/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/051212.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 12, 2005, Vol. 9, No. 294 Headlines AAIPHARMA: Needs More Time to Decide on Eight Unexpired Leases AIIPHARMA INC: Dr. Sancilio Asks Trustee to Appoint Equity Panel AAIPHARMA INC: Has Until February 7 to Remove Civil Actions ALEXANDRA HORVATH: Case Summary & 18 Largest Unsecured Creditors AMERICAN WHOLESALE: S&P Junks $48 Million Senior Subordinated Loan AMERIPOL SYNPOL: Wants Entry of Final Decree Delayed to Jan. 13 AMKOR TECHNOLOGY: Moody's Rates $479.4 Million Sub. Notes at Caa3 ASARCO LLC: Asarco Master Has Until Dec. 30 to File Schedules ASARCO LLC: TMD Wants Court to Rule Purchase Contract is Executory ATT HOLDING: October 1 Balance Sheet Upside-Down by $36.9 Million AURA SYSTEMS: Court Approves Disclosure Statement for Amended Plan AURA SYSTEMS: U.S. Trustee Wants Court to Deny Hiring of SEC Law B/E AEROSPACE: Exercises Over-Allotment Option in Equity Offering BEAR STEARNS: S&P Holds Low-B Ratings on Five Certificate Classes BXG RECEIVABLES: S&P Assigns BB Rating to $8.83 Class F Certs. CHC INDUSTRIES: Has Until Dec. 20 to Object to Proofs of Claims CALPINE CORPORATION: Loses Legal Dispute with Utility Choice Elec. CMS ENERGY: Fitch Assigns BB- Rating to $125 Mil. Sr. Unsec. Notes COMSTOCK HOMEBUILDING: S&P Rates $150MM Senior Sub. Notes at B- CONSOLIDATED ENERGY: Posts $1.6 Million Net Loss in Second Quarter CONSUMERS TRUST: Wants to Hire David Rubin as Financial Advisor CONSUMERS TRUST: Wants to Hire Lawrence Graham as English Counsel CONSUMERS TRUST: Wants More Time to File Schedules & Statements COOPER-STANDARD: Buying ITT Industries' Auto Brake Unit for $205MM CUMULUS MEDIA: Increases Stock Repurchase Program by $100 Million DELTA AIR: Says $325 Mil. in Retiree Benefit Reductions Necessary DELTA AIR: Committee Wants Lytle Soule as Counsel on FAA Matters DELTA AIR: Court Okays $3.4 Mil. Payment of LaGuardia Obligations DENBURY RESOURCES: Prices Senior Subordinated Notes Offering DRESSER INC: Completes Sale of On/Off Valve Business DRESSER INC: Asks for Waiver from Senior Subordinated Noteholders EQUINOX HOLDINGS: Selling Assets to Related Cos. for $505-Mil Cash FIDELITY NATIONAL: Fitch Rates Unit's Senior Secured Loan at BB- FISHER SCIENTIFIC: Fitch Rates Subordinated Debt at BB+ FOSS MANUFACTURING: Committee Hires Aurora as Financial Advisor FOSS MANUFACTURING: Hires Carl Marks as Restructuring Consultant FOSS MANUFACTURING: Files Schedules of Assets and Liabilities HOVNANIAN ENT: Earns $165.4 Mil. of Net Income in Fourth Quarter JAMES RIVER: Weak Performance Prompts S&P's Negative Outlook JP MORGAN: Fitch Affirms Low-B Ratings on $48 Mil. Cert. Classes JP MORGAN: S&P Assigns Low-B Ratings to $78.7 Mil. Class Certs. KANSAS CITY: Prices $210 Million of 5-1/8% Perpetual Pref. Stock KKR FINANCIAL: Moody's Rates $10 Million Class F Rate Notes at B2 LBREP/L SUNCAL: S&P Assigns Low-B Ratings on $320 Mil. Sr. Loans MERIDIAN AUTOMOTIVE: Court Approves Stipulation With CIT Group MERRILL LYNCH: S&P Places Low-B Ratings on Six Certificate Classes MESABA AVIATION: Court OKs Stipulation with Airline Clearing MIRANT NORTH: Fitch Likely to Put Low-B Ratings on $2.4 Bil. Debts NORTHWEST AIRLINES: Board OKs Aircraft Makers' Restructured Pacts NORTHWEST AIRLINES: PFAA Urges CEO to Sign "Bill of Rights" NORTHWEST AIRLINES: Committee Taps FTI as Financial Advisors NORTHWEST AIRLINES: IAA Wants Stay Lifted to Set Off Mutual Debts PALOMAR ENTERPRISES: Posts $395K Net Loss in Third Quarter PATHMARK STORES: Moody's Lowers $350 Million Notes' Rating to Caa2 PAXSON COMMS: Proposes $1.1 Billion Senior Secured Debt Offering PAXSON COMM: S&P Junks Planned $1.13 Bil. Sec. Floating Rate Notes PONDEROSA PINE: Brazos & JPMorgan Files Disclosure Statement PRIMUS INT'L: S&P Affirms B+ Rating Following Boeing Co. Strike PRINCETON COMMUNITY: Lower Losses Prompt S&P's Positive Outlook RADIATION THERAPY: Secures $100 Million Debt Financing Commitment REFCO INC: Wants to Hire Lenz & Staehelin as Special Counsel REFCO INC: Wants Court OK to Hire Omni Management as Claims Agent REFCO INC: Wants Court OK to Hire Conyers Dill as Bermuda Counsel RELIANCE GROUP: Bankruptcy Plan Takes Effect on Dec. 1 RESIDENTIAL ASSET: Fitch Shaves Rating on Class M-3 Certs. to BB STELCO INC: Creditors Approve Third Amended Restructuring Plan STELCO INC: Ernst & Young Files 42nd Monitor's Report STRUCTURED ASSET: Fitch Affirms Low-B Ratings on 4 Cert. Classes SUN HEALTHCARE: Offers Six Million Shares of Common Stock SUPRESTA LLC: Low Earnings Spur S&P to Pare Debt Ratings to B TELOGY INC: Wants to Appoint Bruce M. Blanco as Responsible Person TELOGY INC: U.S. Trustee Meeting With Creditors on January 6 TIMCO AVIATION: Responds to $6.5 Million Lawsuit Filed by Founder TOWER AUTOMOTIVE: Retiree Committee Wants to Retain Jones Day TW HOTEL: S&P Places Low-B Ratings on $68 Million Cert. Classes VIPER NETWORKS: Restates Year 2004 Financial Statements WCI COMMUNITIES: Offers to Buy $298M of 10-5/8% Senior Sub. Notes WELLINGTON PROPERTIES: Wants to Retain LandAmerica as Consultant WINN-DIXIE: Taps ACNielsen as New Preferred Information Provider WINN-DIXIE: Jefferies' Retention by Equity Panel Draws Objections WINN-DIXIE: "Better Holidays Daily Cash Giveaway" Promotion WISCONSIN AVENUE: Fitch Affirms B Rating on $1.2MM Class C Certs. WORLD AM: Posts $724,575 Net Loss in Quarter Ended Sept. 30 * BOND PRICING: For the week of Dec. 5 - Dec. 9, 2005 ********* AAIPHARMA: Needs More Time to Decide on Eight Unexpired Leases -------------------------------------------------------------- aaiPharma Inc. and its debtor-affiliates asks the U.S. Bankruptcy Court for the District of Delaware for an extension of their time to decide whether to assume, assume and assign, or reject unexpired leases of nonresidential real property pursuant to Section 365(d)(4) of the Bankruptcy Code. The Debtors want an additional 120 days from the date of entry of an order approving this request. The Debtors are currently party to at least eight leases. The Debtors say that they've been unable to make informed decisions about the eight leases because their efforts are focused on stabilizing operations, executing the terms of an asset purchase agreement with Xanodyne, and working with various creditors to develop a consensual business plan. The Debtors' decision to assume or reject a particular lease, and the timing of such a decision, depends largely on whether the location will play a role in the Debtors' operations. The Debtors explain that it's not prudent for them at this time to decide what to do with the leases. Headquartered in Wilmington, North Carolina, AAIPharma Inc. -- http://aaipharma.com/-- provides product development services to the pharmaceutical industry and sells pharmaceutical products which primarily target pain management. AAI operates two divisions: AAI Development Services and Pharmaceuticals Division. The Company and eight of its debtor-affiliates filed for chapter 11 protection on May 10, 2005 (Bankr. D. Del. Case No. 05-11341). Karen McKinley, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L. Kaplan, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and the firm of Robinson, Bradshaw & Hinson, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they reported consolidated assets amounting to $323,323,000 and consolidated debts totaling $446,693,000. AIIPHARMA INC: Dr. Sancilio Asks Trustee to Appoint Equity Panel ---------------------------------------------------------------- Dr. Frederick D. Sancilio, a shareholder of aaiPharma Inc., asks the U.S. Bankruptcy Court for the District of Delaware to direct the U.S. Trustee for Region 3 to appoint an official committee of equity security holders to serve in the Debtors' jointly administered cases. Mr. Sancilio relates to the Court factors to consider the equity committee's appointment: * the Debtor is hopelessly insolvent, as opposed to a likelihood that shareholders have real economic interest at stake; * the number of shareholders; * the complexity of the case; * the cost of the additional committee significantly outweighs the concern for adequate representation; * the interests of shareholders are already represented by other parties-in-interest; and * timing of the motion relative to the status of the chapter 11 case. Mr. Sancilio says that the interests represented by Creditors' Committee are in conflict with the old equity's interests, thus, the Creditors' Committee cannot be counted on to represent the interests of the Debtors' public shareholders. In light of these conflicts, Mr. Sancilio adds, the appointment of an equity committee is necessary to protect the interests of the company's public shareholders. Headquartered in Wilmington, North Carolina, AAIPharma Inc. -- http://aaipharma.com/-- provides product development services to the pharmaceutical industry and sells pharmaceutical products which primarily target pain management. AAI operates two divisions: AAI Development Services and Pharmaceuticals Division. The Company and eight of its debtor-affiliates filed for chapter 11 protection on May 10, 2005 (Bankr. D. Del. Case No. 05-11341). Karen McKinley, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L. Kaplan, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and the firm of Robinson, Bradshaw & Hinson, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they reported consolidated assets amounting to $323,323,000 and consolidated debts totaling $446,693,000. AAIPHARMA INC: Has Until February 7 to Remove Civil Actions ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave aaiPharma Inc. and its debtor-affiliates an extension of their time to remove prepetition civil actions through and including February 7, 2006. The Debtors told the Court that most of their time has been spent to stabilizing their core business, drafting and negotiating a disclosure statement and plan, and negotiating and closing the sale of all of their pharmaceutical assets. The extension will afford the Debtors, their management and their advisors more time to determine and evaluate which, if any, of their civil actions should be removed and, if appropriate, transferred to the District. Headquartered in Wilmington, North Carolina, aaiPharma Inc. -- http://aaipharma.com/-- provides product development services to the pharmaceutical industry and sells pharmaceutical products which primarily target pain management. AAI operates two divisions: AAI Development Services and Pharmaceuticals Division. The Company and eight of its debtor-affiliates filed for chapter 11 protection on May 10, 2005 (Bankr. D. Del. Case No. 05-11341). Karen McKinley, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L. Kaplan, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and the firm of Robinson, Bradshaw & Hinson, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they reported consolidated assets amounting to $323,323,000 and consolidated debts totaling $446,693,000. ALEXANDRA HORVATH: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Alexandra Christine Horvath aka Alexandra Horvath-Greenblatt 188 East 70th Street New York, NY 10021 Bankruptcy Case No.: 05-60172 Type of Business: The Debtor is the Joseph Greenblatt's wife. Mr. Greenblatt filed a chapter 11 petition on Nov. 29, 2005 (Bankr. S.D.N.Y. Case No. 05-60142). Chapter 11 Petition Date: December 8, 2005 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Debtor's Counsel: Mark A. Frankel, Esq. Backenroth Frankel & Krinsky, LLP 489 Fifth Avenue New York, New York 10017 Tel: (212) 593-1100 Fax: (212) 644-0544 Total Assets: $2,673,402 Total Debts: $1,549,905 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 188 East 70th Street Condo $34,309 200 Madison Avenue New York, NY 10016 Chase Credit Card $27,910 800 Brooksedge Boulevard Westerville, OH 43081 Citibank Credit Card $25,848 P.O. Box 6241 Sioux Falls, SD 57117 Monogram Bank N America Credit Card $19,722 P.O. Box 17054 Wilmington, DE 19884 Discover Credit Card $14,500 P.O. Box 15316 Wilmington, DE 19850 Monogram Bank N America Check Credit or $12,675 P.O. Box 17054 Line of Credit Wilmington, DE 19884 Aarow Financial Services Collection A.F.S. $12,580 5996 West Touhy Avenue Assignee of Niles, IL 60714 Bank One Sherman Acquisitions Factoring Company, $10,127 P.O. Box 740281 Account: GE Capital Houston, TX 77274 Attn: Ethan Allen NES (GE Capital) $10,029 29125 Solon Road Solon, OH 44139 GEMB/Ethan Allen Charge Account $8,529 950 Forrer Boulevard Kettering, OH 45420 Neiman Marcus $7,034 c/o Furster & Garbus, Esq 500 Bi County Boulevard Farmingdale, NY 11735 LIPA $3,816 117 Doctor's Path Riverhead, NY 11901 HSBC/Bergd Charge Account $3,744 1201 Elm Street Dallas, TX 75270 GEMB/Ethan Allen Charge Account $3,127 P.O. Box 276 Dayton, OH 45401 Barneys NY Credit Co. Charge Account $2,906 1201 Valley Brook Avenue Lyndhurst, NJ 07071 Bank of America Overdrawn Bank $2,000 79th & Lexington Avenue Account New York, NY 10021 WFNNB/Bendel Charge Account $1,468 P.O. Box 182129 Columbus, OH 43218 BLMDSNB Charge Account $1,392 9111 Duke Boulevard Mason, OH 45040 AMERICAN WHOLESALE: S&P Junks $48 Million Senior Subordinated Loan ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on its 'B' counterparty credit ratings on American Wholesale Insurance Group Inc. to negative from stable. The rating is affirmed. At the same time, Standard & Poor's assigned its 'B' senior secured rating to the company's $123 million first lien term loan and its 'CCC+' senior secured subordinated rating to its $48 million second lien term loan. "The ratings are based on the company's improved competitive position following the acquisition of Stewart Smith in April 2005 and its diversified revenue base," said Standard & Poor's credit analyst Donovan Fraser. "Offsetting the company's strengths are its limited track record since beginning operations in 2002 coupled with significant prospective execution and integration risks." As of Sept. 30, 2005, GAAP pretax interest coverage and debt-to-total capital measured approximately 1.8x and 64%, respectively. The $123 million variable rate first lien term loan due in October 2011 replaces the prior $110 million first lien term loan. In addition, the $48 million variable rate second lien term loan due in October 2011 replaces the prior $40 million second lien term loan. The company maintains a $25 million revolving loan commitment available for liquidity purposes that remains untapped. The refinancing of the company's debt effectively layers approximately $21 million in additional debt on the relatively new franchise. The negative outlook reflects the fact that the company's pro forma operating margins, leverage, and coverage metrics are expected to be further compressed due to the increased debt burden. However, Standard & Poor's believes that the company will continue to remain cash flow positive and be able to meet its restrictive covenants in the near to intermediate term. Standard & Poor's expects GAAP pretax interest coverage in excess of 1.5x and total debt to capital of less than 60% by year-end 2005. Standard & Poor's estimates that the company will need to achieve EBITDA margins significantly in excess of its three-year average of 16.3% and the 2004 level of 18.5% in order to meet its restrictive debt covenants given the increased leverage and decreased coverage metrics. Partially offsetting Standard & Poor's concerns is the EBITDA margin of approximately 22% as of Sept. 30, 2005. Standard & Poor's would consider revising the outlook back to stable once the company has established a track record of paying down the increased debt and demonstrated an ability to maintain or increase margins. Conversely, Standard & Poor's would consider a negative rating action should the company's operating performance deteriorate or the company fail to meet its restrictive covenants. AMERIPOL SYNPOL: Wants Entry of Final Decree Delayed to Jan. 13 --------------------------------------------------------------- Ameripol Synpol Corporation asks the U.S. Bankruptcy Court for the District of Delaware to delay entry of an order formally closing its bankruptcy case until Jan. 13, 2006. The Court confirmed the Debtor's amended plan of reorganization on March 18, 2004. The Debtor has made significant progress in prosecuting the chapter 11 case since confirmation of the plan. The Debtor is in the process of resolving objectionable claims. A number of claim objections and other issues remain unresolved. For that reason, the Debtor believes delaying the closing of its case is appropriate to allow more time to resolve the pending claim objections and make the distributions contemplated under the plan. Ameripol Synpol Corporation, one of the nation's largest manufacturers of emulsion styrene butadiene rubber, a synthetic rubber used primarily in the production of new and replacement tires, filed for chapter 11 protection on December 16, 2002 (Bankr. Del. Case No. 02-13682). Jeremy W. Ryan, Esq., and Maria Aprile Sawczuk, Esq. at Young, Conaway, Stargatt & Taylor represent the Debtor in its restructuring efforts. When the company filed for protection from its creditors, it listed assets of more than $100 million and debts of over $50 million. AMKOR TECHNOLOGY: Moody's Rates $479.4 Million Sub. Notes at Caa3 ----------------------------------------------------------------- Moody's Investors Service affirmed the corporate family, long-term debt and speculative grade liquidity ratings of Amkor Technology, Inc. The ratings outlook remains negative. These ratings were affirmed: * Corporate Family Rating of B3 * $300 million Senior Secured (2nd lien) Term Loan due October 2010 of B2 * Senior Unsecured Notes with various maturities totaling $1.14 billion of Caa1 * Subordinated Notes with various maturities totaling $479.4 million of Caa3 * Speculative Grade Liquidity Rating of SGL-4 The ratings outlook is negative. The affirmation considers Amkor's recently completed debt refinancing package announced in November 2005. The company closed a $100 million senior secured (1st priority lien) revolving credit facility maturing in 2009, which will replace the previous $30 million secured revolving credit facility. The company's Taiwanese subsidiary closed on a syndicated NT$1.8 billion (approximately US$54 million) secured (1st priority lien) term loan due 2010, which repaid the US$31 million bridge loan that Amkor Taiwan entered into in September 2005. Amkor is also negotiating to raise US$50 million in secured bank debt in Asia to support its operating cash and capital expenditure requirements in that region. In mid-November, Amkor sold $100 million of convertible junior subordinated notes due 2013 to its CEO, James Kim, in a private placement transaction. Proceeds were used to retire a portion of the $233 million 5.75% convertible notes due June 2006. Moody's expects the company to draw down on the new secured revolver to repay the remaining $133 million outstanding balance on the convertible notes. While the refinancing package provides some additional financial flexibility, there are continuing challenges for Amkor to generate sufficient operating cash flow over the next 12 to 18 months to comfortably service its significant debt load. EBITDAR less capex to fixed charges is expected to remain under 1.5x. The company expects to continue making aggressive capital investments in 2006 to eliminate capacity constraints and to ramp operations for anticipated increases in production volumes. Tight industry capacity coupled with improving flip-chip demand will likely allow industry participants to raise prices and benefit from increased volumes over the near-term. Despite the improving environment for outsourcing, Moody's believes high capex levels will continue to make it challenging for Amkor to generate adequate free cash flow even with a concomitant growth in revenues. As such, Amkor's ability to repay the $146 million convertible debt maturity in March 2007 from existing sources of funds or cash generation over the next 15 months is a concern. Amkor has been unable to generate top-line growth and profitability from aggressive capital investments made over the last two years to support its high financial leverage. In the third quarter ended September 30, 2005, revenues increased 12% to $549.6 million compared to $490.8 million in the comparable quarter in 2004. Revenue growth was attributed to improved unit volumes and higher average selling prices. However, gross and operating profit margins fell to 16.4% and 4.0%, respectively, relative to the third quarter in 2004 due to increased working capital and higher costs associated with: * capacity expansion, * manufacturing overhead, * raw materials, and * labor. The company is expected to generate positive operating earnings in the second half of 2005 as industry conditions continue to improve compared to operating losses posted in the first half of the year. Cash balances have dropped sharply to $159.5 million at the close of the third quarter from $372.3 million at yearend 2004 to fund operating losses and rising interest costs. Moody's expects the company to post an operating loss and negative free cash flow for the entire year, as capital expenditures will likely exceed cash flow from operations. Pro forma for the new debt, total debt to normalized EBITDA is anticipated to be roughly 8x in 2005. The negative outlook reflects the company's negative free cash flow and limited financial flexibility. It also reflects the extremely low visibility in Amkor's packaging and test business resulting in the inability to consistently forecast demand. Given its large fixed cost structure, the company has been unable to reduce costs promptly in response to extended periods of downward pressure in average selling prices and subsequent revenue declines, which has negatively impacted margins and operating cash flow. Additionally, Amkor's ability to effectively shift its revenue mix to advanced products with higher price points and to pass incremental raw material costs to customers has been limited. Ratings could stabilize if Amkor: * reduces capital expenditures such that it is able to generate sufficient free cash flow to service near-term debt maturities; * is able to source or convert a significant amount of equity capital; * secures capital to meet its short-term operating and financial obligations; or * reduces leverage as a result of improved operating performance. Ratings could experience further downward pressure if Amkor is unable to raise funds to address its near-term debt maturity or is unable to improve profitability to levels that enable it to service its debt load. The speculative grade liquidity rating of SGL-4 reflects Amkor's weak liquidity and concerns about Amkor's ability to meet its $146 million debt maturity in March 2007 from existing sources of funds or cash flow generation. The company is expected to produce negative free cash flow for the next four quarters. The rating considers the approximate $159.5 million in cash and cash equivalent balances and new $100 million secured revolver. Amkor has limited alternative liquidity availability given its largely encumbered asset base. Amkor Technology, Inc., headquartered in Chandler, Arizona, is one of the world's largest providers of contract semiconductor assembly and test services for integrated semiconductor device manufacturers as well as fabless semiconductor operators. Revenues for the twelve months ended September 30, 2005 were $1.9 billion. ASARCO LLC: Asarco Master Has Until Dec. 30 to File Schedules ------------------------------------------------------------- At the request of Asarco Master, Inc., the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi extended the time to file its schedules of assets and liabilities, statements of financial affairs, list of creditors, and lists of executory contracts and unexpired leases required by Rule 1007 of the Federal Rules of Bankruptcy Procedure until Dec. 30, 2005. A meeting of Asarco Master's creditors will not be scheduled until shortly after the date Asarco Master file its Schedules. C. Luckey McDowell, Esq., at Baker Botts L.L.P., in Dallas, Texas, explains that due to the administrative load on ASARCO LLC's employees brought on by the pending bankruptcy cases of ASARCO, Asarco Consulting, Inc., the Asbestos Subsidiary Debtors, and the Encycle Debtors, Asarco Master requires the additional time to compile and verify the accuracy of the data needed for the preparation and filing of the Schedules. Asarco Master believes that the extension will be sufficient to accomplish this project. Asarco Master recently merged with 16 companies, all of which were wholly owned subsidiaries of ASARCO LLC. None of the 16 companies survived the merger; none of them had employees; and none were conducting operations at the time of the merger. The entities were merged solely for administrative convenience. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: TMD Wants Court to Rule Purchase Contract is Executory ------------------------------------------------------------------ On March 1, 2005, TMD Acquisition Corporation entered into an Asset Purchase Agreement with ASARCO LLC for the purchase of certain mining property in Tennessee. TMD is a Tennessee corporation with a principal place of business in Benson, Arizona. The closing date for the APA was scheduled for Aug. 1, 2005, subject to satisfaction of certain closing conditions contained in the APA. Pursuant to the APA, TMD paid a $250,000 deposit to ASARCO, which was required to be held by ASARCO in a segregated escrow pending closing. The $250,000 was part of the purchase price and was to be paid to ASARCO only in the event of closing. Contrary to the express provisions of the APA, Michael P. Ridulfo, Esq., at Sorrell, Anderson, Lehrman & Ridulfo, L.L.P., in Corpus Christi, Texas, relates that ASARCO failed to place the $250,000 in escrow and instead placed the money in its general operating account. At no time prior to the bankruptcy filing did ASARCO establish the escrow as required by the APA. ASARCO retained the $250,000 even after it purported to terminate the APA. Pursuant to the APA, ASARCO agreed to provide TMD access to the Property, Assets and Business and further agreed to "provide to Buyer in a timely manner all information as is reasonably requested by Buyer in order for Buyer to provide documentation and information to Buyer's investors or potential investors." Mr. Ridulfo asserts that ASARCO violated the APA provision by failing to provide timely to TMD required documentation and information which TMD needed to share with its potential investors. The APA also contains a "No Shop" provision that prevents ASARCO from shopping the Property to third parties during the term of the APA. Mr. Ridulfo says ASARCO violated this provision by "shopping" the Property to third parties during the time that the APA was in full force and effect. Mr. Ridulfo further argues that the APA cannot be terminated if either party's failure to close is a result of a breach of the APA by the party seeking termination. By letter dated Aug. 2, 2005, ASARCO purported to terminate the APA based on TMD's alleged failure to close by August 1. As of that date, however, Mr. Ridulfo says ASARCO was already in breach by: (1) failing to place the $250,000 into escrow; (2) failing to provide TMD required investor information in a timely manner; and (3) shopping the Property. Based on these breaches, ASARCO was prohibited from terminating the APA, Mr. Ridulfo contends. The APA remains in full force and effect and was not terminated prepetition. The APA remains an executory contract, which must be accepted or rejected by ASARCO. Accordingly, TMD asks the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to find that: -- the APA was not properly terminated by ASARCO prepetition; -- the APA remains executory; and -- upon rejection of the APA, TMD is entitled to a lien on the Property for the recovery of the $250,000 escrow, interest and attorney's fees. