NABT Spring Seminar Sheraton Crescent Hotel, Phoenix, Arizona Contact: http://www.pli.edu/ March 4-6, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute Marriott, Park City, Utah Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ March 9, 2006 AMERICAN BANKRUPTCY INSTITUTE Nuts & Bolts for Young Practitioners Century Plaza, Los Angeles, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 10, 2006 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Century Plaza, Los Angeles, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 22-25, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Desert Ridge, Phoenix, Arizona Contact: http://www.turnaround.org/ March 30 - April 1, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 1-4, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute The Flamingo, Las Vegas, Nevada Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ April 5-8, 2006 MEALEYS PUBLICATIONS Insurance Insolvency and Reinsurance Roundtable Fairmont Scottsdale Princess, Scottsdale, Arizona Contact: http://www.mealeys.com/ April 6-7, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES The Seventh Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures, and Restructurings The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ April 18-22, 2006 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting JW Marriott, Washington, D.C. Contact: 1-703-739-0800; http://www.abiworld.org/ May 4-6, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Fundamentals of Bankruptcy Law Chicago, Illinois Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ May 8, 2006 AMERICAN BANKRUPTCY INSTITUTE NYC Bankruptcy Conference Millennium Broadway, New York, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 18-19, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Third Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel, London, UK Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ May 22, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Annual Golf Outing Indian Hills Golf Club, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ June 7-10, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 22nd Annual Bankruptcy & Restructuring Conference Grand Hyatt, Seattle, Washington Contact: http://www.airacira.org/ June 15-18, 2006 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ June 21-23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Global Educational Symposium Hyatt Regency, Chicago, Illinois Contact: http://www.turnaround.org/ June 22-23, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ June 29 - July 2, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ July 13-16, 2006 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Newport Marriott, Newport, Rhode Island Contact: 1-703-739-0800; http://www.abiworld.org/ July 26-29, 2006 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz Carlton Amelia Island, Amelia Island, Florida Contact: 1-703-739-0800; http://www.abiworld.org/ September 7-9, 2006 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Wynn Las Vegas, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ September 17-24, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Optional Alaska Cruise Seattle, Washington Contact: 800-929-3598 or http://www.nabt.com/ October 11-14, 2006 TURNAROUND MANAGEMENT ASSOCIATION 2006 Annual Conference Milleridge Cottage, Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/ October 25-28, 2006 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800; http://www.abiworld.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ March 29-31, 2007 ALI-ABA Chapter 11 Business Reorganizations Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/ October 22-25, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott, New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili, Jr., 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. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***