/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060117.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, January 17, 2006, Vol. 10, No. 14 Headlines ALLIED HOLDINGS: Toyota to Extend Delivery Contract to March 2007 ANCHOR GLASS: Alvarez & Marsal Okayed as Committee's Advisor ANCHOR GLASS: Needs More Time to Decide on Temple-Inland Contract ANCHOR GLASS: Says No to OCI's Move to Terminate Supply Agreement AMERICAN MEDIA: Appoints John J. Miller as President & COO ARMSTRONG WORLD: Discloses Changes to U.S. Defined Pension Plan ATA AIRLINES: Wants Wilmington Trust Restated Term Sheet Approved ATA AIRLINES: Court Amends Wilmington Participation Claim Amount BANC OF AMERICA: Fitch Upgrades Low-B Ratings on 12 Cert. Classes BELVEDERE INSURANCE: Claim Forms Must Be Filed By Feb. 20 BELVEDERE INSURANCE: U.S. Court Recognizes Bermudan Scheme BOWNE & CO: Buys Vestcom Mktg. & Business Comms. Unit for $30 Mil. CAPITAL AUTOMOTIVE: Launches Offer for 7-1/2% & 8% Preferred Units CARD CORP: Files List of 4 Largest Unsecured Creditors CARGO CONNECTION: Inks $2.35-MM Montgomery Equity Financing Pact CENTURY ALUMINUM: Michael Bless Replaces David Beckley as CFO CHURCH & DWIGHT: Gets Access to $400 Million Credit Facility COLLINS & AIKMAN: To Pay Heidel $259,876 as Adequate Protection COOPER-STANDARD: Moody's Downgrades Sr. Sub. Notes Ratings to Caa1 DELPHI CORP: Appaloosa's Motion to Appoint Equity Panel Draws Fire DELPHI CORP: Creditors Panel Balk at Deloitte & Touche Retention DELPHI CORP: U.S. Trustee Objects to Appointing a Fee Committee DX III: S&P Junks Rating on $150 Million Second-Lien Term Loan B EMMIS COMMS: Reports Financial Performance for Third Quarter ENVIRONMENTAL ELEMENTS: ERISA Plan Termination Objections Due Now EPOCH INVESTMENTS: Files List of 8 Largest Unsecured Creditors ENXNET INC: Gets Approval to Trade on Berlin Stock Exchange ESCHELON OPERATING: Moody's Upgrades $92 Mil. Notes' Rating to B3 FIRST UNION: S&P Lowers Junk Ratings on Class M & N Certificates FLYI INC: Asks Court to Okay Refunds for Post-Shutdown Flights GMAC COMMERCIAL: S&P Puts Junk Rating on $13.3 Mil. Class Certs. GMAC MORTGAGE: Fitch Affirms Low-B Ratings on Six Cert. Classes GT BRANDS: Wants Until Feb. 6 to Decide on Three Unexpired Leases KAISER ALUMINUM: Expects Court to Confirm Plan Next Week KAISER ALUMINUM: Liquidation Plans Declared Effective December 22 LEGACY ESTATE: Files Schedules of Assets and Liabilities LEGACY ESTATE: Committee Taps Nightingale as Financial Advisor MAYTAG CORP: Moody's Maintains B2 Senior Unsecured Notes Ratings MEDMIRA INC: Completes Draw Down of Equity Line with Cornell METROPLEX FINISHING: Case Summary & 20 Largest Unsecured Creditors MORTGAGE ASSET: Fitch Affirms BB Ratings on Class BI-4 Certs. MRS. CUBBISON'S: Case Summary & 21 Largest Unsecured Creditors MUSICLAND HOLDING: Madacy Holds $1.3 Million Trade Receivables NORTHWEST AIRLINES: Citicorp Can Access Cash Collateral Account NORTHWEST AIRLINES: Court Sets Info Blocking Procedures for Panel NORTHWEST AIRLINES: Unions Balk at Proposed CBA Rejections PARADISE TAN: Posts $106,727 Net Loss in Period Ended Sept. 30 PHOENIX COLOR: Moody's Confirms $105 Million Notes' Junk Rating PORTUS ALTERNATIVE: AEGON Returns Referral Fees to Investors PORTUS ALTERNATIVE: Regulators to Augment Payment to Investors REFCO INC: Wants to Hire Goldin Associates as Crisis Managers REFCO INC: Ct. Denies US Trustee's Move to Appoint Ch. 11 Trustee REFCO INC: Refco LLC Wants Until April 24 to Decide on Contracts REFINED GLOBAL: Case Summary & 21 Largest Unsecured Creditors RESIDENTIAL ASSET: Fitch Downgrades Two Certificate Classes to B RF CUNNINGHAM: Wants Until March 27 to File Chapter 11 Plan SAINT VINCENTS: Cases Reassigned to Judge Adlai S. Hardin, Jr. SAINT VINCENTS: Wants Court to Set March 30 as Claims Bar Date SAINT VINCENTS: Agrees to Make $250,000 Payment to Sandra Strumpf SEQUOIA MORTGAGE: Fitch Affirms Low-B Ratings on 8 Cert. Classes SKIN NUVO: Inks Agreement Outlining Extent of Insurer's Liability TELOGY INC: Can Access Up to $7.5 Million in DIP Loans TERAYON COMMS: Form 10-Q Filing Delay Prompts Default Notice TFS ELECTRONIC: Panel Retains FTI Consulting as Financial Advisors TIDEL TECHNOLOGIES: NCR Buys ATM Assets for $10.44 Million TYCO INT'L: Splinters into Three Publicly Traded Companies TYCORP PIZZA: Files Schedules of Assets and Liabilities URBAN HOTELS: U.S. Trustee Appoints 4-Member Creditors' Committee URBAN HOTELS: Panel Wants to Hire Levene Neale as Bankr. Counsel VARIG S.A.: Deposits $6.7 Million as Payment to Aircraft Lessors VARIG S.A.: Nelson Tanure Withdraws Takeover Proposal VARIG S.A.: Brazilian Court Approves Restructuring Plan WEST INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors WESTLAKE CHEMICAL: Completes Issuance of $250M 6-5/8% Senior Notes YOUNG CHANG: Chapter 15 Petition Summary * Large Companies with Insolvent Balance Sheets ********* ALLIED HOLDINGS: Toyota to Extend Delivery Contract to March 2007 ----------------------------------------------------------------- Allied Holdings, Inc. (Pink Sheets: AHIZQ.PK) reported that its subsidiary, Allied Systems, Ltd., has reached an agreement in principle to renew its vehicle delivery agreement with Toyota Motor Sales USA for vehicles delivered in the United States. The agreement will extend the company's contract with Toyota in the United States through March 31, 2007. The Agreement provides that Allied will continue to provide vehicle delivery services for Toyota in the United States at locations which generated approximately 60% of the Company's 2005 revenues associated with the Toyota account. During the first quarter of 2006, Allied will cease performing vehicle delivery services at locations which generated approximately 32% of the Company's 2005 revenues associated with the Toyota account in the United States. The contract renewal also provides for an increase in the rates paid by Toyota to Allied beginning Feb. 1, 2006, and continuing through Mar. 31, 2007. In addition, the current fuel surcharge program and payment terms for services provided by Allied will remain in place through Mar. 31, 2007. The company does not anticipate that there will be a material impact to its operating income as a result of the renewed agreement, as it expects the positive impact of the price increase to substantially offset the adverse impact to the Company resulting from the loss of business. The contract renewal does not affect business handled by Allied for Toyota in Canada, which is covered by a separate agreement. The renewal remains subject to the execution of a definitive agreement between the parties and approval by the U.S. Bankruptcy Court for the Northern District of Georgia. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. ANCHOR GLASS: Alvarez & Marsal Okayed as Committee's Advisor ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida authorized the Official Committee of Unsecured Creditors appointed in Anchor Glass Container Corp.'s chapter 11 case to retain Alvarez & Marsal, LLC, as its as its financial advisor, nunc pro tunc to Oct. 6, 2005. Judge Paskay reserved ruling on the U.S. Trustee's Limited Objection with respect to the date as of which the application is to be approved and may consider the issue at the hearing of the firm's final fee applications. As previously reported, A&M will: (a) review and evaluate the current and prospective financial and operational condition of the Debtor, including but not limited to cash receipts and disbursement forecasts, short term and long term business plans and various plans of reorganization that maybe considered or pursued by the Debtor, review appraisals, DIP financing, plans and effort to sell assets, recapitalize or reorganize the Debtor; (b) assist the Committee and its counsel in evaluating and responding to various developments or motions during the course of the Debtor's Chapter 11 case, including providing expert testimony as may be required and acceptable to A&M; and (c) provide other services that may be required by the Committee and as may also be acceptable to A&M. Terry Hamilton, Managing Director with A&M, will be responsible for the overall engagement. A&M will be paid for its services at these hourly rates: Professional Hourly Rates ------------ ------------ Managing Director $550 Director $425 Associate $325 Analyst $275 Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Needs More Time to Decide on Temple-Inland Contract ----------------------------------------------------------------- Anchor Glass Container Corporation asks the U.S. Bankruptcy Court for the Middle District of Florida to extend the time within which it may decide to assume, assume and assign or reject the Supply Agreement with TIN, Inc., dba Temple-Inland, until confirmation of a plan of reorganization. As previously reported, the Debtor is party to a Paperboard Supply Agreement with Temple-Inland. Temple-Inland supplies the Debtor with paperboard packaging material at a very favorable pricing pursuant to the Agreement. Temple-Inland asserts that the Debtor failed to pay $2,100,964 for paperboard packaging. Temple-Inland had asked the Court to impose a deadline by which Anchor Glass must decide whether to assume or reject the Supply Agreement. Kathleen S. McLeroy, Esq., at Carlton Fields, P.A., in Tampa, Florida, informs the Court that the Debtor is currently analyzing its leases and contracts to determine which should be assumed or rejected. In light of the significant progress made in its Chapter 11 case, however, the Debtor has not yet completed its analysis. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Says No to OCI's Move to Terminate Supply Agreement ----------------------------------------------------------------- Hywel Leonard, Esq., at Carlton Fields, PA, in Tampa, Florida, tells the U.S. Bankruptcy Court for the Middle District of Florida that Anchor Glass Container Corporation should not be deprived of the opportunity to assume its contract with OCI Chemical Corp. As reported in the Troubled Company Reporter on Dec. 16, 2005, OCI asked the Court to lift the automatic stay to allow it to terminate its Sales Contract with the Debtor. OCI supplies approximately 65% of the Debtor's total soda ash requirements. The Sales Contract provides that if the Debtor is in default of the Sales Contract, OCI had the option to decline further performance of the Contract. Before the Petition Date, OCI says that the Debtor was severely delinquent in fulfilling its payment allegations under the Sales Contract. Debtor's Response "Beyond question, OCI is one of [Anchor Glass Corporation's] critical suppliers and it is not feasible or possible for [the Debtor] to just replace OCI as a significant supplier of soda ash," Mr. Leonard tells the Court. "Establishing a replacement supply arrangement would take a significant time period." On Aug. 9, 2005, OCI purported to terminate its contract with the Debtor. However, Mr. Leonard notes, the notification of OCI's intent was not made until after the Debtor had filed for bankruptcy, thus violating the automatic stay provision. Part of OCI's motive in terminating the Contract is to deprive the Debtor of an $840,000 rebate to which the Debtor would otherwise be entitled at the conclusion of the term of the Contract, Mr. Leonard says. Mr. Leonard assures the Court that the cure of existing defaults under the OCI Contract will and can be addressed in the context of assumption as part of a confirmation of a plan of reorganization. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMERICAN MEDIA: Appoints John J. Miller as President & COO ---------------------------------------------------------- American Media, Inc., named John J. Miller as its President and Chief Operating Officer. Mr. Miller joins AMI after nearly 30 years of publishing, media, and financial management experience. He recently served as Senior Vice President/Group Publishing Director for Hachette Filipacchi Media, the U.S. operation of the world's largest consumer magazine company. Mr. Miller will work in the company's New York offices and will report directly to Mr. Pecker. As AMI's President and Chief Operating Officer, Mr. Miller will oversee the company's worldwide publishing business operations including: -- corporate advertising sales, marketing and research; -- event marketing; -- web and television initiatives; -- licensing; -- subscription marketing; -- business management, planning and budgets; -- mergers and acquisitions; and -- AMI International Publishing (with over 40 titles based in London). "John is the perfect partner to help me expand AMI," Mr. Pecker said. "While CEO of Hachette, I witnessed firsthand his remarkable strengths and versatility in establishing new properties, in repositioning and re-launching titles, and in growing and expanding existing businesses." "John successfully breathed life into Home Magazine, strengthened the then-faltering Elle D,cor start-up, and developed highly successful businesses out of American Photo and Popular Photography," Mr. Pecker continued. "Since taking over Woman's Day in 2002, John has increased its advertising pages by 20%, bringing it to #2 share of market in the women's service field." "John is a seasoned executive who brings a unique and diverse skill set that is unparalleled in the industry. In his almost 30 years in the business, John has had executive management responsibility for 12 magazines and 10 websites across a variety of categories, has been the publisher of five different magazines, and has held financial management positions as well," Mr. Pecker added. Mr. Miller said: "While it is not easy leaving a great company like Hachette after 30 years, AMI offers extraordinary growth potential and is extremely well positioned to take full advantage of emerging technologies. I look forward to being part of that effort. David has done an amazing job of building a major magazine company, and I am very happy to have the opportunity to work with David again." Mr. Miller had been serving as Senior Vice President, Group Publishing Director of the Women's Service and Shelter Media at Hachette Filipacchi Media, Inc., overseeing Woman's Day Magazine, Woman's Day Special Interest Publications, Home Magazine, Elle Decor, Metropolitan Home, For Me, and the websites Womansday.com, Homemag.com, Elledecor.com, Methome.com and ForMeMagazine.com. Mr. Miller had previously served as Senior Vice President, Group Publisher of the Hachette Home Group and Vice President and Publisher of the Photography Magazine Group in addition to various financial management positions at CBS Magazines. Mr. Miller has a Bachelor of Science degree in Accounting from The University of Connecticut and an MBA degree from New York University. Headquartered in Boca Raton, Florida, American Media Operations Inc. is the nation's largest publisher of celebrity, health and fitness, and Spanish language magazines. * * * As reported in the Troubled Company Reporter on June 16, 2005, Moody's Investors Service lowered all ratings of American Media Operations, Inc. The ratings affected are: * $60 million senior secured revolving credit facility, due 2006 -- to B1 from Ba3 * $3 million senior secured term loan tranche A, due 2006 -- to B1 from Ba3 * $304 million (remaining amount) senior secured term loan tranche C, due 2007 -- to B1 from Ba3 * $133 million senior secured term loan tranche C-1, due 2007 -- to B1 from Ba3 * $150 million 8.875% senior subordinated notes, due 2011 -- to Caa1 from B3 * $400 million 10.25% senior subordinated notes, due 2009 -- to Caa1 from B3 * Senior implied rating -- to B2 from B1 * Issuer rating -- to B3 from B2 Moody's said the rating outlook is stable. ARMSTRONG WORLD: Discloses Changes to U.S. Defined Pension Plan --------------------------------------------------------------- Armstrong World Industries, Inc., reported changes to its U.S. defined benefit pension plan. The changes, effective Mar. 1, 2006, are part of a broad strategy to enhance Armstrong's competitiveness, while offering its employees a competitive benefit package. The changes will affect current non-production salaried employees only. The changes include: * Benefits under the Retirement Income Plan will continue to accrue only for employees who meet a criterion based on age and years of service. * Benefits for all other employees will be frozen effective Feb. 28, 2006. However, all of these participants will be eligible for an enhanced company match under the company's defined contribution, or 401(k), plan. * The RIP is being modified to provide lower benefits to people who retire before age 65. Approximately 730 employees will cease accruing future benefits under the RIP and will become eligible for the enhanced company match. The 940 employees continuing in the RIP will be subject to the early retirement changes. Armstrong will record a pre-tax charge of approximately $17 million in the fourth quarter of 2005, because the changes are considered a curtailment under SFAS 88 "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits." The changes are expected to reduce Armstrong's retirement-related expenses by approximately $13 million in 2006 and $15 million in 2007, based on pension assumptions for 2006. As of the end of 2005, Armstrong's Retirement Income Plan had approximately 28,500 participants, $2 billion in assets and was funded in excess of its projected benefit obligation. No funding contribution was made to the U.S. plan in 2005. 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 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. ATA AIRLINES: Wants Wilmington Trust Restated Term Sheet Approved ----------------------------------------------------------------- As reported in the Troubled Company Reporter on April 12, 2005, ATA Airlines, Inc., entered into an adequate protection stipulation with Wilmington Trust Company, in its capacity as Indenture Trustee under certain Trust Indentures and Security Agreements, Subordination Agent under certain Intercreditor Agreements, and Pass Through Trustee under certain Pass Through Trust Agreements, with respect to 1996/1997 Series Enhanced Equipment Trust Certificates Airplane Financing in December 2004. The parties entered into a restructuring term sheet and an amendment to the stipulation in February 2005. Restated Term Sheet On Jan. 5, 2006, the parties (i) entered into a second amendment, providing for a further extension of the Adequate Protection Period, nunc pro tunc as of Dec. 31, 2005; and (ii) executed an amended and restated Restructuring Term Sheet. Pursuant to Sections 105, 362, 363, 365, and 1110 of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure, the Debtors ask the U.S. Bankruptcy Court for the Southern District of Indiana to approve the Restated Term Sheet and the Second Amendment. The parties agree to extend the Adequate Protection Period through the later of the confirmation of a Plan or the commencement of the New Leases, but no later than Feb. 28, 2006. ATA Airlines promises to perform in full its obligations under the Restated Term Sheet and the Second Amendment, including the obligation to negotiate the terms of the New Leases in good faith. Wilmington Trust agrees not to exercise any of its rights and remedies against ATA Airlines that may exist under the Aircraft Agreement, Section 1110(c) of the Bankruptcy Code, or applicable non-bankruptcy law. The Restated Term Sheet and the Second Amendment were negotiated at arm's length between the parties, with the active involvement of the Official Committee of Unsecured Creditors. A full-text copy of the Restated Term Sheet is available at no charge at http://bankrupt.com/misc/ata_restated_term_sheet.pdf Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Court Amends Wilmington Participation Claim Amount ---------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Dec. 27, 2005, Thomas N. Eckerle, Esq., in Indianapolis, Indiana, explained that Wilmington Trust's claims arise under various leases with respect to seven aircraft with U.S. Registration Nos. N515AT, N523AT, N524AT, N525AT, N526AT, N527AT, and N528AT. Wilmington Trust is the assignee of the rights of the Lessors under the Leases pursuant to the terms of various Indentures entered into between the Owner Trustees of the Aircraft, as Lessors, and Wilmington Trust. Wilmington Trust Company held a claim against ATA Airlines, Inc., and its debtor-affiliates in an amount not less than $148,000,000 as a result of their rejection of the Leases, Mr. Eckerle informed the U.S. Bankruptcy Court for the Southern District of Indiana. Accordingly, Wilmington Trust asked the Court to amend the Rights Participation Claim Amount for Wilmington Trust Company to an amount not less than $148,000,000. * * * The Debtors and Wilmington Trust Company have resolved Wilmington Trust's request. Accordingly, the Court amends the Rights Offering Claim Amount List with respect to seven 757-200 aircraft identified as N515AT, N523AT-N528AT. Judge Lorch rules that the total Rights Participation Claim Amount for: (i) Wilmington Trust Company will be increased to $148,000,000 from $82,000,000; and (ii) Ambac Assurance Corporation will be reduced to $0 from $80,000,000. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) BANC OF AMERICA: Fitch Upgrades Low-B Ratings on 12 Cert. Classes ----------------------------------------------------------------- Fitch Ratings has taken rating actions on these Banc of America Alternative Loan Trust mortgage pass-through certificates: Series ALT 2003-3: -- Class A affirmed at 'AAA'; -- Class B1 upgraded to 'AAA' from 'AA'; -- Class B2 upgraded to 'AA' from 'A'; -- Class B3 upgraded to 'A' from 'BBB'; -- Class B4 upgraded to 'BB+' from 'BB'; -- Class B5 upgraded to 'B+' from 'B'. Series ALT 2003-4 Group 1: -- Class A affirmed at 'AAA'; -- Class 1-B1 upgraded to 'AAA' from 'AA'; -- Class 1-B2 upgraded to 'AA' from 'A'; -- Class 1-B3 upgraded to 'A+' from 'BBB'; -- Class 1-B4 upgraded to 'BBB' from 'BB'; -- Class 1-B5 upgraded to 'BB' from 'B'. Series ALT 2003-4 Group 2: -- Class A affirmed at 'AAA'; -- Class 2-B1 upgraded to 'AA+' from 'AA'; -- Class 2-B2 upgraded to 'A+' from 'A'; -- Class 2-B3 affirmed at 'BBB'; -- Class 2-B4 affirmed at 'BB'; -- Class 2-B5 affirmed at 'B'. Series ALT 2003-5 Total Groups 1-CB & 1-NC: -- Class A affirmed at 'AAA'; -- Class 1-B1 upgraded to 'AA+' from 'AA'; -- Class 1-B2 upgraded to 'AA-' from 'A'; -- Class 1-B3 upgraded to 'A-' from 'BBB'; -- Class 1-B4 upgraded to 'BB+' from 'BB'; -- Class 1-B5 upgraded to 'B+' from 'B'. Series ALT 2003-5 Group 2: -- Class A affirmed at 'AAA'; -- Class 2-B1 upgraded to 'AA+' from 'AA'; -- Class 2-B2 upgraded to 'AA-' from 'A'; -- Class 2-B3 upgraded to 'BBB+' from 'BBB'; -- Class 2-B4 affirmed at 'BB'; -- Class 2-B5 affirmed at 'B'. Series ALT 2003-6 Group 1: -- Class A affirmed at 'AAA'; -- Class 1-B1 upgraded to 'AA+' from 'AA'; -- Class 1-B2 upgraded to 'A+' from 'A'; -- Class 1-B3 upgraded to 'BBB+' from 'BBB'; -- Class 1-B4 upgraded to 'BB+' from 'BB'; -- Class 1-B5 upgraded to 'B+' from 'B'. Series ALT 2003-6 Group 2: -- Class A affirmed at 'AAA'; -- Class 2-B1 upgraded to 'AA+' from 'AA'; -- Class 2-B2 upgraded to 'AA-' from 'A'; -- Class 2-B3 upgraded to 'BBB+' from 'BBB'; -- Class 2-B4 affirmed at 'BB'; -- Class 2-B5 affirmed at 'B'. Series ALT 2003-7 Total Groups 1 & 2: -- Class A affirmed at 'AAA'; -- Class 1-B1 affirmed at 'AA'; -- Class 1-B2 affirmed at 'A'; -- Class 1-B3 affirmed at 'BBB'; -- Class 1-B4 affirmed at 'BB'; -- Class 1-B5 affirmed at 'B'. Series ALT 2003-7 Group 3: -- Class A affirmed at 'AAA'; -- Class 2-B1 upgraded to 'AA+' from 'AA'; -- Class 2-B2 upgraded to 'A+' from 'A'; -- Class 2-B3 affirmed at 'BBB'; -- Class 2-B4 affirmed at 'BB'; -- Class 2-B5 affirmed at 'B'. Series ALT 2004-11 Total Groups 1 & 2: -- Class A affirmed at 'AAA'; -- Class 30-B1 affirmed at 'AA'; -- Class 30-B2 affirmed at 'A'; -- Class 30-B3 affirmed at 'BBB'; -- Class 30-B4 affirmed at 'BB'; -- Class 30-B5 affirmed at 'B'. Series ALT 2004-11 Total Groups 3 & 4: -- Class A affirmed at 'AAA'; -- Class 15-B1 affirmed at 'AA'; -- Class 15-B2 affirmed at 'A'; -- Class 15-B3 affirmed at 'BBB'; -- Class 15-B4 affirmed at 'BB'; -- Class 15-B5 affirmed at 'B'. The affirmations reflect satisfactory credit enhancement relationships to future loss expectations and affect approximately $1,633 million in outstanding certificates as of the Dec. 27, 2005, distribution date. The upgrades reflect an improvement in the relationship of CE to future loss expectations and affect approximately $67 million in outstanding certificates. As of the Dec. 27, 2005 distribution date, the CE for the upgraded has increased to 1.5x to 2x original CE levels. The underlying collateral in these deals consists of fixed-rate, conventional, fully amortizing mortgage loans secured by first lien on one- to four-family residential properties. All of the mortgage loans were originated or acquired by Bank of America, N.A. In addition, certain of the mortgage loans were originated using underwriting standards that are different from and in certain respects, less stringent than the general underwriting standards of Bank of America, N.A. Bank of America, N.A., rated 'RPS1' by Fitch for Prime and ALT A transactions, is also the servicer for these loans. These deals are 13 to 31 months seasoned, with pool factors ranging from 53% to 84%. BELVEDERE INSURANCE: Claim Forms Must Be Filed By Feb. 20 --------------------------------------------------------- All Scheme Creditors of Belvedere Insurance Company Limited are required to file a Distribution Claim Form on or before Feb. 20, 2006, and those forms must be sent to: KPMG Crown House, 4 Par-la-Ville Road Hamilton HM08, Bermuda Attn: James Makin Tel: +1-441-294-2652 Fax: +1-441-295-8280 E-mail: belvedere-liquidation@kpmg.bm Distribution Claim Forms can be downloaded at http://www.belvedere-liquidation.com Claim Forms may be scanned and e-mailed or faxed to KPMG. Illegible faxes will not be accepted. Headquartered in Hamilton, Bermuda, Belvedere Insurance Company Limited -- http://belvedere-liquidation.com-- wrote general insurance and reinsurance in Bermuda between 1978 and 1994. In 1994, Belvedere ceased writing new business and went into run-off. Belvedere was placed into liquidation in 1998 with Malcolm L. Butterfield and Anthony J. McMahon -- both partners of KPMG -- appointed as joint provisional liquidators and foreign representatives. The petitioners filed an ancillary proceeding on Oct. 26, 1998 (Bankr. S.D.N.Y. Case No. 98-47660). Andrew Rosenblatt, Esq., Francisco Vazquez, Esq., Howard Seife, Esq., and Lisa Carol Dorr, Esq., at Chadbourne & Parke LLP represent the Debtor. BELVEDERE INSURANCE: U.S. Court Recognizes Bermudan Scheme ---------------------------------------------------------- A meeting of Scheme Creditors of Belvedere Insurance Company Limited was held on Dec. 1, 2005, for voting on the Scheme. The Scheme was approved by the requisite majorities of 50% in number and 75% in value voting in favor of the Scheme. The Scheme received sanction from the Supreme Court of Bermuda at a hearing on Dec. 16, 2005. A copy of the order sanctioning the Scheme was then delivered to the Registrar of Companies on Dec. 20, 2005, making the Scheme effective. The legal advisers to the Joint Liquidators in relation to the Scheme of Arrangement is: Attride-Stirling & Woloniecki Crawford House 50 Cedar Avenue Hamilton HM11 Bermuda