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000). ATT HOLDING: October 1 Balance Sheet Upside-Down by $36.9 Million --------------------------------------------------------------- ATT Holding Co., parent of Ames True Temper, Inc., reported results of the company's fiscal fourth quarter ended Oct. 1, 2005. Net sales for the fourteen-week fourth quarter ended Oct. 1, 2005 were $90.0 million, an 8.4% increase over $83.0 million for the thirteen-week fourth quarter ended Sept. 25, 2004. Net loss for the fourth quarter of fiscal 2005 was $127.9 million, compared to a net loss of $7.8 million for the fourth quarter of fiscal 2004. During the fourth quarter of fiscal 2005, the company recorded non-cash impairment charges of $122.7 million related to the impairment of goodwill in accordance with SFAS No. 142, Goodwill and Other Intangible Assets, and the impairment of assets from the closure of a manufacturing facility. Adjusted EBITDA for the fiscal 2005 fourth quarter was $2.4 million, compared to $6.7 million for fiscal 2004 fourth quarter. "We were pleased with our sales during our fourth quarter," said Rich Dell, President and CEO. "Sales were strong to end the quarter, but resin costs continued to put significant downward pressure on margins. We continue to have plenty of liquidity, as we had zero borrowings under the revolving credit facility and $21.4 million of cash invested at year end." "We are very excited and optimistic about fiscal 2006. Overall, we have picked up additional market share during customer line reviews. We have recently kicked off an upgrade of our ERP system, which will position us to make better and faster business decisions with more accurate, timely information. Additionally, we have recently begun production at our new manufacturing facility that will provide significant cost savings." Net sales for the fifty-three week fiscal year 2005 were $450.6 million, a 2.8% increase over $438.5 million for the combined fifty-two week fiscal year 2004. Net loss for fiscal 2005 was $125.2 million, compared to net income of $11.6 million fiscal 2004. Adjusted EBITDA for fiscal year 2005 was $42.3 million, compared to $54.7 million for the combined fiscal year 2004. The combined fiscal year 2004 includes the 39-week period ended June 27, 2004 under the predecessor company and the 13 weeks ended Sept. 25, 2004. Credit Agreement Amendment On Dec. 1, 2005, Ames True Temper, Inc. entered into Amendment No. 2 of the Credit Agreement, which amended certain defined terms and covenants in the Credit Agreement. The new covenants give the company relief during fiscal 2006 from specific financial targets. "This amendment provides us with the necessary flexibility to position our company for the future," stated Dell. Ames True Temper, Inc. is a leading North American manufacturer and marketer of non-powered lawn and garden tools and accessories. At Oct. 1, 2005, ATT Holding, Co.'s balance sheet showed a $36,898,000 stockholders' deficit compared to a $91,389,000 positive equity at Sept. 25, 2004. AURA SYSTEMS: Court Approves Disclosure Statement for Amended Plan ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, approved the adequacy of the Disclosure Statement explaining the First Amended Plan of Reorganization of Aura Systems, Inc. on Dec. 6, 2005. The Debtor is now authorized to send copies of the Disclosure Statement and Amended Plan to creditors and solicit their votes in favor of the Plan. Summary of First Amended Plan The Reorganized Debtor will continue to be a publicly traded company under the Plan, with approximately 23 million shares of common stock to be issued and 5,230,000 warrants reserved for issuance. The group of people and entities known as the New Money Investors will contribute $3,045,000 to the Reorganized Debtor on the effective date of the Plan. On the effective date of the Plan, a total of 3,807,319 of warrants will be issued to the New Money Investors, the Aries Group, the DIP Lenders, General Unsecured Claims, Series B Interests and Series A Interests. The purpose of the warrants if to create a greater vested interest by the entities that contributed to the Reorganized Debtor and to provide an additional vehicle for the Reorganized Debtor to obtain additional working capital. In exchange for the new money contribution, the New Money Investors will receive 3,349,000 shares of the Reorganized Debtor's Common Stock, plus approximately 669,000 warrants. Treatment of Claims All allowed administrative claims, totaling approximately $1,086,600 and all allowed priority claims, totaling approximately $54,482 will be paid in full, in cash on the effective date from the new money contribution. The secured claims of the Koyah Entities, totaling approximately $5.5 million will receive 1,134,000 shares of the Reorganized Debtor Common Stock and 259,900 of the Koyah Entities warrants. The secured claims of Ezra Meyer, totaling approximately $105,000 will be paid in full. All allowed unsecured claims, totaling approximately $8.3 million will receive on a pro rata basis 4,729,499 shares of the Reorganized Debtor Common Stock and up to 945,000 of the warrants. Holders of allowed unsecured claims also have the right to elect to receive a cash distribution equal to 5% of the amount of their allowed claims in lieu of receiving any Reorganized Debtor Common Stock. A full-text copy of the Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=051208041036 Objection to the Amended Plan, if any, must be filed and served by Jan. 3, 2006. The Court will convene a confirmation hearing for the Amended Plan at 2:00 p.m., on January 10, 2006. Headquartered in El Segundo, California, Aura Systems, Inc. -- http://www.aurasystems.com/-- develops and sells AuraGen(R) mobile induction power systems to the industrial, commercial and defense mobile power generation markets. The Company filed for chapter 11 protection on June 24, 2005 (Bankr. C.D. Calif. Case No. 05-24550). Ron Bender, Esq., at Levene Neale Bender Rankin & Brill LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it reported $18,036,502 in assets and $28,919,987 in debts. AURA SYSTEMS: U.S. Trustee Wants Court to Deny Hiring of SEC Law ---------------------------------------------------------------- Steven J. Katzman, the U.S. Trustee for Region 16, asks the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, to deny Aura Systems, Inc.'s motion with the Court to employ the SEC Law Firm as its special securities counsel. Mr. Katzman explains that prior to its bankruptcy filing, the Debtor employed SEC Law as its special securities counsel. Upon the filing of the Debtor's chapter 11 case on June 24, 2005, the Debtor and SEC Law were unable to reach a mutually acceptable agreement on the economic terms. The Debtor eventually employed Loeb & Loeb LLP as its alternative special securities counsel, which the Court approved on Aug. 30, 2005. On Nov. 23, 2005, the Debtor filed with the Court an application to employ SEC Law as its special securities counsel for a limited period of time. The Debtor says that from a perspective of fairness and equity, it believes SEC Law should be employed during the limited period of time of June 24, 2005, through July 14, 2005, the date when SEC Law ceased being the Debtor's securities counsel. The Debtor's pending request with the Court to employ SEC Law is to enable the Firm to file a fee application and to obtain an allowed administrative claim against the Debtor's estate on account of those fees and expenses. U.S. Trustee's Objections Mr. Katzman explains that he objects to the Debtor's request for nunc pro tunc employment of SEC Law because the billing details in the Debtor's application reflects consideration of coordinating the post-petition appointment of SEC Law as early as June 24, 2005. Mr. Katzman says that bankruptcy courts have usually refused to find that neglect or inadvertence by an attorney to file Section 327 approval constitutes an extraordinary situation that would justify retroactive approval. Limiting nunc pro tunc orders to extraordinary circumstances will deter attorneys from general non- observance of Section 327 of the Bankruptcy Code. Additionally, the Debtor or SEC Law has not submitted to the Court a satisfactory explanation of why there is a delay of more than 150 days for the Debtor to file an application with the Court to employ SEC Law The Court will convene a hearing at 11:00 a.m., on Dec. 20, 2005, to consider the U.S. Trustee's request. Headquartered in El Segundo, California, Aura Systems, Inc. -- http://www.aurasystems.com/-- develops and sells AuraGen(R) mobile induction power systems to the industrial, commercial and defense mobile power generation markets. The Company filed for chapter 11 protection on June 24, 2005 (Bankr. C.D. Calif. Case No. 05-24550). Ron Bender, Esq., at Levene Neale Bender Rankin & Brill LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it reported $18,036,502 in assets and $28,919,987 in debts. B/E AEROSPACE: Exercises Over-Allotment Option in Equity Offering ----------------------------------------------------------------- The underwriters of B/E Aerospace, Inc.'s (NASDAQ:BEAV) previously announced public offering of 13,000,000 shares of its common stock have exercised in full their option to purchase an additional 1,950,000 shares of common stock to cover over-allotments granted to the underwriters in connection with the offering. B/E disclosed on Dec. 7, 2005, that its offering of 13,000,000 shares of common stock had been priced at $19.00 per share through Credit Suisse First Boston and UBS Investment Bank as joint book- running managers and Friedman Billings Ramsey, Stephens Inc., and SG Cowen & Co. as co-managers. The sale of the 14,950,000 shares of common stock, including the shares subject to the over-allotment option, is expected to close on Dec. 12, 2005. B/E intends to use the proceeds from the offering, including the proceeds from the exercise of the over-allotment option, to redeem, at par, all of its $250 million aggregate principal amount of 8% Senior Subordinated Notes due 2008. B/E Aerospace, Inc. -- http://www.beaerospace.com/-- manufactures aircraft cabin interior products, and distributes aerospace fasteners. B/E designs, develops and manufactures products for both commercial aircraft and business jets. B/E manufactured products include seating, lighting, oxygen, and food and beverage preparation and storage equipment. The company also provides cabin interior design, reconfiguration and passenger-to- freighter conversion services. Products for the existing aircraft fleet -- the aftermarket -- generate about 60 percent of sales. B/E sells its products through its own global direct sales organization. * * * As reported in the Troubled Company Reporter on March 4, 2005, Moody's Investors Service has upgraded the ratings of B/E Aerospace, Inc.'s senior subordinated notes, to Caa2 from Caa3. Also, the rating agency has confirmed B/E's Senior Implied and Speculative Grade Liquidity ratings of B3 and SGL-2, respectively, and has changed the rating outlook to positive. The ratings upgraded are: * $250 million senior subordinated notes due 2008, to Caa2 from Caa3 * $250 million senior subordinated notes due 2011, to Caa2 from Caa3 * Senior unsecured issuer rating to B3 from Caa2. The ratings confirmed are: * $175 million senior unsecured notes due 2010, rated B3 * Senior implied rating of B3 * Speculative Grade Liquidity Rating at SGL-2 BEAR STEARNS: S&P Holds Low-B Ratings on Five Certificate Classes ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on class B of Bear Stearns Commercial Mortgage Securities Trust 2002-TOP8's commercial mortgage pass-through certificates to 'AA+' from 'AA'. Concurrently, ratings are affirmed on the remaining 15 classes from the same transaction. The raised and affirmed ratings reflect the stable performance of the pool, as well as credit enhancement levels that provide adequate support through various stress scenarios. As of the remittance report dated Nov. 15, 2005, the collateral pool consisted of 121 loans with an aggregate principal balance of $807.5 million, compared with 121 loans totaling $842.2 million at issuance. The master servicer, Wells Fargo Bank N.A., provided year-end 2004 net cash flow debt service coverage figures for 95% of the pool, which excludes five defeased loans ($15.3 million, 2%). Based on this information, Standard & Poor's calculated a weighted average DSC of 1.62x, compared with 1.68x at issuance. All of the loans in the pool are current, with the exception of one loan ($6.8 million), which is secured by an asset that is REO. It is the only loan with the special servicer. An appraisal reduction amount of $1.8 million is outstanding on the loan. The trust has not experienced a loss to date. The top 10 loans have an aggregate outstanding balance of $304.5 million (38%). The weighted average DSC for the top 10 loans is 1.77x, which is the same as at issuance and excludes the largest loan in the pool. The stable DSC reflects the overall stable performance of the pool. Standard & Poor's reviewed property inspections provided by the master servicer for the collateral securing the top 10 loans and all were characterized as "excellent" or "good." At issuance, six loans exhibited credit characteristics consistent with investment-grade rated obligations in the context of their inclusion in the pool. All six loans (202.7 million, 25%) have maintained their respective credit characteristics. A loan for $6.8 million is the only loan with the special servicer, Wachovia Bank N.A. The 182-unit Highland Orchards Apartments in the Atlanta suburb of Conyers, Ga., became REO after the related loan was transferred to the special servicer in March 2004. The multifamily property was built in 1985 and had an occupancy rate of 90% as of Nov. 30, 2004, which has improved as a direct result of an influx of hurricane victims to the immediate area. Wachovia will market the property for sale in January 2006 with an expected sale by the end of the first quarter. The ARA of $1.8 million outstanding on the loan is based on an appraisal from April 2004, while the current total exposure on the loan is $7.8 million. No other loans are with the special servicer. Wells Fargo reported a relatively small watchlist consisting of eight loans that had an aggregate outstanding balance of $41.2 million (5%) as of Nov. 7, 2005. The 11th-largest loan ($13.5 million, 2%) in the pool is the largest loan on Wells Fargo's watchlist and accounts for one-third of the aggregate watchlist balance. A 109,250-sq.-ft. retail property in the New York suburb of Lyndhurst, N.J., secures the loan. The property was built in 2000 and was added to the watchlist following the bankruptcy of Franks Nursery & Crafts Inc. After filing for bankruptcy, the company rejected a lease for 21% of the collateral property. The borrower has re-leased one-third of the vacant space and reports that Staples Inc. (rated BBB/Stable/--) is interested in the remaining vacant space. Wells Fargo noted that the loan had a break-even DSC after Franks Nursery & Crafts Inc. rejected its lease and occupancy fell to 79%. Current occupancy is 86%. Standard & Poor's stressed the loans on the watchlist, as well as other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Rating Raised Bear Stearns Commercial Mortgage Securities Trust 2002-TOP8 Mortgage Pass-Through Certs Series 2002-TOP8 Rating Class To From Credit enhancement (%) ----- -- ---- ---------------------- B AA+ AA 11.47 Ratings Affirmed Bear Stearns Commercial Mortgage Securities Trust 2002-TOP8 Mortgage Pass-Through Certs Series 2002-TOP8 Class Rating Credit Enhancement (%) ----- ------ ---------------------- A-1 AAA 14.60 A-2 AAA 14.60 C A 7.95 D A- 6.78 E BBB+ 5.35 F BBB 4.56 G BBB- 4.04 H BB+ 3.00 J BB 2.61 K BB- 2.09 L B+ 1.70 M B 1.30 N B- 1.04 X-1 AAA N/A X-2 AAA N/A N/A - Not applicable BXG RECEIVABLES: S&P Assigns BB Rating to $8.83 Class F Certs. -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to BXG Receivables Note Trust 2005-A's $203.81 million timeshare loan-backed notes series 2005-A. The preliminary ratings are based on information as of Dec. 8, 2005. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit enhancement available in the form of structural subordination, a reserve account, and available excess spread. The ratings are also based on Bluegreen Corp.'s (Bluegreen; B/Watch Pos) servicing ability and experience in the timeshare market. A copy of Standard & Poor's complete presale report for this transaction can be found on RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/ The presale can also be found on Standard & Poor's Web site at http://www.standardandpoors.com/ Select Credit Ratings, and then find the article under Presale Credit Reports. Preliminary Ratings Assigned BXG Receivables Note Trust 2005-A Class Rating Amount ----- ------ ------ A AAA $76,320,000 B AA- $36,910,000 C A- $36,460,000 D BBB $28,310,000 E BBB- $16,980,000 F BB $8,830,000 CHC INDUSTRIES: Has Until Dec. 20 to Object to Proofs of Claims --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida gave CHC Industries, Inc., until Dec. 20, 2005, to object to proofs of claim filed against the Debtor's estate. The Debtor gave the Court four reasons in support of the extension: 1) the extension will give it more time and opportunity to continue to discuss issues related to objections to claims with the counsel for the Official Committee of Unsecured Creditors; 2) it is continuing to review unresolved claims and may file additional objections with respect to other claims if necessary; 3) the extension will allow the Debtor and the Committee to verify if objections have been filed to all disputed and contested claims; and 4) the extension will not prejudice the Debtor's creditors and it will not delay the payment to holders of allowed claims because the Debtor has made pre-confirmation payments to undisputed claims. Headquartered in Palm Harbor, Florida, and formerly known as Cleaners Hanger Company, CHC Industries, Inc., manufactures and distributes steel wire coat hangers. The Company filed for chapter 11 protection on October 6, 2003 (Bankr. M.D. Fla. Case No. 03-20775). Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, PA, represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $25,000,000 in total assets and $20,000,000 in total debts. CALPINE CORPORATION: Loses Legal Dispute with Utility Choice Elec. ------------------------------------------------------------------ Following Calpine Corp.'s recent adverse ruling from a Delaware Court regarding over $300,000,000 of misspent funds with respect to its bond escrow account, Calpine suffered another substantial defeat in a legal dispute with Utility Choice Electric on Dec. 5, 2005. UCE alleged that Calpine took improper and unlawful actions with respect to UCE's rights and Calpine's obligations under various supply agreements, according to Rob Potosky, general counsel of UCE. "Calpine recently engaged in inappropriate behind-the-scenes actions that resulted in a tremendous interruption in certain of UCE's business relations, without any chance for UCE to object or defend against Calpine's unlawful actions," said David Veiseh, chief operating officer of UCE. "In response, UCE sought immediate relief in state court, alleging that Calpine took unlawful actions towards UCE, including, for example, untrue and unlawful representations that UCE owed Calpine $16,000,000." In a major victory for UCE, the company prevailed against Calpine. On Dec. 5, 2005, the Court signed UCE's proposed Order, which prohibits Calpine from imposing such interruptions in UCE's business in the future, according to Mr. Potosky. "Calpine's aggressive unwarranted actions show a collapsing company grasping at straws to come up with cash quickly in an unfortunate situation. We feel that now, even Calpine realizes it acted hastily and made an enormous mistake. The Court's Order stops Calpine's unlawfulness going forward, which will allow UCE to more easily focus on its attempts to recover damages in response to Calpine's past unlawfulness towards UCE and UCE's customers," said Mr. Potosky. "The problem, however, is that Calpine may soon be bankrupt if recent press reports are correct. This would leave UCE stuck holding the bag when (and if) UCE also prevails on its claims against Calpine for damages," said Potosky. Mr. Veiseh noted, "Calpine repeatedly refused to be reasonable in its actions towards UCE. The Judge's Order substantiates UCE's claims. Going forward, Calpine will also need to explain several misrepresentations regarding UCE that Calpine had recently made to the press, UCE's customers, and the Court." Simon Melhem, chief commercial officer of UCE, added, "After several years of amicable relations between UCE and Calpine, we were surprised that Calpine became a bully so quickly and took out its financial problems on its customers and allies. With this legal victory, UCE remains hopeful that Calpine will begin to take more accountability for its actions." About Utility Choice Electric Utility Choice Electric specializes -- http://www.uchoice.com/-- in offering customers high quality and customized electricity services at low prices, supplying energy services to commercial, industrial governmental and residential customers. Utility Choice Electric was founded by highly experienced energy executives with over 200 years of combined experience in the electricity, natural gas, and related service industries. About Calpine Corporation 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. * * * As reported in the Troubled Company Reporter, Calpine Corp. has until January 22, 2006, to restore a $313 million deposit. Calpine has suggested it won't have the funds available, and has warned that a chapter 11 filing is possible. Fitch, S&P and Moody's have placed their junk ratings on all of Calpine's second- lien and unsecured debt obligations. CMS ENERGY: Fitch Assigns BB- Rating to $125 Mil. Sr. Unsec. Notes ------------------------------------------------------------------ Fitch Ratings has assigned a rating of 'BB-' to CMS Energy Corp.'s $125 million issuance of 6.875% senior unsecured notes, due Dec. 15, 2015. Proceeds from the sale will be used to pay down one of the company's pre-pay gas supply contracts and for general corporate purposes. The Rating Outlook for CMS is Stable. CMS is a holding company whose primary subsidiary is Consumers Energy (senior unsecured debt rated 'BB' by Fitch, Stable Outlook), a regulated electric and gas utility serving more than 3.4 million customers in Western Michigan. CMS also has operations in natural gas pipelines and independent power production. For additional information relating to CMS, please refer to the Fitch Press Release 'Fitch Affirms CMS Energy and Consumers Energy,' dated Dec. 5, 2005. COMSTOCK HOMEBUILDING: S&P Rates $150MM Senior Sub. Notes at B- --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Comstock Homebuilding Cos. Inc. At the same time, a preliminary 'B-' rating is assigned to $150 million of senior subordinated notes to be issued by Comstock and guaranteed by its operating subsidiaries. The outlook is stable. "The ratings reflect a more highly concentrated, but profitable and rapidly expanding homebuilding business, offset by a financial profile that is considered moderate for the assigned rating," said credit analyst Lisa Sarajian. "Proceeds from the company's debut public unsecured note offering will be used for general working capital purposes, including the near-term temporary repayment of existing secured debt." Comstock's strong gross margins will moderate and remain somewhat more volatile due to the company's broader development platform. However, management's expected selective growth should gradually reduce current concentrations, providing a floor to currently sound debt protection metrics. Ratings improvement will be driven by the company growing its equity base while sustaining a sound financial profile so as to support more entrepreneurial leanings. Conversely, a disproportionately large, highly debt-financed acquisition or simultaneous expansion into multiple markets could place the ratings under pressure. CONSOLIDATED ENERGY: Posts $1.6 Million Net Loss in Second Quarter ------------------------------------------------------------------ Consolidated Energy, Inc., delivered its financial results for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. Consolidated Energy incurred a $1,657,568 net loss on $920,739 of revenues for the three months ended Sept. 30, 2005, versus a $406,406 net loss on $1,143,459 of revenues for the three months ended Sept. 30, 2004. The Company's balance sheet showed $15,971,406 in total assets at Sept. 30, 2005 and liabilities of $16,843,250, resulting in a $871,844 stockholders' deficit. $13.7 Million Financing Transaction In the nine months ended Sept. 30, 2005, Consolidated Energy executed a financing transaction and received aggregate gross proceeds of $13,750,000. The financing is in the form of 6% senior secured convertible promissory notes convertible to common stock at a conversion price of $1.70 per share. The financing has been used to retire an outstanding bridge note, for the purchase of equipment and to fund expenditures for the consummation of mining activities at the Company's Warfield Mine. A full-text copy of the Company's latest quarterly report is available for free at http://researcharchives.com/t/s?3ad Going Concern Doubt Killman, Murrell & Company, P.C., expressed substantial doubt about Consolidated Energy'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. About Consolidated Energy Consolidated Energy, Inc. is a company engaged in coal mining operations, gas and oil exploration and development, and development of related clean energy technologies that are environmentally friendly. Consolidated's main business focus in the immediate future will be in operating its mining subsidiary, Eastern Consolidated Energy, Inc. Through its acquisition of Eastern in September 2003, Consolidated is committed to the successful development of a profitable coal mining operation in eastern Kentucky. The Company has also begun operations through its gas and oil subsidiary, Eastern Consolidated Oil & Gas, Inc., with one well drilled and operating and additional development planned subject to funding. CONSUMERS TRUST: Wants to Hire David Rubin as Financial Advisor --------------------------------------------------------------- The Consumers Trust asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ David Rubin & Partners as its financial advisor. David Rubin will assist the Debtor and the Receivers during the pendency of the Debtor's chapter 11 case. The Firm's professionals hourly rates are: Professional Hourly Rate ------------ ----------- David Rubin GBP330 ($571) Henry Lan GBP190 ($502) David Stephenson GBP175 ($303) Other Managers GBP150 - 175 ($260 - $303) Senior Administrators GBP100 - 125 ($173 - $216) Assistants & Support Staff GBP50 - 75 ($87 - $130) To the best of the Debtor's knowledge, David Rubin does not hold any interest adverse to its estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. David Rubin is a firm of chartered accountants and licensed insolvency practitioners with wide ranging experience in the fields of corporate and personal insolvency, forensic examinations of entities in financial difficulties, and the reconciliation of claims and distribution of dividends for all classes of creditors connected with formal insolvency proceedings. Headquartered in London, England, The Consumers Trust filed for chapter 11 protection on Dec. 5, 2005 (Bankr. S.D.N.Y. Case No. 05-60155). Jeff J. Friedman, Esq., at Katten Muchin Rosenman LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated between $1 million to $10 million in total assets and more than $100 million in total debts. CONSUMERS TRUST: Wants to Hire Lawrence Graham as English Counsel ----------------------------------------------------------------- The Consumers Trust asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Lawrence Graham LLP as its special English law counsel. The Debtor is a business trust formed under and governed by English law. The High Court Order imposes certain obligations on the Receivers and the Debtor, which are matters of English law. Accordingly, the Debtor selects Lawrence Graham to represent with respect to English law issues. Lawrence Graham will: a) advice on the Law as it relates to Receivers appointed by the High Court of Justice; b) advice on the duties of the Receivers and the Trustees of the Trust; c) work with professionals retained in England, the USA and Canada to ensure that, in compliance with the High Court's Order, the affairs of the Trust are administered in the correct manner in all three relevant jurisdictions; d) take all necessary steps in England to gather in the assets of the Trust for distribution among its creditors, including as may be appropriate investigating whether any breaches of Trust have occurred and commencing proceedings in respect of the recover of any misapplied trust property; e) engage English barristers for specialist advice where necessary; and f) generally assist the Debtor and Katten Muchin Rosenman LLP, its bankruptcy counsel, in the co-ordination of the bankruptcy case. The firm's professionals hourly rates: Designation Hourly Rate ----------- ----------- Partners GBP320 - 410 ($554 - $710) Associates GBP180 - 310 ($312 - $536) Trainees GBP125 - 115 ($216 - $199) Lawrence Graham received a $108,000 prepetition retainer for its services and expenses provided. To the best of the Debtor's knowledge, Lawrence Graham does not hold any interest adverse to the Debtor's estate. Headquartered in London, England, The Consumers Trust filed for chapter 11 protection on Dec. 5, 2005 (Bankr. S.D.N.Y. Case No. 05-60155). Jeff J. Friedman, Esq., at Katten Muchin Rosenman LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated between $1 million to $10 million in total assets and more than $100 million in total debts. CONSUMERS TRUST: Wants More Time to File Schedules & Statements --------------------------------------------------------------- The Consumers Trust asks the U.S. Bankruptcy Court for the Southern District of New York for an extension of its time to file its schedules of assets and liabilities and statements of financial affairs. The Debtor wants until Jan. 10, 2006, to file those documents. The Debtor explains that it has in excess of 70,000 potential creditors. The Debtor submits it needs additional time to accurately gather and file the necessary information given the size of and complexity of its business. Headquartered in London, England, The Consumers Trust, was formed to administer a discounted consumer promotion in the U.S. and Canada known as Cashable Voucher program. The Debtor filed for chapter 11 protection on Dec. 5, 2005 (Bankr. S.D.N.Y. Case No. 05-60155). Jeff J. Friedman, Esq., at Katten Muchin Rosenman LLP represents the Debtor. When the Trust filed for bankruptcy, it listed $1 million to $10 million in assets and more than $100 million in debts. COOPER-STANDARD: Buying ITT Industries' Auto Brake Unit for $205MM ------------------------------------------------------------------ ITT Industries, Inc. (NYSE: ITT) signed a definitive agreement to sell its automotive brake & fuel tubing and components business to Cooper-Standard Automotive, a privately-held company, for $205 million in cash. The business serves the transportation industry with reported 2004 revenues of $437 million. Both parties expect to finalize the transaction in the first quarter of 2006, subject to customary closing conditions and regulatory approval. "This transaction is consistent with our value-based strategy of focusing ITT's assets and attention on our core businesses, such as advanced water treatment, water and wastewater solutions, space, defense electronics, systems and services, and leisure marine in order to provide greater potential for growth and profitability," said Steve Loranger, Chairman, President and Chief Executive Officer of ITT Industries. "This transaction creates value for ITT, Cooper-Standard and the employees of the auto tubing business, allowing us to focus our resources on our strong growth platforms, and giving Cooper-Standard a well-positioned world-class supplier of components that compliment their existing product lines." "With this transaction, we are moving our portfolio closer toward achieving premier multi-industry performance, with an improved growth profile, increased margins and a more efficient use of capital," Mr. Loranger said. ITT's auto tubing business employs approximately 3,500 people in seven countries, with major manufacturing sites in the U.S., Canada, Mexico, Germany, France and the Czech Republic. Mr. Loranger said the revenue and earnings from its automotive tubing business will be moved into discontinued operations, reducing full-year 2005 earnings per share (EPS) by an estimated 18 cents per share, resulting in a full-year 2005 earnings from continuing operations of between $5.17 and $5.22. Mr. Loranger said the company is also reviewing its businesses within the Electronic Components group to determine which businesses are consistent with ITT's long- term financial objectives, and pointed to the likelihood that the company will take a special charge of $200 - $275 million in the fourth quarter, primarily related to a non-cash asset impairment charge. The company expects to announce its strategic intent for the businesses within the Electronic Components group during its December 16 guidance call forecasting 2006 earnings. About ITT Industries Headquartered in White Plains, N.Y., ITT Industries, Inc. -- http://www.itt.com/-- supplies advanced technology products and services in key markets including: fluid and water management including water treatment; defense communication, opto- electronics, information technology and services; electronic interconnects and switches; and other specialty products. The company generated $6.8 billion in 2004 sales. In addition to the New York Stock Exchange, ITT Industries stock is traded on the Midwest, Pacific, Paris, London and Frankfurt exchanges. About Cooper-Standard Automotive Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the transportation industry. Cooper-Standard Automotive Inc. employs more than 13,000 people across 47 facilities in 14 countries. Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners 2000. * * * As reported in the Troubled Company Reporter on Dec. 7, 2005, Standard & Poor's Ratings Services placed its ratings on Cooper-Standard Automotive Inc., including the company's 'BB-' corporate credit rating and its other debt ratings, on CreditWatch with negative implications. The listing follows the announcement that Cooper-Standard has signed a definitive agreement to acquire the fluid-handling systems business of ITT Industries Inc. (BBB+/Stable/A-2) in a transaction valued at $205 million. Standard & Poor's believes that Cooper-Standard's credit protection measures are already weak for the rating, notwithstanding the planned acquisition, and the company's credit profile will likely worsen, since this large transaction will be financed with debt. CUMULUS MEDIA: Increases Stock Repurchase Program by $100 Million ----------------------------------------------------------------- Cumulus Media Inc.'s (NASDAQ: CMLS) Board of Directors authorized up to an additional $100 million in repurchases of its shares of Class A Common Stock. In September 2004, Cumulus had authorized an initial $100 million stock repurchase program. Lew Dickey, Chairman, President and Chief Executive Officer, commented, "We are pleased to announce the completion of our initial $100.0 million Board approved stock repurchase program, as well as the authorization of an additional $100.0 million for future repurchases. This additional capacity gives us the flexibility to continue to invest our tremendous free cash flow in the most accretive way possible." As of Dec. 6, 2005, Cumulus had completed the repurchase of 7,871,627 shares of Class A Common Stock for approximately $99.0 million or at an average price of $12.56 per share. Based on shares outstanding at the outset of the Board approved program, the Company has repurchased approximately 11% of its outstanding common stock. Giving effect to the increased authorization, Cumulus now has a total of $101.0 million authorized for share repurchases. Repurchases may be made in the open market or through block trades, in compliance with Securities and Exchange Commission guidelines, subject to market conditions, applicable legal requirements and various other factors, including the requirements of Cumulus' credit facility. Cumulus has no obligation to repurchase shares under the repurchase program, and the timing, actual number and value of shares to be purchased will depend on the performance of Cumulus' stock price and market conditions. Cumulus' current credit facility, which took effect in July 2005, limits Cumulus' ability to repurchase more than $150 million in stock during the term of the facility, unless its leverage ratio is less than 4.5 to 1.0. Through Dec. 3, 2005 Cumulus had repurchased approximately $76.5 million in stock during the term of the credit facility. Future repurchases, therefore, will be limited to not more than $73.5 million, unless Cumulus' leverage ratio drops below 4.5 to 1.0, or unless Cumulus obtains authorization from its lenders to waive the limitation and allow further repurchases. As of Sept. 30, 2005, Cumulus' leverage ratio was 5.4 to 1.0. There can be no assurance as to Cumulus' ability to lower its leverage below 4.5 to 1.0 or to obtain authorization from its lenders to waive that limitation. Headquartered in Atlanta, Georgia, Cumulus Media Inc. -- http://www.cumulus.com/-- is the second-largest radio company in the United States based on station count. Giving effect to the completion of all pending acquisitions and divestitures, Cumulus Media Inc., directly and through its investment in Cumulus Media Partners, will own and operate 343 radio stations in 67 U.S. media markets. Cumulus Media Inc. shares are traded on the NASDAQ National Market under the symbol CMLS. * * * As reported in the Troubled Company Reporter on Nov. 2, 2005, Moody's Investors Service affirmed the existing debt ratings and stable rating outlook of Cumulus Media, Inc. following the company's announcement of the formation of Cumulus Media Partners, LLC with a group of private equity sponsors (Bain Capital, The Blackstone Group and Thomas H. Lee Partners) to acquire the radio broadcasting division of Susquehanna Pfaltzgraff Co. for approximately $1.2 billion. These ratings are affirmed: (i) a Ba2 on the $400 million senior secured revolving credit facility due 2012, (ii) a Ba2 on the $400 million senior secured term loan facility due 2012, and (iii) the company's Ba2 Corporate Family rating. Moody's said the outlook is stable. DELTA AIR: Says $325 Mil. in Retiree Benefit Reductions Necessary ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Nov. 8, 2005, Pursuant to Section 1113 of the Bankruptcy Code, Delta Air Lines and its debtor-affiliates sought the U.S. Bankruptcy Court for the Southern District of New York's permission to reject the collective bargaining agreement between Delta Air Lines, Inc., and the Air Line Pilots Association, International. As reported in the Troubled Company Reporter on Nov. 22, 2005, after considering all of the data provided by the Debtors and the Air Line Pilots Association, and after conducting its own independent analysis, the Official Committee of Unsecured Creditors concurs with the Debtors that the employment cost reductions sought from ALPA are necessary for the Debtors to be competitive and become profitable. Representing the Creditors Committee, Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, explains that the rate reductions sought are necessary to bring Delta's pay rates to the mid-range of its competitors flying comparable aircraft. She says that this is especially critical because Delta has the smallest revenue premium of any of the legacy carriers. Delta Insists $325 Million Reductions Necessary Delta Air Lines, Inc., maintains that the Air Line Pilots Association, International's analysis -- Delta's true "need for" annual pilot labor cost reductions was in the range of $100,000,000 for 2006, $80,000,000 for 2007 and with no further reductions thereafter -- is fatally flawed. John J. Gallagher, Esq., at Paul, Hastings, Janofsky & Walker LLP, in Washington, D.C., notes that ALPA used the U.S. Department of Transportation Form 41 data to calculate Delta's 2004 pilot labor costs as a starting point against which to measure reductions from that point forward. Edward H. Bastian, Delta's executive vice president and chief financial officer, points out that, to determine accurately Delta's "baseline" pilot labor costs for 2004, that is, the full- year recurring costs against which to measure future changes, these additional cost items should have been added to the raw Form 41 data: (a) $143,000,000 in pilot pension expense savings for which Delta had already accounted in its 2004 financial reports; (b) $23,000,000 to account for the annualized impact of a pilot pay increase which became effective on May 1, 2004; (c) $45,000,000 to account for the effect of the December 1, 2004, pilot pay reduction; and (d) $50,000,000 to reflect the cost reductions not achieved due to failure to achieve planned growth in flying. Delta insists that it needs $325,000,000 in annual pilot labor cost reductions to be able to successfully reorganize. Debtors Revise Proposal During negotiations on November 11, 2005, Delta presented a revised comprehensive proposal to ALPA. Delta offered to reduce the proposed pay reduction from 19.5% to 19%, accepted ALPA's proposal on the amount of per diem expenses, accepted ALPA's sick leave concept, and offered an enhancement to the relocation policy. Delta's revised Section 1113 Proposal provides for these changes: Annual Estimated Cost Reductions Proposal ($ millions) -------- ---------------- A. Compensation * Reduce hourly pay rates 19% across-the-board $182.4 * Eliminate premium for night pay 1.7 * Eliminate premium for International pay 5.8 * Reduce per diem hourly expense allowance 3.3 B. Work Rules * Reduce amount of pay pilots receive for time not on board the aircraft 21.4 * Reduce staffing levels to meet operational needs: -- Change relief crew composition 1.4 * Permit the Company to create more efficient scheduling rules: -- Allow management pilots to fly open time without pay protecting another pilot 1.8 -- Reduce from two times to one and a half times pay for pilots assigned open time for which they did not volunteer 0.7 -- Eliminate pay back day-off for reserves who voluntarily fly open time on their scheduled day-off 0.4 -- Change the order in which open time is assigned 1.6 -- Reduce training expenses by limiting pilots' ability to change from one position to another 11.5 -- Change sick pay to 30 hours per year at full pay -- 60% thereafter 0.9 -- Eliminate accident leave 0.9 -- Reduce vacation accrual and amount of pay for vacation days 18.0 -- Charge $50 annual fee for access to unlimited free standby travel for pilot and pilot's eligible pass riders 0.3 -- Eliminate obligation to recall furloughed pilots 5.8 C. Benefits * Future retirees to pay full cost of retiree medical coverage 17.1 * Replace Survivorship Plan with $500,000 life insurance 22.1 * Eliminate 2% of 401(k) contribution 18.0 * Modify eligibility requirements for long-term disability 2.8 * Hard freeze defined benefit plan 10.3 D. Management Flexibility/Scope * Reduce restrictions on number and capacity of regional jets operated by Delta's regional partners -- * Eliminate required minimum flying levels -- * Reduce restrictions on partnerships with foreign carriers -- * Remove poison pill -- * Eliminate restrictions on furlough/obligation to recall pilots -- E. Profit Sharing * Significant improvement providing payment to covered employees of 15% of the first $1.5 billion of annual pre-tax income, and 20% of annual pre-tax income over $1.5 billion -- ---------- TOTAL $327.3 ========== Delta Says Balance of Equities in its Favor Mr. Gallagher notes that, while ALPA complains about the five- year term contained in Delta's proposals, ALPA already has agreed to a duration that is long or longer at other reorganizing carriers; ALPA agreed to a six-year term with United Air Lines "to ensure that the transformation of United will be sustainable." Contrary to ALPA's statements to its pilots, Delta's Section 1113 Proposal does not call for termination of the pilot defined benefit pension plan, but only for a "hard" freeze of the Plan, Mr. Gallagher points out. ALPA has threatened that "it will call a post-rejection strike that will kill the Company and eliminate every pilot job -- indeed every Delta job." To position that threat as an appeal to equity is profoundly misguided, Mr. Gallagher says. He argues that, even if Delta's pilots seriously intended to put Delta into liquidation rather than agree to needed concessions, the threat would be a hollow one, because a strike would be enjoinable as a violation of the Railway Labor Act. Creditors Committee & Debtors Respond to Retirees DP3, Inc., doing business as Delta Pilots' Preservation Organization, and Retired Capt. Jim Dean Johnson want the Debtors' request denied on grounds that the Debtors' unilateral cessation of pension plan payments is not included in the Section 1113 Proposal and Delta has not shown that the cessation of these pension plan payments are modifications necessary to permit Delta's successful reorganization. On behalf of the Official Committee of Unsecured Creditors, Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, asserts that there is no legal basis to compel the Debtors to continue to make pension plan payments to or for the benefit of the pilots or to treat the pilots more favorably than all of the Debtors' other prepetition unsecured creditors. She notes that, according to the unambiguous decision of the Court of Appeals for the Second Circuit in In re Ionosphere Clubs, Inc. (Ionosphere II), 22 F.3d 403, 407 (2d Cir. 1994), a debtor's failure to perform prepetition obligations under a collective bargaining agreement does not constitute a unilateral modification or termination of that agreement under Section 1113(f) of the Bankruptcy Code. The Debtors contend that DP3's arguments relating to the "unilateral modification or rejection" of the CBA cannot proceed before the Court at present. John J. Gallagher, Esq., at Paul, Hastings, Janofsky & Walker LLP, in Washington, D.C., asserts that the issue -- which has been argued before the Court and ruled on at a hearing on October 17 -- is now on appeal before the United States District Court for the Southern District of New York. He says that allowing DP3 to re-inject this issue in the Section 1113 rejection proceeding will interfere with the appellate process. As ALPA does not represent the pilot retirees' interests, DP3 and Mr. Johnson contend that the Section 1113 Motion is procedurally defective because: (a) the retired pilots were not included in the Section 1113 negotiations; (b) the retired pilots did not receive any Section 1113 proposals from the Debtors; and (c) the Debtors did not confer with DP3 and Johnson in good faith. In response, Ms. Beckerman maintains that DP3 and Johnson's procedural arguments must also be summarily rejected because there is no legal requirement that the retired pilots receive proposals related to Section 1113 or that they be involved in the Section 1113 negotiations. She explains that the only authorized representative for purpose of Section 1113 is ALPA. Unlike Section 1114, there is nothing in the plain language of Section 1113 that authorizes the appointment of a retiree committee or requires the involvement of retirees in negotiations surrounding modifications to a CBA. She notes that DP3 and Mr. Johnson solely rely on the Second Circuit's decision in In re Century Brass Prod., Inc., 795 F.2d 265, 275 (2d Cir. 1986) which, however, involved the modification and termination of insurance -- not pension benefits -- and was decided before and has been rendered moot by the enactment of Section 1114 in 1988. Ms. Beckerman also points out that since Section 1114 was enacted, not a single reported decision has followed Century Brass and appointed a Section 1113 committee of retirees or compelled the involvement of retirees in the negotiations of a CBA as a procedural requirement to obtaining relief under Section 1113. Debtors & PBGC Sign Stipulation The Court approves a stipulation between the Debtors and the Pension Benefit Guaranty Corporation in connection with the Debtors' request to reject the ALPA CBA. Pursuant to the Stipulation, the Debtors agree that any findings of fact or conclusions of law entered with respect to the request will not give rise to collateral estoppel, res judicata, law of the case, or any other type of issue preclusion against the PBGC in any subsequent proceedings under the Employee Retirement Income Security Act, except that the PBGC will be bound by the decision on the merits of the Section 1113 Motion. The PBGC agrees that it takes no position on the merits of Section 1113 Motion and will not object, challenge, collaterally attack, or appeal any ruling on those merits. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Committee Wants Lytle Soule as Counsel on FAA Matters ---------------------------------------------------------------- The Official Committee of Unsecured Creditors seeks the U.S. Bankruptcy Court for the Southern District of New York's permission to retain Lytle Soule & Curlee P.C. as its counsel in matters pertaining to the Federal Aviation Administration in Delta Air Lines and its debtor-affiliates' Chapter 11 cases, nunc pro tunc to November 14, 2005. Jordan S. Weltman, vice president and senior managing director of Americas Aircraft Financial Services-Boeing Capital Corporation, relates that Lytle Soule possesses extensive knowledge and expertise in FAA matters and is well qualified to represent the Committee. The Firm has served as special FAA counsel in significant Chapter 11 reorganizations, including the UAL Corp., et al., and Continental Airlines, Inc., et al., Chapter 11 cases, and has represented the official creditors' committee in the ATA Holdings Corp., et al., Chapter 11 cases. As the Creditors Committee's FAA Counsel, Lytle & Soule will: (a) examine title and record status of aircraft, aircraft engines, aircraft propellers and spare parts locations; (b) assist with the filing of instruments with the Federal Aviation Administration; (c) review and analyze bills of sale, applications, affidavits and instruments to be filed and recorded with the FAA Aircraft Registry; and (d) issue opinions with respect to aircraft title and registration, encumbrances of record with the FAA with respect to aircraft, aircraft engines, aircraft propellers and spare parts locations, and the recordability of instruments and the perfection of instruments filed with the FAA. The Creditors Committee requests that all fees and related costs and expenses it incurred on account of Lytle Soule's services be paid as administrative expenses of the estates pursuant to Sections 328, 330(a), 331, 503(b) and 507(a)(1) of the Bankruptcy Code. The current hourly rates charged by Lytle Soule are: General Range of Rates ---------------------- Members $200 to $250 Associates $130 to $150 Paraprofessionals $80 to $130 Clerks $40 to $50 Attorneys Expected to Be Most Active ------------------------------------ Patricia J. Hanson (Member) $250 Jason C. Hasty (Associate) $140 Patricia J. Hanson, Esq., shareholder of Lytle Soule, assures the Court that the Firm is "disinterested" and does not hold or represent any interest adverse to the Creditors Committee, the Debtors, the Debtors' estates, their creditors or any party-in- interest upon which the Firm is to be engaged. She discloses that Lytle Soule has worked and is currently working with numerous professionals representing other parties in the Debtors' Chapter 11 cases on various other matters. The Firm's connection with the other professionals includes working with those professionals and their clients in aviation matters. However, none of those connections would give rise to an adverse interest, which would disqualify the Firm from employment as counsel for the Creditors Committee. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Court Okays $3.4 Mil. Payment of LaGuardia Obligations ----------------------------------------------------------------- On December 1, 1992, the Port Authority of New York and New Jersey issued $96,500,000 in principal amount of bonds to refinance an earlier series of bonds it issued in 1983. The earlier bonds had been issued to finance the construction of a passenger terminal building for Delta Air Lines, Inc., at LaGuardia Airport. In connection with the financing, the Port Authority and The Bank of New York, as trustee, entered into a Trust Indenture, dated December 1, 1992. Delta agreed to make payments on the Bonds pursuant to Lease Agreement, dated as of December 10, 1980, with the Port Authority. The Covered Payments are paid in arrears semi- annually on June 1 and December 1. The next Covered Payment of $3,353,375 was due December 1, 2005. Delta Air Lines and its debtor-affiliates $1,700,000,000 DIP Credit Agreement with General Electric Capital Corp. provides that certain payments by Delta of prepetition obligations could constitute an Event of Default, Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, relates. Delta believes that some or all of the December 1 Payment relate to the prepetition period and may well constitute a prepetition obligation. However, Delta also believes that at this time it is not necessary to raise or litigate this issue, and, indeed, that it may never be necessary to do so. Mr. Huebner notes that, if Delta does not make the December 1 Payment or only makes a portion of the Payment, it risks a party taking the position that Delta is in default under the Lease, potentially subjecting Delta to various contractual remedies, including termination of the Lease. The exercise of those remedies would substantially harm Delta because the LaGuardia Airport facility is a vital part of Delta's global network, in terms of both revenue and operations, Mr. Huebner remarks. Accordingly, Delta sought and obtained permission from the Hon. Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York to make the December 1 Payment, provided, that the Payment is without prejudice to the positions of any of the parties, including as to whether the Covered Payments are true lease obligations or prepetition financing obligations. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) DENBURY RESOURCES: Prices Senior Subordinated Notes Offering ------------------------------------------------------------ Denbury Resources Inc. (NYSE:DNR) priced its offering of $150 million of Senior Subordinated Notes due 2015, which will carry a coupon interest rate of 7.5%. The notes are being sold at par. The Company expects to close the sale of the notes on Dec. 21, 2005, subject to the satisfaction of customary closing conditions. Denbury plans to use the estimated net proceeds from the offering to fund a portion of the pending $250 million oil and natural gas property acquisition expected to close in late January 2006. Pending such use, a portion of the funds will be used to repay the current borrowings under the Company's bank credit facility, which were approximately $35 million as of December 1, 2005, with the balance temporarily invested in short-term investments. The offering of the notes is not conditioned on the completion of the acquisition, which is subject to certain customary closing conditions. In the event the acquisition is not completed, the net proceeds will be used for general corporate purposes. Denbury is the largest oil and natural gas operator in Mississippi, owns the largest reserves of CO2 used for tertiary oil recovery east of the Mississippi River, and holds key operating acreage in the onshore Louisiana and Texas Barnett Shale areas. The Company increases the value of acquired properties in its core areas through a combination of exploitation drilling and proven engineering extraction practices. Denbury Resources, Inc. -- http://www.denbury.com/-- is a growing independent oil and gas company. The Company is the largest oil and natural gas operator in Mississippi, owns the largest reserves of CO2 used for tertiary oil recovery east of the Mississippi River, and holds key operating acreage in the onshore Louisiana and Texas Barnett Shale areas. The Company increases the value of acquired properties in its core areas through a combination of exploitation drilling and proven engineering extraction practices. * * * As reported in the Troubled Company Reporter on Nov. 8, 2005, Standard & Poor's Rating Services raised its corporate credit rating on independent oil and gas exploration and production company Denbury Resources Inc. to 'BB' from 'BB-'. The outlook is stable. Dallas, Texas-based Denbury has about $240 million of funded debt. DRESSER INC: Completes Sale of On/Off Valve Business ---------------------------------------------------- Dresser, Inc. has completed the previously announced sale of substantially all of its worldwide On/Off valve business to Cooper Cameron Corporation (NYSE:CAM). The sale of the Brazilian portion of the On/Off business is awaiting Brazilian regulatory confirmation of transfer of operating permits and tax documentation, which Dresser expects to be completed in early 2006. The total purchase price for the On/Off business is $223.8 million, subject to post-closing adjustments, including $21.3 million attributable to the Brazilian operation. The amount attributable to the Brazilian operation will be paid at the time that transaction is closed. Dresser said the net proceeds from the sale will primarily be used to pay down debt. "The sale of this business will allow us to reduce our financial leverage and focus our time and resources on other products in our portfolio such as Masoneilan(R) control valves, Consolidated(R) pressure relief valves, Waukesha(R) engines, and Wayne(R) retail fuel dispensing systems, all of which are leading participants in the markets they serve," Patrick M. Murray, chairman and chief executive officer of Dresser, said. The company has finalized its previously announced goodwill impairment calculation for the On/Off business and expects to record an impairment of approximately $63.8 million in the fourth quarter of 2004, approximately $14 million higher than previously announced. As previously reported, the filing of the company's 2004 results has been delayed due to a pending restatement. 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. Headquartered in Dallas, Texas, Dresser has a comprehensive global presence, with over 8,500 employees and a sales presence in over 100 countries worldwide. * * * Dresser, Inc.'s 9-3/8 Senior Subordinated Notes due 2011 carry Moody's Investor Service's and Standard & Poor's single-B ratings. DRESSER INC: Asks for Waiver from Senior Subordinated Noteholders ----------------------------------------------------------------- Dresser, Inc. has commenced a solicitation of consents from holders of record as of Dec. 6, 2005, of its outstanding $550 million principal amount of 9 3/8% Senior Subordinated Notes due 2011 for the amendment and waiver of certain reporting requirements in the indenture for the notes. The amendment and waiver are related to the company's previously announced delay in issuing restated financial statements. The proposed amendment and waiver would permit Dresser to extend to Feb. 15, 2006, its obligation to file financial statements with the Securities and Exchange Commission for the year ended Dec. 31, 2004, and the quarters ended March 31, June 30, and Sept. 30, 2005. It would also permit a similar extension for the filing of any pro forma financial information required by the previously announced sale of substantially all of Dresser's worldwide On/Off valve business. In addition, the consent solicitation would provide for a waiver of all defaults under the indenture's reporting requirements through the completion of the consent solicitation. The proposed amendment and waiver to the governing indenture requires the consent of holders of a majority in aggregate principal amount of the notes outstanding. Dresser will pay a fee of $1.25 in cash for each $1,000 principal amount of notes for which consents are properly delivered and not revoked prior to the expiration of the consent solicitation. The consent solicitation will expire at 5 p.m., New York City time, on Dec. 19, 2005, unless the consent solicitation is extended by Dresser. The terms and conditions of the consent solicitation are described in a Consent Solicitation Statement dated Dec. 6, 2005, which is being sent to all holders of record as of Dec. 6, 2005. Requests for additional copies of the Consent Solicitation Statement, the Letter of Consent or other related documents should be directed to: The Information Agent MacKenzie Partners, Inc. 800-322-2885 (toll-free) or 212-929-5500 (collect) Questions regarding the consent solicitation should be directed to: The Solicitation Agent Francesco Cipollone Morgan Stanley & Co., Inc. Tel: 800-624-1808 (toll-free) or Tel: 212-761-1941 (collect) Additional information, including draft copies of the company's 2004 Annual Report on Form 10-K and Reports on Form 10-Q for the quarters ending March 31 and June 30, 2005, is included in a Current Report on Form 8-K filed today with the SEC. 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. Headquartered in Dallas, Texas, Dresser has a comprehensive global presence, with over 8,500 employees and a sales presence in over 100 countries worldwide. * * * Dresser, Inc.'s 9-3/8 Senior Subordinated Notes due 2011 carry Moody's Investor Service's and Standard & Poor's single-B ratings. EQUINOX HOLDINGS: Selling Assets to Related Cos. for $505-Mil Cash ------------------------------------------------------------------ The Related Companies, L.P., disclosed the acquisition of Equinox Holdings Inc., in partnership with Equinox Company Management. Equinox is the leading operator of upscale fitness clubs in New York, Chicago, Los Angeles, San Francisco and South Florida. Valued at $505 million, the sale is expected to close in January 2006. The Related Companies, L.P., founded in 1972 by Chairman and CEO Stephen M. Ross, is headquartered in New York City and oversees a real estate portfolio valued in excess of $15 billion. Related has redefined the residential marketplace, created the benchmark for sophisticated urban living and has been committed to quality fitness facilities in its buildings since the mid- eighties. Since its inception 15 years ago, Equinox has been widely recognized for being an industry innovator and for delivering an unparalleled fitness experience. Related will secure a well-known brand as a quality anchor tenant for key current and future developments. This will also help Related to enhance the quality of its amenities and facilities available to residents. Equinox will leverage Related's real estate expertise and relationships to more efficiently secure sites, reducing its site identification and club development costs. Finally, both firms will benefit from current national growth plans already underway in key urban centers. "Related is proud to be acquiring Equinox, a market leader with a broad portfolio of products, a strong customer-focused culture, a long history of profitability, clearly identified growth opportunities, and an extraordinary management team," stated Mr. Ross. In May 2005, Mr. Ross was appointed to the Equinox Board of Directors and at Time Warner Center, Related serves as landlord to the flagship 40,000 square foot club and its innovative "E", a 6,000 square foot elite training facility; the brand's sole invitation only private gym. Harvey Spevak will continue to lead Equinox as CEO and President and the current Equinox management team will remain intact. Since 2000, Equinox has opened 21 new clubs in four new markets and more than doubled its membership. Revenues have grown from $63 million in 2000 to $168 million for the 12-month period ended September of 2005. The company offers an integrated selection of "Equinox- branded" programs, services and products, including strength and cardio training, group fitness classes, personal training, spa services and products, apparel and food/juice bars. In addition, Related and Equinox already have a luxury condominium project in the works together on the Upper West Side of Manhattan, where Equinox will operate a new 35,000 square foot club. "We are looking forward to expanding upon the Equinox vision and growth strategy. We see natural synergies as a result of our partnership and are looking forward to creating new products to benefit our customers," stated Jeff T. Blau, President of The Related Companies, L.P. "We're very excited about the future of Equinox with Related as our partner," said Harvey Spevak. "Given their expertise in the development and management of real estate holdings, and focus on lifestyle, Related will provide strategic value and facilitate the continued growth of the company." In December of 2000, North Castle Partners and J.W. Childs Associates partnered with Harvey Spevak and company management to acquire Equinox Holdings Inc. At that time, the company was a New York centric business. Since its purchase five years ago, Equinox has grown rapidly to become a nationally recognized lifestyle brand. Merrill Lynch and Paul Hastings represented Related in this transaction. Equinox Holdings -- http://www.equinoxfitness.com/-- operates upscale, full-service fitness clubs. It offers an integrated selection of Equinox-branded programs, services and products that help our members get results. * * * As reported in the Troubled Company Reporter on Dec. 7, 2005, Standard & Poor's Ratings Services placed its ratings, including its 'B' corporate credit rating, on Equinox Holdings Inc. on CreditWatch with negative implications, following the company's announcement that it has agreed to be acquired by The Related Companies L.P. for about $505 million in cash. As part of Related's proposed financing for the transaction, a Related entity will commence a cash tender offer to purchase Equinox's outstanding 9% senior notes due 2009. At Sept. 30, 2005, Equinox had about $163 million of debt outstanding. FIDELITY NATIONAL: Fitch Rates Unit's Senior Secured Loan at BB- ---------------------------------------------------------------- Fitch Ratings has assigned a 'BBB-' rating to the combined $500 million in exchange notes being issued by Fidelity National Title Group, Inc. The Rating Outlook is Stable. The exchange note issuances will consist of two $250 million notes that essentially mirror the terms of the Fidelity National Financial, Inc. notes to be exchanged. Specifically, one note carries a 7.30% interest rate and matures in August 2011, while the other note carries a 5.25% interest rate and matures in March of 2013. The exchange note issuance eliminates outstanding debt at the holding company level, FNF. Going forward, Fitch believes the ratings could be influenced by acquisitions at FNF, and increased financial leverage at FNF, which could increase dividend demand on FNT. FNT's proforma debt-to-total capital as of June 30, 2005 is 18% and earnings coverage of interest expense is approximately 18 times. Over a longer-term horizon, Fitch expects FNT's leverage to remain below 20% and for