/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/051219.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 19, 2005, Vol. 9, No. 300 Headlines ABN AMRO: Fitch Affirms Low-B Ratings on 13 Certificate Classes ALEC OLSEN: Case Summary & 17 Largest Unsecured Creditors AMERICAN LIFE: Fitch Chips Insurer Financial Strength Rating to BB AMERICAN MOULDING: Hires Development Specialists as Consultants AMERICAN MOULDING: Committee Hires Parkinson Phinney as Counsel AMERITRADE HOLDING: Acquisition Benefits Prompt S&P's BB Ratings AMERITRADE HOLDING: Fitch to Rate $1.9 Billion Sr. Loans at BB AMSCAN HOLDINGS: S&P Rates Proposed $410 Million Loan at B+ ANY MOUNTAIN: Court Approves Disclosure Statement for Amended Plan ARCAP 2005-1: S&P Puts Low-B Ratings on $115 Mil. Cert. Classes ASARCO LLC: Wants to Assume Gault Group Services Agreement ASARCO LLC: Wants to Assume Modified Prudential Futures Contracts ASARCO LLC: Committee Hires Fulbright as Special Local Counsel ATA AIRLINES: Creditors Have Until Jan. 20 to Vote on Plan ATA AIRLINES: Court Schedules Jan. 30 Plan Confirmation Hearing ATHLETE'S FOOT: Court Confirms Second Amended Liquidation Plan ATLAS PIPELINE: Prices $250 Million of 8.125% Senior Notes BANC OF AMERICA: Fitch Lifts Ratings on $62.4 Mil. Cert. Classes BEAR STEARNS: Fitch Affirms Low-B Ratings on $17.9MM Cert. Classes BEAR STEARNS: Fitch Puts Low-B Ratings on Class J & K Certificates BIRCH TELECOM: Files Disclosure Statement in Delaware BIRCH TELECOM: Wants Exclusive Period Extended Until March 10 BIRCH TELECOM: Has Until Feb. 8 to Remove Civil Actions BISYS GROUP: Extends Closing Date for Unit's Sale to Dec. 31, 2005 BLUE BEAR: Court Establishes February 6 as Claims Bar Date BLUE RIDGE: Cost Pressures Prompt S&P's Negative Outlook BOULEVARD PHARMACY: Case Summary & 20 Largest Unsecured Creditors BUDGET GROUP: Court Enters Final Decree Closing Bankruptcy Case CABOODLES LLC: Wants Until Jan. 31 to Decide on Warehouse Leases CALPINE CORP.: Del. Sup. Ct. Orders $312 Mil. Payment by Jan. 22 CATHOLIC CHURCH: Portland Inks Agreements with Applied Discovery CELERO TECH: Creditors Must File Proofs of Claim by January 13 CELERO TECHNOLOGIES: Lease Decision Period Extended Until Jan. 19 CELTRON INT'L: Inks Agreement to Purchase Satellite Security COGECO CABLE: Satisfactory Industry Niche Earns S&P's BB+ Rating COMBUSTION ENG'G: Court Approves Hartford & First State Settlement COMPASS MINERALS: Prices New 10% Senior Subordinated Notes COVANTA HOLDING: Waste-to-Energy Subsidiary Exits Chapter 11 CREDIT SUISSE: Fitch Affirms Low-B Ratings on Eight Cert. Classes CSC HOLDINGS: S&P Rates Proposed $1 Billion Senior Notes at B+ CSC HOLDINGS: Fitch Rates $1 Billion Senior Notes at BB- CSK AUTO: Completes Pricing of $85 Million Private Debt Placement DANA CORP: Credit Profile Erosion Prompts S&P to Downgrade Ratings DOCTORS HOSPITAL: Panel Taps Chiron Fin'l as Investment Bankers DORAL FINANCIAL: Latham & Watkins Completes Investigation ENRON: Inks Pact Resolving Claims Dispute with United Computing ENTERGY NEW ORLEANS: Can Continue Hiring Ordinary Course Profs. FIRST FRANKLIN: Fitch Puts Low-B Ratings on Four Cert. Classes FIRST HORIZON: Fitch Upgrades Ratings on Two Certificate Classes FLINTKOTE CO: Has Until April 28 to File Chapter 11 Plan FLYI INC: Wants Court Approval of Section 1110 Election Procedures FLYI INC: Wants to Walk Away from Six CRJ Aircraft Leases FLYI INC: Wants Until Jan.5 to Comply with Sec. 345(b) Guidelines FOAMEX INT'L: Foamex L.P. Wants to Assume Amended Bayer Contract FOAMEX INT'L: Wants to Hire FTI Consulting as Special Consultants FOAMEX INT'L: Bar Date for Agents & Lenders Stretched to Feb. 17 GE BUSINESS: Fitch Rates $19 Million Class D Certificates at BB GROVE PARK: Case Summary & 13 Largest Unsecured Creditors HEMOSOL CORP: Has Until Feb. 10 to File BIA Proposals INTEGRATED ELECTRICAL: S&P Lowers Credit Rating to CC from CCC- INTERSTATE BAKERIES: Selling Alameda Property for $1.5 Million INVIVA INC: Fitch Shaves Units' Insurer Financial Strength Rating J CREW: Turnaround Progress Spurs S&P to Raise Credit Rating to B JACK IN THE BOX: Increasing Leverage Sparks S&P's Negative Outlook JAKE'S GRANITE: Court Approves Asset Sale to LaFarge for $13 Mil. JEFFERSON NATIONAL: Fitch Cuts Insurer's Financial Strength Rating JL FRENCH: Interest Nonpayment Cues S&P to Junk Credit Rating JP MORGAN: Fitch Holds Low-B Ratings on Four Certificate Classes LIMELIGHT MEDIA: Equity Deficit Tops $2.4 Mil. at September 30 MCLEODUSA INC: Court Approves Prepackaged Plan of Reorganization METALFORMING TECH: Wants Until March 13 to Remove Civil Actions NANOMAT INC: Section 341 Meeting Slated for January 25 NATIONAL FRANCHISE: Case Summary & 9 Largest Unsecured Creditors NESCO INDUSTRIES: Balance Sheet Upside-Down by $5.8MM at July 31 NEW EARTH: Case Summary & 20 Largest Unsecured Creditors NVE INC: Court Extends Exclusive Plan-Filing Period to Feb. 15 NVE INC: Has Until February 6 to Decide on Leases NVE INC: McElroy Deutsch Approved as Special Litigation Counsel OMNI CAPITAL: Court Rejects Bayview's Bid to Dismiss Case OMNI CAPITAL: Hires General Capital to Market Louisville Property PEAK ENTERTAINMENT: Posts $779,199 Net Loss in Third Quarter PHARMACEUTICAL FORMULATIONS: Court Extends Exclusive Periods PHARMACEUTICAL FORMULATIONS: Disclosure Hearing Set for Dec. 29 PHOTOCIRCUITS CORP: Wants More Time to Decide on Unexpired Leases PRE-PAID LEGAL: Moody's Withdraws $160 Million Debts' B1 Ratings PRECISE TECH: S&P Withdraws Ratings After Rexam Merger Completion PROSOFT LEARNING: Posts $460,000 Net Loss in First Quarter QWEST COMMS: Appoints C. Matthews & R.D. Hoover as Directors RAYMOURS FURNITURE: Weak Debt Measures Cue S&P's Negative Outlook REAL ESTATE: Fitch Puts Low-B Ratings $59 Million Class Certs. ROMOLO CAPOBIANCO: Case Summary & 5 Largest Unsecured Creditors SFBC INT'L: Negative Events Prompt S&P's Stable Outlook SOLUTIA INC: Files Protective Actions in Chapter 11 Case STELCO INC: Ontario Court Approves AltaSteel Sale to Moly Cop SYNDICATED FOOD: Case Summary & 20 Largest Unsecured Creditors TELEGLOBE COMMS: Has Until February 23 to Object to Claims THREE-FIVE: Wants to Assume Agreement with Former CEO Jack Saltich TIER TECH: Delays Filing of Form 10-K for FY Ended September 30 TRENWICK AMERICA: Wants Until Feb. 28 to Object to Proofs of Claim TRENWICK AMERICA: Entry of Final Decree Stretched to March 31 TRIGEM COMPUTER: U.S. Court Agrees Main Proceeding Is In Korea UBIQUITEL INC: Improved Performance Cues S&P to Lift Junk Ratings VARTEC TELECOM: Has Until January 3 to File Chapter 11 Plan WESTERN IOWA LIMESTONE: Case Summary & 20 Unsecured Creditors WESTPOINT STEVENS: Court Approves CIT Group Pact to Remit Funds WINN-DIXIE: Court OKs Deloitte & Touche to Audit Internal Controls WINN-DIXIE: Wants Non-Disturbance Pact With Newport Enforced WODO LLC: Confirmation Hearing Set for January 19 * BOND PRICING: For the week of Dec. 12 - Dec. 16, 2005 ********* ABN AMRO: Fitch Affirms Low-B Ratings on 13 Certificate Classes --------------------------------------------------------------- Fitch Ratings affirms these ABN AMRO Mortgage Corp. residential mortgage-backed pass-through certificates: Series 2003-5 -- Class A affirmed at 'AAA'; -- Class M upgraded to 'AAA' from 'AA'; -- Class B1 upgraded to 'AA' from 'A'; -- Class B2 upgraded to 'A-' from 'BBB-'; -- Class B3 upgraded [sic] to 'BB' from 'BBB'; -- Class B4 upgraded [sic] to 'B' from 'BB'. Series 2003-6 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB-'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. Series 2003-7 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'A'; -- Class B4 affirmed at 'B'. Series 2003-8 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A-'; -- Class B2 affirmed at 'BBB-'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. Series 2003-9 -- Class A affirmed at 'AAA'. Series 2003-10 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'; Series 2003-11 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'A-'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. Series 2003-12 -- Class A affirmed at 'AAA'; -- Class M upgraded to 'AAA' from 'AA'; -- Class B1 upgraded to 'AA' from 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. Series 2003-13 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B1 affirmed at 'A'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BB'; -- Class B4 affirmed at 'B'. All of the mortgage loans in the aforementioned transactions were either originated or acquired by ABN AMRO Mortgage Group. 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 31 months and the pool factors range from approximately 42% to 77%. ABN AMRO Mortgage Group, rated 'RPS2' by Fitch, currently services all of the mortgage loans in these transactions. The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $2.16 billion of outstanding certificates. The upgrades reflect an improvement in the relationship between CE and future loss expectations and affect approximately $19.7 million of outstanding certificates. The CE levels for all the upgrades have at least doubled their original enhancement levels since closing. As of the November 2005 distribution date, all of the pools have experienced little to no losses. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Ratings Web site at http://www.fitchratings.com/ ALEC OLSEN: Case Summary & 17 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Alec Olsen 2013 30th Avenue Northeast Issaquah, Washington 98029 Bankruptcy Case No.: 05-30625 Chapter 11 Petition Date: December 14, 2005 Court: Western District of Washington (Seattle) Judge: Thomas T. Glover Debtor's Counsel: Larry B. Feinstein, Esq. Vortman & Feinstein 500 Union Street, Suite 500 Seattle, Washington 98101 Tel: (206) 223-9595 Total Assets: $5,000,780 Total Debts: $3,322,850 Debtor's 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Washington Mutual Bank $903,245 P.O. Box 3139 Milwaukee, WI 53201-3139 Alina Garrity $450,000 2013 30th Avenue Northeast Issaquah, WA 98029 Svetlana Euzbiakna $148,000 2013 30th Avenue Northeast Issaquah, WA 98027 E. Gary Donion $80,000 Robert Zoffel, Esq. $80,000 Watermark Credit Union $53,486 Alina Garrity $10,500 Roman Uzbyakor $9,000 Chase Cardmember Service $8,500 Cowlitz Bank $7,590 Dr. Roberto Reina $5,663 Mark Mayo $5,500 HFC $5,000 American Express $3,800 Retail Services (Comp USA) $2,900 Wells Fargo Financial $1,000 Wells Fargo Financial $1,000 AMERICAN LIFE: Fitch Chips Insurer Financial Strength Rating to BB ------------------------------------------------------------------ Fitch Ratings has downgraded the insurer financial strength ratings of Jefferson National Life Insurance Company and American Life Insurance Company of New York to 'BB' from 'BBB-'. Both companies are subsidiaries of Inviva, Inc., a privately held insurance holding company based in New York City. The Rating Outlook for both ratings is Negative. The action follows management's decision to defer payment of dividends on its $91.5 million of trust preferred securities. Inviva has not been able to raise equity capital this year as expected and that has further constrained the company's limited debt servicing capabilities. While the trust preferreds do provide for a five-year deferral of dividend payments without triggering a default, Fitch is concerned that subsidiary capital may be needed to meet obligations of the holding company. As of Sept. 30, 2005, JNL and ALICNY had paid no dividends in 2005. JNL's and ALICNY's risk-based capital ratios are expected to be well above expectations for the rating level at year-end 2005. Inviva recently announced that it plans to sell its entire inforce life insurance block to reduce expenses and free up capital. Inviva's capital structure is heavily dependent on convertible preferred shares of private investors and trust-preferred securities. The company used proceeds from the issuance of trust preferreds in 2004 to pay down higher cost debt, reducing the ratio of straight debt to total capital from about 20% at year-end 2003 to 8% at year-end 2004. It was about 8.7% at Sept. 30, 2005. Trust preferred securities represented about 66% of Inviva's capital structure at Sept. 30, 2005. Inviva acquired JNL, formerly Conseco Variable Insurance Company, from Conseco in October of 2002. Inviva acquired ALICNY in 2001. At Sept. 30, 2005, the holding company had $2.3 billion in consolidated total assets and $45 million in equity. Jefferson National Life Insurance Company -- IFS downgraded to 'BB' from 'BBB-' with a Negative Outlook. American Life Insurance Co. of New York -- IFS downgraded to 'BB' from 'BBB-' with a Negative Outlook. AMERICAN MOULDING: Hires Development Specialists as Consultants --------------------------------------------------------------- American Moulding & Millwork Company sought and obtained authority from the U.S. Bankruptcy Court for the Eastern District of California to employ Development Specialists, Inc., as consultants. Development Specialists is expected to: (a) assist the Debtor's development, review and evaluation of overall business or sale plans, including financial and credit restructuring efforts, designed to restore the confidence of the Debtor's lenders and other creditors; (b) review and provide a preliminary and, if requested, updated assessment of the company's historical, current and projected financial operating performance, including a review of all current overhead and operating expenses, plans for implementation of addition financial controls, and other tactical responses to current operating issues; (c) assist the Debtor in the preparation, monitoring and updating of a detailed 13 week operating forecast, for use by the Debtor and delivery to the Debtor's lender; (d) develop a budget, including debtor-in-possession costs and expenses, as a standby alternative for responding to the Debtor's creditor; (e) assist the Debtor with the development and preparation of financials oriented schedules and reports and provide other additional assistance to its financial organization; (f) assist the company with the preparation of its initial bankruptcy statements and schedules due to the Court; and (g) perform such other tasks as may be agreed upon. The Debtor will pay Development Specialists $100,000 plus: * 3% of the sum actually paid to Wells Fargo Bank up to the amount of its prepetition secured claim from the sale, liquidation, refinancing or other disposition of Wells Fargo's collateral; * 3% of the sums actually paid to any other secured creditors from the sale, liquidation, refinancing or other disposition of their collateral; * 6% of the sums paid to pre-petition unsecured creditors, including priority claims, which arose prior to the bankruptcy filing; and * 12% of the sum paid to equity holders, which fee shall be paid at the time of the payments to equity holders, but if the operating business is reorganized instead of liquidated, the Debtor shall pay on the confirmation a fixed fee totaling $200,000. The Debtor discloses that Development Specialists received a $165,325 retainer prior to the petition date, $100,000 of which will be used to pay the fixed fee and $65,325 of which will be held as a deposit. To the best of the Debtor's knowledge, the Firm does not hold or represent any interest adverse to its estate, creditors or equity security holders. Headquartered in Sanford, North Carolina, American Moulding and Millwork Company -- http://www.amfurniture.com/-- is a supplier of real wood furniture and cabinetry. The Company filed for chapter 11 protection on Oct. 6, 2005 (Bankr. E.D. Calif. Case No. 05-34431). Thomas A. Willoughby, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $17,663,776 in assets and $18,481,093 in debts. AMERICAN MOULDING: Committee Hires Parkinson Phinney as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of American Moulding sought and obtained authority from the U.S. Bankruptcy Court for the Eastern District of California to employ Parkinson Phinney as its counsel. Parkinson Phinney is expected to: (a) advise and represent the Committee with respect to all matters and proceedings in the Debtor's chapter 11 case; (b) assist the Committee in analyzing the Debtor's request to use cash collateral, debtor-in-possession financing and assist with its analysis of other bankruptcy issues that may arise in connection with the operation of the Debtor's business except with regard to adversary proceedings and claims objections; and (c) assist the Committee with review, analysis, negotiations and taking a position with regard to a plan of organization. The Committee discloses that the Firm's professionals engaged will bill: Professional Hourly Rate ------------ ----------- Donna Parkinson, Esq. $300 Thomas Phinney, Esq. $250 The Committee further discloses that the Firm will be compensated through: * a fixed fee of $50,000 to be paid: -- $25,000 for the week ending Nov. 12, 2005; and -- $25,000 for the week ending Jan. 14, 2006, and * a contingency fee of 10% of the sums actually paid to pre- petition unsecured creditors, which will be paid at the time of payments to unsecured creditors. To the best of the Committee's knowledge, the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Sanford, North Carolina, American Moulding and Millwork Company -- http://www.amfurniture.com/-- is a supplier of real wood furniture and cabinetry. The Company filed for chapter 11 protection on Oct. 6, 2005 (Bankr. E.D. Calif. Case No. 05-34431). Thomas A. Willoughby, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $17,663,776 in assets and $18,481,093 in debts. AMERITRADE HOLDING: Acquisition Benefits Prompt S&P's BB Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' long-term counterparty credit rating and 'BB' bank loan rating to Ameritrade Holding Corp. The outlook is stable. "The ratings on Ameritrade are based on the financial and strategic benefits that come with the TD Waterhouse Group Inc. acquisition," said Standard & Poor's credit analyst Charles D. Rauch. "Not only does Ameritrade significantly improve its market position in the online brokerage space, it also expands its distribution network by gaining a nationwide branch network and relationships with 2,600 registered investment advisors. This expanded distribution network will help Ameritrade move beyond the active trader and reach a broader customer base of long-term investors." Financially, the combined entity has the capacity to generate strong profit margins well above those of other online brokers. This is due to the company's focused strategy and management's discipline in keeping operating expenses very low. Operating performance at the combined entity should be enhanced by the realization of expected cost savings and possible revenue synergies over the next six quarters. Revenue dynamics should also improve as TD Ameritrade, as the combined company will be called, generates more annuity-like revenues and becomes less dependent on trade execution, which has become a commodity-like service. The outlook on the combined TD Ameritrade is stable and considers the variation of operating performance over the stock market cycle. To the extent that TD Ameritrade can successfully introduce new products that broaden and deepen its penetration of the mass-affluent market and quickly reduce its heavy debt burden, the company would be positioned for a higher rating. If the company botches the Waterhouse integration, the ratings could be lowered. AMERITRADE HOLDING: Fitch to Rate $1.9 Billion Sr. Loans at BB -------------------------------------------------------------- Fitch Ratings expects to assign a 'BB' long-term rating to Ameritrade Holding Corporation's senior debt term loan borrowings, which consist of: -- $250 million term loan A senior secured notes maturing Jan. 24, 2012; -- $1.650 billion term loan B senior secured notes maturing Jan. 24, 2013. -- Rating Outlook Positive. The rating is based on Ameritrade's position as a leading player in the online discount brokerage space. With its proposed acquisition of TD Waterhouse Group, Inc., Ameritrade aims to expand revenue opportunities by broadening its focus to the long-term investor vs. its traditional target client, the active trader. In so doing, Ameritrade's revenues should become more asset-based rather than commission driven. Ameritrade aims to realize revenue and cost synergies of $578 million within 18 months of the transaction's close. Fitch believes the acquisition is beneficial because it strengthens the core franchise and helps Ameritrade remain competitive in a rapidly consolidating industry, but believes challenges exist. Fitch cites the competitive nature of online brokerage and diversified financial services. As profit margins are squeezed in certain business segments due to competition and technology, firms have an ever-increasing need to expand product offerings and diversify revenues. The potential diversification of revenues for TD Ameritrade, a ratings benefit, is highly dependent on the successful integration of the TD Waterhouse business and the ability of the company to grow and retain client assets. The speed and success of integration will directly affect the company's ability to service debt. Debt to equity upon transaction close will be approximately 1.7:1. Fitch also cites the deal's effect on tangible equity as a ratings concern. The transaction will result in negative tangible equity, as total goodwill of the combined companies will be $1.9 billion. Equity at the combined company will be $1.1 billion. Fitch will monitor the rate of synergies realized and whether Ameritrade is on target. The combination should accrue scale benefits to Ameritrade's core franchise, hence warranting the Positive Rating Outlook. The $1.9 billion in borrowings in addition to $350 million in excess cash of Ameritrade and $400 million of capital contributed by TD Bank Financial Group will fund a special dividend to be paid out to current Ameritrade shareholders. The dividend is contingent upon the closing of Ameritrade's acquisition of the U.S. retail securities brokerage business of TD Waterhouse Group, Inc., the discount brokerage segment of TD Bank. Simultaneously, Ameritrade will sell its Canadian based brokerage business to TD for $60 million in cash. Initial ownership by TD will be approximately 32%; however upon transaction close, TD will make a tender offer for approximately 7.2% of outstanding shares at a minimum guaranteed share price of $16. Maximum ownership by TD Bank will be capped at 39.9% for three years. AMSCAN HOLDINGS: S&P Rates Proposed $410 Million Loan at B+ ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' bank loan rating and '1' recovery rating to Amscan Holdings Inc.'s proposed $410 million first lien bank facility, indicating the expectation of full recovery of principal in the event of a payment default. In addition, Standard & Poor's assigned its 'B' bank loan rating and '2' recovery rating to the company's proposed $65 million second lien bank facility, indicating the expectation of substantial recovery of principal in the event of a payment default. The ratings are based on preliminary terms and are subject to review upon final documentation. At the same time, the 'B' corporate credit and 'CCC+' subordinated debt ratings on the party goods distributor and manufacturer were affirmed. The 'B' bank loan and '2' recovery ratings on Amscan's proposed $505 million senior secured bank facility have been withdrawn. Ratings on Amscan's existing $255 million credit facility will be withdrawn upon completion of the refinancing. The outlook remains negative. Pro forma for the acquisition of Party City Corp., Amscan will have about $575 million of total debt outstanding. The actions follow the company's decision to reduce the debt portion related to the acquisition of Party City by $30 million with a corresponding $30 million increase in the amount of equity contribution. Subject to regulatory approval and receipt of debt financing, the transaction is targeted to close by the end of 2005. ANY MOUNTAIN: Court Approves Disclosure Statement for Amended Plan ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of California approved the adequacy of the Disclosure Statement explaining the Fourth Amended Plan of Reorganization of Any Mountain, Ltd., on Dec. 12, 2005. Prior Plan Scrapped The Debtor reminded the Court that it proposed a prior plan, which provided for the liquidation of some of its assets and the continuation of the business at limited remaining locations, and that the Court approved a Disclosure Statement explaining that plan. The Debtor was unable to obtain sufficient ballots and had to scrap that plan. The Official Committee of Unsecured Creditors, in turn, attempted to have a chapter 11 trustee appointed. Although the Court conditionally granted the Committee's motion, the Committee has decided not to implement the order following a change in the Debtor's management. Asset Sale to SSV Ventures The Debtor tells the Court that it entered into an agreement to sell all of its business assets, including, trade name, furniture, fixtures, equipment, leases and inventory to SSV Ventures, LLC for $4.1 million. The Debtor says that it will retain a lease at 2350 Junipero Serra, Daly City, two vehicles and cash on hand. Committee's Agreement with Eldon Hoffman The Debtor discloses that the Committee entered into a compromise agreement with Eldon "Bud" Hoffman, founder and CEO of Any Mountain Ltd., which was approved by the Court. The agreement provides: (1) that Mr. Hoffman resign as officer and director of the Debtor, (2) that claims for avoidable transfers as to Mr. Hoffman would be released, (3) that Mr. Hoffman's claims against the estate are subordinated to all other claims, (4) Mr. Hoffman would receive the vehicles excluded from the SSV sale, and (5) Mr. Hoffman would receive the sum of $150,000 in cash from the estate. Upon resignation by Mr. Hoffman, Steve Ferguson, COO, will be named CRO of the Debtor. Trust Funds The Debtor tells the Court that the cash proceeds of the sale have been disbursed from the trust to: a. Sonoma National Bank Account designated "Cardinal Financial" to which the disputed liens of Cardinal Financial have been attached pursuant to Order of the Court ($700,000); b. Sonoma National Bank Account designated "Marker Ltd." to which the disputed liens of Marker Ltd. have been attached pursuant to Order of the Court ($8,475); c. Sonoma National Bank Account designated "Performance Sports Apparel" to which the disputed liens of Performance Sports Apparel have been attached pursuant to Order of the Court ($85,036); d. Sonoma National Bank Account designated "Rossignol" to which the disputed liens of Rossignol have been attached pursuant to Order of the Court (187,000); e. Sonoma National Bank Account designated "Nordica USA" to which the disputed liens of Nordica USA have been attached pursuant to Order of the Court ($2,272); f. Sonoma National Bank Account designated "Marmot" to which the disputed liens of Marmot have been attached pursuant to Order of the Court ($31,395); and g. the balance to the Debtor-in-Possession accounts. Terms of the Plan Under the Fourth Amended Plan, the secured claims of: * Cardinal Financial Services; * Marker Ltd.; * Marmot; * Nordica USA; * Performance Sports Apparel; and * Rossignol, are secured by the sale proceeds held in trust to the extent of each allowed secured claim. Under the Plan, other allowed claims of creditors, will be paid following payment of allowed expenses of administration and expenses of liquidation and distribution from: a. unencumbered cash on hand; b. unencumbered cash later determined to be unencumbered; c. proceeds of sale of Business Assets as approved by Order of the Court and entered Aug. 5, 2005, including reserves; d. proceeds of sale of the commercial real property lease relating to the real property located at Junipero Blvd., Daly City, California, if any; and e. avoidable transfers net of expenses of recovery. Holders of shareholders interests may retain property and cash distributed or distributable pursuant to a settlement and compromise agreement entered into by such holder with the Unsecured Creditors Committee and approved by the Court. Such property and cash is not distributable on account of such interest, but shall be retained by such holder. Such holder shall not receive any distribution under the terms of the Plan on account of such interests unless the allowed claims of all senior classes are paid in full together with interest at the legal rate. Avoidance Actions Avoidance actions will be initiated by the Debtor against: * Belzer, Hulchly & Murray; * Benchmark; * San Francisco Chronicle; * SBC Yellow Pages; * The Mercury News; * Columbia Sportswear; * Osprey Packs; * Hi Tec Sports; * Spy Optic; * Red Wing Brands; * CSI Outdoors; * Crazy Creek; * Cerf Bros. Bag Co.; * Pur/Katadyn; * Johnson Camping; * Stansport; and * Cardinal Financial. A copy of the Debtor's Fourth Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=051216030744 Headquartered in Corte Madera, California, Any Mountain Ltd, operates ten specialty outdoor stores throughout the San Francisco Bay Area. The Company filed for chapter 11 protection on Dec. 23, 2004 (Bankr. N.D. Calif. Case No. 04-12989). Michael C. Fallon, Esq., of Santa Rosa, California represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed below $50,000 in assets and more than $10 million in debts. ARCAP 2005-1: S&P Puts Low-B Ratings on $115 Mil. Cert. Classes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to ARCap 2005-1 Resecuritization Trust's $568.4 million collateralized debt obligation certificates series 2005-1. The preliminary ratings are based on information as of Dec. 15, 2005. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of securities and the geographic and property type diversity of the mortgaged properties securing the underlying CMBS collateral. The collateral pool consists of 105 classes of pass-through certificates from 15 CMBS transactions. A copy of Standard & Poor's complete presale report for this transaction can be found on RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/ The presale can also be found on the Standard & Poor's Web site at http://www.standardandpoors.com/ Select Credit Ratings, and then find the article under Presale Credit Reports. Preliminary Ratings Assigned ARCap 2005-1 Resecuritization Trust Recommended Class Rating Amount credit support ----- ------ ------ -------------- A AAA $112,100,000 80.28% B AA $55,100,000 70.58% C A $41,100,000 63.35% D A- $23,300,000 59.25% E BBB+ $18,000,000 56.08% F BBB+ $17,000,000 53.09% G BBB+ $17,000,000 50.10% H BBB $21,800,000 46.27% J BBB- $21,800,000 42.43% K BB $82,500,000 27.91% L B $32,800,000 22.14% M NR $125,854,561 0.00% X NR $568,354,561 N/A NR -- Not rated. N/A -- Not applicable. ASARCO LLC: Wants to Assume Gault Group Services Agreement ---------------------------------------------------------- ASARCO LLC is a party to a professional services agreement with Gault Group, Inc., dated Aug. 29, 2002. Under the Agreement, Gault Group provides consulting services in relation with the reclamation of a portion of the Mission Mine Complex, located within San Xavier District of the Tohono O'odham Nation, in Arizona. Specifically, Gault Group develops the Scope of Work on the reclamation project to conform with 25 C.F.R. 211 and 212 and related mine reclamation statutes and regulations, as well as to secure financial assurance for the reclamation tasks. Gault Group provides regular reports that describe current practices and operations in the reclamation project. Due to the complexity and potential size of the reclamation claims related to the Mission Mine, ASARCO seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to assume the Agreement. The outstanding amount due under the Agreement is $89,073. ASARCO intends to pay the cure amount on mutually acceptable terms. ASARCO believes that the Agreement provides ongoing value to its estate and that Gault Group's continued business relationship is critical to its operations. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Wants to Assume Modified Prudential Futures Contracts ----------------------------------------------------------------- C. Luckey McDowell, Esq., at Baker Botts L.L.P., in Dallas, Texas, informs the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi that ASARCO LLC's revenues can be affected dramatically by market movements in the price of copper and precious metals. Many of those revenues come from refined copper sales contracts that provide for sales at a fixed price at a future time. However, ASARCO seeks to obtain "spot" refined copper prices during the month in which it ships refined copper. To limit the adverse effects of declines in the price of copper, which could affect the ability to obtain the "spot" price, ASARCO entered into exchange-traded futures contracts relating to the fixed- price customer contracts. Those futures contracts, Mr. McDowell explains, provide that ASARCO would purchase copper on future dates in certain quantities and at fixed prices, thus, "locking in" its profit on the copper's sale. "This 'customer hedging' protects [ASARCO] against price fluctuations between the time of entering into the sales contract and the actual delivery," Mr. McDowell tells Judge Schmidt. Mr. McDowell says that ASARCO has 95 prepetition futures contracts with Prudential Financial Derivatives, LLC, consisting of: * 23 contracts of December 2005 CMX copper, * 57 contracts of March 2006 CMX copper, * 13 contracts of May 2006 CMX copper, and * two contracts of July 2006 CMX copper. Moreover, since it continues to be in the market for selling copper for future delivery at fixed prices, ASARCO's operations will be less subject to price fluctuations if it can enter into new contracts as the former contracts terminate or run to completion. In addition, Mr. McDowell states that as the copper's current price is at an all time high price, ASARCO may elect to use futures contracts to sell its anticipated production forward, hence, fixing its profit on sales against future production. ASARCO would also use Postpetition Futures Contracts for that purpose as well. Modifications to Prudential Contracts ASARCO's prepetition positions in futures contracts were aimed at fixed prices before the labor strike in early July 2005. Since the Petition Date, ASARCO has been liquidating those prepetition positions by selling in the month of scheduled delivery of the copper. Mr. McDowell relates that ASARCO has been fortunate that copper sales could be completed through delivery of copper cathode ASARCO has continued to produce. However, Mr. McDowell says, ASARCO has not taken on new futures positions since the strike began because of the resulting uncertain production levels. With the resolution of the labor strike and the resumption of normal copper production, Mr. McDowell tells the Court that ASARCO will again need to offer an option to purchase copper for forward delivery at known prices. Pricing copper in advance requires that ASARCO again hedge against market fluctuations by entering into Postpetition Futures Contracts. In support of its positions on the Prudential Contracts, ASARCO maintains a $2,240,139 equity account, consisting of $1,620,751 in cash and $619,388 in unrealized profits. ASARCO is a member of the New York Commodity Exchange, a division of the New York Mercantile Exchange, and is normally required to maintain a margin balance equal to $2,000 per futures contract of 25,000 pounds. Mr. McDowell recounts that on the Petition Date, ASARCO asked NYMEX to permit it to maintain, rather than suspend, its membership. NYMEX accepted ASARCO's request, but it doubled ASARCO's minimum margin balance to $4,000 per futures contract. The higher margin balance requires ASARCO to maintain a $632,000 balance based on its current futures contracts. Currently, ASARCO has over $2,200,000 in equity in the account, so the revised margin requirements will not require ASARCO to post additional capital in the account. Account Agreement and Postpetition Futures Contract Subsequently, ASARCO and Prudential have agreed to permit ASARCO to close out its positions in existing futures contracts by allowing ASARCO to enter into offsetting positions in accordance with this schedule: Schedule No. of Lots to be Liquidated -------- ---------------------------- October 2005 3 November 2005 29 December 2005 26 January 2006 7 February 2006 14 March 2006 7 April 2006 12 May 2006 8 June 2006 10 July 2006 0 August 2006 4 Mr. McDowell tells Judge Schmidt that if ASARCO does not keep to that schedule, Prudential may terminate some or all of the Prudential Contracts. In that event, ASARCO agrees that it will not object to the termination of the contract based on theories of delay or laches. Prudential has agreed to accept the higher margin balance imposed by NYMEX, but Prudential reserves its right to increase that margin requirement at a later time if the circumstances so require. Prudential may also terminate its Contracts on one business day's notice if ASARCO fails to post its required margin payments, which rights are contained in the account agreement. Furthermore, ASARCO and Prudential will enter into Postpetition Futures Contracts. Under its terms, Prudential would have the same rights to terminate the Postpetition Futures Contracts as are provided for under the Account Agreement or as to commodity brokers with respect to prepetition futures contracts. To the extent that there is a loss on the liquidation or termination of a Postpetition Futures Contract, Prudential will be entitled to an administrative claim under Section 503(b) of the Bankruptcy Code. ASARCO seeks the Court's authority to: (1) assume the Prudential Contracts, as modified; (2) enter into Postpetition Futures Contracts with Prudential; and (3) enter into a new Account Agreement with respect to Postpetition Futures Contracts. "The Debtor's decision to assume the Prudential Contracts is based on sound business judgment," Mr. McDowell asserts. Mr. McDowell explains that the Prudential Contracts provide ongoing value to ASARCO's estate by minimizing the market risk of fluctuating copper prices and by fixing ASARCO's profits with respect to its current copper delivery obligations. In addition, Prudential has an ongoing favorable business relationship with ASARCO, and assumption of the Prudential Contracts will foster that business relationship, Mr. McDowell points out. Moreover, by assuming the Prudential Contracts and entering into Postpetition Futures Contracts, ASARCO can prevent Prudential from automatically terminating the prepetition futures contracts. As a commodity broker, Prudential is exempted from the automatic stay provisions. Unless the request is approved, ASARCO's ability to adequately protect itself from market fluctuations in the price of copper will be severely hampered, Mr. McDowell insists. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Committee Hires Fulbright as Special Local Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi gave the Official Committee of Unsecured Creditors appointed in ASARCO LLC's case authority to retain Fulbright & Jaworski L.L.P., as its special local counsel, nunc pro tunc to Sept. 12, 2005. As previously reported in the Troubled Company Reporter on Nov. 30, 2005, Evelyn H. Biery will primarily represent the Committee as its lead attorney. Ms. Biery will be assisted by other Fulbright attorneys Zack A. Clement, Jonathan Bolton, Sharon Beausoleil-Mayer, Jason Boland, Paul Botros and Mark Worden. Fulbright's hourly billing rates for domestic offices range from: Professional Hourly Rate ------------ ----------- Partners $350 to $680 Senior Associates $300 to $465 Senior Counsel $320 to $580 Counsel $165 to $485 Associates $165 to $385 Patent Agents $170 to $265 Counsel $325 to $690 Legal Assistants $70 to $215 Senior Legal Assistants $120 to $210 The hourly rates of the Fulbright professionals that will primarily represent the Committee are: Professional Hourly Rate ------------ ----------- Evelyn Biery $650 Zack Clement 650 Johnathan Bolton 300 Sharon Beausoleil-Mayer 285 Jason Boland 240 Paul Botros 240 Mark Worden 240 Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000). ATA AIRLINES: Creditors Have Until Jan. 20 to Vote on Plan ---------------------------------------------------------- Judge Lorch approved uniform plan solicitation and ballot tabulation procedures in ATA Airlines, Inc., and its debtor- affiliates' chapter 11 cases. The U.S. Bankruptcy Court for the Southern District of Indiana has set Dec. 12, 2005, as the Voting Record Date for determining the holders of Claims entitled to receive a Solicitation Package and entitled to vote on the Reorganizing Debtors' Amended Plan of Reorganization. The BMC Group, the Debtors' voting agent, will transmit the Solicitation Package by December 19 to the holders of Claims, Interests or other parties. The Court directs National City Bank to facilitate service of the Solicitation Package to holders of Old Holdings Common Stock by providing the Voting Agent with a list containing the names, addresses and holdings of the Public Holders of the Old Holdings Common Stock as of the Voting Record Date. Creditors have until January 20, 2006, to cast their ballots to vote to accept or reject the Plan. The Reorganizing Debtors are entitled to temporarily allow certain Claims in substantial compliance with the procedures. The Court fixes January 13, 2006, as the last day for parties-in-interest to seek temporary allowance of Claims for voting purposes pursuant to Rule 3018(a) of the Federal Rules of Bankruptcy Procedure. Each Qualified Holder as of the Voting Record Date may subscribe for its Pro Rata Share of Rights Offering New Shares and additional Rights Offering New Shares of the New Holding Company until January 23, 2006. A Qualified Holder is a person who holds an Allowed Class 6 Claim or is listed on the Rights Offering Claim Amount List who (a) is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act and (b) is a U.S. Citizen. Pro Rata Share of Rights Offering New Shares means the ratio -- expressed as a percentage -- of the Qualified Holders' Rights Participation Claim Amount, as determined as of the Subscription Expiration Date, to $1,100,000,000. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Court Schedules Jan. 30 Plan Confirmation Hearing --------------------------------------------------------------- Judge Lorch of the U.S. Bankruptcy Court for the Southern District of Indiana will convene a hearing to consider confirmation of the Reorganizing Debtors' Amended Plan of Reorganization on Jan. 30, 2006, 10:00 a.m. (EST). The Confirmation Hearing Date may be continued from time to time. Confirmation objections must be filed and served by Jan. 23, 2006. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATHLETE'S FOOT: Court Confirms Second Amended Liquidation Plan -------------------------------------------------------------- The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York confirmed the Second Amended Joint Plan of Liquidation filed by The Athlete's Foot, LLC, and Delta Pace LLC, together with their Official Committee of Unsecured Creditors. Judge Bernstein determined that the Plan satisfies the 13 standards for confirmation required under Section 1129(a) of the Bankruptcy Code. Overview of the Plan After selling substantially all of their assets and paying off their principal secured debt, the Debtors, in consultation with the Committee, focused on formulating a plan of liquidation that will enable them to make distributions to holders of Allowed Claims as soon as practicable and subsequently wind up and terminate the Debtors' business affairs. The Plan provides for the: i) creation of the Liquidation Trust, ii) compromise and settlement of claims; and iii) rejection of any remaining executory contracts and unexpired leases to which any Debtor is still a party. About the Plan The Debtors operations will be winded down after confirmation of their Plan. On the Plan's effective date, the Debtors' assets will be transferred to a Liquidation Trust. A Liquidation Trustee will make distributions to creditors, investigate and prosecute rights of action, and resolve claim disputes. Under the Plan, these claims are unimpaired: * priority non-tax claims, * secured claims, * allowed fee claims, * priority tax claims, and * administrative claims. General unsecured creditors owed approximately $30,284,629 will receive: i) beneficial interests in the Liquidation Trust entitling the holders to recover pro rata shares of any cash from a Distribution Fund; or ii) less favorable treatment that the Debtors or the Liquidation Trustee, the Committee and an unsecured claim holder will agree upon. General unsecured creditors are expected to recover 7% to 10% of their claims. Intercompany claims and equity interests will be cancelled. Creditors' Committee Survives The Official Committee of Unsecured Creditors will not be disbanded upon plan confirmation. The Committee will be given the power to prosecute all litigation causes of action and defenses. It will also continue the adversary proceeding commenced by the Debtors against GMAC Commercial Finance LLC seeking to recover $525,000. Plan Funding A summary of estimated proceeds that will be available for distribution to creditors: Source Estimated Proceeds ------ ------------------ Cash on Hand $2,300,000 to $2,700,000 Professional Fees Carve Out 525,000 525,000 ---------- ---------- Total Estimated Proceeds $2,825,000 $3,230,000 Application of Estimated Proceeds --------------------------------- Chapter 11 Professional Fees $750,000 to $600,000 Wind-down costs 100,000 75,000 -------- -------- Total Estimated Chapter 11 Costs $850,000 $675,000 Estimated Proceeds Available for Distribution $1,975,000 to $2,555,000 Headquartered in New York, New York, Athlete's Foot Stores, LLC -- http://www.theathletesfoot.com/-- operates approximately 125 athletic footwear specialty retail stores in 25 states. The Company and its debtor-affiliate filed for chapter 11 protection on December 9, 2004 (Bankr. S.D.N.Y. Case No. 04-17779). Bonnie Lynn Pollack, Esq., and John Howard Drucker, Esq., at Angel & Frankel, P.C. represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed total assets of $33,672,000 and total debts of $39,452,000. ATLAS PIPELINE: Prices $250 Million of 8.125% Senior Notes ---------------------------------------------------------- Atlas Pipeline Partners L.P. (NYSE:APL) and its newly formed subsidiary Atlas Pipeline Finance Corp. reported the pricing of $250 million of 8.125% senior unsecured notes due 2015 in a private placement. The company intends to use the net proceeds from the private placement to repay substantially all of the indebtedness outstanding under its revolving credit facility. The securities have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Based in Moon Township, Pennsylvania, Atlas Pipeline Partners, L.P. -- http://www.atlaspipelinepartners.com/-- is active in the transmission, gathering and processing segments of the midstream natural gas industry. In the Mid-Continent region of Oklahoma, Arkansas, northern Texas and the Texas panhandle, the Partnership owns and operates approximately 2,565 miles of intrastate gas gathering pipeline and a 565-mile interstate natural gas pipeline. The Partnership also operates two gas processing plants and a treating facility in Velma, Elk City and Prentiss, Oklahoma where natural gas liquids and impurities are removed. In Appalachia, it owns and operates approximately 1,500 miles of natural gas gathering pipelines in western Pennsylvania, western New York and eastern Ohio. * * * As reported in the Troubled Company Reporter, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to midstream natural gas master limited partnership Atlas Pipeline Partners L.P. At the same time, Standard & Poor's assigned its 'B+' rating to the company's proposed $250 million senior unsecured notes due 2015. The outlook is stable. BANC OF AMERICA: Fitch Lifts Ratings on $62.4 Mil. Cert. Classes ---------------------------------------------------------------- Fitch Ratings upgrades Banc of America Commercial Mortgage Inc.'s commercial mortgage pass-through certificates, series 2002-2: -- $64.7 million class B to 'AA+' from 'AA'; -- $17.2 million class C to 'AA' from 'AA-'; -- $12.9 million class D to 'AA-' from 'A+'; -- $17.2 million class E to 'A+' from 'A'; -- $21.6 million class F to 'A' from 'A-'; -- $23.6 million class G to 'A-' from 'BBB+'; -- $19.4 million class H to 'BBB+' from 'BBB'; -- $21.6 million class J to 'BBB' from 'BBB-'; -- $36.6 million class K to 'BBB-' from 'BB+'; -- $12.9 million class L to 'BB+' from 'BB'; -- $12.9 million class M to 'BB' from 'BB-'. In addition, Fitch affirms these classes: -- $38.7 million class A-1 at 'AAA'; -- $320.7 million class A-2 at 'AAA'; -- $975.2 million class A-3 at 'AAA'; -- $1.7 billion class XC at 'AAA'; -- $1.5 billion class XP at 'AAA'; -- $16.8 million class N at 'B+'; -- $6.8 million class O at 'B'. The $38.8 million class P is not rated by Fitch. The ratings upgrades reflect scheduled amortization since issuance and an increase in defeasance. As of the November 2005 distribution date, the pool has paid down 3% to $1.65 billion from $1.69 billion at issuance. There are currently no specially serviced loans. Fitch reviewed the transaction's three credit assessed loans: * Crabtree Valley Mall, * Bank of America Plaza, and * Centre at Preston Ridge. All three loans maintain their investment grade credit assessments based on their stable performance. Crabtree Valley Mall is secured by a 998,486 square feet retail property located in Raleigh, North Carolina. Occupancy as of June 2005 was 97.4%, compared with 97.1% at issuance. Bank of America Plaza is secured by a 1,279,152sf office property located in Atlanta, Georgia. Occupancy as of June 2005 was 100%, compared with 94.0% at issuance. Center at Preston Ridge is secured by a 728,962sf retail property located in Frisco, Texas. Occupancy as of June 2004 was 93.2%, compared with 85.7% at issuance. BEAR STEARNS: Fitch Affirms Low-B Ratings on $17.9MM Cert. Classes ------------------------------------------------------------------ Fitch Ratings upgrades Bear Stearns Commercial Mortgage Securities Corporation's commercial mortgage pass-through certificates, series 1998-C1: -- $35.7 million class B to 'AAA' from 'AA'; -- $32.2 million class C to 'AA' from 'A'. -- $32.2 million class D to 'BBB+' from 'BBB'; -- $8.9 million class E to 'BBB' from 'BBB-'. In addition, Fitch affirms these classes: -- $35.6 million class A-1 at 'AAA'; -- $417.2 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $12.5 million class F at 'BB+'; -- $5.4 million class H at 'BB-'. Fitch does not rate $12.5 million class G, $17.9 million class I, $4.6 million class J or $4 million class K. The upgrades reflect increased credit enhancement levels due to defeasance, prepayments and scheduled amortization. Twenty-eight loans have fully defeased to date. As of the November 2005 distribution date, the pool has paid down 13.4% to $618.7 million from $714.7 million at issuance. Currently, three assets are in special servicing. The largest specially serviced asset is secured by four real estate owned warehouse properties in and around Rochester, New York. The sale of two of these warehouses closed in January 2004 and March 2005, respectively. The remaining two properties are under contract with the closing scheduled for year-end. Fitch projects losses upon disposition of these properties. The second largest specially serviced loan is a retail property in Cedar City, Utah, and is current. This loan was transferred to the special servicer in February 2003 due to the bankruptcy of Kmart and subsequent rejection of lease. The borrower has since been attempting to re-tenant the vacant space. The special servicer is assessing its options with regards to the workout of this loan. Fitch does not anticipate a loss on this loan at this time. BEAR STEARNS: Fitch Puts Low-B Ratings on Class J & K Certificates ------------------------------------------------------------------ Bear Stearns Commercial Mortgage Securities Inc., commercial mortgage pass-through certificates, series 2005-LXR1, are rated by Fitch Ratings: -- $226,375,000 class A-1 'AAA'; -- $150,916,000 class A-2 'AAA'; -- $169,870,000 class A-3 'AAA'; -- $982,753,256 class X-1 'AAA'; -- $982,753,256 class X-2 'AAA'; -- $136,789,000 class B 'AA-'; -- $34,197,000 class C 'A+'; -- $34,197,000 class D 'A'; -- $34,152,000 class E 'A-'; -- $51,387,000 class F 'BBB+'; -- $68,349,000 class G 'BBB'; -- $68,395,000 class H 'BBB-'; -- $75,196,000 class J 'BB+'; -- $24,550,301 class K 'BB'. 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 15 full service hotels and a retail shopping center securing one floating rate loan having a principal balance of approximately $1,074,373,302, as of the cutoff date. For a detailed description of Fitch's rating analysis, please see the report titled 'Bear Stearns Commercial Mortgage Securities Inc., Series 2005-LXR1', dated Nov. 14, 2005, and available on the Fitch Ratings Web site at http://www.fitchratings.com/ BIRCH TELECOM: Files Disclosure Statement in Delaware ----------------------------------------------------- Birch Telecom, Inc. and its debtor-affiliates delivered a Disclosure Statement explaining their Joint Chapter 11 Plan of Reorganization to the U.S. Bankruptcy Court for the District of Delaware. The Plan provides for the classification and treatment of Claims against and Interests in the Debtors based on a joint plan structure. The Plan represents a proposed reorganization of the Debtors including the proposed Lender Settlement, on terms agreeable to the Debtors and the secured lenders under the credit agreement, dated as of Sept. 30, 2002, among Birch Telecom Finance, Inc., the borrower, Birch Telecom, Inc., and Bank of America, N.A., as administrative agents, and the lenders. Terms of the Plan Under the Plan: * Priority Claims other than Administrative Claims and Priority Tax Claims; and * Other Secured Claims, are unimpaired. Treatment of Impaired Claims Lender Claims The Debtor tells the Court that Lender Claims are divided in to 29 sub-classes: 1. Finance Lender Secured Claims; and 2. Birch and Guarantor Debtor Credit Agreement Guarantee Secured Claims where the remaining 28 subclasses are grouped. Finance Lender Secured Claims If the Court approves the Lender Settlement, then on the Consummation Date: (a) an amount equal to the indebtedness under the Credit Agreement will be refinanced as Reinstated Indebtedness under the Amended and Restated Credit Agreement and Reorganized Finance and each holder of Finance Lender Secured Claims will execute and deliver the Amended and Restated Credit Agreement; (b) under the Amended and Restated Credit Agreement, Reorganized Finance will execute and deliver a New Promissory Note to each of the Lenders requesting such a note and evidencing the term loan obligation of Reorganized Finance; (c) Reorganized Finance will enter into and execute such documents, instruments and agreement requested by the New Agent to confirm, affirm or grant to the New Agent for the ratable benefit of the lenders under the Amended and Restated Credit Agreement a duly perfected first priority lien on and security interest in the assets of Reorganized Finance owned on the consummation date subject to liens securing Other Secured Claims and other permitted liens provided in the Amended and Restated Credit Agreement; (d) Reorganized Finance will enter into and execute such other documents, instruments and agreements as requested by the New Agent pursuant to the terms of the Amended and Restated Credit Agreement including the New Guarantee and Collateral Agreement; (e) holders of Finance Lender Secured Claims will receive a Pro Rata share of New Common Stock; (f) Finance and its Estate will release the Agent and the Lenders; and (g) Reorganized Birch will pay in full and in cash the expenses of the Lender Steering Committee. In the event that the Court does not approve the Lender Settlement, holders of Finance Lender Secured Claims will receive the same treatment except that: * Finance and its Estate will not release the Agent and the Lenders, and * the Creditor Trust Action will be assigned to the Creditor Trust. Credit Agreement Guarantee Secured Claims If the Court approves the Lender Settlement, then on the Consummation Date: (i) Reorganized Birch and the Reorganized Guarantor Subsidiary Debtors will enter into and execute: (a) the Amended and Restated Credit Agreement, each as guarantor of Reorganized Finance's obligations and execute such other documents, instruments and agreements requested by the New Agent to confirm, affirm or grant to the lenders under the Amended and Restated Credit Agreement a guarantee by Reorganized Birch and each Reorganized Guarantor Subsidiary Debtor of the indebtedness of Reorganized Finance under the Amended and Restated Credit Agreement; (b) documents, instruments and agreement reasonably requested by the New Agent to confirm, affirm or grant to the New Agent for the ratable benefit of the lenders under the Amended and Restated Credit Agreement a duly perfected first priority lien on and security interest in all assets of Reorganized Birch and each Reorganized Guarantor Subsidiary Debtor owned on the consummation date or acquired subject to liens securing Other Secured Claims and other permitted liens provided in the Amended and Restated Credit Agreement; and (c) other related documents, instruments and agreements requested by the New Agent pursuant to the terms of the Amended and Restated Credit Agreement including the New Guarantee and Collateral Agreement; and (ii) the Guarantor Debtors and their Estates will release the Agent and the Lenders. In the event that the Court does not approve the Lender Settlement, holders Guarantee Secured Claims will receive the same treatment except that: * Finance and its Estate will not release the Agent and the Lenders, and * the Creditor Trust Action will be assigned to the Creditor Trust. Deficiency Claims If the Court approves the Lender Settlement, then holders of Lender Deficiency Claims will receive nothing under the plan. If the Court does not approve the Lender Settlement, then holders of Allowed Lender Deficiency Claims will receive the same treatment as General Unsecured Claims. General Unsecured Claims Under the plan, liability for all General Unsecured Claims as of the consummation date will be automatically deemed assumed by the Creditor Trust. In the event that the holders of General Unsecured Claims accept the Plan, the Committee supports the Plan and the Court approves the Lender Settlement, the Debtors will: (a) pay the Trust Payment to the Creditor Trust the total amount of $500,000; and (b) transfer the Trust Avoidance Claims to the Creditor Trust and on the Distribution Date, each holder of an allowed general unsecured claim will receive: * a Pro Rata share of Available Creditor Trust Cash; * treatment as a Convenience Claims if elected by the holder of the general unsecured claim; or * other treatment that the Trustee and holder of such claim agree upon. In the event that the Court approves the Lender Settlement without the Committee supporting the plan or the holders of general unsecured claims rejecting the plan: (a) Lenders will pay the Limited Recourse Loan Proceeds in the amount of $100,000 to the Creditor Trust on the consummation date; and (b) the Debtors will transfer the Trust Avoidance Claims to the Creditor Trust and on the Distribution Date, each holder of an allowed general unsecured claim will receive: * Pro Rata share of Available Creditor Trust Cash; * treatment as a Convenience Claims if elected by the holder of the general unsecured claim; or * other treatment that the Trustee and holder of such claim agree upon. When the Excess Available Creditor Trust is realized, it will be used to repay to the Agent the Limited Recourse Loan in full. If the Court does not approve the Lender Settlement, then the Debtor will transfer the Creditor Trust Action to the Creditor Trust and on the Distribution Date, each holder of an allowed general unsecured claim will receive: (a) a Pro Rata share of Available Creditor Trust Cash; (b) treatment as a Convenience Claims if elected by the holder of the general unsecured claim; or (c) other treatment that the Trustee and holder of such claim agree upon. Other Claims Holders of: * Intercompany Claims; * Old Birch Series A Preferred Stock Interests; * Old Birch Common Stock Interests; * Old Subsidiary Equity Interest; and * Other Equity Interests, will receive nothing under the plan and on the consummation date, will be cancelled and extinguished. Subordinated Claims won't receive anything under the plan either. Convenience Claims will receive in full satisfaction, cash equal to an [unspecified] percentage of the amount of the convenience claim. Headquartered in Kansas City, Missouri, Birch Telecom, Inc. and its subsidiaries -- http://www.birch.com/-- own and operate an integrated voice and data network, and offer a broad portfolio of local, long distance and Internet services. The Debtors provide local telephone service, long-distance, DSL, T1, ISDN, dial-up Internet access, web hosting, VPN and phone system equipment for small- and mid-sized businesses. Birch Telecom and 28 affiliates filed for chapter 11 protection on Aug. 12, 2005 (Bankr. D. Del. Case Nos. 05-12237 through 05-12265). When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. BIRCH TELECOM: Wants Exclusive Period Extended Until March 10 ------------------------------------------------------------- Birch Telecom, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to further extend until March 10, 2006, the period in which they have the exclusive right to file a chapter 11 plan. The Debtors also want until May 9, 2006, to solicit acceptances of that plan. Since the chapter 11 filing, the Debtors have made significant progress, including: * the stabilization of their businesses, * negotiation of reorganization terms with their creditors, and * filing of an initial plan and disclosure statement [with a number of blanks to be filled-in]. The Debtors believe that the extension will afford them enough time to negotiate and propose one or more reorganization plans to rehabilitate their businesses without the additional costs, business deterioration and disruption that might be caused by the filing of competing reorganization plans by non-Debtor parties. In addition, the Debtors want to further develop and negotiate the terms of their initial reorganization plan, which they hope will lead to a consensual resolution of their chapter 11 cases. Headquartered in Kansas City, Missouri, Birch Telecom, Inc. and its subsidiaries -- http://www.birch.com/-- own and operate an integrated voice and data network, and offer a broad portfolio of local, long distance and Internet services. The Debtors provide local telephone service, long-distance, DSL, T1, ISDN, dial-up Internet access, web hosting, VPN and phone system equipment for small- and mid-sized businesses. Birch Telecom and 28 affiliates filed for chapter 11 protection on Aug. 12, 2005 (Bankr. D. Del. Case Nos. 05-12237 through 05-12265). When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. BIRCH TELECOM: Has Until Feb. 8 to Remove Civil Actions ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended through Feb. 8, 2006, the time within which Birch Telecom, Inc., and its debtor-affiliates may file notices with respect to pre- petition civil actions pursuant to Rule 9006(b) of the Federal Rules of Bankruptcy Procedure. The Debtors explained that they are parties to numerous judicial and administrative proceedings currently pending in various courts and administrative agencies throughout the country. Those actions consist of all forms of commercial, tort and employment-related litigation. The Debtors gave the Court three reasons supporting the extension: 1) they have devoted most of the time since the Petition Date in stabilizing their businesses, implementing various cost- saving measures and implementing procedures to comply with the substantial reporting and disclosure requirements required for debtors-in-possession; 2) the requested extension will give them more time and opportunity to make fully-informed decisions concerning the removal of the pre-petition civil actions in order to protect their valuable right to adjudicate lawsuits pursuant to 28 U.S.C. Section 1452; 3) the requested extension will not prejudice the Debtors' adversaries in the civil actions because if the extension is granted, it will not prevent those adversaries from seeking a remand pursuant to 28 U.S.C. Section 1452(b). Headquartered in Kansas City, Missouri, Birch Telecom, Inc. and its subsidiaries -- http://www.birch.com/-- own and operate an integrated voice and data network, and offer a broad portfolio of local, long distance and Internet services. The Debtors provide local telephone service, long-distance, DSL, T1, ISDN, dial-up Internet access, web hosting, VPN and phone system equipment for small- and mid-sized businesses. Birch Telecom and 28 affiliates filed for chapter 11 protection on Aug. 12, 2005 (Bankr. D. Del. Case Nos. 05-12237 through 05-12265). When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. BISYS GROUP: Extends Closing Date for Unit's Sale to Dec. 31, 2005 ------------------------------------------------------------------ The BISYS Group, Inc. has reached an agreement with Open Solutions Inc. (NASDAQ: OPEN) to amend the Stock Purchase Agreement, dated as of Sept. 15, 2005, among them and certain of their subsidiaries providing for the sale of BISYS' Information Services group. The amendment, among other things, extends the date for completing the sale from Dec. 31, 2005 to Feb. 28, 2006. In connection with the amendment, Open Solutions has extended its financing commitment and BISYS has agreed to compensate Open Solutions for its out-of-pocket expenses and incremental bank fees and interest costs related to the extension. As previously reported, the transaction is subject to certain closing conditions, including the completion of an audit of the Information Services group. The completion of the audit has been delayed pending conclusion of the company's previously announced restatement of certain of its previously issued financial results. BISYS currently expects to complete the restatement and close the sale of Information Services prior to Feb. 28, 2006. Lenders' Consent BISYS has obtained a consent from the lenders under its Senior Unsecured Credit Facility: * to extend the cure periods with respect to defaults resulting from the company's failure to file certain required financial reports and * to deliver the related compliance certificates. The filings of these reports are being delayed pending completion of the restatement. The cure periods with respect to its Form 10-Q for the fiscal quarter ended March 31, 2005 and Form 10-K for the fiscal year ended June 30, 2005 have each been extended to Jan. 31, 2006. The cure period with respect to the company's Form 10-Q for the fiscal quarter ended Sept. 30, 2005 was previously extended to Jan. 31, 2006. In connection with this consent, BISYS repaid the $53.7 million term loan portion of the Credit Facility in full and agreed that it will not request credit under the Credit Facility until such time as it files its Form 10-K for the fiscal year ended June 30, 2005 and completes the Information Services sale. BISYS believes that its operating cash flows and cash on hand will be sufficient to support its near-term working capital and other cash requirements through the expected closing of such sale. The BISYS Group, Inc. (NYSE: BSG) -- http://www.bisys.com/-- provides outsourcing solutions that enable investment firms, insurance companies, and banks to more efficiently serve their customers, grow their businesses, and respond to evolving regulatory requirements. Its Investment Services group provides administration and distribution services for mutual funds, hedge funds, private equity funds, retirement plans and other investment products. Through its Insurance Services group, BISYS is the nation's largest independent wholesale distributor of life insurance and a leading independent wholesale distributor of commercial property/casualty insurance, long-term care, disability, and annuity products. BISYS' Information Services group provides industry-leading information processing, imaging, and back-office services to banks, insurance companies and corporate clients. Headquartered in New York, BISYS generates more than $1 billion in annual revenues worldwide. BLUE BEAR: Court Establishes February 6 as Claims Bar Date ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado set Feb. 6, 2006, as the deadline for all creditors owed money by Blue Bear Funding, LLC, on account of claims arising prior to Aug. 22, 2005, to file their proofs of claim. Creditors must file written proofs of claim on or before the February 6 Claims Bar Date and those forms must be delivered to: Clerk of the Bankruptcy Court U.S. Bankruptcy Court for the District of Colorado United States Custom House 721 19th Street Denver, Colorado 80202-2508 Headquartered in Windsor, Colorado, Blue Bear Funding, LLC -- http://www.bluebearfunding.com/-- provides invoice factoring services. The Company filed for chapter 11 protection on Aug. 22, 2005 (Bankr. D. Colo. Case No. 05-31300). Alice A. White, Esq., and Douglas W. Jessop, Esq., at Jessop & Company, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated it had $1 million to $10 million in assets and liabilities of $10 million to $50 million. BLUE RIDGE: Cost Pressures Prompt S&P's Negative Outlook -------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Canton, North Carolina-based Blue Ridge Paper Products Inc. to negative from stable. At the same time, Standard & Poor's affirmed its 'B-' corporate credit rating and 'B-' senior secured debt rating. "The outlook revision reflects three primary concerns: higher raw material and energy costs; the cost impact of producing higher-brightness uncoated paper; and expiration of the labor contract in May 2006," said Standard & Poor's credit analyst Dominick D'Ascoli. Blue Ridge is facing raw material and energy cost pressures that are pervasive in the forest products industry. In addition, the industry shift to a higher brightness of uncoated paper will increase costs. These two factors are likely to negatively affect Blue Ridge's financial performance and reduce liquidity. "We believe there will be no relief from these cost pressures until some of the announced industry price increases take effect early next year," Mr. D'Ascoli said. "In addition, the company faces the expiration of a labor union contract in May 2006, and we are concerned that employees may seek a substantial increase in wages and benefits because they agreed to a 15% wage and benefit reduction and a seven-year wage freeze when the company was formed in 1999." Unions represented approximately 80% of the company's employees at Dec. 31, 2004. Blue Ridge is a small player in cyclical bleached paperboard and uncoated freesheet markets competing against much larger competitors. BOULEVARD PHARMACY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Boulevard Pharmacy Corporation P.O. Box 52106 Toa Baja, Puerto Rico 00949 Bankruptcy Case No.: 05-13064 Type of Business: The Debtor sells and leases medical equipment. Chapter 11 Petition Date: December 14, 2005 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Winston Vidal Gambaro, Esq. Winston Vidal Law Office P.O. Box 193673 San Juan, Puerto Rico 00919-3673 Tel: (787) 751-2864 Fax: (787) 763-6114 Total Assets: $2,108,125 Total Debts: $1,981,396 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Services Federal taxes $207,709 Mercantil Plaza Bldg R-2 Avenue Ponce De Le�n San Juan, PR 00918-1693 Banco Popular de PR Bank loan $154,992 P.O. Box 362708 San Juan, PR 00936-2708 Department of Treasury of PR Taxes $79,899 Bankruptcy Section (424-B) P.O. Box 9024140 San Juan, PR 00902-4140 Umeco Inc. Trade debt $33,447 Droguer�a Central, Inc. Trade debt $30,352 Municipio de Toa Baja Municipal taxes $19,163 CRIM Real property taxes $14,708 Anda Generics Trade debt $11,684 Pride Mobility Products Corp. Trade debt $10,921 Antonio Vallecillo Trade debt $10,800 Humana Insurance Trade debt $9,156 Department of Treasury of PR Taxes $8,897 Autoridad Energ�a El,ctrica Utility $6,079 Caribbean Retirement Trade debt $5,000 Services, Corp. Worldnet Telecommunications Trade debt $4,907 Lcdo. Carlos E. J�menez Trade debt $4,610 Drugs Unlimited Trade debt $4,138 Departamento Del Trabajo y Taxes $4,099 Recursos Humanos Internal Revenue Services Federal taxes $3,849 Banco Popular de PR Overdraft $3,634 BUDGET GROUP: Court Enters Final Decree Closing Bankruptcy Case --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware issued a final decree closing the chapter 11 case of Budget Group, Inc., nka BRAC Group, Inc., on Dec. 14, 2005. BRAC Group is the reorganized entity created pursuant to the merger of Budget Group, Inc., and its debtor-affiliates following the confirmation of their Second Amended Joint Liquidating Plan of Reorganization. As reported in the Troubled Company Reporter on Sept. 28, 2005, Walker, Truesdell & Associates, the Plan Administrator, told the Bankruptcy Court that the Plan has been substantially consummated and that it does not anticipate filing any further motions, applications or pleadings except to the extent necessary to resolve the remaining claims and effect a turnover of the cure reserve to Cendant Corporation. Walker Truesdell has distributed approximately $81 million since the effective date of the Plan and holds approximately $1.1 million in reserves. Headquartered in Daytona Beach, Florida, Budget Group, Inc., operates under the Budget Rent a Car and Ryder names -- is the world's third largest car and truck rental company. The Company filed for chapter 11 protection on July 29, 2002 (Bankr. Del. Case No. 02-12152). Lawrence J. Nyhan, Esq., and James F. Conlan, Esq., at Sidley Austin Brown & Wood and Robert S. Brady, Esq., and Edward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $4,047,207,133 in assets and $4,333,611,997 in liabilities. On April 20, 2004, the Court confirmed the Debtors' Joint Liquidation Plan, as modified, in accordance with Sections 1129(a) and (b) of the Bankruptcy Code. CABOODLES LLC: Wants Until Jan. 31 to Decide on Warehouse Leases ---------------------------------------------------------------- Caboodles, LLC, asks the U.S. Bankruptcy Court for the Western District of Tennessee to extend the period within which it may assume, assume and assign, or reject its unexpired non-residential leases until Jan. 31, 2006. The Debtor tells the Court that it is the lessee of two warehouses located at: * Suite 112, 6400 Shelby View Drive, Memphis, Tennessee, and * 750 Chester Road, Delta, British Columbia. As reported in the Troubled Company Reporter on Dec. 8, 2005, the Debtor previously asked the Court for an extension until confirmation of a plan of reorganization. Headquartered in Memphis, Tennessee, Caboodles, LLC, aka Caboodles Cosmetics, manufactures cosmetics. The company filed for chapter 11 protection on Sept. 30, 2005 (Bankr. W.D. Tenn. Case No. 05-35710). Steven N. Douglass, Esq., at Harris Shelton Hanover Walsh, PLLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $18,422,133 in assets and $15,874,247 in debts. CALPINE CORP.: Del. Sup. Ct. Orders $312 Mil. Payment by Jan. 22 ---------------------------------------------------------------- The Delaware Supreme Court ruled Friday night that Calpine Corp. must return $312 million to Wilmington Trust Company for the benefit of bondholders. The Court concludes that Calpine was wrong when it used sale transaction proceeds for other corporate purposes. The Delaware Supreme Court entertained oral argument in Wilmington Trust v. Calpine, Case Nos. 602 and 603, 2005, on Thurs., Dec. 15, 2005. A 60-megabyte audio recording of those spirited arguments and intense questioning from a three-judge panel in MP3 format is available at no charge at http://researcharchives.com/t/s?3cd In a 10-page opinion, the three-judge panel tells Calpine to restore the $312 million by January 22, 2006. Calpine's lawyers say the company doesn't have the money. CATHOLIC CHURCH: Portland Inks Agreements with Applied Discovery ---------------------------------------------------------------- The Archdiocese of Portland sought and obtained authority from the U.S. Bankruptcy Court for the District of Oregon to enter into two contracts with Applied Discovery, Inc., a provider of electronic discovery services. Judge Perris has ordered the Archdiocese to produce electronic records pursuant to the discovery requests of ACE Property and Casualty Insurance Company and General Insurance Company. The Archdiocese requires the assistance of an electronic discovery service provider to comply with the Court order. Pursuant to the first contract, ADI has and will provide consulting services to the Archdiocese to assist in evaluating a proposal by the Archdiocese's insurers concerning collection, searching, and review of electronic data, and in monitoring performance of the insurer's proposal for confidentiality purposes, if the insurer's proposal was accepted. Consulting services will be billed at an hourly rate, and the amount to be paid pursuant to the contract is not expected to be outside the ordinary course of business. Pursuant to the second contract, ADI will provide document retrieval and processing services to the Archdiocese to assist it in complying with the Court's order. The Archdiocese has filed a redacted copy of the second contract to protect proprietary information about the Archdiocese's computer systems. Services under the second contract are billed at an hourly rate for consulting services, together with fees for specified deliverables. The amount to be paid pursuant to the contract may exceed $150,000. Teresa H. Pearson, Esq., at Miller Nash LLP, relates that the Archdiocese obtained and evaluated bids from several vendors, including one proposed by its insurers, prior to entering into the contracts. The Archdiocese determined that ADI is the most cost- effective service provider. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000) CELERO TECH: Creditors Must File Proofs of Claim by January 13 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware set January 13, 2006, as the deadline for all creditors owed money by Celero Technologies, Inc. on account of claims arising prior to August 22, 2005, to file their proofs of claim. Creditors must file their written proofs of claim on or before the January 13 Claims Bar Date, and those forms must be filed with: The Clerk of the Bankruptcy Court Eastern District of Pennsylvania Robert N.C. Nix, Sr., Federal Building 900 Market Street, 4th Floor Philadelphia, Pennsylvania 19107 For a Governmental Unit, the Claims Bar Date is June 4, 2006. Headquartered in Philadelphia, Pennsylvania, Celero Technologies, Inc., filed for chapter 11 protection on August 22, 2005 (Bankr. E.D. Pa. Case No. 05-31273). Amy E. Vulpio, Esq., and Robert A. Kargen, Esq., at White and Williams LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $500,000 to $1 million in assets and $10 million to $50 million in liabilities. CELERO TECHNOLOGIES: Lease Decision Period Extended Until Jan. 19 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended the period within which Celero Technologies, Inc., can elect to assume, assume and assign, or reject its unexpired nonresidential real property leases until Jan. 19, 2006. The Debtor is a party to two non-residential real property leases that consist of office spaces. Those two leases are located at 2583 Gateway Drive, Suite 200, State College, Pennsylvania and at 1500 Market Street, Philadelphia, Pennsylvania. The Debtor gave the Court three reasons supporting the extension: 1) it is currently engaged in an adversary proceeding with Strategic Management Group, Inc., which purchased certain assets of the Debtor in February 2005, and the outcome of that adversary proceeding may affect the Debtor's ability to continue operating and to reorganize; 2) it is currently in the process of formulating a plan of reorganization and evaluating alternative strategies that will impact its final decision to assume or reject the unexpired leases; and 3) the extension will not prejudice the counter-parties to the unexpired leases because the Debtor is current on all post- petition obligations under those leases. Headquartered in Philadelphia, Pennsylvania, Celero Technologies, Inc., filed for chapter 11 protection on August 22, 2005 (Bankr. E.D. Pa. Case No. 05-31273). Amy E. Vulpio, Esq., and Robert A. Kargen, Esq., at White and Williams LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $500,000 to $1 million in assets and $10 million to $50 million in liabilities. CELTRON INT'L: Inks Agreement to Purchase Satellite Security ------------------------------------------------------------ Celtron International Inc. (OTCBB:CLTR) signed a definitive agreement to acquire 100% of the outstanding shares of Satellite Security Systems. S3 is an industry leader in tracking, monitoring, and controlling fixed and mobile assets for various Federal, Law Enforcements agencies, municipalities and corporations throughout North America. Under the terms of the agreement, S3 shareholders will receive 67 million shares of Celtron Stock in exchange for 100% of the outstanding shares of S3. In addition, S3 management will assume all executive management responsibilities of Celtron and will move Celtron's headquarters from South Africa to the United States. Management will concentrate on the asset management business in the U.S. and develop and expand upon S3's commercial and government contracts. "S3 has been very successful in identifying and executing on clients' needs and even more importantly, meeting clients' expectations," Ken Dixon, Incoming CEO, said. "We have never had a problem finding the need for our solutions. With access to the public markets, we now have the financial backing necessary to aggressively fulfill the large contracts our customers typically request of our technology and our end-to-end solutions. The combined S3 and Celtron will focus heavily on ensuring we leverage large, existing opportunities to quickly drive revenue, providing us additional cash resources that allow S3 to continue entering new markets and expanding our sales network through OEM and other major market opportunities." Kenneth Dixon, formerly of the head of Automated Resource Logistics, helped design and implement the first indoor location system, and has years of experience in management of public companies. Mr. Dixon's 14 years as a military officer included serving as the Acquisition Officers for the Global Positioning System and Position Location Reporting System, the predecessor of today's automated location systems. Incoming President and COO, John Phillips, co-founded S3, and is the principal system architect and engineer of S3's primary technology. Mr. Phillips brings with him financial management and investment banking experience, as well as a background as a former federal officer for the U.S. Government's Tactical Law Enforcement Team. Incoming CFO Randall A. Smith has served as Vice President and Chief Financial Officer for several large manufacturing companies and is an expert in international business, mergers and acquisitions, fund raising, business restructuring, and Sarbanes-Oxley compliance. Mr. Smith has also served in the capacity of senior manager for the "big four" accounting firm, KPMG. About Satellite Security Systems Satellite Security Systems' GlobalGuard(TM) technology secures, tracks, and controls assets throughout the US, Mexico, and Canada for clients including military, government, police, and the consumer market. With GlobalGuard(TM), users can communicate with, monitor, track, analyze and control the movement of virtually any object in transit. The integration of Motorola's two-way satellite communications, on-board CPU and an integrated Global Positioning System make it possible for GlobalGuard(TM) users to send data back and forth from a central command unit or monitoring center while being continually alerted to new or dynamic changes. The GlobalGuard(TM) active communication and GPS system can be incorporated into unlimited applications. Satellite Security Systems' technology is used in the areas of covert vehicle monitoring and tracking, stolen vehicle recovery, and criminal apprehension, by the FBI, the U.S. Secret Service, U.S. Dept. of Homeland Security, U.S. Bureau of Immigration and Customs Enforcement, U.S. Department of Labor. Additionally, Washington DC Public School System, San Francisco Unified School District, Fairfax County Public Schools, InterState Oil Company, Sacramento Air Quality Management District, Gateway Cities of Governments, and more than 600 other entities utilize S3's solutions for various other commercial applications. About Celtron International Inc. Celtron International, Inc. is engaged in the business of marketing products and services in vehicle locating and management, and asset tracking and telemetry solutions. Celtron's products and services incorporate the latest, state of the art technology, including cellular, global positioning, and satellite technology. * * * Going Concern Doubt As reported in the Troubled Company Reporter on July 7, 2005, Cordovano and Honeck, LLP, expressed substantial doubt about Celtron International, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004. The auditing firm points to the Company's significant operating losses. Since inception, the company has experienced losses and financed its operations primarily through the sale of common stock or by loans from shareholders. The net loss for the year ended Dec. 31, 2004 was $6,612,837, as compared to a net loss at Dec. 31, 2003 of $3,153,204. Management attributes the increase in net loss primarily to expenses charged for stock based compensation of $6,123,889, including a one-time charge for research and development costs for the company's tracking system, in the amount of $4,071,922. COGECO CABLE: Satisfactory Industry Niche Earns S&P's BB+ Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed all its ratings on Cogeco Cable Inc., including the 'BB+' long-term corporate credit rating. The outlook is stable. The ratings on Cogeco Cable reflect the company's satisfactory business position as Canada's fourth-largest cable company, as well as a substantial improvement in the company's financial risk profile in the past three years, as free operating cash flow has been applied to debt reduction. "Leverage and other key credit measures have now improved to levels which are consistent with the current rating," said Standard & Poor's credit analyst Joe Morin. "Barring management's stated intention of seeking appropriate international acquisitions, credit measures would be expected to improve further. Nevertheless, we believe that any acquisition that comes to fruition could have a material debt component, creating uncertainty that precludes any positive revision to the outlook or rating at this time. In fact, an acquisition could have negative rating implications depending on business quality, size and how financed," Mr. Morin added. Cogeco Cable's business risk profile has remained relatively stable in the face of competition from direct-to-home satellite-TV providers Star Choice Communications Inc. and Bell ExpressVu Ltd. Basic penetration as a percentage of homes passed continued to decline, albeit at a lower pace, to 56.7% for fiscal 2005 ended Aug. 31, 2005, compared with 57.9% a year ago, due to additional market share gains by the DTH providers. Nevertheless, basic subscriber losses were only about 2,400 in fiscal 2005 as Cogeco Cable increased the number of homes passed. Another factor contributing to the basic subscriber losses in fiscal 2005 was the intense competition from Bell Canada. Despite pressures on the basic subscriber side, Cogeco Cable has a consistent track record of acquiring higher value digital-TV and high-speed Internet subscribers. Cogeco Cable has one of the highest digital-TV penetration rates but the lowest HSI penetration among the top four Canadian cable operators. Digital penetration as percentage of basic subscribers and broadband penetration as a percentage of homes passed were 31.1% and 19.2%, respectively, for fiscal 2005. The outlook is stable. Standard & Poor's expects that Cogeco Cable will be able to maintain a competitive position against DTH satellite service providers and offset any basic subscriber erosion through continued growth in digital TV and HSI subscribers. The outlook could be negatively affected if Cogeco Cable does not perform as expected due to continued competitive pressures and/or the company completes a significant debt-financed acquisition that negatively affects credit metrics. Alternatively, the outlook could be revised to positive on the continued strengthening of credit metrics and the company's business risk profile. The ratings and outlook also assume that no material amount of debt will be added at the parent level, and that parent company Cogeco Inc. and its media assets will continue to be credit neutral. COMBUSTION ENG'G: Court Approves Hartford & First State Settlement ------------------------------------------------------------------ The Hon. Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement between Combustion Engineering, Inc., First State Insurance Company and Hartford Accident and Indemnity Company. Judge Fitzgerald also authorized the sale of certain insurance policies, free and clear of liens, claims, interests and other encumbrances, to Hartford and First State (collectively know as the Hartford Released Parties). Asbestos-Related Claims As reported in the Troubled Company Reporter on Oct. 31, 2005, the Debtor faces numerous asbestos-related personal injury lawsuits pending in various parts of the United States. First State Insurance Company and Hartford Accident and Indemnity Company are two of the insurance companies that extended insurance coverage to the Debtor from 1940 and 1985. Prior to the mid- 1990s, approximately two-thirds of asbestos payments made by the Debtor were reimbursed by insurance. However, insurance available to cover the payment of asbestos claims has deteriorated dramatically, with Combustion exhausting its primary insurance coverage or settling with its primary carriers, and its excess insurers disputing liability. On Oct. 24, 2003, Combustion sued its insurers in the Delaware Bankruptcy Court seeking, among other relief, coverage from First State for asbestos-related bodily injury claims. Insurance Settlement To resolve their long-standing dispute, the Debtor, Hartford and First State agreed to an amicable settlement. Salient terms of the agreement include: a) Hartford and First State's repurchase of the policies issued to Combustion; b) First State's payment of a settlement amount of $8,475,000 which shall be allocated for the payment of asbestos claims; c) release of Hartford and First State from all issues involving coverage claims. Headquartered in Norwalk, Connecticut, Combustion Engineering, Inc., is the U.S. subsidiary of the ABB Group. ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in more than 100 countries and employs about 103,000 people. Combustion Engineering filed for chapter 11 protection on Feb. 17, 2003 (Bankr. D. Del. Case No. 03-10495). Curtis A. Hehn, Esq., at Pachulski Stang Ziehl Young & Jones and Jennifer Mo, Esq., at Kirkpatrick & Lockhart Nicholson Graham represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated more than $100 million in assets and debts. On July 10, 2003, the Debtor's Plan of Reorganization was confirmed. Certain insurers appealed the confirmation order to the United States Court of Appeals for the Third Circuit. On Dec. 2, 2004, the Third Circuit vacated the Confirmation Order and remanded the Debtor's case. COMPASS MINERALS: Prices New 10% Senior Subordinated Notes ---------------------------------------------------------- Compass Minerals Group, a subsidiary of Compass Minerals International, Inc. (NYSE:CMP), has priced its cash tender offer to purchase any and all of its outstanding 10% Senior Subordinated Notes due 2011. The tender offer and consent solicitation for the Notes is being made pursuant to an Offer to Purchase and Consent Solicitation Statement dated Nov. 21, 2005 and the related Letter of Transmittal and Consent. Upon consummation of the tender offer, Compass will pay holders who validly tendered and did not withdraw their Notes on or before 5:00 p.m. Eastern time on Monday, Dec. 5, 2005 total consideration of $1,080.82 for each $1,000 principal amount of Notes accepted for purchase, plus accrued and unpaid interest up to, but not including, the settlement date. The total consideration includes a consent payment equal to $20 per $1,000 principal amount of Notes tendered. Holders whose Notes are validly tendered and not withdrawn after the Consent Date and on or before midnight Eastern time on Monday, Dec. 19, 2005 will be eligible to receive the tender offer consideration, namely the applicable total consideration minus the consent payment or $1,060.82 per $1,000 of Notes accepted for purchase, plus accrued and unpaid interest up to, but not including, the settlement date. As described in more detail in the Offer to Purchase, the total consideration and the tender offer consideration for the Notes was determined based on a fixed spread of 50 basis points over the bid-side yield of 4.344 percent on the 2.375-percent U.S. Treasury Note due Aug. 15, 2006. The tender offer will expire on the Expiration Date, subject to Compass' right to amend, extend or terminate the tender offer at any time. Consummation of the tender offer and consent solicitation, and payment of the tender offer consideration and consent payment, are subject to the satisfaction or waiver of various conditions, as described in the Offer to Purchase, including a financing condition. Settlement of the tender offer is expected to occur on or about Dec. 22, 2005, unless the tender offer is extended. The Dealer Manager and Solicitation Agent for the tender offer and consent solicitation is: J.P. Morgan Securities Inc. Tel # (212) 834-3424 (collect calls accepted) Toll-Free # (866) 834-4666 Requests for documents may be directed to the Information Agent: Global Bondholder Services, Inc. Tel. # (212) 430-3774 (collect calls accepted) Toll Free # (866) 470-3700 Based in the Kansas City metropolitan area, Compass Minerals -- http://www.compassminerals.com/-- is the second-leading salt producer in North America and the largest in the United Kingdom. The company operates nine production facilities, including the largest rock salt mine in the world in Goderich, Ontario, and two packaging facilities. The company's product lines include salt for highway deicing, consumer deicing, water conditioning, consumer and industrial food preparation, agriculture and industrial applications. In addition, Compass is North America's leading producer of sulfate of potash, which is used in the production of specialty fertilizers for high-value crops and turf, and magnesium chloride, which is a premium deicing and dust control agent. * * * As reported in the Troubled Company Reporter on Dec. 02, 2005, Moody's Investors Service affirmed the ratings of Compass Minerals Group, Inc., including the B1 Corporate Family Rating. Compass Minerals Group, Inc. is a wholly owned subsidiary of Compass Minerals International, Inc. A B1 rating was assigned to the new $350 million senior secured term loan facility, due 2012, and the $100 million senior secured revolving credit facility due 2010. The rating outlook is maintained at positive. As reported in the Troubled Company Reporter on Dec. 01, 2005, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Compass Minerals International Inc. and its operating subsidiary and rating identity Compass Minerals Group Inc. At the same time, Standard & Poor's assigned a 'BB-' rating and a recovery rating of '1' to Compass Minerals' proposed $450 million senior secured bank credit facility, indicating the expectation of full recovery of principal in the event of a payment default. Standard & Poor's also affirmed its 'B-' rating on the company's discount notes. The outlook is positive. COVANTA HOLDING: Waste-to-Energy Subsidiary Exits Chapter 11 ------------------------------------------------------------ Covanta Holding Corporation (NYSE: CVA) disclosed the successful reorganization and emergence from bankruptcy of its subsidiary, Covanta Warren Energy Resources Co., LP, which owns and operates a 400-ton-per-day waste-to-energy facility in Warren County, New Jersey. Under new agreements entered into with the Pollution Control Financing Authority of Warren County, Covanta Warren will continue to own the 12 megawatt waste-to-energy plant and will now operate the facility utilizing its typical "tip fee" contract structure. Covanta will charge market rates for the facility's entire waste disposal capacity which will serve Warren County and surrounding areas. The electrical output remains under long-term contract with Jersey Central Power and Light through 2013. Under the reorganization plan, Covanta Warren paid the entire outstanding balance of the project bonds originally issued by the PCFA of Warren County to finance construction of the facility. "We are very pleased that our Warren facility has successfully reorganized, and that we and the PCFA have worked out new arrangements that make good sense for both parties," said Anthony Orlando, President and Chief Executive Officer of Covanta Holding Corporation. "Since we began operating the Warren facility thirteen years ago, our employees have done an outstanding job providing the County with superior waste disposal service. This plan allows us to continue that tradition for many years to come and ensures that the Warren facility will be an important component of our network of waste disposal assets in the attractive northeast region." Headquartered in Fairfield, New Jersey, Covanta Energy Corporation -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. The Company filed for Chapter 11 protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826). Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,280,378,000 in assets and $3,031,462,000 in liabilities. On March 10, 2004, Covanta Energy Corporation and its core subsidiaries emerged from chapter 11 as a wholly owned subsidiary of Danielson Holding Corporation. Some of Covanta's non-core subsidiaries have liquidated under separate chapter 11 plans. CREDIT SUISSE: Fitch Affirms Low-B Ratings on Eight Cert. Classes ----------------------------------------------------------------- Fitch Ratings affirms Credit Suisse First Boston Mortgage Securities Corp. commercial pass-through certificates, series 2003-C3: -- $81.7 million class A-1 at 'AAA'; -- $214 million class A-2 at 'AAA'; -- $212 million class A-3 at 'AAA'; -- $55 million class A-4 at 'AAA'; -- $862.4 million class A-5 at 'AAA'; -- Interest-only classes A-X, A-SP, and A-Y at 'AAA'; -- $47.4 million class B at 'AA'; -- $19.4 million class C at 'AA-'; -- $38.8 million class D at 'A'; -- $19.4 million class E at 'A-'; -- $19.4 million class F at 'BBB+'; -- $12.9 million class G at 'BBB'; -- $19.4 million class H at 'BBB-'; -- $19.4 million class J at 'BB+' -- $12.9 million class K at 'BB'; -- $6.5 million class L at 'BB-'; -- $10.8 million class M at 'B+'; -- $2.2 million class N at 'B'; -- $4.3 million class O at 'B-'; -- $2.5 million class 622A at 'BBB-'; -- $6 million class 622B at 'BBB-'; -- $6 million class 622C at 'BBB-'; -- $6 million class 622D at 'BBB-'; -- $17.7 million class 622E at 'BB'; -- $1.6 million class 622F at 'BB'. Fitch does not rate the $21.6 million class P. The affirmations are due to the stable pool performance and scheduled amortization. As of the November 2005 distribution date, the pool's aggregate principal certificate balance has decreased 2.6% to $1.72 billion compared to $1.76 billion at issuance. In addition, 4.3% of the pool has been defeased. There is currently one loan in special servicing. The loan is secured by a 25,050 square feet office building located in Los Angeles, California. This loan was transferred to the special servicer due to monetary default. According to the special servicer, the loan has been corrected and monitored, and was returned to the master servicer effective Nov. 22, 2005. Fifteen loans are considered Fitch Loans of Concern due to decreases in debt service coverage ratio and occupancy or other performance issues. These loans' higher likelihood of default was incorporated into Fitch's analysis. The largest of these loans is a nine property multifamily portfolio in Texas where four of the properties sustained minor damage from Hurricane Rita. The five credit assessed loans remain investment grade. Fitch reviewed operating statement analysis reports and other performance information provided by the master servicer, Key Commercial Mortgage. The DSCR for the loans are calculated based on a Fitch adjusted net cash flow and a stressed debt service on the current loan balance and a hypothetical mortgage constant. 622 Third Avenue is secured by a 1 million sf class-A office building located in midtown Manhattan. The whole loan is divided into a $201.9 million pooled portion, a $39.8 million non-pooled portion and a B-note held outside of the trust. As of year-end 2004 the Fitch adjusted NCF has declined approximately 9.1% due to an increase in operating expenses. The Fitch stressed DSCR for the pooled portion as of YE 2004 was 1.48 times compared to 1.56x at issuance. As of September 2005, occupancy is 98.9% compared to 98.0% at issuance. Washington Center Portfolio is secured by a 888-room Grand Hyatt mixed-use full-service hotel and a 355,718 sf class-A office complex, located between the White House and the U.S. Capitol in the East End district of Washington, D.C. The whole loan was divided into a $120.5 million senior A-note, a $63.4 million B- note and a $27.4 million C-note. The B and C notes are held outside of the trust. The equity interest in the borrower serves as additional $35.9 million mezzanine loan. The revenue per available room as of the trailing 12 months ending October 2005 has increased to $159.07 from $121.84 at issuance. Occupancy as of September 2005 for the office portion was 97.6% compared to 99.9% at issuance. The Fitch stressed DSCR for the A-note portion of the loan as of YE 2004 is 2.62x compared to 1.96x at issuance. The remaining three credit assessed loans, Columbiana Center, The Crossings, and Great Lakes Shopping Center, have remained stable since issuance. CSC HOLDINGS: S&P Rates Proposed $1 Billion Senior Notes at B+ -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to CSC Holdings Inc.'s proposed $1 billion senior notes due 2015 to be issued under Rule 144A, with registration rights and a 'BB+' rating with a '1' recovery to CSC Holdings' proposed $4.5 billion in combined senior secured bank loan facilities. This rating is based on preliminary information, subject to receipt of final documentation. CSC Holdings is an intermediate holding company owned by Bethpage, New York-based cable TV operator Cablevision Systems Corp. Proceeds from these financings will be used by Cablevision to pay a $3 billion proposed special dividend, as well as refinance $1.5 billion in upcoming bank maturities. "These new ratings are not on CreditWatch, although Cablevision's existing long term-ratings remain on CreditWatch, where they had been placed with negative implications on June 20, 2005, first for concern about the credit effects of a proposed leveraged buyout by senior management, and subsequently because of unclear financing plans for $1.5 billion in debt maturing in June 2006," said Standard & Poor's credit analyst Catherine Cosentino. The new financings address this maturity. As such, upon completion of this financing package, all Cablevision's and related entities' ratings, including Cablevision's 'BB' corporate credit rating will be affirmed and removed from CreditWatch, except for CSC Holdings' unsecured debt issues. The 'BB-' rating for CSC Holdings' existing unsecured debt will be lowered to 'B+' because of the substantial amount of priority obligations relative to these unsecured debt issues that will exist; principally about $3.5 billion of secured debt. The 'B-2' short-term rating for Cablevision, which is on CreditWatch with developing implications, will simultaneously be raised to 'B-1' because of the modest amortization under the new bank loans and about $1 billion of initial availability under the revolving credit portion of the facility, which provides ample excess liquidity to support a 'B-1' rating. All existing ratings will then be removed from CreditWatch and a negative outlook will be assigned. Pro forma for the new financings total debt will be $12 billion. CSC HOLDINGS: Fitch Rates $1 Billion Senior Notes at BB- -------------------------------------------------------- Fitch Ratings has downgraded and removed from Rating Watch Negative these ratings for CSC Holdings, Inc.: -- Issuer Default Rating to 'B+' from 'BB-'; -- Senior subordinated debt to 'B' from 'B+'. Fitch also affirms: -- Senior unsecured debt 'BB-'; Additionally, Fitch assigns these ratings to CSC: -- $4.5 billion senior secured credit facility 'BB'; -- $1 billion senior unsecured notes 'BB-' CSC's Rating Outlook is Negative. Approximately $8.6 billion of debt at CSC as of Sept. 30, 2005 is affected by Fitch's action. Fitch expects that the proceeds from the bank facility and the senior note offering will be used to refinance CSC's existing senior secured bank facility and to fund a $3 billion special dividend. The downgrade of the IDR reflects CSC's decision to materially increase its leverage to fund the special dividend to Cablevision System Corporation's common shareholders. The increased leverage will constrain CSC's financial flexibility and hamper its ability to generate free cash flow. Fitch estimates that pro forma for the new financing, CSC's leverage as of the end of the third quarter of 2005 would increase to approximately 8 times and leverage within CSC's restricted group will increase to approximately 6.9x. Fitch's ratings also reflect: * the increasing business risk and the potential negative effect on subscriber metrics, * revenue growth, and * margin performance stemming from the persistent competition for video subscribers from the DBS operators and for broadband subscribers primarily from the regional bell operating companies. Longer term credit risks are centered on the increased competition for video business resulting from the regional bell operating companies entering into the video business. In Fitch's opinion, free cash flow generation from the cable operations during 2006 will be further pressured by increasing success based capital expenditures. However Fitch believes that CSC has a strong competitive position to address the increased competition as CSC continues to roll out its cable telephony and advanced digital video products. Fitch expects that the continued diversification of the company's revenue generating units will increase ARPU and drive EBITDA growth during 2006. The Negative Rating Outlook reflects: * Fitch's ongoing concern related to CSC's financial policy, * the potential for the company to continue to place greater priority on returning capital to shareholders at the expense of bond holders, and * the ongoing possibility CSC management will use distributions from the restricted group to fund other investments. Factors that would contribute to a Rating Outlook revision to Stable for CSC include: * an evaluation of the company's commitment to improving, * maintaining a stable credit profile, and * the continuation of CSC's positive subscriber and operational trends. Fitch initially placed all of CSC's ratings on Rating Watch Negative following an announcement by controlling shareholders of Cablevision Systems Corporation to take CVC private. The Rating Watch Negative was maintained following the withdrawal of the proposal and the concurrent recommendation by the controlling shareholder to CVC's board of directors that the company declare a $3 billion special cash dividend. CSK AUTO: Completes Pricing of $85 Million Private Debt Placement ----------------------------------------------------------------- CSK Auto Corp. (NYSE: CAO - News), the parent company of CSK Auto Inc., completed the pricing of its private placement of $85 million aggregate principal amount of exchangeable senior unsecured notes. In addition, the company has granted the initial purchaser of the new exchangeable senior notes an over-allotment option to purchase, within 30 days, up to an additional $15 million aggregate principal amount of notes. The notes will bear interest at a rate of 4.625% per year until Dec. 15, 2010, and will bear interest at a rate of 4.375% thereafter. The notes are exchangeable into shares of CSK Auto Corp. common stock at an initial exchange rate of 49.8473 shares per $1,000 principal amount of notes. The notes will mature on Dec. 15, 2025. The notes will be redeemable at the company's option beginning in December 2010 at a redemption price of 100% of their principal amount plus accrued interest. Holders of the notes will have the right to require the company to repurchase some or all of their notes in December of 2010, 2015 and 2020, and in certain other circumstances at a price equal to 100% of their principal amount plus accrued interest. The notes will be guaranteed by CSK Auto Corp. and the company's subsidiaries. The company expects to use proceeds from the note offering, together with availability under its existing senior credit facility, to fund the acquisition cost of CSK Auto Corp.'s pending acquisition of Murray's Inc. If the acquisition of Murray's Inc. is not consummated, the company intends to use the proceeds of the offering for general corporate purposes. The closing of the sale of the notes is expected to be consummated on or about Dec. 19, 2005, and is subject to customary conditions and contingencies. The notes offered and the common stock issuable upon exchange of the notes have not been registered under the Securities Act of 1933 as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements and applicable state securities laws. CSK Auto Corp. is the parent company of CSK Auto Inc., a specialty retailer in the automotive aftermarket. As of July 31, 2005, the company operated 1,142 stores in 19 states under the brand names Checker Auto Parts, Schuck's Auto Supply and Kragen Auto Parts. The company also operated three value concept retail stores under the brand name Pay N Save. * * * CSK Auto Corp.'s 7% Senior Subordinated Notes due Jan. 15, 2014, carry Standard & Poor's B- rating. DANA CORP: Credit Profile Erosion Prompts S&P to Downgrade Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Dana Corp. to 'B+' from 'BB', and its senior unsecured debt rating on the company to 'B-' from 'BB'. The ratings remain on CreditWatch with negative implications. If Dana files its restated financial statements with the SEC by Dec. 30, 2005, as required under the terms of its amended bank credit facility, the ratings will be affirmed and removed from CreditWatch. Failure to file such statements by Dec. 30 could result in termination of waivers on both the credit facility and its accounts receivable securitization program, and result in lenders pursuing remedies. Total outstanding debt at June 30, 2005, was about $2.2 billion. "The downgrade reflects the deterioration of the Toledo, Ohio-based auto supplier's credit profile," said Standard & Poor's credit analyst Daniel R. DiSenso. "The credit erosion is due to the company's weak operating performance, a result of difficult industry conditions for light-vehicle production. The weakened profile also reflects operational inefficiencies within Dana's automotive systems and commercial vehicle groups that will take time to fix. Free cash generation will be modest at best for the next two years, which means continued elevated debt levels. In addition, Dana will be taking large write-downs that will result in a much more aggressively leveraged balance sheet." Dana's senior unsecured debt is now rated two notches below the corporate credit rating. This reflects the debt's subordinated position to the firm's bank debt, which is now secured, and the priority liabilities at company subsidiaries. In connection with restructuring activities and asset disposals, Dana will record $324 million of pretax charges in 2005, including $315 million to reduce the net assets of businesses to their realizable sale value. The company expects to achieve more than $20 million of annual savings from this restructuring. It will close two facilities in its automotive systems group, and take a number of steps to balance capacity and to enhance manufacturing efficiencies at its commercial vehicle operations. In addition, Dana expects to achieve more than $40 million of annual savings from a 5% salaried workforce reduction and changes to its employee benefit programs. Dana has also