/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/051205.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 5, 2005, Vol. 9, No. 288 Headlines ABITIBI-CONSOLIDATED: Low Earnings Spur S&P to Pare Ratings to B+ ACE SECURITIES: Fitch Rates $3 Mil. Privately Offered Class at BB AMCAST INDUSTRIAL: Case Summary & 20 Largest Unsecured Creditors AMERICAN PACIFIC: S&P Rates Proposed $75MM Senior Sec. Loan at B ANCHOR GLASS: Court Issues Order on Adequate Assurance Dispute ARCH COAL: Commences Offer for 5% Perpetual Pref. Stock Conversion AT&T CORP: S&P Upgrades Ratings on 12 Transactions to A from BB+ ATA AIRLINES: Files First Amended Plan and Disclosure Statement ATA AIRLINES: Discloses MatlinPatterson Amended Commitment Letter AUGA HUDSON: Voluntary Chapter 11 Case Summary AUXILIO INC: Net Loss & Deficit Trigger Going Concern Doubt AXEDA SYSTEMS: Working Capital Deficit is $5.4 Mil. at Sept. 30 BEAR STEARNS: Fitch Puts Low-B Rating on $8 Mil. Class B-4 Certs. BIO-KEY INT'L: Incurs $2,957,541 Net Loss in Third Quarter BOWATER INC: S&P Lowers Corporate Credit Rating to B+ from BB BROADCAST INT'L: Releases Third Quarter Financial Results CALPINE CORP: Must Restore $313 Million Deposit by January 22 CALPINE CORP: Evaluating Options, Including Bankruptcy Filing CALPINE CORP: Insists 6% Convertible Notes Aren't in Default CALPINE CORP: Fitch Slices Junk Ratings on $5.6 Billion Debts CALPINE CORP: Moody's Downgrades Sr. Unsecured Notes' Rating to Ca CAL-BAY INT'L: Releases Third Quarter 2005 Financial Results CATHOLIC CHURCH: Tucson's Parish Incorporation Formally Begins CEDRIC KUSHNER: Sept. 30 Balance Sheet Upside-Down by $12.9 Mil. CIRCUIT RESEARCH: Working Capital Deficit is $1.5MM at Sept. 30 COLLINS & AIKMAN: Wants to Walk Away From Six Leases and Contracts COLLINS & AIKMAN: Breitkreuz Wants Adequate Protection Payments COMM 2001-FL5: Fitch Affirms Junk Ratings on $4.7MM Cert. Classes CONSOLIDATED ENERGY: Posts $1.4 Million Net Loss in Second Quarter CONSOLIDATED ENERGY: Limited Capital Triggers Going Concern Doubt CONTEMPO INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors CREDIT SUISSE: Credit Erosion Cues S&P to Junk Class D-B-5 Certs. CREDIT SUISSE: Fitch Affirms Low-B Ratings on $36.3M Cert. Classes CREDIT SUISSE: Fitch Places BB Rating on $700K Class C-B-4 Certs. CRESCENT REAL: S&P Affirms $625 Mil. Senior Unsec. Notes' B Rating DIALOG GROUP: Sept. 30 Balance Sheet Upside-Down by $3.1 Million DIAMONDHEAD CASINO: Posts $172K Net Loss in Quarter Ended Sept. 30 DIGITAL VIDEO: Sept. 30 Balance Sheet Upside-Down by $1.48 Million DLJ COMMERCIAL: Fitch Affirms Low-B Ratings on $99.7M Class Certs. DOANE PET: Change of Control Offers for Rev. Bonds Ends on Dec. 19 DOMTAR INC: Cost Position Decline Cues S&P to Shave Rating to BB- DRESSER INC: KPS Completes Acquisition on Instruments Business DRUG ASSIST: Soliciting Bids for Sec. 363 Sale Transaction DYNEGY HOLDINGS: Tender Offer for $1.75 Bil. Notes Expires Dec. 12 DYNEGY INC: Names Holli C. Nichols Chief Financial Officer ECHOSTAR COMMS: Fitch Puts B Rating on Convertible Sub. Notes EDGEN CORP: Moody's Affirms Senior Secured Notes' Rating at B3 ENERGY EXPLORATION: Sept. 30 Balance Sheet Upside-Down by $248K EMISPHERE TECHNOLOGIES: Equity Deficit Narrows as Losses Continue FIBERMARK INC: Court Confirms Chapter 11 Plan of Reorganization FRANCHISE STUDIOS: Case Summary & 7 Largest Unsecured Creditors FREESCALE SEMICONDUCTOR: Moody's Ups $1 Bil. Notes' Rating to Ba1 GARDENBURGER INC: Court Approves $15 Million DIP Credit Facilities GB HOLDINGS: Committee Wants to Retain Kasowitz Benson as Counsel GRUPO POSADAS: Fitch Assigns BB- Foreign & Local Currency Rating GRUPO POSADAS: Grupo Mexicana Buy-Out Prompts S&P's Watch Negative GUARDIAN TECHNOLOGIES: Incurs $2.4MM Net Loss in Third Quarter HARBORVIEW MORTGAGE: Fitch Rates $11.8MM Class B-10 Certs. at BB HERTZ CORPORATION: Discloses Results of Tender Offers HONDO TRUST: Case Summary & 10 Known Creditors ICF CORP: Balance Sheet Upside-Down by $2.31 Million at Sept. 30 IMEDIA INTERNATIONAL: Net Losses Continue in Third Quarter IMPERIAL HOME: Wants Court to Approve Avoidance Action Settlements INNOVA PURE: Incurs $60,600 Net Loss in Quarter Ended Sept. 30 INTERNATIONAL PAPER: Inks $800 Million Credit Facility INTERSTATE BAKERIES: Four Tort Claimants Hold $900K Allowed Claim J INCORPORATED: Case Summary & 3 Largest Unsecured Creditors JANKRIS VINEYARDS: Case Summary & 20 Largest Unsecured Creditors JP MORGAN: Fitch Affirms Low-B Ratings on Class J through P Certs. KAISER ALUMINUM: Wants Court to Approve Sherwin Alumina Settlement KMART CORP: Settles Dispute Over Hurst's Lease Rejection Claim KMART CORP: Court Allows Travis County's Tax Claim for $264,000 LEVITZ HOME: Three Utilities Want Press for Cash Deposits MARKEL CORP: Moody's Withdraws Preferred Stock's (P)Ba2 Rating MASSEY ENERGY: S&P Assigns BB- Rating to Proposed $725 Mil. Notes MCDERMOTT INT'L: S&P Lifts Unit's Credit Rating to B+ from CCC+ MERIDIAN AUTOMOTIVE: Wants Until April 21 to File Chapter 11 Plan MERIDIAN AUTOMOTIVE: Hearing on Ford Motor Lease Set for Dec. 8 MERRILL LYNCH: Fitch Upgrades Low-B Ratings on Two Cert. Classes METRIS COS: Fitch Lifts Ratings to AA from B- After HSBC Purchase MIRANT CORP: Court Confirms Second Amended Plan of Reorganization MIRANT CORP: Court Approves $13-Mil. Sale of Maryland Property MIRANT CORP: Court Okays Pact Settling PEPCO's Lawsuit & Claims NATIONAL ENERGY: Wants Court to Nix Citibank's Additional Claims OCEANTRADE CORP: U.S. Trustee Appoints 2-Member Creditors Panel ON TOP COMMUNICATIONS: Taps Miles & Stockbridge as Counsel PARADIGM MEDICAL: Accumulated Deficit Tops $60.8-Mil. at Sept. 30 PENN OCTANE: Accumulated Deficit Tops $26.7MM in Third Quarter PLIANT CORPORATION: Noteholders Agree to Equity-for-Debt Swap POWERLINX INC: Balance Sheet Upside-Down by $210,369 at Sept. 30 PROVIDENTIAL HOLDINGS: Auditors Raise Going Concern Doubt REFCO INC: UBS Wants Debtors to Return More Than $13 Mil. in Funds REFCO INC: Wants to Continue Employing Ordinary Course Profs. REFCO INC: Court Permits Continuance of Intercompany Transactions SALIVA DIAGNOSTICS: Has $2.7MM Equity Deficit as of September 30 SBARRO INC: Incurs $323,000 Net Loss in Quarter Ended October 9 SECURAC INC: Discloses CDN$1,525,071 Net Loss at Sept. 30 SHOPSMITH INC: Posts $236,000 Net Loss in Period Ended Oct. 1 SPORTS CLUB: Posts $5.3 Million Net Loss in Quarter Ended Sept. 30 SPORTS CLUB: Selling Five Clubs to Millennium for $80 Million SPORTS CLUB: Plans to Borrow $60 Million to Pay for Sr. Sec. Notes SYMBOLLON PHARMACEUTICALS: Reports Third Quarter Financial Results TECHNIGLOVE INT'L: Case Summary & 20 Largest Unsecured Creditors TRANSTEL INTERMEDIA: Fitch Junks Proposed $180 Mil. Sr. Sec. Notes TREMONIA CDO: Moody's Rates $7.5 Million Subordinated Notes at B3 TRINITY LEARNING: June 30 Balance Sheet Upside-Down by $6.4 Mil. VENTAS REALTY: Moody's Upgrades Sr. Debt's Rating to Ba2 from Ba3 VENTURE HOLDINGS: Wants Plan Filing Deadline Stretched to Dec. 19 VENTURE HOLDINGS: Clark Hill Approved as Committee's Co-Counsel VERIDIUM CORP: Incurs $3.3 Mil Net Loss in Quarter Ended Sept. 30 VERTIS, INC: Sept. 30 Balance Sheet Upside-Down by $534 Million VERTIS INC: Inks New $130 Mil. GE Trade Receivables Securitization WINDSWEPT ENVIRONMENTAL: Amends Laurus Debt & Equity Agreements WINN-DIXIE: Postpones Annual Meeting At Equity Panel's Request XERIUM TECH: Weak Performance Cues S&P to Chip Debt Ratings to B+ * Scott Stuart Joins Donlin Recano as Vice President * BOND PRICING: For the week of Nov. 28 - Dec. 2, 2005 ********* ABITIBI-CONSOLIDATED: Low Earnings Spur S&P to Pare Ratings to B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit and senior unsecured debt ratings on Montreal-based newsprint manufacturer Abitibi-Consolidated Inc. to 'B+' from 'BB-'. At the same time, the outlook was revised to stable. "The ratings were lowered because despite improving newsprint prices, Abitibi's profitability and cash flow generation have not improved as much as expected due to a stronger Canadian dollar, and high energy and fiber costs," said Standard & Poor's credit analyst Daniel Parker. "The company continues to earn low returns on its invested capital of about 2.2% in the trailing 12 months, and we estimate that Abitibi would have to at least quadruple its pro forma operating income of about CDN$160 million to even earn its cost of capital," Mr. Parker added. This is not likely to happen in the short term, absent a material weakening in the Canadian dollar, as the company already has some of the most efficient operating mills in the industry; the economy is reasonably strong, and newsprint and uncoated groundwood pricing are at historically high levels. The ratings on Abitibi reflect: * its high leverage, * heavy exposure to cyclical commodity-oriented groundwood papers and lumber, and * weak financial performance in the wake of several years of highly unfavorable industry conditions. These risks are partially offset by the company's leading market share position in newsprint and groundwood papers, and by its competitive cost position in North America. The cost pressures have been the latest challenge in an industry that has suffered from chronic oversupply and cyclical demand. North American newsprint consumption has been declining for more than five years, a trend that is expected to continue. In response to declining demand, newsprint producers, led by Abitibi, have gradually closed substantial capacity to improve industry-operating rates, which are currently at about 95%. The response by producers has slowly led to improved newsprint prices and there is the possibility that structural demand changes might have reduced some of the cyclicality. The outlook is stable. S&P expects that the North American newsprint industry will continue to slowly decline, but improved industry supply iscipline will continue to support stronger pricing. Although Abitibi's credit metrics will improve in 2006, S&P believes the company's profitability will continue to be challenged by the strong Canadian dollar, and continued high energy and fiber costs. For the ratings to improve Abitibi must demonstrate sustained improvement in operating margins and cash flow generation, in addition to further reducing leverage. If newsprint fundamentals and pricing deteriorate substantially, the outlook could be revised to negative. ACE SECURITIES: Fitch Rates $3 Mil. Privately Offered Class at BB ----------------------------------------------------------------- Fitch rates ACE Securities Corp. Home Equity Loan Trust, series 2005-SD3: -- $151,751,000 class A 'AAA'; -- $17,242,000 class M-1 'AA'; -- $9,907,000 class M-2 'A'; -- $4,573,000 class M-3 'BBB+'; -- $2,286,000 class M-4 'BBB'; -- $1,715,000 class M-5 'BBB-'; -- $3,048,000 privately offered class B-1 'BB'. The 'AAA' rating on the senior certificates reflects the 22.65% credit enhancement provided by the 9.05% class M-1, 5.20% class M-2, 2.40% class M-3, 1.20% class M-4, 0.90% class M-5, and 1.60% class B-1, along with target overcollateralization of 2.30%. 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 $190,522,233. As of the cut-off dates, Oct. 31, 2005, with respect to 85.41% of the loans and Nov. 1, 2005 with respect to 14.59% of the loans, the mortgage loans had a weighted average loan-to-value ratio of 72.13%, weighted average coupon of 8.606%, weighted average remaining term of 282 months and an average principal balance of $99,698. Single-family properties account for approximately 84.11% of the mortgage pool, two-to four- family properties 6.03%, and condos 3.08%; 54.31% of the properties are owner occupied. The four largest state concentrations are California, Florida, New York, and New Jersey. For additional information on Fitch's rating criteria regarding predatory lending legislation, see the releases 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/ Ace Securities Corp. 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. HSBC Bank USA will act as trustee. Ocwen Federal Bank FSB, rated 'RSS2' by Fitch; Wells Fargo Bank NA, rated 'RSS2+'; and Washington Mutual Bank, rated 'RPS2' will act as servicers for this transaction, with Wells Fargo Bank NA, rated 'RMS1' acting as master servicer. AMCAST INDUSTRIAL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Amcast Industrial Corporation 706 East Depot Street Fremont, Indiana 46737 Bankruptcy Case No.: 05-33323 Debtor-affiliate filing separate chapter 11 petitions: Entity Case No. ------ -------- Amcast Automotive of Indiana, Inc. 05-33322 Type of Business: The Debtors manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates previously filed for chapter 11 protection on Nov. 30, 2004 (Bankr. S.D. Ohio Case No. 04-40504). The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Chapter 11 Petition Date: December 1, 2005 Court: Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz III Debtors' Counsel: David H. Kleiman, Esq. James P. Moloy, Esq. Dann Pecar Newman & Kleiman Box 82008 1 American Square, Suite 2300 Indianapolis, Indiana 46282-0001 Tel: (317) 632-3232 Total Assets Total Debts ------------ ----------- Amcast Industrial Corporation $16,207,349 $20,462,248 Amcast Automotive of Indiana, Inc. $81,572,882 $80,158,607 A. Amcast Industrial Corporation's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Thompson Hine LLP Trade $297,811 2000 Courthouse Plaza NE P.O. Box 8801 Dayton, OH 45401-8801 Plante Moran, PLLC Trade $210,000 750 Trade Centre Way, Suite 300 Portage, MI 49002 FTI Consulting Inc. Trade $127,531 Park 80 West, Plaza One Saddlebrook, NJ 07663 Glass & Associates Trade $40,992 Ernst & Young Trade $40,133 T Rowe Price Retirement Services Trade $29,306 Del & Leona Renfroe Trade $12,495 ENSR International Trade $12,456 Graczyk, Norman Trade $9,640 Haynes and Boone, LLP Trade $8,818 Barnes & Thornberg Trade $2,674 Iron Mountain Records Management Trade $497 Ikon Office Solutions Trade $251 ADP, Inc. Trade $10 B. Amcast Automotive of Indiana, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Zhujiang Wenfeng Auto Wheel Trade $989,381 Company Limited 175 West 9 Mile Road, Suite 1200 Southfield, MI 48075 Transmetco Corporation Trade $954,770 1750 East Riverforks Drive Huntington, IN 46750 D&R Industries Inc. Trade $553,857 901 Seville Road Wadsworth, OH 44281 Ace Companies LLC Trade $488,306 5534 Greensboro SE P.O. Box 8711 Grand Rapids, MI 49518 Grant County Treasurer Tax $327,630 County Complex Room 229, 401 South Adams Marion, IN 46953 Akzo Nobel/Interpon Trade $325,031 P.O. Box 91629 Cleveland, OH 44101-3629 Back Aluminum Corporation Trade $208,097 Production Mold Inc. Trade $191,929 Lacks Wheel Trim Systems Trade $139,993 Quantum Metals Inc. Trade $136,381 Laurand Associates Inc. Trade $125,056 Tancon Trade $96,686 Carpenter Industrial Supply Trade $96,188 Johnson County Treasurer Tax $93,244 Spraylat Corp. Trade $83,091 Intrametco Trade $75,713 Kuntz Electroplating Trade $64,368 Refractory Engineers Inc. Trade $64,193 Toyoda Machinery USA Inc. Trade $49,714 Automation Specialties, Inc. Trade $49,080 AMERICAN PACIFIC: S&P Rates Proposed $75MM Senior Sec. Loan at B ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Las Vegas, Nevada-based American Pacific Corp. The outlook is negative. At the same time, Standard & Poor's assigned a 'B' bank loan rating and its recovery rating of '2' to American Pacific's proposed $75 million senior secured first-lien credit facility, based on preliminary terms and conditions. The rating on the first-lien bank loan is the same as the corporate credit Rating. This and the '2' recovery rating indicate that bank lenders can expect a substantial recovery of principal in the event of a payment default. In addition, Standard & Poor's assigned its 'CCC+' rating and a recovery rating of '5' to the proposed $20 million second-lien term loan. The second-lien facility is rated two notches below the corporate credit rating due to the level of priority debt ahead of the loan that limits recovery prospects. The '5' recovery rating indicates negligible recovery of principal. Pro forma for the acquisition of Aerojet Fine Chemicals, American Pacific will have about $111 million in debt outstanding. "The ratings reflect American Pacific's position as the sole domestic supplier of ammonium perchlorate and decent growth opportunities within AFC's active pharmaceutical ingredients markets," said Standard & Poor's credit analyst George Williams. These positives are more than offset by the small, specialized AP market, uncertainty regarding the future of the Space Shuttle program, a narrow customer and product base, demand dependent on governmental appropriations, and a leveraged financial profile that is susceptible to litigation risks and additional environmental costs related to perchlorate contamination of groundwater supplies. AP is used as an oxidizing agent for composite solid propellants for rockets and booster motors. Demand in this declining market is driven by a relatively small number of Department of Defense and National Aeronautics and Space Administration contractors. Risks inherent in government contracts and dependence on congressional appropriations are negative considerations in the long-term demand outlook. Moreover, the company's single operating facility for AP is subject to the hazards associated with chemical manufacturing and other potential disruptions that could limit production. American Pacific also makes sodium azide, the primary component of a gas generant used in certain automotive airbag safety systems, propulsion products and bipropellant thrusters, and Halotron, a chemical used in fire extinguishing systems ranging from portable fire extinguishers to airport firefighting vehicles. ANCHOR GLASS: Court Issues Order on Adequate Assurance Dispute -------------------------------------------------------------- As reported in the Troubled Company Reporter on Oct. 3, 2005, the Official Committee of Unsecured Creditors of Anchor Glass Container Corporation asked the U.S. Bankruptcy Court for the Middle District of Florida to: a. modify the adequate assurance order so that the Debtor is no longer authorized to pay the prepetition claims of utility companies as adequate assurance of future performance; and b. direct that all the Debtor's payments made as of Sept. 21, 2005, be applied to postpetition bills The Bankruptcy Court had allowed the Debtor to provide adequate assurance of future performance to ensure that they do not alter, refuse or discontinue their services. As part of adequate assurance, the Bankruptcy Court permitted the Debtor to pay prepetition obligations owed to the utility companies in the ordinary course of business. The Debtor estimates owing $8 million in outstanding prepetition obligations to utility companies as of the Petition Date. Six utility companies asked the Court to overrule the Committee's objection or, in the alternative, if the Court sustains the objection, the utilities asked the Court to allow them to retain the prepetition payments until they reach a new agreement with the Debtor for the provision of adequate assurance of payment. Pepco's Response The Court sustained the Committee's objection to the utility companies who did not respond to the panel's request. Pepco Energy Services, Inc., is one of the non-responding utilities. Gregory P. Brown, Esq., at Hill Ward & Henderson, P.A., in Tampa, Florida, notes that the order sustaining the Committee's oijection reverses all of the benefits that Pepco received under the Utility Order and enables the Debtor to recover more than $1,500,000 from Pepco. While there may be many reasons why many utility companies did not respond to the Committee's Objection, Pepco's failure to respond was inadvertent and impacts a substantial amount of its money, Mr. Brown says. According to Mr. Brown, Pepco was unable to file a response due to its volume of mail and the complex nature of its business. Pepco is uncertain whether it received all motions and orders affecting its position. However, Pepco does not deny the receipt of the Order Sustaining Objection. Pepco believes that there is a significant element of unfairness to the Order Sustaining Objection when the Decision did not realize that Pepco could potentially be ordered to disgorge the receipt of more than $1,500,000 that the Court authorized the Debtor to pay to Pepco. There will be no prejudice to the Debtor, the Committee or the general unsecured creditors by allowing Pepco to oppose the Objection, but there is substantial prejudice to Pepco as a result of entry of the Order Sustaining Objection, Mr. Brown asserts. Accordingly, Pepco asks the Court to reconsider or revise the Order Sustaining Objection by striking its applicability to Pepco and overruling the Objection as to Pepco. Court Order Judge Paskay sustains in part and overrules in part the Committee's objection to these responding Utilities: * American Electric Power; * CenterPoint Energy Services; * CenterPoint Energy Resources Corp., doing business as CenterPoint Energy Minnesota Gas; * New York State Electric and Gas Corporation; * Georgia Power Company; * Atlantic City Electric; * JEA; and * Peoples Gas Company. The Responding Utilities, Judge Paskay rules, will retain the funds paid by the Debtor on account of undisputed prepetition invoices as a deposit against future services. In the event any amount of the deposits are not applied, the Court directs the Responding Utilities to refund the amount to the Debtor. UGI Energy Services, Inc., which also filed a response to the Committee Objection, has already reached a settlement with the Committee. The Court orders that Noble Energy Marketing, Inc., is deleted from the list of entities classified as Utility Companies subject to the Utility Order. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) ARCH COAL: Commences Offer for 5% Perpetual Pref. Stock Conversion ------------------------------------------------------------------ Arch Coal, Inc. (NYSE: ACI), commenced an offer to pay a premium to holders of any and all of its 5% Perpetual Cumulative Convertible Preferred Stock who elect to convert their preferred stock to shares of the company's common stock subject to the terms of the offer. Arch expects the conversion offer to reduce its fixed dividend obligations and to improve its overall credit standing. The offer is scheduled to expire at 12:00 midnight, Eastern Standard Time, on Thursday, Dec. 29, 2005, unless extended or earlier terminated. In addition to the shares of common stock to be issued upon conversion pursuant to the documents governing the terms of the preferred stock, holders who surrender their preferred stock on or prior to the expiration date will receive a per share premium in an amount of shares of common stock valued at $3.50, as determined by dividing: (i) $3.50, by (ii) the volume-weighted average of the reported closing sales prices on the New York Stock Exchange of the common stock during the five trading days ending at the close of the second trading day prior to the expiration of the conversion offer. Under the terms of the governing documents, each share of preferred stock is currently convertible into 2.3985 shares of common stock. The offer is being made pursuant to an offering circular and related documents, each dated Nov. 30, 2005. The completion of the offer is subject to conditions described in the conversion offer documents. Subject to applicable law, Arch may waive the conditions applicable to the offer or extend, terminate or otherwise amend the offer. St. Louis-based Arch Coal, Inc., is the second largest coal producer in the United States, with subsidiary operations in West Virginia, Kentucky, Virginia, Wyoming, Colorado and Utah. Through these operations, Arch provides the fuel for approximately 7% of the electricity generated in the United States. * * * As reported in the Troubled Company Reporter on Aug. 11, 2005, Moody's Investors Service affirmed Arch Coal, Inc.'s Ba3 corporate family rating. All other ratings of Arch Coal Inc., and its subsidiary, Arch Western Finance LLC, were affirmed. AWF's notes are guaranteed by its parent, Arch Western Resources, a subsidiary of Arch Coal. The affirmation follows Arch's announcement of its intention to contribute four of its central Appalachian mining operations to a new company, which will also have mining operations (known as Trout Coal) contributed to it by ArcLight. The new company will file for an initial public offering and it is expected that Arch Coal will initially own approximately 37.5% of this company. The rating outlook for both Arch Coal and AWF is stable. These ratings are affirmed: Arch Coal, Inc.: * $700 million five-year guaranteed senior secured revolving credit facility, Ba2 * $145 million of Perpetual Cumulative Convertible Preferred Stock, B3 * Corporate Family rating, Ba3 Arch Western Finance, LLC: * $961 million of 6.75% guaranteed senior notes due 2013, Ba3 AT&T CORP: S&P Upgrades Ratings on 12 Transactions to A from BB+ ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on 12 AT&T Corp.-related synthetic transactions and removed them from CreditWatch, where they were placed with positive implications Feb. 16, 2005. The rating actions follow the Nov. 18, 2005, raising of the long-term corporate credit and senior unsecured debt ratings on AT&T Corp. and their removal from CreditWatch with positive implications. With the exception of SATURNS Trust No. 2001-8, which is a swap-dependent synthetic transaction, each of the remaining synthetics affected by the AT&T Corp. upgrades is swap-independent. All of the transactions are weak-linked to the underlying securities, AT&T Corp.'s senior unsecured debt. The rating actions reflect the credit quality of the underlying securities issued by AT&T Corp. A copy of the AT&T Corp.-related research update, dated Nov. 18, 2005, is available on RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/ Ratings Raised and Removed from Creditwatch Positive Corporate Backed Trust Certificates Series 2001-21 Trust $28 Million Corporate Backed Trust Certificates Series 2001-21 Rating Class To From ----- -- ---- A-1 A BB+/Watch Pos A-2 A BB+/Watch Pos Corporate Backed Trust Certificates, AT&T Note-Backed Series 2001-33 Trust $33 Million Corporate-Backed Trust Certificates Series 2001-33 Rating Class To From ----- -- ---- A-1 A BB+/Watch Pos A-2 A BB+/Watch Pos Corporate Backed Trust Certificates AT&T Note Backed Series 2003-18 $40 Million Certificates Series 2003-18 Rating Class To From ----- -- ---- A-1 A BB+/Watch Pos A-2 A BB+/Watch Pos Corporate Backed Trust Certificates AT&T Note Backed Series 2004-2 $50 Million Certificates Series 2004-2 Rating Class To From ----- -- ---- A-1 A BB+/Watch Pos A-2 A BB+/Watch Pos Preferred PLUS Trust Series ATT-1 $35 Million Trust Certs Series ATT-1 Rating Class To From ----- -- ---- Certs A BB+/Watch Pos SATURNS Trust No. 2001-8 $44 Million Callable Units Series 2001-8 Rating Class To From ----- -- ---- Certs A BB+/Watch Pos SATURNS Trust No. 2003-14 $35 Million Callable Units Series 2003-14 Rating Class To From ----- -- ---- A units A BB+/Watch Pos B units A BB+/Watch Pos SATURNS Trust No. 2003-17 $30 Million Callable Units Series 2003-17 Rating Class To From ----- -- ---- A A BB+/Watch Pos B A BB+/Watch Pos SATURNS Trust No. 2004-3 $45 Million Adjustable-Rate Callable Units Series 2004-3 Rating Class To From ----- -- ---- A A BB+/Watch Pos B A BB+/Watch Pos SATURNS Trust No. 2004-7 $26 Million Adjustable-Rate Callable Units Series 2004-7 Rating Class To From ----- -- ---- A A BB+/Watch Pos B A BB+/Watch Pos STRATS Trust For AT&T Corp. Securities Series 2004-4 $25 Million Certificates Series 2004-4 Rating Class To From ----- -- ---- A-1 A BB+/Watch Pos A-2 A BB+/Watch Pos Trust Certificates Series 2001-1 $25 Million Corporate Bond Backed Certificates Series 2001-1 Rating ------ ----- -- ---- A-1 A BB+/Watch Pos ATA AIRLINES: Files First Amended Plan and Disclosure Statement --------------------------------------------------------------- ATA Holdings Corp., ATA Airlines, Inc., ATA Leisure Corp., and ATA Cargo, Inc., delivered their first amended joint plan of reorganization and disclosure statement explaining the plan to the U.S. Bankruptcy Court for the Southern District of Indiana on November 23, 2005. MatlinPatterson Global Advisers LLC, a Delaware limited liability company, is a co-proponent of the Plan. A full-text copy of Reorganizing Debtors' Amended Plan of Reorganization is available at no charge at: http://ResearchArchives.com/t/s?383 A full-text copy of Reorganizing Debtors' Amended Disclosure Statement is available at no charge at: http://ResearchArchives.com/t/s?384 The Amended Plan provides for the incorporation of a New Holding Company prior to the Effective Date, as the ultimate parent of Reorganized ATA Airlines and certain other Reorganizing Debtors, except ATA Holdings, and as the issuer of New Shares under the Plan. The assets of the other four Debtors -- Ambassadair Travel Club, Inc., Amber Travel, Inc., American Trans Air Execujet, Inc. and C8 Airlines Inc., formerly named Chicago Express, Inc. -- will be sold or otherwise liquidated. The Amended Plan does not deal with Claims against or Interests in or the assets of the Liquidating Debtors. The Amended Plan contemplates the substantive consolidation of the Estates of ATA Holdings, ATA Cargo, and ATA Leisure into the Estate of ATA Airlines for purposes related to the Amended Plan, including voting, confirmation, and distribution. However, except as expressly provided with respect to and following the post-Effective Date merger of ATA Cargo and ATA Leisure into ATA Airlines, each of the Reorganizing Debtors, each of the Reorganized Companies, and Reorganized Holdings will remain at all times an entity separate from the others. As agreed by the proponents of the Amended Plan, the Effective Date of the Plan must occur on or prior to February 28, 2006, unless the date is extended by the Reorganizing Debtors, MatlinPatterson, and Southwest, with the consent of the Official Committee of Unsecured Creditors not to be unreasonably withheld. MatlinPatterson The Amended Plan provides that MatlinPatterson has committed to provide up to $120,000,000 in equity and debt financing to the Reorganized Companies. The financing consists of: (i) the New DIP Facility of up to $30,000,000, the outstanding balance of which on the Effective Date would be converted into DIP New Shares, (ii) a cash investment of up to $50,000,000 on the Effective Date in New Shares and (iii) a commitment to act as the exclusive standby purchaser for the remainder of any Rights Offering New Shares that were not subscribed for in the $20,000,000 Rights Offering. MatlinPatterson has agreed to provide an additional $20,000,000 to the Reorganizing Debtors by way of the New Investor Exit Facility. As a result of its investment in the New Holding Company, MatlinPatterson will hold between 78.2% and 97.8% of the outstanding New Shares as of the Effective Date, and between 71.2% and 89.0% on a fully diluted basis. According to ATA Holdings President and Chief Executive Officer John G. Denison, MatlinPatterson will have significant ownership and control of the Reorganized Companies. MatlinPatterson will designate five of the seven initial members of New Holding Company's board of directors. Rights Offering Holders of allowed general unsecured claims may purchase a Pro Rata Share of Rights Offering New Shares representing 19.6% of the outstanding New Shares as of the Effective Date and 17.8% on a Fully Diluted Basis of the New Holding Company at the same per share value as paid by the New Investor for its equity investment. Each Qualified Holder that exercises its Subscription Rights will be required to pay the holder's Subscription Purchase Price of $10 per share for Rights Offering New Shares. The Plan notes that MatlinPatterson is the Backstop Purchaser of the Rights Offering. As the Backstop Purchaser, it is required to purchase any Rights Offering New Shares in the Rights Offering that are not subscribed for pursuant to Subscription Rights. In the event MatlinPatterson is required to purchase all the Rights Offering New Shares, its ownership interest in the New Holding Company would increase to approximately 98%. New Business Plan Mr. Denison says that ATA Airlines' long term liability and its shorter cash requirements mandated that it obtain infusion of $100,000,000 in connection with its emergence from Chapter 11 and up to $50,000,000 to provide the liquidity necessary to continue as a going concern through the end of 2005. Given material, on-going uncertainties in the domestic airline passenger business, driven primarily by excess capacity and unprecedented fuel cost escalation which was not abating, ATA Airlines determined, in consultation with its financial advisors, that it was improbable to obtain, at an acceptable cost and terms and within the limited time remaining, equity capital commitments in the aggregate amount needed unless the ATA business plan reduced its reliance on its projected scheduled service business. Accordingly, ATA Airlines developed a modified business plan calling for a further downsizing of its scheduled service business in late 2005, and with that business being rebuilt over the following years based on an enhanced codeshare arrangement with Southwest. The New Business Plan serves as the foundation for the MatlinPatterson commitments. Under the New Business Plan, the Debtors project that in 2006 scheduled service will comprise approximately 44% of total annual revenues, and the military charter business will comprise approximately 52% of total annual revenues. The remaining 4% of the annual revenues will be generated from the charter business. The Debtors anticipate that the percentage share of military charter business will decline each year thereafter primarily due to increases in scheduled service revenue. The New Business Plan calls for ATA Airlines to downsize its scheduled service business, with its scheduled service business being more specifically focused to achieve the revenue and other benefits provided for in the Amended and Restated Codeshare Agreement, and with an elimination of unprofitable scheduled service routes, additional reductions in ATA's fleet and network and a decrease in unit costs. The New Business Plan also calls for ATA Airlines to rebuild scheduled service over time, with additional flights being added in 2007 and 2008 with respect to certain markets that are adequate to support sustainable, profitable operations and provide additional codesharing opportunities. The military charter business has historically been profitable for ATA Airlines, and is a key component of the New Business Plan. Under the New Business Plan, ATA will continue to sell downtime on its military and scheduled service aircraft to tour operators on an ad hoc basis. Valuation Analysis At the Debtors' request, Navigant Capital Advisors, LLC, estimated the Reorganizing Debtors' enterprise values in the range of $200,000,000 to $235,000,000 based on available information as of November 23, 2005. Navigant arrived at the values using Discounted Cash Flow Method based on management's three year business plan and forecast, and Market Multiples Method using management's three-year forecast and business plan. A full-text copy of Navigant's Valuation Analysis is available at no charge at http://ResearchArchives.com/t/s?385 Liquidation Analysis The Reorganizing Debtors believe that the Amended Plan provides the best recoveries possible for the holders of Allowed Claims. The Reorganizing Debtors believe that any alternative to Confirmation of the Plan, like liquidation or attempts by another party-in-interest to file a plan of reorganization, could result in significant delays, litigation, and additional costs. Based on MatlinPatterson's financial commitments, and after careful review of the current business operations of the Reorganizing Debtors, their prospects as ongoing business enterprises, and the estimated recoveries of creditors in various liquidation scenarios, the Reorganizing Debtors -- other than ATA Holdings -- believe that their businesses and assets have significant value that would not be realized in a liquidation scenario. The Debtors have prepared a Hypothetical Liquidation Analysis which reflects values for which assets might be liquidated in a Chapter 7 as of December 31, 2005. A full-text copy of the Liquidation Analysis is available at no charge at http://ResearchArchives.com/t/s?386 Financial Projections For purposes of developing the Plan and evaluating its feasibility, the Reorganizing Procedures have prepared financial projections for 2005 through 2008. A full-text copy of the Reorganizing Debtors' four-year financial projections is available at no charge at http://ResearchArchives.com/t/s?387 Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Discloses MatlinPatterson Amended Commitment Letter ----------------------------------------------------------------- To recall, MatlinPatterson Global Opportunities Partners II L.P., and MatlinPatterson Global Opportunities Partners (Cayman) II L.P. have offered to provide $30,000,000 DIP Financing to ATA Airlines, Inc., and its debtor-affiliates, and up to $70,000,000 exit financing to Reorganized ATA in the form of equity investment and a standby purchase commitment for a rights offering to the Debtors' unsecured creditors. Pursuant to a Commitment Letter, dated November 10, 2005, all principal and accrued interest on the DIP Loan will become due and payable in cash on the earlier of: (i) a DIP Loan Event of Default; and (ii) March 15, 2006. Objections (a) Creditors Committee The Official Committee of Unsecured Creditors says that the onerous interrelated transactions entered into by the Debtors will only benefit Southwest Airlines Co., and MatlinPatterson Global Opportunities Partners II L.P., and MatlinPatterson Global Opportunities Partners (Cayman) II L.P. MatlinPatterson's commitment to provide equity and debt financing to the reorganized Debtors is conditioned upon the entry of an amended codeshare agreement between the Reorganizing Debtors and Southwest. In a separate pleading, the Debtors have sought the U.S. Bankruptcy Court for the Southern District of Indiana's approval to enter into the Amended Codeshare Agreement. As part of their agreements, ATA Airlines will transfer its rights to eight gates at Midway International Airport to Southwest and the City of Chicago while ATA will receive rights to one Midway gate previously owned by Southwest. The Creditors Committee complains that the transactions will deliver the Debtors' businesses to MatlinPatterson on a silver platter for substantially less than they are worth and will permit Southwest to drive the Debtors almost completely out of Midway for less consideration than they paid for the gates at Midway in 2004. Andrew D. Stosberg, Esq., at Greenebaum Doll & McDonald PLLC, in Louisville, Kentucky, argues that, among others, the "no shop" clause is unacceptable and will guarantee that no competitive bidding occurs. The "no shop" clause precludes the Reorganizing Debtors from soliciting alternate proposals, encouraging or initiating negotiations with respect to any investment or restructuring proposals competing with the MatlinPatterson Bid. Although not precluded from seeking alternative investment proposals, the Creditors Committee says that it has had not sufficient access to the essential information necessary to seek alternative proposals. Mr. Stosberg notes that, even if the Committee did have access to the information, it is absurd to think that a party would not want access to the Debtors' management prior to committing substantial sums of money, which the "no shop" provision clearly prohibits. The Creditors Committee also complains that the fees to MatlinPatterson are excessive. MatlinPatterson has consensually received $1,500,000 expense reimbursement from the Debtors. Mr. Stosberg argues that is wholly inappropriate for MatlinPatterson to be paid any fees in connection with its $50,000,000 equity investment. He avers that MatlinPatterson should not be given an additional 3% discount of the money that it invests to control ATA. The Creditors Committee believes that a funding fee of 1% to 2% of the $30,000,000 DIP Financing would be appropriate. Mr. Stosberg contends that it is inappropriate to obligate the Debtors to pay a break-up fee where the investor has been paid substantial fees and expenses and will then be entitled to the funding fee. Moreover, the Creditors Committee asserts that the unsecured creditors should be granted unlimited participation in the Rights Offering. The Committee also wants the Debtors to allow the unsecured creditors to participate with respect to entire financing. According to Mr. Stosberg, all of the "negotiated" transactions took place in secret in Dallas, New York and Chicago, choreographed by MatlinPatterson and Southwest, without any participation by the Creditors Committee, despite its repeated requests to participate. Mr. Stosberg asserts that those actions are confounding and inappropriate given that it is the Debtors' unsecured creditors who are most at risk of (i) dilution of their recoveries from any potential financing/investment, (ii) erosion in value and, in the case of the Debtors' employees, loss of employment, due to sudden or poorly thought-out changes to the Debtors' business plan, and (iii) a liquidation, since the Debtors' secured creditors have significant collateral to look to in that situation. (b) Wells Fargo Wells Fargo Bank Northwest, N.A., a member of the Creditors Committee, supports the Committee's objection to the MatlinPatterson Proposal. Wells Fargo is the indenture trustee under the ATA Holdings Corp. 9-5/8% Senior Notes Due 2005, 13% Senior Notes Due 2009, and Senior Notes Due 2010. Mark A. Robinson, Esq., at Valenti, Hanley & Crooks, PLLC, in Louisville, Kentucky, argues that, although styled as a motion seeking authority to obtain postpetition financing, the proposed transaction, if approved, would determine the entire framework for a plan of reorganization. "As such, the [MatlinPatterson] proposal constitutes a sub rosa plan, effectively determining the classification and treatment of creditors' claims, all without approval of a disclosure statement or voting on a plan of reorganization," Mr. Robinson points out. If the MatlinPatterson Proposal were approved prior to approval of a disclosure statement in accordance with Section 1125 of the Bankruptcy Code, any subsequent plan process would be a charade, making solicitation and voting essentially meaningless, he says. Mr. Robinson adds that the MatlinPatterson Proposal contravenes with Section 1123(a)(4) of the Bankruptcy Code by proposing to treat unsecured creditors in an inconsistent and discriminatory manner. Wells Fargo notes that the MatlinPatterson Proposal would give one group of unsecured creditors -- members of the Air Line Pilots Association, International -- substantially more than other unsecured creditors. Wells Fargo says that it does not challenge the proposal to give members of ALPA the right to acquire an additional 4% of the new common stock. However, it opposes the MatlinPatterson Proposal unless all unsecured creditors, including individual Noteholders, are treated on an equal basis. Parties Resolve Dispute The Debtors, MatlinPatterson and Creditors Committee have agreed to modify the Commitment Letter and Term Sheet to address the concerns being raised. The parties described the modifications in open court. Consequently, Judge Lorch authorizes the Reorganizing Debtors to: (i) execute the Commitment Letter as modified; and (ii) pay MatlinPatterson the Break-Up Fee, the Funding Fee and reimbursement of expenses in accordance with the Commitment Letter, the MatlinPatterson Term Sheet and the modifications. The Court will address the remaining items of the Debtors' request at a hearing on December 6, 2005. Terms of New Commitment Letter In a regulatory filing with the U.S. Securities and Exchange Commission, Brian T. Hunt, vice president and general counsel of ATA Holdings, discloses