/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060123.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 23, 2006, Vol. 10, No. 19 Headlines AES CORP: Files Restated Annual and Quarterly Financial Statements AES CORP: Reports Profitable 2005 Second & Third Quarters AIRWAY INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ALAN FRIEDBERG: Case Summary & 6 Largest Unsecured Creditors ALLIED HOLDINGS: Banc of America Withdraws Move to Recover Eqpt. ALLMERICA FINANCIAL: Sale to Goldman Cues Moody's to Lift Rating AMERICAN WATER: Proposes to Settle Indebtedness With Laurus Master AMH HOLDINGS: Poor Performance Cues S&P to Lower Ratings to B- ASARCO LLC: Court Approves Stipulation With Coeur d'Alene Tribe ASARCO LLC: Five Public Agencies Assign Rights to Deutsche Bank ASARCO LLC: Wants to Purchase Mining Equipment from Pitney Bowes ASSOCIATED MATERIALS: Moody's Junks $165 Million Notes' Rating AURA SYSTEMS: Wants Until Feb. 24 to Make Lease-Related Decision AURA SYSTEMS: Court Okays Extension of Claim Objection Deadline BANCORPSOUTH BANK: Moody's Lowers Financial Strength Rating to C BEKENTON USA: Court Okays Adorno & Yoss as New Bankruptcy Counsel BEKENTON USA: Court Approves Kapila & Company as New Accountant BOYD GAMING: Expects to Spend $4 Billion in Echelon Development CAPITAL ONE: Earns $280.3 Million of Net Income in Fourth Quarter CENDANT MORTGAGE: Fitch Affirms Low-B Ratings on 10 Cert. Classes CENTER FOR PHYSICAL: Case Summary & 18 Largest Unsecured Creditors CHASE MORTGAGE: Fitch Holds Low-B Ratings on Four 4 Loan Classes COPANO ENERGY: S&P Rates $225 Million Senior Notes at B CORRECTIONS CORP: Prices $150 Million of 6.75% Senior Notes CORUS ENTERTAINMENT: Prices 8.75% Sr. Subordinated Notes Offering CREDIT SUISSE: Moody's Junks Ratings on Two Certificate Classes CREDIT SUISSE: Moody's Junks Rating on $19 Mil. Class I Certs. DELPHI CORP: Gets Court Approval to Renew ACE Insurance Agreements DELPHI CORP: Appaloosa's Equity Panel Motion Draws More Objections DRS TECHNOLOGIES: S&P Rates Proposed $325 Mil. Senior Notes at B+ EARLE M. JORGENSEN: Reliance Merger Cues S&P's Developing Watch ECHOSTAR COMMS: Moody's Affirms Convertible Sub. Notes' B2 Rating ECHOSTAR COMMS: Fitch Rates Proposed $1 Billion Sr. Notes at BB- ECHOSTAR DBS: S&P Rates Proposed $1 Billion Senior Notes at BB- ENDURANCE SPECIALTY: Promotes Susan Patschak as Operations Chief EVANS SYSTEMS: Stephenson & Trlicek Raises Going Concern Doubt FM LEVERAGED: Moody's Rates $12 Million Class E Rate Notes at Ba2 FORMICA BERMUDA: Moody's Rates $270 Million Debt Securities at B2 FREESCALE SEMICONDUCTOR: Earns $192 Million in Fourth Quarter 2005 GARDEN STATE: Wants Until April 5 to File Chapter 11 Plan GARDENBURGER INC: Court Scraps Proposed Reclamation Procedures GARDENBURGER INC: Secures Insurance Premium Financing from PFS GMAC: GM's Planned Stake Sale Prompts Moody's to Hold Ba1 Rating HALVORSEN BOAT: Case Summary & 20 Largest Unsecured Creditors HAWS & TINGLE: Files Plan & Disclosure Statement in Texas HOLLINGER INT'L: Completes $40.5M Sale of Stake in Canadian Units HOLLINGER INT'L: Sells All Canadian Assets to Glacier for $104.4M ISP CHEMCO: Moody's Rates Proposed $1.15 Billion Facilities at Ba3 J.P. MORGAN: Fitch Affirms Low-B Ratings on 22 Loan Classes J.P. MORGAN: Moody's Lifts Ratings on Class J & K Certificates J.P. MORGAN: Moody's Lifts $11MM Class L Certs.' Rating to Baa1 LEVEL 3: S&P's Rating on $691.8 Million Senior Notes Tumble to D MAGRUDER COLOR: Wants to Reject Certain Contracts and Leases MAXXIM MEDICAL: Makes 9% Initial Distribution to Unsec. Creditors MCMORAN EXPLORATION: Dec. 31 Balance Sheet Upside-Down by $86MM MUSICLAND HOLDING: Can Access Cash Collateral on Interim Basis MUSICLAND HOLDING: Can Borrow Up to $60 Million of DIP Financing MUSICLAND HOLDING: Gets Interim OK to Employ Kirkland as Counsel NATIONAL GAS: Case Summary & 12 Largest Unsecured Creditors NAVISTAR INT'L: Fitch Places Low-B Debt Ratings on Negative Watch NOBEX CORP: Creditors Panel Wants to Hire Blank Rome as Counsel NOBEX CORP: Panel Objects to Motion for Final Order on DIP Loan NORTHWEST AIR: Loses $5 Million a Day Without Labor Concessions O'SULLIVAN IND: Provides Additional Facts Regarding Amended Plan O'SULLIVAN IND: Defends Lazard's Disinterestedness ON SEMICONDUCTOR: Wants Senior Secured Credit Agreement Amended OPTINREALBIG.COM: Wants Plan-Filing Period Stretched to March 3 PREMIER ENT: 10-3/4% Notes Default Prompts Moody's to Junk Ratings PREMIER ENTERTAINMENT: S&P Junks Ratings and Removes Watch REAL MEX: S&P Places B Corporate Credit Rating on CreditWatch REUNION IND: Selling Plastics Unit Assets to Oneida for $10.9MM REVLON INC: CFO McGuire & Unit's President Kennedy to Swap Jobs RFSC SERIES: Moody's Reviews Class B-I-2 Certificates' B2 Rating ROMACORP INC: Wants Until June 5 to Make Lease-Related Decisions ROMACORP INC: Amended Plan Confirmation Hearing Set for March 7 SANKATY HIGH: Moody's Rates $12.5 Million Class E Sub. Notes at B SATMEX: Mexican Government May Sell Stake After Restructuring SAV-ON LTD: Secures $1 Million DIP Loan From Phoenix Partners SEAGATE TECHNOLOGY: Earns $287 Mil. in Quarter Ended Dec. 30, 2005 SHERIDAN HEALTHCARE: S&P Affirms Corporate Credit Rating at B+ SKIN NUVO: Court Sets February 28 for Disclosure Statement Hearing STEWART ENT: Delays Filing of Form 10-K for Fiscal Year 2005 STRATUS SERVICES: Swaps Preferred Stock Held by Pinnacle with Note STRATUS SERVICES: Randall Gruber Replaces Amper as Auditor SUPERB SOUND: Hires Michael Walsh as Ordinary Course Attorney TACTICA INT'L: Court Confirms Chapter 11 Reorganization Plan TREASURE ISLAND: Case Summary & 20 Largest Unsecured Creditors TRUMP ENT: Inks Pacts With TER Keystone for Gaming Facility Biz TRUMP ENT: TrumpStreet Applies for Pennsylvania Gaming License TRUMP ENT: RSH Wants World's Fair Site Sale Funds Distributed ULTIMATE FORD: Case Summary & 20 Largest Unsecured Creditors URBAN TELEVISION: Auditor Uncertain About Going-Concern Ability UTIX GROUP: Vitale Caturano Raises Going Concern Doubt WILSHIRE CREDIT: Fitch Affirms Low-B Ratings on 4 Loan Classes WINN-DIXIE: John Dasburg Resigned as Director Effective Dec. 31 WINN-DIXIE: DFI Trust Beneficially Owns 48,056,704 Shares WINN-DIXIE: JEA Wants to Compel Compliance on Discovery Requests YOUNG BROADCASTING: Liquidity Concerns Cue S&P to Lower Ratings * BOND PRICING: For the week of Jan. 16 - Jan. 20, 2006 ********* AES CORP: Files Restated Annual and Quarterly Financial Statements ------------------------------------------------------------------ The AES Corporation (NYSE:AES) filed its Form 10-K/A for the year ending Dec. 31, 2004 and Form 10-Q/A for the first quarter ending March 31, 2005, on Jan. 19, 2006, to reflect amendments to the financial statements. Material Weakness At the end of 2004, the Company identified a material weakness related to its accounting for deferred income taxes and embarked upon a global process to document the deferred income tax calculations and to perform more detailed reconciliation at its foreign subsidiaries. On July 27, 2005, the Company reported that it had determined that errors found during that process required a restatement. The second and third quarter filings were delayed as the company increased the volume and scope of its review to ensure that key historical transactions and related income tax and other account balances was properly stated. The most significant adjustments involved complex areas of accounting and required a high degree of interpretation or judgment involving transactions, which occurred during and prior to 2002. Management has concluded that all errors were both inadvertent and unintentional. In conjunction with the restatement of its financial statements, the company revised its assessment of the effectiveness of internal control over financial reporting as of Dec. 31, 2004, as required under SEC regulations. A full-text copy of the Form 10-K/A for the period ending December 31, 2004, is available for free at: http://ResearchArchives.com/t/s?46f A full-text copy of the Form 10-Q/A for the period ending March 31, 2005, is available for free at: http://ResearchArchives.com/t/s?470 AES Corporation -- http://www.aes.com/-- is a leading global power company, with 2004 revenues of $9.5 billion. AES operates in 27 countries, generating 44,000 megawatts of electricity through 124 power facilities and delivers electricity through 15 distribution companies. AES Corp.'s 30,000 people are committed to operational excellence and meeting the world's growing power needs. * * * As reported in the Troubled Company Reporter on Jan. 11, 2006, Moody's affirmed the ratings of The AES Corporation, including its Ba3 Corporate Family Rating and the B1 rating on its senior unsecured debt. The rating outlook remains stable. As reported in the Troubled Company Reporter on June 23, 2005, Fitch Ratings has upgraded and removed the ratings of AES Corporation from Rating Watch Positive, where it was initially placed on Jan. 18, 2005 pending review of the company's year-end financial results. Fitch said the Rating Outlook is Stable. AES CORP: Reports Profitable 2005 Second & Third Quarters --------------------------------------------------------- The AES Corporation (NYSE:AES) reported second and third quarter financial results after completing its restatement process. Quarter Ending Sept. 30, 2005 For the three months ended Sept. 30, 2005, the company reported a $244,000 net income on $1,406,000 of revenues, in contrast to a restated net income of $93,000 on $1,251,000 of restated revenues for the same period in 2004. The company's balance sheet showed $29,648,000 in total assets and liabilities of $21,406,000 at Sept. 30, 2005. On a restated basis, income from continuing operations for the year ended Dec. 31, 2004 was $258 million, compared to the previously reported $366 million. For 2003, income from continuing operations decreased to $311 million from $332 million as previously reported. "I am pleased with our strong revenue, earnings and cash flow growth this year," said Paul Hanrahan, AES President and Chief Executive Officer. "The restatement process was important and necessary and took a global effort over a significant period of time. In addition, we have continued to strengthen the effectiveness of our controls and processes throughout the organization to ensure the transparency and accuracy of our financial information. At the same time, our businesses maintained their momentum in achieving strong results and securing new growth opportunities." For the nine months ended Sept. 30, 2005, income from continuing operations was $453 million compared with $231 million in the comparable prior year period, an increase of 96%. Quarter Ending June 30, 2005 For the three months ended June 30, 2005, The AES Corp. reported a $85,000 net income on $1,395,000 of revenues, in contrast to a restated net income of $74,000 on $1,146,000 of restated revenues for the same period in 2004. The Company's balance sheet showed $29,380,000 in total assets and liabilities of $21,353,000 at June 30, 2005. Financial Restatement The Company filed its Form 10-Q filings for the second and third quarters ending June 30, 2005 and September 30, 2005 on Jan. 19, 2006. These filings reflected the results of a restatement for the years ending 2002, 2003, 2004 and the first quarter of 2005. A full-text copy of the Form 10-Q for the period ending June 30, 2005, is available at: http://ResearchArchives.com/t/s?472 A full-text copy of the Form 10-Q for the period ending September 30, 2005, is available at: http://ResearchArchives.com/t/s?471 AES Corporation -- http://www.aes.com/-- is a leading global power company, with 2004 revenues of $9.5 billion. AES operates in 27 countries, generating 44,000 megawatts of electricity through 124 power facilities and delivers electricity through 15 distribution companies. AES Corp.'s 30,000 people are committed to operational excellence and meeting the world's growing power needs. * * * As reported in the Troubled Company Reporter on Jan. 11, 2006, Moody's affirmed the ratings of The AES Corporation, including its Ba3 Corporate Family Rating and the B1 rating on its senior unsecured debt. The rating outlook remains stable. As reported in the Troubled Company Reporter on June 23, 2005, Fitch Ratings has upgraded and removed the ratings of AES Corporation from Rating Watch Positive, where it was initially placed on Jan. 18, 2005 pending review of the company's year-end financial results. Fitch said the Rating Outlook is Stable. AIRWAY INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Airway Industries, Inc. dba Atlantic Luggage Company 10th Street & Factory Avenue Ellwood City, Pennsylvania 16117 Bankruptcy Case No.: 06-20224 Type of Business: The Debtor manufactures suitcases, garment bags, briefcases, and other travel products and accessories. See http://www.atlanticluggage.com/ Chapter 11 Petition Date: January 20, 2006 Court: Western District of Pennsylvania (Pittsburgh) Judge: Judith K. Fitzgerald Debtor's Counsel: Joel M. Walker, Esq. Duane Morris LLP 600 Grant Street, Suite 5010 