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/raid1/www/Hosts/bankrupt/TCR_Public/060104.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 4, 2006, Vol. 10, No. 3 Headlines ANC RENTAL: Court Extends Claims Objection Deadline Until Mar. 15 A PARTNERS: Judge Lee Dismisses Chapter 11 Case ARDEN REALTY: GE Real Estate Buys Company in $4.8-Bil Merger Deal ARMSTRONG WORLD: Appellate Court Denies Plan Confirmation BEKENTON USA: Court Approves William A. Head as Accountant CALPINE CORP: Wants Court OK to Pay Prepetition Sales Taxes & Fees CATHOLIC CHURCH: Court Rejects Qwest's Claim Against Tucson CENTURY HOMEBUILDERS: Case Summary & 15 Unsecured Creditors COVAD COMMS: Inks Comprehensive Settlement Pact with Verizon CRESTRIDGE AMC: Case Summary & 16 Largest Unsecured Creditors DEL MONTE: Completes Exchange Offer for 6-3/4% Sr. Sub. Notes DELTA AIR: Committee Wants Mesirow Financial as Financial Advisor DELTA AIR: Serafina Meoli Wants Stay Lifted to Pursue Lawsuit DELTA AIR: Settles Deposition Issues with DP3 EAGLEPICHER INC: Secures $345 Million DIP Financing EL CHARRO: Case Summary & 2 Largest Unsecured Creditors EQUITEX INC: Annual Shareholders' Meeting Held on Dec. 26 FIBERMARK INC: Emerges from Chapter 11 as Private Company FLYI INC: Can Continue Existing Insurance Policies with AIG FLYI INC: Court Approves KPMG LLP as Auditor & Tax Accountant FLYI INC: Court Okays Mercer Management as Contract Consultant FOREST OIL: Earns $3.3 Million of Net Income in Third Quarter FOREST OIL: Inks Agreement with Banks to Amend Credit Facility FRANCHISE CAPITAL: Responds to SEC Regulatory & Disclosure Issues GFSI INC: Gets Necessary Tenders for 9-5/8% Sr. Subordinated Notes GLOBAL EMPIRE: Section 341(a) Meeting is Scheduled for Tomorrow GOODING'S SUPERMARKETS: Case Summary & 19 Largest Unsec. Creditors HANDEX GROUP: Gronek & Latham Approved as Bankruptcy Counsel HANOVER INSURANCE: Closes $40 Mil. Sale of Variable & Annuity Biz IAP WORLDWIDE: Names Jeffrey Fenton to Board of Directors INTEGRATED HEALTH: Inks Stipulation Resolving Maura Rocha's Claim KAISER ALUMINUM: Wants Amended Salaried Retirees Agreement Okayed KAISER ALUMINUM: Wants $12.9-Mil Westport Settlement Pact Approved KEY TECHNOLOGY: Files Annual Report & Restates Previous Financials LAWRENCE WOOD: Voluntary Chapter 11 Case Summary LEGACY ESTATE: Winston & Strawn Approved as Committee Counsel LEGACY ESTATE: Panel Hires MacConaghy as Winston's Co-Counsel LEVEL 3: Completes WilTel Acquisition in Stock and Cash Deal MERIDIAN AUTOMOTIVE: Wants BDO Seidman as Auditor MERIDIAN AUTOMOTIVE: Wants Until May 25 to Decide on Leases MIRANT CORP: Exits 30-Month Bankruptcy with $2 Billion Financing NATIONAL ENERGY: Attala Entities Hold $48.8-Mil Allowed Claims NOBEX CORP: Court Okays BMC Group as Claims and Noticing Agent NOBEX CORP: Wants Morris Nichols as Bankruptcy Counsel NOBEX CORP: U.S. Trustee Appoints Three-Member Creditors' Panel NORTHWEST AIRLINES: Giving Up Fifteen Excess Aircraft Leases NORTHWEST AIRLINES: Wants Stay Enforced on ATSCC Entities NORTHWEST: US DOT Says Maintenance Flaws Didn't Compromise Safety O'SULLIVAN INDUSTRIES: Has Until April 12 to Decide on Leases O'SULLIVAN INDUSTRIES: Wants Removal Period Stretched to April 12 PACIFIC MAGTRON: Micro Tech Wants Claim Paid Before Confirmation PASQUALE DEANGELIS: Voluntary Chapter 11 Case Summary PHEBE LTD: Voluntary Chapter 11 Case Summary PLIANT CORPORATION: Files for Chapter 11 Protection in Delaware PLIANT CORPORATION: Case Summary & 30 Largest Unsecured Creditors PRECISION STAMPING: Case Summary & 18 Largest Unsecured Creditors PRICE OIL: Court Approves Bradley Arant as Bankruptcy Counsel PRICE OIL: Section 341(a) Meeting Slated for January 31 PRICE OIL: Wants Until Feb. 3 to File Bankruptcy Schedules PROSPECT MEDICAL: Earns $1 Million of Net Income in 4th Quarter REFCO INC: Can Employ FTI Consulting as Forensic Accountant REFCO INC: Can Hire Latham as Special Counsel on Interim Basis REFCO INC: Gets Court OK to Hire Greenhill & Co. as Fin'l Advisor RICHARD DURAND: Richard Banks Approved as Bankruptcy Counsel RICHARD DURAND: Section 341(a) Meeting Slated for January 24 SAFLINK CORP: Must Regain NASDAQ Listing Compliance by June 14 SAINT VINCENTS: Court Gives Final Nod on Cain Brothers' Employment SATCON TECH: Recurring Losses & Deficit Raise Going Concern Doubt SCOTTISH RE: Completes Public Offering of 6,250,000 Common Shares SKILLED HEALTHCARE: Acquired by Onex Corp. for $745 Million SOLECTRON CORP: Reports 2006 First Quarter Financial Results STUTTGART COLLISION: Voluntary Chapter 11 Case Summary TELOGY INC: List of 20 Largest Unsecured Creditors TRINSIC: $1-Mil. Equity Infusion Settles Tax Dispute with New York UAL CORP: Inks Pacts Resolving Claims by Transamerica, et al. WORLDCOM INC: Asks Court to Disallow Rayonda Dye's Claim WORLDCOM INC: DACA Wants Payment of 42 Assigned Claims YAKIMA COMPANY: Voluntary Chapter 11 Case Summary * Burns & Levinson and Perkins Smith & Cohen Join Forces * Upcoming Meetings, Conferences and Seminars ********* ANC RENTAL: Court Extends Claims Objection Deadline Until Mar. 15 ----------------------------------------------------------------- The ANC Liquidating Trust, as successor to ANC Rental Corporation and its debtor-affiliates, sought and obtained from the Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware more time to file objections to proofs of claim. The Trust secured an extension of the claim objection deadline until March 15, 2006. Joseph Grey, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, relates that as of December 12, 2005, approximately 11,500 claims have been filed in the Debtors' Chapter 11 cases. The Debtors have already filed 18 omnibus objections to claims, three omnibus motions seeking Court approval of agreements to settle claims, as well as other requests directed at resolving disputes with respect to individual claims. Although the Trust has completed an initial review of the remainder of over 6,900 claims, many of which are personal injury claims, the Trust, Mr. Grey told Judge Walrath, still requires more time to ensure that it has not omitted any claims that should be the subject of an objection. Mr. Grey says that the extension should be adequate for the Trust to complete a final review of the remaining claims in a timely, cost-efficient and complete manner. Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation, is the world's third-largest publicly traded car rental company. The Company filed for chapter 11 protection on November 13, 2001 (Bankr. Del. Case No. 01-11200). On April 15, 2004, Judge Walrath confirmed the Debtors' 3rd Amended Chapter 11 Liquidation Plan, in accordance with Section 1129(a) and (b) of the Bankruptcy Code. Upon confirmation, Blank Rome LLP and Fried, Frank, Harris, Shriver & Jacobson LLP withdrew as the Debtors' counsel. Gazes & Associates LLP and Stevens & Lee PC serve as substitute counsel to represent the Debtors' post-confirmation interests. When the Company filed for protection from their creditors, they listed $6,497,541,000 in assets and $5,953,612,000 in liabilities. (ANC Rental Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000) A PARTNERS: Judge Lee Dismisses Chapter 11 Case ----------------------------------------------- The Honorable W. Richard Lee of the U.S. Bankruptcy Court for the Eastern District of California dismissed the chapter 11 case of A Partners LLC. Judge Lee dismissed the case because the Debtor failed to timely file complete schedules according to the Bankruptcy Rules. Judge Lee's dismissal order makes it clear that A Partners LLC received no discharge of any kind. Headquartered in Fresno, California, A Partners, LLC, owns Helm Building, a 10-story building with over 55,000 square feet of office space available for rent. The Debtor filed for chapter 11 protection on Oct. 28, 2005 (Bankr. E.D. Calif. Case No. 05-62656). John P. Eleazarian, Esq., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $1 million and $10 million. ARDEN REALTY: GE Real Estate Buys Company in $4.8-Bil Merger Deal ----------------------------------------------------------------- Arden Realty, Inc. (NYSE:ARI) and GE Real Estate, a unit of GE Commercial Finance, executed a definitive agreement pursuant to which GE Real Estate will acquire the Company. In connection with the acquisition, Trizec Properties, Inc. (NYSE:TRZ) will acquire a Southern California portfolio comprised of 13 Arden properties, totaling 4.1 million square feet, concentrated in West Los Angeles and San Diego for approximately $1.6 billion. GE Merger Under the terms of the agreement, GE Real Estate will acquire all of Arden's common stock for $45.25 per share in cash in a merger transaction. The total transaction consideration is approximately $4.8 billion, which includes the assumption and refinancing of approximately $1.6 billion of Arden's outstanding debt. Pending the closing of the transaction, Arden expects to continue to pay customary quarterly dividends at an annualized rate of $2.02 per share. In addition, the cash consideration payable in the transaction per Arden common share will be increased by an amount equal to a proportional customary quarterly dividend through the closing date (without duplication of any declared dividends). Completion of the transaction, which is expected to occur by the end of the first quarter of 2006, is subject to approval of the Company's common shareholders and certain other customary closing conditions. The acquisition is not, however, conditioned upon consummation of the above-described purchase of Arden properties by Trizec. The transaction has been unanimously approved by the members of Arden's Board of Directors. Holders of limited partnership interests in the Company's operating partnership will be given the choice of either receiving $45.25 in cash or a limited liability company interest in an affiliate of Trizec. "This transaction brings us not only a high quality portfolio of real estate assets in the dynamic Southern California market, but also a great platform and infrastructure from which to grow," said Michael Pralle, the President and Chief Executive Officer of GE Real Estate. "We are very excited about incorporating Arden's expertise and footprint in Southern California into our real estate business. This transaction also gives GE Real Estate the opportunity to work with Trizec, one of the nation's leading real estate investment trusts, to structure a transaction that creates positive results for all three parties." "This merger cements the relationship between the global endeavors of GE Real Estate and the dominant regional leverage of Arden," Richard Ziman, the Chairman and Chief Executive Officer of Arden, said. "It is a blending of corporate cultures that will produce a powerful new real estate entity in this region. This transaction also demonstrates the intrinsic value of the Arden portfolio, the Arden executives and employees and their ability to generate strong returns for our investors." Tim Callahan, Trizec's President and Chief Executive Officer, added, "The high quality office properties we will be acquiring will complement our existing Southern California office platform by enabling us to expand into the attractive West Los Angeles and San Diego markets. This transaction will also allow Trizec to continue its strategy of reallocating capital efficiently into markets with strong long-term growth prospects." Victor Coleman, Arden's President and Chief Operating Officer, stated, "Arden's reputation as Southern California's pre-eminent office landlord extends far beyond its real estate assets. Arden's inherent value is also the result of nearly ten years' work in assembling a team of the region's top real estate professionals whose level of expertise and teamwork is unmatched in our industry." Lehman Brothers Inc., Wachovia Securities, and Secured Capital LLC served as financial advisors to Arden in this transaction. Wachovia Securities and Houlihan Lokey Howard and Zukin also rendered fairness opinions to Arden's Board of Directors. Latham & Watkins LLP and Venable LLP provided legal counsel to the Company. Merrill Lynch acted as the financial advisor to GE Real Estate, and King & Spalding LLP provided legal advice to it. Hogan & Hartson LLP provided legal counsel to Trizec. About GE Real Estate GE Commercial Finance Real Estate -- http://www.gerealestate.com/ -- is a world leader in real estate capital. Formed in 1972, the business has more then $35 billion in core assets with 34 offices located throughout North America, Europe, Asia and Australia/New Zealand. GE Real Estate, backed by its parent company's AAA rating, offers a broad range of financing, equity and servicing solutions including: intermediate and long-term mortgage financing, restructuring and acquisition capital, niche equity investment/joint ventures, capital markets securitization and placements, and asset management. As one of the fastest growing units within GE Commercial Finance, Real Estate has experienced annual growth of more than 10% for the last ten consecutive years. About Trizec Trizec Properties, Inc. -- http://www.trz.com/-- a REIT headquartered in Chicago, is one of the largest owners and operators of commercial office properties in the United States. The Company has ownership interests in and manages a high-quality portfolio of 50 office properties totaling approximately 37 million square feet concentrated in the metropolitan areas of seven major U.S. cities. The Company trades on the New York Stock Exchange under the symbol TRZ. About Arden Arden Realty, Inc. -- http://www.ardenrealty.com/-- is a self- administered, self-managing REIT that owns, manages, leases, develops, renovates and acquires commercial office properties located in Southern California. Arden is the largest publicly trade office landlord in Southern California, with 116 properties, consisting of 192 buildings and approximately 18.5 million net rentable square feet of office space. * * * As reported in the Troubled Company Reporter on Dec. 29, 2005, Moody's placed the Baa3 senior unsecured debt rating of Arden Realty Limited Partnership under review for possible upgrade. This rating action follows the announcement of the acquisition of Arden Realty by GE Real Estate, a unit of GE Capital Corporation. The acquisition consideration is expected to be approximately $4.8 billion, including the assumption and refinancing of approximately $1.6 billion of debt. At the same time, Arden announced that Trizec Properties, Inc. [NYSE: TRZ] will acquire thirteen Arden properties totaling 4.1 million square feet for approximately $1.6 billion. Moody's believes that, based on similar transactions in which GE Capital Corporation has engaged in the past, there is a likelihood for some level of support from GE Capital for Arden Realty's bondholders. During its review, Moody's will focus on the REIT's prospective capital structure, and GE Real Estate's plans for Arden's outstanding bonds. Should a unit of GE provide an explicit guarantee or other form of support, the Arden Realty bonds would be upgraded, perhaps by several notches, the degree of upgrade being a function of the character of the support. Moody's notes that should GE Real Estate elect to tender for Arden Realty's bonds, with the possibility that some bonds are left outstanding without covenant protection and perhaps with a weaker capital structure, the review would change to possible downgrade. According to Moody's, the transaction has no impact on GE Capital Corporation's ratings (Aaa senior debt, Prime-1 short-term). These ratings were placed under review for possible upgrade: Arden Realty Limited Partnership: * Senior unsecured debt at Baa3 * Senior secured debt shelf at (P)Baa2 * Senior unsecured debt shelf at (P)Baa3 * Subordinate debt shelf at (P)Ba1 Arden Realty, Inc.: * Preferred stock shelf at (P)Ba1 In its last rating action with respect to Arden (April 2004), Moody's confirmed the Baa3 senior debt rating with a stable outlook. ARMSTRONG WORLD: Appellate Court Denies Plan Confirmation --------------------------------------------------------- The U.S. Court of Appeals for the Third Circuit filed its decision upholding the U.S. District Court's denial of confirmation of Armstrong World Industries' Plan of Reorganization on Dec. 29, 2005. AWI had appealed the District Court's determination that, under the facts of this case, the distribution of warrants to current Armstrong stockholders under the plan was not permissible. AWI is considering its next steps. AWI has been investigating other options to resolve this Chapter 11 case with the representatives of its creditor groups. AWI is unable to predict when it will emerge from Chapter 11, what payouts its major classes of creditors will receive, or whether Armstrong's existing shareholders will receive any recovery from the case. As previously disclosed, AWI continues to monitor proposed reform legislation in Congress addressing asbestos personal injury claims, which could substantially effect AWI's liabilities, if enacted. District Court's Plan Denial On Feb. 23, 2005, the Honorable Eduardo C. Robreno of the U.S. District Court for the Eastern District of Pennsylvania denied confirmation of the Fourth Amended Plan of Reorganization filed by Armstrong World Industries, Inc., and two of its subsidiaries. Judge Robreno finds that the distribution of New Warrants to the class of Equity Interest Holders over the objection of the class of Unsecured Creditors violates the "fair and equitable" requirement of 11 U.S.C. Section 1129(b)(2)(B)(ii), a codification of the absolute priority rule. AWI has estimated that the Unsecured Creditors in Class 6 have claims amounting to approximately $1.651 billion. Under the Plan, AWI proposed that the Unsecured Creditors would recover about 59.5% of their claims. The Asbestos PI Claimants in Class 7 have claims estimated at $3.146 billion and would recover approximately 20% of their claims under the Plan. The Equity Interest Holders in Class 12 would be issued New Warrants valued at approximately $35 million to $40 million. The Plan provides that, if the Unsecured Creditors reject the Plan, the Asbestos PI Claimants will receive the New Warrants, but then will automatically waive the distribution, causing the Equity Interest Holders to secure the New Warrants. Judge Robreno points out that the net result of the Asbestos PI Claimants' waiver is that the Equity Interest Holders -- the old AWI shareholders -- receive the Debtor's property -- the New Warrants -- on account of their equity interests, although a senior class -- the Unsecured Creditors -- would not have full satisfaction of its allowed claims. A full-text copy of the District Court's opinion is available at no charge at: http://bankrupt.com/misc/00-4471-7899.pdf Armstrong Holdings, Inc., is the indirect parent company of Armstrong World Industries, Inc., a global leader in the design and manufacture of floors, ceilings and cabinets. In 2004, Armstrong's net sales totaled more than $3 billion. Headquartered in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior finishings, most notably floor coverings and ceiling systems, around the world. The Company and its debtor-affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $4,032,200,000 in total assets and $3,296,900,000 in liabilities. As of March 31, 2005, the Debtors' balance sheet reflected a $1.42 billion stockholders' deficit. BEKENTON USA: Court Approves William A. Head as Accountant ---------------------------------------------------------- Bekenton USA, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ William A. Head, C.P.A., as its accountant, nunc pro tunc to Nov. 4, 2005. William Head will: a. give the Debtor accounting advice with respect to the Debtor's power and duties as debtor-in-possession in connection with its operation of the business; b. take necessary action to assist the Debtor in formulating a plan of reorganization and any other financial statements or projections that are required in connection with the chapter 11 proceeding; c. prepare monthly statement of cash receipts and disbursement together with supporting schedules; d. prepare monthly accounts receivables aging and reconciliation reports; e. prepare monthly accounts payable and secured payment reports; f. prepare inventory and fixed assets reports; g. prepare monthly reconciliation and check registers; h. assist the Debtor with the preparation and filing of all monthly reports and other accounting information which may be requested of the Debtor; i. perform all other accounting services for the Debtor which may be necessary, including but not limited to compliance with monthly or quarterly filings with the Internal Revenue Service and the State of Florida and other reporting agencies; and j. assist the Debtor in the installation and implementation of the Debtor's post-petition accounting system. The Debtor tells the Court that Mr. Head will bill $150 per hour for his services. The Debtor discloses that clerical and para- professionals will bill between $50 to $75 per hour. To the best of the Debtor's knowledge, Mr. Head is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Maimi Beach, Florida, Bekenton USA, Inc., manufactures tobacco products. The Debtor filed for chapter 11 protection on Nov. 4, 2005 (Bankr. S.D. Fla. Case No. 05-60031). Arthur H. Rice, Esq., at Rice Pugatch Robinson & Schiller, P.A., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed assets totaling $5,227,073 and debts totaling $15,750,548. CALPINE CORP: Wants Court OK to Pay Prepetition Sales Taxes & Fees ------------------------------------------------------------------ In connection with the normal operation of their businesses, Calpine Corporation and its debtor-affiliates incur the use of, franchise, sales, fuel and other taxes necessary to operate their businesses; and collect sales taxes from their customers. The Debtors are also charged fees, licenses, permits and other similar charges and assessments on behalf of various taxing and licensing authorities. Accordingly, the Debtors seek the U.S. Bankruptcy Court for the Southern District of New York's authority to pay the prepetition Taxes and Fees. The Taxes and Fees are paid to the various Taxing Authorities on a periodic basis and, depending on the nature and incurrence of a particular Tax or Fee, are remitted monthly, quarterly or yearly to the applicable Taxing Authority, Richard M. Cieri, Esq., at Kirkland & Ellis, LLP, in New York, relates. Specifically, the Taxes and Fees incurred by the Debtors fall under one of four categories: 1. Sales and Use Taxes In limited instances, the Debtors collect and remit an assortment of sales taxes in connection with the sale of energy to their customers, as well as taxes imposed on the Debtors for their procurement of natural gas and other fuels. Since most of the Debtors' sales are wholesale sales of power, which power in most instances is subsequently resold, the amount of Sales Taxes is limited. Thus, most of the Debtors' tax liability with respect to their power generation business activities will relate to Use Taxes. Generally, the Debtors remit the Sales Taxes collected during the preceding months to the Taxing Authorities on a periodic basis, although in some cases the Debtors elect to prepay the Sales Taxes. The Debtors also are required to pay the Use Taxes when they purchase tangible personal property and certain services, including power generation-related equipment and other spare equipment parts, from vendors who are not always located in the state to which the property is to be delivered. Since some vendors are not located within the particular state, those vendors have no obligation to charge or remit taxes for sales to parties within that state. Nevertheless, applicable law requires the Debtors to self-assess the amount of the taxes and, thus, subsequently pay the Use Taxes to the applicable Taxing Authorities. In the aggregate, the Debtors estimate that they may owe approximately $5,900,000 in Sales Taxes and Use Taxes incurred prior to the Petition Date. 2. Withholding Taxes The Debtors are required to withhold from their employees' and some independent contractors' paychecks amounts on account of various federal, state and local income taxes, FICA, Medicare and other taxes. The Debtors estimate that, as of the Petition Date, they may owe roughly $658,000 with respect to the Withholding Taxes incurred prior to the Petition Date that were due to be paid in the ordinary course of business. 3. Franchise Taxes The Debtors pay franchise taxes to operate their businesses in the applicable taxing jurisdiction. Some states assess a flat Franchise Tax on all businesses, some assess a Franchise Tax based on net operating income, and others assess a Franchise Tax on capital employed in the business. The Debtors incur the bulk of the Franchise Taxes by their operations in New York and Pennsylvania. The Debtors, while they are generally current on their Franchise Taxes, estimate that they may owe around $100,000 or less with respect to the Franchise Taxes incurred prior to the Petition Date. 4. Business License Fees Many municipal and county governments require the Debtors to obtain a business license and to pay corresponding business license fees. The Debtors estimate that the Business License Fees they owe prepetition are minimal and in no event will exceed $10,000. While the Debtors believe that they are substantially current with respect to those Taxes and Fees, out of an abundance of caution the Debtors seek the Court's permission to pay the Taxes and Fees: -- to the extent that any Taxes and Fees accrued prepetition were not, in fact, paid prepetition, or were paid in an amount that was less than the amount actually owed; or -- in the event that any payments sought to be made prepetition are rejected, lost or otherwise not received in full by any of the Taxing Authorities. Furthermore, Mr. Cieri points out, there may be Taxes and Fees incurred or collected from sales and services provided prepetition that may become due shortly after the commencement of the Debtors' Chapter 11 cases. The Debtors estimate that the total accrued but unpaid amount of prepetition Taxes and Fees is less than $8,000,000. This amount, Mr. Cieri notes, represents only a very small fraction of the Debtors' total consolidated assets, as of September 30, 2005. If the Debtors do not pay their tax liabilities in a timely manner, the Taxing Authorities may attempt to curtail or entirely suspend the Debtors' operations, file liens, seek to lift the automatic stay provisions of the Bankruptcy Code and pursue other remedies that will harm the estates, Mr. Cieri says. Thus, the Debtors believe that the failure to pay the Taxes and Fees could trigger a material adverse impact on their ability to operate in the ordinary course of business. Mr. Cieri also tells the Court that some of the Debtors' tax liabilities are "trust fund" taxes. In other words, the Debtors have collected and are holding these funds in trust for the benefit of the Taxing Authorities, in which instance the funds may not constitute property of the Debtors' estates. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Court Rejects Qwest's Claim Against Tucson ----------------------------------------------------------- As reported in the Troubled Company Reporter on November 24, 2005, Tucson entered into a written contract with Xspedius Communications, L.L.C., to obtain local and long distances services for the Diocese. At some time in July 2003, Qwest Communications, Inc., ceased to provide phone services to Tucson. Qwest continued, however, to invoice the Diocese. Gerard R. O'Meara, Esq., at Gust Rosenfeld, PLC, in Tucson, Arizona, explains that Tucson informed Qwest that the Diocese disputed the charges. However, Qwest continued to send invoices. Qwest's invoices pertain to services that Qwest was no longer providing to the Diocese, Mr. O'Meara says. Qwest based its statements and its demands for payment on alleged contractual obligations, which Qwest alleges it has with the Diocese. Tucson has requested that Qwest display a copy of any written contract that would justify Qwest's act of billing the Diocese for unrendered services. To date, Qwest has failed and refused to display any written agreement to the Diocese or its counsel. Mr. O'Meara argues that Tucson is not justly and truly indebted to Qwest. Qwest is unable to meet its burden of proving the validity of the amount of its claim. It has offered nothing to the U.S. Bankruptcy Court for the District of Arizona to show that its claimed debt is valid. Tucson, hence, asks Judge Marlar to disallow Qwest's Claim. * * * Qwest Communications did not respond to the Diocese of Tucson's objection. As a result, the U.S. Bankruptcy Court for the District of Arizona disallows Claim No. 67, for all purposes, including for the purpose of receiving a distribution under the Diocese's confirmed Plan of Reorganization. The Roman Catholic Church of the Diocese of Tucson filed for chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on September 20, 2004, and delivered a plan of reorganization to the Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson Diocese. (Catholic Church Bankruptcy News, Issue No. 49 Bankruptcy Creditors' Service, Inc., 215/945-7000) CENTURY HOMEBUILDERS: Case Summary & 15 Unsecured Creditors ----------------------------------------------------------- Debtor: Century Homebuilders, Inc. P.O. Box 271258 Corpus Christi, Texas 78427 Bankruptcy Case No.: 06-20007 Type of Business: The Debtor is a construction company. Chapter 11 Petition Date: January 2, 2006 Court: Southern District of Texas (Corpus Christi) Judge: Richard S. Schmidt Debtor's Counsel: William Arthur Whittle, Esq. The Whittle Law Firm, PLLC 402 Atrium Plaza I 5151 Flynn Parkway, Suite 402 Corpus Christi, Texas 78411 Tel: (361) 887-6993 Fax: (361) 887-6999 Total Assets: $1,760,000 Total Debts: $1,123,964 Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Armstrong Lumber Non-purchase money $58,000 P.O. Box 4158 Corpus Christi, TX 78469 Hibernia Bank Real estate $56,000 P.O. Box 4649 construction loan Houston, TX 77210-4649 Value of security: $50,000 McCoys Non-purchase money $35,000 1200 IH 35 North San Marcos, TX 78667 Acme Brick Non-purchase money $30,000 Zarsky Lumber Purchase of lumber $26,000 South Texas Molding Non-purchase money $20,000 Quality Ready Mix Non-purchase money $19,000 B & R Supply Non-purchase money $8,500 CED Non-purchase money $8,000 Sanderson State Bank Unpaid closing costs $8,000 Hibernia Bank Credit card $7,800 Willoughbys Non-purchase money $5,560 Keep It Cool Services $4,000 Alarm Security Non-purchase money $3,100 Hub City Non-purchase money $2,600 COVAD COMMS: Inks Comprehensive Settlement Pact with Verizon ------------------------------------------------------------ Covad Communications Group Inc. (AMEX:DVW) and Verizon Communications (NYSE:VZ) disclosed a comprehensive settlement agreement that resolves all pending litigation and disputes between them. The agreement includes the dismissal of both Covad's pending antitrust case against Verizon, and a separate suit that Verizon had filed against Covad. The settlement provides a full resolution to all billing disputes. A related agreement also expands Covad's existing commercial line sharing agreement to enable Covad to provide its xDSL services over lines being used by resellers of Verizon's voice services. "We are pleased to be able to expand our existing wholesale relationship with this highly valued customer," said Virginia Ruesterholz, Verizon's President -- Wholesale Markets. Covad & MCI Agreement Separately, Covad and MCI entered into an agreement under which Covad will be a preferred provider of local access and network services to MCI's DSL business customers. "These agreements build a new, positive relationship with Verizon," said Charles Hoffman, Covad president and CEO. "MCI has been a valued customer and vendor to Covad for many years. The agreements we are announcing today provide an exciting opportunity to grow our business with the combined companies upon closing of the MCI acquisition. MCI has a substantial customer base outside of Verizon's local footprint." "We look forward to a continuing relationship with Covad as a valued supplier and customer to MCI," said Randal Milch, Senior Vice President and Deputy General Counsel of Verizon. "We are also pleased to begin this new chapter in the Covad-Verizon relationship." Financial terms of the agreements were not disclosed. Covad Communications Group, Inc. -- http://www.covad.com/-- provides broadband voice and data communications. The company offers DSL, Voice over IP, T1, Web hosting, managed security, IP and dial-up, and bundled voice and data services directly through Covad's network and through Internet Service Providers, value- added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad broadband services are currently available across the nation in 44 states and 235 Metropolitan Statistical Areas and can be purchased by more than 57 million homes and businesses, which represent over 50 percent of all US homes and businesses. At Sept. 30, 2005, Covad Communications Group, Inc.'s balance sheet showed a stockholders' deficit of $3,746,000 compared to $25,713,000 of positive shareholder equity at June 30, 2005. CRESTRIDGE AMC: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Crestridge AMC, LLC 920 Tenison Memorial Drive Dallas, Texas 75223 Bankruptcy Case No.: 06-30053 Chapter 11 Petition Date: January 2, 2005 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Joyce W. Lindauer, Esq. 8140 Walnut Hill Lane, Suite 301 Dallas, Texas 