interest coverage to exceed at least 7x. The title insurance operations represent the largest business for FNF at approximately 70% of total revenue. Title operations have national scope and industry-leading market share at approximately 30% at year-end 2004. The company also has leading market share in the four states that produce the highest title insurance revenue, California, Florida, Texas, and New York. Fidelity Title has historically shown better than industry average profitability, which is both a product of its strong market share and attention to expense control. The company's expenses as a percentage of premiums are the best among national title insurers. Fitch rates these new issues with a Stable Outlook: -- $250 million 7.30% senior note maturing Aug. 15, 2011 'BBB-'; -- $250 million 5.25% senior note maturing March 15, 2013 'BBB-'. Fitch also currently rates these entities with a Stable Outlook: * Fidelity National Title Ins. Co. * Ticor Title Ins. Co. of FL * Alamo Title Insurance Co. of TX * Nations Title Insurance of NY * Chicago Title Ins. Co. * Chicago Title Ins. Co. of OR * Security Union Title Ins. Co. * Ticor Title Ins. Co. * National Title Ins. Co. of NY -- Insurer financial strength 'A-'. * Fidelity National Financial Inc. -- Long-term issuer 'BBB-'; -- $250 million senior bank facility 'BBB-'. * Fidelity National Title Group, Inc. -- Long-term issuer 'BBB-'; -- $300 million senior bank facility 'BBB-'. * Fidelity National Information Services, Inc. -- Senior secured credit facility 'BB-'. FISHER SCIENTIFIC: Fitch Rates Subordinated Debt at BB+ ------------------------------------------------------- Fitch Ratings has assigned a 'BBB-' issuer default rating to Fisher Scientific International Inc. Fitch has also assigned a 'BBB' rating to FSH's secured credit facility, a 'BBB-' rating to FSH's senior unsecured debt, and a 'BB+' to FSH's subordinated debt. The ratings apply to approximately $2.2 billion of debt. The Rating Outlook is Stable. The ratings reflect the firm's: * strong brand, * solid free cash flow, * manageable capital needs, and * potential for meaningful acquisitions. FSH's improved profitability and financial position since its acquisition of Apogent have also added to the credit profile of the firm. Fitch expects FSH will continue to experience reliable demand growth, owing to its strong market presence and the increasing spending on scientific research and medical testing. FSH should benefit from expanding margins, as it improves operational efficiency and shifts sales to higher margin products. Potential acquisitions could also provide a platform for additional margin expansion. Targeted acquisitions could be funded, in part, by cash on hand and free cash flow. However, larger acquisitions would likely require the assumption of additional debt. FSH generated free cash flow of roughly $410 million for the latest 12 months, ended Sept. 30, 2005. FSH has manageable capital expenditure requirements. At Sept. 30, 2005, FSH had approximately $189 million in cash, $259 million of debt maturing through 2009, and $500 million availability under a $500 million revolver that expires in 2009. At Sept. 30, 2005, latest 12 months interest coverage (EBITDA/interest) was 8.1 times and leverage was 2.4x. Fisher Scientific International Inc. is a leading provider of laboratory products and services to markets involved with global scientific research, global biopharmaceutical production supplies, clinical laboratories, lab safety, and personal protection. FOSS MANUFACTURING: Committee Hires Aurora as Financial Advisor --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Foss Manufacturing Company, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the District of New Hampshire to retain Aurora Management Partners, Inc., as its financial advisor. Aurora Management is expected to: a. analyze the Debtor's current financial situation, review financial and operating statements, and identify and evaluate all of the assets and liabilities of the Debtor; b. analyze the Debtor's forward looking cash flow, cash collateral usage and adequate protection payments; c. review the terms of any exit financing related to any plan of reorganization; d. analyze the Debtor's business plans, restructuring plans and any other reports or analyses prepared by the Debtor or its financial advisors in order to advise the Committee on the viability and reasonableness of the projections and underlying assumptions; e. assess the financial ramifications related to DIP financing, sale of assets, in whole or in part, assumption or rejection of leases or contracts, management retention and severance plans, and any plan of reorganization; f. help with the claim resolution process and distributions; g. prepare liquidation analysis; h. attend meetings with the Committee, counsel to the Committee, other stakeholders, financial advisors and representatives of the Debtor; i. advise the Committee on methods and strategies for negotiating with the Debtor and other stakeholders; j. provide appropriate restructuring advice to the Committee; k. provide testimony on behalf of the Committee; and l. provide such other services as agreed between the parties. The Committee discloses that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners/Managing Directors $250 - $330 Consultants $150 - $275 To the best of the Committee's knowledge, the Firm does not hold any interest adverse to the Debtor's estates or the Committee. Headquartered in Hampton, New Hampshire, Foss Manufacturing Company, Inc. -- http://www.fossmfg.com/-- is a producer of engineered, non-woven fabrics and specialty synthetic fibers, for a variety of applications and markets. The Company filed for chapter 11 protection on Sept. 16, 2005 (Bankr. D.N.H. Case No. 05-13724). Andrew Z. Schwartz, Esq., at Foley Hoag LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million. FOSS MANUFACTURING: Hires Carl Marks as Restructuring Consultant ---------------------------------------------------------------- Foss Manufacturing Company, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the District of New Hampshire to retain P. Woolard Harris as its chief restructuring officer and Carl Marks Advisory Group LLC as its restructuring and management consultants. Carl Marks is expected to: a. exercise day-to-day financial and operational control of the Debtor; b. assist the Debtor with the preparation of its bankruptcy schedules and statements; c. coordinate and manage the Debtor's relationship with its trade vendors, general creditors and customers; d. manage the implementation of cost reductions and costing systems; e. assist the Debtor's chief financial officer with cash management procedures, cash flow projections and financial management; f. negotiating with the Debtor's lenders, the Official Committee of Unsecured Creditors, and other parties-in- interest in the Debtor's chapter 11 case; g. negotiate with any potential acquirers or purchasers of assets from the Debtor's estate; h. assist in the development and implementation of a plan of reorganization; and i. perform such other tasks and duties as are directed by the Debtor. The Debtor discloses that the Firm's professional bill: Professional Designation Hourly Rate ------------ ----------- ----------- P. Wollard Harris Partner $425 F. Duffield Meyercord Partner $475 Mel Henson Managing Director $350 Donald Stries Managing Director $350 The Debtor further discloses that the Firm will be paid a fixed fee of $150,000 per month. To the best of the Debtor's knowledge, the Firm is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Hampton, New Hampshire, Foss Manufacturing Company, Inc., -- http://www.fossmfg.com/-- is a producer of engineered, non-woven fabrics and specialty synthetic fibers, for a variety of applications and markets. The Company filed for chapter 11 protection on Sept. 16, 2005 (Bankr. D.N.H. Case No. 05-13724). Andrew Z. Schwartz, Esq., at Foley Hoag LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million. FOSS MANUFACTURING: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Foss Manufacturing Company, Inc., delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the District of New Hampshire, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $49,846,456 C. Property Claimed as Exempt D. Creditors Holding $34,656,764 Secured Claims E. Creditors Holding $342,140 Unsecured Priority Claims F. Creditors Holding $18,420,769 Unsecured Nonpriority Claims ----------- ----------- Total $49,846,456 $53,419,673 Headquartered in Hampton, New Hampshire, Foss Manufacturing Company, Inc. -- http://www.fossmfg.com/-- is a producer of engineered, non-woven fabrics and specialty synthetic fibers, for a variety of applications and markets. The Company filed for chapter 11 protection on Sept. 16, 2005 (Bankr. D.N.H. Case No. 05-13724). Andrew Z. Schwartz, Esq., at Foley Hoag LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million. HOVNANIAN ENT: Earns $165.4 Mil. of Net Income in Fourth Quarter ---------------------------------------------------------------- Hovnanian Enterprises, Inc. (NYSE: HOV) reported net income available to common stockholders of $469.1 million on $5.3 billion in total revenues for the year ended Oct. 31, 2005. Net income available to common stockholders in fiscal 2004 was $348.7 million on total revenues of $4.2 billion. Consolidated deliveries for fiscal 2005 were 16,274 homes with an aggregate sales value of $5.2 billion, compared with consolidated deliveries of 14,586 homes in fiscal 2004 with an aggregate sales value of $4.1 billion, a 27% sales value increase. Homebuilding gross margin, before interest expense included in cost of sales, was 26.4% for fiscal 2005, an increase of 90 basis points from 25.5% on a comparable basis last year. Total stockholders' equity grew 50% to $1.8 billion at Oct. 31, 2005 from $1.2 billion at the end of fiscal 2004. For the three months ended Oct. 31, 2005, total revenues reached $1.8 billion, up 26% compared to $1.4 billion for the year earlier period. Net income available to common stockholders for the fiscal 2005 fourth quarter increased 24% to $165.4 million compared to $133.8 million in the same period a year ago. Compared to the fourth quarter of fiscal 2004, the dollar value of net contracts during the same period in fiscal 2005 increased by 46.4% and the dollar value of home deliveries rose by 35.1%, including contracts and deliveries from unconsolidated joint ventures. "We are very pleased to report yet another year where we achieved record results in a number of categories, including deliveries, revenues, net income and backlog," said Ara K. Hovnanian, President and Chief Executive Officer of the Company. "Given the 5% annual growth of the overall housing market since 2000, our growth rate in deliveries of 30% over the same period of time is indicative of the market share gains that our Company and the other large homebuilders have been achieving, as we continue to take market share from smaller builders. Our market share growth is a result of our two-pronged strategy of driving organic growth through market share gains in our existing markets, while also expanding our geographic footprint through strategic acquisitions. Our organic growth was particularly evident in our Washington, DC operations, where the number of net contracts increased 57% and the dollar value of net contracts rose 75% for the fourth quarter, in each case excluding unconsolidated joint ventures. This was primarily a result of growing our number of active communities and thus taking share from other builders. At the same time, we completed four strategic acquisitions in 2005. The integration of these companies is well underway and has become a core competency of our Company. However, for the full fiscal 2005 year, 91% of our earnings per share growth came from our organic operations. While our acquisitions typically provide healthy cash returns from the outset, the amount of GAAP earnings they contribute grows in later years as we reduce, and eventually eliminate, additional expenses from premium amortization and earnouts relating to the acquisitions," Mr. Hovnanian continued. "While we were able to exceed our most recent EPS projections for the year, the timing of Hurricane Wilma's landfall on Florida at the end of our fiscal year adversely impacted the Company's ability to deliver homes in southeast and southwest Florida during the last 10 days of the fiscal year," Mr. Hovnanian said. "Our earnings would have been higher in our fourth quarter without the impact of these lost deliveries. However, we are pleased that we were able to make up for this impact by exceeding our expectations in other parts of our operations, confirming our belief in the value of having diversified operations. Overall, we are delighted with our performance in 2005, and more importantly we are excited with our land positions and market-leading powers of scale which position us for additional growth in 2006 and beyond," Mr. Hovnanian concluded. "We believe that our more highly-regulated markets, including California, Washington, D.C., and the Northeast are returning to a more normalized level of activity with regard to both sales pace and price increases," said J. Larry Sorsby, Executive Vice President and Chief Financial Officer. "This return to normalcy is a healthy scenario and one in which we believe we can continue performing extremely well. Our internal and public projections have always assumed that sales prices remain flat and the sales pace in each of our communities remains at current levels. Given those assumptions we continue to believe we will be able to grow both our revenues and our earnings per share through further market share gains and increased community counts, while generating strong net returns on our invested capital." "As we enter fiscal 2006, our backlog of almost 15,000 homes with a sales value in excess of $5 billion provides us with excellent visibility for earnings and deliveries during fiscal 2006," Mr. Sorsby said. "We are maintaining our earnings per share projections for 2006 in the range of $8.05 to $8.40 per fully diluted common share. These projections for fiscal 2006 are inclusive of a full year of preferred dividends, and are after amortizing more than $95 million of non-cash pre-tax expenses related to company acquisition premiums. In addition, based on the new GAAP rules, we estimate recognizing for the first time in fiscal 2006 $11.5 million in non-cash employee stock option expense." "While our backlog is strong, a variety of issues are causing a greater back-end weighting of our fiscal 2006 results. Due primarily to the adverse impact of Hurricane Wilma, regulatory delays in California and construction delays caused by labor and material shortages in Arizona and Florida, we project first quarter earnings to be 13% to 16% of our full-year 2006 earnings projection, in the range of $1.10 to $1.25 per fully diluted common share. In fiscal 2005, our first quarter earnings were approximately 17% of our full year earnings," Mr. Sorsby continued. "We ended the year with a net recourse debt-to-capital ratio of 41.7%, well below our long-term target net recourse debt-to- capital ratio of 50%," Mr. Sorsby continued. "At the same time, we repurchased 600,000 shares in fiscal 2005, with 1.5 million shares remaining in our current authorization. It is tempting to repurchase an even greater number of shares given our current low valuation and low P/E multiple; however, we believe current opportunities in the land and housing market allow us to generate greater returns on capital, even in a more normalized sales environment, than repurchasing more stock. In a consolidating market, provided we continue to find investment opportunities that we expect will generate high returns on capital, we feel it is important to continue expansion," Mr. Sorsby concluded. "While our 2005 results benefited from strong housing markets, in many of our more regulated markets in particular, we believe that we are well-positioned with a sound business model that will allow us to continue to thrive even in a less robust housing market," Mr. Hovnanian said. "We are maintaining our discipline when acquiring land for future communities with an emphasis on achieving strong returns, without the benefit of any price increases and with sales paces that are in line with market norms. While the pace of housing demand and price increases may moderate over the short term, we believe that the long-term fundamentals of the housing industry will provide for a healthy environment to profitably grow in 2006 and further into the future," Mr. Hovnanian concluded. Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, Chairman, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Illinois, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Goodman Homes, Matzel & Mumford, Diamond Homes, Westminster Homes, Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders, Great Western Homes, Windward Homes, Cambridge Homes, Town & Country Homes, Oster Homes and First Home Builders of Florida. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. * * * As reported in the Troubled Company Reporter on Aug. 4, 2005, Fitch Ratings has assigned a 'BB+' rating to Hovnanian Enterprises, Inc.'s (NYSE:HOV) $300 million 6.25% senior unsecured notes due Jan. 15, 2016. The Rating Outlook is Stable. The $300 million issue will be ranked on a pari passu basis with all other senior unsecured debt, including Hovnanian's revolving and letter of credit facility. Proceeds from the new debt issues will be used for general corporate purposes. JAMES RIVER: Weak Performance Prompts S&P's Negative Outlook ------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Richmond, Virginia-based James River Coal Co. to negative from stable. At the same time, all ratings, including the 'B' corporate credit rating, on the company were affirmed. "The outlook revision reflects the company's weaker-than-expected performance to date, and concerns that rising raw-material costs and a substantial increase in its capital expenditure plans could result in negative free cash flows and a further erosion of its limited liquidity in 2006," said Standard & Poor's credit analyst Paul Vastola. Capital expenditures in 2006 are now expected to range between $85 million and $88 million compared to an initial expectation of approximately $54 million. The additional spending primarily reflects projects aimed at increasing production by 1.4 million to 1.8 million tons in 2007. Standard & Poor's had previously factored in rating expectations that, because of lower productivity at some of its mines, James River's liquidity would decline to around $30 million from its third quarter level of $49 million but that it would improve later in 2006 as a result of higher price realizations and improved productivity levels. Yet, this will be challenging given rising costs and higher spending levels, and will require successful execution by the company to reach higher production levels to help mitigate its rising raw-material costs and increase its cash flow generation. The rating on James River reflects: * its relatively small size, * high operating costs, * an aggressive capital spending plan, * capital-intensive operations, * an aggressive financial profile, * thin free cash flow prospects despite strong coal prices, and * concerns about tightening liquidity. With annualized third-quarter 2005 production of approximately 13 million tons, James River is a relatively small coal producer with about two thirds of production located in the difficult operating environment of Central Appalachia. James River emerged from bankruptcy in May 2004 with its Central Appalachian assets. Subsequently, the company acquired mining assets located in the Illinois coal basin on May 31, 2005, that currently account for approximately one third of production. However, the amount of coal reserves associated with the Illinois basin mines is low and only expected to last five years. James River will need to acquire additional reserves or mineral rights under economically feasible arrangements and attain mining permits to continue mining beyond this time frame. JP MORGAN: Fitch Affirms Low-B Ratings on $48 Mil. Cert. Classes ---------------------------------------------------------------- Fitch Ratings upgrades J.P. Morgan Chase Commercial Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2002-CIBC4: -- $32 million class B to 'AAA' from 'AA'; -- $34 million class C to 'A+' from 'A'; -- $10 million class D to 'A' from 'A-'. In addition, Fitch affirms these classes: -- $12.7 million class A-1 at 'AAA'; -- $165 million class A-2 at 'AAA'; -- $403.2 million class A-3 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $24 million class E at 'BBB'; -- $12 million class F at 'BBB-'; -- $14 million class G at 'BB+'; -- $12 million class H at 'BB'; -- $4 million class J at 'BB-'; -- $6 million class K at 'B+'; -- $8 million class L at 'B'; -- $4 million class M at 'B-'. Fitch does not rate the $8.8 million class NR certificates. The rating upgrades are due to defeasance and paydown since issuance. Ten loans have defeased, including three of the top 10 loans. In addition, as of the November 2005 distribution date, the pool has paid down 6.2% to $749.5 million from $798.9 million at issuance. Fitch reviewed the performance of the deal's credit assessed loan and its underlying collateral, the Highland Mall. The Fitch stressed debt service coverage ratio for the loan is calculated using Fitch adjusted net cash flow divided by a Fitch stressed debt service payment. Based on its stable performance, the loan maintains an investment grade credit assessment. The Highland Mall, the largest loan in the pool, is secured by a leasehold interest in 487,170 square feet of a 1,100,000 square foot regional mall located in Austin, Texas. Mall shop occupancy, which includes an 80,000 sf Dillard's Men's and Children's store, declined to 87.5% as of September 2005 from 94.9% at issuance due largely to 2005 lease rollover. Despite the decline in occupancy, the June 30, 2005 Fitch stressed DSCR is 1.41 times, stable with issuance. There are currently no delinquent or specially serviced loans. JP MORGAN: S&P Assigns Low-B Ratings to $78.7 Mil. Class Certs. --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to J.P. Morgan Chase Commercial Mortgage Securities Corp.'s $4.2 billion commercial mortgage pass-through certificates series 2005-LDP5. The preliminary ratings are based on information as of Dec. 8, 2005. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Class A-1, A-2, A-3, A-4, A-SB, A-1A, A-M, A-MFL, A-J, B, C, D, E, F, and X-2 are currently being offered publicly. Standard & Poor's Ratings Services' analysis of the portfolio determined that, on a weighted average basis, the pool has a debt service coverage of 1.41x, a beginning LTV of 98.1%, and an ending LTV of 89.7%. Unless otherwise indicated, pool balances and statistics do not include six B notes that have not been contributed to the trust, but are related to A/B loans having A notes included in the pool. A copy of Standard & Poor's complete presale report for this transaction can be found on RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/ The presale can also be found on Standard & Poor's Web site at http://www.standardandpoors.com/ Select Credit Ratings, and then find the article under Presale Credit Reports. Preliminary Ratings Assigned J.P. Morgan Chase Commercial Mortgage Securities Corp. Recommended Class Rating Amount credit support ----- ------ ------ -------------- A-1 AAA $250,727,000 30.000% A-2 AAA $497,502,000 30.000% A-3 AAA $171,451,000 30.000% A-4 AAA $1,394,695,000 30.000% A-SB AAA $169,706,000 30.000% A-1A AAA $453,417,000 30.000% A-M AAA $319,643,000 20.000% A-MFL AAA $100,000,000 20.000% A-J AAA $298,995,000 12.875% B AA+ $26,228,000 12.250% C AA $73,437,000 10.500% D AA- $41,965,000 9.500% E A+ $20,982,000 9.000% F A $52,455,000 7.750% G A- $36,719,000 6.875% H BBB+ $52,455,000 5.625% J BBB $41,965,000 4.625% K BBB- $62,946,000 3.125% L BB+ $26,228,000 2.500% M BB $15,736,000 2.125% N BB- $15,737,000 1.750% O B+ $5,245,000 1.625% P B $5,246,000 1.250% Q B- $10,491,000 1.000% NR NR $52,455,779 N/A X-1* AAA $4,196,426,779 N/A X-2* AAA $4,112,135,000 N/A HG-1 NR $28,000,000 N/A HG-2 NR $24,000,000 N/A HG-3 NR $40,800,000 N/A HG-4 NR $32,400,000 N/A HG-5 NR $5,800,000 N/A *Interest-only class with a notional dollar amount. NR - Not rated. N/A - Not applicable. KANSAS CITY: Prices $210 Million of 5-1/8% Perpetual Pref. Stock ---------------------------------------------------------------- Kansas City Southern (NYSE:KSU) has priced a public offering of $210 million of its 5-1/8% cumulative convertible perpetual preferred stock at its liquidation preference of $1,000 per share. KCS expects the issuance and delivery of the shares to occur on Dec. 9, 2005. The offering is being made under the company's existing shelf registration statement. KCS intends to use substantially all the net proceeds from the offering to purchase 9 million shares of its common stock formerly owned by Grupo TMM, S.A., its largest shareholder, at a price per share equal to the net proceeds per share before expenses that Grupo TMM receives for 9 million shares of Kansas common stock offered concurrently by Grupo TMM. The annual dividend on each share of preferred stock will be $51.25 and will be payable quarterly in cash, common stock or a combination thereof, when, as and if declared by the company's board of directors, on the fifteenth day of each February, May, August and November, to holders of record as of the first day of the payment month, commencing on Feb. 15, 2006. Each share of preferred stock will be convertible at any time at the option of the holder into 33.3333 shares of KCS common stock, which is based on an initial conversion price of $30 per common share. The conversion price is subject to customary adjustments in certain circumstances. Morgan Stanley was the sole book-running manager for the offering. This offering is being made only by means of a prospectus. Copies of the preliminary prospectus and records relating to the offering may be obtained from: The Offices of Morgan Stanley Prospectus Department 180 Varick Street New York, New York 10014 or by email to prospectus@morganstanley.com Headquartered in Kansas City, Missouri, Kansas City Southern is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holdings include The Kansas City Southern Railway Company and Texas Mexican Railway Company, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, serving northeastern and central Mexico and the port cities of Lazaro Cardenas, Tampico and Veracruz, and a 50% interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Canada and Mexico. * * * As reported in yesterday's Troubled Company Reporter, Standard & Poor's Ratings Services assigned a preliminary 'BB-' senior secured rating, a preliminary 'B+' senior unsecured rating, and a preliminary 'B-' preferred stock rating to Kansas City Southern's (BB-/Stable/--) universal shelf registration. At the same time, Standard & Poor's assigned its 'B-' rating to the company's $210 million cumulative perpetual preferred stock issue. The preferred stock is being used to repurchase the shares of Kansas City Southern common stock recently sold by Grupo TMM S.A. The Kansas City, Missouri-based freight railroad has about $1.8 billion of lease-adjusted debt. KKR FINANCIAL: Moody's Rates $10 Million Class F Rate Notes at B2 ----------------------------------------------------------------- Moody's Investors Service assigned ratings to notes issued by KKR Financial CLO 2005-2, Ltd. on November 3, 2005. These ratings were assigned: * Aaa to the U.S. $ 545,000,000 Class A-1 Senior Secured Floating Rate Notes, Due 2017; * Aaa to the U.S. $ 150,000,000 Class A-2 Senior Secured Delayed Draw Floating Rate Notes, Due 2017; * Aa2 to the U.S. $ 57,000,000 Class B Senior Secured Floating Rate Notes, Due 2017; * A2 to the U.S. $ 64,000,000 Class C Deferrable Mezzanine Secured Floating Rate Notes, Due 2017; * Baa2 to the U.S. $ 64,000,000 Class D Deferrable Mezzanine Floating Rate Notes, Due 2017; * Ba2 to the U.S. $ 30,000,000 Class E Deferrable Mezzanine Floating Rate Notes, Due 2017; and * B2 to the U.S. $ 10,000,000 Class F Deferrable Mezzanine Floating Rate Notes, Due 2017. The ratings of the classes of notes are based on the expected losses posed to the noteholders relative to the promise of receiving the present value of all required interest and principal payments. The ratings take into account the risk of diminishment of cash flows due to defaults in the underlying pool of assets, which consist primarily of senior secured loans. The transaction is managed by KKR Financial Advisors II, LLC. LBREP/L SUNCAL: S&P Assigns Low-B Ratings on $320 Mil. Sr. Loans ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issuer credit rating to LBREP/L SunCal Master I LLC. At the same time, a 'BB-' bank loan rating with a '1' recovery rating is assigned to a $75 million first-lien senior secured revolving credit facility due 2008 and a $160 million first-lien senior secured tern loan due 2009. Additionally, a 'B+' bank loan rating with a '2' recovery rating is assigned to an $85 million second-lien senior secured term loan due 2010. The outlook is stable. "The ratings primarily reflect the risk that the timing and ultimate proceeds from the sale of the residential lots securing these loans could be adversely affected by construction delays and/or softening market conditions," said credit analyst James Fielding. "Business interruption caused by seismic or other natural events, or delays related to entitlement or other construction delays, could render EBITDA insufficient to pay interest and principal when due. Additionally, EBITDA could be similarly affected by a correction in California's cyclically high housing prices. However, unlike single asset project financings, these risks are spread among four communities in southern California, and the project manager has established a long and successful track record in that state. Furthermore, anticipated debt levels are lower than similar land financings, which materially enhance recovery prospects in the event of a default." The stable outlook acknowledges SunCal's: * historical success in navigating California's onerous regulatory processes, * flexibility for modest cash flow diminution, and * the presently favorable housing supply and demand imbalance in Southern California. The borrower's credit profile could improve materially in the latter half of 2008 after substantial infrastructure improvements have been completed, lot sales accelerate, and first-lien debt balances are repaid. MERIDIAN AUTOMOTIVE: Court Approves Stipulation With CIT Group -------------------------------------------------------------- In consensual resolution of The CIT Group/Equipment Financing, Inc.'s request, the parties stipulate and agree that: (1) Meridian Automotive Systems, Inc. and its debtor- affiliates will pay CIT all postpetition amounts owing under their commercial lease agreements with CIT, or any extension, as they become due and payable pursuant to the terms of the Commercial Leases, until the Debtors surrender the Equipment to CIT, or its designated agent; (2) the Debtors will surrender the Equipment to CIT, or its designated agent, at a date which is mutually agreeable to the parties, at which time the Debtors will have no further interest in the Equipment; (3) upon surrender of the Equipment, CIT will be deemed to have relief from the automatic stay solely for the limited purpose of selling or otherwise disposing of the Equipment in their discretion and without further Court order; (4) upon return of all of the Equipment, the Debtors will have no further obligations with respect to the Equipment, and no further obligations to make any payments under the Commercial Leases, which will then be of no further force and effect. Judge Walrath approves the parties' Stipulation. CIT's request is deemed withdrawn. 