/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/051213.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, December 13, 2005, Vol. 9, No. 295 Headlines ACTION DEVELOPMENT: Case Summary & 4 Largest Unsecured Creditors AFC ENTERPRISES: Discloses Mid-Quarter Business Update ALAN CARRUTH: Case Summary & 13 Largest Unsecured Creditors ALLIED HOLDINGS: Creditors Must File Proofs of Claim by Feb. 17 ALLIED HOLDINGS: Court Grants Final Consent to Flatiron Financing ALLIED HOLDINGS: Submits Amendments to $230-Million GE DIP Loan ALLTEL CORP: Spin-Off Plans Prompt S&P's Negative Watch Listing ANCHOR GLASS: Wants Excl. Plan Filing Period Stretched to March 7 ANCHOR GLASS: Wants to Modify Wachovia Credit Agreements ANCHOR GLASS: Ask Court to Approve New Motts-Snapple Contract ARLINGTON HOSPITALITY: Court Okays Asset Sale to Sunburst ARROW ELECTRONICS: Completes Cash Tender Offer for Ultra Source ARROW ELECTRONICS: Stable Performance Prompts Fitch's BB+ Rating ATMEL CORP: Buys Back $81.3 Million of Convertible Notes AVNET INC: Improved Financial Profile Spurs Fitch's BB Rating BEAR STEARNS: Fitch Affirms Low-B Ratings on $31.7MM Cert. Classes BIONICHE LIFE: Completes Private Financing from Laurus Funds BUDGET INN: Case Summary & 7 Largest Unsecured Creditors CASCADES INC: S&P Puts BB+ Rating on CDN$550 Mil. Credit Facility CATHOLIC CHURCH: Spokane Wants Exclusive Date Extended to Jan. 31 CATHOLIC CHURCH: Court Sets March 10 as Spokane's Claims Bar Date CHASE MORTGAGE: Fitch Upgrades Low-B Ratings on Three Class Certs. CHESAPEAKE ENERGY: Looks to Raise $605 Million from Stock Offering CHINA MEDIA1: Posts $24,616 Net Loss in Third Quarter of 2005 CIRTRAN CORP: Forms CirTran Products for Retail Merchandise CLEAN HARBORS: Completes Amendment on $120MM Sr. Credit Agreement CONSTELLATION BRANDS: S&P Affirms BB Corporate Credit Rating CONSUMERS TRUST: Wants to Hire Bankruptcy Services as Claims Agent CREDIT SUISSE: S&P Raises Low-B Ratings on Class G & H Certs. CYBER DEFENSE: Posts $2 Million Net Loss in Quarter Ended Sept. 30 DELTA AIR: ALPA Agrees to Tentative 14% Hourly Wage Cut ELEC COMMS: Closes $2 Million Private Debt Placement with Laurus EMMIS COMMS: Completes Sale of Four TV Stations to Lin TV Corp. ENRON CORP: Strikes Ten ESI Customer Settlement Agreements ENRON CORP: Univ. of Pa. Holds $700,000 Allowed Unsecured Claim EQUINOX HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $49 Mil. FACTORY 2-U: Trustee Wants Admin. Claims Bar Date Set to Feb. 22 FACTORY 2-U: Richard Franklin Okayed as Trustee's Claims Auditor FEDERAL-MOGUL: Court Approves Owens-Illinois' Settlement Agreement FLEETWOOD ENTERPRISES: Posts $1.9 Million Net Loss in Second Qtr. FOOTSTAR INC: Plan Confirmation Hearing Begins on Jan. 26 FORD MOTOR: Plans to Close Eight Plants to Cut Losses FORD MOTOR: Inks Tentative Pact with UAW on Health Care Cuts FRONTIER CHARTER: Case Summary & 20 Largest Unsecured Creditors GFSI INC: Commences Exchange Offer for 9-5/8% Senior Notes GLOBAL EXECUTION: Fitch Lifts Rating on Class E Preferred Shares GRAND EAGLE: Court OKs Creditors Committee Settlement With Viacom HANDEX GROUP: Wants to Hire Gronek & Latham as Bankruptcy Counsel HANDEX GROUP: Section 341(a) Meeting Slated for December 19 HAYES LEMMERZ: Posts $13.3 Million Net Loss in Third Quarter INDUSTRIAL ENT: Earns $265,000 of Net Income in First Quarter INTERSTATE BAKERIES: Wants to Implement Consolidation Protocol INTERSTATE BAKERIES: Executes Amended DIP Financing Agreement LIFESTREAM TECH: Inks Agreement With GenExel for Three-in-One Unit LIN TV: Completes Purchase on Four TV Stations from Emmis Comms. MAJESTIC HOLDCO: Moody's Rates $55 Mil. Sr. Discount Notes at Caa2 MCKESSON CORP: Board Authorizes $250 Million Stock Repurchase MEZZ CAP: Fitch Rates $7.215 Million Class Certificates at Low-B MIRANT CORP: Asks Court to Okay Canadian Units' Refinancing Pact MIRANT CORP: 3V Capital Holds $3.2 Million Unsecured Claim MIRANT CORP: Court Approves Kinder Morgan Settlement Agreement MUTLIFAMILY CAPITAL: Fitch Puts BB Rating on $3.6MM Class D Certs. NDCHEALTH CORP: Launches Tender Offer for 10-1/2% Senior Notes NETWORK INSTALLATION: Names Scott Hoganson as Spectrum President NEVADA STAR: Reports $969,422 Fiscal 2005 Net Loss NORTHWEST AIR: Restructures Agreements with Manufacturers NORTHWEST AIRLINES: Retired Pilots Balk at CBA Rejection Request NORTHWEST AIRLINES: Open-Ended Lease Decision Period Draws Fire O'SULLIVAN IND: Disclosure Statement Hearing Postponed to Jan. 12 O'SULLIVAN INDUSTRIES: Wants January 30 as New Claims Bar Date OMNICARE INC: S&P Places BB+ Rating on $750 Mil. Sr. Debt Offering ONEIDA LTD: Oct. 29 Balance Sheet Upside-Down by $20.7 Million ORIUS CORP: Files Chapter 11 Petition to Implement Asset Sale ORIUS CORP: Case Summary & 50 Largest Unsecured Creditors OWENS CORNING: Acquires Key Composite Solutions Operation in Japan PENN TREATY: S&P Raises Junk Rating on Counterparty Credit Rating PHARMA SERVICES: Moody's Affirms $219 Million Notes' Caa1 Rating PLASTIPAK HOLDINGS: Completes Repurchase of 10.75% Senior Notes QUALITY INCOME: Case Summary & 13 Largest Unsecured Creditors REFCO INC: Wants to Hire Williams Barristers as Bermuda Co-Counsel REFCO INC: Refco LLC Ch. 7 Trustee Hires Togut Segal as Counsel REFCO INC: Refco LLC Ch. 7 Trustee Taps Jenner as Special Counsel RELIANCE GROUP: Judge Gonzalez Issues Post-Confirmation Protocol RIVIERA TOOL: Deloitte & Touche Raises Going Concern Doubt SFBC INT'L: Gets Lenders' Nod to Repurchase $30MM of Common Stock SOLECTRON CORP: Expected Flat Revenue Spurs Fitch's Low-B Ratings SOLO FLOORING: Case Summary & 20 Largest Unsecured Creditors SONICBLUE INC: Wants to Retain Perisho Tombor as Auditors SSA GLOBAL: Earns $1 Million of Net Income in First Quarter STANADYNE CORP: Credit Concerns Earns S&P's Negative Outlook STELCO INC: Court Extends CCAA Stay Period Until Jan. 31 STELCO INC: Ontario Court Approves Equity Sale to Mittal Canada TEE JAYS: Court Confirms Liquidating Chapter 11 Plan TODD MCFARLANE: Exclusive Plan-Filing & Solicitation Periods End TORCH OFFSHORE: Court Approves Marathon EG Settlement Agreement TRANS-INDUSTRIES: Receives Nasdaq Delisting Notice UAL CORP: Creditors Committee Taps Pearl Meyer as Advisers US AIRWAYS: Registers 7% Senior Convertible Notes for Resale USG CORPORATION: Discloses Senior Management Changes VALENTINE PAPER: Completes 363 Asset Sale to Meriturn & Dunn Paper VALOR COMMS: Merger Plans Prompts S&P to Place BB- Credit Rating VINCENT SMITH: Case Summary & 20 Largest Unsecured Creditors VISTEON CORP: Wants to Replace $300 Million Credit Facility W.R. GRACE: Says Chapter 11 Plan Hinges on Asbestos Estimation W.R. GRACE: Ninth Circuit Affirms Order Awarding $54.5M to EPA WEX PHARMACEUTICALS: Shareholders Wants to Convene Special Meeting WILLIAMS CONTROLS: Wipes Away Shareholder Deficit in 4th Quarter ZINNA PLUMBING: Case Summary & 20 Largest Unsecured Creditors * Large Companies with Insolvent Balance Sheets ********* ACTION DEVELOPMENT: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Action Development LLC 2523 El Portal Drive, Suite 101 San Pablo, California 94806 Bankruptcy Case No.: 05-49398 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: December 9, 2005 Court: Northern District of California (Oakland) Judge: Leslie J. Tchaikovsky Debtor's Counsel: William F. McLaughlin, Esq. Law Offices of Robert A. Ward 1305 Franklin Street #301 Oakland, California 94612 Tel: (510) 839-5333 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 4 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Foreclosure Consultants, Inc. Unknown 8180 East Kaiser Blvd. Anaheim Hills, CA 92808 Granite Excavation & Demolition Inc. Unknown c/o Jeffrey H. Lowenthal, Esq. One California Street, Third Floor San Francisco, CA 94111 Newtown Construction Unknown 3100 Kerner Boulevard, Suite U San Rafael, CA Scripps Investments & Loans Unknown 484 Prospect Street La Jolla, CA 92037 AFC ENTERPRISES: Discloses Mid-Quarter Business Update ------------------------------------------------------ AFC Enterprises, Inc. (Nasdaq: AFCE) released operating performance results for its Popeyes business for fiscal period 11, which began Oct. 3, 2005 and ended Oct. 30, 2005, and fiscal period 12, which began Oct. 31, 2005 and ended Nov. 27, 2005. The company's fourth fiscal quarter will end on December 25, 2005. Popeyes reported domestic same-store sales growth was up 6.6% in period 11 and up 6.7% in period 12 of 2005, compared to up 2.3% and up 3.8% for period 11 and period 12 of 2004. These results represented positive same-store sales growth for the eighteenth and nineteenth consecutive periods. The company attributes improvement of same-store sales growth in period 11 to the introduction of its New Chicken Deluxe Sandwich and its new menu board panels which rolled out nationally in October. The company attributes the growth in period 12 to its limited time crawfish offer. The same-store sales growth for the company-owned restaurants was also driven by the increased sales as a result of re-opening restaurants in the New Orleans area. Popeyes anticipates full-year domestic same-store sales growth for 2005 to be at the higher-end of its previous projection of up 2.0-3.0%. Popeyes domestic system-wide average check was up 6.2% for period 11 and up 5.5% for period 12. Domestic system-wide transactions for period 11 was up by 0.4% and up 1.1% for period 12. Domestic Same-Store Sales Growth Period 11 Period 11 Period 12 Period 12 Ended Ended Ended Ended 10/31/04 10/30/05 11/28/04 11/27/05 --------- --------- --------- -------- Company 5.0% 18.6% 3.9% 24.2% Franchised 2.1% 6.3% 3.8% 6.2% Total Domestic 2.3% 6.6% 3.8% 6.7% New Unit Growth The Popeyes system opened 17 restaurants during period 11 and period 12 of 2005, compared to 16 total system-wide openings during the same periods in 2004. These openings included 12 units domestically and 5 units internationally, which further penetrated Popeyes' existing markets. On a system-wide basis, Popeyes had 1,802 units at the end of period 12 of 2005. Total unit count was comprised of 1,466 domestic units and 336 units in Puerto Rico, Guam and 25 foreign countries. This total unit count represented 1,771 franchised and 31 company-owned restaurants excluding the restaurants which remained temporarily closed as a result of Hurricane Katrina. The company's projection for new unit openings for 2005 remains unchanged at 115-125 restaurants. New Unit Openings Period 11 Period 11 Period 12 Period 12 Ended Ended Ended Ended 10/31/04 10/30/05 11/28/04 11/27/05 --------- --------- --------- --------- Company - - - - Franchised 5 6 3 6 Total Domestic 5 6 3 6 International 3 2 5 3 Total Global 8 8 8 9 Unit Count Period 11 Period 11 Period 12 Period 12 Ended Ended Ended Ended 10/31/04 10/30/05 11/28/04 11/27/05 --------- --------- --------- --------- Company 58 28 58 31 Franchised 1,410 1,419 1,411 1,435 Total Domestic 1,468 1,447 1,469 1,466 International 347 336 348 336 Total Global 1,815 1,783 1,817 1,802 Hurricane Katrina Impact Update As of Dec. 8, 2005, the Popeyes system has 30 restaurants temporarily closed due to the effects of Hurricane Katrina, which includes 26 company-owned restaurants in New Orleans and 4 franchised restaurants. The company has re-opened 9 company-owned restaurants and expects 1 additional company-owned restaurant to re-open by the end of fiscal year 2005. The company estimates an additional 8-12 company-owned restaurants to be re-opened in fiscal 2006, subject to available staffing and local governmental approval. The evaluation of additional re-openings will continue well into 2006 as governmental plans for revitalization and re- settlement of New Orleans become clearer. Of the franchised restaurants that currently remain closed, the company expects 1 restaurant will re-open prior to the end of fiscal 2005 and 3 restaurants will re-open during fiscal 2006. AFC maintains up to $25 million in insurance coverage for property and casualty, flood and business interruption. These coverages are subject to deductibles that total approximately $1.2 million. The company believes its insurance is adequate to cover property and casualty losses in excess of the deductibles. In addition, the company's business interruption insurance is expected to cover substantial portions of lost restaurant operating profit associated with closed company-owned restaurants. The company continues to expect that the loss of royalty revenue from closed franchised restaurants will be substantially offset by business interruption insurance and increases in franchise royalty revenue from an increase in sales in markets adjacent to the affected region. The timing and the amount of insurance recoveries are difficult to predict at this time. 2006 Operational Performance Projections The company estimates fiscal year 2006 total domestic system-wide same-store sales growth of 2.0-3.0 percent driven by new menu introduction and promotional activity, continued operations improvements, and more effective food focused advertising. The company anticipates new unit openings for fiscal year 2006 to be in the range of 125-135 restaurants with domestic new unit openings expected to comprise approximately 60%. Popeyes new unit development will continue to focus on penetrating existing markets and continue to focus on expanding in emerging markets such as Las Vegas, Phoenix, Seattle, and Albuquerque. Internationally the brand will continue to focus on developing restaurants in Canada, Mexico and Latin America. For 2006, Popeyes anticipates unit closures to be in the range of 65-75 restaurants as the company continues to focus efforts on the stabilization in the Korean market. The company's unit closure expectation for 2006 does not include company-owned restaurants that may be permanently closed due to Hurricane Katrina. The company also expects the Popeyes system to re-image approximately 190-210 restaurants during 2006. Kenneth Keymer, CEO of AFC Enterprises and President of Popeyes Chicken & Biscuits, stated, "We are very pleased with our performance in period 11 and period 12 and how the Popeyes' system responded to the initiatives implemented in the third quarter. Despite the extraordinary effort of the Popeyes' team needed to work through the effects of Hurricanes Katrina and Rita, our team remains focused on driving the business as evidenced by our strong same-store sales growth, positive transactions and new restaurant openings. We expect this momentum to continue throughout 2006, further accelerating the growth of the business and maximizing value to our stakeholders." AFC Enterprises, Inc. -- http://www.afce.com/-- is the franchisor and operator of Popeyes(R) Chicken & Biscuits, the world's second- largest quick-service chicken concept based on number of units. As of Nov. 27, 2005, Popeyes had 1,802 restaurants in the United States, Puerto Rico, Guam and 25 foreign countries. AFC has a primary objective to be the world's Franchisor of Choice(R) by offering investment opportunities in its Popeyes Chicken & Biscuits brand and providing exceptional franchisee support systems and services. At Oct. 2, 2005, AFC Enterprises, Inc.'s balance sheet showed a $44.2 million stockholders' deficit compared to $140.9 million of positive equity at Dec. 26, 2005. ALAN CARRUTH: Case Summary & 13 Largest Unsecured Creditors ----------------------------------------------------------- Debtors: Alan Brent Carruth and Terri E. Carruth 3956 Freshwind Street Westlake Village, California 91361 Bankruptcy Case No.: 05-50116 Chapter 11 Petition Date: December 9, 2005 Court: Central District of California (San Fernando Valley) Judge: Kathleen Thompson Debtor's Counsel: Lewis R. Landau, Esq. 23564 Calabasas Road, Suite 104 Calabasas, California 91302 Tel: (888) 822-4340 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtors' 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Verizon Directories Corp. Advertising $10,316 555 Saint Charles Drive #100 Thousand Oaks, CA 91360 Attn: Michall Burke WFS Financial $9,579 2143 Convention Center Way #210 Ontario, CA 91764 Bay Area Credit Service $4,000 50 Airport Parkway, Suite 100 San Jose, CA 95110 Providian Washington Mutual Credit Card $2,000 Capital One Credit Card $1,900 AWA Collections $1,273 ATT Long Distance Phone Service $920 Unilab Medical $896 California Financial Credit $787 Association John Jaimerana Service $750 Igal Leizerovich DDS Dental $550 IC Systems Inc. $301 GEMB Mervyns Credit Card $300 ALLIED HOLDINGS: Creditors Must File Proofs of Claim by Feb. 17 --------------------------------------------------------------- The U.S. Bankruptcy Court set Feb. 17, 2006, as the deadline for filing proofs of claim based on prepetition debts or liabilities, including contingent claims, in thee Chapter 11 cases of Allied Holdings, Inc., and its debtor-affiliates. As reported in the Troubled Company Reporter on Nov. 2, 2005, Proof of Claims must: (a) substantially conform to the proposed proof of claim form prepared by the Debtors or Official Form No. 10; (b) be written in the English language; (c) be denominated in lawful currency of the United States of America or in lawful currency of Canada, as may be appropriate, as of the Petition Date; (d) indicate the Debtor against which the claim is being asserted; and (e) be signed by the claimant or, if the claimant is not an individual, by an authorized agent of the claimant. Any person or entity holding a claim against more than one Debtor must file a separate Proof of Claim with respect to each Debtor. Any Proofs of Claim delivered by facsimile, telecopy or electronic mail will not be deemed to be valid. The Debtors also proposed that the Indenture Trustee, in its sole discretion, file aggregate Proofs of Claim in each of the Debtors' Chapter 11 cases on behalf of Senior Notes Claimants in respect of the Debtors' obligations under the Senior Notes, including, without limitation, the repayment of principal, interest or other applicable fees and charges arising under the Notes. However, the Indenture Trustee is not authorized to file any Proof of Claim with respect to any claim held by any current or former holder of Senior Notes arising out of or related to the ownership or purchase of Senior Notes, including, but not limited to, claims arising out of or related to the purchase, sale, issuance, or distribution of Senior Notes, any damages claim under applicable securities law or any claim pursuant to Section 510(b). The Debtors will publish notice of the Bar Date once in (i) The Wall Street Journal (National Edition), (ii) USA Today (National Edition) and (iii) The Fulton County Daily Report no later than 30 days prior to the Bar Date. Any person or entity who is required to file a Proof of Claim but fails to do so by the applicable Bar Date will be forever barred from asserting any right or claim against the Debtors and will be barred from participating in any distribution under a plan of reorganization that may be confirmed in the Debtors' cases. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case No. 05-12515). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Court Grants Final Consent to Flatiron Financing ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia gave its final stamp of approval to Allied Holdings, Inc., and its debtor-affiliates' request for authority to execute a postpetition insurance premium financing arrangement with Flatiron Capital Corporation. As reported in the Troubled Company Reporter on Oct. 21, 2005, the Debtors asked the Court for authority to: (a) enter into a Premium Financing Arrangement with Flatiron Capital Corporation; and (b) execute other postpetition insurance premium financing agreements in which the lending companies receive senior security interests as allowed by Section 364(c)(1) of the Bankruptcy Code and can exercise their rights under the premium financing agreements without further relief from the Court notwithstanding Section 362 of the Bankruptcy Code. A. The Flatiron Agreement The Debtors have engaged in discussion with various companies considering premium financing arrangements and have determined that the terms proposed by Flatiron Capital Corp., also a prepetition Lender, are advantageous for the financing. The Flatiron Agreement requires the Debtors to make a $544,700 down payment to Flatiron and 10 monthly payments in equal amounts of $168,965. The amount financed under the Flatiron Agreement is $1,634,100, with a 7.35% annual interest rate. The total amount of payments due under the Agreement is $2,178,800. Under the Flatiron Agreement, the Debtors will grant Flatiron: (a) a lien and security interest in any and all unearned or returned premiums that may become payable under the Policies identified in the Agreement; and (b) a lien and security interest to secure any loss payment under the Policies but only to the extent the loss payments would reduce the unearned premiums, subject to the interest of any mortgages or other payees. Flatiron's lien and security interest in the collateral will be senior to the rights of the Debtors' estates and to the rights of any person asserting a lien or security interest in any of the Debtors' assets. If the Court determines that the Collateral is insufficient to pay all amounts due and owing to Flatiron under the Agreement, the Debtors agree that Flatiron will be granted a superior priority administrative claim under Section 364(c)(1) equal to the amount of the deficiency. The Debtors also intend to satisfy all monthly payments under the Agreement and any other Premium Financing Agreements. In the event of their default, the Debtors will allow Flatiron to cancel the policies identified in the Agreement and apply to their account the unearned or returned premiums and, subject to the rights of loss payees, any loss payments that would reduce the unearned premiums. B. The AICCO Agreement The Debtors also seek the Court's authority to execute other postpetition insurance Premium Financing Agreements similar to the Flatiron Agreement, particularly with AICCO, Inc. The AICCO Agreement requires the Debtors to make a $507,000 down payment to AICCO and eight monthly payments for $151,081 in equal amounts. The amount financed under the AICCO Agreement is $1,183,000, with a 5.75% annual interest rate. The total amount of payments due under the AICCO Agreement is $1,208,949. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Submits Amendments to $230-Million GE DIP Loan --------------------------------------------------------------- Allied Holdings, Inc., and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Northern District of Georgia copies of the amendments to their $230,000,000 DIP Credit Agreement with General Electric Capital Corp. -- as administrative, collateral, revolver and co-syndication agent -- and a consortium of other lenders. As reported in the Troubled Company Reporter on Aug. 29, 2005, the Court authorized the Debtors to borrow up to $230 million from General Electric, Morgan Stanley Senior Funding, Inc., and Marathon Structured Finance Fund. The DIP Credit Facility includes a $130 million revolving credit line and $100 million in two term loans. The Debtors disclose the aggregate outstanding principal amount of each credit facility as of November 16, 2005: Facility Outstanding Amount -------- ------------------ Revolving Loan $50,982,412 Term Loan A $20,000,000 Term Loan B $80,000,000 The Debtors acknowledge that the principal amounts are payable pursuant to the Credit Agreement without defense, offset, withholding, counterclaim or deduction of any kind. The Debtors will reimburse the DIP Agents for all reasonable costs and expenses incurred in connection with the Amendments. A full-text copy of the First Amendment to the DIP Credit Agreement, dated August 22, 2005, is available at no charge at: http://bankrupt.com/misc/allied--1stAmendment.pdf A full-text copy of the Second Amendment to the DIP Credit Agreement, dated October 26, 2005, is available at no charge at: http://bankrupt.com/misc/allied--2ndAmendment.pdf A full-text copy of the Third Amendment to the DIP Credit Agreement, dated November 16, 2005, is available at no charge at: http://bankrupt.com/misc/allied-3rdamendment.pdf The consortium of DIP lenders, pursuant to the Second Amendment, consists of: 1. Morgan Stanley Senior Funding, Inc., as co-Term Loan B agent, co-syndication agent, co-Bookrunner, and co-Term Loan B lead arranger; 2. Marathon Structured Finance Fund, LP, as Term Loan A agent, co-Term Loan B agent, Term Loan A lead arranger, co-Term Loan B lead arranger and co-Revolver lead arranger; 3. SMBC DIP Limited; 4. Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services, Inc.; 5. Textron Financial Corporation; 6. Fortress Credit Opportunities I, LP; 7. Hampton Funding, LLC; and 8. Wells Fargo Foothill, LLC Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLTEL CORP: Spin-Off Plans Prompt S&P's Negative Watch Listing --------------------------------------------------------------- Standard & Poor's Ratings Services revised its CreditWatch listing for Little Rock, Arkansas-based diversified telecommunications carrier ALLTEL Corp. to negative from developing. This followed the company's recent announcement that it will spin off its wireline business and merge it with Valor Communications Group Inc. Simultaneously, the ratings for Valor, including its 'BB-' corporate credit rating, were placed on CreditWatch with positive implications. The original placement of the ratings on CreditWatch developing encapsulated the small potential for a higher rating. If the company were to delever substantially with a spin-off or sale of its wireline business, a higher rating would be possible. The negative part of the CreditWatch developing incorporated the potential that a divestiture of the wireline business without accompanying debt reduction could pressure the credit metrics sufficiently to support a downgrade. In addition, the negative portion of the CreditWatch included the possibility that ALLTEL's wireless business risk profile was no longer supportive of the current ratings, given competition from the four national operators. "The transaction, while de-leveraging, does not improve credit metrics sufficiently to support a corporate credit rating higher than the current 'A'," said Standard & Poor's credit analyst Catherine Cosentino. Pro forma for the spin-off and the company's indicated intent to reduce debt by about $1 billion, ALLTEL is expected to be levered at about the low 1x area. Further improvement will be tempered by expectations that the company will have a more aggressive financial policy, including its plan to engage in stock buybacks of up to $3 billion for the two years following the spin-off. While the first concern in the negative part of the CreditWatch developing has been eliminated, S&P still has concerns about the company's wireless business risk. S&P will evaluate the company's prospects in competing in its wireless markets to determine if ALLTEL's business risk can still support its current rating. Our review will include an assessment of the company's ability to combat potential increased competition from the national carriers that may more aggressively pursue business in ALLTEL's markets. S&P will also assess ALLTEL's ability to continue to increase its retail wireless subscriber base, which exhibited a relatively low growth level for the third quarter of 2005, at less than 5% on an annualized basis for its more mature heritage markets. If S&P's review indicates that ALLTEL's business risk is significantly weaker than that of the larger national wireless carriers such as Verizon Wireless and Cingular, the ratings will be lowered. However, it is likely that any downgrade of the corporate credit rating and related debt that will remain with ALLTEL will be limited to one notch, given the company's conservative balance sheet. Debt spun off to the new merged wireline business, which includes debt at the operating subsidiary ALLTEL Georgia Communications Corp. and ALLTEL Communications Holdings of the Midwest Inc. (formerly Aliant Communications Inc.), is likely to be lowered to non-investment-grade, in line with expectations for ratings of the new wireline company. ALLTEL's business risk profile does improve with the spin-off of a segment subject to declining price and volume trends, but such improvement is not material given that wireline including the communications support business only represents about one third of the company's overall revenues and operating cash flows. ANCHOR GLASS: Wants Excl. Plan Filing Period Stretched to March 7 ----------------------------------------------------------------- Anchor Glass Container Corporation asks the U.S. Bankruptcy Court for the Middle District of Florida to extend the exclusive period within which it may: a) file a plan of reorganization through March 7, 2006; and b) solicit and obtain acceptances to that plan through May 6, 2006. The Debtor does not anticipate needing the full 90-day extension, but believes it is necessary in the event certain issues delaying the filing of a plan arise. According to Robert A. Soriano, Esq., at Carlton Fields, P.A., in Tampa, Florida, since the Petition Date, the Debtor has made substantial progress in its Chapter 11 case and has: -- renegotiated contracts with several of its key customers; -- obtained Court approval of its Critical Vendors' and Utilities Motion; and -- obtained authorization to implement and honor a Key Employee Retention Program and approve severance and separation claims. The Debtor currently is engaged in conversations with representatives of the Official Committee of Unsecured Creditors, representatives of the Ad Hoc Committee of Noteholders and other parties-in-interest in respect of a plan of reorganization. The Debtor anticipates filing a proposed plan and related disclosure statement on or about December 15, 2005. Section 1121(b) of the Bankruptcy Code provides a debtor the exclusive right to file a plan of reorganization for an initial period of 120 days after the commencement of its Chapter 11 case. Section 1121(c)(3) of the Bankruptcy Code provides that if a debtor files a plan of reorganization within the 120-day initial period, a debtor has 180 days after the commencement of the Chapter 11 case within which to solicit and obtain acceptances of its plan, during which time competing plans may not be filed by any party-in-interest. The Court will convene a hearing on January 3, 2006, to consider the Debtor's request. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Wants to Modify Wachovia Credit Agreements -------------------------------------------------------- Anchor Glass Container Corporation asks permission from the U.S. Bankruptcy Court for the Middle District of Florida to enter into a Modified Letter of Credit Agreements with Wachovia Bank, NA. On March 4, 2003, Wachovia issued an Irrevocable Letter of Credit in the face amount of $4,425,000, for the benefit of Federal Insurance Company. Subsequently extended and amended, the Federal LOC remains outstanding in the current face amount of $11,196,029 and will expire on Feb. 28, 2006. On April 4, 2003, Wachovia issued another Irrevocable Letter of Credit in the face amount of $3,605,252 for the benefit of the Travelers Indemnity Company. Subsequently extended and amended, the Travelers LOC remains outstanding in the current face value of $2,025,025 and will expire on December 31, 2005. Each of the letters of credit was issued under a separate application and agreement for Irrevocable Standby Letter of Credit jointly submitted to and entered into with Wachovia by both Anchor Glass Container Corporation and Congress Financial Corp. (Central), now known as Wachovia Capital Financial Corporation (Central) -- the LOC Agreements. Currently the joint responsibility of Anchor Glass and Congress, the repayment of any draws on the letters of credit are primarily secured by: -- certain assets of Anchor Glass pledged to Congress; and -- a separate credit facility provided by Congress to Anchor Glass. As part of its retiring from the Congress Credit Facility, Anchor Glass asked Wachovia to release Congress from any further liability under or in conjunction with both the original LOC Agreements and the two letters of credit. Anchor Glass also asked Wachovia to extend the expiration dates of the Federal LOC and the Travelers LOC. Wachovia has agreed to release Congress if Anchor Glass enters into a new application and agreement with Wachovia for each of the letters of credit. Simultaneously, Anchor Glass will also enter into an agreement with Wachovia to provide substitute security for the repayment of any future draws against the letters of credit. Modifications to the LOC Agreements Anchor Glass will establish and maintain two depository accounts with Wachovia. The accounts will be assigned to Wachovia as substitute security for the repayment of future draws under the Travelers LOC and the Federal LOC. Anchor Glass will execute and deliver to Wachovia new letter of credit agreements for the Federal LOC and the Travelers LOC, which will replace and supersede the original LOC agreements. Anchor Glass will also establish and fund the two depository accounts for 102% of the current outstanding face amount of the Federal LOC and the Travelers LOC. The assignment of the two depository accounts will be a continuing one and will remain in effect for any further extension of or amendment to either or both of the letters of credit. It will continue until the letters of credit are returned canceled by the beneficiaries. The assignment will also continue and be applicable to any subsequent renewal, in whole or in part, and replacement of either or both of the depository accounts to be assigned. In the event of a default under the new LOC agreements or a demand for payment on either or both of the letters of credit, Anchor Glass will have irrevocably authorized and empowered Wachovia to withdraw and to apply the funds or deposits in the depository accounts. Hywel Leonard, Esq., at Carlton Fields, P.A., in Tampa, Florida, asserts that the new arrangement represents a significant benefit to Anchor Glass. Under its existing arrangement, Anchor Glass' funds representing 110% of the face value of the letters of credit are securing Wachovia's potential obligations to the beneficiaries of the letters of credit. According to Mr. Leonard, $1,000,000 of Anchor's funds will be 'freed up' because of the new arrangement. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Ask Court to Approve New Motts-Snapple Contract ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida previously authorized Anchor Glass Container Corporation to reject its contract with Mott's, LLP and Snapple Beverage Corp. dated April 17, 2004. Since that time, the Debtor and Motts-Snapple have negotiated the terms of the new Motts/Snapple Contract, where the Debtor will supply certain bottle and glass container requirements of Motts- Snapple with products manufactured at several of the Debtor's plants, commencing on Sept. 30, 2005, through Dec. 31, 2008. The Debtor asks the Court to approve the New Motts-Snapple Contract. Under the new Contract, Anchor Glass has obtained improved pricing and is entitled to pass certain increases in its cost of production, with respect to raw materials and energy, to the purchasers. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) ARLINGTON HOSPITALITY: Court Okays Asset Sale to Sunburst --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois approved the sale of substantially all of Arlington Hospitality, Inc. and its debtor-affiliates' assets on Dec. 7, 2005. Sunburst Hotel Holding, Inc. and its affiliates, and SJB Equities, Inc. and its affiliates, both of which are unaffiliated with one another and with Arlington Hospitality, Inc., have agreed to purchase substantially all of the assets, pursuant to separate asset purchase agreements. In addition, Cendant Corporation (NYSE: CD) has consented to Sunburst's assignment and assumption of the development agreement, royalty-sharing agreement, and individual hotel franchise agreements between Arlington and affiliates of Cendant. The total consideration for the sale of the assets, and the assumption of the Cendant Agreements, is approximately $32.4 million, comprised of $9.6 million in cash and the assumption of mortgage debt of approximately $22.8 million on the hotel assets to be purchased. Asset Sale Auction The auction for the sale of the assets commenced on Nov. 14, 2005, and was extended through Nov. 28, 2005. Chanin Capital Partners served as Arlington's exclusive financial advisor in connection with the sale of substantially all of Arlington's assets. Consummation of the transactions contemplated by each purchase agreement is subject to certain closing conditions as set forth in the purchase agreements, and is expected to occur within the next 30 days. Sunburst agreed to purchase substantially all the assets of the company, and assume certain contracts and agreements, except the company's corporate headquarters office building and those assets being purchased and contracts assumed by SJB. SJB agreed to purchase ownership interests in four hotel joint ventures, and the assumption of certain contracts and agreements, including the construction contracts for an AmeriHost Inn hotel being built in Columbus, Ohio. The auction and sale process conducted by the company's management and Chanin Capital Partners was the culmination of strategic efforts to maximize and realize the value of the company's assets that began in mid-2005. The auction resulted in cash proceeds that are approximately 54% higher than contemplated by the stalking horse asset purchase agreement executed by Sunburst in October. Arlington is in the process of evaluating claims, and attempting to sell its corporate headquarters office building, so that it may propose a liquidation plan to the Court as soon as practicable after the closing of the purchase agreements. It is unlikely that shareholders of Arlington will receive a cash distribution pursuant to any liquidation plan since any remaining cash will be used to settle creditors' claims and pay administrative costs of the bankruptcy proceeding. CEO Steps Down Having fulfilled his duties, with the successful conclusion of the auction for the company's assets, Stephen K. Miller will be stepping down as interim president and chief executive officer, effective Dec. 16, 2005. "It has been a pleasure working with Steve through a very difficult and complicated process," commented Kenneth M. Fell, Arlington's chairman of the board. "Steve was instrumental in identifying and attracting bidders for the company's assets, including Sunburst, in an effort to maximize value for all stakeholders. We appreciate all of his efforts, and wish him well in his future endeavors." Effective upon Mr. Miller's departure, the board has appointed James B. Dale, the company's chief financial officer who has been actively involved in the sales process, to serve as acting president and chief executive officer to wind-down the affairs of the company. Mr. Miller has agreed to remain in an advisory role to the company as needed, at no expense to the company. The corporate office building continues to be marketed for sale by Cohen Financial, as approved by the Court. Parties interested in purchasing the office building should contact Richard Tannenbaum, managing director for Cohen, at (312) 803-5689 or rtannenbaum@cohenfinancial.com; or Jon Simon, managing director, at (312) 803-5107 or jsimon@cohenfinancial.com. About Sunburst Hospitality Sunburst Hospitality, based in Silver Spring, Maryland, is a diversified real estate owner and operator, with interests in hotels, golf course and residential developments, multi-family communities and self-storage properties. Currently, Sunburst Hospitality's hotel portfolio includes 30 hotels aggregating approximately 4,500 rooms in 16 states. About Arlington Hospitality Inc. Headquartered in Arlington Heights, Illinois, Arlington Hospitality, Inc., and its affiliates develop and construct limited service hotels and own, operate, manage and sell those hotels. The Debtors operate 15 AmeriHost Inn Hotels under leases from PMC Commercial Trust. Arlington Hospitality, Inc., serves as a guarantor under these leases. Arlington Inns Inc., an affiliate, filed for bankruptcy protection on June 22, 2005 (Bankr. N.D. Ill. Case No. 05-24749), the Honorable A. Benjamin Goldgar presiding. Arlington Hospitality and additional debtor- affiliates filed for chapter 11 protection on Aug. 31, 2005 (Bankr. N.D. Ill. Lead Case No. 05-34885). Catherine L. Steege, Esq., at Jenner & Block LLP, provides the Debtors with legal advice and Chanin Capital LLC serves as the company's investment banker. As of March 31, 2005, Arlington Hospitality reported $99 million in total assets and $94 million in total debts. ARROW ELECTRONICS: Completes Cash Tender Offer for Ultra Source --------------------------------------------------------------- Arrow Electronics, Inc. (NYSE: ARW) disclosed the successful completion of its cash tender offer for Taiwan-based Ultra Source Technology Corp. (TSE: 3020). Arrow will be acquiring 70% of the common shares of Ultra Source for an aggregate purchase price of $62.5 million. All necessary regulatory approvals related to the tender offer have been received. "The combination of Ultra Source's strong technical and engineering resources and our exceptional linecard will accelerate the growth of our components businesses in this important region and further strengthens our leading position throughout Asia Pacific," said William E. Mitchell, President and Chief Executive Officer of Arrow Electronics, Inc. Ultra Source, which is headquartered in Taipei, Taiwan and has approximately 200 employees, is one of the leading electronic components distributors in Taiwan with sales offices and distribution centers in Taiwan and Hong Kong and substantial sales in the People's Republic of China. Total 2005 sales are expected to exceed $500 million. "We are excited about our partnership with Arrow and look forward to working together as a truly integrated team. Ultra Source will now have access to Arrow's abundant resources and broad customer base, which will create significant opportunities for our organizations," stated Mr. M.C. Wen, Chairman of Ultra Source. Arrow Electronics is a major global provider of products, services, and solutions to industrial and commercial users of electronic components and computer products. Headquartered in Melville, New York, Arrow serves as a supply channel partner for nearly 600 suppliers and 150,000 original equipment manufacturers, contract manufacturers, and commercial customers through a global network of more than 200 locations in 53 countries and territories. * * * As reported in the Troubled Company Reporter on Aug. 19, 2005, Fitch Ratings has upgraded Arrow Electronics, Inc., senior unsecured notes to 'BB+' from 'BB' and established a 'BB+' rating for the company's senior unsecured bank credit facility. Fitch said the rating outlook is stable. Fitch's action affected approximately $1.3 billion of debt. ARROW ELECTRONICS: Stable Performance Prompts Fitch's BB+ Rating ---------------------------------------------------------------- Fitch Ratings' recent positive rating actions on Arrow Electronics Inc. and Avnet Inc. reflect improved financial profiles and expectations for more stable operating performances for both companies. Fitch rates Arrow at 'BB+' with a Stable Outlook, and Avnet at 'BB' with a Positive Outlook. Arrow's one-notch higher Issuer Default Rating reflects: * the company's higher operating margins, * the result of earlier restructuring activities, and * more aggressive debt reduction. Fitch believes that further rating actions will depend primarily on Arrow's and Avnet's use of anticipated free cash flow. Both companies face meaningful debt maturities over the next three years, and additional debt reduction funded by free cash flow or equity issuances could result in further positive rating actions. The full report, 'Arrow and Avnet: Use of Free Cash Is Key Ratings Driver,' can be found at http://www.fitchratings.com/ The report provides further analysis on key financial and operating data. ATMEL CORP: Buys Back $81.3 Million of Convertible Notes -------------------------------------------------------- Atmel Corporation repurchased certain of its zero coupon convertible notes, due 2021, for an aggregate purchase price of approximately $81.3 million in privately negotiated transactions. At the time of purchase the repurchased 2021 Notes had an accreted value of approximately $81 million. As of Sept. 30, 2005, the accreted value of all outstanding 2021 Notes was approximately $221 million. Although further purchases of 2021 Notes are not contemplated at this time, Atmel may make additional open market purchases of 2021 Notes from time to time in the future, based on factors such as market conditions, legal requirements and other corporate considerations. Atmel Corporation designs, develops, manufactures, and markets nonvolatile memory and logic integrated circuits using its proprietary complementary metal-oxide semiconductor technologies. * * * Standard & Poor's Rating Services assigned its single-B long-term foreign issuer and long-term local issuer credit ratings to Atmel Corp. on Oct. 24, 2001, and said the outlook, at that time, was negative. AVNET INC: Improved Financial Profile Spurs Fitch's BB Rating ------------------------------------------------------------- Fitch Ratings' recent positive rating actions on Arrow Electronics Inc. and Avnet Inc. reflect improved financial profiles and expectations for more stable operating performances for both companies. Fitch rates Arrow at 'BB+' with a Stable Outlook, and Avnet at 'BB' with a Positive Outlook. Arrow's one-notch higher Issuer Default Rating reflects: * the company's higher operating margins, * the result of earlier restructuring activities, and * more aggressive debt reduction. Fitch believes that further rating actions will depend primarily on Arrow's and Avnet's use of anticipated free cash flow. Both companies face meaningful debt maturities over the next three years, and additional debt reduction funded by free cash flow or equity issuances could result in further positive rating actions. The full report, 'Arrow and Avnet: Use of Free Cash Is Key Ratings Driver,' can be found at http://www.fitchratings.com/ The report provides further analysis on key financial and operating data. BEAR STEARNS: Fitch Affirms Low-B Ratings on $31.7MM Cert. Classes ------------------------------------------------------------------ Fitch Ratings affirms Bear Stearns commercial mortgage pass-through certificates, series 2003-TOP10: -- $259.9 million class A-1 at 'AAA'; -- $749.2 million class A-2 at 'AAA'; -- Interest-only classes X-1 and X-2 at 'AAA'; -- $34.8 million class B at 'AA'; -- $37.9 million class C at 'A'; -- $12.1 million class D at 'A-'; -- $15.2 million class E at 'BBB+'; -- $9.1 million class F at 'BBB'; -- $7.6 million class G at 'BBB-'; -- $10.6 million class H at 'BB+'; -- $4.5 million class J at 'BB'; -- $6.1 million class K at 'BB-'; -- $4.5 million class L at 'B+'; -- $3 million class M at 'B'; -- $3 million class N at 'B-'. Fitch does not rate the $12.1 million class O. The affirmations are due to the stable pool performance and scheduled amortization. As of the November 2005 distribution date, the pool's aggregate principal balance has decreased 3.5% to $1.17 billion from $1.21 billion at issuance. There are no specially serviced loans. There are seven credit-assessed loans in the pool. Although all seven are considered investment-grade, Fitch is closely monitoring the status of the One Canal Place loan. One Canal Place is secured by a 684,297 square foot office property in New Orleans, Louisiana. The loan is currently with the master servicer but 30 days delinquent as a result of insufficient cash flow from the property. Several tenants were displaced as a result of Hurricane Katrina and have subsequently moved back. The building suffered only minor damages, and all repairs have been completed. The borrower has filed a claim for the lost rents under its business interruption insurance. North Shore Towers is secured by shares in a 1,844-unit cooperative apartment complex in Floral Park, Queens, New York. Occupancy as of June 2005 is 99% compared with 100% at issuance. The Fitch-stressed DSCR, based on an imputed NCF, which assumes market rate rental income, remains strong at 4.68 times for YE 2004 compared with 5.32x at issuance. 