Pittsburgh, Pennsylvania 15219 Tel: (412) 497-1000 Fax: (412) 497-1001 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Hangzhou Taiji Bags $759,190 Xing Wang Industrial Area Economic Development Zhejiang, China United Ascent Travelware $494,528 Xinqiao Development District Linping Hangzhou, China Best-Carry Corporation $313,787 Huashen Industrial Zone Longdong Village, Shenzhen, Guangdong, China Datang Travel Products $269,592 Yetang Industrial Park Changsu, China Associated Industrial Company $119,388 Ansel M. Schwartz $48,362 AAA Mid Atlantic $29,081 Meijer $18,405 Full Year Brother Enterprises Co. Ltd. $13,220 Jiaxing (AMD) Traveling Product Co. Ltd. $12,026 XPEDX $10,598 Els Marketing & Design $10,000 Sterling Commerce Inc. $9,251 Krome Communications $8,941 Reed & Witting Company $7,813 NLDA Associates, Inc. $7,500 Suncamp International, Inc. $6,227 Pro-Show Inc. $5,485 Action Packaging Inc. $4,663 Rynn's Luggage $4,663 ALAN FRIEDBERG: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Alan G. Friedberg 154 West 77th Street, Apartment 4F New York, New York 10024 Bankruptcy Case No.: 06-10128 Type of Business: The Debtor is a real estate developer and consultant. Chapter 11 Petition Date: January 20, 2006 Court: Southern District of New York (Manhattan) Debtor's Counsel: Kevin J. Nash, Esq. Finkel Goldstein Berzow Rosenbloom Nash, LLP 26 Broadway, Suite 711 New York, New York 10004 Tel: (212) 344-2929 Fax: (212) 422-6836 Total Assets: $382,079 Total Debts: $1,841,237 Debtor's 6 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Robert Berman Loan $600,000 735 Starlight Road Monticello, NY 12701 Obayashi USA Construction & Trade Debt $517,145 Obayashi Joint Venture 420 East Third Street, Suite 600 Los Angeles, CA 90013 Greenstreet Financial, LP Loan $510,000 2061 South Bayshore Drive Suite 800 Coconut Grove, FL 33133 Feldman & Associates Inc. Trade Debt $97,744 11030 Santa Monica Boulevard Suite 109 Los Angeles, CA 90025 Chase Bank $40,000 P.O. Box 830210 Baltimore, MD 21283-0210 Manufacturers & Traders $10,000 Trust Company P.O. Box 767 Buffalo, NY 14240 ALLIED HOLDINGS: Banc of America Withdraws Move to Recover Eqpt. ---------------------------------------------------------------- Banc of America Leasing & Capital, LLC, withdrew its request to lift the automatic stay so it can take possession of all equipment and exercise any and all of its contractual and state-law rights with respect to the equipment held by Allied Systems Ltd. pursuant to a Master Equipment Lease Agreement. As reported in the Troubled Company Reporter on Aug. 30, 2005, Allied Systems Ltd. leased automobile transport equipment from BancBoston Leasing, Inc., under a Master Equipment Lease Agreement dated June 30, 1998. Allied Holdings, Inc., executed an Equipment Lease Guaranty in favor of BancBoston and agreed to be liable for the payment and performance of all of the Debtors' obligations under the Master Lease. James S. Rankin, Jr., Esq., at Parker, Hudson, Rainer & Dobbs, LLP, in Atlanta, Georgia, related that pursuant to various lease supplements, Allied Systems leased additional equipment from BancBoston: Lease Supplement No. Leased Equipment Expiry Date ---------- ---------------- ----------- 1 14 Volvo Truck Tractors July 31, 2005 14 Cottrell Car Haul Trailers 2 15 Volvo Truck Tractors August 31, 2005 15 Cottrell Car Haul Trailers 3 16 Volvo Truck Tractors September 30, 2005 16 Cottrell Car Haul Trailers 5 22 Volvo Truck Tractors April 30, 2006 22 Cottrell Car Haul Trailers Additional lease supplements exist under the Master Lease and have been assigned to other lessors. On the Petition Date, the term of the First Supplement expired. Mr. Rankin asserted that Allied Systems has not returned the Leased Equipment to BALC pursuant to the First Supplement. According to Mr. Rankin, Allied Systems also failed and refused to pay the amount owed to BALC under the TRAC provisions in the Master Lease and the First Supplement, which, as of the Petition Date, was $150,883. Furthermore, Allied Systems has failed to make any of the rent payments due to BALC on August 1, 2005. Mr. Rankin noted that the term of the Second Supplement will expire soon, yet Allied Systems has been unable or unwilling to commit as to its intentions with respect to the Equipment in general and the lease supplements that have expired or will soon expire in particular. Unless Allied Systems is willing to comply with the Lease Documents, the Equipment will not be available to it to support a reorganization of its business. With respect to the Lease Supplements, there is or soon will be no unexpired lease for Allied Systems to assume or reject. BALC owns the Equipment, and because the various lease supplements will soon expire, the Equipment will not be available to Allied Systems unless it is willing and able to comply with the TRAC provisions in the Lease Documents. Therefore, Mr. Rankin concluded, there is no equity in Allied Systems' interest in the Equipment and the Equipment is not necessary for an effective reorganization. In the alternative, BALC asked the Court to compel Allied Systems to grant it adequate protection by: a. either paying all end-of-lease TRAC amounts to BALC as when they come due or immediately surrender possession of any Equipment that is subject to an expired lease supplement to BALC; b. making all monthly lease payments to BALC as and when they come due under the Lease Documents; c. certifying in writing to BALC that each item of the Equipment is in the possession and control of Allied Systems and is not missing, stole, destroyed, or otherwise unaccounted for; d. providing to BALC evidence of hazard insurance covering all of the Equipment; and e. complying with all of the provisions of the Lease Documents relating to audit and inspection rights in favor of BALC. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case No. 05-12515). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts ALLMERICA FINANCIAL: Sale to Goldman Cues Moody's to Lift Rating ---------------------------------------------------------------- Moody's Investors Service upgraded Allmerica Financial Life Insurance & Annuity Company's insurance financial strength rating to A3 from Ba1, with a stable outlook. This action concludes the rating review initiated on Aug. 24, 2005, which was precipitated by the announcement that Allmerica Financial Corporation (since renamed Hanover Insurance Group, Inc.) had signed a definitive agreement to sell its run-off life and annuity company to Goldman Sachs Group, Inc. (Goldman Sachs, Aa3 senior unsecured debt rating). The rating agency noted that the review was focused on: * the completion of the announced transaction; * the execution of a support agreement with Goldman Sachs; and * the projected capital adequacy for AFLIAC. Moody's also reviewed: * AFLIAC's new hedging strategy; * risk management; and * the company's plans for implementing its new business strategy. On Dec. 30, 2005, The Hanover Insurance Group announced that it closed on the above referenced transaction with Goldman Sachs. Total cash proceeds from the sale, excluding a $40 million dividend from First Allmerica Financial Life Insurance Company, are projected to be approximately $307 million, based on an estimated purchase price calculated as of Nov. 30, 2005. As background, the acquisition consists of approximately $10 billion of total assets and $360 million of surplus on a statutory basis. The assets primarily back variable annuities and, to a significantly lesser degree, variable universal life insurance. This business will be administered by Security Benefit Life, rated A2 for Insurance Financial Strength. Moody's commented that this acquisition provides Goldman Sachs a new platform to acquire additional variable annuity blocks. This latest acquisition strengthens and adds flexibility to Goldman Sach's insurance group, which currently includes Arrow Reinsurance Company, Limited (Aa3 IFSR) and Columbia Capital Life Reinsurance Company. Moody's noted that these factors would place upward pressure for AFLIAC's rating: 1) 24-36 month track record of successfully hedging the variable annuity risk; 2) an increase in the level of capital support; and 3) an increase in the Aa3 senior unsecured debt rating of Goldman Sachs. Conversely, Moody's said that factors that would place negative pressure on AFLIAC's rating include: 1) a reduction of the keepwell below $350 million; 2) not holding capital to the greater of 300% company action level (CAL) RBC calculated under the C-3 Phase II stochastic approach (90% conditional tail expectation or CTE), or 175% CAL RBC under the C-3 Phase II standard scenario; and 3) weak coverage of losses under the 99% CTE, taking into account statutory surplus and the $350 million keepwell. Goldman Sachs is engaged primarily in: * investment banking; * trading and principal investments; and * asset management and securities services. For the fourth quarter of 2005, Goldman Sachs (Aa3/P-1; Stable) reported a 39% pre-tax margin and $2.5 billion of pre-tax profits. AMERICAN WATER: Proposes to Settle Indebtedness With Laurus Master ------------------------------------------------------------------ American Water Star Inc. (AMEX: AMW) sent a proposal to Laurus Master Fund in an attempt to settle the current indebtedness. By letter dated Nov. 4, 2005, Laurus notified the company that certain defaults have occurred and are continuing under the Forbearance Agreement and demand for payment was made in the amount of $6,694,876. Subsequently, the company received from the Trustee, on behalf of Laurus, Notice of Trustee's Sale and Statement of Breach of Non-Performance and Notice of Election to Sell the Company's property and fixtures at 3910 East Weir Avenue, Phoenix, Arizona, at an auction to be held on March 2, 2006. The terms of the proposed settlement submitted by the company to Laurus are: (1) $5,000,000 cash, which will be wired immediately upon closing of the refinancing of the Phoenix property; (2) existing Laurus warrants to remain in effect and priced as-is; and (3) the balance of the fees and interest in the approximate amount of $1,600,000 will be repaid in either options or warrants to purchase the company's common stock at a price per share to be determined on the date of the wire transfer. About Laurus Master Fund Laurus Master Fund is a financial institution that makes direct investments in US listed small and micro cap companies. The Company's vision is to lead the transformation of financial resources into growing profitable businesses in the small and micro cap universe. About American Water Star Inc. Headquartered in Las Vegas, Nevada, American Water Star Inc. is a publicly traded company and is engaged in the beverage bottling industry. Its product brands are licensed and developed in-house, and bottled in strategic locations throughout the United States. AMW's beverage products are sold by the truckload, principally to distributors, who sell to retail stores, corner grocery stores, convenience stores, schools and other outlets. * * * Going Concern Doubt As reported in the Troubled Company Reporter on June 13, 2005, Weaver & Martin, LLC, expressed substantial doubt about American Water Star Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year 2004 ended Dec. 31, 2004. The auditors point to the Company's accumulated deficit at the need to obtain additional financing to fund payment obligations and to provide working capital for operations. AMW management is seeking additional financing, which if successful, should mitigate the factors that have raised doubt about AMW's ability to continue as a going concern. AMH HOLDINGS: Poor Performance Cues S&P to Lower Ratings to B- -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on AMH Holdings Inc. and its operating subsidiary, Cuyahoga Falls, Ohio-based Associated Materials Inc. The corporate ratings were lowered to 'B-' from 'B'. The outlook is stable. "The downgrade reflects our concern that weak earnings could lead to thin levels of free operating cash flow and that, as a result, debt reduction will fall short of accreting interest and cause debt leverage to continue increasing," said Standard & Poor's credit analyst Lisa Wright. Total debt was $791 million at Oct. 1, 2005, including capitalized operating leases, and total debt to EBITDA was an already very aggressive 8x. "The rating action also reflects our expectation that 2006 liquidity during the peak working capital period will likely be meaningfully below the $33 million level reached during the second quarter of 2005," Ms. Wright said. "We believe that this level is thin, given the high raw-material and transportation cost environment, and the lingering efficiency issues at the Ennis manufacturing facility." The vinyl siding industry is relatively mature and consolidated compared with the highly fragmented and faster-growing window and fencing markets. Although company-owned distribution insulates AMH somewhat from competition with larger, more-diversified rivals, it also requires greater overhead expenses. These fixed costs push operating margins