that the Reorganizing Debtors and MatlinPatterson executed an amended Commitment Letter dated November 29, 2005. The salient terms of the Commitment Letter are: (A) MatlinPatterson Financing MatlinPatterson agrees to provide DIP Financing to the Reorganizing Debtors. An aggregate principal amount of $30,000,000 will be made available, in one or more tranches, by December 6, 2005. On the Effective Date of the Debtors' Plan of Reorganization, MatlinPatterson will invest $45,000,000 in ATA Holdings, or a new holding company that will hold all of the stock of the other Reorganizing Debtors in exchange for shares of ATA Holdings' common stock. In the event that the outstanding principal amount of the DIP Loan, the Funding Fee and interest exceeds $30,000,000 on the Effective Date, the amount of the Additional Equity Investment required to be made by MatlinPatterson will be reduced by the amount of the excess. (B) Participation Rights In addition, it is contemplated that the Amended Plan will provide for the offering of $25,000,000 worth of shares of New Common Stock, in which non-transferable rights will be issued to holders of allowed unsecured claims against the Debtors who are accredited investors and who meet certain criteria concerning U.S. citizenship. MatlinPatterson will act as the exclusive standby purchaser of Rights Offering Shares not subscribed by any Eligible Holder so as to ensure that the Rights Offering, when added to the Additional Equity Investment, generates gross proceeds to ATA Holdings Corp. equal to $70,000,000. In addition to having the right to subscribe to all of the Rights Offering Shares, unsecured creditors in Class 6 will receive: (i) shares representing 7% of the New Common Stock outstanding on the Effective Date; (ii) warrants to acquire up to 2% of the New Common Stock outstanding on the Effective Date, at an exercise price per share equal to the price paid by MatlinPatterson and on other terms acceptable to MatlinPatterson; and (iii) additional warrants to acquire up to 2% of the New Common Stock outstanding on the Effective Date, at an exercise price per share equal to the price paid by MatlinPatterson and on other terms acceptable to MatlinPatterson. Management and Members of the Air Line Pilots Association, International, will have the right to acquire up to 5% and 4%, on a fully diluted basis, of the New Common Stock, through the exercise of stock options. (C) Payment of Obligations If no DIP Loan Event of Default occurs, then subject to the satisfaction of the Plan Conditions, the outstanding principal and interest of the DIP Loan will be repaid by the issuance to MatlinPatterson on the Effective Date of New Common Stock, at a conversion ratio of $10.75 to one share of New Common Stock. Interest on each DIP Loan will accrue from the applicable funding date at the rate of 10% per annum and will be payable on the applicable Maturity Date. The Debtors' obligations with respect to the MatlinPatterson DIP Financing will be entitled to superpriority claim status, subordinate to that of the existing Southwest DIP facility and the ATSB Loan. (D) Fees The Debtors will pay to MatlinPatterson a funding fee equal to 3% of the amount available under the Exit Financing. In the event that, without the consent of MatlinPatterson, any person other than MatlinPatterson is selected as the lead investor and plan sponsor in the Debtors, or the Debtors propose or the Bankruptcy Court otherwise confirms a Plan in which MatlinPatterson is not the Lead Investor, then so long as MatlinPatterson has not breached its obligations, MatlinPatterson will be entitled to receive, in addition to the MP Funding Fee, a cash payment equal to 3% of the total amount available under the Additional Equity Investment, the Purchase Commitment and the Exit Loan. The Reorganizing Debtors will reimburse MatlinPatterson its initial due diligence investigation of the Debtors, the negotiation of the Commitment Letter and the Term Sheet, the structuring of the proposed transaction, and the seeking of Court Approval. (E) Execution of the Definitive Documentation The Parties agree to complete and execute a DIP Credit Agreement and related documentation in respect of the New DIP, which will be submitted to the Bankruptcy Court for approval on or before December 6, 2005. The Parties agree to execute an Investment Agreement and related documentation implementing, among others, the Equity Financing provisions set forth in the Term Sheet, which will be submitted to the Bankruptcy Court for approval as part of the confirmation of the Amended Plan. Moreover, the parties will complete other documentation as necessary to reflect their agreements with respect to the Rights Offering and matters relating to the amendments to the Debtors' Codeshare Agreements with Southwest. (F) Conditions to Closing The MatlinPatterson DIP Financing is subject to various closing conditions, including: -- The Debtors will have continued to implement the operating plan for scheduled airline passenger services provided to MatlinPatterson and dated as of October 8, 2005; -- The Debtors will have filed an amended Plan substantially consistent with "OpPlan 6" no later than December 6, 2005; and -- The Reorganizing Debtors and Southwest will have executed an Amended and Restated Codeshare Agreement and related documentation on terms acceptable to MatlinPatterson. (G) Non-Solicitation From and after the execution of this Commitment Letter, the Debtors will not (i) solicit, encourage or initiate any negotiations or discussions with respect to any investment or restructuring proposals competing with the MP Financing, or (ii) except as is required by law or Bankruptcy Court order, or based on the advice of counsel, as is required pursuant to the fiduciary duties of the Debtors: -- disclose any information to any potential sponsor or proponent of a Competing Proposal or afford any such person with access to the properties, books or records of the Debtors or -- participate in any negotiations or discussions with respect to a Competing Proposal, or otherwise negotiate with or cooperate with any person for the purpose of enabling such person to submit a Competing Proposal. A full-text copy of the Commitment Letter is available at http://ResearchArchives.com/t/s?388 Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945-7000) AUGA HUDSON: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Auga Lynn Hudson aka Auga Lynn Lucien aka Auga Lynn Hudson-Lucien 56 East 130th Street, Suite 1 New York, New York 10037 Tel: (646) 302-1384 Bankruptcy Case No.: 05-60147 Type of Business: The Debtor is an associate staff analyst for the New York City Transit for 24 years. She previously filed for bankruptcy protection in July 2005 (Bankr. S.D.N.Y. Case No. 05-15888). Chapter 11 Petition Date: December 1, 2005 Court: Southern District of New York (Manhattan) Debtor's Counsel: Joseph Fleming, Esq. Joseph Fleming, P.C. 45 John Street, Suite 205 New York, New York 10038 Tel: (212) 385-8036 Fax: (212) 406-2045 Total Assets: $1,961,810 Total Debts: $1,057,351 The Debtor did not file a list of her 20 largest unsecured creditors. AUXILIO INC: Net Loss & Deficit Trigger Going Concern Doubt ----------------------------------------------------------- Auxilio Inc. delivered its quarterly report on Form 10-QSB for the quarterly period ending Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. Auxilio Inc. reported a net loss of $2,324,168 for the nine months ended September 30, 2005, compared to a net income of $1,152,099 for the nine months ended September 30, 2004. At September 30, 2005, the Company has an accumulated deficit of $11,198,903. The Company's September 30 balance sheet shows total assets of $5,372,047 and total liabilities of $1,667,962. Going Concern Doubt The Company's management expressed substantial doubt about the Company's ability to continue as a going concern pointing to the Company's net loss and accumulated deficit. The Company warns that it may also not generate sufficient revenues from its operations to cover its cash operating expenses. As a result, Auxilio management says, the Company may not be able to continue as a going concern. The Company's management also said that the loss of any of the Company's key customer could have a material adverse effect upon its financial condition, business, prospects and results of operation. The Company's two largest customers represent approximately 79% of its revenues for the nine months ended September 30, 2005. Although the Company anticipates that those customers will represent less than 45% of revenue for the 2005 fiscal year and less than 18% of revenue for the 2006 fiscal year, the loss of those customers may contribute to the Company's inability to operate as a going concern and may require it to obtain additional equity funding or debt financing to continue its operations. The Company is not sure it will be able to obtain additional financing on commercially reasonable terms, or at all. Stonefield Josephson, Inc., in Irvine, California, audited the company's 2004 financials and issued a clean and unqualified opinion on April 1, 2005. Auxilio Inc. -- http://www.auxilioinc.com/-- provides integration strategies and outsourced services for document image management to healthcare facilities. The Company manages the back-office processes of hospitals and health systems. Auxilio's target market includes medium to large hospitals, health plans and health care systems. Auxilio's customer list includes health systems such as St. Joseph's Health System, Memorial Health Services, Catholic Healthcare West and Huntington Memorial Hospital. AXEDA SYSTEMS: Working Capital Deficit is $5.4 Mil. at Sept. 30 --------------------------------------------------------------- Axeda Systems Inc. delivered its quarterly financials for the period ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. At Sept. 30, 2005, the company's balance sheet showed $11.5 million in total assets and $11.8 million in total liabilities, which resulted in a $358,000 stockholders' deficit. Axeda Systems' Sept. 30 balance sheet also shows strained liquidity with $6.4 million in current assets available to satisfy $11.8 million of liabilities coming due within the next 12 months. Going Concern Doubt KPMG LLP raised substantial doubt about Axeda Systems' ability to continue as a going concern after it audited the Company's 2004 financials. KPMG stated that the Company's recurring losses from operations and negative cash flows from operations since inception triggered that doubt. "Management has developed and begun to implement a plan to address these issues and allow the Company to continue as a going concern through at least the end of 2005," the Company said in its Annual Report. "This plan includes fundraising from new and current investors, continued cost-cutting, and stabilizing and growing our revenue streams. Although we believe the plan will be realized, there is no assurance that these events will occur." Asset Sale On June 29, 2005, the Company entered into a non-binding letter of intent to sell its Axeda DRM system business and related assets to JMI Equity Fund V, L.P., a Baltimore and San Diego-based private equity firm. The letter of intent contemplates that JMI will purchase substantially all of the assets of its Axeda DRM system business, with the exception of its Supervisor product family business, for a total of $7,000,000 in cash plus the assumption of certain liabilities. In addition, JMI committed to provide up to a $1,500,000 bridge loan to Axeda, of which $600,000 was advanced in July 2005. The bridge loan bears interest at the rate of 7% per annum and is secured by the assets of the Company's Axeda DRM system business. Laurus Debt Default The company has been in default under the Laurus Secured Convertible Term Note since July 1, 2005, issued to Laurus Master Fund, Ltd., for failing to pay when due interest under the note for June, July, August and September 2005, as well as the July, August and September 2005 principal payments. Article IV of the Note defines "Events of Default" as the failure to pay any installment of principal or interest within three days of the due date, and that upon the occurrence and continuance of an Event of Default, Laurus may make all sums of principal, interest and other fees then remaining unpaid immediately due and payable. In the event of such an acceleration, the amount due and owing to Laurus shall be 120% of the outstanding principal amount, plus accrued and unpaid interest and fees. In addition, the registration rights agreement entered into in connection with the Note states that if the Company's shares are not traded on a "Trading Market", which does not include the "Pink Sheets", where the Company's shares of common stock currently trade, then Axeda is obligated to issue certain warrants to Laurus, and failure to do so also constitutes a default under the Note. In a Letter Agreement dated July 8, 2005, between the Company and Laurus, Laurus agreed to accept payment in full in cash of the outstanding principal and accrued and unpaid interest simultaneously with the closing of the JMI Asset Sale, in full satisfaction of the Company's obligations. However, the default penalties would resume in the event bankruptcy proceedings are initiated by or against the company prior to the closing of the asset sale. Axeda Systems Inc. -- http://www.axeda.com/-- is the world's leading provider of Device Relationship Management (DRM) software and services. The Company's flagship product, the Axeda(R) DRM system helps manufacturing and service organizations increase revenue while lowering costs, by proactively monitoring and managing devices deployed at customer sites around the world. Axeda DRM is a highly scalable, field-proven, and comprehensive remote management solution that leverages its patented Firewall- Friendly(TM) technology to enable Machine-to-Machine (M2M) communication by utilizing the public Internet. Axeda customers include Global 2000 companies in many markets including Medical Instrument, Enterprise Technology, Office and Print Production Systems, and Industrial and Building Automation industries. Axeda has sales and service offices in the U.S. and Europe, and distribution partners worldwide. BEAR STEARNS: Fitch Puts Low-B Rating on $8 Mil. Class B-4 Certs. ----------------------------------------------------------------- Bear Stearns SACO I Trust mortgage-backed certificates, series 2005-9, are rated by Fitch Ratings: -- $331.93 million class A 'AAA'; -- $26.53 million class M-1 'AA+'; -- $24.58 million class M-2 'AA'; -- $9.25 million class M-3 'AA-'; -- $15.09 million class M-4 'A+'; -- $10.71 million class M-5 'A'; -- $8.27 million class M-6 'A-'; -- $9.73 million class B-1 'BBB+'; -- $6.33 million class B-2 'BBB'; -- $7.06 million class B-3 'BBB-'; -- $8.03 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 31.80% credit enhancement provided by the 5.45% class M-1, 5.05% class M-2, 1.90% class M-3, 3.10% class M-4, 2.20% class M-5, 1.70% class M-6 2.00% class B-1, 1.30% class B-2, 1.45% class B-3, and 1.65% privately held class B-4, as well as 6.00% 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 servicing capabilities as servicer. As of the cut-off date, the mortgage loans have an aggregate balance of $486,705,502. The weighted average mortgage rate is approximately 11.098 % and the weighted average remaining term to maturity is 268 months. The average cut-off date principal balance of the mortgage loans is $51,033. The weighted average original loan-to-value ratio is 97.62%. The properties are primarily located in California, Arizona, Florida, Georgia, Virginia, and Maryland. The principal originator of the mortgage loans is: Waterfield Mortgage Company, with respect to 19.97% of the loans. The remainder of the loans were originated by various originators. BIO-KEY INT'L: Incurs $2,957,541 Net Loss in Third Quarter ---------------------------------------------------------- BIO-key International, Inc., delivered its quarterly report on Form 10-QSB for the quarterly period ending Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005 (as amended on Nov. 23, 2005). BIO-key International reports positive equity of $7,448,843 as of Sept. 30, 2005 -- a 35% erosion of shareholder equity since Dec. 31, 2004. The Company reported a net loss of $2,957,541 for the three months ended Sept. 30, 2005, compared to a net loss of $1,860,164 for the three months ended Sept. 30, 2004. For the nine months ended Sept. 30, 2005, the Company incurred a net loss of $8,716,279 compared to a net loss $4,032,750 for the same period last year. At Sept. 30, 2005, the Company had a working capital deficit of approximately $2,674,000 compared to a working capital deficit of approximately $3,016,000 at Dec. 31, 2004. At Sept. 30, 2005, the Company had an accumulated deficit of $44,116,496 compared to an accumulated deficit of $35,268,159 at Dec. 31, 2004. Going Concern Doubt The Company reports that it has only recently begun to generate significant revenues but it continues to suffer recurring losses from operations and has a working capital deficit. The Company is in need of additional capital and is currently considering various alternatives related to raising additional capital, including continued funding from an investment group and new funding from other sources. No assurance can be given that any form of additional financing will be available on terms acceptable to the Company, or that adequate financing will be obtained to meet its needs, or that financing would not be dilutive to existing shareholders. Problems of obtaining additional capital have raised substantial doubt about the Company's ability to continue as a going concern. BIO-key's independent auditors, Divine, Scherzer & Brody, Ltd., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2004, due to several factors, including its history of losses and limited revenue. The Company's long-term viability and growth will depend on the successful commercialization of its technologies and ability to obtain adequate financing. BIO-key International, Inc., delivers advanced finger based biometric identification and security solutions and information services to law enforcement, fire service, and emergency medical service agencies as well as other government and private sector customers. BIO-key's mobile wireless technology provides first responders with critical, reliable, real-time data and images from local, state, and national databases. More than 2,500 police, fire, and emergency services departments in North America currently use BIO-key solutions, making the company a leading supplier of mobile and wireless solutions for public safety. BIO-key has four major product lines: biometrics, handheld mobile software/devices, mobile information software and records management software for fire service/EMS agencies. BOWATER INC: S&P Lowers Corporate Credit Rating to B+ from BB ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on pulp and paper producer Bowater Inc. and subsidiary Bowater Canadian Forest Products Inc., including the corporate credit rating on each entity to 'B+' from 'BB'. All ratings were removed from CreditWatch, where they were placed on Oct. 12, 2005, with negative implications. The outlook is stable. At Sept. 30, 2005, the Greenville, South Carolina-based company had $2.48 billion in debt outstanding. "The downgrade reflects continued concerns regarding Bowater's still-high debt burden, the negative effect of an appreciating Canadian dollar, and other cost pressures on the company's cash flow generation and earnings, despite relatively favorable newsprint prices," said Standard & Poor's credit analyst Kenneth Farer. "Even after the planned debt reduction of $300 million from the company's planned asset sales and $80 million cost-reduction program, we expect Bowater's debt burden to remain significantly higher than its previously stated target of $1.7 billion-$1.8 billion and credit measures to remain materially weaker than previously anticipated." S&P expects that the North American newsprint industry will continue to slowly decline, but improved industry supply discipline will continue to support current pricing. Bowater's credit metrics will improve in 2006, as a result of asset-sale proceeds to reduce debt and cost-reduction efforts. Still, S&P believes the company's profitability and cash flow will continue to be challenged by the strong Canadian dollar, continued high input costs, and expiration of favorable cost hedges. If further progress stalls because of market reversals, price declines, or higher-than-expected cost increases, the outlook could be revised to negative. To achieve a higher rating, Bowater would have to have a more conservative financial profile -- sustained improvement in operating margins, cash flow generation, and debt reduction -- than that anticipated in the current ratings. BROADCAST INT'L: Releases Third Quarter Financial Results --------------------------------------------------------- Broadcast International, Inc., delivered its financial results for the quarter ended Sept. 30, 2005. The Company generated approximately $1,065,000 in net sales during the three months ended September 30, 2005, compared to net sales of approximately $1,285,000 for the quarter ended September 30, 2004, which represents a 17% decrease in revenue in the current period. The Company entered into a services contract with a new customer, in the second quarter of 2005. Management believed this contract would replace much of the revenue lost in the third quarter as discussed above. Revenue from the new customer aggregated only $230,000 in the quarter ended September 30, 2005 due to slower than expected delivery of equipment supplied by the customer. The Company realized a net profit of approximately $310,000 compared with a $1,852,000 net loss for the same period last year. Going Concern Doubt Tanner LC raised substantial doubt about the Company's ability to continue as a going concern after it audited its consolidated financial statements for the year ended Dec. 31, 2004. The Company has incurred losses and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations. Broadcast International Inc. provides communication network and related services for large retailers and other organizations with widely dispersed locations and operations. As an integrator of broadband delivery technologies, including satellite, Internet streaming and WiFi, the Company offers turnkey communication solutions based on the specific needs of its customers. Companies such as Caterpillar, Albertsons, Safeway, Sprint Communications, Chevron and other customers use the Company's services to communicate with their personnel and others regarding training programs, product announcements, news releases and other applications. As of Sept. 30, 2005, the Company has a $2,985,000 equity deficit compared to a $14,827 equity deficit at Dec. 31, 2004. CALPINE CORP: Must Restore $313 Million Deposit by January 22 ------------------------------------------------------------- Delaware Chancery Court Judge Leo Strine, Jr., told Calpine Corporation (NYSE: CPN) Friday that it must deposit $313 million into a collateral account for the benefit of second-lien bondholders by January 22, 2006. Rather than depositing the proceeds from a sale of some natural gas assets into the collateral account in July 2005, Calpine used the funds for other purposes. Calpine tried to argue that, given the delay of the second lien bondholders in asserting their rights, an appropriate remedy would be the restoration of $199 million, plus accrued interest at a rate of 3.5% per annum, within 90 days to the collateral account or the use of that amount for reinvestment in qualifying designated assets or repurchase of secured debt. Wilmington Trust Company, in its capacity as trustee for the second lien bondholders, asked the court direct Calpine to restore the full $313 million in cash, plus interest at the Delaware statutory pre- judgment rate to the collateral account, without further delay. Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces and is building a plant in Mexico. Calpine was founded in 1984. It is publicly traded on the New York Stock Exchange under the symbol CPN. CALPINE CORP: Evaluating Options, Including Bankruptcy Filing ------------------------------------------------------------- Calpine Corporation (NYSE: CPN) says that recent developments, including an adverse ruling from the Delaware Chancery Court last week, have undermined its ability to complete planned financial transactions to meet its cash-flow requirements. Calpine's management says there is a substantial risk that the Company will not have sufficient cash to pay $313 million to second-lien bondholders by January 22, as ordered by the court, and to fund ongoing debt service obligations and operating expenses. As a consequence, Calpine continues to evaluate its options, including the possibility of filing for bankruptcy. Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces and is building a plant in Mexico. Calpine was founded in 1984. It is publicly traded on the New York Stock Exchange under the symbol CPN. CALPINE CORP: Insists 6% Convertible Notes Aren't in Default ------------------------------------------------------------ Calpine Corporation (NYSE: CPN) informed the Supreme Court, New York County, State of New York, that it continues to believe that there had been no default under its 6% Contingent Convertible Notes due 2014. In a suit filed in Court, Harbert Convertible Arbitrage Master Fund, Ltd. and related entities, holders of Contingent Convertible Notes, joined by Wilmington Trust Company, the trustee under the Indenture for the Convertible Notes, acting on behalf of all holders of the Convertible Notes, contend that Calpine breached an obligation under the Convertible Notes Indenture. Specifically, the plaintiffs allege that Calpine failed to engage the Bid Solicitation Agent to determine the trading price of the Convertible Notes after Harbert presented to Calpine what the plaintiffs assert was reasonable evidence that the Trading Price (as defined by the Convertible Notes Indenture) of the Notes was below 95% of parity in relation to the market price of Calpine's common stock. However, in an effort to remove the uncertainty raised by the claims in the litigation and by a purported default notice based on the same assertions, Calpine has taken actions, which it believes have effected a cure of the alleged default. In this regard, at the request of Calpine, American Stock Transfer and Trust Company, the Bid Solicitation Agent for the Convertible Notes, determined in accordance with the Convertible Notes Indenture the Trading Price of the Convertible Notes at all of the relevant times cited by Harbert and another holder in their purported notice of default. Based on the Trading Prices determined by the Bid Solicitation Agent, Calpine has calculated that at all relevant times the relationship of the Trading Price of the Convertible Notes to the market price of Calpine's common stock was such that the Convertible Notes did not become convertible under the terms of the Convertible Notes Indenture. While Calpine believes that it has at all times been in full compliance with its obligations under the Convertible Notes Indenture, there is no assurance that Harbert and the Trustee will not continue to press their claim that Calpine has breached the Convertible Notes Indenture by failing to engage on a timely basis the Bid Solicitation Agent, including by contending that Calpine's cure of the alleged breach was ineffective. If it is determined that Calpine has defaulted in its obligation under the Convertible Notes Indenture as alleged by Harbert and the Trustee, and if such a default were found to be material and not to have been cured, then all of the Convertible Notes would become immediately due and payable at the election of the holders. Moreover, such acceleration under the Convertible Notes Indenture would constitute a default under other debt obligations of Calpine. Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces and is building a plant in Mexico. Calpine was founded in 1984. It is publicly traded on the New York Stock Exchange under the symbol CPN. CALPINE CORP: Fitch Slices Junk Ratings on $5.6 Billion Debts ------------------------------------------------------------- Fitch has assigned an issuer default rating of 'CC' to Calpine Corp. and downgraded CPN's outstanding $5.6 billion senior unsecured notes and convertible debt to 'CC' from 'CCC-'. CPN's outstanding $642 million first-priority secured notes are affirmed at 'B' and outstanding $3.7 billion second-lien priority secured notes and term loans at 'B-'. In addition, Fitch has assigned recovery ratings to CPN's outstanding debt obligations: -- First-priority secured notes 'RR1'; -- Second-priority secured notes 'RR1'; -- Senior unsecured notes and convertible debt 'RR5'. The Rating Outlook for CPN remains Negative. The assigned IDR of 'CC' reflects uncertainty over CPN's ability to meet their financial obligations on a timely basis and indicates that a default of some kind appears probable in the near term. Since Fitch's last rating action on Nov. 4, 2005, following the release of CPN's third-quarter 2005 financial results, further negative developments have occurred. Most notably, the Delaware Court of Chancery ruled on Nov. 22, 2005, that CPN violated the terms of its second-lien indenture by improperly utilizing $313 million of asset sale proceeds to purchase natural gas inventory. While the appropriate remedy for bondholders has yet to be determined, a near-term order for CPN to remit these funds would placed further pressure on the company's already stressed cash position. In addition, the announced departure of CPN's long-standing CEO and CFO on Nov. 29, 2005, will allow more effective negotiations with bankers, investors, and other parties and provides a clearer indication that the company will pursue more aggressive restructuring measures in the near-term to address CPN's strained liquidity position, excess debt leverage, and continued deterioration in the company's core operating performance. In the face of these developments, successful completion of the CalBear trading joint venture and monetization of CPN's geothermal assets now appear questionable. In conjunction with this rating action, Fitch has published a detailed recovery analysis of CPN available at http://www.fitchratings.com/ The report focuses on the estimated recovery values for CPN's various holding company creditor classes assuming a Chapter 11 scenario. For a more detailed discussion of the methodology and procedures used in the recovery analysis, see the criteria reports, 'Issuer Default Ratings and Recovery Ratings in the Power and Gas Sector,' dated Nov. 7, 2005, 'Recovery Ratings: Exposing the Components of Credit Risk,' dated July 26, 2005, and 'Recovery Ratings-Approach and Process for Corporate Finance,' dated Aug. 9, 2005. CALPINE CORP: Moody's Downgrades Sr. Unsecured Notes' Rating to Ca ------------------------------------------------------------------ Moody's Investors Service downgraded the debt ratings of Calpine Corporation (Calpine: senior unsecured debt to Ca from Caa3) and the ratings of several of its subsidiaries. This action concludes the review for possible downgrade that was initiated on Nov. 30. The rating outlook is negative. The downgrade reflects deterioration in the company's liquidity position and expectations that poor results will continue in the near term due to difficult market conditions for the company's natural gas fired generating fleet. The company announced that it may not have sufficient cash to meet its on-going debt service obligations in addition to amounts that it may be instructed to pay as early as next week as a result of a ruling by the Delaware Chancery Court. The court decision could require Calpine to return $313 million plus interest to the second mortgage trustee and also requires that about $400 million of proceeds from asset sales remain with the trustee for the benefit of second mortgage bondholders. The company also stated that bankruptcy is among the options that it is considering to address the pressure on its liquidity. Calpine's financial performance has been very weak this year, with funds from operations equaling negative $203 million during the first nine months of 2005, and it has relied upon asset sales to generate needed cash. The rating action considers that the court's decision on the use of proceeds from asset sales may reduce the company's flexibility to meet its cash needs for operations and debt service through additional asset sales. The downgrade reflects Moody's opinion that a default is likely. The new rating levels incorporate Moody's expectation for recovery in the event of a Calpine bankruptcy or other form of debt restructuring. Moody's believes that holders of Calpine Generating Company's (CalGen) secured debt will ultimately realize high levels of recovery. This view reflects an assessment of collateral that includes power purchase agreements with various credit worthy third parties and power plants located in California and Texas. The new rating level for the first lien bank debt (downgraded to B3 from B2) reflects an assessment that full recovery is likely. By contrast, the Ca rating for Calpine's $4.6 billion of unsecured debt reflects the likelihood of substantial loss and considers that secured debt and project finance debt represents more than half of Calpine's consolidated debt. The downgrade of Riverside Energy Center and Rocky Mountain Energy Center to B1 from Ba3 reflects the relationship with Calpine as 100% owner and operator of the project. However, the B1 rating also considers the project finance structure of this debt and that the cash flows for debt service are provided by long-term purchase power agreements with investment grade off-takers under terms and conditions that are favorable to the respective projects. The downgrade of South Point to Caa2 from B3 considers the collateral package that includes project assets with contracted power purchase agreements with various load serving entities. The downgrade of Tiverton to Ca from Caa2 reflects Moody's view that the collateral coverage may be weaker because it includes power plants that sell electricity on a merchant basis in the NEPOOL energy market. The new ratings also consider that the underlying leases could be rejected as executory contracts in a Calpine bankruptcy, and damages for the rejection of the leases may be limited under law. Ratings downgraded include: * Calpine's senior unsecured notes and senior unsecured convertible notes to Ca from Caa3; * Calpine Canada Energy Finance's senior unsecured notes (guaranteed by Calpine) to Ca from Caa3; * Calpine's Corporate Family Rating to Caa1 from B3; * Calpine Generating Company, LLC's first priority senior secured revolving credit and term loan facilities to B3 from B2; * CalGen second priority term loans and floating rate notes to Caa1 from B3; * CalGen third priority notes to Caa2 from Caa1; * Riverside Energy Center and Rocky Mountain Energy Center secured term loans to B1 from Ba3; * South Point Energy Center, LLC, Broad River Energy LLC and RockGen Energy LLC Pass Through Certificates to Caa2 from B3; * Tiverton Power Associates Ltd. Partnership and Rumford Power Associates Ltd Partnership Pass Through Certificates to Ca from Caa2; and * Shelf registration for the issuance of various senior unsecured debt and trust preferred to (P)Ca and (P)C, from (P)Caa3 and (P)Ca, respectively. The negative rating outlook reflects: * weak near term prospects for the company due to its tight liquidity position; * high natural gas prices; * limitations on its ability to raise cash through additional asset sales; and * on-going litigation with debtholders. Headquartered in San Jose, California, Calpine is an independent power producer that has a net operating portfolio of more than 90 natural gas fired plants capable of producing about 27,000 megawatts of generation in the: * US, * Canada, and * Mexico; and which leases and operates a significant fleet of geothermal plants at The Geysers in California. CAL-BAY INT'L: Releases Third Quarter 2005 Financial Results ------------------------------------------------------------ Cal-Bay International, Inc., delivered its quarterly report on Form 10-QSB for the quarter ending September 30, 2005, to the Securities and Exchange Commission on November 18, 2005. The company generated $31,706 in revenues for the three months ended September 30, 2005 compared to $111,132 in revenues for the same period in 2004. Operating expenses for the three months ended September 30, 2005 was $45,536 compared to $69,463 for the same period in 2004. Total net loss for the three months ended September 30, 2005 was $913,830 compared to $41,119. The significant increase in net loss was due to the Company acquiring real estate. As of September 30, 2005, the company's balance sheet showed total assets of $11,490,085. These assets are comprised primarily of the real estate the company acquired. The company had a loan receivable in the amount of $50,000 and cash in hand of $201,471. Its current liabilities totaled $1,895,327 and include $1,550,000 in Trust deeds and $339,771 in loans. A full-text copy of the regulatory filing is available at no charge at http://researcharchives.com/t/s?371 Going Concern Doubt Cal-Bay's management expressed substantial doubt about the Company's ability to continue as a going concern because of its losses and its net deficit as of Sept 30, 2005. The Company's continued existence is dependent upon its ability to generate more profitable business activities from its customers. Cal-Bay International, Inc., originally incorporated in the State of Nevada on December 9, 1998, under the name Var-Jazz Entertainment, Inc. Var-Jazz was organized to engage in the business of music production and sales. Var-Jazz did not succeed in the music business and the board of directors determined it was in the best interest of the Company to seek additional business opportunities. On March 8, 2001, Var-Jazz entered into an Agreement and Plan of Reorganization with Cal-Bay Controls, Inc., whereby Var-Jazz changed its name to Cal-Bay International, Inc., and acquired Cal-Bay Controls, Inc., as a wholly owned subsidiary in exchange for 17,112,000 shares of common stock. Cal-Bay International has acquired three real estate properties and is in escrow for the acquisition of four other properties. The Company will continue to expand its current properties where feasible and will continue to acquire additional properties as well. In addition where necessary the Company will manage its properties. CATHOLIC CHURCH: Tucson's Parish Incorporation Formally Begins -------------------------------------------------------------- The individual incorporation of parishes in the Diocese of Tucson, in Arizona, formally began November 2005, reports Bob Scala of The New Vision, a monthly newspaper of the Diocese. Detailed presentations on the parish incorporation process were made in all 11 vicariates in the Diocese of Tucson in October 2005. Mr. Scala says members of the Parish Incorporation Presentation Team spoke to more than 1,000 priests, deacons, religious women and laity of the Diocese about the background leading up to incorporation and plans for the 74 parishes in the Diocese to become individual non-profit corporations under Arizona law by early next year. Bishop Gerald F. Kicanas also participated in the meetings, if his schedule permitted. In the meetings, Father Al Schifano, Moderator of the Curia and Chair of the Parish Incorporation Committee, outlined the history of the parish incorporation process, beginning with the outreach by Bishop Kicanas to the Presbyteral Council and the Diocesan Pastoral Council, the Diocese's major consultative councils. Father Schifano emphasized the important role the laity had in the recommendation to Bishop Kicanas from both councils that individual incorporation of parishes be included in the Diocese's Plan of Reorganization that was submitted in the Chapter 11 process. He also outlined the basic teachings of the Church regarding Apostolic succession and the leadership roles of bishops and pastors under canon law, emphasizing that the individual incorporation of parishes does not affect or change those teachings. Mr. Scala is a parishioner of Our Mother of Sorrows Parish in Tucson. He is the chairman of the Diocesan Pastoral Council, and serves on the Parish Incorporation Committee. Mr. Scala presented the directive from Judge James Marlar of the U.S. Bankruptcy Court in his order confirming the Diocese's Chapter 11 Plan of Reorganization that upon their formation as non-profit corporations parishes are to receive title to their properties. Mr. Scala described how non-profit parish corporations would be formed under Arizona law and what their articles of incorporation and bylaws would look like. A slide presentation on Parish Incorporation is available at no charge at http://www.diocesetucson.org/ParishIncorpInternet.htm The Roman Catholic Church of the Diocese of Tucson filed for chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on September 20, 2004, and delivered a plan of reorganization to the Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson Diocese. (Catholic Church Bankruptcy News, Issue No. 46 Bankruptcy Creditors' Service, Inc., 215/945-7000) CEDRIC KUSHNER: Sept. 30 Balance Sheet Upside-Down by $12.9 Mil. ---------------------------------------------------------------- Cedric Kushner Promotions, Inc., delivered its quarterly results for the period ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. At Sept. 30, 2005, the company's balance sheet showed $4,576,772 in total assets and $12,953,898 in total liabilities, resulting in a $12,924,979 stockholders' deficit. The company's Sept. 30 balance sheet also showed a strained liquidity with $476,929 in current assets available to pay $10,958,887 in liabilities coming due in the next 12 months. For the three months ended Sept. 30, 2005, the company reported a $1,685,797 net loss on $100,475 of revenues, compared to $300,791 of net income on $133,989 of revenues for the same period in 2004. Going Concern Doubt Wolinetz, Lafazan & Company, PC, expressed substantial doubt about Cedric Kushner's ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's significant operating losses in 2004 and 2003 and its working capital deficit at Dec. 31, 2004. Rosenberg, Rich, Baker, Berman & Company replaced Wolinetz Lafazan as the Company's independent certified public accountant on Sept. 21, 2005. Cedric Kushner has three reportable segments: boxing promotions, media, and entertainment. The boxing promotions segment produces boxing events and promotes professional boxers. The media segment, consisting primarily of the Big Content subsidiary and its ThunderBox subsidiary, manages the creation, distribution, and maintenance of all sports media holdings, including the Company's media library of videotaped boxing events. The entertainment segment will produce or co-produce films, television programming and other video products. On January 12, 2005, the Company formed two new wholly owned subsidiaries, Ckrush Sports, Inc., and Ckrush, Inc. Sports will focus primarily on the boxing sector of the Company, while Ckrush will serve as the ultimate holding Company for the various Ckrush subsidiaries that have been set up as a result of the Company's diversification strategy. CIRCUIT RESEARCH: Working Capital Deficit is $1.5MM at Sept. 30 --------------------------------------------------------------- Circuit Research Labs, Inc., delivered its quarterly report on Form 10-QSB for the quarter ended Sept. 30, 2005. Net income for the three and nine months ended September 30, 2005, was $257,000 and $2,695,000, respectively, compared to net loss of $217,000 and $518,000 for the same periods in 2004. The increase in net income is due primarily to the gain realized of $2,042,000 from the Harman debt restructure and also to the increased operational profit attributed to the increase in sales. At September 30, 2005, the Company had a negative working capital of approximately $1.5 million. At December 31, 2004, the Company had a negative working capital of approximately $1.6 million. The increase in working capital is attributable to the principal reductions in the Company's long-term loans. A full-text copy of the Company's regulatory filing is available free of charge at http://ResearchArchives.com/t/s?379 Circuit Research Labs, Inc. -- http://www.crlsystems.com/-- develops, manufactures and markets electronic audio processing, transmission encoding and noise reduction equipment. The products control the audio quality and range of radio, television, cable and Internet audio reception and allow radio and television stations to broadcast in mono and stereo. The Group's Orban division manufactures and markets audio processing equipment under the Orban, Optimod, Audicy and OptiCodec brand names. The product line includes FM Series, AM Series and other audio post-production workstations. The CRL division manufactures and markets audio processing equipment, primarily using analog technology, under the CRL, TVS and Amigo brand names. The customers include AM and FM radio stations and television stations around the world. The products are exported to Europe, Pacific Rim, Latin and South America, Canada and Mexico. On January 18, 2002, the Group acquired the assets of Dialog4 System Engineering GmbH. Going Concern Doubt Altschuler, Melvoin and Glasser LLP expressed substantial doubt about Circuit Research Labs Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 21, 2004. The auditing firm pointed to the Company's net losses and working capital deficit. Its 2004 financial results, coupled with servicing the Harman debt (approximately $8.5 million prior to the debt restructure) strained Circuit Research's liquidity and made it difficult for the Company to focus on its core competencies. Under the terms of its debt agreement with Harman International Inc. in effect prior to the restructure of the debt owed to Harman, Harman had the right to demand at any time that the Company immediately pay in full the outstanding balance of the debt. If this had happened, the Company would likely have been forced to file for protection under Chapter 11 of the United States Bankruptcy Code. Now with the Harman debt restructuring completed, management believes that it will be able to use cash flows to meet current operational needs and make the scheduled principal and interest payments due Harman. COLLINS & AIKMAN: Wants to Walk Away From Six Leases and Contracts ------------------------------------------------------------------ Collins & Aikman Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to reject these leases and contracts. Rejection Counterparty Contract Effective Date ------------ -------- -------------- Waste Management Service Agreement December 8, 2005 Sansome Pacific, Lease at Roxboro, December 8, 2005 Roxboro, LLC North Carolina TALX Corporation Employer Service December 8, 2005 Agreement PAC-EDGE North Professional December 8, 2005 America, LLC Services Agreement Project Advisors Management December 8, 2005 HK Limited Service Agreement PAC-EDGE North Memorandum of December 8, 2005 America, LLC Understanding The Debtors say that the six executory contracts and unexpired leases that are no longer integral to the their ongoing business operations and present burdensome contingent liabilities. Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in New York, explains that the Waste Management Services Agreement is at above-market rates. The Sansome Lease is also at above-market rates and the Debtors no longer need the space. The remaining contracts are for various services the Debtors no longer need, Mr. Carmel says. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Breitkreuz Wants Adequate Protection Payments --------------------------------------------------------------- Before they filed for bankruptcy, Collins & Aikman Corporation and its debtor affiliates along with Breitkreuz Molds & Plastics, Inc., entered into a contract for the production of plastic injection molds for the General Motors 2005 GMX001 Chevrolet Cavalier program. Pursuant to the Contract, the Debtors were obligated to pay $469,800 for the Molds production subject to a discount, which the parties agreed would be $4,500. Thus, the total amount due is $465,300. In March 2004, the Debtors paid $145,500 leaving a balance due of $319,800. Williard E. Hawley, Esq., at Lindahl Gross Lievois, P.C., in Bingham Farms, Michigan, relates that on April 9, 2005, Breitkreuz filed with the State of Michigan a UCC-1 financing statement, detailing the Molds on which the lien was asserted. By virtue of this action, Breitkreuz perfected its liens against the Molds on the same date, Mr. Hawley says. On May 19, 2004, Breitkreuz made the Molds available for pick-up at its facility. The Internal Revenue Service served a levy on the Debtors to collect the amounts due to Breitkreuz on the account receivable. However, Mr. Hawley relates, the Debtors refused to comply with the legally enforceable levy, despite having the obligation to do so. Instead, on November 1, 2004, the Debtors paid $168,169 leaving a remaining unpaid balance of $151,631. By virtue of the levy, Mr. Hawley points out that the IRS succeeded to the rights of payment of Breitkreuz and became a fully secured creditor for the remaining balance. According to Mr. Hawley, the Molds have a limited lifespan, which is dictated by program length. The length of the Cavalier program is estimated to be three years from delivery, after which the Molds have little, if any value, he relates. The Molds decrease in value for each month they continue in production by virtue of their eventual obsolescence. On the Petition Date, the molds had an estimated remaining life of 24 months and were decreasing in value at the rate of $12,925 per month. The Debtors have not made the required payment to the IRS for use of the Molds postpetition. As a result, the IRS is entitled to an administrative expense claim for the postpetition use of the Molds for $90,475 -- seven months times $12,925 - calculated through Dec. 17, 2005. Accordingly, Breitkreuz and the IRS ask the U.S. Bankruptcy Court for the Eastern District of Michigan to: -- grant the IRS adequate protection of its secured claim in the form of adequate protection payments of $12,925 per month payable on the 15th day of each month commencing December 15, 2005; and -- allow the IRS' administrative expense claim for postpetition tooling usage for $90,475. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) COMM 2001-FL5: Fitch Affirms Junk Ratings on $4.7MM Cert. Classes ----------------------------------------------------------------- Fitch Ratings upgrades COMM 2001-FL5 commercial mortgage pass-through certificates: -- $16.4 million class E to 'AAA' from 'A+'. In addition, Fitch affirms these classes: -- $26.5 million class F at 'A-'; -- $19 million class G at 'B+'; -- $1.9 million class K-HH at 'B'; -- $1.4 million class L-HH at 'CCC'; -- $3.3 million class M-HH at 'CCC'; -- Interest-only class X-2 at 'AAA'. Fitch does not rate classes K-LG, L-LG and M-LG. The following classes have been paid in full: A-1, X-1, B, C, D, K-NB, K-FF, L-FF, M-FF, N-FF, K-CP, L-CP, K-GB, L-GB, K-AA, L-AA, M-AA and N-AA. The upgrade reflects the increased credit enhancement due to the pay off of the Loews Miami Beach Hotel. The Houston Hyatt Hotel asset, which now represents 100% of the trust mortgage pool, is currently REO and transferred to the special servicer, LNR Partners, Inc., in July 2004. The asset is split into a $61.9 million A-note, $6.5 million B-note, and a $17.2 million C-note. The K-HH, L-HH and M-HH classes are directly tied to the B-note. The C-note provides credit support to the A- and B-notes. The Houston Hyatt Hotel, with 977 rooms, is located in downtown Houston. Sale negotiations are ongoing with interests in amounts in excess of the A- and B-notes' balance in the trust. According to the special servicer, resolution is likely by end of the first quarter 2006. CONSOLIDATED ENERGY: Posts $1.4 Million Net Loss in Second Quarter ------------------------------------------------------------------ Consolidated Energy Inc. delivered an amended quarterly report for the period ended June 30, 2005, to the Securities and Exchange Commission on Nov. 22, 2005. For the three months ended June 30, 2005, the company posted a $1,353,908 net loss on $462,533 of revenues, compared to a $948,150 net loss on $365,825 of revenues for the same period in 2004. At June 30, 2005, the company's balance sheet showed $14,826,595 in total assets and $15,237,080 in total liabilities, resulting in a $410,485 stockholders' deficit. The company's June 30 balance sheet also showed strained liquidity with $3,337,305 in current assets available to pay $4,395,202 in liabilities coming due within the next 12 months. Change of Auditors In the course of preparing its 2004 financials, CEI changed auditors effective Apr. 1, 2005. Killman, Murrell & Company, P.C., has replaced Clyde Bailey, PC, as the company's new independent auditors. The new auditors have applied significant adjustments to the previously issued financial statements and restated the financial statements for the period ended Dec. 31, 2004. The effects of the restatement include: -- substantial reductions to fixed assets due to a reduction in the value applied to shares issued in connection with the acquisition of Eastern; and -- reductions in other assets due to reclassification of Deferred Royalty and Prepaid Royalty items. Consolidated Energy, Inc., is engaged in coal mining operations, gas and oil exploration and development, and development of related clean energy technologies that are environmentally friendly. CONSOLIDATED ENERGY: Limited Capital Triggers Going Concern Doubt ----------------------------------------------------------------- Killman, Murrell & Company, P.C., expressed substantial doubt about Consolidated Energy Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2004. The auditors pointed to the company's recurring losses from operations and limited capital resources. At Dec. 31, 2004, the company's balance sheet showed a $4,119,260 stockholders' deficit, compared to an $835,474 deficit at Dec. 31, 2003. At Dec. 31, 2004, the company's balance sheet also showed strained liquidity with $79,792 in current assets available to satisfy $5,737,990 of liabilities coming due within the next 12 months. A full-text copy of the company's Annual Report for the period ending Dec. 31, 2004, is available at no charge at http://ResearchArchives.com/t/s?37b Change of Auditors In the course of preparing its 2004 financials, the company changed auditors effective Apr. 1, 2005. Killman Murrell has replaced Clyde Bailey, PC, as the company's new independent auditors. The new auditors have applied significant adjustments to teh previously issued financial statemetns and restated the financial statements for the period ended Dec. 31, 2004. The effects of the restatement include: -- substantial reductions to fixed assets due to a reduction in the value applied to shares issued in connection with the acquisition of Eastern; and -- reductions in other assets due to reclassification of Deferred Royalty and Prepaid Royalty items. Consolidated Energy, Inc., is engaged in coal mining operations, gas and oil exploration and development, and development of related clean energy technologies that are environmentally friendly. CONTEMPO INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Contempo Industries, Inc. dba Woodstock Gardens dba Contempo Products 455 Borden Street Woodstock, Illinois 60098 Bankruptcy Case No.: 05-77875 Type of Business: The Debtor manufactures gardening products like lawn and garden tractors and home lawn and garden equipment. Chapter 11 Petition Date: December 1, 2005 Court: Northern District of Illinois (Rockford) Debtor's Counsel: Jason H. Rock, Esq. Barrick Switzer Law Office 6833 Stalter Drive, First Floor Rockford, Illinois 61108 Tel: (815) 962-6611 Fax: (815) 962-1758 Total Assets: $918,274 Total Debts: $1,317,596 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ McHenry County Inventory and $176,226 2200 North Seminary work-in-process Woodstock, IL 60098 Eastern Forest Products $145,754 352 Center Road Unit #4 Lyndeborough, NH 03082 Richard Szyszka Insider Promissory $133,000 36 Pheasant Run Notes Hawthorne, IL 60040 Ken Pawela Insider Promissory $100,000 1704 Ginko Court Notes Mchenry, IL 60050 Keystone Consolidated $96,300 7000 Southwest Adams Street Peoria, IL 61641 CMI Credit Mediators, Inc. Collection for $46,150 P.O. Box 456 Lawrence R. Upper Darby, PA 19082-0456 McCoy Co. Nottoway Lumber Sales, Inc. $40,000 P.O. Box 908 Mechanicsville, VA 23111 The Customs Companies, Inc. $29,883 94338 Eagle Way Chicago, IL 60678 Delorme Packaging $21,379 86 Old Farm Hill Auburn, ME 04210 H.C. Johnson Press $16,871 2801 Eastrock Drive Rockford, IL 61109 Snavely International $15,520 131 Steuart Street, Suite 500 San Francisco, CA 94105 BryceDowney, LLC Corporate legal $14,968 200 North LaSalle Street services Suite 2700 Chicago, IL 60601 Estes Express Lines $13,495 P.O. Box 25612 Richmond, VA 23260-5612 Richmond International Forest $11,180 Products, LLC 4050 Innslake Drive, Suite 100 Glen Allen, VA 23060 Delta Coatings Corp. $10,209 2055 Jancie Avenue Melrose Park, IL 60160 WareButler, Inc. $8,681 145 Lakewood Road Madison, ME 04950 Statewide Pallet Co. Inc. $8,170 1307 Lamb Road Woodstock, IL 60098 American Express $7,053 P.O. Box 360001 Fort Lauderdale, FL 33336 Camger Coating Systems, Inc. $6,888 364 Main Street Norfolk, MA 02056 Cameo Container Corp. $6,759 1415 West 44th Street Chicago, IL 60609 CREDIT SUISSE: Credit Erosion Cues S&P to Junk Class D-B-5 Certs. ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on 15 classes from three series of mortgage-backed pass-through certificates issued by Credit Suisse First Boston Mortgage-Backed Trust. At the same time, the rating on class D-B-5 from series 2003-1 is lowered. Additionally, the ratings on 54 classes from the three series are affirmed. The raised ratings reflect growth in the actual and projected credit percentages for the respective classes. The higher credit support percentages are due to the shifting interest structure and overall strong performance of these transactions. The three series all have paid down to below 35% of their original pool balances. Loan group three from series 2003-1 and series 2003-7 had no delinquencies and no losses as of November 2005. Series 2003-11 also had no losses, but delinquencies were 0.60%. Collateral group one from series 2003-1, which is composed of loan groups one and two, had cumulative realized losses of 0.71% and total delinquencies of 16.55%. However, the two upgraded classes from this group have substantial credit support relative to the outstanding pool balance, which supports the higher ratings. The rating on class D-B-5 from collateral group one of series 2003-1 was lowered to 'CCC' from 'B-' due to the consistent erosion of credit support for this class. The collateral group has incurred losses averaging about $194,000 per month over the past six months. Should the collateral group continue to incur losses at this rate, the credit support to class D-B-5 will be completely eroded within about five months. Approximately 88% of the losses for this collateral group were incurred by loan group one. The higher losses incurred by this loan group may have resulted from the composition of the collateral at origination; when the deal closed, the collateral for loan group one consisted of approximately 25% multifamily dwellings and 4% manufactured housing, and investment properties represented roughly 18% of the total collateral. In addition, the weighted average loan-to-value ratio at origination was approximately 84%. The collateral composition was significantly different from that of the other loan groups in the transaction. Standard & Poor's will continue to monitor the performance of this collateral group closely and will adjust the rating on class D-B-5 as necessary. The affirmed ratings reflect adequate actual and projected credit support percentages for the respective classes. The collateral for these transactions consists of conventional, 15- to 30-year, fixed-rate mortgage loans secured by one- to four-family residential properties. Ratings Raised CSFB Mortgage-Backed Trust Mortgage-Backed Pass-Through Certificates Rating Series Class To From ------ ----- -- ---- 2003-1 D-B-1 AAA AA 2003-1 D-B-2 AA A- 2003-1 III-B-1 AAA AA+ 2003-1 III-B-2 AA+ AA 2003-1 III-B-3 AA- A 2003-1 III-B-4 A- BBB 2003-7 I-B-1 AAA AA+ 2003-7 I-B-2 AA AA- 2003-7 I-B-3 A A- 2003-7 I-B-4 BBB BBB- 2003-7 I-B-5 BB- B+ 2003-11 I-B-1 AA+ AA 2003-11 I-B-2 A A- 2003-11 I-B-3 BBB BBB- 2003-11 I-B-4 BB+ BB Rating Lowered CSFB Mortgage-Backed Trust Series 2003-1 Mortgage-Backed Pass-Through Certificates Rating Class To From ----- -- ---- D-B-5 CCC B- Ratings Affirmed CSFB Mortgage-Backed Trust Mortgage-Backed Pass-Through Certificates Series Class Rating ------ ----- ------ 2003-1 I-A-1, I-X, I-P, II-A-1, II-A-2, II-A-3 AAA 2003-1 II-A-4, II-A-5, II-P, III-A-2, III-A-3 AAA 2003-1 III-A-4, III-A-6, III-A-7, III-A-8, A-X AAA 2003-1 III-P AAA 2003-1 III-B-5 BB 2003-7 I-A-2, I-A-3, I-A-4, I-A-21, I-A-23 AAA 2003-7 I-A-24, I-A-25, I-A-26, I-A-27, I-A-28 AAA 2003-7 I-X, I-P AAA 2003-11 I-A-2, I-A-3, I-A-4, I-A-5, I-A-6, I-A-25 AAA 2003-11 I-A-26, I-A-27, I-A-28, I-A-29, I-A-30 AAA 2003-11 I-A-31, I-A-32, I-A-33, I-A-34, I-A-35 AAA 2003-11 I-A-36, I-A-37, I-A-38, I-A-39, I-A-40 AAA 2003-11 I-X, I-P AAA 2003-11 I-B-5 B CREDIT SUISSE: Fitch Affirms Low-B Ratings on $36.3M Cert. Classes ------------------------------------------------------------------ Fitch Ratings affirms Credit Suisse First Boston commercial mortgage securities, series 2003-C5: -- $60.4 million class A-1 at 'AAA'; -- $150.4 million class A-2 at 'AAA'; -- $115.6 million class A-3 at 'AAA'; -- $370.3 million class A-4 at 'AAA'; -- $311.5 million class A-1-A at 'AAA'; -- Interest only class A-X at 'AAA'; -- Interest only class A-SP at 'AAA'; -- $39.4 million class B at 'AA'; -- $15.8 million class C at 'AA-'; -- $31.5 million class D at 'A'; -- $17.3 million class E at 'A-'; -- $17.3 million class F at 'BBB+'; -- $14.2 million class G at 'BBB'; -- $14.2 million class H at 'BBB-'; -- $9.5 million class J at 'BB+'; -- $6.3 million class K at 'BB'; -- $6.3 million class L at 'BB-'; -- $7.9 million class M at 'B+'; -- $1.6 million class N at 'B'; -- $4.7 million class O at 'B-'. Fitch does not rate the $15.8 million class P. The affirmations reflect the stable loan performance and minimal paydown since issuance. As of the November 2005 distribution date, the pool's aggregate principal balance has decreased 4% to $1.21 billion from $1.26 billion at issuance. There are no delinquent or specially serviced loans. Fitch has reviewed credit assessments of the Mall at Fairfield Commons, Mayfair Mall, Stanford Shopping Mall, Paramount Plaza, and Eastbridge Landing. All loans maintain investment-grade credit assessments due to their stable performance since issuance. The Mall at Fairfield Commons loan is secured by 856,879 square foot of a 1,046,726sf regional mall in Beavercreek, Ohio. As of October 2005, the occupancy remained strong at 99%. The Mayfair Mall and Office Complex loan is secured by 1,277,483sf of a 1,488,197sf commercial complex, which comprises a regional mall and four office buildings. Occupancy as of June 30, 2005 increased to 95% from 93% at issuance. The Stanford Shopping Mall loan is secured by 1,387,351sf regional mall in Palo Alto, California. Occupancy as of March 2005 increased to 98% from 96% at issuance. The Paramount Plaza loan is secured by two 20-story buildings totaling 911,900sf located in Los Angeles. Occupancy as of Sept. 30, 2005 increased to 88% from 84% at issuance. The Eastbridge Landing loan is secured by 210-unit multifamily property located in New York. Occupancy as of June 30, 2005 has declined to 87% from 95% at issuance. CREDIT SUISSE: Fitch Places BB Rating on $700K Class C-B-4 Certs. ----------------------------------------------------------------- Credit Suisse First Boston Mortgage Acceptance Corp. mortgage pass-through certificates, series 2005-11, is rated by Fitch Ratings: -- $354.7 million classes 5-A-1 through 5-A-4, 6-A-1 through 6-A-8, 8-A-1 through 8-A-10, A-X, and 5-X senior certificates 'AAA'; -- $5.3 million class C-B-1 certificates 'AA'; -- $2.4 million class C-B-2 certificates 'A'; -- $1.3 million class C-B-3 certificates 'BBB'; -- $700,000 privately offered class C-B-4 certificates 'BB'. Loan groups 5, 6, and 8 generate cashflows for the class C-B certificates that support the class 5-A-1 through 5-A-4, 6-A-1 through 6-A-8, 8-A-1 through 8-A-10, A-X, 5-X, and a portion of the A-P, which was not rated by Fitch, certificates. The certificates generally receive distributions based on collections on the mortgage loans in the corresponding loan group or loan groups. The 'AAA' rating on the senior certificates reflects the 3.00% subordination provided by the 1.45% class C-B-1, the 0.65% class C-B-2, the 0.35% class C-B-3, the 0.20% privately offered class C-B-4, the 0.20% class C-B-5, which was not rated by Fitch, and the 0.15% class C-B-6, which was not rated by Fitch, certificates. 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 Wells Fargo Bank, N.A., which is rated 'RMS1' by Fitch. The trust will contain fixed-rate mortgage loans secured by first liens on one- to four-family residential properties with an approximate aggregate principal balance of $687,524,195. The mortgage loans in group 5 consist of 180 fixed-rate mortgage loans with an aggregate principal balance of $106,900,422 as of the cut-off date, Nov. 1, 2005. The mortgage pool has a weighted average loan-to-value ratio of 65.7% with a weighted average mortgage rate of 5.62%. Cash-out refinance loans account for 39.5% and second homes 10.9%. The average loan balance is $593,891, and the loans are primarily concentrated in California, Florida, and New York. The mortgage loans in groups 6 consist of 180 fixed-rate mortgage loans with an aggregate principal balance of $104,561,076 as of the cut-off date. The mortgage pool has a weighted average LTV of 70.0% with a weighted average mortgage rate of 6.43%. Cash-out refinance loans account for 36.7% and second homes 6.3%. The average loan balance is $580,894, and the loans are primarily concentrated in California, New York, and Florida. The mortgage loans in groups 8 consist of 275 fixed-rate mortgage loans with an aggregate principal balance of $157,230,820 as of the cut-off date. The mortgage pool has a weighted average LTV of 68.3% with a weighted average mortgage rate of 5.80%. Cash-out refinance loans account for 33.2% and second homes 2.5%. The average loan balance is $571,748, and the loans are primarily concentrated in California, Ohio, and Michigan. U.S. Bank National Association will serve as trustee. Credit Suisse First Boston Mortgage Acceptance Corp., 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. CRESCENT REAL: S&P Affirms $625 Mil. Senior Unsec. Notes' B Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating assigned to Crescent Real Estate Equities Co. and its operating partnership, Crescent Real Estate Equities L.P. Concurrently, the 'B' rating on the company's senior unsecured notes is affirmed, affecting $625 million of debt, and the 'B-' preferred stock rating is affirmed, affecting $381.65 million of preferred stock. The outlook is stable. Standard & Poor's credit analyst Elizabeth Campbell explained, "The rating affirmations acknowledge the benefits of Crescent's portfolio repositioning efforts over the past year. The company generated meaningful proceeds from the sale of existing office property holdings into joint ventures. Importantly, the company reinvested the majority of its proceeds at relatively attractive yields, despite the continued very competitive environment for quality office assets." Ms. Campbell also noted, "Market fundamentals within Crescent's still highly concentrated office portfolio are stabilizing, but remain relatively soft, and financial measures continue to be aggressive, although they have improved modestly from last year's very weak levels." Crescent's lower financial measures should be relatively stable, given expectations for continued strong contributions from the residential development business, ongoing office portfolio repositioning efforts, and modest additional property refinancing/monetization opportunities. However, material weakness in the contribution from the company's residential development business could cause us to revise our credit opinion downward. DIALOG GROUP: Sept. 30 Balance Sheet Upside-Down by $3.1 Million ---------------------------------------------------------------- Dialog Group, Inc., delivered its financial statements for the quarter ended Sept. 30, 2005, with the Securities and Exchange Commission on Nov. 25, 2005. At Sept. 30, 2005, Dialog Group's balance sheet showed a $3,129,007 stockholders' deficit, compared to a $2,736,516 deficit at Dec. 31, 2004. Going Concern Doubt The Company has incurred substantial losses resulting in an accumulated deficit of $10.2 million as of Sept. 30, 2005. The Company's management said this has raised substantial doubt as to the ability of the Company to continue as a going concern. Auditors at Berenfeld, Spritzer, Shechter & Sheer expressed similar doubts after auditing the Company's 2004 financials. Management disclosed that it continues to review means of raising funds including issuing debentures and equity instruments for the short-term, but at this time has no investor interest. The Company is also reviewing the sale of its non-core assets. Headquartered in New York, N.Y., Dialog Group, Inc., provides a combination of traditional advertising (print, broadcast) and marketing services (broadcast, new media, and internet-based promotional venues), as well as a broad spectrum of proprietary and exclusive databases for healthcare, pharmaceutical, consumer and business-to-business market clients. DIAMONDHEAD CASINO: Posts $172K Net Loss in Quarter Ended Sept. 30 ------------------------------------------------------------------ Diamondhead Casino Corporation delivered its financial results for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 18, 2005. Diamondhead incurred a $172,714 net loss for the three months ended Sept. 30, 2005, versus a $120,685 net loss for the same period in the prior year. The Company's balance sheet showed $5,728,375 in total assets at Sept. 30, 2005, and liabilities of $1,637,130. The Company has continued to incur net losses in the past several years and had a $17,570,761 accumulated deficit and a $1,399,453 working capital deficiency at Sept. 30, 2005. Diamondhead Mississippi Project The Governor of Mississippi signed a new law on Oct. 17, 2005, allowing casinos to be built on land. The new law will allow casinos located in certain areas to be constructed on land no more than 800 feet from the mean high-water line of certain bodies of water. The new law applies to the Company's 404-acre property on the Bay of St. Louis. Diamondhead reported that since the new law was signed, it has received several written proposals relating to its property. These proposals range from outright offers to purchase land to joint venture proposals. The Board of Directors has rejected several proposals, but is considering others and management continues to negotiate with respect to several proposals received. Diamondhead Casino Corporation, through its wholly owned subsidiary, Casino World, Inc., intends to develop a destination casino resort and hotel, condominiums, and other amenities at its Diamondhead property. Going Concern Doubt Friedman LLP expressed substantial doubt about Diamondhead's ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004. The auditing firm pointed to the Company's net losses over the past few years. In addition, Friedman stated that the Company has discontinued all significant operations, except for its efforts to develop a casino resort in Diamondhead, Mississippi. The auditing firm said that the Mississippi project is not expected to contribute to the Company's cash flows in the foreseeable future. Headquartered in Madeira Beach, Florida, Diamondhead Casino Corporation develops a casino resort in Diamondhead, Mississippi. This resort would include a luxury hotel and spa, a sports and entertainment center, a casino space, a recreational vehicle park, and a business conference center. The company owns approximately 404.5 acres of unimproved land in Diamondhead for developing the resort. Diamondhead Casino was founded by Charles S. Liberis. The company, formerly known as Europa Cruises Corporation, was incorporated in 1988. It changed its name to Diamondhead Casino Corporation in 2002. DIGITAL VIDEO: Sept. 30 Balance Sheet Upside-Down by $1.48 Million ------------------------------------------------------------------ Digital Video Systems, Inc., delivered its quarterly report on Form 10-Q for the quarterly period ending Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. Digital Video's balance sheet reflected a $1,478,000 stockholders' deficit at Sept. 30, 2005, compared to a $311,000 stockholders' deficit at Dec. 31, 2004. For the nine months ended Sept. 30, 2005, the Company reported net losses of $7,584,000 compared to net losses of $7,460,000 for nine months ended Sept. 30, 2004. The Company has incurred net losses from operations for the last three years and nine months ended September 30, 2005, and has an accumulated deficit of $94.8 million and a working capital deficit of $7.4 million at September 30, 2005. Working capital declined from a $7.2 million deficit at December 31, 2004 to a $7.6 million deficit at September 30, 2005. The Company requires additional funding and may sell additional shares of common or preferred stock through private placements or further public offerings, or may seek additional credit facilities. The sales of additional equity or convertible securities may result in additional dilution to existing stockholders. If additional funds are raised through the issuance of equity or debt securities, these securities could have rights that are senior to existing stockholders and could contain covenants that would restrict operations. Any additional financing may not be available in amounts or on terms acceptable to the Company, if at all. Additionally, the Company is involved in several outstanding legal matters, and an unfavorable outcome from one or more of those matters could result in a material adverse effect upon the Company's financial position and results of operations. There can be no assurance that the Company will be successful in its efforts to achieve profitable operations, generate sufficient cash from operations or obtain additional funding sources. The Company has reached an agreement with financing sources to raise capital during the second quarter of 2005 followed by additional tranches through February 2006. There is no assurance, however that the additional capital will be provided in accordance with the amounts, terms and schedule provided by the source. If the Company cannot raise additional capital, it may not be able to meet it financial obligations and may have to cease or significantly curtail its operations. Going Concern Doubt In their report in connection with Digital Video's 2004 financial statements, the Company's auditors, Stonefield Josephson, included an explanatory paragraph stating that, because the Company has incurred significant net losses and as of December 31, 2004, has a net capital deficiency and a working capital deficiency, there is substantial doubt about its ability to continue as a going concern. Digital Video's continued existence will depend in large part upon its ability to successfully secure additional financing to fund future operations. In April 2005, the Company obtained an agreement from a former CEO to provide up to $25 million of financing in tranches beginning in May 2005 and ending in February 2006. If this financing is not provided according to the agreement, and if in the future the Company is not able to achieve positive cash flow from operations or to secure additional financing as needed, the Company will experience the risk that it may not be able to continue its operations. If the Company cannot successfully continue as a going concern, its stockholders may lose their entire investment. Established in 1992, Digital Video Systems, Inc. -- http://www.dvsystems.com/-- is a publicly held company specializing in the development and application of digital video technologies enabling the convergence of data, digital audio, digital video and high-end graphics. DVS is headquartered in Palo Alto, California, with subsidiaries and manufacturing facilities in South Korea and China and a subsidiary in India. DLJ COMMERCIAL: Fitch Affirms Low-B Ratings on $99.7M Class Certs. ------------------------------------------------------------------ Fitch Ratings upgrades DLJ Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 1998-CF2: -- $60.9 million class A-3 to 'AA+' from 'A+'; -- $13.8 million class A-4 to 'AA' from 'A'; -- $41.5 million class B-1 to 'BBB+' from 'BBB'; -- $16.6 million class B-2 to 'BBB' from 'BBB-'. In addition, Fitch affirms these classes: -- $35.6 million class A-1A at 'AAA'; -- $579.5 million class A-1B at 'AAA'; -- Interest-only class S at 'AAA'; -- $55.4 million class A-2 at 'AAA'; -- $52.6 million class B-3 at 'BB'; -- $11.1 million class B-4 at 'BB-'; -- $22.2 million class B-5 at 'B'; -- $13.8 million class B-6 at 'B-'. Fitch does not rate the $15.3 million class C certificates. The rating upgrades are due to paydown and defeasance since issuance. As of the November 2005 distribution date, the pool has paid down 17.1% to $918.4 million from $1.11 billion at issuance. In addition, 29 loans have defeased, including three of the top five loans. There are currently seven assets in special servicing: one real estate owned property, one loan that is 30 days delinquent, and five loans that are current. Fitch expects any losses to be fully absorbed by the nonrated class C. The largest specially serviced loan is secured by a hotel in Louisville, Kentucky. This loan transferred to special servicing in April 2005 after the borrower gave notice of financial difficulties. An appraisal has been ordered, however, has not yet been completed. The largest loan in the pool, the Chanin Building, had year-end 2004 and second quarter 2005 debt service coverage ratios of 0.88 times and 0.86x, respectively. The low DSCRs are due to a decline in occupancy to the low 70%-range as of YE 2004 and June 2005, restoration work to the building's facade, and tenant build-out costs. The decline in performance since issuance, however, is mitigated by the property's strong location and low loan per square foot of $77. DOANE PET: Change of Control Offers for Rev. Bonds Ends on Dec. 19 ------------------------------------------------------------------ Doane Pet Care Company reported that on Nov. 22, 2005 it completed the previously announced change of control offers for the company's 14.25% senior preferred stock due 2007 and the company's 10-3/4% senior notes due 2010. On Oct. 24, 2005, Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan Board, completed the previously announced acquisition of beneficial ownership of substantially all of the outstanding capital stock of Doane Pet Care Enterprises, Inc., the company's parent corporation. In connection with the change of ownership of its parent, the company commenced several recapitalization transactions, the goal of which was to significantly deleverage the company. In addition to the recapitalization transactions, the company commenced a change of control offer for its Preferred Stock at a purchase price equal to 101% of the liquidation value thereof, which included a 1% change of control premium. Aggregate consideration paid to all holders of the company's Preferred Stock was approximately $125.2 million. The company also commenced a change of control offer for its Senior Notes at a purchase price equal to 101% of the principal amount thereof, which included a 1% change of control premium. None of the holders of the company's Senior Notes exercised their right to require the company to repurchase the Senior Notes. On Nov. 18, 2005, the company commenced a change of control offer for its industrial development revenue bonds at a purchase price equal to 101% of the principal amount thereof, which includes a 1% change of control premium. The change of control offer for the industrial development revenue bonds is expected to close on Dec. 19, 2005. Prior to commencing the change of control offer, the company received a waiver from a holder of $12 million of industrial development revenue bonds, and therefore expects aggregate consideration paid to the remaining holders of its industrial development revenue bonds to be approximately $3 million. Doane Pet Care Company -- http://www.doanepetcare.com/-- based in Brentwood, Tennessee, is the largest manufacturer of private label pet food and the second largest manufacturer of dry pet food overall in the United States. The Company sells to approximately 550 customers around the world and serves many of the top pet food retailers in the United States, Europe and Japan. The Company offers its customers a full range of pet food products for both dogs and cats, including dry, semi-moist, soft-dry, wet, treats and dog biscuits. * * * As reported in the Troubled Company Reporter on Nov. 15, 2005, Standard & Poor's Ratings Services raised its corporate credit rating on private label pet food manufacturer Doane Pet Care Co. to 'B+' from 'B' and its senior unsecured debt rating to 'B-' from 'CCC+'. At the same time, Standard & Poor's affirmed the 'BB-' bank loan rating and recovery rating of '1' on Doane's $210 million senior secured credit facility, and the 'B-' rating on its $152 million 10.625% subordinated notes due 2015. Standard & Poor's withdrew its ratings on Doane's former $230 million senior secured credit facility and $150 million 9.75% senior subordinated notes due 2007. All remaining ratings on the Brentwood, Tennesee-based company were removed from CreditWatch with positive implications, where they were placed Aug. 29, 2005. The outlook is stable. DOMTAR INC: Cost Position Decline Cues S&P to Shave Rating to BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Montreal, Quebec-based paper producer Domtar Inc. to 'BB-' from 'BB+'. In addition, because Domtar's primary subsidiaries have now granted an upstream guarantee to the revolving credit facility lenders, the senior unsecured rating is notched down from the corporate credit rating to 'B+'. The outlook is negative. The ratings on Domtar were lowered to reflect the weakening of both of the company's cost position and its primary end-markets. The rapid shift in Domtar's relative cost position is due to the continued appreciation of the Canadian dollar. Escalating fiber costs and availability are expected to remain an issue, even if the Canadian dollar weakens. Serious market challenges include: * the deterioration in the industry fundamentals for fine paper, * soaring energy costs, and * the continuing softwood lumber duties. S&P believes that Domtar's adjusted debt level is aggressive, given the company's reduced earnings power and the company will be hard pressed to reduce leverage from internally generated cash. With a majority of its assets located in Canada and 75% of its sales to the U.S., Domtar's cost position is materially affected by the foreign exchange rate of the Canadian dollar, which has sharply appreciated by more than 5 U.S. cents since the end of the second quarter. The ratings on Domtar reflect: * the company's exposure to cyclical and volatile fine paper prices, * its aggressive debt leverage, and * a declining cost position due to a stronger Canadian dollar. These risks are partially offset by: * two low-cost mills; * adequate fiber and energy integration; and * some revenue diversity from packaging, paper distribution, and wood products. Domtar also owns a paper distribution business that accounts for about 15% of sales, in addition to a 50% interest in Norampac Inc., the largest producer of containerboard in Canada. The outlook is negative. The combination of a higher Canadian dollar, high fiber and energy costs, and weak uncoated free sheet prices will hurt Domtar's earnings and cash flow in the near term. Credit metrics are not expected to improve in 2006. The outlook could be revised to stable if Domtar manages to improve earnings and reduce debt in 2006. Standard & Poor's believes it will take several quarters to see the benefits of the restructuring, but the ratings could be lowered if the restructuring plans and industry conditions do not return the company's free cash generation back to at least break-even levels in 2006. DRESSER INC: KPS Completes Acquisition on Instruments Business -------------------------------------------------------------- KPS Special Situations Funds completed its acquisition of substantially all of the worldwide assets of the Dresser Instruments business from Dresser, Inc., a Connecticut- headquartered manufacturer of pressure gauges, transducers, transmitters, pressure and temperature switches, and other devices used in a wide variety of applications and industries. KPS acquired these assets through a newly formed affiliate company, Ashcroft Holdings, Inc., reflecting one of Dresser's best known brands. KPS intends to invest substantial capital in Ashcroft to fund growth opportunities, including new product introductions and working capital requirements. KPS will use its operational expertise to improve the Company's performance; capitalizing on its strong brands and leadership positions in the markets it serves. "Ashcroft is the most recognized brand name in the world for premium pressure gauges and related products," said Michael Psaros, a Managing Principal of KPS. "This is a company with an underleveraged global franchise, comprehensive product offerings, and unique technologies that should thrive as a focused, independent enterprise." John McKenna, CEO of Ashcroft commented, "This is the beginning of an exciting new era for Ashcroft as a stand-alone company. We are delighted that KPS recognized the investment opportunity presented by Ashcroft, and we are confident about the direction of our business and the many opportunities available to us. I am especially grateful to our customers, vendors and employees for their continued support." About Ashcroft Holdings Ashcroft Holdings, Inc. -- http://www.ashcroftinc.com/-- manufactures a variety of pressure gauges, transducers, transmitters, pressure and temperature switches and other devices used in a wide variety of applications and industries. Its products include the Ashcroft(R), Ebro(R), Heise(R), Weksler(R) and Willy(TM) brands. Ashcroft has approximately 1,060 employees worldwide, including 450 in Stratford, Connecticut, where it has its worldwide headquarters and a manufacturing facility. It also has operations in Brazil, Germany, Canada, Mexico, and Singapore and joint ventures in Saudi Arabia and Venezuela. About KPS Special Situations Funds KPS Special Situations Funds -- http://www.kpsfund.com/-- are a family of private equity funds with over $600 million of committed capital focused on constructive investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand- alone entities to operate divested assets; and recapitalized highly-leveraged publ0ic and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. KPS invests its capital concurrently with a turnaround plan predicated on cost reduction, capital investment, and capital availability. Typically, the KPS turnaround plan is accompanied by a financial restructuring of the