A full-text copy of Belvedere Insurance Company Limited's Scheme of Arrangement is available for free at http://www.kpmg.bm/news.asp?unid=149 Permanent Injunction All scheme creditors are enjoined from (a) commencing or continuing any action against the Debtor or its property in the United States; (b) enforcing any judicial, administrative or regulatory judgment against the Debtor or any of its property in the United States; (c) invoking any statute, rule or law requiring the Debtor to establish or post security in the form of a bond or letter of credit as a condition of prosecuting or defending any proceedings; (d) drawing down any letter of credit established by the Debtor in excess of amount expressly authorized by the terms of the contract or agreement under which that letter of credit has been established; and (e) withdrawing from or setting off against property that is the subject of any trust or escrow agreement or similar arrangement in which the Debtor has an interest in excess of amounts expressly authorized by the terms of the contract or agreement under which those trust or escrow agreement has been established. Full-text copies of Belvedere Insurance Company Limited's order and motion for permanent injunction are available upon request to: Chadbourne & Parke LLP 30 Rockefeller Plaza New York, NY 10112 Tel: (212) 408-5100 Attn: Howard Seife, Esq. Francisco Vazquez, Esq. Headquartered in Hamilton, Bermuda, Belvedere Insurance Company Limited -- http://belvedere-liquidation.com-- wrote general insurance and reinsurance in Bermuda between 1978 and 1994. In 1994, Belvedere ceased writing new business and went into run-off. Belvedere was placed into liquidation in 1998 with Malcolm L. Butterfield and Anthony J. McMahon -- both partners of KPMG -- appointed as joint provisional liquidators and foreign representatives. The petitioners filed an ancillary proceeding on Oct. 26, 1998 (Bankr. S.D.N.Y. Case No. 98-47660). Andrew Rosenblatt, Esq., Francisco Vazquez, Esq., Howard Seife, Esq., and Lisa Carol Dorr, Esq., at Chadbourne & Parke LLP represent the Debtor. BOWNE & CO: Buys Vestcom Mktg. & Business Comms. Unit for $30 Mil. ----------------------------------------------------------------- Bowne & Co., Inc. (NYSE: BNE) has completed the acquisition of the Marketing and Business Communications division of Vestcom International, Inc., for $30 million in cash. The division will be integrated with Bowne Enterprise Solutions, and the combined entity will operate under the name Bowne Marketing and Business Communications. BMBC will be one of the leading print-on-demand enterprises in the fastest growing segment of the printing industry, with pro forma 2005 combined revenues of approximately $140 million. The acquisition expands BMBC's digital composition, print, delivery and fulfillment of personalized and customized communication solutions. Marks Baughan & Co. served as the financial advisor to Bowne. Founded in 1775, Bowne & Co., Inc. -- http://www.bowne.com/-- is a global leader in providing high-value solutions that empower its clients' communications. Bowne & Co. combines its capabilities with superior customer service, new technologies, confidentiality and integrity to manage, repurpose and distribute a client's information to any audience, through any medium, in any language, anywhere in the world. * * * Bowne & Co.'s 5% convertible subordinated notes due Oct. 1, 2033, carry Moody's Investors Service's and Standard & Poor's single-B ratings. CAPITAL AUTOMOTIVE: Launches Offer for 7-1/2% & 8% Preferred Units ------------------------------------------------------------------ Capital Automotive LLC reported that the company has commenced cash tender offers for any and all of its outstanding 7-1/2% Series A Cumulative Redeemable Preferred Units -- CUSIP No. 139733117 -- and 8% Series B Cumulative Redeemable Preferred Units -- CUSIP No. 139733307. The Company is the successor to Capital Automotive REIT, a Maryland real estate investment trust, which was merged with and into Capital Automotive LLC effective as of Dec. 31, 2005. In the Restructuring, all of the holders of the REIT's outstanding Series A and Series B preferred shares received the Company's Series A and Series B LLC interests, respectively, with their rights, preferences, restrictions, qualifications, limitations, terms and conditions as provided in the instrument pursuant to which they were issued, the REIT's Articles Supplementary, with respect to the preferred shares materially unchanged. In connection with the Restructuring, the REIT deregistered its Series A and Series B preferred shares under the Securities Exchange Act of 1934 and removed its Series A and Series B preferred shares from quotation on the Nasdaq National Market. The LLC interests are not registered under the Exchange Act, nor quoted on the Nasdaq National Market or any other automated quotation system or traded on or through any stock exchange. Holders of LLC interests who validly tender their LLC interests at or before 5:00 p.m., New York City time, on Monday, Feb. 13, 2006, unless extended, and do not validly withdraw their LLC interests at or before the applicable Expiration Time, will receive as payment for the LLC interests $25.00 per LLC interest. The company expects to make the regular quarterly distribution payment on the LLC interests for the period ended Jan. 31, 2006, when, as and if declared by its Board of Managers, to holders of LLC interests. When, as and if declared, the Board of Managers expects that this distribution will be payable to holders of record of the LLC interests as of Feb. 1, 2006, on Feb. 15, 2006. In addition, the company expects to pay a partial distribution on the applicable payment date for each tender offer for distributions accrued between Jan. 31, 2006, and the applicable Expiration Time to holders whose LLC interests are tendered in response to such tender offer and not withdrawn. The company expects payment to be made on a business day promptly after the applicable Expiration Time. The company expects that LLC interests that are not tendered will continue to receive regular distributions on a quarterly basis when, as and if declared by its Board of Managers. The company will cease to make distribution payments on LLC interests purchased in a tender offer after the applicable payment date for such tender offer, except for the regular quarterly distribution payment payable to holders of record of the LLC interests as of Feb. 1, 2006, on Feb. 15, 2006. Each tender offer is scheduled to expire at 5:00 p.m., New York City time, on Monday, Feb. 13, 2006, unless extended or earlier terminated. Tendered LLC interests may not be withdrawn after the applicable Expiration Time, except as described in the Offer to Purchase, dated Jan. 13, 2006, or as required by law. The terms of the tender offers, and the conditions to which they are subject, including a financing condition, are described in the Offer to Purchase dated Jan. 13, 2006, copies of which may be obtained from Morrow & Co., Inc., the information agent for the tender offers, at (800) 607-0088 -- Holders of LLC interests -- or (800) 662-5200 -- Banks and Brokerage Firms. The Company has retained Wachovia Securities to act as the exclusive Dealer Manager in connection with the tender offers. For additional information regarding the tender offers, contact Wachovia Securities at (866) 309-6316 (US Toll Free) or (704) 715-8341 (collect). Headquartered in McLean, Virginia, Capital Automotive REIT (nka Capital Automotive LLC) is a Delaware limited liability company. The company's primary strategy is to acquire real property and improvements used by operators of multi-site, multi-franchised automotive dealerships and related businesses. * * * As reported in the Troubled Company Reporter on Dec. 26, 2005, Standard & Poor's Ratings Services lowered its corporate credit ratings on Capital Automotive REIT and Capital Automotive L.P. to 'BB+' from 'BBB-'. At the same time, the ratings are removed from CreditWatch negative, where they were placed Sept. 7, 2005, after the announcement that CARS had entered into a definitive agreement to be acquired. Also, the rating on the company's $163.75 million of rated preferred securities is lowered to 'B+' from 'BB+'. Concurrently, the 'BB+' rating assigned to the company's new $2.2 billion secured credit facility, which has a recovery rating of '3', is affirmed. Lastly, ratings are withdrawn on the company's $125 million 6.75% monthly income notes and $175 million 5.46% senior unsecured notes, which were redeemed in connection with the acquisition. The outlook for this newly private entity is stable. CARD CORP: Files List of 4 Largest Unsecured Creditors ------------------------------------------------------ The Card Corp. submitted a list of its 4 Largest Unsecured Creditors to the U.S. Bankruptcy Court for the Southern District of New York, disclosing: Entity Nature of Claim Claim Amount ------ --------------- ------------ LPP Mortgage Ltd. Mortgage lien $745,004 f/k/a Loan Participant Partners, Ltd. 600 Legacy Drive Plano, TX 75024-3601 J.P. Morgan Chase Line of credit $20,000 270 Park Avenue Attn: Stephanie Tapp New York, NY 10017 New York City Dept. of Real estate tax $9,537 Finance 345 Adams Street, 3rd Floor Attn: Devora B Cohn Brooklyn, NY 11201 Consolidated Edison Gas & electric $471 4 Irving Place Attn: Gerald Vomacka New York, NY 10003 Headquartered in Bronx, New York, The Card Corp. filed for chapter 11 protection on Dec. 14, 2005 (Bankr. D. Rhode Island Case No. 05-49371). Sean C. Southard, Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, represent the Debtor in its restructurng efforts. When the Debtor filed for protection from its creditors, the company listed estimated assets between $1 million to $10 million. CARGO CONNECTION: Inks $2.35-MM Montgomery Equity Financing Pact ---------------------------------------------------------------- Cargo Connection Logistics Corp. completed a financing agreement for $2.35 million with Montgomery Equity Partners, Ltd. Under the terms of the agreement, the Company received the initial traunch of the funding in the amount of $1.75 million with the balance of $600,000 to be funded two days prior to the filing of the SB-2 Registration Statement with the Securities and Exchange Commission. The Company issued to Montgomery a secured convertible debenture in the amount of $1.75 million with a 10% interest rate and a maturity date of December 28, 2007. The debentures are convertible into common shares of the Company at the lesser of: (a) $0.0025; or (b) 75% of the lowest closing bid price of the Company's common stock, as quoted by Bloomberg, LP, of the 10 trading days immediately preceding the conversion date. The conversion price may be adjusted pursuant to the other terms of this debenture. The Company simultaneously issued to Montgomery five year warrants to purchase 2 million shares of the Company's common stock, which are exercisable at an exercise price of $0.001. There are penalty provisions for the Company should the Registration Statement to be filed not become effective within 120 days of the closing date. The debentures are secured by all of the assets of the Company. A full-text copy of the Securities Purchase Agreement is available for free at http://ResearchArchives.com/t/s?44c Cargo Connection Logistics Corp. -- http://www.cargocon.com/-- is a leader in world trade logistics. Headquartered adjacent to JFK International Airport, the company is a transportation logistics provider for shipments importing into and exporting out of the United States, especially through the Gateways of Chicago, Illinois; JFK, New York; Miami, Florida or Atlanta, Georgia, with service areas throughout the Unites States and North America. Mid-Coast Management, Inc. has container freight stations specifically designed to handle internationally arriving freight for the major retail suppliers through its CFS facilities in Florida, Georgia, Illinois, New York and Ohio. Since its inception, Mid-Coast Management has developed relationships with many retailers and also works with Freight Forwarders from around the world. Cargo Connection's balance sheet showed $2,824,440 in total assets at Sept. 30, 2005, and liabilities of $6,102,605, resulting in a $3,278,165 stockholders' deficit. CENTURY ALUMINUM: Michael Bless Replaces David Beckley as CFO ------------------------------------------------------------- Century Aluminum Company (NASDAQ:CENX) reported that Michael Bless will succeed David Beckley as chief financial officer, effective Jan. 23, 2006. Mr. Beckley, who will retire after ten years of service, will remain with Century through the first quarter of 2006 to assist with transition matters. Mr. Bless most recently served as managing director of M. Safra & Co. in New York, a private investment firm. Prior to this, he served as senior vice president and chief financial officer of Rockwell Automation, Inc. Before joining Rockwell, Mr. Bless spent ten years as an investment banker with Dillon, Read & Co. Inc., where he rose from the position of financial analyst to senior vice president, focusing on industrial companies and mergers and acquisitions. Mr. Bless is a 1987 graduate of Princeton University. "We are very pleased to bring Mike onboard," said Century chief executive officer Logan Kruger. "His broadly-based financial expertise, combined with his background in the manufacturing sector, should serve us well as we continue to improve our competitiveness in the global aluminum industry." Century presently owns 615,000 metric tonnes per year (mtpy) of primary aluminum capacity. The company owns and operates: -- a 244,000 mtpy plant at Hawesville, Kentucky; -- a 170,000 mtpy plant at Ravenswood, West Virginia; and -- a 90,000 mtpy plant at Grundartangi, Iceland, that is being expanded to 220,000 mtpy. The company also owns a 49.67-percent interest in a 222,000 mtpy reduction plant at Mt. Holly, South Carolina. Alcoa Inc. owns the remainder of the plant and is the operating partner. With the completion of the Grundartangi expansion, Century's total capacity will stand at 745,000 mtpy by mid-2007. Century also holds a 50-percent share of the 1.25 million mtpy Gramercy Alumina refinery in Gramercy, Louisiana and related bauxite assets in Jamaica. Century's corporate offices are located in Monterey, California. Century Aluminum Co. owns 615,000 metric tons per year (mtpy) of primary aluminum capacity. The company owns and operates a 244,000-mtpy plant at Hawesville, Kentucky, a 170,000-mtpy plant at Ravenswood, West Virginia, and a 90,000-mtpy plant at Grundartangi, Iceland. Century also owns a 49.67-percent interest in a 222,000-mtpy reduction plant at Mt. Holly, South Carolina. Alcoa Inc. owns the remainder and is the operating partner. Century's corporate offices are located in Monterey, California. * * * As reported in the Troubled Company Reporter on Dec. 7, 2004, Moody's Investors Service assigned a B1 rating to Century Aluminum Company's $175 million senior unsecured convertible notes due 2024. These ratings were affirmed: * The Ba3 rating for Century's $100 million senior secured revolving credit facility, * The B1 rating for Century's $250 million 7.5% senior notes due 2014 * Century's B1 senior implied rating, and * Century's B3 senior unsecured issuer rating. As reported in the Troubled Company Reporter on Nov. 9, 2004, Standard & Poor's Ratings Services raised its rating on Century Aluminum Company's $150 million 1.75% convertible notes due 2024 to 'BB-' from 'B' and removed it from CreditWatch. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating on the Monterey, California-based company. CHURCH & DWIGHT: Gets Access to $400 Million Credit Facility ------------------------------------------------------------ Church & Dwight Co., Inc., entered into an amended and restated credit agreement with these banks and financial institutions: * The Bank of Nova Scotia, documentation agent; * Bank of America, N.A., documentation agent; * National City Bank, documentation agent; * Citicorp North America, Inc., as syndication agent; * J.P. Morgan Chase Bank, N.A., as administrative agent; * General Electric Capital Corporation * Scotiabanc Inc. * PNC Bank, National Association * Allied Irish Banks, P.L.C. * AIB Debt Management, Limited * The Bank Of New York * Credit Industriel Et Commercial * Fortis Capital Corp. * Lasalle Bank National Association * Erste Bank * KBC Bank N.V. * People's Bank * Wachovia Bank, National Association * Harris Nesbitt Financing, Inc. * DZ Bank AG * HSBC Bank USA, NA * Israel Discount Bank of NY * North Fork Business Capital * Metlife Bank, National Association * Bank Of Tokyo-Mitsubishi Trust Company * Union Bank of California, N.A. * PB Capital Corporation * Webster Bank, National Association * Firstrust Bank; and * IKB Capital Corporation The Credit Agreement, which refinanced the Company's existing bank term loans and continued its existing revolving loan facility provides for: (1) a five year term loan in an aggregate principal amount of $300 million, which term loan may be increased by up to an additional aggregate principal amount of $250 million; and (2) a multi-currency revolving credit and letter of credit facility in an aggregate principal amount of up to $100 million. The Term Loan will bear interest at a rate lower than that payable with respect to the term loans it refinanced. The Revolving Loans, which are currently undrawn, are available for general corporate purposes. The Company's obligations under the Credit Agreement are secured by substantially all of assets of Company and some of its domestic subsidiaries. A full-text copy of the Amended Credit Agreement is available for free at http://ResearchArchives.com/t/s?449 Church & Dwight Co., Inc. manufactures and markets a wide range of personal care, household and specialty products, under the ARM & HAMMER brand name and other well-known trademarks. In addition to Arm & Hammer toothpaste, the Company's oral care portfolio includes the Mentadent brand of toothpaste and toothbrushes, and Close-up, Aim and Pepsodent toothpastes, all of which are sold in the U.S. and Canada, and the Pearl Drops(R) brand of tooth polish which is primarily sold in Europe. * * * As reported in the Troubled Company Reporter on Nov. 18, 2005, Standard & Poor's Ratings Services raised Church & Dwight Co. Inc.'s bank loan rating to 'BB+' from 'BB', its senior unsecured debt rating to 'BB-' from 'B+', and its recovery rating to '1' from '2'. At the same time, Standard & Poor's affirmed its 'BB' corporate credit and 'B+' senior subordinated debt ratings on the Princeton, New Jersey-based consumer products company. About $650 million of debt is affected by these actions. As reported in the Troubled Company Reporter on, Dec. 10, 2004, Moody's Investors Service assigned a Ba3 rating to the $175 million senior subordinated notes to be issued by Church & Dwight, Inc. Existing senior unsecured and senior subordinated debt ratings have been upgraded by one notch, to Ba2 and Ba3, respectively. In addition, CHD's Ba2 senior implied and senior secured debt ratings were affirmed and the ratings outlook was revised to positive from stable. COLLINS & AIKMAN: To Pay Heidel $259,876 as Adequate Protection --------------------------------------------------------------- In a stipulation approved by the U.S. Bankruptcy Court for the Eastern District of Michigan, Collins & Aikman Corporation, its debtor-affiliates and Heidel North America, Inc., agree that in satisfaction of all claims that Heidel may hold against the Debtors on account of the tooling equipment, the Debtors will pay Heidel North $259,876 as adequate protection payment. As reported in the Troubled Company Reporter on Nov. 29, 2005, Heidel asked the Bankruptcy Court to lift the automatic stay to allow it to regain possession of its tooling. Heidel stated that it has a properly perfected lien under the Michigan Special Tools Lien Act and a recorded UCC-1 financing statement. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) COOPER-STANDARD: Moody's Downgrades Sr. Sub. Notes Ratings to Caa1 ------------------------------------------------------------------ Moody's Investors Service lowered the ratings of Cooper-Standard Automotive Inc. and its wholly-owned Canadian subsidiary Cooper- Standard Automotive Canada Limited -- corporate family, to B2 from B1; guaranteed senior secured credit facility, to B2 from B1; guaranteed senior unsecured notes, to B3 from B2; guaranteed senior subordinated notes, to Caa1 from B3. Moody's also assigned a B2 rating to the $215 million incremental term loan component of Cooper-Standard's existing senior secured credit facility that will be used to fund the pending acquisition of ITT's Fluid Handling Systems Division (FHS) for $205 million. The downgrades reflect the weakening of Cooper-Standard's credit metrics during 2005 resulting from agreed upon price concessions to OEM customers, and higher raw material cost which have not been passed through to the OEMs. Although the FHS acquisition will add incremental debt to Cooper- Standard's capital structure, the earnings and cash flow contribution of these operations should limit any deterioration in pro forma credit metrics. Longer-term, there may be the possibility of synergistic cost savings. The confirmation of the SGL-3 Speculative Grade Liquidity rating reflects: * Moody's expectation the company will maintain adequate liquidity during 2006 from internal cash generation; * availability under committed borrowing facilities; and * the modest head room under the financial covenants contained in the lending agreement. The negative outlook reflects the potential that Cooper-Standard's cash generation and credit metrics could come under further pressure as a result of the operating and competitive challenges faced by its OEM customers. Key OEM customers, and consequently Cooper-Standard, will remain vulnerable to: * further erosion in the US truck and SUV market; * continued loss of share to Asian auto manufacturers; and * production disruptions that might occur in the event of a UAW strike at Delphi. The downgraded ratings include: 1) Guaranteed senior secured credit agreement for borrowers Cooper-Standard and Cooper-Standard Canada to B2 from B1, consisting of: * guaranteed senior secured revolving credit facility (US$ denominated) at Cooper-Standard, due December 2010; * guaranteed senior secured revolving credit facility equivalent (US$ or C$ denominated) at Cooper-Standard Canada, due December 2010; * guaranteed senior secured term loan A (C$ denominated) at Cooper-Standard Canada, due December 2010; * guaranteed senior secured term loan B (US$ denominated) at Cooper-Standard Canada, maturing December 2011; and * guaranteed senior secured term loan C (US$ denominated) at Cooper-Standard, maturing December 2011. 2) US$200 million guaranteed senior unsecured notes maturing December 2012, to B3 from B2 3) US$350 million guaranteed senior subordinated unsecured notes maturing December 2014, to Caa1 from B3 Corporate Family rating, to B2 from B1. Assigned ratings included: * rating to the guaranteed senior secured incremental term loan D (US$ denominated) under the guaranteed senior secured credit at Cooper-Standard, maturing December 2011, of B2 Confirmed Ratings include: * Speculative Grade Liquidity rating of Cooper-Standard to SGL-3 Cooper-Standard's operations have been effected by lower unit sales volumes, OEM price concessions, combined with higher raw material prices of steel and petroleum-related products. Partially offsetting the effect of these items has been the company's continuing restructuring efforts including plant closures, consolidations and continued investment in low-cost countries. The result of these trends is reflected in the company's deteriorating operating margins and credit metrics. While Cooper-Standard's ability to generate free cash flow is a favorable factor, the company's high degree of market and customer concentrations, combined with its high leverage, remain key negative rating factors. Moody's believes that Cooper-Standard's credit metrics (calculated using Moody's standard adjustments) are consistent with a B2 rating level based on Moody's Global Auto Supplier Methodology of June 2005. For the year-to-date September 2005 Cooper-Standard's EBIT/interest expense was approximately 1.0x. Total Debt/EBITDA is expected to be approximately 5.3x using estimated full year EBITDA. For the year-to-date September 2005, Cooper-Standard had positive free cash flow of $54 million and is expected to be positive for the full year. At Sept. 30, 2005 the company had $60 million of cash on its balance sheet and an additional $109 million of borrowing capacity under its revolving credit facility, net of letters of credit. Cooper-Standard is acquiring FHS for $205 million (the "Acquisition"). FHS is a leading manufacturer of steel and plastic tubing and quick connects for fuel and brake lines used in automotive applications. FHS is estimated to have net sales for 2004 of $437 million. Moody's anticipates that the Acquisition will have minimal impact on Cooper-Standard's pro forma year-end credit metrics. Cooper-Standard expects an additional annual savings to be attained by year-end 2006 through the consolidation of SG&A functions and combined purchasing material efficiencies. Cooper-Standard's sales will continue to be heavily concentrated among the Big 3 OEMs. However, direct sales to this customer base should narrow modestly from approximately 66% of total sales to 62% pro forma for 2005 after the FHS transaction. Over 84% of the combined company's projected revenues reflect booked business through 2008 based upon the production volumes assumed. FHS' sales and margins have trended downward in recent years due to shifts in management's focus at ITT. Cooper-Standard's management will attempt to reverse this trend in 2006. Management expects the approximate 47% of FHS' business with Tier 2 suppliers to provide an opportunity to pass on some raw material price increases. Cooper-Standard continues to have content on all 20 of the top-selling platforms in North America, and on 17 of the 20 top-selling platforms in Europe and has leading market positions within each of its fragmented niche markets. Cooper-Standard's SGL-3 speculative grade liquidity rating reflects Moody's belief that the company has an adequate liquidity profile over the next year. Pro forma for the transaction, Cooper-Standard is expected to have approximately $64 million of cash on the balance sheet. Cooper-Standard expects to generate cash flow from operations in excess of capital expenditures in 2006. The $125 million revolving credit is expected to remain largely unutilized except for approximately $16 million of letters of credit usage. However, cushion under the interest coverage covenant is viewed as modest. The senior secured credit facility is secured by substantially all the stock and assets owned by the borrowers and guarantors. Future events that could result in pressure on Cooper-Standard's ratings include: * material reductions in OEM production volumes that adversely affect the company's business outlook; * a failure by the company to realize material lean manufacturing and restructuring savings sufficient to offset customer price concessions and other operating cost increases; * rising raw materials prices which cannot