below those of the company's peer group when sales volume declines. AMH's sales base, and product and distribution channel diversity support the ratings, but the highly leveraged financial profile makes the company vulnerable to industry cyclicality and cost pressures. "We could revise the outlook to negative if new construction or repair and remodeling activity weaken more than expected, or if raw-material cost increases cause operating margins and liquidity to narrow further than expected," Ms. Wright said. "We could revise the outlook to positive if end markets strengthen and raw- material costs stabilize causing earnings and liquidity to improve." ASARCO LLC: Court Approves Stipulation With Coeur d'Alene Tribe --------------------------------------------------------------- Years ago, the Coeur d'Alene Tribe of Idaho sued ASARCO LLC for alleged natural resource damages to the Coeur d'Alene River Basin in Idaho. The Coeur Tribe Action was later consolidated with an environmental enforcement action filed by the United States in the same district. On Jan. 31, 2003, ASARCO agreed to pay the Tribe a $5,000,000 interest free, in five equal payments by no later than Nov. 30 of each year, in settlement of the Coeur Tribe Action. The Settlement Agreement was approved on May 6, 2003, and the Coeur Tribe Action was dismissed. ASARCO has made two of the annual $1,000,000 payments to the Tribe. Under a security agreement dated March 31, 2003, ASARCO's payment obligations under the Settlement Agreement are secured by a first-priority lien and security interest in, and against, certain collateral, particularly a promissory note from Americas Mining Corporation, ASARCO's indirect parent company, to Southern Peru Holdings LLC, a wholly-owned, non-operating ASARCO subsidiary holding company, and all proceeds of the Note. A UCC- 1 Financing Statement with respect to the Tribe's security interest in the Collateral was timely filed. Under the Settlement Agreement, ASARCO anticipated making the five settlement payments to the Tribe from the proceeds of the Note. In practice, all payments under the Note have been made directly to ASARCO at ASARCO's request and used for working capital and debt obligations, including payments to the Tribe under the Settlement Agreement. The outstanding principal balance of the Note is $38,500,000 to $38,800,000. On Oct. 31, 2005, AMC made a $3,763,034 Note payment to ASARCO. The Tribe is owed only $3,000,000. Thus, there is no significant equity in the Note for the benefit of ASARCO and its estate. Pursuant to the terms of the Settlement Agreement and the May 6 2003 Order of Dismissal, if ASARCO defaults on its yearly payment obligations to the Tribe: -- the Tribe will be entitled to seek reinstatement of its environmental claims against ASARCO; and -- any payments ASARCO made to the Tribe before the default will be credited against any liability ASARCO may be found to have to the Tribe. In a Court-approved stipulation, ASARCO and the Tribe agree that: (1) ASARCO will pay the remaining settlement payments, at $1,000,000 each, to the Tribe, on Nov. 30, 2006, and Nov. 30, 2007. ASARCO has made the Nov. 30, 2005, settlement payment from the Oct. 31, 2005, Note Proceeds. The balance of the October 31 Note Proceeds was used by ASARCO for working capital, costs and expenses. (2) Southern Peru Holdings LLC will transfer and assign the Note to ASARCO, subject to the Tribe's Liens, for administration in the ASARCO bankruptcy as property of ASARCO's bankruptcy estate. ASARCO will maintain proper perfection of the Lien as required by SPHC under the Security Agreement. (3) The Tribe is granted a postpetition, automatically and continuously perfected replacement lien and security interest in, and against, the Collateral, having a priority equal to the Tribe's existing prepetition Lien, to protect against any diminution in the Tribe's Collateral to ensure ASARCO's performance. The Tribe will be treated as a secured creditor in the Debtor's bankruptcy case. (4) The Tribe's first lien and security interest will remain validly perfected and enforceable notwithstanding the transfer and delivery of the original Note to ASARCO. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Five Public Agencies Assign Rights to Deutsche Bank --------------------------------------------------------------- Pursuant to Rule 2019(a) of the Federal Rule of Bankruptcy Procedure, Deutsche Bank Trust Company Americas, as trustee, discloses that as of the bankruptcy filing, ASARCO LLC and its debtor-affiliates were the obligors under certain agreements that were entered into with certain municipal authorities: Loan Agreement Principal Balance -------------- ----------------- Loan Agreement with $71,900,000 The Development Authority of the County of Gila, Arizona Installment Payment and 27,740,000 Bond Amortization Agreement Nueces River Authority Installment Payment and 22,200,000 Bond Amortization Agreement with Nueces River Authority Loan Agreement with 33,160,000 Lewis and Clark County, Montana Loan Agreement with 34,800,000 Clark County, Montana Elizabeth Page Smith, Esq., at LeBoeuf, Lamb, Greene & MacRae, LLP, in New York, relates that the municipal authorities assigned substantially all of their rights, including the right to receive payments due under the Loan Agreements from the Debtors to Deutsche Bank to pay bond indebtedness through the five trust indentures. Accordingly, the Debtors make all payments due under the Loan Agreements directly to Deutsche Bank. Deutsche Bank has claims against the Debtors for reimbursement of reasonable fees and expenses for services and performance of duties under the Indentures. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Wants to Purchase Mining Equipment from Pitney Bowes ---------------------------------------------------------------- ASARCO LLC seeks permission from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to purchase from Pitney Bowes: * three 830E Haul Trucks, at $460,000 each; and * one 2800XPB shovel for $2,800,000. The Equipment are leased by ASARCO pursuant to an agreement, which expired on Dec. 10, 2005. Because the Equipment Agreement has expired, ASARCO needs to purchase the Equipment to retain possession and to secure the continued use of the Equipment, Romina L. Mulloy, Esq., at Baker Botts LLP, in Dallas, Texas, explains. Ms. Mulloy asserts that the Equipment are indispensable to ASARCO's successful operation of its mines because they contribute to increased production, and therefore, revenue. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASSOCIATED MATERIALS: Moody's Junks $165 Million Notes' Rating -------------------------------------------------------------- Moody's downgraded the ratings of Associated Materials Inc. and its holding company AMH Holdings, Inc. AMH Holdings' corporate family rating and ratings on the AMI's senior secured credit facilities have been downgraded to B3 from B2. The downgrade in the ratings and change in outlook reflects the company's difficulty in passing on higher raw material costs thereby decreasing margins and the uncertainty surrounding the company's ability to navigate around a slowing construction market. The ratings outlook is stable. Moody's has downgraded these ratings for Associated Materials Incorporated: * $80 million secured revolver, due 2009, downgraded to B3 from B2; * $175 million secured term loan B, due 2010, downgraded to B3 from B2; and * $165 million senior subordinated notes, due 2012, downgraded to Caa2 from Caa1. Moody's has downgraded these ratings for AMH Holdings, Inc.: * $446 million senior discount notes, due 2014, downgraded to Caa3 from Caa2; and * Corporate Family Rating, downgraded to B3 from B2. Associated Materials' ratings are constrained by: * high leverage; * low free cash flow generation relative to debt levels; * inability to pass through cost increases; and * uncertainty surrounding the outlook for the industry and in particular for the markets that the company serves. Moody's anticipates that the company's 2005 adjusted total debt (including the AMH II mezzanine notes that Moody's does not rate) to EBITDA was approximately 8.5 times. Moody's notes that the company's financial statements are adjusted by using standard adjustments per Moody's Ratings Methodology report dated July 2005. The company's free cash flow to adjusted total debt for the same time period is projected to be in the low single digits for 2006. Moody's is also concerned with the impact of raw material prices on the company's EBITDA generation as the company has not been able to fully offset the rising raw material costs by increasing its product prices. The concern is further amplified by the possibility that the new construction industry may slow meaningfully. Moody's notes that approximately 40% of Associated Materials revenues are derived from the new construction industry. The ratings benefit from the company's long-standing customer relationships and brand loyalty as well as from geographic diversification as evidenced by the company's extensive network of over 125 supply centers that enable to company to be present and participate across North America. The stable ratings outlook reflects the company's continuing efforts to raise prices to reflect higher raw material prices. The stable outlook also reflects the expectation that the company should be able to generate positive free cash flow in 2006 through price increases and ongoing cost rationalization. The ratings outlook and the ratings could deteriorate if the company is unable to pass along its raw material prices, or if its free cash flow were expected to turn negative on an ongoing basis. The ratings outlook could improve if price increases allowed the company to improve its anticipated free cash flow to debt to above 5% on a sustainable basis. The ratings could also improve if the company were to de-lever faster than currently anticipated. Headquartered in Akron, Ohio, Associated Materials Incorporated is principally engaged in the manufacture and distribution of: * exterior residential products, * including vinyl siding, * windows, * decking, * fencing, * railing, and * garage doors. Revenues for 2004 were approximately $1.1 billion. AURA SYSTEMS: Wants Until Feb. 24 to Make Lease-Related Decision ---------------------------------------------------------------- Aura Systems, Inc., asks U.S. Bankruptcy Court for the Central District of California to extend until Feb. 24, 2006, the time within which it can elect to assume, assume and assign, or reject its unexpired nonresidential real property lease. The Debtor is a party to one unexpired nonresidential real property lease located at 2335 Alaska Avenue and 2330 Utah Avenue, El Segundo, California 90245. The landlord of that lease is Aura Realty Inc., which is 50.1% owned by the Debtor. The property where the lease is located was sold to Alliance Commercial Partners for $8,750,000, which the Court approved on Oct. 18, 2005. Under an amended sale agreement approved by the Court, Alliance will assume the existing loan for the lease. On Nov. 29, 2005, the Court approved the Debtor's motion to enter into a new lease agreement with Alliance upon the closing of the sale transaction. The requested extension is therefore necessary to allow the Debtor more time to close the sale transaction with Alliance and allow Alliance to fully assume the loan for the lease. Headquartered in El Segundo, California, Aura Systems, Inc. -- http://www.aurasystems.com/-- develops and sells AuraGen(R) mobile induction power systems to the industrial, commercial and defense mobile power generation markets. The Company filed for chapter 11 protection on June 24, 2005 (Bankr. C.D. Calif. Case No. 05-24550). Ron Bender, Esq., at Levene Neale Bender Rankin & Brill LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it reported $18,036,502 in assets and $28,919,987 in debts. AURA SYSTEMS: Court Okays Extension of Claim Objection Deadline --------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California gave Aura Systems, Inc., more time to object to proofs of claim and interest filed against its estate. The Debtors have until April 1, 2006, to object to Claim Nos. 44 through 145, all of which were recorded in the Court's Claims Register on or before Nov. 15, 2005, and recently processed by the Bankruptcy Clerk's Office. A 60-day deadline applies to all proofs of claims and interest from Claim No. 146 and higher that were not yet entered or processed by the Clerk's Office as of Dec. 20, 2005. That 60-day period runs from the date the claim is recorded in the Claims Register. The Debtor explained that the two deadlines for those claims are necessary because the Clerk's Office did not have the opportunity to process or enter all the claims filed into the Register due to the substantial administrative burdens resulting from the implementation of the new Bankruptcy Code. The extension will give the Debtor more time and opportunity to review, analyze and object to all the recently processed claims and the claims that have not been processed by the Clerk's