company's liabilities. About Dresser Headquartered in Dallas, Texas, Dresser, Inc. -- http://www.dresser.com/-- is a worldwide leader in the design, manufacture and marketing of highly engineered equipment and services sold primarily to customers in the flow control, measurement systems, and compression and power systems segments of the energy industry. Dresser has a comprehensive global presence, with over 8,500 employees and a sales presence in over 100 countries worldwide. * * * As reported in the Troubled Company Reporter on June 23, 2005, Standard & Poor's Ratings Services lowered its corporate credit rating on Addison, Texas-based Dresser Inc. to 'B+' from 'BB-'. The company remains on CreditWatch with negative implications. The ratings downgrade reflects weak credit measures and debt leverage that remain elevated for the current ratings level. DRUG ASSIST: Soliciting Bids for Sec. 363 Sale Transaction ---------------------------------------------------------- Drug Assist Health Solutions, Inc., dba Shopper's Drug, located in Springfield, Mass., wants to sell all of its assets as a going concern to a qualified buyer. The price, the company says, is "open to negotiation." Drug Assist has a unique system for the preparation and delivery of approximately 6,500 prescriptions weekly primarily to state funded mental health agencies in Western Massachusetts. Drug Assist has been in business since 1976, has approximately 50 full and part-time employees, and generates approximately $75,000 per month in net income. For further information, contact the Debtor's lawyers: George I. Roumeliotis, Esq. Hendel & Collins, P.C. 101 State Street, 5th Floor Springfield, Massachusetts 01103-2006 Tel: (413) 734-6411 Fax: (413) 734-8096 Drug Assist Health Solutions, Inc., dba Shopper's Drug -- http://www.edrugassist.com/-- filed for chapter 11 protection on August 10, 2005 (Bankr. D. Mass. Case No. 05-45397). At that time, the debtor said it had less than $50,000 and between $1 million and $10 million in liabilities. DYNEGY HOLDINGS: Tender Offer for $1.75 Bil. Notes Expires Dec. 12 ------------------------------------------------------------------ Dynegy Inc. (NYSE: DYN) reported that its wholly owned subsidiary, Dynegy Holdings, Inc., has commenced an Asset Sale Offer to purchase at par up to $1,750,000,000 aggregate principal amount of DHI's: * Second Priority Senior Secured Floating Rate Notes Due 2008, * 9.875% Second Priority Senior Secured Notes Due 2010, and * 10.125% Second Priority Senior Secured Notes Due 2013, under the terms of the Indenture governing the Notes. DHI expects to pay for Notes validly tendered (and not withdrawn) with net cash proceeds from the recent sale by Dynegy and DHI of their Midstream natural gas business to Targa Resources Inc., and, to the extent necessary or desirable, borrowings under a credit facility to be entered into by DHI. Under the terms of the Indenture, Excess Proceeds from the Midstream sale transaction are approximately $2,390,000,000, and to the extent not used for the repurchase of the Notes, may be used by DHI for any purpose not otherwise prohibited under the Indenture. Holders that validly tender (and do not withdraw) their Notes prior to the expiration of the offer will receive 100% of the principal amount of the Notes plus accrued and unpaid interest, if any, thereon up to and including the date of payment, subject to the terms and conditions of the offer. The offer will expire at 5:00 p.m., New York City Time, on December 12, 2005, unless extended. Questions regarding the offer and requests for documents may be directed to Wilmington Trust Company -- (302) 636-6470 -- the depositary for the offer. Dynegy Inc. -- http://www.dynegy.com-- provides electricity to markets and customers throughout the United States. The company's fleet of power generation facilities consists of baseload, intermediate and peaking power plants fueled by a mix of coal, fuel oil and natural gas. Located in 12 states, the portfolio is well-positioned to capitalize on regional differences in power prices and weather-driven demand. * * * As reported in the Troubled Company Reporter on Aug 05, 2005, Standard & Poor's Ratings Services placed its 'B/B-2' corporate credit rating on Dynegy Inc. on CreditWatch with developing implications as a result of the announced sale of the firm's midstream business to Targa Resources Inc. for $2.35 billion. DYNEGY INC: Names Holli C. Nichols Chief Financial Officer ---------------------------------------------------------- Dynegy Inc. (NYSE:DYN) reported that Holli C. Nichols, 35, who previously held the position of Senior Vice President and Treasurer, has been promoted to Executive Vice President and Chief Financial Officer. In this capacity, she is responsible for Dynegy's financial affairs, including finance and accounting, treasury, risk management, internal audit and investor and credit agency relationships. In addition to Ms. Nichols' recent role as Treasurer, she previously served as the company's Senior Vice President and Controller. Ms. Nichols, who joined Dynegy from PricewaterhouseCoopers LLP in 2000, received a bachelor's of science from Baylor University. The Company also reported that J. Kevin Blodgett, 34, who previously held the position of Senior Vice President of Human Resources, has been promoted to General Counsel and Executive Vice President, Administration. His new responsibilities include legal and administrative affairs, including legal services supporting the company's operational, commercial and corporate areas, as well as human resources, information technology, building services, facilities and supply chain management. In addition to Mr. Blodgett's recent role in Human Resources, he previously served as Group General Counsel - Corporate Finance & Securities and Corporate Secretary. Mr. Blodgett, who joined Dynegy in 2000 from Baker Botts LLP, received a bachelor's of arts from Texas A&M University and his juris doctorate from the University of Houston Law Center. Lynn A. Lednicky, 45, who previously held the position of Senior Vice President of Strategic Planning and Corporate Business Development, has been promoted to Executive Vice President of the same group. In this capacity, he has responsibility for identifying opportunities and strategies for building value at both the corporate level and within the company's power generation business. Mr. Lednicky, who joined Dynegy predecessor Destec Energy, Inc. in 1991, received both his bachelor's of arts and master's of business administration from Rice University. Ms. Nichols, Mr. Blodgett and Mr. Lednicky, as well as Stephen A. Furbacher, President and Chief Operating Officer, report directly to Bruce A. Williamson, Chairman and Chief Executive Officer of Dynegy Inc., and together comprise the Dynegy Executive Management Team. In addition to naming a new executive leadership team, the company also announced these appointments: Chuck Cook, 41, has been promoted to Senior Vice President and Treasurer, reporting directly to Ms. Nichols. In this capacity, he has responsibility for all treasury, banking, insurance and credit activities of the company. Mr. Cook previously served as a Vice President of Finance in Treasury. Julius Cox, 34, has been promoted to Vice President of Human Resources, reporting directly to Mr. Blodgett. In this capacity, he has responsibility for all Human Resources activities, including employee relations, payroll, benefits, organizational development and compensation. Mr. Cox previously served as a Managing Director in Human Resources. Biren Kumar, 38, has been promoted to Vice President of Information Technology, reporting directly to Mr. Blodgett. In this capacity, he has responsibility for the company's information technology infrastructure and asset management. Mr. Kumar previously served as a Managing Director in Finance and led the company's implementation of PeopleSoft in 2005. John Sousa, 39, has been named Vice President of Investor and Public Relations, reporting directly to Ms. Nichols. In this capacity, he has responsibility for the company's communications with investors, as well as media relations, internal communications and community relations. Mr. Sousa previously served as Vice President of Public Relations. "Dynegy has fundamentally shifted from a company focused on the resolution of legacy issues through a comprehensive self-restructuring to one that is now centered on the operation and growth of a regionally focused fleet of power generation facilities in key markets of the United States," said Williamson. "We are fortunate to have a new generation of leadership within the organization with the capabilities and drive to take Dynegy to the next level by positioning the company as a leading participant in the independent power producer sector." Concurrent with these appointments, Dynegy also reported that four members of its current Executive Management Team will be leaving the organization: Nick J. Caruso, Executive Vice President and Chief Financial Officer. Since coming out of retirement in late 2002 to lead the financial aspects of the company's self-restructuring, Mr. Caruso's efforts have included the completion of the re-audits of Dynegy's financial statements, the development of transparent financial reporting, and compliance with new regulatory and disclosure requirements, as well as the recapitalization of Dynegy and the reduction of the company's debt to current levels. Carol F. Graebner, Executive Vice President and General Counsel. Since joining Dynegy in March 2003, she has been responsible for the company's legal, regulatory and government affairs functions. Ms. Graebner led the company's efforts in resolving legacy legal issues, including litigation related to California energy markets in 2000-2001, Midwest environmental claims and the shareholder class action and derivative litigation. In addition, she has overseen the company's renewed focus on compliance, ethics, effective governance and board processes, along with the resolution of numerous investigative matters with several governmental agencies. R. Blake Young, Executive Vice President of Administration and Technology. Since joining the company in 1998, Young's responsibilities have expanded to include strategic planning and corporate business development, information technology, financial planning, public relations, human resources and corporate shared services. In addition, he served in a leadership role in the sales of the company's communications, regulated energy delivery and midstream natural gas businesses, as well as the transition of these businesses to new ownership. Peter J. Wilt, Vice President of Investor Relations. Wilt joined Dynegy in 2004 to serve as a liaison between company management, investors and the financial community, including portfolio managers and research analysts. He strengthened investors' understanding of the company through the clear, concise communication of Dynegy's financial results, its operational performance, business strategies and valuation methods. Dynegy Inc. -- http://www.dynegy.com/-- provides electricity to markets and customers throughout the United States. The company's fleet of power generation facilities consists of baseload, intermediate and peaking power plants fueled by a mix of coal, fuel oil and natural gas. Located in 12 states, the portfolio is well-positioned to capitalize on regional differences in power prices and weather-driven demand. * * * As reported in the Troubled Company Reporter on Aug. 5, 2005, Standard & Poor's Ratings Services placed its 'B/B-2' corporate credit rating on Dynegy Inc. on CreditWatch with developing implications as a result of the announced sale of the firm's midstream business to Targa Resources Inc. for $2.35 billion. Fitch Ratings rates Dynegy senior unsecured debt obligations at CCC+ and Moody's put its Caa2 rating on the company's subordinated debt obligations. ECHOSTAR COMMS: Fitch Puts B Rating on Convertible Sub. Notes ------------------------------------------------------------- Fitch Ratings has affirmed the 'BB-' issuer default rating and the Stable Rating Outlook assigned to Echostar Communications Corporation. Fitch has also affirmed the 'BB-' rating assigned to the senior unsecured notes issued by Echostar's wholly owned subsidiary Echostar DBS Corporation. Finally, Fitch has affirmed the 'B' rating assigned to the convertible subordinated notes issued by Echostar. Approximately $5.9 billion of debt as of the end of the third quarter is affected by Fitch's action. Fitch's ratings reflect: * the company's size and scale as the third largest multichannel video programming distributor in the country, * the company's solid liquidity position as evidenced by nearly $1.6 billion of cash and marketable securities on its balance sheet at the end of the third quarter of 2005, and * improving credit protection metrics. Additionally, the ratings incorporate Fitch's expectation for continued EBITDA growth and free cash flow generation. A risk to Echostar's credit profile is uncertainty related to the expected use of material amounts of cash on the company's balance sheet as well as expected free cash flow. Balanced against these attributes, the ratings also consider the company's lack of revenue and service diversity, and the increasing business risks connected to Echostar's credit profile stemming from the intense competition for subscriber market share with cable MSOs and other direct broadcast satellite providers. Fitch expects the competition for subscriber market share to intensify as the RBOCs introduce video services. Moreover, the ratings also reflect Echostar's weak competitive position, from Fitch's perspective, to respond to the changing and riskier operating environment that highlights the importance of a bundle of services. Relative to the cable and telephone companies, Echostar lacks the revenue and service diversity enjoyed by the other industry participants. Fitch considers this narrow product focus, resultant from the limitations inherent in Echostar's satellite infrastructure, to be a competitive disadvantage, which will constrain Echostar's ability to generate revenue and cash flow growth. Fitch believes that the services offered by the cable MSOs and the telephone companies in the residential markets will converge leaving Echostar's market share vulnerable to competition. Absent material investment in upgraded technology at the satellite infrastructure and customer premise equipment levels, Fitch believes that these factors will continue to erode the company's longer-term competitive position. Key to Fitch's expectation of EBITDA and free cash flow growth will be how the company balances subscriber growth with controlling subscriber churn, subscriber acquisition and retention costs, and subscriber cash flow in an increasingly competitive market. Through the nine months ended Sept. 30, 2005, subscriber acquisition costs on an absolute basis has increased approximately 9.7% relative to the first nine months of 2004 while SAC per gross addition has increased 11.0% during the same timeframe. Factors driving the increase include lower cobranded subscribers added. Additionally, new subscribers are taking more advanced services such as digital video recorders and high definition service. These services increase the equipment costs associated with the new subscriber as well as the installation costs due to the increased complexity of the configuration. Fitch expects that the competitive pressure will likely result in higher subscriber acquisition costs and higher churn for Echostar, which in Fitch's estimation will erode subscriber profitability and hinder free cash flow generation. In an effort to enhance its competitive position, Echostar will need to increase the level of its HD programming including offering local channels in HD. However, to accomplish this, Echostar must take steps to increase its overall bandwidth capacity, which may expose the company to some technology and obsolescence risks. Echostar is launching a new satellite and introducing satellite receivers with MPEG-4 technology. Both of these initiatives will improve the company's bandwidth capacity. However, depending on the ramp up of customer demand for HD programming the MPEG-4, satellite receivers can materially increase SAC and subscriber retention costs, negatively affecting the company's free cash flow generation. Echostar's liquidity position is primarily supported by approximately $1.59 billion of restricted and unrestricted cash and marketable investment securities on its balance sheet as of Sept. 30, 2005. Fitch believes that the company's liquidity position is adequate, especially when considering the nominal amount of scheduled maturities through 2007 and Fitch's free cash flow expectations. Fitch points out that the company has approximately $2.5 billion of scheduled maturities in 2008, which presents refinancing risk to the company. Fitch notes that Echostar's financial policies, namely more agg ressive share repurchases or a large dividend payment, could quickly erode the company's liquidity profile since the company does not maintain alternate sources of liquidity. During the third quarter of 2004, the company's board of directors approved a $1.0 billion share repurchase program. As of the year-to-date period ending Oct. 31, 2005, the company had repurchased approximately 7 million shares of its class A common stock for approximately $200.5 million. Fitch believes that a significant portion of free cash flow will be utilized for share repurchases or other shareholder friendly actions. Fitch expects that Echostar will continue to capitalize the operating leverage realized during 2005, which will drive improvement of the company's credit protection metrics. Fitch anticipates that during 2006 the company will continue to grow EBITDA. However, free cash flow levels are expected to be consistent with 2005 free cash flow levels. Fitch expects leverage to improve to approximately 5 times by year-end 2005 and approach 4.3x by the end of 2006. The 'B' rating assigned to Echostar's subordinated convertible notes reflects the structural subordination of the notes to the senior notes issued by EDBS and the diminished recovery prospects of the convertible notes relative to the senior notes. Echostar's Stable Rating Outlook reflects the consistent subscriber economic trends and the positive EBITDA and free cash flow prospects expected during 2005 and 2006, balanced with the very competitive operating environment. Outside of the announced share repurchase authorization, Fitch views the use of cash for shareholder-friendly actions as an erosion of financial flexibility that could result in pressure on the ratings or a Rating Outlook revision. EDGEN CORP: Moody's Affirms Senior Secured Notes' Rating at B3 -------------------------------------------------------------- Moody's Investors Service affirmed the B3 rating on Edgen Corporation's senior secured notes due 2011. Moody's also affirmed the B3 corporate family rating and the SGL-3 speculative grade liquidity rating. The outlook is stable. The affirmation was prompted by the recent announcement that Edgen will acquire Murray International Metals, Inc. for approximately $21 million. Financing for the transaction will be provided by a $30.9 million tack-on to Edgen's existing senior secured notes due February 2011. The company will use the proceeds: * to finance the acquisition of Murray International Metals Inc.; * to repay outstanding indebtedness (approximately $7 million); and * to pay fees and expenses related to this offering and the related transactions. The notes will be issued under the same indenture as the outstanding $105 million senior secured notes due 2011 and will rank equal in right of payment with all of Edgen's and the guarantors' existing and future senior indebtedness, including indebtedness under the revolving credit facility. All of the company's existing and future domestic restricted subsidiaries will guarantee the notes on a senior secured basis. The B3 corporate family rating reflects: * the modest scale of Edgen's operations; * the uncertain long-term impact of its recent restructuring and integration efforts; * the inherent cyclicality of the energy and industrial markets that use Edgen's specialized carbon and alloy pipe; and * the potential for margin compression given volatile steel prices and relatively slow-moving inventory. The rating also incorporates: * the increased leverage associated with the announcement; * relatively modest liquidity; * minimal tangible asset coverage; and * the likelihood of acquisitions. The stable outlook reflects Moody's view that Edgen's operating performance will remain at current levels and liquidity will increase with higher levels of balance sheet cash generated from internal sources. Moody's notes, however, that the company's gross margins have declined sequentially in each of the last four quarters. Failure of the company to stem the erosion in its margins and to maintain gross margins of at least 17% would strain its ability to internally fund cash requirements, and could result in a negative rating action. Affirmation of the SGL-3 speculative liquidity rating reflects Moody's view that the company possesses adequate liquidity and may need to rely on external sources of committed financing. There are no financial covenants under the company's $20 million bank agreement and availability (estimated at around $13 million following the incremental notes issue) is governed by a borrowing base formula which should ensure full access to the facility. Moody's believes cash on the balance sheet will remain modest over the next twelve months and the company does not currently own any assets, outside of what is secured by the two pieces of debt, that can be monetized in the near term to satisfy liquidity needs. Edgen Corporation, headquartered in Baton Rouge, Louisiana, is a global distributor of: * specialty steel pipe, * fittings, and * flanges for use in niche markets, primarily in the: * oil, gas, processing; and * power generation industries. ENERGY EXPLORATION: Sept. 30 Balance Sheet Upside-Down by $248K --------------------------------------------------------------- Energy Exploration Technologies Inc. delivered its quarterly report on Form 10-Q for the quarterly period ending Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. The Company reported that in the nine months ended Sept. 30, 2005, it incurred a comprehensive loss of $2,369,268, compared to a net loss of 2,419,889 for the same period last year. At Sept. 30, 2005, EETI's balance sheet showed an accumulated deficit of $28,434,540 and a working capital deficiency of $1,561,601. At Sept. 30, 2005, Energy Exploration's balance sheet showed a $247,191 stockholders' deficit compared to $1,793,117 of positive equity at Dec. 31, 2004. The Company stated that it had $309,748 in cash on hand and $45,000 in short term investments as of September 30, 2005. On November 1, 2005, the Company received $973,325 additional cash through bridge financing and it expects to raise additional $500,000 by the end of December 2005. With funds available to the Company, including the proceeds from the bridge financing, it can sustain partially reduced operations reflecting its cost-cutting measures until October 2006. "The Company can give no assurance that any or all projects in its pending programs will be commercial, or if commercial, will generate sufficient revenues to cover our operating or other costs," EETI says in its latest quarterly report. "Unless the Company can raise sufficient additional working capital by October 2006, it may be forced to suspend operations, possibly even liquidate its assets and wind-up and dissolve the company," EETI adds. Going Concern Doubt Energy Exploration's ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and obtain the necessary financing to meet its obligations and repay liabilities arising from normal business operations when they come due. The outcome of those matters cannot be predicted with any certainty as of now. The Company expects to continue incurring net losses from operations and have negative operating cash flows until it can secure revenue-generating activities. The Company has identified a potential future market opportunity to sell the SFD survey as a service to third parties, but it has not secured any contracts for that activity. Those circumstances raise substantial doubt about the Company's ability to continue as a going concern. Energy Exploration Technologies Inc. -- http://www.nxtenergy.com/ -- is a technology-based reconnaissance exploration company and we utilizes its proprietary stress field detection (SFD) remote- sensing airborne survey technology to quickly and inexpensively identify high-grade oil and natural gas prospects. Energy Exploration conducts its reconnaissance exploration activities, as well as land acquisition, drilling, completion and production activities through its wholly-owned subsidiary, NXT Energy Canada Inc., and also conducts the aerial surveys through its wholly owned subsidiary, NXT Aero Canada Inc. EMISPHERE TECHNOLOGIES: Equity Deficit Narrows as Losses Continue ----------------------------------------------------------------- Emisphere Technologies, Inc., reported its financial results for the quarter ended Sept. 30, 2005. Revenue increased as a result of the new collaborations signed with Novartis and Roche in the second half of 2004. In the Novartis collaboration, the original agreement provided for a one year license period that ended in September 2005. The terms of the agreement were amended in November 2005 to extend the licensing period through March 31, 2006. The Company incurred a net loss of $9.6 million during the three months ended Sept. 30, 2005, as compared to a net loss of $10.1 million during the same period last year. Emisphere also registered a net loss of $8.9 million in the nine months ended Sept. 30, 2005, as compared to a net loss of $28.8 million for the same period in 2004. Equity Deficit Contracts as Losses Continue At Sept. 30, 2005, the Company's liabilities exceeded its assets by $5,882,000. Despite continuing losses this year, that equity deficit is about half what it was at Dec. 31, 2004; ETI reports an $8.6 million increase in derivative instruments on the liabilities side of its balance sheet related to some equity financing deals. As of September 30, 2005, the Company's accumulated deficit was approximately $341 million. Net losses were $37.5 million and $44.9 million for the years ended Dec. 31, 2004, and 2003, respectively. Net loss was $8.9 million for the nine months ended Sept. 30, 2005. Financing Activities On Sept. 26, 2005, the Company realized approximately $13 million by issuing a senior secured note to MHR Institutional Partners IIA LP. The note is exchangeable for a senior secured convertible note upon stockholder approval. The Loan is secured by a first priority lien in favor of MHR on substantially all of the Company's assets. Under the Loan Agreement, a special stockholder meeting should be set not later than December 25 for the purpose of obtaining stockholder approval of: i) the exchange of the Loan for an 11% senior secured convertible note with substantially the same terms as the Loan Agreement, except that the Convertible Note will be convertible, at the sole discretion of MHR into shares of common stock at $3.78 per share, the note will be callable after September 26, 2010; and ii) the amendment and restatement of the Company's Restated Certificate of Incorporation. Going Concern Doubt Emisphere Technologies, Inc.'s auditors, PriceWaterhouseCoopers LLP, raised doubt about the company's ability to continue as a going concern after auditing the its 2004 financial statements (included in the Company's Form 10-K filed with the U.S. Securities and Exchange Commission on March 11, 2005). PwC pointed to the Company's accumulated deficit and net losses. Emisphere Technologies, Inc. -- http://www.emisphere.com/-- is a biopharmaceutical company pioneering the oral delivery of otherwise injectable drugs. Emisphere's business strategy is to develop oral forms of injectable drugs, either alone or with corporate partners, by applying its proprietary eligen(R) technology to those drugs or licensing its eligen(R) technology to partners who typically apply it directly to their marketed drugs. Emisphere's eligen(R) technology has enabled the oral delivery of proteins, peptides, macromolecules and charged organics. Emisphere and its partners have advanced oral formulations or prototypes of salmon calcitonin, heparin, insulin, parathyroid hormone, human growth hormone and cromolyn sodium into clinical trials. Emisphere has strategic alliances with world-leading pharmaceutical companies. FIBERMARK INC: Court Confirms Chapter 11 Plan of Reorganization --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Vermont confirmed the Plan of Reorganization submitted by FiberMark, Inc. The confirmation sets the stage for the company's emergence from chapter 11 as a private company in early January 2006. The Plan of Reorganization dated November 1, 2005, received strong support among its creditors in voting that concluded in November. Under the Plan, general unsecured creditors, including most bondholders and trade creditors, will recover approximately 70% of their claims, and the company expects to emerge with funded debt of up to approximately $88 million, representing one-fourth of the company's pre-chapter 11 debt level. Some creditors elected to receive a combination of stock and cash, with an approximate total recovery value of 62%. Under the Plan, the company's existing common stock will be cancelled, and public trading of that stock is expected to cease prior to or no later than the date of chapter 11 emergence. As reported in the Troubled Company Reporter on Aug. 26, 2005, the company received exit financing commitments for approximately $155 million that will be effective upon the company's emergence from chapter 11. The financing package includes a $75 million five-year non-amortizing term facility, underwritten by Silver Point Finance LLC, which will be used to fund the cash distribution of the recovery for the unsecured creditors. It also includes two revolving credit facilities for working capital and general corporate purposes, underwritten by GE Commercial Finance, including 40 million euros (approximately $50 million) for the company's German operations and $30 million for its North American operations. The size of the revolver for the German operations is larger than the company's current facility to reflect potential capital investment for additional German production capacity. GE also extended the debtor-in-possession credit facility through Jan. 31, 2006, to ensure financing coverage until emergence. According to Alex Kwader, chief executive officer, the confirmation represents the final step in the company's chapter 11 financial reorganization process. "When the Plan becomes effective next month, we will have achieved our objectives to emerge as a stronger company strategically, operationally and financially, with a debt load appropriate for our business," Kwader said. "We deeply appreciate the support of our customers, vendors and employees throughout this process, and look forward to continuing to meet their needs and expectations as a streamlined and strengthened FiberMark in the years ahead." Headquartered in Brattleboro, Vermont, FiberMark, Inc. -- http://www.fibermark.com/-- produces filter media for transportation applications and vacuum cleaning; cover stocks and cover materials for books, graphic design, and office supplies and base materials for specialty tapes, wall coverings and sandpaper. The Company filed for chapter 11 protection on March 30, 2004 (Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D.J. f, Esq., David M. Turetsky, Esq., and Rosalie Walker Gray, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $329,600,000 in total assets and $405,700,000 in total debts. FRANCHISE STUDIOS: Case Summary & 7 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Franchise Studios LLC 5890 West Jefferson Boulevard Los Angeles, California 90016 Bankruptcy Case No.: 05-50100 Type of Business: The Debtor is a filmmaker and affiliate of Franchise Pictures LLC. Franchise Pictures and 20 affiliates filed for chapter 11 protection on Aug. 18, 2004 (Bankr. C.D. Calif. Case No. 04-27996 changed to 05-13855) (Tighe, J.). Merciless Movies Inc. and 18 affiliates (Bankr. C.D. Calif. Case No. 05-50061) and Animal Productions LLC and five affiliates (Bankr. C.D. Calif. Case No. 05-50055) also filed for chapter 11 protection on Nov. 21, 2005 Chapter 11 Petition Date: December 1, 2005 Court: Central District of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Susan H. Tregub, Esq. 17554 Weddington Street Encino, California 91316 Tel: (818) 679-9278 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 7 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Federation of Musicians Unknown 1501 Broadway, Suite 600 New York, NY 10036 Directors Guild of America, Inc. Unknown 7920 Sunset Boulevard Los Angeles, CA 90046 E Group Services, Inc. Unknown c/o Hans Turner 5890 West Jefferson Boulevard Los Angeles, CA 90016 IATSE General Office Unknown 1430 Broadway, 20th Floor New York, NY 10018 R2D2, LLC Unknown c/o David Bergstein 5890 West Jefferson Boulevard Los Angeles, CA 90016 Screen Actors Guild Unknown 5757 Wilshire Boulevard Los Angeles, CA 90036 Writers Guild of America Unknown West, Inc. 7000 West Third Street Los Angeles, CA 90048 FREESCALE SEMICONDUCTOR: Moody's Ups $1 Bil. Notes' Rating to Ba1 ----------------------------------------------------------------- Moody's Investors Service upgraded the corporate family and senior unsecured debt ratings of Freescale Semiconductor Inc. to Ba1 from Ba2. The ratings outlook is stable. The upgrade reflects: * the company's operating improvements since the July 2004 separation from Motorola; * its manufacturing cost reductions and efficiency enhancements; * the recent positive cash flow contribution from the Wireless and Mobile Solutions Group (which historically generated operating losses); and * its constructive efforts toward expanding WMSG's product offering and customer base. Collectively, these factors have resulted in: * improved margins; * consistently higher levels of funds from operations compared to prior year periods; * rising free cash flow; and * enhanced credit protection measures. These ratings were upgraded: * Corporate Family Rating to Ba1 from Ba2; and * Senior Unsecured Guaranteed Notes with various maturities totaling $1.25 billion to Ba1 from Ba2. This rating was affirmed: * Speculative Grade Liquidity Rating of SGL-1 The ratings outlook is stable. Moody's notes that the company has made steady progress towards reducing its cost structure and enhancing operating efficiencies in the current semiconductor cycle. This includes internal fab consolidation initiatives and increased usage of external foundries for incremental capacity needs. As a result, Freescale should be in a better position to manage an industry retrenchment. Additionally, there is an expectation of improvement in gross margins going forward. The company is targeting 45% gross margins before year end 2006, which will not be driven primarily by top-line growth, but rather by: * manufacturing efficiency improvements; * higher utilization rates; and * reduced depreciation expense. The company continues to review opportunities to streamline corporate overhead costs. The WMSG operating segment became profitable for the first time on a LTM September 30, 2005 basis benefiting from strong global cell phone unit growth, which was up 20% year-over-year, in large part from increased shipments to Motorola. Moody's expects this trend will continue to have a positive impact on the segment's profitability. Finally, WMSG's operating earnings improvement stemmed from higher product shipments to Motorola combined with: * higher factory utilization, * better operational efficiencies, and * lower manufacturing costs. Moody's believes uncertainty surrounding the expiring Motorola sales contract in 2006 is mitigated by Motorola's high reliance on Freescale's mid- to high-tier handset integrated circuits, which are "designed-in", and new design wins that should continue in 2006. Moody's notes that Freescale's semiconductors for wireless applications were written into the design specifications for Motorola cell phones, such as the RAZR, which reduces the likelihood of replacement over the near-to-intermediate term. In addition, Motorola announced a new low-end 3G phone, which will use Freescale's chips through 2008. The company is planning to launch a full semiconductor product line for low-end cell phones to broaden its product offering and exploit expected cell phone growth in developing countries. Moody's notes the company's financial performance has generally exceeded expectations. The company's gross margins have improved steadily from 29.2% in 2003 to 43.5% in the third quarter of 2005. Through September 30, 2005, LTM adjusted EBITDA has advanced 9% to $1.3 billion compared to $1.2 billion in 2004. EBITDA margins have improved to 22.6% from 21.0% at year end 2004. Total debt to adjusted EBITDA has improved slightly to 1.2x compared to 1.3x, while LTM EBITDA less capex divided by interest expense has improved to 11.7x compared to 9.7x in 2004. LTM funds from operations rose 21% to $1.3 billion compared to $1.1 billion in 2004. The company continues to generate significant free cash flow and maintains considerable liquidity. Through September 30, 2005, Freescale posted LTM adjusted free cash flow of $724 million, which compares favorably to $709 million of free cash flow generated in 2004 (sans the one-time $1.13 billion dividend to Motorola in the third quarter of 2004). Adjusted free cash flow in the third quarter of 2005 increased 65% to $282 million compared to $171 million in the third quarter of 2004 (excluding the Motorola dividend payment). Balance sheet cash plus short- and long-term investments are substantial at $2.9 billion (compared to $2.4 billion at year end 2004), representing more than twice the total outstanding debt of $1.25 billion. Interest income in the third quarter of fiscal year 2005 entirely offset interest expense. The stable outlook reflects Moody's expectation of moderate revenue growth in conjunction with higher margins via cost improvement measures. The current ratings and outlook incorporate a moderate level of share repurchases and modest acquisition spending. Freescale's board has recently approved the company's first share repurchase program of $500 million. The ratings could experience upward pressure should Freescale: * continue to implement its cost reduction and external foundry capacity programs resulting in sustained consolidated gross and operating margins above 45% and 15%, respectively; * maintain the current level of free cash flow to debt; and * successfully translate research and development spending (approximately 18% of revenues) into higher revenue growth such that there is a high level of stability in operating performance within its markets, muting the inherent volatility of the semiconductor cycle. Additionally, the ratings could migrate higher if the WMSG operating segment: * successfully converts mobile handset orders into higher shipment volumes and profitable sales to cover its fixed costs; * demonstrates new product growth across external markets; and * continues to maintain or grow business from Motorola. Lastly, the maintenance of prudent financial policies with further improvement in financial leverage could lead to improved ratings. The outlook or ratings could be adversely impacted if: * the company is not able to preserve its Motorola business once the contract expires in fiscal year 2006; * positive margin trends reverse due to higher costs or slowing unit volume growth; * management deviates from its prudent financial profile of maintaining sufficient liquidity; or * future cash acquisition spending and share repurchases exceed amounts provided by the company's free cash flow. Freescale's speculative grade liquidity rating of SGL-1 represents very good liquidity and is largely based on its approximate $1.5 billion in unrestricted cash and cash equivalent balances, $1.4 billion in long-term investments and strong free cash flow generation. Moody's expects the company to maintain strong levels of free cash flow to internally fund capital expenditures and working capital requirements. Further supporting the company's overall liquidity is the expectation for covenant compliance over the next four quarters and availability of alternative liquidity given its unencumbered asset base. Headquartered in Austin, Texas, Freescale designs and manufacturers embedded semiconductors for the transportation, networking and wireless markets. The company was separated from Motorola via IPO in July 2004. Freescale has operations in more than 30 countries. Revenues for the twelve months ended September 30, 2005 were $5.8 billion. GARDENBURGER INC: Court Approves $15 Million DIP Credit Facilities ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, approved two postpetition loan agreements giving Gerdenburger, Inc., access to up to $14.7 million of superpriority debtor-in-possession financing. Wells Fargo Facility A Credit and Security Agreement dated as of November 22, 2005 by and between the Company and Wells Fargo Bank, National Association (acting through its Wells Fargo Business Credit operating division) provides the Debtor with access to: -- a secured revolving line of credit in an amount not to exceed $7.5 million; and -- a secured equipment term loan of $2.2 million. Upon the effective date of a chapter 11 plan that the Debtor will file with the Bankruptcy Court, the maturity date of the WFBC Credit Facility will be automatically extended to the date 36 months after the date of the Credit and Security Agreement with WFBC -- November 22, 2008. All loans, advances and obligations under the WFBC Credit Facility are secured by first priority security interests on all of the Company's assets and those of the reorganized Company, except general intangible assets and proceeds thereof. The WFBC Credit Facility was used to refinance the Company's indebtedness with CapitalSource Finance, LLC, and will provide for ongoing working capital needs and for payment of obligations under, and in accordance with, the Plan. The Revolving Credit and Term Loan Agreement, as amended, between the Company and CapitalSource was terminated upon the repayment by the Company on November 22, 2005 of all outstanding principal, accrued interest, and fees and expenses, which totaled approximately $7.4 million, due to CapitalSource under the Loan Agreement. The Company does not have any material relationship with CapitalSource or any of its affiliates other than in respect of the Loan Agreement and other agreements entered into in connection with the Loan Agreement. A full-text copy of the WFBC Credit Agreement is available for free at http://ResearchArchives.com/t/s?381 GB Credit Facility A Credit and Security Agreement dated as of November 22, 2005 between the Company and GB Retail Funding, LLC, provides the Debtor with a $5 million secured single-advance term loan. This facility is secured by a second priority lien in all collateral securing the WFBC Credit Facility, except that it is secured by a first priority perfected security interest in all of the Company's general intangible assets and proceeds thereof. The interest rate on the GB Credit Facility is the Prime Rate plus 6.75% per annum floating, payable monthly in arrears. The GB Credit Facility is to be repaid in equal monthly installments of $100,000, subject to the Company's right to prepay as described in the Credit and Security Agreement between the Company and GB. Upon the effective date of a chapter 11 plan that the Debtors will file with the Bankruptcy Court, the maturity date of the GB Credit Facility will be automatically extended to the date 36 months after the date of the Credit and Security Agreement with GB -- November 22, 2008. A full-text copy of the GB Credit Agreement is available for free at http://ResearchArchives.com/t/s?382 Headquartered in Los Angeles, California, Gardenburger, Inc. -- http://www.gardenburger.com/-- makes original veggie burgers and innovates in meatless, 100% natural, low-fat food products. The company distributes its meatless products to more than 35,000 foodservice outlets throughout the United States and Canada. Retail customers include more than 30,000 grocery, natural food and club stores. The company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. C.D. Calif. Case No. 05-19539). David S. Kupetz, Esq., at SulmeyerKupetz represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $21,379,886 in assets and $39,338,646 in debts. GB HOLDINGS: Committee Wants to Retain Kasowitz Benson as Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of GB Holdings, Inc., asks the Court for permission to retain Kasowitz, Benson, Torres & Friedman LLP, as its counsel nunc pro tunc to October 19, 2005. Kasowitz Benson will: a) assist, advise and represent the Committee with respect to the administration of this Chapter 11 case and the exercise of oversight with respect to the Debtor's affairs including all issues arising from or impacting the Debtor, the Committee or this Chapter 11 case; b) provide all necessary legal advice with respect to the Committee's powers and duties; c) assist the Committee in maximizing the value of the Debtor's assets for the benefit of all creditors and other parties-in-interest; d) pursue confirmation of a plan of reorganization and approval of an associated disclosure statement or conversion to Chapter 7 or the appointment of a Chapter 11 trustee; e) conduct such investigations, as the Committee desires, concerning, among other things, the assets, liabilities, financial condition, claims and operations of the Debtor; f) commence and prosecute any and all necessary and appropriate actions or proceedings on behalf of the Committee that may be relevant to this Chapter 11 case; g) prepare on behalf of the Committee necessary applications, motions, answers, orders, reports and other legal papers; h) communicate with the Committee s constituents and others as the Committee may consider desirable in furtherance of its responsibilities; i) assist the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; j) appear in Court and representing the interests of the Committee; and k) provide any other legal serves to the Committee that are appropriate, necessary and proper in this Chapter 11 case. The firm's professionals current hourly rates: Professional Hourly Rate ------------ ----------- Partners $525 - $795 Associates $195 - $500 Paraprofessionals $125 - $190 The professionals who will primarily provide services to the Committee are: Attorney Hourly Rate -------- ----------- David S. Rosner $725 Andrew K. Glenn $630 Scott H. Bernstein $325 To the best of the Committee's knowledge, Kasowitz Benson is a "disinterested person" as that term is defined in section 101(14) of the bankruptcy code. 