announced plans to divest noncore businesses with annual sales of about $1.3 billion, representing about 14% of the firm's 2004 sales. Dana's U.S. operations have been unprofitable since 2001, and given the uncertain earnings outlook, Dana will be unable to maintain its U.S. deferred tax benefits or to record similar tax benefits in the future. Therefore, it will write off its U.S. deferred tax assets, which totaled about $740 million at June 30, 2005. The write-off will hurt earnings but not the company's cash flow. DOCTORS HOSPITAL: Panel Taps Chiron Fin'l as Investment Bankers --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Doctors Hospital 1997 LP asks the United States Bankruptcy Court for the Southern District of Texas, Houston Division, for permission to employ Chiron Financial Group, Inc., as its investment bankers. Chiron Financial is expected to: a) assist the Committee in the preparation of a placement memorandum describing the company, as well as other materials requested by interested parties, including financing and equity resources and business plan; b) develop and recommend financial structures for obtaining the required financing and equity capital in support of a Committee Plan and related disclosure statement; c) assist the Committee in raising equity for the Debtor and organize certain interested medical doctors to participate in an equity investment in the Debtor; d) identify, contract, and negotiate with lending and capital sources to obtain capital on costs and terms acceptable to the Committee; e) prepare written materials to be used with debt and equity capital sources in an effort to complete financial due diligence; f) assist the Committee in the preparation and implementation of the financing, including supporting the Committee in negotiations with and selection of potential providers of financing, and in the re-negotiation of existing debt or financing; g) assist the Committee in coordinating all communications with the various parties involved in any proposed financing; h) provide other assistance reasonably requested by the Committee to successfully confirm a Committee Plan, including testimony as to feasibility of the Committee Plan; and i) have no responsibility for independent verification of the accuracy and completeness of financial and other information that is and will be furnished to it by the Committee, the Debtor or any other party to any transaction. Chiron Financial will receive a $10,000 initial retainer that will be fully-earned and non-refundable. The firm will also receive: i) 1% of the aggregate commitment amount of any revolving debt financing that becomes effective under Committee Plan, payable in cash at the closing of transaction; alternatively, ii) 1.5% fee payable in cash at the closing of such replacement DIP facility if GE HFS Holdings, Inc., terminates the existing DIP financing and the firm introduces an alternative financing source able to close a replacement DIP facility that becomes effective under a Committee Plan; In addition, Chiron Financial is entitled to receive: i) 2% of the aggregate firm commitment amount of any senior term debt for real estate or equipment debt financing; ii) the greater of $50,000 or 3% of the aggregate firm commitment amount of subordinated debt financing; iii) 1.5% of the proceeds raised in any offering of new equity investment raised from one or more members which currently hold partnership interests in the Debtor; and iv) 4.5% of the proceeds raised in any offering of new equity investment raised from an investor which does not currently own, hold, or manage a partnership interest in the Debtor. Chiron Financial assures the Court that it does not represent any interest materially adverse to the Debtors or their estates. Headquartered in Houston, Texas, Doctors Hospital 1997 LP, dba Doctors Hospital Parkway-Tidwell, operates a 101-bed hospital located in Tidwell, Houston, and a 152-bed hospital located in West Parker Road, Houston. The Company filed for chapter 11 protection on April 6, 2005 (Bankr. S.D. Tex. Case No. 05-35291). James M. Vaughn, Esq., at Porter & Hedges, L.L.P., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $41,643,252 and total debts of $66,306,939. DORAL FINANCIAL: Latham & Watkins Completes Investigation --------------------------------------------------------- Doral Financial Corporation (NYSE: DRL) stated that the independent investigation being conducted by Latham & Watkins LLP at the direction of the company's Audit Committee has been substantially completed. As previously reported, as part of this investigation, Latham examined the mortgage loan sale transactions between the company and several local financial institutions. After receiving information from Latham concerning the results of its investigation, on Dec. 14, 2005, the company's Audit Committee decided: * to record the mortgage sales transactions with FirstBank Puerto Rico as loans payable secured by mortgage loans and * to reverse the gains previously recognized with respect to such transactions. It is likely that at the time of the transactions there were oral agreements or understandings between former members of the company's management and First Bank providing recourse beyond the limited recourse established in the written contracts. During the restatement period, the company entered into loan sale transactions with FirstBank aggregating to approximately $3.9 billion. In addition, while the company has not made a final determination of the accounting treatment of the mortgage sale transactions with other local financial institutions, it expects that the accounting for these transactions will continue to qualify for "sale" treatment under SFAS 140, except as set forth below with respect to certain contemporaneous mortgage loans purchase and sale transactions. The Audit Committee also decided to reverse a number of transactions involving the generally contemporaneous purchase and sale of mortgage loans from and to local financial institutions where the amounts purchased and sold, and other terms of the transactions, were similar. These include: * transactions with R&G Financial Corporation during the fourth quarter of 2004 and the first quarter of 2005 covering the purchase and sale of approximately $530 million in mortgage loans, * transactions covering the purchase and sale of approximately $200 million in mortgages with a local financial institution during 2000 and approximately $445 million in mortgages with another local financial institution during 2000 and 2001. The company's Audit Committee determined that there was insufficient contemporaneous documentation regarding the business purpose for these transactions in light of the timing and similarity of the purchase and sale amounts and other terms of the transactions. Accordingly, the Audit Committee determined to reverse the gains previously recognized with respect to these sales and record the transactions as loan payables secured by mortgage loans. Restatement Update The company also reported that, with the independent investigation substantially completed, absent new information, it anticipates that it will file its amended annual report on Form 10-K for the year ended Dec. 31, 2004 within approximately 60 days, and its quarterly reports on Form 10-Q for the first three quarters of 2005 as soon as practicable after the filing of its amended annual report on Form 10-K. As previously noted in its Form 8-K dated Sept. 22, 2005, the company had estimated that the corrections of the accounting issues addressed in the restatement would reduce its consolidated stockholders' equity, on a pre-tax basis, by approximately $720 million. As a result of the work completed, while the accounting has not been finalized, the company currently estimates that its consolidated stockholders' equity at Dec. 31, 2004 will be reduced, on a pre-tax basis, by approximately $910 million. The company expects that it and its banking subsidiaries will continue to be "well capitalized" for bank regulatory purposes as of Dec. 31, 2005. All the estimates included above are unaudited and have been calculated on a pre-tax basis because the company is still calculating the required adjustments for tax accruals. Doral Financial Corporation -- http://www.doralfinancial.com/-- a financial holding company, is the largest residential mortgage lender in Puerto Rico, and the parent company of Doral Bank, a Puerto Rico based commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm, Doral Insurance Agency, Inc. and Doral Bank FSB, a federal savings bank based in New York City. * * * As reported in the Troubled Company Reporter on Nov. 01, 2005, Moody's Investors Service downgraded to Ba3 from Ba1 the senior debt of Doral Financial Corporation. The ratings have been downgraded a number of times since Moody's initial review process began in April 2005. According to Moody's, a number of negative developments have occurred since the most recent downgrade, which was on Sept. 6, 2005. A partial list of ratings that have been downgraded: * Senior debt to Ba3 from Ba1 and * Subordinated debt to B1 from Ba2. ENRON: Inks Pact Resolving Claims Dispute with United Computing --------------------------------------------------------------- On Oct. 15, 2002, United Computing Group filed general unsecured claims against the Debtors' estates, each for $910,154, including: -- Claim No. 14979 against Enron Corp.; -- Claim No. 18454 against Enron Net Works L.L.C.; -- Claim No. 18455 against Enron Global Markets, LLC; -- Claim No. 18926 against Enron North America Corp.; and -- Claim No. 19654 against Enron Energy Services Operations, Inc. On August 20, 2003, Enron filed a complaint to avoid and recover preferential transfer against United Computing, styled as Enron Corp. and Enron Net Works L.L.C. v. United Computing Group. The Enron Complaint was then amended and superseded on December 1, 2003. Enron and ENW seek the avoidance and recovery of preferential payments or fraudulent transfers that United Computing received totaling $1,448,738. On August 21, 2003, ENW also filed a complaint against United Computing to avoid and recover a preferential transfer. The ENW Complaint was subsequently amended and superseded on Sept. 10, 2003. ENW sought to avoid and recover from United Computing $1,427,144 in preferential transfers. The Parties negotiated a consensual compromise and settlement of all disputes concerning the Adversary Proceedings and the Filed Claims to avoid the cost, uncertainty and delay attendant to litigation. Specifically, the Parties stipulate that: 1. United Computing will withdraw with prejudice all of the filed claims, which will be expunged from the Debtors' claims registers without further Court order; 2. United Computing will forever waive all scheduled claims; 3. The Adversary Proceedings will be dismissed pursuant to Rule 7041(a)(1) of the Federal Rules of Bankruptcy Procedure; and 4. United Computing, and Enron and ENW will release each other from any claims, which they may have against each other relating in any way to the filed claims and the Adversary Proceedings. 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) ENTERGY NEW ORLEANS: Can Continue Hiring Ordinary Course Profs. --------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Dec. 8, 2005, Entergy New Orleans, Inc., is seeking the U.S. Bankruptcy Court for the Eastern District of Louisiana's authority to: (a) employ professionals utilized in the ordinary course of business without requiring the submission of separate retention pleadings for each professional; and (b) pay the ordinary course professionals without the need for a fee application. In the day-to-day performance of their duties, the Debtor's employees regularly call on certain outside counsel to assist them in carrying out their assigned responsibilities. Tara G. Richard, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, relates that the Debtor cannot continue to operate its business with sound business practice unless it retains and pays for the services of ordinary course professionals. Ms. Richard explains that a number of the Ordinary Course Professionals are unfamiliar with the fee application procedures employed in bankruptcy cases. Thus, some of the Ordinary Course Professionals might be unwilling to work with the Debtor if those fee application requirements were imposed. The operation of the Debtor's business would be hindered if the Debtor were required to file retention pleadings and follow the usual fee application process required of other bankruptcy professionals, Ms. Richard asserts. In addition, the cost of preparing and prosecuting the retention applications and fee applications would be significant and unnecessary because it would be borne by the Debtor's estate. The Debtor proposes to file statements with the Court disclosing: (1) the name of the Ordinary Course Professional; (2) the aggregate amounts paid as compensation for services rendered and reimbursement of expenses incurred by the Ordinary Course Professional during the previous 120 days; and (3) a general description of the services rendered by each Ordinary Course Professional. The Debtor will provide the U.S. Trustee with unredacted copies of the bills or invoices of the Ordinary Course Professionals before payment and receipts of related expenses. The Debtor will also require each Ordinary Course Professional to file an Affidavit of Disinterestedness with the Court and to serve copies on the Debtor, the Office of the U.S. Trustee, counsel to any statutory creditors' committee appointed, and those listed on the Special Notices List, prior to or contemporaneous with its first submission to the Debtor of invoices accompanying a request for compensation. Although some of the Ordinary Course Professionals hold unsecured claims against it, the Debtor does not believe that any of the Ordinary Course Professionals have an interest materially adverse to it, its creditors or other parties-in-interest. * * * The Honorable Jerry A. Brown of the Bankruptcy Court for the Eastern District of Louisiana authorizes the Debtor to employ its professionals in the ordinary course of business. The Court rules that all ordinary course professionals to whom the Debtor pays: -- less than $25,000 on a three-month basis will not have to file retention pleadings or follow the usual fee application process; and -- more than $25,000 per quarter must follow the full application process to act as outside counsel to the Debtor. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) FIRST FRANKLIN: Fitch Puts Low-B Ratings on Four Cert. Classes -------------------------------------------------------------- First Franklin Mortgage Loan Trust, asset-backed certificates, series 2005-FFH4, is rated by Fitch Ratings: -- $691,264,000 classes I-A-1, II-A-1, II-A-2, II-A-3 and II-A-4 'AAA'; -- $53,061,000 class M-1 certificates 'AA+'; -- $51,587,000 class M-2 certificates 'AA'; -- $2,143,000 class M-3 certificates 'AA-'; -- $24,565,000 class M-4 certificates 'A+'; -- $22,600,000 class M-5 certificates 'A'; -- $15,230,000 class M-6 certificates 'A-'; -- $19,161,000 class M-7 certificates 'A-'; -- $15,230,000 class M-8 certificates 'BBB+'; -- $12,283,000 class M-9 certificates 'BBB'; -- $11,791,000 class M-10 certificates 'BB+'; -- $6,387,000 privately offered class B-1 certificates 'BB+'; -- $9,826,000 class B-2 privately offered certificates 'BB'; -- $8,843,000 class B-3 certificates 'BB'. The 'AAA' rating on the senior certificates reflects the 29.65% total credit enhancement provided by the 5.40% class M-1, the 5.25% class M-2, the 2.05% class M-3, the 2.50% class M-4, the 2.30% class M-5, the 1.55% class M-6, the 1.95% class M-7, the 1.55% class M-8, the 1.25% class M-9, the 1.20% class M-10, the privately offered 0.65% class B-1, the privately offered 1% class B-2, the privately offered 0.90% class B-3, and the 2.10% initial overcollateralization. All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the quality of the loans, the integrity of the transaction's legal structure as well as the primary servicing capabilities of National City Home Loan Services, Inc., and Deutsche Bank National Trust Company as trustee. The mortgage loans are divided into two loan groups. The group I mortgage loans consist of conforming first-lien, fixed-rate and adjustable-rate mortgage loans. As of the cut-off date, Nov. 1, 2005, the group I mortgage loans have an aggregate balance of $390,788,138. The weighted average loan rate is approximately 8.000%. The weighted average remaining term to maturity is 357 months. The average outstanding principal balance of the mortgage loans is approximately $115,789. The weighted average original loan-to-value ratio is 98.76% and the weighted average Fair, Isaac & Co. score was 647. The properties are primarily located in Ohio, Indiana, Michigan and Illinois. The group II mortgage loans consist of non-conforming first-lien, fixed-rate and adjustable-rate mortgage loans. As of the cut-off date, the group II mortgage loans have an aggregate balance of $334,293,968. The weighted average loan rate is approximately 7.860%. The WAM is 358 months. The average outstanding principal balance of the mortgage loans is approximately $249,659. The weighted average OLTV ratio is 99.84% and the weighted average Fair, Isaac & Co. score was 669. The properties are primarily located in California, Florida, Illinois, North Carolina, Maryland and New York. In addition, on or before Dec. 23, 2005, the depositor may sell and the trustee will be obligated to purchase, on behalf of the trust, additional mortgage loans to be included in the mortgage pool. On the closing date, the depositor will pay to the trustee * an amount equal to approximately $136,257,723, which will be held by the trustee in a pre-funding account and * an amount equal to approximately $121,265,772, which will be held by the trustee in a pre-funding account for the purchase of such subsequent mortgage loans. The certificates will benefit from an Interest Rate Swap Agreement with The Bank of New York as swap provider effective October 2006 through February 2010 which may be used to cover unpaid interest and realized losses. Under the Interest Rate Swap Agreement, on each distribution date, the trust will be obligated to make fixed payments at a rate of 4.85% on a declining notional amount and the swap provider will be obligated to make floating payments at a rate of one-month LIBOR on such notional amount. FIRST HORIZON: Fitch Upgrades Ratings on Two Certificate Classes ---------------------------------------------------------------- Fitch Ratings affirms and upgrades these First Horizon Home Loan Mortgage Trust issues: Series 2002-8 -- Class A affirmed at 'AAA'. Series 2002-9 -- Class A affirmed at 'AAA'. Series 2003-2 -- Class A affirmed at 'AAA'. Series 2003-3 -- Class A affirmed at 'AAA'. Series 2003-4 -- Class A affirmed at 'AAA'. Series 2003-6 -- Class A affirmed at 'AAA'. Series 2003-9 -- Class A affirmed at 'AAA'. Series 2003-10 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2003-AR1 -- Class A affirmed at 'AAA'. Series 2003-AR2 -- Class A affirmed at 'AAA'. Series 2003-AR3 -- Class A affirmed at 'AAA'. Series 2003-AR4 -- Class A affirmed at 'AAA'; -- Class B1 upgraded to 'AA+' from 'AA'; -- Class B2 upgraded to 'A+' from 'A'; -- Class B3 upgraded to 'BBB+' from 'BBB'; -- Class B4 upgraded to 'BB+' from 'BB'; -- Class B5 upgraded to 'B+' from 'B'. All of the mortgage loans in the aforementioned transactions were either originated or acquired by First Horizon Home Loan 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 36 months and the pool factors range from approximately 15% to 77%. First Horizon Home Loan Corporation, rated 'RPS2' by Fitch, currently services all of the mortgage loans in these transactions. The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $1.6 billion of outstanding certificates. All affirmed classes have experienced small to moderate growth in CE since the last rating action in December 2004. The upgrades reflect an improvement in the relationship between CE and future loss expectations and affect approximately $40.47 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. There have been no collateral losses to date. FLINTKOTE CO: Has Until April 28 to File Chapter 11 Plan -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware further extended The Flintkote Company and Flintkote Mines Limited's exclusive periods to file and solicit acceptances of a chapter 11 plan. The Court gave the Debtors until Apr. 28, 2006, to file a plan, and until June 30, 2006, to solicit acceptances of that plan from creditors. As reported in the Troubled Company Reporter on Sept. 6, 2005, the Court extended the Debtors exclusive periods to file a chapter 11 plan to Dec. 29, 2005 and their right to solicit acceptances of that plan until Feb. 27, 2006. This is the fifth extension by Flintkote Company and the fourth extension for Flinkote Mines. The Debtors say that the extension will give them sufficient time to: * finalize the terms of the joint plan and related Section 524(g) trust agreement and distribution procedures; * pursue negotiations with various insurers regarding coverage settlements; and * properly asses the Debtor's liabilities and propose a fair and equitable treatment for such liabilities in the joint plan. Joint Plan and Trust Agreement The Debtors tell the Court that they, the Official Committee of Unsecured Creditors, and Futures Representative, are working together to develop and propose a consensual joint plan of reorganization. As part of the division of labor, the parties agreed that the Debtors would draft the plan and disclosure while the Committee and Futures Representative would jointly draft the Section 524(g) trust agreement and related trust distribution procedures. The drafts will be circulated for review and comment to the other parties. The Debtors say that they have already sent a draft of the proposed joint plan and related disclosure statement and are presently awaiting comments or proposed modifications. The Debtors expect to receive a draft of the trust agreement documents in the near future. Insurance Receivables The Debtors remind the Court that they have continued to further refine their strategy to collect all of their outstanding insurance receivables and realize the full potential value of the remaining assets. As reported in the Troubled Company Reporter on Nov. 11, 2005, the Court approved a settlement agreement between the Debtors and Mt. McKinley Insurance Company and Everest Reinsurance Company for $38 million. The Debtors tell the Court that they are currently involved in ongoing negotiations with other insurers regarding payment of outstanding receivables and the prospect of entering into similar "buy-out" arrangements of remaining coverage limits in order to maximize the cash available for distribution to current and future asbestos personal injury claimants under a confirmed plan. Non-Asbestos PI Claims The Debtors further tell the Court that they are continuing to assess all non-Asbestos Personal Injury Claims filed in the U.S. and Canada. The Debtors further tell the Court that they have completed a preliminary analysis of these claims and shared the information with the Committee and Futures Representatives. The extension would afford these creditor constituencies additional time, to conduct their own analysis and reach a consensus with the Debtor as to the proposed treatment of these claims under the joint plan. Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. The Company and its affiliate filed for chapter 11 protection on April 30, 2004 (Bankr. Del. Case No. 04-11300). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G. McLamb, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., represent the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of more than $100 million. FLYI INC: Wants Court Approval of Section 1110 Election Procedures ------------------------------------------------------------------ FLYi, Inc. and its debtor-affiliates operate an aircraft fleet consisting of 12 Airbus A319 aircraft and 36 Bombardier CL-600- 21319 regional jets. All of the operating Debtors' aircraft are leased, except for seven CRJs that they own. In addition, the Debtors possess an inventory of spare parts and spare engines associated with the operation of their CRJ fleet, which spare parts and spare engines are pledged as collateral to General Electric Capital Corporation pursuant to certain agreements. On Nov. 22, 2005, the U.S. Bankruptcy Court for the District of Delaware approved auction procedures for investment or sale proposals with respect to their business and assets. As of Dec. 6, 2005, the Debtors are continuing with the auction process. Depending on the outcome of that process, the Debtors may seek to renegotiate their aircraft obligations and obligations under the GECC Loan Agreements to enable them to reorganize successfully. Moreover, it is unlikely that the Debtors will be able to reach final agreements with certain parties to the Aircraft Agreements before the end of the 60-day period pursuant to Section 1110 of the Bankruptcy Code. M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, notes that the Section 1110 Period runs through the holiday season and the Debtors are running a process seeking potential investors or purchasers during the same period. By this motion, the Debtors seek the Court's permission: -- to make elections pursuant to Section 1110 and perform obligations under certain leases and secured financings relating to aircraft equipment; -- to make payments and to take other necessary actions to cure defaults and retain protection of the automatic stay with respect to the aircraft equipment; -- to enter into stipulations with their aircraft lessors and financiers extending the time to perform obligations required under Section 1110; and -- to file the Section 1110(a) Elections and executed Stipulations under seal. Section 1110(a) Elections Procedures The Debtors propose to implement uniform procedures for Section 1110(a) Elections: a. The Debtors will file with the Court a Section 1110(a) Election and serve it on: * in the case of leased Aircraft Equipment, the lessor, the beneficial owner of the Aircraft Equipment, and any indenture trustee, loan trustee, or collateral trustee known to the Debtors to be acting on behalf of debt holders who have provided financing to that lessor; * in the case of owned Aircraft Equipment, any mortgagee, security trustee, or indenture trustee known to the Debtors to have a security interest in the Aircraft Equipment; and * counsel to the Committee; b. A Schedule 1 to each Election will list: * the applicable Leased Aircraft Notice Parties or the Owned Aircraft Notice Parties, as the case may be; and * the U.S. Federal Aviation Administration Registration number for each item of the Aircraft Equipment that is the subject of the Election; c. Each Election will constitute as the Debtors' agreement to perform all obligations that become due under the relevant Aircraft Agreement with respect to the Aircraft Equipment; d. With respect to any Aircraft Agreement that is the subject of an Election, the Debtors will cure any default under the Aircraft Agreement: * in the case of any default that occurred prepetition, on or before January 5, 2006; and * in the case of any default that occurred postpetition and before the expiration of the Section 1110 Period, on or before the later of 30 days after the date of the default, or January 5, 2006; e. The Schedule 1 will state the amount, if any, that the Debtors believe they must pay under the relevant Aircraft Agreement relating to the Aircraft Equipment identified in the Election to comply with Section 1110(a)(2)(B); f. Any party-in-interest may object to the Election or any Cure Amount specified in the Election by filing a written objection on or before 4:00 p.m. prevailing Eastern Time on the date, which is 10 days from the date of the filing of the Election; g. Any Section 1110(a) Objection must specify: (1) the party's interest in the affected Aircraft Equipment, if any; (2) the basis for the objection; (3) the provisions of the Aircraft Agreement or any other agreement under which the objecting party contends any uncured default exists, if any; and (4) the amount, if any, that the objecting party asserts as the Cure Amount, if different from that specified by the Debtors; h. Unless the Court rules otherwise, upon the filing of the Election before January 5, 2006, and the timely payment of the Cure Amounts, if any: * all defaults under the applicable Aircraft Agreement will be deemed cured; * the Election will be deemed effective as of January 5, 2006; and * the 60-day period under Section 1110(a)(2) will be deemed to have been extended with respect to the Aircraft Equipment. If any Objection is timely filed with respect to a specific Aircraft Equipment and the dispute relating to the Aircraft Equipment is not resolved consensually among the parties within 10 days from the date of the Objection, the Debtors will schedule a hearing to consider the Objection only with respect to that particular Aircraft Equipment and the filing of the Objection will not delay the effectiveness of the Election with respect to other Aircraft Equipment for which no Objection is filed; and i. The Debtors' Elections will not be deemed to constitute an assumption of any Aircraft Agreement under Section 365 of the Bankruptcy Code. Proposed Procedures for Section 1110 (b) Stipulations The Debtors concluded that it is in the best interest of their estates to reach agreements with certain Section 1110 Parties on the terms of a new or modified Aircraft Agreement that are more closely aligned with current market conditions. Given the number of Aircraft Agreements that the Debtors may seek to renegotiate, the number of Section 1110 Parties that may be involved in the negotiations, and the sale process that the Debtors are engaged in to seek potential investors, the Debtors are unlikely to complete the task within the Section 1110 Period. Hence, the Debtors will need to enter into stipulations with certain Section 1110 Parties to provide the Debtors and the other parties with additional time to negotiate, document, and implement the terms of new or modified Aircraft Agreements. Each Stipulation will provide for an extension of the deadline established by Section 1110. In certain cases, the Stipulation may modify, either on an interim or permanent basis, certain terms of the relevant Aircraft Agreement. Each Stipulation will not constitute: * as the Debtors' election or agreement to perform all of their obligations under the relevant Aircraft Agreement pursuant to Section 1110(a) or any other provision of the Bankruptcy Code; and * as an assumption of the relevant Aircraft Agreement under Section 365 and will not restrict the Debtors' ability to later restructure the Aircraft Agreement or reject or abandon the Aircraft Equipment. Objections to the Stipulation must be filed, on or before 4:00 p.m. prevailing Eastern Time on the date that is 10 days from the date of the filing of the Stipulation, with the Court. The Stipulation must be served on the Court, the counsels to the Debtors and the Official Committee of Unsecured Creditors, and the United States Trustee. Except as otherwise ordered by the Court, upon execution and filing of the Stipulation and the Debtors' timely performance of their obligations under it: (a) the Stipulation will be deemed to be effective as of January 5, 2006; and (b) the 60-day period provided in Section 1110(a)(2) will be deemed to have been extended with respect to the applicable Aircraft Equipment for a specified period. The Debtors will schedule a hearing to address any unresolved Objection. Additionally, the Debtors will file the Elections and the Stipulations under seal to preserve the confidentiality of the terms and commercial information of the contracts and maintain a level playing field among their competitors and all other parties. The Debtors will provide unredacted copies of the Elections and the Stipulations to the Committee's and the U.S. Trustee's counsel, provided, however, that the parties must maintain the confidentiality of the Elections and the Stipulations. Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. (FLYi Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000). FLYI INC: Wants to Walk Away from Six CRJ Aircraft Leases --------------------------------------------------------- FLYi, Inc. and its debtor-affiliates want to reduce their fleet of 58 Bombardier CL-600-21319 regional jets to 30. The Debtors have already asked the U.S. Bankruptcy Court for the District of Delaware's permission to abandon or reject 22 CRJ aircraft leases. By this motion, the Debtors seek the Court's permission to: a. reject six more CRJ aircraft leases, effective as of Dec. 30, 2005; and b. establish a deadline for aircraft lessors, lenders and other parties to: * take possession of the aircraft; and * file proofs of claim with respect to the aircraft. Brendan Linehan Shannon, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, tells the Court that after the Effective Date, the Debtors will make available to certain Controlling Parties the aircraft records of six CRJs at the Debtors' maintenance hangar, located at 23321 Autopilot Drive in Dulles, Virginia. To ensure that each Controlling Party promptly relieves the Debtors of carrying costs associated with the CRJs, the Debtors require each Controlling Party or its designee to take possession of its aircraft no later than seven business days after the Effective Date, except as may be otherwise agreed. The Debtors also require each Controlling Party to pay the Debtors for any related storage, insurance, or other costs reasonably incurred after the seven-day period. The Debtors, in their discretion, reserve the right to negotiate with the Controlling Parties to make the CRJs available to the Controlling Parties prior to the Effective Date, but after the entry of an Order rejecting the six aircraft leases. The Debtors also want that: (a) at or before the time a Controlling Party or its designee takes or is delivered possession of the CRJs, the Controlling Party or its designee must certify in writing to Independence Air, Inc., that the Controlling Party or its designee is authorized to take possession of the CRJs; and (b) Independence Air be entitled to rely on the certification to relinquish possession of the CRJs. The Debtors propose that any claims arising out of the rejection of the CRJ Leases or that otherwise relate to the CRJs must be timely filed on or before the later of the deadline to file a proof of claim, or 30 days after the Effective Date. Any claim not timely filed will be irrevocably barred. Upon rejection or abandonment of the CRJs pursuant to the Lease Rejection Order, the Debtors ask the Court to modify the automatic stay under Section 362 of the Bankruptcy Code as to any and all of the Debtors' estates to allow the parties to effectuate the provision of the Lease Rejection Order and to transfer, move, and dispose of the rejected CRJs. Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. (FLYi Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000). FLYI INC: Wants Until Jan.5 to Comply with Sec. 345(b) Guidelines ----------------------------------------------------------------- Pursuant to Section 345(b) of the Bankruptcy Code, any deposit or other investment made by a debtor must be secured by a bond in favor of the United States that is secured by: -- the undertaking of a corporate surety approved by the United States Trustee for the relevant district; or -- the deposit of securities of the kind specified in Section 9303 of the Money and Finance Code. Section 345(b) provides that a bankruptcy court may allow the use of alternatives to certain approved investment guidelines "for cause," Brendan Linehan Shannon, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, notes. Consistent with Section 345(b), Mr. Shannon points out, Rule 1007-2(b) provides that no waiver of "section 345 [will] be granted by the Court, except upon notice with an opportunity for hearing, in accordance with these rules." Nevertheless, Rule 1007-2(b) further provides that "if a motion for such waiver is filed on the first day of a chapter 11 case in which there are more than 200 creditors, the Court may grant an interim waiver until a hearing on the Debtors' motion can be held." Pursuant to Section 345(a) and Rule 1007-2(b), FLYi, Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve, on an interim basis, these proposed investment guidelines: (i) Overnight investments in instruments with an AAA rating; (ii) Short-term investments in instruments with a rating of at least Al/Pl; (iii) longer term investments in instruments with a rating of at least AA/Aa2; and (iv) other deposits in financial institutions comparable to those already utilized by the Debtors, in each case without the need for any depository or holder of those investments to provide a bond, undertaking or deposit of securities of any kind. The maximum maturity of any investments would be one year. Additionally, the Debtors ask the Court to: -- authorize and direct applicable institutions to accept and hold or invest those funds, at the Debtors' direction, in accordance with the Investment Guidelines; and -- approve, on a final and permanent basis, the Investment and Deposit Guidelines, after notice and hearing. The Hon. Mary F. Walrath authorizes the Debtors to invest and deposit funds in accordance with their Deposit and Investment Guidelines pending a final hearing on their request. Needs More Time to Comply with Section 345 Mr. Shannon tells the Court that the Debtors were unable to devote their time to comply with the requirements of Section 345 of the Bankruptcy Code because they have been primarily focused on transitioning their business into Chapter 11. Hence, the Debtors ask the Court to: a. extend the time within which they must comply with the requirements of Section 345 of the Bankruptcy Code; and b. approve their Investment Guidelines on a further interim basis through and including January 5, 2006. The Debtors will use the extension to evaluate the need to maintain their prepetition Investment Guidelines and coordinate with financial institutions to satisfy Section 345 with respect to the Bank Accounts or seek to utilize their Investment Guidelines. The Court will convene a hearing on Jan. 5, 2006, at 10:00 a.m. (ET) to consider the Debtors' request. By application of Local Rule 9006-2, the deadline to comply with the Section 345 requirements is automatically extended until the conclusion of that hearing. Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. (FLYi Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000). FOAMEX INT'L: Foamex L.P. Wants to Assume Amended Bayer Contract ---------------------------------------------------------------- Foamex L.P. utilizes chemicals that are specially formulated to meet its specific needs and are capable of being obtained from a few select providers. The chemicals, including polyol and TDI, are the fundamental building blocks for Foamex's foam products, without which Foamex's manufacturing operations would grind to a halt, Pauline K. Morgan, Esq., Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, says. Bayer MaterialScience LLC is one of Foamex's primary suppliers of polyol and TDI. Foamex, Ms. Morgan relates, has experienced difficulties in the last year in procuring polyol and TDI. As a consequence of Foamex's financial condition, many of its chemical suppliers, including Bayer, placed Foamex on fixed dollar credit limits. The credit constraints limit the quantity of chemicals that Foamex can purchase from each supplier and, given the recent dramatic increases in chemical prices, Foamex constantly pushes up against these limits. More recently, Hurricanes Rita and Katrina have further eroded the availability and accessibility of the chemicals, Ms. Morgan says. In addition, one of Foamex's primary suppliers of TDI closed a major production facility in September 2005. Consequently, Foamex expects that the present shortage in capacity of TDI in the marketplace will become even more acute. According to Ms. Morgan, Foamex's inventory of many of these major chemicals, including polyol and TDI, is quite limited and at certain points in time is only sufficient to sustain its operations for up to one week. Pursuant to Section 365 of the Bankruptcy Code, Foamex seeks the U.S. Bankruptcy Court for the District of Delaware's authority to assume an executory contract with Bayer and its Deerfield Urethane affiliate for the purchase and sale of chemicals, dated August 19, 2005, as amended on November 18, 2005. In the Amended Bayer Contract, Bayer agreed to: (a) increase the quantities of polyol and TDI that will be made available to Foamex; (b) increase Foamex's fixed dollar credit limit to purchase chemicals; (c) restore trade terms that are comparable to the original trade terms before Bayer changed them to "cash-before delivery"; and (d) provide Foamex with an eight-week period to cure the $13,100,000 unpaid prepetition obligation owed by Foamex to Bayer on account of prepetition chemical purchases. Ms. Morgan asserts that the increased availability of polyol and TDI and the increase in the credit limit will allow Foamex to secure more of the needed chemicals that it currently can, which, in turn, will better allow Foamex to meet customer demand for its foam products. The change from "cash-before-delivery" to normal trade terms will also significantly improve Foamex's liquidity position, she adds. Foamex believes it satisfies the cure and adequate assurance requirements for assumption under Section 365(b)(1). Foamex owes $13,126,215 to Bayer on account of prepetition purchases. Other than payment of the amount, which will be paid in eight weekly payments, there are no other defaults that need to be cured, Ms. Morgan contends. Bayer has not requested any additional adequate assurance of Foamex's future performance under the Bayer Contract. Committee Responds Sharon L. Levine, Esq., at Lowenstein Sandler PC, in Roseland, New Jersey, points out that certain provisions in the Bayer Contract allows Bayer to unilaterally alter the Contract after assumption. The provisions, she says, empower Bayer to alter the fixed dollar trade limit or the quantities to be provided, thereby nullifying any benefit to Foamex International Inc., and its debtor-affiliates. The Debtors have circulated a revised agreement with Bayer in an effort to address the objectionable provision, Ms. Levine tells the Court. The Official Committee of Unsecured Creditors is in the process of reviewing the revised agreement. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOAMEX INT'L: Wants to Hire FTI Consulting as Special Consultants ----------------------------------------------------------------- On July 11, 2005, the Securities and Exchange Commission issued a Cease-and-Desist Order with the consent of Foamex International, Inc., Pauline K. Morgan, Esq., Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates. The Cease-and-Desist Order was issued after an investigation into perceived deficiencies in Foamex International Inc., and its debtor-affiliates' internal accounting controls dating back in 1999, when Foamex International was under a different management. The Order found that Foamex International, now under new management: -- has strengthened financial management, -- continued to implement an enterprise-wide IT system, and -- has engaged in meaningful efforts to remediate the reportable conditions. However, the Order found that the remediation was not timely as required by the SEC. The Cease-and-Desist Order required the Debtors to undertake measures ensuring that future deficiencies in their internal accounting controls do not arise. One of these measures is the retention of a "Special Consultant." The Special Consultant's role is to review the report of the Debtors' internal auditors, whether the internal auditors concur with the Debtors' management's assessment of internal controls over financial reporting and any deficiencies in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, Ms. Morgan explains. The Special Consultant is required to review the Section 404 Report and issue a written report of its own directly to Foamex International's audit committee and the SEC, including recommendations for modifying internal controls over financial reporting to address any deficiencies as well as procedures to implement the modifications. The Order further requires the Special Consultant to review and monitor Foamex International's progress in complying with any the Consultant's recommendations and to provide regular written reports to Foamex International's audit committee and the SEC. In compliance with the Order, Foamex International named Ernest Ten Eyck and FTI Consulting, Inc., as special consultants, and subsequently entered into a letter agreement dated July 11, 2005. Mr. Eyck is a Senior Managing Director of FTI. FTI, a financial advisory services firm with numerous offices throughout the country, has been the Debtors' special consultant since July 2005. The SEC has approved the Debtors' retention of FTI as Special Consultant. By this application, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to appoint FTI and Mr. Eyck as Special Consultants pursuant to the July 2005 Letter Agreement. The Debtors believe it would be exceptionally burdensome if they were required to seek a substitute Special Consultant. In addition, any new consultant will require the approval of the SEC before its engagement. FTI has indicated an unwillingness to continue acting as Special Consultant unless its appointment is approved. FTI is expected to: (a) assist the Debtors in their cooperation with Foamex International's auditors in connection with the SEC's audit of their financial statements; (b) review the written report prepared by Foamex International's auditors in connection with the audit and issue a written report to the Debtors' audit committee and the SEC's staff, which recommends modifications and additions to the Debtors' internal accounting controls; and (c) review the Debtors' progress in correcting significant deficiencies identified as a result of the audit, and provide a written report to the Audit Committee and the SEC's staff on the status of the Debtors' remediation efforts. Pursuant to the Letter Agreement, the Debtors will pay FTI and its professionals based on the firm's customary hourly rates: Professional Hourly Rates ------------ ------------ Senior Managing Directors/Managing Directors $350 - $650 Directors/Managers $250 - $435 Senior Consultants/Consultants $175 - $315 Paraprofessionals/Administrative $50 - $125 The Debtors will reimburse FTI for all reasonable out-of-pocket expenses incurred. Mr. Eyck assures the Court that neither FTI nor its employees have any connection with the Debtors, their creditors, other parties-in-interest and the United States Trustee or its employees. However, Mr. Eyck discloses, a separate office of FTI currently serves as financial advisor to a subsidiary of Spring Air Corporation in its currently pending Chapter 11 case. Foamex International is a creditor of Spring Air. FTI's consulting services to Foamex are wholly unrelated to its engagement with Spring Air, Mr. Eyck attests. FTI's books and records shows that during the 90-day period prior to the Petition Date, the firm received $62,299 from the Debtors for services performed and expenses incurred. As of the Petition Date, the Debtors owe FTI $88,815 in fees and expenses. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOAMEX INT'L: Bar Date for Agents & Lenders Stretched to Feb. 17 ---------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Oct. 26, 2005, the Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware set December 8, 2005, as the deadline for all entities holding a prepetition claim against Foamex International Inc., and its debtor-affiliates to file a proof of claim. That date is 45 days after the Bar Date Notice Package were mailed. Bar Date Notice Packages were mailed to the Debtors' creditors on Oct. 24, 2005. * * * In a Court-approved stipulation, the Debtors, the prepetition Agents and Lenders agree that the Bar Date for the Prepetition Agents and Lenders is extended until Feb. 17, 2006, at 4:00 p.m. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) GE BUSINESS: Fitch Rates $19 Million Class D Certificates at BB --------------------------------------------------------------- Fitch rates GE Business Loan Trust 2005-2: -- $676,000,000 class IO certificates 'AAA'; -- $667,375,890 class A certificates 'AAA'; -- $61,367,898 class B certificates 'A'; -- $19,177,468 class C certificates 'BBB'; -- $19,177,468 class D certificates 'BB'. The class IO and A ratings reflect credit enhancement provided by the subordination of the class B certificates, the class C certificates, the class D certificates, the spread account, and expected excess spread. The class B rating reflects credit enhancement provided by the subordination of the class C certificates, class D certificates, the spread account, and expected excess spread. The class C rating reflects credit enhancement provided by the subordination of the class D certificates, the spread account, and expected excess spread. The class D rating reflects credit enhancement provided by the spread account and expected excess spread. The ratings address the payment of interest and principal in accordance with the terms of the legal documents. The certificates are backed primarily by a pool of conventional business loans and unguaranteed portion of Small Business Administration Section 504 Program loans made to small businesses. The loans are secured by first liens on owner-occupied or single-tenant retail, office, industrial, or other commercial real estate. None of the underlying business loans are insured or guaranteed by any governmental agency. The loans were originated by GE Commercial Finance Business Property Corporation and the Small Business Finance lending division of General Electric Capital Corporation. This transaction represents the sixth term securitization of loans originated by the GECF and SBF business units. The trust assets consist primarily of 341 business loans made to 301 borrowers. The $767 million underlying collateral pool consists of approximately $500 million of conventional business loans originated by GECF and approximately $267 million of SBA 504 loans originated by SBF. The loans are secured by first liens on owner-occupied or single tenant retail, office, industrial, or other commercial real estate. The pool is diversified geographically, with loans from 41 states. The largest state concentrations are in California, Texas, Georgia, New York, and Florida. Fitch took into consideration both quantitative and qualitative factors in evaluating GEBLT's credit enhancement structure. After reviewing historical default and recovery data on both an annual and static pool basis to develop an expected loss rate, Fitch analyzed cash flows reflecting stressed default rates, recovery rates, and recovery timing lags under several default timing scenarios. Fitch also assessed borrower and balloon payment concentrations over the life of the transaction. This review included a semiannual comparison of top borrower concentrations with expected credit enhancement. Fitch's ratings also took into consideration: * the historical delinquency and loss performance of GECF and SBF; * the origination, underwriting, and servicing experience of GECF and SBF; * the role of GECC as master servicer; and * the sound legal and payment structure. The IO certificates will receive fixed-rate interest payments. Classes A, B, C, and D certificates will pay floating-rate interest based on a spread over one-month London Interbank Offered Rate. Principal will be paid to the class A, B, C, and D certificates on a pro rata basis. The interest rate swap counterparty is General Electric Capital Services, Inc., a subsidiary of General Electric Company. The class IO, A, B, C, and D certificates were privately placed pursuant to Rule 144A. GROVE PARK: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Grove Park Office Complex, Inc. 6820 Loop Road Centerville, Ohio 45459 Bankruptcy Case No.: 05-46676 Chapter 11 Petition Date: December 14, 2005 Court: Southern District of Ohio (Dayton) Judge: Thomas F. Waldron Debtor's Counsel: Reid J. Haddick, Esq. Law Office of Reid J. Haddick 1129 Miamisburg-Centerville Road, Suite 305 West Carrollton, Ohio 45449 Tel: (937) 859-8026 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Beautiful Boundaries Snow plowing $5,777 4302 Bellemeade Drive Bellbrook, Ohio 45305 Vectren Energy Delivery Gas heat $3,974 P.O. Box 6262 Indianapolis, Indiana 46206-6262 Utica National Insurance Group Insurance $2,691 P.O. Box 6532 Utica, N.Y. 13504-6532 The Gem Real Estate Group, Inc. Appraisal $1,050 B.C. Vision Cntrs. Inc. Security deposit $500 Waste Management of Ohio - IWD Trash Removal $428 Cleanergy Supply Paper supplies $389 City of Huber Heights Water & sewer $331 J & J Property Snow plowing $285 Bridgetek Technologies LLC Security deposit $225 Tim Fox HVAC repairs $137 M.G. Heating & Air, Inc. HVAC repairs $86 Dayton Power & Light Co. Trade debt Unknown HEMOSOL CORP: Has Until Feb. 10 to File BIA Proposals ----------------------------------------------------- The Ontario Superior Court of Justice (Commercial List) approved a 45-day extension of the time by which Hemosol Corp. (TSX: HML) and its affiliate Hemosol LP are required to file proposals for their respective creditors pursuant to the provisions of the Bankruptcy and Insolvency Act of Canada. Subject to further orders of the Superior Court, Hemosol will have until Feb. 10, 2006, to file one or more proposals. Parties interested in potential investments in, or purchase of, the assets or business of Hemosol are invited to contact Dean Mullett of PricewaterhouseCoopers Finance Inc. at dean.mullet@ca.pwc.com. Binding expressions of interest must be received prior to Feb. 3, 2006. At this time there is no certainty as to the outcome of the marketing and sales process. Accordingly, it is unclear whether or not there will be any value for holders of Hemosol's shares at the conclusion of the marketing and sales process. Hemosol Corp. -- http://www.hemosol.com/-- is an integrated biopharmaceutical developer and manufacturer of biologics, particularly blood-related protein based therapeutics. The common shares of Hemosol are listed on the NASDAQ Stock Market under the trading symbol "HMSLQ" and on the TSX under the trading symbol "HML". * * * AS reported in the Troubled Company Reporter on Nov. 25, 2005, Hemosol Corp. (NASDAQ: HMSL, TSX: HML) reported that it is insolvent. Hemosol Corp. and Hemosol LP have filed Notices of Intention to Make a Proposal to their creditors under the Bankruptcy and Insolvency Act of Canada, and have appointed PricewaterhouseCoopers Inc., a licensed trustee, to act as trustee under the proposals. Hemosol continues discussions with its secured creditors with respect to its current financial position. Credit Facility Default On Nov. 22, 2005, Hemosol reported that it defaulted in the payment of interest under its $20 million credit facility. Hemosol said that it would require additional capital to continue as a going concern and is in discussions with its secured creditors with respect to its current financial position. Lay-Offs On Oct. 28, 2005, the company served approximately two thirds of its employees with layoff notices. The layoffs were necessary in order for the company to conserve its remaining cash and to continue to pursue potential strategic relationships and various financing options. On Nov. 9, 2005, the company said that its reduced workforce and limited resources have caused Hemosol to suspend the provision of bio-manufacturing services to third parties and, accordingly, the Company and Organon Canada Ltd. reached a mutual agreement to terminate the Manufacturing and Supply Agreement dated Sept. 24, 2004. This termination is effective immediately and was implemented without additional cost or penalty to either party. As reported in the Troubled Company Reporter on Dec. 6, 2005, PricewaterhouseCoopers Inc., in its capacity as trustee under the Notices of Intention to Make a Proposal of Hemosol Corp. and Hemosol LP, filed, on Dec. 2, 2005, an application with the Ontario Superior Court of Justice seeking, among other things, an order appointing PricewaterhouseCoopers Inc. as the interim receiver over the property, assets and undertaking of Hemosol Corp. and Hemosol LP and approving interim financing by Hemosol's secured creditors in the amount of $2 million. INTEGRATED ELECTRICAL: S&P Lowers Credit Rating to CC from CCC- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Houston, Texas-based Integrated Electrical Services Inc. to 'CC' from 'CCC-' and affirmed its 'C' rating on the company's senior subordinated notes. The ratings were removed from CreditWatch, where they were originally placed on May 19, 2005. The outlook is negative. At June 30, 2005, IES had approximately $223 million in total debt outstanding. "The downgrade reflects the company's proposal with a committee of senior subordinated noteholders to undergo a capital restructuring, which also includes a Chapter 11 filing," said Standard & Poor's credit analyst James T. Siahaan. The terms of this agreement in principle stipulate that noteholders would receive shares constituting 82% of the reorganized company in exchange for all of their notes, while existing shareholders and company management receive 15% and 3% of common shares, respectively. The committee of senior subordinated noteholders represents approximately $101 million of the $173 million in principal amount of the notes. The approval of the plan requires the consent of at least two-thirds in the outstanding debt amount and one-half in the number of the senior subordinated noteholders. IES expects to begin soliciting noteholder consent in January of 2006. If agreed to, the proposal would include the company's filing of a Chapter 11 reorganization so that it could exchange all of the senior subordinated notes for equity. Once the appropriate consents are received and the restructuring is completed, Standard & Poor's will lower its corporate credit rating to 'D' and withdraw the ratings shortly thereafter. IES is one of the larger contractors specializing in electrical engineering and construction projects in the U.S. INTERSTATE BAKERIES: Selling Alameda Property for $1.5 Million -------------------------------------------------------------- Interstate Bakeries Corporation and its debtor-affiliates propose to sell their property located at 2460 Alameda Street in San Francisco, California, to Baker Hamilton Properties, LLC, subject to higher and better offers. The Property includes approximately 0.37 acres of land with an approximately 7,813-square foot building, which was formerly used as a garage. The Debtors are no longer using the Property as part of their ongoing business operations. Paul M. Hoffman, Esq., at Stinson Morrison Hecker LLP, in Kansas City, Missouri, relates that, beginning September 2005, the Debtors, with the assistance of Hilco Industrial, LLC, and Hilco Real Estate LLC, conducted marketing efforts for the Property. They have determined that the $1,500,000 offered by Baker Hamilton represents the highest and best offer for the Property at this time. The salient terms of the Sale Agreement signed by the Parties are: Purchase Price: $1,500,000 Escrow Deposit: Baker Hamilton deposited $600,000 which is being held in escrow until all closing conditions are met. Closing: The closing will occur within five business days of the approval of the Sale Agreement subject to the payment of the Purchase Price Conditions to Closing: The Sale Agreement is subject to higher and better offers as well as Court approval. Condition of Property: The Debtors will deliver good and marketable fee simple title to the Land and Improvements, free and clear of liens, other than Permitted Exceptions. The Property is being sold AS-IS, WHERE-IS, with no representations or warranties, reasonable wear and tear, casualty and condemnation excepted. The Debtors request that the proposed sale be exempted from transfer, stamp or similar taxes, conveyance fees and recording fees, costs or expenses imposed by any federal, state, county or other local law in connection with the transfer or conveyance of the Property. The Debtors also request that the Property be transferred to Baker Hamilton or the successful bidder free and clear of all liens, claims and encumbrances, with the liens to attach to the proceeds of the sale. As bid protection, the Debtors have agreed to provide Baker Hamilton a $30,000 termination fee and expense reimbursement of up to $25,000. 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) INVIVA INC: Fitch Shaves Units' Insurer Financial Strength Rating ----------------------------------------------------------------- Fitch Ratings has downgraded the insurer financial strength ratings of Jefferson National Life Insurance Company and American Life Insurance Company of New York to 'BB' from 'BBB-'. Both companies are subsidiaries of Inviva, Inc., a privately held insurance holding company based in New York City. The Rating Outlook for both ratings is Negative. The action follows management's decision to defer payment of dividends on its $91.5 million of trust preferred securities. Inviva has not been able to raise equity capital this year as expected and that has further constrained the company's limited debt servicing capabilities. While the trust preferreds do provide for a five-year deferral of dividend payments without triggering a default, Fitch is concerned that subsidiary capital may be needed to meet obligations of the holding company. As of Sept. 30, 2005, JNL and ALICNY had paid no dividends in 2005. JNL's and ALICNY's risk-based capital ratios are expected to be well above expectations for the rating level at year-end 2005. Inviva recently announced that it plans to sell its entire inforce life insurance block to reduce expenses and free up capital. Inviva's capital structure is heavily dependent on convertible preferred shares of private investors and trust-preferred securities. The company used proceeds from the issuance of trust preferreds in 2004 to pay down higher cost debt, reducing the ratio of straight debt to total capital from about 20% at year-end 2003 to 8% at year-end 2004. It was about 8.7% at Sept. 30, 2005. Trust preferred securities represented about 66% of Inviva's capital structure at Sept. 30, 2005. Inviva acquired JNL, formerly Conseco Variable Insurance Company, from Conseco in October of 2002. Inviva acquired ALICNY in 2001. At Sept. 30, 2005, the holding company had $2.3 billion in consolidated total assets and $45 million in equity. Jefferson National Life Insurance Company -- IFS downgraded to 'BB' from 'BBB-' with a Negative Outlook. American Life Insurance Co. of New York -- IFS downgraded to 'BB' from 'BBB-' with a Negative Outlook. J CREW: Turnaround Progress Spurs S&P to Raise Credit Rating to B ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on specialty apparel retailer J. Crew Group Inc. to 'B' from 'B-'. The rating remains on CreditWatch with positive implications due to the planned recapitalization of the company, which includes an IPO of its common stock and debt refinancing. "The upgrade reflects the substantial progress J. Crew has achieved in turning around its operating performance for the past several quarters," said Standard & Poor's credit analyst Ana Lai. This reflects management's successful merchandising initiative and operating discipline. Comparable-store sales increased 2.8% in the quarter and 15.9% in the nine months ended Oct. 29, 2005, while direct sales increased 20% and 37% for the same respective periods. Profitability has recovered because of lower markdowns and positive sales leverage, with operating margins increasing to 19% in the third quarter from 17% a year ago. "Despite the recent improvement, however," said Ms. Lai, "the company faces difficult comparable-store sales over the next few quarters and has only a relatively short track record of operating performance at the current level." JACK IN THE BOX: Increasing Leverage Sparks S&P's Negative Outlook ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on San Diego, California-based Jack in the Box Inc. to negative from stable. Ratings on this fast food operator, including the 'BB' corporate credit rating, were affirmed. The outlook revision reflects the company's more aggressive policy at a time when cash flow protection measures are weak for the rating category and its operating margins are under pressure. Jack in the Box's board of directors recently approved a $150 million share repurchase program after completing a $65 million program in 2005. Standard & Poor's had expected the company to use some of its internally generated funds for debt reduction. The company's leverage is already high for the rating category, with total debt to EBITDA at 4.4x at the end of fiscal 2005. This compares to the industrial average of 3.8x for the 'BB' rating category. "The ratings on Jack in the Box Inc.," said Standard & Poor's credit analyst Diane Shand, "reflect the company's participation in the intensely competitive quick-service segment of the restaurant industry and its highly leveraged capital structure." These weaknesses are partially offset by: * the company's solid regional presence, * its generally good operating performance, and * its ability to develop and market new products. JAKE'S GRANITE: Court Approves Asset Sale to LaFarge for $13 Mil. ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona approved the sale of Jake's Granite Supplies LLC's assets to LaFarge North America, free and clear of liens, claims, for $13 million. LaFarge acquired Jake's 240 acres of real estate and physical plant and mobile equipment. Headquartered in Chandler Heights, Arizona, Jake's Granite Supplies, L.L.C., owns and operates a sand and gravel mining operation in Buckeye, Arizona. The Company filed for chapter 11 protection on June 13, 2005 (Bankr. D. Ariz. Case No. 05-10601). Joseph E. Cotterman, Esq., Gallagher & Kennedy, P.A. When the Debtor filed for protection from its creditors, it listed assets of $16,473,500 and debts of $6,141,198. JEFFERSON NATIONAL: Fitch Cuts Insurer's Financial Strength Rating ------------------------------------------------------------------ Fitch Ratings has downgraded the insurer financial strength ratings of Jefferson National Life Insurance Company and American Life Insurance Company of New York to 'BB' from 'BBB-'. Both companies are subsidiaries of Inviva, Inc., a privately held insurance holding company based in New York City. The Rating Outlook for both ratings is Negative. The action follows management's decision to defer payment of dividends on its $91.5 million of trust preferred securities. Inviva has not been able to raise equity capital this year as expected and that has further constrained the company's limited debt servicing capabilities. While the trust preferreds do provide for a five-year deferral of dividend payments without triggering a default, Fitch is concerned that subsidiary capital may be needed to meet obligations of the holding company. As of Sept. 30, 2005, JNL and ALICNY had paid no dividends in 2005. JNL's and ALICNY's risk-based capital ratios are expected to be well above expectations for the rating level at year-end 2005. Inviva recently announced that it plans to sell its entire inforce life insurance block to reduce expenses and free up capital. Inviva's capital structure is heavily dependent on convertible preferred shares of private investors and trust-preferred securities. The company used proceeds from the issuance of trust preferreds in 2004 to pay down higher cost debt, reducing the ratio of straight debt to total capital from about 20% at year-end 2003 to 8% at year-end 2004. It was about 8.7% at Sept. 30, 2005. Trust preferred securities represented about 66% of Inviva's capital structure at Sept. 30, 2005. Inviva acquired JNL, formerly Conseco Variable Insurance Company, from Conseco in October of 2002. Inviva acquired ALICNY in 2001. At Sept. 30, 2005, the holding company had $2.3 billion in consolidated total assets and $45 million in equity. Jefferson National Life Insurance Company -- IFS downgraded to 'BB' from 'BBB-' with a Negative Outlook. American Life Insurance Co. of New York -- IFS downgraded to 'BB' from 'BBB-' with a Negative Outlook. JL FRENCH: Interest Nonpayment Cues S&P to Junk Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'CCC+' corporate credit rating on automotive supplier J.L. French Automotive Castings Inc. on CreditWatch with negative implications, following published reports that the company did not make a bond interest payment due Dec. 1, 2005. Sheboygan, Wisconsin-based J.L. French has total debt of $680 million, including the present value of operating leases and debt-like preferred stock. "We have not confirmed that the interest payment was missed, and it is unclear whether the terms of other debt agreements have been violated," said Standard & Poor's credit analyst Martin King. "We will seek clarification on these points." The corporate credit rating could be lowered to 'D' if the company fails to make required interest or principal payments under all of its debt agreements, or if it files for bankruptcy. The rating could be lowered to 'SD', however, if J.L. French only fails to make required debt service payments under certain debt agreements while continuing to meet all payment requirements of its other debt obligations. J.L. French suffers from a vulnerable business profile because of the intense challenges of the automotive casting industry, which is fragmented, highly capital intensive, and subject to volatile demand and customer pricing pressures. The company's earnings and cash flow have been pressured this year by vehicle production cuts and price reductions instigated by its major customers. Especially hard hit have been the carmakers' sport utility vehicle and light-truck platforms, which have experienced sharp sales declines because of tough competition and high gas prices. Products for SUVs and light trucks account for a disproportionate share of J.L. French's sales and profits. Debt leverage is high and increasing because of falling EBITDA and negative cash flow. Despite the company's strong EBITDA margins in the 15%-20% range, free cash flow generation is weak because of heavy capital spending and debt service requirements. Liquidity has been constrained by increasing working capital requirements and restrictive financial covenants. JP MORGAN: Fitch Holds Low-B Ratings on Four Certificate Classes ---------------------------------------------------------------- Fitch Ratings upgrades JP Morgan Chase Commercial Mortgage Securities Corporation's commercial mortgage pass-through certificates, series 2001-CIBC2: -- $38.5 million class B to 'AAA' from 'AA'; -- $38.5 million class C to 'AA' from 'A'; -- $14.4 million class D to 'A+' from 'A-'; -- $28.9 million class E to 'BBB+' from 'BBB'; -- $12 million class F to 'BBB' from 'BBB-'; -- $25.2 million class G to 'BBB-' from 'BB+'; -- $7.2 million class H to 'BB+' from 'BB'. In addition, Fitch affirms these classes: -- $131.2 million class A-2 at 'AAA'; -- $561.4 million class A-3 at 'AAA'; -- Interest-only classes X-1 and X-2 at 'AAA'; -- $7.2 million class J at 'BB-'; -- $12 million class K at 'B+'; -- $4.8 million class L at 'B'; -- $4.8 million class M at 'B-'. Fitch does not rate the $17.3 million class NR. Class A-1 has paid in full. The rating upgrades reflect defeasance and paydown since issuance. Fifteen loans have been defeased to date. In addition, as of the November 2005 distribution date, the pool has paid down 6.1% to $903.4 million from $961.7 million at issuance. Currently, there are three assets in special servicing. The largest specially serviced asset is a vacant, class B office complex located in Memphis, Tennessee. The asset is real estate owned. The special servicer is marketing the asset for sale. Based on current appraised values, losses will be incurred upon disposition. The second specially serviced loan is a retail center in High Point, North Carolina. The loan was transferred to the special servicer in September 2005 due to Winn-Dixie rejecting the store at this location. Negotiations with the borrower over a potential workout are ongoing. The third specially serviced loan is a multifamily property located in Pascagoula, Mississippi, which suffered heavy damage due to Hurricane Katrina. This loan was transferred to the special servicer in October 2005 due to imminent default and is 60 days delinquent. The special servicer is working with the borrower to determine property damage and establish a timetable for repairs. Collin Creek Mall maintains an investment grade credit assessment. The Fitch stressed debt service coverage ratio for the loan was calculated using a Fitch adjusted net cash flow and a stressed debt service based on the current loan balance and a hypothetical mortgage constant. Collin Creek Mall is secured by 332,055 square feet of in-line space in a regional mall in Plano, Texas. The mall is anchored by Foley's, Dillard's, Sears, JC Penney, and Mervyn's, which, according to the master servicer, are closing in January 2006. As of June 30, 2005, in-line occupancy is 92.6% compared with 98.2% at issuance. The Fitch stressed DSCR has increased to 1.53 times as of June 2005 from 1.50x at issuance. LIMELIGHT MEDIA: Equity Deficit Tops $2.4 Mil. at September 30 -------------------------------------------------------------- Limelight Media Group, Inc. (OTCBB: LMMG) reported $1,422,781 of revenues for the third quarter ended Sept, 30, 2005, compared to $1,016,966 in the second quarter of 2005, a 39.9% increase quarter over quarter. The increase in revenues were primarily due to revenue recognition from the company's IMPART subsidiary and its Media Side Street operations during the third quarter, in addition to increased sales of the enhanced digital out-of-home media solutions being developed by the company. For the three-months ended Sept. 30, 2005, Limelight Media incurred a $821,467 net loss, as compared to a $15,349 net loss for the same period in the prior year. The net operational losses were attributable to significant expense increases in three areas: 1) professional expenses due to legal and accounting costs associated with the acquisition of IMPART, increased from $27,341 to $313,883, and were recorded as a one-time expense; 2) an increase of $371,332 in cost of revenues and increased non-cash depreciation expenses of $96,333 related to continued operational investments including hardware and system purchases to support its expansion into new market segments such as the SeaTac Airport deployment previously announced; and 3) a key investment in the personnel needed to fulfill the company's enhanced vision and business model included direct expense increases of $77,250 quarter over quarter. David V. Lott, CEO, stated, "We are very encouraged by the progress made in the first quarter following the acquisition of IMPART, Inc., and its iPoint Networks and Media Side Street businesses. We not only announced the deployment of our first interactive digital media network in the airport market segment, we also validated the business model with the subsequent sale of