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 16 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ American Property Financing $1,714,035 6 E. 43rd Street, 20th Floor New York, NY 10017 Dallas Central Appraisal District $44,792 P.O. Box 560368 Dallas, TX 75356-0000 City of Dallas $1,359 Utilities and Services City Hall, 1AN Dallas, TX 75277-0000 Atmos Energy $1,269 P.O. Box 650654 Dallas, TX 75264 Waste Management $783 Dallas Hauling P.O. Box 78251 Phoenix, AZ 85062 Leggett & Clemons $590 2745 N. Dallas Parkway, Suite 310 Plano, TX 75093 A & B Supply, Inc. $157 P.O. Box 550877 Dallas, TX 75355 RCI Utilities, Inc. $135 P.O. Box 802049 Dallas, TX 75240 Bug Stompers, Inc. $119 P.O. Box 848 Royse City, TX 75189 Comtech Incorporated $92 2501 Avenue J, Suite 104 Arlington, TX 76006 Suarez Carpet Cleaning $76 13005 Meandering Way #112 Dallas, TX 75240 Call Source $59 31280 Oak Crest Drive, Suite 3 Westlake Village, CA 91361 Tenant Tracker, Inc. $11 P.O. Drawer 1990 Mc Kinney, TX 75070 M Power Retail Energy, LP $0 P.O. Box 203811 Houston, TX 77216 Fabio Construction Co. & Landscape $0 P.O. Box 741013 Dallas, TX 75374 Dallas County City Taxes $0 500 Elm Records Building Dallas, TX 75202 DEL MONTE: Completes Exchange Offer for 6-3/4% Sr. Sub. Notes ------------------------------------------------------------- Del Monte Corporation, a wholly owned subsidiary of Del Monte Foods Company (NYSE:DLM), completed its exchange offer to exchange up to $250 million principal amount of newly issued 6-3/4% Senior Subordinated Notes Due 2015, registered under the Securities Act of 1933, for a like principal amount of its outstanding, privately placed 6-3/4% Senior Subordinated Notes Due 2015. The newly issued notes are guaranteed on a subordinated basis by Del Monte Foods Company and on a senior subordinated basis by certain wholly-owned subsidiaries of Del Monte Corporation. Approximately $247.2 million aggregate principal amount, or 98.9%, of the privately placed 6-3/4% Senior Subordinated Notes Due 2015 were exchanged in the exchange offer and were accepted by Del Monte Corporation. The exchange offer expired at 5:00 p.m. New York City time on Dec. 20, 2005. The outstanding, privately placed notes were issued in conjunction with the refinancing of a substantial portion of Del Monte Foods' then-existing indebtedness in February 2005. Del Monte Corporation made the exchange offer to satisfy its obligations under the registration rights agreement relating to the outstanding, privately placed notes in which Del Monte Corporation committed to use its commercially reasonable efforts to issue notes pursuant to a registration under the Securities Act of 1933, which notes generally can be publicly traded, in exchange for the outstanding, privately placed notes, which are subject to certain transfer restrictions. The exchange offer did not affect Del Monte's outstanding debt levels, as new notes issued pursuant to the registration under the Securities Act were issued only upon cancellation of a like amount of currently outstanding notes. Del Monte Foods -- http://www.delmonte.com/-- is one of the country's largest and most well known producers, distributors and marketers of premium quality, branded and private label food and pet products for the U.S. retail market, generating over $3 billion in net sales in fiscal 2005. With a powerful portfolio of brands including Del Monte(R), Contadina(R), StarKist(R), S&W(R), Nature's Goodness(TM), College Inn(R), 9Lives(R), Kibbles 'n Bits(R), Pup-Peroni(R), Snausages(R), Pounce(R) and Meaty Bone(R), Del Monte products are found in nine out of ten American households. * * * The Company's 6-3/4% senior subordinated notes due 2015 and 8-5/8% senior subordinated notes due 2012 carry Moody's Investors Service's B2 rating, Standard & Poor's B rating, and Fitch's BB- rating. DELTA AIR: Committee Wants Mesirow Financial as Financial Advisor ----------------------------------------------------------------- Jordan S. Weltman, chairperson of the Official Committee of Unsecured Creditors of Delta Air Lines Inc., tells the U.S. Bankruptcy Court for the Southern District of New York that the Creditors Committee has a pressing need to retain a financial advisor to assist in collecting and analyzing financial and other information in relation to Delta Air and its debtor-affiliates' chapter 11 cases and to help guide the Committee through the Debtors' reorganization efforts. Thus, the Creditors Committee seeks the Court's authority to retain Mesirow Financial Consulting, LLC, as its financial advisor, nunc pro tunc to October 6, 2005. Mr. Weltman says that the Creditors Committee selected MFC as one of its financial advisors because of the firm's diverse experience and extensive knowledge in the field of bankruptcy. MFC has considerable experience with rendering services to committees and other parties in numerous Chapter 11 cases. As financial advisor to the Creditors Committee, MFC will: a. assist in the review of reports or filings as required by the Bankruptcy Court or the U.S. Trustee, including, but not limited to, schedules of assets and liabilities, statement of financial affairs and monthly operating reports; b. review the Debtors' financial information, including, but not limited to, analyses of cash receipts and disbursements, financial statement items and certain proposed transactions for which Court approval is sought or may be sought; c. review and analyze the reporting regarding cash flow projections and monitor actual versus projected and budgeted cash position; d. assist with identifying, analyzing and evaluating potential cost containment and liquidity enhancement opportunities; e. analyze the Debtors' aircraft fleet and fleet plan, including aircraft in relation to proposed negotiations of aircraft financing arrangements and Section 1110 elections; f. review and analyze the Debtors' proposed transformation and business plans and the business and financial condition of the Debtors generally, including but not limited to: (i) reviewing, analyzing and assessing the Debtors' global network in terms of operational viability and optimal utilization of assets and alliances; (ii) reviewing and critiquing the Debtors' financial projections and assumptions; (iii) analyzing the Debtors' network profitability and the efficiency of major domestic, international, primary and secondary hubs and alignment between proposed fleet plan and proposed network; (iv) assisting with identifying and analyzing potential operational improvement and asset redeployment opportunities; (v) reviewing and monitoring key transformation initiatives in support of the business and transformation plan including analyzing assumption and rejection issues regarding executory contracts and leases; (vi) analyzing labor and labor-related costs relative to Section 1113 and 1114 activities, including analyzing pension related replacement or termination issues; (vii) analyzing the impact of fuel cost and efficiency programs; (viii) analyzing aircraft related operating results and cost savings initiatives related to aircraft utilization and maintenance costs; and (ix) assisting in market and competitive analysis; g. assist in evaluating the viability of reorganization strategies and alternatives available to the creditors; h. analyze non-operating asset sales and liquidation values; i. advise and assist on tax related matters including, but not limited to, consequences of proposed plans of reorganization; j. assist with the claims resolution procedures, including, but not limited to, analyzing creditors' claims by type and entity; k. assess plans of reorganization, disclosure statements and liquidity alternatives; l. advise and assist the Committee and, where appropriate, participating in or attending negotiations and meetings with the Debtors and other parties-in-interest; m. provide litigation consulting services and expert witness testimony regarding confirmation issues, avoidance actions and other matters deemed appropriate by the Committee; n. perform other functions as requested by the Committee or its counsel to assist the Committee in these Chapter 11 cases; and o. review and analyze proposals for new product ideas to determine the impact on return on investment. The Creditors Committee is also seeking to retain Houlihan Lokey Howard & Zukin as its financial advisor. As agreed by MFC and Houlihan, MFC will be principally responsible for providing to the Committee financial analyses of the Debtors' liquidity, aircraft fleet and certain operational elements of the Debtors' plan of transformation and exit strategy, as well as tax-related advice and claims analysis. Houlihan Lokey will be primarily responsible for advising the Committee on the financial elements of the Debtors' plan of transformation, potential merger and acquisition transactions, as well as financing alternatives for the Debtors, including exit financing, and any potential key employee retention programs. The Creditors Committee asks the Court to approve MFC's retention effective October 6, 2005, the date the Creditors Committee selected MFC as its financial advisor. This is appropriate, Mr. Weltman says, because since that date, MFC has been providing the critical services to the Committee. As compensation for its services, MFC will be entitled to receive a $425,000 monthly fee for the first three months of its engagement, $300,000 per month for the next three months of its engagement and $250,000 per month thereafter. MFC will also receive reimbursement of all reasonable out-of- pocket expenses, which will include travel, photocopying, delivery service, postage, vendor charges and other out-of- pocket expenses incurred in providing professional services. The Creditors Committee further asks the Court to direct the Debtors to indemnify MFC and hold harmless MFC from and against any and all losses, claims, damages or liabilities, arising out of or related to MFC's provision of services to the Committee. James S. Feltman, senior managing director at MFC, assures the Court that MFC is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Feltman, however, discloses that he is the trustee for the Rich International Airways Liquidating Trust, which was established pursuant to a confirmed Plan of Liquidation for the Chapter 11 case of Rich International Airways, Inc., pending before the U.S. Bankruptcy Court for the Southern District of Florida (Case No. 96-17399-BKC-RAM-S.D. Fla.). Delta Air Lines, Inc., filed a proof of claim for $581,079 against the Rich Trust for postpetition "Airline related services" and another proof of claim for $3,169,843 for prepetition "Airline related services". The Florida Court disallowed the claims pursuant to a hearing conducted in August 2005. Delta has asserted that it did not receive notice of the hearing and has requested that the Trustee agree, subject to the Florida Court's approval, to the allowance of a part or the entire amount of the claims. Mr. Feltman says that he will ask the Florida Court to appoint another representative for the Rich Trust for the limited purpose of resolving Delta's claims against the Rich Trust. Ethical Wall And Trading Wall Procedures MFC is a wholly owned subsidiary of Mesirow Financial Holdings, Inc., a diversified financial services firm which also offers services in investment management, insurance services, investment services, investment banking and real estate. Mr. Feltman relates that Mesirow Financial has established an "Ethical Wall" between MFC and the other subsidiaries, divisions and units of Mesirow Financial. The Ethical Wall prohibits MFC from sharing confidential or non-public information concerning the Debtors and these cases with any other employees of Mesirow Financial. Likewise, the Ethical Wall prohibits any employees of Mesirow Financial from sharing confidential or non-public information concerning the Debtors and these cases with any employee of MFC. Mesirow Financial and MFC have informed all employees of the Ethical Wall procedures. MFC also has established an "Information Barrier" between the engagement personnel assigned to the Delta Committee engagement and MFC personnel assigned to engagement teams providing services in other aviation-related matters. The Information Barrier has been established to prevent the flow of confidential and non- public information between the MFC Delta Team and other MFC aviation-related engagement teams, as well as with personnel who may be assigned to the MFC Delta Team in the future. No MFC personnel assigned to this engagement will be assigned to any other aviation-related cases until MFC's engagement in Delta's Chapter 11 cases is concluded. Moreover, Mesirow Financial has established a "Trading Wall". In the ordinary course of business, Mesirow Financial, Inc., Mesirow Financial's affiliated broker-dealer, and its affiliated investment advisor subsidiaries, together with MFI, may purchase or sell securities on a principal or agency basis, or provide investment advice to retail or institutional clients on a non- discretionary or discretionary basis. The Mesirow BD/IA Subsidiaries also execute securities transactions on behalf of clients of introducing broker-dealers ore unaffiliated investment advisors. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Serafina Meoli Wants Stay Lifted to Pursue Lawsuit ------------------------------------------------------------- Serafina Meoli commenced a personal injury lawsuit against, among others, Delta Air Lines, Inc., in the Supreme Court, County of Bronx, New York, on October 21, 2004. Ms. Meoli sustained injuries after she slipped and fell at a Delta terminal in the John F. Kennedy Airport on January 26, 2004. Gregory Messer, Esq., in Brooklyn, New York, notes that Delta has insurance coverage by the United States Aviation Underwriters, Inc., as aviation managers for and on behalf of member companies of the United States Aircraft Insurance Group. The coverage is for in excess of $10,000,000. According to Mr. Messer, there is no possibility that Ms. Meoli's claim will exceed the amount of insurance coverage. In addition, Ms. Meoli is prepared to limit her recovery to the limits of the existing insurance policy. Pursuant to Section 362(g) of the Bankruptcy Code and Rule 4001 of the Federal Rules of Bankruptcy Procedure, Ms. Meoli asks the Court to lift to automatic stay to allow her Lawsuit to proceed. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Settles Deposition Issues with DP3 --------------------------------------------- As reported in the Troubled Company Reporter on Dec. 30, 2005, since filing for Chapter 11, the Delta Air Lines Inc., and its debtor-affiliates have ceased payments of non-qualified pension benefits to the retired pilots and payments to their defined pension plans. The Debtors have sought to reject their collective bargaining agreement with their line pilots, the Pilot Working Agreement. All of those actions directly impact the retired pilots whose rights derive from the CBA, John A. Christy, Esq., at Schreeder, Wheeler & Flint, LLP, in Atlanta, Georgia, asserts. On Oct. 18, 2005, the Retired Pilots served the Debtors with their first request for production of documents related to the pension and retirement benefit plans and the Committee Motion. The Debtors' response to the Document Request was due on or before November 20, 2005. DP3, Inc., doing business as Delta Pilots' Pension Preservation Organization, sought deposition of Delta pursuant to Rule 7030 of the Federal Rules of Bankruptcy Procedure and Rule 30(b)(6) of the Federal Rules of Civil Procedure. DP3 complains that, as of Dec. 7, 2005, the Debtors have failed to respond to the Document Request in violation of Rule 34 of the Federal Rules of Civil Procedure. Mr. Christy explains that the documents produced by Delta on October 24, 2005, failed to include all requested documents, specifically documents identifying the retired pilots and their survivors, documents related to the pension and retirement benefit plans, and documents related to the retirement benefit trusts. This is not a sufficient response and does not comport with Civil Rule 34 or Bankruptcy Rule 7034, Mr. Christy says. DP3 also complains that Delta failed to appear at the deposition scheduled on October 24, 2005, in violation of Civil Rule 26 and Bankruptcy Rule 7026. Delta is not permitted to ignore the deposition notice without seeking the entry of a protective order, Mr. Christy argues. Accordingly, DP3 asks the U.S. Bankruptcy Court for the Southern District of New York to compel the Debtors to respond to the Document Request and designate a representative to appear for deposition. The Retired Pilots also request that the Court award them attorney's fees incurred in bringing the request. Debtors Seek Protective Order The Debtors ask the Court to vacate the notice of deposition served by DP3, Inc., doing business as Delta Pilots' Pension Preservation Organization, on December 7, 2005. Pursuant to the Notice, DP3 wants to depose one or more Delta representatives regarding 15 benefit plans maintained by Delta and the trusts from which they draw funding, and the funding of severance benefits offered by Delta to its active employees. Benjamin S. Kaminetzky, Esq., at Davis Polk & Wardwell, in New York, recounts that in connection with DP3's request for an appointment of an official committee of retired pilots, the Court provided specific guidance to counsel for DP3 on the facts it deemed relevant to the Committee Appointment Motion. In particular, the Court repeatedly recommended to the parties that they create a schedule of the numbers of retired pilots covered by various welfare benefit plans and the benefits to which those pilots are entitled under those plans. At a hearing held in October 2005, Mr. Kaminetzky relates that the Court exercised its discretion to order appointment of an official committee of retirees. The Court, however, expressed the view that neither appointment of an official committee of retired pilots nor appointment of retired pilots to the Retiree Committee was appropriate at that time. Counsel for the Debtors accordingly sought to adjourn the Committee Appointment Motion. In November 2005, the Committee Appointment Motion was adjourned without date. According to Mr. Kaminetzky, despite the Court's clear guidance, DP3 never specifically requested the Schedule. Nevertheless, Delta provided DP3 with a schedule stating the distribution of pilot-retiree participants among healthcare coverages made available to pilot retirees at various points in time. In addition, Delta produced nearly 3,000 pages of documents to counsel for DP3, summarizing the healthcare options available to pilot retirees, including plan structures, premium costs, and benefit changes of time. Moreover, Delta has repeatedly offered to respond informally to DP3's specific questions or information requests. DP3 declined Delta's offers. Instead, since mid-October, DP3 has served no fewer than six requests for production of documents, notices of deposition, and other discovery-related motions on Delta. These notices, requests, and motions have sought discovery ranging from the names, home addresses, and birth dates of Delta's retired pilots to every report, review and analysis produced by any internal department of the Debtor over the past seven years. The Schedule Delta provided to DP3 is the only information identified by the Court as relevant to its discretionary determination whether to appoint an official committee of retired pilots or to appoint retired pilots to the existing Retiree Committee, Mr. Kaminetzky contends. Further discovery ostensibly relevant to the Committee Appointment Motion is unnecessary, unduly burdensome, and duplicative. Mr. Kaminetzky also points out that it is hardly apparent how the deposition noticed would be even remotely relevant to the recently continued Committee Appointment Motion. DP3's Notice of Deposition requests testimony concerning the Delta Family- Care Disability and Survivorship Trust, the funding of the Supplemental Unemployment Program, and the use of funds from any one of 15 plans or trusts from which they draw funding to fund severance claims. DP3 supplied no explanation as to how the deposition noticed would be relevant to any contested matter except to state in a footnote that the Notice is being served in connection with the Committee Appointment Motion. DP3 apparently regards the pendency of its Committee Appointment Motion as a roving commission to investigate any matters pertaining, however remotely, to Delta or any persons in any way associated with Delta, Mr. Kaminetzky argues. The Federal Rules of Civil Procedure, as made relevant to the bankruptcy proceeding through Rule 9014 of the Federal Rules of Bankruptcy Procedure, however, do not contemplate that aimless, wide-ranging, and abusive discovery. The applicable rules, rather, require that discovery sought, at the very least, be relevant to a contested matter. The Notice of Deposition fails to meet even this minimal threshold, he concludes. * * * Marshall S. Huebner, Esq., at Davis Polk & Wardwell advised the Court at a hearing on December 19 that the issue with DP3 has been settled. "I'm very happy to report that that has been resolved for the moment," Mr. Huebner told Judge Beatty. "We have agreed to provide certain documents to some of the representatives of the individual retired pilots and/or the ad hoc group DP3; and, with that, those will be essentially resolved for the present. "And if they feel that they still need something that they're not getting from us, they'll come back on proper notice." Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) EAGLEPICHER INC: Secures $345 Million DIP Financing --------------------------------------------------- EaglePicher Incorporated completed a $345 million financing transaction arranged by Goldman Sachs Credit Partners L.P., the proceeds of which were used to repay all obligations under an existing debtor-in- possession credit facility and EaglePicher's pre-petition senior secured credit facility. The new credit facilities consist of: * a $230 million first lien facility, which includes: -- a $70 million revolving credit facility and -- a $160 million term loan; * a $65 million second lien term loan; and * a $50 million third lien term loan. The new credit facilities are convertible into financing pursuant to a plan of reorganization acceptable to the agents for the lenders and satisfaction of other conditions, including court approval. "This financing is an important step towards EaglePicher's reorganization," said Stuart B. Gleichenhaus, interim Chairman, President and CEO of EaglePicher. "This enables us to assure our customers, suppliers and most importantly, our employees, that our capital structure is set, and we have sufficient financing in place to complete our restructuring and execute our business plan." Headquartered in Phoenix, Arizona, EaglePicher Incorporated -- http://www.eaglepicher.com/-- is a diversified manufacturer and marketer of innovative advanced technology and industrial products for space, defense, automotive, filtration, pharmaceutical, environmental and commercial applications worldwide. The company along with its affiliates and parent company, EaglePicher Holdings, Inc., filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P, represents the Debtors in their restructuring efforts. Houlihan Lokey Howard & Zukin is the Debtors financial advisor. When the Debtors filed for protection from their creditors, they listed $535 million in consolidated assets and $730 in consolidated debts. EL CHARRO: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------- Debtor: El Charro, Inc. 1209 West Wyatt Earp Boulevard Dodge City, Kansas 67801 Bankruptcy Case No.: 05-60294 Type of Business: The Debtor owns and operates a restaurant located in Dodge City, Kansas. Chapter 11 Petition Date: December 30, 2005 Court: District of Kansas (Wichita) Judge: Robert E. Nugent Debtor's Counsel: Susan G. Saidian, Esq. Redmond & Nazar, LLP 245 North Waco, Suite 402 Wichita, Kansas 67202 Tel: (316) 262-8361 Total Assets: $1,929,565 Total Debts: $1,744,380 Debtor's 2 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Farm Bureau $4,652 Insurance of Kansas, Inc. 2627 KFB Plaza Manhattan, KS 66502-0000 Jones Packaging $4,159 P.O. Box 78 Garden City, KS 67801 EQUITEX INC: Annual Shareholders' Meeting Held on Dec. 26 --------------------------------------------------------- Equitex, Inc. (NASDAQ: EQTX) announced the results from its annual stockholders' meeting held in West Palm Beach, Florida, on Dec. 26, 2005. The Company's stockholders elected five directors and approved the Company's 2005 Stock Option Plan as well as the appointment of GHP Horwath, P.C., to serve as the Company's auditors for the year ending December 31, 2005. Equitex, Inc., is a holding company operating through its majority owned publicly-traded subsidiary FastFunds Financial Corporation (OTC/BB: FFFC) of Minnetonka, Minnesota, as well as its majority owned subsidiary Denaris Corporation. FastFunds, through its operating subsidiary Chex Services, Inc., provides comprehensive cash access services to Native American and traditional casinos, other gaming facilities and retail establishments. Denaris was formed to provide stored value card services. At Sept. 30, 2005, Equitex Inc.'s balance sheet showed a working capital deficit of $10,057,685 and a net loss of $2,402,464. FIBERMARK INC: Emerges from Chapter 11 as Private Company --------------------------------------------------------- FiberMark, Inc., completed its financial reorganization and emerged from chapter 11 as a private company. Effective Jan. 3, 2006, having completed all conditions for emergence, the company implemented its Plan of Reorganization, which had been approved by the U.S. Bankruptcy Court for the District of Vermont on Dec. 5, 2005. Exit Financing In conjunction with its emergence from chapter 11, the company also closed on its exit financing facilities. The package includes $80 million in revolving credit facilities for working capital and general corporate purposes underwritten by GE Commercial Finance for its German and North American operations, none of which was drawn at closing. The company also has approximately $18 million in cash. Consistent with the Court-approved Plan, FiberMark's previously outstanding common stock will cease trading and has been cancelled. New common stock has been created under the Plan for issuance to certain unsecured creditors, including a small number of former bondholders, among them the company's new majority owner, investment firm Silver Point Capital, as well as a small number of trade creditors. As a now-private company, FiberMark is no longer required to file its financial statements with the Securities and Exchange Commission. Also effective Jan. 3, 2006, FiberMark installed its new Board of Directors, as detailed in its Plan. New Officers The Board of Directors reported the retirement of Alex Kwader as the company's Chairman of the Board of Directors and Chief Executive Officer. The Board expressed its appreciation to Mr. Kwader for his many years of service and his efforts in successfully guiding the company through the difficult bankruptcy process. The Board disclosed that Thomas Weld will serve as Chairman of the Board of Directors, effective immediately. Dr. Walter Haegler will continue as Senior Vice President and Managing Director of FiberMark's German Operations and will report directly to Mr. Weld as Chairman of the Board of Directors. The Board appointed Brian Esher Chief Executive Officer of the company's North American and UK operations. Mr. Esher brings a wealth of related industry experience to this position having been a successful CEO in many other companies. Mr. Esher will be responsible for all aspects of the company's North American and U.K. operations and report to Mr. Weld as Chairman of the Board of Directors. "This is a long-awaited and welcome day for the company, marking completion of our financial restructuring and our emergence from chapter 11," said John Hanley, Chief Financial Officer. "We have met our objective of emerging as a stronger company strategically, operationally and financially, with a debt load appropriate for our business. I credit this achievement to the confidence and support of our creditors and vendors, the loyalty and support of our customers, and the professionalism and dedication of our employees, all of which were evident throughout this process. We look forward to delivering the results that underlay this confidence in FiberMark as we implement our fresh start balance sheet, operate on a more streamlined basis and continue to build our product lines and brands in support of our core markets: office products, technical specialties, publishing and packaging." Headquartered in Brattleboro, Vermont, FiberMark, Inc. -- http://www.fibermark.com/-- produces filter media for transportation applications and vacuum cleaning; cover stocks and cover materials for books, graphic design, and office supplies and base materials for specialty tapes, wall coverings and sandpaper. The Company filed for chapter 11 protection on March 30, 2004 (Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D.J. f, Esq., David M. Turetsky, Esq., and Rosalie Walker Gray, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $329,600,000 in total assets and $405,700,000 in total debts. FLYI INC: Can Continue Existing Insurance Policies with AIG ----------------------------------------------------------- FLYi, Inc., and its debtor-affiliates maintain insurance policies that provide coverage for liability from aircraft operations, aircraft damage, automobile damage and liability, property damage, directors and officers liability, employment practices liability, fiduciary liability, key man life, disability, and risk of war. The Debtors also maintain a high-deductible workers' compensation insurance program for all of their employees. The Debtors maintain the Insurance Policies through several different insurance carriers. The annual Premiums under all of the Insurance Polices aggregate $11,046,201. Premiums for the Insurance Policies, other than the Workers' Compensation Program, are paid in advance, either on an annual or monthly basis. The Workers' Compensation Program is insured and administered primarily by AIG Insurance Company and its affiliates. The annual premium under the Program is $995,829, subject to retroactive adjustment after an audit of the actual number of employees employed by the Debtors during the term of the Program. The current policy term runs from February 1, 2005 through February 1, 2006. Under the Workers' Compensation Program (a) insurance coverage is provided by AIG for workers' compensation claims subject to the policy limits, with a per-incident deductible of $250,000; (b) AIG processes and pays the workers' compensation claims and also pays amounts billed directly by doctors and medical facilities; and (c) the Debtors are obligated to (i) pay the Workers' Compensation Premium, and (ii) reimburse AIG, up to $250,000 per claim, for the loss payments that AIG makes in respect of coverage deductibles, all in accordance with the terms of the Workers' Compensation Program. The Debtors have provided a $5,500,000 letter of credit for AIG's benefit as collateral for the Debtors' obligation to reimburse AIG under the Workers' Compensation Program. As of October 31, 2005, approximately 137 open workers' compensation claims were pending against the Debtors under the Workers' Compensation Program with AIG, and AIG has reserved $5,170,000 on account of the claims. In addition, there may be other claims by employees relating to prepetition injuries that have not yet been processed. The Debtors have been current in the payment of their workers' compensation reimbursement obligations to AIG. However, the Debtors estimate that, as of the Petition Date, they will owe $110,000 in additional workers' compensation reimbursement obligations to AIG for amounts accrued through that date. In addition, the Debtors may, in the event of a retroactive adjustment to the Workers' Compensation Premium, owe additional amounts. The Debtors have also provided a $200,000 letter of credit -- which should be reduced to $50,000 in the near future -- for the benefit of Reliance Insurance Company, which is in liquidation before the Commonwealth Court of Pennsylvania. The RIC Letter of Credit represents collateral for the Debtors' obligation to reimburse RIC under their former workers' compensation program, which RIC insured and administered. The Debtors believe that, as of the Petition Date, there are no open claims under the RIC Workers' Compensation Program. Insurance Policies Must Be Continued Steven Westberg, FLYi, Inc.'s vice president for restructuring, tells Judge Walrath that the Insurance Policies, including the Workers' Compensation Program, are essential for the preservation of the Debtors' business, and are, in some cases, required by various laws, regulations, or contracts that govern the Debtors' business. The Debtors ask the U.S. Bankruptcy Court for the District of Delaware for authority to: (a) continue their Insurance Policies, including their Workers' Compensation Program; (b) pay any related prepetition obligations, including, any payments to AIG, the other insurers, letter of credit issuers, or employees required as result of any claims against the Debtors, as the obligations become due in the ordinary course of business; and (c) liquidate in an appropriate forum or settle Prepetition Insurance Claims. The Debtors further request that any party holding a letter of credit to secure any of the Debtors' obligations under the Insurance Policies be authorized to use the letter of credit to secure the Debtors' postpetition insurance obligations. Mr. Westberg explains that without insurance, the Debtors and their estates could be exposed to catastrophic liability. If the Insurance Policies were to lapse, the Debtors would be unable to carry on their business as they would no longer have liability insurance coverage required by government regulation and their aircraft leases. Rather, the Debtors would be required immediately to obtain replacement insurance, likely at a greater cost than to maintain the current Insurance Policies. Mr. Westberg also notes that the guidelines of the Office of the United States Trustee require the Debtors to maintain their Insurance Policies. A schedule of the Debtors' Insurance Policies is available at no charge at http://bankrupt.com/misc/FLYipolicies.pdf * * * The Court grants the motion. 