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. GRUPO POSADAS: Fitch Assigns BB- Foreign & Local Currency Rating ---------------------------------------------------------------- Fitch Ratings has placed the 'BB-' senior unsecured foreign and local currency rating and the 'A(mex)' national scale rating of Grupo Posadas S.A. de C.V. on Rating Watch Negative. Approximately $225 million and MXP800 million of debt are affected by this action. The rating action takes place following the announcement of Posadas to buy a 100% of airline carrier Grupo Mexicana de Aviacion S.A. de C.V. for $165.5 million. Fitch expects the acquisition to be funded with a mix of capital and new debt. The acquisition is expected to increase Posadas' leverage and potentially business risk, depending on the ultimate organizational and financial structure of the transaction, which is yet to be determined. The Rating Watch will be resolved when the final terms and conditions of the acquisition, including the funding of the acquisition, and the financial structure post transaction have been determined. Primary concerns are increasing leverage that will alter the financial structure of the company and the higher business risk profile of the airline industry versus Posadas' traditional lodging business. Posadas' current ratings reflect: * a solid business position, * strong brand name, and * multiple hotel formats. The company's presence in all major urban and resort locations in Mexico, consistent product offerings and quality brand image have resulted in occupancy levels above the industry average in Mexico. The company's use of multiple hotel formats allows it to target both domestic and international business travelers, as well as tourists. Posadas' operations are primarily located in Mexico, which limits diversification; approximately one-fifth of room capacity is located outside Mexico. Grupo Posadas is the largest hotel operator in Mexico with more than 30 years in business. The company operates 94 hotels and 17,277 rooms across Mexico, United States, Brazil and Argentina. Approximately 72% of rooms are in urban locations, with the remaining 28% in coastal destinations. The company manages different hotel formats under a combination of owned, leased, and managed properties including Fiesta Americana and Fiesta Inn in Mexico and Caesar Park and Caesar Business in Argentina and Brazil. Grupo Posadas' securities are traded in the United States and are registered in the Securities and Exchange Commission. SEC filings on the company are available at no charge at http://ResearchArchives.com/t/s?37a GRUPO POSADAS: Grupo Mexicana Buy-Out Prompts S&P's Watch Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BB-' long-term foreign and local currency corporate credit ratings on Grupo Posadas S.A. de C.V. on CreditWatch with negative implications. At the same time, Standard & Poor's placed its 'mxA-' national scale rating on Posadas on CreditWatch negative. The 'BB-' senior unsecured debt rating on Posadas was also placed on CreditWatch Negative. "The CreditWatch listing follows the announcement that Posadas' offer of $165.5 million for 100% of the assets of Grupo Mexicana de Aviaci�n S.A. de C.V. was accepted," said Standard & Poor's credit analyst Fabiola Ortiz. Even though the effect of the acquisition on Posadas' business profile could be beneficial in the long term, this may not be enough to offset the effect the funding of the acquisition could have on the financial profile. Moreover, Posada has been more aggressive in the operational development and growth in areas other than the hotel sector, which historically has been its main business. S&P will resolve the CreditWatch listing when the acquisition is completed and after assessing its funding. S&P expects the corporate credit rating to be lowered by one notch, if it is lowered. The senior debt rating will depend on the resulting structure. GUARDIAN TECHNOLOGIES: Incurs $2.4MM Net Loss in Third Quarter -------------------------------------------------------------- Guardian Technologies International, Inc. (OTCBB:GDTI), delivered its financial results for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 15, 2005. Guardian Technologies incurred a $2,386,316 net loss on $43,288 of revenues for the three months ended Sept. 30, 2005, in contrast to a $3,862,712 net loss on $62,248 of revenues for the comparable period in 2004. The Company's balance sheet showed $7,214,521 in total assets at Sept. 30, 2005, and liabilities of $775,250. At Sept. 30, 2005, the Company had a $3,892,843 net working capital surplus, compared with a $1,634,117 net working capital surplus at Sept. 30, 2004. The increase in working capital is the result of the Company's fund raising activities, particularly during the third quarter of 2005. As of September 30, 2005, the Company's revenue generating activities have not produced sufficient funds for profitable operations, and the Company has incurred operating losses since inception. New COO Guardian Technologies has appointed William Donovan as President and COO, effective Nov. 21, 2005. He replaces Robert Dishaw, who is stepping down as President and COO for medical reasons. Mr. Dishaw will continue to serve on the Board of Directors for Guardian and is taking on a new assignment as a consultant engaged in driving the business with EGC located in Florida. Mr. Donovan, 54, has been Chief Financial Officer of Guardian since August 2003. Mr. Donovan has held a number of executive positions over the past 20 years that have prepared him for his new role as President and COO. Guardian is currently conducting a search for a new CFO. Mr. Donovan will continue to perform as CFO until his replacement is on board. Guardian has entered into a new three-year employment agreement with Mr. Donovan and a three-year consulting services agreement with Mr. Dishaw. Going Concern Doubt Aronson & Company expressed substantial doubt about Guardian Technologies' ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004. The auditing firm pointed to the Company's significant operating losses since inception and dependence on additional funding through debt or equity financing to continue its operations. Guardian Technologies -- http://www.guardiantechintl.com/-- designs, develops and delivers sophisticated imaging informatics solutions to its target markets: security and healthcare. The Company utilizes high-performance imaging technologies and advanced analytics to create integrated information management technology products and services that address critical problems in healthcare and homeland security for corporations and governmental agencies. HARBORVIEW MORTGAGE: Fitch Rates $11.8MM Class B-10 Certs. at BB ---------------------------------------------------------------- Fitch rates HarborView Mortgage Loan Trust 2005-16 mortgage loan pass-through certificates: -- $1.513 billion classes 1 A1A, 1 A1B, 2 A1A, 2 A1B, 2 A1C, 3 A1A, 3 A1B, 3 A1C, 4-A1A, 4-A1B, X-1, X-2, X-3, X-4, X-B, PO-1, PO-2, PO-3, PO-4, PO-B, and A-R (senior certificates) 'AAA'; -- $41.4 million class B-1 'AA+'; -- $22.8 million class B-2 'AA'; -- $14.3 million class B-3 'AA-'; -- $12.7 million class B-4 'A+'; -- $11.8 million class B-5 'A'; -- $10.9 million class B-6 'A-'; -- $8.4 million class B-7 'BBB+'; -- $4.2 million class B-8 'BBB'; -- $8.4 million class B-9 'BBB-'; -- $11.8 million class B-10 'BB'. The classes B-11, B-12, and A-R-II are not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 10.50% credit enhancement provided by the 2.45% class B-1, 1.35% class B-2, 0.85% class B-3, 0.75% class B-4, 0.70% class B-5, 0.65% class B-6, 0.50% class B-7, 0.25% class B-8, 0.50% class B-9, 0.70% class B-10, 1.0% class B-11, and 0.80% class B-12. The ratings on the classes B-1 through B-10 certificates are based on their respective subordination. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and the servicing capabilities of Countrywide Home Loan Servicing (rated 'RPS1'/'RMS2+' by Fitch). The trust comprises four cross-collateralized groups of 2,439 conventional first lien mortgage loans with an aggregate principal balance of $1,017,317,094 as of the cut-off date, Nov. 1, 2005. The collateral was primarily originated by Countrywide Home Loans. The mortgage loans are adjustable-rate mortgages with the potential to negatively amortize, commonly known as Option ARMs. The Option ARM borrowers have four payment options: * interest only, * minimum monthly payment, * principal and interest payment based on a 15-year amortization schedule, and * principal and interest payment based on a 30-year amortization schedule. The loans may negatively amortize if the borrower chooses to make the MMP particularly in a rising rate environment. The Option ARMs are indexed to either one-month LIBOR plus a spread, or the 12-month moving average U.S. Treasury index plus a spread. Loan group 1 consists of conforming balance mortgage loans with an aggregate principal balance of $211,775,351.79 as of the cut-off date. The average principal balance is $223,392. The original weighted average loan-to-value ratio is 77.97% and the weighted average FICO score is 700. Cash-out and rate/term refinance loans represent 42.11% and 14.08% of the loan pool, respectively. The states that represent the largest portion of mortgage loans are California, Florida, Nevada, and Arizona. All other states represent less than 5% of the loan pool. Loan group 2 consists of conforming and non-conforming balance mortgage loans with an aggregate principal balance of $187,838,333 as of the cut-off date. The average principal balance is $513,219. The original weighted average OLTV ratio is 77.40% and the weighted average FICO score is 708. Cash-out and rate/term refinance loans represent 24.74% and 11.64% of the loan pool, respectively. The states that represent the largest portion of mortgage loans are California, New Jersey, Florida, and Virginia. All other states represent less than 5% of the loan pool. Loan group 3 consists of conforming and non-conforming balance mortgage loans with an aggregate principal balance of $595,979,740 as of the cut-off date. The average principal balance is $544,771. The original weighted average OLTV ratio is 75.63% and the weighted average FICO score is 706. Cash-out and rate/term refinance loans represent 38.20% and 11.56% of the loan pool, respectively. The states that represent the largest portion of mortgage loans are California and Florida. All other states represent less than 5% of the loan pool. Loan group 4 consists of conforming and non-conforming balance mortgage loans with an aggregate principal balance of $21,723,668 as of the cut-off date. The average principal balance is $700,764. The original weighted average OLTV ratio is 77.37% and the weighted average FICO score is 706. Cash-out and rate/term refinance loans represent 48.70% and 9.25% of the loan pool, respectively. The states that represent the largest portion of mortgage loans are Florida, California, New Jersey, Louisiana, Colorado, and Michigan. All other states represent less than 5% of the loan pool. HERTZ CORPORATION: Discloses Results of Tender Offers ----------------------------------------------------- On Oct. 17, 2005, The Hertz Corporation commenced tender offers to purchase for cash any and all of the company's outstanding notes and consent solicitations for certain proposed amendments to the indentures pursuant to which the Notes were issued. Hertz said that, as of 5:00 p.m., New York City time, on Wednesday, Nov. 30, 2005, the amount and percentage of Notes tendered for each series and for each indenture were: 1986 Indenture Aggregate Aggregate Outstanding Principal CUSIP/ Principal Title of Amount Percentage ISIN Amount Security Tendered Tendered Number ------ ----------- -------- ---------- ---------- 428040AP4/ $99,998,000 9% Senior $96,389,000 96.39% US428040AP48 Notes due Nov. 1, 2009 Totals for 1986 Indenture: $96,389,000 96.39% 1994 Indenture Aggregate Aggregate Outstanding Principal CUSIP/ Principal Title of Amount Percentage ISIN Amount Security Tendered Tendered Number ------ ----------- -------- ---------- ---------- 428040BM0/ $250,000,000 6.50% Sr. $160,478,000 64.19% US428040BM08 Notes due May 15, 2006 428040BF5/ $6,859,000 6.30% Sr. $2,009,000 29.29% US428040BF56 Notes due Nov. 15, 2006 428040BN8/ $500,000,000 7-5/8% Sr. $374,204,000 74.84% US428040BN80 Notes due Aug. 15, 2007 428040BK4/ $200,000,000 6-5/8% Sr. $158,688,000 79.34% US428040BK42 Notes due May 15, 2008 428040BL2/ $300,000,000 6-1/4% Sr. $230,969,000 76.99% US428040BL25 Notes due Mar. 15, 2009 428040BQ1/ $500,000,000 7.40% Sr. $371,383,000 74.28% US428040BQ12 Notes due Mar. 1, 2011 428040BJ7/ $250,000,000 7% Senior $214,272,000 85.71% US428040BJ78 Notes due Jan. 15, 2028 Totals for 1994 Indenture: $1,512,003,000 75.34% 2001 Indenture Aggregate Aggregate Outstanding Principal CUSIP/ Principal Title of Amount Percentage ISIN Amount Security Tendered Tendered Number ------ ----------- -------- ---------- ---------- 428040BT5/ $500,000,000 4.7% Sr. $420,955,000 84.19% US428040BT50 Notes due Oct. 2, 2006 428040BV0/ $250,000,000 Floating Rate $240,982,000 96.39% US428040BV07 Notes due Aug. 5, 2008 428040BU2/ $600,000,000 6.350% Sr. $545,077,000 90.85% US428040BU24 Notes due June 15, 2010 428040BS7/ $800,000,000 7-5/8% Sr. $615,612,000 76.95% US428040BS77 Notes due June 1, 2012 428040BW8/ $250,000,000 6.9% Notes $226,548,000 90.62% US428040BW89 due Aug. 15, 2014 Totals for 2001 Indenture: $2,049,174,000 85.38% Each indenture pursuant to which the Notes were issued provides that it may be amended with the consent of holders of not less than a majority in principal amount of all securities outstanding thereunder. Hertz announced on Oct. 31, 2005 that the requisite consents under each indenture had been received, and as a result of the receipt of these consents, tendered Notes may not be withdrawn and consents may no longer be revoked with respect to the Notes, except in limited circumstances. The Expiration Date with respect to each of the Offers under the Offers to Purchase and Consent Solicitation, dated Oct. 17, 2005, as amended by the Supplement, dated Oct. 21, 2005, will occur at 5:00 p.m., New York City time, on Friday, Dec. 9, 2005, unless such date is extended or earlier terminated. Hertz said that, with respect to the following series of Notes only (such notes, the "Affected Notes"), it has extended the date by which holders must tender in order to be eligible to receive the "Total Consideration" as set forth with respect to such series of Affected Notes in the Statement. Holders of Affected Notes who tender such Notes prior to 5:00 p.m., New York City time, on Friday, Dec. 9, 2005, will be eligible to receive the Total Consideration, which includes the Early Consent Premium with respect to the Affected Notes. The Affected Notes are: Aggregate Outstanding Title of CUSIP/ISIN Number Principal Amount Security ----------------- --------------------- -------- 428040BN8/US428040BN80 $500,000,000 7-5/8% Sr. Notes due Aug. 15, 2007 428040BK4/US428040BK42 $200,000,000 6-5/8% Sr. Notes due May 15, 2008 428040BV0/US428040BV07 $250,000,000 Floating Rate Notes due Aug. 5, 2008 428040BL2/US428040BL25 $300,000,000 6-1/4% Sr. Notes due Mar. 15, 2009 428040AP4/US428040AP48 $99,998,000 9% Sr. Notes due Nov.1, 2009 Holders of all other series of Notes who tender their notes after 5:00 p.m., New York City time, on Friday, Oct. 28, 2005, but before 5:00 p.m. on Friday, Dec. 9, 2005, unless such date is extended or earlier terminated, will be eligible to receive only the Tender Offer Consideration set forth in the Statement with respect to such Notes. Holders who tender Notes must also deliver consents to the proposed amendments with respect to the series of such Notes and with respect to the indenture which governs such Notes. Holders may not deliver consents without also tendering their Notes and holders who validly tender their Notes will be deemed by such tender to have delivered their consents. The Offers are being conducted in connection with the pending sale of Hertz by Ford Holdings LLC to CCMG Holdings, Inc. or to a wholly-owned subsidiary thereof. The obligation of Hertz to accept for purchase, and to pay the applicable consideration set forth in the Statement, for Notes validly tendered pursuant to the Offers is conditioned upon the consummation of the Sale Transaction, which is itself subject to certain conditions described in the Statement. Hertz intends to further extend the Expiration Date, if necessary, so that the date on which it initially accepts Notes for payment pursuant to the terms of the Offers coincides with the closing of the Sale Transaction. Subject to applicable securities law, Hertz reserves the right to waive any and all conditions to any or all of the Offers and Solicitations or extend, terminate or otherwise amend the Offers or Solicitations. In connection with the Sale Transaction, Hertz or its subsidiary Hertz Finance Centre plc are offering to purchase the outstanding EUR200,000,000 Floating Rate Notes due July 2007 of Hertz Finance Centre PLC pursuant to a concurrent tender offer. Citigroup Corporate and Investment Banking, Deutsche Bank Securities Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Lehman Brothers Inc. are serving as dealer managers and solicitation agents for the Offers and Solicitations; Global Bondholder Services Corporation is serving as information agent and depositary and Deutsche Bank Luxembourg S.A. is serving as Luxembourg tender agent. Questions may be directed to Citigroup Corporate and Investment Banking at (800) 558-3745; Deutsche Bank Securities Inc. at (866) 627-0391; Goldman, Sachs & Co. at (800) 828-3182; J.P. Morgan Securities Inc. at (866) 834-6666; and Lehman Brothers Inc. at (800) 438-3242. Requests for documents may be directed to Global Bondholder Services Corporation at (866) 387-1500 or in writing at 65 Broadway - Suite 704, New York, NY 10006, The Hertz Corporation operates the largest general use car rental business in the world and one of the largest industrial, construction and material handling equipment rental businesses in North America, based on revenues. * * * As reported in the Troubled Company Reporter on Dec. 1, 2005, Standard & Poor's Ratings Services assigned its 'B' rating to Hertz Corp.'s proposed $2.2 billion of senior notes due 2013 and $600 million of subordinated notes due 2015. At the same time, a 'BB+' rating was assigned to the car rental company's proposed $1.6 billion senior ABL facility, and a 'BB' rating to its proposed $2.250 billion senior term facility. Both facilities are assigned recovery ratings of '1', indicating high expectations of full recovery of principal in the event of a payment default. Upon completion of these transactions, the 'BBB-' corporate credit rating on Hertz would be lowered to 'BB-', the 'BBB-' senior unsecured debt rating lowered to 'B', and the 'A-3' commercial paper rating withdrawn. All ratings would be removed from CreditWatch with negative implications; ratings were initially placed on CreditWatch developing on April 21, 2005, with implications revised to negative on Sept. 13, 2005. Standard & Poor's would assign a stable outlook. "The ratings on Hertz reflect a weakened financial profile after its proposed approximately $15 billion acquisition, reduced financial flexibility, and the price-competitive nature of on-airport car rentals and equipment rentals," said Standard & Poor's credit analyst Betsy Snyder. "Ratings also incorporate the company's position as the largest global car rental company and the strong cash flow its businesses generate," she continued. HONDO TRUST: Case Summary & 10 Known Creditors ---------------------------------------------- Debtor: The Hondo Trust dated January 7, 2000 11615 Forest Central Drive, Suite 209 Dallas, Texas 75243 Bankruptcy Case No.: 05-86931 Chapter 11 Petition Date: December 1, 2005 Court: Northern District of Texas (Dallas) Debtor's Counsel: Patrick Joseph Schurr, Esq. Scheef & Stone, L.L.P. 5956 Sherry Lane, Suite 1400 Dallas, Texas 75225 Tel: (214) 706-4200 Fax: (214) 706-4242 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Kirby Albright Unknown 1215 Benton Woods Drive Rockwall, TX 75032 James W. Ayres Unknown c/o Charles Gameros 4311 Oak Lawn, Suite 600 Dallas, TX 75219 David Childs Unknown Dallas County Tax Assessor P.O. Box 139066 Dallas, TX 75313 Susan Gregory Unknown P.O. Box 7084 Dallas, TX 75209 Gregory Commercial Unknown P.O. Box 7084 Dallas, TX 75209 Truman Heddins Unknown P.O. Box 459 Grand Saline, TX 75140 Special Procedures Staff Unknown Internal Revenue Service Mail Code 5020-DAL 1100 Commerce, Room 9B8 Dallas, TX 75242 North Houston Bank Unknown 1401 McKinney, Suite 2350 Houston, TX 77010 Office of the U.S. Trustee Unknown 1100 Commerce, Room 9C60 Dallas, TX 75242 Office of the U.S. Attorney Unknown 1100 Commerce, 3d Floor Dallas, TX 75242 ICF CORP: Balance Sheet Upside-Down by $2.31 Million at Sept. 30 ---------------------------------------------------------------- ICF Corporation reported its financial results for the quarter ended Sept. 30, 2005. The Company incurred a $617,200 net loss from operations for the three months ended Sept. 30, 2005, compared to a loss from operations of $564,800 for the three months ended Sept. 30, 2004. Going Concern Doubt BDO Seidman, LLP, raised substantial doubt about the Company's ability to continue as a going concern based on (i) operating losses in the first nine months of 2005 and operating and net losses in 2004 and 2003, and (ii) capital deficiencies reported at December 31, 2004, and September 30, 2005. The Company has limited additional financing available under its current accounts receivable financing facility in order to fund any additional cash required for its operations or otherwise. ICF Corporation fka COMC, Inc., is a technology service company in the telecommunications industry with a regional service coverage area. It designs, implements, and supports LAN/WAN computer network systems, voice communication network systems, and premises wiring for both data and voice. In addition, it distributes and maintains equipment on behalf of major telecommunication equipment manufacturers. At Sept. 30, 2005, ICF Corporation's balance sheet showed a $2,314,700 equity deficit compared to a $6,640,800 equity deficit at Dec. 31, 2004. IMEDIA INTERNATIONAL: Net Losses Continue in Third Quarter ---------------------------------------------------------- iMedia International, Inc., delivered its financial results for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 18, 2005. IMedia's net loss increased by 101% for the three months ended Sept. 30, 2005 to $2,539,684 from $1,265,444 for the three months ended Sept. 30, 2004. The substantial increase in net loss is attributable partially to the overall increase in operations, but more specifically to unusual and one-time non-cash general and administrative expenses, additional legal and accounting costs relating to the filing of an SB-2 registration statement and non- cash interest expenses. Net sales increased by 28% for the three months ended Sept. 30, 2005 to $970,165 from $756,794 for the three months ended Sept. 30, 2004. The increase in sales in the third quarter versus the same time period in the prior year is primarily due to an increase in customer base as a result of the implementation of the Company's marketing plan. The Company's balance sheet showed $4,220,939 in total assets at Sept. 30, 2005, and liabilities of $1,214,912. Going Concern Doubt Singer Lewak Greenbaum & Goldstein LLP expressed substantial doubt about iMedia's ability to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2004. The auditing firm pointed to the Company's significant losses from operations and dependence on equity and debt financing. About iMedia iMedia International -- http://www.imedia.com.sg/-- is a niche CRM solutions provider focused on helping corporate clients increase their revenue platforms, customer lifetime value and reducing operational costs through a complete end-to-end suite of CRM, Customer Centric Marketing and Process enablers. Established since 1989, iMedia has a client list that includes many blue chip multinational companies, the public sector, and SMEs -- all coming from a wide range of diverse industries. IMPERIAL HOME: Wants Court to Approve Avoidance Action Settlements ------------------------------------------------------------------ Montague S. Claybrook, the Chapter 7 Trustee appointed in Imperial Home Decor Group Holdings, Inc., and its debtor-affiliates' liquidation proceedings, asks the U.S. Bankruptcy Court for the District of Delaware to approve certain avoidance action settlements. The Trustee has identified approximately 76 potential defendants who may have received preferential transfers ranging from $5,000 to $250,000, and has settled claims against 10 defendants after initiating an adversary proceeding. Pursuant to the proposed settlements, the potential defendants and the defendants will make certain payments to the estate and will release various claims against the Debtors. In exchange, the Trustee will release various claims asserted against the potential defendants and asserted against the defendants in filed adversary proceedings. Tobey M. Daluz, Esq., Mr. Claybrook's counsel, tells the Court that the proposed settlements allow the Debtors to collect significant settlement payments while avoiding the cost, uncertainty and delay of litigation. Mr. Claybrook believes that settlement of the avoidance actions is in the best interests of the Debtors and all creditors. A list of the defendants is available at no charge at http://ResearchArchives.com/t/s?380 Headquartered in Cleveland, Ohio, Imperial Home Decor Group, Inc. -- http://www.ihdg.com-- manufactures and distributes home and commercial wall-coverings. The Company also provides online wall-covering information sales services. Products and services are sold to multiple industries. The Company and its debtor-affiliates filed for chapter 11 protection on Dec. 27, 2003 (Bankr. D. Del. Case No. 03-13899). The Debtors' cases were converted to chapter 7 on Sept. 1, 2004. Prior to the conversion date, substantially all of the Debtors' assets were liquidated. Currently, the estates are administratively insolvent. On Sept. 9, Montague S. Claybrook was appointed as chapter 7 Trustee. Duane David Werb, Esq., at Werb & Sullivan represents the Debtors. When the Debtor filed for protection from its creditors, it estimated $100 million in total assets and $100 million in debts. INNOVA PURE: Incurs $60,600 Net Loss in Quarter Ended Sept. 30 -------------------------------------------------------------- Innova Pure Water, Inc., reported its financial results for the quarter ended Sept. 30, 2005. Net sales for the three-month period ended Sept. 30, 2005, were $139,900, an increase of $62,100 or 79% from the $77,800 of net sales for the comparable period in 2004. This increase is mainly attributable to the acquisition of Numera Software Corporation and Desert View Management Services, Inc. Net loss for the three months ended Sept. 30, 2005, amounted to $60,600 as compared to net loss of $73,100 for the same period last year. This decrease in the net loss is principally attributable to acquisition of Numera and DesertView, without increasing the overhead expenses for the Company. Going Concern Doubt Turner, Stone & Company LLP, expressed substantial doubt about Innova Pure Water, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended June 30, 2005. The auditing firm points to the Company's $251,800 negative working capital at June 30, 2005 and $9,369,500 accumulated deficit. Innova Pure's annual report for the fiscal year ended June 30, 2004 also contained a negative going concern opinion from its previous independent auditor, Pender Newkirk & Company, CPAs. The auditing pointed to the Company's recurring losses and negative working capital at June 30, 2004. A full-text copy of the Company's regulatory filing is available free of charge at http://ResearchArchives.com/t/s?37d Innova Pure Water, Inc. -- http://www.innovapurewater.com/-- designs, develops, manufactures, and markets unique consumer water filtration and treatment products. These products have been historically of the portable nature and generally consist of a container serving as a water reservoir incorporating highly efficient water filtering and treatment technology. INTERNATIONAL PAPER: Inks $800 Million Credit Facility ------------------------------------------------------ International Paper Company, and International Paper Investments (Luxembourg) S.a r.l., a Luxembourg wholly owned subsidiary, entered into a $800,000,000 Credit Facility providing the company with access to a five-year $700,000,000 term loan and a 364-day $100,000,000 revolving credit facility backed by: Term Loan Revolving Lender Commitment Commitment ------ ---------- ---------- ABN AMRO Bank N.V. $43,750,000 $6,250,000 BNP Paribas Ireland 62,125,000 8,875,000 Citibank International plc, London Branch 43,750,000 6,250,000 The Bank of Tokyo-Mitsubishi Ltd., New York Branch 41,562,500 5,937,500 Deutsche Bank AG, London Branch 41,562,500 5,937,500 Banco Santander Central Hispano S.A., New York Branch 35,000,000 5,000,000 Bank of America, N.A. 35,000,000 5,000,000 Commerzbank AG, New York and Grand Cayman Branches 35,000,000 5,000,000 Credit Suisse, Cayman Islands Branch 35,000,000 5,000,000 Goldman Sachs Credit Partners L.P. 35,000,000 5,000,000 JP Morgan Chase Bank 35,000,000 5,000,000 Mizuho Corporate Bank, Ltd 35,000,000 5,000,000 The Royal Bank of Scotland plc 35,000,000 5,000,000 UBS Limited 35,000,000 5,000,000 Fortis Capital Corp. (Fortis Bank S.A./N.V. as its Affiliate in relation to Loans to any Borrower incorporated in Belgium (if any)) 23,625,000 3,375,000 Nordea Bank Finland Plc 18,375,000 2,625,000 The Norinchukin Bank, New York Branch 18,375,000 2,625,000 SANPAOLO IMI S.p.A. 18,375,000 2,625,000 Societe Generale 18,375,000 2,625,000 Sumitomo Mitsui Banking Corporation 18,375,000 2,625,000 U.S. Bank, N.A. 18,375,000 2,625,000 Wachovia Bank, National Association 18,375,000 2,625,000 ------------ ------------ $700,000,000 $100,000,000 The Facility Agent for the Lending Consortium is: BNP PARIBAS Attention: Thierry Bonnel 37 Place du Marche Saint Honore 75031 Paris Cedex 01 FRANCE Under the Credit Facility the Company can add up to four additional borrowers. The Company intends to use the proceeds of the Credit Facility for general corporate purposes, with the revolving credit portion also intended to be used for working capital purposes. A full-text copy of the Credit Agreement is available for free at http://ResearchArchives.com/t/s?36a International Paper's other material funded debt obligations are: Issue Principal Amount ----- ---------------- 5.85% Note Due 2012 $1,140,000,000 3.75% Zero Coupon Convertible Note Due 2021 $1,001,264,000 6.75% Note Due 2011 $975,000,000 5.30% Note Due 2015 $625,000,000 4.00% Note Due 2010 $567,800,000 5.50% Note Due 2014 $484,250,000 4.25% Note Due 2009 $476,175,000 5.25% Note Due 2016 $400,000,000 3.80% Note Due 2008 $300,000,000 5.375% Euro Notes Due 2006 EUR250,000,000 7.35% Note Due 2025 $200,000,000 6.4% Note Due 2026 $200,000,000 7.2% Note Due 2026 $200,000,000 7.625% Note Due 2007 $198,000,000 6.875% Note Due 2023 $200,000,000 6.875% Note Due 2029 $200,000,000 7.75% Note Due 2025 $150,000,000 6.5% Note Due 2007 $150,000,000 Preferred Securities Principal Amount -------------------- ---------------- 5.25% Convertible Preferred Securities Due 2025 $449,831,150 7.005% Preferred Stock - TCCII Due 2039 $170,000,000 Amount Outstanding as at Bank Facility September 30, 2005 ------------- ------------------ $750,000,000 R/C Facility Due 2006 $0 $1,250,000,000 R/C Facility Due 2009 $0 $1,200,000,000 Receivable Securitization 2004 $0 EUR500,000,000 IPISAS Credit Facility Due 2009 EUR500,000,000 PLN 400,000,000 IP Kwidzyn SA Credit Facility Due 2006 PLN400,000,000 International Paper Inc. -- http://www.internationalpaper.com/-- is the world's largest paper and forest products company. Businesses include paper, packaging, and forest products. As one of the largest private forest landowners in the world, the company manages its forests under the principles of the Sustainable Forestry Initiative (R) (SFI) program, a system that ensures the continual planting, growing and harvesting of trees while protecting wildlife, plants, soil, air and water quality. * * * As reported in the Troubled Company Reporter on July 22, 2005, Moody's Investors Service placed International Paper Company's ratings on review for possible downgrade. International Paper Company: * Senior Unsecured Baa2 * Subordinate Shelf (P)Baa3 * Preferred Shelf (P)Ba1 * Commercial Paper P-2 International Paper Capital Trust II: * Bkd Preferred Stock Baa3 * International Paper Capital Trust III: * Bkd Preferred Shelf Baa3 International Paper Capital Trust IV: * Bkd Preferred Shelf (P) Ba1 * International Paper Capital Trust VI: * Bkd Preferred Shelf (P) Ba1 Champion International Corporation: * Senior Unsecured Baa2 * Federal Paper Board Co., Inc. * Senior Unsecured Baa2 Union Camp Corporation: * Senior Unsecured Baa2 INTERSTATE BAKERIES: Four Tort Claimants Hold $900K Allowed Claim ----------------------------------------------------------------- The Hon. Jerry W. Venters of the U.S. Bankruptcy Court for the Western District of Missouri approves Interstate Bakeries Corporation and its debtor-affiliates' resolution of tort claims filed by four tort claimants. The Debtors entered into separate settlement agreements with the four tort claimants in accordance with the Court-approved Claims Resolution Procedures. Pursuant to Settlement Agreements, the Debtors agree that the tort claimants will be allowed general prepetition unsecured, non-priority claims in the Debtors' Chapter 11 cases: Tort Claimant Claim No. Amount ------------- --------- ------ Antonio Martinez 398 $90,000 City of Sacramento 459 79,101 Janice Buckler 5407 675,000 Nofisia Morisseau 924 56,500 925 1192 The Allowed Claims will be satisfied in accordance with any confirmed plan of reorganization in the Debtors' cases. The Claimants agree to release the Debtors from any claims and causes of action relating to the Claims. The automatic stay remains in effect with respect to all actions to collect or enforce the Allowed Claims and any other claims against the Debtors, their affiliates, or their Chapter 11 estates. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014, on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000) J INCORPORATED: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: J Incorporated dba 1878 Tavern and Grille 12 North 2nd Street Fernandina Beach, FL 32034 Bankruptcy Case No.: 05-15767 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: December 1, 2005 Court: Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Debtor's Counsel: Lanny M. Rauer, Esq. Law Office of Lanny M. Rauer 501 Centre Street, Suite 123 Fernandina Beach, Florida 32034 Tel: (904) 261-4171 Fax: (904) 491-8687 Total Assets: $1,400,000 Total Debts: $1,000,511 Debtor's 3 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service 940 & 941 Taxes $235,731 Attn: Group 1100 Stop 5111 Sept. 2001 6800 Southpoint Parkway to present Suite 500 Jacksonville, FL 32216-6221 Florida Department of Revenue Sales & Use Tax $68,067 Jacksonville Service Center Jan. 2002 921 N. Davis Street, Suite 250A to present Jacksonville, FL 32209-6825 Florida Department of Revenue Unemployment Tax $15,169 5050 West Tennessee Street Aug. 2001 Tallahassee, FL 32399-0180 to present JANKRIS VINEYARDS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: JanKris Vineyards 1266 North Bethel Road Templeton, California 93465 Bankruptcy Case No.: 05-50026 Type of Business: The Debtor operates a winery. See http://www.jankris.com/ Chapter 11 Petition Date: December 1, 2005 Court: Central District of California (Santa Barbara) Judge: Robin Riblet Debtor's Counsel: Joseph M. Sholder, Esq. Michaelson Susi and Michaelson 7 West Figueroa Street, 2nd Floor Santa Barbara, California 93101 Tel: (805) 965-1011 Fax: (805) 965-7351 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 ------ --------------- ------------ Trilogy Glass Packaging Glass & Packaging $46,423 1180 C. Holm Road Petaluma, CA 94954 Jesus A. Rendon Machine Harvesting $27,563 P.O. Box 4006 Paso Robles, CA 93447 W.S. Packaging Group, Inc. Labels $23,382 P.O. Box 127 Algoma, WI 54201 Andres Silva Harvest Labor $23,129 Financial Pacific Fund Leasing Generator Lease $18,360 County of SLO Tax Collector Taxes $16,415 Western Farm Service Vineyard Chemicals $15,169 Michael Dusi Trucking Harvest Trucking $13,373 The Bottlemeister Mobile Bottling $12,391 Agajanian Vineyards Inc. Viognien Grapes $11,440 Portocork Inc. Corks $9,496 Le Vigne Di San Domenico Wine Making Services $8,202 SVP Winery LLC Wine $6,792 HPC Eagle Energy Diesel Fuel $6,533 Rail & Hail Insurance Insurance $6,209 Jarek Moiski, Thomas Frankovich Disability Lawsuit $6,000 Patrick Connally Taylor Rental Rental Equipment $5,389 M.S. Walker Marketing Costs $5,104 ComLease Inc. Material Lease $4,500 Clarksville Stave Wine Making $2,602 Additives JP MORGAN: Fitch Affirms Low-B Ratings on Class J through P Certs. ------------------------------------------------------------------ Fitch Ratings affirms J.P. Morgan's commercial pass-through certificates, series 2004-CIBC9: -- $51.9 million class A-1 at 'AAA'; -- $146 million class A-2 at 'AAA'; -- $103.7 million class A-3 at 'AAA'; -- $466.3 million class A-4 at 'AAA'; -- $165.4 million class A-1A at 'AAA'; -- Interest-only class X at 'AAA'; -- $27.5 million class B at 'AA'; -- $13.8 million class C at 'AA-'; -- $20.7 million class D at 'A'; -- $11 million class E at 'A-'; -- $15.2 million class F at 'BBB+'; -- $9.6 million class G at 'BBB'; -- $17.9 million class H at 'BBB-'; -- $2.8 million class J at 'BB+'; -- $4.1 million class K at 'BB'; -- $5.5 million class L at 'BB-'; -- $5.5 million class M at 'B+'; -- $2.8 million class N at 'B'; -- $2.8 million class P at 'B-'. Fitch does not rate the $13.8 million class NR. The affirmations reflect stable pool performance and scheduled amortization since issuance. As of the November 2005 distribution date, the pool's aggregate principal certificate balance has decreased 1.4% to $1.09 billion compared with $1.10 billion at issuance. There are currently no loans in special servicing. Fitch has identified 13 loans that are located in areas designated as FEMA disaster zones due to Hurricanes Katrina, Rita, or Wilma. Twelve of these properties sustained little to no damage due to the hurricanes. However, a retail center in Metairie, Louisiana suffered significant flood and wind damage and is 30+ days delinquent. The borrower is currently waiting on funds from insurance that will serve as compensation for loss of rents. Fitch is monitoring the loan as more information becomes available. Fitch reviewed the credit assessments of both the Centro Retail Portfolio II and Grace Building. Both loans maintain investment-grade credit assessments. The Fitch stressed debt service coverage ratio is calculated using servicer provided net operating income less required reserves divided by debt service payments based on the current balance using a Fitch stressed refinance constant. The Centro Retail Portfolio is secured by seven, cross-collateralized anchored retail properties in Northern and Southern California. As of the trailing twelve months ending June 30, 2005, the Fitch stressed DSCR is 1.48 times compared with 1.32x at issuance. Occupancy as of June 30, 2005 is 99.7% compared with 99.3% at issuance. The Grace Building is secured by an office building, comprised by 1,518,210 square feet and located in New York, New York. Only the A-1 note is included in the trust; the pari-passu A-2 and A-3 notes, totaling $234 million, and a subordinate $30 million B-note are located outside the trust. The Fitch stressed annualized June 30, 2005 DSCR is 1.50x compared with 1.43x at issuance. Occupancy as of June 30, 2005 is 100% compared with 98% at issuance. KAISER ALUMINUM: Wants Court to Approve Sherwin Alumina Settlement ------------------------------------------------------------------ Jason M. Madron, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, relates that Kaiser Bauxite Company, a Kaiser Aluminum Corporation debtor-affiliate, and Sherwin Alumina LP were parties to a bauxite purchase agreement dated November 13, 2001. Under the agreement, Kaiser Bauxite agreed to provide bauxite to Sherwin Alumina at certain tonnage amounts and minimum prices through December 31, 2009. On October 18, 2004, KBC rejected the Supply Agreement. Sherwin Alumina filed Claim No. 11318 against KBC alleging that Sherwin Alumina will incur damages as a result of the rejection, including damages it may incur if it has to pay a higher price for bauxite than the price in the Supply Agreement, or if it cannot secure a replacement supply from any source. When Sherwin Alumina entered into a replacement supply contract with a third party in May 2005, Sherwin Alumina amended its proof of claim and asserted an unsecured rejection damage claim against KBC for $68,600,000. On August 19, 2005, Sherwin Alumina filed an objection to the disclosure statement accompanying Kaiser Aluminum Corporation and its debtor-affiliates' Second Amended Reorganization Plan. Among other things, Sherwin Alumina alleged that: (a) the Plan was not proposed in good faith because the Intercompany Claims Settlement, which was unfair to KBC, is the foundation of the Plan and the Intercompany Claims Settlement, and the Plan may be tainted by conflicts of interest; and (b) the substantive consolidation proposed in the Plan would only be permissible if KBC were added to the Plan. Over the past several weeks, the Debtors, the Official Committee of Unsecured Creditors and Sherwin Alumina have been negotiating a resolution of the Sherwin Alumina Claim and the issues raised by the Sherwin Alumina objection. Consequently, the parties agree that: (a) KBC will become a proponent of the Plan along with the Reorganizing Debtors; (b) the Sherwin Alumina claim will be allowed for $42,125,000 as a general unsecured claim; (c) all unsecured claims against KBC, including Sherwin Alumina's, will be treated in Subclass 9B under the Plan and KBC will be substantively consolidated with certain of the Reorganizing Debtors solely for that purpose; (d) Sherwin Alumina will waive any attempt to challenge the Intercompany Settlement Agreement or the Plan; and (e) the Plan will be modified to implement the settlement. In particular: -- the definitions of the Debtors and the Other Debtors will be adjusted to reflect the fact that KBC is now a proponent of the Plan; -- in connection with confirmation of the Plan, the Debtors will seek Court approval of the substantive consolidation of KBC with the Substantively Consolidated Debtors solely to treat any Unsecured Claims against KBC as Claims in Subclass 9B for purposes of distributions to be made under the Plan; and -- the Plan will provide that Sherwin Alumina's Unsecured Claim against KBC is allowed for $42,125,000 under Subclass 9B. A full-text copy of the Plan Modifications is available free of charge at http://ResearchArchives.com/t/s?389 The Settlement will be binding on the parties only if the Plan, as modified, is confirmed. Modifications Are Not Material The Reorganizing Debtors ask the U.S. Bankruptcy Court for the District of Delaware to approve the Settlement Agreement with Sherwin Alumina. The Debtors also seek permission to make Plan Modifications and deem those modifications to be accepted by all creditors that previously voted to accept the Plan. Mr. Madron assures the Court that the Plan Modifications will not cause a material adverse change in the treatment of any claim of any creditor that has not accepted the Plan Modifications in writing. Moreover, Mr. Madron notes that with respect to the creditors of the Reorganizing Debtors, the treatment of the various classes under the Plan is not being altered and the only effect of the Plan Modifications is a de minimis dilution of Class 9 claims caused by the increase of $42,000,000 in the aggregate amount of claims in Class 9, which are estimated to be $2,900,000,000. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 84; Bankruptcy Creditors' Service, Inc., 215/945-7000) KMART CORP: Settles Dispute Over Hurst's Lease Rejection Claim -------------------------------------------------------------- Hurst Realty Corporation and Kmart Corporation advise the U.S. Bankruptcy Court for the Northern District of Illinois that they have resolved their disputes with respect to Hurst Realty's lease rejection claim for Kmart Store No. 4267 in Hurst, Texas. Pursuant to the parties' agreement, the Court allows Hurst's Claim as a Class 5 Lease Rejection Claim for $544,600, which amount will be satisfied in accordance with the terms of the Debtors' Plan of Reorganization. The Court also allows Hurst Realty an administrative claim for $33,735. Judge Sonderby declares that, on receipt of all distributions, all of Hurst Realty's claims relating to lease rejection damages and administrative amounts for Kmart Store No. 4267 will be deemed satisfied in their entirety. Hurst Realty is forever barred from asserting, collecting, or seeking to collect any lease rejection or administrative expense amount in addition to the allowed Lease Rejection Claim and Administrative Claim with respect to the Store. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service, Inc., 215/945-7000) KMART CORP: Court Allows Travis County's Tax Claim for $264,000 --------------------------------------------------------------- Nelda Wells Spears, Tax Collector of the County of Travis, for and on behalf of: (i) Travis County, Texas; (ii) Austin Independent School District, City of Austin; and (iii) Austin Community College, filed claims against Kmart Corporation for certain property taxes: Claim No. Amount --------- ------ 833 $291,032 14036 $1,067,413 29340 $1,246,520 53203 $543,066 The Claims also include Claim No. 40534 on account of Travis County's Second Amended Notice of Tax Lien filed on July 31, 2002. The Debtors and Travis County desire to liquidate and resolve the liabilities relating to the Claims. Therefore, the Parties agree that the Claims will be allowed for $264,000 in aggregate, in final satisfaction of Kmart's prepetition liability for property taxes. In exchange for the payment, Travis County will withdraw all the Claims. Accordingly, Judge Susan Pierson Sonderby of the U.S. Bankruptcy Court for the Northern District of Illinois approved the Stipulation in its entirety. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEVITZ HOME: Three Utilities Want Press for Cash Deposits --------------------------------------------------------- As previously reported in the Troubled Company Reporter on Nov. 18, 2005, the U.S. Bankruptcy Court for the Southern District of New York granted Levitz Home Furnishings, Inc., and its debtor-affiliates' request to: (a) prohibit utilities from altering, refusing, or discontinuing services on account of prepetition invoices; (b) determine that the Utility Companies have received adequate assurance of payment for future utility services; and (b) establish procedures for determining requests for additional adequate assurance. Three Utilities Want Cash Deposit Atlantic City Electric, Delmarva Power, and Sacramento Municipal Utility District ask the Court to reconsider its Order, dated October 12, 2005, and compel the Debtors to provide cash deposits as additional adequate assurance of payment of postpetition services. William Douglas White, Esq., at McCarthy & White PLLC, in McLean, Virginia, relates that, as of the Petition Date, the Debtors owed Atlantic City and Delmarva $74,160 for the provision of direct service on eight accounts. None of these accounts achieved an excellent payment rating. In six of the eight accounts, payment delinquencies dropped the account payment rating from good to fair. Atlantic City and Delmarva want the Debtors to deposit $45,200 cash. Likewise, Sacramento Municipal provides service was owed $55,613 on the two accounts. On one of the two accounts, the Debtors were late in making payment during seven out of the last 12 months. Sacramento Municipal wants the Debtors to deposit $48,797 cash. At the Debtors' behest, on October 12, 2005, the Court entered an order prohibiting utilities from altering, refusing, or discontinuing services on account of prepetition invoices; and determining that the Utility Companies have received adequate assurance of payment for future utility services. Mr. White, however, asserts that the Debtors' Motion is defective because: (i) it was not properly served on the Objecting Utilities under applicable Rules as copies of the document were mailed to the Utilities at post office boxes; (ii) it seeks denial of deposits that are required to furnish adequate assurance of payment to the Objecting Utilities under Section 366 of the Bankruptcy Code. (iii) it seeks injunctive relief that is not authorized by Sections 105 or 366; and (iv) it seeks injunctive relief without an Adversary Proceeding or service of process. Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. (Levitz Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) MARKEL CORP: Moody's Withdraws Preferred Stock's (P)Ba2 Rating -------------------------------------------------------------- Moody's withdrew its provisional ratings (senior unsecured at (P)Baa3) on two universal shelves of Markel Corporation (NYSE: MKL) that are no longer effective because of their full utilization and lack of remaining capacity. The first was a universal shelf totaling $475 million filed on December 22, 2000, and the second was a universal shelf totaling $650 million filed on October 19, 2001. These provisional shelf ratings were withdrawn: Markel Corporation: * senior debt at (P)Baa3; * subordinated debt at (P)Ba1; and * preferred stock at (P)Ba2. Markel Capital Trust II: * trust preferred securities (P)Ba1 Markel Corporation is a P&C insurance holding company based in Glen Allen, Virginia. Markel posted total revenue of $1.62 billion and equity of $1.60 billion for the nine-month period ending September 30, 2005. MASSEY ENERGY: S&P Assigns BB- Rating to Proposed $725 Mil. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' senior unsecured bond rating to the proposed $725 million notes due 2013 of Massey Energy Co. (BB-/Stable/--). The proceeds from the note offering will be used to finance Massey's 2.25% convertible senior note exchange offer and its 6.95% senior note and 4.75% convertible senor note tender offers. Any remaining proceeds will be used for general corporate purposes. At the same time, Standard & Poor's affirmed its other ratings on the Richmond, Virginia-based coal producer Massey Energy company. "We expect sales volumes and average price realizations to increase in 2006. We expect operating costs to fall within the guidance provided by the company," said Standard & Poor's credit analyst Dominick D'Ascoli. "Ratings could be lowered if sales volumes fall significantly short of company guidance or costs significantly increase above guidance. We could also lower the ratings if the company implements additional shareholder initiatives at a meaningful detriment to the balance sheet. Given our view on the company's business position, we are unlikely to raise the ratings unless financial leverage is substantially reduced." Despite strong coal fundamentals, many Eastern coal producers, including Massey, are facing numerous challenges that include increasing environmental compliance costs, rising production costs, and permitting/regulatory issues that could increase costs associated with future expansion initiatives. Indeed, because of these issues and rising costs for steel, explosives, and diesel fuel, and low productivity because of high labor turnover, Massey's cash operating costs rose significantly to a very high $37.20 per ton in the third quarter of 2005, from $30.99 per ton for the year-earlier period. Standard & Poor's also has longer-term concerns that Central Appalachian coal will lose market share to the Illinois and Northern Appalachian coal-producing regions over the next several years. Coal-burning power plants in these regions are expected to install emission-control equipment to comply with emission regulations that become more restrictive in 2010. This equipment removes the sulfur content from emissions and, because of this, we expect Central Appalachia's low-sulfur price premium to be substantially eliminated. Free cash flow is expected to improve in 2006 compared with 2005 because of higher price realizations and increased sales volumes. However, the extent of that improvement will depend on the amount of capital expenditures for growth, working capital cash usage, cost increases, and sales volumes. MCDERMOTT INT'L: S&P Lifts Unit's Credit Rating to B+ from CCC+ --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on McDermott International Inc. and its intermediate holding company, McDermott Inc., to 'B+' from 'B-'. Standard & Poor's also raised its corporate credit rating on McDermott International's wholly owned operating subsidiary, J Ray McDermott S.A., to 'B+' from 'CCC+'. The upgrades reflect the companies' improved financial performance and liquidity positions. At the same time, Standard & Poor's removed all the ratings from CreditWatch with positive implications where they were placed on Sept. 27, 2005. Moreover, Standard & Poor's assigned its '2' recovery rating to J Ray's $200 million senior secured notes due 2013, which indicates the expectation for substantial recovery of principal in the event of a payment default. Standard & Poor's also assigned its 'B+' corporate credit rating to McDermott International's wholly owned subsidiary, The Babcock & Wilcox Co., and its 'B+' rating and '3' recovery rating to B&W's $650 million senior secured bank loan facilities, indicating the expectation of meaningful recovery of principal in the event of payment default. The $650 million bank loan facilities will consist of a $250 million six-year delayed draw term loan, a six-year $150 million synthetic LOC facility, and a $250 million five-year revolver. The outlook on McDermott International and its subsidiaries is stable. Pro forma for the B&W's intended bank debt issuance, New Orleans, Louisiana-based McDermott International will have $462 million of funded debt outstanding. "We expect industry fundamentals for J Ray, B&W, and BWX Technologies to be stable to improving," said Standard & Poor's credit analyst David Lundberg. "That said, we view J Ray's business as being very volatile," continued Mr. Lundberg. "J Ray's cash flow and credit protection measures would likely fall significantly in an industry downturn." MERIDIAN AUTOMOTIVE: Wants Until April 21 to File Chapter 11 Plan ----------------------------------------------------------------- Meridian Automotive Systems, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive periods to: (1) file a plan of reorganization through April 21, 2006; and (2) solicit and obtain acceptances of that plan through June 30, 2006. Edward J. Kosmowski, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that the Debtors are now in the process of producing a term sheet for a plan of reorganization, to be timely delivered to their lenders and creditors by Dec. 15, 2005. The Debtors anticipate that this term sheet will provide: -- a framework for negotiations towards a confirmable plan of reorganization; and -- a foundation and starting point for a meaningful dialogue between the Debtors and their creditors toward reaching their shared goal of a confirmable plan. While the Debtors intend to timely deliver a plan term sheet by December 15, Mr. Kosmowski notes that there is not enough time between December 15 and December 22, the date the current Exclusive Filing Period terminates, for the Debtors to bridge the gap between a term sheet and a confirmable reorganization plan. Therefore, the Debtors want an extension of their Exclusive Periods to facilitate the successful completion of the process initiated by the Debtors' delivery of a business plan and continued by their delivery of a plan term sheet. "The chances of obtaining a confirmable plan of reorganization will thus be enhanced if the Debtors are allowed to work with their key creditor constituencies within a structure that keeps all constituencies 'at the table,'" Mr. Kosmowski maintains. Mr. Kosmowski asserts that to deny a further extension of the Debtors' Exclusive Periods would jeopardize the significant progress they have made in their Chapter 11 cases, thereby defeating the very purpose of Section 1121 of the Bankruptcy Code -- to afford a debtor a meaningful and reasonable opportunity to negotiate with creditors and propose and confirm a plan of reorganization. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Hearing on Ford Motor Lease Set for Dec. 8 --------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Sept. 30, 2005, the Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware extended Meridian Automotive Systems, Inc., and its debtor-affiliates' time to assume, assume and assign or reject unexpired non-residential real property leases. The Debtors have until Jan. 25, 2006, to decide on their leases. Debtors Seek to Amend Lease Ford Motor Land Development Corporation seeks to terminate its lease agreement with the Debtors relating to 40,000 square feet of office space located at 550 Town Center Drive in Dearborn, Michigan. Ford Motor wants the Debtors to vacate their corporate headquarters on or before March 1, 2006. The Debtors disputed Ford's right to deliver the Notice of Termination and terminate the Lease agreement, without replying to Ford's demand to vacate the Existing Premises. The parties engaged in negotiations to resolve any dispute regarding the Lease Agreement and the Debtors' occupancy of the Existing Premises. Those discussions have culminated in a third amendment to the Lease Agreement. Under the Third Amendment, the Debtors' corporate headquarters will be relocated to 999 Republic Drive in Allen Park, Michigan, consisting of approximately 37,000 square feet of office and garage space. Ford Land, at its own expense, intends to complete certain agreed upon improvements to the New Premises that are expected to be completed by March 1, 2006, at which time Ford Land, at its own expense, will pack, move and relocate the Debtors' personal property and furnishings to the New Premises. Pursuant to the Third Amendment, the term of the Lease Agreement will be quarter-to-quarter. The gross monthly rent for the New Premises will be $81,786, payable in advance on the first day of each month. Following the Debtors' relocation to the New Premises, the parties have agreed to negotiate in good faith toward the goal of agreeing to a mutually acceptable long-term agreement with respect to the New Premises. Upon Court approval of the Debtors' entry into the Third Amendment, Ford agrees to withdraw its objection to the Debtors' request to extend their lease decision period with prejudice and the Debtors will waive any claim they may have against Ford. Edward J. Kosmowski, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, clarifies that by entering into the Third Amendment, the Debtors are not executing a new long term postpetition lease with Ford, which would burden the Debtors' Chapter 11 estates with a potentially large administrative claim. The Debtors will not incur out-of-pocket costs or expenses in relocating to the New Premises. Mr. Kosmowski further clarifies that the Third Amendment does not constitute or imply the Debtors' assumption of the Lease Agreement. The automatic stay under Section 362 of the Bankruptcy Code will be deemed modified solely for the limited purpose to permit Ford to provide notice of termination of the Lease Agreement to Meridian pursuant to and in accordance with the terms and conditions of the Amendment. Hearing Adjournment Judge Walrath adjourns the hearing on the Debtors' extension request to Dec. 8, 2005, solely with respect to the lease between Meridian Automotive Systems, Inc., and Ford Motor Land Development Corporation. Pursuant to Del.Bankr.L.R. 9006-2, the lease decision period is extended with respect to the Lease until the time the Court acts on the Debtors' request. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERRILL LYNCH: Fitch Upgrades Low-B Ratings on Two Cert. Classes ---------------------------------------------------------------- Fitch Ratings has taken rating actions on these Merrill Lynch Credit Corp. issue: Series 2003-C: -- Classes A-1 and A-2 affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA+'; -- Class B-2 upgraded to 'AA' from 'A+'; -- Class B-3 upgraded to 'A' from 'BBB+'; -- Class B-4 upgraded to 'BBB' from 'BB+'; -- Class B-5 upgraded to 'BB' from 'B+'. The collateral consists primarily of adjustable-rate, conventional, fully amortizing, first lien residential mortgage loans, substantially all of which have an original term to stated maturity of approximately 25 years. All of the mortgage loans were either originated by MLCC pursuant to a private label relationship with Cendant Mortgage Corporation or acquired by MLCC in the course of its correspondent lending activities and underwritten in accordance with MLCC underwriting guidelines as in effect at the time of origination. The loans are currently being serviced by PHH Mortgage Corp., rated 'RPS1' by Fitch. At issuance, the mortgage loans had a weighted average FICO of 728 and a weighted average loan-to-value ratio of 63%. The current pool factor of the deal is 47%. To date there have been no realized losses when compared to the original principal balance of the collateral. The affirmations, affecting $494 million in outstanding principal, reflect Fitch's expectations that there is sufficient credit enhancement to protect the certificates against future losses. The upgrades, affecting $24.3 million are the result of increased credit enhancement combined with a low level of delinquent loans. All of the upgraded classes have seen their credit enhancement increase by at least two times their original amount. METRIS COS: Fitch Lifts Ratings to AA from B- After HSBC Purchase ----------------------------------------------------------------- Fitch Ratings has upgraded the long-term ratings of Metris Companies Inc. and Direct Merchants Credit Card Bank, N.A. to 'AA-' from 'B-' and removed them from Rating Watch Positive where they were placed on Aug. 5, 2005. Concurrent with these actions, Fitch has withdrawn all outstanding ratings of Metris and DMCCB. These actions follow the completion of the company's acquisition by HSBC Finance, rated 'AA-' by Fitch. These ratings upgraded and removed from Rating Watch Positive and withdrawn by Fitch: Metris Companies Inc. -- Senior debt to 'AA-' from 'B-'. Direct Merchants Credit Card Bank, N.A. -- Long-term to 'AA-' from 'B'; -- Short-term to 'F1+' from 'B'. MIRANT CORP: Court Confirms Second Amended Plan of Reorganization ----------------------------------------------------------------- Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas approved the Second Amended Plan of Reorganization of Mirant Corporation and its debtor-affiliates on December 2, 2005. "The plan, as confirmed . . . by the bankruptcy court, satisfies the claims of our creditors and provides a meaningful return to our shareholders," a company spokesman said in an e-mail message to Reuters. Under the Debtors' Plan, creditors will own the new Mirant after it emerges from bankruptcy protection. The holders of approximately $6,350,000 of unsecured claims against Mirant will receive: (i) 96.25% of the reorganized company's common stock; and (ii) the right to receive a share of cash payments to be triggered by certain litigation recoveries. Current stockholders, on the other hand, will receive a 3.75% stake in the reorganized company and warrants to purchase an additional 10%, among others. JPMorgan Chase & Co., Deutsche Bank AG, and Goldman Sachs Group Inc., will finance the Debtors' emergence with a $2.3 billion loan. According to Bloomberg News, Judge Lynn asked the Debtors' counsel to prepare a Confirmation Order, which he will sign this month. "We are very pleased with the result," Edward Weisfelner, a lawyer representing Mirant shareholders told Bloomberg. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 86 Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORP: Court Approves $13-Mil. Sale of Maryland Property -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved a Sale Agreement dated September 5, 2005, between Mirant Mid-Atlantic, LLC, a Mirant Corporation debtor-affiliate, and the Church of the Rapture, Inc., wherein MIRMA will sell to Rapture Church a track of land located in Prince George's County, Maryland, free and clear of certain liens, claims, encumbrances, and interests. The Property is comprised of a 68.96-acre land located at 8711 Westphalia Road, in Upper Marlboro, Maryland, and improvements made on it, including an office building, an industrial shop and a common area. The Property is zoned Light Industrial, which allows for light intensity manufacturing, warehousing, and distribution services. NAI The Michael Companies, Inc., brokered the deal. As reported in the Troubled Company Reporter on Nov. 22, 2005, the salient terms of the sale agreement are: Purchase Price: The Debtors will sell the Property for $13,000,000. Deposit Escrow Amount: The Rapture Church has delivered $1,200,000 in earnest money deposit, which was placed in escrow held by the Brennan Title Company. The Deposit will be returned in the event of termination of the Agreement during the Diligence Period. Lease-Back Period: The Debtors may opt to lease back the Office Space for a period of six months at $20,000 monthly rent or the Shop for 12 months at $40,000 monthly rent. The Debtors will pay all utilities, day-to-day maintenance and insurance with respect to the Office Space or the Shop during the Lease-Back Period. The Debtors may terminate the Office Space or the Shop leases at any time on a 30-day prior written notice. After the Lease-Back Period ends, the Debtors may extend either the lease term on a month-to-month basis, which may be terminated by either party on a 30-day prior written notice. No security deposit is required. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 84 Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORP: Court Okays Pact Settling PEPCO's Lawsuit & Claims --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved the settlement agreement inked among Mirant Corporation and its debtor-affiliates and Potomac Electric Power Corporation. The settlement agreement resolve the disputes which arose from the litigation following Mirant's purchase of PEPCO's power generating facilities and related assets in Maryland, Virginia, and the District of Columbia on June 7, 2000. Pursuant to the sale, Mirant assumed certain obligations while PEPCO retained certain liabilities with respect to the purchased assets. The Wilson Case In January 2001, Alexander Wilson amended a claim filed in 1999 in the case styled In re Baltimore City Asbestos Litigation in the Maryland Circuit Court to add PEPCO as a defendant. The Circuit Court granted PEPCO's motion for summary judgment in the Wilson Case and dismissed all claims related to PEPCO on December 14, 2001. Consequently, PEPCO asked Mirant to reimburse it for its expenses relating to the Wilson Case. Mirant refused. On February 1, 2002, PEPCO filed a complaint in the United States District Court for the District of Columbia styled Potomac Electric Power Co. v. Mirant Corp., Case No. 1:02-CV-00178-RMU, seeking a determination that the costs and expenses it incurred in connection with the Wilson Case were obligations assumed by Mirant Corp. under the Agreement. PEPCO's Claims PEPCO filed several proofs of claim against the Debtors for reimbursement and indemnification relating to the Wilson Case and the Wilson Asbestos Litigation Cost Case: Amended Claim No. Claim No. Claim Amt. Debtor Asserted --------- --------- ---------- --------------- 6496 8234 $688,272 Mirant Corp. 6474 8230 688,272 Potomac River 6475 8229 688,272 Piney Point 6476 8228 688,272 Mirant Peaker 6477 8233 688,272 MIRMA 6478 8231 688,272 MD Ash 6479 8237 688,272 D.C. O&M 6480 8236 688,272 Chalk Point 6481 8232 688,272 MIRMA 6482 8235 688,272 MAEM In 2004, the Debtors objected to PEPCO's Claim Nos. 190, 191, 6474 to 6484 and 6496, and PEPCO Energy Services, Inc.'s Claim No. 6490. But PEPCO and PEPCO Energy asserted that Mirant failed to rebut the prima facie validity of their Claims. The Debtors subsequently sought to estimate certain of PEPCO's Claims, including the Indemnification Claims. PEPCO objected to the Estimation Motion. At PEPCO's request, the U.S. Bankruptcy Court for the Northern District of Texas lifted the automatic stay in early 2005 to allow the Wilson Asbestos Litigation Cost Case to proceed. After negotiations, the Debtors and PEPCO agreed to settle their dispute regarding the Indemnification Claims. The principal terms of the Settlement Agreement are: a. PEPCO will have an allowed, prepetition general unsecured claim against Mirant Corp., for $472,500; b. The Allowed Claim will supersede and amend Claim Nos. 6496 and 8234 filed against Mirant Corp., to the extent the amount sought in the proofs of claim are related to the Wilson Case; c. The Other Mirant Party Claims will be disallowed in their entirety to the extent that the amount sought in the proofs of claim are related to the Wilson Case; d. The Wilson Asbestos Litigation Cost Case will be dismissed, with prejudice; e. PEPCO will release the Debtors from any claims arising from the Wilson Asbestos Litigation Cost Case, except for the Allowed Claim; and f. The Debtors will release PEPCO from any claims arising from the Wilson Asbestos Litigation Cost Case. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 84 Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL ENERGY: Wants Court to Nix Citibank's Additional Claims ---------------------------------------------------------------- National Energy & Gas Transmission, Inc., asks the U.S. Bankruptcy Court for the District of Maryland to disallow in full certain additional claims asserted by Citibank N.A., as administrative and security agent for the La Paloma Lenders and the Lake Road Lenders. The La Paloma Lenders and the Lake Road Lenders include the lenders and investors party to the La Paloma Credit and Reimbursement Agreement, and the Lake Road Priority Credit and Reimbursement Agreement, both dated as of December 4, 2002. Dennis J. Shaffer, Esq., at Whiteford, Taylor & Preston L.L.P., in Baltimore, Maryland, recounts that on January 8, 2004, Citibank filed a proof of claim, in behalf of the Lake Road and La Paloma Project Lenders, against NEG for $623,909,779, plus additional unliquidated and contingent amounts, on account of certain Guarantee Agreements -- pertaining to La Paloma and Lake Road -- entered into by NEG in Citibank's favor. Pursuant to NEG's Plan of Reorganization, the La Paloma Guarantee Claim was allowed as a general unsecured claim for $385,001,291, and the Lake Road Guarantee Claim was allowed as a general unsecured claim for $238,908,487. Citibank already has begun to receive distributions on account of the Guarantee Claims. Additional Claims The NEG Plan provides that the Guarantee Claims may be increased by the aggregate amount of unpaid interest and all amounts payable in connection with NEG's obligations. On November 14, 2005, over 22 months after the bar date for filing proofs of claim and more than two years after initially raising the issue, Citibank demanded that NEG increase the Allowed Claims of the Lenders by: (i) $10,616,672 for postpetition expenses, including fees for legal, consulting and financial services allegedly incurred by the Lenders in connection with the bankruptcy case and the transition of the Lake Road and La Paloma generating facilities back to the Lenders; plus (ii) $90,872,297 in postpetition interest that allegedly accrued on certain loans from the Petition Date through the dates of the transfer of the generating facilities to the Lenders. Additional Claims Are Barred Mr. Shaffer contends that the Expense Claims should be disallowed because postpetition fees and costs may only be recovered by creditors to the extent their claims are oversecured. In addition, Mr. Shaffer asserts that the Postpetition Interest Claims should also be disallowed. "It is well-settled that unsecured creditors are not entitled to recover postpetition interest that accrues on their claims after the filing of a bankruptcy petition," Mr. Shaffer avers. According to Mr. Shaffer, the Additional Claims are barred as a matter of law and must be disallowed. Mr. Shaffer notes that the Lenders' asserted entitlement to postpetition interest runs from the Petition Date through the dates of the transfer of the Lake Road and La Paloma Generating Facilities. However, much of the seven-month delay between the time that the Court authorized the facility transfers on March 15, 2004, and the time of the actual transfers are directly attributable to the Lenders, who were not prepared to take the facilities back on a timely basis, notwithstanding entry of the order authorizing the Debtors to give them back. Thus, Mr. Shaffer insists that it would be inequitable for NEG to have liability to the Lenders for interest that would not have accrued but for the Lenders' inaction. Moreover, Mr. Shaffer points out that the Lenders' claims for over $10,000,000 in fees and expenses is particularly questionable given that the Expense Claims are in addition to the $2,000,000 in deposits already received from NEG before the Petition Date to cover the Lenders' postpetition expenses. Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas Transmission, Inc.) develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company and its debtor-affiliates filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher, and Paul M. Nussbaum, Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston, L.L.P., represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT received bankruptcy court approval of its reorganization plan in May 2004, and that plan took effect on Oct. 29, 2004. The Hon. Paul Mannes confirmed NEGT Energy Trading Holdings Corporation, NEGT Energy Trading - Gas Corporation, NEGT ET Investments Corporation, NEGT Energy Trading - Power, L.P., Energy Services Ventures, Inc., and Quantum Ventures' First Amended Plan of Liquidation on Apr. 19, 2005. The Plan took effect on May 2, 2005. (PG&E National Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) OCEANTRADE CORP: U.S. Trustee Appoints 2-Member Creditors Panel --------------------------------------------------------------- The United States Trustee for Region 2 appointed two creditors to serve on an Official Committee of Unsecured Creditors in Oceantrade Corporation's chapter 11 case: 1. MGL Martrade Gulf Logistics FZCO Attention: Klauss Maassen Jebel Ali Free Zone, Office LB 10G19 P.O. Box 17858 Dubai, U.A.E. Tel: 492113670034 2. Samsun Logix Corp. Attention: H.H. Oh c/o Nicholas Woo 5-6F, Lee Ma Building 146-1 Soosong-Dong, Chongno-ku Seoul, Korea Tel: 441473232300 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 Rowayton, Connecticut, Oceantrade Corporation ships dry bulk commodities and raw materials for cargo interests and industrial groups worldwide. The Debtor filed for chapter 11 protection on Oct. 15, 2005 (Bankr. S.D.N.Y. Case No. 05-48253). When the Debtor filed for protection from its creditors, it listed $1 million to $10 million in assets and $10 million to $50 million in debts. ON TOP COMMUNICATIONS: Taps Miles & Stockbridge as Counsel ---------------------------------------------------------- On Top Communications, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Maryland, Greenbelt Division, for permission to employ Miles & Stockbridge P.C. as their counsel, nunc pro tunc to Nov. 18, 2005. Miles & Stockbridge will: (a) provide legal advice to the Debtors regarding the continued possession and management of their property as a debtor and debtor-in-possession; (b) prepare amendments to Schedules and State of Financial Affairs and attend status or other meetings of creditors required by the Bankruptcy Court; (c) analyze the Debtors' contracts and leases and moving to assume or reject them as determined by the Debtors; (d) advise and represent the Debtors in connection withthe formulation and confirmation of a chapter 11 plan and disclosure statement; (e) analyze claims and objecting to these claims where appropriate; and (f) provide other legal services for the Debtors that may be necessary to generally represent, advise, and assist the Debtors in carrying out their duties under the Bankruptcy Code. Thomas D. Renda, Esq., disclosed that the Firm represents Verizon and an affiliate of GE Capital Assurance Company in matters unrelated to the Debtors' bankruptcy proceedings. Both are unsecured creditors in these proceedings. Mr. Renda tells the Court that he is unaware of any dispute among the parties at this time. Mr. Renda disclosed that his Firm's professionals will bill: Designation Hourly Rate ----------- ----------- Principals $255 - $430 Associates $170 - $290 Mr. Renda's time will be billed at $350 per hour. The Debtors' senior secured lenders will enter into a carve-out agreement from their collateral to pay professional fees after the Debtors' proposed financial advisors, McShane Group, has been retained. Headquartered in Lanham, Maryland, On Top Communications, LLC, and its affiliates acquire, own and operate FM radio stations located in the Southeastern United States. The Company and its debtor- affiliates filed for chapter 11 protection on July 29, 2005 (Bankr. D. Md. Case No. 05-27037). Thomas L. Lackey, Esq., of Bowie, Maryland, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts of $10 million to $50 million. PARADIGM MEDICAL: Accumulated Deficit Tops $60.8-Mil. at Sept. 30 ----------------------------------------------------------------- Paradigm Medical Industries delivered its quarterly report on Form 10-QSB for the quarter ending September 30, 2005, to the Securities and Exchange Commission on November 21, 2005. Net sales for the three months ended September 30, 2005 decreased by $349,000, or 39%, to $550,000 as compared to $899,000 for the same period of 2004. For the three months ended September 30, 2005, gross profit decreased slightly by 4%, to 56% of total revenues, compared to the 60% of total revenues for the comparable period of 2004. As of September 30, 2005, the company's balance sheet showed $3,191,000 in total assets and $3,407,000 in total liabilities. At September 30, 2005, the company had an accumulated deficit of $60,772,000. Going Concern Doubt Chisholm, Bierwolf & Nilson, the company's independent accountants, expressed doubt about Paradigm's ability to continue as a going concern. The auditors observed that the company's balance sheet as of December 31, 2004, that the Company showed a working capital deficit and Paradigm's suffered recurring operating losses. Historically, the Company has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations, and the Company has incurred significant losses. These factors raise substantial doubt about the Company's ability to continue as a going concern. Paradigm Medical Industries -- http://www.paradigm-medical.com/-- is engaged in the design, development, manufacture and sale of high technology diagnostic and surgical eye care products. PENN OCTANE: Accumulated Deficit Tops $26.7MM in Third Quarter -------------------------------------------------------------- Penn Octane Corporation delivered its quarterly report on Form 10-Q for the quarter ending September 30, 2005, to the Securities and Exchange Commission on November 21, 2005. The Company reported net income of $165,000 in the quarter ending Sept. 30, 2005. During the quarter ended September 30, 2004, the Company reported a net loss of $439,000. Revenues for the three months ended September 30, 2005, were $66.7 million compared with $59.4 million for the three months ended September 30, 2004, an increase of $7.3 million or 12.4%. As of September 30, 2005, the company had $36.8 million in total assets and $36.3 million in liabilities. The company's balance sheet shows an accumulated deficit of $26.7 million at Sept. 30, 2005. A full-text copy of the regulatory filing is available at no charge at http://researcharchives.com/t/s?373 Going Concern Doubt As reported in the Troubled Company Reporter on November 19, 2005, the company received a going concern qualification in the audit opinion. The qualification states that "conditions exist which raise substantial doubt about the Company's ability to continue as a going concern." The factors contributing to the auditors' inclusion of that qualification were: -- reduced sales volume to Penn Octane's primary customer, which may result in insufficient cash flow to pay obligations when due; -- the pledge of substantially all assets as collateral on existing debt, which may render the Company unable to obtain additional financing collateralized by those assets; and -- the fact that Penn Octane's existing credit facility may be insufficient to finance its business. Each audit opinion received by Penn Octane since inception has contained a going concern qualification. Penn Octane historically has been a leading supplier of Liquefied Petroleum Gas to Northeastern Mexico until the recent transfer of its owned pipeline and terminal assets to Rio Vista Energy Partners L.P. (Rio Vista). Penn Octane continues to lease a 132-mile, six-inch pipeline, which connects from a pipeline in Kleberg County, Texas, to the terminal facility in Brownsville, Texas. The Brownsville terminal facility was transferred to Rio Vista in September 2004. Penn Octane supplies to Rio Vista all LPG, which Rio Vista supplies to Northeastern Mexico. Penn Octane also utilizes a 12-inch propane pipeline, which connects certain gas plants in Corpus Christi, Texas, to its pipeline in Kleberg County. The Company's network is further enhanced by the 155 miles of pipeline it has rights to use to transport LPG to and from its storage facility of 500,000 barrels in Markham, Texas, that enhances the company's ability to deliver LPG to Rio Vista for potential further distribution to Northeastern Mexico. The Company has recently begun operations of its gasoline and diesel fuel reseller business. By having the ability to access portions of certain pipeline and terminal space located in California, Arizona, Nevada and Texas, the Company is able to sell gasoline and diesel fuel at rack loading terminals and through bulk and transactional exchanges. PLIANT CORPORATION: Noteholders Agree to Equity-for-Debt Swap ------------------------------------------------------------- Pliant Corporation reached an agreement in principle with a committee representing the holders of the company's 13% Senior Subordinated Notes and with a majority of the company's current equity holders on the terms of a transaction that, if completed, will result in the exchange of the company's $320 million of 13% Senior Subordinated Notes and $278 million of mandatorily redeemable preferred stock. These would be exchanged for a combination of shares of Pliant common stock and shares of a new Pliant preferred stock, which will not be subject to mandatory redemption, and $20 million of new debt. Completion of the exchange transaction is subject to a number of conditions, including definitive documentation and receipt of requisite approvals from the holders of the company's 13% Senior Subordinated Notes. The conversion of the subordinated debt would eliminate $41.6 million of annual cash interest payments. Harold Bevis, President and CEO, said, "This financial restructuring is a key pillar in the transformation of Pliant. We have been very successful in transforming our innovation programs, transforming our operational excellence programs, partnering with winning customers and key vendors, and bringing in a world-class executive team to lead the company. We have been hampered by the tremendous debt load on the company, including our mandatorily redeemable preferred stock which is classified as a liability on the company's balance sheet. We believe that this deal will fix the key final component and give us access to the free cash flow that we need to make Pliant the best flexible packaging company in the industry. We are very proud and happy with this new agreement. It is great for our vendors, our customers and our company. "We thank the members of the 13% noteholder committee and our shareholders for their cooperation in reaching this agreement and for partnering with Pliant's management team. W e are confident in our business strategy and our direction. We believe that this