1290 Avenue of the Americas is secured by a 43-story class A office building totaling two million sf, located in midtown Manhattan, New York. The whole loan was divided into four pari passu notes and a subordinate B-note. Only the $70 million A-4 note serves as collateral in the subject transaction. As of YE 2004, the Fitch-stressed DSCR increased to 1.54x from 1.46x at issuance. Occupancy as of March 2005 is 94.1% compared with 98.7% at issuance. The remaining four credit assessed loans: Federal Center Plaza; 575 Broadway; Towne Mall; and Mount Pleasant Villa Apartments have performed better or remained stable since issuance. BIONICHE LIFE: Completes Private Financing from Laurus Funds ------------------------------------------------------------ Bioniche Life Sciences Inc. (TSX: BNC) completed its previously announced private financing, which has been increased to $18,500,000, consisting of shares, debt, convertible debt, and a warrant, with Laurus Funds. The terms of this financing were also moderately restructured and improved. The proceeds will be used to refinance all existing North American debt and for product development and working capital. The financing will consist of: (a) A three-year, $4 million operating facility based on eligible inventory and accounts receivable, with interest at the Wall Street Journal prime rate; (b) A three-year, $7 million U.S. secured convertible term loan with interest at the greater of 6.5% and WSJ Prime plus 2%, reducing based on increases in Bioniche's stock price, and convertible at C$0.965 per share. This principal amount is amortized monthly, and any monthly principal instalment must be converted if Bioniche shares trade at a 15% premium to the conversion price and may be paid by Bioniche in common shares at a 15% discount to the then market price, subject in each case to trading volume limits. The amount advanced under the facility was discounted by $915,000; (c) A four-month, $7,500,000 secured bridge loan to be repaid from the proceeds of the proposed sale of Bioniche's Irish Pharma operation. If that transaction is not completed and this loan is not paid at maturity, it will automatically have the same terms as the $7 million secured convertible loan except that: * the conversion price will be based on the market price for Bioniche shares at the time; and * Bioniche will issue additional common shares at no consideration equal to 6% of the amount of the extended loan; (d) 1,333,788 common shares acquired for $915,000 U.S.; and (e) A five-year warrant to acquire 800,000 common shares at C$1.10 per share. Bioniche paid a cash fee of $647,500 as part of this transaction. As the approval of shareholders was obtained at the Bioniche shareholders' meeting held on Nov. 3, 2005, the maximum number of shares that may be issued under this financing is 15 million. Concurrently, Bioniche has arranged a private placement of 764,041 common shares for $611,233 Cdn., or $0.80 Cdn. per share, to the holders of senior debt being repaid from the proceeds of this new financing, subject to TSX approval. "This is an important transaction for our Company," noted Graeme McRae, President & CEO of Bioniche. "The proceeds from it will be used to refinance existing debt and to support ongoing resource requirements for our areas of strategic focus. With this financing closed, we are focused on moving ahead with the sale of our Irish Pharma division. These corporate initiatives will position us well for growth in the coming year." Patrick Montpetit, Chief Financial Officer of Bioniche added, "Following the pending sale of Pharma, our only debt will consist of this new $4 million U.S. operating facility and the $7 million term facility." Bioniche Life Sciences Inc. -- http://www.Bioniche.com/-- is a research-based, technology-driven Canadian biopharmaceutical company focused on the discovery, development, manufacturing, and marketing of proprietary products for human and animal health markets worldwide. The fully-integrated company employs more than 175 skilled personnel and has three principal operating divisions: Animal Health, Food Safety, and Human Health. The company's primary goal is to develop proprietary cancer therapies supported by revenues from marketed products in human and animal health. * * * Going Concern Doubt Due to a number of factors, including the Company's losses, decreases in working capital and cash balances, and current burn rate, as well as the reclassification of certain amounts of long- term debt to current, the notes to the financial statements describe a "going concern uncertainty". The Company is addressing this situation through debt and equity financings, and the potential sale of Bioniche Pharma Group Limited. These initiatives are at a preliminary stage and, the Company said, there is no assurance that they will be completed as currently planned. BUDGET INN: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Budget Inn of Bradenton, LLC 5812 Cruiser Way Tampa, Florida 33615 Bankruptcy Case No.: 05-29885 Type of Business: The Debtor operates an inn. Chapter 11 Petition Date: December 9, 2005 Court: Middle District of Florida (Tampa) Debtor's Counsel: Buddy D. Ford, Esq. 115 North MacDill Avenue Tampa, Florida 33609 Tel: (813) 877-4669 Total Assets: $4,919,000 Total Debts: $2,399,683 Debtor's 7 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Department of Revenue Tax Warrant $67,113 Sarasota Service Center 1991 Main Street, Suite 240 Sarasota, FL 34236 Manatee County Tax Collector Real Estate $50,000 P.O. Box 25300 Taxes (2003) Bradenton, FL 34206 Manatee County Tax Collector Real Estate $50,000 P.O. Box 25300 Taxes (2004) Bradenton, FL 34206 Manatee County Tax Collector Real Estate $45,015 P.O. Box 25300 Taxes (2005) Bradenton, FL 34206 Department of Revenue Tax Warrant $23,349 Sarasota Service Center 1991 Main Street, Suite 240 Sarasota, FL 34236 Advanceme, Inc. Loan $100 245 Town Park Drive, Suite 400 Kennesaw, GA 30144 Internal Revenue Service Taxes $1 Special Procedures Staff 400 West Bay Street, Stop 5720 Jacksonville, FL 32202 CASCADES INC: S&P Puts BB+ Rating on CDN$550 Mil. Credit Facility ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Cascades Inc. to 'BB' from 'BB+'. At the same time, the company's new CDN$550 million credit facility was assigned a 'BB+' rating that reflects its superior recovery prospects versus other classes of debt. The senior unsecured rating was lowered to 'BB-' to reflect the increasing amount of priority obligations. The outlook is negative. "The ratings on Kingsey Falls, Quebec-based Cascades were lowered to reflect the company's improving, but weak earnings, and aggressive leverage," said Standard & Poor's credit analyst Daniel Parker. Cascades has been unable to materially improve profitability due to high energy costs, and the continued appreciation of the Canadian dollar. These weaknesses are partially offset by the company's good product diversity between various packaging businesses and tissue. The company is focused on packaging and tissue and primarily operates in Canada, the U.S., and to a lesser extent Europe. Cascades' diverse revenue base and exposure to tissue has partially mitigated the cyclical volatility in earnings experienced by many of its peers in the past decade. Cascades financial performance has not improved as much as originally expected as cost pressures and the appreciation of the Canadian dollar have hurt profitability. Credit metrics remain weak for the ratings. Standard & Poor's expects that cash flow protection measures could improve if packaging and tissue pricing gain traction, or there is some relief from the currency appreciation, and the high cost of energy. The negative outlook reflects Standard & Poor's concerns that Cascades's credit profile may not improve in the near term. Although pricing has improved, the company is still partially exposed to potential fiber price increases, sustained high-energy costs, and a higher Canadian dollar. Failure to make progress toward improved interest coverage metrics and leverage ratios in 2006 could result in the ratings being lowered. The outlook could be revised to stable if the company demonstrates improved profitability and uses free cash flow to reduce debt. CATHOLIC CHURCH: Spokane Wants Exclusive Date Extended to Jan. 31 ----------------------------------------------------------------- As previously reported, the U.S. Bankruptcy Court for the Eastern District of Washington extended the period within which the Diocese of Spokane has the exclusive right to file a plan of reorganization until January 6, 2006, and the exclusive right to solicit acceptance of the plan until March 10, 2006. However, Judge Williams added that the Exclusive Periods will terminate 45 days after the Court enters its Memorandum Decision concerning the "property of the estate" issues. On August 26, 2005, the Court entered its decision on the Property of the Estate Dispute. Spokane filed its Reorganization Plan and Disclosure Statement on October 10, and the Exclusive Periods were extended through December 9. Currently, the Diocese is engaged in resolving the various Disclosure Statement objections filed by the Tort Litigants' Committee, the Tort Claimants' Committee, Gayle E. Bush, the Future Claims Representative, certain insurance carriers, the U.S. Trustee and other parties-in-interest. Spokane anticipates settling most Disclosure Statement issues by the first week of January 2006. By this motion, Spokane asks the Court to further extend the period within which it has the exclusive right to file an amended plan and disclosure statement to January 31, 2006. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller LLP, in Spokane, Washington, explains an extension of the Diocese's Exclusive Periods is necessary to allow Spokane to: -- reach a fair and equitable resolution of its Chapter 11 case; and -- reduce the number of disputed legal issues and facts in the case. The facts in the Chapter 11 case beg for a consensual plan, Mr. Paukert says. The Diocese believes that a consensual plan is still possible, but it will take more time. According to Mr. Paukert, the Diocese's intention in filing the Plan was to provide a framework for settlements that would follow. Spokane believes this is exactly what will happen because of the willingness of the Litigants Committee, the Creditors Committee, the FCR, and the insurance carriers to give the Diocese additional time. "None of the creditors in this highly charged case has taken the position that the Debtor's request for more time is improper in any way or designed to pressure creditors," Mr. Paukert tells Judge Williams. "That simple fact . . . speaks volumes about how the parties who are active in this case view the progress of the Debtor or, at a minimum, the desire of the Debtor to make real progress in the case." Mr. Paukert argues that additional time is necessary to permit the Diocese to resolve objections to the Disclosure Statement, continue negotiating the Reorganization Plan, and obtain the necessary information to complete a valuation analysis. The value of the parishes and schools is truly unknown as of this time, Mr. Paukert maintains. The Diocese has stipulated to the hiring of GVA Kidder Mathews to appraise the parishes and schools. However, the appraisal plan to be used by GVA will be filed with the Court in mid-December. Presumably, after the Court approves the appraisal plan, GVA will take the next 60 to 90 days to execute the appraisal plan. Accordingly, additional time is necessary for GVA to do the appraisal. This appraisal information is important to all the parties and the entire confirmation process. Without a valuation of the parishes and schools, no party would be able to move to confirmation with any confidence. Moreover, less than three months have passed since the Court rendered its Property of the Estate Decision. As it stands, the Diocese and Parishes have had less than three months to digest the Court's ruling and to discuss the possible resolution of the case, both within the Catholic community and with counsel for the parties in the Chapter 11 case. The amount of time that has elapsed and the additional time the Diocese is seeking are not unreasonable in light of the complex factual and legal issues of the bankruptcy case, Mr. Paukert asserts. By comparison, Mr. Paukert says the Exclusive Periods in the Chapter 11 case of the Archdiocese of Portland in Oregon pending in the U.S. District Court for the District of Oregon was extended for more than 12 months beyond the original statutory period of 120 days. The Portland Archdiocese just recently filed its first plan and disclosure statement, more than 16 months after its Chapter 11 filing. The Diocese is not seeking to extend the Exclusive Periods to pressure creditors. Otherwise, the creditors would not be working with the Diocese on exclusivity and other matters, Mr. Paukert says. * * * Judge Williams rules that Spokane's exclusive period for filing a plan and disclosure statement will terminate on January 16, 2006, provided that: (a) the Diocese files an Amended Disclosure Statement and Amended Plan by December 30, 2005; and (b) the Diocese does not request further extension of the exclusive period without consent of the Tort Litigants' Committee, the Tort Claimants' Committee, the FCR, and the Association of Parishes. The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Court Sets March 10 as Spokane's Claims Bar Date ----------------------------------------------------------------- Judge Williams sets March 10, 2006, at 5:00 p.m., Pacific Standard Time, as the deadline by which all creditors of the Diocese of Spokane must file claims to share in any distribution of funds from the Diocese's estate. The Bar Date applies to all creditors asserting claims against the Diocese's estate, including governmental units and creditors asserting claims based on sexual abuse by a priest, worker, volunteer, employee or other person or entity associated with the Diocese. Sexual Abuse Claims include claims for any acts that occurred at, or were committed by a person employed by or associated with, a parish, school or mission within the territory of the Diocese and for which a creditor asserts the Diocese is responsible. Gayle E. Bush, the Future Claims Representative, will file proofs of claim for Future Tort Claimants no later than the Bar Date. The bar date for filing proofs of claim for any claim arising from the rejection of an executory contract or unexpired lease is 30 days from the date of the entry of an order confirming the Diocese's Plan of Reorganization. Claim Forms and Notices Judge Williams approves: (a) the General Proof of Claim Form which will be used for filing general claims against the Diocese that are not based on claims for sexual abuse; and (b) the Confidential Proof of Claim for Sexual Abuse Form which will be used for filing claims based on sexual abuse. Proofs of claim filed against the Diocese must be delivered in person, by courier service, or by first class mail so as to be actually filed with the Court or actually received by the BMC Group, Inc., the Diocese's Claims Agent, on or before the Bar Date. The BMC Group will not be required to accept proofs of claim sent by facsimile, e-mail or telecopy transmission. The Court further approves: * the Long Form Notice Regarding Sexual Abuse Claims; * the form of publication of notice for claims related to sexual abuse; and * the form of notice to creditors other than creditors claiming sexual abuse. The Mailing and Media Program Judge Williams approves the Mailing and Media Notice Program. The Diocese and its professionals, including the Diocese's Claims Agent, are authorized to take any and all actions reasonable or necessary to the full implementation of the Mailing and Media Notice Program, including incurring of expenses necessary to implement the Mailing and Media Notice Program, the placement of advertising contemplated by the Mailing and Media Notice Program, and the payment for mailing and advertisement. Confidential Proofs of Claim The Court rules approves a protocol for sharing confidential proofs of claim for sexual abuse: (1) General Proofs of Claim Form received by the BMC Group which do not assert a claim based on sexual abuse will be fully scanned and electronically filed with the Court via Electronic Case Files system. (2) All Confidential Proofs of Claim for Sexual Abuse Form received by the BMC Group will not be scanned. The BMC Group will create a "dummy" PDF document, which will say "Confidential Proof of Claim for Sexual Abuse." (3) The "dummy" PDF document will be selected to attach when the BMC Group electronically files the proof of claim with the Court. The creditor's name will be entered as "UNKNOWN - CONFIDENTIAL" together with the claim amount if an amount is listed in the proof of claim. No other information will be placed in the creditor record. These Confidential Proofs of Claim for Sexual Abuse will be segregated and kept under seal to maintain confidentiality until further Court order. Absent further Court order, access to the Proofs of Claim will be restricted only to the Diocese and those persons who have executed a Compliance Declaration, who are authorized to utilize the information contained in the Confidential Proofs of Claim for Sexual Abuse, including the claimant's name, in conducting their investigations into the facts and circumstances surrounding the claim. (4) The BMC Group will retain paper copies of all General Proofs of Claim and Confidential Proofs of Claim for Sexual Abuse that it has received until otherwise instructed by the Court. The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000) CHASE MORTGAGE: Fitch Upgrades Low-B Ratings on Three Class Certs. ------------------------------------------------------------------ Fitch Ratings has taken rating actions on these Chase Mortgage Finance Trust issues: Series 2002-S4 -- Class A affirmed at 'AAA'. Series 2002-S8 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B1 upgraded to 'AAA' from 'AA+'; -- Class B2 upgraded to 'AA' from 'A+'; -- Class B3 upgraded to 'A' from 'BBB-'; -- Class B4 upgraded to 'BBB' from 'BB'. Series 2003-S1 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B-1 upgraded to 'AA+' from 'AA'; -- Class B-4 upgraded to 'BB' from 'B'. Series 2003-S2 -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'A+' from 'A'; -- Class B-4 affirmed at 'B'. Series 2003-S3 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-4 upgraded to 'BB' from 'B'. Series 2003-S5 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'A+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BB'; -- Class B-4 affirmed at 'B'. Series 2003-S6 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'A'; -- Class B-2 affirmed at 'BBB'; -- Class B-4 affirmed at 'B'. Series 2003-S7 -- Class A affirmed at 'AAA'. Series 2003-S8 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'A'; -- Class B-4 affirmed at 'B'. Series 2003-S12 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA-'; -- Class B-1 affirmed at 'A'; -- Class B-4 affirmed at 'B'. Series 2003-S13 -- Class A affirmed at 'AAA'. All of the mortgage loans in the aforementioned transactions were either originated or acquired by Chase Manhattan Mortgage Corporation. The mortgage loans consist of 15 and/or 30-year fixed-rate mortgages secured by first liens on one- to four-family residential properties. As of the November 2005 distribution date, the transactions are seasoned from a range of 24 to 45 months and the pool factors range from approximately 6% (series 2002-S4) to 77% (series 2003-S13). Chase Home Finance, LLC, rated 'RPS1' by Fitch, currently services all of the mortgage loans in the transactions detailed above. The affirmations reflect a satisfactory level of credit enhancement given future loss expectations and affect approximately $1.84 billion of outstanding certificates. The upgrades reflect an improvement in the relationship between CE and future loss expectations and affect approximately $10.04 million of outstanding certificates. The CE levels for all the classes affected by the upgrades have at least doubled their original enhancement levels since closing. Additionally, cumulative losses and the non-performing loan levels are very low for all transactions detailed above. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Ratings Website at http://www.fitchratings.com/ CHESAPEAKE ENERGY: Looks to Raise $605 Million from Stock Offering ------------------------------------------------------------------ Chesapeake Energy Corporation (NYSE: CHK) priced a public offering of 20.0 million shares of its common stock at $31.46 per share. All shares are being sold by Chesapeake. Chesapeake also has granted the underwriters a 30-day option to purchase up to 3.0 million additional shares of its common stock solely to cover over-allotments, if any. Chesapeake expects the issuance and delivery of the shares to occur on Dec. 14, 2005, subject to satisfaction of customary closing conditions. Chesapeake intends to use the net proceeds, estimated at $605 million after underwriting discount and expenses, to repay amounts outstanding under its revolving bank credit facility or for general corporate purposes. UBS Investment Bank, Banc of America Securities LLC, Credit Suisse First Boston LLC, Lehman Brothers and Raymond James acted as joint book-running managers for the offering. Copies of the preliminary prospectus and records relating to the offering may be obtained from the offices of UBS Securities LLC, Prospectus Department, 299 Park Avenue, 29th Floor, New York, NY 10171, 212-821-3000; Banc of America Securities LLC, Attn: Prospectus Department, 100 West 33rd Street, New York, NY 10001, 646-733-4166; Credit Suisse First Boston LLC, One Madison Avenue, Level 1B, New York, NY 10010, 212- 325-2580; Lehman Brothers Inc., c/o ADP Financial Services, Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, NY 11717; Raymond James & Associates, 880 Carillon Parkway, St. Petersburg, FL 33716, 727-567-2400. Chesapeake Energy Corporation is the second largest independent producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and property acquisitions in the Mid- Continent, Permian Basin, South Texas, Texas Gulf Coast, Barnett Shale, Ark-La-Tex and Appalachian Basin regions of the United States. * * * As reported in the Troubled Company Reporter on Nov. 8, 2005, Standard & Poor's Ratings Services assigned its 'BB' rating to oil and gas exploration and production company Chesapeake Energy Corp.'s $500 million senior notes due 2020 and its $600 million 2.75% contingent convertible senior notes due 2035. Standard & Poor's also assigned its 'B' rating to Chesapeake's $500 million 5% cumulative convertible preferred stock issue. Amounts do not include overallotment options. At the same time, Standard & Poor's affirmed its 'BB/B-1' corporate credit rating on the company. The outlook is stable. Pro forma for the recent capital raises, Oklahoma City, Oklahoma-based Chesapeake will have $5.4 billion in debt outstanding. CHINA MEDIA1: Posts $24,616 Net Loss in Third Quarter of 2005 ------------------------------------------------------------- Irvine, California-based China Media1 Corp., fka Eagle River Mining Corp., incurred net losses of $24,616 and $706,672 during the three and nine months ended Sept. 30, 2005, respectively. The Company expects losses to continue in the next six months or until it can obtain enough revenues to exceed its cost structure. The Company generated revenues from the Guangzhou Mass Transit Railway Pillar Advertising Contract of $554,765 and $1,219,457 during the three-month and nine-month periods ended Sept. 30, 2005, respectively. The contract provides for pillar wrap around advertising for 12 stations along the Guangzhou MTR system in China. China Media1's balance sheet showed $2,811,451 in total assets at Sept. 30, 2005, and liabilities of $2,518,120. $2 Million Advance Payment China Media1 announced on Dec. 5, 2005 that it received an approximate $2 million advance payment from Chi Shang Ling Yue Advertising Company Ltd. This is another payment further to the 10% down payment of about US$625,000 announced in July. In April 2005, the Company signed a one-year advertising contract with Chi Shang for $6.25 million for 30 outdoor area scrolling light boxes for their clients at the Guangzhou New Baiyun Airport. Going Concern Doubt Moore Stephens Ellis Foster Ltd. expressed substantial doubt about China Media1'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 losses from operations and need for additional capital. About China Media1 With its headquarters in Irvine, Calif., China Media1 Corp. (OTCBB: CMDA) --http://www.chinamedia1corp.com/-- has obtained rights to premiere Chinese advertising media assets in the city of Guangzhou in Southern China. Its affiliate, Guangzhou Chuangrun Advertising Company, operates the advertising space and advertising contracts with top-tier brand names and multi-national corporations as well as large advertising agencies. China Media1 has focused on providing its clients superior advertising locations based on viewership, exclusivity, and uniqueness through the use of its illuminated scrolling poster signs at the Guangzhou New Baiyun International airport. China Media1's advertising locations include the Guangzhou New Baiyun International Airport and the Guangzhou MTR (12 Subway Stations). China Media1 was a development-stage company until the first quarter of 2005. CIRTRAN CORP: Forms CirTran Products for Retail Merchandise ----------------------------------------------------------- CirTran Corp. (OTCBB: CIRT) has formed CirTran Products, which will offer products for sale at retail. Iehab J. Hawatmeh, CirTran's founder and president, said the division will be run from CirTran's new Los Angeles office with Trevor Saliba, the company's executive vice president for worldwide business development, spearheading sales. "CirTran is currently in the process of becoming a 'vendor of record' so as to sell directly to large retailers in the U.S.," Mr. Hawatmeh said. "It is our hope and expectation that consumer products built by our CirTran-Asia subsidiary, as well as products we will acquire for merchandising, will be on retailers' shelves by the end of the first quarter of 2006." Court Victories The Honorable Bruce Jenkins of the U.S. District Court for the District of Utah ruled in favor of CirTran-Asia, keeping its claims against International Edge Inc., in Utah. International Edge's affiliate, Telebrands, produces infomercials and markets products, including the AB King Pro, on TV in Europe. CirTran-Asia's claims against International Edge are included in an action brought by CirTran-Asia against TV infomercial marketer Michael Casey, Michael Casey Enterprises Inc., David Hayek, one of Casey's business associates, and HIPMG Inc., Hayek's company which works with Asian manufacturers. "International Edge filed a motion to dismiss, arguing it did not have sufficient contacts with Utah for the U.S. District Court in Utah to exercise personal jurisdiction over it," Hawatmeh said. "But Judge Jenkins rejected that argument and denied the motion. This decision is very positive because it will allow us to proceed more effectively and cost-efficiently against all defendants in the U.S. District Court here. CirTran-Asia will file documents to collect attorney fees as part of legal action won against Mindstorm Technologies LLC of Boynton Beach, Florida. A default judgment was signed in October by Judge Sandra Peuler (Third Judicial District Court, Salt Lake County, State of Utah), awarding CirTran $288,000 for goods provided. As part of that judgment, Judge Peuler awarded "fair and reasonable" attorney fees, plus interest, to CirTran. CirTran-Asia --- http://www.CirTran-Asia.com/-- was formed in 2004 as a high-volume manufacturing arm and wholly owned subsidiary of CirTran Corp. with its principal office in ShenZhen, China. CirTran-Asia operates in three primary business segments: high-volume electronics, fitness equipment and household products manufacturing, focusing on being a leading manufacturer for the multibillion-dollar direct response industry, which sells through infomercials, print and Internet advertisements. Founded in 1993, CirTran Corp. -- http://www.CirTran.com/-- is a premier international full-service contract manufacturer of low- to midsize- volume contracts for printed circuit board assemblies, cables and harnesses to exacting specifications. Headquartered in Salt Lake City, its ISO 9001:2000-certified, noncaptive 40,000-square-foot manufacturing facility is the largest in the Intermountain Region, providing "just-in-time" inventory management techniques designed to minimize an OEM's investment in component inventories, personnel and related facilities while reducing costs and ensuring speedy time to market. In 1998, CirTran acquired Racore Technology, founded in 1983 and reorganized as Racore Technology Corp. in 1997. * * * Going Concern Doubt The company has $377,357 cash on hand at Sept. 30, 2005. Because the company has negative cash flows from operations, it must rely on other cash sources. The company anticipates that various methods of equity financing will be required to support its operations until cash flows from operations are positive. As reported in the Troubled Company Reporter on April 19, 2005, Hansen, Barnett & Maxwell, CirTran's accountants, raised substantial doubts about the Company's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Dec. 31, 2004, citing continuing losses and negative cash flows from operations, and pointing to the company's accumulated deficit, equity deficit and working capital deficit. CLEAN HARBORS: Completes Amendment on $120MM Sr. Credit Agreement ----------------------------------------------------------------- Clean Harbors, Inc. (NASDAQ: CLHB) completed with its existing lenders an amendment of its senior credit agreement. The amended credit agreement provides for a five-year, $120 million senior credit facility comprised of: -- a $70 million, asset-based revolving line of credit, bearing interest at an annual rate of 1.5% for outstanding letters of credit and Libor plus 1.5% for cash borrowings, and -- a $50 million secured synthetic letter of credit facility, requiring fees at an annual rate of 3.10%, which will decrease to 2.85% if Clean Harbors successfully completes its proposed public offering of common shares and the redemption of $52.5 million of its outstanding 11.25% senior secured notes due 2012. The new agreement replaces the company's existing $30 million senior secured revolving credit facility and $90 million senior secured synthetic letter of credit facility, both of which would have matured in 2009. "This new credit agreement significantly lowers our cost of capital and provides Clean Harbors with greater financial flexibility," James M. Rutledge, Executive Vice President and Chief Financial Officer, stated. "We expect this amendment will generate $2.6 million in annual savings for Clean Harbors, which can be used to pay down our debt and support our growth strategy. We also expect to benefit from a reduction in annual non-cash amortization of deferred financing fees of approximately $300,000." In connection with the amendment, the company will incur a one-time, non-cash charge in the fourth quarter of 2005 of approximately $2.4 million. This charge is related to the write-off of costs associated with the prior credit facilities. Headquartered in Braintree, Massachusetts, Clean Harbors, Inc. -- http://www.cleanharbors.com/-- is North America's leading provider of environmental and hazardous waste management services. With an unmatched infrastructure of 48 waste management facilities, including nine landfills, five incineration locations and seven wastewater treatment centers, the company provides essential services to over 45,000 customers, including more than 175 Fortune 500 companies, thousands of smaller private entities and numerous federal, state and local governmental agencies. Clean Harbors has more than 100 locations strategically positioned throughout North America in 36 U.S. states, six Canadian provinces, Mexico and Puerto Rico. * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services raised its ratings on Clean Harbors Inc. The corporate credit rating was raised to 'BB' from 'BB-', and the senior secured notes rating was raised to 'B+' from 'B'. At the same time, the ratings were removed from CreditWatch, where they were placed with positive implications on Nov. 9, 2005. The outlook is stable. CONSTELLATION BRANDS: S&P Affirms BB Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating and other ratings on beverage alcohol producer and distributor Constellation Brands Inc. These ratings were removed from CreditWatch with negative implications, where they were placed on Sept. 28, 2005, following the company's announcement that it had made an initial unsolicited offer to buy Vincor International Inc. for CDN$31.00 per share, plus the assumption of debt, which represented an all cash transaction value of CDN$1.4 billion. In addition, the rating on the company's proposed $4.1 billion senior secured credit facility has been withdrawn. The outlook is negative. Fairport, New York-based Constellation Brands had about $3 billion of debt outstanding at Aug. 31, 2005. The rating actions follow the December 8 expiration of the company's tender offer to acquire Vincor. At this time, Constellation Brands will no longer pursue a debt-financed acquisition of Vincor. However, in the event that Constellation Brands were to renew its pursuit of Vincor, Standard & Poor's would reevaluate the impact of this on the company's ratings. CONSUMERS TRUST: Wants to Hire Bankruptcy Services as Claims Agent ------------------------------------------------------------------ The Consumers Trust asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Bankruptcy Services LLC as its claims and noticing agent. The Debtor has more than 70,000 possible creditors and parties-in- interest to receive notices in this case, most of whom, will file proofs of claim. Accordingly, the Debtor proposed Bankruptcy Services as its agent to relieve the clerk's office of burdens. Bankruptcy Services will: a) prepare and serve required notices in the chapter 11 case, including: i) notice of the commencement of the chapter 11 case and the initial meeting of creditors under section 341(a) of the Bankruptcy Code; ii) proofs of claim forms and the notice of the claims bar date; and iii) other miscellaneous notices to any entities, as the Debtor or the Court may deem necessary or appropriate for an orderly administration of this chapter 11 case; b) file with the Clerk's Office a certificate or affidavit of service that includes a copy of the notice involved, an alphabetical list of persons to whom the notice was mailed and the date and manner of mailing; c) maintain copies of all proofs of claim filed; d) maintain the official claims register, including, among other things, the following information for each proof of claim: i) the name and address of the claimant and any agent thereof, if the proof of claim was filed by an agent; ii) the date received; iii) the claim number assigned; and iv) the asserted amount and classification of the claim; e) implement necessary security measures to ensure the completeness and integrity of the claims register; f) transmit to the Clerk's Office a copy of the claims register on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; g) maintain an up-to-date mailing list for all entities that have filed a proof of claim, which list shall be available upon request of a party in interest or the Clerk's Office; h) provide access to the public for examination of copies of the proofs of claim or interest without charge during regular business hours; i) record all transfers of claims pursuant to Bankruptcy Rule 3001(e) and provide notice of such transfers as required by Bankruptcy Rule 3001(e); j) comply with applicable federal, state, municipal, and local statutes, ordinances, rules, regulations, orders and other requirements; k) provide temporary employees to process claims, as necessary; l) promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; m) box and transport all original documents in proper format, as provided by the Clerk's office, to the Federal and Record Administration at the close of this case. Ron Jacobs, Bankruptcy Services' president, discloses the firm's professionals hourly rates: Professional Hourly Rate ------------ ----------- Senior Managers/On-Site Consultants $225 Schedule Preparation $225 Other Senior Consultants $185 Programmer $130 - $160 Associate $135 Date Entry/Clerical $40 - $60 The Debtors believed that Bankruptcy Services LLC is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. 