be offset by customer surcharges and price increases; * lost market share; * insufficient availability under the revolving credit facility; * additional announcements of a material acquisition (particularly if debt-financed); or * plans for buybacks of common stock or a dividend payment to the common shareholders. Consideration for lower ratings could arise if any combination of these factors were to increase leverage over 5.5x. Future events that could stabilize Cooper-Standard's rating outlook include: * the realization of incremental new business awards from both domestic transplants and foreign OEM's that will serve to diversify and globalize the customer base; * rising average content per vehicle, stabilized raw material costs resulting in increase margins; and * permanent debt reduction at a faster pace than projected. Consideration for an improved outlook or rating upgrade could arise if any combination of these factors were to reduce leverage consistently under 4.0x or increase EBIT/interest coverage consistently above 2.0x. Cooper-Standard, headquartered in Novi, Michigan, is a portfolio company of The Cypress Group and Goldman Sachs Capital Partners. It is a leading global manufacturer of: * fluid handling, * body sealing, and * noise, vibration, and harshness control systems for automotive vehicles. As a percentage of revenues, these business lines currently respectively contribute approximately 34%, 47%, and 19% of the total. The company sells about 90% of its products to automotive original equipment manufacturers. Annual revenues currently approximate $1.9 billion. DELPHI CORP: Appaloosa's Motion to Appoint Equity Panel Draws Fire ------------------------------------------------------------------ As previously reported in the Troubled Company Reporter on Jan. 2, 2006, Appaloosa Management L.P., one of Delphi Corporation's largest shareholders, owning beneficially 9.3% of Delphi's issued and outstanding shares, asks the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to direct the United States Trustee for the Southern District of New York to appoint an official committee of equity security holders to serve in Delphi Corporation and its debtor-affiliates' Chapter 11 cases. Both the Debtors and the Official Committee of Unsecured Creditors have communicated to the U.S. Trustee their opposition to the appointment of an Equity Committee, Mr. Cunningham tells the Court. Objections of U.S Trustee, JPMorgan & General Motors (1) U.S. Trustee Deirdre A. Martini, the United States Trustee for Region 2, says that Appaloosa Management L.P.'s request was filed prematurely given that the fact that no Section 341(a) meeting has yet been held in the Debtors' Chapter 11 cases and the deadline for the Debtors to file their schedules and statements of financial affairs has been extended to Jan. 22, 2006. The U.S. Trustee maintains that any decision on whether to appoint an official committee of equity security holders should be made only after the issue of insolvency is conclusively determined along with the other relevant criteria established by case law. "Insolvency can not determined until the [Debtors] file verified schedules and statements of financial affairs with the Court," the U.S. Trustee asserts. "[Parties-in-interest] and the Court should be afforded ample opportunity to review all factors necessary to this decision." Appaloosa, the U.S. Trustee contends, has failed to demonstrate that the appointment of an equity committee is necessary to adequately represent equity security holders' interests. The U.S. Trustee asks Judge Drain to deny Appaloosa's request. (2) JPMorgan JPMorgan Chase Bank, N.A., in its capacity as administrative agent for a syndicate of approximately 250 senior secured lenders to the Debtors, asserts that Appaloosa has failed to demonstrate that the appointment of an equity committee is warranted under the circumstances surrounding the Debtors' Chapter 11 cases. "Give the economics of [the Debtors'] cases, an equity committee would be little more than an estate funded vehicle for out-of- money equity designed to extract value through the threat of litigation and the risks, costs and delays associated therewith," Kenneth S. Ziman, Esq., at Simpson Thacher & Bartlett LLP, in New York tells the Court. JPMorgan notes that the Official Committee of Unsecured Creditors adequately represents the interests of the Debtors' existing equityholders. "The Committee has been an active watchdog in these cases," Mr. Ziman avers. "Any role to be played by an equity committee would be redundant of the role that the Committee is already playing." JPMorgan also notes that, as stated by the Debtors, Delphi's Board of Directors adequately represents all of its stakeholders, including the Existing Equity Holders, in its "fiduciary mission in the Chapter 11 cases to maximize business enterprise value for all the Debtors' stakeholders." (3) General Motors General Motors Corporation clarifies that it neither opposes nor supports Appaloosa's request. However, General Motors wants to correct Appaloosa's principal misstatements relating to General Motors' involvement in the Debtors' Chapter 11 cases to the extent those allegations are relied on to support Appaloosa's request. General Motors denies the accusations that it is able to exercise undue influence over Delphi, to the detriment of Delphi's shareholders. General Motors maintains that: -- following Delphi's formation and spin-off from General Motors in 1999, Delphi has remained a wholly separate and independent corporation with its own management and an autonomous board of directors. General Motors has not held any seats on Delphi's board of directors since General Motors' complete divestiture of Delphi stock in May 1999; -- it has had no influence over any employment decisions relating to Delphi's management; -- at no point did it publicly or privately recommend, advise, advocate, urge or support the filing of Delphi's Chapter 11 cases; and -- it is not controlling and, in fact, cannot control Delphi's negotiations with its unions. General Motors suggests that to the extent Appaloosa desires the appointment of an equity committee, it should concentrate on meeting its burden of satisfying the need for adequate representation through the presentation of accurate and substantiated facts, and not through rumor and innuendo. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Creditors Panel Balk at Deloitte & Touche Retention ---------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Dec. 6, 2005, Delphi Corporation and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's authority to employ Deloitte & Touche LLP, as their independent auditors and accountants, nunc pro tunc to Oct. 8, 2005. Creditors Committee Objects The Official Committee of Unsecured Creditors opposes the approval of the Debtors' Application unless the Debtors and Deloitte & Touche LLP adequately address these issues: (a) Neither the indemnification language in Deloitte's Government Reports Engagement Letter dated Jan. 24, 2005, the provisions in the form of the proposed Court order approving the Application, nor the fact that the Debtors' employment of the firm may be a basis for the conversion of any prepetition claims or the firm's requests for indemnification or reimbursement of administrative claims; and (b) The proposed Order and Deloitte's employment cannot be a basis in any manner for the preclusion of avoidance actions under Chapter 5 of the Bankruptcy Code against the firm. The Creditors Committee contends that any claim by Deloitte for reimbursement of attorneys' fees and expenses incurred prior to the Petition Date should be treated and reviewed as a general unsecured prepetition claim. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: U.S. Trustee Objects to Appointing a Fee Committee --------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Oct. 17, 2005, pursuant to Sections 105(a) and 331 of the Bankruptcy Code, Delphi Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to establish uniform procedures for paying and reimbursing professionals retained by Court order. The Debtors believe that their proposed Interim Compensation Procedures will enable all parties-in-interest to: -- closely monitor the costs of administration, -- maintain a level cash flow; and -- implement efficient cash management procedures. Fee Committee Appointment & Objections As part of their request, the Debtors asked the Court to appoint a fee committee to review and analyze fee statements and interim and final fee applications submitted by the Debtors' Court- appointed professionals. They further requested that the Court authorize the Fee Committee to hire a fee examiner and separate legal counsel. However, Deirdre A. Martini, United States Trustee for Region 2, asserts that the complexity of the Debtors' cases does not warrant a Fee Committee. The U.S. Trustee argues that she has the capability to review fee statements, fee applications and budgets without a Fee Committee's assistance. The U.S. Trustee also contends that a Fee Committee would only be an unnecessary administrative expense to the Debtors' Chapter 11 estates because the Debtors will then have to pay, at a minimum, the: (a) expenses of the Fee Committee members, including airfare, hotel, and meals; (b) fees and costs of the Retained Professionals who prepare the Fee Committee members' expense reports; (c) fees and costs of a fee examiner; and (d) the fees and costs of the Fee Committee's counsel. The Debtors' creditors should not be forced to subsidize another layer of administrative expenses, the U.S. Trustee asserts. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) DX III: S&P Junks Rating on $150 Million Second-Lien Term Loan B ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to film processor DX III Holdings Corp., which is expected to be renamed Deluxe Entertainment Services Group LLC after the closing of the acquisition of the company by MacAndrew & Forbes Holdings Inc. from Rank Group PLC. At the same time, a bank loan rating of 'B' and a recovery rating of '3' were assigned to Deluxe's proposed $607.5 million first-lien credit facilities, indicating an expectation of meaningful recovery of principal in a default scenario. The facilities consist of a $150 million revolving credit facility due 2011 and a $457.5 million term loan A due 2011. Standard & Poor's also assigned its 'CCC+' bank loan rating and a recovery rating of '5', indicating an expectation of negligible recovery of principal in a default scenario, to Deluxe's $150 million second-lien term loan B due 2011. The outlook is stable. Proceeds from the financing transaction will be used to fund the acquisition. Pro forma for the transaction, total debt outstanding as of Sept. 24, 2005, was $615.9 million. "The ratings reflect Deluxe's significant exposure to the risk of accelerated digital adoption, its dependence on several large movie studios, and the need for advances to secure movie studio contracts," said Standard & Poor's credit analyst Tulip Lim. These factors are only partially offset by: * the company's leading position in the motion picture film processing and printing industry; * some near-term growth prospects, especially in its creative services and European film lab businesses; * the likelihood of slower digital projection adoption in the more fragmented European market; and * its holding of long-term contracts with movie studios. Los Angeles-based Deluxe processes 35mm film for the motion picture industry and distributes release and trailer prints for exhibition in theaters. The company also provides subtitling and assorted digital services for the movie industry. The transition to digital projection represents a major challenge for Deluxe. If digital projection is widely adopted by movie exhibitors, 35mm film processing volume will likely decline, affecting Deluxe's financial performance. So far, the adoption of digital projection has been hampered by industry participants' reluctance to shoulder its large initial installation and transition costs. Longer term, it is highly likely that movie studios and movie exhibitors will resolve the transition cost issue, because digital projection offers considerable added value to both parties, especially to the studios, in terms of cost, flexibility, and speed. The company's EBITDA margins have been good. In the near term, Deluxe's revenue and profit should increase as a result of growth potential in the company's creative services and European film lab businesses. Creative services should remain lucrative in the longer term as new content distribution channels emerge, studios begin to digitally convert their film libraries, use of new technologies to enhance visual content remains popular, and studios outsource more and more technical and creative services. The European film lab segment also has some near-term growth prospects because Hollywood studios are releasing more films abroad at the same time as in the U.S. This division is somewhat insulated from the risk of digital implementation because a more fragmented feature film production and exhibition industry in Europe will likely translate into a slower rate of digital migration. Though near-term growth prospects and significant debt amortization could improve leverage and coverage in the short term, credit metrics could worsen considerably once digital projection adoption materializes. Deluxe's conversion of EBITDA to discretionary cash flow is inconsistent, driven by the timing of advance contract payments to movie studios. However, in the next two years, advance contract payments are expected to be low, which should enable Deluxe to meet the high scheduled debt repayment over those two years. EMMIS COMMS: Reports Financial Performance for Third Quarter ------------------------------------------------------------ Emmis Communications Corporation (NASDAQ: EMMS) reported results for its third fiscal quarter ended Nov. 30, 2005. For the third fiscal quarter, the company reported net revenue of $100.5 million, compared to $90.2 million for the same quarter of the prior year, an increase of 11%. Reported net revenues for all periods presented exclude the results of Emmis' television stations and WRDA-FM, which have been classified as discontinued operations. Diluted net income per common share from continuing operations was $0.01, compared to $0.07 for the same quarter of the prior year. The decrease is due to significantly higher interest expense, principally as a result of borrowings to finance the Dutch Auction Tender Offer, completed in June 2005. "Emmis saw a lot of positive activity this quarter, and the results are still emerging. By the end of the month, we expect to have sold 13 of our 16 television stations, and, as promised, we have continued to build a solid capital structure," said Jeff Smulyan, Emmis Chairman and CEO. "And we accomplished all this while remaining focused on operations, beating our radio markets and delivering another strong quarter. Looking ahead, we expect even more success in Chicago due to current investments in talent and promotions." For the third quarter, the company's radio net revenues increased by 10%, while pro forma radio net revenues (including WLUP-FM and the Emmis radio networks in Slovakia and Bulgaria) increased by 4%. Publishing net revenues increased by 18%. For the third quarter, operating income was $25.5 million, compared to $20.9 million for the same quarter of the prior year. Emmis' station operating income for the third quarter was $38.2 million, compared to $35.2 million for the same quarter of the prior year. International radio net revenues and station operating expenses for the quarter ended Nov. 30, 2005, were $5.9 million and $5 million. On Nov. 30, 2005, Emmis sold substantially all of the assets of television station WSAZ in Huntington/Charleston, West Virginia to Gray Television for $186 million. Also on Nov. 30, 2005, Emmis sold substantially all of the assets of four television stations (plus regional satellite stations) to LIN Television Corporation and entered into a Local Programming and Marketing Agreement with LIN for WBPG in Mobile, Ala./Pensacola, Fla., receiving gross proceeds of $257 million. Net proceeds of these transactions, approximately $441.6 million, were used to repay outstanding debt obligations. On Dec. 5, 2005, Emmis sold substantially all of the assets of television stations WFTX in Ft. Myers, Fla. and KGUN in Tucson, Ariz., and the tangible assets and many of the intangible assets (excluding, principally, the FCC license) of KMTV in Omaha, Neb. to Journal Communications for $225 million of gross proceeds. Emmis plans to use the proceeds to repay outstanding debt obligations, to fund acquisitions or for other general corporate purposes. Also on Dec. 5, 2005, Emmis entered into an LMA with Journal for KMTV. On Sept. 28, 2005, Emmis signed definitive agreements to sell four television stations (plus regional satellite stations) to SJL Broadcast Group and affiliates of The Blackstone Group for $259 million. The FCC has approved the license transfers, and Emmis expects the sale to close by Jan. 31, 2006. The Company plans to use the proceeds to repay outstanding debt obligations, to fund acquisitions or for other general corporate purposes. On Sept. 23, 2005, Emmis signed a definitive agreement to sell radio station WRDA-FM in St. Louis, Mo. to Radio One, Inc., for $20 million. Radio One, Inc. began operation of this station under an LMA effective Oct. 1, 2005. Closing of this sale is subject to customary conditions. Emmis hopes to close this sale by Feb. 28, 2006 and plans to use the proceeds to repay outstanding debt obligations, to fund acquisitions or for other general corporate purposes. On Dec. 2, 2005, Walter Z. Berger, former Chief Financial Officer of the Company, announced his resignation. That same day David R. Newcomer was appointed Interim Chief Financial Officer, and the Company announced that it would conduct a search for a permanent replacement for Berger. On Dec. 12, 2005, the Board of Directors approved the acceleration of the vesting of certain "out-of-the-money" unvested incentive and non-qualified stock options granted prior to July 1, 2004, with exercise prices equal to or greater than $20.76 per share. Approximately $5.6 million of expense that would have been recognized in the fiscal years ending Feb. 28, 2007, and 2008 (under SFAS No. 123R) will instead be a component of the Company's SFAS No. 123 pro forma footnote expense disclosure in the fiscal year ending Feb. 28, 2006. On Dec. 23, 2005, Emmis called for redemption $230 million aggregate outstanding principal amount of its Floating Rate Senior Notes due in 2012, pursuant to the terms of the Indenture, dated June 21, 2005, between the Company and The Bank of Nova Scotia Trust Company of New York, as trustee. The Notes will be redeemed on a pro rata basis on Jan. 23, 2006. The redemption price for the Notes to be redeemed is $1,000 per $1,000 in aggregate principal amount of the Notes, plus accrued and unpaid interest on the Notes to be redeemed Jan. 23, 2006. During December 2005, Emmis repaid an aggregate $387.9 million of amounts outstanding under its senior credit facility. Approximately $170.5 million was used to repay amounts outstanding under the credit facility's revolving loan and $217.4 million was used to repay amounts outstanding under the credit facility's term loan. Emmis Communications Corporation -- http://www.emmis.com/-- is an Indianapolis-based diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. Emmis owns 23 FM and 2 AM domestic radio stations serving the nation's largest markets of New York, Los Angeles and Chicago as well as Phoenix, St. Louis, Austin, Indianapolis and Terre Haute, Indiana. Emmis has recently announced its intent to seek strategic alternatives for its 16 television stations, which will result in the sale of all or a portion of its television assets. In addition, Emmis owns a radio network, international radio stations, regional and specialty magazines and ancillary businesses in broadcast sales and book publishing. * * * As reported in the Troubled Company Reporter on Oct. 5, 2005, Moody's Investors Service affirmed the long-term ratings of Emmis Communications Corporation and its wholly owned subsidiary, Emmis Operating Company, and changed the outlook to positive. Emmis Operating Company: * Ba2 rating on its senior secured credit facilities; and * B2 rating on its $375 million of senior subordinated notes due 2012. Emmis Communications Corporation: * B3 rating on the $350 million senior unsecured floating rate notes due 2012, * B3 rating on the 12.5% senior discount notes due 2011; * Caa1 rating on the $143.8 million of cumulative convertible preferred stock; * Ba3 corporate family rating; and * SGL-3 rating. ENVIRONMENTAL ELEMENTS: ERISA Plan Termination Objections Due Now ----------------------------------------------------------------- Environmental Elements Corporation intends to commence a distressed termination of its Retirement Plan. The plan is a defined benefit pension plan established under the Employee Retirement Income Security Act. Under the provisions of Title IV of ERISA, a plan sponsor may initiate a distressed termination of an underfunded pension plan if the sponsor is liquidating its assets in a bankruptcy case. Lawrence D. Coppel, Esq., at Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC, tells the U.S. Bankruptcy Court for the District of Maryland in Baltimore that the Retirement Plan is underfunded since the present value of benefits payable to participants is presently greater than the Plan's assets. The amount of the underfunding will vary depending upon applicable interest rate assumptions and the Retirement Plan's termination date. Upon termination, the PBGC will have a claim against the bankruptcy estate for termination liability in the underfunded amount. The PBGC has filed a $11.6 million claim for estimated termination liabilities. A termination of the Retirement Plan will fix the termination date for determining the amount of the PBGC's claim for termination liability. Mr. Coppel adds that there is no advantage to the bankruptcy estate for the Retirement Plan to continue because Debtor is in the process of liquidating its remaining assets and no longer employ persons who are participants in the Retirement Plan. All of the Debtor's employees have been terminated as of December 2005, when the Debtor consummated the sale of substantially all of its assets to Clyde Bergemann US, Inc. Clyde Bergemann did not assume responsibility for the Retirement Plan when it acquired the Debtor's assets. Parties-in-interest have until today, Jan. 17, 2006, to file objections to the proposed termination of the Retirement Plan. Objections must be filed with the Bankruptcy Court and copies must be served to: Lawrence D. Coppel, Esq. Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC 233 East Redwood Street Baltimore, Maryland 21202 Edmund Goldberg, Esq. Office of the U.S. Trustee Garmatz Federal Courthouse 101 West Lombard Street, Suite 2625 Baltimore, Maryland 21201. Headquartered in Baltimore, Maryland, Environmental Elements Corporation -- http://www.eec1.com/-- provides innovations for plant maintenance services, air pollution control equipment and complementary products. The Company filed for chapter 11 protection on July 1, 2005 (Bank. D. Md. Case No. 05-25073). Lawrence Coppel, Esq., at Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC, represents the Debtor. When the Debtor filed for protection from its creditors, it listed $1 million to $10 million in assets and $10 million to $50 million in debts. EPOCH INVESTMENTS: Files List of 8 Largest Unsecured Creditors -------------------------------------------------------------- Epoch Investments, L.P., fka Empyrean Investment, L.P., delivered to the U.S. Bankruptcy Court for the Southern District of New York its list of its largest unsecured creditors. Debtor's 8 Largest Unsecured Creditors are: Entity Nature of Claim Claim Amount ------ --------------- ------------ Empyreen Investment Fund LP Loan $3,000,000 343 Commercial Street Union Wharf Boston, MA 02109 Empyreen Investment Fund LP Possible $3,000,000 343 Commercial Street unperfected lien Union Wharf under 9/7/03 Boston, MA 02109 Claims Purchase Confirmation Agreement MarketXT Holdings Corporation Loan $2,500,000 c/o Alan Nisselson, Trustee 61 Broadway, 18th Floor New York, NY 10006 MarketXT, Inc. Loan $2,400,000 c/o Herold & Haines, P.A. 25 Independence Boulevard Warren, NJ 07059 Omar Sharif Amanat Loan $60,000 15 East 69th Street, Unit 7C New York, NY 10021 Anjun Mahmood Accounting $15,000 5 Walnut Street Services Pine Brook, NJ 07058 Engel & Reiman PC Legal Services $10,000 The Equitable Building 730-17th Street, Suite 500 Denver, CO 80202 Irfan Amanat Services rendered Unknown 68 Windsor Drive Pine Brook, NJ 07058 Headquartered in New York, Epoch Investments, L.P., fka Empyrean Investment, L.P.'s creditor, MarketXT Holdings, Inc., filed an involuntary chapter 11 petition against the company on May 12, 2005 (Bankr. S.D.N.Y. Case No. 05-13470). Alan Nisselson, Esq., at Brauner Baron Rosenzweig & Klein, LLP, is the chapter 11 Trustee of MarketXT Holdings. Gabriel Del Virginia, Esq., of New York, represents Epoch. Leslie S. Barr, Esq., at Brauner Baron Rosenzweig & Klein, LLP, represents Mr. Nisselson. MarketXT Holdings asserts a $2.5 million claim against Epoch. When the Debtor filed for chapter 11 protection from its creditors, it listed $7,671,360 in assets and $10,985,000 in debts. ENXNET INC: Gets Approval to Trade on Berlin Stock Exchange ----------------------------------------------------------- EnXnet, Inc. (OTCBB Symbol: EXNT) (German WKN# A0HMDW) has been granted permission to trade on the Berlin Stock Exchange. EnXnet is planning a worldwide awareness campaign, beginning with an extensive tour starting in Germany. Company representatives will then travel onto many other cities in Europe including but not limited to: Zurich, Geneva, Vienna, Paris, Brussels, Amsterdam and Stockholm to meet a diversified and comprehensive group of professionals. The tour will serve the purpose of introducing EXNT to the investment Community as well as to potentially expand on the business relationships already forged in the European Community. Ryan Corley, CEO of EnXnet, Inc., stated, "Our decision to apply for listing and trade on the German Exchanges demonstrates our commitment to facilitate global access to our securities and improve market liquidity. We are looking to expand business opportunities in Western Europe." EnXnet, Inc., offers video compression services for distribution, downloading, and streaming of video and audio content for use on the Internet, advertising applications, television and cable broadcasting companies, and standard content media such as DVDs. At Sept. 30, 2005, the company's balance sheet showed a $786,870 stockholders' deficit, compared to a $812,905 deficit at March 31, 2005. Going Concern Doubt The company said in its latest quarterly report filed with the Securities and Exchange Commission that its working capital deficit and incurred losses since inception raise substantial doubt about its ability to continue as a going concern. ESCHELON OPERATING: Moody's Upgrades $92 Mil. Notes' Rating to B3 ----------------------------------------------------------------- Moody's