deal will effectively remove a cap that we have had on our profit performance and reinvestment rates and enable us to optimize Pliant's performance." Separately, Pliant announced several new business wins in Personal Care & Medical, Food and Beverage packaging, and Industrial markets that will ramp up immediately and are expected to result in more than $50 million of incremental sales. "We are also pleased to have been selected as a supplier to the market leaders in the areas where we participate. These new business wins reflect the fundamental strength of our business and our outstanding reputation as a provider of value-added packaging products," Mr. Bevis concluded. Timothy Walsh, Partner with JPMorgan Partners, which is the majority shareholder of Pliant, said, "This deal is in line with our goal of helping Pliant be the best possible company over the long term. We are a total return investor and this is the right answer for Pliant." A committee of 13% noteholders is represented by: Anthony J. Smits, Esq. Bingham McCutchen LLP One State Street Hartford, CT 06103-3178 Telephone (860) 240-2700 "The noteholder committee looks forward to quickly implementing this deleveraging so that Pliant can focus on business and growth opportunities on a stronger financial footing," Mr. Smits said last week. Subject to the continued support of its trade creditors, the company intends to pursue completion of the exchange transaction through an out-of-court exchange offer that will be subject to, among other things, approval by the holders of 97% of the 13% Senior Subordinated Notes and approval by the company's preferred and common stockholders. If the company is unable to complete the exchange transaction through an out-of-court exchange offer, it intends to pursue the exchange transaction through a plan of reorganization in bankruptcy that would leave its trade and senior creditors unimpaired. Any such plan of reorganization would be subject to, among other things, approval by a majority of the holders of the 13% Senior Subordinated Notes that hold, in the aggregate, 66-2/3% of the 13% Senior Subordinated Notes and subject to bankruptcy court approval. If completed, the exchange transaction will result in substantial dilution to the company's current common stockholders and preferred stock holders. Pliant Corporation is a leading producer of value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The company operates 23 manufacturing and research and development facilities around the world, and employs approximately 2900 people. * * * As reported in the Troubled Company Reporter on Nov. 25, 2005, Standard & Poor's Ratings Services lowered its corporate credit rating on Pliant Corp. to 'CC' from 'CCC+' and placed all ratings on CreditWatch with negative implications. Other ratings were also lowered. The rating actions follow the company's announcement that it currently does not expect to make its $20.8 million interest payment due on Dec. 1, 2005, on its $314 million 13% senior subordinated notes maturing in 2010. The company also indicated that it has entered into discussions regarding a possible debt for equity conversion with an ad hoc committee of the 13% subordinated noteholders. If Pliant does not make the interest payment by the end of a 30-day grace period on Dec. 31, 2005, then the company will be in default under the 13% subordinated notes indenture, which would allow the noteholders to accelerate the maturity and would result in an event of default under the company's new $140 million revolving credit facility. Acceleration of the subordinated notes would also result in an event of default under the 11-1/8% senior secured discount notes due 2009 and the 11-5/8% senior secured second-lien notes due 2009. Pliant does not expect the noteholders to accelerate the subordinated notes as long as its discussions are continuing. The company stated that if it is unable to successfully conclude a transaction with the subordinated noteholders on a timely basis or does not have sufficient liquidity to fund ongoing operations, then it could seek protection afforded by Chapter 11 of the United States Bankruptcy Code and pursue a plan of reorganization. POWERLINX INC: Balance Sheet Upside-Down by $210,369 at Sept. 30 ---------------------------------------------------------------- PowerLinx, Inc.'s $223,900 of revenues for the quarter ended Sept. 30, 2005, exceeded revenues for the same period in 2004 by $138,000 or 161%. The Company incurred a $941,000 net loss for the quarter ended Sept. 30, 2005, including loss from discontinued operations, compared to a $1,420,500 net loss for the same period ended 2004. The results for the quarter ended Sept. 30, 2005 was highlighted by record net revenues of $198,600 in the Company's growing DC Transportation product segment; which includes the Company's rear vision and accident avoidance product line. This resulted in a 905% increase in net revenues compared to the same period ended Sept. 30, 2004. Mike Tomlinson, President & Chief Executive Officer stated: "The DC Transportation division continued to accelerate growth by both expanding distribution to new customers while continuing to increase the number of vehicles installed among existing customers. Continuing revenue growth coupled with a targeted reduction in expenses across the Company produced a substantial decrease in operating losses. We continue to strive to improve performance in each of these areas." At Sept. 30, 2005, PowerLinx had $1,873,635 in total assets and liabilities of $2,084,004, resulting in a stockholders' deficit of $210,369. Discontinued Operations During the period ended March 31, 2005, the Company formalized a plan to dispose of its Hotel/MDU products segment. The plan included the termination of all employees associated with the segment, and the closing of the Company's sales office in South Carolina. At the end of the quarter ended Sept, 30, 2005, the majority of the plan had been implemented and the Company is pursuing an agreement with an outside party to sell the remaining installation and monthly service contracts. Going Concern Doubt Aidman, Piser & Company, PA, expressed substantial doubt about PowerLinx, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004. The auditing firm pointed to the Company's recurring losses and use of significant cash in its operating activities. PowerLinx, Inc. (OTCBB:PWLX) -- http://www.power-linx.com/-- develops, manufactures, and markets, among other devices, products and applications developed to transmit voice, video, audio and data either individually or any and all combinations over power lines, twisted pair wires and coax in AC and DC power environments, on any and all power grids. The Company also develops, manufactures and markets underwater video cameras, lights and accessories for the marine, commercial and consumer retail markets. PROVIDENTIAL HOLDINGS: Auditors Raise Going Concern Doubt --------------------------------------------------------- Kabani & Company, Inc., raised substantial doubt about Providential Holdings, Inc.'s ability to continue as a going concern after it audited the Company's financial results for the year ended June 30, 2005. The auditors point to the Company's accumulated deficit and losses in the years ended June 30, 2005, and 2004. The Company had a loss from continuing operations of $3,681,487 for the year ended June 30, 2005, as compared to a loss of $3,382,491 for the year ended June 30, 2004. The Company had a net loss of $2,119,904 for the year ended June 30, 2005, as compared to a net loss of $3,853,160 for the year ended June 30, 2004. The Company generated $4,242,303 from consulting and advisory services for the year ended June 30, 2005, as compared to $4,891,990 for the year ended June 30, 2004, which represented a 13% decrease in consulting and advisory revenue. This decrease is mainly due to a slight decrease in the size and scope of the merger and acquisition activities during the current year. During the fiscal year ended June 30, 2005, the Company had sales of $37,049 compared to $3,702,650 for the fiscal year ended June 30, 2004. This decrease is due to the decrease in Provimex and PHI Digital product sales of $3,566,407 and $136,243, respectively. The Company incurred total operating expenses of $7,517,916 for the year ended June 30, 2005, as compared to $7,645,620 for the year ended June 30, 2004. The decrease in operating expenses was primarily due to the decrease IN professional services, including non-cash compensation during the current fiscal year. Providential Holdings, Inc., specializes in merger and acquisition advisory services. The Company acquires and consolidates special opportunities in selective industries to create additional value, acts as an incubator for emerging companies and technologies, and provides financial consultancy and M&A advisory services to U.S. and foreign companies REFCO INC: UBS Wants Debtors to Return More Than $13 Mil. in Funds ------------------------------------------------------------------ UBS AG and UBS Limited ask the U.S. Bankruptcy Court for the Southern District of New York to direct Refco Inc., and its debtor-affiliates to return funds totaling $13,054,292, that was erroneously transferred postpetition to the Debtors, plus interest. UBS/Refco Capital Contracts UBS AG, through its predecessor Swiss Bank Corporation, and Refco Capital Markets Ltd., through its predecessor Refco F/X Associates, Ltd., are parties to an ISDA Master Agreement dated June 6, 1994, under which Refco Capital and UBS AG engaged in foreign currency forward transactions. UBS Limited, by novation from UBS AG, successor to Swiss Bank Corporation, and Refco Capital, through its predecessor Refco F/X, are parties to a certain Global Master Repurchase Agreement dated January 30, 1996, pursuant to which Refco Capital and UBS Limited engaged in certain repurchase transactions or buy and sell back transactions of securities and financial instruments. On October 14, 2005, Refco Capital failed to make a payment to UBS AG under a foreign exchange transaction. Refco Capital's failure to cure the default within three days of written notice constitutes an Event of Default under the ISDA. By a letter dated October 18, 2005, UBS AG notified Refco Capital that it was designating October 18, 2005, as the Early Termination Date pursuant to the ISDA due to outstanding Events of Default, including the failure to make the required payments and Refco Capital's bankruptcy filing. By a letter dated October 21, 2005, UBS AG notified Refco Capital that pursuant to the ISDA, the amount payable by Refco Capital to UBS AG, as of the Early Termination Date, was $5,008,518 and collateral pledged by Refco Capital to UBS AG, valued at $4,487,978, would be applied and set off against the amounts owing to UBS AG, leaving a deficiency of $520,540. On October 14, 2005, Refco Capital also failed to make a payment to UBS Limited under a repurchase transaction triggering an Event of Default under the GMRA. On October 18, 2005, pursuant to the GMRA, UBS Limited closed out all outstanding repurchase transactions and liquidated the securities held by UBS Limited. After application to outstanding indebtedness under the GMRA, there was an excess of $14,628,433 and approximately EUR323,825 that could be owing to Refco Capital, subject to any contractual rights, including UBS AG's set-off rights pursuant to the ISDA or any other rights under applicable law. Erroneous Postpetition Transfer Alan E. Marder, Esq., at Rosen Slome Marder LLP, in Uniondale, New York, relates that due to an administrative error and notwithstanding the termination of all pending trades under the ISDA, UBS AG inadvertently failed to cancel wire transfer instructions for two foreign exchange transactions that had already been terminated in conformity with the ISDA provisions. As a result, UBS AG erroneously transferred postpetition $13,054,292, constituting the UBS Funds to a Refco Capital account at HSBC Bank USA New York branch that Refco Capital continues to maintain. Mr. Marder asserts that Refco Capital was not entitled to receive the UBS Funds. The Transactions relating to the delivery of the UBS Funds had already been terminated. As with all other terminated Transactions under the ISDA: -- Refco Capital had no expectation that any further payments would be made with respect to those Transactions; and -- Refco Capital made no attempt to perform its obligations to deliver foreign currency to UBS AG. Consequently, UBS AG did not receive any consideration for the UBS Funds. Alternative Relief In the alternative, UBS AG and UBS Limited asks the Court to grant it: (a) an administrative claim in respect of the funds and order the immediate payment of the funds; or (b) relief from the automatic stay to allow setoff and, pending determination of its request, adequate protection of its rights of setoff with respect to the UBS Funds. 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. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFCO INC: Wants to Continue Employing Ordinary Course Profs. ------------------------------------------------------------- Refco Inc., and its debtor-affiliates customarily retain the services of various attorneys and other professionals to represent them in matters arising in the ordinary course of their businesses, unrelated to their Chapter 11 cases. Among the Debtors' Ordinary Course Professionals are: Professional Services to be Rendered ------------ ----------------------- Codan Services Ltd. Administrative Support Service and Storage Compliance Supervisors, Inc. Securities and Commodities Compliance Consulting Fairway Management Ltd. Administrative Support Service and Storage Henderson & Lyman Non-bankruptcy Legal Counsel Herrick, Feinstein LLP Non-bankruptcy Legal Counsel Ogihara & Associates LLP Non-bankruptcy Legal Counsel Schiff Hardin LLP Non-bankruptcy Legal Counsel Ulmer & Berne LLP Non-bankruptcy Legal Counsel By this motion, the Debtors seek the U.S. Bankruptcy Court for the Southern District of New York's authority to: (a) employ the OCPs as of the Petition Date, without the necessity of filing separate, formal retention applications for each Ordinary Course Professional; and (b) pay the OCPs for postpetition services rendered and expenses incurred, subject to certain limits, without the necessity of additional Court approval. Certain of the OCPs may hold unsecured claims against the Debtors. The Debtors do not believe, however, that any of the OCPs have an interest materially adverse to them, their estates, creditors or shareholders. According to Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, the Debtors will continue to require the services of the OCPs to enable them to continue normal business activities that are essential to their stabilization and reorganization efforts. Retention Procedures The Debtors propose that each OCP will be required to: -- file a Declaration of Legal Ordinary Course Professional or a Declaration of Non-Legal Ordinary Course Professional, with the Court; and -- serve the Declaration on the Debtors, the U.S. Trustee, counsel for any trustee appointed in the Debtors' cases, the Debtors' counsel, counsel for the official committee of unsecured creditors and counsel for the Debtors' proposed postpetition secured lenders. Upon service of the Declaration, the Interested Parties will have 10 days to object to the OCP retention. If any objection cannot be resolved, the matter will be scheduled for a hearing before the Court. If no objection is received or withdrawn, the Debtors will be authorized to retain the Ordinary Course Professional without further Court order, nunc pro tunc to the Petition Date. The Debtors seek the Court's authority to employ additional OCPs, as future circumstances require, without the need to file individual retention applications or provide further hearing or notice to any party. Payment Procedures The Debtors propose that they be permitted to pay, without formal Court application by any OCP, fees and expenses not exceeding $50,000 per month for each OCP. The Debtors also propose that aggregate monthly payments to OCPs be limited to $500,000, unless the Court authorizes additional payments. The Debtors propose to file with the Court every 120 days a statement of fees and disbursements, which will include: (1) The name of the Ordinary Course Professional; (2) The aggregate amounts paid as compensation for services rendered and reimbursement of expenses incurred by each OCP during the statement period; (3) The aggregate amounts paid as compensation for services rendered and reimbursement of expenses incurred by each Ordinary Court Professional during the postpetition period; and (4) A general description of the services rendered by each OCP. 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. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFCO INC: Court Permits Continuance of Intercompany Transactions ----------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Nov. 18, 2005, Refco Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to continue intercompany financial transactions with each other and certain non-Debtor affiliates. The Debtors believe that the continuation of intercompany services is beneficial to their estates and creditors and that corresponding transfers among the appropriate intercompany accounts should be permitted. The Debtors also intend to preserve and exercise intercompany setoff rights pursuant to Section 553(a) of the Bankruptcy Code. Court Order The Honorable Robert D. Drain of the Southern District of New York Bankruptcy Court authorizes the Debtors to continue to engage in Intercompany Transactions in the ordinary course of their businesses, provided however that those actions will be limited to one Debtor transferring funds of that Debtor that constitute property of its estate to another Debtor to the extent necessary to fund specific disbursements on behalf of the transferring Debtor, which funds will be held in trust, as property of the transferring Debtor's estate, and not as property of the transferee Debtor's estate, until those funds have been disbursed in accordance with the instructions of the transferring Debtor. The Court does not authorize the Debtors to set off prepetition obligations arising on account of Intercompany Transactions between a Debtor and another Debtor, or between a Debtor and a non-Debtor, without further Court order on motion noticed to parties-in-interest. 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. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) SALIVA DIAGNOSTICS: Has $2.7MM Equity Deficit as of September 30 ---------------------------------------------------------------- Saliva Diagnostic Systems, Inc., delivered its financial results for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 15, 2005. Saliva Diagnostic reported a $426,606 net loss on $204,846 of revenues for the three months ended Sept. 30, 2005, in contrast to $10,859 of net income on $392,915 of revenues for the same period in the prior year. The Company's balance sheet showed $1,291,786 in total assets at Sept. 30, 2005, and $3,966,022 of liabilities, resulting in a stockholders' deficit of $2,674,236. At Sept. 30, 2005, the Company had a working capital deficit of $614,063, versus a $506,511 working capital deficit at Dec. 31, 2004. Going Concern Doubt Lazar Levine & Felix LLP expressed substantial doubt about Saliva Diagnostic's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's suffered recurring losses from operations, negative working capital and net capital deficiency. The Company has incurred significant operating losses since its inception, resulting in an accumulated deficit of $45,351,381 at Sept. 30, 2005. Saliva Diagnostic -- http://www.salv.com/-- is engaged in the development, manufacture and marketing of rapid immunoassay tests for the detection of sexually transmitted and other infectious diseases; in addition, the Company has developed and is marketing a product line of patented, oral-fluid collection devices. The Company's proprietary platforms provide significant customer benefits and competitive advantages as compared to similar products that are currently available. Improved accuracy, operator convenience, and reduced risk of infection from collecting and handling specimens, have been engineered into SDS products. SBARRO INC: Incurs $323,000 Net Loss in Quarter Ended October 9 --------------------------------------------------------------- Sbarro, Inc., reported its financial results for the quarter ended Oct. 9, 2005, in a Form 10-Q delivered to the Securities and Exchange Commission on Nov. 21, 2005. The Company reported a $323,000 net loss on $79,326,000 of revenues for the twelve weeks ending Oct. 9, 2005, as compared to a $1,029,000 net loss on $78,306,000 of revenues for the twelve weeks ending Oct. 3, 2004. The Company's balance sheet showed $364,684,000 in total assets at Oct. 9, 2005, and liabilities of $304,725,000. Sbarro, Inc. -- http://www.sbarro.com/-- develops and operates an international chain of family-style Italian restaurants under the names "Sbarro" and "Sbarro The Italian Eatery". These outlets serve high quality, affordable Italian food to a wide range of consumers. It has restaurants situated in 48 states throughout the United States, its territories and 21 countries throughout the world. It owns 898 restaurants and franchises 268 restaurants. * * * As reported in the Troubled Company Reporter on May 17, 2005, Standard & Poor's Ratings Services raised its corporate credit and senior unsecured debt ratings on Sbarro Inc. to 'CCC+' from 'CCC.' S&P said the outlook is positive. S&P said its ratings on Melville, New York-based Sbarro reflect the risks associated with operating in the highly competitive restaurant industry, the company's vulnerability to mall traffic and seasonality, a highly leveraged capital structure, and limited liquidity. SECURAC INC: Discloses CDN$1,525,071 Net Loss at Sept. 30 --------------------------------------------------------- Securac Inc. delivered its financial results for the quarter ended Sept. 30, 2005, on Form 10-QSB to the Securities and Exchange Commission on Nov. 21, 2005. Securac incurred a CDN$1,525,071 net loss at Sept. 30, 2005, compared to a $1,115,883 net loss at Sept. 30, 2004. The Company's net loss increased because of continued focus in marketing and sales activities to support the company's software. As of September 30, 2005, the Company had a working capital deficit of CDN$2,010,445 and an accumulated deficit of CDN$12,412,396. Securac also incurred operating losses since inception. Its activities have been funded principally through equity and debt financings. Going Concern Doubt Chisholm, Bierwolf & Nilson, LLC, raised substantial doubt about the Company's ability to continue as a going concern based on significant losses which have resulted in an accumulated deficit of CDN$12,412,396 at September 30, 2005, a working capital deficit of approximately CDN$2,010,000, and limited internal financial resources. Securac Corp. provides enterprise risk management software and services for the public sector, financial and Global 2000 companies. The Company has developed risk management and compliance solutions designed to enable organizations to identify, measure, and manage information and physical risks, and to assess their compliance against best practice standards. SHOPSMITH INC: Posts $236,000 Net Loss in Period Ended Oct. 1 ------------------------------------------------------------- Shopsmith, Inc., a Dayton, Ohio-based woodworking tool manufacturer, reported $2,438,000 of sales in the quarter ended Oct. 1, 2005, a 19.4% decrease from $3,026,000 of sales reported during the same period a year ago. Management attributes the decrease to a decline in sales through product demonstrations within Lowe's Companies' stores. The Company sells its products directly to consumers through demonstration sales events and indirectly to consumers through distributors such as Lowe's. The lower level of sales, along with expenses incurred from going private transaction efforts, resulted in a $236,000 net loss for the quarter ended Oct. 1, 2005, compared to a $15,000 net loss for the same period of last year. The Company's balance sheet showed $5,261,439 in total assets at Oct. 1, 2005, and liabilities of $4,425,077. At Oct. 1, 2005, the Company had a working capital deficiency of $1,670,257. National City Bank Default Shopsmith had the ability to borrow, under a revolving credit agreement with National City Bank, the lesser of $600,000 or the sum of 80% of accounts receivable due from Lowe's Companies. The Company's revolving credit arrangement with National City Bank expired Aug. 15, 2005, and outstanding borrowings became due on that date. The borrowings, aggregating $239,127 as of Nov. 14, 2005, have not been repaid. On Nov. 22, 2005 Shopsmith entered into an agreement with Greystone Metro Financial LP regarding the factoring of certain receivables generated from sales to Lowe's. Initial proceeds from this arrangement were used to repay amounts due under the National City Bank line of credit. The agreement with Greystone gives the Company, subject to a satisfactory appraisal of the Company's inventory, access to up to $300,000. Obligations arising from the Greystone line of credit are secured by a lien on substantially all assets of the Company. Going Concern Doubt Shopsmith, Inc., expressed substantial doubt about Shopsmith's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended April 2, 2005 and April 3, 2004. The auditing firm pointed to the Company's losses and its default on the National City Bank obligation. Shopsmith, Inc. (OTCBB:SHPS) -- http://www.shopsmith.com/-- an Ohio corporation organized in 1972, produces and markets power woodworking tools designed primarily for the home workshop. The principal line of power tools marketed under the name "Shopsmith" dates back to 1946 and was purchased by the Company in 1972. The line is built around the Shopsmith MARK V, a multi-purpose tool, and includes separate function special purpose tools that may be mounted on the MARK V or used independently. SPORTS CLUB: Posts $5.3 Million Net Loss in Quarter Ended Sept. 30 ------------------------------------------------------------------ The Sports Club Company, Inc., incurred a $5,349,000 net loss on $10,978,000 of revenues for the quarter ended Sept. 30, 2005, as compared to a $729,000 net loss on $11,903,000 of revenues for the same period in the prior year. At Sept. 30, 2005, the Company's balance sheet showed $231,542,000 in total assets and liabilities of $226,004,000. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 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 million working capital deficiency as of Dec. 31, 2004, * $107 million accumulated deficit as of December 31, 2004, and * $100 million senior debt obligation maturing March 15, 2006. About Sports Club 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." SPORTS CLUB: Selling Five Clubs to Millennium for $80 Million ------------------------------------------------------------- The Sports Club Company, Inc., has agreed to sell five of its sports clubs to Millennium Entertainment Partners for $80 million. The Company expects the transaction to close by year-end. In October, the Company agreed to sell six clubs (three located in New York City, one in Boston, one in Washington, D.C., and one in San Francisco) to Millennium for $65 million, subject to adjustments. The new five-club deal does not include the club located in Rockefeller Center after the Company exercised an election under the sale contract. The reason for the $15 million increase was not readily apparent at press time. The Company expects to receive approximately $72.2 million in cash from the sale and will receive a note from Millennium for the remaining $7.8 million balance. The note will be secured by a pledge of the Company's Series B and Series C Preferred Stock owned by Millennium and will be guaranteed by an affiliate of Millennium. In order to complete the transaction prior to December 31, 2005, the Company is having discussions with Millennium to amend the agreement to allow Millennium to pay the Company $50 million in cash on the closing date and for Millennium to issue a second note payable to the Company in the amount of $22.2 million. The second note would be due and payable on January 31, 2006. In addition, the management agreement covering the Club in Miami, Florida will be assigned to Millennium. Following the sale, the Company will continue to own and operate its three Southern California Clubs: * The Sports Club/LA - Los Angeles, * The Sports Club/LA - Beverly Hills, and * The Sports Club/LA - Orange County along with The Sports Club/LA - New York at Rockefeller Center. Millennium is currently a principal stockholder in the Company. 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 Oct. 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. SPORTS CLUB: Plans to Borrow $60 Million to Pay for Sr. Sec. Notes ------------------------------------------------------------------ The Sports Club Company, Inc., plans to borrow approximately $60 million to be secured by a pledge of its club in Los Angeles. The financing and proceeds from an $80 million asset sale of five of the Company's clubs will be used to retire its $100 million Senior Secured Notes that are due in March 2006 and for working capital purposes. The Company will sell five of nine of its clubs to its principal stockholder, Millennium Entertainment Partners. 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 Oct. 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. SYMBOLLON PHARMACEUTICALS: Reports Third Quarter Financial Results ------------------------------------------------------------------ Symbollon Pharmaceuticals, Inc., delivered its quarterly report on Form 10-QSB for the quarter ending September 30, 2005, to the Securities and Exchange Commission on November 21, 2005. For the three months ended September 30, 2005, the Company reported net income of $38,395, compared with a net loss of $471,275 in the third quarter of 2004. For the nine-month period ending Sept. 30, 2005, the company reports a $329,307 net loss. At September 30, 2005, the company's balance sheet showed $1.3 million in assets, minimal current liabilities, and $1.1 million in shareholder equity. A full-text copy of the regulatory filing is available at no charge at http://researcharchives.com/t/s?37e Going Concern Doubt VITALE, CATURANO & COMPANY, LTD., in Boston, Massachusetts, expressed doubt about Symbollon's ability to continue as a going concern after auditing the company's 2004 financial statements. The auditors' report dated March 28, 2005, highlighted concerns about the company's recurring losses from operations and an accumulated deficit. Symbollon Pharmaceuticals, Inc., is a specialty pharmaceutical company focused on the development and commercialization of proprietary drugs based on its molecular iodine technology. Symbollon has initiated a Phase III clinical trial evaluating IoGen as a potential treatment for moderate to severe cyclic pain and tenderness associated with fibrocystic breast disease. FBD is a condition that affects about 24 million women in the U.S., and there are approximately 7 million women suffering from clinical cyclic mastalgia. The Company believes IoGen also may be useful in treating and/or preventing endometriosis, ovarian cysts, and premenopausal breast cancer. TECHNIGLOVE INT'L: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: TechNIGlove International Inc. 22607 East La Palma Avenue, Suite 409 Yorba Linda, California 92887 Bankruptcy Case No.: 05-50054 Type of Business: The Debtor designs, manufactures and sells disposable gloves for contamination-controlled work environments. Their products are used in cleanrooms, sterile non-medical environments, and scientific and industrial activities. See http://www.techniglove.com/ Chapter 11 Petition Date: December 1, 2005 Court: Central District of California (Santa Ana) Judge: John E. Ryan Debtor's Counsel: Evan D. Smiley, Esq. Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP 650 Town Center Drive, Suite 950 Costa Mesa, California 92626 Tel: (714) 966-1000 Fax: (714) 966-1002 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 ------ --------------- ------------ PCM/Robb Evans Receiver $4,900,000 11450 Sheldon Street Sun Valley, CA 91352 Flexitech SND BHD Trade Debt $242,679 Lot 5071, Batu 5-1/2 Jalan Mer Klang, Malaysia 41050 Olen Properties Corp. Rent $8,068 Seven Corporate Plaza Newport Beach, CA 92660 Vision Express Trade Debt $1,753 Alexander A. Madrid, Jr., CPA Services $1,425 Graphics World Trade Debt $1,358 Lee Jennings Enterprises, Inc. Services $1,154 F. Elliott Goldman Services $963 UPS Shipping $646 Target Express Trade Debt $381 Klarin & Associates Services $280 E&S Pallets Services $275 Peachtree Checks & Forms Services $274 Unishippers Services $207 Staples Commercial Account Office Supplies $193 Pitney Bowes Trade Debt $193 MCI Services $186 Suicos General Janitorial Services $180 Southern California Edison Services $144 Uline Shipping Supply Trade Debt $132 TRANSTEL INTERMEDIA: Fitch Junks Proposed $180 Mil. Sr. Sec. Notes ------------------------------------------------------------------ Fitch Ratings has assigned an issuer default rating of 'CCC' to Transtel Intermedia S.A. and a 'CCC+' to the proposed issuance of $180 million senior secured notes due 2012. The Outlook is Stable. Proceeds will be use to refinance exiting indebtedness of parent company Transtel S.A. Transtel's rating incorporates: * the company's high leverage, * marginal yet improving profitability, * limited financial flexibility, and * its position as a niche player in Colombia's competitive local exchange market. The ratings incorporate an improved maturity profile, which is the result of a debt restructuring early last year and moderate regulatory risk. Transtel is exposed to competition from larger local exchange incumbents and increased substitution of fixed-line telephony by mobile traffic. The proposed notes will be guaranteed by the holding company, Transtel S.A., and all operating subsidiaries and will be secured by virtually all of the assets of the company. Total debt to adjusted EBITDA is high at 5.6 times and adjusted EBITDA to interest expense is low at 1.2x for the first six months of 2005. Despite the high debt levels, the company is expected to generate free cash flow that will be used to gradually reduce indebtedness in the coming years, helped by low capital expenditures levels. Transtel operates a modern, 100% digital network that allows it to offer high quality voice and data services, which has enough capacity to meet its growth strategy over the next five years. As a result, capital expenditures are expected to be at minimal levels and free cash flow generation positive that can be used to decrease debt over the next couple years. Transtel completed a debt restructuring under a 550 proceeding in early 2004 that improved its debt profile by moderately lowering leverage and extended maturities. As part of the restructuring a total of $309 million of indebtedness was exchanged for $198.4 million of new debt and $111.2 million was capitalized for Transtel's equity, representing about $152 million of 12.5% senior secured notes and $33 million of convertible subordinated notes. The proposed transaction will be used to refinance the outstanding secured notes and subordinated convertible notes. A minimum of at least 90% of the outstanding debt must be tendered in order to allow the new notes to be fully collateralized by the assets of the operating companies. After the proposed transaction is completed, the improved maturity profile of the debt will lower refinancing risk. Transtel is the largest, although still small, private fixed local service provider in Colombia. The company is well positioned to take advantage of offering unregulated bundled products that include voice and broadband services, as well as video services in Cali. This strategy may help the company to further reduce churn rates and increase profitability and penetration. Future operating strategy targets to lever the unused installed capacity of its network in Cali, where good demographics and low market share by the company provides a good opportunity to increase its subscriber base by directly competing with incumbent, municipally-owned Emcali. The company has leading market shares in Palmira and Cartago, where about 40% of revenues are generated. Over the last few years, changes in revenues reflect the substitution of fixed line services by wireless services and pressure from overall traffic; growth of lines in service has been offset by increases in tariffs. During the first six months of 2005, the company reversed the trend of declining LIS by increasing its sales force and maintaining the rates. Nevertheless, revenue declined 15% for this period vis-a-vis 2004 as the increase in LIS was not enough to compensate the higher tariffs. Broadband penetration in Colombia is low and offers an attractive opportunity over the medium term to enhance ARPU and to help retain LIS with the offering of unregulated bundle services. Regulatory risk is moderate. In 2006, the industry will switch to charging for minutes verses pulses, which is not expected to significantly affect the revenues of the company. Local service plans are regulated if market share exceeds 60%. Transtel will have four of its seven local service operations under a regulated regime by January 2006, representing approximately 64% of LIS. Regulated rates follow a cap system, in which original caps are adjusted every year by the difference of the inflation less a productivity factor and for a service quality score. The current productivity factor of 2% is comparable to certain countries in the region that follow the same system. The productivity factor is reviewed every five years; the latest took place in 2005, adding certainty until 2010. Transtel controls and operates seven telephone systems and one cable system, serving residential and commercial subscribers in ten cities including Cali and its metropolitan area and the municipalities of Popayan and Jamundi. The company offers local telephone, data, internet, and, to a lesser extent, pay television services. At June 30, 2005 total subscribers included over 210,000 for fixed line services, 28,000 internet subscribers including 1,900 broadband users, and 10,000 pay television subscribers. Revenues and EBITDA for 2004 equaled approximately $60 million and over $40 million, respectively. Transtel securities are traded in the United States and are registered in the Securities and Exchange Commission. SEC filings on the company are available at no charge http://ResearchArchives.com/t/s?37c TREMONIA CDO: Moody's Rates $7.5 Million Subordinated Notes at B3 ----------------------------------------------------------------- Moody's Investors Service assigned ratings to these tranches of Notes issued by Tremonia CDO 2005-1 PLC: 1) Aaa to the U.S. $825,000,000 Class A-1 Tremonia CDO 2005-1 PLC Floating Rate Notes Due 2045; 2) Aaa to the U.S. $55,000,000 Class A-2 Tremonia CDO 2005-1 PLC Floating Rate Notes Due 2045; 3) Aa2 to the U.S. $33,000,000 Class B Tremonia CDO 2005-1 PLC Floating Rate Notes Due 2045; 4) A3 to the U.S. $79,500,000 Class C Tremonia CDO 2005-1 PLC Floating Rate Notes Due 2045; and 5) B3 to the U.S. $7,500,000 Tremonia CDO 2005-1 PLC Subordinated Notes 2045. The ratings reflect: * Moody's evaluation of the underlying collateral as of the Closing Date; * the transaction's structure; * the draft legal documentation; and * the expertise of the managers, Collineo Asset Management and Structured Asset Investors, LLC. Moody's notes that the rating of these notes address the ultimate cash receipt of all required interest and principal payments required by the governing documents and are based on the expected losses posed to holders of notes relative to the promise of receiving the present value of such payments. Moody's B3 rating assigned to the U.S. $7,500,000 Class D Tremonia CDO 2005-1 PLC Subordinated Notes Due 2045 only addresses the ultimate return of the Rated Amount by the Stated Maturity. This transaction, underwritten by Wachovia Securities, is a resecuritization of highly rated RMBS, HEL, CDOs and CMBS. TRINITY LEARNING: June 30 Balance Sheet Upside-Down by $6.4 Mil. ---------------------------------------------------------------- Trinity Learning Corporation delivered its annual report on Form 10-KSB for the fiscal year ended June 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. Trinity Learning incurred a net loss of 15,615,042 for the fiscal year ended June 30, 2005, compared to a net loss of $11,462,063 for the fiscal year ended June 30, 2004. At June 30, 2005, the Company reported total assets of 23,385,589 and total liabilities of 26,985,856. At June 30, 2005, Trinity Learning 's balance sheet showed a $6,397,328 stockholders' deficit compared to a $444,520 positive equity at Jun. 30, 2004. The Company's accumulated deficit as of June 30, 2005 was $38,266,018, compared to $22,650,976 at June 30, 2004. The Company reported net loss available for common stockholders of $15,615,042 or $0.49 per share for the fiscal year 2005 as compared with $11,462,063, or $0.50 per share for the fiscal year 2004. At June 30, 2005, Trinity Learning had a cash balance of $752,261. Net cash used by operating activities during the fiscal year 2005 was $1,176,953, attributable primarily to its loss from operations of $15,615,042. Net cash generated by financing activities was $6,467,688 for fiscal year 2005. Accounts receivable increased to $3,540,415 at June 30, 2005. Accounts payable increased to $3,134,406 at June 30, 2005, and accrued expenses increased to $1,625,901 at June 30, 2005. Those increases are attributable to expenses incurred by the Company's operating subsidiaries, including Trinity Workplace Learning, and its corporate office expenditures during the year. The Company stated in its report that it expects its cumulative net losses and cumulative negative cash flow to continue until it can increase revenues or reduce costs. If the Company is unable to generate sufficient revenues to become profitable and have positive cash flow, it could default on its commitments and may have to discontinue operations or seek a purchaser for its business or assets. Going Concern Doubt Trinity Learning stated in its report that it does not have significant cash or other material assets, nor does it has an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The Company does not currently possess a financial institution as source of financing and it cannot be certain that its existing sources of cash will be adequate to meet its liquidity requirements. Those conditions raise substantial doubt about its ability to continue as a going concern. The Company's independent public accounting firm, Chisholm, Bierwolf & Nilson, LLC, in its review of Trinity Learning's financial statements as of June 30, 2005, raised substantial doubt about the Company's ability to continue as a going concern because it has a working capital deficit and has suffered recurring operating losses. Trinity Learning Corporation (OTC Bulletin Board: TTYL) -- http://www.trinitylearning.com/-- is a global learning company that is aggressively executing an acquisition-based growth strategy in the $2 trillion global education and training market. The Company currently provides workplace learning and certification services to 7,000 clients including governmental organizations and Fortune 1000 companies. With 300 employees and a 205,000 sq. foot state-of-the-art content production and distribution facility, Trinity Learning produces and delivers education and training content to organizations in growing vertical markets such as healthcare, homeland security, and industrial services. Trinity Learning is focused on the growing and highly fragmented workplace certification sector and by leveraging its size and