advertising space, and have made inroads in other markets yet to be announced." Lott continued, "About 80% of our reported loss falls into the category of non-cash depreciation or one-time extraordinary charges associated with the acquisition. The operating losses attributed to personnel costs, represents our commitment to aggressive investment in product development and services needed to continue expansion into additional vertical markets." Limelight Media's balance sheet showed $2,283,824 in total assets at Sept. 30, 2005, and liabilities of $4,700,553, resulting in a stockholders' deficit of $2,416,729. As of Sept. 30, 2005, the Company had a working capital deficit of $3,123,619. Going Concern Doubt L.L. Bradford & Company, LLC, expressed substantial doubt about Limelight Media'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 Company's balance sheet showed losses from operations and working capital deficit. Headquartered in Seattle, Washington, Limelight Media Group, Inc., -- http://www.impartmedia.com/-- is a rapidly expanding digital signage leader in the emerging out-of-home media sector, which is beginning to take center stage with advertisers. The company is growing through a consolidation strategy that includes acquiring the industries best and brightest talent and most advanced solutions to create a broad, integrated one-stop communications media company focused on digital signage and networked advertising offerings for leading brands in industries such as retail, grocery, banking, restaurants, hospitality, government and public spaces, among others. The company's digital media solutions enable the simultaneous delivery of video content to a variety of remote audiences in real time, allowing for immediate customization of messages through a centralized network operations center. MCLEODUSA INC: Court Approves Prepackaged Plan of Reorganization ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois approved, on Dec. 15, 2005, the prepackaged plan of reorganization submitted by McLeodUSA Incorporated and its debtor-affiliates. As a result of this approval, the Debtors expect to consummate the plan of reorganization and emerge from Chapter 11 in January 2006. DIP Financing As part of the plan confirmation, the Debtors were authorized to access the full amount of its $50 million debtor-in-possession credit facility. Upon consummation of the plan the Debtors' DIP financing will be replaced with a new $50 million revolving credit facility. The Debtors' approximately $677.3 million of secured junior bank debt will be converted into 100% of the Company's equity, and the Debtors' existing $100 million in secured senior bank debt will be cancelled and replaced with a new $100 million term facility. All of the Debtors' existing preferred and common stock will be cancelled, and holders of that stock will have no recovery. Pending the consummation of the plan of reorganization, the Debtors expect to continue to operate its business in the ordinary course without disruption to its employees, customers or suppliers. "We are very pleased that our plan of reorganization has been confirmed by the Bankruptcy Court," said Stan Springel, Chief Restructuring Officer. "We appreciate the strong support of our plan by our lenders and are grateful to our customers, employees and vendors for their continued support during the reorganization. As we emerge from Chapter 11, we will be able to put an even greater focus on strengthening our sales, operational and financial performance." Terms of the Plan As reported in the Troubled Company Reporter on Nov. 2, 2005, the principal economic terms of the Plan, Stanford Springel, chief restructuring officer of McLeodUSA, relates, provide for the Company's balance sheet to be restructured by: (a) converting Senior Prepetition Lender Claims into New Term Loan Notes; (b) converting Junior Prepetition Lender Claims into 100% of the New Common Stock, subject to dilution by the Management Stock Plan Awards; and (c) canceling the Company's existing Preferred Stock and Common Stock. Importantly, Mr. Springel says, all other unsecured claims, except for the claims held by landlords of a designated group of leases of non-residential real property that the Debtors intend to reject, are unimpaired under the Plan. Under the Plan, holders of the Rejected Lease Claims will be paid 100% of the allowed amount of their claims as determined by Section 502(b)(6) of the Bankruptcy Code. Under the Plan, there are three classes of Impaired Claims: -- Class 4 Senior Prepetition Lender Claims, -- Class 5 Junior Prepetition Lender Claims, and -- Class 6 Lease Rejection Claims There are two classes of Impaired Interests: -- Class 8 Old Preferred Stock Interests and Subordinated Claims, and -- Class 9 Old Common Stock Interests and Subordinated Claims. All other Claims and Interests are Unimpaired: -- Class 1 Non-Tax Priority Claims, -- Class 2 Other Secured Claims, -- Class 3 General Unsecured Claims, and -- Class 7 Equity Interests in Debtors' Subsidiaries Holders of unimpaired claims and interests will be unaffected by the Plan. According to Mr. Springel, the value of the Company is significantly less than the aggregate amount of the Claims held by the Prepetition Lenders, which Claims are secured by substantially all assets of the Company. The Plan essentially provides for the transfer of ownership of the Company to the Junior Prepetition Lenders. At the Debtors' request, Miller Buckfire performed a valuation analysis of Reorganized McLeodUSA. The total enterprise value of Reorganized McLeodUSA was assumed for the purposes of the Plan by the Debtors, based on advice from Miller Buckfire, to be between approximately $255,000,000 to $345,000,000 as of an assumed Effective Date of October 31, 2005. Based on the total enterprise value of Reorganized McLeodUSA's business and an assumed total debt of approximately $125,200,000, cash on hand of $20,000,000 and potential asset sale proceeds as estimated by the Debtors of $61,000,000, the Debtors have employed an assumed range of equity values for Reorganized McLeodUSA of approximately $210,800,000 to $300,800,000. The values are based on information available to, and analyses undertaken by, Miller Buckfire as of September 6, 2005. The Company, with the assistance of Alvarez & Marsal, LLC, conducted a Liquidation Analysis to determine the dollar amount that would be generated from the liquidation of the Company's assets and properties in the context of a Chapter 7 liquidation case. After consideration of the effects that a Chapter 7 liquidation would have on the ultimate proceeds available for distribution to creditors, including: (i) the increased costs and expenses of a liquidation under Chapter 7 arising from fees payable to a trustee in a bankruptcy and professional advisors to that trustee, (ii) the erosion in value of assets in a Chapter 7 case in the context of the expeditious liquidation required under Chapter 7 and the "forced sale" atmosphere that would likely prevail, and (iii) the substantial increase in claims, which would need to be satisfied on a priority basis, McLeodUSA has determined that confirmation of the plan will provide each creditor and equity holder with a recovery that is not less than it would receive pursuant to a liquidation of the company under chapter 7 of the bankruptcy code. McLeodUSA Liquidation Analysis As of June 30, 2005 (in thousands of dollars) Net Book Estimated Proceeds Value Recovery -------- ----- --------- Cash $33,391 $33,391 Accounts Receivable - Net 54,856 41,156 Prepaid Expenses 14,744 - Property, Plant & Equipment - Net 410,412 72,040 Headquarters Sale 28,627 27,300 ATS Sale 15,386 20,500 Other Long term Assets 116,587 7,360 -------- --------- Total Proceeds $674,002 $201,746 -------- --------- Costs & Fees Wind Down Operating Costs 4,393 Trustees Fees 3,367 Professional Fees 8,500 Employee Retention Bonuses 8,278 Total Costs & Fees 24,538 --------- Proceeds Available for Payment of Claims $177,208 Claim Estimated Value Recovery % ---------- --------- ---- Secured Claims: Senior Pre-Petition Lender Claims Exit Facility $108,355 $108,355 100% Junior Pre-Petition Lender Claims Revolver (includes accrued interest) 155,842 15,230 10% Tranche A (includes accrued interest) 156,677 15,312 10% Tranche B (includes accrued interest) 392,003 38,311 10% -------- -------- Total $704,522 $68,853 10% Proceeds Available for Payment of General Unsecured Creditors $0 General Unsecured Claims: Severance 6,837 - 0% Trade Payables 36,706 - 0% Customer Deposits 2,900 - 0% Lease Rejection Claims 65,911 - 0% Asset Retirement Obligations 62,300 - 0% Other Current Liabilities 85,700 - 0% -------- -------- $260,354 - 0% Proceeds Available for Payment of Equity Holders $0 0% The Debtors have already sent a copy of the Disclosure Statement describing, among other things, the proposed reorganization and its effects on holders of claims against and interests in the Debtors, the Plan, and ballots, to each known creditor that was entitled to vote on the Plan. The Debtors established October 28, 2005, as the deadline for receipt of votes to accept or reject the Plan. "The solicitation was an overwhelming success. With respect to Class 4 (Senior Prepetition Lender Claims), approximately 100% in amount and 100% in number voted to accept the Plan. With respect to Class 5 (Junior Prepetition Lender Claims), approximately 97.0% in amount and 97.3% in number voted to accept the Plan," Mr. Springel relates. A full-text copy of the Joint Prepackaged Plan is available for free at http://bankrupt.com/misc/McLeodUSAPLAN.pdf A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/McLeodUSADisclosureStatement.pdf Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated -- http://www.mcleodusa.com/-- provides integrated communications services, including local services in 25 Midwest, Southwest, Northwest and Rocky Mountain states. The Debtor and its affiliates filed for chapter 11 protection on Oct. 28, 2005 (Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234). Peter Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate, Meagher and Flom, represent the Debtors in their restructuring efforts. As of June 30, 2005, McLeodUSA Incorporated reported $674,000,000 in total assets and $1,011,000,000 in total debts. McLeodUSA Inc. previously filed for chapter 11 protection on January 30, 2002 (Bankr. D. Del. Case No. 02-10288). The Court confirmed the Debtor's chapter 11 plan on April 5, 2003, and that Plan took effect on April 16, 2002. The Court formally closed the case on May 20, 2005. METALFORMING TECH: Wants Until March 13 to Remove Civil Actions --------------------------------------------------------------- Metalforming Technologies, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend until March 13, 2006, the period within which they can remove prepetition civil actions. The extension will afford the Debtors more time to make fully informed decisions concerning removal of each pending action from a remote court to the District of Delaware for continued litigation. The extension will assure that the Debtors don't forfeit valuable rights. Headquartered in Chicago, Illinois, Metalforming Technologies, Inc., and its debtor-affiliates manufacture seating components, stamped and welded powertrain components, closure systems, airbag housings and charge air tubing assemblies for automobiles and light trucks. The Company and eight of its affiliates filed for chapter 11 protection on June 16, 2005 (Bankr. D. Del. Case Nos. 05-11697 through 05-11705). Joel A. Waite, Esq., Robert S. Brady, Esq., and Sean Matthew Beach, Esq., at Young Conaway Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of May 1, 2005, the Debtors reported $108 million in total assets and $111 million in total debts. NANOMAT INC: Section 341 Meeting Slated for January 25 ------------------------------------------------------ The U.S. Trustee for Region 3 will convene a meeting of Nanomat, Inc.'s creditors at 1:00 p.m. on Jan. 25, 2006, at the Liberty Center, 9th Floor, Room 960, 1001 Liberty Avenue, Pittsburgh, Pennsylvania. 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 North Huntingdon, Pennsylvania, Nanomat, Inc. -- http://www.nanomat.com/-- is a leading manufacturer of nanomaterials, powders, and technologies. Nanomat filed for chapter 11 protection on March 18, 2005 (Bankr. W.D. Pa. Case No. 05-23245). Donald R. Calaiaro, Esq., at Calaiaro, Corbett & Brungo, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, its estimated assets and debts from $10 million to $50 million. NATIONAL FRANCHISE: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: National Franchise Developers Holdings, LLC dba Perkins Restaurant & Bakery 2870 Langford Common Drive Norcross, Georgia 30611 Bankruptcy Case No.: 05-86465 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: December 18, 2005 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: M. Denise Dotson, Esq. Jones & Walden, LLC 21 Eighth Street Northeast Atlanta, Georgia 30309 Tel: (404) 564-9300 Fax: (404) 564-9301 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Peoples First Community Bank Land & Building $1,280,000 1022 West 23rd Street located in 14471 Panama City, FL 32405 Beach Boulevard In Jacksonville, Florida USSBA/JEDCO Land & Building $750,000 1300 River Place Boulevard located in 11190 Suite 105 San Jose Boulevard Jacksonville, FL 32207 in Jacksonville, Florida USSBA/JEDCO Land & Building $500,000 1300 River Place Boulevard located in 14471 Suite 105 Beach Boulevard Jacksonville, FL 32207 in Jacksonville, Florida Internal Revenue Service Tax $300,000 P.O. Box 995 Room 1640, Stop 334-D Atlanta, GA 30370 Duval County Tax Commissioner Tax $125,000 Attn: Mike Hagan 231 East Forsyth Street Jacksonville, FL 32202 The Restaurant Company Trade Debt $150,000 6075 Poplar Avenue, Suite 800 Memphis, TN 38119 State of Florida Sales Tax $85,000 Sales Tax Division 1379 Blountstown Highway Tallahassee, FL 32304 Jacksonville Electric Authority $10,000 Attn: In-house Counsel 21 West Church Street Jacksonville, FL 32202 Micros Systems, Inc. Trade Debt $15,000 P.O. Box 23747 Baltimore, MD 21203 NESCO INDUSTRIES: Balance Sheet Upside-Down by $5.8MM at July 31 ---------------------------------------------------------------- Nesco Industries, Inc., delivered its financial results for the quarter ended July 31, 2005, to the Securities and Exchange Commission on Nov. 23, 2005. Nesco's net loss for the three months ended July 31, 2005 decreased to $1,202,000 from $3,539,000 for the three months ended July 31, 2004. The $2,337,000 includes a non-cash debt discount charge and amortization of debt financing costs of $828,000, an increase of $531,000 from the three months ended July 31, 2004. Revenues for the three months ended July 31, 2005 were $386,000 as compared to $188,000 for the same period in the prior year. The $198,000 increase is primarily attributable to one new customer that had revenues of $94,000 in the current period and another customer who had increased revenues of $71,000 from the prior period due to developmental work on a new product. At July 31, 2005, Nesco's balance sheet showed $1,613,816 in total assets and liabilities of $7,431,665, resulting in a stockholders' deficit of $5,817,849. The Company had a working capital deficit of approximately $6,986,000 and an accumulated deficit of approximately $19,771,000, at July 31, 2005. Going Concern Doubt Rothstein, Kass & Company, PC, expressed substantial doubt about Nesco's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended April 30, 2005. The auditing firm pointed to the Company's cumulative losses and working capital and stockholders' deficit. Nesco Industries, Inc., develops, manufactures and markets high water content, electron beam cross-linked, aqueous polymer hydrogels used for wound care, medical diagnostics, transdermal drug delivery and cosmetics. NEW EARTH: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: New Earth Services, Inc. 306 Mill Street Cambridge, Maryland 21613 Bankruptcy Case No.: 05-90541 Type of Business: The Debtor operates a compost facility that recycles by-products generated in food processing plants and farms. See http://www.newearthservices.com/ Chapter 11 Petition Date: December 12, 2005 Court: District of Maryland (Baltimore) Judge: E. Stephen Derby Debtor's Counsel: Harry M. Rifkin, Esq. Baxter, Baker, Sidle, Conn & Jones, P.A. 120 East Baltimore Street, Suite 2100 Baltimore, Maryland 21202 Tel: (410) 230-3800 Fax: (410) 230-3801 Total Assets: $712,039 Total Debts: $3,389,644 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Days Cove Reclamation Company Loans $893,586 6425 Days Cove Road White Marsh, MD 21162 Department of Business & Powerscreen M60 $300,000 Economic Development Conveyance, s/n Redwood Tower, 22nd Floor 2409002 217 East Redwood Street Powerscreen 620 Attn: Loan Administration Trommel s/n Baltimore, MD 21202 9103800 Value of security: $20,000 Department of Business & Yale Forklif Truck $300,000 Economic Development m/n 6777 s/n Redwood Tower, 22nd Floor YTGLP050RGN 217 East Redwood Street Value of security: Attn: Loan Administration $3,000 Baltimore, MD 21202 Department of Business & Scarab window $300,000 Economic Development turner Redwood Tower, 22nd Floor m/n 16 s/n 99 217 East Redwood Street Value of security: Attn: Loan Administration $5,000 Baltimore, MD 21202 Department of Business & Hitachi Excavator $300,000 Economic Development m/n EX200LC3 Redwood Tower, 22nd Floor s/n 14C83152 217 East Redwood Street Value of security: Attn: Loan Administration $5,000 Baltimore, MD 21202 Department of Business & JayLor 2100 Cutter $300,000 Economic Development mixer wagon Redwood Tower, 22nd Floor S/N Tmixer 217 East Redwood Street T7201802000D Attn: Loan Administration 7201802000D Baltimore, MD 21202 Value of security: $5,000 Isabella Trust Note for loan to $260,000 883 Airport Park Road debtor Glen Burnie, MD 21061 Days Cove Reclamation Company Promissory note $100,000 Maryland Clean Water Fund Penalty for $50,000 environmental violations Weston Investments, Inc. Note for loan to $50,000 debtor Rich & Henderson, P.C. Attorney's fees for $49,835 legal services Quality Built Homes, Inc. Wood chips $42,000 Eleanor Condon 2000 Note $33,680 Pine View Trucking Manure $8,200 Ronald E. Small, CPA Accounting fees $6,250 The Schundler Company Horticultural $5,866 supplies Dorchester County Case No. $5,600 09M04004329TX Personal property taxes Town of Hurlock Disposal fees $5,068 Condon Randis, Inc. Bag designs & $4,940 website design Wise Oil & Fuel, Inc. Fuel $4,659 NVE INC: Court Extends Exclusive Plan-Filing Period to Feb. 15 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended, until Feb. 15, 2006, NVE Inc.'s period within which it has the exclusive right to file a chapter 11 plan. The Debtor has until April 15, 2006, to solicit acceptances of that plan. The Debtor told the Court that the formulation of a plan, which will be supported by the Official Committee of Unsecured Creditors, the plaintiff bar, and the retailers, will be an extraordinary and difficult task. The Debtor believes unexpected delays will require a request for further extension. Thus, the extension period will allow the Debtor to move forward with its negotiations with the Creditors' Committee and other creditors. Headquartered in Andover, New Jersey, NVE Inc., dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now-banned herbal stimulant, Ephedra. The Company filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J. Case No. 05-35692). When the Debtor filed for protection from its creditors, it listed $10,966,522 in total assets and $14,745,605 in total debts. NVE INC: Has Until February 6 to Decide on Leases ------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey gave NVE Inc. until Feb. 6, 2006, to decide whether to assume, assume and assign, or reject unexpired non-residential real property leases pursuant to Section 365(d)(4) of the Bankruptcy Code. The Debtor submitted that the extension will permit it to properly evaluate the merits of each unexpired lease. Absent the extension, the Debtor said it might assume leases that will prove cumbersome in the future or reject leases that will prove useful it its reorganization. Headquartered in Andover, New Jersey, NVE Inc. dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now-banned herbal stimulant, ephedra. The Debtor filed for chapter 7 liquidation proceeding on August 10, 2005 (Bankr. D. N.J. Case No. 05-35692). Daniel Stolz, Esq., at Wasserman, Jurista & Stolz, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for chapter 7, it listed $10,966,522 in total assets and $14,745,605 in total debts. NVE INC: McElroy Deutsch Approved as Special Litigation Counsel --------------------------------------------------------------- The Honorable Novalyn L. Winfield of the U.S. Bankruptcy Court for the District of New Jersey authorized NVE Inc. dba NVE Pharmaceuticals, Inc., to employ McElroy, Deutsch, Mulvaney & Carpenter, LLP, as its special counsel in two litigation matters. The first matter is a consumer fraud action that was instituted against the Debtor by the Attorney General for the State of New Jersey, entitled Peter C. Harvey, Attorney General of the State of New Jersey and Renee Erdos, Director of New Jersey Division of Consumer Affairs, v. NVE, Inc., et al., Docket No. SSX-C-39-04. The State of New Jersey wants injunctive relief for penalties related to alleged false advertisement claims. The Debtor vehemently denies these allegations. The matter is pending before the Honorable Kenneth MacKenzie in Morris County. The second matter is pending in the Third Circuit Court of Appeals, which relates to the Food and Drug Authority ban on ephedrine alkaloids -- Ephedra, the ban that ended the sale of the Debtor's most successful products. A successful outcome of this appeal could have a significantly positive economic result for the Debtor. It would lift the FDA ban on the sale of Ephedra based products, for which there is significant demand. The matter has been briefed and only oral argument before the Third Circuit remains. Oral argument is currently scheduled for Sept. 26, 2005. The Debtor wants to continue McElroy Deutsch's employment because the Firm is already familiar with the litigation. The current hourly rates of McElroy Deutsch's professionals are: Professional Hourly Rate ------------ ----------- Walter F. Timpone, Esq. $425 Michael B. Devins, Esq. $225 Walter R. Krzastek $200 With 180 lawyers in five offices in three states, McElroy, Deutsch, Mulvaney & Carpenter, LLP -- http://www.mdmlaw.com/-- is the third largest law firm in New Jersey that offers a full range of legal services including a wide variety of insurance services emphasizing coverage and defense, labor and employment, corporate, construction, commercial litigation, tax, and private client services. The Debtor believes that McElroy, Deutsch, Mulvaney & Carpenter, LLP, is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Headquartered in Andover, New Jersey, NVE Inc. dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now-banned herbal stimulant, ephedra. The Debtor filed for chapter 7 liquidation proceeding on August 10, 2005 (Bankr. D. N.J. Case No. 05-35692). When the Debtor filed for chapter 7, it listed $10,966,522 in total assets and $14,745,605 in total debts. OMNI CAPITAL: Court Rejects Bayview's Bid to Dismiss Case --------------------------------------------------------- The Hon. David T. Stosberg of the U.S. Bankruptcy Court for the Western District of Kentucky in Louisville overruled Bayview Loan Servicing, LLC's motion to dismiss the chapter 11 case of Omni Capital Limited Partnership. Bayview, as successor-in-interest to Allstate Insurance Company, holds a $6 million secured claim against the Debtor's estate on account of a 15-year mortgage note. The note is secured by Omni Capital's sole asset -- an office building located at 9721 Ormsby Station Road in Louisville. As reported in the Troubled Company Reporter on Nov. 16, 2005, Bayview wanted the Debtor's case dismissed because it was a two- party dispute and should be settled outside the Bankruptcy Court. Asset Sale Bayview has agreed to give the Debtor until May 16, 2006, to close the sale or refinancing of the Louisville property. If the Debtor fails to secure an enforceable purchase contract for the property by March 31, 2006, Bayview is authorized to schedule an auction in behalf of the Debtor. Pursuant to the agreement with Bayview, the Debtor hired General Capital Partners, LC, nunc pro tunc to Nov. 16, 2005, to assist in the sale. General Capital will work to sell or refinance the property for an amount sufficient to pay Bayview's claim in full and produce additional proceeds to pay the Debtor's other priority creditors and interest holders. In addition, the Bankruptcy Court allowed Bayview's prepetition claim as a secured claim totaling $6,947,698, subject to the recalculation of the prepayment premium at the date of the sale. Postpetition accruals of interest and expenses will be added to Bayview claim in order to determine its total allowed claim at the date of the sale. Headquartered in Louisville, Kentucky, Omni Capital Limited Partnership collects rent from various tenants of its office building. The Debtor filed for chapter 11 protection on Sept. 9, 2005 (Bankr. W.D. Ky. Case No. 05-36490). William Stephen Reisz, Esq., at Foley Bryant & Holloway, PLLC represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,578,450 in assets and $7,424,571 in debts. OMNI CAPITAL: Hires General Capital to Market Louisville Property ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Kentucky in Louisville authorized Omni Capital Limited Partnership to retain General Capital Partners, LLC, as its financial consultant, nunc pro tunc to Nov. 16, 2005. General Capital will: a) advise and consult with the Debtor concerning a potential sale of its office building located at 9721 Ormsby Station Road, Louisville, Kentucky; b) advise and consult with the Debtor concerning a refinance of the Office Building and to seek refinancing contracts on behalf of the Debtor; c) provide organizational services for the conduct of an auction, in the event the Office Building is auctioned pursuant to the Debtor's proposed Plan of Reorganization or other section 363 sale; d) perform other similar tasks which may be required in the administration of the estate. General Capital will receive a fixed fee of $2,500 per month for the duration of the agreement with the Debtor or until a transaction occurs, whichever occurs first. In addition, General Capital is entitled to a transaction fee equal to 3% of the gross value of any sale price, including auction price, or amount refinanced. The Debtor assures the Bankruptcy Court that General Capital does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. About General Capital Offering an array of specialized services encompassing M&A, private placement of capital, and financial advisory and restructuring services, General Capital Partners, LLC -- http://www.generalcapitalpartners.com/-- is a specialized investment bank exclusively focused on distressed markets nationwide. About Omni Capital Headquartered in Louisville, Kentucky, Omni Capital Limited Partnership collects rent from various tenants of its office building. The Debtor filed for chapter 11 protection on Sept. 9, 2005 (Bankr. W.D. Ky. Case No. 05-36490). William Stephen Reisz, Esq., at Foley Bryant & Holloway, PLLC represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,578,450 in assets and $7,424,571 in debts. PEAK ENTERTAINMENT: Posts $779,199 Net Loss in Third Quarter ------------------------------------------------------------ Peak Entertainment Holdings Inc. delivered its financial results for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 23, 2005. Peak Entertainment incurred a $779,199 net loss on $437,908 of revenues for the three months ended Sept. 30, 2005, versus a $1,144,129 net loss on $138,474 of revenues for the same period in 2004. The Company's balance sheet, showed $3,900,059 in total assets and $1,564,771 of liabilities. At Sept. 30, 2005, the Company had no cash and used approximately $521,000 to fund operations and net loss for the nine months ended Sept. 30, 2005. Going Concern Doubt Garbutt & Elliott Limited expressed substantial doubt about Peak Entertainment's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's recurring losses from operations, cash flow deficits and net capital deficiency. About Peak Entertainment Headquartered in Derbyshire, England, Peak Entertainment Holdings Inc. -- http://www.peakentertainment.co.uk/-- is a fully integrated multimedia company dedicated to quality children's television entertainment, character licensing and consumer products. The Company's unique, fully integrated business model, which includes concept creation and branding, production of entertainment programs, character licensing, and manufacturing and distribution of toys and related consumer products, gives it maximum quality control and speed-to-market while developing total brand equity. Peak's properties include Monster Quest, The Wumblers, Little Big Feet, Countin' Sheep and Mini Flora. PHARMACEUTICAL FORMULATIONS: Court Extends Exclusive Periods ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware extended Pharmaceutical Formulations, Inc.'s exclusive periods to file and solicit acceptances of a chapter 11 plan of reorganization. The extension blocks any party-in-interest other than the Debtor from filing a chapter 11 plan through Feb. 6, 2006. The Debtor has the exclusive right, until Apr. 10, 2006, to solicit acceptances of that plan. The Debtor filed a plan and accompanying disclosure statement on Nov. 4. The Debtor anticipates it will continue to work with the Official Committee of Unsecured Creditors and ICC Industries, Inc., to forge a consensual plan. The Debtor submits that the requested extension will not prejudice creditor interests as it continues to make timely payment on all its postpetition obligations. Headquartered in Edison, New Jersey, Pharmaceutical Formulations, Inc. -- http://www.pfiotc.com/-- is a publicly traded private label manufacturer and distributor of nonprescription over-the- counter solid dose generic pharmaceutical products in the United States. The Company filed for chapter 11 protection on July 11, 2005 (Bankr. Del. Case No. 05-11910). Matthew Barry Lunn, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtor in its chapter 11 proceeding. As of Apr. 30, 2005, the Debtor reported $40,860,000 in total assets and $44,195,000 in total debts. PHARMACEUTICAL FORMULATIONS: Disclosure Hearing Set for Dec. 29 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on Dec. 29, 2005, to consider the adequacy of information contained in Pharmaceutical Formulations, Inc.'s Disclosure Statement explaining its Chapter 11 Plan of Reorganization. Objections to the Disclosure Statement, if any, must be filed Dec. 21, 2005. Pharmaceutical Formulations delivered its Plan and an accompanying Disclosure Statement to the Court on Nov. 4, 2005. About the Plan The Plan contemplates the Debtor's reorganization and contains a settlement reached among the Debtor, its majority shareholder, ICC Industries Inc., and the Official Committee of Unsecured Creditors. Pursuant to the settlement: (i) the net proceeds of the sale to Leiner Health Products, L.L.C; (ii) a waiver by ICC and its affiliate, ICC Chemical Corporation, of their right to receive distributions under the Plan; (iii) a cash contribution by ICC equal to the ICC Plan Cash Contribution, will be used to: (a) pay allowed administrative claims, the CIT Dip claim, priority tax claims, fee claims and other allowed claims in full; (b) make distributions to the convenience claimants holding approximately $350,000 of allowed class 9 claims, equal to 90% in cash on account of their claim; and (c) make distributions to the holders of $6.5 million in allowed general unsecured claims in an amount equal to: (x) either 40% of their claims or a pro rata share of the funds in the class 10 pool; and (y) the ICC Individual Release Consideration fee. Class 11 interest holders will retain all rights and entitlements in the Reorganized Debtor while claims of class 12 interest holders will be deemed cancelled on the effective date. A full-text copy of the Debtor's Disclosure Statement explaining its Chapter 11 Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=051123025407 As reported in the Troubled Company Reporter on Sept. 29, the Debtor consummated its previously-announced sale of substantially all of its assets related to its OTC solid dose pharmaceutical products business to Leiner Health Products, L.L.C., pursuant to Section 363 of the U.S. Bankruptcy Code. The purchase price of $23,000,000 (plus certain assumed trade liabilities) is being used to pay certain creditors of the Company. The Company is continuing to operate Konsyl Pharmaceuticals Inc., which was not part of the sale. Headquartered in Edison, New Jersey, Pharmaceutical Formulations, Inc. -- http://www.pfiotc.com/-- is a publicly traded private label manufacturer and distributor of nonprescription over-the- counter solid dose generic pharmaceutical products in the United States. The Company filed for chapter 11 protection on July 11, 2005 (Bankr. Del. Case No. 05-11910). Matthew Barry Lunn, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtor in its chapter 11 proceeding. As of Apr. 30, 2005, the Debtor reported $40,860,000 in total assets and $44,195,000 in total debts. PHOTOCIRCUITS CORP: Wants More Time to Decide on Unexpired Leases ----------------------------------------------------------------- Photocircuits Corporation asks the U.S. Bankruptcy Court for the Eastern District of New York to extend until: a) the date a chapter 11 plan is confirmed, its time to decide whether to assume, assume and assign, or reject its Alpha and Beta leases; and b) December 31, 2005, its time to assume, assume and assign, or reject other unexpired nonresidential real property leases. The Debtor owns Glen Cove Campus that covers approximately 26.4 acres. Its affiliate, Alpha Forty-Five, LLC, leased a property located at 45-A Sea Cliff Avenue, in Glen Cove, New York. The other affiliate, Beta Forty-Five, LLC, leased a portion of the Glen Cove Campus located at 45-B Sea Cliff Avenue. The Debtor also leases from Gloria Connan, a small building utilized as a tool storage room located at 262 Glen Head Road. By its terms, the Tool Room lease expires on December 31, 2005. With regard to the Alpha Lease and Beta Lease, the Debtor explains that the landlords are its wholly-controlled affiliates and are also co-Debtors of its senior and junior secured debt. It is expected that the entire Glen Cove Campus will remain with the Debtor in the event of recapitalization, or sale of its assets. In addition, the Debtor must preserve its rights to address all of its lease issues in the context of this chapter 11 case. As for the Tool Room lease, the Debtors wants more time to decide whether to assume or reject that lease because of the immediate effect of rejection under Section 354(d)(4) of the Bankruptcy Code. Headquartered in Glen Cove, New York, Photocircuits Corporation -- http://www.photocircuits.com/-- was the first independent printed circuit board fabricator in the world. Its worldwide reach comprises facilities in Peachtree City, Georgia; Monterrey, Mexico; Heredia, Costa Rica; and Batangas, Philippines. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. E.D.N.Y. Case No. 05-89022). Gerard R Luckman, Esq., at Silverman Perlstein & Acampora LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated more than $100 million in assets and debts. PRE-PAID LEGAL: Moody's Withdraws $160 Million Debts' B1 Ratings ---------------------------------------------------------------- Moody's Investors Service withdrew the ratings of Pre-Paid Legal Services, Inc. following the company's announcement that it has terminated funding efforts related to a proposed senior secured credit facility. These ratings have been withdrawn: * $150 million senior secured term loan B, B1 * $10 million senior secured revolving credit facility, B1 * Corporate family rating, B1 * Speculative grade liquidity rating, SGL-2 Pre-Paid Legal Services, Inc., headquartered in Ada, Oklahoma, is a leading developer and marketer of legal service plans. Revenue for the twelve-month period ended September 30, 2005 was $433 million. PRECISE TECH: S&P Withdraws Ratings After Rexam Merger Completion ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B' corporate credit rating and other ratings on North Versailles, Pennsylvania-based Precise Technology Inc., following the announcement by U.K.