Office. Headquartered in El Segundo, California, Aura Systems, Inc. -- http://www.aurasystems.com/-- develops and sells AuraGen(R) mobile induction power systems to the industrial, commercial and defense mobile power generation markets. The Company filed for chapter 11 protection on June 24, 2005 (Bankr. C.D. Calif. Case No. 05-24550). Ron Bender, Esq., at Levene Neale Bender Rankin & Brill LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it reported $18,036,502 in assets and $28,919,987 in debts. BANCORPSOUTH BANK: Moody's Lowers Financial Strength Rating to C ---------------------------------------------------------------- Moody's Investors Service aligned the bank financial strength rating of BancorpSouth Bank to C by lowering its bank financial strength rating to C from C+. Moody's made no other changes to the ratings it assigns to BancorpSouth Bank (A3/P-1 for deposits) and BancorpSouth, Inc., its parent company (Baa1 issuer rating). The rating outlook was also unchanged at stable. Moody's cited that US banks rated A3 for deposits typically possess a C financial strength rating. The current ratings of BancorpSouth reflect: * the bank's sound and expanding community banking franchise; * relatively low level of problem loans and good loan loss record; and * robust capital levels. The ratings also incorporate relatively low, though improving profitability as well as the rising risk concentration in commercial real estate. Moody's said that the commercial real estate portfolio is granular. BancorpSouth, Inc. is headquartered in Mississippi and reported assets as of Sept. 30, 2005 were $11.1 billion. BancorpSouth Bank accounts for over 99% of consolidated assets. BEKENTON USA: Court Okays Adorno & Yoss as New Bankruptcy Counsel ----------------------------------------------------------------- Bekenton USA, Inc. sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Adorno & Yoss LLP as its new bankruptcy counsel. As previously reported in the Troubled Company Reporter, the Debtor obtained Court approval to employ Rice Pugatch Robinson & Schiller, P.A., as its bankruptcy counsel. The Debtor tells the Court that Rice Pugatch has decided to withdraw as its counsel. Adorno & Yoss will: (a) give advice to the Debtor with respect to its powers and duties as debtor-in-possession and the continued management of the business operations; (b) advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the Court; (c) prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the chapter 11 case; (d) protect the interest of the Debtor in all matters pending before the Court; and (e) represent the Debtor in negotiations with its creditors in the preparation of a plan. The Debtor did not disclose how much the Firm would be paid for their services. Mariaelena Gayo-Guitian, Esq., a shareholder at Adorno & Yoss, assures the Court that the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Miami Beach, Florida, Bekenton USA, Inc., manufactures tobacco products. The Debtor filed for chapter 11 protection on Nov. 4, 2005 (Bankr. S.D. Fla. Case No. 05-60031). Mariaelena Gayo-Guitian, Esq., at Adorno & Yoss, P.A., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed assets totaling $5,227,073 and debts totaling $15,750,548. BEKENTON USA: Court Approves Kapila & Company as New Accountant --------------------------------------------------------------- Bekenton USA, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Kapila & Company as its accountant, nunc pro tunc to Jan. 10, 2006. As previously reported in the Troubled Company Reporter, the Debtor received Court approval to employ William A. Head, C.P.A., as its accountant. The Debtor says that after entry of the order, it learned that Mr. Head and his firm were not disinterested. Thus, the Debtor relates, it discharged Mr. Head and his firm as its accountant. Kapila & Company will: a. give the Debtor accounting advice with respect to the Debtor's power and duties as debtor-in-possession in connection with its operation of the business; b. take necessary action to assist the Debtor in formulating a plan of reorganization and any other financial statements or projections that are required in connection with the chapter 11 proceeding; c. prepare monthly statement of cash receipts and disbursement together with supporting schedules; d. prepare monthly accounts receivables aging and reconciliation reports; e. prepare monthly accounts payable and secured payment reports; f. prepare inventory and fixed assets reports; g. prepare monthly reconciliation and check registers; h. assist the Debtor with the preparation and filing of all monthly reports and other accounting information which may be requested of the Debtor; i. perform all other accounting services for the Debtor which may be necessary, including but not limited to compliance with monthly or quarterly filings with the Internal Revenue Service and the State of Florida and other reporting agencies; and j. assist the Debtor in the installation and implementation of the Debtor's post-petition accounting system. Sonnet R. Kapila, a shareholder at Kapila & Company, discloses that he bills $400 per hour for his services. Mr. Kapila further says that clerks and para-professionals at the Firm bill between $50 to $100 per hour. Mr. Kapila assures the Court that the Firm does not represent any interest adverse to the Debtor or its estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Miami Beach, Florida, Bekenton USA, Inc., manufactures tobacco products. The Debtor filed for chapter 11 protection on Nov. 4, 2005 (Bankr. S.D. Fla. Case No. 05-60031). Mariaelena Gayo-Guitian, Esq., at Adorno & Yoss, P.A., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed assets totaling $5,227,073 and debts totaling $15,750,548. BOYD GAMING: Expects to Spend $4 Billion in Echelon Development --------------------------------------------------------------- Boyd Gaming Corporation's wholly owned subsidiary, Echelon Resorts Corporation, entered into a joint venture agreement with Morgans/LV Investment LLC, a wholly owned subsidiary of Morgans Hotel Group LLC. The joint venture will develop Delano Las Vegas and Mondrian Las Vegas to be located within the Company's 63-acre Las Vegas Strip property known as Echelon Place. Echelon Resorts and Morgans/LV each initially have a 50% interest in the joint venture. After certain milestones in the joint venture development process have been met, Morgans/LV will contribute approximately $97.5 million in cash and Echelon Resorts will contribute approximately 6.5 acres of land to the joint venture. In addition to their capital contributions, ERC and MLV will jointly seek to arrange non-recourse project financing of approximately $500 million. The Company anticipates that Echelon Resort will be wholly owned and principally operated by it and will include two upscale hotel towers with an aggregate of approximately 3,300 guest rooms and suites and approximately 175,000 square feet of meeting space. The Company expects that each hotel tower will contain its own spa and will connect directly to extensive public areas containing an approximate 140,000 square foot casino, approximately 25 restaurants and bars, and pool and garden areas. The Company also plans to build an approximate 4,000 seat theater with a large stage and stadium seating designed to accommodate major concerts and production shows, as well as an approximate 1,500 seat theater to house smaller shows and touring acts. The Company's plans for Echelon Place also include the Shangri-La Hotel Las Vegas, which will be located within a portion of one of the upscale hotel towers of Echelon Resort. The Shangri-La Hotel Las Vegas is expected to include approximately 400 guest rooms and suites, a 20,000 square foot spa, two restaurants and meeting space. While the Company plans to own this hotel, the Company has entered into a management agreement with Shangri-La Hotels and Resorts for its management. $4 Billion Capital Expenditure The Company anticipates that the total cost of Echelon Place, including both its wholly owned portions and the joint venture portions, will be approximately $4 billion. The Company expects its wholly owned portions of Echelon Place, which include Echelon Resort and the Las Vegas ExpoCenter, to cost approximately $2.9 billion. The Company intends to finance its portion of Echelon Place project costs primarily with cash flow from operations, borrowings under its bank credit facility and equity or debt financings. The Company plans to develop Echelon Place in one phase and to open it in early 2010. Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) -- http://www.boydgaming.com/-- is a leading diversified owner and operator of 18 gaming entertainment properties, plus one under development, located in Nevada, New Jersey, Mississippi, Illinois, Indiana and Louisiana. * * * As reported in the Troubled Company Reporter on Jan. 9, 2006, Moody's Investors Service revised the ratings outlook of Boyd Gaming Corporation to positive from stable. Moody's affirmed Boyd's: * Ba2 corporate family rating; * Ba2 secured bank loan rating; * B1 senior subordinated debt rating; and * SGL-2 speculative grade liquidity rating. As reported in the Troubled Company Reporter on Jan. 6, 2006, Standard & Poor's Ratings Services revised its outlook on casino operator Boyd Gaming Corp. to stable from positive. At the same time, Standard & Poor's affirmed its ratings on the Las Vegas- based company, including its 'BB' corporate credit rating. CAPITAL ONE: Earns $280.3 Million of Net Income in Fourth Quarter ----------------------------------------------------------------- Capital One Financial Corporation (NYSE: COF) reported earnings of $1.8 billion for the year compared with $1.5 billion in 2004. Earnings for the fourth quarter of 2005 were $280.3 million, compared with $195.1 million for the fourth quarter of 2004, and $491.1 million in the previous quarter. Current period results include a $30.6 million contribution to net income from the acquisition of Hibernia Corporation, which was completed on Nov. 16, 2005. "Capital One delivered another year of solid results across our diversified consumer financial services businesses and is well-positioned for continued growth and profitability in 2006," Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer, said. "With the addition of Hibernia, we have further expanded our broad portfolio of lending and deposit products, as well as our distribution channels, to better serve our customers." Capital One's managed revenue margin decreased to 12.06% in the fourth quarter of 2005 from 12.54% in the previous quarter, primarily due to the addition of Hibernia's loan portfolio. The company's managed revenue margin was 12.66% in the fourth quarter of 2004. Return on managed assets for 2005 of 1.72% remained consistent with 1.73% in 2004. Headquartered in McLean, Virginia, Capital One Financial Corporation -- http://www.capitalone.com/-- is a financial holding company whose principal subsidiaries, Capital One Bank, Capital One, F.S.B. and Capital One Auto Finance, Inc., offer a variety of consumer lending products. As of June 30, 2005, Capital One's subsidiaries collectively had 48.9 million accounts and $83.0 billion in managed loans outstanding. Capital One is a Fortune 500 company and, through its subsidiaries, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index. * * * As reported in the Troubled Company Reporter on Nov. 17, 2005, Moody's Investors Service upgraded the long-term ratings of Capital One Financial Corporation and its subsidiaries (parent company senior unsecured to Baa1 from Baa3, bank deposits to A3 from Baa1). The rating agency also confirmed the long-term debt ratings of Hibernia Corporation (subordinated at Baa2) and Hibernia National Bank (issuer at A3), and lowered the short-term ratings of Hibernia National Bank to Prime-2. Ratings upgraded include: Capital One Financial Corporation: -- senior debt to Baa1 from Baa3 -- subordinate shelf to P(Baa2) from P(Ba1) -- junior subordinate shelf to P(Baa2) from P(Ba1) -- preferred shelf to P(Baa3) from P(Ba2) Capital One Bank: -- bank financial strength to C from C- -- long-term deposits to A3 from Baa1 -- senior debt to A3 from Baa2 -- issuer rating to A3 from Baa2 -- long-term other senior obligations to A3 from Baa2 -- subordinated debt to Baa1 from Baa3 Capital One FSB: -- bank financial strength to C from C- -- long-term deposits to A3 from Baa1 -- issuer rating to A3 from Baa2 -- long-term other senior obligations to A3 from Baa2 Capital One Capital I: -- preferred stock to Baa2 from Ba1 These ratings were confirmed: Hibernia Corporation: -- issuer rating at Baa1 -- subordinated debt at Baa2 Hibernia National Bank: -- long-term other senior obligations at A3 -- issuer rating at A3 These ratings were downgraded: Hibernia National Bank: -- short-term deposits and other senior obligations to Prime-2 from Prime-1 CENDANT MORTGAGE: Fitch Affirms Low-B Ratings on 10 Cert. Classes ----------------------------------------------------------------- Fitch Ratings affirms these Cendant Mortgage Corporation