Investors Service upgraded the senior secured and corporate family ratings of Eschelon Operating Co. Moody's also affirmed the company's SGL-3 speculative grade liquidity rating. The outlook is stable. Moody's has taken these ratings actions: Eschelon Operating Co.: * $92 million Senior 2nd Priority Lien Notes maturing in 2010 -- Upgraded to B3 from Caa1 * Corporate family rating -- Upgraded to B3 from Caa1 * Liquidity rating -- affirmed SGL-3 The rating outlook remains stable. Moody's upgrade of Eschelon's credit rating reflects the company's reduced financial risk stemming from improved operating performance in its original markets and the successful integration of the Advanced TelCom, Inc. -- ATI -- acquisition completed in December 2004. Although the company has not commenced free cash flow generation, the debt reduction led by the IPO in mid-2005 and its growing EBITDA has given the company more breathing room in its debt capital structure. The stable rating outlook reflects Moody's expectations that the company will be able to sustain revenue growth and will maintain current EBITDA margins. Given the competitive nature of its business, Eschelon's ability to generate free cash flow is dependent on continued growth in sales. Eschelon primarily serves small to medium businesses in mid-west and western U.S. markets that have exhibited greater than average growth. The company's focus on customers that have been underserved by the incumbent local exchange carriers (85% footprint overlaps with Qwest), has enabled it to grow revenue at 29% over the last 4 years, and 38% over the same period, proforma the ATI acquisition. Eschelon benefits from being the first or the second largest competitive telecom provider in the top 6 markets that it serves, and has worked its churn rate down to below 1.5% during 2005. Moody's projects Eschelon will generate positive cash flow in the second half of 2006, and expects EBITDA margins to rise slightly above the current range of 18%-20%. Moody's expects the company's adjusted leverage to be under 2.5x by the end of 2007, which is a marked improvement from upwards of 8.0x prior to the ATI acquisition and the IPO offering. Ratings or their outlook may be subject to further upward revision if the company: * demonstrates its ability to grow revenues at a double digit growth rate; * sustains EBITDA margins above 20%; and * generates free cash flow on a sustainable basis such that its free cash flow to debt ratio reaches a mid-single digit level. However, ratings could come under pressure: * if changes in the capital structure leads to increased leverage above 3.0x either as a result of new acquisitions or a decline in EBITDA or; * if the current expected level of negative free cash flow were to increase significantly. Additionally, heightened concerns arising from regulatory uncertainties may trigger a review of the business risk for this sector of the telecom industry. Moody's has also affirmed Eschelon's speculative grade liquidity rating at SGL-3. The rating reflects the company's adequate liquidity profile as projected for the next twelve months. Moody's believes that Eschelon's $30 million cash balance is sufficient to fund the expected reasonable shortfall in operating cash flow in 2006, and recognizes the company's flexibility to modestly pare expenses and investment levels if business conditions warrant during this period. Eschelon currently has no backup credit facility, which acts as a constraint on alternate liquidity. Moody's also believes that the company has few "backdoor" sources of liquidity, other than the potential to monetize a fairly modest amount of receivables, whose prospective financing would be less than assured. Eschelon is a competitive local exchange carrier servicing 406 thousand access lines in 19 markets in the western United States. The company maintains its headquarters in Minneapolis, Minnesota. FIRST UNION: S&P Lowers Junk Ratings on Class M & N Certificates ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on eight classes of First Union National Bank Commercial Mortgage Trust's pass-through certificates from series 2000-C2. Concurrently, ratings are lowered on two classes from the same transaction, and the ratings on the remaining six classes are affirmed. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios, as well as the defeasance of 12% of the pool. Class Q derives all of its cash flow from a subordinate interest in the fourth-largest loan, which has been defeased. This class is not exposed to losses from the remaining trust assets. The lowered ratings reflect potential losses on the specially serviced assets. As of Dec.16, 2005, the collateral pool consisted of 149 loans with an aggregate balance of $1.01 billion million, down from 162 loans with a balance of $1.14 billion at issuance. The master servicer, Wachovia Bank N.A., provided year-end 2004 net cash flow debt service coverage figures for 94% of the non-defeased loans. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.47x for the pool, up from 1.35x at issuance. To date, the trust has experienced six losses totaling $14.6 million. Two appraisal reduction amounts totaling $6.7 million are in effect relating to two real estate owned assets. All of the loans in the pool are current. The current top 10 exposures secured by real estate have an aggregate outstanding balance of $312.2 million. The weighted average DSC for the top 10 exposures was 1.46x for year-end 2004, an increase from 1.37x at issuance. The increased DSC reflects improved NCF in excess of 15% for four of the top 10 exposures. Three of the top 10 exposures are on the servicer's watchlist, including the largest exposure in the pool. Standard & Poor's reviewed property inspections provided by Wachovia for all of the assets underlying the top 10 exposures, and all were characterized as "good" or "excellent." At issuance, the third-largest loan, which is secured by the Park Plaza Mall, displayed credit characteristics consistent with an investment-grade rated obligation in the context of its inclusion in the pool. The loan now displays credit characteristics Consistent with a high investment-grade rated obligation. Wachovia reported a watchlist of 23 loans, which includes the largest exposure, the HCPI portfolio. The HCPI portfolio consists of six cross-collateralized and cross-defaulted loans. The loans are secured by six medical office buildings that are located in San Diego, California; Minneapolis, Minnesota; Murfreesboro, Tennessee; Houston, and Dallas, Texas. The buildings were built between 1976 and 1986 and all are located in close proximity to major hospitals in their respective submarkets. The HCPI portfolio was placed on watchlist because of a decline in occupancy at the Cambridge Medical Building in San Diego. For the six months ending June 30, 2005, occupancy dropped to 67%, resulting in a decline in DSC to 1.05x. The Cambridge property accounts for $7.9 million of the total loan amount. For all six properties, the combined year-end 2004 DSCwas 1.82x and occupancy was 92%. FelCor-Embassy Suites-Orlando is a 244-room full-service lodging property in Orlando, Florida. The loan was placed on watchlist due to low DSC and a decline in overall income. Additionally, the property incurred damage from Hurricane Frances in the fall of 2004, but was not damaged by the hurricanes in 2005. The year-end 2004 DSC was 1.12x and occupancy was 82%. The Homewood Suites exposure consists of six cross-collateralized and cross-defaulted loans secured by extended stay lodging properties located in Texas, Georgia, Mississippi, and Utah. Two properties, located in Irving and Addison, Texas, were placed on the watchlist due to low DSC resulting from low occupancy. The combined year-end 2004 DSC for all six properties was 1.61x and occupancy was 74%. There are four assets with the special servicer, LNR Partners Inc. The largest asset with the special servicer, North Andover Mills, is secured by a 233,000-square-foot research and development industrial center in North Andover, Massachusetts. The loan was transferred to LNR in July 2005 when the borrower was not able to pay the loan off at maturity. Year-end 2004 DSC was 1.06x and occupancy was 69%. The borrower is remitting all net cash flow from the property. The special servicer is pursuing a note sale. The resolution of this asset could result in a significant loss to the trust. The Chesapeake Crossing Shopping Center loan is secured by a 287,279-sq.-ft. anchored retail center in Chesapeake, Virginia. The loan was originally transferred to LNR in September 2002 because of a cash flow modification request. The asset is REO, and an ARA of $5.4 million is in effect. The ARA is based on the most recent appraisal, which indicates a loss to the trust upon the eventual disposition of the property. The Four Corners Shopping Center loan is secured by a 116,000-sq.-ft. anchored retail center in Tomball, Texas. The loan was transferred to LNR Nov. 21, 2005 due to imminent default. The loan was categorized as imminent default after the property's major tenants, Kroger and CVS, vacated. For the six months ended June 2005, DSC for the loan was 1.08x. At that time, Standard & Poor's incorporated multiple loss projections, as limited data was made available for the asset. The remaining loan with the special servicer, Steeple's Glen at LA Tech, is secured by a 44-unit student housing facility built in 1999 in Ruston, Louisiana, which is near the Arkansas border. The asset is REO. Current occupancy is 60%. The special servicer is currently analyzing disposition strategies. An ARA of $1.6 million is in effect, suggesting a loss upon disposition. Ratings Raised First Union National Bank Commercial Mortgage Trust Commercial Mortgage Pass-Through Certs Series 2000-C2 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ B AAA AA 19.97% C AA+ A 15.73% D AA- A- 14.03% E A BBB+ 12.20% F A- BBB 10.50% G BBB+ BBB- 9.09% H BB+ BB 5.28% Q AAA BB N/A Ratings Lowered First Union National Bank Commercial Mortgage Trust Commercial Mortgage Pass-Through Certs Series 2000-C2 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ M CCC CCC+ 1.46% N CCC- CCC 0.90% Ratings Affirmed First Union National Bank Commercial Mortgage Trust Commercial Mortgage Pass-Through Certs Series 2000-C2 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 25.48% A-2 AAA 25.48% J BB- 4.43% K B 3.58% L B- 2.03% X AAA N/A N/A -- Not applicable. FLYI INC: Asks Court to Okay Refunds for Post-Shutdown Flights -------------------------------------------------------------- FLYi, Inc. (Nasdaq: FLYIQ) voluntarily discontinued all scheduled flights planned to depart after 7:00 p.m. on the evening of Thursday, Jan. 5. The company is seeking bankruptcy court approval to automatically refund customers with reservations for flights scheduled to depart beyond that time. Independence Air Chairman and CEO Kerry Skeen said, "While we've been clear in reminding everyone that this was a possibility, we remained optimistic that there would be a way to avoid reaching this juncture. To date there has not been a firm offer put forward that meets the financial criteria necessary to continue operations as is. Therefore, we are voluntarily discontinuing scheduled service as of Thursday evening. We offer our sincere thanks to the over eight million customers who have flown with us since the launch of Independence Air, and to the communities across America that we have served." Mr. Skeen continued. "And most importantly, we thank our extraordinary employees for creating an airline brand that has been so universally praised by our customers. Our people have demonstrated that they are capable of operating an airline that quickly rose to the top of the rankings in every major independent survey of airline quality and customer satisfaction. And while this is a profoundly sad day for all of us, we could not be more proud of our employees and everything they have accomplished." Independence Air began service on June 16, 2004 and currently offers over 200 daily departures to 37 destinations. The company has advised the public, and reiterates, that the likely outcome of the company's bankruptcy proceeding is the cancellation of the company's existing common stock without consideration, making FLYi stock of no value. 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. GMAC COMMERCIAL: S&P Puts Junk Rating on $13.3 Mil. Class Certs. ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to GMAC Commercial Mortgage Securities Inc. Series 2006-C1 Trust's $1.7 billion commercial mortgage pass-through certificates series 2006-C1. The preliminary ratings are based on information as of Jan. 13, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Classes A-1, A-1A, A-2, A-3, A-4, XP, A-M, A-J, B, C, D, and E are currently being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.39x, a beginning LTV of 101.6%, and an ending LTV of 91.2%. A copy of Standard & Poor's complete presale report for this transaction can be found on RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/ The presale can also be found on Standard & Poor's Web site at http://www.standardandpoors.com/ Select Credit Ratings, and then find the article under Presale Credit Reports. Preliminary Ratings Assigned GMAC Commercial Mortgage Securities Inc. Series 2006-C1 Trust Recommended Class Rating Amount credit support ----- ------ ------ -------------- A-1 AAA $53,000,000 30.000% A-1A AAA $310,191,000 30.000% A-2 AAA $171,000,000 30.000% A-3 AAA $99,000,000 30.000% A-4 AAA $569,955,000 30.000% A-M AAA $171,878,000 20.000% A-J AAA $116,018,000 13.250% B AA $36,524,000 11.125% C AA- $19,336,000 10.000% D A+ $12,891,000 9.250% E A $21,485,000 8.000% F A- $17,188,000 7.000% G BBB+ $19,336,000 5.875% H BBB $19,336,000 4.750% J BBB- $23,634,000 3.375% K BB+ $6,445,000 3.000% L BB $6,445,000 2.625% M BB- $8,594,000 2.125% N B+ $2,149,000 2.000% O B $4,297,000 1.750% P B- $6,445,000 1.375% Q NR $23,633,989 0.000% FNB-1 BBB- $5,100,000 N/A FNB-2 BB $5,600,000 N/A FNB-3 BB- $2,100,000 N/A FNB-4 B $4,500,000 N/A FNB-5 B- $2,400,000 N/A FNB-6 CCC $13,300,000 N/A XC* AAA $1,718,780,989 N/A XP* AAA TBD 30.000% * Interest-only class with a notional dollar amount. NR -- Not rated. N/A -- Not applicable. TDB -- To be determined. GMAC MORTGAGE: Fitch Affirms Low-B Ratings on Six Cert. Classes --------------------------------------------------------------- Fitch Ratings has affirmed these GMAC Mortgage Corporation Home Equity Issues: Series 2004-J4 -- Class A 'AAA'; -- Class M-1 'AA'; -- Class M-2 'A'; -- Class M-3 'BBB'; -- Class B-1 'BB'; -- Class B-2 'B'. Series 2004-J5 -- Class A 'AAA'; -- Class M-1 'AA'; -- Class M-2 'A'; -- Class M-3 'BBB'; -- Class B-1 'BB'; -- Class B-2 'B'. Series 2004-J6 -- Class A 'AAA'; -- Class M-1 'AA'; -- Class M-2 'A'; -- Class M-3 'BBB'; -- Class B-1 'BB'; -- Class B-2 'B'. The affirmations reflect satisfactory collateral performance with general stable credit enhancement level and affect approximately $1.22 billion in outstanding certificates as detailed above. The above listed transactions comprise of 30-year adjustable-rate mortgages that are extended to prime borrowers and are secured by first liens on one- to four-family residential properties. As of the December 2005 distribution date, the transactions are seasoned from a range of 12 to 16 months. The pool factors are approximately 81%, 73%, and 82% for series 2004-J4, 2004-J5, and 2004-J6, respectively. GMAC Mortgage Corporation, the servicer for all three deals, is rated 'RPS1' as a primary servicer for prime residential mortgage loans by Fitch. GT BRANDS: Wants Until Feb. 6 to Decide on Three Unexpired Leases ----------------------------------------------------------------- GT Brands Holdings LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to further extend, until Feb. 6, 2006, the period during which they can elect to assume, assume and assign, or reject three unexpired nonresidential real property leases. The Debtors are parties to three real property leases relating to their: * headquarter offices in New York City, * warehouse and distribution facility in Jersey City, New Jersey, and * a fitness facility in Columbia, South Carolina. As reported in the Troubled Company Reporter on Oct. 7, 2005, the Debtors have been unable to decide on such leases because they were preoccupied with the operation of their businesses. The Debtors also want to minimize the likelihood of inadvertent rejections of valuable leases or premature assumption of other leases. The Debtors assure the Court that they are current on all their postpetition rent obligations under each unexpired lease pursuant to Sec. 365(d)(3) of the Bankruptcy Code. In addition, the Debtors have also started preparing these leases for turnover to the lessors, which with respect to their large New Jersey warehouse facility. Headquartered in New York, New York, GT Brands Holdings LLC, supplies home video titles to mass retailers. The Debtors also develop and market branded consumer, lifestyle and entertainment products. The Company and its affiliates filed for chapter 11 protection on July 11, 2005 (Bankr. S.D.N.Y. Case No. 05-15167). Brian W. Harvey, Esq., at Goodwin Procter LLP, represents the Debtors in their chapter 11 proceedings. When the Debtors filed for protection from their creditors, they listed total assets of $79 million and total debts of $212 million. KAISER ALUMINUM: Expects Court to Confirm Plan Next Week -------------------------------------------------------- Kaiser Aluminum Corporation and its debtor-affiliates disclosed in papers filed with the U.S. Bankruptcy Court for the District of Delaware that they expect Judge Judith Fitzgerald to confirm their Plan of Reorganization "next week or so." However, the Debtors said they have no assurance that the Plan will become effective and they will be able to emerge from bankruptcy before their $200,000,000 replacement financing facility matures on Feb. 11, 2006. Kimberly Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, notes that although the Debtors expect that the Bankruptcy Court will enter the Confirmation Order soon, it still need to be issued or affirmed by the District Court pursuant to Section 524(g) of the Bankruptcy Code. The District Court must affirm the Bankruptcy Court's findings that the Asbestos Personal Injury Trust under the Plan complies with the funding requirements of Section 524(g). In preparation for their emergence, the Debtors and their lenders have agreed to amend certain provisions in the Replacement DIP Facility. Under the Amendment, among other things, the maturity date is extended to May 11, 2006, and the Debtors are given an option to increase the Replacement DIP Facility to $275,000,000, by obtaining one or more commitments from one or more of the Lenders. 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: Liquidation Plans Declared Effective December 22 ----------------------------------------------------------------- Gregory M. Gordon, Esq., at Jones Day, in Dallas, Texas, notifies the U.S. Bankruptcy Court for the District of Delaware that the Third Amended Joint Plans of Liquidations became effective on Dec. 22, 2005, for: -- Alpart Jamaica Inc., -- Kaiser Jamaica Corporation, -- Kaiser Alumina Australia Corporation, and -- Kaiser Finance Corporation. As previously reported in the Troubled Company Reporter on Dec. 29, 2005, the Court confirmed the Liquidation Plans on Dec. 20, 2005. All distributions, including future distributions, under the Liquidating Plans will be made to the holders of claims as of the close of business on December 20. In connection with the effectiveness of the Liquidating Plans, once the Liquidating Debtors have paid the cash and other assets to the trustee, the Liquidating Debtors will be deemed to be dissolved and they will take the actions necessary to dissolve or otherwise terminate their corporate existence. 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) LEGACY ESTATE: Files Schedules of Assets and Liabilities -------------------------------------------------------- The Legacy Estate Group, LLC, delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Northern District of California, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $48,317,500 B. Personal Property $59,969,546 C. Property Claimed as Exempt D. Creditors Holding $80,446,096 Secured Claims E. Creditors Holding $452,080 Unsecured Priority Claims F. Creditors Holding $3,687,055 Unsecured Nonpriority Claims ------------ ----------- Total $108,287,046 $84,585,230 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 Nov. 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 listed $108,287,046 in assets and $84,585,230 in debts. LEGACY ESTATE: Committee Taps Nightingale as Financial Advisor -------------------------------------------------------------- The Official Committee of Unsecured Creditors of The Legacy Estate Group, LLC, asks the U.S. Bankruptcy Court for the Northern District of California for permission to employ Nightingale & Associates, LLC, as its financial advisor. Nightingale & Associates will: (a) provide assistance to the Committee in the review of financial disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports in this Chapter 11 case; (b) provide assistance to the Committee with information and analyses required in preparation for hearings regarding the use of cash collateral and debtor in possession financing; (c) provide assistance with a review of the Debtor's short-term management evaluation of the present level of operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; (d) provide assistance with a review of the Debtor's proposed key employee retention plan, if any, and critical employee benefit programs; (e) provide assistance and advice to the Committee in identifying core business assets and disposition of assets or liquidation of unprofitable operations; (f) provide assistance with a review of the Debtor's performance cost/benefit evaluations with respect to the affirmation or rejection of various executory contracts and leases; (g) provide assistance in the review of financial information distributed by the Debtor to creditors and others, including cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts and analysis of proposed transactions for which Court approval is sought; (h) attend meetings and conference calls and assist in discussions with Debtor, secured lenders, potential investors, the U.S. Trustee, other parties in interest and professionals hired by same; (i) provide assistance in the review and/or preparation of information and analysis necessary for the confirmation of a Plan of Reorganization in this Chapter 11 case; (j) provide assistance in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; (k) assist, at the direction of the Committee, the Debtor with compiling financial data and financial management issues; (l) assist with the sale of all or part of the Debtor's business or assets; and (m) render other general business consulting services or provide other assistance as the Committee and its counsel may deem necessary. The Committee discloses that the Firm's professionals bill: Professionals Hourly Rate ------------- ----------- Principals $450 - $525 Managing Directors $350 - $450 Associates $250 - $350 Clerical $80 The Committee further discloses that Nightingale will charge $50,000 per month. To the best of the Debtor's knowledge, the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in 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 Nov. 