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLYI INC: Court Approves KPMG LLP as Auditor & Tax Accountant ------------------------------------------------------------- As reported in the Troubled Company Reporter on Dec. 6, 2005, FLYi, Inc., and its debtor-affiliates sought the U.S. Bankruptcy Court for the District of Delaware's permission to employ KPMG LLP, as their independent auditor and tax accountants, nunc pro tunc to November 8, 2005. KPMG will render accounting, auditing and risk advisory services, including: (a) performing an audit of the Debtors' consolidated financial statements and an audit of its internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States); (b) reviewing the condensed consolidated balance sheets of the Debtors as of March 31, June 30, September 30 and December 31, and the related condensed consolidated statements of operations and cash flows for the quarterly and year-to-date periods and other selected quarterly financial data; (c) issuing a comfort letter in connection with a future filing under the Securities Act of 1933, or an exempt offering if the Debtors request; (d) analyzing accounting issues and providing advice to the Debtors' management regarding the proper accounting treatment of events; (e) reviewing and commenting on the Debtors' documents, if any, required to be filed with the Securities and Exchange Commission; (f) providing additional audit services as requested and agreed from time to time; (g) performing an audit of the financial statements of the Debtors' Employee Benefit Plans as required by the Employee Retirement Income Security Act; and (h) performing audits of Passenger Facility Charges and TSA charges. KPMG will also perform tax services, including: (a) reviewing and providing assistance in the preparation and filing of any tax returns, including income, franchise, sales and use, property, and assistance in calculations of estimated tax payments; (b) providing advice and assistance to the Debtors regarding tax planning issues, including but not limited to, assistance in estimating net operating loss carryforwards, international taxes and, state and local taxes; (c) providing assistance regarding transaction taxes and state and local sales and use taxes; (d) providing assistance regarding tax matters related to the Debtors' pension plans; (e) providing assistance regarding real and personal property tax matters, including, review of real and personal property tax records; (f) providing assistance regarding any existing or future Internal Revenue Service, state or local tax examinations or claims; (g) providing advice and assistance on the tax consequences of proposed plans and reorganization, including assistance in the preparation of IRS ruling requests regarding the future tax consequences of alternative reorganization structures; and (h) providing other consulting, advice, research, planning or analysis regarding tax issues as may be requested from time to time. The Debtors will pay KPMG for professional services rendered at its normal and customary rates: Professional Hourly Rate ------------ ----------- Partner or Principals $600 - $825 Managing Directors or Directors $550 - $725 Senior Managers or Managers $350 - $660 Senior Associates or Associates $175 - $500 Paraprofessionals $100 - $150 The firm will also be reimbursed for necessary expenses incurred. Mr. Westberg discloses that the Debtors provided KPMG with a $125,000 retainer prior to the Petition Date. The retainer will constitute a general security retainer for KPMG's postpetition services and expenses until the conclusion of the Debtors' cases, at which point KPMG will apply the retainer against its then- unpaid fees and expenses. Tracy K. Kenny, CPA, a partner at KPMG LLP, assures the Court that KPMG is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). * * * The Honorable Mary F. Walrath approves the Debtors' employment of KPMG LLP as their independent auditors, nunc pro tunc to the Petition Date. Certain indemnification provisions in the Engagement Letter relating to "Limitation of Damages," among others, are modified. KPMG will no longer prepare the Canadian and Puerto Rico corporate income tax returns. The Court authorizes KPMG to: a. complete its reconciliation of prepetition fees and expenses actually incurred through the Petition Date; and b. make the corresponding adjustments to the amount and application of the Retainer. In the event that the firm seeks reimbursement for attorney's fees from the Debtors pursuant to the Engagement Letter, the fees will be subject to the U.S. Trustee's guidelines for compensation and reimbursement of expenses. Judge Walrath also permits KPMG LLP to maintain the Retainer as a general security retainer for postpetition fees and expenses until the conclusion of the Debtors' Chapter 11 cases. At the end of the Debtors' cases, the firm will apply the Retainer against its unpaid fees and expenses. 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLYI INC: Court Okays Mercer Management as Contract Consultant -------------------------------------------------------------- As reported in the Troubled Company Reporter on Nov. 24, 2005, FLYi, Inc., and its debtor-affiliates sought the U.S. Bankruptcy Court for the District of Delaware's permission to employ Mercer Management Consulting, Inc., as their executory contract consultant, nunc pro tunc to Nov. 8, 2005, pursuant to an Engagement Letter dated Oct. 20, 2005. As consultant, Mercer will: (a) create baseline cost and forecasted spend scenarios; (b) analyze executory contracts and develop disposition plans; (c) develop and evaluate supplier scenarios based on market responses; (d) assist in negotiations and implementation planning; (e) assist with development of supplier-related communications to suppliers, creditors' committee, labor groups and other parties-in-interest; and (f) provide other executory contract-related services to the Debtors as requested by them and agreed to by Mercer. Pursuant to the Engagement Letter, the Debtors' retention of Mercer will be for three months, and will end on January 24, 2006. Mercer will charge the Debtors $210,000 for services performed in the first month and $170,000 per month for services performed in the succeeding two months. Geoffrey C. Murray, a director at Mercer, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and as required by Section 327(a) of the Bankruptcy Code. In the event that one or more of Mercer's other clients request the firm to engage in services focusing on direct commercial transactions or relationships with the Debtors, Mr. Murray says, the firm would either give notice of withdrawal or notify the Debtors and other key parties-in-interest of the fact that it has been requested to perform services for another client whose posture is, or may be, adverse to the Debtors' estates. Mr. Murray discloses that Mercer currently provides consulting services to UAL Corporation and its affiliated debtors, ATA Airlines, Inc., Delta Airlines, Inc., and Mesaba Aviation, Inc., in connection with the Airlines' Chapter 11 cases. Although the Airlines may be competitors, which the Debtors may have commercial relationships with, Mercer does not believe that the services it provides to the Airlines relate directly to the Debtors or their Chapter 11 cases. Mercer will continue its representation of the Airlines, but will not do so with respect to matters directly relating to either parties' commercial relationship with the Debtors. * * * The Honorable Mary F. Walrath permits the Debtors to employ Mercer Management Consulting, Inc., as their consultants. The Debtors approved and assumed their Engagement Letter, as modified. The U.S Trustee will review Mercer's fees pursuant to Section 330 of the Bankruptcy Code. Mercer's engagement may be modified without need for Court approval, provided that the Official Committee of Unsecured Creditors and the U.S. Trustee approve of the modification. Mercer is not allowed to perform services for another client whose posture is, or may be, adverse to the Debtors' estates. 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOREST OIL: Earns $3.3 Million of Net Income in Third Quarter ------------------------------------------------------------- Forest Oil Corporation (NYSE:FST) reported results for the third quarter and first nine months of 2005. In the third quarter of 2005 compared to the third quarter of 2004, the Company had the following highlights: For the quarter ended Sept. 30, 2005, Forest reported net earnings of $3.3 million. This amount compares to net earnings of $31.8 million in the corresponding 2004 period. Net earnings in the third quarter of 2005 were adversely affected by: * Accounting regulations required Forest to take a pre-tax, non-cash charge of $72.1 million including $42.8 million associated with the discontinuance of hedge accounting related to 2005 hedges on Hurricane Katrina and Rita production deferrals, $23.0 million of unrealized losses related to several collar agreements that did not qualify for cash flow hedge accounting, and measured hedge ineffectiveness of $6.3 million. * A pre-tax charge of $3.6 million to establish a reserve for insurance surcharges related primarily to Hurricane Katrina. Without the effect of these items, Forest's adjusted net earnings would have been $50.2 million. These amounts compare to adjusted net earnings of $34.0 million in the corresponding 2004 period computed on a comparable basis. At Sept. 30, 2005, net debt decreased 14% to $812 million compared to $945 million at Sept. 30, 2004. The year-over-year decrease in net debt was primarily due to the internally generated free cash flow and property sales during this period, offset by additional debt incurred for the acquisition of the Buffalo Wallow field in the second quarter of 2005. The company had a net debt to book capitalization of 35% at Sept. 30, 2005 compared to 41% at Sept. 30, 2004. For the nine months ended Sept. 30, 2005, Forest reported net earnings of $94.3 million. This amount compares to net earnings of $79.0 million in the corresponding 2004 period. Net earnings for the nine months ended September 30, 2005 were adversely affected by: * Accounting regulations required Forest to take a pre-tax, non-cash charge of $74.4 million including $42.8 million associated with the discontinuance of hedge accounting related to 2005 hedges on Hurricane Katrina and Rita production deferrals, $26.1 million of unrealized losses related to several collar agreements that did not qualify for cash flow hedge accounting, and measured hedge ineffectiveness of $5.5 million. * A pre-tax charge of $4.0 million to establish a reserve for insurance surcharges related primarily to Hurricane Katrina. * A pre-tax, non-cash charge of $2.9 million primarily due to the impairment of properties related to our exit from Romania. * A pre-tax, non-cash charge of $2.2 million representing our 40% share of a valuation allowance that Cook Inlet Pipeline Company recorded against a portion of its deferred tax assets. Without the effect of these items, Forest's adjusted net earnings would have been $146.1 million. These amounts compare to adjusted net earnings of $82.1 million in the corresponding 2004 period computed on a comparable basis. Capital Activities For the nine months ended Sept. 30, 2005, Forest: * invested $224 million on acquisitions, excluding the deferred tax step-up in booked fair value for the Buffalo Wallow assets, * invested $343 million in exploration and development activities, and * received $24 million from asset dispositions. Total costs incurred included a non-cash gross up of $89 million relating to the deferred tax step-up in the booked fair value of the assets acquired in the Buffalo Wallow acquisition. Spin-Off Also during the quarter, Forest reported on Sept. 12, 2005 that it intends to spin-off to Forest shareholders its offshore Gulf of Mexico operations, and that the Gulf of Mexico operations would immediately thereafter be acquired in a merger transaction by Mariner Energy, Inc. Mariner has filed Form S-4 with the Securities Exchange Commission which is currently under review. After the spin-off and merger, Mariner will be a separately traded public company that will own and operate the combined businesses of Mariner and Forest's offshore Gulf of Mexico operations. The transaction is expected to be non-taxable to Forest and its shareholders and is anticipated to close in the first quarter of 2006. CEO Comments H. Craig Clark, President and CEO, stated, "Despite the deferral of approximately 6 Bcfe of production due to the hurricanes in the third quarter, Forest was able to post another record quarter for adjusted EBITDA and cash flow. Strong cash flow was generated from our onshore business units which now comprise over 75% of our reserve base. As a result of the strong performance in our onshore business units, we will continue to increase activity onshore in the fourth quarter and thereafter. We continue to see excellent momentum in our key onshore fields including significant production increases in our resource plays, Buffalo Wallow and Wild River, and positive results in our first well in the Greater Haley Area. Finally, we continue to work towards the closing of our Gulf of Mexico combination with Mariner Energy and see the spin-off as a strategic value creator for our shareholders." Forest Oil Corporation -- http://www.forestoil.com/-- is engaged in the acquisition, exploration, development, and production of natural gas and crude oil in North America and selected international locations. Forest's principal reserves and producing properties are located in the United States in the Gulf of Mexico, Alaska, Louisiana, Oklahoma, Texas, Utah, and Wyoming, and in Canada. Forest's common stock trades on the New York Stock Exchange under the symbol FST. * * * As reported in the Troubled Company Reporter on Nov. 2, 2005, Standard & Poor's Ratings Services affirmed its 'BB-' long-term corporate credit rating and 'B-2' short-term rating on oil and gas exploration and production company Forest Oil Corp. and removed the ratings from CreditWatch with negative implications, where they were placed on Sept. 12, 2005, following the company's announced spin-off of its offshore Gulf of Mexico reserves to Mariner Energy Inc. The outlook is negative. As of June 30, 2005, Denver, Colorado-based Forest had $884 million in principal debt outstanding. FOREST OIL: Inks Agreement with Banks to Amend Credit Facility -------------------------------------------------------------- On Dec. 27, 2005, Forest Oil Corporation (NYSE: FST) reached an agreement with its commercial banks to amend its $600 million combined credit facility to reallocate its global borrowing base. The allocated Canadian borrowing base was increased from $50 million to $100 million, while the allocated U.S. borrowing base was decreased by $50 million to $500 million. This change is being made to accommodate a $75 million dividend from Canadian Forest Oil to Forest in 2005. The dividend will be invested in U.S. oil and gas properties and will be eligible for favorable U.S. tax treatment under the American Jobs Creation Act of 2004. Forest intends to record a current tax charge of approximately $4 million associated with this dividend in the fourth quarter. Forest Oil Corporation -- http://www.forestoil.com/-- is engaged in the acquisition, exploration, development, and production of natural gas and crude oil in North America and selected international locations. Forest's principal reserves and producing properties are located in the United States in the Gulf of Mexico, Alaska, Louisiana, Oklahoma, Texas, Utah, and Wyoming, and in Canada. Forest's common stock trades on the New York Stock Exchange under the symbol FST. * * * As reported in the Troubled Company Reporter on Nov. 2, 2005, Standard & Poor's Ratings Services affirmed its 'BB-' long-term corporate credit rating and 'B-2' short-term rating on oil and gas exploration and production company Forest Oil Corp. and removed the ratings from CreditWatch with negative implications, where they were placed on Sept. 12, 2005, following the company's announced spin-off of its offshore Gulf of Mexico reserves to Mariner Energy Inc. The outlook is negative. As of June 30, 2005, Denver, Colorado-based Forest had $884 million in principal debt outstanding. FRANCHISE CAPITAL: Responds to SEC Regulatory & Disclosure Issues ----------------------------------------------------------------- Franchise Capital Corp. (OTCBB: FCCN) responded to a letter from the Securities & Exchange Commission dated Nov. 22, 2005, which followed up a telephone conference from Nov. 15, 2005, where the staff of the Securities & Exchange Commission raised a number of regulatory and disclosure issues regarding the company's obligations under, and compliance with, certain provisions of the federal securities laws and the rules thereunder, as well as with Article 6 of Regulation S-K and Generally Accepted Accounting Principals. In the response letter to the Securities & Exchange Commission, the company agreed there are serious deficiencies within the company's filings, including reports filed on Forms 10-Q, 10-K and 1-E, and that corrective actions are being taken. The company also noted it is correcting issues related to the company's preferred stock rights and debentures. The company confirmed it has ceased selling shares, and will not, under any circumstances, sell shares using the company's amended Form 1-E filed on Oct. 19, 2005, until the company has taken all appropriate corrective action and made related disclosures to bring the company in compliance with applicable securities laws, rules and regulations. The company also informed the Securities & Exchange Commission that it agrees there are problems with the valuation used with the Creative Eateries transaction, and that the company is actively discussing the relevant issues with its accountants and advisers that included possible rescission or restructuring of the transaction. Going Concern Epstein, Weber & Conover, P.L.C., expressed substantial doubt about Franchise Capital's ability to continue as a going concern, after it audited the company's financial statements for the year ended Sept. 30, 2005. The company has not yet generated adequate cash flow to support its operations. The Company has incurred material operating losses, continued operating cash flow deficiencies and working capital deficit at September 30, 2005. Franchise Capital Corp. --http://www.franchisecapitalcorp.com/-- is a business development company that provides long-term debt and equity investment capital to support the expansion of companies in the casual, fast food restaurant industry. As of September 30, 2005, the company had an accumulated deficit of $6,491,246, compared to $6,254,522 of accumulated deficit for the same period of 2004. GFSI INC: Gets Necessary Tenders for 9-5/8% Sr. Subordinated Notes ------------------------------------------------------------------ GFSI, Inc., received tenders for $123.4 million principal amount of Senior Subordinated Notes satisfying the minimum condition for its exchange offer. The tenders are in connection GFSI's previously announced offer to exchange a new issuance of $134.9 million of principal amount of Senior Secured Notes due 2011 for: -- all of its outstanding $125 million of principal amount of 9-5/8% Senior Subordinated Notes due 2007; and -- all of its outstanding $9.9 million of principal amount of 9-5/8% Senior Subordinated Notes due 2007. GFSI will pay a consent fee of $20 per $1,000 in principal amount of Senior Subordinated Notes tendered on or prior to 5:00 P.M., New York City time on Dec. 27, 2005. The exchange offer and consent solicitation commenced on Dec. 7, 2005 and will expire at 5:00 P.M., New York City time, on Jan. 5, 2006, unless extended. Copies of the offering documents related the exchange offer only will be provided to holders who can demonstrate eligibility to participate. Subject to these limitations, copies of the offering documents can be obtained by contacting U.S. Bank National Association, the exchange agent, at (800) 934-6802. MacKenzie Partners, Inc., is the information agent for the exchange offer and consent solicitation. Additional information containing the terms and conditions of the exchange offer and consent solicitation may be obtained by contacting MacKenzie Partners, Inc. at (212) 929-5500. GFSI Inc. designs, manufactures and markets high quality, custom designed sportswear and activewear bearing names, logos and insignia of resorts, corporations, national associations, colleges and professional sports leagues and teams. GFSI custom designs and decorates an extensive line of high-end outerwear, fleecewear, polo shirts, T-shirts, woven shirts, sweaters, shorts, performance apparel and headwear. GFSI markets its products through its well- established and diversified distribution channels. * * * Moody's Investors Service's rated the company's 9-5/8% Senior Subordinated Notes due 2007 at Caa1. GLOBAL EMPIRE: Section 341(a) Meeting is Scheduled for Tomorrow --------------------------------------------------------------- The U.S. Trustee for Region 7 will convene a meeting of Global Empire Investments & Holdings, LLC's creditors at 1:00 p.m., on Jan. 5, 2006, at Suite 3401 located at 515 Rusk Avenue in Houston, Texas. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Houston, Texas, Global Empire Investments & Holdings, LLC, filed for chapter 11 protection on Dec. 6, 2005 (Bankr. S.D. Tex. Case No. 05-95389). Richard L. Fuqua, II, Esq., at Fuqua & Keim, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. GOODING'S SUPERMARKETS: Case Summary & 19 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Gooding's Supermarkets, Inc. dba Gooding's fdba Gooding's of Maitland, Inc. fdba Gooding's of Warehouse, Inc. fdba Gooding's Warehouse/Ogden Entertainment LC fdba Gooding's/Ogden/Ali LC 8255 International Drive, Suite 120 Orlando, Florida 32819 Bankruptcy Case No.: 05-17769 Type of Business: The Debtor operates a chain of supermarkets. Chapter 11 Petition Date: December 30, 2005 Court: Middle District of Florida (Orlando) Judge: Arthur B. Briskman Debtor's Counsel: R. Scott Shuker, Esq. Gronek & Latham LLP Post Office Box 3353 Orlando, Florida 32802 Tel: (407) 481-5800 Fax: (407) 481-5801 Total Assets: $1 Million to $10 Million Total Debts: $10 Million to $50 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sysco Trade Debt $123,197 200 West Story Road Ocoee, FL 34761 George Weston Bakeries Utility $65,564 4116 Silver Star Road Orlando, FL 32808 Walt Disney Attractions, Inc. Commissions $65,000 P.O. Box 470818 Celebrations, FL 34747 Chastang, Ferrell, Sims, P.A. Accounting $56,571 Services Insurance Office of America Insurance $55,577 Southern Wine & Spirits Trade Debt $53,056 Coca-Cola Bottling Co. Trade Debt $52,788 Pepsi-Cola Bottling Group Trade Debt $52,210 T.G. Lee Foods Rent $50,078 Farnam Street Financial, Inc. Equipment Lease $42,814 BP-RP Universal, LLC Rent $40,557 Valencia Community College Commissions $39,631 Florida Power/Progress Energy Utility $37,835 Citicorp Vendor Finance, Inc. Equipment Lease $35,156 Dade Paper Company Trade Debt $34,234 The News Group Trade Debt $32,778 Murray Biscuit Co. LLC Trade Debt $32,228 Del Monte Fresh Produce N.A. Trade Debt $28,838 Tropical Nut & Fruit Inc. Trade Debt $25,534 HANDEX GROUP: Gronek & Latham Approved as Bankruptcy Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court Middle District of Florida in Orlando gave Handex Group Inc., fka Handex Environmental Inc., permission to employ Gronek & Latham, LLP, as its bankruptcy counsel, nunc pro tunc to Nov. 23, 2005. Gronek & Latham will: 1) assist and advise the Debtors about their rights, duties and obligations in their chapter 11 cases; 2) prepare on behalf of the Debtor, pleadings related to their chapter 11 cases, a proposed plan of reorganization and an accompanying disclosure statement; 3) take all necessary actions incident to the proper preservation and administration of the Debtors' chapter 11 cases; and 4) render all other legal services to the Debtors that are necessary in their bankruptcy cases. R. Scott Shuker, Esq., a partner at Gronek & Latham, is one of the lead attorneys for the Debtor. Mr. Shuker disclosed that his Firm received a $180,385 retainer. Until Apr. 24, 2006, the Firm may bill against the retainer on a monthly basis for 100% of its costs and for 70% of its fees as they accrue without further order but subject to final review and approval by the Court. Gronek & Latham assured the Court that it does not represent any interest materially adverse to the Debtors and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Mount Dora, Florida, Handex Group Inc. -- http://www.handex.com/-- and its affiliates help companies solve environmental issues. The Debtors offer management and consulting services, which include remediation, regulatory support, risk management, waste minimalization, health and safety training, data support, engineering and construction services. The Debtors filed for chapter 11 protection on Nov. 23, 2005 (Bankr. M.D. Fla. Case No. 05-17617). When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $10 million to $50 million. HANOVER INSURANCE: Closes $40 Mil. Sale of Variable & Annuity Biz ----------------------------------------------------------------- The Hanover Insurance Group, Inc. (NYSE: THG) closed the previously announced sale of its run-off variable life insurance and variable annuity business to The Goldman Sachs Group, Inc., on Dec. 30, 2005. In conjunction with this closing, The Hanover also has received approval from the Massachusetts Division of Insurance for a dividend of $40 million from its retained life business, First Allmerica Financial Life Insurance Company. "I am pleased we have closed the previously announced life transaction, monetizing the value of our life business and enabling us to focus on our property and casualty business," said Frederick H. Eppinger, president and chief executive officer of The Hanover Insurance Group, Inc. "The sale provides us with greater financial flexibility and funding for our share repurchase program." Total proceeds are expected to be approximately $347 million, based on an estimated purchase price calculated as of Nov. 30, 2005. Total proceeds include the $40 million dividend from FAFLIC and $17 million additional cash available from certain non- insurance subsidiaries. Also included is $26 million of expected proceeds from the related Allmerica Investment Trust fund reorganization and sale of the AIT funds' investment advisory company, which is scheduled to close on Friday, Jan. 6, 2006. Approximately $34 million of the total proceeds will be paid to The Hanover over a three-year period beginning in 2006. The final purchase price will be determined as of the Dec. 30, 2005 closing; accordingly, the total expected proceeds of approximately $347 million will be modified to reflect adjustments as of that date. The impact of this final adjustment is not expected to be material. The transaction is expected to result in a net after-tax loss on the sale that is projected to be approximately $457 million in 2005, primarily as the result of the write-down of non-cash deferred acquisition cost assets. The after-tax net loss will also be modified to reflect the Dec. 30, 2005, closing adjustments. Additionally, as previously disclosed, the transaction will also result in a net after tax loss that is projected to be $16 million in 2006, related to transition services expenses and severance costs. Share Repurchase Program As previously announced, the company's Board of Directors has authorized a share repurchase program of up to $200 million funded from the proceeds of the transaction. This program is currently expected to be substantially completed in the first half of 2006. The Hanover Insurance Group, Inc., formerly know as Allmerica Financial Corporation, is the holding company for a group of insurance companies headquartered in Worcester, Massachusetts. * * * The Hanover Insurance Group, Inc.'s 7-5/8% notes due Oct. 15, 2025 carry Moody's Ba1 rating and Fitch's and Standard & Poor's BB+ ratings. IAP WORLDWIDE: Names Jeffrey Fenton to Board of Directors --------------------------------------------------------- IAP Worldwide Services, Inc., appointed Jeffrey J. Fenton, director of Cerberus Capital Management, to the IAP Board of Directors. Mr. Fenton currently serves as chief executive and principal of Devonshire Advisors LLC and is a senior member of Cerberus' operations team. He is the chairman of the board of Bluelinx Corporation and has been a director of that company since June 2004. "Jeff's expertise in the logistics and distribution industries will be a key asset as IAP continues to execute its successful growth strategy," said Dave Myers, chairman of the IAP Board of Directors. "Jeff brings to the board a wealth of knowledge and dedication to IAP's work as a top-tier Government services contractor." From 2000 until 2002, Mr. Fenton served as CEO of Maxim Crane Works. Prior to that time, he held positions of increasing responsibility over a twenty-year career with General Electric, culminating in the role as the chief executive officer of GE Capital Modular Space and an officer of GE Capital Corporation. Mr. Fenton received a B.S. in Mechanical Engineering from Northeastern University and a M.S. in Management from MIT Sloan Business School, where he was a Sloan Fellow. IAP Worldwide Services, Inc. -- http://www.iapws.com/-- is a premier government contractor providing a broad spectrum of services focused on global mission support for the federal market. The company specializes in three top-tier lines of business: contingency, logistics and procurement support; facility maintenance/base operations; and technical services. With Corporate Operations headquartered in Cape Canaveral, FL, IAP also has corporate offices in Irmo, S.C.; Panama City, FL; and Washington, D.C.; and project sites in over 50 locations worldwide. * * * As reported in the Troubled Company Reporter on Dec. 26, 2005, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on IAP Worldwide Services Inc. At the same time, Standard & Poor's affirmed its 'B+' bank loan rating and the '2' recovery rating on IAP's proposed $490 million first-lien credit facility. S&P also affirmed its 'B-' bank loan rating and '5' recovery rating on IAP's proposed $120 million second-lien term loan. S&P said the outlook is negative. As reported in the Troubled Company Reporter on Dec. 23, 2005, Moody's adjusted the ratings assigned on December 6, 2005 to IAP Worldwide Services, Inc. in response to changes in its proposed capital structure. IAP has announced an incremental increase of approximately $65 million to the proposed first lien term loan B. Despite a proposed decrease in total debt with an approximately $105 million permanent reduction in the proposed second lien term loan and a reduction in the proposed dividend to $146 million from $186 million, the B2 corporate family rating is unchanged (refer to the Moody's press release dated December 6, 2005 for details of the original proposal and ratings rationale). Moody's took these rating actions: * $75 million (originally $100 million) proposed first lien revolver, maturing 2010, lowered to B2 from B1 * $415 million (originally $350 million) proposed first lien term loan, due 2012, lowered to B2 from B1 * $120 million (originally $225 million) proposed second lien term loan, due 2013, raised to B3 from Caa1 * Corporate Family Rating, affirmed B2 Moody's said the ratings outlook is stable. INTEGRATED HEALTH: Inks Stipulation Resolving Maura Rocha's Claim ----------------------------------------------------------------- On August 28, 2000, Maura E. Rocha filed Claim No. 11383 against Integrated Health Services, Inc., and its debtor-affiliates, asserting an unliquidated amount on the basis of personal injury or wrongful death. The parties have contemplated that the Rocha Claim will be liquidated in a court of competent jurisdiction and, if allowed, may be satisfied in whole or in part by available insurance. Thus, if the Rocha Claim is satisfied by insurance, Ms. Rocha will not be entitled to any distributions from IHS Liquidating LLC, and if the Rocha Claim is partially satisfied by insurance, Ms. Rocha's distributions will be reduced, all as provided more fully in the IHS Plan. The parties have agreed to amend the Rocha Claim to reflect its maximum amount, it being understood that the Rocha Claim remains disputed and subject to proceedings before another court. In a Court-approved stipulation, the parties agree that the Rocha Claim is deemed to be amended to reflect that it is a prepetition Disputed Tort Claim in an amount not to exceed $500,000. If the Rocha Claim is satisfied by insurance, Ms. Rocha will file a notice withdrawing the Claim with the U.S. Bankruptcy Court for the District of Delaware within 30 days after satisfaction. If the Rocha Claim is reduced to final judgment by a court of competent jurisdiction, but is not fully satisfied by insurance, Ms. Rocha will notify IHS Liquidating within 30 days after the later of: (i) the date of the entry of the final judgment; and (ii) the date Ms. Rocha receives notice that the insurance proceeds will not be available to satisfy her claim. Upon receipt of the Notice, the parties will enter into a new stipulation, without the need for further Court approval, establishing the allowance of the Rocha Claim as a general unsecured in an amount to the lesser of: (a) $500,000; and (b) the amount of the Rocha Claim, if any, as fixed by the final judgment, that has not been satisfied by insurance. Integrated Health Services, Inc. -- http://www.ihs-inc.com/-- operated local and regional networks that provide post-acute care from 1,500 locations in 47 states. The Company and its 437 debtor-affiliates filed for chapter 11 protection on February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical Corporation and its direct and indirect debtor-subsidiaries broke away from IHS and emerged under their own plan of reorganization on March 26, 2002. Abe Briarwood Corp. bought substantially all of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan on May 12, 2003, and that plan took effect September 9, 2003. Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D. Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP, represent the IHS Debtors. On September 30, 1999, the Debtors listed $3,595,614,000 in consolidated assets and $4,123,876,000 in consolidated debts. (Integrated Health Bankruptcy News, Issue No. 99; Bankruptcy Creditors' Service, Inc., 215/945-7000) KAISER ALUMINUM: Wants Amended Salaried Retirees Agreement Okayed ----------------------------------------------------------------- As previously reported, Kaiser Aluminum Corporation and its debtor-affiliates reached agreements with the Official Committee of Salaried Retirees, the United Steel Workers of America and certain other unions regarding modifications to the Debtors' retiree medical obligations, termination of their defined-benefit pension plans and implementation of replacement defined contribution plans, and rejection of their collective bargaining agreements to remove the contractual bar to restructuring their liabilities. The Debtors engaged in talks with the Retirees Committee to amend and restate the Legacy Liability Agreements in anticipation of the confirmation of the Debtors' Second Amended Joint Plan of Reorganization, to make technical corrections, incorporate certain previously agreed-upon modifications, accurately reflect the current status of the agreement, and more fully formalize the parties' agreement. The principal terms of the Amended and Restated Agreement are: (a) All existing plans, funds and programs maintained or established by the Debtors, prior to February 12, 2002, that provide medical, surgical, prescription drugs, hospital care benefits, or benefits in the event of sickness, accident, disability, or death for the Salaried Retirees will be terminated; (b) The Debtors agree that the termination of Retiree Benefits on May 31, 2004, was a one-time bankruptcy-qualifying event under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; (c) Eligible participants who elected bankruptcy-COBRA coverage during the time period specified by the Debtors in 2004 will be entitled to participate in the KACC Employees Group Insurance Program for Active Employees; (d) Nothing in the Amended and Restated Agreement will abridge the right of any individual to exercise his or her 18-month or 36-month statutory COBRA rights; (e) The Debtors will not at any time declare or otherwise treat any Salaried Retiree as ineligible for or disqualified from receiving any of the COBRA benefits or coverage described in the Amended and Restated Agreement, on the basis that the Salaried Retiree has received or is entitled to receive any distribution or other benefit from the voluntary employees' beneficiary association created for the benefit of Salaried Retirees; (f) The Debtors made an initial $200,000 advance for the benefit of the Salaried Retirees' VEBA in June 2004 and have made monthly VEBA advances of $300,000 per month from June 2004 through the present date, which advances will be credited against any cash obligations of the Debtors upon the effective date of the Plan; (g) The Debtors will make a contribution to the Salaried Retirees' VEBA equal to 14.5% of the excess of the Initial Availability Amount above $50,000,000; provided, however, that in no event will the contribution be more than the Salaried Retirees' allocable share of $36,000,000; (h) The Debtors will make a variable contribution under the Retiree Insurance Profit Sharing Plan; and (i) The Debtors will contribute the Residual Value of KACC and Kaiser Bellwood to the Salaried Retirees' VEBA. The Debtors ask the U.S. Bankruptcy Court for the District of Delaware to approve the Amended and Restated Agreement. The Debtors explain that the proposals they made to the Retiree Committee were based on the most complete and reliable information available at the time. The Debtors provided the Committee with relevant information necessary to evaluate the proposals. According to the Debtors, the proposals were necessary to formulate a Chapter 11 plan of reorganization and were designed to ensure that all creditors, the Debtors and all affected parties were treated fairly and equitably. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Service, Inc., 215/945-7000) KAISER ALUMINUM: Wants $12.9-Mil Westport Settlement Pact Approved ------------------------------------------------------------------ In May 2000, Kaiser Aluminum & Chemical Corporation instituted an insurance coverage action against certain insurers, including Westport Insurance Company, in the Superior Court of California for the County of San Francisco. KACC seeks a declaratory judgment that the Insurers under more than 300 insurance policies issued from 1959 to 1985 are obligated to cover the asbestos- related bodily injury products liability claims that have been asserted against KACC. The Products Coverage Action also seeks damages for breach of contract and breach of the covenant of good faith and fair dealing against several of the Insurers. The Products Coverage Action, if successful, would establish KACC's rights, and the Insurers' obligations, with respect to the Asbestos Products Claims and would allow KACC to recover its costs from the Insurers in connection with the defense and settlement of the Asbestos Products Claims. Westport provided excess insurance coverage to KACC from 1976 to 1983. KACC and Westport have reached a settlement that resolves all claims against the Westport Parties with respect to the Westport Policies, including coverage for Channeled Personal Injury Claims, as well as other present and future liabilities. The Settlement Agreement also resolves all Tort Claims against the Westport Parties with respect to additional policies. The principal terms of the Settlement Agreement are: (1) Westport will pay a total of $12,900,000, according to a payment schedule, to a Settlement Account Agent, unless the trigger date has occurred, in which case to the Insurance Escrow Agent for distribution to the Funding Vehicle Trust. After the Trigger Date has occurred, payments to the Settlement Account Agent will be disbursed to the Insurance Escrow Agent for distribution to the Funding Vehicle Trust, or as otherwise directed by the Court. Upon the payment of the Settlement Amount to the Insurance Escrow Account, legal and equitable title to the Settlement Amount will pass irrevocably to the Insurance Escrow Agent to be distributed pursuant to the Debtors' Plan of Reorganization; (2) Westport has specifically contracted, for itself and for the Westport Parties, to receive all of the benefits of being designated as a Settling Insurance Company in the Plan of Reorganization, including, but not limited to, the PI Channeling Injunctions; (3) The Settlement Agreement covers all claims that might be covered by the Policies. Accordingly, KACC will sell the Policies back to Westport, and Westport will buy back the Policies pursuant to Sections 363(b) and 363(f) of the Bankruptcy Code free and clear of all liens on, claims against, or interests in the Policies. Westport's payment of the Settlement Amount will constitute consideration for the buy-back; and (4) The Settlement Agreement covers all claims that might be covered by the Policies. A full-text copy of the Debtors' Settlement Agreement with Westport is available for free at: http://bankrupt.com/misc/Westport_Settlement_Agreement.pdf Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, tells the U.S. Bankruptcy Court for the District of Delaware that the Settlement Agreement will: -- eliminate KACC's continuing costs of prosecuting the Products Coverage Action against Westport; -- eliminate uncertainty regarding future payments by Westport; and -- secure the payment of a total fixed amount from Westport without further delay and cost to KACC. Ms. Newmarch notes that the $12,900,000 purchase price is fair and reasonable consideration for the Policies given the available limits of the Policies and uncertainty regarding future payments. It also brings immediate value to KACC's estate to cover present and future asbestos-related liability. Hence, the Debtors ask the Court to approve the Settlement Agreement and authorize the sale of the Policies to Westport free and clear of all liens, claims, encumbrances or other interests. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Service, Inc., 215/945-7000) KEY TECHNOLOGY: Files Annual Report & Restates Previous Financials ------------------------------------------------------------------ Key Technology, Inc. (Nasdaq:KTEC) filed its Annual Report on Form 10-K for its fiscal year ended Sept. 30, 2005. Financial Adjustments Grant Thornton LLP identified certain proposed adjustments in the company's financial statements for the year ended Sept. 30, 2005, in the course of completing its audit procedures. Upon considering this information, the Company's management subsequently determined that adjustments relating to lease accounting also affected the Company's interim financial statements for the quarters ended March 31, 2005, and June 30, 2005. In addition, management and Grant Thornton identified certain adjustments that resulted in changes to the amounts previously disclosed in the Company's earnings press release for fiscal 2005. The principal adjustments -- all of which are non-cash and are related to non-recurring transactions -- that will give rise to the restatement of the quarterly financial statements and adjustments to the previously reported preliminary unaudited financial results were: -- Accounting for Lease Termination. The Company incorrectly reversed deferred rent credits in connection with the termination of the lease of one of the Company's operating facilities. The Company had been reducing the deferred rent credits over the remaining term of the expiring lease beginning in the second quarter of fiscal 2005 and continuing through the end of fiscal 2005. The correction of this reversal in connection with the year-end closing resulted in a reduction of annual net earnings of $360,000 before income taxes as compared to the amount reported by the Company in its earnings press release dated Nov. 3, 2005. -- Expiration of Redeemable Warrants. The financial information reported in the Company's earnings press release on Nov. 3 incorrectly reflected a gain of $127,000 before income taxes relating to the expiration of certain redeemable warrants that expired in the fourth quarter of fiscal 2005. In connection with the year-end closing, the liability relating to the redeemable warrants was reclassified to equity as of the expiration date of the warrants. The recognition of these accounting adjustments will result in aggregate adjustments to the amounts previously disclosed in the Company's earnings release for fiscal 2005, dated Nov. 3, 2005, as follows (in thousands, except per share data): -- decrease in gross profit from $31,667 to $31,307; -- decrease in earnings before income taxes from $4,081 to $3,593; -- decrease in net earnings from $3,003 to $2,691; -- decrease in net earnings per share-basic from $0.59 to $0.53; -- decrease in net earnings per share-diluted from $0.58 to $0.52; and -- increase in total assets from $57,486 to $57,527 and decrease in total shareholders' equity from $40,656 to $40,471. Financial Restatements On Dec. 21, 2005, management met with the Audit Committee of the Board of Directors to discuss these adjustments. The Audit Committee concurred with management's determination to restate the Company's previously issued interim financial statements for the quarters ended March 31, 2005 and June 30, 2005. The Company's Audit Committee and management discussed this determination with Grant Thornton. Accordingly, investors should no longer rely on the Company's previously issued financial statements for the quarters ended March 31, 2005, and June 30, 2005. The Company expects that the restatement of the quarterly financial information will result in: -- a reduction of earnings before taxes of $164,000 and $98,000 in the quarters ended March 31, 2005, and June 30, 2005, respectively; -- a reduction of net earnings of $105,000 and $63,000 in the quarters ended March 31, 2005, and June 30, 2005, respectively; and -- a reduction in diluted earnings per share of $0.02 and $0.01 in the quarters ended March 31, 2005, and June 30, 2005, respectively. In addition, the Company previously reported a fourth quarter fiscal 2005 warranty charge of $325,000. The Company has concluded that this item is more appropriately characterized as a product performance issue which will be settled through sales price reductions on future product purchases by the affected customer. Material Weakness As a result of these changes, the Company also disclosed in its Form 10-K a material weakness in its internal controls as a result of the aggregation of significant deficiencies related to the documentation of accounting guidance applicable to significant non-recurring events and transactions, and significant deficiencies in reconciliation procedures and policies related to the Company's monthly closing processes. The Company is adopting remediation steps to address these concerns. Headquartered in Walla Walla, Washington, Key Technology, Inc., designs and manufactures process automation systems for the food processing and industrial markets. The Company's products integrate electro-optical inspection and sorting, specialized conveying and product preparation equipment, which allow processors to improve quality, increase yield and reduce cost. Key has manufacturing facilities in Washington, Oregon and the Netherlands, and worldwide sales and service coverage. LAWRENCE WOOD: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtors: Lawrence R. Wood and Vickie T. Wood P.O. Box 446 Varnell, Georgia 30756 Bankruptcy Case No.: 06-40004 Chapter 11 Petition Date: January 2, 2006 Court: Northern District of Georgia (Rome) Debtors' Counsel: James R. McKay, Esq. Fuller & McKay P.O. Box 6063 Rome, Georgia 30162-6063 Tel: (706) 295-1300 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million The Debtors did not file a list of their 20 largest unsecured creditors. LEGACY ESTATE: Winston & Strawn Approved as Committee Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in The Legacy Estate Group, LLC's chapter 11 case sought and obtained authority from the U.S. Bankruptcy Court for the Northern District of California to employ Winston & Strawn LLP as its bankruptcy counsel. Winston & Strawn will: (a) provide legal advice to the Committee with respect to its duties and powers in the chapter 11 case; (b) consult with the Committee and the Debtor concerning the administration of the Chapter 11 case; (c) assist the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtor, operation of the Debtor's businesses, and the desirability of continuing or selling such businesses or assets, and any other matters relevant to the Chapter 11 case or to the formulation of a plan; (d) assist the Committee in the evaluation of claims against the estate, including analysis of and possible objections to the validity, priority, amount, subordination, or avoidance of claims and/or transfers of property in consideration of such claims; (e) assist the Committee in participating in the formulation of a plan, including the Committee's communications with unsecured creditors concerning the plan and the collecting of and filing with the Court acceptances or rejections to such a plan; (f) assist the Committee with any effort to request the appointment of a trustee or examiner; (g) advise and represent the Committee in connection with administrative and substantive matters arising in the Chapter 11 case, including the obtaining of credit, the sale of assets, and the rejection or assumption of executory contracts and unexpired leases; (h) appear before the Court, any other federal court, state court or appellate courts; and (i) perform such other legal services as may be required and which are in the interests of the unsecured creditors. The Debtor discloses that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $360 - $765 Associates $225 - $470 Legal Assistants $105 - $230. To the best of the Committee's knowledge, the Firm is a "disinterest person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Saint Helena, California, The Legacy Estate Group LLC -- http://www.freemarkabbey.com/-- owns Freemark Abbey Winery, which produces a range of red, white, and dessert wines. Legacy Estate and Connaught Capital Partners, LLC, filed for chapter 11 protection on November 18, 2005 (Bankr. N.D. Calif. Case No. 05-14659). John Walshe Murray, Esq., Lovee Sarenas, Esq., and Robert A. Franklin, Esq., at Law Offices of Murray and Murray represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts between $50 million and $100 million. LEGACY ESTATE: Panel Hires MacConaghy as Winston's Co-Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in The Legacy Estate Group, LLC's chapter 11 case, sought and obtained authority from the U.S. Bankruptcy Court for the Northern District of California to employ MacConaghy & Barnier, PLC, as Winston & Strawn LLP's co-counsel. MacConaghy & Barnier will: (a) investigate the acts, conduct, liabilities, and financial condition of the Debtor, the operation of the Debtor's business, and the desirability of the continuance of such business, and any other matters relevant to the case or to the formulation of a plan; (b) participate in the formulation of a plan of reorganization or advise the Committee concerning reorganization, conversion, or the appointment of a Chapter 11 Trustee or Examiner; (c) investigate potentially recoverable pre-petition and post- petition transfers and other litigation claims held by the estate, and participate in the prosecution of such litigation, if warranted; and (d) perform such other services as may reasonably be required by the Committee during the progression of the case. John H. MacConaghy, Esq., and Jean Barnier, Esq., will be the lead attorneys for the Committee. Mr. MacConaghy bills $350 per hour for his services while Mr. Barnier bills $225 per hour. To the best of the Committee's knowledge, the Firm represents no interest materially adverse to the Debtor's or its estate. Headquartered in Saint Helena, California, The Legacy Estate Group LLC -- http://www.freemarkabbey.com/-- owns Freemark Abbey Winery, which produces a range of red, white, and dessert wines. Legacy Estate and Connaught Capital Partners, LLC, filed for chapter 11 protection on November 18, 2005 (Bankr. N.D. Calif. Case No. 05-14659). John Walshe Murray, Esq., Lovee Sarenas, Esq., and Robert A. Franklin, Esq., at Law Offices of Murray and Murray represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts between $50 million and $100 million. LEVEL 3: Completes WilTel Acquisition in Stock and Cash Deal ------------------------------------------------------------ Level 3 Communications, Inc. (Nasdaq: LVLT) completed its acquisition of WilTel Communications Group, LLC. As consideration, Level 3 has paid Leucadia National Corporation (NYSE: LUK) 115 million shares of Level 3 common stock and $386 million in cash. Pursuant to the purchase agreement signed by Level 3 and Leucadia on Oct. 30, 2005, Level 3's cash consideration at closing was increased from the previously announced amount of $370 million, to reflect an improvement in WilTel's working capital and is subject to adjustment based on the subsequent calculation of actual closing date working capital. Level 3 paid an additional $100 million in consideration for $100 million in cash held by WilTel at the time of closing. "There is a unique and compelling fit between WilTel and Level 3," said James Q. Crowe, chief executive officer of Level 3. "Because of this and hard work by all involved, we have been able to close this transaction ahead of schedule. Through this process, we have continued our analysis of the WilTel business and are confident in the overall financial projections we provided at the time we announced the definitive agreement. We have also continued our integration planning and we are extremely pleased with the progress we have made leading up to the announcement." Financial Projections "We are reiterating our previously announced overall revenue and cash flow projections for the acquisition," said Sunit S. Patel, chief financial officer of Level 3. "This transaction adds substantial new revenue from high quality customers and creates value from significant synergies resulting from elimination of duplicative common resources and network infrastructure. We continue to expect the acquisition to add $1.5-1.6 billion in revenue to our 2006 communications revenue which approximately doubles the size of our existing communications business. "While we recognize that the contribution from the AT&T (formerly SBC) contract will diminish over time in accordance with their contract with WilTel, we continue to expect that this transaction will contribute approximately $50-90 million of incremental cash flow in 2006 and $125-150 million of incremental cash flow annually from 2007 onward. We expect to provide more detail when we announce our 2005 fourth quarter results in February 2006." Integration costs are expected to be $100-150 million. Integration Planning and Execution "The combination of Level 3 and WilTel unites two leading providers of communications backbone services to create what we believe is the premier wholesale communications services provider in the industry," said Kevin O'Hara, president and chief operating officer of Level 3. "Due to the unique strategic fit between the two companies and Level 3's past integration experience, we remain confident in our ability to successfully combine the businesses and conclude a smooth transition for customers," continued Mr. O'Hara. "We commenced integration planning immediately after signing the definitive agreement in October, and we believe we are well positioned for a smooth integration process in keeping with our projected schedule. "The transaction will significantly increase the size of Level 3's communications business by increasing the scale of the company's transport, IP and voice business. In addition, broadening our network capabilities will facilitate increased network reach by adding 3000 additional route miles, access to 50 new markets and improved responsiveness on high demand routes." Vyvx As a part of the transaction, Level 3 acquired the WilTel subsidiary, Vyvx, LLC, the industry leader in gathering and distributing broadcast quality live and non-live video for the media and entertainment industry. "We recognize the importance of Vyvx's customers and are committed to ensuring they receive the highest quality service without disruption," said Mr. O'Hara. "We believe that Vyvx's expertise in transporting video combined with its strong brand and customer relationships may create some additional opportunities for Level 3 as the video transport market evolves." About Level 3 Communications Level 3 Communications (Nasdaq: LVLT) is an international communications and information services company. The company operates one of the largest Internet backbones in the world, is one of the largest providers of wholesale dial-up service to ISPs in North America and is the primary provider of Internet connectivity for millions of broadband subscribers, through its cable and DSL partners. The company offers a wide range of communications services over its 23,000-mile broadband fiber optic network including Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, and patented softswitch managed modem and voice services. Level 3 is an industry leader in IP and VoIP services, which it provides to cable operators, ISPs, carriers and others. Level 3's E-911 service offering includes both fixed location and nomadic VoIP E- 911 capabilities, supporting an FCC-compliant E- 911 solution for interconnected VoIP providers. The company offers information services through its subsidiary, Software Spectrum -- http://www.softwarespectrum.com/-- and fiber-optic and satellite video delivery solutions through its subsidiary, Vyvx -- http://www.vyvx.com/ MERIDIAN AUTOMOTIVE: Wants BDO Seidman as Auditor ------------------------------------------------- Meridian Automotive Systems, Inc., and its debtor-affiliates seek permission from the Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware to employ BDO Seidman, LLP, nunc pro tunc to Dec. 1, 2005, to provide accounting and auditing services in accordance with the terms of an engagement letter, as well as to provide tax services in accordance with a separate engagement letter. Meridian President and Chief Executive Officer Richard E. Newsted relates that in the ordinary course of business, the Debtors require the services of seasoned and experience accountants and auditors that are familiar with: (i) the Debtors' businesses and operations; (ii) the automotive industry in general; and (iii) the Chapter 11 process. Based on BDO's experience in providing audit and accounting services for a number of manufacturing companies, including automotive and heavy truck original equipment manufacturing companies as well as second tier suppliers, the Debtors believe that the firm has a unique understanding of the significant challenges affecting the Debtors and the automotive supply industry in general, and is well suited and qualified to perform the services for which it is to be employed, as necessary to the effective and efficient administration of the Debtors' cases. BDO will audit the Debtors' consolidated financial statements for the fiscal year ending Dec. 31, 2005. In addition, the firm will: (a) review the Debtors' U.S., Canadian and Brazilian federal corporate tax returns; (b) perform quarterly review services on, among others, three quarterly financial statement reviews for the fiscal year 2006; (c) prepare expatriate tax returns for the Debtors' employees; (d) prepare Forms 5500 and audits of the Debtors' Qualified Employee Benefit plans for years ending 2002, 2003, 2004 and 2005; (e) perform tax analysis and render advice concerning tax impacts of the Debtors' bankruptcy; (f) perform tax analysis and render advice concerning tax credits and state and local taxes; (g) provide tax structuring advice to the Debtors related to discrete vendor supply arrangements; (h) provide other tax advice at the Debtors' behest; and (h) render other accounting and financial reporting advice at the Debtors' request. The Debtors and BDO estimate the professional fees associated with the 2005 Audit to total $210,000. The Debtors will pay the Estimated Audit Fee in three installments: Date Fee Amount ---- ---------- January 15, 2006 $60,000 January 31, 2006 100,000 February 15, 2006 50,000 The professional fees associated with the 2005 Expatriate Tax Return Services is estimated to total $25,000. The Debtors intend to pay the Estimated Expatriate Return Fee in four installments: Date Fee Amount ---- ---------- January, 2006 $10,000 February, 2006 5,000 March, 2006 5,000 April, 2006 5,000 In addition, the Debtors will also pay BDO a flat fee for other services contemplated under the Engagement Letters, including: (1) reviewing the U.S. 2005 federal income tax return -- $15,000; and (2) reviewing the Canadian 2005 federal income tax return -- $5,000. In sum, the Debtors propose to pay a $255,000 total flat fee. The Flat Fee, Mr. Newsted clarifies, does not cover any additional services the Debtors may request, including tax consulting or auditing their employee benefit plans. These additional services will be billed at these hourly rates, as adjusted periodically: Partners $425 - $500 Managers/Directors $225 - $300 Associates/Sr. Associates $125 - $175 To reduce the expense to the Debtors' Chapter 11 estates, BDO plans to utilize employees of BDO Trevisan Auditores Independentes and BDO Dunwoody, LLP, to perform certain auditing procedures, including inventory test counts and inventory price testing at certain of the Debtors' Brazilian and Canadian locations in connection with the 2005 Audit and potentially other services as well. "The Debtors' Brazilian subsidiary is not a debtor in this or any other bankruptcy case," Mr. Newsted tells the Court. BDO Brazil will bill the Debtors' Brazilian operation directly for these services: (1) $15,000 for limited agreed upon auditing procedures at the Brazil operation; and (b) $5,000 for reviewing the Brazilian 2005 federal income tax return. To ensure that the BDO Foreign Affiliates are disinterested, each of them have executed an affidavit certifying that they do not represent or hold any interest adverse to the Debtors or their estates. William J. Coyne, a partner at BDO, assures the Court that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). Dispute Resolution Procedures The Debtors and BDO have agreed that any dispute, controversy, or claim arising in connection with the performance or breach of the Engagement Letters or the terms of the firm's employment, which cannot be resolved by facilitated negotiations, will be settled by arbitration governed by the provisions of the Federal Arbitration Act in the city in which the BDO office providing the relevant services exists. If a court of competent jurisdiction determines the FAA as inapplicable, the laws of the United States will govern the arbitration. In any arbitration instituted, the proceedings will proceed in accordance with the Arbitration Rules for Professional Accounting and Related Disputes of the American Arbitration Association. The arbitration will be conducted before a panel of three persons, one chosen by each party and the third selected by the two party-selected arbitrators. The arbitration panel will have no authority to award non-monetary or equitable relief, and monetary award will not include punitive damages. The award issued by the arbitration panel may be confirmed in a judgment by any federal or state court of competent jurisdiction. Accordingly, the Debtors also ask the Court to approve the Dispute Resolution Procedures. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Wants Until May 25 to Decide on Leases ----------------------------------------------------------- Meridian Automotive Systems, Inc., and its debtor-affiliates ask the Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware to further extend the deadline within which they must assume, assume and assign or reject unexpired non- residential real property leases, through and including May 25, 2006, without prejudice to their right to seek further extensions for cause. The Debtors are parties to 12 Non-Residential Real Property Leases: Lessor Location ------ -------- Etkin Equities 2001 Centerpointe Parkway Suite 112 Pontiac, Michigan DEMBS/ Roth Group 4280 Haggerty Road Canton, Michigan Ford Motor Land Development Corp. 550 Town Center Drive Dearborn, Michigan GR Glen LLC 3196 Kraft Ave., S.E. Grand Rapids, Michigan Insite Angola, L.L.C. 300 Growth Parkway Angola, Indiana Communite Improvement Corp. 1020 E. Main Street Jackson, Ohio L.E. Tassel, Inc. 3075 Brenton Road, S.E. Grand Rapids, Michigan Meri (NC) LLC 6701 Stateville Blvd. Salisbury, North Carolina North-South Properties LLC 747 Southport Drive, Shreveport, Louisiana P&E Realty Inc. 13811 Roth Road Grabill, Indiana Rushville Manufacturing Mall Land Trust # 101 1350 Coomerce Street Rushville, Indiana Westfield Industrial Center 13881 West Chicago Street Detroit, Michigan Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, informs Judge Walrath that because the Debtors' Chapter 11 cases are large and complex, they have not had sufficient time to determine what role all of the Real Property Leases will play in their ongoing restructuring efforts. Mr. Brady further explains that if the Debtors are forced to prematurely assume the Real Property Leases, the consequences might include their being required to pay cure obligations under the Real Property Leases and the elevation of lessor claims to administrative expense status prior to confirmation of a plan of reorganization. "Conversely, if the Debtors precipitously reject the Real Property Leases or are deemed to reject the Real Property Leases by operation of section 365(d)(4) of the Bankruptcy Code, they may forgo significant value in such Real Property Leases, thereby resulting in the loss of valuable property interests that may be essential to the Debtors' reorganization." Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000). MIRANT CORP: Exits 30-Month Bankruptcy with $2 Billion Financing ---------------------------------------------------------------- Mirant Corporation (OTC Pink Sheets: MIRKQ) successfully emerged from Chapter 11 bankruptcy protection on Jan. 3, 2006. The company has completed the steps necessary to cause its Plan of Reorganization to become effective, including securing $2.35 billion in exit financing. "This is a major milestone for Mirant," said Edward R. Muller, the company's chairman and chief executive officer. "After 30 months in the bankruptcy process, we have successfully restructured Mirant to provide it with the financial flexibility necessary to be a leader in the industry. The talented employees of Mirant will create tremendous value for our shareholders through discipline, creativity and operational excellence." Under its Plan of Reorganization, Mirant is converting more than $6 billion of debt and liabilities into equity in the reorganized company and will nearly halve its overall debt. In accordance with the Plan of Reorganization, Mirant will issue 300 million shares of common stock to its creditors and existing equity holders. Additional shares will be reserved for issuance pursuant to the company's employee stock programs, and for issuance in connection with the Series A and Series B Warrants being distributed under the Plan of Reorganization. Mirant has begun its initial distributions of common stock and cash provided for in its Plan of Reorganization, and expects to complete these initial distributions by the middle of January 2006. The Company has applied for re-listing with the New York Stock Exchange and expects to begin trading on Jan. 11, 2006, under the ticker symbol MIR. Mirant's U.S. and Canadian units filed for bankruptcy protection on July 14, 2003, and various dates thereafter. The company's other international operations did not file for bankruptcy. Subsidiaries of Mirant owning generating facilities and other assets in New York state will remain in Chapter 11 proceedings pending the resolution of certain matters with local authorities - including property tax settlements and the capital expenditures required for those facilities to continue to operate in future years. New Directors With the company's emergence from bankruptcy, Mirant has a new nine-member board of directors. The directors, in addition to Edward R. Muller, are: * Thomas W. Cason, * A.D. Correll, * Terry G. Dallas, * Thomas H. Johnson, * John T. Miller, * Robert C. Murray, * John M. Quain and * William L. Thacker. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. NATIONAL ENERGY: Attala Entities Hold $48.8-Mil Allowed Claims -------------------------------------------------------------- As previously reported, National Energy & Gas Transmission, Inc., argued that the Attala Owner Entities' Claim Nos. 308, 629, 306, 628, 307 and 305 must be disallowed. The Attala Owner Entities consist of: * BATCL-1987 II, Inc., * Newcourt Capital USA, Inc., * TCC Attala OL LLC, and * VCC Attala OL LLC. NEG also argued that the claims filed by the Owner Participants -- Claim Nos. 309 and 631, filed by VCC Attala OP LLC, and Claim Nos. 304 and 630, filed by TCC Attala OP LLC -- must be disallowed, or in the alternative, superceded by these claims in their reduced amounts: -- Claim No. 631 for $6,085,505; and -- Claim No. 630 for $1,520,876. Since the Attala Owner Entities offered little to no argument in their response to NEG's assertions, the Hon. Paul Mannes sustains the Objection to Claim Nos. 308, 629, 306, 628, 307 and 305. With respect Claim Nos. 309, 631, 304 and 630, the U.S. Bankruptcy Court for the District of Maryland overrules NEG's Objection in part. Judge Mannes points out that the tax indemnity agreement provides that the Owner Participants are entitled to certain United States federal, state and local income tax benefits. Attala Generating Company, LLC, also "agreed to indemnify the Owner Participant[s] under certain circumstances for the loss of such benefits." The tax indemnity agreement further provides that in certain circumstances, Attala Generating will pay to the Owner Participants a lump sum amount that "shall be sufficient to preserve Owner Participant's Net Economic Return. . . ." "The parties do not dispute that the foreclosure triggered Attala Generating's obligation under the tax indemnity agreement to indemnify the Owner Participants," Judge Mannes explains. "Nor do the parties disagree that by virtue of the indemnity guarantee, NEG is liable to the Owner Participants as NEG guaranteed Attala Generating's payments under the tax indemnity agreement." In determining how much is owed to the Owner Participants under the tax indemnity agreement, Judge Mannes maintains that Attala Generating will pay the Owner Participants a lump sum payment in an amount sufficient to preserve the Owner Participants' "net economic return." Judge Mannes states that the term "net economic return" is not defined in the tax indemnity agreement, but is defined in the participation agreement. The two agreements were entered into in connection with the same transaction, and while the tax indemnity agreement does not refer to the participation agreement, the definition provided in the participation agreement should apply, Judge Mannes says. Per the participation agreement, "net economic return" is defined as: "(a) the Owner Participant's anticipated net after-tax yield, calculated according to the multiple investment sinking fund method analysis, and (b) aggregate GAAP income and after-tax cash flow." The Attala Owner Entities argued that using this formula, their claims total $240,091,351. They further argued that in the alternative, if a discount rate is necessary, a rate of 2.58% is appropriate, reducing the total amount of their claims to $178,983,599. NEG, on the hand, argued that the claims should be reduced to cover actual lost tax benefits only. NEG asserted that the Owner Participants' claim should be subject to a 12% discount rate, resulting in an aggregate of $48,753,903. Based on NEG's argument regarding the risk involved with the Owner Participants' investment, the Court accepts NEG's proposed 12% discount rate. Accordingly, Judge Mannes rules that: -- Claim No. 631 is reduced and allowed for $39,003,123; -- Claim No. 630 is reduced and allowed for $9,750,780; and -- Claims Nos. 309 and 304 are disallowed as superseded by Claim Nos. 631 and 630. Owner Participants Seek Reconsideration John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, asserts that the Court must reconsider its decision because the allowability and amount of the Owner Participants' claims under the general indemnity provisions of the Participation Agreement for fees and expenses was not addressed. The Court's Memorandum focuses only on the Owner Participants' claims in the collective amount of $240,091,351 under the Tax Indemnity Agreements, Mr. Butler says. In their response to NEG's Objection, the Owner Participants submitted evidence supporting their General Indemnity Claims. As of November 21, 2005, the GI Claims aggregated $2,186,867. Mr. Butler points out that the Owner Participants clearly set forth the legal and factual bases for the GI Claims in the papers they filed with the Court. The failure to include the GI Claims in the overall allowed amount of the claims appears to be an oversight as the Court made clear its view that the plain terms of the relevant documents control. The Owner Participants, hence, ask the Court to reconsider their GI Claims and amend the Memorandum to fully include these Claims. In addition, the Owner Participants ask the Court to reconsider the discount rate applied in determining the amount of the Owner Participants' claims under the Tax Indemnity Agreements. The 12% discount rate proposed by the Debtors is a pre-tax discount rate, Mr. Butler explains. Applying a pre-tax discount rate to the Owner Participants' claims for Net Economic Return is the equivalent to applying a 19.74% discount rate to the Owner Participants' pre-tax cash flows. Based on the investment profile, a 12% discount rate may be appropriate. But if the 12% discount rate is applied on a pre-tax basis to after-tax cash flows of Net Economic Return, the Owner Participants will not receive their negotiated after-tax return, even on a present value basis. Because the Court applied the plain language of the agreements in arriving at its decision with respect to the Net Economic Return claims, the Owner Participants believe that the Court should have applied the 12% pre-tax discount rate, on an after-tax basis, to the after-tax cash flows of Net Economic Return. According to Mr. Butler, the 12% pre-tax rate is equivalent to a 7.29% after-tax discount rate. Applying the 7.29% after-tax rate to the after-tax cash flows results in a discounted amount of the Owner Participants' Tax Indemnity Claims of $65,771,522. The Owner Participants ask the Court to apply, on an after-tax basis, 7.29% as the appropriate net discount rate. This after- tax discount rate approach, Mr. Butler says, is the correct one and is more consistent with the Court's findings. Mr. Butler emphasizes that the Owner Participants' allowed claims aggregate $67,958,389, with: -- $65,771,522 relating to the tax indemnity claims; and -- $2,186,867 relating to the GI Claims. The Owner Participants want a hearing and oral argument with respect their request. NEG Objects to Attala's Reconsideration Request Dennis J. Shaffer, Esq., at Whiteford, Taylor & Preston LLP, in Baltimore, Maryland, asserts that there is no legal basis for the Court to reconsider its decision. The Court was clear in its opinion that it considered all 13 briefings on the matter and the arguments made at the hearing before rendering its final decision, Mr. Shaffer maintains. Attala intended to prevent manifest injustice and to clarify the decisions reached in the Court's decision. However, Mr. Shaffer notes, Attala made no allegations that the Decision actually results in manifest injustice and clarification is not a ground on which to amend substantively a decision. The Court was aware of and considered the general indemnity claim in its Decision as the Court accurately summarized Attala's position. Just because the Court did not include a discussion on the specifics does not mean it was not considered, Mr. Shaffer points out. Furthermore, even if the omission was an oversight as Attala alleged, Attala presented no evidence or arguments as to how the failure could have resulted in manifest injustice, Mr. Shaffer says. Other than the general indemnity issue, Mr. Shaffer notes that Attala discussed only the issue of the appropriate discount rate and again does not contend that the 12% discount rate applied by the Court results in a manifest injustice. In addition, Attala does not argue that the Court misapplied the law or that the Court misunderstood the facts. Attala simply argued that a tax-affected discount rate should apply, ignoring the fact that the Debtors argued in their Response that this is not appropriate for an equity investment, and that the Court adopted the Debtors' position. Mr. Shaffer contends that Attala should not be permitted to reargue a position that the Court rejected. * * * Judge Mannes denies Attala's Motion to Reconsider. Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas Transmission, Inc.) develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company and its debtor-affiliates filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher, and Paul M. Nussbaum, Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston, L.L.P., represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT received bankruptcy court approval of its reorganization plan in May 2004, and that plan took effect on Oct. 29, 2004. The Hon. Paul Mannes confirmed NEGT Energy Trading Holdings Corporation, NEGT Energy Trading - Gas Corporation, NEGT ET Investments Corporation, NEGT Energy Trading - Power, L.P., Energy Services Ventures, Inc., and Quantum Ventures' First Amended Plan of Liquidation on Apr. 19, 2005. The Plan took effect on May 2, 2005. (PG&E National Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000) NOBEX CORP: Court Okays BMC Group as Claims and Noticing Agent -------------------------------------------------------------- Nobex Corporation sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ BMC Group, Inc., as its claims, noticing and balloting agent. BMC Group is expected to: a. prepare and serve required notices in the Debtor's chapter 11 case, including: (1) the Section 341(a) Notice; (2) bar date notice; (3) notice of hearings on a disclosure statement and confirmation of a plan of reorganization; and (4) other miscellaneous notices to any entities, as the Debtor or the Court may deem necessary or appropriate for an orderly administration of the chapter 11 case; b. file, within five business days after mailing of a particular notice, with the Clerk's Office a declaration of service that includes a copy of the notice involved, an alphabetical list of persons to whom the notice was served and the date and manner of service; c. comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; d. promptly comply with such further conditions and requirements as the Clerk's Office or Court may at any time prescribe; e. provide such other noticing, disbursing and related administrative services as may be required from time to time by the Debtor; and f. provide assistance with, among other things, certain data processing and ministerial administrative functions, including, but not limited to the Debtor's schedules, statements of financial affairs and master creditor list, including any amendment and if necessary, the reconciliation and resolution of claims. The Debtor discloses that it will pay BMC Group a flat fee of $15,000. Tinamarie Feil, President of Legal Services at BMC Group, assures the Court that the Firm is "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Durham, North Carolina, Nobex Corporation -- http://www.nobexcorp.com/-- is a drug delivery company developing modified drug molecules to improve medications for chronic diseases. The company filed for chapter 11 protection on Dec. 1, 2005 (Bankr. D. Del. 05-20050). Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell, and Ben Hawfield, Esq., at Moore & Van Allen PLLC, represent the Debtor in its chapter 11 proceedings. When the Debtor filed for protection from its creditors, it estimated between $1 million to $10 million in assets and $10 million to $50 million in liabilities. NOBEX CORP: Wants Morris Nichols as Bankruptcy Counsel ------------------------------------------------------ Nobex Corporation asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Morris, Nichols, Arsht & Tunnell as its bankruptcy counsel. Morris Nichols is expected to: (a) perform all necessary services as the Debtor's co-counsel, including, without limitation, providing the Debtor with advice, representing the Debtor, and preparing all necessary documents on behalf of the Debtor in the areas of debtor-in-possession financing, corporate law, real estate, employee benefits, business and commercial litigation, tax, debt restructuring, bankruptcy and asset dispositions; (b) take all necessary action to protect and preserve the Debtor's estate during the Debtor's chapter 11 proceedings, including the prosecution of actions by the Debtor, the defense of any actions commenced against the Debtor, negotiations concerning all litigation in which the Debtor is involved and objecting to claims filed against the estate; (c) prepare or coordinate preparation on behalf of the Debtor, as a debtor-in-possession, all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the chapter 11 case; (d) counsel the Debtor with regard to its rights and obligations as a debtor-in possession; and (e) perform all other necessary legal services. The Debtor discloses that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $400 - $585 Associates $220 - $380 Paraprofessionals $165 Case Clerks $100 Derek C. Abbott, Esq., is the lead attorney for the Debtor. To the best of the Debtor's knowledge, the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Durham, North Carolina, Nobex Corporation -- http://www.nobexcorp.com/-- is a drug delivery company developing modified drug molecules to improve medications for chronic diseases. The company filed for chapter 11 protection on Dec. 1, 2005 (Bankr. D. Del. 05-20050). When the Debtor filed for protection from its creditors, it estimated between $1 million to $10 million in assets and $10 million to $50 million in liabilities. NOBEX CORP: U.S. Trustee Appoints Three-Member Creditors' Panel --------------------------------------------------------------- The United States Trustee for Region 3 appointed three creditors to serve on an Official Committee of Unsecured Creditors in Nobex Corporation's chapter 11 case: 1. Cardinal Health Attn: Matthew P. Berry 14 Schoolhouse Road, Somerset, New Jersey 08873 Tel: (732) 537-6552 Fax: (732) 537-5940 2. American Peptide Company, Inc. Attn: David Andrew Godkin 777 Evelyn Avenue Sunnyvale, California 94086 Tel: (408) 733-7604 Fax: (408) 733-7603 3. Biomedical Technology Consulting Attn: Frank J. Daugherty, MD 10308 Rockbrook Road, Omaha, Nebraska 60124 Tel: (402) 393-3034 Fax: (402) 393-2521 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Durham, North Carolina, Nobex Corporation -- http://www.nobexcorp.com/-- is a drug delivery company developing modified drug molecules to improve medications for chronic diseases. The company filed for chapter 11 protection on Dec. 1, 2005 (Bankr. D. Del. 05-20050). Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell, and Ben Hawfield, Esq., at Moore & Van Allen PLLC, represent the Debtor in its chapter 11 proceedings. When the Debtor filed for protection from its creditors, it estimated between $1 million to $10 million in assets and $10 million to $50 million in liabilities. NORTHWEST AIRLINES: Giving Up Fifteen Excess Aircraft Leases ------------------------------------------------------------ Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, tells the U.S. Bankruptcy Court for the Southern District of New York that Northwest Airlines Corp. and its debtor- affiliates have identified 15 aircraft leases that, under existing lease terms, are not beneficial to their estates. The Excess Aircraft are essentially new airframes and engines that the Debtors acquired on lease and subsequently subleased to Pinnacle Airlines Corp. in the 15-month period prior to the Petition Date. A full-text, tabulated list of the Excess Aircraft Leases is available for free at: http://bankrupt.com/misc/northwestexcessaircraft[3].pdf Accordingly, the Debtors seek Judge Allan Gropper's authority to: -- reject the leases for the Excess Aircraft; and -- abandon the owned Excess Aircraft, subject to secured debt obligations. The Debtors assure the Court that upon approval of the proposed rejection, they will deliver each of the Excess Aircraft to the concerned lessor and lender at the indicated locations. To the extent that any of the Excess Aircraft is subleased out to their regional carriers, the Debtors also propose to reject the subleases. The Debtors assure the Court that they will cooperate with the lessors and lenders and other affected parties in the execution and delivery of lease termination statements and title transfer documents in a form adequate for filing with the FAA. Aircraft Parties Object A. HMRC and U.S. Bank Her Majesty in Right of Canada and U.S. Bank National Association complain that the Debtors' proposed order for the Third Rejection Motion fails to conform to the negotiated provisions of the Court's earlier orders pertaining to rejection and abandonment of aircraft. HMRC is a lender with respect to aircraft financing or leasing transactions in connection with the Excess Aircraft. U.S. Bank is the Indenture Trustee with respect to the Excess Aircraft. Wilbur F. Foster, Jr., Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, asserts that these provisions should be incorporated in the proposed order approving the Third Rejection Motion: (1) The Debtors are required to maintain current insurance on the Excess Aircraft and comply with applicable FAA regulations concerning the maintenance and operation of the Aircraft, and not swap engines or other parts, except in the ordinary course of maintenance or to return an Aircraft with its associated engines; (2) In the event the lessor, lender or other affected party is unable to move an Excess Aircraft due to a failure by the Debtors to deliver the records and documents as are necessary for the lessor, lender or other affected party to cause the aircraft to be moved to another location, the Excess Aircraft Coverage Period will be extended to the earlier of (i) the date that is 15 days after the Debtors deliver the necessary documentation or (ii) the date the lessor, lender or other affected party takes possession of the Aircraft; (3) The Debtors are permitted to assume a sublease and assign a sublease and certain warranties or similar manufacturer benefits at the request of a lessor, lender or other affected party, and to provide that assigned warranties will remain in full force and effect as if the warranties remain held by the Debtors; and (4) The term "administrative expense claim" includes claims for rent, use, or adequate protection. Moreover, HMRC and U.S. Bank object to the Debtors' proposal to relinquish possession of the Excess Aircraft at "to be determined" locations. Mr. Foster explains that, because the Debtors failed to identify the Aircraft's current location or where they will be relinquished, they cannot determine whether the proposed rejection is reasonable and complies with the requirements of Section 1110 of the Bankruptcy Code. HMRC and U.S. Bank also demand that the Debtors' insurance and storage obligations continue: (a) until 30 days after the effective date of rejection; or (b) until after the complete aircraft equipment and documents are actually surrendered to the appropriate aircraft creditors. B. Wells Fargo Wells Fargo Bank Northwest, National Association, serves as owner trustee and Wells Fargo Bank, National Association, serves as owner participant to the Excess Aircraft. The Debtors acquired the Excess Aircraft on lease and subsequently subleased the aircraft to Pinnacle Airlines Corp., in the 15-month period preceding the Petition Date. Ann E. Acker, Esq., at Chapman and Cutler LLP, in Chicago, Illinois, notes that, without any support, the Debtors merely allege to the Court that the Excess Aircraft Leases are above market for similar aircraft and have no value unless renegotiated. Ms. Acker contends that this assertion is contradicted by the treatment under Section 1110(a) of the Bankruptcy Code of aircraft leases with the Goldman Sachs Group, Inc.; Wachovia Bank, National Association; and General Electric Capital Corporation, some of which may actually be on less favorable terms than the Excess Aircraft. Yet, the Debtors didn't state whether they attempted to renegotiate the Excess Leases, let alone indicate how the Excess Leases differ in their terms from the identical leases for the Goldman Aircraft, which are not being rejected, Ms. Acker states. She adds that the Debtors only recently acquired the Excess Aircraft, some as late as August 2005, which clearly is indicative of current market value. The Debtors did not explain why they have retained countless other virtually identical planes or what makes the Excess Aircraft "excess" to their operations. Ms. Acker also argues that the Debtors should only be allowed the return of the Excess Aircraft in accordance with Section 1110 and the terms of the related financing documents. Among other things, the financing documents require that on return: (a) the airframes must be fully equipped with the original engines; (b) the airframes and engines must be certified as an airworthy aircraft by the FAA; (c) the airframes and engines must be in as good an operating condition as when delivered by the manufacturer to the Debtors, ordinary wear and tear excepted; (d) Wells Fargo must be allowed to inspect the Excess Aircraft; and (e) the Debtors maintain insurance on the aircraft in place and pay all storage costs at Debtors' expense, all as more particularly provided in the underlying documents. C. Pinnacle Pinnacle Airlines, Inc., operates and subleases the Excess Aircraft from the Debtors pursuant to an Airline Services Agreement effective as of January 1, 2003, and various aircraft subleases and other transactions. Matthew R. Goldman, Esq., at Baker & Hostetler LLP, in Cleveland, Ohio, tells the Court that, on November 1, 2005, at the Debtors' request, Pinnacle paid the November payments on the Subleases in advance. Pinnacle made the payments in reliance on the Debtors' representation that, on November 30, 2005, they would pay Pinnacle an amount equal to the November Payment, plus contractual margin and related payments in accordance with the ASA, and that they would not reject the Sublease until the end of November. Mr. Goldman asserts that Pinnacle has a first priority administrative claim against the Debtors with respect to those payments under Sections 503(b)(1) and 507(a)(1) of the Bankruptcy Code. Pinnacle reserves all of its rights under the Bankruptcy Code, the ASA and applicable law, including, without limitation, its right to receive full payment of the ASA Payment on November 30, 2005, and all future payments under the ASA in the ensuing months. Debtors Respond to Objections In response to Wells Fargo, Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, argues that it is neither a coincidence nor an act of capriciousness that the rejected aircraft have a single owner because: (a) the Excess Aircraft Leases are above the current market; and (b) the selection was based on payment due dates and maintenance histories, and because it required the Debtors to perform the least number of engine exchanges to return the aircraft on time and with matching engines. The selection was both efficient and cost effective, Mr. Zirinsky attests. Consequently, the Debtors' decision "withstands scrutiny under the business judgment rule," he says. Mr. Zirinsky also notes that the Court trashed previous requests that the Debtors comply with the surrender and return conditions stated in the applicable aircraft leases. The Debtors refute Wells Fargo's allegations that they did not engage in negotiations to reduce the costs associated with the Excess Aircraft before deciding to reject the leases. The Debtors admit that they did not negotiate with Wells Fargo, which holds the equity interests in the Aircraft. However, the Debtors stress that they did engage in intensive negotiations regarding the Aircraft with the holders of the debt, Her Majesty Rights of Canada/Export Development Corporation of Canada and Bombardier. The Debtors believe that HMRC/EDC is the real party- in-interest in the aircraft because it has an economic interest in virtually the entire fleet of the aircraft type leased to Pinnacle. To accommodate HMRC and U.S. Bank's demands, the Debtors agree: (i) that the Excess Aircraft Coverage Period will be extended 15 days after the Debtors deliver the necessary documentation related to the Aircraft, or the date the affected party takes possession of the Aircraft; (ii) to assume and assign a certain sublease and assign warranties or similar manufacturer benefits at the request of an affected party; and (iii) that the term "administrative expense claim" is defined to include claims for rent, use, or adequate protection. Mr. Zirinsky, however, argues that the proposal for the Debtors to maintain insurance and comply with FAA regulations concerning maintenance and operation of the Excess Aircraft is inapplicable because the Aircraft have been parked since November 14, 2005, and will remain parked. As to U.S. Bank's objection regarding the non-disclosure of the aircraft locations, Mr. Zirinsky notes that the Third Rejection Motion does not place return conditions in issue. He says that the only issue is whether the Debtors' decision to reject the specified aircraft leases should be approved. Mr. Zirinsky also attests that none of the Excess Aircraft is in the possession of a sublessee. The Debtors dispute Pinnacle's assertion that it is entitled to certain administrative priority claims against Northwest. The Debtors also notes that they did not seek any relief with respect to Pinnacle or the ASA, or a determination regarding any claims that Pinnacle may assert. The Debtors reserve all rights with respect this dispute. Thus, the Debtors ask the Court to approve their Third Rejection Motion and overrule all objections. * * * Judge Gropper authorizes the Debtors to reject the Excess Aircraft Leases, and to abandon the Excess Aircraft that are owned by the Debtors, effective as of November 29, 2005. Judge Gropper rules that the Debtors are not required to comply with the surrender and return provisions of the security agreement or lease, as applicable, to the extent the return conditions exceed the surrender and return obligations of Section 1110(c)(1). Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Wants Stay Enforced on ATSCC Entities --------------------------------------------------------- On November 7, 2005, the Airport Terminal Services Canadian Company commenced an action against Northwest Airlines, Inc., in the Court of Queen's Bench of Alberta, Judicial District of Calgary. ATSCC filed the lawsuit after the Debtors refused to pay C$462,349 for ground handling services rendered by ATSCC to Northwest pursuant to a Standard Ground Handling Agreement between the parties. Under the Ground Handling Agreement, ATSCC and its parent corporation, Airport Terminal Services, Inc., charge Northwest specific rates for ground handling services. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, explains that due to the automatic stay, Northwest did not remit the amount due to the ATS Entities for the services rendered by ATSCC between July 16, 2005, and September 15, 2005, at five airports in Canada. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to: (i) enforce the automatic stay and bar the ATS Entities from commencing or continuing the Canadian Action and demanding payment on account of the prepetition services; and (ii) impose contempt sanctions and damages against each of the ATS Entities and their officers and directors for violation of the stay. Mr. Petrick notes that the ATS Entities' commencement of the Canadian Action violates Section 362(a)(1) of the Bankruptcy Code and the Court's Automatic Stay Order. An award of actual damages and sanctions by contempt may be appropriate to remedy this violation. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST: US DOT Says Maintenance Flaws Didn't Compromise Safety ----------------------------------------------------------------- As previously reported, Aircraft Mechanics Fraternal Association officials said that some union members who returned to work during the current strike have left their jobs because of serious concerns about maintenance safety at Northwest Airlines. According to AMFA National Safety and Standards Director John Glynn, "Two former strikebreakers who quit their jobs at Northwest just within the past week told me that maintenance practices there are still in such disarray that the situation raises serious safety concerns they were unwilling to tolerate. The United States Department of Transportation confirmed that Northwest Airlines Corp. did not adequately train some replacement workers for striking mechanics or follow a parts procedure, Bloomberg News reports. However, the Department said these two flaws did not compromise safety. Kenneth Mead, DOT inspector general, also said that the inspectors for the Federal Aviation Administration did not follow their own procedures in the maintenance oversight during the Northwest strike, according to Bloomberg writer John Hughes. The FAA noted the same flaws committed by Northwest in a report on the investigation. The FAA raised concerns that worker training had not been effective and that a Northwest employee failed to follow the company's procedures for processing parts. The FAA also said it began an enforcement action regarding the parts issue that may result in a fine, Bloomberg also reports. FAA spokesperson Elizabeth Isham Cory said that Northwest has corrected those problems. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) O'SULLIVAN INDUSTRIES: Has Until April 12 to Decide on Leases ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia extended until April 12, 2006, the period within which O'Sullivan Industries Holdings, Inc., and its debtor-affiliates can decide whether to assume or reject their unexpired nonresidential real property leases. As reported in the Troubled Company Reporter on Nov. 30, 2005, the Debtors are still in the process of analyzing the necessity of their leases in connection with their development of a long-term business plan and anticipate assuming or rejecting the Leases pursuant to the Plan. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, P.A., in Atlanta, Georgia, explains that the Debtors' large and complex cases required them to expend a tremendous amount of energy stabilizing their business and addressing various operational concerns at these initial stages. As a result, the Debtors have not yet completed a review of the Leases. Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). On September 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) O'SULLIVAN INDUSTRIES: Wants Removal Period Stretched to April 12 ----------------------------------------------------------------- O'Sullivan Industries Holdings, Inc., and its debtor-affiliates were involved in these legal proceedings and may be involved in others as well: a. O'Sullivan Industries, Inc., is a co-defendant in a personal injury action entitled Dandurand v. O'Sullivan Industries, Inc., Case No. 05AR000305, pending in the Circuit Court, 18th Judicial Circuit of DuPage County, Illinois. The action stemmed from an alleged injury caused by a product sold by the Debtors. The plaintiff claims more than $75,000 in damages. b. The Debtors are defendants in a preference action in the Ames Department Stores, Inc., bankruptcy case, which was filed in the United States Bankruptcy Court for the Southern District of New York on August 20, 2001. The Action, which was commenced on July 1, 2003, seeks recovery of about $2,000,000 in allegedly preferential transfers as well as interest and costs. Section 1452 of the Judiciary Code provides that "a party may remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce police or regulatory power, to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title." Rule 9027(a) of the Federal Rules of Bankruptcy Procedure provides that if a claim or cause of action is pending when a bankruptcy case is commenced, a notice of removal may be filed in the bankruptcy court only within the longest of (A) 90 days after the Petition Date. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, P.A., in Atlanta, Georgia, tells the U.S. Bankruptcy Court for the Northern District of Georgia that the Debtors have not reviewed the actions pending against them to determine whether any should be removed under Bankruptcy Rule 9027(a) because they have focused primarily on: -- stabilizing their business; -- responding to a multitude of creditor inquiries and addressing a variety of creditor concerns; and -- working towards negotiating a potential consensual plan of reorganization. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the Northern District of Georgia to extend the deadline by which they may remove causes of action, through and including April 12, 2006. Mr. Cifelli assures the Court that the Debtors' adversaries will not be prejudiced by the extension, as they may not prosecute the actions absent relief from the automatic stay. In the event of removal, Mr. Cifelli further assures the Court that the extension will not prejudice any party to a remand pursuant to Section 1452(b). Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05-83049). On September 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) PACIFIC MAGTRON: Micro Tech Wants Claim Paid Before Confirmation ---------------------------------------------------------------- Adam P. Bowler, Esq., at Piper Rudnick Gray Cary US LLP asks the U.S. Bankruptcy Court for the District of Nevada to compel Pacific Magtron Inc. to pay its secured creditor, Micro Technology Concepts Inc. Micro Technology holds a security interest in the Debtor's inventory, accounts, accounts receivable and cash. MTC's prepetition lien includes the Wells Fargo Restricted Account. Micro Technology reminds the Court of the litigation commenced by Pacific Magtron alleging breach of an interim management agreement. The parties settled the dispute and the Court approved the terms of a settlement on Oct. 31, 2005. Under the terms of the agreement, Pacific Magtron acknowledged that Micro Technology has a $679,846 claim against the bankruptcy estate. Micro Technology's claim, as stated in the agreement, is secured by all of the cash in Pacific Magtron's accounts at Wells Fargo Bank and Union Bank. In its Disclosure Statement filed in August, the Debtor stated that Micro Technology's claim will be paid after Wells Fargo's claim is paid in full. On October 28, 2005, the Court approved the sale of the Debtor's property in Milpitas, Calif. Upon the closing of the sale of Pacific Magtron's real property, Wells Fargo was paid in full. However, Micro Technology has not received the funds from the restricted funds contrary to what's been agreed under the settlement agreement. Micro Technology says it is the only party asserting a claim on the account. Since Pacific Magtron is not reorganizing, there's no reason why it needs to withhold the restricted account until its liquidating plan is confirmed, Micro Technology asserts. The merits of the Debtor's Plan will be discussed at a hearing on Jan. 24. Headquartered in Milpitas, California, Pacific Magtron International Corp. -- http://www.pacificmagtron.com/-- distributes some 1,800 computer hardware, software, peripheral, and accessory items that it buys directly from 30 manufacturers like Creative Labs, Logitech, and Yamaha. The Company, along with its subsidiaries, filed for chapter 11 protection on May 11, 2005 (Bankr. D. Nev. Case No. 05-14326). As of Dec. 31, 2004, the Company reported $11,740,700 in total assets and $11,105,200 in total debts. PASQUALE DEANGELIS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Pasquale DeAngelis dba P&G Getty dba P&G Gulf 61 Spruce Street Paterson, New Jersey 07501 Bankruptcy Case No.: 06-10006 Type of Business: The Debtor is a service station operator. The Debtor previously filed for chapter 11 protection in Newark, New Jersey, on: Mar. 10, 1998, Case No. 98-23168, Feb. 11, 1999, Case No. 99-31574, Apr. 15, 1999, Case No. 99-34416, Jun. 24, 1999, Case No. 99-37342, and Apr. 24, 2001, Case No. 01-34692. Chapter 11 Petition Date: January 2, 2006 Court: District of New Jersey (Newark) Debtor's Counsel: Stuart D. Gavzy, Esq. 163 East Main Street, Suite B Little Falls, New Jersey 07424 Tel: (973) 256-6080 Fax: (973) 256-3665 Total Assets: $1,634,501 Total Debts: $1,295,098 The Debtor does not have unsecured creditors who are not insiders. PHEBE LTD: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Phebe, Ltd. 2002 Arthur Lane Austin, Texas 78704 Bankruptcy Case No.: 06-10001 Chapter 11 Petition Date: January 2, 2006 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: Gray Byron Jolink, Esq. Law Offices of Gray Byron Jolink 4131 Spicewood Springs Road, Building C-8 Austin, Texas 78759 Tel: (512) 346-7717 Fax: (512) 346-7714 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. PLIANT CORPORATION: Files for Chapter 11 Protection in Delaware --------------------------------------------------------------- Pliant Corporation and 10 of its subsidiaries filed for chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware on Jan. 3, 2006, in order to complete a financial restructuring that will significantly reduce debt and annual interest expense. Pliant expects to continue to operate in the normal course of business during the reorganization process. All of the Company's 24 manufacturing and research and development facilities around the world are open and continuing to serve customers as usual. Pliant's operations in Mexico, Germany, and Australia were not included in the Chapter 11 filing and are not subject to the reorganization proceedings. CCAA Proceedings Three of the company's subsidiaries with Canadian operations will seek recognition of the chapter 11 proceedings in a Canadian court as "foreign proceedings" pursuant to Canada's Companies' Creditors Arrangement Act. Pliant intends to use the Chapter 11 reorganization process to complete its previously announced financial restructuring, which would reduce debt by up to $578 million and annual interest expense by up to $84 million. The company intends to file a plan of reorganization to implement the agreed restructuring in the near term. The holders of more than two-thirds of Pliant's 13% Senior Subordinated Notes and the holders of a majority of its preferred and common stock have agreed to support the restructuring transaction and vote in favor of the plan of reorganization. $70 Million GE DIP Financing To fund its continuing operations during the reorganization process, Pliant has secured a commitment for debtor-in-possession financing from GE Commercial Finance that will provide Pliant with additional liquidity of approximately $70 million. Subject to court approval, these funds will be available to satisfy obligations associated with conducting the Company's business, including payment under normal terms for goods and services provided after today's filing and payment of wages and benefits to active employees and retirees. "During the past two years Pliant has taken numerous steps to strengthen operations, expand product offerings and improve the quality of service we provide to our customers," Harold C. Bevis, Pliant's President and Chief Executive Officer, said. "Our strategic plan is designed to position Pliant for a stronger future, with a focus on innovation, customer service, accretive sales growth and operational excellence. We believe that it will enable us to consistently meet and exceed the expectations of our diverse customer base, while continuing to win new business from some of the most important names in Corporate America." Mr. Bevis continued, "Today, as the next step in the implementation of our strategic plan, we have taken decisive action to position Pliant to succeed in the long term. Our leadership team and Board of Directors made the decision to file for Chapter 11 because a court-supervised reorganization will allow us to most efficiently resolve our financial challenges and build on our recent accomplishments. Because we enter Chapter 11 with a pre-negotiated debt reduction agreement with several of our stakeholders, we are optimistic that we can complete the process quickly." Mr. Bevis noted that Pliant expects its operations to function normally during the Chapter 11 process, with very little change in how it conducts business: -- Employees will continue to be paid. Pliant fully expects that there will be no interruptions to salary or benefits for employees. -- Pliant will meet customer obligations. The company anticipates that its manufacturing and research and development facilities will remain open on normal schedules, and that it will continue to fulfill customer orders and provide uninterrupted customer service. -- Suppliers will be paid. Pliant intends to continue paying all suppliers for goods and services they provide after the filing. The company also anticipates that its proposed plan of reorganization will leave suppliers unimpaired for any pre-petition claims they may have incurred. A Difficult Industry Environment In motions filed with the Court, Pliant reported that its decision to file for Chapter 11 was influenced by several factors, including challenging industry conditions -- namely the increase in the price of raw materials. The principal raw materials used by Pliant are polyethylene, PVC and polypropylene (collectively referred to as "resin"), which are petrochemical products whose price and availability are linked closely to the market supply of crude oil and natural gas. The cost of resin constituted nearly two-thirds of Pliant's total manufacturing costs in the first half of 2005. Recent events such as Hurricane Katrina and Hurricane Rita triggered severe increases in the price of resin and tightened availability. Coupled with the tightening of trade terms by certain of Pliant's key suppliers, this increase in the price of resin resulted in a steady deterioration of the Company's liquidity position. Financial Restructuring Transaction Pliant's proposed financial restructuring is intended to improve its liquidity position significantly through the elimination of $41.6 million of annual cash interest payments. On Dec. 28, 2005, Pliant entered into Support Agreements with the holders of more than two-thirds of its 13% Senior Subordinated Notes, the holders of a majority of the outstanding shares of its mandatorily redeemable preferred stock and the holders of a majority of the outstanding shares of its common stock, pursuant to which such holders agreed, subject to the terms and conditions contained in the Support Agreements, to support the Company's proposed financial restructuring. Under the terms of this restructuring: (i) holders of Pliant's $320 million of 13% Senior Subordinated Notes will: (a) receive up to $35 million in new debt in consideration for accrued interest that was payable on Dec. 1, 2005, and (b) exchange all of their 13% Senior Subordinated Notes for a combination of 30% of the reorganized Company's common stock and at least $260 million of a newly issued Series AA Redeemable Preferred Stock, which will not be subject to mandatory redemption, and (ii) holders of Pliant's $278 million of mandatorily redeemable preferred stock will exchange all of their mandatorily redeemable preferred stock for a combination of up to $75.5 million of a new Series AA Redeemable Preferred Stock and a percentage of the reorganized Company's common stock to be determined. Completion of the restructuring is subject to a number of conditions, including completion of a plan of reorganization and other definitive documentation, receipt of formal approval of the plan of reorganization from the holders of at least two-thirds in claim amount and 50% in number of the 13% Senior Subordinated Notes that vote on the plan, and bankruptcy court approval. The holders of more than two-thirds of Pliant's 13% Senior Subordinated Notes have agreed to vote in favor of the plan of reorganization. Pliant's principal legal advisors for the Chapter 11 proceedings are Sidley Austin LLP and Young Conaway Stargatt & Taylor LLP. The Company's financial advisor is Jefferies & Company, Inc. Headquartered in Schaumburg, Illinois , Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. PLIANT CORPORATION: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------------- Lead Debtor: Pliant Corporation 1475 Woodfield Road, Suite 700 Schaumburg, Illinois 60173 Bankruptcy Case No.: 06-10001 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Uniplast Holdings, Inc. 06-10000 Pliant Corporation International 06-10002 Pliant Solutions Corporation 06-10003 Pliant Film Products of Mexico, Inc. 06-10004 Pliant Packaging of Canada, LLC 06-10005 Pliant Investment, Inc. 06-10006 Alliant Company LLC 06-10007 Uniplast U.S., Inc. 06-10008 Uniplast Industries, Co. 06-10009 Pliant Corporation of Canada, Ltd. 06-10010 Type of Business: Pliant Corporation produces film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Company operates 24 manufacturing and research and development facilities around the world, and employs approximately 3,000 people. See http://www.pliantcorp.com/ Chapter 11 Petition Date: January 3, 2006 Court: District of Delaware Judge: Mary F. Walrath Debtors' Counsel: Edmon L. Morton, Esq. Robert S. Brady, Esq. Young, Conaway, Stargatt & Taylor, LLP The Brandywine Building 1000 West Street, 17th Floor P.O. Box 391 Wilmington, Delaware 19899 Tel: (302) 571-6600 Fax: (302) 571-1253 -- and -- Sidley Austin LLP 1 South Dearborn Chicago, Illinois 60603 Debtors' Financial Advisor: Jefferies & Company, Inc. 520 Madison Avenue, 12th Floor New York, New York 10022 Financial Condition as of September 30, 2005: Total Assets: $604,275,000 Total Debts: $1,197,438,000 Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Bank of New York Note Debt $220,000,000 Attn: Corporate Trust 13% Senior Administration Subordinated 21st Floor West Notes Due 2010 101 Barclay Street New York, NY 10286 Tel: (800) 254-2826 Fax: (315) 414-3885 The Bank of New York Note Debt $100,000,000 Attn: Corporate Trust 13% Senior Administration Subordinated 21st Floor West Notes Due 2010 101 Barclay Street New York, NY 10286 Tel: (800) 254-2826 Fax: (315) 414-3885 Dow USA Trade Debt $2,495,722 2030 Dow Center Midland, MI 48674 Tel: (800) 258-2436 Fax: (989) 638-1740 Equistar Trade Debt $2,493,377 1221 McKinney Houston, TX 77010 Tel: (713) 652-7300 Fax: (713) 652-4542 Paper Converting Machine Co. Trade Debt $2,281,947 39068 Treasury Center Chicago, IL 60694 Tel: (920) 494-5601 Total Petrochemicals Trade Debt $2,067,031 1201 Louisiana Street, Suite 1800 Houston, TX 77002 Sun Chemical Corporation Trade Debt $1,361,828 35 Waterview Boulevard Parsippany, NJ 07054-1285 Tel: (973) 404-6000 Fax: (973) 404-6439 Sonoco Trade Debt $1,092,100 1 North Second Street Hartsville, SC 29550-3305 Tel: (800) 377-2692 Fax: (843) 339-6682 Blue Cross Blue Shield Insurance $1,100,000 P.O. Box 1186 Chicago, IL 60690-1186 Tel: (800) 541-2768 Fax: (312) 819-1943 Chevron Phillips Chemical Co. Trade Debt $1,022,254 10001 Six Pines Drive The Woodlands, TX 77380 Tel: (800) 231-1212 Fax: (832) 813-6060 DuPont Company Trade Debt $884,963 Center Chestnut Run Plaza 705/GS38 Wilmington, DE 19880-0705 Tel: (800) 628-6208 Fax: (302) 351-7191 Oxyvinyls LP Trade Debt $686,371 5005 LBJ Freeway Dallas, TX 75244-6119 Tel: (877) 699-8465 Fax: (972) 720-7408 BASF Canada Trade Debt $604,066 P.O. Box 7841 Station A Toronto, ON Canada M5W 2R2 Tel: (416) 675-3611 Fax: (289) 360-6005 Ampacet Corporation Trade Debt $598,527 660 White Plains Road Tarrytown, NY 10591-5130 Tel: (888) AMPACET Fax: (914) 631-7197 Phenix Marketing Group Inc. Brokerage $506,968 3305 Healy Drive Winston Salem, NC 27103 Attn: Nyal Cannon Tel: (336) 251-1100 Fax: (603) 798-5434 Huntsman Polymers Trade Debt $479,373 10003 Woodloch Forest Drive The Woodlands, TX 77380 Windmoeller & Hoelscher Corp. Capital Improvement $470,968 23 New England Way Lincoln, RI 02865-4252 BASF USA Trade Debt $443,479 100 Campus Drive Florham Park, NJ 07932 Atofina Chemicals Trade Debt $434,103 2000 Market Street Philadelphia, PA 19103-3222 GE Capital Leases $404,730 1415 West 22nd Street, Suite 600 Oak Brook, IL 60523 Yellow Freight Systems Shipping $333,339 10990 Roe Avenue Overland Park, KS 66211-1213 ARKEMA Inc. Trade Debt $329,154 2000 Market Street Philadelphia, PA 19103-3222 Eastman Chemicals Trade Debt $321,926 P.O. Box 511 Kingsport, TN 37662 Smurfit Stone Container Corp. Trade Debt $319,835 150 North Michigan Avenue Chicago, IL 60601 Westlake Polymers Trade Debt $316,644 2801 Post Oak Boulevard Houston, TX 77056 USF Holland Shipping $298,941 750 East 40th Street Holland, MI 49423 Amoco Polymer Trade Debt $296,419 9040 Cedarview Avenue Jenison, MI 49428 D. Thomas & Associates, Inc. Brokerage $265,470 1717 West 91st Place Kansas City, MO 64114-3279 Standridge Color Trade Debt $250,244 1196 East Hightower Trail Social Circle, GA 30025 C.H. Robinson International Trade Debt $232,306 8100 Mitchell Road Edens Prairie, MN 55344 PRECISION STAMPING: Case Summary & 18 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Precision Stamping, Inc. 2405 Squire Place Farmers Branch, Texas 75234 Bankruptcy Case No.: 06-30050 Type of Business: The Debtor manufactures and sells stamps. Chapter 11 Petition Date: January 2, 2005 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Joyce W. Lindauer, Esq. 8140 Walnut Hill Lane, Suite 301 Dallas, Texas 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citibank Loan $900,000 P.O. Box 6415 The Lakes, NV 88901-6415 Metalwest LLC $79,822 Department 157 Denver, CO 80271 Citibank Credit Card $33,362 P.O. Box 6415 The Lakes, NV 88901-6415 Citi Cards Credit Card $29,955 P.O. Box 6402 The Lakes, NV 88901-6407 MBNA Credit Card $22,860 P.O. Box 15026 Wilmington, DE 19850-5026 Wells Fargo $19,594 P.O. Box 7487 Boise, ID 83707 Komatsu $11,712 Lock Box 3449 Collection Center Drive Chicago, IL 60693 PraxAir Distribution $11,576 2801 Montopolis Austin, TX 78741 Metal Products of Alabama $8,788 P.O. Box 433 Dolomite, AL 35061 Protech $4,708 P.O. Box 33212 Detroit, MI 48232 Steelfast $3,328 11281 Leo Lane Dallas, TX 75229 Keystone Steel and Wire $2,561 7000 South West Adams Peoria, IL 61641 Rohm Hass Powder Coating $2,096 P.O. Box 930777 Atlanta, GA 31193 Sherwin Williams $1,585 616 Fifth Street Garland, TX 75040 Greene Plastics $1,043 PO Box 845265 Boston, MA 02284 Dallas Container Corp. $0 8330 Endicott Lane Dallas, TX 75227 Control Concepts $0 8748 Clay Road, Suite 320 Houston, TX 77080 Concentra Medical Centers $0 P.O. Box 9005 Addison, TX 75001 PRICE OIL: Court Approves Bradley Arant as Bankruptcy Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Alabama gave Price Oil, Inc., and its debtor-affiliates permission to employ Bradley, Arant, Rose & White LLP as their general bankruptcy counsel. Bradley Arant will: 1) assist and advise the Debtors of their duties and responsibilities as debtors-in-possession in the continued operation of their businesses and management of their assets; 2) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, contracts, reports and other legal documents required in their chapter 11 cases; 3) perform legal services to the Debtors, including those arising out of labor, tax, environment, corporate, litigation and other matters in connection with their chapter 11 cases; 4) advise and consult the Debtors in preparing all of their necessary schedules, proposed disclosure statements and plan or plans of reorganization; and 5) perform all other legal services to the Debtors that are required in their chapter 11 cases. John P. Whittington, Esq., a partner of Bradley Arant, is one of the lead attorneys for the Debtors. Mr. Whittington reports Bradley Arant's professionals bill: Designation Hourly Rate ----------- ----------- Partners $230 - $515 Associates $155 - $325 Legal Assistants $110 - $180 Court records don't show if Bradley Arant received a retainer for its retention as the Debtors' bankruptcy counsel. Bradley Arant assures the Court that it does not represent any interest materially adverse to the Debtors and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Niceville, Florida, Price Oil, Inc., supplies gasoline fuel to convenience store owners and operators throughout Alabama and Florida panhandle. The Company also owns, operates and lease multiple convenience stores. The Debtor and its affiliates filed for chapter 11 protection on Dec. 22, 2005 (Bankr. M.D. Ala. Case No. 05-34286). When the Debtors filed for protection from their creditors, they listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $50 million. PRICE OIL: Section 341(a) Meeting Slated for January 31 ------------------------------------------------------- The U.S. Bankruptcy Administrator will convene a meeting of Price Oil, Inc., and its debtor-affiliates' creditors at 1:30 p.m., on Jan. 31, 2006, at the U.S. Bankruptcy Courthouse, Courtroom 4E, One Church Street, Montgomery, Alabama 36104. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Niceville, Florida, Price Oil, Inc., supplies gasoline fuel to convenience store owners and operators throughout Alabama and Florida panhandle. The Company also owns, operates and lease multiple convenience stores. The Debtor and its affiliates filed for chapter 11 protection on Dec. 22, 2005 (Bankr. M.D. Ala. Case No. 05-34286). M. Leesa Booth, Esq., at Bradley, Arant, Rose & White LLP represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $50 million. PRICE OIL: Wants Until Feb. 3 to File Bankruptcy Schedules ---------------------------------------------------------- Price Oil, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Alabama, Northern Division, for an extension of their time to file their schedules of assets and liabilities and statements of financial affairs. The Debtors explain that they need to compile a large amount of data to be included in the schedules. The Debtors assure the Court that their employees are already working to complete the documents. However, their employees' efforts are divided between data gathering and stabilizing the Debtors' operations during the initial period after their bankruptcy filings. The Debtors tell the Court that an extension until Feb. 3, 2006, is sufficient for them to accurately file those documents. Headquartered in Niceville, Florida, Price Oil, Inc., supplies gasoline fuel to convenience store owners and operators throughout Alabama and Florida panhandle. The Debtor also owns, operates and lease multiple convenience stores. The Debtor and five of its affiliates filed for chapter 11 protection on Dec. 22, 2005 (Bankr. M.D. Ala. Case No. 05-34286). M. Leesa Booth, Esq., at Bradley, Arant, Rose & White represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed $10 million to $50 million in assets and debts. PROSPECT MEDICAL: Earns $1 Million of Net Income in 4th Quarter --------------------------------------------------------------- Prospect Medical Holdings, Inc. (AMEX: PZZ) reported financial results for its fiscal 2005 fourth quarter and year ended Sept. 30, 2005. Total operating revenue for the fourth quarter of fiscal 2005 rose to $35.5 million, from $35.0 million in the same period last year, including approximately $4 million of additional calendar year 2005 rate increases under Medicare's revised reimbursement methodology. Medicare is at the mid-point of a four year phase-in to a new "Risk Adjusted" methodology of paying for the healthcare of America's seniors. Under Risk Adjustment, companies caring for seniors with conditions requiring more services will receive additional compensation. As of Sept. 30, 2005, Prospect managed the care for approximately 12,500 seniors. Gross margin for the fourth quarter of fiscal 2005 improved to 29.4% from 22.1% in the same period last year, due primarily to the increased Medicare reimbursement discussed above, and decreased capitation and claims expense, resulting in an improved medical loss ratio. These margin and MLR improvements were partially offset by approximately $2.2 million of physician bonuses recorded during the 2005 quarter. Operating income increased 108% to $3.5 million from $1.7 million in the same period last year, reflecting the improved gross margin discussed above, recovery of approximately $500,000 in transaction costs upon the September 1, 2005 closing of Prospect's minority investment in Brotman Medical Center, and approximately $600,000 resulting from the favorable conclusion of a longstanding legal matter. Net income for the fourth quarter of fiscal 2005 improved to $1.0 million, from net income of $908,000 in the fourth quarter of fiscal 2004. Net income for the fourth quarter of fiscal 2005 included a $1.0 million charge related to Prospect's investment in Brotman. Prospect does not have any exposure to future losses at Brotman. Dr. Jack Terner, Chairman and Chief Executive Officer of Prospect Medical, commented, "We are very pleased with our results for this quarter, improving earnings per share over the same quarter last year, as well as over our June 30 quarter. These 2005 results are especially gratifying in that they were achieved after setting aside almost $3 million in annual bonuses for our physician partners that provided the most and best care to our members. Fiscal 2005 was a very important year for Prospect on a number of other strategic fronts; we completed our transformation to a public company, listed our shares on the American Stock Exchange, completed the integration of our prior year acquisitions of the ProCare, StarCare and Northwest Orange County operations, finalized a potentially strategic investment in Brotman, increased our emphasis on the lucrative Medicare market, and continued to invest in our operating infrastructure to accommodate our next series of acquisitions. In that regard, we have already finalized the key Genesis Healthcare acquisition, and are in discussion with several other acquisition targets that would further strengthen our presence in the region." Dr. Terner continued, "In addition to the positive impact we believe the revised Medicare Risk Adjustment approach will have on operating results going forward, we continue to focus on other Medicare-related initiatives. Our potentially strategic investment in Brotman Medical Center was made to enable Prospect to offer our HMO partners a full-risk Medicare product in the large West Los Angeles market. In another of our key markets -- Orange County, California -- we have been approved to participate in the County's One Care program, which is a managed care program for the approximately 50,000 individuals who qualify for both Medicare and Medi-Cal benefits. Revenue from those Medi-Medis choosing, or assigned to, Prospect's contracted physicians will begin in January 2006." Dr. Terner concluded, "We believe that these Medicare developments (Risk Adjustment, Brotman and Medi-Medi) provide us an opportunity to increase our presence and enhance our operating profitability, while the industry's increasing barriers to entry further insulate us from significant new competition. We look forward to fiscal 2006 with confidence and optimism." Prospect's balance sheet at Sept. 30, 2005 included cash and investments of $18.0 million and shareholders' equity of $26.9 million. Prospect had $8.2 million outstanding on its $10 million term facility, and had not utilized any portion of its $5 million revolving credit facility. Revenues for fiscal 2005 increased to $133.5 million from $129.5 million in fiscal 2004. In addition to the reasons discussed above, fiscal 2005 revenues included almost $1.2 million in hospital risk pool revenue resulting from better hospital contracting and utilization programs in fiscal 2005. Hospital risk pool revenue for 2004 was negligible. Gross margin for the year improved to 27.8% from 25.9% last year, due primarily to the reasons cited above. For those same reasons, operating income for fiscal 2005 rose to $9.1 million, from $8.7 million last year. Net income for fiscal 2005 was $4.1 million, inclusive of the $1.0 million Brotman investment charge, increased physician bonus expense and increased interest on our new credit facility used, in part, to fund the November 2005 Genesis HealthCare acquisition. Net income for fiscal 2004 was $5.1 million. Prospect Medical Holdings, Inc. is a health care management services organization that provides management services primarily to its affiliated IPAs. IPAs are professional corporations that contract with independent physicians and other health care providers to create a medical panel of primary care and specialist physicians, and other health care service providers, capable of providing the full range of medical services to individuals enrolled in health maintenance organization managed care health plans. At Sept. 30, 2005, Prospect's 10 IPAs were comprised of approximately 9,000 primary care and specialist physicians serving approximately 172,000 HMO enrollees. * * * As reported in the Troubled Company Reporter on Troubled Company Reporter, Apr. 14, 2005, the Company did not meet the "senior debt to EBITDA ratio" required by its credit facility with Residential Funding Corporation as of Sept. 30, 2004, and Dec. 31, 2004. Effective April 7, 2005, RFC granted the Company a waiver of these covenant violations, and agreed to exclude certain items from the covenant computations for a twelve-month period, which enabled the Company to meet the minimum fixed charge coverage ratio at December 31, 2004. REFCO INC: Can Employ FTI Consulting as Forensic Accountant ----------------------------------------------------------- Refco Inc., and its debtor-affiliates asked the U.S. Bankruptcy Court for the Southern District of New York's authority to continue to employ FTI Consulting, Inc., as forensic accountant and electronic evidence consultant effective, nunc pro tunc to Oct. 17, 2005. The Debtors further seek to allow the firm to perform any outstanding services under its engagement with Latham & Watkins LLP. As previously reported, Refco, Inc., had discovered through an internal review a receivable owed to Refco by an entity controlled by Mr. Phillip R. Bennett, chief executive officer and chairman of Refco's Board of Directors. The receivable amount was $430,000,000, the existence of which had not been disclosed in the public offering prospectus. The receivable has since been collected. Accordingly, Latham, counsel to Refco's Audit Committee, employed FTI, in anticipation of litigation surrounding the circumstances of the Receivable. FTI's services included performing forensic accounting and financial analysis services to investigate circumstances surrounding the Receivable. On behalf of the Audit Committee, FTI reviewed and analyzed accounting books and records of the Debtors and of third parties to assist in connection with the Investigation. FTI also reviewed the prepetition conduct and activities of the Debtors and certain insiders and assisted with interviews of Refco's current and former employees and third parties. As forensic accountant and electronic evidence consultant, FTI will: (a) assist the Debtors in the collection and preservation of electronic evidence, including its processing and storage; (b) perform reporting of electronic evidence, including analysis of back-up tapes; (c) process and host electronic files using Attenex and Ringtail; (d) perform other electronic evidence consulting services as mutually agreed upon by the Debtors and FTI in connection with the investigation of the prepetition conduct and activities of the Debtors and certain insiders; and (e) perform necessary services in connection with the Debtors' Chapter 11 cases as mutually agreed upon by the Debtors and FTI. FTI estimates that the Documents Services it will perform with respect to the Records will amount to $5,800,000. The standard hourly rates for FTI's professional services are: Managing Directors $450 - $650 Directors $400 - $450 Managers $330 - $390 Senior Consultants $295 - $325 Consultants $185 - $280 Paraprofessionals $65 - $160 Consistent with its policy, FTI will continue