mortgage pass-through certificates: Series 2004-1: * Class A at 'AAA' * Class B-1 at 'AA' * Class B-2 at 'A' * Class B-3 at 'BBB' * Class B-4 at 'BB' * Class B-5 at 'B' Series 2004-2: * Class A at 'AAA' * Class B-1 at 'AA' * Class B-2 at 'A' * Class B-3 at 'BBB' * Class B-4 at 'BB' * Class B-5 at 'B' Series 2004-3: * Class A at 'AAA' * Class B-1 at 'AA' * Class B-2 at 'A' * Class B-3 at 'BBB' * Class B-4 at 'BB' * Class B-5 at 'B' Series 2004-4: * Class A at 'AAA' * Class B-1 at 'AA' * Class B-2 at 'A' * Class B-3 at 'BBB' * Class B-4 at 'BB' * Class B-5 at 'B' Series 2004-5: * Class A at 'AAA' * Class B-1 at 'AA' * Class B-2 at 'A' * Class B-3 at 'BBB' * Class B-4 at 'BB' * Class B-5 at 'B' All of the mortgage loans in the aforementioned transactions were either originated or acquired in accordance with the underwriting guidelines established by Cendant Mortgage Corporation. The mortgage loans consist of 15- and 30-year fixed-rate mortgages secured by first liens, primarily on one- to four-family residential properties. Additionally, any mortgage loan with an original loan to value in excess of 80% is required to have a primary mortgage insurance policy. PHH Mortgage Corporation, rated 'RPS1' for prime products by Fitch, is the servicer for all of the mortgage loans. The affirmations reflect a satisfactory relationship between credit enhancement (CE) and future loss expectations and affect approximately $495.6 million of outstanding certificates. All classes in the transactions detailed above have experienced small to moderate growth in CE since closing, and there have been no collateral losses to date. As of the December 2005 distribution date, the transactions are seasoned from a range of 15 to 23 months, and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from approximately 72% (series 2004-5) to 87% (series 2004-3). CENTER FOR PHYSICAL: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: The Center for Physical Therapy and Wellness, LLC 131 East Broad Street, Suite 104 Falls Church, Virginia 22046 Bankruptcy Case No.: 06-10029 Type of Business: The Debtor owns and operates a rehabilitation facility located in Falls Church, Virginia. See http://www.cptw.com/ Chapter 11 Petition Date: January 20, 2006 Court: Eastern District of Virginia (Alexandria) Debtor's Counsel: Bennett A. Brown, Esq. Gilliam, Sanders & Brown, P.L.C. 3905 Railroad Avenue, Suite 200N Fairfax, Virginia 22030 Tel: (703) 591-3500 Fax: (703) 591-2185 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gordon Frederick Loan $340,000 8328 Epinard Court Annandale, VA 22003 Rose Ferrari $140,000 6200 Wilson Boulevard Falls Church, VA 22044 JK McLean Investments Rent $130,000 1340 Chain Bridge Road McLean, VA 22102 Tery Hong Loan $125,000 Triinu Tombak Loan $100,000 Chun Rhee Loan $70,000 Alan Rudd Loan $68,000 Rebecca Zuurbier Loan $67,000 AG Day Corp. Trade debt $60,000 Mira Vinglish Loan $50,000 Virginia Department of Labor $30,000 Paychex Trade debt $30,000 Medco Supplies Trade debt $7,000 WS Medical Trade debt $3,100 Quill Trade debt $3,000 SJM Agency Trade debt $3,000 CIT Group Trade debt $3,000 Aetna Trade debt $2,800 CHASE MORTGAGE: Fitch Holds Low-B Ratings on Four 4 Loan Classes ---------------------------------------------------------------- Fitch Ratings has taken rating actions on these Chase Mortgage Finance Trust issues: Series 2004-S1: * Class A affirmed at 'AAA' Series 2004-S3: * Class A affirmed at 'AAA' * Class M affirmed at 'AA' * Class B1 affirmed at 'A' * Class B2 affirmed at 'BBB' * Class B3 affirmed at 'BB' * Class B4 affirmed at 'B' Series 2004-S4: * Class A affirmed at 'AAA' * Class M affirmed at 'AA' * Class B1 affirmed at 'A' * Class B2 affirmed at 'BBB' * Class B3 affirmed at 'BB' * Class B4 affirmed at 'B' All of the mortgage loans in the aforementioned transactions were either originated or acquired by Chase Manhattan Mortgage Corporation. The mortgage loans consist of 15- and 30-year fixed- rate mortgages secured by first liens on one- to four-family residential properties. Chase Home Finance, LLC, rated 'RPS1' for prime products by Fitch, is the servicer for all of the mortgage loans. The affirmations reflect a satisfactory relationship between credit enhancement (CE) and future loss expectations and affect approximately $740.5 million of outstanding certificates. All classes in the transactions detailed above have experienced small to moderate growth in CE since closing, and there have been no collateral losses to date. As of the December 2005 distribution date, the transactions are seasoned from a range of 20 to 23 months, and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from approximately 66% (series 2004-S3) to 73% (series 2004-S4). COPANO ENERGY: S&P Rates $225 Million Senior Notes at B ------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to midstream energy company Copano Energy LLC. At the same time, Standard & Poor's assigned its 'B' rating to Copano's $225 million senior notes maturing in 2016. Houston, Texas-based Copano is a midstream gas gathering, processing, and transmission company with operations in the Texas Gulf Coast region and central and eastern Oklahoma. Copano had $402 million of long-term debt outstanding as of Sept. 30, 2005. The ratings on Copano are based on the company's weak business risk profile and aggressive financial policy. Copano's business risks include an asset base that is small compared with some of its midstream peers and margins that are sensitive to volume declines as well as commodity pricing risk. These risks are somewhat mitigated by long-lived reserves and healthy drilling activity in Copano's core operating regions, which is supported by the currently favorable pricing environment. Importantly, the company has recently implemented a hedging program, consisting of crude oil puts, NGL puts and swaps through 2008, and natural gas puts through 2009. "The stable outlook on Copano relies on the company's continued efforts to manage its cash-flow volatility and the ongoing implementation of its hedging program," said Standard & Poor's credit analyst Plana Lee. CORRECTIONS CORP: Prices $150 Million of 6.75% Senior Notes ----------------------------------------------------------- Corrections Corporation of America (NYSE:CXW) reported the pricing of $150 million aggregate principal amount of its 6.75% Senior Notes due 2014. The Senior Notes are being sold under an automatically effective shelf registration statement that was filed by the Company with the Securities and Exchange Commission on Jan. 17, 2006. The closing of the sale of the notes, which is subject to customary conditions, is expected to occur today, Jan. 23, 2006. The Company intends to use the net proceeds from the sale of the Senior Notes to: (1) prepay approximately $139 million of term loan indebtedness under the Company's senior secured bank credit facility and (2) make capital expenditures. Copies of the applicable prospectus and prospectus supplement relating to the offering may be obtained by contacting: Banc of America Securities LLC 9 West 57th Street New York, New York, 10019 Toll-free: 1-800-294-1322 Headquartered in Nashville, Tennessee, Corrections Corporation of America -- http://www.correctionscorp.com/-- is the nation's largest owner and operator of privatized correctional and detention facilities and one of the largest prison operators in the United States, behind only the federal government and three states. CCA currently operates 63 facilities, including 39 company-owned facilities, with a total design capacity of approximately 71,000 beds in 19 states and the District of Columbia. CCA specializes in owning, operating and managing prisons and other correctional facilities; and providing inmate residential and prisoner transportation services for governmental agencies. * * * As reported in the Troubled Company Reporter on Jan. 20, 2006, Moody's Investors Service assigned a Ba3 rating to Correction Corporations of America's $150 million new senior unsecured notes due 2014. The outlook for all of the firm's ratings was revised to positive, from stable. According to Moody's, this outlook revision reflects a substantially reduced secured debt burden as well as improving leverage and coverage statistics. CCA maintains its industry leadership position as the USA's largest owner and operator of private correctional facilities. This rating was assigned with a positive outlook: Corrections Corporation of America: * Ba3 $150 million senior unsecured notes due 2014. These ratings were affirmed with a positive outlook: Corrections Corporation of America: * Ba2 senior secured debt rating; * Ba3 senior unsecured debt rating; * (P)Ba2 senior secured debt shelf; * (P)Ba3 senior unsecured debt shelf; * (P)B1 senior subordinate shelf; and * (P)B2 preferred shelf. CORUS ENTERTAINMENT: Prices 8.75% Sr. Subordinated Notes Offering ----------------------------------------------------------------- Corus Entertainment Inc. (TSX: CJR.NV.B; NYSE: CJR) set the pricing for the previously announced tender offer and consent solicitation for its outstanding $375 million aggregate principal amount of 8.75% Senior Subordinated Notes due 2012. The total consideration for the Notes was determined as of 2 p.m. ET on Wednesday, Jan. 18, 2006, by reference to a fixed spread of 50 basis points above the yield to maturity of the 3.375% U.S. Treasury Note due Feb. 28, 2007. The total consideration for each $1,000 principal amount of Notes validly tendered and accepted for payment is $1081.59, which includes a consent payment of $20.00 per $1,000 principal amount of Notes tendered on or prior to 5:00 p.m. ET on Dec. 29, 2005 by holders who did not validly withdraw their Notes prior to the Withdrawal Rights Expiration of 5:00 p.m. ET on Dec. 29, 2005. Holders who validly tendered their Notes after the Consent Deadline but prior to expiration will receive the total consideration less the consent payment. Holders will also receive the accrued and unpaid interest on tendered Notes from the last interest payment date to, but not including, the Final Settlement Date, payable on the Final Settlement date. The Final Settlement Date is expected to be Jan. 23, 2006. The Expiration Time (as that term is defined in the Offer to Purchase) for the tender offer and consent solicitation has been extended to 12:00 midnight ET on Jan. 20, 2006. The depositary, Global Bondholder Services Corporation, has advised Corus that approximately $373.5 million aggregate principal amount of the Notes, representing approximately 99.62% of the Notes outstanding, had been validly tendered and not withdrawn as of 5:00 p.m. ET on Jan. 17, 2006. Prior to 5:00 p.m. ET on Dec. 29, 2005, Corus obtained the consents required to effect the proposed amendments to the indenture governing the Notes, which eliminate substantially all of the restrictive covenants and certain events of default contained in the indenture. The supplemental indenture containing these proposed amendments has been executed and will become operative upon our acceptance for payment of the Notes validly tendered and not withdrawn. Notes tendered and consents delivered prior to 5:00 p.m. ET on Dec. 29, 2005, may no longer be withdrawn or revoked. Copies of the Offer to Purchase and Letter of Transmittal can be obtained by contacting the information agent and depositary at: Global Bondholder Services Corporation Toll Free (866) 470-4300 or Telephone (212) 430-3774 (collect) Additional information concerning the terms and conditions of the tender offer and consent solicitation may be obtained by contacting the exclusive dealer manager and solicitation agent for the tender offer and consent solicitation at Citigroup Corporate and Investment Banking Telephone (800) 558-3745 or (212) 723-6106 Corus Entertainment Inc. -- http://www.corusent.com/-- is a Canadian-based media and entertainment company. Corus is a market leader in both specialty TV and Radio. Corus also owns Nelvana Limited, a leading international producer and distributor of children's programming and products. The company's other interests include publishing, television broadcasting and advertising services. A publicly traded company, Corus is listed on the Toronto (CJR.NV.B) and New York (CJR) Exchanges. Corus Entertainment Inc.'s 8.75% Senior Subordinated Notes due 2012 carry Moody's Investors Service's and Standard & Poor's single B rating. CREDIT SUISSE: Moody's Junks Ratings on Two Certificate Classes --------------------------------------------------------------- Moody's Investors Service downgraded three certificates from three deals and confirmed the rating of one certificate from one deal, all issued by Credit Suisse First Boston Mortgage Securities Corp. in 2002. The downgrade actions are based on the fact that the bonds' current credit enhancement levels, including excess spread where applicable, are low compared to the current projected loss numbers for the current rating level. The rating for the I-B-2 certificate issued in the 2002-9 transaction has been confirmed. The rating has been confirmed because current credit enhancement levels