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. CREDIT SUISSE: S&P Raises Low-B Ratings on Class G & H Certs. ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on seven classes of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates from series 2000-C1. Concurrently, ratings are affirmed on the remaining six classes from the same transaction. The raised and affirmed ratings reflect the defeasance of 21% of the collateral as well as credit enhancement levels that provide adequate support through various stress scenarios. As of the remittance report dated Nov. 18, 2005, the collateral pool consisted of 203 loans with an aggregate principal balance of $1 billion, down from 211 loans totaling $1.1 billion at issuance. The master servicer, GMAC Commercial Mortgage Corp., provided interim and year-end 2004 net cash flow debt service coverage figures for 62% of the pool, which excludes the aforementioned defeased loans as well as the 12% of the transaction secured by co-op loans. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.45x, compared with 1.43x at issuance. The trust has experienced six losses totaling $10.8 million, and three loans are over 90 days delinquent. One loan with a balance of $11.9 million has an appraisal reduction amount in effect for $7.1 million. The remaining loans in the pool are current. The top 10 loan exposures have an aggregate outstanding balance of $304.6 million. The weighted average DSC for the top 10 loan exposures is 1.58x, compared with 1.61x at issuance. Standard & Poor's reviewed property inspections for all but one of the collateral properties securing the top 10 loan exposures, and all were characterized as "good." Despite the stable performance of the transaction, three of 10 largest loan exposures consist of corrected mortgage loans due to insufficient or forced-placed terrorism insurance. These three loan exposures are secured by defeased collateral as well as properties in Manhattan and in Washington, D.C. While the collateral supporting each loan is performing relatively well, the trust will incur corrected mortgage loan fees as a result of the transfers, which range from 0.50% to 1.00% of all cash flow received on two of the three loans. The remaining corrected mortgage loan incurred a one-time fee of $250,000, which was passed through the trust in December 2002. The upcoming fees will cause significant interest shortfalls when balloon principal payments are scheduled to occur in 2008 and 2009. The interest shortfalls will affect all of the classes up to and including class H. The impact and timing of the anticipated interest shortfalls were considered in the revised ratings. Five loans are with the special servicer, LNR Partners Inc. The West Park Plaza in Billings, Montana, secures a loan for $11.9 million that is over 90 days delinquent. The 305,523-sq.-ft. retail property was built in 1961 and renovated in 1985. As of Dec. 31, 2004, the DSC was 1.25x and occupancy was 71%. However, the property is anchored by a Sears, Roebuck and Co. (BB+/ Negative/--) store with an April 2006 lease expiration. An ARA of $7.1 million is in effect based upon an appraisal from March 2005. LNR is moving forward with foreclosure on the collateral property. Three loans secured by multifamily properties outside of Dallas, Texas, are with the special servicer. Two of the loans are over 90 days delinquent, while the third loan is current after a recent transfer to the special servicer. Each property was built between 1969 and 1980, with total loan exposures ranging from roughly $17,000 to $22,000 per unit for each loan. As of Dec. 31, 2004, the DSCs for the collateral properties securing the two delinquent loans were 0.27x and 0.29x, respectively, with occupancies of 58% and 81%, respectively, as of March 31, 2005. LNR is moving forward with foreclosure on each collateral property for the delinquent loans while formulating resolution strategies for all three loans. The fifth loan with the special servicer was secured by a multifamily property in Las Vegas, Nevada. After a fire destroyed part of the collateral building, the borrower and a prospective buyer entered into litigation surrounding the fire and the transfer of the property. An unsigned order from the court ruled that all insurance proceeds would be released to the lender. The borrower has kept the loan current while continuing to litigate the aforementioned matters. GMACCM reported a relatively small watchlist of 26 loans with an aggregate outstanding balance of $99.2 million, which reflects the stable performance of the pool. Standard & Poor's stressed the loans on the watchlist, along with other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2000-C1 Rating Class To From Credit enhancement ----- -- ---- ------------------ B AAA AA 18.85% C AAA A 14.42% D AAA A- 12.90% E AA- BBB 10.00% F A- BBB- 8.62% G BBB- BB+ 5.58% H BB+ BB 4.33% Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2000-C1 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 23.83% A-2 AAA 23.83% J BB- 3.36% K B 2.25% L B- 1.29% A-X AAA N/A N/A - Not applicable. CYBER DEFENSE: Posts $2 Million Net Loss in Quarter Ended Sept. 30 ------------------------------------------------------------------ Cyber Defense Systems, Inc., delivered its financial results for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Dec. 5, 2005. Cyber Defense reported a $2,002,312 net loss on $114,873 of revenues for the three months ended Sept. 30, 2005, versus a $190,958 net loss on zero revenues for the comparable period in the prior year. For the nine months ended Sept. 30, 2005, the Company recorded a $8,840,268 net loss, including a charge for impairment of goodwill in the amount of $4,577,069. At Sept. 30, 2005, Cyber Defense had $14,732,210 in total assets and liabilities of $6,487,714. Going Concern Doubt Hansen, Barnett & Maxwell expressed substantial doubt about Cyber Defense's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's recurring losses and losses and current ratio deficits since inception. On February 16, 2005 the Company and Commerce Funding Corporation executed a Working Capital Financing Proposal relative to a potential secured financing of up to $3 million for a two-year term. The financing is collateralized by a first-priority interest on all assets related to accounts receivable and a Cross Corporate Guaranty by Proxity, Inc., one of the Company's major shareholders. About Cyber Defense Headquartered in St. Petersburg, Fla., Cyber Defense Systems, Inc. (OTCBB:CYDF) -- http://www.proxygen.com/or http://www.cduav.com -- designs and builds small-unmanned air vehicles. The Company is currently marketing the airships and their CyberBug(TM) UAV's to various branches of the U.S. government and U.S. allies as multi- use platform vehicles capable of deployment in surveillance and communication operations. DELTA AIR: ALPA Agrees to Tentative 14% Hourly Wage Cut ------------------------------------------------------- Delta Air Lines, Inc. (Pink Sheets:DALRQ) confirmed on Dec. 11, 2005, that it has reached a tentative interim agreement with the Air Line Pilots Association, International, the collective bargaining representative of the company's more than 6,000 pilots. Subject to pilot ratification by no later than Dec. 28, 2005, the tentative interim agreement provides for a 14% hourly wage reduction and reductions in other pilot pay and cost items equivalent to approximately an additional 1% hourly wage reduction. The interim cost reductions would be effective Dec. 15, 2005 and would remain in effect while the parties seek to reach a comprehensive agreement. The company and ALPA would seek to negotiate a tentative comprehensive agreement by Mar. 1, 2006, with pilot membership ratification by Mar. 22, 2006. "This agreement reflects the resolve of Delta people to work together to help save the company. We recognize and appreciate the additional sacrifice this will represent," said Ed Bastian, Delta's chief financial officer. Delta and ALPA will request that the U.S. Bankruptcy Court for the Southern District of New York suspend the hearing on the company's motion to reject the existing Delta-ALPA collective bargaining agreement pursuant to section 1113 of the U.S. Bankruptcy Code, pending the ratification process for the tentative interim agreement. Delta has said that achieving additional annual pilot labor cost reductions is an important element of its restructuring plan. The restructuring plan calls for an additional $3 billion in annual cost reductions and revenue improvements to be realized by the end of 2007. The $3 billion improvement target is in addition to the approximately $5 billion in annual financial benefits the company says it is on track to deliver by the end of 2006, as compared to 2002. 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 505 destinations in 93 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. ELEC COMMS: Closes $2 Million Private Debt Placement with Laurus ---------------------------------------------------------------- eLEC Communications Corp. consummated a private placement with Laurus Master Fund, Ltd., a Cayman Islands corporation. The Company issued to Laurus a secured convertible term note in $2 million of principal amount and a common stock purchase warrant that entitles Laurus to purchase up to 1,683,928 shares of the Company's common stock, par value $.10 per share. The Note and the Warrant were sold to Laurus, an "accredited investor" defined under the Securities Act of 1933, for a purchase price of $2 million. Notes Terms Note Maturity Date and Interest Rate Absent earlier redemption by the Company or earlier conversion by Laurus, the Note matures on November 30, 2008. Interest will accrue on the unpaid principal and interest on the Note at a rate per annum equal to the "prime rate" published in The Wall Street Journal from time to time, plus 2%. If the Company completes its requirements under the Registration Rights Agreement and the average market price of the Company's stock trades for 5 consecutive trading days at a price at least 25% higher than the fixed conversion price, then the interest rate will be reduced by 200 basis points (2%) for each incremental 25% increase in the average market price of the Company's common stock. Payment of Interest and Principal Interest on the Note is payable monthly on the first day of each month during the term of the Note, commencing January 1, 2006. Commencing May 1, 2006, the Company is required to make monthly principal payments of $33,333 per month. Any principal amount that remains outstanding on November 30, 2008 will be due and payable at that time. Note Conversion Rights All or a portion of the outstanding principal and interest due under the Note will be converted into shares of Common Stock upon satisfaction of certain conditions. The Note is initially convertible into shares of Common Stock at a price of $0.61 per share. Security for Note The Note is secured by a blanket lien on substantially all of the Company's assets pursuant to the terms of a security agreement executed by the Company and its subsidiaries in favor of Laurus. eLEC Communications Corp. -- http://www.elec.net/-- is a Competitive Local Exchange Carrier that offers local and long distance calling plans to small business and residential customers. The Company sells under the names of New Rochelle Telephone and eLEC Communications, and the Company delivers telephone services. At August 31, 2005, the Company's balance sheet shows $2,692,097 in total assets and a $2,642,674 stockholders deficit. EMMIS COMMS: Completes Sale of Four TV Stations to Lin TV Corp. --------------------------------------------------------------- LIN TV Corp. (NYSE:TVL) reported that on Nov. 30, 2005 it completed its previously announced purchase from Emmis Communications Corp. (NASDAQ: EMMS) of: * WALA-TV (Ch. 10, Fox affiliate) in Mobile, Alabama/Pensacola, Florida.; * WTHI-TV (Ch. 10, CBS affiliate) in Terre Haute, Indiana; * WLUK-TV (Ch. 11, Fox affiliate) in Green Bay, Wisconsin; and * KRQE-TV (Ch. 13, CBS affiliate) in Albuquerque, New Mexico, plus regional satellite stations. The sale price for these four stations was $257 million. The parties have agreed that an additional payment of $3 million will be transferred to Emmis upon the completion of the sale of a fifth station, WBPG-TV (Ch. 55, WB affiliate) in Mobile, Alabama/Pensacola, Florida, upon receipt of FCC license renewal by that station, which is still pending. Until FCC license renewal is obtained, WBPG-TV will be operated by LIN TV under a Local Programming and Marketing Agreement between the parties, which began on November 30, 2005. The acquisition was funded with proceeds from LIN's credit facility. LIN TV Corp. -- http://lintv.com/-- headquartered in Providence, Rhode Island, pro forma for the acquisition owns and operates 30 television stations in 14 markets. In addition, the company also owns approximately 20% of KXAS-TV in Dallas, Texas and KNSD-TV in San Diego, California through a joint venture with NBC. LIN TV is a 50% investor in Banks Broadcasting, Inc., which owns KWCV-TV in Wichita, Kansas and KNIN-TV in Boise, Idaho. Emmis Communications Corporation -- http://www.emmis.com/-- is an Indianapolis-based diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. Emmis owns 23 FM and 2 AM domestic radio stations serving the nation's largest markets of New York, Los Angeles and Chicago as well as Phoenix, St. Louis, Austin, Indianapolis and Terre Haute, Indiana. Emmis has recently announced its intent to seek strategic alternatives for its 16 television stations, which will result in the sale of all or a portion of its television assets. In addition, Emmis owns a radio network, international radio stations, regional and specialty magazines and ancillary businesses in broadcast sales and book publishing. * * * As reported in the Troubled Company Reporter on Oct. 5, 2005, Moody's Investors Service affirmed the long-term ratings of Emmis Communications Corporation and its wholly owned subsidiary, Emmis Operating Company, and changed the outlook to positive. Emmis Operating Company: * Ba2 rating on its senior secured credit facilities; and * B2 rating on its $375 million of senior subordinated notes due 2012. Emmis Communications Corporation: * B3 rating on the $350 million senior unsecured floating rate notes due 2012, * B3 rating on the 12.5% senior discount notes due 2011; * Caa1 rating on the $143.8 million of cumulative convertible preferred stock; * Ba3 corporate family rating; and * SGL-3 rating. ENRON CORP: Strikes Ten ESI Customer Settlement Agreements ---------------------------------------------------------- In separate pleadings, Enron Energy Services, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to approve its settlement agreements with ten customers: 1. D&L Energy, Inc. 2. DAE Industries, Inc., d/b/a House of Pies 3. Goldenwest Laundry & Valet Services. Inc. 4. Illinois State University 5. Magic Touch Cleaners 6. Pleasant Gardens Realty Corp., d/b/a Pleasant Gardens 7. Rex Buckeye Company, Inc. 8. San Jose Unified School District 9. The Spires Association 10. Home Depot U.S.A., Inc. EESI and the Customers were parties to prepetition contracts for the sale of products and services. Following discussions between the parties, they negotiated a settlement agreement stating that: -- the Customers will pay EESI the payments due under the Contracts or as agreed between the parties; -- EESI and the Customers will mutually release the claims related to the Contracts; and -- each liability scheduled by EESI related to the Customers, except for Home Depot, will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable expunged and disallowed in its entirety. Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. Enron filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Confirmed Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. (Enron Bankruptcy News, Issue No. 164; Bankruptcy Creditors' Service, Inc., 15/945-7000) ENRON CORP: Univ. of Pa. Holds $700,000 Allowed Unsecured Claim --------------------------------------------------------------- On Feb. 20, 2001, Enron Corp. and the Trustees of the University of Pennsylvania entered into an agreement under which Enron will donate $1,000,000 to the University in exchange for a role in the Wharton Electronic Business Initiative program at the University's business school and inclusion in certain promotional materials as a donor. The Agreement provided that Enron would contribute $1 million in cash or readily marketable securities to the University, payable over four years in equal installments in April of each year beginning in April 2001. In April 2001, Enron made the first $250,000 payment. After the Petition Date, the Debtors made no further payments under the Agreement. On October 10, 2002, the University filed Claim No. 8088 for $750,000 for the unfulfilled portion of the Enron donation. The Debtors objected to the Claim on the basis that their books and records indicate that no amount was due to the University. On November 7, 2003, the Court disallowed and expunged the Claim. On March 24, 2004, the University filed a motion for reconsideration and requested the reinstatement of the Claim. The Court issued a memorandum opinion granting the motion to reconsider on June 14, 2005, resulting in the reinstatement of the Claim on the claim registry. To resolve the claim and associated disputes, the Parties stipulated that: -- Claim No. 8088 will be reduced and allowed as a Class 4 General Unsecured Claim for $700,000; -- Payments or distributions on account of the Allowed Claim will be made in the manner provided and at the time set in the Debtors' Chapter 11 Plan; and -- All scheduled liabilities related to the University are disallowed in their entirety in favor of the Allowed Claim. Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. Enron filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Confirmed Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. (Enron Bankruptcy News, Issue No. 164; Bankruptcy Creditors' Service, Inc., 15/945-7000) EQUINOX HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $49 Mil. ---------------------------------------------------------------- Equinox Holdings, Inc. reported financial results for the nine months ended Sept. 30, 2005. The company will file its first, second and third quarter 2005 Forms 10-Q with the Securities and Exchange Commission. For the nine months ended Sept. 30, 2005, total revenue increased 22% to $129.6 million compared to $106.0 million a year ago. Revenue from comparable fitness clubs rose 12.1%. Operating income increased to $18.2 million versus $13.2 million in the first nine months of 2004. Adjusted EBITDA improved to $31 million for the nine months ended Sept. 30, 2005 as compared with $24.6 million for the prior year period. Net loss was $9 million compared to net income of $1.3 million in 2004 as a result of a $12.3 million charge in 2005 for the valuation of the company's common stock put warrant liability. Third quarter total revenue for the period ended Sept. 30, 2005 was $44 million, an increase of 22% versus $36.2 million in the year ago period. Revenue from comparable fitness clubs rose 12.1% during the third quarter of 2005. Operating income was $5.3 million versus $6.1 million in the third quarter of 2004. The year-over-year decline is primarily due to the fact that marketing expenses in the third quarter of 2004 were lower than normal, owing to a shift in the timing of spending last year. Operating income was also impacted by the number of newly opened clubs relative to ramping and mature clubs. Adjusted EBITDA was $9.8 million, essentially flat compared to $9.7 million in the third quarter of 2004. Third quarter net income was $723,000 compared to $971,000 in 2004. Total revenue for the second quarter ended June 30, 2005 increased 22% to $44.3 million compared to $36.2 million in 2004. Revenue from comparable fitness clubs increased 11.5% for the period. Second quarter operating income rose 34% to $7 million compared to $5.2 million in 2004. Adjusted EBITDA increased to $11.3 million versus $8.8 million in the second quarter of 2004. Net income improved to $1.6 million compared to $1 million in 2004. Total revenue for the first quarter ended March 31, 2005 increased 23% to $41.4 million compared to $33.6 million in 2004. Revenue from comparable fitness clubs rose 13.0% for the period. First quarter operating income increased significantly to $5.9 million versus $2 million in the comparable period of 2004. Adjusted EBITDA improved to $10 million in the first quarter of 2005 as compared with $6.2 million in the prior year first quarter. Net loss was $11.3 million compared to net loss of $600,000 in 2004 as a result of a $12.3 million charge in 2005 for the valuation of the company's common stock put warrant liability. "We turned in strong results during the first nine months of the year, experiencing solid revenue growth across all categories, including Membership, Personal Training, Retail and Spa," Harvey Spevak, president and chief executive officer, said. "Importantly, both our new and ramping clubs continue to perform well as consumers enthusiastically embrace our innovative programs and high quality service offerings. Active member count rose 14% during the period and member retention remained stable at approximately 66%, reflecting the increasing strength of the Equinox brand." Related Cos. Acquires Equinox Equinox Holdings, Inc. has agreed to be acquired by The Related Companies, L.P., one of the nation's most pre-eminent real estate development firms. The Related Companies has agreed to acquire 100% of the issued and outstanding common stock of the company for an amount in cash equal to $505 million, less certain indebtedness, the payments in connection with the cancellation of options, and certain transaction expenses. 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. As of Sept. 30, 2005, the company had approximately $16 million in unrestricted cash and cash equivalents, no borrowings under its revolving credit facility and long-term debt of $163 million. Headquartered in New York, New York, Equinox Holdings, Inc. -- http://www.equinoxfitness.com/-- operates upscale, full-service fitness clubs, catering to the middle- to upper-end market segment. 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. Since its inception in 1991, Equinox has developed a lifestyle brand that represents service, value, quality, expertise, innovation, attention to detail, market leadership and results. As of Dec. 1, 2005, the company operated 30 Equinox fitness clubs. At Sept. 30, 2005, Equinox Holdings, Inc.'s balance sheet showed a stockholders' deficit of $49,365,000, compared to a $40,464,000 deficit at Dec. 31, 2004. FACTORY 2-U: Trustee Wants Admin. Claims Bar Date Set to Feb. 22 ---------------------------------------------------------------- Jeoffrey L. Burtch, the Chapter 7 Trustee overseeing the liquidation of Factory 2-U Stores, Inc., and its debtor- affiliates, asks the U.S. Bankruptcy Court for the District of Delaware to set February 22, 2006, at 4:00 p.m., as the deadline for all creditors owed money by the Debtor on account of administrative expense claims arising from December 1, 2005, to file their proofs of claim. The Trustee believes the approximately sixty days notice to prepare and file any claim affected by the Administrative Expense Claim Bar Date is more than sufficient time, and consistent with the approved practices in this jurisdiction. Headquartered in San Diego, California, Factory 2-U Stores, Inc., -- http://www.factory2-u.com/-- operates a chain of off-price retail apparel and housewares stores in 10 states, mostly in the western and southwestern US. The stores sell branded casual apparel for the family, as well as selected domestics, footwear, and toys and household merchandise. The Company filed for chapter 11 protection on January 13, 2004 (Bankr. Del. Case No. 04-10111). The Court converted the Debtors' case into a chapter 7 proceeding on Jan. 27, 2005, and appointed Jeoffrey L. Burtch as trustee. M. Blake Cleary, Esq., and Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their bankruptcy cases. When the Debtors filed for protection from their creditors, they listed $136,485,000 in total assets and $73,536,000 in total debts. FACTORY 2-U: Richard Franklin Okayed as Trustee's Claims Auditor ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the retention of Richard C. Franklin as claims auditor for Jeoffrey L. Burtch, the chapter 7 trustee overseeing the liquidation of Factory 2-U Stores, Inc., and its debtor- affiliates, nunc pro tunc to July 11, 2005. The Trustee selected Mr. Franklin as his Claims Auditor because of his general experience and knowledge of insurance and workers' compensation claims. From 2000 to 2004, the Debtor made over $10 million in payments for claims to various workers compensation insurers. The Trustee has been unable to identify a third party administrator who participated in a review of the claims in this period. Mr. Franklin will: a) identify a population of claims that would be audited from the loss runs of the workers compensation insurers from 2000 to 2004; b) acquire individual claim files, identified in the test population, from the insurers and review these files for appropriateness of the bills submitted and treatment provided; c) note any exceptions based upon his professional experience and communicate with the insurer on an individual claim basis seeking a fee adjustment; d) report to the Trustee regarding any exceptions identified in his audit and based upon the frequency and type of exceptions may be asked to expand his audit beyond the original test population; e) will provide expert litigation and trial assistance to the Trustee, as needed, to obtain a refund from the workers compensation insurers; and f) provide other analytical and litigation services for the Trustee in connection with these workers compensation issues on an as needed basis and as requested by the Trustee or his legal counsel. Mr. Franklin charges $350 per hour for analysis of insurance issues, including the preparation of expert reports, preparation for depositions and preparation for trials. His rate for actual time testifying in Court or in depositions is $450 per hour. To the best of the Trustee's knowledge, Mr. Franklin holds no interest adverse to the Debtor or its estate. Richard C. Franklin is a property and casualty insurance and reinsurance professional with experience developing and managing U.S. personal and commercial lines business for major insurers. His primary strengths include business analysis and strategy, underwriting, marketing and business development, regulatory and operations management. His regulatory experience spans 25 years and includes personal and commercial lines, product line management, filing, compliance and customer service. Headquartered in San Diego, California, Factory 2-U Stores, Inc. -- http://www.factory2-u.com/-- operates a chain of off-price retail apparel and housewares stores in 10 states, mostly in the western and southwestern US. The stores sell branded casual apparel for the family, as well as selected domestics, footwear, and toys and household merchandise. The Company filed for chapter 11 protection on January 13, 2004 (Bankr. Del. Case No. 04-10111). The Court converted the Debtors' case into a chapter 7 proceeding on Jan. 27, 2005, and appointed Jeoffrey L. Burtch as trustee. M. Blake Cleary, Esq., and Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their bankruptcy cases. When the Debtors filed for protection from their creditors, they listed $136,485,000 in total assets and $73,536,000 in total debts. FEDERAL-MOGUL: Court Approves Owens-Illinois' Settlement Agreement ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved the settlement agreement inked between Federal-Mogul Corporation and its debtor-affiliates, the Official Committee of Unsecured Creditors, the Official Committee of Asbestos Claimants Committee, the Legal Representative for Future Asbestos Claimants, the Official Committee of Equity Security Holders and the Agent for the Prepetition Bank Lenders. The settlement agreement resolves the dispute arising from the 1999, complaint Owens-Illinois, Inc., filed against T&N Limited seeking over $1.6 billion in damages on account of its historical expenditures in defending and resolving asbestos cases since the 1970s. Among other things, Owens-Illinois asserted that T&N conspired for more than three decades with: -- Cape Asbestos Co. Ltd., now known as Cape PLC, a U.K. asbestos company not affiliated with the Debtors; and -- Johns-Manville Corp., in the sale of asbestos fiber, allegedly hiding the hazards of asbestos to asbestos product end-users. The salient terms of the Settlement Agreement are: A. Effectiveness The terms and conditions of the Settlement Agreement will apply if the Ultimate Plan -- the Plan, any modification of the Plan that does not require re-solicitation of Owens- Illinois or an alternative plan of reorganization proposed by any or all of the Plan Proponents -- leaves intact the treatment of the Claims substantially as provided in the Settlement Agreement. B. Settlement Amount On the Effective Date of the Ultimate Plan, Owens-Illinois will receive a distribution of not less than $4.8 million cash, payable by Federal-Mogul in full satisfaction of the Claims. C. Releases On the Effective Date of the Ultimate Plan, these Claims are deemed satisfied, waived or withdrawn, with prejudice: a. Claims against T&N, Federal-Mogul, any other Debtor and any non-Debtor affiliate in relation to the 2000 Agreement or those that otherwise could have asserted in the Litigation; and b. Proofs of claim, scheduled claims, motions or requests for payment made by Owens-Illinois in the Debtors' cases, with the exception of the C&I Claims. Federal-Mogul will advance the payment of the Settlement Amount, on behalf of certain other Debtors and non-Debtor affiliates who have or may bear some of the responsibility for a portion of the Settlement Amount other than that portion for which Federal-Mogul has agreed to be responsible. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some US$6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed US$10.15 billion in assets and US$8.86 billion in liabilities. At Dec. 31, 2004, Federal-Mogul's balance sheet showed a US$1.925 billion stockholders' deficit. At Mar. 31, 2005, Federal-Mogul's balance sheet showed a US$2.048 billion stockholders' deficit, compared to a US$1.926 billion deficit at Dec. 31, 2004. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. (Federal-Mogul Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLEETWOOD ENTERPRISES: Posts $1.9 Million Net Loss in Second Qtr. ----------------------------------------------------------------- Fleetwood Enterprises, Inc. (NYSE: FLE) reported results for the second quarter and first half of fiscal 2006 ended Oct. 30, 2005. Consolidated revenues for the quarter were $629.5 million, down 2.5% from $645.9 million in last year's second quarter. Income from continuing operations totaled $3.8 million compared with $15.3 million in the prior year. The company incurred a net loss, including discontinued operations, of $1.9 million, compared with net income in last year's second quarter of $8.1 million. Discontinued operations, which include the manufactured housing retail and financial services businesses that were recently sold, incurred a loss of $5.7 million in the second quarter, compared to a loss of $7.2 million in the comparable period last year. The majority of this quarter's loss from discontinued operations related to the retail business, which was sold midway through the fiscal quarter, as well as ongoing general and administrative expenses. The current quarter loss includes severance and related costs totaling $0.8 million, reduced by a gain on sale from insurance assets of $2.4 million. "The quarter's results show marked sequential improvement over the first quarter," said Elden L. Smith, Fleetwood's president and chief executive officer. "We are pleased with the progress in our restructuring plan and with the boost provided by significant orders for disaster relief shelter received by both our travel trailer and manufactured housing operations. On the other hand, the slower market for motor homes negatively impacted our results. Declining consumer confidence, driven by higher fuel prices and rising interest rates, has led to an industry decline of approximately 8% in motor home retail sales so far in calendar 2005. In turn, this caused dealers to reduce their inventories, and both factors contributed to a slowing of the Company's sales. Last year, dealer inventories were still increasing, exaggerating the year-over-year decline in wholesale shipments." For the first six months of fiscal 2006, consolidated revenues declined 4.5% to $1.25 billion compared with $1.31 billion for the first half of last year. RV Group sales were down 12.7 percent while Housing Group sales improved 4.8 percent. The net loss in the first half of fiscal 2006 was $31.5 million compared with net income of $13.7 million in the first six months of fiscal 2005. Loss from continuing operations for the first six months of fiscal 2006 was $13.6 million compared to income of $27.8 million last year. Housing Group Results The Housing Group generated operating income of $14.2 million in the second quarter, an improvement of 21% compared with $11.7 million of operating income in the prior year second quarter. Quarterly revenues for the Group grew 5% to $225.0 million from $213.9 million in last year's second quarter. The second quarter included revenues of approximately $30 million from the sale of homes for disaster relief, compared with approximately $44 million in the same quarter last year. For the first half of the fiscal year, Housing Group revenues increased 4.8% to $429.3 million from $409.6 million in the prior year. Operating income climbed to $19.2 million for the first six months, compared with $17.8 million in the first six months of last year. "The longer-term outlook for our Housing Group is quite positive," Mr. Smith said. "Beyond the immediate need for emergency housing, we expect to see increased demand for two to three years for replacement permanent housing throughout the areas affected by this season's hurricanes. These areas are traditionally strong markets for manufactured housing. Because the bulk orders from FEMA result in extended production runs, we are able to achieve enhanced labor efficiencies that directly benefit our gross margin." RV Group Results The RV Group incurred an operating loss of $0.7 million for the quarter on revenues of $393.5 million, compared to operating income of $8.6 million for the same quarter of the prior year, on revenues of $450.3 million. In the first six months of fiscal 2006, the Group reported an operating loss of $5.8 million on revenues of $816.7 million, compared with operating income of $24.2 million on revenues of $936.0 million in the comparable period last year. The primary reason for the deterioration in operating results was the 13% decline in revenues in both the second quarter and first half, largely due to slowing motor home sales, similar to that experienced throughout the industry. In the second quarter, the operating performance in both travel trailers and folding trailers was significantly improved, but was more than offset by the decline in the motor home division's operating results. The travel trailer division's operating loss narrowed to $3.8 million compared with $6.7 million in the prior year period, while operating income for the folding trailer division improved to $0.3 million from $0.1 million. The motor home division's operating income dropped to $2.9 million compared with the prior year's $15.1 million. "Our travel trailer operations in the second quarter benefited from the sale of $30 million in FEMA units, which compares to $5 million in similar units last year," Mr. Smith said. "As with the Housing Group, the large FEMA orders allow for improved labor efficiency, positively impacting travel trailer gross margin. In addition, because of the size of the FEMA trailer orders, we will be building these units throughout our fiscal third quarter and into the fourth quarter, after ramping up production more than midway through the second quarter. The timing of this production will provide an excellent bridge for both the Company and our dealers, because we can maintain a high production level without building and carrying inventory during the winter season. At these higher levels of production, we can then quickly build to meet our dealers' orders for the spring selling season. "At last week's national RV show in Louisville, Kentucky, we were encouraged by the dealers' cautious optimism regarding next spring's selling season," Mr. Smith continued. "Even more importantly, our products were met with enthusiasm. We had new floor plans on display that were directly targeted to respond to dealer and consumer requests. We were also pleased to introduce our unique full-wall-slide technology, which was successfully introduced in our Pace Arrow product in last year's show, with updated floor plans in three more of our best-selling motor home brands. And 12 of the 24 travel trailers displayed were designed to compete against the most popular floor plans in the industry. In addition, we launched lighter-weight versions of several of our top brands." Corporate Events Subsequent to the end of the quarter, the Company completed a direct placement of 7 million common shares, raising net proceeds of approximately $66 million. The proceeds will be used to pay deferred distributions plus interest on the Company's 6% convertible trust preferred securities on the next scheduled payment date of Feb. 15, 2006, in the amount of $58.8 million. The remaining proceeds will be used for general corporate purposes. Corporate Outlook "Due in large part to the FEMA orders, we expect that sales in our third quarter, which is usually seasonally weak, will approach second-quarter levels and will significantly outpace last year's third quarter," Mr. Smith concluded. "Further, we anticipate that results from continuing operations will be at similar levels to those of the second quarter. The expected reduction in the loss from discontinued operations should enable us to achieve our previously indicated sequential improvement in our results at the net income line. We believe that long-term consumer demographics, our leadership position in both of our industries, and our ongoing corporate revitalization will enable us to post consistently better results over time." Fleetwood Enterprises, Inc. -- http://www.fleetwood.com/-- is a leading producer of recreational vehicles and manufactured homes. This Fortune 1000 company, headquartered in Riverside, California, is dedicated to providing quality, innovative products that offer exceptional value to its customers. Fleetwood operates facilities strategically located throughout the nation, including recreational vehicle, manufactured housing and supply subsidiary plants. * * * As reported in the Troubled Company Reporter on July 22, 2005, Standard & Poor's Ratings Services lowered its corporate credit rating on Fleetwood Enterprises Inc. to 'B+' from 'BB-'. S&P said the outlook is negative. At the same time, the rating assigned to the company's convertible senior subordinated debentures is lowered to 'B-' from 'B'. The rating assigned to Fleetwood Capital Trust's convertible trust preferred securities remains 'D', as Fleetwood continues to defer payment of related dividends. FOOTSTAR INC: Plan Confirmation Hearing Begins on Jan. 26 --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a confirmation hearing at 10:30 a.m., on Jan. 26, 2005, for the First Amended Joint Plan of Reorganization filed by Footstar Inc., and its debtor-affiliates. The Court approved the adequacy of the Amended Disclosure Statement explaining the Amended Joint Plan on Dec. 5, 2005. The Debtors are now authorized to send copies of the Amended Disclosure Statement and Amended Joint Plan to creditors and solicit their votes in favor of the Plan. Summary of Amended Joint Plan The Amended Plan provides for a stand-alone reorganization of the Debtors around their Meldisco business, which currently generates over 90% of its revenue from the Debtors' relationship with Kmart Corporation, which is governed by the Master Agreement and as amended by the Kmart Settlement. The Plan contemplates that the Debtors will emerge with up to $100 million in exit financing All unsecured creditors will be paid in full with a new post- petition interest rate of 4.25% per annum, from the previous 1.23% per annum. That new post-petition interest rate is refereed under the Plan as the case interest rate. Treatment of Claims and Interests A) Other priority claims, totaling approximately less than $1 million, will be paid in full on the effective date of the Amended Plan. B) Secured tax claims, totaling approximately $1.9 million, will be either be paid in full on the effective date or over a period of six years from the date of assessment of the tax with interest. C) Other secured claims, totaling approximately $8 million, will either be paid in full on the effective date, or reinstated by curing all outstanding defaults, or delivery or retention of collateral plus payment of interest. D) Allowed general unsecured claims, totaling approximately $129 million, will be paid in full, in cash on the effective date plus the 4.25% per annum case interest rate. If the class of general unsecured claims does not vote to accept the Plan, the Debtors and the Equity Holders Committee reserve their right to propose an interest rate that is lower than the case interest rate. E) Subordinated Claims will receive their pro rata share of the proceeds of the AIG Settlement, which represents $14.3 million of insurance proceeds. F) Footstar equity interests and subsidiary equity interests will be unaltered and remain in place. A full-text copy of the Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=051212211618 All Ballots must be completed and returned by Jan. 17, 2005, to the Debtors' voting and tabulation agent: Footstar, Inc. c/o Financial Balloting Group LLC 757 Third Avenue - 3rd Floor New York City, New York 10017 Objections to the First Amended Plan, if any, must be filed and served by Jan. 17, 2005. Headquartered in West Nyack, New York, Footstar Inc., retails family and athletic footwear. As of August 28, 2004, the Company operated 2,373 Meldisco licensed footwear departments nationwide in Kmart, Rite Aid and Federated Department Stores. The Company also distributes its own Thom McAn brand of quality leather footwear through Kmart, Wal-Mart and Shoe Zone stores. The Company and its debtor-affiliates filed for chapter 11 protection on March 3, 2004 (Bankr. S.D.N.Y. Case No. 04-22350). Paul M. Basta, Esq., at Weil Gotshal & Manges represents the Debtors in their restructuring efforts. When the Debtor filed for chapter 11 protection, it listed $762,500,000 in total assets and $302,200,000 in total debts. FORD MOTOR: Plans to Close Eight Plants to Cut Losses ----------------------------------------------------- Ford Motor Co., America's second-largest car manufacturer, plans to shutter at least eight assembly and parts plants to stem losses and realign its production capacity with its shrinking market share, industry paper Automotive News revealed Monday. Citing a key company insider, the paper said the planned closings include an SUV plant in St. Louis, a sedan plant in Atlanta, a pickup truck plant in St. Paul, Minn., a luxury car plant in Wixom, Mich., and a truck-assembly plant in Cuautitlan, Mexico. Additionally, Ford is expected to include at least three parts plants in the closings, including and an engine-parts plant in Windsor, Ontario. Ford is expected to reveal the details of its restructuring plan in January. Ford is losing large chunks of market share to Asian rivals, most notably Toyota Motor Corp. (TM). In November, Ford reported its third consecutive double-digit sales decline compared to a year ago as deliveries fell off 15%. (Troubled Company Reporter Latin America, Vol. 6, Issue 242, Wednesday, Dec. 7, 2005). FORD MOTOR: Inks Tentative Pact with UAW on Health Care Cuts ------------------------------------------------------------ The United Auto Workers and Ford Motor Co. reached a tentative agreement, which allows certain reductions in health care benefits for UAW employees. The agreement is subject to ratification by UAW-Ford's active rank-and-file members and court approval. "Our goal in these discussions with Ford was to provide the best possible health care coverage and the strongest possible long-term protections for all UAW-Ford active workers, retirees and surviving spouses. We believe this tentative agreement achieves that goal," UAW President Ron Gettelfinger and Vice President Gerald Bantom, who directs the UAW National Ford Department, said. "Like the UAW-GM health care agreement, this tentative agreement asks every UAW member, active and retired, to make sacrifices so that everyone can continue to receive excellent health care coverage today and in the future. UAW-Ford workers and retirees have long enjoyed some of the best health care coverage of any industrial workers in America, and they will continue to do so under this agreement," the UAW leaders said. Details of the tentative agreement are being withheld pending a meeting of the UAW-Ford Council, which is being scheduled this week in Detroit. A similar deal was made between General Motors Co. and the union in October. The Ford deal, like the GM agreement, requires workers and retirees to pay more for their health care, Sholnn Freeman of The Washington Post reports citing a person familiar with the agreement. The new agreement with the UAW will allow Ford to cut healthcare liabilities by 20% or about $7.8 billion, Stephen Wisnefski of Dow Jones Newswires cited Bear Stearns analyst Peter Nesvold as saying. Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Dec. 1, 2005, Standard & Poor's Ratings Services said that its 'BB+' long-term and 'B-1' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and all related entities will remain on CreditWatch with negative implications, where they were placed on Oct. 3. Hertz Corp.'s ratings had already been placed on CreditWatch negative on Sept. 13, 2005, pending completion of Ford's plan to divest it. FRONTIER CHARTER: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Frontier Charter & Contract Services, LLC 2050 Glendale Avenue Sparks, NV 89431 Bankruptcy Case No.: 05-54856 Type of Business: The Debtor is a motorcoach company that provides charter services. Chapter 11 Petition Date: December 7, 2005 Court: District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Rew R. Goodenow, Esq. P.O. Box 2790 Reno, NV 89505 Tel: (775) 323-1601 Total Assets: $679,930 Total Debts: $2,556,597 Debtor's 114 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service $1,052,272 Stop 5028 110 City Parkway Las Vegas, NV 89106 Ramos Oil $552,000 1515 South River Road West Sacramento, California 95691 Berry Hinckley Industries $169,447 P.O. Box 11020 Reno, NV 89510 California Employment Development $66,903 P.O. Box 82676 Sacramento, CA 94230 Dawson Oil $42,138 4325 Pacific Street P.O. Box 360 Rocklin, CA 95677 Aramark Sports & Entertainment $23,296 Cingular Wireless $22,097 Brannon Tire $20,940 Morgan Tire Of Sacramento Inc. $16,995 Carson Valley Oil $16,241 PG& E $11,238 American Express $11,000 Washoe County Treasurer $9,982 Barrett Paint Supply $9,940 Nevada Blue Ltd. $9,395 Sacramento County Treasurer $8,811 Department of Motor Vehicle $8,272 MCI Service Parts Inc. $8,260 Nextel Communication $8,092 Qwest $7,837 GFSI INC: Commences Exchange Offer for 9-5/8% Senior Notes ---------------------------------------------------------- GFSI, Inc. commenced an exchange offer pursuant to which GFSI is offering to exchange a new issuance of $134.9 million of principal amount of 11% Senior Secured Notes due 2011 for: (i) all of its outstanding $125.0 million of principal amount of 9-5/8% Senior Subordinated Notes due 2007 (CUSIP No. 361695-AC-3) and (ii) all of its outstanding $9.9 million of principal amount of 9-5/8% Senior Subordinated Notes due 2007 (CUSIP No. 361695-AF-6). In connection with the exchange offer, GFSI is also soliciting consents from the holders of the Senior Subordinated Notes to approve certain amendments to the indentures under which the Senior Subordinated Notes were issued to eliminate substantially all of the restrictive covenants and certain events of default and related provisions in such indentures. The exchange offer and consent solicitation are subject to various conditions including the tenders for exchange by holders of at least 95% of the Senior Subordinated Notes, the execution of supplemental indentures containing the amendments for which consents were solicited, the receipt of the consent of GFSI's lenders under its existing revolving credit facility and the substantially simultaneous consummation of certain refinancing transactions involving GFSI's parent, GFSI Holdings, Inc. Pursuant to the exchange offer, holders of the Senior Subordinated Notes that are both "qualified institutional buyers" and "accredited investors," as defined in the rules under the Securities Act of 1933, as amended, may elect to exchange $1,000 in principal amount of Senior Subordinated Notes for $1,000 in principal amount of the Senior Secured Notes. Any holder that tenders its Senior Subordinated Notes pursuant to the exchange offer will also receive a cash payment in respect of all accrued and unpaid interest on the Senior Subordinated Notes through the initial settlement date of the exchange offer. The exchange offer and consent solicitation commenced on Dec. 7, 2005 and will expire at 5:00 P.M., New York City time, on Jan. 5, 2006, unless extended. Holders of Senior Subordinated Notes cannot tender their Senior Subordinated Notes in the exchange offer without delivering their consents to the proposed amendments in the consent solicitation. Holders that validly tender (and do not withdraw) Senior Subordinated Notes in the exchange offer and validly deliver (and do not revoke) consents in the consent solicitation on or prior to the consent payment deadline, which is 5:00 P.M., New York City time on the later of: (a) December 20, 2005 and (b) the first date on which each of the conditions to the exchange offer and consent solicitation are satisfied, will be entitled to receive the payment of a consent fee of $10 per $1,000 in principal amount of Senior Subordinated Notes tendered by such Holder. Tenders of Senior Subordinated Notes and deliveries of consents may be withdrawn at any time prior to the consent payment deadline. Information regarding the exchange consideration, tender and delivery procedures and conditions of the exchange offer and consent solicitation is contained in the Exchange Offering Memorandum and Consent Solicitation Statement and related documents. Copies of the offering documents related the exchange offer only will be provided to holders who can demonstrate eligibility to participate. Subject to these limitations, copies of the offering documents can be obtained by contacting U.S. Bank National Association, the exchange agent, at (800) 934-6802. MacKenzie Partners, Inc. is the information agent for the exchange offer and consent solicitation. Additional information containing the terms and conditions of the exchange offer and consent solicitation may be obtained by contacting MacKenzie Partners, Inc. at (212) 929-5500. GFSI Inc. is a leading designer, manufacturer and marketer of high quality, custom designed sportswear and activewear bearing names, logos and insignia of resorts, corporations, national associations, colleges and professional sports leagues and teams. GFSI custom designs and decorates an extensive line of high-end outerwear, fleecewear, polo shirts, T-shirts, woven shirts, sweaters, shorts, performance apparel and headwear. GFSI markets its products through its well-established and diversified distribution channels. * * * Moody's Investors Service's rated the company's 9-5/8% Senior Subordinated Notes due 2007 at Caa1. GLOBAL EXECUTION: Fitch Lifts Rating on Class E Preferred Shares ---------------------------------------------------------------- Fitch Ratings has upgraded the Global Execution Auto Receivables Securitization Auto Owner Trust 2004-A asset-backed transaction: -- Class B-1 notes to 'AAA' from 'AA'; -- Class B-2 notes to 'AAA' from 'AA'; -- Class C notes to 'AA' from 'A+'; -- Class D preferred shares to 'A' from 'BBB'; -- Class E preferred shares to 'BBB' from 'BB+'. The rating upgrades are a result of increased available credit enhancement in excess of expected remaining losses. Under the credit enhancement structure, the bonds can now withstand stress scenarios consistent with the upgraded ratings and still make full payments of principal and interest, in accordance with the terms of the documents. GRAND EAGLE: Court OKs Creditors Committee Settlement With Viacom ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ohio, Eastern Division, approved a settlement between the Official Committee of Unsecured Creditors of Grand Eagle, Inc., and its debtor-affiliates and Viacom, Inc. The settlement calls for the reduction of Viacom's claim against the Debtors' estates to $1 million. Viacom had filed a $2.3 million general unsecured claim against the debtors' estates for alleged actual and future environmental cleanup costs associated with two of the Debtor's former properties. The Committee objected to the claim and Viacom subsequently filed a reduced claim of approximately $2 million. Despite the reduction, the Committee continued to dispute the claim. Its contentions centered on: -- the allocation of costs attributed to the Debtors by Viacom in the reduced claim; and -- the Debtors' liability for future, estimated clean-up costs. After extensive negotiations, Viacom agreed to reduce and limit its allowed general unsecured claim against the Debtor's estate to $1 million. The Committee said the settlement is in the best interest of the Debtors' estate given the risks and costs associated with litigation. The Official Committee of Unsecured Creditors is represented by: Jessica E. Price, Esq. Brouse McDowell 1001 Lakeside Avenue, Suite 1600 Cleveland, OH 44114-1151 Telephone (216) 830-6830 Grand Eagle Companies, Inc., a privately held company, used to be North America's largest independent motor, switchgear, and transformer services provider. The Company filed for chapter 11 protection on December 7, 2001 (Bankr. N.D. Ohio Case No. 01- 54821). Subsequently, Grand Eagle sold all of its assets and is no longer an operating business providing any goods or services and no longer operates a business office. Jeffrey Baddeley, Esq., at Benesch Friedlander Coplan & Aronoff, represents the Debtors. HANDEX GROUP: Wants to Hire Gronek & Latham as Bankruptcy Counsel ----------------------------------------------------------------- Handex Group Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida for permission to employ Gronek & Latham LLP as their general bankruptcy counsel. Gronek & Latham will: 1) assist and advise the Debtors about their rights, duties and obligations in their chapter 11 cases; 2) prepare on behalf of the Debtor, pleadings related to their chapter 11 cases, a proposed plan of reorganization and an accompanying disclosure statement; 3) take all necessary actions incident to the proper preservation and administration of the Debtors' chapter 11 cases; and 4) render all other legal services to the Debtors that are necessary in their bankruptcy cases. R. Scott Shuker, Esq., a partner of Gronek & Latham, is one of the lead attorneys for the Debtor. Mr. Shuker discloses that his Firm received a $180,385 retainer. Gronek & Latham had not yet submitted the hourly rates of its professionals performing services to the Debtor when the Debtor filed its request with the Court to employ the Firm as its general bankruptcy counsel. Gronek & Latham assures the Court that it does not represent any interest materially adverse to the Debtors and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Mount Dora, Florida, Handex Group Inc. -- http://www.handex.com/-- and its affiliates help companies solve environmental issues. The Debtors offer management and consulting services, which include remediation, regulatory support, risk management, waste minimalization, health and safety training, data support, engineering and construction services. The Debtors filed for chapter 11 protection on Nov. 23, 2005 (Bankr. M.D. Fla. Case No. 05-17617). When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $10 million to $50 million. HANDEX GROUP: Section 341(a) Meeting Slated for December 19 ----------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of Handex Group Inc. and its debtor-affiliates' creditors at 9:00 a.m., on Dec. 19, 2005, at 6th Floor, Suite 600, 135 West Central Blvd., Orlando, Florida 32801. 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 Mount Dora, Florida, Handex Group Inc. -- http://www.handex.com/-- and its affiliates help companies solve environmental issues. The Debtors offer management and consulting services, which include remediation, regulatory support, risk management, waste minimalization, health and safety training, data support, engineering and construction services. The Debtors filed for chapter 11 protection on Nov. 23, 2005 (Bankr. M.D. Fla. Case No. 05-17617). R. Scott Shuker, Esq., and Mariane L. Dorris, Esq., at Gronek & Latham LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $10 million to $50 million. HAYES LEMMERZ: Posts $13.3 Million Net Loss in Third Quarter ------------------------------------------------------------ Hayes Lemmerz International, Inc. (Nasdaq: HAYZ) reported that sales for the fiscal third quarter ended Oct. 31, 2005, rose 11% to $604.0 million from $545.9 million for the same period last year, helped by higher international volume, significant recovery from customers of increased steel prices, and favorable foreign exchange rates, while North American sales were lower than a year earlier. The company reported earnings from operations of $16.8 million, up 29% from $13.0 million in the year earlier quarter. Net loss for the quarter was $13.3 million, compared with a net loss of $5.3 million in the year earlier third quarter, primarily due to higher interest costs. Adjusted EBITDA was $60.8 million for the third quarter of 2005, down slightly from $62.4 million a year earlier. During the quarter, the company generated positive free cash flow of $25.1 million (excluding the change in receivables securitization), and its total liquidity improved to $179 million at Oct. 31, 2005 from $129 million at July 31, 2005. "In the face of lower sales of domestic auto and light truck sales, we are pleased with our third quarter results," said Curtis Clawson, President, CEO and Chairman of the Board of Hayes Lemmerz. "Our long-term strategy again demonstrated its value by making it possible for us to realize increased sales and higher operating income despite the difficult business environment in North America. "We will continue to pursue our strategic plans to expand in low- cost countries, to serve our customers as they continue to expand in markets outside of the U.S. and Western Europe," Mr. Clawson said. In that regard, Mr. Clawson noted that in November, the company bought a controlling interest in its aluminum wheel joint venture in Turkey. "Increasing our stake in this joint venture further improves our ability to meet customer needs in very important Turkish and European markets," Mr. Clawson said. Mr. Clawson also cited the Company's recent decision to invest in low pressure aluminum wheel casting technology to serve the European truck and trailer market, where aluminum wheels are becoming widely accepted for their ability to provide improved fuel economy and increased payload. "Consistent with our efforts to concentrate on our core business, subsequent to the quarter, we completed the sale of our Hubs and Drums business and sold our operations in Cadillac, Michigan," he said. "We will continue to cut costs, rationalize our manufacturing capacity in the U.S., and improve efficiency worldwide. Continued cash flow generation and lowering our debt level is of the highest priority." Mr. Clawson noted that Hayes Lemmerz has secured over $300 million in new and carry-over business during the first nine months of 2005, and is winning new business internationally not only with Japanese manufacturers, but also with Korean auto makers. "We are winning new business with the OEMs who are winning the global automotive competition," Mr. Clawson said. For the nine months ended Oct. 31, the company reported sales of $1.75 billion, up 9% from $1.61 billion a year earlier. Earnings from operations for the nine months, excluding asset impairment losses and other restructuring charges, were $18.9 million compared with $54.2 million in the prior year period. The company recorded asset impairment and restructuring charges in the first nine months of fiscal 2005 totaling $37.6 million, compared with $6.2 million of charges in the year earlier period. Adjusted EBITDA for the nine months was $163.5 million, versus $197.2 million in the prior nine months. The Company provided revised guidance for 2005, to reflect the continued softening in the North American market, the impact to revenue, profits, and cash flow from companies sold, and less favorable exchange rates. Adjusted EBITDA is now expected to be approximately $180 million to $190 million (revised from prior guidance of $190 million to $205 million). Revenue is now expected to be $2.2 billion to $2.3 billion for the full year, and with a free cash flow between neutral and negative $15 million for the full fiscal year. Capital expenditures for the year are still expected to be under $130 million, the Company said. Due to uncertainties in the North American market, the company is not providing financial guidance for fiscal year 2006 at this time, but announced that it is targeting positive free cash flow with capital expenditures of under $100 million. Hayes Lemmerz International, Inc. -- http://www.hayes-lemmerz.com/ -- is a leading global supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The company has 36 facilities and over 10,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Sept. 13, 2005, Standard & Poor's Ratings Services lowered its corporate credit rating on Hayes Lemmerz International Inc. to 'B+' from 'BB-'. The action reflects the company's weaker-than-expected operating results and rising debt leverage amid challenging conditions in the automotive industry. Northville, Michigan-based Hayes has total debt of about $800 million. The outlook is negative. INDUSTRIAL ENT: Earns $265,000 of Net Income in First Quarter ------------------------------------------------------------- Industrial Enterprises of America, Inc. (OTCBB: ILNP) reported financial results for its fiscal first quarter 2005. The company recorded net income of approximately 2 cents per share on a pro forma basis for the quarter ended Sept. 30, 2005. ILNP will report net income of $265,000, which reflects certain nonrecurring expenses related to merger activity and recent financings that occurred during the first quarter. The company is in the process of restating past financial statements due to the accounting treatment of the asset purchase agreement with Power3 Medical Products, Inc. This restatement, based on legal research, will result in the removal of approximately $1,900,000 of disputed liabilities and has delayed the reporting of the final consolidated numbers until the end of the week. This change, when coupled with other activities in the quarter, has resulted in a $4.6 million improvement in stockholders' equity. "We are quite pleased with the company's first quarter results as they are in line with management's previous projections," John Mazzuto, Chief Executive Officer of Industrial Enterprises of America, commented. "Our packaging subsidiary, EMC Packaging, Inc., continues to demonstrate strong growth and profitability and Unifide Industries Limited Liability Company performed extremely well during what has historically been the slowest season in the automotive chemicals industry. The first quarter financials reflect an aggressive turnaround strategy successfully implemented by management and its commitment to increasing stockholder value. Additionally, we are in the process of liquidating our Power3 holdings under the requirements and restrictions of Rule 144 of the Securities Act of 1933. At current prices, such sales are expected to generate approximately $2 million in proceeds for the Company which will flow directly to net income as these shares are listed at essentially zero value on our balance sheet." Additionally, the following five members were elected to Industrial Enterprises of America's Board of Directors: * Jerome Davis, * Scott Margulis, * Lou Frey, * Robert Casper, and * John Mazzuto. The election was a result of a stockholder vote on Nov. 11, 2005 that occurred in lieu of an annual meeting. Headquartered in New York, New York, Industrial Enterprises of America, Inc. -- http://www.TheOtherGas.com/-- is a holding Company with three operating subsidiaries, EMC Packaging, Unifide Industries and Todays Way Manufacturing, LLC. EMC Packaging is one of the largest worldwide providers of refrigerant gases, specializing in converting hydroflurocarbon gases into branded and private label refrigerant and propellant products as well as packaging of "gas dusters" used in a variety of industries. Unifide Industries markets and sells specialty automotive products under proprietary trade names and private labels, and Todays Way Manufacturing manufactures and packages the products sold by Unifide Industries. * * * Going Concern Doubt Beckstead and Watts, LLP, has expressed substantial doubt about Industrial Enterprises of America, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the fiscal year ended June 30, 2005. The auditors issued the opinion because "the company has had limited operations and [has] not commenced planned principal operations." INTERSTATE BAKERIES: Wants to Implement Consolidation Protocol -------------------------------------------------------------- As previously reported, Interstate Bakeries Corporation and its debtor-affiliates have obtained the U.S. Bankruptcy Court for the Western District of Missouri's consent to consolidate operations in six of their profit centers in the United States: -- Florida/Georgia, -- Mid-Atlantic, -- Northeast, -- Northern California, -- Southern California, and -- Northwest. J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, relates that the Debtors have continued to analyze their four remaining profit centers, seeking to identify, among other things: (i) unprofitable products and routes; (ii) areas of inefficient distribution; (iii) opportunities to rationalize brands and stock keeping units; and (iv) excess capacity in each profit center. The Debtors currently have 16 bakeries within their North Central, South Central, and Southeast profit centers. Based on their analyses, the Debtors have determined that none of these bakeries should be closed at this time. However, the Debtors believe that certain distribution centers and thrift stores in the Affected Profit Centers should be closed and the remaining depots must service remapped delivery routes. By this motion, the Debtors seek the Court's permission to: (1) take actions necessary to consolidate operations, including the closure of certain depots and thrift stores and the reduction of routes in the Affected Profit Centers; (2) implement a process for rejecting additional executory contracts and unexpired leases associated with the proposed consolidation; and (3) implement a process for abandoning certain property associated with the consolidations within the Affected Profit Centers. Mr. Ivester believes that the planned consolidations within the Affected Profit Centers will result in reduced costs, more efficiencies and an improvement in their financial performance. This improvement will be a significant component of their long- term business plan and, ultimately, a plan of reorganization, Mr. Ivester says. The Debtors expect to complete their consolidation actions in the Affected Profit Centers by mid- to late-December 2005. The consolidations are also expected to affect approximately 450 workers in the Affected Profit Centers. The Debtors will spend approximately $3,000,000 in charges for the consolidations in the Affected Profit Centers -- with $1,000,000 for severance charges and the remaining amount for other charges. The Debtors also intend to spend approximately $3,000,000 in capital expenditures and accrued expenses to implement the consolidation. According to Mr. Ivester, only one profit center, the Upper Midwest Profit Center, remains to be reviewed by the Debtors. Upon completion of the final review, the Debtors may file a similar request with respect to the Upper Midwest Profit Center. Rejection and Abandonment Mr. Ivester tells Judge Venters that during the course of closing depots and thrift stores and reducing routes, certain executory contracts and unexpired leases will no longer be required for the Debtors' operations. To avoid incurring unnecessary administrative charges for the contracts or property that will no longer provide tangible benefit to their estates, the Debtors propose to implement uniform procedures for rejecting contracts and abandoning property. A. Contract Rejection Process (a) The Debtors seek to reject a contract by filing a notice of rejection. The rejection will automatically be effective on the date set forth in the Rejection Notice. (b) Objections must be filed within 10 days from the date on which the Rejection Notice is filed with the Court. Timely filed objections will be heard at the next omnibus hearing occurring not less than seven days following the filing of the Objection. (c) Parties will have 30 days from the Rejection Date to file a claim for damages arising from the rejection for each contract. Any claims not timely filed will be forever barred. B. Property Abandonment Process (a) The Debtors seek to abandon property by filing a notice of abandonment. The abandonment of the property will be automatically effective on the date set forth in the Abandonment Notice. (b) Objections to the abandonment must be filed within 10 days from the date on which the Abandonment Notice is filed with the Court. Timely filed objections will be heard at the next omnibus hearing occurring not less than seven days following the filing of the Objection. (c) Parties will have 30 days from the Abandonment Date to file a claim for damages arising from the abandonment for each property. Any claims not timely filed will be forever barred. Debtors' Statement As previously reported in the Troubled Company Reporter, the Debtors disclosed plans to consolidate sales and retail operations in its North Central, South Central and Southeast profit centers by standardizing distribution and consolidating delivery routes and bakery outlets throughout the individual PCs. The Company's 16 bakeries within these regions are currently expected to remain open. The Company expects the PC consolidations to be completed by mid- to late December, subject to the bankruptcy court approval. These consolidations are expected to affect approximately 450 workers. Following these consolidations, IBC will have completed the restructuring of nine of its ten PCs and closed seven bakeries. IBC had originally anticipated completing its PC consolidation process by the end of the year. Due in part to the temporary deferral of this process while discussions with union leaders were continuing as previously announced, IBC currently expects to complete the last of its PC consolidations, the one affecting its Upper Midwest PC, in the first quarter of calendar 2006. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014, on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000) INTERSTATE BAKERIES: Executes Amended DIP Financing Agreement ------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Interstate Bakeries Corporation and its debtor- affiliates disclose that they entered into a Fourth Amendment to the DIP Agreement with JPMorgan Chase Bank, N.A., as Agent, on Nov. 30, 2005. The Parties have amended the DIP Agreement to provide the Debtors the ability to implement the Court Order, dated Oct. 4, 2005, which authorized the Debtors to make payments -- not to exceed $12,000,000 -- of certain prepetition real property tax claims and other secured claims that would otherwise have been prohibited by the DIP Agreement. In addition, the Parties agree to extend waivers previously granted by the Lenders. Under the agreement: (i) The delivery of consolidated quarterly financials for Fiscal Year 2005 and consolidated annual financials for Fiscal Years 2004 and 2005 is extended to March 31, 2006; and (ii) The delivery of consolidated quarterly financials for each of the first, second and third quarters of Fiscal Year 2006 is extended to June 3, 2006. The Agreement also permits the financial statements and the accompanying certifications for fiscal periods ending before June 3, 2006, to be subject to adjustments and qualifications related to pension matters and certain expense allocations. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014, on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000) LIFESTREAM TECH: Inks Agreement With GenExel for Three-in-One Unit ------------------------------------------------------------------ Lifestream Technologies, Inc. (OTCBB:LFTC) has entered into an agreement with GenExel-Sein, Inc. for the production of the new Lifestream Three-In-One Blood Pressure monitor. "We are pleased that, after over 6 months of review and discussions with numerous blood pressure manufacturers, GenExel met our stringent quality standards and had the clarity of vision for this market opportunity," Christopher Maus, Lifestream's CEO, stated. "This new technology will complement our product line and expand our present market opportunities in an area not yet commercialized." The new Lifestream "Three-in-One" Blood Pressure monitor will measure blood pressure, cholesterol and HDL, all in less than three minutes. Consumer awareness for cholesterol testing can be significantly expanded through this merger. Between 5 to 7 million blood pressure monitors are sold each year in the U. S. or 14 million worldwide. "The health conscious consumer, who uses or will use a blood pressure monitor, now has a real clear choice," continued Mr. Maus. "This dual use device supplies more meaningful information about a consumer's cardiac health. The combined unit is also more cost effective and will play an essential role for individuals who are managing both blood pressure and cholesterol. There is an estimated 73% overlap of individuals with elevated blood pressure and high cholesterol. About 20 million people are on both blood pressure and cholesterol lowering medications." "GenExel is pleased to be partnering with Lifestream on this very innovative product," Dr. Douglas Stafford, Executive Vice President of GenExel, said. "Lifestream understands the market as much as GenExel does. This collaboration is perfect given that GenExel is also bringing an innovative Blood Pressure/Glucose monitor to the market. This product is a natural evolution for the hypertensive market. Together, Lifestream and GenExel have an opportunity to meet the goals of both companies and give health conscious consumers more quality choices." GenExel-Sein, Inc. -- http://www.genexel.com/-- is a rapidly growing medical products company with headquarters in South Korea. Its business units provide innovative products for home medical diagnosis and engage in the discovery and development of pharmaceutical products with an emphasis on central system disorders (such as Alzheimer's disease and Parkinson's disease). The company has operating subsidiaries in South Korea, China, Germany, the United Kingdom, and the United States. It is traded publicly on the KOSDAQ under the symbol GENEXEL. Contact: GenExel-Sein, Inc., 111 Seocho-Gu, YangJae-1 Dong, Namkyung Bldg 3rd Floor 137-891, Seoul, South Korea. Lifestream Technologies Inc. -- http://www.lifestreamtech.com/-- markets a proprietary over-the-counter, total cholesterol- monitoring device for at-home use by both health-conscious and at- risk consumers. The Company's cholesterol monitor enables an individual, through regular at-home monitoring of their total cholesterol level, to continually assess their susceptibility to developing cardiovascular disease, the single largest cause of premature death and permanent disability among adult men and women in the U.S. As of Sept. 30, 2005, Lifestream Technologies' balance sheet shows a $7,597,476 stockholders' deficit compared to a $6,398,851 stockholders' deficit at June 30, 2005. LIN TV: Completes Purchase on Four TV Stations from Emmis Comms. ---------------------------------------------------------------- LIN TV Corp. (NYSE:TVL) announced that on Nov. 30, 2005 it completed its previously announced purchase from Emmis Communications Corp. (NASDAQ: EMMS) of: * WALA-TV (Ch. 10, Fox affiliate) in Mobile, Alabama/Pensacola, Florida.; * WTHI-TV (Ch. 10, CBS affiliate) in Terre Haute, Indiana; * WLUK-TV (Ch. 11, Fox affiliate) in Green Bay, Wisconsin; and * KRQE-TV (Ch. 13, CBS affiliate) in Albuquerque, New Mexico, plus regional satellite stations. The sale price for these four stations was $257 million. The parties have agreed that an additional payment of $3 million will be transferred to Emmis upon the completion of the sale of a fifth station, WBPG-TV (Ch. 55, WB affiliate) in Mobile, Alabama/Pensacola, Florida, upon receipt of FCC license renewal by that station, which is still pending. Until FCC license renewal is obtained, WBPG-TV will be operated by LIN TV under a Local Programming and Marketing Agreement between the parties, which began on November 30, 2005. The acquisition was funded with proceeds from LIN's credit facility. Emmis Communications Corporation -- http://www.emmis.com/-- is an Indianapolis-based diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. Emmis owns 23 FM and 2 AM domestic radio stations serving the nation's largest markets of New York, Los Angeles and Chicago as well as Phoenix, St. Louis, Austin, Indianapolis and Terre Haute, Indiana. Emmis has recently announced its intent to seek strategic alternatives for its 16 television stations, which will result in the sale of all or a portion of its television assets. In addition, Emmis owns a radio network, international radio stations, regional and specialty magazines and ancillary businesses in broadcast sales and book publishing. LIN TV Corp. -- http://lintv.com/-- headquartered in Providence, Rhode Island, pro forma for the acquisition owns and operates 30 television stations in 14 markets. In addition, the company also owns approximately 20% of KXAS-TV in Dallas, Texas and KNSD-TV in San Diego, California through a joint venture with NBC. LIN TV is a 50% investor in Banks Broadcasting, Inc., which owns KWCV-TV in Wichita, Kansas and KNIN-TV in Boise, Idaho. * * * As reported in the Troubled Company Reporter on Aug. 29, 2005, Standard & Poor's Ratings Services lowered its ratings on LIN TV Corp., including lowering its long-term corporate credit rating to 'B+' from 'BB-'. S&P said the outlook is stable. On Aug. 23, 2005, Moody's Investors Service placed the ratings of LIN TV Corp., including the Ba2 corporate family rating, on review for possible downgrade following the company's announcement that it has entered into a definitive agreement to acquire five television station from Emmis Communications Corp. for $260 million with cash. MAJESTIC HOLDCO: Moody's Rates $55 Mil. Sr. Discount Notes at Caa2 ------------------------------------------------------------------ Moody's Investors Service confirmed Majestic Star Casino, L.L.C. and its co-issuer Majestic Star Casino Capital Corporation's B2 corporate family rating and B2 rating on its outstanding $260 million 9 ½% senior secured notes due 2010. Moody's also assigned a B2 rating to Majestic Opco's proposed $30 million add-on to its existing 9 ½% senior secured notes, a B3 rating to its proposed $200 million 10% senior guaranteed unsecured notes due 2011, and placed its $80 million senior secured bank loan on review for possible upgrade. The ratings outlook is stable. At the same time, Moody's assigned a Caa2 rating to Majestic Holdco L.L.C. and its co-issuer Majestic Star Holdco, Inc.'s $55 million 12% senior discount notes due 2011. Majestic Holdco is a newly created entity that will own 100% of Majestic Opco. The Caa2 rating on Majestic Holdco's discount notes acknowledge that the notes will be unsecured, will not be guaranteed by Majestic Opco, and structurally subordinated to all of Majestic Opco's debt. A B2 corporate family rating and stable ratings outlook were also assigned to Majestic Holdco. Once the transaction closes, Majestic Opco's B2 corporate family rating and ratings outlook will be withdrawn so that the corporate family rating and ratings outlook will be located at Majestic Holdco, the highest level legal entity with rated debt. However, Moody's ratings and analysis will continue to reflect the credit profile and financing structure of Majestic Opco. Proceeds from the new notes issued by Majestic Opco and Majestic Holdco will be used primarily to fund the acquisition of Trump Entertainment Resorts Holdings, L.P.'s Gary, Indiana riverboat casino for $253 million in cash, or about 8 times the casino property's latest twelve month EBITDA. The acquisition is expected to close by the end of 2005 and is subject to customary approvals and consents. The ratings confirmation of Majestic Opco's existing corporate family and senior secured notes considers that, despite an increase in leverage resulting from the planned debt-financed acquisition, Majestic Opco's competitive position and growth opportunity in the Chicagoland gaming market will improve, and the company will be able to take advantage of significant operating synergies given that Majestic Opco's Indiana riverboat is adjacent to Trump Indiana. Also, Majestic Opco and Trump through a joint venture arrangement, currently own, develop and operate all common land-based and waterside operations in support of their riverboat casinos at Buffington Harbor in Gary, Indiana. Once the transaction is complete, Majestic Opco will own the common land and waterside operations in its entirety. The B1 rating on Majestic's Opco's $80 million senior secured bank loan, which has a prior lien status over the company's senior secured notes and is currently rated one-notch higher than the corporate family rating, was placed on review for possible upgrade on the basis that, once the transaction closes, the secured bank facility will benefit further from the larger asset base and increased amount of debt subordinated to it. An upgrade of the bank facility would place it two-notches higher than the B2 corporate family rating. The B3 rating on Majestic Opco's new senior unsecured notes recognizes that the notes and guaranty will be effectively subordinated to all of Majestic Opco's senior secured notes