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 listed $108,287,046 in assets and $84,585,230 in debts. MAYTAG CORP: Moody's Maintains B2 Senior Unsecured Notes Ratings ---------------------------------------------------------------- Moody's Investors Service anticipates downgrading Whirlpool Corp.'s senior long term debt by one notch to Baa2 and subordinated debt to (P)Baa3 at the conclusion of the purchase of Maytag Corp. Whirlpool's commercial paper rating is expected to be confirmed at P-2. The rating outlook will be determined at the conclusion of the review based on updated financial and operating trends of the companies. Whirlpool's ratings are currently under review for possible downgrade pending the acquisition of Maytag. The acquisition is under review by the U.S. Department of Justice and has already been approved by European authorities. The acquisition is expected to close as early as the first quarter of 2006. Maytag's ratings are under review with direction uncertain, pending the completion of the merger. If its debt is legally assumed or guaranteed by Whirlpool on a pari passu basis with Whirlpool's existing debt, Moody's would rate Maytag's debt at the same level as Whirlpool's. If the acquisition does not close, Moody's would review the companies' separate operating strategies and financial positions to conclude the reviews. There is no certainty that the rating for either company would remain at current levels. The expected rating outcome incorporates the benefits of the acquisition as well as Moody's concerns about the difficulty and expense of integrating the companies. The benefits to Whirlpool include: * greater market share in core product categories; * ownership of valuable trademarks; * enhanced segment and geographic diversity; and * the potential for better operating leverage based on higher unit volumes. The rating also anticipates that the combined company's credit and operating metrics will be weak for the rating category during the 18 months following the transaction, but should approach the median for the category within two years. The use of equity and balance sheet cash to finance much of the purchase price limits the increase in leverage. Moody's expects Whirlpool's organic cash flow to remain strong enough to allow the company to finance integration costs, which the company has estimated at $350 - $500 million, and to pay down a meaningful amount of debt within three years. Maytag's operating trends remained weak through the third quarter of 2005. The company has not issued guidance for the full year 2005, but Moody's recognizes the risk that Maytag's unit volumes or profitability could trend negatively prior to or following the acquisition. Whirlpool's leverage metrics will depend in part on the operating contribution from the acquired company, and will also reflect integration costs in operating results and cash flow. Adjusted leverage will also be affected by the considerable pension obligations of both companies. For the proposed rating level to be effective, Moody's would expect that 12-month adjusted EBIT to interest would remain above 2 times even at its lowest point soon after the acquisition, with the expectation of substantial recovery to 3.0 times or more within the subsequent year. To maintain those rating levels, Moody's would expect adjusted free cash flow to debt to recover from less than 10% in the integration year to 20% within a 24-month period. Whirlpool has increased the size of its commercial paper program to $2.5 billion in anticipation of the acquisition. The company has increased its committed bank facilities commensurately, with the increased availability contingent on receiving Department of Justice approval for the acquisition. Moody's P-2 rating assumes that the company will not issue commercial paper in excess of the amount of its available backup lines. Moody's maintains these ratings for Whirlpool, all of which are remain on review for possible downgrade: * Senior debt rated Baa1 * Senior Term Bank Loan Facilities rated Baa1 * Senior shelf rating of (P) Baa1 * Subordinated shelf rating of (P) Baa2 * Commercial paper rating at P-2 Whirlpool Canada, Inc. (guaranteed by Whirlpool Corp.): * Commercial paper rating at P-2 Whirlpool Finance BV (guaranteed by Whirlpool Corp): * Commercial paper rating at P-2 Moody's maintains these ratings for Maytag, which are on review with direction uncertain: * Corporate family rating of B1 * Senior unsecured notes ratings at B2 * Senior unsecured credit facility rating at B1 Whirlpool Corporation, based in Benton Harbor, Michigan, is a global manufacturer and marketer of home appliances under the: * Whirlpool, * KitchenAid, * Brastemp, * Bauknecht, * Consul, and * other brand names. Maytag, based in Newton, Iowa, is the third largest US-based appliance company. The corporation's primary brands are: * Maytag, * Hoover, * Jenn-Air, * Amana, * Dixie-Narco, and * Jade. MEDMIRA INC: Completes Draw Down of Equity Line with Cornell ------------------------------------------------------------ MedMira Inc. (TSX Venture: MIR, NASDAQ: MMIRF) completed the draw down against its equity line of credit with Cornell Capital Partners, LP, which was disclosed on Dec. 23, 2005. Under the terms negotiated in the equity line, Cornell has purchased 11,491 common shares from MedMira at an average price of C$0.6527, which is 96.5% of the daily volume weighted average price over a 10 day pricing period, beginning on Dec. 28, 2005, and ending on Jan. 11, 2006, for net proceeds of C$7,125. In the draw down notice delivered on Dec. 23, 2005, MedMira set a minimum price of $0.63. For a number of days during the pricing period the VWAP for MedMira shares was below the minimum price and accordingly the draw down was reduced by 10% for each day that the VWAP was below that minimum price. First Purchasers -- as defined in the Prospectus -- of MedMira common shares issued in relation to this draw down notice have certain statutory rights of rescission or damages for a period of 40 days from the settlement date. The terms of the equity line financing, and the rights of First Purchasers are described in more detail in a prospectus dated Nov. 21, 2005. MedMira Inc. -- http://www.medmira.com/-- is the leading global manufacturer and marketer of in vitro flow-through rapid diagnostic tests. MedMira delivers rapid diagnostic solutions to healthcare communities around the globe. Its corporate offices and manufacturing facilities are located in Halifax, Nova Scotia, Canada with a representative office in Guilin, China. At July 31, 2005, Medmira Inc.'s balance sheet showed a $9,804,644 shareholders' deficit compared to a $5,873,770 deficit at July 31, 2004. METROPLEX FINISHING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Metroplex Finishing, Inc. 2143 North Stemmons Lewisville, Texas 75077-0000 Bankruptcy Case No.: 06-40048 Type of Business: The Debtor operates a full-service printing company that designs, prints, binds, finishes, & mails documents. See http://www.metroplexfinishing.com/ Richard Neal Dorman, the Debtor's president, filed for chapter 11 protection on October 13, 2005 (Bankr. E.D. Tex. Case No. 05-47367). Chapter 11 Petition Date: January 13, 2006 Court: Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Daniel C. Durand, III, Esq. Durand & Associates, P.C. 522 Edmonds, Suite 101 Lewisville, Texas 75067 Tel: (972) 221-5655 Fax: (972) 221-9569 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1st International Bank Security Agreement $1,701,000 1912 Avenue K & Note Metroplex Plano, TX 75074 Finishing 3/15/05 (Negative Equity Estimate $1,301,000 All Inventory, accounts, equipment, intangible fixtur Value of security: $400,000 EKCC d/b/a Imaging Financial Lease Equipment $363,336 100 Kings Highway South, Suite 2000 Rochester, NY 146175597 MBM Financial Interest, L.P Lease of copier $250,000 7300 North Gessner Houston, TX 77040 IRS Payroll Taxes $120,000 Western Paper Company Trade debt $90,000 American Enterprises Lease of Equipment $88,272 #3450 Savin, #1105 RICOH, #6513 RICOH, Wrap System Wells Fargo Financial Lease of Equipment $86,790 Folder, Punch, Drill, S Litter and 2 Duplicators NEC Financial Services, Inc. Lease of Computer $85,514 Equipment Dell Poweredge Server Pitney Bowes Credit Lease of Equipment $85,800 Model #CM31Model CM31-3080006 MBM Financial Interest, L.P Lease of copier $85,000 GE Vendor Financial Service Lease of Equipment $63,925 Pitney Bowes Credit Lease of Copier $57,780 #0211244 and Copier #8500423 Citi Capital Lease of Canon Copier $56,212 Dell Server Bank One Credit card purchases $53,000 Manifest Group/Lyon Lease of $48,678 Financial equipment and two used xerox copiers MBNA Credit card purchases $45,272 Imagistics Services $41,172 MBNA America Credit card purchases $37,844 IRS Payroll Taxes $35,000 Wells Fargo Financial Lease of Equipment $31,944 #5490 Gestetner Copier MORTGAGE ASSET: Fitch Affirms BB Ratings on Class BI-4 Certs. ------------------------------------------------------------- Fitch Ratings has affirmed these Mortgage Asset Securitization Transactions, Inc. Alternative Loan Trust Transactions residential mortgage-backed certificates: Series 2004-13 Group 1 -- Class IA 'AAA'; -- Class BI-1 'AA'; -- Class BI-2 'A'; -- Class BI-3'BBB'; -- Class BI-4 'BB'. Series 2004-13 Group 2 -- Class A affirmed at 'AAA'. The affirmations reflect satisfactory collateral performance with general stable credit enhancement levels and affect approximately $353 million outstanding certificate. The collateral consists of both 30-year fixed-rate and 15-year fixed-rate mortgages extended to Alt-A borrowers, which are secured by first and second liens, primarily on one- to four-family residential properties. As of the December 2005 distribution date, the transactions are 12 months seasoned. The pool factors are 86% for series 2004-13 Group 1 and 80% for series 2004-13 Group 2. These transactions are service by Wells Fargo Bank Minnesota, N.A. MRS. CUBBISON'S: Case Summary & 21 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Mrs. Cubbison's Foods, Inc. 7240 East Gage Avenue Commerce, California 90040 Bankruptcy Case No.: 06-40111 Type of Business: The Debtor makes stuffing, dressings, and croutons. See http://www.mrscubbisons.com/ The debtor is an affiliate of Interstate Bakeries Corporation, which filed for chapter 11 petition on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). Chapter 11 Petition Date: January 14, 2006 Court: Western District of Missouri (Kansas City) Judge: Arthur B. Federman Debtor's Counsel: Samuel S. Ory, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 333 West Wacker Drive, Suite 2100 Chicago, Illinois 60606-1285 Tel: (312) 407-0700 Fax: (312) 407-0411 - and - Paul M. Hoffmann, Esq. Stinson Morrison Hecker LLP 1201 Walnut Street, Suite 2800 Kansas City, Missouri 64106-2150 Tel: (816) 691-2746 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million Debtor's 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Public Logistics Trade debt $34,053 3141 Progress Circle Mira Loma, CA 91752 PCT Litigation $23,265 c/o Pepper Hamilton, LLP Hercules Plaza, Suite 5100 1313 Market Street Wilmington, DE 19899-1709 Performance Freight Systems Trade debt $13,301 P.O. Box 518 Rancho Cucamonga, CA 91729 Buckeye Haulers Trade debt $12,244 Fastway Terminals Freight Trade debt $11,289 Lou Misterly Food Sales Inc. Trade debt $10,986 Sharp Freight Systems Trade debt $10,930 Shippers Warehouse Inc. Trade debt $7,264 Safeway Trucking Trade debt $5,597 East Coast Warehouse Trade debt $5,333 M&W Distribution Services Trade debt $4,268 Acme Distribution Center Trade debt $3,488 United Warehouse Services Trade debt $2,852 Aspen Distribution Trade debt $2,847 Lagrou Bolingbrook Trade debt $2,599 Anchor Distribution Services Trade debt $1,684 Herche Transfer Freight Trade debt $1,403 Atlantic-Alliance Sales & Trade debt $1,304 Mkt #89 Southwest Storage Trade debt $1,284 Distribution Saddle Creek Transportation Trade debt $1,125 Leonard Transport Inc. Trade debt $1,026 MUSICLAND HOLDING: Madacy Holds $1.3 Million Trade Receivables -------------------------------------------------------------- Madacy Entertainment Income Fund (TSX: MEG.UN) reported that one of its customers, Musicland Group Inc., has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Musicland said that it has received commitments for up to $75 million in debtor-in-possession financing which will enable it to continue to operate during the restructuring period. As reported in the Troubled Company Reporter on Jan. 13, 2006, Musicland Holding Corp and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York on Jan. 12, 2006. The company believes the move is necessary to complete its restructuring initiatives and refine its business model. Musicland represented less than 5% of Madacy's 2005 net sales. Madacy currently has a trade receivable from Musicland in the amount of approximately $1.3 million. As a result of the uncertainty surrounding the Musicland restructuring and the ultimate collectability of the balance owing and the timing of eventual receipt of any funds, Madacy will be taking an additional provision for an appropriate portion of the receivable not already covered by existing reserves. "We have been there before with Musicland and they have shown their ability to work out their problems", said Amos Alter, CEO of Madacy. "We will work with them through their difficult times", he added. The one-time charge is not expected to impact the current distribution rate to Class A unitholders -- the publicly traded units. As a result of the charge, Madacy will reduce, on a one- time basis, its quarterly distribution on its Class B Exchangeable Subordinated Units -- held by the former controlling shareholders of Madacy -- with respect to the fourth quarter of 2005 by the amount of the charge. Madacy is a leading developer, producer and marketer of budget and mid-priced recorded music products in North America. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. NORTHWEST AIRLINES: Citicorp Can Access Cash Collateral Account --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York modifies the automatic stay to permit Citicorp USA, Inc., to take actions necessary to apply the collateral in satisfaction of Northwest Airlines, Inc.'s obligations. The automatic stay is continued in full force and effect with respect to the payment of legal fees and expenses incurred in connection with the Letters of Credit and the Reimbursement Agreements until further Court order. Moreover, Judge Allan Gropper authorizes Citicorp to retain $100,000 in the Collateral Account as a reserve with respect to the payment of Legal Fees pending a resolution of the extent Citicorp is entitled to. The amount will be held in the Collateral Account until further Court order. In the event the parties are unable to reach agreement on the amount of Legal Expenses to be reimbursed by January 31, 2006, on not less than 10 days' notice by either party, the Citicorp Motion will be returned to the Court's calendar for a hearing with respect to the payment of the Legal Fees at the later of either: (a) the date after the next available omnibus hearing date in the Debtors' Chapter 11 cases to determine the amount of reasonable Legal Expenses to which Citicorp is entitled to reimbursement; or (b) if the Debtors desire discovery with respect to any issue pertaining to the Legal Fees, the date as the Court may direct at a pre-trial conference. The Court directs the parties to prepare and submit a stipulation in the event they are able to reach agreement on the amount of Legal Expenses to be reimbursed. Citicorp will return to Northwest Airlines all amounts in the Collateral Account, and any other proceeds of any Collateral in excess of the amounts applied to satisfy Citicorp's claim plus the Reserved Amount, by wire transfer to an account to be provided by Northwest Airlines. In the event that the amount of the Legal Expenses ultimately reimbursed to Citicorp is less than the Reserved Amount, Citicorp will promptly return the difference to Northwest Airlines in the same manner. Judge Gropper directs that, after the sale of the Collateral is completed, Citicorp will provide Northwest Airlines: (a) a document sufficient to show, to Northwest Airlines' reasonable satisfaction, that the liquidation of the Collateral was effected in a commercially reasonable manner; and (b) an accounting of the liquidation of the Collateral and its application. 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. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Court Sets Info Blocking Procedures for Panel ----------------------------------------------------------------- As previously reported, Deirdre A. Martin, the U.S. Trustee for Region 2, asked the SDNY to establish information blocking procedures for members of the Official Committee of Unsecured Creditors. The U.S. Trustee noted that with the dual filings of Delta Air Lines, Inc., and Northwest Airlines, Inc., four major airlines were, at the time of filing, operating under bankruptcy protection. Thus, nearly half of the United States air capacity was running on carriers with Chapter 11 cases. The prospects for the airline industry are uncertain, thus, the U.S. Trustee believes that additional procedures should be established for members of the Creditors Committee who serve on committees in certain other pending airline Chapter 11 cases with respect to confidential information related to the Debtors. The Honorable Allan Gropper approved the U.S. Trustee's request. Judge Gropper rules that the information blocking procedures will continue until confirmation of a plan of reorganization in the Debtors' Chapter 11 cases. 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. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Unions Balk at Proposed CBA Rejections ---------------------------------------------------------- As previously reported, Northwest Airlines Corp. and its debtor- affiliates sought the U.S. Bankruptcy Court for the Southern District of New York's authority to reject, under Section 1113(c) of the Bankruptcy Code, nine collective bargaining agreements with the six unions that represent the vast majority of the Debtors' employees: (1) Air Line Pilots Association, International; (2) Professional Flight Attendants Association; (3) International Association of Machinists and Aerospace Workers; (4) Transport Workers Union of America; (5) Northwest Airlines Meteorologists Association; and (6) Airline Technical Support Association. Unions Object A. IAM The International Association of Machinists and Aerospace Workers argues that the Debtors are not entitled to reject their collective bargaining agreements with IAM under Section 1113(c) of the Bankruptcy Code. Financial difficulties are never enough by themselves to warrant the Court's exercise of its extraordinary statutory power to authorize the rejection of a debtor's CBA with its unions, Sharon L. Levine, Esq., at Lowenstein Sandler PC, in New York, asserts. Section 1113(c) allows a debtor-employer to obtain drastic relief only when it satisfies the statute's rigorous procedural and substantive requirements, which are protections designed to prevent the debtor from misusing Chapter 11 merely to escape the constraints of collective bargaining relationships with its unions. Ms. Levine tells the Court that after delivering their proposal for modifications to four IAM CBAs, the Debtors refused to negotiate in good faith with IAM over those proposals. The Debtors also refused to provide IAM the information it needs to evaluate the Section 1113(c) proposal. Specifically, they refused to provide documentation on how they allocated among the various union groups the $1,400,000,000 in total cost savings demanded from labor, or how they arrived at their $190,400,000 "ask" to IAM. Viewed as a whole, Ms. Levine says the Debtors' conduct appears to have been designed to manufacture an "impasse" with IAM, which they could use at the hearing to justify their request for authority to reject the IAM CBAs. The Debtors demand extreme outsourcing rights that, if accepted, would effectively eliminate much of IAM's membership at Northwest Airlines, Ms. Levine asserts. This outsourcing would impact the vast majority of equipment service employees and customer service agents. Although not in the original Section 1113(c) proposal, the Debtors subsequently proposed "re-assigning" some ESEs and CSAs to work for GroundCo, a new subsidiary they intend to establish, which will have a pay structure drastically lower than even the Debtors' proposal for the ESEs and CSAs at the two hubs, while still outsourcing the rest. GroundCo is merely an idea at this point, Ms. Levine clarifies. The Debtors have not provided IAM with any details or even a formal written proposal concerning the new company. Nor is it clear whether or how GroundCo will relate to the new regional airline that the Debtors want to create. The Debtors' outsourcing proposal, Ms. Levine says, eliminates 45% of IAM members employed by the Debtors. Moreover, Ms. Levine points out that the Debtors' outsourcing/GroundCo proposal is an attempt to destroy IAM's bargaining unit by: (a) pitting members who work at the two major hubs against members at other stations; and (b) stripping members of the other stations of union representation. Ms. Levine contends that the Debtors knew this would never be acceptable to IAM. Thus, IAM objected to it during its bargaining session with the Debtors. Accordingly, IAM wants the Debtors' request denied. B. PFAA The Professional Flight Attendants Association asks the Court to deny the Debtors' request as unreasonable, particularly because their justification of last resort is that labor cost reductions are necessitated by increases in the price of jet fuel. In fact, the sole justification offered by the Debtors for increasing their global labor "ask" from $1,100,000,000 to $1,400,000,000 was the increase in jet fuel costs. Lee Seham, Esq., at Seham, Seham, Meltz & Petersen, LLP, in White Plains, New York, explains that Northwest Airlines Inc.'s cynical strategy of wringing an extraordinary cost advantage out of the Section 1113(c) process is "betrayed by the dramatic disconnect between its pre-filing and post-filing negotiating strategy." Mr. Seham notes that throughout the pre-filing process, Northwest characterized United Airlines as its primary competitor and stated that its goal was to have a "United-like" cost structure. Only with the bankruptcy did Northwest Airlines shift its goal to emulate the cost structure of non-competitor US Airways, Mr. Seham states. According to Mr. Seham, the PFAA has acted reasonably by offering labor cost reduction proposals to Northwest Airlines that actually exceed the United model. The PFAA's use of the United model is reasonable, not just because it was the model that Northwest referenced throughout the pre-filing negotiations, but because market analysis and industry pricing practices confirm that Northwest Airlines' principal competitors are its fellow Legacy Carriers. Mr. Seham says that Legacy Carriers have indeed blamed the inability to raise airfares not on the low cost carriers, but on Northwest's insistence on playing the role of the "spoiler." Mr. Seham tells the Court that in United Airlines' bankruptcy proceeding, Judge Eugene Wedoff expressly rejected jet fuel as a legitimate basis for seeking Section 1113(c) labor cost reductions. Fuel increases affect all carriers and therefore support industry-wide fare increases. Judge Wedoff further found that Legacy Carriers actually receive a competitive advantage over LCC's from higher fuel prices and, therefore, should be "hoping" for fuel price increases. The PFAA maintains that the Debtors' efforts to exploit the bankruptcy process to undermine their competitors and destroy the Flight Attendant profession should not be countenanced by the Court. The PFAA's United-plus proposals, which is a product of the coercive power of the Section 1113(c) process, offer Northwest Airlines more than what can fairly be deemed "necessary." Moreover, Mr. Seham contends that procedurally, Section 1113 requires a debtor to attempt to negotiate modifications to its collective bargaining agreements with its unions in good faith before it can be allowed to reject those CBAs. If the debtor fails to conduct a fair negotiation process in good faith, its rejection request must be denied. In addition to these procedural requirements, a debtor must demonstrate that the proposed modifications are necessary to permit its reorganization, treat all constituencies fairly and equitably, and are clearly justified by the balance of equities. C. ALPA Richard M. Seltzer, Esq., at Cohen, Weiss and Simon LLP, in New York, recounts that the Air Line Pilots Association, International, and Northwest Airlines recently reached an agreement freezing the pilots' defined benefit pension plan. That agreement will provide Northwest Airlines with tremendous total cash savings. ALPA also made a comprehensive proposal, dated December 20, 2005, which was later refined, that would additionally provide $294,340,000 a year in annual savings, as well as at least over $66,000,000 in annual revenue enhancements and savings associated with regional jet operations. These agreements and proposals would add up to a combined total of at least $544,000,000 in annual savings, out of the $630,000,000 in the annual savings demanded by Northwest Airlines, or 86% of Northwest Airlines' request in annual savings, Mr. Seltzer explains. Northwest Airlines also seeks to transfer the work of its current DC-9 fleet to a separate corporation, "Newco," which would exclusively fly regional jets of 70 seats or more. Approximately 20% of Northwest Airlines' pilots fly the DC-9, which it intends to retire over the next several years. While Northwest Airlines would initially control Newco, it could eventually be sold or come under the control of other entities, taking with it up to one-fifth of all pilot positions at Northwest Airlines, Mr. Seltzer notes. In response, ALPA has proposed that Northwest Airlines establish a new division, "N Star," to handle 60-100 seat operations with pilot pay rates competitive with similar operations and substantially less than current DC-9 rates. According to Mr. Seltzer, ALPA has good cause to reject Northwest Airlines' proposal because ALPA has offered concessions that will give Northwest Airlines a competitive advantage over the other four major network carriers. He says the results should also provide profit margins within the range of recent airline financings. Moreover, Northwest Airlines' demands are neither fair nor equitable and it has not been negotiated in good faith. Northwest Airlines, Mr. Seltzer asserts, is risking labor peace with its pilots and the chances for a successful reorganization by rejecting ALPA's proposals. He explains that the unilateral implementation of Northwest Airlines' demands, in the face of ALPA's substantial and credible proposal, would leave Northwest Airlines without a consensual pilot contract and the pilots with the right to strike. The Debtors give no indication that they have any operational or financial plans to cope with a pilot walk-out. "ALPA has committed to continued collective bargaining to reach a consensual agreement, while Northwest has apparently only committed to a process where ALPA would agree to Northwest's original proposal," Mr. Seltzer says. Mr. Seltzer also notes that financing is unlikely in the absence of a consensual agreement with ALPA. Mr. Seltzer explains that ALPA's proposed concessions, coupled with other cost and revenue measures, are sufficient to enable Northwest Airlines to reorganize. Based on this factor alone, the balance of equities does not clearly favor rejection, Mr. Seltzer states. For these reasons, ALPA asks the Court to deny the Debtors' request and defer to a continuing bargaining process where there is an incentive for both parties to reach a truly consensual agreement. Court Modifies Protective Order At the Debtors' request, the Court modifies the Protective Order dated Oct. 27, 2005, to add the Official Committee of Retired Employees, as party. Barry J. Dichter, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, says it would be advantageous to add the Retiree Committee as a party to the Protective Order to facilitate and protect the exchange of confidential information between the parties. 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. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARADISE TAN: Posts $106,727 Net Loss in Period Ended Sept. 30 -------------------------------------------------------------- Paradise Tan, Inc., delivered its financial results for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 11, 2005. For the three months ended Sept. 30, 2005, Paradise Tan incurred a $106,727 net loss on $205,744 of revenues, as compared to a $145,894 net loss on $225,802 of revenues for the same period in the prior year. Revenues decreased $20,058, or 9%, for the three months ended Sept. 30, 2005, from the comparable period in 2004 because of poor customer retention and decreased advertising that generated fewer customers. As of Sept. 30, 2005, the Company had $1,341,081 in total assets and liabilities of $2,117,485, resulting in a stockholders' deficit of $776,404. Paradise Tan had a working capital deficit of $962,393 as of Sept. 30, 2005. This compares with a working capital deficit of $978,596 at Dec. 31, 2004. Going Concern Doubt Bongiovanni & Associates expressed substantial doubt about Paradise Tan's ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's recurring losses, negative working capital, stockholders' deficit, and material restrictions on cash. Bongiovanni & Associates 17111 Kenton Drive, Suite 100B Cornelius, North Carolina 28031 Telephone (704) 892-8733 Paradise Tan, Inc. -- http://www.paradisetan.com/-- develops, markets, franchises, licenses, and operates retail locations offering indoor tanning services and related products to the general public under the Paradise Tan brand. The Company currently operates tanning salons in and around the Dallas/Fort Worth, Texas metropolitan area and in Arizona. PHOENIX COLOR: Moody's Confirms $105 Million Notes' Junk Rating --------------------------------------------------------------- Moody's Investors Service confirmed all ratings of Phoenix Color Corp., including its: * $105 million senior subordinated notes, due 2009 -- Caa1 * Corporate Family rating -- B2 The rating outlook is stable. This rating action concludes the review which was initiated in May 2005 following the company's announcement that it was revising the financial information and projections which it had provided to Moody's and upon which Moody's had based its credit opinion with regard to a proposed refinancing of the existing senior subordinated notes. The ratings incorporate Phoenix's leading market share in the book components business, the limited number of domestic competitors in this sector and the value of its contracts with leading publishing companies. However, the ratings recognize: * Phoenix's highly leveraged financial condition; * its focus on a relatively narrow product range; * its customer concentration; and * increasing competition from multi-colored book manufacturers, especially those domiciled in the Far East. The stable outlook reflects management's decision to exit the one and two-color book manufacturing business and focus on its more profitable core book components and multi-color juvenile book operations. At the end of September 2005, Phoenix reported total debt of approximately $107 million, which represented a 4.7 times multiple of LTM EBITDA, compared to 4.8 times at the end of December 2004. Management plans to consolidate its manufacturing facilities in Hagerstown, Maryland, and sell its excess production facilities for approximately $12 million (net of related expenses). The company plans to apply the proceeds of this sale to further reduce debt. For the nine month period ended Sept. 30, 2005, Phoenix reported free cash flow of $4 million. Although it had minimal short term borrowings at the end of September 2005, Phoenix reported $11 million of availability under its $15 million revolving credit facility. This facility, which is governed by borrowing base limitations, expires at the end of August 2006. Phoenix must successfully refinance or renew this facility in order to avoid any potential liquidity squeeze, although usage under this facility is not currently anticipated. Moody's considers that the company represents a reasonable senior secured refinancing risk; however, there can be no assurance that management will be successful in refinancing or renewing its revolving credit facility on acceptable terms and conditions. Moody's expects that the company's core business will continue to face competitive pricing pressure from both domestic and international book manufacturers. Within the US, Phoenix competes principally against: * Coral Graphics, * Jaguar Advanced Graphics, and * The Lehigh Press. The company also faces increasing international competition, especially from rival multi-colored book manufacturers in China. Ratings could be upgraded if: * the book component market experiences a significant increase in sales; * the company demonstrates a significant improvement in its liquidity through the sale of its excess Hagerstown production facilities; and * the ratio of free cash flow to total debt increases to the high single digit level on a sustainable basis. Ratings could be downgraded or the outlook changed to negative if the company's book components business or its book manufacturing business loses market share through heightened competitive pressure resulting in negative free cash flow or debt to EBITDA exceeding 5.0 times. Headquartered in Hagerstown, Maryland, Phoenix Color Corp. is a leading manufacturer of book components and multi-colored books. The company reported sales of $110 million over the last twelve months ended September 2005. PORTUS ALTERNATIVE: AEGON Returns Referral Fees to Investors ------------------------------------------------------------ AEGON Dealer Services Canada Inc. disclosed plans to return referral fees to investors who were affected by the collapse of Portus Alternative Asset Management Inc. and its related entities. This follows an intensive investigation of Portus by various securities commissions, the Mutual Fund Dealer's Association, the Investment Dealers Association, and the court-appointed Receiver, KPMG. According to ADSCI President and CEO, Scott Sinclair, "During the investigation, ADSCI was part of a working group of seven companies that led an initiative representing nearly 50 investment dealers across Canada. Until now, the dimensions of the Portus collapse were difficult to ascertain. However, working with our industry group, KPMG, and the regulators, we have been able to gain a better understanding of the situation, and many of the investment dealers involved have reached an agreement to return referral fees. I believe this collaborative industry approach was most prudent and fair, and ADSCI is pleased to offer some relief to its investors." The fees were originally paid by Portus to the mutual fund and investment dealers who referred clients to that organization. ADSCI has pledged to return all of the fees it received directly to investors, and to do so well in advance of the industry's proposed deadline. ADSCI will communicate with investors about the amount and timing of their refunds, once the regulators approve its repayment plan. "ADSCI has invested tremendous human and financial resources into this investigation, and investors have waited a long time for answers. Now that there is knowledge and understanding of the extent and nature of the Portus deceptions, we are responding without delay by refunding the fees we received from Portus, which we believe is our obligation as good corporate citizens," said Mr. Sinclair. Bankruptcy proceedings for Portus are underway, and further information about the potential recovery and disbursement of investor funds is expected early this year. While chapters of this still unfolding story remain to be written, Sinclair is optimistic about the progress to date: "I'm grateful that Canada's mutual fund and investment dealers have come together to do the right thing. The Portus scandal was a shock to us all, and ADSCI will continue to take a lead role in helping the industry, regulators and authorities find relief for the victims of this impropriety." About AEGON Dealer Services Canada Inc. AEGON Dealer Services Canada Inc., a member of the Netherlands based AEGON Group, has been processing mutual fund trades for Canadian investors for 18 years. AEGON Dealer is a mutual fund dealership that enables advisors to provide their clients with excellent service and selection for their mutual fund investments. Through AEGON Dealer Services Canada Inc. advisors have the choice of Canada's best financial products and are well equipped to help Canadians and their family achieve their financial goals. About Portus Alternative Asset Management Inc. Portus Alternative Asset Management Inc.-- http://www.kpmg.ca/portus-- is a registered investment counsel/portfolio manager and limited market dealer. KPMG Inc. acts as Portus' receiver of all its property, undertakings and assets. PORTUS ALTERNATIVE: Regulators to Augment Payment to Investors -------------------------------------------------------------- The Ontario Securities Commission and the Mutual Fund Dealers Association of Canada disclosed a plan that would require some 55 investment and mutual fund dealers to repay investors all fees received from Portus Alternative Asset Management Inc. in connection with client referrals. The Investment Dealers Association of Canada supports the plan, which applies to five of its members. In total, excluding fees that have already been recovered, about $12 million in fees was paid out of funds invested in Portus to MFDA and IDA Ontario-registered dealers. This payment will be in addition to the money investors stand to recover from the insolvency proceedings currently involving the Portus Group. Investors had placed approximately $800 million in Portus products. Portus assets located by the Receiver, KPMG Inc., include C$133 million and $36 million in cash, as well as notes with a purchase price of $529 million and a maturity value of $611 million. No estimate of the likely realizable value of the notes is available at the present time. The best information available for investors is contained in a letter from the Representative Counsel for investors and the Ninth Report of the Receiver. The OSC, the MFDA and the IDA have been reviewing dealer regulatory issues arising from the referrals of clients to Portus. Regulatory issues arose from the due diligence process undertaken by dealers to approve referrals to Portus, the supervision of the appropriateness of client referrals and related compliance functions. The regulators propose that dealers agree to Terms and Conditions that would result in the repayment of fees received for referring clients to Portus. Because the participating dealers will agree the Terms and Conditions apply to their clients across Canada, the regulators are communicating with other Canadian securities regulators about developments that may affect investors in their jurisdictions. The regulators have already received indications from 28 dealers, representing more than 80% of fees paid out of funds invested in Portus to MFDA and IDA Ontario-registered dealers, that they are willing to accept the Terms and Conditions. Dealers have been asked to confirm by Jan. 24, 2006 that they intend to comply with the request and repay investors by May 31, 2006 under oversight by the MFDA and the IDA. The dealers will contact investors prior to issuing payment to confirm the accuracy of the amount of their investment in the Portus products, net of redemptions. In total, 64 dealers across Canada approved referrals resulting in their clients investing in Portus through some 25,000 accounts. Fifty-nine of these dealers are MFDA members and five are members of the IDA. Two of the IDA members are also affiliated with an MFDA member. Of the 64 dealers, approximately 55 have operations in Ontario. The Terms and Conditions on the registration of referring dealers also require dealers to: -- participate in regulatory studies relating to referral fee arrangements and non-mutual fund products; and -- enact and comply with practices, policies and procedures to reflect the findings arrived at pursuant to such regulatory studies. Should dealers not agree to the imposition of the Terms and Conditions, regulators may continue to review and investigate all regulatory issues arising from referrals to Portus. Enforcement proceedings may be undertaken, as circumstances warrant. Participation in the Terms and Conditions process by dealers is encouraged in Ontario and will be viewed by the regulators as a cooperative response to regulatory issues which maximizes prompt recovery to investors. Acceptance of the Terms and Conditions by a dealer will resolve the regulatory issues in Ontario regarding dealer due diligence and supervision. However, the MFDA will continue to investigate other matters relating to the conduct of dealers in referring clients to Portus. Investigations will also continue regarding the sales practices of referring advisors. The Terms and Conditions process does not affect the rights of clients to pursue further recoveries through the civil court process. Failure to meet the Terms and Conditions will lead to the suspension of the dealer's registration. As reported in the Troubled Company Reporter on Mar. 8, 2005, the Ontario Superior Court of Justice, on application of the Ontario Securities Commission, appointed KPMG Inc. Receiver of Portus Alternative Asset Management Inc., Portus Asset Management Inc., and BancNote Corp. As Receiver, KPMG will take control immediately of the assets and records of the Portus Group. KPMG will also begin an assessment of Portus and its associated companies and report back to the Ontario Superior Court of Justice within 15 days. "The expeditious application by the OSC to have the Receiver appointed enabled the Receiver to identify and secure a large proportion of clients' funds and prevent misappropriation of those funds," said Bob Rusko, Senior Vice President of KPMG. "We will report back to the Court on the disposition of Portus assets. We are in the process of moving the Receivership into bankruptcy and we will develop a plan to realize upon the assets of the Portus Group and distribute the proceeds to the investors." Full copies of the Receiver's reports relating to asset recovery can be found at http://www.kpmg.ca/portus/ Meanwhile, the OSC is proceeding expeditiously with the administrative and court proceedings commenced in October of 2005. The next appearance with respect to the administrative proceeding commenced against Portus, Boaz Manor, Michael Mendelson, Michael Labanowich and John Ogg is scheduled to take place on Jan. 17, 2006. With respect to the court proceeding against Boaz Manor, the next attendance in provincial court will take place on Jan. 18, 2006. Portus Alternative Asset Management Inc.-- http://www.kpmg.ca/portus-- is a registered investment counsel/portfolio manager and limited market dealer. KPMG Inc. acts as Portus' receiver of all its property, undertakings and assets. REFCO INC: Wants to Hire Goldin Associates as Crisis Managers ------------------------------------------------------------- Refco Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Goldin Associates, LLC, as their crisis managers, effective as of Dec. 16, 2005. As previously reported, the Court has authorized the Debtors to employ APS Services, LLC, as their crisis managers. The Debtors selected APS because of its vast experience in providing crisis management services to financially troubled organizations. APS continues to provide excellent services to the Debtors. Refco's Board of Directors has appointed Harrison J. Goldin as chief executive officer provided that he continues to utilize, to the extent practicable, the institutional knowledge acquired by APS in a cost efficient and effective manner. Mr. Goldin commenced performing services for the Debtors on Dec. 16, 2005. Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, in New York, relates that as crisis managers: (a) Goldin Associates will designate Mr. Goldin as temporary chief executive officer and Mark Slane as the temporary chief restructuring officer. In this capacity, the Officers will assist the Debtors in their operations with an objective to restructure the Debtors and manage the Debtors' restructuring efforts, including: * negotiating with parties-in-interest; and * managing, overseeing and coordinating the "working group" of the Debtors' employees, APS personnel and external professionals who are assisting the Debtors in the restructuring. (b) Goldin Associates will work with APS and: * assist with the management of Refco's U.S. and non-U.S. entities; * assist with the management of the Debtors' unregulated business to maximize the orderly resolution of the issues facing that business; * assist with the management of the Chapter 11 bankruptcy process, including assisting the Debtors in evaluating and implementing strategic and tactical options through the proceedings; * assist with post-closing adjustments and reconciling items associated with the sale of the Debtors' regulated business; * assist in developing and implementing cash management strategies, tactics and processes; * coordinate information requests and responses to all regulators, lender groups, and other parties-in- interest in the bankruptcy process; * coordinate communications with all constituents; * assist in negotiations with stakeholders and their representatives; * assist with the preparation of the statement of affairs, schedules, monthly operating reports and other regular reports required by the Bankruptcy Court as well as claims processes; and * assist with other matters as may be requested that fall within Goldin Associates' expertise and that are mutually agreeable between the Debtors and Goldin Associates. The Officers will be assisted by a staff of other temporary employees provided through Goldin Associates at various levels, as well as APS personnel. The Temporary Employees will serve at the direction of the Debtors' chief executive officer and Board of Directors. The Debtors will pay Goldin Associates' professionals at the firm's standard hourly rates: Professional Hourly Rate ------------ ----------- Senior Managing Directors $685 Managing Directors/Directors $400 to $550 Vice Presidents/Managers $300 to $450 Senior Analysts/Analysts $150 to $350 Associates $100 to $150 The Goldin Associates employees to be engaged by the Debtors and their hourly rates are: Hourly Professional Position Rate ------------ -------- ------ Harrison J. Goldin Chief Executive Officer $685 Mark Slane Chief Restructuring Officer $550 Jerry Lombardo Vice President $500 Andrew Craven Vice President $375 Michael Cordasco Vice President $350 Adam Boyd Vice President $350 Tom Brady Vice President $350 The Debtors will reimburse Goldin Associates for all reasonable out-of-pocket expenses incurred in connection with its services to be performed for the Debtors. The Debtors seek the Court's authority to pay all reasonable amounts invoiced by Goldin Associates for fees and expenses in the ordinary course of their businesses. Goldin Associates reserves the right to file an application to the Court for the payment of a success fee upon substantial completion of its duties, provided that the Refco Board approves that fee. The Debtors agree to indemnify Goldin Associates and the Goldin Temporary Employees under applicable corporate bylaws and state law. The Debtors further seek the Court's permission to pay Goldin Associates a $250,000 retainer. Forty-five days after the end of each quarter, Goldin Associates will file a notice of compensation earned and expenses incurred for the previous quarter with the Court and the U.S. Trustee and serve that notice on the Debtors' counsel and counsel for any official committee in these cases. Mr. Goldin assures the Court that Goldin Associates has no adverse interest as to the matters for which it has been employed with the Debtors. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFCO INC: Ct. Denies US Trustee's Move to Appoint Ch. 11 Trustee ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Dec. 14, 2005, Deirdre A. Martini, the United States Trustee for Region 2, asked the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to appoint a Chapter 11 trustee in Refco Inc., and its debtor-affiliates' chapter 11 cases pursuant to Section 1104(a)(2) of the Bankruptcy Code. Andrew D. Velez-Rivera, Esq., trial attorney for the U.S. Trustee, tells the Court that the appointment of a truly independent fiduciary to investigate the Debtors' prepetition affairs and to maximize the recoveries for their estates has been of paramount concern to the U.S. Trustee since Refco, Inc., filed for bankruptcy protection. * * * At the Jan. 10, 2005, hearing, the U.S. Trustee advised Judge Drain that in the event the Court will direct the appointment of a trustee, she would appoint a separate trustee for RCM. The Debtors also advised the Court in the event the Trustee Motion is denied, they would file a motion for reconstitution to remove Philip R. Bennett as member of the Refco Board of Directors. The Debtors said that the other members of the Board are prepared to resign effective upon the appointment of unaffiliated independent board members. In light of these representations, Judge Drain denies the Trustee Motion as it applies to all Debtors other than RCM on the condition that on or before Jan. 13, 2006: (1) the members of the Refco Board other than Mr. Bennett tender their resignations; (2) at least one new director, who was previously unaffiliated with the Debtors and is independent, is appointed to the Refco Board; and (3) the Bennett Removal Motion is granted by the Court. The Court rules that if the Board Reconstitution Condition is not timely satisfied, the Trustee Motion will be granted and the U.S. Trustee is directed to appoint a Chapter 11 trustee for all the Debtors. The Court, however, clarifies that any trustee appointed will: (1) have only the oversight functions of a board of directors and not the management powers of a chief executive officer; and (2) not cause the removal of or otherwise interfere with the actions of Harrison J. Goldin as the Debtors' chief executive officer absent good cause and after compliance with the requirements of Section 363(b) of the Bankruptcy Code. Judge Drain adjourns the hearing to consider the Trustee Motion as to RCM until the time of the hearing of the Motion to Convert the RCM case into a Chapter 7 case. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFCO INC: Refco LLC Wants Until April 24 to Decide on Contracts ---------------------------------------------------------------- Section 365(d)(1) of the Bankruptcy Code grants a trustee an initial 60-day period to determine whether to assume or reject unexpired executory contracts, unless that time is extended by a Court order. In a case under Chapter 7 of the Bankruptcy Code, Section 365(d)(1) provides that if a trustee does not assume or reject an executory contract or unexpired lease of residential real property or of personal property of a debtor within 60 days after the order for relief, or within such additional time as the Court, for cause, within that sixty-day period, fixes, then that contract or lease is deemed rejected. As of the bankruptcy filing, Refco LLC was a counterparty to several hundred executory contracts. According to Albert Togut, the interim Chapter 7 trustee appointed to oversee liquidation of Refco LLC's estates, Refco LLC's contracts fall into three categories: (1) Agreements with introducing brokers, guaranteed introducing brokers, and associated persons working on commissions; (2) Service and license agreements with third parties; and (3) Miscellaneous agreements with third party vendors and suppliers. However, the Chapter 7 trustee tells the U.S. Bankruptcy Court for the Southern District of New York that he and his advisors have not yet had a sufficient opportunity to review or analyze all of LLC's books and records to identify the universe of executory contracts to which LLC may be a counterparty. Due to the number of executory contracts that the Chapter 7 trustee has identified so far as well as the numerous executory contracts that may exist and are still unknown, it is too early for the Chapter 7 trustee to decide which contracts should be assumed or rejected, Scott E. Ratner, Esq., at Togut, Segal & Segal, LLP, in New York, avers. Accordingly, the Chapter 7 trustee asks the Court to extend the time within which he may assume, assume and assign or reject all of Refco LLC's executory contracts, through and including April 24, 2006. In the interim, Mr. Ratner reports that the Chapter 7 trustee is meeting: -- all obligations imposed on him under Section 365 with respect to the Executory Contracts; and -- all of LLC's obligations under the Acquisition Agreement entered into by, among others, Refco LLC and Man Financial Inc., pursuant to which Man is entitled to receive performance under, and the benefit of, certain of LLC's Executory Contracts for a specified period of time. Mr. Ratner asserts that the Chapter 7 trustee requires more time to identify and evaluate all of LLC's unexpired executory contracts and to ensure that those contracts remain subject to a possible request by Man that the Chapter 7 trustee assume and assign various contracts to it pursuant to the terms of the Acquisition Agreement. Man has identified several hundred executory contracts to be potentially assumed and assigned to it, and the Chapter 7 trustee is in the process of preparing cure notices related to such contracts, Mr. Ratner discloses. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFINED GLOBAL: Case Summary & 21 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Refined Global Solutions, Inc. 4897 West Lake Park Boulevard, Suite 100 Salt Lake City, Utah 84120 Bankruptcy Case No.: 06-20097 Type of Business: The Debtor develops bypass oil filtration and purification systems for commercial use. Refined Global also designs, produces, and distributes a variety of products for long-haul transport, mining, marine, agriculture, and construction applications. See http://www.rgsoilrig.com/ Chapter 11 Petition Date: January 13, 2006 Court: District of Utah (Salt Lake City) Judge: Glen E. Clark Debtor's Counsel: Ralph R. Mabey, Esq. Mabey & Murray LC 136 South Main Street 1000 Kearns Building Salt Lake City, Utah 84101-1685 Tel: (801) 320-6700 Fax: (801) 359-8256 Total Assets: $215,528 Total Debts: $5,260,809 Debtor's 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Olson & Hierl, Ltd. Legal services $72,000 Attn: Michael Hierl 20 North Wacker Drive, 36th Floor Chicago, Illinois 60606 Flying J Product liability $60,000 Attn: Michael Baldwin claim 1104 Country Hills Drive Ogden, UT 84403 Truck Enterprises Trade debt $44,916 3440 South Main Street Harrisonburg, VA 22801 Kent DeMars Subordinated $30,000 convertible promissory note Bob Millerberg Subordinated $23,610 convertible promissory note Kenworth Sales Company Product refund $21,000 Paul Whetsone Former employee $20,784 (technical sales manager) Gaylin Thomas Former employee $20,000 On-Site Analysis, Inc. Trade debt $19,953 Larry Kokkelenberg Subordinate $15,000 convertible promissory note Combustion Resources Trade debt $12,500 Central Refrigerated Product liability $12,000 claim Thorpe North & Western Patent legal services $11,662 Arnold & Wiggins Legal services $10,944 Brandon Lloyd Former employee $9,000 Richburg/McKee & Associates Factory representative $7,791 commissions Mid-States Heavy Duty Factory representative $4,025 Representation, LLC commissions Wright-Green Associates Factory representative $3,950 commissions Atkinson Sales Co., Inc. Factory representative $2,315 commissions LynRus Aluminum Products Trade debt $989 Lube Track Oil Analysis Trade debt $520 RESIDENTIAL ASSET: Fitch Downgrades Two Certificate Classes to B ---------------------------------------------------------------- Fitch Ratings has taken rating actions on these Residential Asset Securities Corporation's home equity loan transactions: Series 2001-KS2 Group 1: -- Class A-I-5 affirmed at 'AAA'; -- Class A-I-6 affirmed at 'AAA'; -- Class M-I-1 downgraded to 'AA-' from 'AA'; -- Class M-I-2 downgraded to 'A-' from 'A'; -- Class M-I-3 downgraded to 'B' from 'BB'. Series 2001-KS2 Group 2: -- Class A-II affirmed at 'AAA'; -- Class M-II-1 affirmed at 'AAA'; -- Class M-II-2 affirmed at 'A'; -- Class M-II-3 affirmed at 'BBB'. Series 2001-KS3 Group 1: -- Class A-I-5 affirmed at 'AAA'; -- Class A-I-6 affirmed at 'AAA'; -- Class M-I-1 downgraded to 'AA-' from 'AA'; -- Class M-I-2 downgraded to 'A-'from 'A'; -- Class M-I-3 downgraded to 'B' from 'BBB-'. Series 2001-KS3 Group 2: -- Class A-II affirmed at 'AAA'; -- Class M-II-1 affirmed at 'AA'; -- Class M-II-2 affirmed at 'A'; -- Class M-II-3 affirmed at 'BBB'. The affirmations of the above classes, reflect credit enhancement consistent with future loss expectations. The downgrades affect about $67,531,352 of outstanding certificates and reflect potential negative impact of loan performance issues on these bonds. The collateral in these deals consists of fixed-rate and adjustable-rate one- to four-family residential mortgage loans secured by first and second liens. These loans were originated using less stringent underwriting standards than those applied by some other first and junior mortgage loan purchase programs including other programs of Residential Funding Corporation and Fannie Mae & Freddie Mac. In addition, certain first lien loans with original loan-to-value ratios greater than 65% were insured by a mortgage insurance policy from PMI Mortgage Insurance Co. These loans were sold by Residential Funding Corporation to Residential Asset Securities Corporation, the depositor. The loans are primarily serviced by Homecomings Financial Network, Inc., which is rated 'RPS1', Rating Watch Evolving by Fitch. The master servicer for these loans is Residential Funding Corporation (rated 'RMS1', Rating Watch Evolving by Fitch). Series 2001-KS2 Group 1: The monthly excess interest has averaged approximately $439,398 during the past six months and the monthly losses have averaged $716,099 during the same period. This has resulted in an average monthly reduction of approximately $276,701 to the available credit support. This loss has been somewhat mitigated by the fact that some of the excess spread from Group 2 is available to cover losses for this group. The deal is structured so that excess spread is crossed between the two groups. This means that any excess spread available from Group 2 after the Group 2 losses have been covered, goes to cover losses occurring in Group 1. The 60+ delinquencies have averaged 23.22% of the current pool balances during this period. As of the Dec. 27, 2005, distribution date, the overcollateralization was $2,227,322 with a target of $4,500,000. The pool factor currently stands at 17%. Series 2001-KS2 Group 2: As of the Dec. 27, 2005, distribution date, the OC was $2,551,317, with a target of $3,125,000. The pool factor currently stands at 10%. As discussed in the previous section, excess spread from Group 2 is available to offset losses incurred in Group 1 after Group 2 losses have been accounted for. This support occurs before such monies can be used to fund Group 2's OC to its required level. Therefore, despite the ongoing generation of positive net excess spread, Group 2's OC remains below its target level. Series 2001-KS3 Group 1: The monthly excess interest has averaged approximately $506,889 during the past six months and the monthly losses have averaged $644,291 during the same period. This has resulted in an average monthly reduction of approximately $137,402 to the available credit support. This deal is also structured in the same way as the 2001-KS2 deal in that the excess spread is crossed between the two groups. The 60+ delinquencies have averaged 23.47% of the current pool balances during this period. As of the Dec. 27, 2005, distribution date, the OC was $2,213,159, with a target of $4,250,003. The pool factor currently stands at 18%. Series 2001-KS3 Group 2: As of the Dec. 27, 2005 distribution date, the OC was $5,617,290, with a target of $5,750,000. The pool factor currently stands at 11%. RF CUNNINGHAM: Wants Until March 27 to File Chapter 11 Plan ----------------------------------------------------------- R.F. Cunningham & Company asks the U.S. Bankruptcy Court for the Eastern District of New York to further extend until March 27, 2006, the period within which it has the exclusive right to file a plan of reorganization. The Debtor also wants its exclusive period to solicit plan acceptances extended to May 26, 2006. The Debtor needs more time to: i) permit the State Department of Agriculture to make its determinations on the claims; and ii) analyze the claims determined by the State, and compare those to claims file in the bankruptcy case and with the Debtor. Furthermore, the Debtor is a party to numerous leases. The Debtor is currently analyzing those assets, to decide whether it is profitable to assume, assume and assign or reject those leases. The extension, the Debtor relates, will not prejudice the legitimate interests of any creditor and will provide the Debtor an opportunity to complete the plan negotiation process. Headquartered in Smithtown, New York, R.F. Cunningham & Company, is a grain dealer, licensed under the Agriculture and Markets Law of New York. The company filed for chapter 11 protection on June 13, 2005 (Bankr. E.D.N.Y. Case No. 05-84105). Harold S. Berzow, Esq., at Ruskin Moscou Faltischek, P.C., represents the Debtor in its restructuring efforts. When The Debtor filed for protection from its creditors, it listed $8,416,240 in total assets and $10,218,229 in total debts. SAINT VINCENTS: Cases Reassigned to Judge Adlai S. Hardin, Jr. -------------------------------------------------------------- As widely reported, the Hon. Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York is currently on a medical leave of absence. The Hon. Stuart M. Bernstein, Chief Judge of the U.S. Bankruptcy Court for the Southern District of New York, has reassigned all of the Debtors' jointly administered Chapter 11 cases and all related adversary proceedings to Judge Adlai S. Hardin, Jr. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Wants Court to Set March 30 as Claims Bar Date -------------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to establish March 30, 2006, as the deadline for filing proofs of claim based on prepetition debts or liabilities. Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that establishing the Bar Date will enable the Debtors to receive, process, and begin their analysis of creditors' claims in a timely and efficient manner. It will also assist the Debtors in the formulation of a disclosure statement to accompany their plan of reorganization, when filed. The Debtors further ask the Court to require all creditors, even those whose claims are not listed in their Schedules of Assets and Liabilities as disputed, contingent, or unliquidated, to file proofs of claim for three reasons: (1) The Debtors could not be sure that they have identified the exact amounts they owe as of the Petition Date given their accounting systems. (2) Some creditors failed to issue to the Debtors appropriate invoices or credit advices for the periods just before the Petition Date. Similarly, the Debtors may have failed to record all invoices or credit advices actually received. (3) Because certain of the Debtors' operations closed prior to the Petition Date, the records for those facilities were particularly difficult to assess for the purpose of preparing the Schedules and accurately identifying claims as contingent, unliquidated, or disputed. Each person or entity that asserts a prepetition claim against the Debtors must file an original, written proof of the claim that substantially conforms to Official Form No. 10 so as to be received on or before the Bar Date by Bankruptcy Services LLC, the Debtors' claims agent, either by overnight delivery, by hand delivery, or by mailing to the Bankruptcy Court - St. Vincents Claims Processing unit. The St. Vincents Claims Processing Center will not accept Proofs of Claim sent by facsimile, telecopy, or electronic mail transmission. The Proofs of Claim will be deemed timely filed only if the claims are actually received by the St. Vincents Claims Processing Center on or before the Bar Date. Persons or entities not required to file a Proof of Claim on or before the Bar Date are: (a) Any person or entity that has already properly filed, with the Clerk of the United States Bankruptcy Court for the Southern District of New York, a Proof of Claim against the applicable Debtor or Debtors utilizing a claim form which substantially conforms to Official Form No. 10; (b) Any person or entity having a claim under Sections 503(b) or 507(a) of the Bankruptcy Code as an administrative expense of the Debtors' Chapter 11 cases; (c) Any person or entity whose claim has been paid in full by any of the Debtors; (d) Any of the Debtors having a claim against another Debtor; (e) Any person or entity that holds a claim that has been allowed by a Court Order entered on or before the Bar Date; (f) Any person or entity that holds a claim solely against any of the Debtors' non-debtor affiliates; and (g) Any current director, officer, or employee of any of the Debtors that has or may have a claim against any of the Debtors for indemnification, contribution, subrogation, or reimbursement. Any person or entity that holds a claim that arises from the rejection of an executory contract or unexpired lease must file a proof of claim based on the rejection by the later of: (a) the Bar Date; or (b) the date which is 30 days after the effective date of the rejection. Proofs of Claim Form The Debtors prepared a customized Proof of Claim Form, which will be further customized when sent to a creditor to contain certain information about that creditor, its claim, and the Debtor against which its claim may lie. The creditor is required to file a Proof of Claim, confirming the Debtor against which it is asserting a claim and identifying the amount and type of the claim. The Proof of Claim Form also makes certain modifications to the Official Form No. 10, including: (a) allowing the creditor to correct any incorrect information contained in the name and address portion; (b) adding certain instructions; (c) highlighting that supporting documentation must be provided in connection with the filing of a Proof of Claim, and adding that voluminous supporting documentation otherwise allowed to be summarized must be provided upon the Debtors' request; and (d) updating claim amounts entitled to priority status under Section 507(a), amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The Debtors ask the Court to approve the proposed Proof of Claim Form. The Debtors propose that any holder of a claim who is required, but fails, to file a proof of the claim in accordance with the Bar Date will be forever barred, estopped, and enjoined from asserting a claim against them. The Debtors propose to file a bar date notice within five days of the Court's approval of their request. Publication Notice Pursuant to Rule 2002(1) of the Federal Rules of Bankruptcy Procedure, the Debtors ask the Court to approve a supplemental notice of the Bar Date by publishing a notice in: -- The New York Times (National Edition); and -- in the largest local paper of general circulation in Brooklyn, Queens, Staten Island, the Bronx and Westchester. Mr. Troop explains that publication of the Bar Date is intended to give effective notice to all creditors, including: (a) those creditors to whom no other notice was sent and who are unknown or not reasonably ascertainable by the Debtors; (b) known creditors with addresses unknown by the Debtors; and (c) potential creditors with claims unknown by the Debtors. The Debtors ask the Court to find that the publication of the Bar Date Notice will provide adequate and sufficient notice of the Bar Date in the Debtors' Chapter 11 cases. Objections to Claims After the Bar Date passes, the Debtors will be in a position to begin their review of the claims, Mr. Troop notes. The Debtors, thus, reserve their right to: (a) object to any Proof of Claim, whether filed or scheduled, on any grounds; and (b) dispute, or assert offsets or defenses to, any claim reflected on the Schedules, or any amendments, as to amount, liability, classification or otherwise and to subsequently designate any claim as disputed, contingent, unliquidated or undetermined. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Agrees to Make $250,000 Payment to Sandra Strumpf ----------------------------------------------------------------- On Aug. 4, 1999, Sandra Strumpf, as administratrix of the estate of Charles Strumpf, commenced an action in the New York Supreme Court, County of Richmond against several defendants, including Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates, alleging that medical malpractice at SVCMC's Staten Island hospital caused the death of Charles Strumpf. Prior to the trial of the Action, Ms. Strumpf's counsel agreed to settle the Action with respect to the claims against the Debtors directly with Medical Liability Mutual Insurance Company, the Debtors' primary insurance carrier for SVCMC's Staten Island hospital, for $250,000. However, prior to consummation of the Settlement, the automatic stay was imposed due to the Debtors' bankruptcy filing. Thereafter, to effectuate the Settlement, Ms. Strumpf's counsel sought relief from the automatic stay. The Debtors determined that they have sufficient primary insurance coverage from Medical Liability to fund the Settlement with Ms. Strumpf. To resolve the Action, the Debtors and Ms. Strumpf agree to modify the automatic stay solely to permit: (a) Ms. Strumpf, through counsel, to execute a proper Stipulation of Discontinuance, Hold Harmless Stipulation, and any other relevant document with defense counsel and present wrongful death compromise order to a court with competent jurisdiction for approval of the Settlement; (b) the parties to consummate the Settlement through the distribution of $250,000 in insurance proceeds to Ms. Strumpf, provided, however, that Ms. Strumpf and the estate of Charles Strumpf will in no event be entitled to recover any property of the Debtors or their estates and will instead have recourse solely against the available Insurance Proceeds; and (c) the use of the Insurance Proceeds, to the extent available, to pay the Debtors' defense costs and any possible indemnity. Ms. Strumpf agrees to release and forever discharge the Debtors from any and all Claims and other actions, which she may now have, may claim to have, or ever had, including claims asserted in relation to the Action. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) SEQUOIA MORTGAGE: Fitch Affirms Low-B Ratings on 8 Cert. Classes ---------------------------------------------------------------- Fitch Ratings has affirmed these Sequoia Mortgage Trust pass-through certificates: Series 2004-9 -- Class A 'AAA'; -- Class B-1 'AA'; -- Class B-2 'A'; -- Class B-3 'BBB'; -- Class B-4 'BB+'; -- Class B-5 'B'. Series 2004-10 -- Class A 'AAA'; -- Class B-1 'AA'; -- Class B-2 'A'; -- Class B-3 'BBB'; -- Class B-4 'BB'; -- Class B-5 'B'. Series 2004-11 -- Class A 'AAA'; -- Class B-1 'AA'; -- Class B-2 'A'; -- Class B-3 'BBB'; -- Class B-4 'BB'; -- Class B-5 'B'. Series 2004-12 -- Class A 'AAA'; -- Class B-1 'AA'; -- Class B-2 'A'; -- Class B-3 'BBB'; -- Class B-4 'BB'; -- Class B-5 'B'. The underlying collateral for the Sequoia Mortgage transactions consists of 30-year traditional and hybrid adjustable-rates mortgages extended to Prime borrowers. As of December 2005 distribution date, these transactions are seasoned from a range of 12 to 15 months and the pool factors range from approximately 47% to 65%. The Sequoia Mortgage Trust loans are acquired from various originators by a subsidiary of Redwood Trust Inc, a mortgage real estate investment trust that invests in residential real estate loans and securities. The master servicer for the deals above is Wells Fargo Bank Minnesota. The affirmations reflect satisfactory collateral performance with general stable credit enhancement level and affect approximately $1.81 billion outstanding certificate. SKIN NUVO: Inks Agreement Outlining Extent of Insurer's Liability ----------------------------------------------------------------- Skin Nuvo International, LLC, its debtor-affiliates and Admiral Insurance Company negotiated a compromise to settle all disputes relating to potential insurance liabilities arising from certain personal injury tort claims. The claims stem from certain alleged bodily injuries sustained by the Debtors' customers in the course of various skin treatments performed at their clinics. The compromise agreement offers a comprehensive resolution of pending and potential litigation between Admiral and the Debtors by providing the certainty of substantial insurance coverage consistent with the terms underlying the insurance policy originally issued by Admiral. Admiral Insurance Policy Prior to the petition date, Admiral issued Professional Liability Policy No. EO 000002853-01 to Skin Nuvo International Laser Centers. The same policy also provided insurance coverage for certain doctors, nurses, nurse practitioners and other persons employed by Skin Nuvo. In March 2005, Admiral moved to cancel the policy because of a substantial increase in the frequency and severity of claims being submitted. The cancellation would have been effective on April 10, 2005, but was stayed after the Debtors sought protection from its creditors. Admiral subsequently asked for relief from automatic stay to permit the cancellation of the Policy. The Debtors fought the stay-relief motion. The Compromise Agreement To avoid the expense and uncertainty of continuing litigation, the Debtors and Admiral have agreed to consensually and comprehensively resolve all issues related to the insurance coverage. For this reason, the Debtors ask the U.S. Bankruptcy Court for the District of Nevada to approve the Debtors' agreement with Admiral. The principal terms of the agreement include: a) a stay on all litigation related to the insurance coverage, including any related discovery, pending adjudication of the compromise agreement; b) Admiral's consent to provide insurance coverage pursuant to the terms of the policy for any claims arising from incidents that occurred between Nov. 27, 2004, to May 31, 2005, provided that: i) any such Claim was actually reported to Skin Nuvo before May 31, 2005; and ii) that Skin Nuvo actually reported any such Claims to Admiral before Sept. 7, 2005. c) the Debtors' consent for Admiral to retain all premium payments made by Skin Nuvo. All Non-Debtor Insureds are also bound by the terms of the compromise agreement. Permanent Injunction As an integral part of the compromise agreement, the Debtors ask the Bankruptcy Court to issue a permanent injunction restraining any person or entity from making a collateral attack upon, or taking any direct action against, Admiral and all of the Non- Debtor Insureds for any insurance coverage not provided by the compromise agreement. Headquartered in Henderson, Nevada, Skin Nuvo International, LLC, dba Nuvo International, LLC, and dba A&E Aesthetics, LLC -- http://www.nuvointernational.com/-- specializes in offering progressive anti-aging treatments and top quality products and the first medical cosmetic company to launch a chain of retail skin care clinics in shopping malls throughout the United States. Keith M. Aurzada, Esq., and Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Fled LLP represent the Debtors. The Company and its debtor-affiliates filed for chapter 11 protection on March 7, 2005 (Bankr. D. Nev. Case No. 05-50463). When the Debtors filed for protection from their creditors, they estimated assets and debts of $10 million to $50 million. TELOGY INC: Can Access Up to $7.5 Million in DIP Loans ------------------------------------------------------ The Hon. Edward D. Jellen of the U.S. Bankruptcy Court for the Northern District of California in Oakland, authorized Telogy, Inc., to incur up to $7.5 million in postpetition loans from a subgroup of existing secured lenders, led by DDJ Capital Management, LLC. The Debtor's affiliate, e-Cycle, LLC, will guarantee the loan. In addition, the Debtors also obtained permission from the Bankruptcy Court to use cash collateral securing approximately $105.7 million in prepetition debts from a consortium of bank lenders and approximately $58.6 million in prepetition debts from a group of senior noteholders. Security interests and liens on substantially all of the Debtors, including deposit accounts, secure these debts. The Debtors sought to obtain postpetition financing as well as access to its lenders' cash collateral in order to maintain the going concern value and prevent irreparable harm to its business. Bank of America, NA, serves as collateral agent for the Bank Lenders and the Senior Noteholders. DIP Financing DDJ Capital, as DIP Agent, is granted a superpriority interest over all claims for the ratable benefit of the DIP Lenders. To further secure the DIP loan, DDJ Capital is granted these additional liens and security interests: a) a perfected first-priority senior security interest in and liens on all of the Debtors' prepetition and postpetition property; b) a junior priority security interest in and liens upon all of the Debtors' prepetition and postpetition property subject to valid, perfected and unavoidable liens in existence as of the petition date or to valid and unavoidable liens in existence immediately prior to the petition date that are perfected subsequent to the petition date. c) a perfected first priority, senior priming lien on all of the prepetition collateral; and all of the liens on the prepetition collateral that secure the prepetition obligations shall be primed by and made subject and subordinate to the Priming Liens, which, however, shall not prime liens, if any, to which the Primed Liens are subject as of the Petition Date. Use of Cash Collateral To protect against the decrease, diminution, or decline in the value of the Bank Lenders and the Senior Noteholders' prepetition collateral, Bank of America is granted a continuing, perfected replacement lien and security interest on: a) all assets of the Debtors' bankruptcy estates acquired after the petition date of the same type and description as the prepetition collateral; and b) all other property of the Debtors' bankruptcy estates that is not prepetition collateral or postpetition "Like Kind" collateral. As additional adequate protection, the Bank Lenders and the Senior Noteholders are allowed a Junior Superpriority Claim over all administrative claims except for claims subject to the carve out, such as fees to the U.S. Trustee. The Debtors will use cash collateral in accordance with this 14- week budget: http://researcharchives.com/t/s?44b The DIP Loan and any adequate protection payments will be due and payable, and the Debtor's authority to access cash collateral will terminate upon the earliest to occur of: a) Nov. 29, 2006; b) the effective date of any plan of reorganization; or c) the consummation of a sale of substantially all of the Debtor's assets. Headquartered in Union City, California, Telogy, Inc. -- http://www.tecentral.com/-- rents, sells, leases electronic test equipment including oscilloscopes, spectrum, network, logic analyzers, power meters, OTDRs, and optical, from manufacturers like Tektronix, Rohde & Schwarz. Telogy, Inc. and its debtor-affiliate, e-Cycle, LLC, filed for chapter 11 protection on Nov. 29, 2005 (Bankr. N.D. Calif. Case No. 05-49371). Ramon M. Naguiat, Esq., at Pachulski, Stang, Ziehl, Young Jones & Weintraub P.C. represents the Debtor in its restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. TERAYON COMMS: Form 10-Q Filing Delay Prompts Default Notice ------------------------------------------------------------ Terayon Communication Systems, Inc. (Nasdaq: TERNE) reported that the filing of its Quarterly Report on Form 10-Q for the quarterly period ended Sept. 30, 2005, would be delayed and that it had commenced an accounting review after determining that certain revenues recognized in the second half of fiscal year 2004 may have been recorded in incorrect periods. As a result of the delay in filing its Form 10-Q, Terayon is not in compliance with its obligation under the Indenture with respect to Terayon's 5% Convertible Subordinated Notes due 2007 to file with the Securities and Exchange Commission and the trustee of the Notes all reports, information and other documents required pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934. Default Notice On Jan. 12, 2006, Terayon was provided written notice of default from holders of over 25% in aggregate principal amount of the Notes outstanding based on Terayon's failure to file its Form 10-Q. If such default is not cured within 60 days of this notice, an event of default will occur and the Trustee or holders of at least 25% in aggregate principal amount of the Notes then outstanding, upon notice to the Company, may accelerate the maturity of the Notes and declare the entire principal amount of the Notes, together with all accrued and unpaid interest thereon, to be due and payable immediately. The Notes currently outstanding have an aggregate principal amount of approximately $65 million. The company ended 2005 with approximately $101 million of cash and cash equivalents plus short-term investments which represents a $3 million increase over year end 2004 balances of approximately $98 million. "We were aware of our obligations under the Indenture and have already considered alternative actions," stated Mark Richman, Terayon's Chief Financial Officer. "Given our cash position and reduction in cash usage as a result of our restructuring of the business we are comfortable with our cash position and we have several options available." Headquartered in Santa Clara, California, Terayon Communication Systems, Inc. -- http://www.terayon.com/-- provides digital video networking applications and home access solutions that enable the delivery of advanced digital video, voice and data services. Service providers worldwide have deployed more than 6,000 of Terayon's digital video systems to brand their programming, insert millions of digital ads, offer HDTV and other digital video services. More than five million Terayon cable modems and other home access solutions have been deployed by cable operators globally to provide broadband Internet access and VoIP telephony. TFS ELECTRONIC: Panel Retains FTI Consulting as Financial Advisors ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Arizona gave the Official Committee of Unsecured Creditors of TFS Electronic Manufacturing Services, Inc., authority to retain FTI Consulting, Inc., as its financial advisors. FTI Consulting will: a) assist the Committee in the analysis of substantive consolidation of the bankruptcy estates of the Debtor and Three Five Systems, Inc.; b) assist the Committee in the analysis of equitable subordination of the Firm's purported intercompany claim against the Debtor; c) assist in the review or preparation of information and analysis necessary for the confirmation of a plan in this chapter 11 proceeding; d) assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; e) provide litigation advisory services along with expert witness testimony on case-related issues as required by the Committee; and f) render other general business consulting or other assistance as the Committee or its counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in this proceeding. FTI Consulting will bill the Debtor its professionals' hourly rates: Professional Hourly Rate ------------ ----------- Senior Managing Directors $450 - $625 Directors/Managing Directors $315 - $560 Associates/Consultants $195 - $385 Administration/Paraprofessionals $95 - $168 Michael A. Tucker at FTI Consulting, assures the Court that the Firm does not represent any interest adverse to the Debtor or its estate. Headquartered in Redmond, Washington, TFS Electronic Manufacturing Services, Inc., is an electronics manufacturing services facility that specializes in New Product Introduction services, prototype Development and low to medium-volume manufacturing. The Company filed for chapter 11 protection on August 19, 2005 (Bankr. D. Ariz. Case No. 05-15403). John R. Clemency, Esq., Koriann M. Atencio, Esq., and Tajudeen O. Oladiran, Esq., at Greenberg Traurig LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protections from its creditors, it estimated assets between $1 million to $10 million and estimated debts between $10 million to $50 million. TIDEL TECHNOLOGIES: NCR Buys ATM Assets for $10.44 Million ---------------------------------------------------------- NCR Corporation (NYSE: NCR) completed the acquisition of Tidel Technologies, Inc.'s (Other OTC: ATMS.PK) automated teller machine assets, as approved by a majority of Tidel's stockholders. The initial purchase price is $9,940,000, plus a $500,000 holdback post closing net asset value adjustment. The Company applied approximately $8,200,000 of the ATM Sale proceeds towards the repayment of outstanding indebtedness held by Laurus Master Fund, Ltd. On Dec. 28, 2005, a majority of holders of the shares of the Company's outstanding common stock approved the ATM Sale. Mike Hudson, previously executive vice president and