provide sufficient protection for the certificate. The complete rating actions are: Issuer: Credit Suisse First Boston Mortgage Securities Corp. Downgrades: * Series 2002-9; Class I-B-3, downgraded to B3 from B1 * Series 2002-10; Class II-B-4, downgraded to Ca from B2 * Series 2002-22; Class II-B-2, downgraded to Caa2 from B2 Confirmed: * Series 2002-9; Class I-B-2, A2 rating confirmed CREDIT SUISSE: Moody's Junks Rating on $19 Mil. Class I Certs. -------------------------------------------------------------- Moody's Investors Service upgraded the ratings of three classes, downgraded the ratings of two classes and affirmed the ratings of five classes of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 1998- C2 as: * Class A2, $973,186,594, Fixed, affirmed at Aaa * Class AX, Notional, affirmed at Aaa * Class B, $105,600,000, Fixed, affirm at Aaa * Class C, $105,600,000, Fixed, upgraded to Aaa from Aa2 * Class D, $105,500,000, Fixed, upgraded to A1 from A3 * Class E, $28,800,000, Fixed, upgraded to A3 from Baa1 * Class F, $105,600,000, Fixed, affirmed at Ba2 * Class G, $19,200,000, Fixed, affirmed at Ba3 * Class H, $47,900,000, Fixed, downgraded to B3 from B2 * Class I, $19,200,000, Fixed, downgraded to C from Caa1 As of the Jan. 18, 2005 distribution date, the transaction's aggregate balance has decreased by approximately 21.1% to $1.5 billion from $1.9 billion at closing. The Certificates are collateralized by 195 mortgage loans ranging in size from less than 1.0% to 5.2% of the pool, with the top 10 loans representing 41.0% of the pool. The pool consists of: * two shadow rated loans, representing 8.9% of the pool; * a conduit component, representing 79.2% of the pool; and * a credit tenant lease component, representing 11.9% of the pool. Forty-nine loans, representing 29.5% of the pool, have defeased and been replaced by U.S. Government securities. The largest defeased loans include: * Intell/Reichmann Portfolio ($79.6 million; 5.2%); * 260-261 Madison Avenue ($67.0 million; 4.4%); and * Garden Variety Apartments Portfolio ($40.7 million; 2.7%). Eleven loans have been liquidated from the pool, resulting in aggregate realized losses of approximately $32.5 million. Four loans, representing 4.2% of the pool, are in special servicing. Moody's has estimated aggregate losses of approximately $7.8 million for the specially serviced loans. Thirty-five loans, representing 11.9% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2004 operating results for approximately 94.7% of the performing loans and partial year 2005 operating results for approximately 79.9% of the performing loans. Moody's loan to value ratio for the conduit component (excluding the defeased loans) is 88.5%, essentially the same as at Moody's last full review in February 2004 and compared to 88.9% at securitization. The upgrade of Classes C, D and E is due to a large percentage of defeased loans, stable overall pool performance and increased subordination levels. The downgrade of Class H and I is due to realized losses and anticipated losses from the specially serviced loans. The largest shadow rated loan is the 180 Water Street Loan ($69.2 million - 4.5%), which is secured by a 505,000 square foot office building located in the Financial District submarket of New York City. The property is 100.0% leased to the City of New York Department of Citywide Administrative Services (Moody's general obligation bond rating of New York City -- A1) under a long-term lease which expires in June 2018. The loan matures in July 2018. Moody's current shadow rating is Ba1, the same as at last review. The second shadow rated loan is the 260-261 Madison Avenue Loan ($67.0 million - 4.4%), which defeased. The top three non-defeased conduit exposures represent 14.3% of the outstanding pool balance. The largest non-defeased conduit exposure is the Butera Portfolio ($75.7 million - 4.9%), which is secured by a portfolio of seven industrial properties, five office buildings and two retail centers. The properties, which are located in Maryland (13) and West Virginia (1), total 1.4 million square feet. The portfolio's overall occupancy is 96.0%, essentially the same as at last review. Performance has been impacted by increased expenses. Moody's LTV is 91.5%, compared to 89.1% at last review. The second largest non-defeased conduit exposure is the Patriot American Portfolio Loan ($73.0 million - 4.8%), which is secured by two full service hotel properties. The Wyndham Greenspoint Hotel is located in Houston, Texas and contains 472 guestrooms. Occupancy and RevPAR for the trailing 12 month period ending October 2005 were 86.0% and $78.00 respectively, compared to 67.0% and $62.00 at last review. The Chicago Embassy Suites is located in Chicago, Illinois and contains 358 rooms. Occupancy and RevPAR for the trailing 12 month period ending October 2005 were 77.0% and $144.00 respectively, compared to 75.0% and $119.00 at last review. Moody's LTV is 98.1%, compared to in excess of 100.0% at last review. The third largest non-defeased conduit exposure is the L'Enfant Plaza Loan ($69.6 million - 4.5%), which is a participation interest in a $139.2 million loan secured by a mixed use complex located in southwest Washington, D.C. The collateral consists of 889,000 square feet of office and retail space and a 370-room Loews Hotel. The commercial component is 92.0% leased. The hotel's RevPAR for calendar year 2004 was $120.57, compared to $109.87 at last review. Moody's LTV is 86.4%, compared to in excess of 100.0% at last review. The CTL component includes 37 loans secured by properties under bondable, triple-net, or double-net leases. The largest exposures are: * Motel 6/Accor SA (50.3% of the CTL component); and * CVS (21.8%; Moody's senior unsecured rating A3 -- stable outlook). The pool's collateral is a mix of: * U.S. Government securities (29.5%), * office (19.9%), * retail (12.1%), * multifamily (11.3%), * CTL (11.9%), * lodging (7.4%), * industrial and self storage (6.8%), and * healthcare (1.1%). The collateral properties are located in 34 states plus Washington, D.C. The highest state concentrations are: * New York (21.7%), * California (17.0%), * New Jersey (11.4%), * Washington, D.C. (10.9%), and * Texas (8.3%). All of the loans are fixed rate. DELPHI CORP: Gets Court Approval to Renew ACE Insurance Agreements ------------------------------------------------------------------ As previously reported in the Troubled Company Reporter on Jan. 3, 2006, Delphi Corporation and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's permission to: (1) renew or enter into new insurance policies with ACE American Insurance Company and its affiliates and to execute and deliver all related documents and agreements; (2) assume insurance policies and related agreements with the Insurers, including: (a) a Multi-Line Deductible Program Agreement, effective as of October 1, 2000, between Pacific Employers Insurance Company and the Debtors, including all related amendments and addenda; (b) all General Liability Policies issued to the Debtors and all related renewals, extensions, and endorsements; (c) all Automobile Liability Policies issued to the Debtors, including all related renewals, extensions, and endorsements; (d) all Workers' Compensation Policies issued to the Debtors, including all related renewals, extensions, and endorsements; (e) the binder related to the Insurance Policies; and (f) the claims administration agreements related to the Insurance Policies; and (3) replace the existing $5,388,967 cash collateral provided to the Insurers prepetition with an irrevocable letter of credit in an amount equal to the Cash Collateral. * * * The Court authorizes the Debtors to assume their Insurance Agreements with ACE American Insurance Company. The Debtors are authorized, but not directed, to replace the $5,388,967 of existing cash collateral with a new, irrevocable letter of credit in the same amount as the Cash Collateral, in form and substance acceptable to the Insurers, and issued by a financial institution acceptable to the Insurers. 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: Appaloosa's Equity Panel Motion Draws More Objections ------------------------------------------------------------------ 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. * * * Objections of Debtors, U.S. Trustee, Creditors Committee & Wilmington (1) Debtors The Debtors maintain that the interests of Law Debenture Trust Company of New York are adequately represented by the current composition of the Official Committee of Unsecured Creditors. The U.S. Trustee has formed a committee that adequately represents the interests of unsecured creditors, including the subordinated noteholders. Moreover, the Creditors' Committee has shown an ability to adequately and properly perform its duties. It was actively involved in, among other things: (a) reviewing the Court's First Day Orders; (b) reviewing every request that is filed in the Debtors' Chapter 11 cases; (c) providing the Debtors with hundreds of information requests on virtually every material subject area in their cases; (d) negotiating a resolution to the Debtors' supply chain issues, which includes daily onsite oversight by the Committee's professionals at the Debtors' worldwide headquarters in Michigan; and (e) negotiating the Key Employee Compensation Program and other long-term incentive plans for the Debtors' employees. The Debtors contend that there is no evidence to prove that any conflict on the Creditors Committee with respect to maximizing value or that the representatives of the interests of the subordinated notes have not had a meaningful voice. The Creditors Committee has also noted that it is able to perform its fiduciary duties without Law Debenture's assistance. The Debtors oppose any expansion or reconstitution of the Committee to include Law Debenture. (2) U.S. Trustee Deirdre A. Martini, the United States Trustee for Region 2, asserts that the reconstitution of the Committee is not warranted because: (i) she has properly exercised her discretion in declining to reconstitute the Committee; (ii) her formation of the Committee was not arbitrary or capricious; and (iii) the Subordinated Bondholders are adequately represented on the Committee. Accordingly, the U.S. Trustee asks Judge Drain to deny Law Debenture's request. (3) Creditors Committee The Official Committee of Unsecured Creditors objects to Law Debenture's request on the grounds that it is unnecessary and is not in the best interests of the Debtors, their Chapter 11 estates, or the various creditor constituencies in their Chapter 11 cases. The Creditors Committee asserts that it adequately represents the interests of all unsecured creditors in the Debtors' cases. Robert J. Rosenberg, Esq., at Latham & Watkins LLP, in New York, notes that the Committee, as presently constituted, includes members that are representative of each type and priority of unsecured debt in the Debtors' cases, explicitly including the subordinated debt. These members, Mr. Rosenberg says, owe a fiduciary duty to all unsecured creditors, not just to any similar constituency that it purports to represent. Therefore, the Committee members are entitled to a presumption that they will fulfill their fiduciary duty and thus represent the interests of the Subordinated Noteholders as well as all other unsecured creditors, Mr. Rosenberg maintains. "Considering the progress that the Committee has made to date, [its] effective internal working relationships and the developing relationship with the Debtors, and the extraordinary work still to come in [the Debtors'] cases, the addition of such a self- interested actor on the Committee could have unfortunate consequences for [the Debtors'] cases," Mr. Rosenberg tells Judge Drain. Capital Research and Management, co-chair of the Committee and the holder of approximately $530,000,000 in principal amount of Delphi Senior and Subordinated Notes, supports the Creditors Committee's Objection. (4) Wilmington Trust Wilmington Trust Company is the indenture trustee with respect to certain senior notes and debentures in the aggregate principal amount of $2,000,000,000 issued by Delphi Corp. Wilmington also serves as Delaware Trustee under an Amended and Restated Declaration of Trust dated as of October 28, 2003, and an Amended and Restated Declaration of Trust dated as of November 21, 2003, with respect to Delphi Trust I and Delphi Trust II. In this regard, Wilmington clarifies that it has no legal authority or obligation to represent the interests of Delphi Trust I and Delphi Trust II, as holders of the 8.25% Junior Subordinated Notes Due 2033, and adjustable Rate Junior Subordinated Notes due 2033, issued by Delphi. According to Wilmington, Law Debenture represents the interests of: (a) the holders of the trust preferred securities issued by the Delphi Trusts, in its capacity as property trustee for each of the Delphi Trusts; and (b) the Holders of the Subordinated Notes, in its capacity as successor indenture trustee for each of the issues of Subordinated Notes. In its capacity as member of the Committee, however, Wilmington assures the Court it is fully cognizant of its responsibility to serve the interests of the entire class of unsecured creditors, and its ability to discharge that duty is not in any way compromised by its concurrent roles as Indenture Trustee or Delaware Trustee. 