-based packaging group Rexam PLC (BBB/Stable/A-2) that it had completed its acquisition of the plastic packaging company. The ratings on Precise were placed on CreditWatch Nov. 15, 2005, after Rexam announced its acquisition plan. PROSOFT LEARNING: Posts $460,000 Net Loss in First Quarter ---------------------------------------------------------- Prosoft Learning Corporation reported financial results for its first fiscal quarter ended Oct. 31, 2005. Revenue in the first quarter of fiscal 2006 was $1.53 million, compared to $1.86 million in the first quarter of fiscal 2005. Net loss for the first quarter of fiscal 2006 was $460,000, compared to a net loss of $370,000 for the first quarter of fiscal 2005. Gross profit, as a percentage of revenue, was 68% for the quarter ended Oct. 31, 2005, compared to 75% for the same quarter of the previous fiscal year. However, the gross profit percentage for the quarter ended Oct. 31, 2004, included a one-time credit adjustment due to correction of an overbilling from the company's major content supplier. If adjusted for this error, the gross profit in the first quarter of fiscal 2005 would have been 70%. "While we are disappointed that we have not continued the trend of year-over-year growth that we established last quarter, we continue to be encouraged by a stabilizing marketplace," Benjamin Fink, Prosoft's president and CEO, stated. "The year-over-year decline in our first fiscal quarter can be attributed to two main factors: First, our summer buying occurred in July this year as opposed to August last year; and second, our sales force was 30% understaffed in this quarter, which has since been corrected. We now believe the market for technology training materials is stabilizing after four years of decline, and our financial results will display this once internal and seasonal issues are resolved." Content development, sales and marketing, and general and administrative expenses were $1.28 million in the first quarter of fiscal 2006, compared to $1.47 million for the same quarter of the previous fiscal year, a decrease of $190,000 or 13%. Days sales outstanding of receivables were at 31 days, consistent with recent performance. Prosoft Learning Corporation -- http://www.ProsoftLearning.com/-- offers content and certifications to enable individuals to develop and validate critical Information and Communications Technology workforce skills. Prosoft is a leader in the workforce development arena, working with state and local governments and school districts to provide ICT education solutions for high school and community college students. Prosoft has created and distributes a complete library of classroom and e-learning courses. Prosoft distributes its content through its ComputerPREP division to individuals, schools, colleges, commercial training centers and corporations worldwide. Prosoft owns the CIW job-role certification program for Internet technologies and the Certified in Convergent Network Technologies certification, and manages the Convergence Technologies Professional vendor-neutral certification for telecommunications. * * * Going Concern Doubt As reported in the Troubled Company Reporter on Nov. 1, 2005, Hein & Associates LLP expressed substantial doubt about Prosoft Learning Corporation's ability to continue as a going concern after it audited the company's financial statement for the fiscal year ended July 31, 2005. The auditing firm says that the company is party to certain note agreements that provide creditors with the ability to demand accelerated repayment of amounts owed if the company is unable to comply with the terms of the note agreements. The auditing firm notes that the company's ability to comply with the terms of the agreement in uncertain. The auditing firm also says that the company also experienced losses from operations in each of the last three years. QWEST COMMS: Appoints C. Matthews & R.D. Hoover as Directors ------------------------------------------------------------ The Board of Directors for Qwest Communications International Inc. (NYSE:Q) has approved the appointments to the Qwest board of Caroline "Caz" Matthews, president of Blue Cross and Blue Shield of Georgia, and R. David Hoover, chairman, president and CEO of Ball Corporation. Prior to joining Blue Cross and Blue Shield of Georgia in December 2004, Ms. Matthews served as president of Anthem Blue Cross and Blue Shield's West Region in Denver after having worked as the group's chief operating officer. Ms. Matthews joined Anthem's corporate finance department in 1988 and later served in senior capacities with the company's information technology and finance departments. In 2004, Matthews was awarded the Frances Wisebart Jacobs "Woman in Philanthropy" award from the Mile High United Way and was named CEO of the Year by the Denver Business Journal. Mr. Hoover has held a succession of leadership roles at Ball Corporation, where he has worked since 1970. Mr. Hoover was named chief operating officer in 2000, and was elected president and CEO the next year; he was elected chairman in 2002. Mr. Hoover serves on the boards of Energizer Holdings, Inc., and Irwin Financial Corporation. Mr. Hoover is also a member of the University of Colorado at Denver Business School Board of Advisors and the Colorado Forum. "I'm looking forward to the perspective and talent Caz and David will bring to the Qwest board," said Richard C. Notebaert, Qwest chairman and CEO. The additions of Ms. Matthews and Mr. Hoover will bring Qwest's board membership to 13. Qwest Communications International Inc. -- http://www.qwest.com/ -- is a leading provider of high-speed Internet, data, video and voice services. With approximately 40,000 employees, Qwest is committed to the "Spirit of Service" and providing world-class services that exceed customers' expectations for quality, value and reliability. * * * As reported in the Troubled Company Reporter on Nov. 17, 2005, Fitch has upgraded and removed from Rating Watch Positive Qwest Communications International, Inc.'s Issuer Default Rating to 'B+' from 'B'. Fitch has also upgraded specific issue ratings and recovery ratings assigned to Qwest and its wholly owned subsidiaries, including upgrading the senior unsecured debt rating assigned to Qwest Corporation to 'BB+' from 'BB'. In addition, Fitch has revised the Rating Outlook to Positive from Stable. RAYMOURS FURNITURE: Weak Debt Measures Cue S&P's Negative Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on furniture retailer Raymours Furniture Co. Inc. to negative from stable. The 'BB-' corporate credit rating was affirmed. The outlook revision is based on weak credit measures for the rating category and Standard & Poor's expectation that these will not materially improve over the near term because the company is expanding its store base more aggressively than previously anticipated. "The rating on Raymours Furniture Co. Inc.," said Standard & Poor's credit analyst Robert Lichtenstein, "reflects the company's participation in the cyclical and highly competitive furniture industry, as well as its regional concentration, small earnings base, and modest financial flexibility." These risks are partially offset by the company's established market position in the Northeast and its disciplined growth. REAL ESTATE: Fitch Puts Low-B Ratings $59 Million Class Certs. -------------------------------------------------------------- Fitch rates the securities of Real Estate Synthetic Investment Finance Limited Partnership 2005-D and RESI Finance DE Corporation 2005-D. The rating on the securities addresses the timely payment of interest and ultimate repayment of principal upon maturity. -- $60,551,000 class B3 notes 'A'; -- $23,547,000 class B4 notes 'A-'; -- $31,957,000 class B5 notes 'BBB'; -- $10,091,000 class B6 notes 'BBB-'; -- $20,183,000 class B7 notes 'BB'; -- $8,409,000 class B8 notes 'BB-'; -- $13,455,000 class B9 certificates 'B+'; -- $8,409,000 class B10 certificates 'B'; -- $8,409,000 class B11 certificates 'B-'. The transaction is a synthetic balance sheet securitization that references a $16.82 billion diversified portfolio of primarily jumbo, A-quality, fixed-rate, first-lien residential mortgage loans. The ratings are based upon the credit quality of the reference portfolio, the credit enhancement provided by subordination for each tranche, the financial strength of Bank of America, National Association, as swap counterparty, and the sound legal structure of the transaction. The reference portfolio consists of primarily 30-year mortgage loans originated by various lenders. The issuers have entered into a credit default swap with BOANA, documented under an International Swaps and Derivatives Association agreement, and receive a premium in return for credit protection on the reference portfolio. The proceeds of the issued securities will be used to purchase eligible investments, pursuant to a forward delivery agreement between the trustee and BOANA, whereby the co-issuers are obligated to purchase eligible investments from BOANA at a specified yield on each determination date. Eligible investments will consist of direct obligations of or guaranteed by the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Home Loan Bank, or any other agency backed by the U.S.A. The collateral is pledged first to the counterparty to reimburse for credit losses on the reference portfolio during the term of the CDS and second to the noteholders for repayment of principal at maturity. Interest earned on the collateral during the term of the CDS is used in combination with the premium from BOANA to make monthly security payments. ROMOLO CAPOBIANCO: Case Summary & 5 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Romolo E. Capobianco, Inc. 29 Andover Road Billerica, Massachusetts 01821 Bankruptcy Case No.: 05-60107 Debtor affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Capobianco E. Romolo 05-60109 Type of Business: The Debtor sells & delivers firewood. Chapter 11 Petition Date: December 8, 2005 Court: District of Massachusetts (Worcester) Judge: Joel B. Rosenthal Debtors' Counsel: Timothy M. Mauser, Esq. Mauser & Dipiano, LLP 98 North Washington Street, Suite 305 Boston, Massachusetts 02114 Tel: (617) 720-5585 Fax: (617) 720-5553 Estimated Assets Estimated Debts ---------------- --------------- Romolo E. Capobianco, Inc. $0 to $50,000 $1 Million to $10 Million Capobianco E. Romolo $0 to $50,000 $1 Million to $10 Million Romolo E. Capobianco, Inc.' 5 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fay E. Capobianco $2,561,908 Bloodbrook Road Westfield, VT 05874 Town of Tewksbury 29 Andover Road $400,000 Town Hall 11 Town Hall Avenue Tewksbury, MA 01876 Town of Tewksbury 29 Andover Road $400,000 Town Hall 11 Town Hall Avenue Tewksbury, MA 01876 Massachusetts DOR 2004 Income tax $5,000 Bradford Glenn, Inc. Unknown SFBC INT'L: Negative Events Prompt S&P's Stable Outlook ------------------------------------------------------- Standard & Poor's Rating Services revised its rating outlook on Miami, Florida-based contract research services provider SFBC International Inc. to stable from positive. Ratings on the company, including the 'B+' corporate credit rating, were affirmed. "The outlook revision reflects our view that the likelihood of an upgrade is materially diminished by recent events," said Standard & Poor's credit analyst David Lugg. Mr. Lugg points to: * a business magazine charging ethical violations in SFBC's clinical tests, * Miami-Dade County officials rendering a poor safety assessment of the company's Miami testing facility, and * Hurricane Wilma damage that forced the delay of some clinical trials. SFBC responded by hiring an independent counsel to investigate the ethics charges, utilizing spare capacity in other facilities. The independent counsel's report addressed many of the allegations leveled in the magazine article. However, the company is still in the process of addressing all of these events. Factors suggesting that sustainable improvement in credit measures may not be demonstrated within the next two years: * the uncertain timing and costs to resolve these issues, * the diminished liquidity occasioned by the enlarged share repurchase program, and * a potential slowdown in growth of the base business. The speculative-grade ratings on SFBC continue to reflect: * the company's short record of success, * its strategy of growth through acquisitions, and * its position as a relatively small player in the global market for outsourced clinical trial services. These risks outweigh a moderate debt burden and prospects for improving free cash flow over the next few years, S&P says. SOLUTIA INC: Files Protective Actions in Chapter 11 Case -------------------------------------------------------- Solutia Inc. (OTC Bulletin Board: SOLUQ) filed several protective actions in its Chapter 11 case. According to federal bankruptcy law, Solutia has two years from its Chapter 11 petition (Dec. 17, 2003) to file certain types of actions. As a result, the company is filing approximately 90 avoidance actions prior to this deadline, including one such action against Monsanto/Pharmacia, to preserve the legal rights of the bankrupt estate. "While no decision has been made to pursue these actions and we may never do so, we believe it is a prudent step to file them prior to the deadline to preserve the rights of the bankrupt estate," said Jeffry N. Quinn, president and CEO, Solutia Inc. "Solutia remains committed to the agreement-in- principle announced in June. We continue to make progress toward the successful restructuring of Solutia consistent with that agreement." Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. STELCO INC: Ontario Court Approves AltaSteel Sale to Moly Cop ------------------------------------------------------------- Stelco Inc. (TSX:STE) disclosed that the Superior Court of Justice (Ontario) approved the previously announced sale of AltaSteel Ltd. to Moly Cop Steel Inc., an affiliate of Scaw International Sarl, on Dec. 16. As in past non-core asset sale transactions during Stelco's restructuring process, the Court agreed to seal certain terms of the sale agreement until the transaction closes or until further order of the Court. At the same hearing, the Court granted an order temporarily sealing certain commercially sensitive information contained in a report prepared by Navigant Consulting. The report was commissioned and will be used by certain equity holders in opposing Stelco's motion for Court approval of the restructuring plan approved by affected creditors on Dec. 9, 2005. That motion will be heard on Jan. 17, 2006. A version of the report excluding the sealed information has been filed with the Court and will be accessible through a link available on Stelco's web site. 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 extended the stay period under Stelco's Court-supervised restructuring from Dec. 12, 2005, until Jan. 31, 2006. SYNDICATED FOOD: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Syndicated Food Service International, Inc. fka Floridino's International Holdings, Inc. P.O. Box 2185 Front Royal, Virginia 22630 Bankruptcy Case No.: 05-33375 Type of Business: The Debtor is a holding company with three operating subsidiaries that participate in the wholesale foodservice distribution industry. Chapter 11 Petition Date: December 14, 2005 Court: Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz III Debtor's Counsel: David R. Krebs, Esq. Hostetler & Kowalik P.C. 101 West Ohio Street, Suite 2100 Indianapolis, Indiana 46204 Tel: (317) 262-1001 Fax: (317) 262-1010 Financial Condition as of December 31, 2004: Total Assets: $9,908,084 Total Debts: $11,182,726 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Platinum Funding Corporation Judgment $453,000 Two University Plaza Hackensack, NJ 07601 Proskauer Rose, LLP Judgment $232,911 1585 Broadway New York, NY 10036 Barry Tenzer Open Account $150,000 2656 South Federal Highway Delray Beach, FL 33483 Hill, Kertscher & Wharton, LLP Open Account $124,315 3350 Riverwood Pkwy., Suite 800 Atlanta, GA 30339 Weinberg & Company, P.A. Open Account $87,973 6100 Glades Road, Suite 314 Boca Raton, FL 33434 Sacher Zelman Open Account $75,000 1404 Brickell Avenue, Suite 700 Miami, FL 33131 SB Financial Consulting 29B Open Account $59,313 Venetial Way, No. 7 Miami Beach, FL 33139 John F. McCarthy, III Open Account $50,000 2546 North Vermont Street Arlington, VA 22207 Salas, Ede, Peterson & Lage, LLC Open Account $40,705 6333 Sunset Drive Miami, FL 33143 EQuaNet, Inc. Open Account $35,210 P.O. Box 5498 Syracuse, NY 13220 Robert Klezmer Lawsuit $35,200 c/o David B. Russell 213 Silver Beach Avenue Daytona Beach, FL 32118 Beltram Edge Tool Supply Judgment $30,760 c/o Gibbons Tucker Miller Attn: Whatley Stein 101 East Kennedy, Suite 1000 Tampa, FL 33602 Brooks Houghton Open Account $28,778 444 Madison Avenue, 25th Floor New York, NY 10022 Ralph Cannon Promissory note $25,000 457 Avery Creek Road Arden, NC 28704 Berkovits, Lago & Company, LLC Promissory note $22,712 8211 West Broward Boulevard Peachtree City, GA 30269 Harve S. Duval, P.A. Open Account $19,200 11601 Biscayne Blvd., Suite 201 Miami, FL 33181 Carreden Group Incorporated Open Account $16,179 14 West 49th Street One Rockefeller Plaza New York, NY 10020 Bowne of Atlanta, Inc. Open Account $15,598 1570 Northside Drive Atlanta, GA 30318 Hilbert Binderow Promissory note $15,000 c/o Wright Ponsoldt & Lozeau 1000 Southeast Monterey Commons Boulevard, Suite 208 Stuart, FL 34996 Consice Management, Inc. Open Account $14,558 1016 Acquarian Drive Secaucus, NJ 07094 TELEGLOBE COMMS: Has Until February 23 to Object to Claims ---------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware extended, until Feb. 23, 2006, the period within which Reorganized Teleglobe Communications Corporation and its affiliates and the Plan Administrator can object to claims filed against their estates. The Reorganized Debtors tell the Court that the extension would allow them sufficient time to finalize their analysis of all proofs of claim. The Reorganized Debtors say that they have been working diligently to review and reconcile around 1,000 claims filed against their estates and have filed over 45 omnibus objections. The Reorganized Debtors say that they only have a handful of claims left to review and expect to file additional claim objections before the February 23 deadline. Headquartered in Reston, Virginia, Teleglobe Communications Corporation -- http://www.teleglobe.com/-- is a wholly owned indirect subsidiary of Teleglobe Inc., a Canadian Corporation. Teleglobe currently provides services in more than 220 countries via a fully integrated network of terrestrial, submarine and satellite capacity. During the calendar year 2001, the Teleglobe Companies generated consolidated gross revenues of approximately $1.3 billion. As of Dec. 31, 2001, the Teleglobe Companies has approximately $7.5 billion in assets and approximately $44.1 billion in liabilities on a consolidated book basis. The Debtors filed for chapter 11 protection on May 28, 2002 (Bankr. D. Del. Case No. 02-11518). Cynthia L. Collins, Esq., and Daniel J. DeFranceschi, Esq., at Richards Layton & Finger, PA, represent the Debtors in their restructuring efforts. The Court confirmed Teleglobe's Amended Chapter 11 Plan on Feb. 11, 2005, and the Plan took effect on March 2, 2005. THREE-FIVE: Wants to Assume Agreement with Former CEO Jack Saltich ------------------------------------------------------------------ Three-Five Systems, Inc., asks the U.S. Bankruptcy Court for the District of Arizona, for permission to assume an executive retention agreement dated Aug. 29, 2005, between the Debtor and its former chief executive, Jack Saltich. The Debtor believes that the assumption of the executive agreement is necessary to effect the successful completion of its chapter 11 case since Mr. Saltich is familiar with all aspects of the Debtor's current and former operations, its management, and its major equity holders. Mr. Saltich primarily reports to and assists the Debtor's chief restructuring officer, Carl Young, with the fulfillment of his duties. Mr. Young's services include: (a) liquidating the estate's assets for the benefit of creditors and equity holders; and (b) resolving the various claims creditors have against the Debtor's estate. Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey L.L.P., tells the Court that Mr. Saltich's knowledge and experience will play a critical role in helping the Debtor's professionals formulate a disclosure statement and confirm a chapter 11 plan. Because the executive agreement provides Mr. Saltich the necessary incentives to maintain his employment with the Debtor and his continued assistance to the CRO and other professionals, the Debtor believes that it is in the estate's best interest to assume the executive agreement. A full-text copy of the executive retention agreement is available at no charge at http://ResearchArchives.com/t/s?3cc Headquartered in Tempe, Arizona, Three-Five Systems, Inc. -- http://tfsc.com/-- provides specialized electronics manufacturing services to original equipment manufacturers. TFS offers a broad range of engineering and manufacturing capabilities. The Company filed for chapter 11 protection on Sept. 8, 2005 (Bankr. D. Ariz. Case No. 05-17104). Thomas J. Salerno, Esq., at Squire, Sander & Dempsey, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,694,467 in total assets and $2,880,377 in total debts. TIER TECH: Delays Filing of Form 10-K for FY Ended September 30 --------------------------------------------------------------- Tier Technologies, Inc. (Nasdaq:TIER), reported that the filing of its Form 10-K for the fiscal year ended Sept. 30, 2005 with the Securities and Exchange Commission would be delayed beyond the filing deadline of Dec. 14, 2005. Additionally, the company expects to restate its financial results for the fiscal years ended Sept. 30, 2002, 2003 and 2004 and for the associated fiscal quarters as needed. While preparing its financial statements for fiscal 2005, the Company discovered a number of errors, including its accounting for: (1) net accounts receivable relating to a payment processing operation; (2) certain accruals and reserves; and (3) certain notes receivable. Many of these issues are still under review and the company needs additional time to complete the process and assess the final impact on fiscal 2005 financial results and on previously reported financial results. Currently, the company does not expect that this process will be completed in time to permit the company to file its Form 10-K within the 15-day timeframe provided by Rule 12b-25 under the Securities Exchange Act. The company is working diligently to complete this review and assessment and to file the Form 10-K and the prior period restatements as soon as possible. The company currently expects these restatements primarily to reflect: * The write-off of net accounts receivable originally recorded on the company's balance sheets for these periods relating to one of its payment processing operations. This change is necessary to reflect proper accounting for amounts owed to the company as a result of both (1) insufficient-funds checks received by the company from child-support payers and (2) over-payments made by the company. The company is not able at this time to quantify the amount of the expected restatements for this issue. * The recording of an accrual for sales commission expense on the company's Sept. 30, 2004 and Dec. 31, 2004 statements of operations. The effect of this change is expected to increase selling and marketing expense for the fiscal year ended Sept. 30, 2004 and the first quarter of fiscal 2005, which ended Dec. 31, 2004, by approximately $225,000 and $99,000, and to reduce selling and marketing expense for the quarter ended March 31, 2005 by approximately $324,000. These adjustments are expected to reduce diluted earnings per share by $0.01 for fiscal year 2004, but are not expected to materially impact the quarter ended Dec. 31, 2004. These adjustments would increase diluted earnings per share by $0.01 for the quarter ended March 31, 2005. * The correction of the amounts shown as due to the company under its notes and accrued interest receivable from related parties and notes receivable from shareholders on its balance sheets for the relevant periods and the reduction of the related interest income shown on its relevant statements of operations. These adjustments are expected to result in the reclassification of $378,000 of notes previously classified as assets to shareholders equity for all reported periods, which will have the effect of reducing both assets and shareholders equity by that amount. In addition, the company believes that the adjustments will result in a cumulative downward adjustment of approximately $150,000 of accumulated interest income reported in our retained earnings in the periods noted above. The company's review of its accounting practices is ongoing. Once it has completed its review, it may conclude that additional changes to its financial statements for these periods are appropriate, that the proper adjustments are different in amount or type from those summarized above, or that changes are necessary to financial statements for other periods. "The company regrets the delay in completing its fiscal 2005 financial statements and the need to restate prior financial results," Jim Weaver, the Company's Chairman and Chief Executive Officer, said. "We take very seriously our public reporting obligations, and we are taking the steps that we believe are necessary to ensure that the financial information we report will be complete and accurate." Preliminary Fiscal 2005 Results The company currently expects revenues for the fiscal fourth quarter and full year ending Sept. 30, 2005 to be $34.3 million, up 11% over the prior year, and $150.8 million, up 18% over the prior year, respectively, exceeding the high end of its previously guided range for the year of $149 million. These financial results are preliminary and have not been finalized by the company or audited by its auditors. They are based on information available to management at this time, and could change materially when the company reports its audited financial results for the fiscal year. Technical Default The restatements and the delayed availability of the company's financial statements for the fiscal year ended Sept. 30, 2005 may result in a technical default under the revolving credit agreement between the company and its lender. At Sept. 30, 2005, the company had outstanding letters of credit under this facility totaling $1.3 million. The company will communicate with the lender to seek a waiver of the defaults, but there can be no assurance that the lender will grant a waiver. Tier Technologies, Inc. -- http://www.tier.com/-- is a leading provider of transaction processing and packaged software and systems integration services for public sector clients. The company combines its understanding of enterprise-wide systems with domain knowledge enabling clients to rapidly channel emerging technologies into their operations. The company focuses on sectors that are driven by forces that make demand for its services less discretionary and are likely to provide the company with recurring long-term revenue streams. TRENWICK AMERICA: Wants Until Feb. 28 to Object to Proofs of Claim ------------------------------------------------------------------ Trenwick America Corporation asks the U.S. Bankruptcy Court for the District of Delaware to extend, until Feb. 28, 2006, to object to proofs of claim filed in its estate. The Court confirmed the Debtor's Second Amended Plan of Reorganization on Oct. 27, 2004, and the Plan took effect on Aug. 15, 2005. The Reorganized Debtor explains that since the claims reconciliation process is almost complete, the requested extension is necessary so it can have more time and opportunity to reconcile any claims disputes without the necessity of filing and prosecuting additional claims objections. Additionally, the requested extension is in the best interest of the Debtor's estate, its creditors and other parties-in-interest. The Court will convene a hearing at 2:00 p.m., on Jan. 19, 2005, to consider the Debtor's request. Headquartered in Stamford, Connecticut, Trenwick America Corporation is a holding company for operating insurance companies in the United States. The Company filed for chapter 11 protection on August 20, 2003 (Bankr. Del. Case No. 03-12635). Christopher S. Sontchi, Esq., and William Pierce Bowden, Esq., at Ashby & Geddes, and Benjamin Hoch, Esq., Irena Goldstein, Esq., Carey D. Schreiber, Esq., at Dewey Ballantine LLP represent the Debtors in their restructuring efforts. As of June 30, 2003, the Debtor listed approximate assets of $400,000,000 and debts of $293,000,000. The Court confirmed the Debtor's Second Amended Plan of Reorganization on Oct. 27, 2004, and the Plan became effective as of Aug. 15, 2005. On Aug. 20, 2003, Trenwick Group, Ltd., and LaSalle Re Holdings Limited also filed insolvency proceedings in the Supreme Court of Bermuda. On Aug. 22, 2003, the Bermuda Court granted an order appointing Michael Morrison and John Wardrop, partners of KPMG in Bermuda and KPMG LLP in the United Kingdom, respectfully, as Joint Provisional Liquidators in respect of TGL and LaSalle. The Bermuda Court granted the JPLs the power to oversee the continuation and reorganization of these companies' businesses under the control of their boards of directors and under the supervision of the U.S. Bankruptcy Court and the Bermuda Court. TRENWICK AMERICA: Entry of Final Decree Stretched to March 31 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved Trenwick America Corporation's request to delay until March 31, 2006, the entry of a final decree closing its chapter 11 case and the time for filing of a final report. The Court the Debtor's Second Amended Plan of Reorganization on Oct. 27, 2004, and the Plan took effect on Aug. 15, 2005. As previously reported, the Reorganized Debtor said that the extension is necessary in order to avoid the premature closure of its bankruptcy case and to ensure that creditor recoveries will be maximized. The estate's rights and obligations with respect to various post-confirmation matters remains with the Reorganized Debtor pursuant to the confirmed plan. The Debtor also assures the Court that the delay of entry of a final decree will not prejudice its creditors and other parties- in-interest. Headquartered in Stamford, Connecticut, Trenwick America Corporation is a holding company for operating insurance companies in the United States. The Company filed for chapter 11 protection on August 20, 2003 (Bankr. Del. Case No. 03-12635). Christopher S. Sontchi, Esq., and William Pierce Bowden, Esq., at Ashby & Geddes, and Benjamin Hoch, Esq., Irena Goldstein, Esq., Carey D. Schreiber, Esq., at Dewey Ballantine LLP represent the Debtors in their restructuring efforts. As of June 30, 2003, the Debtor listed approximate assets of $400,000,000 and debts of $293,000,000. The Court confirmed the Debtor's Second Amended Plan of Reorganization on Oct. 27, 2004, and the Plan became effective as of Aug. 15, 2005. On Aug. 20, 2003, Trenwick Group, Ltd., and LaSalle Re Holdings Limited also filed insolvency proceedings in the Supreme Court of Bermuda. On Aug. 22, 2003, the Bermuda Court granted an order appointing Michael Morrison and John Wardrop, partners of KPMG in Bermuda and KPMG LLP in the United Kingdom, respectfully, as Joint Provisional Liquidators in respect of TGL and LaSalle. The Bermuda Court granted the JPLs the power to oversee the continuation and reorganization of these companies' businesses under the control of their boards of directors and under the supervision of the U.S. Bankruptcy Court and the Bermuda Court. TRIGEM COMPUTER: U.S. Court Agrees Main Proceeding Is In Korea -------------------------------------------------------------- Il-Hwan Park, the duly appointed receiver for TriGem Computer, Inc., asked the U.S. Bankruptcy Court for the Central District of California to recognize TriGem's pending case under the Corporate Reorganization Act in Korea as a foreign main proceeding. Section 1517 of the Bankruptcy Code provides that "an order recognizing a foreign proceeding shall be entered" if three conditions are met: 1. The foreign proceeding for which recognition is sought is a foreign main proceeding or foreign non-main proceeding within the meaning of Section 1502; 2. The foreign representative applying for recognition is a person or body; and 3. The petition meets the requirements of Section 1515. TriGem's CRA Case has met these requirements, Mr. Park says: -- The CRA Case is a foreign main proceeding within the meaning of Section 1502(4) since it is a judicial corporate reorganization proceeding pending in the Republic of Korea, the country where TriGem has the center of its main interests. Mr. Park notes that TriGem's head office is in Ansan City in Korea. It has branch offices in Seoul, Busan, Kyungbuk, Choongchung and Honam. Its business, research and training centers are in Wonju. -- The foreign representative applying for recognition is a person over the age of 18. -- The Chapter 15 Petition was accompanied by: (i) the decision of the Suwon District Court in Korea, which affirmed the existence of the CRA Case and the appointment of the Receiver; (ii) a translation of the Decision in English; and (iii) a statement identifying all foreign proceedings with respect to the Debtor known to the Receiver. A full-text copy of the Korean Court's Order accepting TriGem's CRA Petition is available at http://chapter15.com/ Court's Nod The Court finds that the corporate reorganization proceeding commenced by the Debtor before the Suwon District Court, Bankruptcy Division, in the Republic of Korea, is a foreign main proceeding within the meaning of Section 1502 of the Bankruptcy Code. The Debtor has its main center of interests in Korea. The Chapter 15 Petition filed by Il-Hwan Park, the duly appointed receiver for TriGem, satisfies all aspects of Section 1515. Notice of the Petition was duly given in full compliance with Rule 2002(q)(1) of the Interim Bankruptcy Rules adopted by the Central District of California. "Neither granting the Chapter 15 Petition nor thereby recognizing the CRA Proceeding as a foreign main proceeding, is manifestly contrary to the public policy of the United States," the Hon. Thomas B. Donovan says. The Court also finds that Mr. Park, as Foreign Representative, is a "person" for the purposes of Section 1517(a)(2). Judge Donovan rules that the commencement or continuation of any and all judicial, administrative, or other action or proceeding against the Debtor in the United States is automatically stayed. Pending Litigation TriGem is a party to litigation pending in the United States initiated by these parties: 1. Robert Miles (Plaintiff) c/o Robert C. Schubert, Esq. Schubert & Reed LLP Two Embarcadero Center, Suite 1660 San Francisco, CA 94111 2. Toshiba Corporation c/o Evan Finkel, Esq. Pillsbury Winthrop Shaw Pittman LLP 725 South Figuera Street, Suite 2800 Los Angeles, California 90017-5406 3. David Packard (Plaintiff) 5870 Jefferson Street Vidor, TX 77662 -- and -- John E. Hock (Plaintiff) 2002 Solitude Cave Round Rock, TX 78664 Gary N. Reger, Esq. Orgain, Bell & Tucker 470 Orleans Beaumont, TX 77701 Law Office of L. DeWayne Layfield P.O. Box 3829 Beaumont, TX 77704-3829 The Reaud Law Firm 801 Laurel Beaumont, TX 77701 Hubert Oxford, III, P.C. 3535 Calder, P Floor Beaumont, TX 77706 The Dodd Law Firm P.O. Box 3504 Beaumont, TX 77704-5304 Joseph C. Blanks, P.C. P.O. Drawer 999 Doucette, TX 75942 Mr. Park has noted that while TriGem has been named a defendant in the Miles lawsuit, it does not appear that TriGem has been ever served. TriGem may not be a party to the lawsuit. Mr. Park is represented by Charles D. Axelrod, Esq., and Scott H. Yun, Esq., at Stutman Treister & Glatt P.C., in Los Angeles, California. Headquartered in Ansan City, Kyunggi-Do, Korea, TriGem Computer Inc. -- http://www.trigem.com/-- manufactures desktop PCs, notebook PCs, LCD monitors, printers, scanners, other computer peripherals, and PIDs and supplies over four million PCs a year to clients all over the world. Il-Hwan Park, the Foreign Representative, filed a chapter 15 petition on Nov. 3, 2005 (Bankr. C.D. Calif. Case No. 05-50052). Charles D. Axelrod, Esq., at Stutman Treister & Glatt, P.C., represents the Foreign Representative in the United States. TriGem America Corporation, an affiliate of the Debtor, filed for chapter 11 protection on June 3, 2005 (Bankr. C.D. Calif. Case No. 05-13972). TriGem Texas, Inc., another affiliate of the Debtor, also filed for chapter 11 protection on June 8, 2005 (Bankr. C.D. Calif. Case No. 05-14047). (TriGem Bankruptcy News, Issue No. 2 Bankruptcy Creditors' Service, Inc., 215/945-7000) UBIQUITEL INC: Improved Performance Cues S&P to Lift Junk Ratings ----------------------------------------------------------------- Standard & Poor's Rating Services raised its ratings on Conshohoken, Pennsylvania-based UbiquiTel Inc., including its corporate credit rating, which was raised to 'B-' from 'CCC+', and its senior unsecured debt rating, which was raised to 'B-' from 'CCC'. The outlook is positive. The ratings on these entities were removed from CreditWatch, where they were placed with positive implications on Nov. 2, 2005, because of strengthening operating and financial performance. While the senior notes covenants permit the incurrence of secured debt, given UbiqiTel's improved operating performance and substantial cash balance, S&P now views incurrence of a material amount of secured debt as unlikely. Accordingly, the senior unsecured debt is now rated at the level of the corporate credit. "The rating upgrades reflect UbiquiTel's improving financial profile as a result of better operating performance and strong roaming and wholesale segment growth; recent network investments that improve quality and enhance data capabilities; and its ability to generate modest operating cash flow," said Standard & Poor's credit analyst Susan Madison. Rating constraints include: * concerns regarding the recent slowdown in retail subscriber growth, * the company's lack of spectrum assets, and * its reliance on Sprint Nextel. UbiquiTel is a Sprint PCS affiliate serving approximately 434,000 subscribers, with the exclusive right to provide Sprint PCS digital wireless services to certain markets throughout the Western and Midwestern United States covering 8.3 million population equivalents. Debt outstanding at Sept. 30, 2005, totaled approximately $424 million. VARTEC TELECOM: Has Until January 3 to File Chapter 11 Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas extended Vartec Telecom Inc., and its debtor affiliates' exclusive periods to file and solicit acceptances of a chapter 11 plan. The Court gave the Debtors until Jan. 3, 2006, to file a plan and until Mar. 3, 2006, to solicit acceptances of that plan. The Debtors gave the Court seven reasons in support of the extension: 1) their chapter 11 cases are large and complex, with identified assets of more than $800,000,000, liabilities of more than $590,000,000 and 14,000 creditors; 2) they have shown good faith progress towards their reorganization efforts, including completing the sale of substantially all of their assets to Comtel Investments, L.L.C., and obtaining DIP financing on a going forward basis; 3) they have been working diligently with the Official Committee of Unsecured Creditors, the Rural Telephone Finance Cooperative, the Official Committee of Excel Independent Representatives, their carriers, and other parties-in-interest to maximize the value of the Debtor's estates. 