chief operating officer of Tidel Engineering, will lead the new NCR EasyPoint ATM team that includes Tidel's ATM business employees. Because Tidel will retain its other businesses, NCR will initially market this product line as Tidel EasyPoint ATM, a solution of NCR. "Tidel has a successful product line and an established distribution focus that fits the retail ATM segment extremely well," Brad Lozier, vice president of product management for NCR's Financial Solutions Division said. "NCR is the established world leader in providing selfservice ATM solutions. This acquisition allows us to combine Tidel's product line with NCR's financial and global market expertise that will enhance our growth within the retail and convenience ATM segment. It is a win for both teams." The acquisition will allow for the integration of NCR's existing EasyPoint ATMs with Tidel's 3000 Series product line to deliver the most effective self-service technology for retail ATM deployment. In the United States, NCR will sell Tidel ATM products using a separate sales organization, capitalizing on Tidel's established distribution and product strength in the convenience and retail ATM market segments. NCR will leverage its established global leadership to increase the EasyPoint ATM's product penetration internationally. About NCR Corporation NCR Corporation (NYSE: NCR) -- http://www.ncr.com/-- is a leading global technology company helping businesses build stronger relationships with their customers. NCR's Teradata(R) data warehouses and ATMs, retail systems and IT services provide Relationship Technology(TM)s solutions that maximize the value of customer interactions and help organizations create a stronger competitive position. Based in Dayton, Ohio, NCR employs approximately 28,500 people worldwide. About Tidel Technologies Tidel Technologies, Inc. (Other OTC: ATMS.PK) -- http://www.tidel.com/-- manufacturers cash security equipment designed for specialty retail marketers. * * * Going Concern Doubt Hein & Associates LLP, the firm that audited Tidel Technologies' financial statements for the year ending Sept. 30, 2004, and 2003, expressed concern about the Company's ability to continue as a going concern pointing to the Company's recurring losses. TYCO INT'L: Splinters into Three Publicly Traded Companies ---------------------------------------------------------- Tyco International Ltd. (NYSE: TYC; BSX: TYC) reported that its Board of Directors has approved a plan to separate the company's current portfolio of diverse businesses into three separate, publicly traded companies: 1. Tyco Healthcare, one of the world's leading diversified healthcare companies; 2. Tyco Electronics, the world's largest passive electronic components manufacturer, and 3. the combination of Tyco Fire & Security and Engineered Products & Services, a global business with leading positions in residential and commercial security, fire protection and industrial products and services. The company intends to accomplish the separation through tax-free stock dividends to Tyco shareholders, after which they will own 100% of the equity in three publicly traded companies. Each company will have its own independent Board of Directors and strong corporate governance standards. Tyco expects to complete the transactions during the first quarter of calendar 2007. According to Tyco Chairman and Chief Executive Officer Ed Breen, "In the past several years, Tyco has come a long way. Our balance sheet and cash flows are strong and many legacy financial and legal issues have been resolved. We are fortunate to have a great mix of businesses with market-leading positions. After a thorough review of strategic options with our Board of Directors, we have determined that separating into three independent companies is the best approach to enable these businesses to achieve their full potential. Healthcare, Electronics and TFS/TEPS will be able to move faster and more aggressively -- and ultimately create more value for our shareholders -- by pursuing their own growth strategies as independent companies." Tyco's Board of Directors and senior leadership have evaluated a broad range of strategic alternatives, including continuation of Tyco's current operating strategy, sales of select businesses, and separation of only one of the businesses. The company and Board concluded that separating into three businesses is the best way to position these market-leading companies for sustained growth and value creation. Tyco Healthcare With 2005 revenue of nearly $10 billion, Tyco Healthcare is one of the foremost global providers of healthcare products and services. The company is well-positioned to capitalize on the attractive dynamics of the healthcare industry and to realize more robust growth. Its product portfolio includes advanced surgical instruments and supplies, respiratory care products, contrast media and diagnostic imaging products, needles and syringes, vascular therapies, sutures and wound care products, and generic pharmaceuticals. Healthcare has more than 40,000 employees. This proposed separation will create a leading stand-alone healthcare company, which is expected to benefit from a focused and independent healthcare culture to help attract top industry talent and strategic partners, as well as increasing access to emerging healthcare-related technologies. This business will continue to be led by current Tyco Healthcare President Rich Meelia, who will become the company's Chief Executive Officer. Chief Operating Officer Kevin Gould and Chief Financial Officer Chuck Dockendorff will also continue in their current leadership positions with the company. Tyco Electronics Tyco Electronics is one of the world's largest suppliers of electronic components, including connectors, switches, relays, circuit protection devices, touch screens, magnetics, resistors, wire and cable, as well as fiber-optic and wireless components and systems. Electronics has 88,000 employees worldwide. As a $12 billion stand-alone enterprise, Tyco Electronics will be positioned to move quickly and strategically as competition requires, and will be better able to participate in ongoing electronics industry consolidation. The company's Chief Executive Officer will be Tom Lynch -- current President of Tyco's Engineered Products & Services segment -- who brings broad experience in the communications and electronics industries. Dr. Juergen Gromer, who has led Tyco Electronics since 1999, will continue as President, and will also assume additional responsibilities as Vice Chairman. Jacki Heisse will continue to serve as the company's Chief Financial Officer. Tyco Fire & Security/Engineered Products & Services TFS/TEPS will be led by Tyco International Chairman and CEO Ed Breen as well as Tyco International's Chief Financial Officer, Chris Coughlin. TFS/TEPS is an $18 billion world leader in electronic security solutions for residential, business, and governmental customers, fire protection and sprinkler systems, and industrial valves and controls. With more than 118,000 employees, TFS/TEPS has a large, stable recurring revenue base and generates strong cash flow. Dave Robinson will continue to serve as President of Tyco Fire & Security. Naren Gursahaney will succeed Tom Lynch as President of Engineered Products & Services. Mr. Breen added, "We believe this separation is a logical next step in Tyco's evolution and we are absolutely convinced that this is the right decision for the long-term success of our businesses, employees and shareholders." Transaction Details It is anticipated that all three companies will be capitalized to provide financial flexibility to take advantage of future growth opportunities. They are expected to have financial policies, balance sheets and credit metrics that are commensurate with solid investment grade credit ratings. Tyco will continue to follow financial policies that are consistent with its current credit ratings until the planned transactions take place. The company's existing debt is expected to be allocated among the three companies or refinanced. Any existing or potential liabilities that cannot be associated with a particular entity will be allocated appropriately to each of the businesses, and a sharing arrangement among the three companies will be established. The three entities together are initially expected to pay a dividend that is equal in sum to the current Tyco dividend. Until the planned transactions are completed, Tyco expects to pay its current quarterly dividend of $0.10 per share. One-time transaction costs are expected to total approximately $1.0 billion -- largely for tax and debt refinancing. Under the proposed transaction structure, each of the companies is expected to remain incorporated in Bermuda. Consummation of the proposed separations is subject to certain conditions, including: * final approval by the Tyco International Board of Directors, * receipt of a tax opinion of counsel, and * the filing and effectiveness of registration statements with the Securities and Exchange Commission. The separations are also subject to the completion of any necessary refinancings. Approval by Tyco International shareholders is not required. First Quarter and Full-Year 2006 Update Tyco expects first quarter 2006 earnings per share from continuing operations -- excluding special items -- to be about $0.38 per share compared to its previous guidance of $0.40 to $0.42 per share. Organic growth will be approximately 4 percent for the quarter, with 7 to 8% organic growth in Electronics and Engineered Products & Services partially offset by flat organic growth in Fire & Security and Healthcare. In Fire & Security, revenue and margins were adversely impacted by weakness in the commercial security and Worldwide Fire Services businesses, partially offset by improved performance in residential security. In Healthcare, strong growth in revenue and operating profit in International was offset by revenue and profit shortfalls in the Imaging and Respiratory businesses, primarily due to the impact of product recalls and regulatory compliance issues, as well as capacity limitations in the Pharmaceuticals business. The issues in Imaging and Respiratory have been identified and are in the process of being resolved. The company expects to have additional pharmaceutical capacity coming on-line in the second quarter. For the full year 2006, the company is now expecting EPS from continuing operations excluding special items to be in the range of $1.85 to $1.92 per share. The change from the company's previous guidance is mostly due to the items in Fire & Security and Healthcare noted above. The estimated transaction costs related to the separations will be treated as special items and are therefore excluded from this guidance. The company will release its full first quarter results on Feb. 2, 2006. Tyco International Ltd. -- http://www.tyco.com/-- is a global, diversified company that provides vital products and services to customers in five business segments: Fire & Security, Electronics, Healthcare, Engineered Products & Services, and Plastics & Adhesives. With 2004 revenue of $40 billion, Tyco employs approximately 250,000 people worldwide. * * * As reported in the Troubled Company Reporter on Sept. 6, 2005, Moody's Investors Service has placed the long-term and short-term debt ratings of Tyco International Group S.A. (TIGSA), the principle debt issuer for Tyco International Ltd. and its consolidated subsidiaries under review for possible upgrade, acknowledging the company's continued strong cash generation and accelerated debt reduction initiatives. Ratings under review for possible upgrade: Tyco International Group S.A.: * Baa3 for senior notes and debentures; * shelf registration ratings of (P)Baa3 for senior debt securities; * (P)Ba1 for subordinated debt securities; and * Baa3 senior unsecured debt rating for the $2.5 billion senior unsecured bank revolving credit agreements and Prime-3 for the short-term debt rating. These debt obligations and shelf registration are guaranteed by Tyco International Ltd. Tyco International Ltd.: * Shelf registration ratings of (P)Ba1 for senior debt securities; * (P)Ba2 for subordinated debt securities; and * (P)Ba3 for preferred stock. Debt securities issued at the Bermuda holding company would be structurally subordinate to debt securities raised at the TIGSA level. Tyco International (US) Inc.: * Baa2 for senior unsecured notes and debentures TYCORP PIZZA: Files Schedules of Assets and Liabilities ------------------------------------------------------- Tycorp Pizza, Inc., delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Eastern District of Virginia, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property C. Property Claimed as Exempt D. Creditors Holding Secured Claims E. Creditors Holding $1,223,498 Unsecured Priority Claims F. Creditors Holding $24,609,974 Unsecured Nonpriority Claims --- ----------- Total $0 $25,833,472 Headquartered in Norfolk, Virginia, Tycorp Pizza Inc. is a Pizza Hut restaurant franchisee. The Debtor and its affiliates filed for chapter 11 protection on Nov. 21, 2005 (Bankr. S.D. VA. Case Nos. 05-77907 through 05-77910). Kelly Megan Barnhart, Esq., and Karen M. Crowley, Esq., at Marcus, Santoro & Kozak, P.C. represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they estimated assets between $1 million to $10 million and debts between $10 million to $50 million. URBAN HOTELS: U.S. Trustee Appoints 4-Member Creditors' Committee ----------------------------------------------------------------- The U.S. Trustee for Region 16 appointed four creditors to serve on the Official Committee of Unsecured Creditors in Urban Hotels, Inc., dba Lax Plaza Hotel's chapter 11 case: 1. Bhupendra Mistry 1753 Cannes Drive Thousand Oaks, California 91362 Tel: 805-297-5017 2. Guest Supply LLC Attn: Michael W. Hall P.O. Box 902 Monmouth Junction, New Jersey 08852 Tel: 800-448-3787 3. Hallmark Motors Attn: Anoosh Saei 124 West Beach Avenue Inglewood, California 90302 Tel: 310-259-4668 4. HBL Security Services, Inc. Attn: Carol Lee 982 S. New Hampshire Ave., #100 Los Angeles, California 90006 Tel: 213-388-7111 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's 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 Culver City, California, Urban Hotels Inc., operates Lax Plaza Hotel. The Company filed for chapter 11 protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No. 05-50140). M. Jonathan Hayes, Esq., of Woodland Hills, California, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $23,000,000 in assets and $20,000,000 in debts. URBAN HOTELS: Panel Wants to Hire Levene Neale as Bankr. Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Urban Hotels, Inc., dba Lax Plaza Hotel, asks the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, for authority to employ Levene, Neale, Bender, Rankin & Brill, LLP, as its general bankruptcy counsel. Levene Neale is expected to: a) render legal advice and guidance with respect to the Committee's powers, duties, rights and obligations; b) review and advise the Committee in regard to the Debtor's business affairs; c) interface with the Debtor's representatives, the U.S. Trustee's office and other parties-in-interest concerning all facets of the Chapter 11 case; d) assist in the protection of assets of the estate; e) prepare, on behalf of the Committee, such petitions, applications, motions, complaints, answers, orders, reports, memoranda and all other legal documents as may be necessary; and f) perform such additional legal services as may be necessary or appropriate in this chapter 11 case. Daniel H. Reiss, Esq., a Levene Neale partner, discloses that his Firm's professionals bill: Professional Hourly Rate ------------ ----------- David W. Levene $565 Martin J. Brill $565 David L. Neale $495 Ron Bender $495 Craig M. Rankin $495 Anne E. Wells $450 Daniel H. Reiss $450 Monica Y. Kim $450 David B. Golubchik $450 Beth Ann R. Young $450 Nellwyn W. Voorhies $425 Jacqueline L. Rodriguez $365 Juliet Y. Oh $335 Susan K. Seflin $335 Ovsanna Takvoryan $290 Todd M. Arnold $280 Paraprofessionals $175 Mr. Reiss assures the Court that his Firm does not hold any interest adverse to the Committee. Headquartered in Culver City, California, Urban Hotels Inc., operates Lax Plaza Hotel. The Company filed for chapter 11 protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No. 05-50140). M. Jonathan Hayes, Esq., of Woodland Hills, California, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $23,000,000 in assets and $20,000,000 in debts. VARIG S.A.: Deposits $6.7 Million as Payment to Aircraft Lessors ---------------------------------------------------------------- On Dec. 28, 2005, pursuant to a ruling by the Hon. Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York, VARIG, S.A., Rio Sul Linhas Aereas S.A., and Nordeste Linhas Aereas S.A. deposited $6,700,000 as partial payment to amounts they owed to aircraft lessors in the United States. The amount will be divided among 15 lessors. Agencia Brasil reports that on Jan. 13, 2006, the Foreign Debtors intend to submit to the U.S. Bankruptcy Court proof of the payments. The Foreign Debtors' debt to lessors aggregate $44,000,000. The Debtors expect to pay the remaining $19,700,000 by the time of the next hearing in the U.S. Court. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) VARIG S.A.: Nelson Tanure Withdraws Takeover Proposal ----------------------------------------------------- Docas Investimentos SA's owner and chairman, Nelson Tanure, will not push through with his plan to take over VARIG S.A. Mr. Tanure attributes his decision to withdraw his offer to negative press, Dow Jones Newswires says. As previously reported, in December 2005, Mr. Tanure made a $112,000,000 offer for the control of Fundacao Ruben Berta, which is VARIG's controlling shareholder. The deal involved the purchase of a 25% stake in FRB and a loan of a 42% stake over a 10-year period. However, certain parties had expressed concern that Mr. Tanure would take control of VARIG and not assume its debts. This led to a series of court actions seeking to block the deal. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) VARIG S.A.: Brazilian Court Approves Restructuring Plan ------------------------------------------------------- On Dec. 28, 2005, Judge Luiz Roberto Ayoub, of The Eighth Corporate Court of the District of the State Capital of Rio de Janeiro, found that the restructuring plan of VARIG, S.A., Rio Sul Linhas Aereas S.A., and Nordeste Linhas Aereas S.A. met the legal requirements under the New Bankruptcy and Restructuring Law of Brazil. Thus, Judge Ayoub stamps his seal of approval on the Plan. As previously reported, VARIG's creditors have approved the Recovery Plan by an enormous margin of acceptance, with no opposition from Classes I and II. Judge Ayoub said that this is enough to make the entire process legitimate. According to Judge Ayoub, VARIG's tax debt with the Municipality of Rio de Janeiro is the object of a petition to pay in installments, which is not yet examined by the administrative authority and, therefore, the Debtors cannot be held responsible for the public bureaucracy's inertia. In considering the public interest revealed by the principle of preservation of the company and considering the absence of a law governing the payment of tax debts in installments by companies undergoing judicial recovery, Judge Ayoub found that it would make no sense to prevent the possibility of the Debtors' reorganization due to the lack of a certificate of good tax standing. A full-text copy of Judge Ayoub's decision is available for free at http://bankrupt.com/misc/Dec28BrazilCourtDecision.pdf * * * The creditors will hold a general meeting on January 31, 2006, to present a detailed proposal for the implementation of the Recovery Plan. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) WEST INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: West Industries, L.L.C. P.O. Box 1605 Great Bend, Kansas 67530 Bankruptcy Case No.: 06-10029 Type of Business: The Debtor processes sweet corn. Chapter 11 Petition Date: January 13, 2006 Court: District of Kansas (Wichita) Judge: Robert E. Nugent Debtor's Counsel: Edward J. Nazar, Esq. Redmond & Nazar, L.L.P. 245 North Waco, Suite 402 Wichita, Kansas 67202-1117 Tel: (316) 262-8361 Fax: (316) 263-0610 Total Assets: $1,250,206 Total Debts: $3,337,336 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sunflower Bank, N.A. Value of collateral: $1,436,055 c/o Michael P. Alley $1,122,000 P.O. Box 380 Salina, KS 67402 Sunrise Staffing $293,255 Services, LLC 322 North Lincoln Liberal, KS 67901 Grant County Economic $200,000 Development 113 South Main Street Ulysses, KS 67880 Arthur & Mae Wilkins $186,164 Tri-Rotor Spray & Chemical $173,419 Grant County Implement $154,697 J & L Smith Farms, Inc. $124,255 Arthur Wilkens $100,000 Tarence Mayeske $49,000 Pioneer Electric Cooperative, $39,295 Inc. Guthrie Wilkens Trailer Co. $39,114 Steve Johnson $37,766 Leon Shapland $36,531 Don Ellis $31,138 Brian Zimmerman $30,573 Waste Disposal, LLC $23,772 Kent Wilkens $20,815 Alltech $18,333 Virgil Johnson $15,070 Tri-Pak Machinery, Inc. $14,812 WESTLAKE CHEMICAL: Completes Issuance of $250M 6-5/8% Senior Notes ------------------------------------------------------------------ Westlake Chemical Corporation (NYSE: WLK) completed the issuance of its new 6-5/8% Senior Notes due 2016 in the principal amount of $250 million. The company has also issued a redemption notice for the remaining balance of its 8-3/4% Senior Notes due 2011, in the principal amount of $67 million, to be redeemed on Feb. 13, 2006, at a redemption price of 100% plus accrued but unpaid interest and a make-whole premium. Also, on Jan. 9, 2006, the company issued a notice of redemption for $180 million of the 8-3/4% Senior Notes due 2011, creating a total of $247 million of these notes to be redeemed, or the entire principal amount currently outstanding. Further, on Jan. 12, 2006, the company gave notice to the lenders of its term loan that the company plans to repay on Jan. 18, 2006, the outstanding principal amount of $9 million. Albert Chao, Westlake Chemical's Chief Executive Officer and President, stated, "We are pleased to have taken these steps to refinance our debt. Completing this plan will increase our financial flexibility going forward." The new senior notes have been issued pursuant to a shelf registration statement filed with the Securities and Exchange Commission on May 23, 2005, and declared effective on Dec. 19, 2005. Westlake Chemical Corporation -- http://www.westlakechemical.com/ -- is a manufacturer and supplier of petrochemicals, polymers and fabricated products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC and PVC pipe, windows and fence. * * * As reported in the Troubled Company Reporter on Jan. 12, 2006, Standard & Poor's Ratings Services raised its ratings on Westlake Chemical Corp. "The upgrade reflects favorable operating prospects over the intermediate term, and our expectation that management will continue to adhere to moderate financial policies that will limit debt in the capital structure," said Standard & Poor's credit analyst Paul Kurias. The corporate credit rating was raised to 'BB+' from 'BB' and the senior unsecured debt rating was raised to 'BB+' from 'BB-'. The outlook is stable. At the same time, S&P assigned a 'BB+' rating to Westlake's proposed $250 million senior unsecured notes due 2016, the proceeds of which will be used primarily for refinancing purposes. The senior unsecured debt ratings are the same as the corporate credit rating to recognize Westlake's progress toward reducing its secured debt obligations and the expectation that the secured revolving credit facility is not likely to be utilized to a meaningful extent. YOUNG CHANG: Chapter 15 Petition Summary ---------------------------------------- Petitioner: Ho Seok Lee Foreign Representative Debtor: Young Chang Co. Ltd. 178-55 Kajwa-Dong Seo-Gu Incheon, Republic of Korea 404-714 Case No.: 06-40043 Type of Business: The Debtor is one of the world's largest piano makers with corporate headquarters and main piano manufacturing operations in Inchon, Korea. Young Chang pianos are sold in more than 45 countries throughout the world. The company, which has won numerous awards for its manufacturing excellence, manufactures several brands of pianos, including Bergmann, Young Chang, and Pramberger Signature Series. See http://www.youngchang.com/ Chapter 15 Petition Date: January 13, 2006 Court: Western District of Washington (Tacoma) Judge: Philip H. Brandt Petitioner's Counsel: Jason T. Dennett, Esq. Carlson & Dennett, P.S. 1601 Fifth Avenue, Suite 2150 Seattle, Washington 98101-1619 Tel: (206) 621-1158 Fax: (206) 621-1151 Total Assets: $50 Million to $100 Million Total Debts: $50 Million to $100 Million * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Abraxas Petro ABP (27) 120 (4) Accentia Biophar ABPI (8) 34 (20) AFC Enterprises AFCE (44) 216 53 Alaska Comm Sys ALSK (9) 589 49 Alliance Imaging AIQ (43) 643 42 AMR Corp. AMR (729) 29,436 (1,882) Atherogenics Inc. AGIX (98) 213 190 Bally Total Fitn BFT (1,463) 486 (442) Biomarin Pharmac BMRN (65) 209 (38) Blount International BLT (201) 427 110 CableVision System CVC (2,486) 10,204 (1,881) CCC Information CCCG (95) 112 34 Centennial Comm CYCL (488) 1,511 69 Cenveo Inc CVO (12) 1,146 127 Choice Hotels CHH (165) 289 (34) Cincinnati Bell CBB (672) 1,893 (10) Clorox Co. CLX (532) 3,570 (229) Columbia Laborat CBRX (13) 17 10 Compass Minerals CMP (83) 686 149 Crown Media HL CRWN (64) 1,250 (125) Deluxe Corp DLX (101) 1,461 (297) Denny's Corporation DENN (261) 498 (72) Domino's Pizza DPZ (553) 414 3 DOV Pharmaceutic DOVP (3) 116 94 Echostar Comm DISH (785) 7,533 321 Emeritus Corp. ESC (134) 713 (62) Emisphere Tech EMIS (6) 29 5 Empire Resorts NYNY (18) 65 (4) Foster Wheeler FWLT (375) 1,936 (186) Guilford Pharm GLFD (20) 136 60 Graftech International GTI (13) 1,026 283 Hollinger Int'l HLR (177) 1,001 (396) I2 Technologies ITWO (144) 352 112 ICOS Corp ICOS (67) 232 141 IMAX Corp IMAX (34) 245 30 Immersion Corp. IMMR (15) 46 29 Immunomedics Inc. IMMU (7) 39 16 Indevus Pharma IDEV (115) 113 79 Intermune Inc. ITMN (30) 194 109 Investools Inc. IED (20) 64 (46) Kulicke & Soffa KLIC (32) 386 186 Level 3 Comm. Inc. LVLT (632) 7,580 502 Ligand Pharm LGND (96) 306 (99) Lodgenet Entertainment LNET (69) 283 22 Maxxam Inc. MXM (677) 1,044 114 Maytag Corp. MYG (95) 2,989 371 McDermott Int'l MDR (53) 1,627 244 McMoran Exploration MMR (61) 407 118 NPS Pharm Inc. NPSP (55) 354 258 Owens Corning OWENQ (8,443) 8,142 976 ON Semiconductor ONNN (317) 1,171 300 Quality Distribu QLTY (26) 377 20 Quest Res. Corp. QRES (27) 244 (29) Qwest Communication Q (2,716) 23,727 822 Revlon Inc. REV (1,169) 980 86 Riviera Holdings RIV (28) 221 6 Rural/Metro Corp. RURL (93) 315 56 Rural Cellular RCCC (460) 1,367 46 SBA Comm. Corp. SBAC (47) 886 25 Sepracor Inc. SEPR (213) 1,193 703 St. John Knits Inc. SJKI (52) 213 80 Tivo Inc. TIVO (9) 163 36 US Unwired Inc. UNWR (76) 414 56 Unigene Labs Inc. UGNE (15) 14 (9) Unisys Corp UIS (141) 3,888 318 Vector Group Ltd. VGR (38) 536 168 Vertrue Inc. VTRU (35) 441 (80) Visteon Corp. VC (1,430) 8,823 404 Vocus Inc. VOCS (9) 21 (10) Worldspace Inc. WRSP (1,475) 765 249 WR Grace & Co. GRA (574) 3,465 848 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. 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 ***