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: S&P Places Low-B Ratings on Six Certificate Classes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary ratings to Merrill Lynch Mortgage Trust 2005-LC1's $1.546 billion commercial mortgage pass-through certificates series 2005-LC1. The preliminary ratings are based on information as of Dec. 8, 2005. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Classes A-1, A-2, A- 2FL, A-3, A-3FL, A-1A, A-SB, A-4, AM, AJ, B, C, and D are currently being offered publicly. The remaining classes will be offered privately. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.34x, a beginning LTV of 99.9%, and an ending LTV of 88.2%. Preliminary Ratings Assigned Merrill Lynch Mortgage Trust 2005-LC1 Recommended Class Rating Amount ($) credit support (%) ----- ------ ---------- ------------------ A-1 AAA 51,000,000 30.000 A-2 AAA 52,423,500 30.000 A-2FL AAA 52,423,500 30.000 A-3 AAA 81,333,500 30.000 A-3FL AAA 81,333,500 30.000 A-1A AAA 225,100,000 30.000 A-SB AAA 88,067,000 30.000 A-4 AAA 450,698,000 30.000 A-M AAA 154,625,000 20.000 A-J AAA 94,708,000 13.875 B AA 32,858,000 11.750 B AA- 15,463,000 10.750 D A 28,992,000 8.875 E A- 15,463,000 7.875 F BBB+ 25,126,000 6.250 G BBB 19,329,000 5.000 H BBB- 21,261,000 3.625 J BB+ 7,731,000 3.125 K BB 5,798,000 2.750 L BB- 5,799,000 2.375 M B+ 5,798,000 2.000 N B 5,799,000 1.625 P B- 3,865,000 1.375 Q NR 21,261,942 0.000 X AAA 1,546,225,942* N/A * Notional dollar amount NR -- Not rated N/A -- Not applicable MESABA AVIATION: Court OKs Stipulation with Airline Clearing ------------------------------------------------------------ As previously reported in the Troubled Company Reporter, Airline Clearing House, Inc., proposed to execute a stipulation with Mesaba Aviation, Inc., to clarify each party's obligations in connection with the assumption of the Clearinghouse Agreement. To comply with the Stipulation, the Debtor asked the Court to modify the automatic stay so it and ACH may perform under the Clearinghouse Agreement, including the use of a deposit. In an amended motion, the Debtor asks the U.S. Bankruptcy Court for the District of Minnesota to modify the automatic stay to also allow JPMorgan Chase, ACH's designated bank, and other Clearinghouse participants to perform under the Clearinghouse Agreement. Furthermore, the Debtor seeks the Court's permission to honor certain prepetition obligations and to continue honoring, performing and exercising its rights and obligations in the ordinary course of business. * * * The Court authorizes the Debtor to execute the Stipulation with Airline Clearing House, Inc. The Court rules that the restoration of the Debtor's full participation as an Associate Member of Airlines Clearing House will be in accordance with the terms agreed to by the parties in the Stipulation. Furthermore, the Court modifies the automatic stay to the extent necessary to enable the Debtor, Clearing House and the Clearing House participants to participate in routine Clearing House settlements involving billings submitted by and against the Debtor in the ordinary course of business and in accordance with the Clearinghouse Agreement. The Hon. Gregory F. Kishel makes it clear that the Order is not an authorization of the transfer of property of the estate for purposes of Section 549(a) of the Bankruptcy Code. Mesaba Aviation, Inc., d/b/a Mesaba Airlines,-- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT NORTH: Fitch Likely to Put Low-B Ratings on $2.4 Bil. Debts ------------------------------------------------------------------ Fitch Ratings expects to assign a 'BB' rating to Mirant North America, LLC's proposed six-year $800 million secured revolving credit facility and $700 million seven-year secured term loan and a 'BB-' rating to MNA's proposed issuance of $850 million unsecured notes with maturities of eight years. In addition, Fitch assigns an expected 'BB+' rating to Mirant Mid-Atlantic, LLC's outstanding $970 million pass-through certificates and a 'B' expected rating to Mirant Americas Generation, LLC's existing $1.7 billion senior unsecured notes, which will be reinstated upon Mirant Corp.'s emergence from bankruptcy. Finally, Fitch has assigned an issuer default rating of 'B+' to the reorganized MIR and its subsidiaries MNA, MIRMA, and MAG, as well as recovery ratings for the both the proposed and reinstated debt instruments. The Rating Outlook is Stable. The ratings of MIR and the debt of its subsidiaries MAG, MNA, and MIRMA assume a revised corporate and debt structure that is expected to be in place upon emergence from bankruptcy. On a postbankruptcy basis, MIR's consolidated debt will be significantly less at $5.4 billion versus a pre-emergence level of $11.2 billion. Upon emergence from bankruptcy, current holders of MIR parent company debt will be given MIR common stock in satisfaction of their claims. Holders of prepetition MAG bank debt or notes with maturities prior to 2011 will receive $1.35 billion in cash or new debt and 2.3% of MIR's common equity. Three issues of MAG debt totaling $1.7 billion with maturities in 2011 and beyond will be reinstated. Upon emergence from Chapter 11, MIR and its subsidiaries will be structured: -- MIR will continue to be the ultimate parent holding company for all domestic and international operations. MIR will not initially be capitalized with external debt; -- Mirant Americas Inc will continue to be a first tier holding company under MIR for the group's domestic operations. MAI directly owns interests in four generating facilities and a 100% interest in MAG, which, in turn, owns the bulk of the company's domestic generating assets; -- Upon emergence, a new intermediate holding company, MNA, will be established between MAG and the ultimate subsidiaries/assets, including MIRMA. The most significant effect of the establishment of MNA is that MAG debtholders will be structurally subordinate to debt at MNA; -- MIR's marketing and trading arm, Mirant American Energy Marketing, will become a subsidiary of MNA. The 'B+' IDR assigned to MIR and its subsidiaries recognizes the group's improved postbankruptcy capital structure and strong cash flow generated from a merchant fleet with diverse fuel and geographic characteristics. At the same time, prospective leverage remains high, especially considering the above-average business risk profile and cash flow volatility embedded in MIR's U.S. merchant generating activities. Fitch notes that MIR's standalone credit quality also benefits from roughly $450 million of annual EBITDA generated by its international investments located in the Philippines and the Caribbean, most of which have long-term contracts or are vertically integrated utilities. After satisfying project level debt, these international activities can provide upstream cash distributions to MIR. Unlike its foreign operations, few of MIR's domestic generating assets have long-term contracts thus exposing the company to commodity price risk and volatility in earnings and cash flow. However, the company's efficient coal assets, especially those in the PJM are benefiting from the current high natural gas price scenario. The 'BB+' rating assigned to MIRMA's outstanding certificates reflects the strong recovery prospects of these securities as well as their primary claim on lease payments for the Morgantown and Dickerson generating facilities. These efficient coal-fired plants are considered to be among MIR's strongest performing domestic assets and, along with MIRMA's other facilities, are expected to represent roughly 70% of the MIR's domestic EBITDA during 2005. Fitch notes that the certificates remained outstanding during the bankruptcy, as the issuers were trusts affiliated with the owners of the plants and not MIRMA itself. Throughout the bankruptcy, MIRMA made sufficient rent payments to ensure the timely payment of amounts due to certificateholders. The MIRMA certificates have several structural elements that enhance recoveries for certificateholders, including a fixed-charge coverage test that must be met before funds can be distributed to the parent, a debt service reserve fund, and a limitation on additional debt. MNA's proposed $800 million revolving credit facility and $700 million term loan will be secured by a primary lien on MNA's equity ownership in MIRMA and the trading subsidiary, as well as a direct lien on other assets held by MNA, which include 6,786 MW of generating capacity. MNA's capital structure is also expected to include $850 million of senior unsecured debt. MNA bank and unsecured note documents contain covenants that enhance recovery, most notably cash sweeps and restriction on dividends to MAG. Fitch has determined that the residual value of the MIRMA operations available to MNA as well as that of MNA's other assets are expected to allow MNA's secured and unsecured debtholders 100% recovery in the event of default. MNA's proposed unsecured notes are rated 'BB-', one notch above the IDR, because of this high recovery level. The secured debt is rated 'BB' due to its seniority to the MNA unsecured debt. The 'B' rating for the reinstated senior unsecured MAG debt is one notch below the IDR due to MAG's high individual debt leverage and the structural subordination to the debt obligations of both MIRMA and MNA and reflects Fitch's estimate that recovery of MAG debt could be below 50% in the event of default. Fitch's 'B+' IDR for MAG recognizes the $150 million preferred stock backstop from MAI, which covers roughly one year of MAG's projected interest payments. Specifically, MAI plans to issue two series of intercompany preferred stock instruments that are designed to ensure credit support by the parent for interest payments of $150 million at MAG debt and the construction of pollution control facilities of $265 million at MIRMA. If MAI defaults on the preferred stock, the instruments can be put to MIR. Mirant Corp., through its subsidiaries is engaged in the generation and sale of electricity in the wholesale power markets in the U.S. Additionally, MIR has interests in power projects and vertically integrated utilities in the Philippines and the Caribbean. Recovery ratings are by Fitch: Mirant Mid-Atlantic LLC -- Pass-through certificates 'RR1'. Mirant North America, Inc. -- Senior secured bank debt 'RR1'; -- Senior unsecured notes 'RR1'. Mirant Americas Generation, LLC -- Senior unsecured notes 'RR5'. NORTHWEST AIRLINES: Board OKs Aircraft Makers' Restructured Pacts ----------------------------------------------------------------- The Board of Directors for Northwest Airlines (OTC: NWACQ) approved agreements reached with Airbus and Pratt & Whitney for the two manufacturers to continue delivery and financing of all of the remaining 14 A330-300 and A330-200 aircraft that Northwest has on order. The agreements, filed on Dec. 7 in the U.S. Bankruptcy Court for the Southern District of New York, are subject to approval by the Bankruptcy Court, as well as certain other conditions. During its restructuring, Northwest is reducing labor costs, strengthening its balance sheet and optimizing its fleet to more effectively compete in an increasingly competitive environment. "The A330 is the most modern, fuel-efficient jet in Northwest's international fleet, and as such, it is a vital part of securing our future," President and CEO Doug Steenland said. "The continued financing agreements with Airbus and Pratt & Whitney will ensure that Northwest can continue to meet customer needs by offering a wide-ranging international route system." Airbus has agreed to finance 10 of the 14 A330s, and Pratt & Whitney will finance the other four. The aircraft are scheduled to become part of Northwest's fleet during 2006 and 2007. Terms of the agreements were not disclosed. "Airbus is pleased to have reached agreement with Northwest Airlines to participate in their global restructuring efforts," said Gustav Humbert, Airbus president and CEO. "NWA has been a strong, long-term Airbus business partner, and our participation demonstrates the value we place on that relationship." Northwest currently operates a fleet of 11 A330-300 aircraft on trans- Atlantic routes and seven A330-200 aircraft on trans- Pacific and intra-Asia routes. All of Northwest's A330 aircraft are equipped with the airline's lie-flat World Business Class seats, which offer 176 degrees of recline, more degrees of recline than any other U.S. airline's competing product, as well as an array of innovative comforts and features. Customers in both cabins of Northwest's A330 aircraft also enjoy a state-of-the-art in-flight entertainment system, featuring a wide variety of audio and video entertainment, all available on demand. The A330 also provides Northwest with significant maintenance savings and up to 30 percent in fuel savings over the DC10-30 aircraft it is replacing. The A330 possesses a similar flight deck and systems as Northwest's Airbus A319/A320 fleet, which also helps contain training expenses for the airline. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. NORTHWEST AIRLINES: PFAA Urges CEO to Sign "Bill of Rights" ----------------------------------------------------------- The Professional Flight Attendants Association urged Northwest Airlines President and Chief Executive Officer Doug Steenland to sign an "Airline Bill of Rights" in an effort to make NWA executives responsible to stakeholders of the airline. The "Airline Bill of Rights" challenges Mr. Steenland and his executives to join employees in offering the company realistic concessions in order to fly the carrier out of bankruptcy, and also serves as an outline for management accountability. In a letter issued on Dec. 9, 2005, to Mr. Steenland, PFAA President Guy D. Meek reminded the CEO of past and continuing sacrifices the NWA Flight Attendant group and others have made to support Northwest Airlines. "Last month, Northwest Flight Attendants sacrificed again to save this company from liquidation. Flight Attendants took the incredible step of temporarily providing the equivalent of $117 million in temporary annual wage reductions to the company while this company emerges from bankruptcy," Meek wrote. "Northwest Flight Attendants are not alone in their forfeitures to your executive team. Creditors, investors and passengers have all been asked to forego money, service and conveniences. Hub cities, as well as state and federal governments have invested greatly in Northwest Airlines are now facing future service cutbacks, loss of community jobs to foreign countries, and reduction of tax revenue." Meek noted that in return for all the sacrifices made on behalf of the airline that management must too participate in concessions to demonstrate their long-term commitment, and worthiness, to Northwest and its employees. "It would be outrageous for NWA management to exploit this crisis and profit while employees suffer and hurt," Meek said. The "Airline Bill of Rights" calls for Steenland to reassess a scheme that would allow the outsourcing of the positions of many loyal, long-term employees to foreign-based employees and other foreign nationals (including more than 2,500 Flight Attendants). PFAA represents the nearly 10,000 U.S.-based NWA Flight Attendants, who ensure the highest levels of safety, security and service on the carrier's hundreds of daily flights around the world. NORTHWEST AIRLINES: Committee Taps FTI as Financial Advisors ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Northwest Airlines Corp. and its debtor-affiliates seeks the U.S. Bankruptcy Court for the Southern District of New York's authorization to retain FTI Consulting, Inc., to perform financial advisory services to the Committee effective as of October 6, 2005. R. Douglas Greco, Esq., chairperson of the Committee, tells the Court that FTI's services are necessary to enable the Committee to assess and monitor the efforts of the Debtors and their professional advisors to maximize the value of their estates and reorganize successfully. As advisor to the Committee, FTI will: (a) assist the Committee in the review of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; (b) review the Debtors' short-term cash management procedures; (c) review the Debtors' employee benefit programs, including key employee retention, incentive, pension and other post-retirement benefit plans; (d) assist and advise the Committee with respect to the Debtors' identification of core business assets and the disposition of assets or liquidation of unprofitable operations; (e) review the Debtors' performance of cost/benefit evaluations with respect to the affirmation or rejection of various executory contracts and leases; (f) assist in the evaluation of the Debtors' operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; (g) review financial information distributed by the Debtors, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analyses, analyses of various asset and liability accounts, and analyses of proposed transactions for which Court approval is sought; (h) assist the Committee with information and analyses, as it relates to the other services, required pursuant to any DIP financing including, but not limited to, preparation for hearings regarding the use of cash collateral and any DIP financing; (i) attend meetings and assist in discussions with the Debtors, potential investors, banks, other secured lenders, the Committee and any other official committees organized in the Debtors' Chapter 11 proceedings, the U.S. Trustee, other parties-in-interest and professionals hired by the Committee, as requested; (j) assist in the review and preparation of information and analysis, as it relates to the other services, necessary for the confirmation of a plan in the Debtors' Chapter 11 proceedings; (k) assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; and (1) assist in various tax matters including, but not limited to, the impact of the Debtors' claims and equity trading and tax issues related to a plan of reorganization; (m) provide litigation advisory services with respect to accounting and tax matters, along with expert witness testimony on case related issues as required by the Committee; and (n) render other general business consulting or other assistance as the Committee or its counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in this proceeding. FTI will be paid $275,000 per month, plus reimbursement of actual and necessary expenses it incurs. FTI reserves the right to request a success or completion fee, which will be subject to approval by both the Committee and the Court. Samuel Star, senior managing director at FTI, discloses that the firm was retained in 2004 by Boise Schiller & Flexner, LLP, on behalf of Northwest Airlines, Inc., in an antitrust matter before the United States District Court for the District of Minnesota. A nominal amount of work was performed in 2004, which was not, and will not be, billed. FTI will not perform any work in connection with this matter during the Debtors' Chapter 11 proceedings, Mr. Star assures the Court. FTI has also been involved with other litigation matters in the airline industry. In addition, Anna Schaefer who will become the Debtors' vice president of finance and chief accounting officer, effective December 1, 2005, is the sister of one of FTI's non-management employees within our administrative support practice. That employee, however, has no access to client information and in no way is involved with the Debtors' Chapter 11 proceedings or the FTI engagement team serving the Committee. George P. Stamas, Esq., a partner at Kirkland & Ellis, is currently a member of FTI's Board of Directors. Mr. Stamas is not involved with the Kirkland & Ellis team in the Debtors' Chapter 11 proceedings, nor does Mr. Stamas have any professional involvement in this matter in any capacity. Mr. Star tells the Court that FTI is not a "Creditor" with respect to fees and expenses of any of the Debtors within the meaning of Section 101(10) of the Bankruptcy Code. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: IAA Wants Stay Lifted to Set Off Mutual Debts ----------------------------------------------------------------- Ben T. Caughey, Esq., at Ice Miller, in Indianapolis, Indiana, tells the U.S. Bankruptcy Court for the Southern District of New York that the Debtors have used, and continue to use, certain of the Indianapolis Airport Authority's facilities in the operation of their businesses by, among other things: (a) causing passenger aircraft to land at and takeoff from the Indianapolis International Airport; (b) using Airport terminal space, including gates, offices, baggage and ramp areas; (c) using non-terminal space, like cargo areas and aircraft parking spaces; and (d) using Airport equipment, including common use baggage handling equipment and check-in equipment. Northwest Airlines Corp. and its debtor-affiliates owe the IAA less than $680,185 for services provided by the Airport prior to the Petition Date and for the Debtors' use of the Airport's facilities. As of the Petition Date, the IAA owed the Debtors certain amounts related to prepetition credits accrued. Mr. Caughey says an Air Service Credit was provided to the Debtors as a part of a marketing and incentive program and in recognition of their service to new target markets. The application of the Credit began in November 2004, and $159,097 of the credit remains as of the Petition Date. In addition, a Jetway Modification Credit was provided to the Debtors to enable them to complete jetway modifications to accommodate regional jets. The application of the Credit began in May 2005 and $188,429 of the Credit remains as of the Petition Date. Pursuant to Sections 553 and 362 of the Bankruptcy Code, the IAA asks the Court to lift the automatic stay to set off the parties' mutual obligations. Mr. Caughey asserts that the set-off will not unfairly prejudice the Debtors or any of their creditors. He notes that the IAA and the Debtors are standing in their same capacities, as they both have a claim and are indebted to the other, and the relevant claims between the parties arose prepetition. Moreover, the parties' claims and debts are valid and enforceable. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) PALOMAR ENTERPRISES: Posts $395K Net Loss in Third Quarter ---------------------------------------------------------- Palomar Enterprises, Inc., reported a 69% decline in net loss for the third quarter of 2005, from a $1,297,626 net loss incurred in the period ended Sept. 30, 2004, to a $395,868 net loss for the period ended Sept. 30, 2005. Total net sales and revenue were at $142,194 for the three months ending Sept. 30, 2005 compared to $126,829 for the prior period. This represents an increase of approximately 12%. The Company's balance sheet showed $2,270,905 in total assets at Sept. 30, 2005, and liabilities of $1,692,301. As of Sept. 30, 2005, the Company had a $415,422 working capital deficiency. Going Concern Doubt Epstein, Weber & Conover, PLC, expressed substantial doubt about Palomar'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 material net losses for the year ended Dec. 31, 2004. About Palomar Enterprises Headquartered in Carson City, Nevada, Palomar Enterprises, Inc. -- http://www.palomarenterprises.com/-- is a real estate brokerage firm, licensed with the California Department of Real Estate. The Company employs several top agents, specializing in Southern California Coastal properties. Revenue is generated through commissions on the sale and purchase of residential and commercial properties. Palomar Enterprises also provides clients with mortgage loans to purchase their property and has professional affiliations with several large lending institutions, such as World Savings Bank, Flagstar Bank, Countrywide, Provident and several others. Revenue is generated from commissions derived from the origination and processing of every mortgage loan. PATHMARK STORES: Moody's Lowers $350 Million Notes' Rating to Caa2 ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of Pathmark Stores Inc., including the Corporate Family Rating to B3, and continued the negative outlook. The rating downgrade was prompted by Moody's concerns that the intensity of grocery retailing competition in the company's limited trade area will continue to challenge Pathmark's ability to improve sales and profitability, making free cash flow deficits likely over the intermediate term. The negative outlook reflects the possibility, in Moody's view, that the company's merchandising and storing initiatives may take time to yield the returns necessary to stabilize credit metrics. Ratings lowered: * Corporate Family Rating (previously Senior Implied Rating) to B3 from B2 * $350 million guaranteed 8.75% Senior Subordinated Notes (2012) to Caa2 from Caa1 The new rating level reflects Moody's concern that revenues and profit margins are unlikely to improve in the near term given the intense competition in the company's geographically limited trade area between New York City and Philadelphia. Same store sales fell 0.6% in the recent third quarter and 0.8% in first nine months of fiscal 2005 due to reduced customer traffic. The company has initiatives to improve merchandising by expanding perishable assortments, and to make its stores easier to shop. The implementation of perishable strategy resulted in a $4.9 million increase in shrink in the third fiscal quarter. EBITDA, before $9.4 million of one-time charges but including the higher shrink level, fell to $83.6 million or 2.8% of sales for the first 39 weeks of fiscal 2005, down from nearly $102 million or 3.4% in the prior year's period. Given expected 2005 capital expenditures of $70 million (including property acquired under leases), its annual interest bill, and possible working capital needs, the company may not be self-funding in the near future. However, the ratings also acknowledge Pathmark's status as a well- recognized supermarket operator in its trade areas, potential operating efficiencies from relatively high sales per square foot, and the progress made in updating its store base. The company has sufficient current liquidity in terms of cash and marketable securities at the end of the third quarter of $83.7 million. In addition, Pathmark has an unrated senior secured bank facility composed of a $180 million revolving credit agreement and $70 million term loan, both maturing in October 2009. Covenants include the requirement that the company maintain a ratio of credit extensions to consolidated EBITDA at or below 1.9 times. Based on that covenant, the company's availability under its revolving credit was $86 million at the end of the third fiscal quarter. Liquidity was significantly enhanced in June 2005 when Pathmark issued common equity of $137.5 million, net of $12.5 million of costs, to Yucaipa Companies LLC and certain of its affiliated investment funds. Pathmark used $40.3 million of net proceeds to pay down outstandings under its revolving credit and $23.3 million to defease mortgage borrowings. The continued negative outlook is based on Moody's view that sales and profit margins could decline further in a highly competitive environment, as the company's strategic initiatives take time to generate expected returns. Ratings could be lowered again: * if the company fails to stem the erosion in same store sales and profitability; * if operating cash flow does not improve so as to allow Pathmark to be reliably self-funding in the near term; or * if working capital becomes a significant use of cash. Conversely, the ability to internally finance debt payments and an adequate capital investment program, stabilize its market share, provide evidence that its strategic initiatives are likely to boost sales and profit margins, and improve debt protection measures (such that lease adjusted debt to EBITDAR stabilizes at no more than 5.5 times and fixed charge coverage approaches 1.0 time) could cause the rating outlook to stabilize. The rating on the $350 million senior subordinated notes reflects the subordination of this debt to significant amounts of more senior secured obligations. Contractually senior claims include the $250 million bank credit facilities, and $183.6 million of capital lease obligations. The senior subordinated notes are also effectively junior to approximately $115 million of trade accounts payable. The majority of revenue and assets are located in the issuing entity, and almost all operating subsidiaries guarantee the notes and the company's bank agreement. Pathmark Stores, Inc., with headquarters in Carteret, New Jersey, operates 142 supermarkets around the New York City and Philadelphia metropolitan areas. The company generated revenue of approximately $4.0 billion for the twelve months ended October 29, 2005. PAXSON COMMS: Proposes $1.1 Billion Senior Secured Debt Offering ---------------------------------------------------------------- Paxson Communications Corporation (AMEX:PAX) intends to offer under Rule 144A: -- up to $700 million aggregate principal amount of its Floating Rate First Priority Senior Secured Notes due 2012; and -- approximately $430 million aggregate principal amount of its Floating Rate Second Priority Senior Secured Notes due 2013. The proceeds of the offering will be used to provide the funds necessary to purchase or redeem, in connection with a cash tender offer commenced by the Company on Nov. 30, 2005: -- $365 million outstanding principal amount of the Company's Senior Secured Floating Rate Notes due 2010; -- approximately $496.3 million outstanding principal amount at maturity of the Company's 12-1/4% Senior Subordinated Discount Notes due 2009; and -- $200 million outstanding principal amount of the Company's 10-3/4% Senior Subordinated Notes due 2008, and pay related fees and expenses. The simultaneous completion of the tender offer is one of the conditions to the offering. The Company anticipates completing the offering in December 2005. Paxson Communications Corporation -- http://www.paxson.com/-- owns and operates the nation's largest broadcast television station group. Paxson reaches 83% of U.S. television households via nationwide broadcast television, cable and satellite distribution systems. * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Moody's Investors Service assigned a B2 rating to Paxson Communications Corporation's $700 million of proposed first lien senior secured floating rate notes due 2012 and a B3 rating to $430 million of proposed second lien senior secured floating rate notes due 2013. Additionally, Moody's lowered the corporate family rating to B3 from B2 and affirmed the company's other existing ratings. Moody's said the outlook is now stable. PAXSON COMM: S&P Junks Planned $1.13 Bil. Sec. Floating Rate Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'CCC+' rating to Paxson Communication Corp.'s proposed $700 million first-lien secured floating-rate notes. Standard & Poor's also assigned a 'CCC-' rating to Paxson's proposed $435 million second-lien secured floating-rate notes. Proceeds from the proposed offerings are expected to be used to refinance existing debt. The 'CCC+' long-term and 'C' short-term corporate credit ratings on Paxson were affirmed. The outlook is negative. The TV broadcaster had approximately $1.1 billion in debt outstanding at Sept. 30, 2005, pro forma for the proposed transaction. "The rating on Paxson," said Standard & Poor's credit analyst Alyse Michaelson Kelly, "reflects high financial risk because of the company's limited liquidity, its onerous debt and preferred stock burden, its weak EBITDA and negative discretionary cash flow, and weak audience ratings for its entertainment programming." Paxson's challenges are exacerbated by competition from well-capitalized rivals and the persistence of TV duopoly and newspaper/broadcaster ownership rules that have hampered its