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) DRS TECHNOLOGIES: S&P Rates Proposed $325 Mil. Senior Notes at B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services held certain ratings on DRS Technologies Inc., including the 'BB-' corporate credit rating, on CreditWatch, where they were placed with negative implications on Sept. 22, 2005. At the same time, Standard & Poor's assigned its 'B+' rating to the company's proposed $325 million senior unsecured notes due 2016, and its 'B' rating to the proposed $250 million subordinated notes due 2018. The notes will be issued under an existing Rule 415 shelf registration. In addition, the bank loan and recovery ratings on the proposed $700 million credit facility, which was increased by $50 million, are affirmed. The ratings on the proposed credit facility and notes are not on CreditWatch. On Oct. 5, 2005, Standard & Poor's indicated that if the proposed acquisition of Engineered Support Systems Inc. (ESSI) is completed on terms similar to those presented, it would affirm ratings on DRS and remove them from CreditWatch. The outlook would be negative. "The pending affirmation reflects expected improvements in program and customer diversity as a result of the $2 billion, largely debt financed acquisition," said Standard & Poor's credit analyst Christopher DeNicolo. "However, the improved business risk profile is offset somewhat by the increase in leverage and deterioration in cash flow protection measures," the analyst continued. DRS has offered $43 for each share of ESSI stock to be paid 70% in cash and 30% in DRS stock. The cash portion, including fees and expenses and repaying bank debt at DRS and ESSI, will be financed with: * cash on hand, * $523 million of proceeds from the new credit facility, and * the $875 million of new public debt securities. As a result of the transaction, fiscal 2006 (ending March 31, 2006) pro forma debt to EBITDA is expected to increase above 5x, from previous expectations of 3.5x-4x for DRS standalone. Similarly, funds from operations to debt is likely to decline to the 10%-15% range from over 20%. The significant equity portion of the purchase consideration limits the impact on debt to capital, which will increase to 60% from around 50% currently. However, the acquisition will: a) improve DRS' program diversity; b) increase its exposure to the U.S. Air Force; and c) provide a service offering (that should be less vulnerable to funding pressures) to complement its existing largely product portfolio. The transaction is expected to close by Jan. 31, 2006. EARLE M. JORGENSEN: Reliance Merger Cues S&P's Developing Watch --------------------------------------------------------------- Standard & Poor's Ratings Services revised its CreditWatch on 'B+'-rated Earle M. Jorgensen Co. to developing from positive following the company's announcement that it signed a definitive agreement to be acquired by Reliance Steel & Aluminum Co. (unrated) for $934 million. The transaction will be comprised of cash, stock, and the assumption of approximately $291 million of Earle M. Jorgensen debt. "The CreditWatch developing implication reflects the uncertainties surrounding the ultimate ratings on Earle M. Jorgensen's secured notes, which have a change-of-control provision," said Standard & Poor's credit analyst Dominick D'Ascoli. The merger is subject to: * shareholder approval, * regulatory approvals, and * the registration of the shares of Reliance common stock being issued as stock consideration. ECHOSTAR COMMS: Moody's Affirms Convertible Sub. Notes' B2 Rating ----------------------------------------------------------------- Moody's Investors Service affirmed all ratings for EchoStar Communications Corporation and subsidiary EchoStar DBS Corporation (EDBS) following the company's announcement of a proposed $1 billion senior unsecured debt issuance (not rated by Moody's) at EDBS. The company intends to use the proceeds of the offering to redeem the approximately $450 million of outstanding 9-1/8% Senior Notes due 2009 at EDBS, as well as for general corporate purposes. The current ratings can sustain the modest increase in leverage of less than 0.5 times debt-to-EBITDA, pro forma for the new issuance and incorporating retirement of the outstanding notes. EchoStar's ratings continue to reflect expectations of higher costs to grow and retain subscribers in an increasingly competitive operating environment and lack of clarity on management's operational and fiscal strategies. EchoStar's: * solid liquidity position (based predominantly on cash balances of approximately $2 billion pro forma for the transaction); * its substantial and growing subscriber base of over 12 million; and * modest positive free cash flow support the ratings. The outlook remains stable. Moody's took these actions: EchoStar Communications Corporation: * Corporate Family Rating -- Ba3 (affirmed) * Convertible Subordinated Notes -- B2 (affirmed) * Speculative Grade Liquidity Rating -- SGL-1 (affirmed) EchoStar DBS Corporation: * Senior Unsecured Notes due 2014 -- Ba3 (affirmed) Moody's will withdraw the Ba3 ratings on the 9.125% senior unsecured notes due 2009 upon the closing of the proposed financing and the subsequent retirement of these notes. The Ba3 corporate family rating continues to reflect: * expectations of higher costs to grow and retain subscribers in an increasingly competitive operating environment; * ongoing concerns about diminishing returns on invested capital and the EchoStar's long term strategic position as a one product company; and * moderate leverage of 3.6 times (pro forma for the transaction and incorporating retirement of the 9.125% senior notes). Although management seems to have moderated the aggressive equity rewards program of 2004 (which totaled $1.265 billion), lack of clarity on fiscal policy remains a concern. Incremental risks associated with: * the lack of management guidance, * flexible indenture agreements, and * volatility in performance also constrain the rating. Supporting the ratings are: * EchoStar's solid liquidity position (based predominantly on cash balances of approximately $2 billion pro forma for the transaction); * its substantial and growing subscriber base of over 12 million; and * modest positive free cash. The ratings continue to incorporate short-term uncertainties regarding the company's intentions for its substantial cash balances; no restriction on utilization of this cash for strategic short term purposes exists. EchoStar's lack of a bundled offering creates inherent business risk which demands greater flexibility and a stronger credit profile than its cable TV competitors, in Moody's view. Should EchoStar expand its product offerings, Moody's would consider the ratings in the context of anticipated upfront costs, returns, and the likely impact on margin and free cash flow. Moody's also expects continued intense competition from DirecTV. The stable ratings outlook at Ba3 incorporates Moody's concerns over EchoStar's long term competitive growth prospects and lack of guidance on both management's strategic plans and potential for continued shareholder returns, balanced by the sizeable and still growing subscriber base and high cash balance. Application of cash on hand to reduce debt on a sustained basis could provide upward rating momentum, assuming Moody's believed that such leverage reduction did not occur at the expense of its competitive position or financial flexibility. Sustained use of cash toward shareholder rewards or strategic ventures with negative implications for EchoStar's credit profile could result in a negative rating outlook or pressure the ratings downward, particularly if leverage were to increase beyond 5.0 times. Satellite failures or capacity constraints could also have negative ratings implications. Pro forma for the transaction and incorporating retirement of the 9-1/8% notes, EchoStar's leverage increases modestly to approximately 3.6 times on debt-to-EBITDA on a trailing twelve months basis through Sept. 30, 2005 but remains below the 5 times level of the company throughout most of 2004. Moody's has historically hesitated to consider EchoStar's leverage on a net basis due to the unlikelihood that cash would be used to pay down debt; continued share repurchase activity combined with the absence of debt reduction substantiates this approach. Furthermore, EchoStar's evolving subscriber acquisition strategies (including set top box leasing, discounting) make EBITDA margins less informative, and Moody's focuses more on subscriber acquisition costs and free cash flow. EchoStar Communications Corporation is a leading provider of direct broadcast satellite pay television services to approximately 12 million subscribers. The company maintains its headquarters in Englewood, Colorado. ECHOSTAR COMMS: Fitch Rates Proposed $1 Billion Sr. Notes at BB- ---------------------------------------------------------------- Fitch Ratings affirmed Echostar Communications Corporation's 'BB-' Issuer Default Rating, and affirmed the 'B' rating on the convertible subordinated notes. Fitch also affirms the 'BB-' rating on the senior unsecured notes issued by Echostar's wholly owned subsidiary Echostar DBS Corporation. In addition, Fitch has assigned a 'BB-' rating to the proposed offering of $1 billion in senior notes in accordance with SEC rule 144A. Approximately $5.9 billion of debt as of the end of the third quarter is affected by Fitch's action. The rating outlook is stable. The company intends to use the proceeds from the proposed offering to redeem Echostar DBS Corporation's outstanding 9.125% senior notes due 2009, of which approximately $442 million was outstanding as of the end of third-quarter 2005. The balance of the proceeds from the issuance will be used for general corporate purposes. The offering will increase overall debt balances by approximately $558 million and will slow the pace of expected improvement in credit protection metrics during 2006. Pro forma for the issuance as of the end of the third quarter of 2005 consolidated debt would increase to approximately $6.5 billion and leverage (on a latest 12-month basis) would increase to 3.6 times from 3.3x on an actual basis. Fitch anticipates that during 2006 the company will continue to grow EBITDA. However, free cash flow levels are expected to be consistent with 2005 free cash flow levels. Fitch expects leverage to decline to 2.9x by the end of 2006 and, when adjusting for capitalized subscriber acquisition costs, Fitch expects leverage to decline to 4.7x by the end of 2006. Fitch's ratings reflect: * Echostar's size and scale as the third-largest multi-channel video programming distributor in the country; * the company's solid liquidity position as evidenced by nearly $1.6 billion of cash and marketable securities on its balance sheet at the end of third-quarter 2005, which increases to approximately $2.1 billion pro forma for the proposed issuance; and * improving credit protection metrics. In addition, the ratings incorporate Fitch's expectation for continued EBITDA growth and free cash flow generation. Risks to Echostar's credit profile include uncertainty related to the expected use of material amounts of cash on the company's balance sheet, as well as expected free cash flow. Balanced against these attributes, the ratings also consider the company's lack of revenue and service diversity, and the increasing business risks connected to Echostar's credit profile stemming from the intense competition for subscriber market share with cable MSOs (multiple system operators) and other direct broadcast satellite providers. Fitch expects the competition for subscriber market share to intensify as the RBOCs (regional bell operating companies) introduce video services. Moreover, from Fitch's perspective, the ratings also reflect Echostar's weak competitive position from which to respond to the changing and riskier operating environment that highlights the importance of a bundle of services. Relative to the cable and telephone companies, Echostar lacks the revenue and service diversity enjoyed by the other industry participants. Fitch considers this narrow product focus, resulting from the limitations inherent with Echostar's satellite infrastructure, to be a competitive disadvantage which will constrain Echostar's ability to generate revenue and cash flow growth. Fitch believes that the services offered by the cable MSOs and the telephone companies in the residential markets will converge, leaving Echostar's market share vulnerable to competition. Absent material investment in upgraded technology at the satellite infrastructure and customer premise equipment levels, Fitch believes these factors will continue to erode the company's longer term competitive position. Echostar's Stable Rating