4) they have provided a draft of the plan to the Official Committee; 5) they are paying obligations to their employees, carriers, vendors, landlords, and utility providers in the ordinary course of business as those obligations become due; 6) they have made efforts in maximizing the value of their estates by reducing overhead costs, rejecting executory contracts and unexpired leases, disposing of non-core assets, and obtaining Court approval of the sale of the Acquired Assets; and 7) the extension will not prejudice their creditors and other parties-in-interest and it is not meant to pressure their creditors into accepting an objectionable plan. Headquartered in Dallas, Texas, Vartec Telecom Inc. -- http://www.vartec.com/-- provides local and long distance service and is considered a pioneer in promoting 10-10 calling plans. The Company and its affiliates filed for chapter 11 protection on November 1, 2004 (Bankr. N.D. Tex. Case No. 04-81694. Daniel C. Stewart, Esq., William L. Wallander, Esq., and Richard H. London, Esq., at Vinson & Elkins, represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed more than $100 million in assets and debts. WESTERN IOWA LIMESTONE: Case Summary & 20 Unsecured Creditors ------------------------------------------------------------- Debtor: Western Iowa Limestone, Inc. dba Western Iowa Limestone, WIL, LLC dba Hopp Construction Co., Inc. 1408 A Highway 44, Suite 800 Harlan, Iowa 51537 Bankruptcy Case No.: 05-85930 Type of Business: The Debtor is a construction company and a producer of limestone. Chapter 11 Petition Date: December 12, 2005 Court: District of Nebraska (Omaha Office) Judge: Timothy J. Mahoney Debtor's Counsel: Richard D. Myers, Esq. Alan E. Pedersen, Esq. McGill, Gotsdiner, Workman & Lepp, P.C., L.L.O. 11404 West Dodge Road, Suite 500 Omaha, Nebraska 68154-2576 Tel: (402) 492-9200 Fax: (402) 492-9222 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ City of Logan Suit for damages $578,000 City Clerk, City Hall 108 West 4th Street Logan, IA 51546 Weihs Enterprises Loan $255,745 1408A Highway 44, Suite 100 Harlan, IA 51537 Murphy Tractor & Equipment Trade debt $223,596 9751 South 148th Street Omaha, NE 68138 Harrison County Engineer Prepaid product $200,000 P.O. Box 171 Logan, IA 51546 Binns & Stevens Trade debt $135,054 Lawrence Handlos Trade debt $120,221 Road Builders Trade debt $114,201 Leinen, Inc. Prepaid product $60,000 Robert Schwab Cause of action $56,400 Road Machinery & Supplies Equipment rental $50,718 & repairs Paul Leinen Prepaid product $50,000 Farm Service Coop. Prepaid product $47,359 Skinner Law Office P.C. Legal services $42,541 Pottawattamie County Prepaid product $40,000 Engineer Sheehan Mack Sales Trade debt $36,744 Independent Inputs Prepaid product $30,000 Dave Scwartz Dianna Hopp Loan $28,725 Gary Hopp Loan $28,725 Leland Kaltoft Loan $27,000 Schildberg Construction Royalties $24,968 Company WESTPOINT STEVENS: Court Approves CIT Group Pact to Remit Funds --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the stipulation between CIT Group/Commercial Services and WestPoint Home, Inc., pursuant to which CIT will pay WestPoint Home $1,025,878. As previously reported in the Troubled Company Reporter on November 9, 2005, In late April and May 2005, the Debtors alleged preference liability with respect to CIT and certain of its Clients in various adversary proceedings. WestPoint Home, Inc., as purchaser of substantially all of the Debtors' assets, has demanded that CIT pay the Remaining Funds over to it. The Purchaser believes that it is the proper recipient of the Remaining Funds. To avoid litigation and in the interest of reaching a compromise, the Purchaser and CIT entered into good faith, arm's-length negotiations to settle the claims between them. Those negotiations culminated in a stipulation, pursuant to which the Purchaser will receive a $1,025,898 lump sum payment from CIT in full payment and settlement of any debt owed by CIT with respect to the Letter of Credit or the Remaining Funds. In the event the Adversary Proceedings are settled, or are adjudicated to a final non-appealable judgment, and the Settlement or Judgment is less than the amount of the Remaining Funds, then CIT has agreed to pay to the Purchaser the difference between the Remaining Funds and the Settlement or Judgment, as applicable, in one lump sum payment. The parties will exchange mutual releases. CIT has agreed to remit the Remaining Funds to the Purchaser upon: (i) order of the Court approving the Stipulation and directing CIT to remit the Remaining Funds to Purchaser; and (ii) dismissal of the Adversary Proceedings with prejudice. Headquartered in West Point, Georgia, WestPoint Stevens, Inc. -- http://www.westpointstevens.com/-- is the #1 US maker of bed linens and bath towels and also makes comforters, blankets, pillows, table covers, and window trimmings. It makes the Martex, Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux brands, as well as the Martha Stewart bed and bath lines; other licensed brands include Ralph Lauren, Disney, and Joe Boxer. Department stores, mass retailers, and bed and bath stores are its main customers. (Federated, J.C. Penney, Kmart, Sears, and Target account for more than half of sales.) It also has nearly 60 outlet stores. Chairman and CEO Holcombe Green controls 8% of WestPoint Stevens. The Company filed for chapter 11 protection on June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. (WestPoint Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) WINN-DIXIE: Court OKs Deloitte & Touche to Audit Internal Controls ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida gave Winn-Dixie Stores, Inc., and its debtor-affiliates permission to employ Deloitte & Touche, LLP, to assist them with internal auditing projects related to information security, fraud investigations, and best practice. As previously reported in the Troubled Company Reporter on Nov. 18, 2005, the Debtors have also employed the services of KPMG LLP, PricewaterhouseCoopers LLP, and CFO Services in connection with their auditing and accounting needs. The Debtors assure the Court that the services that Deloitte & Touche will provide are not duplicative of the services provided by KPMG, PwC or CFO Services. The Debtors explain that the services to be provided by Deloitte & Touche are internal audit support services relating to risk assessment, quality assessment, and journal entry assessment. By contrast, the services provided by KPMG are external auditing services required by law as well as tax advisory services. Furthermore, the services provided by PwC have been focused on the Debtors' overall governance controls and information technology controls regarding compliance with the annual Sarbanes-Oxley internal controls assessment. The services provided by CFO Services are focused on the Debtors' accounting processes. The Debtors will pay Deloitte & Touche at these hourly rates: Designation Hourly Rate ----------- ----------- Partners $315 Senior Managers $250 Managers $175 Consultants $135 Deloitte & Touche estimates that the total professional fees for its services will be between $300,000 and $330,000. Court's Ruling Judge Funk directs the Debtors to seek the Court's authorization to the extent that they wish to retain Deloitte & Touche, LLP, to provide additional services that are not encompassed in their Engagement Letter with the firm. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Wants Non-Disturbance Pact With Newport Enforced ------------------------------------------------------------ Winn-Dixie Stores, Inc., operates a grocery store in Miami, Florida, known as Store No. 251, under a sublease dated Sept. 23, 1993. D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that the Sublease was originally entered into by Xtra Super Food Centers, Inc., as sublessee, and Malone and Hyde, Inc, as sublessor. At the time the Sublease was executed, R.P.D.A. Corporation was the owner of the Premises and leased the store to Malone and Hyde. Malone and Hyde subsequently merged into Fleming Companies, Inc. RPDA subsequently sold the Premises and assigned the Prime Lease to The Morris Tract Corp., doing business as Newport Partners doing business as Partnership/ Newport Motel. On Feb. 2, 1995, Newport Partners, Fleming and Xtra entered into a non-disturbance agreement, which contains this provision: [I]f Subtenant is not in default under the Sublease beyond the applicable cure period and cures any default by the Tenant under the [Prime] Lease in accordance with Section 2(a) of this Agreement, then Landlord shall not terminate the [Prime] Lease or the Sublease or otherwise interfere with Subtenant's possession of the Leased Premises in accordance with the [Prime] Lease and the Sublease. Mr. Bakers states that the Non-Disturbance Agreement expressly inures to the benefit of Xtra's successors and assigns. In 1996, Xtra assigned all of its rights under the Sublease to the Debtor. Neither the Lease nor Sublease expires until the year 2045. On April 1, 2003, Fleming filed a Chapter 11 petition for reorganization in the United States Bankruptcy Court for the District of Delaware. By order of the Fleming Bankruptcy Court dated March 9, 2004, Fleming rejected both the Prime Lease and the Sublease. Fleming did not reject the Non-Disturbance Agreement. About a year later, Newport Partners sent a letter to the Debtor contending that as a result of Fleming's rejection of the Prime Lease, the Sublease "is terminated." After the Debtors filed for Chapter 11 protection, Newport Partners sent the Debtor a Notice of Termination purporting to terminate the Sublease. Newport Partners also sent a letter to the Debtors demanding holdover rent. Mr. Baker relates that the Debtor continues to occupy the Premises under the terms of the Sublease and continues to timely perform all of its obligations under the Sublease. The Debtor has also incurred substantial expenses for improvements to the Premises, Mr. Baker says. Enforceability of Agreements According to Mr. Baker, there exists an actionable controversy within the meaning of Section 2201(a) of the Judiciary Code between the Debtor and Newport Partners regarding: (i) the continued existence and enforceability of the Sublease and Lease; (ii) the Debtor's right to remain on the Premises; and (iii) the enforceability of the Non-Disturbance Agreement. In this regard, the Debtor asks the U.S. Bankruptcy Court for the Middle District of Florida to enter a judgment declaring that: (1) the Sublease and Lease are valid and enforceable as between the Debtor and Newport Partners; (2) the Non-Disturbance Agreement is valid and binding on Newport Partners and the Debtor; and (3) the Debtor is entitled to remain on the Premises under the Sublease. Violation of Automatic Stay Mr. Baker asserts that Newport's attempt to terminate or otherwise interfere with the Debtor's possessory rights to the Premises is a direct violation of the automatic stay imposed by Section 362 of the Bankruptcy Code. Prior to sending the Notice of Termination and demand letter, Mr. Baker notes that Newport Partners knew: -- that the Debtor had filed its bankruptcy case; and -- of the Debtor's interest in the Sublease. Notwithstanding, Newport Partners sent the Notice of Termination and demand letter to the Debtor demanding that the Debtor vacate the premises and pay holdover rent in the interim. As a result, the Debtor has incurred attorneys' fees and costs to protect its property rights in the Premises. Accordingly, the Debtors ask the Court to enter a judgment: (1) declaring that the Notice of Termination constitutes a violation of the automatic stay and is void and of no effect; (2) holding Newport Partners in contempt for violation of the automatic stay; (3) sanctioning Newport Partners for its contempt by ordering it to reimburse the Debtor for attorneys' fees and costs incurred in connection with this adversary proceeding; and (4) enjoining Newport from terminating the Sublease or otherwise interfering with the Debtor's possession of the Premises. Moreover, Mr. Baker insists that the Court should exercise its authority under Section 105(a) to enjoin Newport Partners from commencing any proceedings to evict the Debtor or from otherwise interfering with its possessory rights to the Premises because: (a) there is a reasonable probability that the Debtor will be able to effect a successful reorganization in this case; (b) the Debtor will suffer irreparable injury if an injunction is not issued because an eviction proceeding threatens to extinguish the Debtor's interest in the Sublease and its possessory interest in the Premises; and (c) the threatened injury to the Debtor outweighs any harm the injunction could cause Newport Partners because if allowed, the Debtor must expend estate resources to defend the proceeding and Newport Partners will suffer no harm from the status quo because all payments due to Newport Partners under the Sublease are current. The Debtor asks the Court to enter judgment enjoining Newport Partners from commencing an eviction proceeding or in any way interfering with the Debtor's possessory rights to the Premises. The Debtor further asks the Court to direct Newport Partners to reimburse it for attorney's fees incurred in defending its possessory interests in the Premises. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000). WODO LLC: Confirmation Hearing Set for January 19 ------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington will convene a hearing on Jan. 19, 2006, at 9:30 a.m., to discuss the merits of Wodo, LLC's Plan of Reorganization. The Court approved the Debtor's Disclosure Statement at a hearing on Nov. 15, 2005. Terms of the Plan Under the Plan, holders of Administrative Convenience Claims will receive cash payments equal to the full amount of their Allowed Claims, not to exceed $10,000. Holders of Allowed Administrative Convenience Claims will be paid 50% of their claims from non- Debtor sources ten days after the Effective Date and the remaining 50% of their Allowed Claims will be paid thirty days after the Effective Date. Holders of Secured Property Tax Claims will retain all the liens securing their claims. Interest shall accrue on the claims from the Petition Date at the non-default rates in accordance with applicable non-bankruptcy law. Upon transfer of any of the Real Property, the Claims secured by such property will be paid in full. Holders of Allowed General Unsecured Claims will be paid from non- Debtor sources 50% of their Allowed Claims 30 days following the Effective Date and 50% of their Claims sixty 60 days following the Effective Date. Any liens against the Real Property not otherwise treated under the Plan will remain against the Real Properties and holders of those liens will retain all of their rights. Unit Holders will retain their interests in the Debtor. WULA Secured Claims The Debtor discloses that the WULA Secured Claim arises from documents executed by the Company in favor of WULA including: * July 20, 2001 Loan Agreement, * Promissory Note, * Deed of Trust, * Security Agreement, and * Assignment of Lease and Rents and Fixture filing recorded on July 25, 2001 against the following properties: -- Block 11, -- Block 12, -- Block 14(A and B), -- Block 18, and -- Block 19(A and B) The Allowed WULA Secured Claim consists of the principal balance of the WULA loan, plus a 13% interest at the non-default rate provided in the WULA Loan Documents. The Allowed WULA Secured Claim will not include: * any attorneys' fees or other charges; * the default 23% interest rate set forth in the WULA Loan Documents, and * the $1,000,000 purported "bonus." The Allowed WULA Secured Claim will accrue interest from the Effective Date at the 13% non-default rate provided in the Loan Documents until satisfied. The Debtor proposes a compromise of controversies regarding portions of WULA's secured claims which includes: * WULA's claim to attorneys' fees, * WULA's claim to default interest under its loan documents, * WULA's claim to a $1,000,000 "bonus," and * claims the Debtor and its affiliates may have against WULA resulting from their failure to carry out prior commitments relating to this and other transactions. If the Plan is confirmed as proposed, the Debtor will waive any lender liability claims. If the Plan is not confirmed as proposed, the Debtor will retain the right to prosecute its lender liability claims, as well as its objections to portions of WULA's claim. Legacy Plaza Claims Legacy Plaza, LLC holds contingent Claims under three agreements: (a) May 25, 2001 Indemnification Agreement under which the Debtor indemnified Legacy for certain tax payments. Legacy Plaza will retain its rights under the Indemnification Agreement and associated Letter of Credit. (b) May 25, 2001 Parking Lease of Blocks 17, 18 and 19A; 10- year term; terminable upon construction of parking on Block 19C and Block 16. The Debtor tells the Court that it sent Legacy a letter regarding release of Block 17 from the obligations under the Parking Lease. In the event Legacy does not comply, the Debtor will institute an adversary proceeding to require the release. In addition, other disputes between the Debtor and Legacy respecting certain aspects of the Parking Lease will be resolved either through negotiation or through appropriate proceedings before the Bankruptcy Court. (c) May 2001, Option to Purchase Block 19C. The Debtor may reject this contract and request an evidentiary hearing to estimate Legacy's claim which the Debtor asserts has no value. If the rejection claim is determined to have value, it will become a General Unsecured Claim. Guaranty Bank Secured Claims Guaranty Bank has two Letters of Credit in favor Legacy Plaza, LLC against the Debtor for: a) tax rate increases through May 25, 2013 and b) surface parking improvements. Guaranty Bank will retain its liens in the two accounts and all of its rights and remedies. Skagit State Bank Liens On or prior to the Effective Date, Skagit State Bank's claims and liens against the Debtor's assets will be satisfied in full from non-Debtor assets through a refinancing of Skagit State Bank's loans to the Debtor's affiliates. In the event the refinancing does not occur as of the Effective Date, Skagit State Bank 's underlying claim will remain adequately secured by its primary collateral consisting of hardwood mills which are not property of the estate, and Skagit State Bank 's liens against the Debtor's assets, specifically Block 19C and Block 16, will be released. Headquartered in Bellingham, Washington, Wodo, LLC, fka Trillium Commons, LLC, is a real estate company. The Company filed for chapter 11 protection on January 18, 2005 (Bankr. W.D. Wash. Case No. 05-10556). Gayle E. Bush, Esq., at Bush Strout & Kornfeld represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $90,380,942 and total debts of $21,451,210. * BOND PRICING: For the week of Dec. 12 - Dec. 16, 2005 ------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- Adelphia Comm. 3.250% 05/01/21 2 Adelphia Comm. 6.000% 02/15/06 2 Adelphia Comm. 7.500% 01/15/04 60 Adelphia Comm. 7.750% 01/15/09 61 Adelphia Comm. 7.875% 05/01/09 59 Adelphia Comm. 8.125% 07/15/03 59 Adelphia Comm. 8.375% 02/01/08 60 Adelphia Comm. 9.250% 10/01/02 60 Adelphia Comm. 9.375% 11/15/09 61 Adelphia Comm. 9.500% 02/15/04 58 Adelphia Comm. 9.875% 03/01/05 59 Adelphia Comm. 9.875% 03/01/07 58 Adelphia Comm. 10.250% 11/01/06 60 Adelphia Comm. 10.250% 06/15/11 63 Adelphia Comm. 10.500% 07/15/04 60 Adelphia Comm. 10.875% 10/01/10 60 Aladdin Gaming 13.500% 03/01/10 0 Albertson's Inc. 6.520% 04/10/28 74 Albertson's Inc. 7.000% 07/21/17 74 Allegiance Tel. 11.750% 02/15/08 23 Allegiance Tel. 12.875% 05/15/08 25 Alt Living Scvs 7.000% 06/01/04 1 Amer & Forgn PWR 5.000% 03/01/30 71 Amer Color Graph 10.000% 06/15/10 69 Amer Plumbing 11.625% 10/15/08 15 American Airline 8.390% 01/02/17 74 American Airline 9.980% 01/02/15 67 American Airline 9.980% 01/02/15 67 American Airline 9.980% 01/02/15 67 American Airline 10.180% 01/02/13 68 American Airline 10.430% 09/15/08 70 American Airline 10.430% 09/15/08 70 American Airline 10.850% 03/15/09 65 Amer Restaurant 11.500% 11/01/06 25 AMR Corp. 9.750% 08/15/21 72 AMR Corp. 9.800% 10/01/21 70 AMR Corp. 9.880% 06/15/20 70 AMR Corp. 10.000% 04/15/21 70 AMR Corp. 10.125% 06/01/21 66 AMR Corp. 10.150% 05/15/20 66 AMR Corp. 10.200% 03/15/20 73 AMR Corp. 10.290% 03/08/21 68 AMR Corp. 10.550% 03/12/21 72 Amtran Inc. 9.625% 12/15/05 4 Anchor Glass 11.000% 02/15/13 72 Antigenics 5.250% 02/01/25 59 Anvil Knitwear 10.875% 03/15/07 55 Apple South Inc. 9.750% 06/01/06 3 Archibald Candy 10.000% 11/01/07 0 Armstrong World 6.350% 08/15/03 74 Armstrong World 6.500% 08/15/05 71 Armstrong World 7.450% 05/15/29 73 Armstrong World 9.000% 06/15/04 73 Asarco Inc. 7.875% 04/15/13 60 Asarco Inc. 8.500% 05/01/25 57 ATA Holdings 12.125% 06/15/10 4 ATA Holdings 13.000% 02/01/09 4 At Home Corp. 4.750% 12/15/06 0 Atlantic Coast 6.000% 02/15/34 3 Atlas Air Inc 8.770% 01/02/11 62 Autocam Corp. 10.875% 06/15/14 70 Bank New England 8.750% 04/01/99 7 Bank New England 9.500% 02/15/96 3 Big V Supermkts 11.000% 02/15/04 0 Budget Group Inc. 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 58 Calpine Corp. 4.000% 12/26/06 22 Calpine Corp. 4.750% 11/15/23 20 Calpine Corp. 7.625% 04/15/06 33 Calpine Corp. 7.750% 04/15/09 35 Calpine Corp. 7.875% 04/01/08 33 Calpine Corp. 8.500% 02/15/11 21 Calpine Corp. 8.625% 08/15/10 22 Calpine Corp. 8.750% 07/15/07 32 Calpine Corp. 10.500% 05/15/06 34 CD Radio Inc. 8.750% 09/29/09 0 Cell Therapeutic 5.750% 06/15/08 56 Cell Therapeutic 5.750% 06/15/08 51 Cellstar Corp. 12.000% 01/15/07 42 Cendant Corp 4.890% 08/17/06 50 Charter Comm Hld 10.000% 05/15/11 56 Charter Comm Hld 11.125% 01/15/11 58 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 44 Color Tile Inc 10.750 12/15/01 0 Comcast Corp. 2.000% 10/15/29 40 Compudyne Corp 6.250% 01/15/11 73 Cons Container 10.125% 07/15/09 67 Constar Intl 11.000% 12/01/12 74 Covad Communication 3.000% 03/15/24 58 Cray Inc. 3.000% 12/01/24 55 Cray Research 6.125% 02/01/11 24 Curagen Corp. 4.000% 02/15/11 66 Curagen Corp. 4.000% 02/15/11 64 Curative Health 10.750% 05/01/11 62 DAL-DFLT09/05 9.000% 05/15/16 19 Dana Corp 5.850% 01/15/15 70 Dana Corp 7.000% 03/15/28 71 Dana Corp 7.000% 03/01/29 69 Decrane Aircraft 12.000% 09/30/08 51 Delco Remy Intl 9.375% 04/15/12 33 Delco Remy Intl 11.000% 05/01/09 39 Delta Air Lines 2.875% 02/18/24 21 Delta Air Lines 7.541% 10/11/11 62 Delta Air Lines 7.700% 12/15/05 18 Delta Air Lines 7.900% 12/15/09 20 Delta Air Lines 8.000% 06/03/23 18 Delta Air Lines 8.187% 10/11/17 60 Delta Air Lines 8.270% 09/23/07 45 Delta Air Lines 8.300% 12/15/29 20 Delta Air Lines 8.540% 01/02/07 29 Delta Air Lines 8.540% 01/02/07 29 Delta Air Lines 8.540% 01/02/07 55 Delta Air Lines 8.540% 01/02/07 26 Delta Air Lines 8.950% 01/12/12 44 Delta Air Lines 9.200% 09/23/14 45 Delta Air Lines 9.250% 12/27/07 19 Delta Air Lines 9.250% 03/15/22 17 Delta Air Lines 9.300% 01/02/10 40 Delta Air Lines 9.320% 01/02/09 56 Delta Air Lines 9.375% 09/11/07 55 Delta Air Lines 9.450% 02/26/06 54 Delta Air Lines 9.590% 01/12/17 40 Delta Air Lines 9.750% 05/15/21 19 Delta Air Lines 9.875% 04/30/08 65 Delta Air Lines 10.000% 08/15/08 19 Delta Air Lines 10.000% 05/17/09 42 Delta Air Lines 10.000% 05/17/09 62 Delta Air Lines 10.000% 06/01/09 44 Delta Air Lines 10.000% 06/01/10 50 Delta Air Lines 10.000% 06/01/10 68 Delta Air Lines 10.000% 06/01/11 26 Delta Air Lines 10.060% 01/02/16 53 Delta Air Lines 10.125% 05/15/10 20 Delta Air Lines 10.125% 06/16/10 61 Delta Air Lines 10.375% 02/01/11 19 Delta Air Lines 10.375% 12/15/22 19 Delta Air Lines 10.430% 01/02/11 42 Delta Air Lines 10.430% 01/02/11 42 Delta Air Lines 10.500% 04/30/16 68 Delta Air Lines 10.790% 09/26/13 42 Delta Air Lines 10.790% 03/26/14 14 Delta Air Lines 10.790% 03/26/14 32 Delta Air Lines 10.790% 03/26/14 42 Delphi Auto Syst 6.500% 05/01/09 54 Delphi Auto Syst 7.125% 05/01/29 54 Delphi Corp 6.500% 08/15/13 54 Delphi Trust II 6.197% 11/15/33 28 Diamond Brands 12.875% 04/15/09 0 Duane Reade Inc 9.750% 08/01/11 66 Dura Operating 9.000% 05/01/09 62 Dura Operating 9.000% 05/01/09 60 Duty Free Int'l. 7.000% 01/15/04 4 DVI Inc. 9.875% 02/01/04 13 Empire Gas Corp. 9.000% 12/31/07 0 Epix Medical Inc. 3.000% 06/15/24 60 Exodus Comm. Inc. 11.625% 07/15/10 0 Falcon Products 11.375% 06/15/09 2 Family Golf Ctrs 5.750% 10/15/04 0 Fedders North AM 9.875% 03/01/14 70 Federal-Mogul Co. 7.375% 01/15/06 34 Federal-Mogul Co. 7.500% 01/15/09 33 Federal-Mogul Co. 8.160% 03/06/03 33 Federal-Mogul Co. 8.330% 11/15/01 33 Federal-Mogul Co. 8.370% 11/15/01 31 Federal-Mogul Co. 8.800% 04/15/07 34 Fibermark Inc. 10.750% 04/15/11 74 FMXIQ-DFLT09/05 13.500% 08/15/05 7 Foamex L.P.-DFLT 9.875% 06/15/07 8 Foamex LP/C-DFLT 10.750% 04/15/11 74 Ford Motor Co. 6.500% 08/01/18 69 Ford Motor Co. 6.625% 02/15/28 65 Ford Motor Co. 7.125% 11/15/25 68 Ford Motor Co. 7.400% 11/01/46 63 Ford Motor Co. 7.500% 08/01/26 72 Ford Motor Co. 7.700% 05/15/97 62 Ford Motor Co. 7.700% 05/15/97 62 Ford Motor Co. 7.750% 06/15/43 64 Ford Motor Cred 5.000% 01/20/11 70 Ford Motor Cred 5.000% 02/22/11 73 Ford Motor Cred 5.100% 02/22/11 74 Ford Motor Cred 5.150% 11/20/09 74 Ford Motor Cred 5.150% 01/20/11 73 Ford Motor Cred 5.200% 03/21/11 71 Ford Motor Cred 5.200% 03/21/11 74 Ford Motor Cred 5.250% 02/22/11 72 Ford Motor Cred 5.250% 03/21/11 70 Ford Motor Cred 5.250% 03/21/11 72 Ford Motor Cred 5.300% 03/21/11 71 Ford Motor Cred 5.300% 04/20/11 71 Ford Motor Cred 5.350% 02/22/11 73 Ford Motor Cred 5.400% 01/20/11 73 Ford Motor Cred 5.400% 09/20/11 71 Ford Motor Cred 5.400% 10/20/11 70 Ford Motor Cred 5.400% 10/20/11 72 Ford Motor Cred 5.450% 06/21/10 74 Ford Motor Cred 5.450% 04/20/11 73 Ford Motor Cred 5.450% 10/20/11 71 Ford Motor Cred 5.500% 09/20/11 72 Ford Motor Cred 5.500% 10/20/11 74 Ford Motor Cred 5.550% 08/22/11 73 Ford Motor Cred 5.550% 09/20/11 73 Ford Motor Cred 5.600% 08/22/11 69 Ford Motor Cred 5.600% 09/20/11 70 Ford Motor Cred 5.600% 11/21/11 75 Ford Motor Cred 5.600% 11/21/11 72 Ford Motor Cred 5.650% 05/20/11 70 Ford Motor Cred 5.650% 11/21/11 72 Ford Motor Cred 5.650% 12/20/11 73 Ford Motor Cred 5.650% 01/21/14 66 Ford Motor Cred 5.700% 05/20/11 73 Ford Motor Cred 5.700% 12/20/11 73 Ford Motor Cred 5.700% 01/20/12 69 Ford Motor Cred 5.750% 10/20/10 73 Ford Motor Cred 5.750% 12/20/11 73 Ford Motor Cred 5.750% 01/21/14 73 Ford Motor Cred 5.750% 02/20/14 68 Ford Motor Cred 5.750% 02/20/14 65 Ford Motor Cred 5.850% 07/20/10 75 Ford Motor Cred 5.850% 07/20/11 73 Ford Motor Cred 5.850% 01/20/12 73 Ford Motor Cred 5.900% 07/20/11 74 Ford Motor Cred 5.900% 02/20/14 67 Ford Motor Cred 6.000% 01/21/14 72 Ford Motor Cred 6.000% 03/20/14 71 Ford Motor Cred 6.000% 03/20/14 72 Ford Motor Cred 6.000% 03/20/14 69 Ford Motor Cred 6.000% 03/20/14 67 Ford Motor Cred 6.000% 11/20/14 67 Ford Motor Cred 6.000% 11/20/14 67 Ford Motor Cred 6.000% 11/20/14 67 Ford Motor Cred 6.000% 01/20/15 66 Ford Motor Cred 6.000% 02/20/15 66 Ford Motor Cred 6.050% 03/20/12 74 Ford Motor Cred 6.050% 02/20/14 70 Ford Motor Cred 6.050% 03/20/14 68 Ford Motor Cred 6.050% 04/21/14 72 Ford Motor Cred 6.050% 12/22/14 66 Ford Motor Cred 6.050% 12/22/14 67 Ford Motor Cred 6.050% 12/22/14 70 Ford Motor Cred 6.050% 02/20/15 67 Ford Motor Cred 6.100% 06/20/11 74 Ford Motor Cred 6.100% 02/20/15 71 Ford Motor Cred 6.150% 12/22/14 69 Ford Motor Cred 6.150% 01/20/15 67 Ford Motor Cred 6.200% 05/20/11 75 Ford Motor Cred 6.200% 04/21/14 73 Ford Motor Cred 6.200% 03/20/15 67 Ford Motor Cred 6.250% 06/20/11 73 Ford Motor Cred 6.250% 06/20/11 72 Ford Motor Cred 6.250% 12/20/13 73 Ford Motor Cred 6.250% 12/20/13 74 Ford Motor Cred 6.250% 04/21/14 70 Ford Motor Cred 6.250% 01/20/15 69 Ford Motor Cred 6.250% 03/20/15 67 Ford Motor Cred 6.300% 05/20/14 69 Ford Motor Cred 6.300% 05/20/14 69 Ford Motor Cred 6.350% 04/21/14 70 Ford Motor Cred 6.500% 12/20/13 70 Ford Motor Cred 6.500% 02/20/15 69 Ford Motor Cred 6.500% 03/20/15 68 Ford Motor Cred 6.520% 03/10/13 73 Ford Motor Cred 6.550% 12/20/13 71 Ford Motor Cred 6.550% 07/21/14 74 Ford Motor Cred 6.650% 10/21/13 72 Ford Motor Cred 6.650% 06/20/14 75 Ford Motor Cred 6.750% 06/20/14 68 Ford Motor Cred 6.800% 06/20/14 72 Ford Motor Cred 6.800% 03/20/15 67 Ford Motor Cred 6.850% 09/20/13 74 Ford Motor Cred 6.850% 05/20/14 69 Ford Motor Cred 6.850% 06/20/14 71 Ford Motor Cred 7.250% 07/20/17 71 Ford Motor Cred 7.250% 07/20/17 68 Ford Motor Cred 7.350% 03/20/15 75 Ford Motor Cred 7.350% 09/15/15 69 Ford Motor Cred 7.400% 08/21/17 74 Ford Motor Cred 7.500% 08/20/32 66 Ford Motor Cred 7.550% 09/30/15 70 Ford Motor Cred 7.900% 05/18/15 72 Gateway Inc. 1.500% 12/31/09 73 Gateway Inc. 2.000% 12/31/11 69 General Motors 7.125% 07/15/13 70 General Motors 7.400% 09/01/25 64 General Motors 7.700% 04/15/16 67 General Motors 8.100% 06/15/24 65 General Motors 8.250% 07/15/23 69 General Motors 8.375% 07/15/33 70 General Motors 8.800% 03/01/21 68 General Motors 9.400% 07/15/21 70 General Motors 9.450% 11/01/11 73 Gfsi Inc. 9.625% 03/01/07 75 GMAC 5.250% 01/15/14 70 GMAC 5.350% 01/15/14 72 GMAC 5.700% 06/15/13 71 GMAC 5.700% 10/15/13 73 GMAC 5.700% 12/15/13 71 GMAC 5.750% 01/15/14 74 GMAC 5.850% 05/15/13 73 GMAC 5.850% 06/15/13 73 GMAC 5.850% 06/15/13 70 GMAC 5.900% 12/15/13 74 GMAC 5.900% 01/15/19 65 GMAC 5.900% 01/15/19 65 GMAC 5.900% 02/15/19 69 GMAC 5.900% 10/15/19 65 GMAC 6.000% 07/15/13 71 GMAC 6.000% 11/15/13 74 GMAC 6.000% 02/15/19 68 GMAC 6.000% 02/15/19 70 GMAC 6.000% 02/15/19 69 GMAC 6.000% 03/15/19 59 GMAC 6.000% 03/15/19 70 GMAC 6.000% 03/15/19 68 GMAC 6.000% 03/15/19 68 GMAC 6.000% 03/15/19 67 GMAC 6.000% 04/15/19 68 GMAC 6.000% 09/15/19 69 GMAC 6.000% 09/15/19 68 GMAC 6.050% 08/15/19 69 GMAC 6.050% 08/15/19 67 GMAC 6.050% 10/15/19 65 GMAC 6.100% 09/15/19 65 GMAC 6.125% 10/15/19 67 GMAC 6.150% 08/15/19 70 GMAC 6.150% 09/15/19 66 GMAC 6.150% 10/15/19 74 GMAC 6.200% 04/15/19 71 GMAC 6.250% 12/15/18 67 GMAC 6.250% 01/15/19 72 GMAC 6.250% 04/15/19 70 GMAC 6.250% 05/15/19 70 GMAC 6.250% 07/15/19 70 GMAC 6.300% 08/15/19 67 GMAC 6.300% 08/15/19 66 GMAC 6.350% 04/15/19 70 GMAC 6.350% 07/15/19 67 GMAC 6.350% 07/15/19 66 GMAC 6.400% 12/15/18 70 GMAC 6.400% 11/15/19 71 GMAC 6.400% 11/15/19 63 GMAC 6.500% 06/15/18 73 GMAC 6.500% 11/15/18 75 GMAC 6.500% 12/15/18 67 GMAC 6.500% 12/15/18 71 GMAC 6.550% 05/15/19 69 GMAC 6.500% 01/15/20 68 GMAC 6.500% 02/15/20 69 GMAC 6.600% 08/15/16 71 GMAC 6.600% 05/15/18 68 GMAC 6.600% 06/15/19 68 GMAC 6.600% 06/15/19 69 GMAC 6.650% 06/15/18 73 GMAC 6.650% 10/15/18 72 GMAC 6.650% 02/15/20 70 GMAC 6.700% 05/15/14 72 GMAC 6.700% 08/15/16 75 GMAC 6.700% 06/15/18 73 GMAC 6.700% 06/15/18 72 GMAC 6.700% 11/15/18 71 GMAC 6.700% 06/15/19 68 GMAC 6.700% 12/15/19 71 GMAC 6.750% 11/15/09 75 GMAC 6.750% 06/15/14 74 GMAC 6.750% 08/15/16 73 GMAC 6.750% 03/15/18 72 GMAC 6.750% 07/15/18 71 GMAC 6.750% 10/15/18 73 GMAC 6.750% 11/15/18 70 GMAC 6.750% 05/15/19 73 GMAC 6.750% 06/15/19 68 GMAC 6.750% 06/15/19 74 GMAC 6.750% 03/15/20 71 GMAC 6.800% 09/15/18 75 GMAC 6.800% 10/15/18 73 GMAC 6.850% 05/15/18 71 GMAC 6.875% 07/15/18 75 GMAC 6.900% 06/15/17 74 GMAC 6.900% 07/15/18 73 GMAC 6.900% 08/15/18 74 GMAC 7.000% 09/15/16 73 GMAC 7.000% 07/15/17 75 GMAC 7.000% 02/15/18 71 GMAC 7.000% 03/15/18 71 GMAC 7.000% 05/15/18 75 GMAC 7.000% 09/15/18 72 GMAC 7.000% 02/15/21 73 GMAC 7.000% 09/15/21 70 GMAC 7.000% 09/15/21 72 GMAC 7.000% 06/15/22 75 GMAC 7.000% 11/15/23 73 GMAC 7.000% 11/15/24 72 GMAC 7.000% 11/15/24 73 GMAC 7.000% 11/15/24 73 GMAC 7.050% 05/15/17 72 GMAC 7.050% 03/15/18 74 GMAC 7.050% 04/15/16 72 GMAC 7.150% 07/15/17 73 GMAC 7.150% 01/15/25 75 GMAC 7.150% 03/15/25 74 GMAC 7.250% 05/15/17 74 GMAC 7.250% 08/15/18 75 GMAC 7.250% 02/15/25 71 GMAC 7.250% 03/15/25 73 GMAC 7.375% 04/15/18 75 Golden Northwest 12.000% 12/15/06 3 Graftech Int'l 1.625% 01/15/24 71 Gulf Mobile Ohio 5.000% 12/01/56 74 Home Interiors 10.125% 06/01/08 73 Human Genome 2.250% 08/15/12 75 Human Genome 2.250% 08/15/12 75 Huntsman Packag 13.000% 06/01/10 20 Impsat Fiber 6.000% 03/15/11 71 Inland Fiber 9.625% 11/15/07 50 Integrat Elec SV 9.375% 02/01/09 56 Integrat Elec SV 9.375% 02/01/09 57 Intermet Corp. 9.750% 06/15/09 38 Iridium LLC/CAP 10.875% 07/15/05 27 Iridium LLC/CAP 11.250% 07/15/05 27 Iridium LLC/CAP 13.000% 07/15/05 26 Iridium LLC/CAP 14.000% 07/15/05 25 Isolagen Inc. 3.500% 11/01/24 51 Jts Corp. 5.250% 04/29/02 1 Kaiser Aluminum & Chem. 12.750% 02/01/03 4 Kellstrom Inds 5.500% 06/15/03 0 Kellstrom Inds 5.750% 10/15/02 0 Kmart Corp. 8.990% 07/05/10 21 Kmart Corp. 9.350% 01/02/20 30 Kmart Corp. 9.780% 01/05/20 73 Kmart Funding 8.800% 07/01/10 45 Kmart Funding 9.440% 07/01/18 71 Lehman Bros Hldg 11.000% 10/25/17 74 Level 3 Comm. Inc. 2.875% 07/15/10 65 Level 3 Comm. Inc. 6.000% 09/15/09 62 Level 3 Comm. Inc. 6.000% 03/15/10 62 Liberty Media 3.250% 03/15/31 73 Liberty Media 3.750% 02/15/30 55 Liberty Media 4.000% 11/15/29 60 Macsaver Financl 7.400% 02/15/02 4 Macsaver Financl 7.875% 08/01/03 0 Merisant Co 9.500% 07/15/13 64 MHS Holdings Co 16.875% 09/22/04 0 Motels of Amer 12.000% 04/15/04 66 MSX Int'l Inc. 11.375% 01/15/08 65 Muzak LLC 9.875% 03/15/09 54 Nabi Biopharm 2.875% 04/15/25 72 Natl Steel Corp. 9.375% 08/01/06 0 Natl Steel Corp. 9.875% 03/01/09 2 Nexprise Inc. 6.000% 04/01/07 0 New Orl Grt N RR 5.000% 07/01/32 71 North Atl Trading 9.250% 03/01/12 65 Northern Pacific RY 3.000% 01/01/47 58 Northern Pacific RY 3.000% 01/01/47 58 Northwest Airlines 6.625% 05/15/23 35 Northwest Airlines 7.068% 01/02/16 69 Northwest Airlines 7.248% 01/02/12 18 Northwest Airlines 7.360% 02/01/20 70 Northwest Airlines 7.625% 11/15/23 36 Northwest Airlines 7.875% 03/15/08 36 Northwest Airlines 8.070% 01/02/15 23 Northwest Airlines 8.130% 02/01/14 20 Northwest Airlines 8.304% 09/01/10 73 Northwest Airlines 8.700% 03/15/07 35 Northwest Airlines 8.875% 06/01/06 37 Northwest Airlines 8.970% 01/02/15 17 Northwest Airlines 9.179% 04/01/10 23 Northwest Airlines 9.875% 03/15/07 36 Northwest Airlines 10.000% 02/01/09 36 Northwest Stl & Wir 9.500% 06/15/01 0 NTK Holdings Inc. 10.750% 03/01/14 62 NWA Trust 9.360% 03/10/06 64 Oakwood Homes 7.875% 03/01/04 8 Oakwood Homes 8.125% 03/01/09 8 Orion Network 11.250% 01/15/07 56 Osu-Dflt10/05 13.375% 10/15/09 0 O'Sullivan Ind. 10.630% 10/01/08 62 Owens-Crng Fiber 8.875% 06/01/02 74 PCA LLC/PCA Fin 11.875 08/01/09 23 Pegasus Satellite 9.625% 10/15/05 22 Pegasus Satellite 12.375% 08/01/06 6 Pegasus Satellite 13.500% 03/01/07 0 Piedmont Aviat 9.900% 11/08/06 0 Piedmont Aviat 10.000% 11/08/12 3 Piedmont Aviat 10.350% 03/28/11 3 Pinnacle Airline 3.250% 02/15/25 71 Pixelworks Inc. 1.750% 05/15/24 68 Pliant Corp. 13.000% 06/01/10 24 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 7.250% 01/15/07 0 Polaroid Corp. 11.500% 02/15/06 0 Portola Packagin 8.250% 02/01/12 73 PRG-Schultz Intl 4.750% 11/26/06 65 Primedex Health 11.500% 06/30/08 57 Primus Telecom 3.750% 09/15/10 31 Primus Telecom 5.750% 02/15/07 62 Primus Telecom 8.000% 01/15/14 59 Primus Telecom 12.750% 10/15/09 54 Psinet Inc. 11.000% 02/15/05 0 Psinet Inc. 11.500% 11/01/08 0 RDM Sports Group 8.000% 08/15/03 0 Read-Rite Corp. 6.500% 09/01/04 15 Reliance Group Holdings 9.000% 11/15/00 21 Reliance Group Holdings 9.750% 11/15/03 1 Salton Inc. 12.250% 04/15/08 40 Solectron Corp. 0.500% 02/15/34 75 Tekni-Plex Inc. 12.750% 06/15/10 54 Toys R Us 7.375% 10/15/18 73 Trans Mfg Oper 11.250% 05/01/09 62 Transtexas Gas 15.000% 03/15/05 1 Trism Inc. 12.000% 02/15/05 0 Triton Pcs Inc. 8.750% 11/15/11 74 Triton Pcs Inc. 9.375% 02/01/11 75 Tropical Sportsw 11.000% 06/15/08 0 Twin Labs Inc. 10.250% 05/15/06 5 United Air Lines 6.831% 09/01/08 74 United Air Lines 7.270% 01/30/13 55 United Air Lines 7.371% 09/01/06 35 United Air Lines 7.762% 10/01/05 58 United Air Lines 7.870% 01/30/19 53 United Air Lines 8.030% 07/01/11 74 United Air Lines 8.250% 04/26/08 29 United Air Lines 9.000% 12/15/03 16 United Air Lines 9.020% 04/19/12 63 United Air Lines 9.125% 01/15/12 16 United Air Lines 9.200% 03/22/08 52 United Air Lines 9.560% 10/19/18 62 United Air Lines 9.750% 08/15/21 17 United Air Lines 10.020% 03/22/14 58 United Air Lines 10.110% 01/05/06 52 United Air Lines 10.125% 03/22/15 58 United Air Lines 10.250% 07/15/21 16 United Air Lines 10.670% 05/01/04 17 United Air Lines 11.210% 05/01/14 16 Univ. Health Services 0.426% 06/23/20 58 Universal Stand 8.250% 02/01/06 1 US Air Inc. 10.250% 01/15/49 1 US Air Inc. 10.250% 01/15/49 24 US Air Inc. 10.250% 01/15/49 25 US Air Inc. 10.550% 01/15/49 24 US Air Inc. 10.610% 06/27/07 0 US Air Inc. 10.680% 06/27/08 2 US Air Inc. 10.700% 01/01/49 26 US Air Inc. 10.700% 01/15/49 3 US Air Inc. 10.750% 01/15/49 6 US Air Inc. 10.800% 01/01/49 4 US Air Inc. 10.800% 01/01/49 28 US Air Inc. 10.800% 01/01/49 6 Venture Hldgs 11.000% 06/01/07 0 Venture Hldgs 12.500% 06/01/07 0 WCI Steel Inc. 10.000% 12/01/04 69 Werner Holdings 10.000% 11/15/07 30 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Winstar Comm 10.000% 03/15/08 0 World Access Inc. 4.500% 10/01/02 4 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili, Jr., Tara Marie Martin, and Peter A. Chapman, Editors. Copyright 2005. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***