ability to sell assets or the entire company. "These factors are minimally offset by the company's valuable programming distribution platform and fairly resilient station asset values," added Ms. Kelly, "and its transition to lower cost long-form programming and away from expensive entertainment programming." PONDEROSA PINE: Brazos & JPMorgan Files Disclosure Statement ------------------------------------------------------------ JPMorgan Chase Bank, N.A., as agent for a group of lenders under a Construction and Term Loan Agreement, and Brazos Electric Power Cooperative, Inc., delivered a Disclosure Statement explaining their Chapter 11 Plan of Reorganization for Ponderosa Pine Enrgy Partners, Ltd., and its debtor-affiliates. JPMorgan and Brazos are Ponderosa's two largest creditors and DIP lenders. As previously reported, the lenders had outlined to the Court their own plan when they asked for the termination of the Debtors' exclusive plan filing period. About the Plan The lenders' Plan provides for the: a) transfer substantially all of Ponderosa's assets to Brazos Electric; b) payment by Brazos Electric to KBC Bank of $32 million on the Effective Date, and up to $20 million afterwards pursuant to the Joint Settlement Term Sheet; and c) extension of the exit facility provided by Chase to Brazos Electric to finance repair of the Cogeneration Plan. The Joint Plan contemplates that Brazos will issue a note, which is part of an exit facility, to satisfy all claims of the Agent and the senior secured lenders. The exit facility will comprise all amounts owed by Ponderosa under a Prepetition Credit Agreement and an additional $50 million credit facility for the repair of the Cleburne Plant. Brazos will assume all obligations under the exit facility in exchange for an assignment of substantially all of Ponderosa's assets. In addition, Brazos will subordinate its claim to the general unsecured creditors. Treatment of Claims Under the Plan, these claims will be paid in full: -- $5,580,064 administrative claims; -- $1,679,475 priority tax claims; and -- $2,791,746 general unsecured claims; Chase Bank Group's $135,725,500 claim will be exchanged for the Brazos Electric Note that will be issued on the Effective Date. Brazos Electric's $51,644,957 claim will be deemed resolved and compromised on the Effective Date. Holders of equity interests won't receive anything under the Plan. The Court will convene a hearing on Dec. 20, 2005, to consider the adequacy of the Disclosure Statement and to discuss the merits of the Plan. Headquartered in Morristown, New Jersey, Ponderosa Pine Energy, LLC, and its affiliates are utility companies that supply electricity and steam. The Company and its debtor-affiliates filed for chapter 11 protection on April 14, 2005 (Bankr. D. N.J. Case No. 05-22068). Mary E. Seymour, Esq., Sharon L. Levine, Esq., and Kenneth A. Rosen, Esq., at Lowenstein Sandler PC represent the Debtor in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. PRIMUS INT'L: S&P Affirms B+ Rating Following Boeing Co. Strike --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on aircraft component supplier Primus International Inc., including the 'B+' corporate credit rating, and removed them from CreditWatch, where they were placed with negative implications on Sept. 9, 2005. The outlook is stable. "The affirmation reflects a minimal impact on the financial profile of Primus due to the resolved strike at Boeing Co.'s commercial aircraft operations," said Standard & Poor's credit analyst Christopher DeNicolo. As a result of the relatively short duration of the strike, the effect on earnings and cash flow is not likely to be significant. Previously planned increases in production rates for Boeing aircraft are likely to more than offset the financial impact of the strike over the intermediate term. The ratings on Primus reflect: * a very small revenue base, * participation in the competitive and cyclical commercial aerospace market, and * high customer concentration, offset somewhat by efficient operations and leading positions in niche markets. Bellevue, Washington-based Primus is a Tier II supplier to the commercial, including regional and business jets, and military aircraft original equipment manufacturers providing kits, assemblies, and components for aircraft structures, controls, landing gear, passenger doors, and engine mounts. Around 80% of Primus' business is related to Boeing jetliners. Boeing's production rates leveled off in 2004, after two years of significant declines, and are likely to show a modest increase in 2005 due to the strike and more significant increases in 2006. Primus is attempting to diversify its revenue base by increasing its work on business and regional aircraft, as well as military programs. In addition, the firm has been successful in increasing its content on each type of aircraft and expanding relationships with existing customers. Primus' strategy of producing more assemblies and kits should enable the company to capitalize on the trend toward increased outsourcing by OEMs and Tier I suppliers. Primus' efforts to generate new business, its efficient operations, and increasing Boeing production rates should enable the company to attain a credit profile consistent with current ratings. The outlook could be revised to negative if the recovery in the commercial aerospace market slows or if Primus is not able to profitably increase output to meet demand. A revision of the outlook to positive is less likely at this time. PRINCETON COMMUNITY: Lower Losses Prompt S&P's Positive Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Princeton, W.Va.'s series 1993 and 1999 bonds, issued for Princeton Community Hospital, to positive from stable based on PCH's dramatic decline in operating losses and hiring of a permanent CEO following a consulting engagement. At the same time, Standard & Poor's affirmed its 'B-' rating on the bonds, which continues to reflect: (1) the accumulated damage to PCH's balance sheet from six consecutive years of operating losses; (2) thin liquidity, although there is a measurable amount of cash held as collateral for a loan; and (3) weak demographic factors, including a declining population and below-average income levels. PCH had struggled with losses, some sizable, for several years, resulting in a dramatic decline in liquidity and other balance sheet measures. In 2004, the CEO was replaced by a consulting firm, which also led a broad-ranging turnaround engagement. The result is a dramatic decline in the operating loss in fiscal 2005. In addition, a new CEO started in September 2005. Although the turnaround was dramatic, the organization still incurred losses and has very little liquidity cushion left to absorb even lower levels of operating losses. The management team seems to have internalized the challenge, and results from the first quarter of 2006 were very encouraging, with a small positive operating income. "The rating could improve over the next one to two years if the turnaround evident in fiscal 2005 and the first quarter of fiscal 2006 continues," said Standard & Poor's credit analyst Liz Sweeney. "The organization still faces several key challenges, however, including rebuilding its very thin liquidity while maintaining investment in plant, in addition to the challenge that weak local demographics continue to pose. If PCH fails to maintain its operational improvement, or if liquidity declines, the outlook could be revised back to stable." The bonds are secured by a revenue pledge of PCH, the primary entity, which operates an acute-care facility with 211 beds in Princeton. The outlook revision affects about $44 million of debt. RADIATION THERAPY: Secures $100 Million Debt Financing Commitment ----------------------------------------------------------------- Radiation Therapy Services, Inc. (Nasdaq: RTSX) received a financing commitment to provide a $100 million Term B loan and to amend its existing $140 million revolving credit facility in connection with its senior secured credit facility. The Term B loan will have a fixed interest rate spread of 175 basis points. The Company will use the proceeds of this Term B loan to pay off its pre-existing Term A loan as well as all borrowings drawn on its revolving credit facility, resulting in a $62 million increase in availability under the combined facilities. In addition, the interest rate spreads on the revolving credit facility will be reduced by 25 basis points. The Term B loan will be a seven-year commitment with a maturity date of Dec. 31, 2012. The maturity date for the revolving credit facility remains March 15, 2010. Participants in the Term B financing include institutional investors as well as the Company's senior bank lending group. LaSalle Bank was added to the banking syndicate, bringing the total number of banks to nine. LaSalle Bank joins the ongoing participants -- Bank of America, Wachovia Bank, Fifth Third Bank, SunTrust Bank, Regions Bank, National City Bank, Carolina First Bank and International Bank of Miami. "As a result of our strong operating performance, we are pleased to enhance our financial flexibility under the credit facility by adding institutional investors to our lending group and reduce our interest rate spreads with this transaction," David M. Koeninger, Executive Vice President and Chief Financial Officer, said. "This access to an additional capital source will support program expansions within our existing local markets, entry into new local markets and ensure that we have the most advanced treatment technology for our patients. The modified covenants will provide further flexibility. The interest rate reductions to our amended facility will take effect upon closing. We are particularly pleased to add LaSalle Bank to our banking relationships." The closing of the financing commitment described above is expected to occur on or before Dec. 20, 2005, and will be reported on a Form 8-K filed with the SEC. Radiation Therapy Services, Inc. -- http://www.rtsx.com/-- which operates radiation treatment centers primarily under the name 21st Century Oncology, is a provider of radiation therapy services to cancer patients. The Company's 68 treatment centers are clustered into 22 local markets in 14 states, including Alabama, Arizona, California, Delaware, Florida, Kentucky, Maryland, Massachusetts, Nevada, New Jersey, New York, North Carolina, Rhode Island and West Virginia. The Company is headquartered in Fort Myers, Florida. * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services assigned its 'BB' corporate credit rating to Radiation Therapy Services Inc. The rating outlook is stable. In addition, the company's $240 million secured credit facilities were rated 'BB', with a recovery rating of '3', reflecting the expectation for meaningful recovery of principal in the event of a payment default. REFCO INC: Wants to Hire Lenz & Staehelin as Special Counsel ------------------------------------------------------------ Robert Dangremond, Refco Inc., and its debtor-affiliates' interim chief executive officer, relates that the Debtors, through Refco Capital Markets Ltd. and Refco F/X Associates, own 51% of ACM Advanced Currency Markets SA, a Geneva-based foreign exchange broker. In exploring ways to maximize value, RCM and Refco F/X decided to sell their 51% interest in ACM. On November 15, 2005, certain ACM shareholders took action to increase ACM's capital share that would have the effect of diluting the Sale Debtors' interest in ACM. An increase in capital share would not be in the best interests of the Debtors' estates for the Sale Transaction and would result in lesser amounts owing to the Sale Debtors in the Sale Transaction, Mr. Dangremond states. Thus, the Debtors contacted Lenz & Staehelin to protect the Sale Debtors' interest against the increase in capital share and close the Sale Transaction. The Debtors note that Lenz & Staehelin is an expert in Swiss law and cross-border transactions. Furthermore, Lenz & Staehelin is familiar with the Sale Debtors' corporate, capital structure, financing documents and other material agreements and is aware of the overall corporate structure of the Debtors. Thus, the Debtors seek the U.S. Bankruptcy Court for the Southern District of New York's authority to employ Lenz & Staehelin as special counsel for Refco Capital Markets Ltd. and Refco F/X Associates, effective as of November 17, 2005. As special counsel, Lenz & Staehelin will: (a) assist and advise on questions of Swiss law in relation to the Sale Transaction, including review of the Sale Transaction documents from a Swiss law perspective; (b) attend to any and all judicial proceedings before Swiss courts for the purpose of protecting the Sale Debtors' interest in ACM and filing all claims, requests and declarations with any competent court or other authority; and (c) in particular, draft and file a claim seeking the avoidance of the capital increase resolution passed on or about November 15, 2005, by the minority shareholders of ACM, as well as the ongoing conduct of the judicial proceedings before the Geneva courts. Lenz & Staehelin will make every effort to avoid duplicating the work performed by other professionals retained by the Debtors. The Debtors will pay Lenz & Staehelin based on its standard hourly rates: Junior Associates $160 Senior Partners $550 The firm's attorneys who are expected to be principally responsible for the matters in the Debtors' cases and their hourly rates are: Shelby R. du Pasquier $550 Fedor Poskriakov $350 Lenz & Staehelin seeks a $3,000 retainer, which will serve as an advance on fees for the services to be rendered. Shelby R. du Pasquier, Esq., a partner at Lenz & Staehelin, assures the Court that the firm and its partners and associates do not hold or represent any interest adverse to the Debtors, their creditors or any other party-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. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFCO INC: Wants Court OK to Hire Omni Management as Claims Agent ----------------------------------------------------------------- Refco Inc., and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's authority to employ Omni Management Group, LLC, as claims, noticing and balloting agent, effective as of November 2, 2005. Robert Dangremond, the Debtors' interim chief executive officer, relates that there are numerous entities to whom various notices, pleadings and other documents filed in the Debtors' cases must be served. The Debtors believe that the appointment of Omni, as agent of the Clerk of the Bankruptcy Court, will expedite service of papers, streamline the claims administration process and permit the Debtors to focus on their reorganization efforts. At the request of the Debtors or the Clerk of the Court, Omni will: (a) maintain a consolidated list of creditors; (b) serve notices to parties-in-interest; (c) maintain all proofs of claims and proofs of interest filed in the Debtors' cases; (d) docket all the Claims; (e) maintain and transmit to the Clerk's office the official claims registers; (f) maintain current mailing lists of all entities that have filed Claims and notices of appearance it receives; (g) record all transfers it receives, pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure; (h) provide the Debtors with consulting and computer software support regarding the reporting and management requirements of the bankruptcy administration process; (i) provide assistance in preparing the Debtors' schedules; (j) provide balloting and solicitation services to the Debtors; and (k) provide any other service the Debtors require. The Debtors propose to pay Omni at the firm's normal hourly rates, which range from $35 to $285, without further Court order, upon Omni's submission of monthly invoices. The Debtors also propose to reimburse Omni for reasonable and necessary expenses incurred in connection with services rendered. Robert L. Berger, president of Omni Management, assures the Court that neither the firm nor any of its employees hold any interest adverse to the Debtors' estates with respect to the matters on which it is to be engaged. Mr. Berger represents that Omni: -- is not employed by the United States and will not seek any compensation from the United States Government; -- by accepting employment in the Debtors' cases, is waiving any rights to receive compensation from the United States; -- is not an agent of the United States and is not acting on behalf of the United States; -- will not misrepresent any fact to the public; and -- will not employ any past or present employee of the Debtors for work involving the Debtors' chapter 11 cases. 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. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFCO INC: Wants Court OK to Hire Conyers Dill as Bermuda Counsel ----------------------------------------------------------------- Refco Inc., and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's authority to employ Conyers Dill & Pearman as special counsel for Bermuda Debtors Refco Capital Markets, Ltd., and Refco Global Finance, Ltd., nunc pro tunc to the Petition Date. Conyers Dill is an expert in Bermuda insolvency law and has extensive experience in representing creditors, debtors and liquidators of many Bermuda-based companies both in liquidation and restructuring proceedings, Robert Dangremond, the Debtors' interim chief executive officer, relates. Conyers Dill has been providing general corporate advice, including ancillary restructuring advice, to the Debtors since October 1, 1991, and is intimately familiar with the Debtors' business, Mr. Dangremond tells the Court. On October 17, 2005, Skadden, Arps, Slate, Meagher & Flom LLP contacted Conyers Dill to assist, on the Debtors' behalf, with certain filings that were being considered in Bermuda and the United States. Conyers Dill provided advice directed and through Skadden Arps to the Bermuda Debtors regarding the filings' impact and the need to institute insolvency proceedings in Bermuda and appoint provisional liquidators to oversee the proceedings. The Bermuda proceedings are continuing and the Debtors seek to retain Conyers Fill to continue to advise the Bermuda Debtors with respect to the issues of Bermuda law. As special counsel, Conyers Dill will: (a) advise the Bermuda Debtors with respect to their powers and duties as debtors and debtors-in-possession in the continued management and operation of their business and properties; (b) attend meetings and negotiate with representatives of creditors and other parties-in-interest of the Bermuda Debtors, and advise and consult on the conduct of these cases, including all of the legal and administrative requirements of operating in a provisional liquidation parallel to a Chapter 11 proceeding; (c) take all necessary actions to protect and preserve the Bermuda Debtors' estates, including the prosecution of actions on their behalf, the defense of any actions commenced against their estates, negotiations concerning all litigation in which the Bermuda Debtors may be involved in Bermuda and objections to claims against the estates; (d) interface and coordinate with the Provisional Liquidators and any analogous parties that may be appointed under the laws of various jurisdictions; (e) on the Bermuda Debtors' behalf, prepare all motions, applications, answers, orders, reports and papers necessary to the administration in Bermuda of the Bermuda Debtors' estates; (f) negotiate and prepare on the Bermuda Debtors' behalf a plan of reorganization, disclosure statement, schemes of arrangement, explanatory statements and all related agreements and documents, and take any necessary action on the Bermuda Debtors' behalf to obtain confirmation of that plan and scheme; (g) advise and assist the Bermuda Debtors in connection with asset sales; and (h) appear before the Bermuda Supreme Court, the Bermuda Court of Appeal, Bermuda Magistrate Courts and Bermuda regulatory bodies, and protect the interests of the Bermuda Debtors' estates before those courts and regulators. The Debtors believe that the employment of Conyers Dill will enhance and will not duplicate the employment of Skadden Arps and other professionals by the Debtors. Robin J. Mayor, Esq., a partner at Conyers Dill, assures the Court that the firm does not hold or represent any interest adverse to the Debtors, their creditors and any other party-in- interest with respect to the matters on which Conyers Dill is to be employed. The Debtors will pay Conyers Dill based on its standard hourly rates: Partners $420 to $620 Associates $300 to $540 Conyers Dill attorneys who are expected to be principally responsible for the matters in the Debtors' Chapter 11 cases and their standard hourly rates are: Robin Mayor $550 Narinder Hargun $620 Paul Smith $550 Daina Casling $300 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. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) RELIANCE GROUP: Bankruptcy Plan Takes Effect on Dec. 1 ------------------------------------------------------ Arnold Gulkowitz, Esq., at Orrick, Herrington & Sutcliffe, in New York City, on behalf of the Official Committee of Unsecured Creditors, informs the U.S. Bankruptcy Court for the Southern District of New York that as of December 1, 2005, all conditions to consummation of the First Amended Plan of Reorganization for Reliance Group Holdings, Inc., were either satisfied or waived. Mr. Gulkowitz says the Creditors Committee waived certain conditions and any other conditions to consummation of the Plan that were not yet satisfied. Accordingly, the RGH Plan became effective on December 1, 2005. Headquartered in New York, New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, in turn, owns 100% of Reliance Insurance Company. The holding and intermediate finance companies filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing $12,598,054,000 in assets and $12,877,472,000 in debts. The insurance unit is being liquidated by the Insurance Commissioner of the Commonwealth of Pennsylvania. On Nov. 7, 2005, the Hon. Eugene Gonzalez issued an order confirming the Creditors Committee's First Amended Plan for RGH. (Reliance Bankruptcy News, Issue No. 86; Bankruptcy Creditors' Service, Inc., 215/945- 7000) RESIDENTIAL ASSET: Fitch Shaves Rating on Class M-3 Certs. to BB ---------------------------------------------------------------- Fitch Ratings has taken rating actions on these Residential Asset Mortgage Products, Inc., transaction: Series 2003-RP1: -- Class A-1 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 downgraded to 'BB' from 'BBB+'. The collateral in this transaction consists of fixed-rate and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties. In addition, the loans in this deal were categorized as performing, reperforming or subperforming loans at origination. The major servicers for these loans are Select Portfolio Servicing, Litton Loan Servicing, LP and Wilshire Credit Corp., which are currently rated 'RSS2-', 'RSS1' and 'RSS1-', respectively, by Fitch. The downgrade of the M-3 class reflects deterioration in the relationship between the bond's credit enhancement and Fitch's expected future losses on the loans. Losses to date have been higher than Fitch initially expected. Over the past 12 months, losses have generally exceeded excess spread resulting in a reduction of the overcollateralization amount. As of the Nov. 25, 2005 distribution date, the OC had declined to $4,111,650, below its target amount of $5,881,752. The affirmations of the above classes reflect credit enhancement consistent with future loss expectations and affect approximately $47 million in outstanding certificates. The affirmed classes are expected to benefit from performance test triggers, which should prevent the release of credit enhancement at the step-down date. As of the Nov. 25, 2005 distribution date, the cumulative loss as a percentage of the initial pool balance is 4.70%, the 90+ days delinquencies are approximately 39% of the current pool balance and the pool factor currently stands at 34.63%. The certificates were offered and sold under Rule 144A of the Securities Act. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Web site at http://www.fitchratings.com/ STELCO INC: Creditors Approve Third Amended Restructuring Plan -------------------------------------------------------------- Stelco Inc. (TSX:STE) disclosed that a third amended restructuring plan was approved by affected creditors at the previously- adjourned meeting that resumed Friday, Dec. 9. Affected creditors of certain Stelco subsidiaries also voted to approve the plan at other meetings resumed on Friday. At the meeting of affected creditors of Stelco, the plan was approved by 78.4% of those affected creditors who voted in person or by proxy, representing 87.7% of the total value of affected claims that were voted at the meeting. "We truly appreciate the support shown by our creditors," Courtney Pratt, Stelco President and Chief Executive Officer, said. "The approved plan is fair, reasonable and responsible. It balances the competing interests of our stakeholders. And it paves the way for Stelco to emerge from Court protection and to become a viable and competitive steel producer for the long term. "I want to acknowledge the efforts of our stakeholders and their representatives, our own Board of Directors and advisors, as well as the management team and employees of Stelco itself. The combined commitment and hard work shown by all parties helped to secure this positive outcome. The strengthened Stelco resulting from those efforts will work to reward the confidence that's been shown today." The Company will be in Court this morning to report on Friday's developments and to request an extension of the stay period. It will then proceed to seek the Court's approval of the plan. The Company anticipates this could occur before the end of the year, subject to the Court's availability. If that approval is granted, the Company anticipates emerging from Court protection early in 2006. Several substantive changes from the second amended plan announced on Dec. 8, 2005, concern the recovery to unsecured creditors. Terms of the Plan Unsecured creditors will still receive a pro rata share of Secured Floating Rate Notes. The cash pool will now range from a minimum of $108,548,000 to a maximum of $137.5 million. In addition to their share of 1.1 million new common shares, affected creditors may elect to receive up to an additional 5.264 million new common shares. Tricap Management Limited, Sunrise Partners Limited Partnership and Appaloosa Management LP have agreed not to elect to acquire any of the additional new common shares related to their respective claims. As well, Tricap, Sunrise and Appaloosa will commit to purchase a total of 19.736 million new common shares, funding $108,548,000 of the cash pool. If affected creditors elect to take cash in lieu of exercising the option to acquire their portion of the 5.264 million additional new common shares, Sunrise and Appaloosa will acquire such shares, providing up to an additional $28.952 million to the cash pool. In addition, affected creditors will receive a pro rata share of new warrants, with a seven-year maturity, entitling them to purchase 1,418,500 new common shares, representing approximately 5% of the fully diluted equity in the Company. The new warrants will have an exercise price of $11 per share. The third amended plan is based on: -- The availability of a $600 million asset-based revolving loan facility. -- The availability of a $375 million revolving bridge facility being negotiated with Tricap Management Limited. -- A $150 million Unsecured Subordinated 1% Note, issued to the Province of Ontario in exchange for a $150 million cash contribution. If the pension solvency deficiency is fully funded by year 10, then 75% of the Note would be forgiven at maturity, with the balance payable in cash or shares. -- Warrants, with a seven-year maturity, issued to the Province of Ontario to purchase up to approximately 3% of the fully diluted equity (or approximately 851,100 new common shares) at an exercise price of $11.00 per new common share. Existing secured operating lenders will be repaid in full. Unsecured creditors will receive a pro rata share of: -- Secured Floating Rate Notes: $275 million; interest of LIBOR (London Interbank Offering Rate) plus 500 basis points if paid in cash or LIBOR plus 800 basis points if paid in Secured Floating Rate Notes at the Company's option; 10-year term, payable in cash on maturity. -- A cash pool consisting of a minimum of $108,548,000 and a maximum of $137.5 million. -- 1.1 million new common shares with a right to receive up to an additional 5.264 million new common shares in lieu of $5.50 per share out of the cash pool. -- New warrants, entitling them to purchase 1,418,500 new common shares, representing approximately 5% of the fully- diluted equity in the Company at an exercise price of $11 per share. The cash pool would be funded as follows. Tricap would commit to purchase 9.818 million new common shares at $5.50 per share, funding the cash pool in the amount of $53.999 million. Sunrise and Appaloosa would each commit to purchase 4.959 million new common shares at the same price, for a total of 9.918 million new common shares, funding the cash pool in the amount of $54.549 million. Sunrise and Appaloosa would also acquire, on a 50/50 basis, any of the additional shares not purchased by affected creditors by an agreed date, at a price of $5.50 per share. This could fund the cash pool up to an additional $28.952 million. The Stelco Pension Plans will receive: -- An upfront cash contribution of $400 million. -- Fixed annual cash funding payments of $65 million each year between 2006-2010 and $70 million each year between 2011- 2015. -- There may be increased payments through annual cash sweep payments, commencing in 2007, based on cash flow and liquidity tests. -- Any solvency deficiency at the end of 2015 will be funded through the normal 5-year pension funding rules. A six-month grace period on cash funding payments will be provided during the first half of 2006, increasing Stelco's liquidity on emerging from Court protection. The existing shares will be effectively cancelled. As the Company has stated for some time, there is insufficient value to provide full recovery to unsecured creditors. Factors affecting the Company, its value and the recovery for unsecured creditors include volatile steel prices, reduced production and shipments, and increased costs. Board Members The size of Stelco's Board of Directors will be fixed at nine members. Tricap Management Limited will have the right to name four of the directors. Sunrise and Appaloosa will have the right to nominate one each. The remaining directors will be chosen through a consultative process. Board nominees will be elected on the basis of cumulative voting. This means that shareholders may allocate the total number of votes they're entitled to cast in any way they wish, i.e. all for one nominee, among several nominees, or divided among all nominees. The plan sponsor agreement requires plan implementation to occur not later than March 31, 2006. If the Court sanctions the plan, Stelco expects to implement the plan early in 2006. Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. In early 2004, after a thorough financial and strategic review, Stelco concluded that it faced a serious viability issue. The Corporation incurred significant operating and cash losses in 2003 and believed that it would have exhausted available sources of liquidity before the end of 2004 if it did not obtain legal protection and other benefits provided by a Court-supervised restructuring process. Accordingly, on Jan. 29, 2004, Stelco and certain related entities filed for protection under the Companies' Creditors Arrangement Act. The Court has extended Stelco's CCAA stay period until today, Dec. 12, 2005, in order to accommodate the creditors' meetings and a sanction hearing. STELCO INC: Ernst & Young Files 42nd Monitor's Report ----------------------------------------------------- Ernst & Young Inc., the Monitor appointed in Stelco Inc.'s (TSX:STE) Court-supervised restructuring, filed its Forty-Second Report of the Monitor. The Report deals exclusively with the previously-announced signing of a definitive agreement for the sale of the shares of AltaSteel Ltd. and related assets to Moly Cop Steel Inc., an affiliate of Scaw International Sarl, subject to Court approval. The Monitor reviews the history of AltaSteel, the nature of its business, the sale process that was followed and terms of the agreement. The Report notes that Stelco has advised the Monitor that it will seek an Order on Friday, Dec. 16, 2005, to approve the sale and to seal certain terms in the agreement until confirmation that the transaction has closed or until further order of the Court. The Monitor indicates its view that Stelco and its advisors adequately canvassed the market for prospective purchasers, that the purchase price is fair and commercially reasonable under the circumstances, and that a sealing order is appropriate and reasonable as it protects certain commercially sensitive information from being disclosed until the transaction is closed or until further order of the Court. Based on these considerations, E&Y recommends that the sale be approved and that a sealing order be granted until confirmation that the transaction has closed or until further order of the Court. Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. In early 2004, after a thorough financial and strategic review, Stelco concluded that it faced a serious viability issue. The Corporation incurred significant operating and cash losses in 2003 and believed that it would have exhausted available sources of liquidity before the end of 2004 if it did not obtain legal protection and other benefits provided by a Court-supervised restructuring process. Accordingly, on Jan. 29, 2004, Stelco and certain related entities filed for protection under the Companies' Creditors Arrangement Act. The Court has extended Stelco's CCAA stay period until today, Dec. 12, 2005, in order to accommodate the creditors' meetings and a sanction hearing. STRUCTURED ASSET: Fitch Affirms Low-B Ratings on 4 Cert. Classes ---------------------------------------------------------------- Fitch Ratings has affirmed 12 classes of Structured Asset Securities Corp. residential mortgage-backed certificates: Series 2002-AL1 -- Class A 'AAA'; -- Class B1 'AA'; -- Class B2 'A'; -- Class B3 'BBB'; -- Class B4 'BB'; -- Class B5 'B'. Series 2003-AL1 -- Class A 'AAA'; -- Class B1 'AA'; -- Class B2 'A'; -- Class B3 'BBB'; -- Class B4 'BB'; -- Class B5 'B'. The affirmations on the above classes reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $624.94 million of certificates. As of the November 2005 distribution date, series 2002-AL1 is 45 months seasoned, and series 2003-AL1 is 33 months seasoned. Cumulative losses as a percent of the original collateral balance is 0.18% and 1.30% respectively. All classes in both transactions have experienced small to moderate growth in CE since the last rating action date. The pool factor is 50% for series 2002-AL1 and 59% for series 2003-AL1. The underlying collateral consists of fully amortizing, fixed-rate, first and junior lien disaster home loans. The mortgage loans were originated by the United States Small Business Administraion to borrowers who incurred losses in a federally recognized disaster. The mortgage loans are master serviced by Aurora Loan Services, Inc. Further information regarding current delinquency, loss and credit enhancement statistics is available on the Fitch Ratings Web site at http://www.fitchratings.com/ SUN HEALTHCARE: Offers Six Million Shares of Common Stock --------------------------------------------------------- Sun Healthcare Group, Inc. (NASDAQ: SUNH) plans to offer 6,000,000 shares of its common stock in an underwritten public offering under an existing shelf registration statement. In connection with the offering, Sun expects to grant the underwriters a 30-day option to purchase up to 900,000 additional shares of its common stock to cover over-allotments, if any. Sun intends to use the net proceeds from this offering to repay amounts outstanding under its revolving credit facility and for general corporate purposes. UBS Investment Bank is acting as the sole book-running manager of this offering. CIBC World Markets and Jefferies & Company are acting as co-managers. Sun Healthcare Group, Inc., with executive offices located in Irvine, California, owns SunBridge Healthcare Corporation and other affiliated companies that operate long-term and postacute care facilities in many states. In addition, the Sun Healthcare Group family of companies provides therapy through SunDance Rehabilitation Corporation, medical staffing through CareerStaff Unlimited, Inc., and home care through SunPlus Home Health Services, Inc. The Company filed for chapter 11 protection on Oct. 14, 1999 (Bankr. D. Del. Case No. 99-03657). Mark D. Collins, Esq., and Christina M. Houston, Esq., at Richards, Layton & Finger, P.A., represent the Debtor. The Court confirmed the Debtor's chapter 11 Plan on Feb. 6, 2002, and the Plan took effect on Feb. 28, 2002. At Sept. 30, 2005, Sun Healthcare's balance sheet showed a $109,509,000 stockholders' deficit, compared to a $123,380,000 deficit at Dec. 31, 2004. SUPRESTA LLC: Low Earnings Spur S&P to Pare Debt Ratings to B ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit and bank loan ratings on Supresta LLC to 'B' from 'B+'. The outlook is stable. Standard & Poor's said that the downgrade on this Ardsley, New York-based company reflected the unexpected deterioration of operating earnings and discretionary cash flows, thus stalling the improvement of debt leverage measures. "Credit quality ratios were already aggressive for the former ratings and operating conditions are expected to remain challenging over the near term. Competitive conditions, raw material cost pressures, and higher interest rates, will likely make it difficult for Supresta to swiftly strengthen its financial profile," said Standard & Poor's credit analyst Wesley E. Chinn. The ratings on Supresta reflect: * a modest sales base, * a narrow product line, * cyclical end markets, * vulnerability of earnings to raw-material costs, and * aggressive debt leverage measures resulting from the acquisition of Supresta from Akzo Nobel N.V. in July 2004. These negatives overshadow the company's solid position in the organophosphorus flame retardants market, modest capital expenditures, and a manageable debt amortization schedule. Flame-retardants are additives used to improve the fire resistant qualities of a variety of end products. Supresta's key products are supplied to polyurethane producers for use in furniture, auto interiors and linings, mattresses, and insulation, and to engineering resins producers for electrical and electronic applications. The company also has a leading market position in functional fluids, which are used as fire resistant hydraulic fluids primarily for energy plants and aviation. The overall market for flame-retardants is estimated at roughly $2 billion, with phosphorus-based chemicals consisting of only about $500 million. Increasingly stringent fire safety standards are a major long-term driver of flame retardant consumption in the U.S. and Europe, although year-to-year volume growth is less certain. The ongoing shift of the production of end products to Asia and elsewhere will likely serve to increase flame retardant opportunities, as fire safety legislation evolves. A global, diverse customer base, good proprietary technology, and a track record of product innovation should sustain Supresta's competitive position. In addition, customer concentration is moderate. Nevertheless, S&P's assessment of the company's vulnerable business risk profile incorporates its narrow business focus, contributing to a modest sales base of roughly $250 million, and the cyclicality of general economic conditions, especially as it impacts flame retardant demand within consumer electronics, information technology, and automotive markets. The business profile also considers the vulnerability of operating results to increased raw-material costs, including phosphorus, chlorine, and propylene oxide, as well as the competitive environment in North America and Europe. Also, certain competitors are larger and have an array of flame retardant offerings, such as brominated compounds, antimony oxides, and alumina trihydrate, which account for an estimated 75% of industry sales. TELOGY INC: Wants to Appoint Bruce M. Blanco as Responsible Person ------------------------------------------------------------------ Telogy, Inc. asks the U.S. Bankruptcy Court for the Northern District of California to approve its request to appoint: Bruce M. Blanco c/o Telogy, Inc. 3200 Whipple Road Union City, California 94587 Telephone: 510-675-9500 as the natural person responsible for all the administrative duties and obligations of the Debtor during its chapter 11 restructuring. Mr. Blanco's proposed duties include taking all steps necessary, convenient or advisable to administer the Debtor's bankruptcy case and to assist and direct the Debtor's legal counsel in the prosecution of its bankruptcy case. Mr. Blanco will also perform on behalf of the Debtor, all other matters that are appropriate and necessary to perform his duties and obligations as the Debtor's responsible person. Headquartered in Union City, California, Telogy, Inc. -- http://www.tecentral.com/-- rents, sells, leases electronic test equipment including oscilloscopes, spectrum, network, logic analyzers, power meters, OTDRs, and optical, from manufacturers like Tektronix, Rohde & Schwarz. Telogy, Inc. and its debtor- affiliate, e-Cycle, LLC, filed for chapter 11 protection on Nov. 29, 2005 (Bankr. N.D. Calif. Case No. 05-49371). Ramon M. Naguiat, Esq., at Pachulski, Stang, Ziehl, Young Jones & Weintraub P.C. represents the Debtor in its restructurng efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. TELOGY INC: U.S. Trustee Meeting With Creditors on January 6 ------------------------------------------------------------ The U.S. Trustee for Region 17 will convene a meeting of Telogy, Inc. and its debtor-affiliate, e-Cycle, LLC's creditors at 9:30 a.m., on January 6, 2006, at the Office of the U.S. Trustee, Suite 690N, 1301 Clay Street, Oakland, California 94612-5217. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Union City, California, Telogy, Inc. -- http://www.tecentral.com/-- rents, sells, leases electronic test equipment including oscilloscopes, spectrum, network, logic analyzers, power meters, OTDRs, and optical, from manufacturers like Tektronix, Rohde & Schwarz. Telogy, Inc. and its debtor- affiliate, e-Cycle, LLC, filed for chapter 11 protection on Nov. 29, 2005 (Bankr. N.D. Calif. Case No. 05-49371). Ramon M. Naguiat, Esq., at Pachulski, Stang, Ziehl, Young Jones & Weintraub P.C. represents the Debtor in its restructurng efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. TIMCO AVIATION: Responds to $6.5 Million Lawsuit Filed by Founder ----------------------------------------------------------------- James Ventures, L.P., (OTC: TMAV) and its General Partner, Robert Alpert, filed a lawsuit against Timco Aviation Services, Inc., in the Federal District Court of Arizona on Oct. 24, 2005. The Complaint seeks to recover over $6.5 million for Timco's alleged failure to honor Timco's contractual commitment to fully indemnify James Ventures, L.P., Don Sanders and Robert Belfer from any losses they might sustain from posting letters of credit to facilitate Timco's successful transaction with Kellstrom Industries in the formation of the joint venture KAV Inventory, LLC., in the fourth quarter of 2000. Former CEO Supports Complaint The Complaint is supported by the affidavit of former Timco CEO, Dale S. Baker, who attested to Timco's promises to the plaintiffs to "find a way to serve the obligations" of the letters of credit in the event they were called, which they eventually were in October, 2001. Timco had guaranteed the performance of Kellstrom Industries, which defaulted on its obligation and filed bankruptcy. The plaintiffs allege that they relied upon Timco's indemnification commitment in agreeing to supply the letters of credit. Mr. Baker's affidavit attests that if the plaintiffs had not provided the letters of credit on a timely basis in 2000, "it would have been necessary for the Company [Timco] to file bankruptcy." No Disclosure The plaintiffs' November 21 News Release had asserted that, "Notwithstanding the company's awareness of the pending lawsuit the company did not disclose this material information to public shareholders and creditors during the pendency of its rights offering which was completed on November 15, 2005." On Nov. 29, 2005, Timco's counsel advised that, "Contrary to your clients' published statements, Timco absolutely did disclose the existence of this litigation to the public in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, that was filed with the SEC on November 10, 2005, prior to the expiration date of its rights offering." The plaintiffs acknowledge that Timco's counsel is correct, and that Timco did in fact make the following statement in its 10-Q filed on Nov. 10, 2005, in Section 13 entitled "Subsequent Events": "Subsequent to September 30, 2005, the Company was named as the defendant in a lawsuit which alleges that the Company breached a purported verbal agreement for indemnification. The suit seeks damages of $6,600, plus interest, costs and attorneys fees. While the Company does not believe that any such indemnification agreement exists, believes that it has meritorious defenses to the claim and intends to vigorously defend the lawsuit, there can be no assurance as to its outcome." The plaintiffs' News Release cited above was incorrect as related to Timco's filing of the 10-Q that reported the filing of a complaint. Regrettably, Timco's 10-Q reported the plaintiffs' claim as being $6,600 instead of the plaintiffs' actual claim of $6.6 million. It is the opinion of James Ventures, L.P., that its claim, which represents in excess of 1/6 of Timco's market value, is a significant and material claim that would best have been announced over the news wire in addition to its addition to a 10-Q under a section entitled "Subsequent Events." The actions of the plaintiffs in posting the letters of credit saved the predecessor of Timco from filing a bankruptcy in the fourth quarter of 2000, and saved the company from imminent demise. The plaintiffs stand behind the allegations of the Complaint as being true and correct. Timco Responds In its press release, JVLP states that the disclosure in TIMCO's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 was incorrect because it stated that the claim sought damages of $6,600 and not $6.6 million. Since all financial information contained in TIMCO's third quarter 2005 Form 10-Q was reported in thousands, the Form 10-Q disclosure was correct. On the lawsuit alleging that the Company has breached a purported oral agreement for indemnification and seeks damages in the amount of $6.6 million, plus interest, costs and attorneys fees, the Company does not believe that any such indemnification agreement exists, believes it has meritorious defenses to the claim and intends to vigorously defend the lawsuit. At the time of the Company's sale of its redistribution business to Kellstrom Industries in December 2000, four investors: (i) Robert Alpert, a former director and principal stockholder of the Company, (ii) Don A. Sanders, (iii) Robert Belfer, and (iv) Lacy Harber, the Company's current principal stockholder, posted $8.0 million in letters of credit with Kellstrom's lenders to support Kellstrom's senior revolving credit facilities. JVLP has asserted in its complaint that under the purported oral agreement, the Company agreed to "fully indemnify the LOC Lenders from any and all harm, cost or losses they might incur if Kellstrom failed to fully perform its obligations to the LOC Lenders, or if Kellstrom failed to fully perform its obligations to [Kellstrom's senior lenders]." In addition to asserting its own alleged claims in the complaint, JVLP asserts that it has acquired the rights and claims of Messrs. Sanders and Belfer under the purported oral agreement and the complaint seeks relief for itself under those alleged rights and claims. Neither Mr. Sanders nor Mr. Belfer is a party to the action. The fourth LOC Lender, Lacy Harber, is also not a party to the action and has advised the Company that he does not believe that any such oral agreement to pay for losses caused by the alleged failure of Kellstrom to meet its obligations existed or exists. The letters of credit were drawn by Kellstrom's lenders in October 2001 and the LOC Lenders became creditors of Kellstrom in its bankruptcy proceeding. In Kellstrom's bankruptcy proceeding, the LOC Lenders asserted claims against a warehouse and office facility that Kellstrom owned in Sunrise, Florida. In July 2002, the LOC Lenders entered into a proceeds sharing agreement with Kellstrom's lenders in which the LOC Lenders were given certain rights in the Sunrise Facility. Based on available information, the Company believes that the LOC Lenders, excluding Mr. Harber, fully recouped not less than the $6 million that they funded to Kellstrom in December 2000 from the sale of the Sunrise Facility in 2004. Further, the Company reported that Mr. Alpert was a member of the Company's Board of Directors at the time of the events that are the subject matter of the complaint, and that no Board nor shareholders action approving any such indemnification agreement in favor of an entity controlled by a member of the Company's Board of Directors, nor anyone else, was ever obtained. Additionally, Dale S. Baker, the Company's former Chairman and Chief Executive Officer, who has filed an affidavit in support of JVLP's claim that is attached to the complaint, has previously provided the Company with an affidavit disavowing the existence of any such purported oral indemnification agreement, and has never advised the Company, nor the Company's Board of Directors, that any such purported oral indemnification obligation exists. TIMCO Aviation Services, Inc. -- http://www.timco.aero/-- is among the world's largest providers of aviation maintenance, repair and overhaul (MRO) services for major commercial airlines, regional air carriers, aircraft leasing companies, government and military units and air cargo carriers. The Company currently operates four MRO businesses: Triad International Maintenance Corporation (known as TIMCO), which, with its four active locations (Greensboro, NC; Macon, GA; Lake City, FL and Goodyear, AZ), is one of the largest independent providers of heavy aircraft maintenance services in the world and also provides aircraft storage and line maintenance services; Brice Manufacturing, which specializes in the manufacture and sale of new aircraft seats and aftermarket parts and in the refurbishment of aircraft interior components; TIMCO Engineered Systems, which provides engineering services both to our MRO operations and our customers; and TIMCO Engine Center, which refurbishes JT8D engines and performs on-wing repairs for both JT8D and CFM-56 series engines. At Sept. 30, 2005, TIMCO Aviation's balance sheet showed a $41,774,000 stockholders' deficit, compared to a $94,852,000 deficit at Dec. 31, 2004. TOWER AUTOMOTIVE: Retiree Committee Wants to Retain Jones Day ------------------------------------------------------------- The Official Committee of Retired Employees of Tower Automotive Inc. and its debtor-affiliates asks the U.S. Bankruptcy Court for the Southern District of New York for authority to retain Jones Day as its counsel in connection with the Debtors' Chapter 11 cases, nunc pro tunc to Nov. 11, 2005. Retirees Committee Chairperson, Michael W. Doherty, tells Judge Gropper that Jones Day is one of the largest law firms in the United States, with a national and international practice, and has substantial experience in virtually all aspects of the law that may arise in the Debtors' cases. In particular, Jones Day has extensive bankruptcy and restructuring, employee benefits, labor and employment, finance and litigation expertise. Therefore, the Retirees Committee believes that the firm is well qualified to represent its interests in the Debtors' cases. As counsel, Jones Day will: (a) advise the Retirees Committee concerning its rights, powers and duties under Section 1114 of the Bankruptcy Code; (b) attend all meetings of the Retirees Committee; (c) assist and advise the Retirees Committee regarding: -- its governance and organization; -- the conduct of its business and meetings; -- communications with and dissemination of information to its constituency; and -- all other matters as may arise regarding the business and administration of the Retirees Committee; (d) advise the Retirees Committee concerning, and prepare responses to, applications, motions, other pleadings, notices and other papers that may affect the Retirees Committee's rights and interests in the Debtors' cases; (e) review, analyze and respond to any motion filed by the Debtors under Section 1114 to modify or terminate retiree benefits; (f) communicate with the Debtors, the other committees appointed in the Debtors' cases and their professionals, as well as any other professionals engaged by the Retirees Committee, with respect to all matters concerning the Retirees Committee's rights and interests and its constituency in the Debtors' cases; (g) prepare on the Retirees Committee's behalf all necessary and appropriate applications, motions, notices, draft orders and other pleadings, and review all financial and other reports filed or otherwise made available in the Debtors' cases; (h) review, evaluate and represent the Retirees Committee with respect to any proposal by the Debtors, or any other party-in-interest in the Debtors' cases, to modify or terminate retiree benefits, including reviewing and analyzing all information and documents that the Retirees Committee, or Jones Day as its counsel, deems necessary to evaluate any proposal; and (i) perform all other legal services for and on behalf of the Retirees Committee that may be necessary or appropriate to assist it in performing its duties under Section 1114. In exchange for its services, the Debtors will pay the firm at its ordinary and customary hourly rates: Partners $350 - $795 Associates $200 - $475 Legal Assistants $150 - $200 Corinne Ball, Esq., a member of Jones Day, assures the Court that the firm does not: -- have any connection with the Debtors, their creditors, the U.S. Trustee or any other party with an actual or potential interest in the Debtors' cases; and -- hold or represent any interest adverse to the Retirees Committee in the matters for which it is to be employed and will not represent any creditor of the Debtors or any other party in their cases in any matter that is adverse to the Retirees Committee's interests. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05- 10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) TW HOTEL: S&P Places Low-B Ratings on $68 Million Cert. Classes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to TW Hotel Funding 2005 LLC $425 million commercial mortgage pass-through certificates series 2005-LUX. The preliminary ratings are based on information as of Dec. 8, 2005. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: * the experience and financial strength of the sponsor and manager, * the liquidity provided by the trustee, * the historical and projected performance of the collateral, * the terms of the loan, and * the transaction structure. Standard & Poor's determined that the loan has a stabilized debt service coverage of 1.25x based on a 10.5% refinance constant, and a beginning and ending LTV of 83.71%. A copy of Standard & Poor's complete presale report for this transaction can be found on RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/ The presale can also be found on the Standard & Poor's Web site at http://www.standardandpoors.com/ Select Credit Ratings, and then find the article under Presale Credit Reports. Preliminary Ratings Assigned TW Hotel Funding 2005 LLC Class Rating Amount LTV DSC ----- ------ ------ --- --- A1 AAA $133,350,000 26.26% 3.44 A2 AAA $44,450,000 35.02% 2.58 B AA+ $22,200,000 39.39% 2.30 C AA $25,900,000 44.49% 2.03 D AA- $12,700,000 46.99% 1.92 E A+ $17,000,000 50.34% 1.80 F A $17,300,000 53.75% 1.68 G A- $12,700,000 56.25% 1.61 H BBB+ $25,000,000 61.17% 1.48 J BBB $19,400,000 64.99% 1.39 K BBB- $27,000,000 70.31% 1.29 L BB+ $18,000,000 73.86% 1.22 M BB $29,800,000 79.73% 1.13 N BB- $20,200,000 83.71% 1.08 R N/A N/A N/A N/A N/A - Not applicable. VIPER NETWORKS: Restates Year 2004 Financial Statements ------------------------------------------------------- Viper Networks, Inc., (OTC:VPER) amended its Annual Report on Form 10-KSB for the year ended Dec. 31, 2004, originally submitted with the Securities and Exchange Commission on April 21, 2005, to expand disclosures and restate the Consolidated Financial Statements in response to the SEC's comments. Viper Networks' independent auditors, Armando C. Ibarra, CPA, PC, have expressed substantial doubt about the Company's ability to continue as a going concern because of the Company's recurring net losses. For the year ended Dec. 31, 2004, Viper incurred a $7,910,925 net loss on $4,612,783 of revenues, as compared to a $2,200,854 net loss on $433,376 of revenues in the prior year. The Company has incurred cumulative losses of $11,071,676 since the its inception through Dec. 31, 2004. The Company's balance sheet showed $1,327,115 in total assets at Dec. 31, 2004, and liabilities of $1,308,326. The Company's liquidity and access to capital is very limited. At Dec. 31, 2004, the Company had a working capital deficit of $1,003,078. Viper Names New President Viper announced the appointment of Yale W. Wong as its new President for day-to-day operations and new business development on Dec. 6, 2005. Prior to joining Viper Networks as its Vice President of Business Development, Mr. Wong was the founder and CEO of Compass Communications in Seattle, Wash., where he established a track record of building and maintaining a profitable large scale communications business and services corporations. About Viper Viper Networks, Inc. -- http://www.vipernetworks.com/-- provides VoIP products and services through distributors and resellers around the world. Its network of VoIP gateways serves more than 350 countries and regions, and it is unique in offering both network services and equipment to its customers. Unlike most competing VoIP providers, Viper Networks offers its service on a pre-pay basis. It charges only for minutes used and does not require any monthly fees. Its Internet-based users can get dial- up or broadband service with equal quality. Viper has been pioneering VoIP service and technology for more than five years. WCI COMMUNITIES: Offers to Buy $298M of 10-5/8% Senior Sub. Notes ---------------------------------------------------------------- WCI Communities, Inc. (NYSE:WCI) has commenced a cash tender offer and consent solicitation for any and all of its outstanding 10-5/8% Senior Subordinated Notes due 2011. Terms and conditions for the tender offer and consent solicitation are included in the company's Offer to Purchase and Consent Solicitation Statement, dated Dec. 2, 2005, and the accompanying Consent and Letter of Transmittal. The aggregate outstanding principal amount of the Notes is approximately $298 million. The tender offer will expire at 11:59 p.m. EST on Dec. 30, 2005, unless extended or terminated earlier by the company. The company also announced that it expects to enter into a new $300 million senior unsecured term loan facility, the proceeds of which the company expects to use primarily to repurchase the Notes to the extent tendered in the offer. KeyBanc Capital Markets and Wachovia Securities will act as joint lead arrangers and KeyBanc Capital Markets will be the Sole Book Runner in the origination of the new term loan. The total consideration for each $1,000 principal amount of Notes validly tendered and accepted for purchase will be the price determined on Dec. 15, 2005 at 2:00 p.m. EST using the present value on the early payment date of the sum of $1,053.13 and all future interest payments through Feb. 15, 2006 minus accrued and unpaid interest from the last date on which interest has been paid up to, but not including, the early payment date. The present value will be determined using the bid yield to maturity of the 5.625% U.S. Treasury Note due Feb. 15, 2006, plus a fixed spread of 50 basis points. The total consideration for each Note tendered includes a consent payment of $30 per $1,000 principal amount of Notes to holders who validly tender their Notes and deliver their consents prior to 5:00 p.m., EST, on Dec. 15, 2005. Holders who tender their Notes after the Consent Payment Deadline will not receive the consent payment. Holders who properly tender and whose Notes are accepted for purchase also will be paid accrued and unpaid interest up to, but not including, the applicable payment date. The company expects to pay the total consideration for Notes validly tendered by the Consent Payment Deadline shortly after the conditions to payment are satisfied, including the closing of the new senior unsecured facility. Payment of the tender offer consideration, which will not include the consent payment, for Notes validly tendered in the tender offer after the Consent Payment Deadline will be made promptly after the expiration of the tender offer. In conjunction with the tender offer, the company is soliciting the consents of the holders of the Notes to eliminate substantially all of the restrictive covenants and certain events of default and related provisions in the indenture under which the Notes were issued. Holders who tender their Notes must consent to the proposed amendments. Tendered Notes may not be withdrawn and consents may not be revoked after the company receives consents from holders of a majority in aggregate principal amount of outstanding Notes and a supplemental indenture reflecting the proposed amendments has been executed. The company's tender offer and consent solicitation is conditioned on: * consummation of the company's new $300 million senior unsecured term loan facility to provide the financing necessary to complete the offer and related transactions; * receipt of consents of holders of a majority in aggregate principal amount of outstanding Notes not owned by the company or any of its affiliates with respect to certain of the proposed amendments to the indenture and execution of a supplemental indenture providing for such amendments; and * certain other customary conditions. The company may waive some or all of these conditions in its sole discretion. Sole Dealer Manager for the Offer and Solicitation: Wachovia Securities Tel: (704) 715-8341 Toll free: (866) 309-6316 Information Agent for the Offer and Solicitation: Georgeson Shareholder Communications Inc. Tel: (212) 440-9800 (collect) Toll free: (866) 729-6814 Depositary for the Offer and Solicitation: Bank of New York Trust Company, N.A. Tel: (212) 815-5920 Copies of the offer documents and other related documents may be obtained from the Information Agent. WCI Communities, Inc. -- http://www.wcicommunities.com/-- named America's Best Builder in 2004 by the National Association of Home Builders and Builder Magazine, has been creating amenity-rich, master-planned lifestyle communities since 1946. Florida-based WCI caters to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland, and Virginia. The company offers traditional and tower home choices with prices from the high-$100,000s to more than $10 million and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division, its mortgage and title businesses, and its amenities, as well as through land sales and joint ventures. The company currently owns and controls developable land of over 17,000 acres. * * * WCI Communities' 3% contingent convertible senior subordinated notes due 2023 carry Moody's Investors Service's Ba3 rating and Standard & Poor's B+ rating. WELLINGTON PROPERTIES: Wants to Retain LandAmerica as Consultant ---------------------------------------------------------------- Wellington Properties, LLC, asks the U.S. Bankruptcy Court for the Middle District of North Carolina for permission to retain LandAmerica Assessment Corporation as its environmental consultant. On September 12, 2005, the Debtor filed a proposed plan of reorganization plan. The Debtor has asked to delay the disclosure statement hearing so that some environmental issues can be assessed. The Plan proposed retention of Wellington Place apartment complex with some claims and improvements to the property to be funded by cash contributions from the Investors. After the disclosure statement was filed, the Investors found out that a number of basement of former laundry rooms had flooded and sewage pipes broken, which results in the accumulation of waste in those rooms, damage to some structural elements, and development of mold infestation. The Investors are unwilling to proceed with the Disclosure Statement hearing until the situation has been fully settled and remedial work identified. In that regard, the Debtor selected LandAmerica to provide a mold survey and an asbestos survey of 35 apartments in the property. The Debtor will pay the firm $10,700 for the survey cost. To the best of the Debtor's knowledge, Mr. Kepley does not hold any interest adverse to its estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Durham, North Carolina, Wellington Properties, LLC, owns and operates a 501-unit apartment complex known as Wellington Place located in Durham, North Carolina. The Company filed for chapter 11 protection on March 29, 2005 (Bankr. M.D.N.C. Case No. 05-80920). John A. Northen, Esq., at Northen Blue, L.L.P., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $11,625,087 and total debts of $12,632,012. WINN-DIXIE: Taps ACNielsen as New Preferred Information Provider ---------------------------------------------------------------- ACNielsen U.S. reported a new and greatly expanded agreement with Winn-Dixie, one of the nation's largest grocery retailers with operations throughout the Southeastern United States and the Bahamas. Under the agreement, the retailer will utilize ACNielsen as its new preferred provider of syndicated sales information and consumer insights, while an on-site ACNielsen team will lead Winn-Dixie's category management initiatives from a syndicated data perspective. "We have complete trust in the quality of ACNielsen's information and the expertise of the team assigned to our business," Winn- Dixie Director of Category Management Larry Biggerstaff said. "We are very confident that this expanded relationship with ACNielsen will be instrumental to our future success. We encourage all of our manufacturer partners to utilize ACNielsen information when working with us on category development plans," Mr. Biggerstaff added. "This new agreement is a tremendous opportunity for us to take our relationship with Winn-Dixie to a whole new level, ACNielsen Senior Vice President of Retail Client Service Danny Sacco said. "Winn-Dixie has embraced the competitive strengths made possible by our 'one-VNU' approach to business practices like category management. We relish the opportunity to work with Winn-Dixie in such a comprehensive manner," Mr. Sacco added. Under the new contract, Winn-Dixie will continue to use ACNielsen CBP(R)-Category Business Planner to monitor and analyze its sales based on the retailer's custom category definitions; the Homescan(R) consumer panel will provide unparalleled consumer insights; Retail ACView(TM) will provide market share monitoring and analysis; and Local Market Planner(TM) will enable Winn-Dixie to conduct sales analysis within easy-to-customize trading areas. In addition, a team of ACNielsen analysts will provide full-time on-site support to Winn-Dixie, managing a new consumer-centric category management process. ACNielsen, a VNU business, is the world's leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns. 