to charge the Debtors for all other services provided and for other charges and disbursements incurred in the rendition of its services. Under Latham's retention of FTI, the Debtors have paid FTI a $700,000 retainer. As of the Petition Date, FTI has $14,100 remaining in the Retainer. FTI seeks to apply the balance of the Retainer to its final bill in the Debtors' Chapter 11 cases. Neal A. Hochberg, a senior managing director at FTI, attests that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. * * * The Honorable Robert D. Drain of the Southern District of New York Bankruptcy Court approves the Debtors' application on an interim basis. Headquartered in New York, New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. (Refco Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFCO INC: Can Hire Latham as Special Counsel on Interim Basis -------------------------------------------------------------- Refco Inc., and its debtor-affiliates sought the U.S. Bankruptcy Court for the Southern District of New York's permission to employ Latham & Watkins LLP as special investigation counsel to the Audit Committee of their Board of Directors with regard to certain matters, nunc pro tunc to Oct. 17, 2005. Latham has represented the Audit Committee since October 6, 2005, Robert Dangremond, the Debtors' interim chief executive officer, relates. Since the Petition Date, Latham has assisted the Audit Committee's investigation of the circumstances surrounding an undisclosed related party receivable totaling $430,000,000, owed to Refco by an entity controlled by Phillip R. Bennett, chief executive officer and chairman of the Board of Directors, including: -- managing the collection of electronic and paper documents from relevant current and former Refco personnel; -- working with forensic accountants retained by Latham and approved by the Audit Committee; -- interviewing persons with knowledge of relevant facts; and -- communicating with various government entities that have also undertaken investigations of the Receivable and related matters. The Debtors believe that in light of the extensive time and effort that the Latham attorneys have put forth in investigating the events leading to the Debtors' Chapter 11 filing, Latham is well qualified to act as special investigation counsel on behalf of the Audit Committee. According to Mr. Dangremond, Latham will continue to represent and advise the Audit Committee with regard to the investigation that the Audit Committee undertook concerning the Receivable, any related financial matters and any regulatory investigations or inquiries that might follow. Latham expects that its postpetition representation of the Audit Committee as special investigation counsel has effectively been completed. Latham further expects that, at some time in the future, Latham will agree, as requested, to represent the individual members of the Audit Committee -- Ronald O'Kelley, Nathan Gantcher, and Leo Breitman -- in any related investigations or proceedings, including related class actions. The firm's hourly rates are: Partners $625 to $775 Associates $310 to $475 Legal Assistants $85 to $370 The Latham attorneys who worked on behalf of the Audit Committee are: David M. Brodsky $775 Douglas N. Greenburg $650 Walter P. Loughlin $625 Thomas Hur $475 Richard C. Rosalez $425 Jonathan C. Su $395 Andres Alvarez $395 Michael David $310 Latham's hourly rates are subject to periodic increases in the normal course of the firm's business, often due to the increased experience of a particular professional. Latham will also charge the Debtors for expenses incurred in connection with its representation of the Audit Committee. In the 90 days leading up to the Petition Date, the Debtors paid Latham $500,000 as a retainer for professional services rendered or to be rendered to the Audit Committee and expenses incurred or to be incurred by Latham on behalf of the Audit Committee. As of October 17, 2005, Latham had rendered services valued at $449,752 and incurred $8,481 in expenses, for a total of $458,233. As of November 30, 2005, Latham has rendered services valued at $223,730 and has incurred expenses amounting to $12,066, for a total of $235,796. Latham wants to: (1) apply its Retainer in satisfaction of fees and expenses owing for its prepetition services and expenses; and (2) apply its remaining Retainer totaling $41,767 to the postpetition fees and expenses already incurred. The firm seeks payment of the balance after offset of the excess of the Retainer, totaling $194,029. David M. Brodsky, Esq., a member of Latham & Watkins LLP, assures the Court that the firm does not represent or hold any interest adverse to the estates or the Debtors with respect to the matter on which the firm is to be employed. Mr. Brodsky adds that Latham will conduct an ongoing review of its files to ensure that no conflicts or other disqualifying circumstances exist or arise. If any new facts or relationships are discovered, Latham will supplement its disclosure to the Court. Creditors Committee Objects The Official Committee of Unsecured Creditors is concerned about two separate and apparently contradictory roles Latham seeks to assume: (1) It seeks to be retained as special counsel under Section 327(e) of the Bankruptcy Code and purports to "not represent or hold an interest adverse to the debtor or the estate with respect to the matter on which such attorney is to be employed." (2) It seeks to use the knowledge it has acquired as counsel to the Audit Committee to defend the individual members of the Audit Committee against claims that may be asserted against them by or on behalf of the Debtors' estates. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, tells the Court that the Creditors Committee is prepared to consent to Latham's representation and compensation on two conditions: (1) Latham must agree not to represent the individual members of the Audit Committee in connection with any claims asserted by or on behalf of the Debtors' estates. (2) To the extent that the Court authorizes Latham's retention and thus requires the Debtors to pay Latham for services rendered, the Court should also direct Latham to share with the Creditors Committee all the work product for which estate funds have paid. * * * The Honorable Robert D. Drain of the Southern District of New York Bankruptcy Court grants the Debtors' request on an interim basis. Headquartered in New York, New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. (Refco Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFCO INC: Gets Court OK to Hire Greenhill & Co. as Fin'l Advisor ----------------------------------------------------------------- Refco Inc., and its debtor-affiliates sought and obtained the U.S. Bankruptcy Court for the Southern District of New York's authority to employ Greenhill & Co., LLC, as financial advisor and investment banker, nunc pro tunc to Oct. 17, 2005. The Debtors and Greenhill entered into an engagement letter dated October 14, 2005. According to the Debtors, Greenhill has played an integral role in their cases. The firm was instrumental in the sale of the Debtors' regulated commodities futures merchant business. Greenhill has experience, expertise and knowledge of the capital markets. The firm has advised billion-dollar companies in their restructuring efforts. Harvey R. Miller and Bradley A. Robins will work closely with the Debtors. Greenhill will perform services in three general categories: 1. general financial advisory services, 2. reorganization services, and 3. sales services. Specifically, under General Financial Advisory Services, Greenhill will: (a) review and analyze the business, operations, properties, financial condition and prospects of the Company; (b) determine a range of values for the Company on an ongoing concern basis and on a liquidation basis; (c) advise and attend meetings of the Company's Board of Directors and its Committees; and (d) participate in hearings before the Bankruptcy Court with respect to matters upon which Greenhill has provided advice, including coordinating with the Company's counsel with respect to testimony in connection therewith. Under Reorganization Services, the firm will: (a) provide financial advice and assistance to the Company in developing and seeking approval of a Plan; (b) provide financial advice and assistance to the Company in structuring any new securities and other consideration or other inducements to be offered or issued under the Plan; (c) assist the Company and participate in negotiations with entities of groups affected by the Plan; and (d) assist the Company in preparing documentation with Greenhill's area of expertise required in connection with the Plan. Under Sale Services, Greenhill will: (a) identify and contact selected qualified acquirors acceptable to the Company; (b) arrange for potential acquirors to conduct business investigations; (c) evaluate and recommend financial and strategic alternatives with respect to a proposed Sale; (d) advise the Company as to the timing, structure and pricing of a proposed Sale; (e) assist the Company in negotiating and consummating a proposed Sale; (f) render an opinion to the Board of Directors of the Company as to the fairness, from a financial point of view, of the consideration to be received by the Company; and (g) provide other financial advisory and investment banking services as are customary for similar transactions and as may be mutually agreed upon by the Company and Greenhill. The Honorable Robert D. Drain of the Southern District of New York Bankruptcy Court ruled that Greenhill's total compensation for its services is capped at $5,300,000. The Total Compensation is broken down as: (a) Sale Transaction Fee. The Sale Transaction Fee is capped at $4,000,000, of which $3,900,000 was earned upon the sale of the Debtors' regulated business to Man Financial Inc. The Debtors are authorized to pay this amount to Greenhill, upon the filing of a fee application on notice to all parties in interest. Greenhill will be entitled to receive up to an additional $100,000 upon the sale of the Debtors' interest in FXCM and assets related to Refco's online foreign exchange trading unit; provided, however, that Greenhill apply to this Court upon notice to all parties in interest for that compensation in respect of the FXCM Sale in an amount equal to: (i) the product of the applicable prorated Standard Transaction Fee Percentage and the aggregate Transaction Value of the Man Sale and the FXCM Sale less (ii) $3,900,000; provided, further, that the Sale Transaction Fee for the FXCM Sale will not be more than $100,000. (b) Initial Fee. The Initial Fee is $1,300,000. The Debtors are authorized to pay this amount to Greenhill. Greenhill has waived its right to receive any Monthly Advisory Fee and any Completion Fee in the Debtors' cases. Greenhill will continue to provide Sale Services relating to the Man Sale and the FXCM Sale. Greenhill's services will conclude upon the closing of the Man Sale and the FXCM Sale. All requests of Greenhill for payment of indemnity pursuant to the Engagement Letter will be made by means of an application and will be subject to review by the Court to ensure that payment of that indemnity conforms to the terms of the Engagement Letter and is reasonable based on the circumstances of the litigation or settlement in respect of which the indemnity is sought. Judge Drain emphasizes that in no event will Greenhill be indemnified if the Debtors or representatives of their estates assert a claim for, and a court determines by a final order that the claim arose out of Greenhill's own bad faith, self-dealing, breach of fiduciary duty (if any), gross negligence or willful misconduct. Mr. Robins assured the Court that Greenhill has no connection with the Debtors, their creditors or other parties-in-interest in the Debtors' cases, and the firm does not hold or represent any interest adverse to the Debtors' estates. Headquartered in New York, New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. (Refco Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) RICHARD DURAND: Richard Banks Approved as Bankruptcy Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Tennessee gave Richard Dillon Durand permission to employ Richard Banks & Associates, P.C., as his general bankruptcy counsel. Richard Banks will render all legal services to the Debtor that are appropriate and necessary for the administration and representation of his bankruptcy case. Richard L. Banks, Esq., a member of Richard Banks, is the lead attorney for the Debtor. Mr. Banks charges $200 per hour for his services. Court records don't show if Richard Banks received a retainer for its legal services to the Debtor. Richard Banks assures the Court that it does not represent any interest materially adverse to the Debtor and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Cleveland, Tennessee, Richard Dillon Durand filed for chapter 11 protection on Dec. 16, 2005 (Bankr. E.D. Alaska Case No. 05-18158). When the Debtor filed for protection from his creditors, he listed estimated assets of $10 million to $50 million and estimated debts of $1 million to $10 million. RICHARD DURAND: Section 341(a) Meeting Slated for January 24 ------------------------------------------------------------ The U.S. Trustee for Region 8 will convene a meeting of Richard Dillon Durand's creditors at 10:00 a.m., on Jan. 24, 2006, at Basement Room 18, U.S. Courthouse located at 31 East 11th Street, in Chattanooga, Tennessee 37402. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Cleveland, Tennessee, Richard Dillon Durand filed for chapter 11 protection on Dec. 16, 2005 (Bankr. E.D. Alaska Case No. 05-18158). Richard L. Banks, Esq., at Richard Banks & Associates, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from his creditors, he listed estimated assets of $10 million to $50 million and estimated debts of $1 million to $10 million. SAFLINK CORP: Must Regain NASDAQ Listing Compliance by June 14 -------------------------------------------------------------- Saflink(R) Corporation (NASDAQ:SFLK) received a deficiency letter from The NASDAQ Stock Market(R) on December 21, 2005, indicating that it is not in compliance with the continued listing requirements on the NASDAQ(R) Capital Market because, for the previous 30 consecutive business days, the bid price of its common stock had closed below the $1.00 minimum per share requirement for continued listing as set forth in Marketplace Rule 4310(c)(4). It is NASDAQ's customary practice to issue a deficiency letter when a listed company does not meet the minimum bid price requirement. By NASDAQ rule, Saflink will be provided 180 calendar days, or until June 14, 2006, to regain compliance with the bid price requirement. The deficiency letter has no effect on the listing of Saflink common stock at this time and its common stock will continue to trade on the NASDAQ Capital Market under the symbol "SFLK." The letter also stated that Saflink can regain compliance with the bid price requirement if, at any time before June 14, 2006, the bid price of its common stock closes at or above $1.00 per share for a minimum of ten consecutive business days. If Saflink cannot demonstrate compliance by June 14, 2006, NASDAQ will determine whether it meets the NASDAQ Capital Market initial listing criteria set forth in Marketplace Rule 4310(c), except for the bid price requirement. If Saflink meets the initial listing criteria, it will be provided an additional 180 calendar-day period to comply with the bid price requirement. If it is not eligible for this additional compliance period, Saflink will be provided written notice that its securities will be delisted. At that time, Saflink would have the right to appeal NASDAQ's determination to delist its securities to a listing qualifications panel, which would stay the effect of the delisting pending a hearing on the matter before the panel. Saflink Corporation -- http://www.saflink.com/-- offers biometric security and smart card solutions that protect intellectual property, secure information assets and eliminate passwords. Saflink Identity Assurance Management solutions allow administrators to verify identity and control access to computer networks, physical facilities and applications. The company also offers protection and privacy for email, web applications and electronic documents. SAINT VINCENTS: Court Gives Final Nod on Cain Brothers' Employment ------------------------------------------------------------------ The Hon. Prudence Carter Beatty authorizes Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates to employ Cain Brothers, on a final basis, as their investment bankers nunc pro tunc to July 5, 2005. The Court gave the U.S. Trustee and the Official Committee of Unsecured Creditors until Dec. 20, 2005, to file an objection to the Application. If an objection was interposed, the Interim Order would remain in effect until the time the Court considers the objection. No objection was filed by the deadline. As reported in the Troubled Company Reporter on Nov. 16, 2005, the Debtors and Cain Brothers are parties to an Engagement Letter, dated July 12, 2005, which was subsequently amended on October 21, 2005. Pursuant to the amendment, Cain Brothers' scope of services was reduced, as well as the compensation payable for those services. To limit the duplication of effort among the professionals hired in the Debtors' Chapter 11 cases, and to help offset the cost associated with the appointment of a new chief executive officer/chief restructuring officer, Cain Brothers' services will be limited to sales transactions. Moreover, Cain Brothers will not provide services with respect to the sale of non-hospital real estate, as these services will be provided by Huron Consulting Services LLC. Should the Debtors elect to sell the Hospitals, including any and all related real estate, Cain Brothers may act, at the Debtors' sole discretion, as their agent. Specifically, Cain Brothers may assist the Debtors' management in: (a) identifying of the assets and development of the strategy for the sale process and expected value of the assets being sold; (b) developing a list of prospective purchasers for the Assets; (c) preparing a memorandum for the Assets that describes the operations, management, results of operation and financial condition and incorporates current financial data and other appropriate information furnished by the Debtors; (d) contacting and soliciting interest from prospective parties; (e) reviewing and analyzing all indications of interest and proposals that are received by the Debtors for the Assets; (f) testifying on behalf of the Debtors in conjunction with seeking Court-approval for the sale of the Assets; and (g) assisting the Debtors in negotiations with prospective parties leading to the closing of the Sales Transaction. In exchange for its services, Cain Brothers will be paid a $150,000 monthly fee for two months, and then $75,000 per succeeding months, to be paid in cash on the first business day of each month. The firm will also be paid at least $400,000 for each consummated sales transaction: -- 2% of the Aggregate Transaction Value for the first $25,000,000 of the value received; plus -- 1.5% of the Aggregate Transaction Value for value received between $25,000,000 and $100,000,000; plus -- 1% of the Aggregate Transaction Value for value received in excess of $100,000,000. Cain Brothers will also be reimbursed for all out-of-pocket expenses incurred in connection with its engagement. The Debtors will provide limited indemnification of Cain Brothers for its services. The parties have also entered into customary dispute resolution provisions. Cain Brothers did not receive any payments from the Debtors for services within one year preceding the Petition Date. The firm is not a prepetition "creditor" of the Debtors within the meaning of Section 101(10) of the Bankruptcy Code, Thomas M. Barry, managing director at Cain Brothers, says. Mr. Barry discloses that Cain Brothers has in the past, or present, provided services to, or transacted with, various parties-in-interest in matters unrelated to the Debtors' Chapter 11 cases. He assures the Court that Cain Brothers is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). Founded in 1982, Cain Brothers -- http://www.cainbrothers.com/-- is an investment banking and financial advisory firm that focuses exclusively on the medical services and medical technology industries and their related businesses. Cain Brothers has one of the largest teams dedicated to the healthcare industry on Wall Street, with offices in New York, Chicago, Indianapolis, Houston and San Francisco. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, represent the Debtors in their restructuring efforts. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) SATCON TECH: Recurring Losses & Deficit Raise Going Concern Doubt ---------------------------------------------------------------- SatCon Technology Corporation(C) (Nasdaq NM: SATC), reported its financial results for its fiscal 2005 fourth quarter and year-end of Sept. 30, 2005. "This past year we have put in place aggressive measures to manage our cash usage. As a result, our cash usage from operations in the last two quarters was reduced to approximately $1.5 million per quarter. Our plans in 2006 are to reduce our cash usage from the 2005 rates. We believe that our current cash and availability will sustain our operations through our fiscal 2007. In the past year we focused on the strategy of building shareholder value over both the near and long term," said David Eisenhaure, SatCon's Chief Executive Officer. "That has led us to make some significant, and we believe positive, changes in management, business strategy, cost controls and near term objectives setting. We strengthened our management team with several additions. We have developed a strategic plan with both near and long-term objectives and focused our target markets on specific technologies and products involved in Alternative Energy, Hybrid-Electric Vehicles, Grid Support, High Reliability Microelectronics and Advanced Power Technology." "We have also put into place disciplines, milestones and metrics for measuring success on which we will report in 2006. These milestones include the following; the accomplishment of which we believe will lead to improved revenues. -- Q1 Focus on SatCon core business by selling the Ling Shaker product line. Done. -- Q2 Qualify a 500 kw solar photo-voltaic power control unit product for the California Energy Commission listing. -- Q2 Secure development projects for the U.S. Army's Future Combat System applications. -- Q2 Book orders for production quantities of HEV motors and converters. -- Q3 Book an order for a megawatt stationary fuel cell power control unit. -- Q3 Introduce a new design for a solar photo-voltaic power control unit in the power range of 100 kw for the European photo-voltaic market. -- Q3 Introduce for 2006 delivery a high reliability standard product line of 1 Amp to 5 Amp Class K Low Drop Out Voltage Regulators used in power supplies for space flight and satellite applications. -- Q4 Develop new high-temperature packaging technology for Silicon Carbide power devices. -- Q4 Introduce the PowerPac line of industry leading 15W to 30W non-isolated DC to DC converters for the emerging high reliability distributed power markets. The Company's revenue for fiscal year 2005 was $36 million, an increase of $1.8 million over 2004. This year's revenue included the recognition of the EDO contract of $1.5 million, however it excluded the recognition of the Rotary Uninterruptible Power Supply for the National Institute for Standards and Technology, which was a system we shipped in third quarter, and other revenue deferrals in the fourth quarter totaling approximately $1.8 million. The Company's Operating Loss was approximately $9.5 million, an increase of $5.4 million from 2004 primarily due to the following: -- Investments in product R&D in our Power Systems and Electronics divisions as they focused to deliver new products in our business strategy for alternative energy, hybrid electric vehicles and a new series of high-reliability microelectronic standard products. -- Continued investment in Operating and Sales infrastructure primarily in our Power Systems Division as we ramped up that business for future growth. -- One time increases in corporate costs such as legal, readiness for compliance to Sarbanes-Oxley, accounting and tax issues and other expenses. -- Write down of certain long-lived assets, primarily leasehold improvements in our Power Systems division. -- Increases in material cost and direct labor primarily in Power Systems due to product mix and timing. * * * Going Concern Doubt Satcon's financial statements for its fiscal year ended Sept. 30, 2005, contain an audit report from Grant Thornton LLP. That audit report stated that for the fiscal year ended Sept. 30, 2005, Satcon has an accumulated deficit of $137.9 million, a net loss of $10.2 million and used $7.9 million in its operating activities. Satcon's recurring losses, deficits and a line of credit agreement containing certain restrictive covenants, which expires on Jan. 30, 2006, raises substantial doubt about its ability to continue as a going concern. SatCon Technology Corporation -- http://www.satcon.com/-- designs and manufactures enabling technologies and products for electrical power conversion and control for high-performance, high-efficiency applications in large, growth markets such as alternative energy, hybrid electric vehicles, distributed power generation, power quality, semiconductor fabrication capital equipment, industrial motors and drives, and high reliability defense electronics. As of Sept. 30, 2005, Satcon declared total assets of $27,731,704 and total liabilities of $12,129,448. SCOTTISH RE: Completes Public Offering of 6,250,000 Common Shares ----------------------------------------------------------------- Scottish Re Group Limited (NYSE:SCT) closed the previously announced public offering of its ordinary shares. The Company offered 6,250,000 newly issued ordinary shares at $24.00 per share. In addition, approximately 3,150,000 ordinary shares were borrowed and offered in connection with forward sale agreements. The Company has also granted the underwriters a 30-day option to purchase up to an additional 1,410,000 ordinary shares at the public offering price less the underwriting discount, to cover over-allotments. Bear, Stearns & Co. Inc., Lehman Brothers Inc., Banc of America Securities LLC, Goldman, Sachs & Co., Wachovia Capital Markets, LLC, A.G. Edwards & Sons, Inc., Fox-Pitt, Kelton Incorporated, Keefe, Bruyette & Woods, Inc. and Oppenheimer & Co. Inc. underwrote the offering. Bear, Stearns & Co. Inc. and Lehman Brothers Inc. were joint book running managers for the offering. The offering was made under the Company's existing shelf registration statement filed with the Securities and Exchange Commission. In connection with the offering, the Company entered into forward sale agreements with affiliates of Bear, Stearns & Co. Inc. and Lehman Brothers Inc. and the forward purchasers borrowed and sold an aggregate of approximately 3,150,000 ordinary shares as their initial hedge of the forward sale agreements. Pursuant to the forward sale agreements, the forward purchasers agree to pay the Company an aggregate of approximately $75 million in approximately nine months and an aggregate of approximately $75 million in approximately twelve months, subject to the Company's right to receive a portion of such payment prior to the settlement dates. In exchange, on each of such dates the Company will deliver to the forward purchasers a variable number of ordinary shares based on the average market price of the ordinary shares, subject to a floor price of $22.80 and a cap price of $28.80. The Company also has the right to net share settle or cash settle the forward sale agreements. The Company expects to use the net proceeds from the sale of its shares, and the subsequent sale of shares under the forward sale agreements for general corporate purposes, which may include investments in or advances to subsidiaries, possible acquisitions, working capital and other corporate purposes. Scottish Re Group Limited -- http://www.scottishre.com-- is a global life reinsurance specialist and issuer of customized life- insurance based wealth management products for high net worth individuals and families. Scottish Re Group Limited has operating units in Bermuda, the Cayman Islands, Guernsey, Ireland, Singapore, the United Kingdom and the United States. Its operating subsidiaries include Scottish Annuity & Life Insurance Company Ltd. and Scottish Re (U.S.), Inc. which are rated A- by A.M. Best, A by Fitch Ratings, A3 by Moody's and A- by Standard & Poor's, Scottish Re Limited, which is rated A- by A.M. Best, A by Fitch Ratings and A- by Standard & Poor's and Scottish Re Life Corporation which is rated A-by A.M. Best. * * * As reported in the Troubled Company Reporter on June 29, 2005, Standard & Poor's Ratings Services assigned its 'BB-' preferred stock rating to Scottish Re Group Ltd.'s (NYSE:SCT) (Rated by S&P at BBB-/Stable/--) proposed $125 million noncumulative perpetual preferred stock. SKILLED HEALTHCARE: Acquired by Onex Corp. for $745 Million ----------------------------------------------------------- Onex Corporation (TSX:OCX.SV) completed the previously announced acquisition of Skilled Healthcare Group, Inc., in a transaction valued at approximately $745 million on Dec. 27, 2005. Skilled Healthcare's subsidiaries, operating a total of 69 skilled nursing and assisted living facilities in California, Texas, Kansas and Nevada, focus on treating elderly patients that require a high level of skilled nursing care and extensive rehabilitation therapy. The company's subsidiaries also provide rehabilitation therapy services in its affiliated facilities and for third parties. The company has recently established a growing subsidiary hospice care business. The equity investment of approximately $260 million was made through Onex Partners, Onex' $2.1 billion private equity fund, and includes a significant investment by Skilled Healthcare's senior management team. About Onex Onex Corporation -- http://www.onex.com/-- is a diversified company with annual consolidated revenues of approximately $16 billion and consolidated assets of approximately $15 billion. Onex is one of Canada's largest companies with global operations in service, manufacturing and technology industries. Its operating companies include Celestica Inc., Spirit AeroSystems, Inc., Emergency Medical Services Corporation, Skilled Healthcare Group, Inc., ClientLogic Corporation, Cineplex Entertainment Limited Partnership, J.L. French Automotive Castings, Inc., Res- Care, Inc., Cosmetic Essence, Inc., Center for Diagnostic Imaging, Inc. and Radian Communication Services Corporation. Onex controls and has a 25% equity interest in Onex Partners, its $2.1 billion private equity fund. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX.SV. About Skilled Healthcare Headquartered in Foothill Ranch, California, Skilled Healthcare Group, Inc. operates long-term care facilities and provides post- acute care and rehabilitation services. As of September 2005, the company operated 57 skilled nursing facilities and 12 stand-alone assisted living facilities in: * California, * Texas, * Kansas, and * Nevada. For the twelve months ended September 30, 2005, Skilled Healthcare recognized revenues of $411 million. * * * As reported in the Troubled Company Reporter on Nov. 23, 2005, Moody's assigned a (P)B1 rating to Skilled Healthcare Group, Inc.'s credit facilities, consisting of a $75 million revolver and a $260 million first lien term loan, and a (P)Caa1 rating to the proposed $200 million senior subordinated notes. These ratings, along with the corporate family rating of (P)B2, have been assigned on a provisional basis to the successor company. Moody's also assigned a speculative grade liquidity rating of SGL-2 to Skilled Healthcare. Concurrently, Moody's affirmed the ratings of the existing company, Skilled Healthcare Group, Inc. (Old). The ratings of Skilled Healthcare Group, Inc. (Old) will be withdrawn and the provisional ratings will be made final upon the closing of the transaction. The proceeds of the subordinated note offering along with $221 million of equity will be used to finance the acquisition of the company by Onex Corp. The credit facilities, as amended, will be assumed by the successor company, Skilled Healthcare. The existing second lien term loan will be repaid at the closing of the transaction. SOLECTRON CORP: Reports 2006 First Quarter Financial Results ------------------------------------------------------------ Solectron Corporation (NYSE:SLR), reported sales of $2.46 billion in the first quarter of fiscal 2006, an increase of 2.4 percent over fourth quarter revenues of $2.40 billion. Sales in the first quarter of fiscal 2005 were $2.69 billion. The company reported a GAAP profit after tax from continuing operations in the first quarter of $20.2 million, or two cents per share, compared with GAAP profit after tax from continuing operations of $11.8 million, or one cent per share, in the fourth quarter of fiscal 2005. GAAP profit after tax from continuing operations in the first quarter of fiscal 2005 was $47.5 million, or 5 cents per share. Non-GAAP profit after tax for the first quarter was $28.1 million, or $0.03 per share, compared to non-GAAP profit after tax of $41.4 million, or $0.04 per share, for the fourth quarter of fiscal 2005, and non-GAAP profit after tax of $51.4 million, or $0.05 per share in the first quarter of fiscal 2005. Non-GAAP financial results do not include restructuring costs, impairment charges, amortization of intangibles, stock based compensation expenses, or other infrequent or unusual items. The financial results of prior periods have been adjusted to reflect the impact of stock compensation charges and amortization of intangibles. "We are pleased to deliver sequential revenue growth in the first quarter," said Mike Cannon, president and chief executive officer, Solectron. "We are continuing to make investments to expand our global capabilities and to position Solectron for continued revenue growth in the second half of this year." First Quarter Highlights: Improved Asset Velocity Metrics The company made further improvements in working capital during the quarter. Days sales outstanding improved to 45 days and inventory turns in the quarter were eight. The company's cash conversion cycle improved to 37 days. Company Invests to Expand Global Capabilities In the first quarter, Solectron opened new design engineering facilities in Guadalajara, Mexico, and Timisoara, Romania, and expanded its existing design capabilities in Singapore and Shanghai, China. In featuring design services in conjunction with the Solectron Production System(TM), Solectron is expanding its competitive offerings to help customers accelerate time-to-market with lower costs, improved quality and increased flexibility. The Guadalajara site was also recently expanded to add an Enclosure Center, adding this critical vertical integration capability to the Guadalajara campus. The Company also recently announced the opening of a medical manufacturing Center of Excellence in Singapore, to provide medical device manufacturers access to a lower-cost manufacturing region. Stock Repurchase Program On November 1, 2005, Solectron announced that the company has successfully completed the $250 million stock repurchase program commenced in July 2005. Under this program, the company repurchased 63.6 million shares of its common stock. On Nov. 1, Solectron announced that its Board of Directors authorized a new stock repurchase program, to commence in the second quarter, under which up to $250 million of the company's outstanding common stock may be repurchased over the next 12 months. Second Quarter 2006 Guidance Fiscal second quarter guidance is for sales of $2.3 billion to $2.5 billion, and for non-GAAP EPS from continuing operations in a range from 2 cents to 4 cents, on a fully diluted basis. Non-GAAP Information In addition to disclosing results determined in accordance with generally accepted accounting principles -- GAAP -- Solectron also discloses non-GAAP results of operations that exclude certain items. By disclosing this non-GAAP information, management intends to provide investors with additional information to further analyze the company's performance, core results and underlying trends. Management utilizes a measure of net income and earnings per share on a non-GAAP basis that excludes certain charges to better assess operating performance. Earnings guidance is provided only on a non-GAAP basis due to the inherent difficulty in forecasting such charges. Consistent with industry practice, management has historically applied these non-GAAP measures when discussing earnings or earnings guidance and intends to continue doing so. Non-GAAP information is not determined using GAAP; therefore, the information is not necessarily comparable to other companies and should not be used to compare the company's performance over different periods. Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as measures of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made. Solectron Corporation -- http://www.solectron.com/-- provides a full range of worldwide manufacturing and integrated supply chain services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, product manufacturing, and product warranty and end-of-life support. The company is based in Milpitas, California, and had sales from continuing operations of $11.64 billion in fiscal 2004. * * * As previously reported in the Troubled Company Reporter on December 13, 2005, Fitch Ratings affirmed Solectron Corporation's debt ratings: -- issuer default rating and senior unsecured debt at 'BB-'; -- senior secured bank facility at 'BB+'; and -- subordinated debt has been upgraded to 'B+' from 'B'. Fitch says the Rating Outlook is Stable. Approximately $700 million of debt is affected by Fitch's action. STUTTGART COLLISION: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Stuttgart Collision, Inc. aka Stutgart Collision, Inc. 3050 Southwest 38th Court Miami, Florida 33146 Bankruptcy Case No.: 05-60306 Chapter 11 Petition Date: December 27, 2005 Court: Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Octavio E. Mestre, Esq. Law Offices of Octavio Mestre 7385 S.W. 87 Avenue, Suite 100 Miami, Florida 33173 Tel: (305) 443-7020 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. TELOGY INC: List of 20 Largest Unsecured Creditors -------------------------------------------------- Telogy Inc., submitted a list of its 20 Largest Unsecured Creditors to the U.S. Bankruptcy Court for the Northern District of California: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Prudential Capital Group Sub-Debt Holder $51,855,555 180 North Stetson Street, Suite 5600 Chicago, IL 60601 Massachusetts Mutual Life Sub-Debt Holder $14,284,473 1500 Main Street, Suite 2800 Springfield, MA 01115 Hewlett Packard Sub-Debt Holder $9,000,000 420 Mountain Avenue Murray Hill, NJ 07974 B IV Capital Partner/ Revolver Lender/ Unknown DDJ Capital Senior Noteholder 141 Linden Street, Suite 4 Wellesley, MA 02482 DK Acquisition Partners Revolver Lender/ Unknown 885 Third Avenue, Suite 3300 Senior Note Holder New York, NY 10022 Sunrise Partners/ Revolver Lender Unknown Buckeye Capital 230 Park Avenue, Suite 1540 New York, NY 10169 Prudential Capital Group Senior Note Holder Unknown 180 North Stetson Street, Suite 5600, Chicago, IL 60601 Prudential Capital Group Senior Note Holder Unknown 180 North Stetson Street, Suite 5600, Chicago, IL 60601 Deutsche Bank Trust Company Revolver Lender Unknown Americas DB Services New Jersey, Inc. 60 Wall Street, 2nd Floor New York, NY 10005 Advantus Capital Management, Senior Note Holder Unknown Inc. 400 Robert Street North, Suite 1000 St. Paul, MN 55101 Great West Life Insurance Senior Note Holder Unknown 8515 East Orchard Road Greenwood Village, CO 80111 TRS Callisto LLC Senior Note Holder Unknown c/o DB Services New Jersey, Inc. 90 Hudson Street, MS JCY05-0511 Jersey City, NJ 7302 Allstate Insurance Company Senior Note Holder Unknown 3075 Sanders Road, Suite G5D Northbrook, IL 60062-7127 Mutual of Omaha Companies Senior Note Holder Unknown Mutual of Omaha Plaza Omaha, NE 68175 Guggenheim Partners Senior Note Holder Unknown 135 East 57th St., 9th Floor New York, NY 10022 Bank of the West Pool Holder Unknown 1450 Treat Boulevard NC-TRE-03-A Walnut Creek, CA 94957 Equipment Blocker Corp. Pool Holder Unknown c/o Goodwin Procter LLP One Exchange Place Boston, MA 2109 National Loan Investors, LP Pool Holder Unknown 3030 Northwest Expressway #1313 Oklahoma City, OK 73112 Siemens Financial Services, Lease broker Unknown 200 Somerset Corporate Blvd., Bridgewater, NJ 08807-2840 Trinity Capital Group Lease broker Unknown 473 Sansome Street San Francisco, CA 94411 Headquartered in Union City, California, Telogy, Inc. -- http://www.tecentral.com/-- rents, sells, and leases electronic test equipment including oscilloscopes, spectrum, network, logic analyzers, power meters, OTDRs, and optical, from manufacturers like Tektronix, Rohde & Schwarz. Telogy, Inc. and its debtor- affiliate, e-Cycle, LLC, filed for chapter 11 protection on Nov. 29, 2005 (Bankr. N.D. Calif. Case No. 05-49371). Ramon M. Naguiat, Esq., at Pachulski, Stang, Ziehl, Young Jones & Weintraub P.C. represents the Debtor in its restructurng efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. TRINSIC: $1-Mil. Equity Infusion Settles Tax Dispute with New York ------------------------------------------------------------------ Trinsic, Inc. (OTCBB: TRIN), disclosed it has borrowed $1,000,000 from The 1818 Fund III, L.P., its largest shareholder, in order to take advantage of a tax settlement with the State of New York. The Fund is one of a family of funds managed by Brown Brothers Harriman & Company. To secure the loan, Trinsic delivered to the Fund a promissory note bearing interest at 12% annually and due on demand. The promissory note requires that, upon request by the Fund, Trinsic must provide to the Fund a security interest in any and all of its assets, except those assets subject to its Receivables Sales Agreement with Thermo Credit LLP. According to the Company, it has provided the Fund a mortgage on real estate in Atmore, Alabama, where it has an operations facility. The settlement with the State of New York resolves certain corporate and sales tax disputes from the years 1999 through 2001. Under the settlement, Trinsic has agreed to pay approximately $2.8 million, with a down payment of $750,000 and the balance paid in 24 equal monthly installments. Trinsic Inc. -- http://www.trinsic.com-- offers consumers and businesses traditional and IP telephony services. Trinsic's products include proprietary services such as Web-accessible, voice-activated calling and messaging features that are designed to meet customers' communications needs intelligently and intuitively. Trinsic is a member of the Cisco Powered Network Program and makes its services available on a wholesale basis to other communications and utility companies, including Sprint. Trinsic, Inc., changed its name from Z-Tel Technologies, Inc. on January 3, 2005. At Sept. 30, 2005, Trinsic, Inc.'s balance sheet showed a $1,395,000 stockholders' deficit compared to a $21,082,000 equity deficit at Dec. 31, 2004. UAL CORP: Inks Pacts Resolving Claims by Transamerica, et al. ------------------------------------------------------------- In connection with their fleet restructuring program, UAL Corporation and its debtor-affiliates entered into various agreements relating to individual aircraft, settling the claims of financiers in connection with the prepetition financing arrangements and the postpetition restructurings. In several instances, however, the proofs of claim filed against the Debtors were not amended to reflect the settlements, or the claims the financiers retained, subsequent to the restructuring. In three separate stipulations, the Debtors resolved and reconciled several claims separately filed by Transamerica Aviation LLC, U.S. Bank National Association, and Wells Fargo Bank Northwest, N.A., to match the applicable restructurings and claim settlements. The Stipulations The Transamerica Stipulation settles Transamerica's Claim No. 39309 relating to Aircraft Nos. N341UA and N342UA. It provides that Transamerica will be allowed to assert general unsecured claims against the Debtors bankruptcy estate as part of the N341UA and N342UA restructuring transactions. The U.S. Bank and Wells Fargo Stipulation, on the other hand, relates to aircraft: -- N375UA, -- N376UA, -- N377UA, -- N378UA, -- N782UA, -- N772UA, -- N665UA, -- N781UA, -- N525UA, -- N825UA, -- N819UA, -- N826UA, and -- N820UA U.S. Bank and Wells Fargo served either as Indenture Trustee or Security Trustee in the financing transactions for the 13 aircraft. On account of certain rights, remedies, and liabilities under the Financing transactions: (a) U.S. Bank filed general unsecured claims against the Debtors: Claim No. Claim Amount Tail No. --------- ------------ -------- 33718 $23,433,454 N375UA 33761 23,422,373 N376UA 33763 23,422,373 N378UA 33764 23,422,373 N377UA (b) Wells Fargo filed claims asserting secured status against the Debtors: Claim No. Claim Amount Tail No. --------- ------------ -------- 31843 $51,812,645 N782UA 40348 40,135,020 N772UA 40349 52,934,215 N665UA 40364 46,248,182 N781UA 36212 33,058,052 N525UA 33660 24,099,526 N825UA 33661 24,675,370 N819UA 33662 24,174,960 N826UA 33663 22,679,455 N820UA The U.S. Bank/Wells Fargo Stipulation provides that as part of the restructuring transactions for the 13 aircraft: * U.S. Bank will be allowed to assert each of its Claims as general unsecured claims for $5,226,946 against the Debtors' bankruptcy estate; and * Wells Fargo will be allowed to assert general unsecured claims against the Debtors' bankruptcy estate in these reduced amounts: Claim No. Claim Amount Tail No. --------- ------------ -------- 31843 $100,00 N782UA 40348 100,000 N772UA 40349 7,571,536 N665UA 40364 100,000 N781UA 36212 18,272,719 N525UA 33660 35,000 N825UA 33661 35,000 N819UA 33662 35,000 N826UA 33663 35,000 N820UA In a separate stipulation, Claim No. 43759 filed by U.S. Bank for $11,913,963 relating to Aircraft No. N318UA, is reduced and allowed at $10,566,648 as part of the restructuring transactions. The stipulation was executed separately because of timing issues in obtaining the applicable financier's consent to entry into the stipulation. The Debtors ask the U.S. Bankruptcy Court for the Northern District of Illinois to approve the three stipulations in their entirety. Even though the Debtors believe that they already have received full authority from the Court to consummate the settlements through the stipulations, the Debtors are seeking the Court's approval in an abundance of caution to ensure that the claims against their estate properly reflect the settlements and restructuring transactions effectuated during the bankruptcy case. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service, Inc., 215/945-7000) WORLDCOM INC: Asks Court to Disallow Rayonda Dye's Claim -------------------------------------------------------- WorldCom, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to disallow Rayonda Dye's Claim No. 15531. Mark A. Shaiken, Esq., at Stinson Morrison Hecker, LLP, in Kansas City, Missouri, relates that on November 23, 1998, the Debtors hired Ms. Dye as a Provisioner I, a non-sales position. Ms. Dye subsequently transferred to Skytel Corporation in Rolling Meadows, Illinois, as a sales associate with an 8% pay increase. On January 31, 2000, Ms. Dye filed with the U.S. Equal Employment Opportunity Commission a charge of discrimination against the Debtors, contending that: (a) the Debtors promised her a six month starting pay adjustment but did not receive it; and (b) she was paid less than white employees performing the same job. The EEOC issued a "no cause" finding on Ms. Dye's Charge of Discrimination. In April 2001, the Debtors started considering Ms. Dye's transfer to Chicago, Illinois, as a Wireless Sales Representative, Mr. Shaiken discloses. On April 23, 2001, Ms. Dye voluntarily terminated her employment with the Debtors. Subsequently, Ms. Dye filed Claim No. 15531 in the Debtors' Chapter 11 cases, pursuing her allegations in the Charge of Discrimination. Ms. Dye also asserted an allegation of discrimination in transfers or promotions. Ms. Dye contended that the Debtors discriminated against her when she attempted to transfer to a new position, by telling her she could not do so because she had not been in her current position for one year. Ms. Dye complained that it was discriminatory because a white co-worker transferred into her department without having met the requirement. "[Ms. Dye's] assertion is insufficient to survive a motion for summary judgment because she has not identified any specific position to which she allegedly sought to transfer or be promoted, and there is no evidence that such a position was available or that [she] was qualified for it," Mr. Shaiken argues. Mr. Shaiken points out that Ms. Dye never raised the issue of discriminatory transfer or promotion in her Charge of Discrimination, nor did she file any subsequent Charge Of Discrimination asserting the same. Mr. Shaiken explains that an employee raising a claim of discrimination under Title VII of the Civil Rights Act of 1964 must file a charge of discrimination with the EEOC before commencing a lawsuit against her employer. Accordingly, Ms. Dye failed to exhaust the required administrative remedies. Hence, she is barred from recovering under Title VII for any claim based on allegedly discriminatory decisions regarding promotion or transfer. Moreover, there is no evidence that Ms. Dye filed suit against the Debtors within the required time limit, or at any other time, Mr. Shaiken maintains. Thus, Ms. Dye is barred from recovering under Title VII for any of the claims of race or sex discrimination she first raised in her Charge of Discrimination. Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service, Inc., 215/945-7000) WORLDCOM INC: DACA Wants Payment of 42 Assigned Claims ------------------------------------------------------ Debt Acquisition Company of America holds 42 claims acquired by assignment from various creditors of WorldCom, Inc., and its debtor-affiliates' bankruptcy case. The DACA Claims are Class 4 Convenience Claims or Executory Cure Claims by definition, Dean T. Kirby, Jr., Esq., at Kirby & McGuinn, in San Diego, California, tells the U.S. Bankruptcy Court for the Southern District of New York. A complete list of the 42 DACA Claims is available for free at: http://bankrupt.com/misc/worldcom_DACAClaims.pdf By this motion, DACA asks the Court to compel the Debtors to pay its Claims. Under the confirmed Plan of Reorganization, Class 4 Convenience Claimholders are to receive the lesser of: (a) 40% of the Allowed amount of the Convenience Claim; or (b) $16,000. Holders of Allowed Claims greater than $40,000 were able to elect their Claim into the Class, Mr. Kirby notes. The Plan also provides that Executory Cure Claims were required to be paid in full upon the assumption of the executory contracts to which they were related, Mr. Kirby cites. DACA first received distributions to certain of its claims in June 2004. Since then, additional checks have been received at random intervals. However, as of December 5, 2005, DACA has not received distributions on 42 of its assigned claims, Mr. Kirby avers. DACA has attempted to resolve various issues relating to unpaid claims with the Debtors. As a result, DACA has learned that the Debtors mistakenly made distributions to the original creditors or incorrect parties and did not pay DACA. Mr. Kirby contends that the Debtors have defaulted under the Plan. "Although these errors have been called to the attention of counsel for the Debtors, DACA has not received the payments to which it is entitled," Mr. Kirby remarks. DACA is entitled to payment because the Debtors had both actual and constructive notice that DACA was the valid assignee, Mr. Kirby argues. "If the Debtors paid the wrong party, then they should bear the risk of loss." Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service, Inc., 215/945-7000) YAKIMA COMPANY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Lead Debtor: Yakima Company, Inc. P.O. Box 311 Woodinville, Washington 98072 Bankruptcy Case No.: 05-02364 Debtor affiliate filing separate chapter 11 petitions: Entity Case No. ------ -------- Yakima Compost Company 05-02365 Chapter 11 Petition Date: December 30, 2005 Court: District of Arizona (Yuma) Judge: James M. Marlar Debtors' Counsel: Joseph E. Cotterman, Esq. Gallagher & Kennedy, P.A. 2575 East Camelback Road Phoenix, Arizona 85016-9225 Tel: (602) 530-8000 Fax: (602) 530-8500 Estimated Assets Estimated Debts ---------------- --------------- Yakima Company, Inc. $1 Million to $1 Million to $10 Million $10 Million Yakima Compost Company $1 Million to $1 Million to $10 Million $10 Million The Debtors did not file their lists of 20 largest unsecured creditors. * Burns & Levinson and Perkins Smith & Cohen Join Forces -------------------------------------------------------- Burns & Levinson LLP and Perkins Smith & Cohen LLP reported that the attorneys of Perkins Smith & Cohen, including members of its "Sci-Tech" practice, are joining Burns & Levinson. The combination of Burns & Levinson's strong corporate, finance and other business law specialties with Perkins Smith's thriving Science and Technology Group provides Burns & Levinson with significant high-tech and life sciences expertise. With the addition of the Perkins Smith & Cohen attorneys, Burns & Levinson will grow from 100 to nearly 140 lawyers. Founded in 1960, Burns & Levinson specializes in business law, finance, business litigation, real estate, bankruptcy, intellectual property and private client representation. Burns & Levinson has additional offices in Providence, R.I., and Washington, D.C. Perkins Smith & Cohen, founded in 1975, has a renowned Science & Technology practice -- dubbed "Sci-Tech" -- with a strong emphasis in intellectual property law specializing in the representation of scientists, entrepreneurs, emerging companies, universities and public and privately held high- technology and life sciences companies. "Unlike other recent regional deals matching Boston law firms with firms from far-flung areas, this marriage is uniquely Boston, combining the best business law attributes of Burns & Levinson with the unrivaled technology expertise of Perkins Smith & Cohen," said David P. Rosenblatt, managing partner at Burns & Levinson. "Boston is a leading center for life sciences, colleges and universities, and we saw the strength in Perkins Smith's Sci-Tech practice and how it would complement our corporate, finance and venture capital practices. Having Perkins Smith & Cohen join us will create a host of opportunities and synergies for all of us." Rosenblatt emphasized the importance of Perkins Smith & Cohen's intellectual property practice, noting that Jerry Cohen, one of Perkins Smith & Cohen's founding partners, is a highly respected intellectual property attorney. "As a firm focused on New England- based clients, as well as national and international clients, it is critical that we have sufficient depth and breadth in the intellectual property arena," he added. "Perkins Smith & Cohen's longstanding reputation for excellence in this area provides us with the opportunity to better serve these businesses and open the doors for us to market ourselves more strongly to the high-tech and life sciences communities." Robert D. Friedman, managing partner at Perkins Smith & Cohen, also lauded the combined firm. "We're thrilled about the prospect of combining our Science & Technology group with Burns & Levinson's impressive corporate and business law acumen," said Friedman. "The combined firm will also have international expertise in representing business interests in Canada, China and Israel. In addition, Perkins Smith clients will benefit from the added depth offered by Burns & Levinson's litigation, real estate, and trusts and estates practices." Friedman described the partnership with Burns & Levinson as a significant growth opportunity. "The range of specialties that they bring to the table will enable us to provide full service to our clients and expand and develop new client relationships," he said. Perkins Smith & Cohen LLP is expected to join Burns & Levinson LLP in early January 2006. About the Firms Burns & Levinson, with 100 attorneys in five offices in New England, as well as one in Washington, D.C., is a full-service Boston-based business law firm. The firm has grown steadily and strategically throughout the years and has become a premier New England-based business law firm with regional, national and international clientele. The firm has expertise in corporate law, finance, venture capital, private equity, tax, bankruptcy, lending and leasing, real estate, intellectual property and business litigation. Burns & Levinson also has a large private clients group that services clients in the areas of estate planning, probate and trust litigation, divorce and other family law issues. The firm will also open an office in Shanghai, China in early 2006 to service its U.S. and Chinese clients. For more information, visit Burns & Levinson at http://www.burnslev.com/ Perkins Smith & Cohen, with 40 attorneys, is a full-service Boston-based law firm with a focus on the Science and Technology sector. Its Patent and Intellectual Property practice is widely known with significant representation of scientists, inventors and entrepreneurs in both established and emerging technology and life sciences companies. The firm also represents numerous universities throughout the country in patent, licensing and technology matters. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- January 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION NJTMA Holiday Party Iberia Tavern & Restaurant, Newark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ January 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Forum Mid-day Club, Chicago, Illinois Contact: 815-469-2935 or http://www.turnaround.org/ January 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, Florida Contact: 561-882-1331 or http://www.turnaround.org/ January 24, 2006 TURNAROUND MANAGEMENT ASSOCIATION Hedge Fund Panel Troy Marriott, Detroit, Michigan Contact: 248-593-4810 or http://www.turnaround.org/ January 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION PowerPlay - TMA Night at the Thrashers Philips Arena, Atlanta, Georgia Contact: 678-795-8103 or http://www.turnaround.org/ January 26, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS Looking Back at the First 90 Days Cornell Club, New York, New York Contact: http://www.airacira.org/ January 26-28, 2006 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ January 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Retail Roundtable Discussion Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ February 2, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ February 9-10, 2006 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Eden Roc, Miami, Florida Contact: 1-703-739-0800; http://www.abiworld.org/ February 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ February 27-28, 2006 PRACTISING LAW INSTITUTE 8th Annual Real Estate Tax Forum New York, New York Contact: http://www.pli.edu/ February 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ March 2-3, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS Legal and Financial Perspectives on Business Valuations & Restructuring (VALCON) Four Seasons Hotel, Las Vegas, Nevada Contact: http://www.airacira.org/ March 2-5, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES 2006 NABT Spring Seminar Sheraton Crescent Hotel, Phoenix, Arizona Contact: http://www.pli.edu/ March 4-6, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute Marriott, Park City, Utah Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ March 9, 2006 AMERICAN BANKRUPTCY INSTITUTE Nuts & Bolts for Young Practitioners Century Plaza, Los Angeles, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 9, 2006 TURNAROUND MANAGEMENT ASSOCIATION UTS Fundamentals of Turnaround Management for SMEs Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ March 10, 2006 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Century Plaza, Los Angeles, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner South Florida Contact: 561-882-1331 or http://www.turnaround.org/ March 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ March 15-17, 2006 STRATEGIC RESEARCH INSTITUTE Mid-Market March Madness: Capitalizing on M&A, Buyouts & Turnaround Opportunities Omni Hotel at CNN Center, Atlanta, GA Contact: 925-825-8738 or http://www.srinstitute.com/ March 22-25, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Desert Ridge, Phoenix, Arizona Contact: http://www.turnaround.org/ March 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ March 30-31, 2006 PRACTISING LAW INSTITUTE Commercial Real Estate Financing: What Borrowers & Lenders Need to Know Now Chicago, Illinois Contact: http://www.pli.edu/ March 30 - April 1, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 1-4, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute The Flamingo, Las Vegas, Nevada Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ April 5-8, 2006 MEALEYS PUBLICATIONS Insurance Insolvency and Reinsurance Roundtable Fairmont Scottsdale Princess, Scottsdale, Arizona Contact: http://www.mealeys.com/ April 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ April 6-7, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES The Seventh Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures, and Restructurings The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ April 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION The Great Debate ANZ Bank, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ April 18-22, 2006 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting JW Marriott, Washington, D.C. Contact: 1-703-739-0800; http://www.abiworld.org/ April 19, 2006 PRACTISING LAW INSTITUTE Residential Real Estate Contracts & Closings New York, New York Contact: http://www.pli.edu/ April 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, FL Contact: 561-882-1331 or http://www.turnaround.org/ May 4-6, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Fundamentals of Bankruptcy Law Chicago, Illinois Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ May 5, 2006 AMERICAN BANKRUPTCY INSTITUTE Nuts & Bolts for Young Practitioners Alexander Hamilton Custom House, New York, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 8, 2006 AMERICAN BANKRUPTCY INSTITUTE NYC Bankruptcy Conference Millennium Broadway, New York, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ May 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, FL Contact: 561-882-1331 or http://www.turnaround.org/ May 18-19, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Third Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel, London, UK Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ May 22, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Annual Golf Outing Indian Hills Golf Club, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ May 30, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ June 1, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ June 1-2, 2006 TURNAROUND MANAGEMENT ASSOCIATION Southeast Regional Conference Amelia Island, Florida Contact: 410-347-7391 or http://www.turnaround.org/ June 7-10, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 22nd Annual Bankruptcy & Restructuring Conference Grand Hyatt, Seattle, Washington Contact: http://www.airacira.org/ June 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Signature Luncheon, Charity Event Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ June 15-18, 2006 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ June 21-23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Global Educational Symposium Hyatt Regency, Chicago, Illinois Contact: http://www.turnaround.org/ June 22-23, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ June 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ June 29 - July 2, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ July 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ July 13-16, 2006 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Newport Marriott, Newport, Rhode Island Contact: 1-703-739-0800; http://www.abiworld.org/ July 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner South Florida Contact: 561-882-1331 or http://www.turnaround.org/ July 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ July 26-29, 2006 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz Carlton Amelia Island, Amelia Island, Florida Contact: 1-703-739-0800; http://www.abiworld.org/ August 3, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ August 3-5, 2006 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ August 9, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ August 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 7-9, 2006 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Wynn Las Vegas, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ September 17-24, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Optional Alaska Cruise Seattle, Washington Contact: 800-929-3598 or http://www.nabt.com/ September 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ October 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 11-14, 2006 TURNAROUND MANAGEMENT ASSOCIATION 2006 Annual Conference Milleridge Cottage, Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/ October 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 1-4, 2006 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges San Francisco, California Contact: http://www.ncbj.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, FL Contact: 561-882-1331 or http://www.turnaround.org/ November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function GE Commercial Finance, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800; http://www.abiworld.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ March 27-31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spring Conference Four Seasons Las Colinas, Dallas, Texas Contact: http://www.turnaround.org/ March 29-31, 2007 ALI-ABA Chapter 11 Business Reorganizations Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, RI Contact: 1-703-739-0800; http://www.abiworld.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/ October 22-25, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott, New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry A. Soriano-Baaclo, Marjorie C. Sabijon, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Junior M. Pinili, Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. 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 $725 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 ***