expertise to new industry segments and geographic markets through additional acquisitions, internal growth, and strategic alliances. Trinity Learning is seeking to become an industry leader and one of the first global learning brands over the next five years. VENTAS REALTY: Moody's Upgrades Sr. Debt's Rating to Ba2 from Ba3 ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of Ventas, Inc. and its affiliates (senior debt to Ba2, from Ba3) with a stable outlook. The rating action results from the rating agency's belief that Ventas will continue to successfully execute its commitment to unencumber a material portion of its assets in the near term, as well as the progress the REIT has made, and should continue to make, in growing and diversifying its healthcare property portfolio, and in strengthening its management infrastructure. The stable outlook reflects the good competitive position that Ventas has achieved, a sound property portfolio and a firmer balance sheet. Though Ventas' secured debt increased to 42% of gross assets following its merger with Provident Senior Living Trust in 2Q05, the REIT raised nearly $100 million in common stock in June 2005, helping to reduce secured debt to 29% of gross assets at 3Q05. In addition, the Provident acquisition materially helped the REIT diversify its asset and tenant bases. In 2005, Ventas made material progress in diversifying its tenant concentration with Kindred -- its largest tenant -- especially after its merger with Provident. Revenues contributed by Kindred should be approximately 60% of the REIT's rental revenue for 2005, reduced from 82% for 2004. However, Brookdale Senior Living became a large tenant via the Provident acquisition at 31% of revenues (including revenues attributed with Brookdale and Alterra Healthcare Corp. merger), so Ventas has progress yet to be made in diversifying its tenant base. Ventas has also made significant progress in reducing in its exposure to highly regulated health care segments -- skilled nursing facilities and long-term acute care hospitals which account for approximately 56% of run-rate revenues, down from 99% for 3Q03. Private pay assisted living facilities now account for 42% of Ventas' revenue, assuming full-year affect of 2005 acquisitions. Moody's expects that Ventas will continue to make progress in reducing these property-type and tenant concentrations a priority. Moody's also noted that Ventas has been making laudable progress in building its management team and management information systems, including underwriting and asset management; these efforts should begin to become more visible in the REIT's performance, and should help stabilize its earnings and capacity to grow. Moody's remarked that an upgrade to Ba1 would depend on the ability of the REIT to: * bring its secured debt level below 15% of gross assets; * reduce its top two tenant exposure closer to 40% of revenue, while continuing to increase its exposure to private pay health care segments; and * grow overall in size. A rating downgrade would likely result if Ventas were to change to a more aggressive capital strategy, demonstrated by a rise in secured debt from its existing levels, most likely driven by a leveraged strategic transaction. These ratings were upgraded with a stable outlook: Ventas Realty Limited Partnership: * Senior debt to Ba2, from Ba3 * senior debt shelf to (P)Ba2, from (P)Ba3 * subordinated debt shelf to (P)B1, from (P)B2 Ventas, Inc.: * Preferred stock shelf to (P)B1, from (P)B2 Ventas Capital Corporation: * senior debt shelf to (P)Ba2, from (P)Ba3 * subordinated debt shelf to (P)B1, from (P)B2 In its previous rating action (April 2005) with respect to Ventas, Moody's affirmed the Ba3 rating with a positive outlook. Ventas, Inc. [NYSE: VTR] is a health care real estate investment trust (REIT) that owns 381 health care and senior housing assets in 42 states, including: * 41 hospitals, * 200 skilled nursing facilities, * 140 senior housing, and * other assets. At September 30, 2005, Ventas had $2.7 billion in book assets. VENTURE HOLDINGS: Wants Plan Filing Deadline Stretched to Dec. 19 ----------------------------------------------------------------- NM Holdings Company, LLC, fka Venture Holdings Company, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan to extend until Dec. 19, 2005, the deadline for them to file a liquidating chapter 11 plan and an accompanying disclosure statement. The Debtors and the Official Committee of Unsecured Creditors have been working towards a chapter 11 plan and disclosure statement since the sale of the Debtors' substantial assets to New Venture Holdings, LLC closed on May 2, 2005. Significant impediments to the filing of a plan and disclosure statement exist, including substantial administrative claims and plan funding issues. The Debtors and the Committee are currently engaged in negotiations with the Agent for the Debtors' pre- petition lenders and New Venture, to attempt to resolve those issues before filing a plan and disclosure statement. The Debtors give the Court three reasons supporting the extension: 1) they believe a liquidating chapter 11 plan will present the greatest opportunity for unsecured creditors to fully recover their claims; 2) they and the Committee have made progress in their negotiations with the Agent for the pre-petition lenders, which proves the filing of an acceptable and consensual chapter 11 plan is possible within the coming weeks; and 3) the requested extension would not cause harm to creditors because the issues under discussion between the Committee and the Agent for the pre-petition lenders would have to be addressed by any subsequent chapter 7 trustee. Headquartered in Fraser, Michigan, Venture Holdings Company, LLC, nka NM Holdings Company, LLC, and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. Mich. Case No. 03-48939) on March 28, 2003. Deluxe Pattern Corporation and its debtor- affiliates filed for chapter 11 protection on May 24, 2004 (Bankr. E.D. Mich. Case No. 04-54977). As of March 31, 2002, the Debtors had total assets of $1,459,834,000 and total debts of $1,382,369,000. Venture's prepetition lenders acquired Venture's assets during the chapter 11 proceeding. John A. Simon, Esq., at Foley & Lardner LLP represent the Debtors. John A. Karaczynski, Esq., and Robert M. Aronson, Esq., at Akin Gump Strauss Hauer & Feld LLP, and Joel D. Applebaum, Esq., at Clark Hill PLC represent the Creditors' Committee. VENTURE HOLDINGS: Clark Hill Approved as Committee's Co-Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District Of Michigan gave the Official Committee of Unsecured Creditors in Venture Holdings Company, LLC, nka NM Holdings Company, LLC, and its debtor-affiliates' chapter 11 cases permission to employ Clark Hill PLC as its co-counsel. Clark Hill will: 1) advise and consult with the Committee and the Debtors concerning: a) questions arising from the administration of the Debtors' estates and the rights and remedies of the Committee and its constituents vis-.-vis the assets of the Debtors' estates and the administration of their chapter 11 cases, and b) the formulation of a plan of liquidation of the Debtors and the claims and interests of secured and unsecured creditors, equity holders and other parties-in-interest in the Debtors' chapter 11 cases; 2) analyze, prosecute, defend and represent the Committee's interests in contested matters and adversary proceedings arising in the Debtors' bankruptcy cases, including chapter 5 causes of action and the litigation against Mr. Wingel, his affiliates, insiders and related properties; and 3) represent the Committee with respect to the Debtors' bankruptcy proceedings and with respect to the matters identified in Section 1103 of the Bankruptcy Code. Joel D. Applebaum, Esq., a Member of Clark Hill, is one of the lead professionals from the firm performing services to the Committee. Mr. Applebaum charges $350 per hour for his services. Mr. Applebaum reports Clark Hill's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Robert D. Gordon Member $350 Shannon L. Deeby Associate $190 Seth A. Drucker Associate $190 Designation Hourly Rate ----------- ----------- Members $220 - $400 Sr. Attorneys $210 - $225 Associates $135 - $215 Legal Assistants $90 - $180 Clark Hill assures the Court that it does not represent any interest materially adverse to the Committee and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Fraser, Michigan, Venture Holdings Company, LLC, nka NM Holdings Company, LLC, and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. Mich. Case No. 03-48939) on March 28, 2003. Deluxe Pattern Corporation and its debtor- affiliates filed for chapter 11 protection on May 24, 2004 (Bankr. E.D. Mich. Case No. 04-54977). As of March 31, 2002, the Debtors had total assets of $1,459,834,000 and total debts of $1,382,369,000. Venture's prepetition lenders acquired Venture's assets during the chapter 11 proceeding. John A. Simon, Esq., at Foley & Lardner LLP represent the Debtors. John A. Karaczynski, Esq., and Robert M. Aronson, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Creditors' Committee. VERIDIUM CORP: Incurs $3.3 Mil Net Loss in Quarter Ended Sept. 30 ----------------------------------------------------------------- Veridium Corporation incurred a $3.3 million net loss for the three months ended Sept. 30, 2005, as compared to a $500,000 net loss for the same period in 2004. The Company earned $429,000 of net income from continuing operations for the quarter ended Sept. 30, 2005 on revenues of $3.4 million. "Veridium has suffered some disappointing blows over the past few years and Veridium's business model is clearly in need of reinvention -- a process that we started this past quarter and expect to complete this year," said Kevin Kreisler, Veridium's Chairman and Chief Executive Officer. "We are implementing a plan currently that we expect will unlock the value of Veridium's' service group and catalyze its growth while separately revitalizing the development of our technology driven industrial waste model. We have already made significant headway in this initiative, and will provide additional information on this shortly." Veridium's balance sheet showed $9.3 million in total assets at Sept. 30, 2004, and liabilities of $10.8 million, resulting in a stockholders' deficit of approximately $2.3 million. At Sept. 30, 2005, the Company had a negative working capital position of $3.2 million, of which convertible debentures accounted for approximately $2 million. Going Concern Doubt WithumSmith+Brown, PC, expressed substantial doubt about Veridium's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's recurring losses from operations, working capital deficiency and accumulated deficit. Veridium Corporation -- http://www.veridium.com/-- is setting a new standard for environmental service with its focus on the use of state-of-the-art green technologies to recycle, reuse and mine commodities from industrial hazardous wastes. Veridium's patented and proprietary technologies allow it to offer a uniquely broad array of competitively priced industrial hazardous waste recycling services. Veridium's mission is to minimize and eliminate the need for disposal and reduce the burden on natural resources by recycling, reusing and mining all reusable resources from industrial hazardous wastes in a safe, compliant and profitable manner. VERTIS, INC: Sept. 30 Balance Sheet Upside-Down by $534 Million --------------------------------------------------------------- Vertis, Inc., reported results for the three and nine months ended Sept. 30, 2005. Vertis reported $378.2 million of net sales in the third quarter of 2005 versus $379.2 million in the third quarter of 2004. For the nine-month period ending Sept. 30, 2005, Vertis has generated net sales of $1.095 billion, compared to $1.091 billion in the same period last year. The 2005 third quarter net income from continuing operations was $2.3 million and the nine-month net loss was $36.3 million. The 2004 third quarter net income from continuing operations was $16.4 million and the nine-month net loss was $4.6 million. "I am especially pleased with the performance in our direct mail, premedia, and media product lines," Dean D. Durbin, President and Chief Operating Officer, stated. "Direct mail and media revenue were up in the third quarter as well as through the first nine months of 2005. In premedia, excluding locations exited as part of our restructuring activities, revenue was up in the quarter and for the first nine months of 2005. Collectively, these three platforms generated $4.8 million of quarter-over-quarter EBITDA growth and are up $7.5 million on a year-to-date basis. Advertising inserts continues to face volume challenges versus 2004, a significant portion of which was mitigated by favorable pricing and lower costs, the net result being a decline in EBITDA of $2.5 million in the third quarter of 2005 versus the third quarter of 2004." European Segment The company previously reported its intention to pursue strategic alternatives with respect to its underperforming Europe Segment. On Oct. 3, 2005 the company divested of the direct mail portion of its Europe Segment. As a result of the divestiture of the direct mail business and the limited strategic importance of the company's remaining interests in the UK, the company has also decided to sell its UK premedia business and has reported the entire Europe Segment as a discontinued operation as of Sept. 30, 2005. All prior periods have been restated to exclude the Europe Segment from continuing operations. As such, the Vertis Europe net losses are included in discontinued operations. Such losses amounted to $26.8 million in the 2005 third quarter and $2.1 million in the 2004 third quarter and $147.3 million in the nine months ended Sept. 30, 2005 and $3.9 million in the nine months ended Sept. 30, 2004. Headquartered in Baltimore, Maryland, Vertis Inc. -- http://www.vertisinc.com-- is the premier provider of targeted advertising, media, and marketing services. Its products and services include consumer research, audience targeting, media planning and placement, creative services and workflow management, targeted advertising inserts, direct mail, interactive marketing, packaging solutions, and digital one-to-one marketing and fulfillment. With facilities throughout the US and the UK, Vertis combines technology, creative resources, and innovative production to serve the targeted marketing needs of companies worldwide. At Sept. 30, 2005, Vertis Inc.'s balance sheet showed a $534,048,000 stockholders' deficit, compared to a $348,560,000 deficit at Dec. 31, 2004. VERTIS INC: Inks New $130 Mil. GE Trade Receivables Securitization ------------------------------------------------------------------ Vertis, Inc., has entered into a $130 million, three-year revolving trade receivables facility with GE Commercial Finance. This facility replaces the 2002 trade receivables facility expiring on Nov. 30, 2005. GE Commercial Finance is also the Agent and Lead Arranger of Vertis' $200 million, four-year revolving credit agreement. "The completion of this transaction leaves us with no scheduled debt maturities until fourth quarter 2008," Stephen E. Tremblay, Chief Financial Officer, stated. Headquartered in Baltimore, Maryland, Vertis Inc. -- http://www.vertisinc.com-- is the premier provider of targeted advertising, media, and marketing services. Its products and services include consumer research, audience targeting, media planning and placement, creative services and workflow management, targeted advertising inserts, direct mail, interactive marketing, packaging solutions, and digital one-to-one marketing and fulfillment. With facilities throughout the US and the UK, Vertis combines technology, creative resources, and innovative production to serve the targeted marketing needs of companies worldwide. At Sept. 30, 2005, Vertis Inc.'s balance sheet showed a $534,048,000 stockholders' deficit, compared to a $348,560,000 deficit at Dec. 31, 2004. WINDSWEPT ENVIRONMENTAL: Amends Laurus Debt & Equity Agreements --------------------------------------------------------------- Windswept Environmental Group, Inc., has entered into an Amendment and Fee Waiver Agreement with Laurus Master Fund, Ltd., dated as of November 23, 2005, pursuant to which Laurus agreed to amend the terms of the: -- Amended and Restated Secured Convertible Term Note issued by Windswept to Laurus on October 6, 2005, in the aggregate principal amount of $7,350,000, maturing on June 30, 2008; -- option issued by Windswept to Laurus on June 30, 2005, to purchase 30,395,179 shares of Windswept's common stock; -- warrant issued by Windswept to Laurus on June 30, 2005 to purchase 13,750,000 shares of Windswept's common stock; -- securities purchase agreement between Windswept and Laurus dated as of June 30, 2005; and -- registration rights agreement between Windswept and Laurus dated as of June 30, 2005. The terms of the Note, the Option, the Warrant and the Securities Purchase Agreement previously required Windswept to reserve from its authorized and unissued common stock sufficient number of shares to provide for the issuance of shares upon the full conversion and exercise of the Note, the Option and the Warrant, as applicable, after the earlier to occur of: (a) December 31, 2005, or (b) the date of Windswept's next shareholders' annual meeting. The Amendment and Fee Waiver Agreement extended the Additional Authorization Date to the earlier to occur of: (a) January 31, 2005, or (b) the date of Windswept's next shareholders' annual meeting. The Registration Rights Agreement previously set forth Windswept's obligations to register the shares of common stock underlying the Note, the Option and the Warrant by filing a registration statement on Form S-1 and having the Registration Statement declared effective by the Securities and Exchange Commission by November 22, 2005. The Registration Rights Agreement provided that beginning November 23, 2005, Windswept would be required to pay to Laurus these fees in the event that the Registration Statement was not effective by November 22, 2005: -- 1.5% of the principal outstanding on the Note, for the first 30 days, prorated for partial periods, which equals $3,675 per day based upon the $7,350,000 principal amount of the Note currently outstanding; and -- 2.0% of the principal outstanding on the Note, for each subsequent 30-day period, prorated for partial periods, which currently equals $4,900 per day. Pursuant to the Amendment and Fee Waiver Agreement, the date by which the Registration Statement must be declared effective by the Securities and Exchange Commission has been postponed from November 22, 2005, to February 10, 2006. As a result, the date by which any other Fees may accrue and become payable has been postponed until February 10, 2006. In addition, the Fees that accrued relating to the lack of effectiveness of the Registration Statement on November 23, 2005 have been waived by Laurus. Windswept requested the Amendment and Fee Waiver Agreement in order to maximize its flexibility in responding to a Securities and Exchange Commission comment letter that it received on October 31, 2005, in relation to the Registration Statement, which it filed on October 3, 2005. Windswept remains obligated to perform its obligations under the Note, as amended, the Warrant, the Option, the Securities Purchase Agreement and the Registration Rights Agreement, except to the extent modified by the Amendment and Fee Waiver Agreement. A full-text copy of the Amendment and Fee Waiver Agreement is available for free at http://ResearchArchives.com/t/s?37f Windswept Environmental Group, Inc., through its wholly owned subsidiary, Trade-Winds Environmental Restoration, Inc., -- http://www.tradewindsenvironmental.com/-- provides a full array of emergency response, remediation, disaster restoration and commercial drying services to a broad range of clients. * * * Going Concern Doubt As reported in the Troubled Company Reporter on November 28, 2005, the Company's management expresses substantial doubt about the Company's ability to continue as a going concern, pointing to its recurring losses from operations and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. As of Sept. 27, 2005, the company had a cash balance of $147,493, working capital of $2,597,138 and stockholders' equity of $5,552,011. WINN-DIXIE: Postpones Annual Meeting At Equity Panel's Request -------------------------------------------------------------- Winn-Dixie Stores, Inc. reported that the Company's annual meeting of shareholders has been postponed at the request of the Equity Committee in Winn-Dixie's Chapter 11 proceedings. The annual meeting had been scheduled to be held on Thursday, Dec. 8, 2005, in Jacksonville, Florida. A new date for the annual meeting has not yet been determined. The Equity Committee was appointed earlier this year by the U.S. Trustee to represent the interests of Winn Dixie's shareholders in the company's chapter 11 proceedings. The Equity Committee requested the postponement of the annual meeting to allow time for there to be an independent review of the events and circumstances that led up to the filing of the Company's Chapter 11 cases, as well as other related matters. 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, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 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. XERIUM TECH: Weak Performance Cues S&P to Chip Debt Ratings to B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating and bank loan ratings on Westborough, Massachusetts-based Xerium Technologies Inc. to 'B+' from 'BB-'. At the same time, the ratings were placed on CreditWatch with negative implications. Xerium is a manufacturer of consumable products used in the papermaking process. The company's total debt was approximately $645 million as of Sept. 30. "The downgrade reflects the company's weaker-than-expected operating performance and deterioration in credit protection measures, as well as concerns that manufacturing issues will further delay improvement in the company's financial profile," said Standard & Poor's credit analyst James Siahaan. The company's operating performance has been hurt by difficult end markets and by manufacturing inefficiencies. Furthermore, problems related to the transfer of production capacity have resulted in the company's inability to satisfy some customer orders. Standard & Poor's will meet with Xerium management to review the company's operating performance and examine its business and financial prospects. Attention will be paid to the company's manufacturing issues, its ability to obtain price increases in a difficult operating environment, its business prospects for 2006, and its expectations for financial performance and liquidity. * Scott Stuart Joins Donlin Recano as Vice President ---------------------------------------------------- Donlin Recano & Company, Inc., announced that Scott Y. Stuart, Esq., has joined its team as Vice President. For the past 18 years Mr. Stuart has been a respected member of the bankruptcy community. His background includes extensive public and private sector experience, including the Office of the United States Trustee for the Eastern District of New York, Department Chair of Rivkin Radler's insolvency department and General Counsel to TruFoods Systems, Inc, a company built on acquiring distressed companies in the fast food sector either as turnaround opportunities or out of bankruptcy and includes nationally known chains such as Pudgie's Famous Chicken, Arthur Treacher's Fish and Chips and Wall Street Deli. Mr. Stuart will be responsible for business development and marketing with an emphasis on the uniqueness of Donlin Recano's ability to customize its product on a case by case basis; a specialized customer service team for each aspect of the claims management process; competitive pricing and new systems aimed at assuring an unsurpassed level of information accuracy, public accessibility and compliance with the new Bankruptcy Laws, including creditor noticing capabilities. Mr. Stuart earned his B.A. with Academic Honors from the State University of New York at Binghamton and his J.D. from Brooklyn Law School. He is a member of the American Bankruptcy Institute and Turnaround Management Association as well as numerous charitable organizations for which Scott is an active fundraiser and board member. * BOND PRICING: For the week of Nov. 28 - Dec. 2, 2005 ------------------------------------------------------ Issuer Coupon Maturity Price ------ ------ -------- ----- Adelphia Comm. 3.250% 05/01/21 2 Adelphia Comm. 6.000% 02/15/06 3 Adelphia Comm. 7.500% 01/15/04 59 Adelphia Comm. 7.750% 01/15/09 57 Adelphia Comm. 7.875% 05/01/09 59 Adelphia Comm. 8.125% 07/15/03 56 Adelphia Comm. 8.375% 02/01/08 62 Adelphia Comm. 9.250% 10/01/02 60 Adelphia Comm. 9.375% 11/15/09 62 Adelphia Comm. 9.500% 02/15/04 58 Adelphia Comm. 9.875% 03/01/05 58 Adelphia Comm. 9.875% 03/01/07 61 Adelphia Comm. 10.250% 11/01/06 60 Adelphia Comm. 10.250% 06/15/11 64 Adelphia Comm. 10.500% 07/15/04 61 Adelphia Comm. 10.875% 10/01/10 60 AHI-DFLT 07/05 8.625% 10/01/07 51 Aladdin Gaming 13.500% 03/01/10 0 Albertson's Inc. 7.000% 07/21/17 74 Allegiance Tel. 11.750% 02/15/08 21 Allegiance Tel. 12.875% 05/15/08 25 Alt Living Scvs 7.000% 06/01/04 1 Amer & Forgn PWR 5.000% 03/01/30 69 Amer Color Graph 10.000% 06/15/10 69 Amer Plumbing 11.625% 10/15/08 15 American Airline 7.379% 05/23/16 67 American Airline 8.390% 01/02/17 74 American Airline 8.800% 09/16/15 65 American Airline 9.980% 01/02/15 67 American Airline 9.980% 01/02/15 67 American Airline 9.980% 01/02/15 67 American Airline 10.180% 01/02/13 67 American Airline 10.430% 09/15/08 70 American Airline 10.430% 09/15/08 70 American Airline 10.850% 03/15/09 65 Amer Restaurant 11.500% 11/01/06 25 AMR Corp. 9.750% 08/15/21 60 AMR Corp. 9.800% 10/01/21 75 AMR Corp. 9.880% 06/15/20 64 AMR Corp. 10.000% 04/15/21 64 AMR Corp. 10.150% 05/15/20 58 AMR Corp. 10.200% 03/15/20 65 AMR Corp. 10.400% 03/10/11 75 AMR Corp. 10.420% 03/10/11 73 AMR Corp. 10.550% 03/12/21 69 Anchor Glass 11.000% 02/15/13 72 Antigenics 5.250% 02/01/25 54 Anvil Knitwear 10.875% 03/15/07 55 Apple South Inc. 9.750% 06/01/06 3 Armstrong World 6.350% 08/15/03 73 Armstrong World 6.500% 08/15/05 72 Armstrong World 7.450% 05/15/29 73 Armstrong World 9.000% 06/15/04 73 Amtran Inc. 9.625% 12/15/05 4 Asarco Inc. 7.875% 04/15/13 61 Asarco Inc. 8.500% 05/01/25 50 ATA Holdings 13.000% 02/01/09 4 At Home Corp. 4.750% 12/15/06 0 Atlas Air Inc 8.770% 01/02/11 62 Autocam Corp. 10.875% 06/15/14 66 Bank New England 8.750% 04/01/99 7 Big V Supermkts 11.000% 02/15/04 0 Budget Group Inc. 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 58 Burlington Inds 7.250% 09/15/05 2 Burlington Inds 7.250% 08/01/25 2 Calpine Corp. 4.000% 12/26/03 22 Calpine Corp. 4.750% 11/15/23 24 Calpine Corp. 7.625% 04/15/06 32 Calpine Corp. 7.750% 04/15/09 32 Calpine Corp. 7.875% 04/01/08 31 Calpine Corp. 8.500% 02/15/11 26 Calpine Corp. 8.625% 08/15/10 26 Calpine Corp. 8.750% 07/15/07 33 Calpine Corp. 8.750% 07/15/13 73 Calpine Corp. 10.500% 05/15/06 33 CD Radio Inc. 8.750% 09/29/09 0 Cell Therapeutic 5.750% 06/15/08 56 Cell Therapeutic 5.750% 06/15/08 51 Cellstar Corp. 12.000% 01/15/07 0 Cendant Corp 4.890% 08/17/06 50 Charter Comm Hld 5.875% 11/16/09 75 Charter Comm Hld 10.000% 05/15/11 59 Charter Comm Hld 11.125% 01/15/11 62 CIH 10.000% 05/15/14 63 Ciphergen 4.500% 09/01/08 75 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 44 Color Tile Inc 11.000 12/1/12 74 Comcast Corp. 2.000% 10/15/29 39 Compudyne Corp 6.250% 01/15/11 75 Constar Intl 11.000% 12/01/12 74 Cons Container 10.125% 07/15/09 69 Constar Intl 11.000% 12/01/12 74 Cooper Standard 8.375% 12/15/14 75 Covad Communication 3.000% 03/15/24 57 Cray Inc. 3.000% 12/01/24 55 Cray Research 6.125% 02/01/11 25 Curagen Corp. 4.000% 02/15/11 72 Curagen Corp. 4.000% 02/15/11 74 Curative Health 10.750% 05/01/11 70 DAL-DFLT09/05 9.000% 05/15/16 19 Dana Corp 5.850% 01/15/15 71 Dana Corp 7.000% 03/15/28 72 Dayton Superior 13.000% 06/15/09 72 Decrane Aircraft 12.000% 09/30/08 50 Delco Remy Intl 9.375% 04/15/12 36 Delco Remy Intl 11.000% 05/01/09 41 Delta Air Lines 2.875% 02/18/24 17 Delta Air Lines 7.299% 09/18/06 62 Delta Air Lines 7.541% 10/11/11 60 Delta Air Lines 7.700% 12/15/05 20 Delta Air Lines 7.900% 12/15/09 20 Delta Air Lines 8.000% 06/03/23 20 Delta Air Lines 8.187% 10/11/17 60 Delta Air Lines 8.270% 09/23/07 45 Delta Air Lines 8.300% 12/15/29 21 Delta Air Lines 8.540% 01/02/07 28 Delta Air Lines 8.540% 01/02/07 28 Delta Air Lines 8.540% 01/02/07 26 Delta Air Lines 8.540% 01/02/07 31 Delta Air Lines 8.950% 01/12/12 43 Delta Air Lines 9.200% 09/23/14 47 Delta Air Lines 9.250% 12/27/07 19 Delta Air Lines 9.250% 03/15/22 20 Delta Air Lines 9.320% 01/02/09 55 Delta Air Lines 9.375% 09/11/07 55 Delta Air Lines 9.590% 01/12/17 40 Delta Air Lines 9.750% 05/15/21 19 Delta Air Lines 9.875% 04/30/08 63 Delta Air Lines 10.000% 08/15/08 20 Delta Air Lines 10.000% 05/17/08 42 Delta Air Lines 10.000% 05/17/09 39 Delta Air Lines 10.000% 05/17/09 39 Delta Air Lines 10.000% 06/01/10 44 Delta Air Lines 10.000% 06/01/10 50 Delta Air Lines 10.000% 06/01/10 61 Delta Air Lines 10.000% 12/05/14 19 Delta Air Lines 10.060% 01/02/16 53 Delta Air Lines 10.125% 05/15/10 19 Delta Air Lines 10.140% 08/14/11 59 Delta Air Lines 10.330% 03/26/06 27 Delta Air Lines 10.375% 02/01/11 21 Delta Air Lines 10.375% 12/15/22 21 Delta Air Lines 10.430% 01/02/11 41 Delta Air Lines 10.430% 01/02/11 41 Delta Air Lines 10.500% 04/30/16 65 Delta Air Lines 10.790% 09/26/13 41 Delta Air Lines 10.790% 03/26/14 41 Delta Air Lines 10.790% 03/26/14 14 Delta Air Lines 10.790% 03/26/14 31 Delphi Auto Syst 7.125% 05/01/29 55 Delphi Auto Syst 6.500% 05/01/29 55 Delphi Corp 6.500% 08/15/13 56 Delphi Trust II 6.197% 11/15/33 28 Diamond Brands 12.875% 04/15/09 0 Duane Reade Inc 9.750% 08/01/11 69 Dura Operating 9.000% 05/01/09 60 DVI Inc. 9.875% 02/01/04 10 E.Spire Comm Inc. 13.000% 11/01/05 0 Eagle-Picher Inc 9.750% 09/01/13 74 Edison Brothers 11.000% 09/26/07 0 Empire Gas Corp. 9.000% 12/31/07 0 Epix Medical Inc. 3.000% 06/15/24 68 Exodus Comm. Inc. 10.750% 12/15/09 0 Exodus Comm. Inc. 11.625% 07/15/10 0 Falcon Products 11.375% 06/15/09 2 Fedders North AM 9.875% 03/01/14 73 Federal-Mogul Co. 7.375% 01/15/06 34 Federal-Mogul Co. 7.500% 01/15/09 33 Federal-Mogul Co. 8.160% 03/06/03 33 Federal-Mogul Co. 8.250% 03/03/05 33 Federal-Mogul Co. 8.330% 11/15/01 33 Federal-Mogul Co. 8.370% 11/15/01 31 Federal-Mogul Co. 8.800% 04/15/07 35 Finova Group 7.500% 11/15/09 35 FMXIQ-DFLT09/05 13.500% 08/15/05 3 Foamex L.P.-DFLT 9.875% 06/15/07 7 Foamex L.P./C-DFT 10.750% 04/01/09 74 Ford Motor Co. 7.400% 11/01/46 65 Ford Motor Co. 7.700% 05/15/97 60 Ford Motor Co. 7.750% 06/15/43 68 Ford Motor Co. 9.215% 09/15/21 74 Ford Motor Cred 4.400% 03/20/09 72 Ford Motor Cred 4.800% 07/20/09 72 Ford Motor Cred 5.000% 01/20/11 67 Ford Motor Cred 5.000% 02/22/11 74 Ford Motor Cred 5.100% 02/22/11 72 Ford Motor Cred 5.150% 11/20/09 74 Ford Motor Cred 5.200% 03/21/11 70 Ford Motor Cred 5.250% 12/21/09 73 Ford Motor Cred 5.250% 01/20/10 75 Ford Motor Cred 5.250% 02/22/11 72 Ford Motor Cred 5.250% 03/21/11 73 Ford Motor Cred 5.250% 03/21/11 72 Ford Motor Cred 5.250% 09/20/11 71 Ford Motor Cred 5.300% 03/21/11 71 Ford Motor Cred 5.300% 04/20/11 72 Ford Motor Cred 5.350% 12/21/09 74 Ford Motor Cred 5.350% 02/22/11 70 Ford Motor Cred 5.400% 01/20/11 72 Ford Motor Cred 5.400% 09/20/11 75 Ford Motor Cred 5.400% 10/20/11 73 Ford Motor Cred 5.450% 04/20/11 73 Ford Motor Cred 5.450% 10/20/11 70 Ford Motor Cred 5.500% 04/20/11 71 Ford Motor Cred 5.500% 09/20/11 74 Ford Motor Cred 5.500% 10/20/11 69 Ford Motor Cred 5.550% 06/21/10 73 Ford Motor Cred 5.550% 09/20/11 69 Ford Motor Cred 5.600% 08/22/11 73 Ford Motor Cred 5.600% 09/20/11 69 Ford Motor Cred 5.600% 11/21/11 71 Ford Motor Cred 5.600% 11/21/11 70 Ford Motor Cred 5.650% 05/20/11 73 Ford Motor Cred 5.650% 07/20/11 72 Ford Motor Cred 5.650% 11/21/11 70 Ford Motor Cred 5.650% 11/21/11 66 Ford Motor Cred 5.650% 12/20/11 73 Ford Motor Cred 5.650% 01/21/14 67 Ford Motor Cred 5.700% 05/20/11 72 Ford Motor Cred 5.700% 01/20/12 72 Ford Motor Cred 5.750% 08/22/11 75 Ford Motor Cred 5.750% 12/20/11 67 Ford Motor Cred 5.750% 01/21/14 67 Ford Motor Cred 5.750% 02/20/14 67 Ford Motor Cred 5.750% 02/20/14 67 Ford Motor Cred 5.800% 11/22/10 75 Ford Motor Cred 5.800% 08/22/11 73 Ford Motor Cred 5.850% 05/20/10 74 Ford Motor Cred 5.850% 06/21/10 75 Ford Motor Cred 5.850% 07/20/10 74 Ford Motor Cred 5.850% 07/20/11 70 Ford Motor Cred 5.850% 01/20/12 72 Ford Motor Cred 5.900% 07/20/11 74 Ford Motor Cred 5.900% 02/21/12 72 Ford Motor Cred 5.900% 02/20/14 64 Ford Motor Cred 5.950% 05/20/10 75 Ford Motor Cred 6.000% 01/20/12 71 Ford Motor Cred 6.000% 01/21/14 70 Ford Motor Cred 6.000% 03/20/14 65 Ford Motor Cred 6.000% 03/20/14 68 Ford Motor Cred 6.000% 03/20/14 66 Ford Motor Cred 6.000% 03/20/14 68 Ford Motor Cred 6.000% 11/20/14 63 Ford Motor Cred 6.000% 11/20/14 68 Ford Motor Cred 6.000% 11/20/14 69 Ford Motor Cred 6.000% 01/20/15 64 Ford Motor Cred 6.050% 02/20/15 65 Ford Motor Cred 6.050% 09/20/10 74 Ford Motor Cred 6.050% 06/20/11 74 Ford Motor Cred 6.050% 02/21/14 70 Ford Motor Cred 6.050% 03/20/14 67 Ford Motor Cred 6.050% 04/21/14 68 Ford Motor Cred 6.050% 12/22/14 70 Ford Motor Cred 6.050% 12/22/14 68 Ford Motor Cred 6.050% 12/22/14 67 Ford Motor Cred 6.050% 02/20/15 67 Ford Motor Cred 6.100% 02/20/15 67 Ford Motor Cred 6.150% 12/22/14 70 Ford Motor Cred 6.150% 01/20/15 68 Ford Motor Cred 6.200% 05/20/11 74 Ford Motor Cred 6.200% 04/21/14 70 Ford Motor Cred 6.200% 03/20/15 66 Ford Motor Cred 6.250% 06/20/11 74 Ford Motor Cred 6.250% 06/20/11 74 Ford Motor Cred 6.250% 12/20/13 75 Ford Motor Cred 6.250% 12/20/13 70 Ford Motor Cred 6.250% 04/21/14 65 Ford Motor Cred 6.250% 01/20/15 69 Ford Motor Cred 6.250% 03/20/15 67 Ford Motor Cred 6.300% 05/20/14 69 Ford Motor Cred 6.300% 05/20/14 71 Ford Motor Cred 6.350% 04/21/14 71 Ford Motor Cred 6.500% 12/20/13 70 Ford Motor Cred 6.500% 02/20/15 71 Ford Motor Cred 6.500% 03/20/15 70 Ford Motor Cred 6.500% 08/01/18 64 Ford Motor Cred 6.520% 03/10/13 68 Ford Motor Cred 6.600% 10/21/13 73 Ford Motor Cred 6.625% 02/15/28 64 Ford Motor Cred 6.650% 10/21/13 73 Ford Motor Cred 6.650% 06/20/14 73 Ford Motor Cred 6.750% 10/21/13 70 Ford Motor Cred 6.750% 06/20/14 69 Ford Motor Cred 6.800% 06/20/14 74 Ford Motor Cred 6.800% 03/20/15 67 Ford Motor Cred 6.850% 09/20/13 70 Ford Motor Cred 6.850% 05/20/14 75 Ford Motor Cred 6.850% 06/20/14 73 Ford Motor Cred 6.950% 05/20/14 74 Ford Motor Cred 7.250% 07/20/17 65 Ford Motor Cred 7.250% 07/20/17 69 Ford Motor Cred 7.300% 09/15/15 71 Ford Motor Cred 7.350% 09/15/15 75 Ford Motor Cred 7.350% 09/15/15 67 Ford Motor Cred 7.500% 07/20/17 60 Ford Motor Cred 7.550% 09/15/15 68 Ford Motor Cred 7.900% 05/18/15 71 Gateway Inc. 1.500% 12/31/09 74 Gateway Inc. 2.000% 12/31/11 71 General Motors 7.125% 07/15/13 68 General Motors 7.400% 09/01/25 60 General Motors 7.700% 04/15/16 68 General Motors 8.100% 06/15/24 66 General Motors 8.250% 07/15/23 68 General Motors 8.375% 07/15/33 68 General Motors 8.800% 03/01/21 67 General Motors 9.400% 07/15/21 72 Gfsi Inc. 9.625% 03/01/07 75 GMAC 4.100% 03/15/09 71 GMAC 5.250% 01/15/14 67 GMAC 5.350% 01/15/14 71 GMAC 5.700% 06/15/13 75 GMAC 5.700% 10/15/13 74 GMAC 5.700% 12/15/13 74 GMAC 5.750% 01/15/14 72 GMAC 5.850% 05/15/13 73 GMAC 5.850% 06/15/13 70 GMAC 5.850% 06/15/13 72 GMAC 5.900% 12/15/13 72 GMAC 5.900% 01/15/19 62 GMAC 5.900% 01/15/19 65 GMAC 5.900% 02/15/19 63 GMAC 5.900% 10/15/19 63 GMAC 6.000% 11/15/13 72 GMAC 6.000% 02/15/19 65 GMAC 6.000% 02/15/19 68 GMAC 6.000% 02/15/19 64 GMAC 6.000% 03/15/19 67 GMAC 6.000% 03/15/19 65 GMAC 6.000% 03/15/19 65 GMAC 6.000% 03/15/19 67 GMAC 6.000% 03/15/19 71 GMAC 6.000% 04/15/19 68 GMAC 6.000% 09/15/19 70 GMAC 6.000% 09/15/19 65 GMAC 6.050% 08/15/19 61 GMAC 6.050% 08/15/19 66 GMAC 6.050% 10/15/19 63 GMAC 6.100% 09/15/19 64 GMAC 6.125% 10/15/19 68 GMAC 6.150% 08/15/19 68 GMAC 6.150% 09/15/19 66 GMAC 6.150% 10/15/19 67 GMAC 6.200% 11/15/13 73 GMAC 6.200% 04/15/19 65 GMAC 6.250% 07/15/13 74 GMAC 6.250% 10/15/13 73 GMAC 6.250% 11/15/13 74 GMAC 6.250% 12/15/18 66 GMAC 6.250% 01/15/19 70 GMAC 6.250% 04/15/19 72 GMAC 6.250% 05/15/19 64 GMAC 6.250% 07/15/19 65 GMAC 6.300% 03/15/13 74 GMAC 6.300% 11/15/13 72 GMAC 6.300% 08/15/19 67 GMAC 6.300% 08/15/19 69 GMAC 6.350% 05/15/13 74 GMAC 6.350% 04/15/19 69 GMAC 6.350% 07/15/19 72 GMAC 6.350% 07/15/19 72 GMAC 6.400% 03/15/13 68 GMAC 6.400% 12/15/18 71 GMAC 6.400% 11/15/19 68 GMAC 6.400% 11/15/19 70 GMAC 6.500% 02/15/13 75 GMAC 6.500% 06/15/18 72 GMAC 6.500% 11/15/18 66 GMAC 6.500% 12/15/18 70 GMAC 6.500% 12/15/18 70 GMAC 6.550% 05/15/19 70 GMAC 6.500% 01/15/20 70 GMAC 6.500% 02/15/20 70 GMAC 6.550% 12/15/19 67 GMAC 6.600% 05/15/18 69 GMAC 6.600% 06/15/19 70 GMAC 6.600% 06/15/19 71 GMAC 6.650% 06/15/18 70 GMAC 6.650% 10/15/18 68 GMAC 6.650% 10/15/18 69 GMAC 6.700% 05/15/14 72 GMAC 6.700% 05/15/14 73 GMAC 6.700% 06/15/14 73 GMAC 6.700% 08/15/16 73 GMAC 6.700% 06/15/18 72 GMAC 6.700% 06/15/18 74 GMAC 6.700% 11/15/18 69 GMAC 6.700% 06/15/19 69 GMAC 6.700% 12/15/19 73 GMAC 6.750% 11/15/09 75 GMAC 6.750% 07/15/16 72 GMAC 6.750% 09/15/16 73 GMAC 6.750% 06/15/17 73 GMAC 6.750% 03/15/18 71 GMAC 6.750% 07/15/18 72 GMAC 6.750% 09/15/18 71 GMAC 6.750% 10/15/18 67 GMAC 6.750% 11/15/18 70 GMAC 6.750% 05/15/19 70 GMAC 6.750% 05/15/19 72 GMAC 6.750% 06/15/19 66 GMAC 6.750% 06/15/19 72 GMAC 6.750% 03/15/20 69 GMAC 6.800% 09/15/18 71 GMAC 6.800% 10/15/18 70 GMAC 6.850% 05/15/18 60 GMAC 6.875% 08/15/16 72 GMAC 6.875% 07/15/18 72 GMAC 6.900% 06/15/17 74 GMAC 6.900% 07/15/18 72 GMAC 6.950% 06/15/17 71 GMAC 7.000% 06/15/16 74 GMAC 7.000% 07/15/16 74 GMAC 7.000% 09/15/16 74 GMAC 7.000% 05/15/17 73 GMAC 7.000% 07/15/17 73 GMAC 7.000% 02/15/18 71 GMAC 7.000% 03/15/18 73 GMAC 7.000% 05/15/18 72 GMAC 7.000% 08/15/18 68 GMAC 7.000% 09/15/18 72 GMAC 7.000% 02/15/21 68 GMAC 7.000% 09/15/21 71 GMAC 7.000% 09/15/21 73 GMAC 7.000% 06/15/22 72 GMAC 7.000% 11/15/23 69 GMAC 7.000% 11/15/24 67 GMAC 7.000% 11/15/24 68 GMAC 7.000% 11/15/24 68 GMAC 7.050% 03/15/18 74 GMAC 7.050% 03/15/18 74 GMAC 7.050% 04/15/16 72 GMAC 7.125% 04/15/17 74 GMAC 7.125% 10/15/17 72 GMAC 7.150% 07/15/17 75 GMAC 7.150% 09/15/18 71 GMAC 7.150% 01/15/25 69 GMAC 7.150% 03/15/25 66 GMAC 7.250% 03/15/17 73 GMAC 7.250% 07/15/17 71 GMAC 7.250% 09/15/17 73 GMAC 7.250% 09/15/17 73 GMAC 7.250% 01/15/18 73 GMAC 7.250% 09/15/18 74 GMAC 7.250% 01/15/25 72 GMAC 7.250% 02/15/25 70 GMAC 7.250% 03/15/25 65 GMAC 7.300% 12/15/15 74 GMAC 7.300% 12/15/17 72 GMAC 7.300% 12/15/16 75 GMAC 7.350% 03/15/17 75 GMAC 7.400% 12/15/17 72 GMAC 7.400% 02/15/21 73 GMAC 7.500% 11/15/17 75 GMAC 7.500% 12/15/17 73 GMAC 7.500% 03/15/25 74 Golden Northwest 12.000% 12/15/06 3 Graftech Int'l 1.625% 01/15/24 72 Gulf Mobile Ohio 5.000% 07/01/32 73 Home Interiors 10.125% 06/01/08 70 Home Prod Intl 9.625% 05/15/08 73 Huntsman Packag 13.000% 06/01/10 19 Imperial Credit 9.875% 01/15/07 0 Impsat Fiber 6.000% 03/15/11 71 Inland Fiber 9.625% 11/15/07 48 Integrat Elec SV 9.375% 02/01/09 53 Intermet Corp. 9.750% 06/15/09 38 Iridium LLC/CAP 10.875% 07/15/05 24 Iridium LLC/CAP 11.250% 07/15/05 24 Iridium LLC/CAP 13.000% 07/15/05 24 Iridium LLC/CAP 14.000% 07/15/05 24 Jts Corp. 5.250% 04/29/02 1 Kaiser Aluminum & Chem. 12.750% 02/01/03 8 Kellstrom Inds 5.500% 06/15/03 0 Kellstrom Inds 5.750% 10/15/02 0 Kmart Corp. 8.990% 07/05/10 21 Kmart Corp. 9.780% 01/05/20 73 Kmart Funding 9.440% 07/01/18 71 Kulicke & Soffa 1.000% 06/30/10 72 Level 3 Comm. Inc. 2.875% 07/15/10 64 Level 3 Comm. Inc. 6.000% 09/15/09 62 Level 3 Comm. Inc. 6.000% 03/15/10 60 Liberty Media 3.750% 02/15/30 55 Liberty Media 4.000% 11/15/29 60 Macsaver Financl 7.400% 02/15/02 0 Macsaver Financl 7.875% 08/01/03 0 Mcms Inc. 9.750 03/01/08 0 Merisant Co 9.500% 07/15/13 65 Metricom Inc. 13.000% 02/15/10 0 Motels of Amer 12.000% 04/15/04 66 MSX Int'l Inc. 11.375% 01/15/08 71 Muzak LLC 9.875% 03/15/09 52 Nabi Biopharm 2.875% 04/15/25 69 Natl Steel Corp. 8.375% 08/01/06 2 Natl Steel Corp. 9.875% 03/01/09 2 Nexprise Inc. 6.000 04/01/07 0 New Orl Grt N RR 5.000% 07/01/32 70 North Atl Trading 9.250% 03/01/12 68 Northern Pacific RY 3.000% 01/01/47 57 Northern Pacific RY 3.000% 01/01/47 57 Northwest Airlines 6.625% 05/15/23 36 Northwest Airlines 7.068% 01/02/16 69 Northwest Airlines 7.248% 01/02/12 18 Northwest Airlines 7.360% 02/01/20 69 Northwest Airlines 7.625% 11/15/23 36 Northwest Airlines 7.875% 03/15/08 36 Northwest Airlines 8.070% 01/02/15 22 Northwest Airlines 8.130% 02/01/14 23 Northwest Airlines 8.304% 09/01/10 72 Northwest Airlines 8.700% 03/15/07 37 Northwest Airlines 8.875% 06/01/06 36 Northwest Airlines 8.970% 01/02/15 16 Northwest Airlines 9.179% 04/01/10 25 Northwest Airlines 9.875% 03/15/07 38 Northwest Airlines 10.000% 02/01/09 36 Northwest Stl & Wir 9.500% 06/15/01 0 NTK Holdings Inc. 10.750% 03/01/14 60 NWA Trust 9.360% 03/10/06 64 O'Sullivan Ind. 10.630% 10/01/08 62 Oakwood Homes 7.875% 03/01/04 10 Oakwood Homes 8.125% 03/01/09 10 Orion Network 11.250% 01/15/07 56 Oscient Pharm 3.500% 04/15/11 74 Osu-Dflt10/05 13.375% 10/15/09 5 Owens-Crng Fiber 8.875% 06/01/02 69 PCA LLC/PCA Fin 11.875 08/01/09 23 Pegasus Satellite 9.625% 10/15/05 22 Pegasus Satellite 9.750% 12/01/05 25 Pegasus Satellite 12.375% 08/01/06 21 Pegasus Satellite 12.500% 08/01/07 25 Pegasus Satellite 13.500% 03/01/07 0 Pen Holdings Inc. 9.875% 06/15/08 65 Piedmont Aviat 9.900% 11/08/06 0 Piedmont Aviat 10.000% 11/08/12 11 Pixelworks Inc. 1.750% 05/15/24 66 Pliant Corp. 13.000% 06/01/10 22 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 7.250% 01/15/07 0 Polaroid Corp. 11.500% 02/15/06 1 PRG-Schultz Intl 4.750% 11/26/06 49 Primedex Health 11.500% 06/30/08 57 Primus Telecom 3.750% 09/15/10 29 Primus Telecom 5.750% 02/15/07 52 Primus Telecom 8.000% 01/15/14 59 Primus Telecom 12.750% 10/15/09 49 Psinet Inc. 11.500% 11/01/08 0 RDM Sports Group 8.000% 08/15/03 0 Read-Rite Corp. 6.500% 09/01/04 20 Refco Finance 9.000% 08/01/12 73 Reliance Group Holdings 9.000% 11/15/00 24 Reliance Group Holdings 9.750% 11/15/03 1 Safety-Kleen Corp. 9.250% 06/01/08 0 Salton Inc. 12.250% 04/15/08 40 Solectron Corp. 0.500% 02/15/34 75 Solutia Inc. 6.720% 10/15/37 70 Solutia Inc. 7.375% 10/15/27 72 Speciaty PaperB 9.375% 10/15/06 75 Tekni-Plex Inc. 12.750% 06/15/10 56 Teligent Inc. 11.500% 12/01/07 0 Toys R Us 7.375% 10/15/18 70 Trans Mfg Oper 11.250% 05/01/09 62 Transtexas Gas 15.000% 03/15/05 1 Trism Inc. 12.000% 02/15/08 0 Triton Pcs Inc. 8.750% 11/15/11 74 Triton Pcs Inc. 9.375% 02/01/11 75 Tropical Sportsw 11.000% 06/15/08 0 United Air Lines 6.831% 09/01/08 70 United Air Lines 7.270% 01/30/13 49 United Air Lines 7.371% 09/01/06 35 United Air Lines 7.762% 10/01/05 58 United Air Lines 7.870% 01/30/19 49 United Air Lines 8.030% 07/01/11 69 United Air Lines 9.000% 12/15/03 17 United Air Lines 9.020% 04/19/12 57 United Air Lines 9.125% 01/15/12 16 United Air Lines 9.200% 03/22/08 52 United Air Lines 9.350% 04/07/16 71 United Air Lines 9.560% 10/19/18 59 United Air Lines 9.750% 08/15/21 15 United Air Lines 10.020% 03/22/14 58 United Air Lines 10.110% 01/05/06 51 United Air Lines 10.125% 03/22/15 58 United Air Lines 10.250% 07/15/21 17 United Air Lines 10.670% 05/01/04 17 United Air Lines 11.210% 05/01/14 15 Univ. Health Services 0.426% 06/23/20 57 US Air Inc. 10.250% 01/15/49 25 US Air Inc. 10.250% 01/15/49 1 US Air Inc. 10.250% 01/15/49 24 US Air Inc. 10.550% 01/15/49 24 US Air Inc. 10.550% 01/15/49 28 US Air Inc. 10.610% 06/27/07 0 US Air Inc. 10.680% 06/27/08 2 US Air Inc. 10.700% 01/15/49 26 US Air Inc. 10.700% 01/15/49 28 US Air Inc. 10.700% 01/15/49 27 US Air Inc. 10.750% 01/15/49 6 US Air Inc. 10.800% 01/01/49 6 US Air Inc. 10.800% 01/01/49 5 Venture Hldgs 11.000% 06/01/07 0 WCI Steel Inc. 10.000% 12/01/04 68 Werner Holdings 10.000% 11/15/07 45 Westpoint Steven 7.875% 06/15/05 0 Winn-Dixie Store 8.875% 04/01/08 67 Winstar Comm 10.000% 03/15/08 0 World Access Inc. 4.500% 10/01/02 4 Xerox Corp 0.570% 04/21/18 41 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili, Jr., 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 ***