and senior secured bank debt. The stable ratings outlook reflects Majestic Opco's slot-oriented, regional market focus but also incorporates the negative earnings impact resulting from increased promotional activity and competitive conditions, particularly in the Tunica, MS gaming market. Going forward, Moody's expects Majestic Opco will continue to generate positive free cash flow and experience some leverage improvement resulting from higher earnings. However, the likely pursuit of further debt-financed expansion and development opportunities could limit ratings improvement in the intermediate term. These Majestic Opco ratings were confirmed: * Corporate family rating -- B2; and * $260 million 9 ½% senior secured notes due 2010 -- B2. This Majestic Opco rating was placed on review for possible upgrade: * $80 million senior secured first lien bank facility -- B1. These Majestic Opco new ratings were assigned: * $30 million 9 ½% senior secured notes due 2010 (add-on) -- B2; and * $200 million 10% senior unsecured notes due 2011 - B3. These Majestic Holdco new ratings were assigned: * Corporate family rating - B2; and * $55 million 12% senior discount notes due 2011 -- Caa2. Majestic Star Casino, LLC directly and indirectly owns and operates riverboat casinos in: * Gary, Indiana; * Tunica, Mississippi; and * Black Hawk, Colorado. Majestic Star Holdco, Inc. is a newly created entity that will own 100% of Majestic Opco. MCKESSON CORP: Board Authorizes $250 Million Stock Repurchase ------------------------------------------------------------- McKesson Corporation's (NYSE: MCK) Board of Directors has authorized a new repurchase from time to time of up to $250 million of the company's shares of common stock in open market or private transactions. The board's authorization follows a previous $250 million share repurchase program authorized in August 2005, which has approximately $4 million remaining. Repurchased shares will be held as treasury shares and used for general corporate purposes. At Sept. 30, 2005, McKesson had approximately 308 million shares outstanding, and cash totaled $3 billion. Headquartered in San Francisco, California, McKesson Corporation - - http://www.mckesson.com/-- is a Fortune 15 healthcare services and information technology company dedicated to helping its customers deliver high-quality healthcare by reducing costs, streamlining processes and improving the quality and safety of patient care. Over the course of its 172-year history, McKesson has grown by providing pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients. * * * As reported in the Troubled Company Reporter on Aug. 29, 2005, Moody's Investors Service assigned ratings to McKesson Corporation's new $1.5 billion universal shelf filing (senior unsecured (P)Baa3). Moody's understands that the new shelf includes $350 million that had remained undrawn under a prior shelf registration. Ratings under the prior shelf, which has been de-registered, have been withdrawn. At the same time, Moody's affirmed all of McKesson's long-term ratings and Prime-3 short-term rating. The rating outlook remains stable. Ratings assigned: McKesson Corporation: * (P)Baa3 Senior unsecured shelf * (P)Ba1 Senior subordinated shelf * (P)Ba1 Subordinated shelf * (P)Ba1 Junior subordinated shelf * (P)Ba1 Preferred shelf Ratings withdrawn: McKesson Corporation: * (P) Baa3 Senior unsecured shelf * (P) Ba1 Senior subordinated shelf * (P) Ba1 Junior subordinated shelf * (P) Ba1 Preferred shelf McKesson Financing Trust II: * (P) Ba1 Preferred shelf McKesson Financing Trust III: * (P) Ba1 Preferred shelf McKesson Financing Trust IV: * (P) Ba1 Preferred shelf Ratings affirmed: McKesson Corporation: * Baa3 Senior unsecured notes * Baa3 Medium term notes * Baa3 Industrial revenue bonds * Ba1 Junior subordinated notes * Prime-3 Short-term rating Medis Health & Pharmaceutical Services (Now McKesson Canada): * Prime-3 Short-term rating MEZZ CAP: Fitch Rates $7.215 Million Class Certificates at Low-B ---------------------------------------------------------------- Mezz Cap Commercial Mortgage Trust 2005-C3, commercial mortgage pass-through certificates are rated by Fitch Ratings: -- $42,031,000 class A 'AAA'; -- $63,443,869 class X 'AAA'; -- $1,824,000 class B 'AA'; -- $1,903,000 class C 'A'; -- $3,172,000 class D 'BBB'; -- $1,824,000 class E 'BBB-'; -- $1,586,000 class F 'BBB-'; -- $1,665,000 class G 'BB'; -- $4,916,000 class H 'B'; -- $634,000 class J 'B-'; -- $3,888,869 class K not rated. All classes are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 109 fixed-rate loans having an aggregate principal balance of approximately $63,443,869, as of the cutoff date. For a detailed description of Fitch's rating analysis, see the report 'Mezz Cap Commercial Mortgage Trust 2005-C3,' dated Nov. 17, 2005 and available on the Fitch Ratings Web site at http://www.fitchratings.com/ MIRANT CORP: Asks Court to Okay Canadian Units' Refinancing Pact ---------------------------------------------------------------- To realize the remaining value in certain of their non-debtor affiliates including Mirant Canada Energy Marketing Investments, Inc., and Mirant Canada Energy Marketing, Ltd., Mirant Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas to: (i) approve a Reorganization and Refinancing Agreement between MCEMII and Mirant Americas, Inc.; (ii) authorize MCEMII and MCEM to enter into transactions for the sale of the shares of Mirant Canada to certain outside investors; and (iii) waive, release and extinguish any and all claims by Mirant Canada against the Debtors. MCEM is 100% owned by MCEMII, which is 100% owned by Mirant Americas Energy Marketing Investments, Inc. In turn, MAEMIII is 100% owned by Mirant Americas, which is 100% owned by Mirant Corp. Craig H. Averch, Esq., at White & Case LLP, in Miami, Florida, relates that on April 15, 2004, the Bankruptcy Court approved a Global Settlement Agreement between the Debtors and Mirant Canada, which resolved substantially all of the third party creditor issues with respect to the Debtors' Canadian assets. Following the Global Settlement Agreement, the Debtors began pursuing a sale of their equity interests in Mirant Canada. The Debtors intend to effectuate a sale of the shares of Mirant Canada to certain investors to allow Mirant Canada to embark on a new business to better utilize certain tax losses. The Debtors believe that entering into the Reorganization and Refinancing Agreement and the related transactions will result in a maximization of the value of Mirant Canada. Under the Reorganization and Refinancing Agreement, MCEMII will undertake a private placement to the Investors of 923,000 common shares and 8,077,000 common non-voting shares at CN$0.3729474 per share, for gross proceeds of CN$3,356,527 or $2,800,000. Mr. Averch notes that Mirant has required the Investors to place the $2,800,000 funds in escrow pending Court approval of the Agreement. As part of the arrangement, MCEMII will reorganize its capital structure and amalgamate with MCEM. In relation to the Agreement, MCEM and MCEMII must: (a) unwind all remaining contracts; (b) close its bank accounts and transfer $4,800,000 to MAEMII; (c) make certain required amendments to MCEMII's corporate documents; (d) amalgamate MCEMII and MCEM to form one entity, MCEM2; and (e) take all steps necessary to cause the consolidation of the existing Common Shares, with the result that MAEMII will own 1,000,000 Common Shares of MCEM2 immediately prior to the transactions. At Closing: (1) MCEM2 will issue 923,000 Common Shares to the Investors; (2) MCEM2 will issue 8,077,000 Non-Voting Shares to the Investors; and (3) MCEM2 will distribute approximately $2,800,000 to MAEMII in repayment of share capital. Pursuant to the Agreement, Mirant Americas agrees to indemnify MCEM from and against all losses to which MCEM may be subject or may suffer or incur, arising from a breach of any representation or warranty of Mirant Americas. However, Mirant Americas' liability for the losses is limited to $2,800,000 and 18 months in duration. The Debtors believe that the structure proposed in the Agreement maximizes the value of Mirant Canada, Mr. Averch tells the Court. "[T]his proposal ensures that Mirant Corp. is completely divested of Mirant Canada within the next four months. It is important for the Debtors to get this Agreement approved and to consummate the transaction prior to their emergence from Chapter 11, because implementation of the many changes to the Debtors' corporate structure will serve to complicate the issue of whether Mirant Canada has undergone a change in control." Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 87 Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to power generator and developer Mirant Corp. The outlook is stable. The rating reflects the credit profile of Mirant, based on the structure the company expects to have on emergence from bankruptcy at or around year-end 2005. MIRANT CORP: 3V Capital Holds $3.2 Million Unsecured Claim ---------------------------------------------------------- Sacramento Municipal Utility District and Mirant Americas Energy Marketing, LP, a Mirant Corporation debtor-affiliate were parties to a Master Natural Gas Purchase Agreement dated June 3, 1998. Pursuant to the Master Natural Gas Purchase Agreement, Sacramento agreed to purchase, and MAEM agreed to deliver, natural gas over a period of time. MAEM still continued to deliver gas to Sacramento postpetition. Sacramento paid for all deliveries through the September 2003 billing cycle. In October 2003, MAEM filed a request to reject its executory contract with Sacramento effective November 6, 2003. As of the Rejection Date, Sacramento owed MAEM $2,007,488 for gas deliveries in October and November 2003. Sacramento did not pay MAEM the remaining gas payments. Instead, Sacramento asserted a right of recoupment of the payments against Sacramento's damages arising from the rejection of the Agreement. On March 18, 2004, Sacramento and MAEM entered in an Agreed Order, pursuant to which Sacramento conditionally agreed to pay MAEM the remaining gas payments totaling $2,007,488. Sacramento reserved the right to argue to the U.S. Bankruptcy Court for the Northern District of Texas its entitlement recoup those amounts. If Sacramento would succeed in its recoupment claim, it will receive an administrative claim for the remaining gas payments, which will be $2,007,488. Sacramento filed Claim Nos. 7753, 7858 and 7948 for damages arising from the rejection of the agreement. The Bankruptcy Court subsequently approved a stipulation between the Debtors and Sacramento providing that Claim No. 7948 amounting to $2,812,684 will be Sacramento's sole claim for damages arising from the rejection of the Agreement. On April 6, 2004, Sacramento commenced an adversary proceeding against MAEM seeking to recoup the amount of the Remaining Gas Payments, which Sacramento paid to MAEM pursuant to the Agreed Order. The Adversary Proceeding was resolved in favor of MAEM. Sacramento took an appeal from the Bankruptcy Court's Denial Order to the U.S. District Court for the Northern District of Texas. But the District Court affirmed the Bankruptcy Court's Order. Subsequently, Sacramento further filed a notice of appeal to the U.S. Court of Appeals for the Fifth Circuit. On July 11, 2005, Sacramento transferred and assigned its Claim to 3V Capital Management, LLC. After engaging in discussions regarding the Sacramento Claim, the Appeal, and other related matters, the Debtors and 3V, as assignee, agreed to enter into a stipulation. The salient terms of the Court-approved Stipulation are: a. 3V will have an allowed claim against MAEM for $3,200,000, plus certain accrued interest; b. The Allowed Claim will be deemed as a Class 3 Allowed Unsecured Claim against the Mirant Debtors and treated in accordance with the Amended Plan; c. Sacramento' Claim will be included in the list of parties receiving distributions on their claims on the initial distribution date as defined by the Plan. In the event that the Debtors are unable to include the Allowed Claim on the List, 3V has the option to declare the Stipulation null and void; and d. The Parties will submit an order dismissing the Appeal with prejudice. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 86 Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to power generator and developer Mirant Corp. The outlook is stable. The rating reflects the credit profile of Mirant, based on the structure the company expects to have on emergence from bankruptcy at or around year-end 2005. MIRANT CORP: Court Approves Kinder Morgan Settlement Agreement -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved the settlement agreement inked between Mirant Corporation and its debtor-affiliates and Kinder Morgan Power Company relating to their disputes regarding: * their claims against each other arising from the sale of Wrightsville Power Facility, LLC; * the rejection of their executory contracts; and * the claims arising from a settlement agreement with Entergy Arkansas, Inc., arising from disputes on the interconnection and operating agreement. Wrightsville Power Facility is 50% owned by Debtor Mirant Wrightsville Investments, Inc., 1% owned by Debtor Mirant Wrightsville Management, Inc., and 49% owned by KMPC. The salient terms of the agreement are: A. Partial Disallowance of Claims Each of KMPC's Claims except for Claim No. 7126 are disallowed and expunged in their entirety, with prejudice to KMPC's ability or right to assert or prosecute those Claims in any forum. B. Allowed KMPC Claim Kinder Morgan is allowed a $1,500,000 unsecured, general, prepetition, non-subordinated claim against Wrightsville Management. C. Rejection of Executory Contracts KMPC and Kinder Morgan Michigan, L.L.C., consent to the rejection of its executory contracts they inked with the Debtors. KMPC and Kinder Morgan will each waive and release any rejection damage claims that could possibly arise from the rejection of any KM Contract. D. Consent Relating to the Sale Agreement Notwithstanding entry of the order approving the sale of Wrightsville Power Facility to with Arkansas Electric Cooperative Corporation. Kinder Morgan Michigan, L.L.C., formerly known as Kinder Morgan Arkansas, L.L.C., will execute a consent to the assignment to AECC of these Assigned Contracts to which KMM is a party: * The Assignment and Assumption Agreement For Certain Gas Pipeline Rights of Way between KMM and Wrightsville Power dated September 28, 2000; and * The Assignment and Assumption Agreement For Certain Gas Pipeline Rights of Way between KMM and Wrightsville Power dated April 26, 2001. E. Mutual Releases The Debtors and Kinder Morgan have executed general, mutual releases in favor of each other. The Debtors' release of KMPC, Kinder Morgan and certain Kinder Morgan Affiliates includes a release of avoidance actions that arise under chapter 5 of the Bankruptcy Code. The release in favor of the Debtors includes: -- a release and waiver of any interest in the Transmission Credits; -- a release of any rejection damage claims; and -- a release of the Debtors' obligations to KMPC under the Entergy Settlement Order. F. Tolling of Limitations Periods The running of any applicable statutes of limitations with respect of any of the Debtors' asserted claims against KMPC and Kinder Morgan are tolled to the extent that they have not expired as of the execution date of the Settlement Agreement. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 85 Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to power generator and developer Mirant Corp. The outlook is stable. The rating reflects the credit profile of Mirant, based on the structure the company expects to have on emergence from bankruptcy at or around year-end 2005. MUTLIFAMILY CAPITAL: Fitch Puts BB Rating on $3.6MM Class D Certs. ------------------------------------------------------------------ Fitch Ratings upgrades Multifamily Capital Access One, Inc.'s multifamily mortgage bonds, series 1: -- $2.4 million class B certificates to 'AA' from 'A'. In addition, Fitch affirms these classes: -- $49.7 million class A at 'AAA'; -- $96,124 class I at 'AAA'; -- $474,328 class P at 'AAA'; -- $2 million class C at 'BBB'; -- $3.6 million class D at 'BB'. Fitch does not rate the $4.7 million surplus balance. The rating upgrade reflects the improved credit enhancement levels resulting from principal paydown and loan payoffs. As of the November 2005 distribution date, the pool has paid down 38.3% to $63.1 million from $102.2 million at issuance. The pool is collateralized by 100% low-income housing tax credit multifamily properties. The pool benefits from the low leverage of the loans. The average loan per unit is below $20,000. The pool also benefits from overcollateralization in the amount of $4.7 million that serves as a first loss piece. The weighted average debt service coverage for year-end 2004 was 0.95 times. Low DSCRs are not uncommon for LIHTC properties, and tax credits often act as incentives for the borrowers to keep the loans current. However, for the loans outstanding, approximately 40% of the loans' tax credits have expired and 12.2% will expire by the end of 2006, while the remaining 47.8% expire by the end of 2007. There are currently six specially serviced loans in the pool. Five of the six loans are held by the same borrower and are secured by properties in Wisconsin. The loans transferred to the special servicer due to monetary default and, based on appraisal valuations, losses are expected to incur upon their disposition. Losses associated with the workout of these assets have been incorporated into Fitch's analysis and are expected to be absorbed by the surplus balance. Fitch will continue to monitor the workout of these loans, as well as the tax credit expirations. With an increase in expected losses, Fitch will revisit the ratings. NDCHEALTH CORP: Launches Tender Offer for 10-1/2% Senior Notes -------------------------------------------------------------- NDCHealth Corporation (NYSE: NDC) commenced a cash tender offer and consent solicitation for its $200 million outstanding of 10-1/2% senior subordinated notes due 2012. The tender offer expires at 12:00 midnight, U.S. Eastern time, on Monday, Jan. 9, 2006, unless extended or earlier terminated. The consent solicitation expires at 5:00 p.m., U.S. Eastern time, on Thursday, Dec. 22, 2005, unless extended or earlier terminated. The total consideration per $1,000 principal amount of notes validly tendered and not withdrawn will be based on a fixed spread of 50 basis points over the yield of the 4-1/4% U.S. Treasury Note due Nov. 30, 2007. The total consideration will be calculated at 2:00 p.m., U.S. Eastern time, on a date to be selected by NDCHealth, which will be at least 10 business days prior to the tender offer expiration date. All holders who validly tender their notes will receive accrued and unpaid interest up to, but not including, the date of payment of the notes. In connection with the tender offer, NDCHealth is soliciting consents to certain proposed amendments to eliminate substantially all of the restrictive covenants as well as certain events of default and related provisions in the indenture governing the notes. NDCHealth is offering to make a consent payment of $30.00 per $1,000 principal amount of notes (which is included in the total consideration described above) to holders who validly tender their notes and deliver their consents on or prior to Dec. 22, 2005, unless the expiration date of the consent solicitation is extended. Holders who validly tender and do not validly withdraw their notes will receive payment if the conditions to the tender offer and consent solicitation are satisfied or waived and their notes are accepted for purchase. Holders may not tender their notes without delivering consents or deliver consents without tendering their notes. The consent payment of $30.00 per $1,000 principal amount will not be paid to holders who tender their notes after the expiration of the consent solicitation. Tendered notes may not be withdrawn and consents may not be revoked after the time NDCHealth and the trustee for the notes execute an amendment to the indenture governing the notes to effect the proposed amendments. The indenture amendment is expected to be executed promptly following receipt of the requisite consents from the note holders. Any extension, delay, termination or amendment of the tender offer and consent solicitation will be publicly announced as promptly as practicable. As reported in the Troubled Company Reporter on Aug. 31, 2005, Per-Se Technologies, Inc. and NDCHealth inked definitive agreements for the sale of NDCHealth, in a transaction valued at approximately $1 billion. Per-Se Technologies will acquire Atlanta-based NDCHealth, including the physician, hospital and retail pharmacy businesses, for total consideration of approximately $665 million, which includes refinancing NDCHealth's outstanding debt at closing, currently totaling approximately $270 million. As part of the transaction, Wolters Kluwer, based in Amsterdam, the Netherlands, will purchase the pharmaceutical information management business from NDCHealth. On Dec. 2, 2005, NDCHealth and Per-Se announced that each company will hold a special meeting of stockholders on Jan. 5, 2006, to approve matters relating to the proposed merger between the two companies. The acquisition remains subject to other closing conditions, including approval by shareholders of both NDCHealth and Per-Se. The tender offer and consent solicitation are subject to the satisfaction of certain conditions including: (1) receipt of consents from holders of a majority in principal amount of the outstanding notes, (2) completion of the sale of the information management business to Wolters Kluwer and satisfaction of the closing conditions of the proposed merger with Per-Se, and (3) certain other customary conditions. The complete terms and conditions of the tender offer and consent solicitation are described in the Offer to Purchase and Consent Solicitation Statement dated Dec. 9, 2005, copies of which may be obtained from MacKenzie Partners, Inc., the information agent for the transaction, at (800) 322-2885 (US toll free), or for bankers and brokers (212) 929-5500. NDCHealth has engaged Banc of America Securities LLC to act as the exclusive dealer manager and solicitation agent in connection with the transaction. Questions may be directed to Banc of America Securities LLC, High Yield Special Products, at (888) 292-0070 (US toll-free) and (704) 388-9217 (collect). Headquartered at Atlanta, Ga., NDCHealth Corporation -- http://www.ndchealth.com/-- is a leading information solutions company serving all sectors of healthcare. Its network solutions have long been among the nation's leading, automating the exchange of information among pharmacies, payers, hospitals and physicians. Its systems and information management solutions help improve operational efficiencies and business decision making for providers, retail pharmacy and pharmaceutical manufacturers. * * * As reported in the Troubled Company Reporter on Sept. 1, 2005, Moody's Investors Service has placed the ratings of Per Se Technologies, Inc. and NDCHealth Corporation on review for possible downgrade, following Per Se's announcement of August 29th to acquire NDCHealth's physician, hospital, and retail pharmacy businesses for $665 million. The transaction is expected to be funded with a combination of cash and equity and is likely to increase Per-Se's debt leverage substantially. The acquisition is expected to close by early calendar 2006 and is subject to shareholder and regulatory approvals. Per-Se's total acquisition consideration of $665 million includes refinancing NDCHealth's outstanding $270 million debt at closing. As part of the transaction, Wolters Kluwer will purchase the pharmaceutical information management business from NDCHealth for $382 million in cash. NDCHealth's review will focus on the refinancing plan for NDCHealth's $270 million outstanding debt. To the degree all of this debt is refinanced as anticipated by Per-Se, the outstanding ratings for NDCHealth will likely be withdrawn. Per Se's review will focus on: 1) the prospects for revenue and cost synergies associated with the acquisition; 2) levels of debt and equity financing chosen to consummate the transaction; 3) anticipated integration costs associated with the acquisition; 4) prospects to reduce NDCHealth's costs for accounting controls, which have elevated over the past twelve months as NDCHealth has restated revenues within its physician business; and 5) anticipated revenues and costs associated with NDCHealth's information management business, anticipated to be sold to Wolters Kluwer. Per Se ratings on review for possible downgrade: * Corporate Family rating of B1 * $75 million secured revolving credit facility maturing June 2007 rated B1 NDC ratings on review for possible downgrade: * Corporate Family rating of B1 * $125 million secured term loan due 2008 rated B1 * $100 million secured revolving credit facility due 2008 rated B1 * $200 million senior subordinated notes due 2012 rated B3 NETWORK INSTALLATION: Names Scott Hoganson as Spectrum President ---------------------------------------------------------------- Network Installation Corp. (OTC Bulletin Board: NWKI), reported that Scott E. Hoganson has been appointed to the position of President and COO of Spectrum Communications, the company's recently acquired subsidiary. Mr. Hogansen will be responsible for the operational results and growth of Spectrum. Network Installation CEO Jeffery Hultman stated, "One look at Scott's extensive operational experience and resulting success at a very high level within the communications sector is proof enough that he comes as a significant addition to our senior management team. We will continue to place a premium on importing superior personnel as I deem it to be the most critical component in building a high growth organization." Mr. Hoganson commented, "Over the past twenty years, Spectrum Communications has built an excellent reputation among its strong customer base throughout southern California, driven by its experienced and highly skilled employees. These combined attributes, along with a robust market opportunity, provide outstanding potential for growth in 2006 and beyond. I look forward to leading this organization to accomplishing this objective." Spectrum Communications founder Robert Rivera was appointed Network Installation VP Strategy upon its acquisition of Spectrum in November. With over twenty-eight years of experience in the wireless telecommunications industry among three Fortune 500 companies, Mr. Hoganson has held many executive positions, including Nextel Communications Sr. VP of Sales Operations (a 5,000 employee organization), several regional operations start-up roles and VP of three separate national field operations, including national retail sales. From 2002 until the merger with Sprint in 2005, Mr. Hoganson was VP of National Field Care and Service & Repair at Nextel. In this position Mr. Hoganson managed the start-up of a customer care organization to provide professional field support for after-sales support to the company's most strategic accounts. The combined groups had a budget in excess of $250 million and over 1,400 employees. Mr. Hoganson served as President -- Mid-South Area at Nextel Communications from 1996 through 2000. Mr. Hoganson had complete P&L responsibility for a six-state, 14 million population area with operations in the Carolinas, Tennessee and Virginia. Mr. Hoganson managed an operating budget of $300 million, resulting in over 40% margins each year and over 500 employees in sales, service, support, marketing, fulfillment, finance, service/repair, engineering, site development, network operations and human resources. Joining Dial Call in 1993, Mr. Hoganson served as COO of Analog Operations and later as President -- Atlantic Region until its merger with Nextel Communications in 1996. Prior to Dial Call, Mr. Hoganson held numerous positions with Pac Tel Cellular, including VP & GM of San Diego operations from 1986 to 1993, and with Motorola in various sales and sales management roles. Mr. Hoganson holds a B.A. in Communications from Cal State University, Fullerton. About Spectrum Communications Spectrum Communications provides network design, installation and maintenance of voice and data network systems. About Network Installation Headquartered in Irvine, California, Network Installation Corp. -- http://www.networkinstallationcorp.net/-- is a single source provider of communications infrastructure, specializing in the design, installation, deployment and integration of specialty systems and computer networks. Through its wholly-owned subsidiaries, Kelley Technologies, Spectrum Communications and Com Services, Network Installation Corp. provides its services to the following customers and industries; U.S. Dept. of Homeland Security, Gaming & Casinos, U.S. Government & Military, local and regional municipalities, Healthcare and Education. At Sept. 30, 2005, Network Installation's balance sheet showed a $6,700,753 stockholders' deficit, compared to a $1,877,631 deficit at Dec. 31, 2004. NEVADA STAR: Reports $969,422 Fiscal 2005 Net Loss -------------------------------------------------- Nevada Star Resource Corp. included an explanatory note in its annual report for the year ended Aug. 31, 2005, discussing substantial doubts about its ability to continue as a going concern. The note pointed to the Company's significant losses since inception. Smythe Ratcliffe, Nevada Star's Canadian auditing firm, did not issue a negative going concern opinion in its audit report submitted to the Company's shareholders, in accordance with Canadian reporting standards. However, the auditing firm added a comment, included in the Company's Form 10-K submitted with the Securities and Exchange Commission, that refers to substantial doubt about the Company's ability to continue as a going concern. Fiscal Year 2005 Results Nevada Star reported a $969,422 net loss for the fiscal year ended Aug. 31, 2005, in contrast to a $829,501 net loss in the prior year. The Company's balance sheet showed $9,242,074 in total assets at Aug. 31, 2005, and liabilities of $47,302. About Nevada Star Nevada Star Resource Corp. -- http://www.nevadastar.com/-- is a mineral exploration company that uses advanced technology to search for metals that are in high demand world-wide. In addition to the Alaska property, Nevada Star currently has projects in Nevada and Utah. The Nevada and Utah properties are in joint partnership with Round Mountain Gold, and Western Utah Copper Company, respectively. Both properties are scheduled to go into production in 2006. NORTHWEST AIR: Restructures Agreements with Manufacturers --------------------------------------------------------- Northwest Airlines (OTC: NWACQ) reported on Dec. 8, 2005, that its board of directors has 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, 2005, in U.S. Bankruptcy Court for the Southern District of new York, are subject to approval by the 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 agreement is a significant part of the airline's fleet optimization plan, said President and CEO Doug Steenland. "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," Mr. 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% 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: Retired Pilots Balk at CBA Rejection Request ---------------------------------------------------------------- As previously reported, Northwest Airlines Corp. and its debtor- affiliates soguht the U.S. Bankruptcy Court for the Southern District of New York's authority to reject, under Section 1113(c) of the Bankruptcy Code, nine collective bargaining agreements with the six unions that represent the vast majority of the Debtors' employees: (1) Air Line Pilots Association, International; (2) Professional Flight Attendants Association; (3) International Association of Machinists and Aerospace Workers; (4) Transport Workers Union of America; (5) Northwest Airlines Meteorologists Association; and (6) Airline Technical Support Association. Retired Pilots Associated Objects The Northwest Airlines Retired Pilots Benefit Guardian Association complains that the Debtors failed to make a proposal to the retirees' authorized representative prior to filing a request to reject their collective bargaining agreements with their unions. Daryle L. Uphoff, Esq., at Lindquist & Vennum P.L.L.P., in Minneapolis, Minnesota, argues that the Debtors' failure to serve the proposal to the Retired Pilots Associations is in contravention of Section 1114 of the Bankruptcy Code. * * * The Debtors have agreed to postpone proceedings related to their request to reject the collective bargaining agreements with their unions. The Debtors have reached interim agreements with the Air Line Pilots Association, International, and the Professional Flight Attendants Association pending their negotiations for permanent changes to the CBAs. Failing to reach a temporary agreement with the International Association of Machinists and Aerospace Workers, the Debtors seek to impose interim modifications to their CBAs with IAM pursuant to Section 1113(e) of the Bankruptcy Code. If the Court denies their request for interim concessions, the Debtors will proceed with their Rejection Motion. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Open-Ended Lease Decision Period Draws Fire --------------------------------------------------------------- As previously reported, Northwest Airlines Corp. and its debtor- affiliates asked the U.S. Bankruptcy Court for the Southern District of New York to extend the date by which they may assume, assume and assign, or reject the unexpired non-residential real property leases to the earlier of May 13, 2006, or the date of a confirmed a plan or plans of reorganization in their Chapter 11 cases. Objections (A) U.S. Bank U.S. Bank National Association, in its capacity as indenture trustee with respect to various issuances related to airport facilities, is the assignee of rights under various leases. David J. McCarty, Esq., at Sheppard, Mullin, Richter & Hampton LLP, in Los Angeles, California, argues that, if the Court is inclined to grant an extension, the extension should be limited to 180 days, or if earlier, the approval of the disclosure statement, rather than confirmation of a plan. U.S. Bank requests that the order approving the request include the Debtors' statement that the extension will not shift the "burden of persuasion," and that they will retain the burden in the event that any lessor seeks to shorten the extended period for assumption or rejection. U.S. Bank wants the extension conditioned on the Debtors' timely postpetition payments, as adequate protection. (B) San Francisco and Denver Airports The City and County of San Francisco, California, and the Denver International Airport, which is owned and operated by the City and County of Denver, in connection with its municipal airport system, object to the Debtors' request for failure to pay their postpetition obligations to the Airports. The Airports also argue that a six-month extension of the Debtors' Lease Decision Period is unreasonable. The Debtors' request should be denied, or in the alternative, limited to a reasonable period of time. San Francisco explains that a shorter extension will not only give San Francisco and other landlords more certainty in managing their affairs, it will act as a check on the Debtors' timely performance of their postpetition obligations and encourage the Debtors to make assumption and rejection decisions promptly, as required by the Bankruptcy Code. Denver notes that the Debtors are requesting an extension of time through the earlier of May 13, 2006, or the date of confirmation. If a confirmation order were to enter prior to May 13, Denver may be forced to vote on any plan of reorganization before knowing whether the Debtors will assume or reject their agreements with Denver. At a minimum, Denver asks the Court to require the Debtors to assume or reject their Agreements prior to the plan voting date. The Airports and the Debtors are parties to a number of agreements wherein the Debtors lease and use the Airports' facilities. Under the Agreements with each of the Airports, the Debtors incur monthly obligations to: -- San Francisco for rent, charges, and landing fees with respect to the San Francisco International Airport aggregating $1,072,000; and -- Denver on rent, charges and landing fees aggregating $645,925 and Passenger Facility Charges aggregating $230,000 with respect to the Denver Airport. The Debtors currently owe the Airports these obligations: Airport Postpetition Prepetition ------- ------------ ----------- San Francisco $185,321 $913,930 Denver $1,230,745 $525,245 Denver's prepetition amount does not include prepetition credits totaling $1,410,884, which may be owed by Denver to the Debtors under the DIA Agreements. It is also subject to change based on the Debtors' decision to assume or reject the DIA Agreements and does not include any amounts that may be owed by Debtors for taxes to Denver. Denver reserves all rights regarding the DIA Credits. Denver says the Debtors' obligations remain outstanding until they obtain an agreement and an order allowing them to apply the credits to the postpetition obligations. (C) CargoPort Prior to the Petition Date, Alaska CargoPort LLC entered into a Land Lease Agreement, dated as of July 1, 1997, with the State of Alaska, Department of Transportation and Public Facilities, Ted Stevens Anchorage International Airport. The Ground Lease relates to certain airport cargo facilities located at the Ted Stevens Anchorage International Airport. CargoPort also entered into a Transient Ramp Lease with the lessor of the Ground Lease, dated as of July 26, 2000, which provided for CargoPort's lease of additional facilities appurtenant to the airport cargo facilities covered by the Ground Lease. CargoPort subleased to Northwest Airlines, Inc., certain portions of the facilities covered by the AIA Leases, in connection with its air cargo business. The parties' Sublease Agreement dated October 8, 2000, contemplates and provides for Northwest Airlines' option to incorporate certain additional facilities, including aircraft parking parcels also known as Hardstands, under the Sublease as subleased premises. Pursuant to the Sublease, Northwest Airlines currently owes $77,821 in monthly base rent obligations to Cargo Port, in addition to additional rent comprised primarily of annual operating expense obligations. According to Janice B. Grubin, Esq., Wormser, Kiely, Galef & Jacobs LLP, in New York, to finance construction of improvements and facilities covered by the AIA Leases, CargoPort entered into a Loan Agreement dated as of April 1, 2001, with the Alaska Industrial Development and Export Authority, as Issuer, for the issuance of $15,215,000 in 2001 Revenue Bonds. Ms. Grubin tells the Court that CargoPort's monthly obligations under the Loan Agreement amount to $111,149. Although Northwest Airlines has paid its postpetition obligations to CargoPort, Northwest Airlines remains $27,761 in arrears for prepetition amounts owed to CargoPort under the Sublease, in addition to attorneys' fees and costs, including postpetition fees and costs, to which CargoPort is entitled under the terms of the Sublease. Ms. Grubin contends that in any event, Northwest Airlines must continue to make all postpetition payments owing to CargoPort. Accordingly, CargoPort asks the Court to deny the Debtors' request as to the Sublease. In the alternative, CargoPort wants the Court approval conditioned on Northwest Airlines' cure of all defaults and timely performance of all postpetition obligations to CargoPort as to the Sublease. (D) Consortium of Airports A consortium of airports objects to a lengthy extension of time. The Airports and the Debtors are parties to various nonresidential real property leases for various airport facilities. If the Debtors' request is granted, the Consortium will be severely prejudiced in at least two respects: (1) It cannot effectively plan for the use of its facilities given the uncertainty of its members' relationships with the Debtors; and (2) It will be expected to vote on plan confirmation with the benefit of knowing whether the Leases will be assumed or rejected. Accordingly, the Consortium asks the Court to limit the extension to the earlier of: (a) an additional 120 days; (b) the expiration of the Debtors' exclusive periods; or (c) the filing of the Debtors' disclosure statement, without prejudice on timely payment and performance of all obligations under the Leases during the extension period. The Consortium of Airports consists of: (a) Detroit Metropolitan Wayne County Airport; (b) Metropolitan Washington Airports Authority; (c) Lehigh Valley-Northampton Airport Authority; (d) City of Phoenix; (e) Clark County (Las Vegas) Nevada; (f) City of Baton Rouge; (g) Burlington Vermont Airport; (h) John Wayne Airport; (i) Tucson International Airport; (j) Austin-Bergstrom International Airport; (k) Sarasota-Manatee Airport; (l) Albany International Airport; (m) Moline Metropolitan Airport Authority of Rock Island County, Illinois; (n) Capital Region Airport Authority (Lansing, MI); (o) Norfolk Airport Authority; (p) Columbus Regional Airport Authority; (q) Port of Portland; and (r) Lee County Airport Authority. (E) MAC The Metropolitan Airports Commission owns and operates the Minneapolis-St. Paul International Airport. MAC and Northwest Airlines are parties to numerous lease agreements including, but not limited to, an Airline Operating Agreement and Terminal Building Lease dated January 1, 1999, as supplemented and amended. Connie A. Lahn, Esq., at Fafinski Mark & Johnson, P.A., in Eden Prairie, Minnesota, asserts that the Debtors are not current on their postpetition obligations to MAC. She tells the Court that the parties are attempting to resolve this dispute. However, MAC wishes to reserve its right to challenge whether the Debtors are in fact current as represented in their request, should the dispute be unresolved. Accordingly, MAC wants the Court to: (1) except MAC and all agreements between the parties from the order until the parties have resolved their dispute; or (2) condition approval on the Debtors' immediate payment of all postpetition obligations, as well as timely payments of those obligations during the extension period. * * * Judge Gropper extends the time within which the Debtors may assume or reject unexpired leases on the earlier of: (a) May 13, 2006; and (b) the date on which an order is entered confirming a plan of reorganization for the Debtors. The extension, however, is without prejudice to U.S. Bank's right to seek reduction of the time, on prior notice to the Debtors, the official Committee of Unsecured Creditors, and the United States Trustee. To the extent any U.S. Bank Lease is re-characterized, the payments will be deemed adequate protection payments pursuant to Sections 362 and 363 to the extent U.S. Bank is entitled to the them as adequate protection under applicable law, without prejudice to U.S. Bank's right to seek additional adequate protection. With respect to the other Objecting Parties, the hearing on the objections are adjourned until December 15, 2005, and the time within which the Debtors may assume or reject the Objecting Parties' Unexpired Leases is extended to and including the hearing, provided however, that before December 15, 2005: (a) the Objecting Parties may request a hearing for cause shown; and (b) the Debtors and the Objecting Parties may enter into agreements resolving the objections. Judge Gropper declares that the extension is without prejudice to the Debtors' rights to request further extensions of time within which they may assume or reject the Unexpired Leases. Judge Gropper also clarifies that the Order will not be deemed an approval of the assumption or rejection of any executory contract or unexpired lease. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) O'SULLIVAN IND: Disclosure Statement Hearing Postponed to Jan. 12 ----------------------------------------------------------------- The Official Committee of Unsecured Creditors asks the U.S. Bankruptcy Court for the Northern District of Georgia to extend the Disclosure Statement Hearing to January 23, 2006. James R. Sacca, Esq., at Greenberg Traurig, LLP, in Atlanta, Georgia, tells Judge Mullins that O'Sullivan Industries Holdings, Inc., and its debtor-affiliates' bankruptcy cases are sizeable with numerous complex issues, thus requiring the Committee's detailed, independent investigation of the Debtors to determine if their estates hold any value for the unsecured creditors. In addition, Mr. Sacca states that the Committee's receipt of due diligence information has started only recently and while it is proceeding apace, the Committee needs more time to undertake its baseline statutory duties. The Debtors' Disclosure Statement does not contemplate the Plan to take effect until March 30, 2006. Thus, under the Debtors' own timeline, there is no need to rush to confirmation of the Disclosure Statement, Mr. Sacca adds. According to Mr. Sacca, the Debtors have not demonstrated that they have provided proper notice of the Disclosure Hearing in accordance with Rule 2002(b) of the Federal Rules of Bankruptcy Procedure. Bankruptcy Rule 2002(b) requires a debtor to give not less than 25 days' notice by mail of the time fixed for filing objections and the hearing to consider approval of a disclosure statement. "It appears, however, that the Debtors have failed to comply with this basic procedure," Mr. Sacca remarks. Moreover, the Debtors' DIP Facility is in place providing them with the liquidity required to maintain operations. Thus, the anticipated hue and cry of "expense" is not a material and sufficient basis to deny the continuance of the Original Disclosure Hearing, Mr. Sacca avers. As part of their prepetition restructuring efforts, the Debtors requested that holders of the Senior Subordinated Notes form an ad hoc committee, which was established in July 2005. However, the Debtors did not retain professionals for the Ad Hoc Committee and did not provide the due diligence information requested by the Ad Hoc Committee. "Although they had the opportunity to include the Ad Hoc Committee in the preparation and negotiation of a consensual plan of reorganization, the Debtors inexplicably chose not to do so," Mr. Sacca points out. "The Committee is now playing catch up," Mr. Sacca says. "Instead of allowing all parties to play on a level playing field, the Debtors are forcing the Committee to participate at a decided disadvantage." Mr. Sacca asserts that had the Debtors not filed a one-party "pre- arranged" bankruptcy, a request for an extension of exclusivity would have been automatic. Debtors Object "The Committee has failed to disclose that the Debtors offered the Committee a 14-day continuance of the Disclosure Statement Hearing without prejudice to the Committee's right to ask for a further continuance," James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, P.A., in Atlanta, Georgia, contends. "That continuance should be granted at this time without the need for a costly hearing." The Creditors Committee's request is based on a misrepresentation of the record, according to Mr. Cifelli. The Committee has blatantly distorted and minimized the history of the financial and other information, materials, and access provided to the Committee, its predecessor, and their professional advisors. Mr. Cifelli asserts that the record demonstrates that: (i) the Committee and its predecessor, represented by the same professionals, has been receiving substantial due diligence information for months; and (ii) the information is more than sufficient for the Committee to determine whether the Disclosure Statement contains adequate information, as required by Section 1125 of the Bankruptcy Code. The Creditors Committee's request appears to be designed for the sole purpose of threatening delay of proceedings, Mr. Cifelli says. The Committee is attempting to gain leverage by exploiting the risks to the stability of the Debtors' business operations and their going concern value that are inherent in the prolonged stay in bankruptcy. The risks include: (a) loss of key customers, given that the Debtors' top 10 customers represent 80% of their sales, and some of them have already withheld payment due to perceived uncertainties associated with bankruptcy; (b) risk that the proceedings will impair the Debtors' ability to stabilize and expand sales; (c) risk to the Debtors' ability to develop, source, and sell new products to a wary customer base; (d) loss or demoralization of the Debtors' key employees and workforce; (e) cash drain from continued funding of professional fees; (f) risk to cost-cutting initiatives; (g) the effect that prolonged and contentious proceedings might have on securing exit financing; and (h) the impact of the proceedings on the Debtors' ability to rapidly adjust to changing market and retail conditions. The Debtors and the Senior Secured Noteholders are deeply concerned about purposeless delay in concluding these Chapter 11 cases. A "fast track" proceeding should be encouraged as the appropriate object of Chapter 11, Mr. Cifelli says. It is not in any way an act of wrongdoing, as the Committee suggests, he adds. Mr. Cifelli maintains that the Creditors Committee is merely employing a litigation tactic intended to exert pressure on the Debtors and their bona fide stakeholders by attempting to hinder reorganization unless the Senior Secured Noteholders, who are impaired, reallocate some of their recovery. GoldenTree Asset Management L.P., Mast Credit Opportunities I, (Master) Ltd., and Breakwater Fund Management, LLC -- members of the Ad Hoc Senior Secured Noteholders Committee -- support the Debtors' opposition to the Creditors Committee's request. On behalf of the Ad Hoc Committee, Richard F. Casher, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, in New York, asserts that: a) as evidenced by the Creditors Committee's recent proposal regarding treatment of the general unsecured Creditors under the Plan of Reorganization, the Creditors Committee has sufficient information to value the Debtors; b) despite the Creditors Committee's attempt to attribute a nefarious purpose to the Plan, the Plan simply proposes to distribute the Debtors' assets in accordance with the mandate of the Absolute Priority Rule; and c) the Forbearance Agreement was not an attempt by the Debtors to "alter the playing field in favor of the Senior Secured Creditors." * * * For reasons stated on the record, Judge Mullins denies the Committee's request. In a notice filed with the Court on December 1, 2005, the Debtors advise that the Disclosure Statement hearing has been rescheduled to January 12, 2006. Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). On September 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) O'SULLIVAN INDUSTRIES: Wants January 30 as New Claims Bar Date -------------------------------------------------------------- As previously reported, the U.S. Bankruptcy Court for the Northern District of Georgia set January 9, 2006, as the deadline for filing proofs of claim in O'Sullivan Industries Holdings, Inc.'s Chapter 11 cases. The Debtors want that deadline extended until January 30, 2006. Gregory D. Ellis, Esq., at Lamberth, Cifelli, Stokes & Stout, P.A., in Atlanta, Georgia, explains that because of a clerical error, certain individuals and entities were not served with the Bar Date Notice or provided with a Proof of Claim Form. Those parties include certain current and former employees of the Debtors. Although the Debtors believe that it is highly unlikely that any of those parties will file a proof of claim, the Debtors agreed to serve them with the Bar Date Notice and Proof of Claim Form pursuant to the Bar Date Order, Mr. Ellis relates. In addition, through an administrative error on the part of the printer, the Proof of Claim Forms sent to creditors wrongfully listed all claims as Contingent or Unliquidated or Disputed. Mr. Ellis points out that most of the claims are not contingent, unliquidated, or disputed, and the Debtors believe that the erroneous description may cause confusion and anxiety on the part of many of their creditors. The printer has offered to reprint the Proof of Claim Forms correctly and to serve the reprinted forms, along with an explanatory cover letter, at no cost to the Debtors. The Debtors will send the Proof Of Claim Forms and the notice of the Extended Bar Date no later than December 30, 2005. Mr. Ellis assures the Court that the notice and Proof of Claim Forms will be substantially similar to the forms previously approved by the Court. Accordingly, the Debtors ask the Court to extend the Claims Bar Date to January 30, 2006. Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). On September 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) OMNICARE INC: S&P Places BB+ Rating on $750 Mil. Sr. Debt Offering ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Omnicare Inc., including the 'BBB-' corporate credit rating. All ratings were removed from CreditWatch, where they were placed with negative implications May 24, 2004, when Omnicare first initiated its ultimately successful effort to acquire competitor NeighborCare Inc. for $1.9 billion. The rating outlook is stable. At the same time, Standard & Poor's assigned its 'BB+' rating to Omnicare's offering of $750 million convertible senior debentures due 2035. The lower rating of this "senior" issue reflects the relative weakness of the subsidiary guaranteeing the debentures. Also, a 'BB+' rating was assigned to the company's $750 million senior subordinated notes, a portion of which will mature in 2013, with the rest maturing in 2015. Both of these offerings are drawdowns from a previously filed Rule 415 shelf filing. "The ratings reflect Omnicare's leading position as a provider of pharmacy services to nursing homes and other long-term care providers, and its commitment to an investment-grade financial profile," said Standard & Poor's credit analyst David Lugg. Covington, Kentucky-based Omnicare achieved its 45% market share through a long series of acquisitions, utilizing a mix of cash and stock. The company has leveraged its larger size to achieve economies of scale in its operations and improve its purchasing clout with pharmaceutical manufacturers. These benefits have largely been outweighed by continuing reimbursement pressure, particularly from financially challenged state Medicaid programs. Operating margins have not broken out of the 12.0%-12.5% range for the past five quarters. The newly rated debt offerings, in combination with an equity offering expected to yield about $750 million, will be used to replace a $1.9 billion 364-day bank facility used to help finance Omnicare's acquisitions and to retire $375 million of higher cost debt. Lease-adjusted total debt to EBITDA, annualized for the quarter ended Sept. 30, 2005, was about 5.7x. The debt reduction occasioned by these transactions will lower this credit measure to 4.6x. Standard & Poor's expects that acquisition-driven expansion of free cash flow will provide the funds to rapidly improve this measure to a level substantially less than 3.0x by the end of 2006. ONEIDA LTD: Oct. 29 Balance Sheet Upside-Down by $20.7 Million -------------------------------------------------------------- Oneida Ltd. (OTCBB:ONEI) reported operating and financial results for the third quarter and nine month period ended Oct. 29, 2005. Operating income for the third quarter was $3.0 million, compared to an operating loss of $16.8 million during the corresponding period last year. The operating results included goodwill impairment losses attributed to the Company's United Kingdom operation of $4.2 million for the three month periods ending Oct. 29, 2005 and $15.5 million for the three month periods ending Oct. 30, 2004. The operating income improvement also reflects the favorable impact of the company's comprehensive operational restructuring program. Oneida's operational restructuring efforts are focused on reducing the Company's cost structure and transitioning from fixed-cost manufacturing to variable-cost sourcing throughout its product line portfolio, thereby maximizing the Company's competitiveness in today's global marketplace. Net loss for the third quarter ended Oct. 29, 2005 was $6.0 million compared to year-ago net loss of $23.8 million. Commenting on the Company's results, Terry G. Westbrook, President and Chief Executive Officer of Oneida, said, "Our results demonstrate that the operational restructuring initiatives we've undertaken have taken hold and are contributing strongly to continuing improvements in our performance. We have strong brands that connect with the consumer, the right business model for the demands of the market, and we are now focused on growing our revenue base, building our brands and strengthening our balance sheet for future growth." Total revenues for the third quarter were $89.3 million, compared to $102.2 million in the third quarter of the previous fiscal year. Approximately $7.9 million of the revenue decline was attributed to the Company's foodservice division, where sales to equipment & supply distributors, chain restaurants and airlines were down from prior year levels. Other factors were the discontinuance of certain marginally profitable product lines, several large customers opting to dual source a portion of their tabletop product requirements, and the direct import strategy of certain large volume customers in the company's commodity flatware and dinnerware market segment. The Consumer division's revenues were down approximately $3.2 million from the prior year, attributed to the August 2004 sale of Encore Promotions, Inc. and the closure of 23 unprofitable Oneida outlet stores during the previous twelve months, partially offset by an increase in the sale of dinnerware products to the retail sector. International division revenues were down approximately $1.6 million from the prior year, primarily in the United Kingdom. Gross margins improved from $26.5 million (25.9% of revenues) during the three month period ended Oct. 30, 2004, to $32.3 million (36.2% of revenues) during the quarter ended Oct. 29, 2005. The company's continued gross margin improvement was achieved as a result of the March 22, 2005 sale of the Sherrill, N.Y. manufacturing facility resulting in the complete outsourcing of the Company's manufacturing operations. Other positive activities were product line rationalization, reduction of LIFO valued inventory levels, and a reduction in the write-down of obsolete inventory. Operating income was favorably impacted by the closure of unprofitable Oneida outlet stores; reductions in personnel, employee benefits, general & administrative expenses, and logistics costs. During the quarter the Company refined its calculation of the Allowance for Doubtful Accounts, and reviewed its accrual for incentive compensation based on current projections, resulting in a favorable earnings adjustment of $1.2 million. For the first nine months of the fiscal year ending January 2006, Oneida's operating income was $9.6 million, on total revenues of $258.8 million, compared to an operating loss of $62.9 million on total revenues of $314.8 million during the first three quarters of the prior fiscal year. Net loss was $16.1 million for the nine month period ended October 29, 2005, versus net loss of $17.8 million during the corresponding period last year. The prior year's net loss included non-recurring income items, totaling $62.1 million, attributed to the net effect of eliminating the Company's post-retirement medical liabilities, termination of the Company's long-term disability plan and freezing two of the Company's domestic defined benefit pension plans. Additionally, non-recurring expense items, totaling $52.2 were recorded for impairment losses on goodwill and closure of the Sherrill, NY factory. Interest expense increased by $9.3 million to $24.2 million for the nine month period ended October 29, 2005 due to the higher effective interest rate and amortization of deferred financing costs associated with its restructured debt. Net cash flow provided by operating activities was $1 million during the nine month period ended October 29, 2005, versus net cash used by operating activities of negative $40 million during the corresponding period last year. Liquidity under the Company's U.S. revolving credit agreement and available cash balances was $20.0 million at Oct. 29, 2005, which decreased from $22.2 million at Jan. 29, 2005 and increased from $12.2 million at October 30, 2004. These actions were taken during the third quarter ended Oct. 29, 2005: -- Appointed Robert Hack as Vice President -- Information Technology and Chief Information Officer. Mr. Hack will be responsible for Oneida's worldwide information technology strategy and implementation. His prior experience includes a variety of senior level IT positions with the Eastman Kodak Company and Carrier Corporation, and most recently he was CIO at Marietta Corporation. -- Appointed John Ross as Corporate Controller and Chief Accounting Officer. Prior to joining Oneida, Mr. Ross served in a variety of accounting and financial positions, including VP and Controller Accounting Operations of Pacer International, VP Finance of PIC International Group, Director of Accounting and Corporate Controller of Hubbell Inc. Mr. Ross started his career at Deloitte-Touche and is a Certified Public Accountant. -- Signed a 5-year lease agreement for a 244,000 square foot warehouse and distribution facility with Tejon Ranch Company in order to relocate Oneida's west coast distribution center to Lebec, California. The new facility, located approximately 90 miles northwest of the port of Long Beach, CA, is expected to be operational during the first quarter of the next fiscal year, and will employ as many as 100 workers. The conversion from Oneida's current third party logistics platform on the west coast to this Oneida-managed facility is expected to generate additional supply chain savings and service level improvements. -- Continued the rationalization and operational integration of Oneida's various product lines in order to leverage the Company's strengths in brand, design and global procurement. Toward that end, during the third quarter, certain functions of the New York City-based dinnerware operation were integrated into the Company's headquarters located in Oneida, New York. The Company also opened a new showroom at 41 Madison Avenue, New York City, featuring a combination of flatware, dinnerware and food service product lines including the launch of a new Buffalo China consumer dinnerware brand offered in a variety of shapes, patterns and colors. -- Engaged the New England Consulting Group, a leading marketing and branding consulting firm, to assist the company in developing a strategic market positioning, growth and branding plan. Oneida Ltd. -- http://www.oneida.com/-- is the world's largest manufacturer of stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and the largest supplier of dinnerware to the foodservice industry. Oneida is also a leading supplier of a variety of crystal, glassware and metal serveware for the tabletop industries. Oneida manufacturing facilities, foodservice and retail products are present throughout the world including the United States, Canada, Mexico, the United Kingdom, Italy and Australia. Our company originated in a mid- nineteenth century utopian community based on a work ethic of quality craftsmanship. At Oct. 29, 2005, Oneida Ltd.'s balance sheet showed a $20,732,000 stockholders' deficit, compared to a $3,619,000 deficit at Jan. 29, 2005. ORIUS CORP: Files Chapter 11 Petition to Implement Asset Sale ------------------------------------------------------------- Orius Corporation and certain of its subsidiaries filed a chapter 11 petition in the U.S. Bankruptcy Court for the Northern District of Illinois yesterday, Dec. 12, 2005. Orius Corp. filed its reorganization in order to implement an Asset Purchase Agreement with Dycom Industries. Pursuant to the agreement, Dycom will buy certain assets and assume a number of the contracts of Orius for approximately $8 million in cash. Dycom will also assume $1 million of Orius Corp.'s liabilities. Orius will also file a motion with the Court seeking the establishment of sale procedures for an auction that allows other qualified bidders to submit higher or otherwise better offers for all or part of Orius in a competitive auction process. About Dycom Industries Inc. Dycom Industries, Inc. is a leading provider of specialty contracting services throughout the United States. These services include engineering, construction, maintenance and installation services to telecommunication providers, underground locating services to various utilities, including telecommunication providers, and other construction and maintenance services to electric utilities and others. About Orius Corporation Headquartered in Barrington, Illinois, Orius Corp. -- http:www.oriuscorp.com/ -- provides construction, deployment and maintenance services to customers operating within the telecommunications; broadband; gas and electric utilities; and government industries. The Debtor and 13 of its affiliates filed for chapter 11 protection on Dec. 12, 2005 (Bankr. N.D. Ill. Case No. 05-63876). Folarin S. Dosunmu, Esq., at Lord, Bissell & Brook LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and debts between $50 million to $100 million. The Debtors previously filed for chapter 11 protection on Nov. 15, 2002 (Bankr. N.D. Ill. Case No. 02-45127). The Court confirmed the Debtors' Plan of Reorganization Jan. 13, 2003. ORIUS CORP: Case Summary & 50 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: Orius Corp. 1000 Hart Road, Suite 140 Barrington, Illinois 60010 Bankruptcy Case No.: 05-63876 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Catv Subscriber Services Inc. 05-63877 Channel Communications Inc. 05-63878 Copenhagen Utilities & Construction Inc. 05-63879 Hattech Inc. 05-63880 Lisn Company 05-63881 Lisn Inc. 05-63883 Natg Holdings LLC 05-63884 Orius Telecom Services Inc. 05-63886 Orius Telecommunications Services Inc. 05-63887 Texor, Inc. 05-63888 Orius Central Office Services Inc. 05-63889 US Cable Inc. 05-63890 Type of Business: Orius Corp. is a nationwide provider of construction, deployment and maintenance services to customers operating within the telecommunications; broadband; gas and electric utilities; and government industries. See http://www.oriuscorp.com/ The Debtors previously filed for chapter 11 protection on Nov. 15, 2002 (Bankr. N.D. Ill. Case No. 02-45127). The Court confirmed the Debtors' Plan of Reorganization Jan. 13, 2003. Chapter 11 Petition Date: December 12, 2005 Court: Northern District of Illinois (Chicago) Judge: Bruce W. Black Debtors' Counsel: Folarin S. Dosunmu, Esq. Lord, Bissell & Brook LLP 115 South LaSalle Street Chicago, Illinois 60603 Tel: (312) 443-0219 Debtors' Financial Advisors: Conway Del Genio Greis & Co. Estimated Assets: $10 Million to $50 Million Estimated Debts: $50 Million to $100 Million Consolidated List of Debtors' 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Merrill Lynch Credit Bank Loan $13,207,611 Products LLC 4 World Financial Center 250 Vesey Street, 7th Floor New York, NY 10080 Attn: Robert Spork Tel: (212) 449-4969 Morgan Stanley & Co., Inc. Bank Loan $9,806,878 1585 Broadway, 2nd Floor New York, NY 10036 Attn: Anton Anikst Tel: (212) 761-1630 Bank of America Bank Loan $8,961,893 335 Madison Avenue New York, NY 10017 Attn: Kevin Behan Tel: (212) 503-8333 DB Trust Americas Bank Loan $4,819,816 60 Wall Street, 43rd Floor New York, NY 10005 Attn: Robert Wood Tel: (212) 250-6160 Van Kampen Senior Loan Fund Bank Loan $4,636,234 c/o Van Kampen Investment Advisory Corp. One Parkview Plaza Oakbrook Terrace, IL 60181 Attn: Greg White Tel: (630) 684-6674 Bank of America Strategic Bank Loan $3,339,479 Solutions 335 Madison Avenue New York, NY 10017 Attn: Kevin Behan Tel: (212) 503-8333 Stein Roe & Farnham CLO I Ltd. Bank Loan $2,885,183 c/o: Columbia Asset Management Group, as Agent 1185 Avenue of the Americas, 16th Floor New York, NY 10036 Attn: Eric S. Meyer Tel: (212) 819-6049 Carlyle High Yield Bank Loan $1,645,710 Partners II, LP 520 Madison Avenue New York, NY 10022 Attn: Linda Pace Tel: (212) 381-4946 BNP Paribas North America, Inc. Bank Loan $1,564,476 787 Seventh Avenue, 31st Floor New York, NY 10019 Attn: Brock Harris Tel: (212) 841-2069 Highland Floating Rate Bank Loan $1,273,735 Limited Liability Fund c/o: Highland Capital Management, LP 1300 Two Galleria Tower 13455 Noel Road Dallas, TX 75240 Attn: Niles Chura Tel: (972) 628-4100 First Dominion Funding III Bank Loan $1,259,896 c/o Credit Suisse Asset Management 11 Madison Avenue New York, NY 10010 Attn: Linda Karn Tel: (212) 538-8060 First Dominion Funding II Bank Loan $1,207,101 c/o Credit Suisse Asset Management 11 Madison Avenue New York, NY 10010 Attn: Linda Karn Tel: (212) 538-8060 Van Kampen Senior Income Trust Bank Loan $1,206,031 c/o Van Kampen Investment Advisory Corp. One Parkview Plaza Oakbrook Terrace, IL 60181 Attn: Greg White Tel: (630) 684-6674 Guggenheim Portfolio Bank Loan $1,147,033 Company XII, LLC c/o Gracie Capital, LP 950 Third Avenue, 29th Floor New York, NY 10022 Attn: Greg Pearson Tel: (212) 319-8220 Gracie Capital, LP Bank Loan $1,144,202 950 Third Avenue, 29th Floor New York, NY 10022 Attn: Sam Konz Tel: (212) 319-8000 Pilgrim CLO 1999-1 Ltd. Bank Loan $1,138,394 c/o ING Investments LLC 7337 E. Doubletree Ranch Road Scottsdale, AZ 85258 Attn: Ralph Bucher Tel: (480) 477-2231 JP Morgan Chase NA Bank Loan $1,021,245 270 Park Avenue, 17th Floor New York, NY 10017 Attn: Stanley Lim Tel: (212) 270-4421 Winged Foot Funding Trust Bank Loan $858,152 c/o Conseco Capital Management 11825 North Pennsylvania Street Carmel, IN 46032 Attn: Thomas Davis Tel: (317) 817-5696 Carlyle High Yield Partners, LP Bank Loan $804,734 520 Madison Avenue New York, NY 10022 Attn: Linda Pace Tel: (212) 381-4946 Longacre Management LLC Contract $729,291 810 Seventh Avenue, 22nd Floor New York, NY 10019 Attn: Terrell Ross Tel: (212) 259-4313 AIMCO CDO Series 2000-A Bank Loan $686,521 3705 Sanders Road, Suite G5D Northbrook, IL 60062 Attn: Tom Napholz Tel: (847) 402-7835 Allstate Life Insurance Company Bank Loan $686,521 3705 Sanders Road, Suite G3A Northbrook, IL 60062 Attn: Tom Napholz Tel: (847) 402-7835 Magnetite Asset Investors, LLC Bank Loan $686,521 345 Park Avenue New York, NY 10154 Attn: Mark Williams Tel: (212) 409-3724 Trison, LLC Facility Lease $613,703 c/o The Rockcrest Group 14800 Conference Center Drive Chantilly, VA 20151 Attn: Scott Kasprowicz Tel: (703) 502-9797 Gopher Motor Rebuilding, Inc. Facility Lease $542,500 6530 James Avenue North Brooklyn Center, MN 55430 Attn: Denny Janisewski Tel: (763) 746-3440 Altec Capital Services Equipment Leases $458,016 31 Inverness Center Parkway Suite 360A Birmingham, AL 35242 General Electric Capital Equipment Leases $437,414 Corporation 3000 Lakeside Drive, Suite 200N Bannockburn, IL 60015 J&L Investments Facility Leases $307,320 P.O. Box 367 Star, ID 83669 Daniel E. and Terri A. Wilson Facility Lease $297,000 2700 Six Mile Church Road Independence, MO 64058 JAG Investments, LP Facility Leases $275,418 P.O. Box 367 Star, ID 83669 Chet Barrows Litigation Claim $225,000 951 Oxford Drive Davenport, FL 33897 Hart Road LLC Facility Lease $201,495 1130 Lake Cook Road Buffalo Grove, IL 60089 TD&I Cable Maintenance, Inc. Trade Vendor $171,574 P.O. Box 266 Lakeland, MN 55043 Excel Equipment LLC Facility Lease $165,375 c/o Horizon Management LP 14000 SW Goodall Road Lake Oswego, OR 97034 Corporate Actions Bank Loan $161,360 c/o: Deutsche Bank Global Technology & Operations (GTO) 90 Hudson Street, 1st Floor Jersey City, NJ 07302 Highland Floating Rate Bank Loan $160,947 Advantage Fund c/o: Highland Capital Management, LP 1300 Two Galleria Tower 13455 Noel Road Dallas, TX 75240 Aon Risk Services, Inc. Trade Vendor $129,739 200 East Randolph, Suite 1100 Chicago, IL 60601 Ada Sand and Gravel Trade Vendor $116,434 P.O. Box 15644 Boise, ID 83715 Mudrick Underground, Inc. Trade Vendor $83,124 Oregon Electric Group Trade Vendor $81,963 Robinson Brothers Trade Vendor $77,648 Construction, Inc. Western States Electric, Inc. Trade Vendor $75,706 John Deere Credit Equipment Leases $68,888 Underground Logistics, Inc. Trade Vendor $66,777 S&S Underground, Inc. Trade Vendor $63,039 CVA of South Florida Trade Vendor $59,086 Al B Underground Trade Vendor $54,702 Gahr Line & Cable, LLC Trade Vendor $51,748 K&M Service Trade Vendor $50,338 Mehoe Construction, Inc. Trade Vendor $49,774 OWENS CORNING: Acquires Key Composite Solutions Operation in Japan ------------------------------------------------------------------ Owens Corning announced reached an agreement with Asahi Glass Co., Ltd. to acquire its composites business, including a glass manufacturing facility located near Tokyo. Terms were not disclosed. The acquisition underscores Owens Corning's commitment to the Japanese market and positions the company to capitalize on emerging opportunities within the Asia Pacific region. The composites and glass fibers produced in this facility will support the growth of customers in the automotive, consumer and electrical, building and construction, and infrastructure markets. The transaction is expected to close in the second quarter of 2006. "Japan continues to be a significant growth market for Owens Corning," said Steve Zirkel, managing director, Composite Solutions Asia Pacific - Owens Corning. "The addition of this business strategically positions Owens Corning to better serve existing customers, add new customers and increase our presence in the Asia Pacific region." This acquisition represents a continued commitment to Japan, one of the world's largest glass fiber markets, and reinforces the company's position as a world leader in building materials and composite systems. Key patents, product formulas and innovative technologies were an instrumental part of the agreement. Combining these new technologies with Owens Corning's current product offering will deliver a broader range of composite solutions to the market. "We've worked together successfully with Owens Corning in Japan for many years," said Toru Shiraishi, president and representative director - Asahi Fiber Glass. "Based on this relationship, we explored the best option for the plant and its employees, and as a result, decided that Owens Corning provided the best opportunity for the plant's future. As a trusted partner and leader in the global fiber glass and composite materials markets, we believe that Owens Corning's acquisition of this facility will lead to providing better services to customers and an opportunity for continued cooperation between our companies in the future." The transaction is subject to the approval of the United States Bankruptcy Court for the District of Delaware and other regulatory approvals. Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the Debtors in their restructuring efforts. PENN TREATY: S&P Raises Junk Rating on Counterparty Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its counterparty credit and financial strength ratings on long-term care insurer Penn Treaty Network America Insurance Co. to 'B' from 'B-'. At the same time the, Standard & Poor's raised its counterparty credit rating on PTNA's parent, Penn Treaty American Corp. to 'CCC' from 'CCC-'. The outlook is stable. "The ratings were raised because of the company's continued operating gains, successful renegotiation of its reinsurance treaties, and conversion of PTAC's convertible subordinated debt to common stock, leaving PTAC debt free and reducing PTAC's liquidity requirements," said Standard & Poor's credit analyst Neal Freedman. The ratings reflect the company's: * below-average business profile; * limited, but improving, new business volume; * adequate capitalization; * below-average, but improving, earnings performance; and * the reduced, but still present, parent company liquidity concerns. Standard & Poor's expects PTAC's pretax consolidated GAAP operating income, which excludes the effect of market gains and losses, goodwill impairment, litigation expense, and expenses related to obtaining new reinsurance, but includes interest expense, to be $15 million-$20 million in 2005 on annualized sales of about $20 million. Capitalization of the operating insurance companies is expected to remain adequate at year-end 2005. PHARMA SERVICES: Moody's Affirms $219 Million Notes' Caa1 Rating ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Quintiles Transnational Corp., including the B1 corporate family rating, the B3 subordinated debt rating, and the Caa1 rating on senior discount notes issued by Pharma Services Intermediate Holding Corp. At the same time, Moody's withdrew Quintiles' B1 secured Term Loan B rating and B1 secured revolving credit facility rating following full repayment of the outstanding balance and termination of the credit agreement. Following these rating actions, the rating outlook is stable. Moody's last prior rating action on Quintiles was on March 10, 2004, when we confirmed Quintiles' ratings with a stable outlook and assigned a Caa1 rating to the holding company discount notes issued by Pharma Services. These rating actions follow Quintiles announcement that it has monetized its Cymbalta royalty rights through a financing transaction, and utilized proceeds to repay in full $154 million of its outstanding Term Loan B balance. The rating action also incorporates: 1) the recent sale of Quintiles Early Development and Packaging business for $124 million in cash; 2) earlier reduction of Term Loan B balances; and 3) favorable business trends, especially in Quintiles Product Services Groups, including double-digit revenue increases. Moody's estimates that Quintiles cash balances are approximately $500 million as of September 30, 2005 pro forma for these transactions and for its $75 million shareholder dividend recently declared. As part of the Cymbalta transaction, Quintiles contributed its Cymbalta royalty rights (and the rights to certain other payments from Eli Lilly) to a subsidiary, Duloxetine Royalty Sub ("Royalty Sub"), in exchange for the net proceeds from Royalty Sub's recent $250 million financing. This financing was comprised of $125 million of secured loans through a new credit facility maturing in 2013, and $125 million of secured notes due 2013. Moody's has not assigned ratings to these securities. Moody's believes that these recent developments have both positive and negative implications for bondholders, resulting in an affirmation of the existing ratings. Moody's views favorably the paydown of bank debt and the accumulation of cash, providing the company with higher financial flexibility over the near term. However, it remains unclear how Quintiles will deploy its cash. In addition, Moody's believes there will be a significant reduction in Quintiles' operating cash flow and free cash flow available to service the debt that existed prior to the Royalty Sub financing. The new debt issued by Royalty Sub is secured by the Cymbalta payments. For the first nine months of 2005, Moody's estimates that Cymbalta payments represented $40 to $45 million (or close to 50%) of Quintiles' cash flow from continuing operations; this amount also represented the majority of Quintiles free cash flow after capital expenditures. Moody's further notes that discontinued operations (including the divested EDP business), generated $9.8 million of cash flow from operating activities that will be nonrecurring. The company has undergone various restructurings in 2004 and 2005. Restructuring charges have totaled $22.6 million for the first nine months of 2005. Although these activities appear to be having a positive effect on operating margins, they may be constraining cash flow over the near term. Based on Moody's estimates, there appears to be only a modest level of cash flow from Quintiles' primary businesses (including Product Development and Commercial Services) relative to Quintile's total debt, exclusive of the new debt at Royalty Sub. Moody's estimate of Quintiles debt (excluding Royalty Sub) includes $450 million of subordinated notes, the holding company discount notes (with an estimated accreted value of approximately $150 million), and Basket D hybrid treatment of the PIK preferred equity at the holding company, with an estimated debt equivalent of approximately $125 million. Also, Quintiles relatively high operating leases represent off-balance sheet leverage. Moody's acknowledges that residual cash flow after specified debt reduction at Royalty Sub may eventually be distributed to Quintiles, but the timing is uncertain and would depend on Cymbalta sales. The rating outlook is currently stable. Over time, upward rating pressure could result from: 1) greater cash flow generation from the company's Product Development and Contract Services businesses (i.e. excluding the Cymbalta payments) relative to Quintiles debt exclusive of Royalty Sub debt; and 2) greater clarity about the potential uses of cash. Conversely, situations that could cause downward rating pressure include: 1) a downturn in Product Development or Contract Services business trends such that cash flow from these operations becomes constrained; and 2) a large acquisition involving incremental debt, depending on the cash flow benefit from the acquired entity. Ratings affirmed: Quintiles Transnational Corp.: * B1 corporate family; B3 senior subordinated notes of $450 million due 2013 Pharma Services Intermediate Holding Corp.: * Caa1 discount notes of $219 million (face amount) due 2014 Rating withdrawn: Quintiles Transnational Corp.: * B1 secured Term Loan B facility; B1 secured revolving credit facility of $75 million Quintiles Transnational Corp., headquartered in Durham, North Carolina, is a leading global provider of contract research and contract sales services to pharmaceutical, biotechnology and medical device companies. The company reported 2004 net revenue of $1.8 billion. Quintiles is 99.2% owned by Pharma Services Intermediate Holding Corp., which is owned by Pharma Services Holding, Inc. PLASTIPAK HOLDINGS: Completes Repurchase of 10.75% Senior Notes --------------------------------------------------------------- Plastipak Holdings, Inc. completed its offering of $250 million aggregate principal amount of its 8-1/2% Senior Notes due Dec. 15, 2015. The net proceeds of the offering of the Senior Notes, together with the proceeds of borrowings under the Company's senior secured credit facility and cash on hand, were used to repurchase its 10.75% Senior Notes due 2011 that were validly tendered and accepted for purchase in its previously announced cash tender offer for the 10.75% Notes. The cash tender remains open until its expiration at 5:00 p.m., New York City time, on December 15, 2005. The Senior Notes may be resold by the initial purchasers pursuant to Rule 144A under the Securities Act of 1933, as amended, and in offshore transactions pursuant to Regulation S under the Act. The Senior Notes have not been registered under the Act and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Act and applicable state securities laws. Plastipak Hldings, Inc., -- http://www.plastipak.com/-- is a leading manufacturer of plastic packaging containers for many of the world's largest consumer products companies. For the fiscal year ended Oct. 30, 2004, Plastipak manufactured and distributed approximately 8.5 billion containers worldwide for over 450 customers. To meet the demand of its diverse customer base, Plastipak operates 16 plants in the United States, Brazil and Europe. Plastipak also provides integrated transportation and logistics services, which the company's management believes makes it uniquely, vertically integrated in the plastic packaging industry. Plastipak has obtained 153 U.S. patents for its state-of-the-art packages and package-manufacturing processes. * * * As reported in the Troubled Company Reporter on Dec 2, 2005, Moody's Investors Service assigned a B2 rating to the proposed $250 million senior unsecured notes of Plastipak Holdings, Inc. and affirmed Plastipak's B2 corporate family rating. Today, Moody's took these ratings actions: * Assigned B2 to the proposed $250 million guaranteed senior unsecured notes, due 2015. * Assigned B2 corporate family rating to Plastipak Holdings, Inc. (moved from Plastipak Packaging, Inc.). * B3 rating of the 10.75% existing senior notes will be withdrawn upon execution of the tender. The ratings outlook is stable. QUALITY INCOME: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Quality Income Systems, Inc. fka Gootnick Charitable, Tr., Inc. aka Gootnick Family Trust aka J & J Trust, Inc. aka Full Dimension Trust aka Professional Tax Related Fraud Research and Investigation P.O. Box 490 Volcano, Hawaii 96785 Bankruptcy Case No.: 05-50023 Type of Business: The Debtor acquires, develops and manages real estate for tourist accommodation and affordable housing in Hawaii. Chapter 11 Petition Date: December 9, 2005 Court: District of Hawaii (Honolulu) Judge: Robert J. Faris Debtor's Counsel: Wing C. Ng, Esq. 1149 Bethel Street, Suite 306 Honolulu, Hawaii 96813 Tel: (808) 599-4192 Total Assets: $9,796,800 Total Debts: $10,807,881 Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Taxes, including $6,000,000 350 Ala Moana Boulevard FICA & Futa Honolulu, HI 96850 Attn: Leyton Leong Tel: (808) 539-2099 Hawaii State Tax Collector Income & Payroll $1,000,000 P.O. Box 259 Taxes Honolulu, HI 96809-0259 California Franchise Tax Board Income & Payroll $1,000,000 P.O. Box 942867 Taxes Sacramento, CA 94267-001 Hawaii State Tax Collector GET & TAT Taxes $94,119 Hawaii State Tax Collector Other GET & TAT $40,000 Taxes City and County of San Francisco Property Tax $12,000 Hawaii Electric Utilities $900 Hawaiian Telecom Utilities $282 Cablevision Utilities $190 Gas Co. Utilities $175 T Mibile Utilities $70 Sprint Utilities $70 Verizon Wireless Unknown REFCO INC: Wants to Hire Williams Barristers as Bermuda Co-Counsel ------------------------------------------------------------------ On October 12, 2005, Skadden, Arps, Slate, Meagher & Flom LLP, Refco Inc., and its debtor-affiliates' counsel, contacted Williams, Barristers & Attorneys to advise on Bermuda law and to conduct certain filings in Bermuda resulting from the bankruptcy cases in the United States. Williams gave advice to Refco Capital Markets, Ltd. and Refco Global Finance, Ltd. -- the Bermuda Debtors -- regarding the filing of insolvency proceedings in Bermuda and appointment of provisional liquidators to oversee those proceedings. By this application, the Debtors seek the U.S. Bankruptcy Court for the Southern District of New York's authority to retain Williams as co-counsel for Refco Capital Markets and Refco Global, nunc pro tunc to the Petition Date. Williams will serve as co-counsel for the Bermuda Debtors with Conyers Dill & Pearman. Conyers does not believe that it can be retained as general counsel and is seeking to be retained as special counsel. The Bermuda Debtors need counsel that can assist them with any issue impacting Bermuda law without chance of conflict, Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court. The Debtors believe that Williams' continued involvement is critical for their estates and creditors. As co-counsel for the Bermuda Debtors, Williams 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 plan of reorganization, disclosure statement, schemes of arrangement, explanatory statements and all related agreements and documents and take any necessary action on behalf of the Bermuda Debtors to obtain confirmation of that plan and scheme; (g) advise and assist the Bermuda Debtors in connection with sales of assets; (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; and (i) perform other necessary legal services to the Bermuda Debtors in connection with the Debtors' Chapter 11 cases and the Bermuda proceedings. The Debtors will pay Williams at its standard hourly rate of $450. The Williams attorneys who are expected to be principally responsible for the matters in the Debtors' Chapter 11 cases are Justin Williams, Esq., Orlando Smith, Esq., and John Milligan- Whyte, Esq. Williams will continue to charge the Debtors for all other services provided and for other charges and disbursements incurred. Damien Justin Williams, Esq., a member of Williams, assures the Court that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. 