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. (Winn-Dixie Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Jefferies' Retention by Equity Panel Draws Objections ----------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Oct. 21, 2005, the Official Committee of Equity Security Holders seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Jefferies & Company, Inc., as its financial advisor in the Debtors' Chapter 11 cases, effective as of Sept. 1, 2005. Jefferies will be paid: -- a $125,000 monthly fee until the firm has been paid $375,000 in total monthly fees, and $100,000 per month thereafter; and -- a success fee equal to: (1) 1% of any recoveries by the holders of the Debtors' equity securities aggregating $150,000,000; (2) 1.25% of any recoveries by Equity aggregating between $150,000,000 and $300,000,000; and (3) 1.5% of any recoveries by Equity aggregating in excess of $300,000,000. A credit equal to 50% of all Monthly Fees paid to Jefferies in excess of $375,000 will be applicable against the Success Fee, if any. Objections (1) Retirees The Ad Hoc Committee of Winn-Dixie Retirees objects to the approval of the Retention Application because it is premature in light of the outstanding motions regarding the disbandment of the Official Committee of Equity Security Holders. The Retirees Committee agrees with the assertion of the Official Committee of Unsecured Creditors that any selection of professionals would be rendered moot should the Disbandment Motion be granted. In addition, the Disbandment Motion is currently abated to allow the United States Trustee to review the current need for an Equity Committee. The Retirees Committee sees no prejudice in delaying any ruling on the Application until a determination is made regarding the Equity Committee. Jerrett M. McConnell, Esq., at Friedline & McConnell, P.A., in Jacksonville, Florida, asserts that since the Application requests approval nunc pro tunc, it should not matter whether the Application is heard now or a month from now. Conversely, Mr. McConnell continues, should the Disbandment Motion be granted, or should the U.S. Trustee decide to disband the Equity Committee, the Retirees Committee fails to see why the Debtors' bankruptcy estate should be taxed for the financial advisor fees of a committee improperly appointed by the U.S. Trustee. Should the Court find that the U. S. Trustee's appointment of the Equity Committee was proper, the Retirees Committee objects to the Court approving the retention of the Advisors. While the Retirees Committee agrees with the assertion that a properly appointed equity or creditors committee is entitled to retain financial advisors, it asserts that the proposed fees outlined in the Application are excessive, Mr. McConnell says. Accordingly, the Retirees Committee asks the Court to postpone the approval of the Application until a decision on the pending Disbandment Motion is rendered or the U.S. Trustee makes a decision regarding the propriety of an Equity Committee. In the alternative, the Retirees Committee asks the Court to schedule an evidentiary hearing on the reasonableness of the proposed fees before approving the Application. (2) Debtors The Debtors have asked the Equity Committee and Jefferies to revise the firm's engagement letter to remove provisions that purport to bind the Debtors, who are not signatories to the agreement. The Debtors believe that Jefferies has agreed to make the modifications. To the extent the Court approves Jefferies' engagement, the approval should be on the terms reflected in the revised Letter Agreement. With respect to the economic terms of Jefferies' retention, the Debtors do not object to the monthly fee amount or to the formula for determining the amount of a success fee. The Debtors, however, do object to the payment of any success fee in a form other than the form in which distributions, if any, are made to the Debtors' stockholders under the plan of reorganization. Therefore, the Debtors ask the Court to either approve a success bonus component for Jefferies only if it is payable in the form of stockholder distributions or to permit payment in cash or any other form only with the consent of the Debtors and the Creditors Committee. The Letter Agreement seeks indemnification protections for Jefferies. The Debtors have advised the Equity Committee that those protections must be limited and made consistent with the protections granted to the financial advisors for the Debtors and the Creditors Committee by orders of the Court, which include expanded exclusions and a court application requirement. The Debtors understand that the Equity Committee has agreed to limitations, but in the event Jefferies' retention does not contain the necessary language, the Debtors object to the granting of indemnification to Jefferies. 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. (Winn-Dixie Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: "Better Holidays Daily Cash Giveaway" Promotion ----------------------------------------------------------- With the holiday season of giving underway, Winn-Dixie Stores (Pink Sheets:WNDXQ) said that customers have the chance to win a bag full of cash just by using their Customer Reward Cards whenever they buy groceries. Each day from November 30 through December 23, the grocer will announce a $10,000 prize as part of its "Better Holidays Daily Cash Giveaway." On December 24, Winn- Dixie will announce the grand prize winner for the $50,000. "What could be better than to go into the store to do some holiday shopping and come out with $10,000 or $50,000?" said Terry Derreberry, Winn-Dixie director of communications and neighborhood marketing. "The Winn-Dixie Reward Card is designed to reward our loyal customers every time they buy groceries. This year, we will be giving a bag full of cash for a holiday to remember." The sweepstakes is open to U.S. residents 18 or older living in Florida, Georgia, Alabama, Mississippi and Louisiana. Winning Customer Reward Card numbers will be posted in all Winn-Dixie stores each day, as well as on the supermarket's Web site http://www.winn-dixie.com 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. (Winn-Dixie Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000). WISCONSIN AVENUE: Fitch Affirms B Rating on $1.2MM Class C Certs. ----------------------------------------------------------------- Wisconsin Avenue Securities' subordinate REMIC pass-through certificates, series 1997-M8 are upgraded by Fitch Ratings: -- $3.7 million class B to 'BBB' from 'BBB-'. In addition, Fitch affirms this class: -- $1.2 million class C at 'B'. The $10.7 million class A-2, $13.4 million class A-3, and X-2 certificates were exchanged for Federal National Mortgage Association guaranteed REMIC pass-through certificates and are not rated by Fitch. Classes A-1 and interest only class X-1 have paid in full. The certificates are collateralized by 31 mortgage loans, which are secured by cooperative apartment buildings. By loan balance, 84% of the pool is located in the New York City metropolitan area. Fitch views this concentration positively because cooperatives within the New York City market have performed extremely well historically. As of the October 2005 distribution date, the pool's aggregate principal balance has been reduced by approximately 85% to $28.9 million from $196.2 million at issuance. Currently, there are no specially serviced loans. NCB, FSB, the master servicer, received year-end 2004 operating statements on approximately 68% of the outstanding balance. The YE 2004 stressed weighted-average debt service coverage ratio decreased to 4.35 times compared to 4.60x at YE 2003. The stressed DSCR's were calculated based on Fitch mortgage constants and net operating income derived from hypothetical market rental income less current actual borrower reported expenses. The hypothetical market rental income is based on conservative market rental rates at origination. WORLD AM: Posts $724,575 Net Loss in Quarter Ended Sept. 30 ----------------------------------------------------------- World Am, Inc., incurred a $724,575 net loss on $101,763 of revenues for the three months ended Sept. 30, 2005, in contrast to a $314,238 net loss on $151,768 of revenues for the comparable period in 2004. The net loss from operations for the three months ended Sept. 30, 2005 was $605,492, a 90% increase, as compared to $319,025 for the three months ended Sept. 30, 2004. The Company's balance sheet showed $1,148,031 in total assets at Sept. 30, 2005, and liabilities of $1,287,959, resulting in a stockholders' deficit of approximately $139,928. At Sept. 30, 2005, the Company's current liabilities exceed its current assets by approximately $1,145,659. New Directors As a result of the agreement between World Am and Senz-It, Inc., and its shareholder (SUTI Holdings, L.P., which is controlled by its general partner, Select University Technologies, Inc.), SUTI now controls the Company. Under the terms of this agreement, SUTI obtained the right to appoint a minimum of three directors to the board. On Nov. 10, 2005, the Company's board of directors appointed David J. Barnes and James R. Largent to the board of directors. As yet, neither Mr. Barnes nor Mr. Largent has been, or is expected to be, named to any committee of the Company. James H. Alexander, the Company's former president and chief executive officer, resigned as a director of the Company on Nov. 11, 2005. Going Concern Doubt L.L. Bradford & Company, LLC, expressed substantial doubt about World Am, Inc.'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 losses from operations and working capital deficit. About World Am World Am, Inc. (OTCBB:WDAM) -- http://www.world-am.com/-- is a holding company whose mission is to identify, acquire and develop commercially viable innovative technology. The present business plan calls for WDAM to continue to develop its operating subsidiary, Isotec to profitability, and to acquire additional companies or technologies in order to increase the value of the company. Future plans may involve the sale or spin-off of business units as deemed appropriate. The objective of The Company is to achieve superior returns through acquisition and equity investments in ventures based on commercially developing innovative technologies offering high, mid to long-term growth potentials. * BOND PRICING: For the week of Dec. 5 - Dec. 9, 2005 ----------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- Adelphia Comm. 3.250% 05/01/21 2 Adelphia Comm. 6.000% 02/15/06 2 Adelphia Comm. 7.500% 01/15/04 60 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 60 Adelphia Comm. 9.250% 10/01/02 59 Adelphia Comm. 9.375% 11/15/09 62 Adelphia Comm. 9.500% 02/15/04 58 Adelphia Comm. 9.875% 03/01/05 60 Adelphia Comm. 9.875% 03/01/07 58 Adelphia Comm. 10.250% 11/01/06 60 Adelphia Comm. 10.250% 06/15/11 63 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 70 Aladdin Gaming 13.500% 03/01/10 0 Albertson's Inc. 6.520% 04/10/28 74 Albertson's Inc. 7.000% 07/21/17 74 Allegiance Tel. 11.750% 02/15/08 25 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 71 Amer Color Graph 10.000% 06/15/10 68 Amer Plumbing 11.625% 10/15/08 16 American Airline 8.390% 01/02/17 74 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 68 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 70 AMR Corp. 9.800% 10/01/21 70 AMR Corp. 9.880% 06/15/20 70 AMR Corp. 10.000% 04/15/21 70 AMR Corp. 10.125% 06/01/21 66 AMR Corp. 10.150% 05/15/20 66 AMR Corp. 10.200% 03/15/20 73 AMR Corp. 10.550% 03/12/21 69 Amtran Inc. 9.625% 12/15/05 4 Anchor Glass 11.000% 02/15/13 73 Antigenics 5.250% 02/01/25 54 Anvil Knitwear 10.875% 03/15/07 55 Apple South Inc. 9.750% 06/01/06 3 Archibald Candy 10.000% 11/01/07 0 Armstrong World 6.350% 08/15/03 74 Armstrong World 6.500% 08/15/05 72 Armstrong World 7.450% 05/15/29 74 Armstrong World 9.000% 06/15/04 74 Asarco Inc. 7.875% 04/15/13 61 Asarco Inc. 8.500% 05/01/25 50 ATA Holdings 12.125% 06/15/10 5 ATA Holdings 13.000% 02/01/09 4 At Home Corp. 4.750% 12/15/06 0 Atlantic Coast 6.000% 02/15/34 3 Atlas Air Inc 8.770% 01/02/11 62 Autocam Corp. 10.875% 06/15/14 65 Bank New England 8.750% 04/01/99 4 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 57 Calpine Corp. 4.000% 12/26/06 22 Calpine Corp. 4.750% 11/15/23 19 Calpine Corp. 7.625% 04/15/06 34 Calpine Corp. 7.750% 04/15/09 37 Calpine Corp. 7.875% 04/01/08 37 Calpine Corp. 8.500% 07/15/10 74 Calpine Corp. 8.500% 02/15/11 21 Calpine Corp. 8.625% 08/15/10 22 Calpine Corp. 8.750% 07/15/07 34 Calpine Corp. 8.750% 07/15/13 75 Calpine Corp. 10.500% 05/15/06 35 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 42 Cendant Corp 4.890% 08/17/06 50 Charter Comm Hld 10.000% 05/15/11 59 Charter Comm Hld 11.125% 01/15/11 62 CIH 10.000% 05/15/14 62 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 10.750 12/15/01 0 Comcast Corp. 2.000% 10/15/29 39 Compudyne Corp 6.250% 01/15/11 71 Cons Container 10.125% 07/15/09 67 Covad Communication 3.000% 03/15/24 58 Cray Inc. 3.000% 12/01/24 55 Cray Research 6.125% 02/01/11 24 Curagen Corp. 4.000% 02/15/11 71 Curagen Corp. 4.000% 02/15/11 70 Curative Health 10.750% 05/01/11 68 DAL-DFLT09/05 9.000% 05/15/16 20 Dana Corp 5.850% 01/15/15 70 Dana Corp 7.000% 03/15/28 71 Dana Corp 7.000% 03/01/29 70 Decrane Aircraft 12.000% 09/30/08 51 Delco Remy Intl 9.375% 04/15/12 39 Delco Remy Intl 11.000% 05/01/09 38 Delta Air Lines 2.875% 02/18/24 18 Delta Air Lines 7.541% 10/11/11 62 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 17 Delta Air Lines 8.300% 12/15/29 20 Delta Air Lines 8.540% 01/02/07 29 Delta Air Lines 8.540% 01/02/07 26 Delta Air Lines 8.540% 01/02/07 29 Delta Air Lines 8.540% 01/02/07 26 Delta Air Lines 8.950% 01/12/12 44 Delta Air Lines 9.200% 09/23/14 45 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 56 Delta Air Lines 9.375% 09/11/07 55 Delta Air Lines 9.450% 02/26/06 54 Delta Air Lines 9.590% 01/12/17 40 Delta Air Lines 9.750% 05/15/21 20 Delta Air Lines 9.875% 04/30/08 65 Delta Air Lines 10.000% 08/15/08 21 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 62 Delta Air Lines 10.000% 06/01/09 44 Delta Air Lines 10.000% 06/01/10 68 Delta Air Lines 10.000% 06/01/10 50 Delta Air Lines 10.060% 01/02/16 53 Delta Air Lines 10.125% 05/15/10 21 Delta Air Lines 10.125% 06/16/10 61 Delta Air Lines 10.140% 08/14/11 60 Delta Air Lines 10.330% 03/26/06 28 Delta Air Lines 10.375% 02/01/11 20 Delta Air Lines 10.375% 12/15/22 20 Delta Air Lines 10.430% 01/02/11 42 Delta Air Lines 10.430% 01/02/11 42 Delta Air Lines 10.500% 04/30/16 65 Delta Air Lines 10.790% 09/26/13 42 Delta Air Lines 10.790% 03/26/14 42 Delta Air Lines 10.790% 03/26/14 14 Delphi Auto Syst 6.500% 05/01/09 55 Delphi Auto Syst 7.125% 05/01/29 54 Delphi Corp 6.500% 08/15/13 54 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 66 Dura Operating 9.000% 05/01/09 62 Dura Operating 9.000% 05/01/09 62 Duty Free Int'l. 7.000% 01/15/04 4 DVI Inc. 9.875% 02/01/04 10 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 34 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. 8.370% 11/15/01 34 Federal-Mogul Co. 8.800% 04/15/07 35 Finova Group 7.500% 11/15/09 33 FMXIQ-DFLT09/05 13.500% 08/15/05 3 Foamex L.P.-DFLT 9.875% 06/15/07 8 Ford Motor Co. 6.500% 08/01/18 65 Ford Motor Co. 6.625% 02/15/28 65 Ford Motor Co. 7.125% 11/15/25 68 Ford Motor Co. 7.400% 11/01/46 62 Ford Motor Co. 7.700% 05/15/97 61 Ford Motor Co. 7.750% 06/15/43 62 Ford Motor Co. 8.875% 01/15/22 75 Ford Motor Co. 9.900% 01/15/32 75 Ford Motor Co. 9.215% 09/15/21 74 Ford Motor Cred 5.000% 01/20/11 67 Ford Motor Cred 5.000% 02/22/11 69 Ford Motor Cred 5.100% 02/22/11 70 Ford Motor Cred 5.150% 11/20/09 74 Ford Motor Cred 5.200% 03/21/11 70 Ford Motor Cred 5.200% 03/21/11 71 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 69 Ford Motor Cred 5.300% 03/21/11 71 Ford Motor Cred 5.350% 02/22/11 72 Ford Motor Cred 5.400% 09/20/11 67 Ford Motor Cred 5.400% 10/20/11 71 Ford Motor Cred 5.400% 10/20/11 73 Ford Motor Cred 5.450% 06/21/10 74 Ford Motor Cred 5.450% 04/20/11 73 Ford Motor Cred 5.450% 10/20/11 71 Ford Motor Cred 5.500% 02/22/10 75 Ford Motor Cred 5.500% 04/20/11 73 Ford Motor Cred 5.500% 09/20/11 72 Ford Motor Cred 5.500% 10/20/11 74 Ford Motor Cred 5.550% 06/21/10 75 Ford Motor Cred 5.550% 08/22/11 73 Ford Motor Cred 5.550% 09/20/11 73 Ford Motor Cred 5.600% 04/20/11 72 Ford Motor Cred 5.600% 08/22/11 69 Ford Motor Cred 5.600% 09/20/11 70 Ford Motor Cred 5.600% 11/21/11 75 Ford Motor Cred 5.600% 11/21/11 72 Ford Motor Cred 5.650% 05/20/11 75 Ford Motor Cred 5.650% 07/20/11 75 Ford Motor Cred 5.650% 11/21/11 70 Ford Motor Cred 5.650% 11/21/11 72 Ford Motor Cred 5.650% 12/20/11 73 Ford Motor Cred 5.650% 12/20/11 72 Ford Motor Cred 5.650% 01/21/14 65 Ford Motor Cred 5.700% 05/20/11 74 Ford Motor Cred 5.700% 12/20/11 74 Ford Motor Cred 5.700% 01/20/12 73 Ford Motor Cred 5.750% 10/20/10 73 Ford Motor Cred 5.750% 08/22/11 70 Ford Motor Cred 5.750% 12/20/11 72 Ford Motor Cred 5.750% 01/21/14 66 Ford Motor Cred 5.750% 02/20/14 68 Ford Motor Cred 5.750% 02/20/14 67 Ford Motor Cred 5.800% 08/22/11 73 Ford Motor Cred 5.850% 07/20/11 69 Ford Motor Cred 5.850% 01/20/12 72 Ford Motor Cred 5.900% 07/20/11 73 Ford Motor Cred 5.900% 02/21/12 74 Ford Motor Cred 5.900% 02/20/14 68 Ford Motor Cred 6.000% 01/20/12 72 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 65 Ford Motor Cred 6.000% 03/20/14 67 Ford Motor Cred 6.000% 11/20/14 66 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 70 Ford Motor Cred 6.000% 02/20/15 70 Ford Motor Cred 6.050% 07/20/10 70 Ford Motor Cred 6.050% 06/20/11 74 Ford Motor Cred 6.050% 03/20/12 74 Ford Motor Cred 6.050% 02/20/14 67 Ford Motor Cred 6.050% 03/20/14 65 Ford Motor Cred 6.050% 04/21/14 70 Ford Motor Cred 6.050% 12/22/14 70 Ford Motor Cred 6.050% 12/22/14 67 Ford Motor Cred 6.050% 12/22/14 67 Ford Motor Cred 6.050% 02/20/15 67 Ford Motor Cred 6.100% 06/20/11 74 Ford Motor Cred 6.100% 02/20/15 69 Ford Motor Cred 6.150% 09/20/10 75 Ford Motor Cred 6.150% 12/22/14 66 Ford Motor Cred 6.150% 01/20/15 66 Ford Motor Cred 6.200% 06/20/11 75 Ford Motor Cred 6.200% 04/21/14 70 Ford Motor Cred 6.200% 03/20/15 67 Ford Motor Cred 6.250% 08/20/10 74 Ford Motor Cred 6.250% 02/21/12 71 Ford Motor Cred 6.250% 03/20/12 74 Ford Motor Cred 6.250% 12/20/13 71 Ford Motor Cred 6.250% 12/20/13 70 Ford Motor Cred 6.250% 04/21/14 69 Ford Motor Cred 6.250% 01/20/15 69 Ford Motor Cred 6.250% 03/20/15 67 Ford Motor Cred 6.300% 05/20/14 70 Ford Motor Cred 6.300% 05/20/14 67 Ford Motor Cred 6.350% 04/21/14 70 Ford Motor Cred 6.500% 12/20/13 72 Ford Motor Cred 6.500% 02/20/15 66 Ford Motor Cred 6.500% 03/20/15 68 Ford Motor Cred 6.520% 03/10/13 67 Ford Motor Cred 6.550% 12/20/13 73 Ford Motor Cred 6.550% 07/21/14 70 Ford Motor Cred 6.600% 10/21/13 73 Ford Motor Cred 6.650% 10/21/13 73 Ford Motor Cred 6.650% 06/20/14 68 Ford Motor Cred 6.750% 10/21/13 73 Ford Motor Cred 6.750% 06/20/14 75 Ford Motor Cred 6.800% 06/20/14 72 Ford Motor Cred 6.800% 06/20/14 67 Ford Motor Cred 6.800% 03/20/15 67 Ford Motor Cred 6.850% 09/20/13 72 Ford Motor Cred 6.850% 05/20/14 72 Ford Motor Cred 6.850% 06/20/14 72 Ford Motor Cred 6.950% 05/20/14 72 Ford Motor Cred 7.000% 11/26/11 74 Ford Motor Cred 7.050% 09/20/13 72 Ford Motor Cred 7.100% 09/20/13 73 Ford Motor Cred 7.250% 07/20/17 64 Ford Motor Cred 7.250% 07/20/17 63 Ford Motor Cred 7.300% 01/23/12 74 Ford Motor Cred 7.300% 04/20/15 73 Ford Motor Cred 7.350% 05/15/12 74 Ford Motor Cred 7.350% 03/20/15 75 Ford Motor Cred 7.350% 09/15/15 66 Ford Motor Cred 7.400% 08/21/17 69 Ford Motor Cred 7.500% 08/20/32 59 Ford Motor Cred 7.550% 09/30/15 67 Ford Motor Cred 7.900% 05/18/15 70 Gateway Inc. 2.000% 12/31/11 71 General Motors 7.125% 07/15/13 69 General Motors 7.400% 09/01/25 62 General Motors 8.100% 06/15/24 64 General Motors 8.250% 07/15/23 67 General Motors 8.375% 07/15/33 68 General Motors 8.800% 03/01/21 67 General Motors 9.400% 07/15/21 68 Gfsi Inc. 9.625% 03/01/07 75 GMAC 4.150% 04/15/09 73 GMAC 5.250% 01/15/14 68 GMAC 5.350% 01/15/14 69 GMAC 5.700% 06/15/13 73 GMAC 5.700% 10/15/13 70 GMAC 5.700% 12/15/13 67 GMAC 5.750% 01/15/14 71 GMAC 5.850% 05/15/13 71 GMAC 5.850% 06/15/13 72 GMAC 5.850% 06/15/13 73 GMAC 5.900% 12/15/13 71 GMAC 5.900% 01/15/19 65 GMAC 5.900% 01/15/19 69 GMAC 5.900% 02/15/19 68 GMAC 5.900% 10/15/19 63 GMAC 6.000% 11/15/13 74 GMAC 6.000% 12/15/13 73 GMAC 6.000% 02/15/19 67 GMAC 6.000% 02/15/19 67 GMAC 6.000% 02/15/19 68 GMAC 6.000% 03/15/19 64 GMAC 6.000% 03/15/19 66 GMAC 6.000% 03/15/19 64 GMAC 6.000% 03/15/19 66 GMAC 6.000% 03/15/19 68 GMAC 6.000% 04/15/19 68 GMAC 6.000% 09/15/19 66 GMAC 6.000% 09/15/19 63 GMAC 6.050% 08/15/19 66 GMAC 6.050% 08/15/19 67 GMAC 6.050% 10/15/19 66 GMAC 6.100% 09/15/19 67 GMAC 6.125% 10/15/19 68 GMAC 6.150% 12/15/13 73 GMAC 6.150% 08/15/19 67 GMAC 6.150% 09/15/19 69 GMAC 6.150% 10/15/19 66 GMAC 6.200% 11/15/13 73 GMAC 6.200% 04/15/19 67 GMAC 6.250% 03/15/13 68 GMAC 6.250% 10/15/13 75 GMAC 6.250% 11/15/13 75 GMAC 6.250% 12/15/18 71 GMAC 6.250% 01/15/19 69 GMAC 6.250% 04/15/19 68 GMAC 6.250% 05/15/19 67 GMAC 6.250% 07/15/19 67 GMAC 6.300% 03/15/13 74 GMAC 6.300% 08/15/19 68 GMAC 6.300% 08/15/19 68 GMAC 6.350% 05/15/13 74 GMAC 6.350% 04/15/19 68 GMAC 6.350% 07/15/19 71 GMAC 6.350% 07/15/19 71 GMAC 6.375% 08/01/13 75 GMAC 6.400% 12/15/18 73 GMAC 6.400% 11/15/19 72 GMAC 6.400% 11/15/19 69 GMAC 6.500% 06/15/18 71 GMAC 6.500% 11/15/18 69 GMAC 6.500% 12/15/18 71 GMAC 6.500% 12/15/18 71 GMAC 6.550% 05/15/19 68 GMAC 6.500% 01/15/20 67 GMAC 6.500% 02/15/20 72 GMAC 6.550% 12/15/19 71 GMAC 6.600% 08/15/16 72 GMAC 6.600% 05/15/18 71 GMAC 6.600% 06/15/19 70 GMAC 6.600% 06/15/19 70 GMAC 6.650% 06/15/18 68 GMAC 6.650% 10/15/18 68 GMAC 6.650% 10/15/18 68 GMAC 6.700% 08/15/16 73 GMAC 6.700% 06/15/18 72 GMAC 6.700% 06/15/18 72 GMAC 6.700% 11/15/18 72 GMAC 6.700% 06/15/19 71 GMAC 6.700% 12/15/19 70 GMAC 6.750% 11/15/09 75 GMAC 6.750% 06/15/14 74 GMAC 6.750% 07/15/16 71 GMAC 6.750% 08/15/16 73 GMAC 6.750% 09/15/16 71 GMAC 6.750% 06/15/17 73 GMAC 6.750% 03/15/18 74 GMAC 6.750% 07/15/18 71 GMAC 6.750% 09/15/18 72 GMAC 6.750% 10/15/18 72 GMAC 6.750% 11/15/18 71 GMAC 6.750% 05/15/19 72 GMAC 6.750% 05/15/19 74 GMAC 6.750% 06/15/19 71 GMAC 6.750% 06/15/19 74 GMAC 6.750% 03/15/20 71 GMAC 6.800% 09/15/18 73 GMAC 6.800% 10/15/18 72 GMAC 6.850% 05/15/18 60 GMAC 6.875% 08/15/16 74 GMAC 6.875% 07/15/18 70 GMAC 6.900% 06/15/17 73 GMAC 6.900% 07/15/18 72 GMAC 6.900% 08/15/18 67 GMAC 7.000% 06/15/16 74 GMAC 7.000% 07/15/16 74 GMAC 7.000% 09/15/16 73 GMAC 7.000% 05/15/17 72 GMAC 7.000% 05/15/17 74 GMAC 7.000% 06/15/17 74 GMAC 7.000% 07/15/17 72 GMAC 7.000% 07/15/17 75 GMAC 7.000% 02/15/18 71 GMAC 7.000% 02/15/18 73 GMAC 7.000% 02/15/18 74 GMAC 7.000% 03/15/18 73 GMAC 7.000% 05/15/18 73 GMAC 7.000% 05/15/18 74 GMAC 7.000% 08/15/18 75 GMAC 7.000% 09/15/18 72 GMAC 7.000% 02/15/21 73 GMAC 7.000% 09/15/21 69 GMAC 7.000% 09/15/21 74 GMAC 7.000% 06/15/22 71 GMAC 7.000% 11/15/23 71 GMAC 7.000% 11/15/24 69 GMAC 7.000% 11/15/24 69 GMAC 7.000% 11/15/24 69 GMAC 7.050% 05/15/17 74 GMAC 7.050% 03/15/18 74 GMAC 7.050% 03/15/18 71 GMAC 7.050% 04/15/16 71 GMAC 7.125% 07/15/17 74 GMAC 7.125% 10/15/17 74 GMAC 7.150% 01/15/25 71 GMAC 7.150% 03/15/25 72 GMAC 7.200% 10/15/17 72 GMAC 7.250% 09/15/17 75 GMAC 7.250% 01/15/18 74 GMAC 7.250% 04/15/18 75 GMAC 7.250% 04/15/18 74 GMAC 7.250% 08/15/18 75 GMAC 7.250% 08/15/18 70 GMAC 7.250% 01/15/25 72 GMAC 7.250% 02/15/25 68 GMAC 7.250% 03/15/25 72 GMAC 7.300% 12/15/17 73 GMAC 7.300% 01/15/18 75 GMAC 7.350% 03/15/17 74 GMAC 7.375% 04/15/18 72 GMAC 7.400% 02/15/21 75 GMAC 7.500% 11/15/17 75 GMAC 7.500% 11/15/17 75 GMAC 7.500% 12/15/17 74 Golden Northwest 12.000% 12/15/06 3 Graftech Int'l 1.625% 01/15/24 72 Gulf Mobile Ohio 5.000% 12/01/56 74 Home Interiors 10.125% 06/01/08 70 Home Prod Intl 9.625% 05/15/08 73 Huntsman Packag 13.000% 06/01/10 18 Imperial Credit 9.875% 01/15/07 0 Inland Fiber 9.625% 11/15/07 48 Integrat Elec SV 9.375% 02/01/09 53 Integrat Elec SV 9.375% 02/01/09 55 Intermet Corp. 9.750% 06/15/09 38 Iridium LLC/CAP 10.875% 07/15/05 27 Iridium LLC/CAP 11.250% 07/15/05 27 Iridium LLC/CAP 13.000% 07/15/05 25 Iridium LLC/CAP 14.000% 07/15/05 26 Isolagen Inc. 3.500% 11/01/24 53 Jts Corp. 5.250% 04/29/02 1 Kaiser Aluminum & Chem. 12.750% 02/01/03 4 Kmart Corp. 8.990% 07/05/10 21 Kmart Corp. 9.350% 01/02/20 30 Kmart Corp. 9.780% 01/05/20 73 Kmart Funding 8.800% 07/01/10 45 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 62 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 59 Macsaver Financl 7.400% 02/15/02 4 Macsaver Financl 7.875% 08/01/03 0 Mcms Inc. 9.750 03/01/08 0 Merisant Co 9.500% 07/15/13 64 Motels of Amer 12.000% 04/15/04 66 MSX Int'l Inc. 11.375% 01/15/08 67 Muzak LLC 9.875% 03/15/09 54 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 72 New World Pasta 9.250% 02/15/09 7 North Atl Trading 9.250% 03/01/12 64 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 70 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 26 Northwest Airlines 9.875% 03/15/07 37 Northwest Airlines 10.000% 02/01/09 38 Northwest Stl & Wir 9.500% 06/15/01 0 NTK Holdings Inc. 10.750% 03/01/14 62 NWA Trust 9.360% 03/10/06 64 Oakwood Homes 7.875% 03/01/04 8 Oakwood Homes 8.125% 03/01/09 8 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 74 PCA LLC/PCA Fin 11.875 08/01/09 23 Pegasus Satellite 9.625% 10/15/05 22 Pegasus Satellite 12.375% 08/01/06 8 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 Pinnacle Airline 3.250% 02/15/25 72 Pixelworks Inc. 1.750% 05/15/24 69 Pliant Corp. 13.000% 06/01/10 18 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 7.250% 01/15/07 0 Polaroid Corp. 11.500% 02/15/06 0 PRG-Schultz Intl 4.750% 11/26/06 49 Primedex Health 11.500% 06/30/08 57 Primus Telecom 3.750% 09/15/10 32 Primus Telecom 5.750% 02/15/07 62 Primus Telecom 8.000% 01/15/14 59 Primus Telecom 12.750% 10/15/09 54 Psinet Inc. 11.000% 02/15/05 1 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 Reliance Group Holdings 9.000% 11/15/00 21 Reliance Group Holdings 9.750% 11/15/03 0 Safety-Kleen Corp. 9.250% 06/01/08 0 Salton Inc. 12.250% 04/15/08 40 Solectron Corp. 0.500% 02/15/34 75 Solutia Inc. 6.720% 10/15/37 73 Solutia Inc. 7.375% 10/15/27 74 Specialty PaperB 9.375% 10/15/06 75 Tekni-Plex Inc. 12.750% 06/15/10 58 Toys R Us 7.375% 10/15/18 73 Trans Mfg Oper 11.250% 05/01/09 62 Transtexas Gas 15.000% 03/15/05 1 Trism Inc. 12.000% 02/15/05 0 Triton Pcs Inc. 8.750% 11/15/11 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 50 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 50 United Air Lines 8.030% 07/01/11 64 United Air Lines 9.000% 12/15/03 18 United Air Lines 9.020% 04/19/12 61 United Air Lines 9.125% 01/15/12 18 United Air Lines 9.200% 03/22/08 52 United Air Lines 9.560% 10/19/18 59 United Air Lines 9.750% 08/15/21 18 United Air Lines 10.020% 03/22/14 58 United Air Lines 10.110% 01/05/06 52 United Air Lines 10.125% 03/22/15 58 United Air Lines 10.250% 07/15/21 18 United Air Lines 10.670% 05/01/04 18 United Air Lines 11.210% 05/01/14 18 Univ. Health Services 0.426% 06/23/20 58 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% 01/01/49 26 US Air Inc. 10.700% 01/15/49 27 US Air Inc. 10.700% 01/15/49 28 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 25 US Air Inc. 10.800% 01/01/49 4 US Airways Pass- 6.820% 01/30/14 72 WCI Steel Inc. 10.000% 12/01/04 70 Werner Holdings 10.000% 11/15/07 46 Westpoint Steven 7.875% 06/15/05 0 Winn-Dixie Store 8.875% 04/01/08 71 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 A. 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 ***