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: Refco LLC Ch. 7 Trustee Hires Togut Segal as Counsel --------------------------------------------------------------- Albert Togut, the interim Chapter 7 trustee of the estate of Refco LLC, seeks the U.S. Bankruptcy Court for the Southern District of New York's authority to employ Togut, Segal & Segal LLP to serve as its general bankruptcy counsel. The Chapter 7 Trustee selected Togut Segal based on the highly specialized practice of the firm -- limited almost exclusively to matters pending in the Bankruptcy Court for the Southern District of New York. According to the Chapter 7 Trustee, Togut Segal has had considerable experience and has acted in a professional capacity in numerous Chapter 7 cases, representing the interests of debtors, creditors' committees trustees and individual secured and unsecured creditors. As general bankruptcy counsel, Togut Segal will: (a) assist the Chapter 7 Trustee in obtaining Court approval of, and consummating, the asset purchase agreement to sell Refco's regulated futures commodities merchant business, including the capital stock of certain broker subsidiaries and related assets; (b) assist the Chapter 7 Trustee in compelling the Debtor's production of books and records concerning the Debtor's financial affairs and transfers of property interests; (c) advise the Chapter 7 Trustee regarding any other sale and conveyance of the Debtor's assets; (d) initiate and prosecute claim objections where a purpose would be served; (e) appear before the Court and any appellate courts and protecting the Chapter 7 Trustee before these Courts; (f) prepare, on the Chapter 7 Trustee's behalf, motions, applications, answers, orders, reports, and papers necessary to the administration of the Debtor's estate; and (g) perform other necessary legal services and providing other necessary legal advice to the Chapter 7 Trustee. Togut Segal will be paid its customary hourly rates for 2005, which range from $115 for paraprofessionals to $765 for attorneys. Togut Segal will apply to the Court for allowance of compensation and reimbursement of actual and necessary expenses. Neil Berger, Esq., a member of the firm, discloses that Togut Segal has not represented and has had no connection with the Debtor or any of its creditors in matters related to the Chapter 7 case. Mr. Berger assures the Court that Togut Segal is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. * * * The Court permits the Chapter 7 Trustee to hire Togut Segal on an interim basis. 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: Refco LLC Ch. 7 Trustee Taps Jenner as Special Counsel ----------------------------------------------------------------- Given the complex legal and factual nature of the sale of Refco LLC and the issues associated with the liquidation of the Debtor and administration of its estate, Albert Togut, the interim Chapter 7 trustee, believes that retention of a special commodities bankruptcy counsel is important. Thus, the Trustee seeks the U.S. Bankruptcy Court for the Southern District of New York's authority to employ Jenner & Block LLP, as his special commodities bankruptcy counsel. Specifically, Jenner & Block will: (a) assist the Trustee in his due diligence regarding the assets of the Debtor and the Sale; (b) advise the Trustee regarding his duties in connection with the Sale and the rules that govern future commission merchants and their liquidations; (c) advise the Trustee regarding any other any other sale and conveyance of the Debtor's assets; (d) appear before the Court and any appellate courts and protect the Trustee before these courts; (e) prepare on the Trustee's behalf motions, applications, answers, orders, reports, and papers necessary to effectuate the transfer of the Debtor's customer accounts; and (f) perform other necessary legal services and provide other necessary legal advice to the Trustee in connection with Refco LLC's Chapter 7 case. Jenner & Block will not duplicate the efforts of Togut, Segal & Segal LLP in its representation of the Trustee. The firm's current hourly rates are: Partners $410 - $750 Associates $215 - $390 Paralegals $150 - $210 Project Assistants $110 Jenner & Block's professionals who expected to render services to the Trustee and their current hourly rates are: Partners Jeff J. Marwil $625 Vincent E. Lazar $495 Paul V. Possinger $495 Jerry L. Switzer, Jr. $465 Donald E. Batterson $465 Brian R. Boch $450 Associates Christine L. Childers $275 Melissa M. Hinds $235 David M. Kavanaugh $215 Paralegals Lowell T. Yap $210 Vincent E. Lazar, Esq., a partner at Jenner & Block LLP, attests that neither the firm nor any partner or associate of the firm represents any interest adverse to that of the Debtor or its creditors. Jenner & Block is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code, Mr. Lazar says. * * * The Court grants the Trustee's request, on an interim basis. 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: Judge Gonzalez Issues Post-Confirmation Protocol ---------------------------------------------------------------- Pursuant to Rule 58 of the Local Bankruptcy Rules of the U.S. Bankruptcy Court for the Southern District of New York, the Hon. Arthur Gonzalez directs Reliance Group Holdings, Inc., to inform the Court of the progress made towards: (1) consummation of the First Amended Plan of Reorganization for RGH under Section 1101(2) of the Bankruptcy Code; (2) entry of a final decree under Rule 3022 of the Federal Rules of Bankruptcy Procedure; and (3) case closing under Section 350 of the Bankruptcy Code. Judge Gonzalez directs RGH to file by January 16, 2006, a status report detailing the actions taken and the progress made in the consummation of the Plan. Reports will be filed thereafter every January 15th, April 15th, and October 15th until a final decree has been entered dismissing the Debtor's case. RGH will submit a written request to the Clerk of the Court by December 17, 2005, to obtain the sum representing any notice and excess claim charges. The amount will be paid in full not later than February 2, 2006. Judge Gonzalez further directs RGH to file an application for a final decree closing the case, in accordance with Section 1106(a)(7) of the Bankruptcy Code, within 15 days of substantial consummation of the plan. The application will include a narrative of the activities taken toward compliance with the Plan. Judge Gonzalez rules that unless parties demonstrate otherwise, "substantial consummation" is presumed to have occurred with the distribution of any deposit. If no deposit was required, "consummation" is presumed by the payment of the first distribution required by the plan. RGH submit a final report and the request for final decree closing the case by May 7, 2005, unless the Court orders otherwise. However, if RGH fails to comply with the order, Judge Gonzalez will hold a post-confirmation status conference on June 7, 2006, at 9:30 a.m. 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. 85; Bankruptcy Creditors' Service, Inc., 215/945- 7000) RIVIERA TOOL: Deloitte & Touche Raises Going Concern Doubt ---------------------------------------------------------- Deloitte & Touche LLP expressed substantial doubt about Riviera Tool Company's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Aug. 31, 2005 and 2004. The auditing firm pointed to the Company's losses from operations, significant current debt, and non-compliance with the terms of certain of its debt agreements. Fiscal Year 2005 Results For the year ended Aug. 31, 2005, Riviera Tool sustained a $498,282 loss from operations and a $2.5 million net loss. This loss resulted in a $13 million accumulated deficit at the end of fiscal year 2005. The Company reported net sales of $19.3 million for fiscal 2005, compared with net sales of $24.7 million for fiscal 2004, a decrease of 21.5%. This decrease was a result of the Company having a low contract backlog at the end of fiscal 2004. The Company's backlog as of August 31, 2005 was $13.7 million as compared to $2.5 million in 2004. "While we are pleased to post improved financial results in fiscal 2005, we look forward to even more improvements for the upcoming year," said Kenneth K. Rieth, president and chief executive officer of Riviera Tool. "We made significant improvements on contract margins during 2005, however, our volume of orders was not sufficient to absorb all fixed costs. As we begin 2006, we do have a strong backlog which should support continued improvements in our future financial performance." The Company's balance sheet showed $21,216,599 in total assets at Aug. 31, 2005, and liabilities of $17,234,851. Laurus Loan Facility In May 2005, Riviera Tool executed a new senior loan facility agreement with Laurus Master Fund LTD. Pursuant to this agreement, the Company received a Secured Convertible Term Loan in the aggregate principal amount of $3.2 million as well as a Revolving Credit Note with a maximum availability of $10 million. The Company used the proceeds from the Laurus loan to extinguish, in full, its indebtedness to Comerica Bank, its former secured lender, and The HillStreet Fund II, LP, its subordinated secured lender, as well as for general working capital purposes. About Riviera Tool Riviera Tool Co. -- http://www.rivieratool.com/-- designs, develops and manufactures large-scale, custom metal stamping die systems used in the high-speed production of sheet metal parts and assemblies for the global automotive industry. A majority of Riviera's sales are to Mercedes Benz, BMW, Nissan, DaimlerChrysler, General Motors Corp., Ford Motor Co. and their Tier One suppliers. SFBC INT'L: Gets Lenders' Nod to Repurchase $30MM of Common Stock ----------------------------------------------------------------- SFBC International, Inc. (NASDAQ: SFCC) has implemented plans to ensure its ability to conduct business with no material impact as to future revenue or net income. In addition, SFBC's lenders demonstrated their confidence in the company by amending the credit facility to allow SFBC to spend up to $30 million on repurchasing shares of its common stock on the open market. At this time, SFBC has agreed with Miami-Dade County to reduce the number of beds to 350 beds at its principal Miami facility. SFBC is confident that its ability to win new contracts and fulfill existing contracts will not be impacted by the current capacity of 350 beds at its principal Miami facility for the following reasons: -- The company was operating the principal Miami facility at approximately 50% of its practical capacity, which SFBC has consistently defined as approximately 60% of the total number of beds, or, on average, 200 occupied beds per day; -- The company expects to have available up to an additional 120 beds at its other Miami site that was previously operated as a Phase I clinic by Clinical Pharmacology, which was acquired by SFBC in August 2003. This facility has been kept operational and maintains a current license. Recently, it has been primarily used for recruiting and outpatient studies; and -- The company also has available capacity at its 120-bed Fort Myers facility to conduct trials during the week, given many of the trials at this facility are conducted on weekends. SFBC announced yesterday that the company's credit facility has been amended to allow SFBC to spend up to $30 million on repurchasing shares of its common stock on the open market. SFBC's Board of Directors has also amended its repurchase program, which previously was limited to one million shares of common stock, and approved the authorization to repurchase up to $30 million of its common stock. This includes approximately $3.1 million that SFBC previously spent to repurchase 100,000 shares, which was the maximum allowed under the previous covenants of the credit facility. Purchases will be in the open market, subject to market conditions, and block trades will be permitted - all in accordance with Rule 10b-18 under the Securities Exchange Act of 1934. Purchases will be transacted through one or more brokerage firms to be determined by the Company's management. "We believe this accretive repurchase program demonstrates management's confidence in the business," Arnold Hantman, chief executive officer of SFBC International, stated. "We believe that at current levels a stock repurchase program is an appropriate use of our cash and borrowing power under our credit facility. Given our advantage of knowing the underlying strength of our operations, the commitment and dedication of our employees, and the support we have received to date from our clients, we are confident in the long term opportunity for our business. By agreeing to amend the credit facility, the lead Arranger of the credit facility and the other lenders have also demonstrated their confidence in our business." SFBC is also fully cooperating with Miami-Dade County officials to address certain concerns about structural issues at the Miami headquarters and clinical facility. In response to the concerns raised by the County, SFBC installed structural metal supports where the walls had been removed as part of prior renovations and is continuing to operate at this facility. The company's professional engineers and architects believe the building is safe in all respects. SFBC International, Inc. -- http://www.sfbci.com/-- provides early and late stage clinical drug development services to branded pharmaceutical, biotechnology, generic drug and medical device companies around the world. SFBC has more than 30 offices located in North America, Europe (including Central and Eastern Europe), South America, Asia, and Australia. In early clinical development services, SFBC specializes primarily in the areas of Phase I and early Phase II clinical trials and bioanalytical laboratory services, including early clinical pharmacology. SFBC also provides late stage clinical development services globally that focus on Phase II through IV clinical trials. SFBC also offers a range of complementary services, including data management and biostatistics, clinical laboratory services, medical and scientific affairs, regulatory affairs and submissions, and clinical IT solutions. SFBC International, Inc.'s 2.25% Convertible Senior Notes due 2024 carry Standard & Poor's B- rating. SOLECTRON CORP: Expected Flat Revenue Spurs Fitch's Low-B Ratings ----------------------------------------------------------------- Fitch Ratings has affirmed Solectron Corporation's (Solectron) issuer default rating and senior unsecured debt at 'BB-'. The senior secured bank facility is affirmed at 'BB+', and the subordinated debt has been upgraded to 'B+' from 'B'. The Rating Outlook is Stable. Approximately $700 million of debt is affected by Fitch's action. The Outlook and ratings reflects Fitch's belief that Solectron's revenue will be flat for fiscal 2006 while operating margins are expected to moderately expand, driven primarily by successful cost restructuring activities. As a result, the company's credit protection measures are expected to improve slightly over the near term. Solectron has the opportunity to further strengthen credit metrics by meeting more than $200 million of debt maturities over the next six quarters with available cash. Fitch also expects the company will continue to generate free cash flow during fiscal 2006, potentially offsetting the current $250 million share repurchase program. Fitch notes, however, the comparatively weak quality of recent free cash flow, which has been driven primarily by lower inventories associated with declining revenues. While the ratings consider the demand volatility inherent to Solectron's less diversified end-market portfolio and exposure to large customer programs, Fitch believes that continued quarterly revenue declines for the company could result in negative rating actions. The company's revenues decreased more than 10% in fiscal 2005 due primarily to reductions and cancellations of certain customer programs in the consumer electronics market, as well as weaker-than-expected revenues in communications and computing and storage, which continue to represent more than 50% of total revenues. While revenue growth for most North American tier 1 EMS providers is expected to be subdued for 2006 due to a modestly positive overall demand environment and intense competition from Asian providers, Fitch is particularly concerned about the effect of any further meaningful revenue declines on Solectron's competitive position and profitability. Solectron's capacity utilization rates are expected to remain at less than optimal levels, but Fitch believes the company's operating margins should be flat to slightly higher for fiscal 2006, driven by aforementioned restructuring and efficiency initiatives. However, Fitch does not expect margins will meaningfully improve without a return to robust revenue growth, despite Solectron's efforts to expand into higher value-added service offerings, including design-related and post-manufacturing services. Fitch notes that Solectron's operating margins improved to 1.6% for fiscal 2005 from 1.2% in fiscal 2004 and negative 0.2% in fiscal 2003, which in conjunction with substantial debt reduction has resulted in significantly stronger credit protection measures. Total leverage adjusted for rents declined to 3 times for fiscal 2005 from 4.4x for fiscal 2005. At the same time, interest coverage increased to 6.4x in fiscal 2005 from only 2.5x in fiscal 2004. Liquidity was solid as of Aug. 26, 2005 and consisted of unrestricted cash of approximately $1.7 billion and an undrawn $500 million secured revolving facility expiring August 2007. Given the company's muted demand outlook, Fitch also expects Solectron will support liquidity with free cash flow that will likely exceed $200 million in fiscal 2006, driven in part by more efficient working capital management. The company reduced its cash conversion cycle to a Fitch-estimated 41 days for fiscal 2005 from 50 days for fiscal 2004 and 59 days in fiscal 2003. Modest share repurchase and acquisition activity are factored into the current ratings, but significant shareholder-friendly transactions or debt-financed acquisitions would likely result in negative rating actions. Total debt was $700 million as of Aug. 26, 2005 and consisted primarily of the following: -- $450 million 0.5% convertible senior notes due February 2034 (convertible any time by the holders if Solectron's stock price reaches $11.60 per share); -- $150 million 7.375% senior notes due March 2006; -- $63 million 7.97% subordinated notes due November 2006. The ratings continue to reflect Solectron's: * below industry-average but improving operating performance; * customer concentration to traditional end markets, which are characterized by more mature growth prospects and have resulted in greater historical operating performance volatility than more diversified competitors; * expectations that EBIT margins for the EMS industry will remain thin, despite ongoing efforts to grow higher margin service offerings; and * competition from faster growing original design manufacturers and/or the ODM model, particularly in consumer electronics and other nontraditional end-markets with more attractive growth rates. Support for the ratings centers on the company's: * conservative capital structure driven mostly by significant debt reduction over the past few years; * meaningfully improved credit protection measures; * solid liquidity position, even pro forma current share repurchase programs and near-term debt maturities; and * positive long-term trends supporting additional penetration of the design and manufacturing outsourcing model. SOLO FLOORING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Solo Flooring Inc. 12155 Magnolia Avenue, Suite 2A Riverside, California 92503 Bankruptcy Case No.: 05-50121 Type of Business: The Debtor installs commercial flooring. Chapter 11 Petition Date: December 8, 2005 Court: Central District of California (Riverside) Judge: Meredith A. Jury Debtor's Counsel: Craig G. Margulies, Esq. Law Office of Craig G. Margulies, APLC 6345 Balboa Boulevard, Suite I-300 Encino, California 91316 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Allied Interstate Inc. Business Debt $292,625 31229 Cedar Valley Drive Thousand Oaks, CA 1362 Internal Revenue Service 941 Withholding $235,000 Insolvency Group 1 Taxes 290 North D Street San Bernardino, CA 92401-1734 LBI/Boyd Business Debt $62,965 2275 Auto Centre Drive Glendora, CA 91740 Glaziers Local 1399 Business Debt $13,021 Health & Welfare Rancho Sierra Industrial Park Business Debt $11,462 Greenbaum Co., Inc. Business Debt $7,584 N.B. Flooring Business Debt $6,349 Floortech Industries Business Debt $4,499 Amtico Business Debt $4,472 Wade Business Debt $2,515 Arco Business Debt $1,892 Atlas Carpet Business Debt $1,735 Employment Development Dept. Business Debt $1,661 Fox Bookkeeping & Consulting Business Debt $1,613 California Concrete Cleaning Business Debt $1,250 McKague & Tong Business Debt $1,095 Nextel Communications Business Debt $935 Matworks Business Debt $800 Pacific Bell Business Debt $786 Wood Floorings Distributors Business Debt $715 SONICBLUE INC: Wants to Retain Perisho Tombor as Auditors --------------------------------------------------------- SONICblue Incorporated, its debtor-affiliates and the Official Committee of the Unsecured Creditors appointed in the Debtors' chapter 11 cases, ask the U.S. Bankruptcy Court for the Northern District of California for permission to retain Perisho, Tombor, Loomis & Ramirez as their auditors. Furthermore, the parties also want the Firm to be excused from having to comply with the U.S. Trustee's regulations requiring time records and project billing. Perisho Tombor will: a) perform audit procedures on individual 401(k) accounts in accordance with U.S. Department of Labor requirements, and of the Plan's financial statements as a whole; b) prepare and file IRS Form 5500; and c) provide assistance on other matters as the Debtors or the Creditors Committee may request. Kay Filler, a Perisho Tombor partner, discloses the firm's professionals hourly rates: Professional Hourly Rate ------------ ----------- Kay Filler $295 Renee Hazel $260 Juvy Zappel $180 John Sung $180 Gillian Athayde $160 The firm will charge the Debtors $16,000 for approximately 80 hours it will take to properlyh audit the 401(k) plan. Mrs. Filler assures the Court that Perisho Tombor does not represent or hold any interest adverse to the Debtors or to the estates. Headquartered in Santa Clara, California, SONICblue Incorporated is involved in the converging Internet, digital media, entertainment and consumer electronics markets. The Company, together with three of its wholly owned subsidiaries, Diamond Multimedia Systems, Inc., ReplayTV, Inc., and Sensory Science Corporation, filed for chapter 11 protection on Mar. 21, 2003 (Bankr. N.D. Calif. Case Nos. 03-51775 to 03-51778). Craig A. Barbarosh, Esq., at the LAw Offices of Pillsbury Winthrop, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets totaling $342,871,000 and debts totaling $335,473,000. SSA GLOBAL: Earns $1 Million of Net Income in First Quarter ----------------------------------------------------------- SSA GlobalTM (NASDAQ:SSAG) reported financial results for the first quarter ended Oct. 31, 2005. "We are pleased to report another strong performance in fiscal 2006 Q1, our 14th consecutive quarter of profitability with continuing strong license revenue," said Mike Greenough, chairman, president and CEO of SSA Global. "We believe our product strategy and laser focus on solutions are being very well received by our customers." First quarter total revenue increased 7% to $177.5 million compared to $166.5 million in the prior year. License revenue for the quarter was $52.0 million, an increase of 26% from the first quarter last year. On an organic basis, license revenue grew 21% for the quarter and represented 29% of total revenue compared to 25% last year. The acquisition of Epiphany, which closed on Sept. 29, 2005, contributed $6.4 million to total revenue and $2.4 million to license revenue in the first quarter. During the first quarter, North America contributed 49% of total revenue; Europe, Middle East and Africa (EMEA) contributed 35%; and Asia-Pacific/Japan (APJ) and Latin America contributed the remaining 16%. For the quarter ended October 31, 2005, 982 contracts were signed, including 58 new customers that represented 8% of the total license value associated with software contracts signed in the quarter. On an adjusted basis, net income for the quarter grew 19% to $17.8 million or $0.24 per diluted share up from $15.0 million or $0.21 per diluted share last year. For the quarter, adjusted operating income grew 20% to $30.9 million representing 17% of revenue which was up from 15% of revenue last year. For the first quarter, the Company reported GAAP operating income of $10.3 million compared to $13.7 million last year and GAAP net income of $1.0 million compared to $6.4 million last year. Cash and cash equivalents as of Oct. 31, 2005 totaled $90.0 million and net cash used in operations for the quarter totaled $8.5 million. Days Sales Outstanding were 75 and down from 78 days at the end of the first quarter of 2005. SSA Global Technologies Inc. -- http://www.ssaglobal.com/-- is a leading provider of extended ERP solutions for manufacturing, distribution, retail, services and public organizations worldwide. In addition to core ERP applications, SSA Global offers a full range of integrated extension solutions including corporate performance management, customer relationship management, product lifecycle management, supply chain management and supplier relationship management. Headquartered in Chicago, SSA Global has 63 locations worldwide and its product offerings are used by approximately 13,000 active customers in over 90 countries. * * * As reported in the Troubled Company Reporter on Aug. 1, 2005, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Chicago, Illinois-based SSA Global Technologies Inc. At the same time, Standard & Poor's assigned its 'BB-' rating, with a recovery rating of '3', to SSA Global's proposed $225 million senior secured bank facility, which will consist of a $25 million revolving credit facility (due 2010) and a $200 million term loan (due 2011). The bank loan rating, which is the same as the corporate credit rating, along with the recovery rating, reflect our expectation of meaningful (50%-80%) recovery of principal by creditors in the event of a payment default or bankruptcy. The proceeds from this facility will be used to refinance existing debt, and to add cash to the balance sheet. The outlook is negative. STANADYNE CORP: Credit Concerns Earns S&P's Negative Outlook ------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on engine components manufacturer Stanadyne Corp. to negative from stable. The ratings on the company, including the 'B+' corporate credit rating, were affirmed. "The outlook revision reflects Standard & Poor's concerns about the company's ability to achieve credit protection measures consistent with the rating, given year-to-date financial performance and current fundamental challenges," said Standard & Poor's credit analyst Nancy C. Messer. The company's EBITDA for the 12 months ended Sept. 30, 2005, totaled $56.2 million, falling below expectations because of relatively weak aftermarket services sales, price concessions, and cost side pressures. As a result, lease-adjusted total debt to EBITDA remains high at 5.2x as of Sept. 30, 2005, compared with Standard & Poor's expectation that the company's leverage would trend toward 4.5x during the year. In addition, after three years of consistent free cash flow generation, Stanadyne's 2005 year-to-date cash flow generation is negative. Privately held Stanadyne Corp., controlled by Kohlberg & Co. LLC, is an independent manufacturer of diesel fuel-injection equipment and precision engine components for diesel and gasoline engines supplied to original equipment manufacturers in the automotive, agricultural, construction, industrial, and marine industries. In addition, Stanadyne sells replacement parts and other products to the aftermarket. The ratings on the company reflect its highly leveraged financial risk profile and weak business risk profile. Stanadyne, based in Windsor, Connecticut, is wholly owned by Stanadyne Automotive Holding Corp., which in turn is wholly owned by Stanadyne Holdings Inc. At Sept. 30, 2005, Stanadyne Corp. had $292 million of total balance-sheet debt, including $64 million of discount notes issued by Stanadyne Holdings. Stanadyne Corp., the only asset held by the holding companies, does not guarantee the discount notes. Stanadyne Corp. faces intense competition from large global companies with greater resources and participates in cyclical end markets. Although the company's product line is narrow, its operations are somewhat diversified by customer and by end market. Its operations are also geographically diverse. This diversity, combined with a fair amount of relatively stable aftermarket sales, dampens the company's earnings and cash flow volatility. The company's internal expansion prospects are supported by long-term growth in the worldwide market for diesel engines and by the ongoing development of gasoline engines that require more hydraulic valve lifters. STELCO INC: Court Extends CCAA Stay Period Until Jan. 31 -------------------------------------------------------- The Superior Court of Justice (Ontario) extended the stay period under Stelco Inc.'s (TSX:STE) Court-supervised restructuring from Dec. 12, 2005, until Jan. 31, 2006. In its 43rd Report, Ernst & Young, the Court-appointed Monitor expressed the view that the extension would be in the interests of all stakeholders. This period would allow Stelco to take the steps necessary to seek Court approval of the restructuring plan approved by affected creditors on Dec. 9, 2005. "This extension provides us with the time to seek the Court's approval of the plan that was accepted by affected creditors on Friday," Courtney Pratt, Stelco President and Chief Executive Officer, said. "If that approval is granted, we can then begin the process of emerging from Court protection." The Court's sanction hearing to consider the plan that was approved by affected creditors will occur on Jan. 17, 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. STELCO INC: Ontario Court Approves Equity Sale to Mittal Canada --------------------------------------------------------------- The Superior Court of Justice (Ontario) approved Stelco Inc.'s sale of 100% of the shares of Norambar Inc., Stelfil Lt,e. and Stelwire Ltd. to Mittal Canada Inc. On Nov. 2, 2005, Stelco and Mittal Canada Inc. disclosed that they had signed a Letter of Intent in this matter. The sale process reflects Stelco's decision, as outlined in the four-point strategy announced in July 2004, to focus on its integrated steel business. The purchase price was not disclosed. As in past asset sale transactions during its restructuring process, Stelco will ask the Court to seal such information until the sale has closed or until such other time as may be appropriate. The company anticipates that, if all conditions are satisfied as planned, the transaction will close 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 Jan. 31, 2006. TEE JAYS: Court Confirms Liquidating Chapter 11 Plan ---------------------------------------------------- The Honorable Jack Caddell of the U.S. Bankruptcy Court for the Northern District of Alabama confirmed Tee Jays Manufacturing Co., Inc.'s Liquidating Chapter 11 Plan filed on July 8, 2005. Judge Caddell determined that the Plan satisfies the 13 standards for confirmation required under Section 1129(a) of the Bankruptcy Code. The Liquidating Plan provides for the appointment of a Disbursing Agent to liquidate the entire Debtor's assets following the Plan's Effective Date. Treatment of Claims Under the Plan, priority claims will be fully paid in cash on the Effective Date or 15 days after a claim becomes allowed. Grupo M's $6,598,797 claim is secured by liens on all of the Debtor's property except two tracts of real estate. In April, the Court granted Grupo's request to lift the automatic stay allowing it to repossess the Debtor's equipment, inventory and accounts. As for its lien on some of the Debtor's real estate, Grupo has not yet foreclosed on that property. Compass Bank's $892,000 claim is secured by a lien on Tee Jay's real property located on Parkway Drive in Florence, Alabama. Compass has not yet foreclosed on the property. General unsecured creditors, owed $3,600,000 in the aggregate, will share pro rata in an amount determined by the Disbursing Agent. Equity holders will receive distributions on an Initial Trust Distribution Date which will be set by the Disbursing Agent. * * * Pursuant to the terms of the Plan, SI Group, Inc., will be established. The new company will purchase equipment used by the Debtor's creative design and demo department. After the Debtor's liquidation, Grupo M intends to transfer its equity interest in the Debtor to the new company for $1. Headquartered in Florence, Alabama, Tee Jays Manufacturing Co., Inc., is a textile manufacturing company. The Company filed for chapter 11 protection on February 4, 2005 (Bankr. N.D. Ala. Case No. 05-80527). Stuart M. Maples, Esq., at Johnston Moore Maples & Thompson represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $50 million and $100 million. TODD MCFARLANE: Exclusive Plan-Filing & Solicitation Periods End ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona denied Todd McFarlane Productions, Inc.'s request for an extension of its exclusive periods under 11 U.S.C. Sec. 1121 to file and solicit acceptances of a chapter 11 plan after Tony Twist and Neil Gaiman objected. Asking for extensions into early-2006, the Debtor told the Court that for the past six months its professionals have been engaged in due diligence of over 35 insurance policies. Also, the Debtor filed consolidated lawsuits against several insurance carriers in the District Court of Missouri, and asked for the transfer of those cases to the Bankruptcy Court in Arizona. The Debtor said it needs the extension to resolve: * the Gaiman litigation, * the insurance coverage litigation, and * the Twist litigation. If Todd McFarlane can't resolve the three cases, it hopes to at least gather enough information to formulate a viable plan. The Twist Litigation In July 2004, Tony Twist, a former professional hockey player, obtained a $15 million judgment on a right-of-publicity claim against Todd McFarlane. Mr. Twist complained that the Debtor had unlawfully used his identity as "Mr. Twist" when it used the name on a Spawn comic book series and in a Home Box Office animated series. Mr. Twist sought to enforce the judgment by demanding immediate turnover of the Debtor's property. In December 2004, the Debtor's checking account at Bank of America and Wells Fargo Bank were debited to a suspense account pending further order from the Superior Court of Arizona. The event led to the Debtor's bankruptcy filing on Dec. 17, 2004. The Debtor expects to resolve the Twist appeal by December. The Gaiman Litigation Neil Gaiman, a freelance artist, was awarded $45,000 in damages from a lawsuit he filed against the Debtor for breach of contract, copyrights co-ownership and violation of the right of publicity. The Wisconsin District Court ordered an accounting of the profits generated by Mr. Gaiman's intellectual property and the liquidation of his claim. The Court is expected to enter a final judgment after completion of the accounting. The lawsuit is currently stayed pursuant to Section 362(a) of the bankruptcy code. Insurance Claims The Debtor is currently evaluating whether to consolidate the indemnification claims filed against Hanover Insurance Company with other similar lawsuits that may be commenced as part of the Debtor's efforts to recover estate assets for the benefit of all its creditors. Hanover Insurance had repudiated its duty to defend the first six and one half years of the Twist Lawsuit and claimed that the insurance policy it sold to the Debtor does not cover any loss resulting from the Twist litigation. The Debtors have asserted counterclaims against Hanover Insurance for breach of contract, promissory estoppel and bad faith. The Debtor has also sought for a Declaratory Judgment against American International Insurance Company in connection with claims arising from the Gaiman litigation. The Debtor has initiated an investigation regarding its insurance coverage to identify potential sources of funding for its plan of reorganization. Traveler's Property & Casualty Corp and General Star Indemnity Company and Citizens Insurance Co. of America are subject to this investigation. Headquartered in Tempe, Arizona, Todd McFarlane Productions, Inc. -- http://www.spawn.com/-- publishes comic books including Spawn, Hellspawn, and Sam and Twitch. The Company filed for chapter 11 protection on Dec. 17, 2004 (Bankr. D. Ariz. Case No. 04-21755). Kelly Singer, Esq., at Squire Sanders & Dempsey, LLP, represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed more than $10 million in assets and more than $50 million in debts. TORCH OFFSHORE: Court Approves Marathon EG Settlement Agreement --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Louisiana approved Torch Offshore, Inc., and its debtor-affiliates' settlement agreement with Marathon EG Production Limited. Both parties entered into a contract agreement on April 20, 2004, pursuant to which the Debtors agreed to construct offshore pipeline for Marathon in Equatorial Guinea. Marathon owes an undisputed amount of $4,995,469 to the Debtors' services performed under the construction contract. Pursuant to the primary terms and conditions of the settlement agreement, Marathon will: 1) pay the sum of $1,760,545 as initial payment to the Debtors; 2) retain the aggregate amount of $3,324,924, which is equal to: i) $2,949,924 in respect of subcontractor lien claims, plus ii) $250,000 for warranty claims, plus iii) $35,000 in exchange for a release of the Debtors' obligations; 3) retain the subcontractor claims retention amount until the first to occur of any of the following: i) the Debtors settle any subcontractor claim and provides lien waivers upon payment; ii) the time has expired for any subcontractor to exercise rights, if any, against Marathon or the contract, including but not limited to, the timely filing of valid liens against the contract; and iii) the Court enters a final order authorizing: a) Marathon to offset the retention amount against any alleged liens or b) any other dispositions of such funds; 4) retain the warranty retention amount in accordance with the terms of the construction contract; and 5) enter into reciprocal releases with the Debtors for any and all claims related to the construction contract. Headquartered in Gretna, Louisiana, Torch Offshore, Inc., provides integrated pipeline installation, sub-sea construction and support services to the offshore oil and gas industry, primarily in the Gulf of Mexico. The Company and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. La. Case No. 05-10137) on Jan. 7, 2005. When the Debtors filed for protection from their creditors, they listed $201,692,648 in total assets and $145,355,898 in total debts. TRANS-INDUSTRIES: Receives Nasdaq Delisting Notice -------------------------------------------------- Trans-Industries, Inc. (Nasdaq: TRNI) reported the receipt of a Nasdaq Staff Determination letter from The Nasdaq Stock Market indicating the Company's securities will be delisted from The Nasdaq Capital Market at the opening of business on Dec. 15, 2005. The Company is not in compliance with Nasdaq's requirements for continued listing because the Company's shareholders equity amount is below the minimum requirement of $2.5 million and accordingly does not comply with Marketplace Rule 4310(c)(2)(B). The Company was unable to submit to Nasdaq a definitive plan evidencing its ability to achieve near term compliance with the continued listing requirements or sustain such compliance over an extended period of time. The Company has decided not to appeal Nasdaq's determination. Accordingly, the Company's securities will be delisted as provided in the Nasdaq Staff Determination letter. The Company intends to investigate the possibility of facilitating the trading of its securities in the Over the Counter Market through the Pink Sheets. Trans-Industries, Inc., provides lighting systems and related components to the mass transit market as well as a supplier of information hardware and software solutions on Intelligent Transportation Systems and mass transit projects. ITS utilizes integrated networks of electronic sensors, signs and software to monitor road conditions, communicate information to drivers and help transportation authorities better manage traffic flow across their existing infrastructures. At Dec. 31, 2004, Trans-Industries' balance sheet showed $15.7 million in assets and $13.3 million in liabilities. Net sales in 2004 were $27.7 million, down 17% from net sales a year earlier. The Company employs approximately 160 people, supplemented as necessary by temporary workers. * * * As reported in the Troubled Company Reporter on Apr. 27, 2005, Plante & Moran, PLLCP raised substantial doubt about Trans- Industries, Inc.'s ability to continue as a going concern after it audited the Company's Form 10-K for the fiscal year ended December 31, 2004. The audit opinion cited the Company's recurring losses from operations, cash flow difficulties, and the fact the Company is in default of the terms of its credit facility. UAL CORP: Creditors Committee Taps Pearl Meyer as Advisers ---------------------------------------------------------- As previously reported, the Official Committee of Unsecured Creditors in UAL Corporation and its debtor-affiliates' chapter 11 proceedings retained KPMG International as its accountants and restructuring advisors to provide compensation consulting services. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP, in Chicago, Illinois, informs the Court that majority of KPMG's practice group professionals will be terminated this December pursuant to a settlement agreement between KPMG and the Internal Revenue Service, wherein KPMG agreed to disband its human resources consulting practice by February 2006. According to Mr. Jacobson, KPMG and the IRS agreed to the disbandment to resolve issues relating to questionable and allegedly abusive tax shelters KPMG sold to numerous wealthy individuals and other entities. Mr. Jacobson notes that the Committee is currently in the midst of extensive, complicated, and detailed discussions and negotiations with the Debtors regarding the appropriateness of their proposed management and director equity incentive programs, which will comprise 15% of total stock in the emerging company. As part of these ongoing discussions and negotiations, the Committee requires talented and capable professionals to provide compensation consulting services on a stable basis. For this reason, the Committee sought and obtained the Court's authority to retain Pearl Meyer & Partners as compensation consultants in the Debtors' Chapter 11 cases, effective November 15, 2005. Pearl Meyer has been providing KPMG with research data for use in its assessment of the Debtors' proposed management and director equity incentive programs. Given Pearl Meyer's familiarity with the situation, Mr. Jacobson asserts that the firm is well positioned to provide the Committee with necessary compensation consulting services on an ongoing basis. As compensation consultants, Pearl Meyer will advise the Committee with respect to the appropriateness of the Debtors' proposed management and director equity incentive programs and potential alternatives. Pearl Meyer will be paid based on these hourly rates: Managing Director $578 - $919 Vice President $436 - $525 Consultant $236 - $394 Associate $289 - $315 Analyst $158 - $236 Pearl Meyer will also be reimbursed for actual and necessary expenses incurred. "Pearl Meyer previously assisted KPMG to provide research for KPMG's use in connection with advising the Committee and assessing the Debtors' proposed management and director equity incentive programs," James V. Hughes, Pearl Meyer's senior managing director, tells Judge Wedoff. Mr. Hughes assures the Court that Pearl Meyer in no way holds any conflicting or adverse interests with respect to the Debtors' Chapter 11 cases. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., 215/945-7000) US AIRWAYS: Registers 7% Senior Convertible Notes for Resale ------------------------------------------------------------ US Airways Group, Inc. (NYSE: LCC) filed with the Securities and Exchange Commission a registration statement on Form S-3 covering the resale of $143,750,000 of its 7% Senior Convertible Notes due 2020 and the shares of common stock issuable upon conversion of the notes. The notes were issued through a private placement in September 2005 to qualified institutional buyers pursuant to rule 144A of the Securities Act of 1933, as amended, calling for the subsequent registration of the notes and the underlying common stock. Although a registration statement relating to these securities has been filed with the SEC, it has not yet become effective. The notes and the underlying common stock may not be offered, nor may offers to buy these securities be accepted, prior to the time the registration statement becomes effective except in a transaction meeting the requirements of Rule 144A. Once the registration statement is declared effective, the notes and common stock issuable upon conversion of the notes may be offered for resale by the holders listed as selling securityholders in the registration statement. US Airways Group, Inc. will not receive any proceeds from the resale by any selling securityholders of the notes or the shares of common stock issuable upon conversion of the notes. Holders of the notes who wish to be listed as selling securityholders in the registration statement are required to submit to US Airways Group, Inc., no later than Dec. 29, 2005, the selling securityholders' questionnaire provided in connection with the private placement. Copies of the selling securityholders' questionnaire may be obtained by contacting US Airways Group, Inc. Investor Relations at (480) 693-1227. The completed questionnaire must be submitted to: US Airways Group, Inc. Attn: Patricia A. Penwell 111 West Rio Salado Parkway Tempe, AZ 85281 Fax: (480) 693-5122 Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. USG CORPORATION: Discloses Senior Management Changes ---------------------------------------------------- Building materials leader USG Corporation (NYSE: USG) reported several senior-level management changes in order to continue its record-setting operating performance, build new platforms for growth and continue working toward a fair resolution of its Chapter 11 case. The changes, which are effective Jan. 1, 2006, recognize four senior USG executives for their outstanding achievements. The executives and their new positions are: -- James S. Metcalf, President and Chief Operating Officer, USG Corporation; -- Edward M. Bosowski, Executive Vice President and Chief Strategy Officer, USG Corporation and President, USG International; -- Dominic A. Dannessa, Vice President, USG Corporation and Executive Vice President, Manufacturing, Building Systems; and -- Fareed A. Khan, Vice President, USG Corporation and Executive Vice President, Sales and Marketing, Building Systems. "I am pleased to announce these promotions, which acknowledge the many valuable contributions that Jim, Ed, Dom and Fareed have made to USG's success over the years," said William C. Foote, USG Corporation Chairman and CEO. "Their talents and new roles will help us continue the terrific progress we have made in our businesses." Mr. Metcalf will oversee USG's North American operating subsidiaries, including United States Gypsum Company, USG Interiors, Inc., CGC Inc., USG Mexico and L&W Supply Corporation in the manufacture, sales, marketing and distribution of gypsum, ceilings and related products. Mr. Metcalf formerly served as Executive Vice President, USG Corporation and President, Building Systems. Mr. Bosowski will direct USG's overall growth plan and strategy, international operations and the strategic technology, supply chain and growth functions. Mr. Bosowski previously served as Executive Vice President, Marketing and Corporate Strategy, USG Corporation and President, USG International. Mr. Dannessa will oversee United States Gypsum Company and USG Interiors, Inc. manufacturing operations, as well as manufacturing administration, synthetic gypsum strategy and paper strategy. Mr. Dannessa formerly served as Senior Vice President, Manufacturing, Building Systems. Mr. Khan will have responsibility for sales, national accounts, marketing, customer relationship management and specialty products. Mr. Khan previously served as Senior Vice President, Supply Chain Management, Customer Information Management and Information Technology, Building Systems. These promotions follow the earlier appointment of Brendan J. Deely as Vice President, USG Corporation and President and Chief Operating Officer of L&W Supply Corporation, USG's building materials distribution subsidiary. Mr. Deely previously served as Senior Vice President and Chief Operating Officer, L&W Supply Corporation. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., at Jones Day represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. VALENTINE PAPER: Completes 363 Asset Sale to Meriturn & Dunn Paper ------------------------------------------------------------------ Meriturn Partners, LLC and Dunn Paper, Inc., disclosed their acquisition of the assets of Valentine Paper, Inc. in Lockport, Louisiana. Valentine Paper had been operating in bankruptcy since filing for Chapter 11 protection on June 5, 2005. Meriturn purchased Valentine's senior secured debt from LaSalle Bank on November 10th in order to provide additional debtor-in- possession financing to the company, which enabled Valentine to continue operating until a sale could take place to Meriturn under its 'stalking horse' bid in the 363 auction process. Valentine Paper is a recognized leader in Machine Finished and latex-saturated papers, and one of the only specialty paper mills in the U.S. able to produce such products as wallpaper, Diazo (architectural), masking, and thermal base papers. The acquisition of Valentine Paper will specifically complement Dunn Paper's Machine Glazed and online coating and waxing expertise, which makes Dunn a market leader in flexible packaging, wet- strength, grease and mold-resistant, and metalized-base papers. The combined Dunn and Valentine mills will have the capacity to produce over 140,000 tons of specialty paper serving a diverse customer base. Located in Port Huron, Michigan, Dunn Paper was a troubled mill acquired by Meriturn in October 2003, and since then has turned around its operations and built a strong platform for innovation, customer service, and reliability. The combination now extends this platform to Valentine. "We are especially excited about the powerful synergies this alliance will create for our customers," DunnValentine's CEO Brent Earnshaw said. "DunnValentine will have the ability to service a broad customer base, with a greater suite of technologies and specialized papers. We look forward to working with the Valentine team and continuing to build a world-class specialty paper company." Valentine's General Manager Thomas Bingham commented: "I want to personally thank our customers, suppliers, and employees for their valuable support through this difficult bankruptcy; only through the hard work of our employees did we manage to fulfill every order and retain our valuable customers. Now with the support of Meriturn Partners and Dunn Paper, Valentine will finally be in a position to leverage the significant technologies for which this mill has become known, capitalize immediately on numerous new product development initiatives, and deliver greater value to our customers. I am very excited about the future of this partnership." Meriturn's Partner Mark W. Kehaya commented: "The combination of Valentine with Dunn significantly expands the value proposition for our customers. With our combined and expanded sales force and specialty paper-making expertise, DunnValentine's customers can expect tremendous service, product quality, and creativity to solve their unique MG and MF paper needs. As we look to build a world-class specialty paper company, we believe the addition of the Valentine mill is a tremendous step forward. " Sanabe and Associates acted as financial advisor to Meriturn and Dunn in this transaction. About Dunn Paper, Inc. Dunn Paper -- http://www.dunnpaper.com/-- is a premier manufacturer of specialty and coated papers, serving flexible packaging companies, bag manufacturers, labelers, foodservice, and printing companies worldwide. The company is a leading North American producer of specialty coated-one-side and uncoated MG papers. The company operates 4 MG machines with online coating and waxing abilities in Port Huron, Michigan, and employs over 190 people. Dunn Paper was acquired by Meriturn Partners in October 2003, and has produced paper continuously since its founding in 1924. About Meriturn Partners, LLC Meriturn Partners -- http://www.meriturn.com/-- invests in corporate restructuring and turnaround opportunities where its capital, financial restructuring, and operational initiatives can return a company to a balance of revenue growth and profitability. The company targets control investments in companies operating in basic industries (manufacturing, services, and distribution) with $20-$250 million of revenue and based in the U.S. and Canada. Meriturn currently owns 5 portfolio companies, with combined annual revenue of over $275 million and 950 employees. Meriturn was founded in 2001 and has offices in San Francisco, Calif. and Raleigh, N.C. About Valentine Paper, Inc. Headquartered in Lockport, Louisiana, Valentine Paper, Inc. -- http://www.valentinepaper.com/-- produces technical and specialty papers. The Company filed for chapter 11 protection on June 6, 2005 (Bankr. E.D. La. Case No. 05-14659). David F. Waguespack, Esq., at Lemle & Kelleher, L.L.P., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed assets from $1 million to $10 million and debts from $10 million to $50 million. VALOR COMMS: Merger Plans Prompts S&P to Place BB- Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Valor Communications Group Inc., including the 'BB-' corporate credit rating, on CreditWatch with positive implications after the announcement that Valor will merge with the newly formed wireline company created by the spin-off of ALLTEL Corp.'s wireline business. Valor, an Irving, Texas-based rural local exchange provider, has approximately $1.2 billion of outstanding debt. "The CreditWatch placement reflects our expectation that the business and financial profiles for the new company will be stronger than Valor's current profiles," said Standard & Poor's credit analyst Susan Madison. The new company will be significantly larger and more geographically diverse, serving approximately 3.4 million access lines across 16 states. As a result, opportunities for cost savings due to increased operating efficiencies and the elimination of duplicate overhead may result in improved margins. The enhanced geographic diversity and predominantly rural nature of the new company should also provide some protection from competitive pressure. Valor's debtholders will also benefit from the lower overall leverage of the proposed company. Pro forma for the proposed transaction, debt to EBITDA for the merged entity will be in the low 3x area, a material improvement from Valor's current 4.3x leverage. The company has also identified a number of merger synergies, which should result in substantial cost savings. Given S&P's expectation that the new company's dividend policy will be fairly aggressive, coupled with the competitive challenges currently facing the wireline sector, any potential upgrade is likely to remain in the speculative-grade category. Valor and ALLTEL expect to complete the proposed spin-off and merger transactions over the next 12 months. The merger is conditional upon numerous state and federal regulatory approvals, approval by Valor shareholders, and receipt of an IRS ruling approving the tax-free treatment of the transactions. Standard & Poor's review will focus on the merged company's: * ability to integrate operations and realize synergies, * the impact of wireless substitution and cable competition on the company's revenue base, * the ability of the combined company to effectively market new products and services, and leverage and dividend policies. VINCENT SMITH: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtors: Vincent J. & Sheila M. Smith 176 Maple Grove Road Mohnton, Pennsylvania 19540 Bankruptcy Case No.: 05-29261 Chapter 11 Petition Date: December 2, 2005 Court: Eastern District of Pennsylvania (Reading) Judge: Thomas M. Twardowski Debtors' Counsel: Dexter K. Case, Esq. Case, Digiamberardino & Lutz, P.C. 845 North Park Road, Suite 101 Wyomissing, Pennslyvania 19610 Tel: (610) 372-9900 Fax: (610) 372-5469 Estimated Assets: $1 Million to $10 Million Estimated Debts: More than $100 Million Debtors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ NJ Dept. Banking & Finance Business guaranty $1,229,465 c/o OSI Collection Services, Inc. P.O. Box 3030 Edison, NJ 08818-3030 Samara Bail Bonds Business guaranty $310,000 799 Main Street Paterson, NJ 07503 Triangle Refrigeration Company Personal guarantee $257,415 3200 Oregon Pike re City-Mart Stores Leola, PA 17540 LLC Better Deal Bail Bonds Business guaranty $150,000 Wilentz Goldman & Spitzer $65,000 PA Department of Revenue Delinquent taxes $61,238 Jones Day Law Offices Legal services $36,670 Internal Revenue Service Delinquent taxes $33,891 Tammac Financial Corporation $32,737 Stevens & Lee Legal services $30,000 Ciatto Construction Co. $23,457 Fleet Bank/Bank of America $15,157 Ciardi Maschmeyer & Karalis PC Legal services $15,000 Suburban Energy Services $11,752 Wachovia Visa Credit card $11,390 Goya Foods Personal guarantee $8,140 re City-Stores LLC GMAC Financing $7,835 AT&T Universal Card Credit card $7,461 Moscarino & Connolly LLP Legal services $5,000 Tom Masano, Inc. Charge $4,194 VISTEON CORP: Wants to Replace $300 Million Credit Facility ----------------------------------------------------------- Visteon Corporation (NYSE: VC) intends to replace its existing $300 million short-term secured revolving credit facility, which expires Dec. 15, 2005, with a new 18-month secured term-loan. The new transaction is expected to close by mid-January 2006 and will be for up to $300 million. Visteon has appointed JPMorgan Securities and Citicorp Inc. as lead arrangers. Visteon also intends to seek amendments to the financial and other covenants contained in its existing $775 million multi-year revolving credit facility and its $250 million delayed draw term loan, both of which expire in June 2007, to provide flexibility as the company implements its restructuring plans. Visteon Corporation is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. With corporate offices in Van Buren Township, Michigan; Shanghai, China; and Kerpen, Germany; the company has more than 170 facilities in 24 countries and employs approximately 50,000 people. * * * Fitch Ratings has affirmed and removed from Rating Watch Positive these ratings for Visteon Corporation: -- Issuer default rating 'B'; -- Senior secured 'BB'; Recovery 'RR-1'; -- Senior unsecured 'B', Recovery 'RR-4'. The Rating Outlook for Visteon is Negative. W.R. GRACE: Says Chapter 11 Plan Hinges on Asbestos Estimation -------------------------------------------------------------- W.R. Grace & Co., and its debtor-affiliates' chapter 11 cases present a complex challenge for all parties, according to James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., in Wilmington, Delaware. From the very beginning, the Debtors aggressively attempted to map out a strategy for claims adjudication, common issue litigation and confirmation. Mr. O'Neill relates that while the various constituencies have been at odds for years on that strategy, the Court has now placed the parties on a clear path toward estimation and, ultimately, confirmation. As previously reported, the Court has approved case management orders for the estimation of both asbestos personal injury and property damage claims, and a PI questionnaire. The parties have also complied with the requirements of the PD CMO and are nearly at the stage of the Phase I hearing for PD claims. In addition, the Debtors have eliminated nearly 75% of the PD claims through claims objections, and all constituents have a renewed commitment to settlement discussions to reach a consensual plan of reorganization. The Debtors state that they can only proceed to plan confirmation after the estimation hearings are concluded and the aggregate amount of asbestos claims is determined. Essentially, the parties are well down the estimation road that the Court established, Mr. O'Neill attests. The Debtors ask Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to further extend: (a) their exclusive right to file a Plan through and including the 90th day after a final order is issued in the estimation hearings; and (b) their exclusive right to solicit acceptances of the Plan through and including an additional 60 days thereafter. Terminating exclusivity in the Debtors' cases, Mr. O'Neill says, would almost certainly result in, among other things, a tightening of the Debtors' ability to obtain credit and other accommodations, loss of customer confidence, and lack of competitive edge. It may also damage employee relations and the Debtors' ability to recruit and keep young talents. The Court will convene a hearing on the Debtors' request on December 19, 2005, at 12:00 p.m. Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. (W.R. Grace Bankruptcy News, Issue No. 99; Bankruptcy Creditors' Service, Inc., 215/945-7000) W.R. GRACE: Ninth Circuit Affirms Order Awarding $54.5M to EPA -------------------------------------------------------------- The Ninth Circuit of the United States Court of Appeals affirmed, on December 1, 2005, the Montana US District Court's order granting the US Environmental Protection Agency summary judgment on the asbestos removal issues in the former WR Grace & Company sites in Libby, Montana. In Case No. 03-35924, the Court also affirmed the district court's order awarding the EPA US$54,527,081.11 in costs and a declaratory judgment on Grace's liability for future costs. Circuit Judges Betty B. Fletcher, M. Margaret McKeown, and Carlos T. Bea reviewed the case. In 1999, the EPA was called to Libby to address health reports due to asbestos contamination. The Court ruled the EPA did not exceed its authority to conduct cleanup activities under the Comprehensive Environmental Response, Compensation, and Liability Act. WR Grace & Co, Kootenai Development Corp, and WR Grace & Co- Conn, collectively known as Grace, did not dispute that they were financially tied under CERCLA to help with the cleanup from their former mining and processing operations. Grace contested the EPA's cleanup as a removal action rather than a remedial action under CERCLA. Grace contended that even if the action was a removal, the District Court erred in exempting the action from CERCLA's general 12-month, US$2 million cap for removal actions and in granting the EPA over US$54 million in reimbursement plus a declaratory judgment for future costs. Grace disputed the accounting methods used to calculate the EPA's indirect costs. After initial investigation in November 1999, the EPA issued a Sampling and Quality Assurance Project Plan in December, followed by a more comprehensive revised plan in January 2000. These findings led the EPA to set out the intended removal action in a series of three memoranda issued between May 2000 and May 2002, which progressively broadened the scope of the cleanup. The EPA sued Grace in March 2001 seeking recovery of all costs incurred by the Government and a declaration that Grace would be liable for future costs. In December 2002, the District Court granted the EPA summary judgment on the liability issue. After a three-day trial, the District Court issued an order awarding the EPA the full US$54.53 million in reimbursement, including US$11.32 million in indirect costs, and granting a declaratory judgment that Grace would be liable for future cleanup costs. On appeal, Grace's challenged that the EPA termed its cleanup in Libby a removal action as a subterfuge when the response was a remedial action. Having determined that the action was a removal, the inquiry turned to whether the EPA can recover costs in excess of the US$2 million, 12-month statutory cap on removal actions. The District Court was persuaded by the EPA's account in the Action Memos of the immediate risk to public health. Finally, Grace complained that the methodology used to calculate indirect costs of US$11,322,226 overstated the EPA's costs attributable to the Libby response action. Christopher Landau and John C. O'Quinn from Kirkland & Ellis LLP of Washington, DC; Kenneth W. Lund, Linnea Brown and Katheryn Jarvis Coggon from Holme Roberts & Owen LLP of Denver, CO represented the defendants-appellants. John T. Stahr, Environment and Natural Resources Division, U.S. Department of Justice, Washington, D.C.; James Freeman, Environment and Natural Resources Division, U.S. Department of Justice, Denver, CO stood for the plaintiff-appellee. Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. (Class Action Reporter, December 9, 2005) WEX PHARMACEUTICALS: Shareholders Wants to Convene Special Meeting ------------------------------------------------------------------ WEX Pharmaceuticals Inc. (TSX:WXI) reported that it has received two separate requisitions from different shareholders, each seeking to convene a special meeting of shareholders. One requisition, received from Ms. Margaret Chow, seeks approval for resolutions to remove all of the existing directors of the Company, to fix the size of the Board at six and to elect six of Ms. Chow's, as yet unidentified nominees, as directors. The other requisition, received from Mr. A.J. Miller, seeks approval for resolutions to remove Ms. Donna Shum, Mr. Frank Shum and Mr. Kenneth Li as directors and to elect Mr. Miller as a director. Mr. Miller's requisition also asks shareholders to vote on a resolution to create a royalty trust, as a defensive takeover mechanism. Although there have been discussions among the company and the respective shareholders to explore the possibilities of an agreed resolution to the restructuring of the Board, no agreement has yet been reached. Although such discussions may continue, in the circumstances, the Board has determined to call a special meeting of shareholders for 10:00 a.m. PT on Thursday, Jan. 26, 2006 to enable shareholders to consider the two proposals for restructuring the Board. Since receiving the requisitions, Dr. Howard Cohen, currently chair of the Company's scientific advisory board, has joined the Board of Directors. Dr. Cohen, M.D. is Director of Dallas Mind/Body Medicine. Dr. Cohen is certified by the American Board of Psychiatry and Neurology in Psychiatry (1991), Geriatric Psychiatry (1992), Addiction Psychiatry (1993) and Pain Medicine (2001). Dr. Cohen lectures at the University of Texas Southwestern Medical School and the University of Texas-Arlington Graduate School of Nursing in pain medicine and psychiatry. Dr. Cohen has also published in the fields of pain medicine and addiction and has consulted for many major pharmaceutical companies and for NASA research projects. Dr. Cohen replaces Dr. Gold, who has stepped down as a director, and will continue to serve the Company as a member of the scientific advisory board. "I continue to have great faith in the project and in Tetrodotoxin," said Dr. Phil Gold. "I feel it may be of great help to many of our patients suffering from both acute and, perhaps more importantly, chronic pain." The Company thanks Dr. Gold for his contribution as a director of the Company. The company will be recommending in the information circular to be mailed to the company's shareholders in connection with the special meeting, that shareholders vote in favour of Mr. Miller's proposal regarding the changes to the Board and against Ms. Chow's proposal. The Board is continuing to review Mr. Miller's proposal regarding the creation of a royalty trust. WEX Pharmaceuticals Inc. is dedicated to the discovery, development, manufacture and commercialization of innovative drug products to treat moderate to severe acute and chronic pain, symptom pain relief associated with addiction withdrawal from opioid abuse and medicines designed for local anaesthesia. The Company's principal business strategy is to derive drugs from naturally occurring toxins and develop proprietary products for the global market. The Company's Chinese subsidiary sells generic products manufactured at its facility in China. * * * As reported in the Troubled Company Reporter on Aug. 22, 2005, WEX Pharmaceuticals Inc. was issued a request for early redemption of its unsecured convertible debentures in the aggregate principal amount of US$5.1 million that were issued in June 2004 by the Company's wholly owned subsidiary, Wex Medical Ltd., to 3 investment funds managed by a major Asian financial institution. The Institution alleges that the Company breached certain representations and warranties contained in the agreements in regards to the registered ownership of the drug withdrawal patent "Use of Amino Quinazoline Hydride Compound and its Derivative for Abstaining from Drug Dependence". As the debentures may now be due on demand, in accordance with Canadian generally accepted accounting principles, for financial statement purposes they have been reclassified as current liabilities as at June 30, 2005. Going Concern Doubt Management believes that with the existing cash resources there are sufficient resources for the Company's current programs to fund operations until early Q1 in fiscal 2007. At June 30, 2005, the Company had incurred significant losses and had an accumulated deficit of $49 million. The Company's ability to continue as a going concern is uncertain and dependent upon its ability to achieve profitable operations, obtain additional capital and dependent on the continued support of its shareholders. Management is planning to raise additional capital to finance expected growth. The outcome of these matters cannot be predicted at this time. If the Company is unable to obtain adequate additional financing, management will be required to curtail the Company's operations. The Company's contractual commitments are related to the lease of the Company's office space and operating leases for office equipment, plus clinical and non-clinical research. Payments required under these agreements and leases are: -- pursuant to the license agreement referred to in note 12 to the consolidated financial statements, the Company is jointly responsible for development costs in excess of $40 million (EUR 25 million), if any. -- pursuant to certain People's Republic of China regulations, the Company's subsidiary is likely required to transfer certain percentages of its profit, as determined under the PRC accounting regulations, to certain statutory funds. To date, the subsidiary has not recognized any statutory reserves as it has not been profitable. Should the subsidiary become profitable in the future, it will be required to recognize these statutory accounts and accordingly, a portion of the subsidiary's future earnings will be restricted in use and not available for distribution. WILLIAMS CONTROLS: Wipes Away Shareholder Deficit in 4th Quarter ---------------------------------------------------------------- Williams Controls, Inc. (OTC: WMCO), reported results for its 2005 fourth quarter and full year ended September 30, 2005. Net sales of $17,488,000 for the fourth quarter ended September 30, 2005, were up 9.9% from $15,908,000 reported in the fourth quarter last year. Net sales for the year ended September 30, 2005, increased $9,366,000, or 16.1%, to $67,416,000 from $58,050,000 for the comparable period in fiscal 2004. The Company reported net income in the fourth quarter of fiscal 2005 of $2,396,000 compared to a net loss of $7,782,000 for the corresponding quarter in 2004. For the year ended September 30, 2005, net income was $7,495,000 compared to a net loss of $4,058,000 for the year ended September 30, 2004. Included in the fiscal 2004 fourth quarter and full year 2004 results is a charge of $19,770,000 for loss on extinguishment of debt related to the elimination of all outstanding Series B preferred stock and accrued dividends, and an income tax benefit of $9,401,000, primarily relating to reversal of the valuation allowance on certain deferred tax assets. The increase in 2005 sales for both the fourth quarter and year ended September 30, 2005, was primarily due to higher unit volumes to our heavy truck, transit bus and off-road customers in North America, Europe and Asia. Gross profit improvements in both the fourth quarter and the full year were driven by the higher sales volumes. Gross profit improved to $5,986,000 in the fourth quarter of fiscal 2005, a 9.2% increase from the $5,484,000 in the fourth quarter of fiscal 2004. Gross profits for the year ended September 30, 2005, improved to $23,013,000, a 22.3% increase from gross profits in fiscal 2004 of $18,816,000. During fiscal 2005, the Company embarked on several strategic growth initiatives, which included establishing sales and manufacturing operations in China, opening a sales and technical office in Europe, and developing sensors for use in our electronic throttle control product lines. These initiatives, as well as other factors, resulted in an overall increase in operating expenses during fiscal 2005 as compared to fiscal 2004. Operating expenses for the fourth quarter of 2005 decreased $144,000 compared to the same quarter in 2004; however, for the full year ended September 30, 2005, operating expenses increased $1,173,000 over the prior year. Interest expense on debt for the fourth quarter and year ended September 30, 2005, of $325,000 and $1,459,000, respectively, is related to the new bank debt drawn on September 30, 2004 in conjunction with the 2004 recapitalization. During fiscal 2004, the Company had minimal bank debt. In the fourth quarter and year ended September 30, 2004, the Company recorded $863,000 and $3,245,000, respectively, of interest expense related to dividends and accretion of outstanding Series B preferred stock. As part of the 2004 recapitalization, all outstanding Series B preferred stock and associated dividends were eliminated. For the year ended September 30, 2005, the Company recorded tax expense of $4,279,000 at an effective tax rate of 36.3%. Prior to the fourth quarter of fiscal 2004, the Company had recorded a full valuation allowance on its deferred tax assets. During the fourth quarter of fiscal 2004, the Company reduced the valuation allowance, which resulted in an income tax benefit during the quarter of $9,401,000. Williams Controls' President and Chief Executive Officer, Patrick W. Cavanagh stated, "We are pleased with our performance over the last year. The Company achieved substantial growth in sales and net profits while significantly reducing our debt." He continued, "Progress at our recently opened manufacturing facility in China and our sales and technical center in Germany has been promising." He continued, "In addition, we anticipate that our technology license for advanced non-contacting sensor technology will enable us to respond faster and at lower costs to our customers' requirements." He concluded, "During the last year we have positioned the Company to take advantage of international opportunities while investing in improving our competitive position with better technology and lower costs." Williams Controls -- http://www.wmco.com/-- is a leading designer and manufacturer of Electronic Throttle Control Systems for the heavy truck and off-road markets. William Controls turned-around its balance sheet with $581,000 equity at September 30, 2005, compared to a $1,817,000 equity deficit at June 30, 2005. ZINNA PLUMBING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Zinna Plumbing 4900 Preston Road, Suite A Frisco, Texas 78034 Bankruptcy Case No.: 05-87117 Type of Business: The Debtor is a plumber. Chapter 11 Petition Date: December 12, 2005 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Mary F. Sailors, Esq. Law Firm of Sissy Sailors 334 West Mistletoe Avenue San Antonio, Texas 78212 Tel: (210) 582-5887 Financial Condition as of December 1, 2005: Total Assets: $1,137,477 Total Debts: $1,255,717 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ LA Investment $583,000 North America P.O. Box 78178 San Antonio, TX 78278 Morrison Supplies $566,986 P.O. Box 70 Fort Worth, TX 76101 MasterCraft Plumbing $8,716 4715 Rittman Road San Antonio, TX 78218 Texas United Excavation $5,320 Humana Insurance $2,698 Nextel Communications $2,568 Preston Road Tire & Service $1,428 Polansky, McNutt, Perry $725 R & S Backhoe Service $616 Stanford Trucking $550 Staples Supply $484 Ozarka Processing Center $215 Sunbelt Industrial Trucks $198 Patsy Schultz $52 * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Abraxas Petro ABP (27) 120 (4) Accentia Biophar ABPI (8) 34 (20) AFC Enterprises AFCE (44) 216 53 Alaska Comm Sys ALSK (9) 589 49 Alliance Imaging AIQ (43) 643 42 AMR Corp. AMR (729) 29,436 (1,882) Atherogenics Inc. AGIX (98) 213 190 Bally Total Fitn BFT (1,463) 486 (442) Biomarin Pharmac BMRN (65) 209 (38) Blount International BLT (201) 427 110 CableVision System CVC (2,486) 10,204 (1,881) CCC Information CCCG (95) 112 34 Centennial Comm CYCL (463) 1,456 85 Cenveo Inc CVO (12) 1,146 127 Choice Hotels CHH (165) 289 (34) Cincinnati Bell CBB (672) 1,893 (10) Clorox Co. CLX (532) 3,570 (229) Columbia Laborat CBRX (13) 17 10 Compass Minerals CMP (83) 686 149 Crown Media HL CRWN (64) 1,250 (125) Deluxe Corp DLX (101) 1,461 (297) Denny's Corporation DENN (261) 498 (72) Domino's Pizza DPZ (553) 414 3 DOV Pharmaceutic DOVP (3) 116 94 Echostar Comm DISH (785) 7,533 321 Emeritus Corp. ESC (134) 713 (62) Empire Resorts NYNY (18) 65 (4) Foster Wheeler FWLT (375) 1,936 (186) Guilford Pharm GLFD (20) 136 60 Graftech International GTI (13) 1,026 283 I2 Technologies ITWO (144) 352 112 ICOS Corp ICOS (67) 232 141 IMAX Corp IMAX (34) 245 30 Immersion Corp. IMMR (15) 46 29 Indevus Pharma IDEV (103) 119 86 Intermune Inc. ITMN (30) 194 109 Investools Inc. IED (20) 64 (46) Kulicke & Soffa KLIC (32) 386 186 Ligand Pharm LGND (63) 332 (44) Lodgenet Entertainment LNET (69) 283 22 Maxxam Inc. MXM (681) 1,024 103 Maytag Corp. MYG (95) 2,989 371 McDermott Int'l MDR (53) 1,627 244 McMoran Exploration MMR (61) 407 118 NPS Pharm Inc. NPSP (55) 354 258 Owens Corning OWENQ (8,443) 8,142 976 ON Semiconductor ONNN (317) 1,171 300 Qwest Communication Q (2,716) 23,727 822 Riviera Holdings RIV (28) 221 6 Rural/Metro Corp. RURL (93) 315 56 Rural Cellular RCCC (460) 1,367 46 SBA Comm. Corp. SBAC (47) 886 25 Sepracor Inc. SEPR (213) 1,193 703 St. John Knits Inc. SJKI (52) 213 80 Tiger Telematics TGTL (70) 21 (78) Tivo Inc. TIVO (9) 163 36 US Unwired Inc. UNWR (76) 414 56 Unigene Labs Inc. UGNE (15) 14 (9) Unisys Corp UIS (141) 3,888 318 Vector Group Ltd. VGR (38) 536 168 Vertrue Inc. VTRU (35) 441 (80) Visteon Corp. VC (1,430) 8,823 404 Vocus Inc. VOCS (9) 21 (10) Worldspace Inc. WRSP (1,475) 765 249 WR Grace & Co. GRA (574) 3,465 848 ********* 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. 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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 ***