Outlook reflects the consistent subscriber economic trends and the positive EBITDA and free cash flow prospects expected during 2006, balanced with the very competitive operating environment. Outside of the announced share repurchase authorization, Fitch views the use of cash for shareholder-friendly actions as an erosion of financial flexibility that could result in pressure on the ratings or in a rating outlook revision. ECHOSTAR DBS: S&P Rates Proposed $1 Billion Senior Notes at BB- --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to the proposed $1 billion senior notes due 2016 of EchoStar DBS Corp., a subsidiary of satellite direct to home (DTH) TV provider EchoStar Communications Corp. (EchoStar; BB-/Stable/--). The notes are being offered under Rule 144A with registration rights, with proceeds being used to call the $442 million 9.125% senior notes due 2009 and for general corporate purposes. The 'BB- 'corporate credit rating on EchoStar and its subsidiaries was affirmed. "The transaction will boost EchoStar's cash balance by about $500 million and increase gross debt to EBITDA leverage modestly to about 3.6x, from 3.3x, for the 12 months ended Sept. 30, 2005, but still within acceptable limits for the rating," said Standard & Poor's credit analyst Eric Geil. The ratings on EchoStar continue to reflect intense competition against cable TV system operators and larger DTH rival The DIRECTV Group Inc. Rising concern surrounds risk to the company's longer- term competitive position because of its inability to provide the high-speed data, voice, and other two-way services available from cable companies, and likely to be offered by phone companies over the next few years. Other concerns include: * high subscriber acquisition costs to support customer growth; * satellite capacity constraints to provide high definition channels; and * financial policy uncertainty and potential share repurchases or dividends. Tempering factors include: * healthy customer and revenue momentum; * scale advantages from EchoStar's large subscriber base; and * rising discretionary cash flow. ENDURANCE SPECIALTY: Promotes Susan Patschak as Operations Chief ---------------------------------------------------------------- Endurance Specialty Holdings Ltd. (NYSE:ENH) promoted two senior executives at Endurance Specialty Insurance Ltd., its Bermuda operating subsidiary. Susan J. Patschak will become Executive Vice President and Chief Operating Officer and Christopher T. Schaper will become Executive Vice President and Head of Reinsurance Operations. Both executives will report to Daniel M. Izard, President of Endurance Specialty Insurance Ltd. Both promotions are effective upon approval by the Bermuda Department of Immigration. Susan Patschak joined Endurance in September of 2004 and was most recently Senior Vice President of the Company's Property Treaty unit. Ms. Patschak is also currently a member of Endurance's Loss Reserve Committee. From 2002 to 2004, Ms. Patschak served as Global Chief Actuary of ACE where she was responsible for coordinating and consolidating all actuarial functions of the group. Ms. Patschak began her insurance career with the Wyatt Company in Washington D.C. as an Actuarial Assistant. Shortly thereafter, Ms. Patschak joined Tillinghast - Towers Perrin where she held numerous management positions, including Property/Casualty Sector Leader for North America and Managing Director of Latin America and Asia/Pacific. Ms. Patschak was the liaison between Tillinghast and Towers Perrin Reinsurance, promoting joint marketing of services for these two divisions of Towers Perrin and she served as the Location Manager for the Atlanta, Philadelphia, and Bermuda offices. Ms. Patschak received her Bachelor of Science degree in mathematics from the University of Maryland. Recently elected Vice Chairman of the Bermuda Independent Underwriters Association, Ms. Patschak is also a member of the American Academy of Actuaries, a Fellow of the Casualty Actuarial Society, and a Board member of the Leadership Foundation of America. Christopher Schaper was most recently Senior Vice President and Head of the Casualty Treaty Reinsurance Group within Endurance Specialty Insurance Ltd. In his new role, Mr. Schaper will be responsible for all of the Company's property and casualty reinsurance business. Mr. Schaper joined Endurance in 2002 and has 20 years of experience within the insurance and reinsurance industry. Prior to joining Endurance, Mr. Schaper was Director of Underwriting at Gerling Global Financial Products where he was involved with underwriting and structuring financial risk products. Previously, Mr. Schaper was with GE/ERC and was responsible for underwriting treaty reinsurance for the National/Global Treaty Reinsurance group. Prior to this, Mr. Schaper underwrote facultative reinsurance at ERC, held underwriting positions within the insurance industry for property and casualty lines at CIGNA, as well as USF&G, and he began his career at the National Council on Compensation Insurance. Mr. Schaper has extensive experience in pricing and structuring risk as well as developing risk management procedures for corporate underwriting initiatives. Mr. Schaper holds a Masters Degree in International Business from Johns Hopkins University and is a Chartered Property Casualty Underwriter. In announcing these promotions, Daniel Izard commented, "The new roles for these two talented individuals will greatly enhance Endurance Specialty's ability to execute its strategic objectives. Susan brings a strong technical background to Endurance, enhanced by her many years of marketing and management experience. Chris's impressive and varied underwriting background provides him with insights and leadership skills which will improve our ability to move these important segments forward. I look forward to working with both of them in the years ahead." Kenneth LeStrange, Chairman, President, and CEO of Endurance Specialty Holdings Ltd. said, "I am very pleased to see these two fine executives taking on these new roles at Endurance. Susan and Chris have each demonstrated an ability to make a difference through their market knowledge, energy, and insight. With their increased responsibilities, they are in a position to expand their influence and make an even greater contribution to the success of our organization." Endurance Specialty Holdings Ltd. -- http://www.endurance.bm/-- is a global provider of property and casualty insurance and reinsurance. Through its operating subsidiaries, Endurance currently writes property per risk treaty reinsurance, property catastrophe reinsurance, casualty treaty reinsurance, property individual risks, casualty individual risks, and other specialty lines. Endurance's headquarters are located at Wellesley House, 90 Pitts Bay Road, Pembroke HM 08, Bermuda and its mailing address is Endurance Specialty Holdings Ltd., Suite No. 784, No. 48 Par- la-Ville Road, Hamilton HM 11, Bermuda. * * * As reported in the Troubled Company Reporter on June 10, 2005, Standard & Poor's Ratings Services affirmed its 'BBB' counterparty credit and senior debt ratings on Endurance Specialty Holdings Ltd. (NYSE:ENH; Endurance). S&P said the outlook is positive. At the same time, Standard & Poor's assigned its 'BBB' preliminary senior debt rating, 'BBB-' preliminary subordinated debt rating and 'BB+' preliminary preferred stock rating to Endurance following the company's increasing its existing universal shelf to $750 million in debt capacity from the existing $250 million. EVANS SYSTEMS: Stephenson & Trlicek Raises Going Concern Doubt -------------------------------------------------------------- Stephenson & Trlicek, PC, expressed substantial doubt about Evans Systems, Inc.'s, ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Sept. 30, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations and working capital deficiency. The Company's auditors can be reached at: Stephenson & Trlicek, P.C. 485 N Jefferson Street La Grange, Texas Fiscal Year 2005 Results Evans Systems incurred a $868,000 net loss for the fiscal year ended Sept. 30, 2005, versus a $332,000 net loss in the prior year. Consolidated revenues from continuing operations, now consisting of only the Company's environmental segment, increased approximately 5%, from $973,000 of revenue at Sept. 30, 2004 to $1,019,000 of revenue at Sept. 30, 2005. At Sept. 30, 2005, Evans Systems' balance sheet showed $2,498,000 in total assets and liabilities of $4,216,000, resulting in a stockholders' deficit of $1,718,000. The Company had a net working capital deficit of $810,000 at Sept. 30, 2005, as compared with a deficit of $144,000 at Sept. 30, 2004. As of Sept. 30, 2005, Evans Systems was in default under the terms of a note issued to McLane Company, Inc., for failing to make timely payments in full as stated in the agreements. The Company is required to make 12 monthly payments of $3,717 each pursuant to the McLane note. About Evans Systems Evans Systems, Inc., dba MC Star, and its subsidiaries operate 3 convenience stores selling gasoline, merchandise and fast food to the motoring public, provides environmental remediation services in southern Texas and provides freight deliver services of petroleum products. In December 2005, the Company sold its inventory in its remaining operating convenience stores with the intent the stores and store equipment will be leased to outside operators, effectively discontinuing its Texas Convenience Store Segment operations. FM LEVERAGED: Moody's Rates $12 Million Class E Rate Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned ratings to five classes of notes issued by FM Leveraged Capital Fund I. Moody's assigned these ratings: 1) Aaa to the U.S. $245,520,000 Class A First Priority Senior Floating Rate Delayed Draw Notes Due 2017; 2) Aa2 to the U.S. $35,300,000 Class B Second Priority Senior Floating Rate Notes Due 2017; 3) A2 to the U.S. $24,600,000 Class C Third Priority Deferrable Floating Rate Notes Due 2017; 4) Baa2 to the U.S. $24,600,000 Class D Fourth Priority Deferrable Floating Rate Notes Due 2017; and 5) Ba2 to the U.S. $12,200,000 Class E Fifth Priority Deferrable Floating Rate Notes Due 2017. The ratings reflect: * Moody's evaluation of the underlying collateral as of the Closing Date; * the transaction's structure; * the draft legal documentation; and * the expertise of the manager, Friedberg Milstein, LLC. Moody's stated that the ratings of these notes address the ultimate cash receipt of all required interest and principal payments required by the governing documents and are based on the expected losses posed to holders of notes relative to the promise of receiving the present value of such payments. This transaction, underwritten by Merrill Lynch & Co., is a securitization of middle market loans. FORMICA BERMUDA: Moody's Rates $270 Million Debt Securities at B2 ----------------------------------------------------------------- Moody's Investors Service assigned B2 corporate family rating to Formica Corporation, a subsidiary of Formica Bermuda Holdings Ltd., to reflect: * the company's high leverage; * short post bankruptcy operating history; and * low margins. The ratings benefit from the company's impressive brand name recognition and significant market share. Moody's has assigned these ratings: * $60 million Revolving Credit Facility, rated B2; * $210 million First Lien Term Loan, rated B2; and * Corporate Family Rating, rated B2. Proceeds from the debt issuance will primarily go towards refunding existing debt and to pay a $30 million dividend. The company's largest shareholders are the investment firms: * Cerberus Capital Management, L.P.; and * Oaktree Capital Management, LLC. Moody's understands that the company does not expect to rely on the revolver except for unanticipated seasonal working capital needs. The company's covenants are currently being set and are anticipated to give the company a good cushion. The company's restricted payments basket was an important consideration in the rating as it limits the maximum dividend to $30 million. The ratings consider the: * company's high leverage; * history of weak free cash flow generation; and * low return on assets. The ratings also reflect: * the difficulty in projecting the company's long term performance given recent years' volatile financial performance; * the competitive climate; * its cost structure; and * various trends in new products including the move from laminates to solid surfacing, engineered stone, and granite. Moody's current expectation is for Formica's average revenue growth over the next five years to be in the low to mid single digits. The company's pro forma FYE 2005 debt to EBITDA, as calculated by Moody's (including adjustments for leases and pension liabilities), is approximately 4.8 times and debt to capitalization for the same period is approximately 74%. Moody's notes that the company's financial statements are adjusted by using standard adjustments per Moody's Ratings Methodology report dated July 2005. Moody's also notes that the company's anticipated leverage ratios, interest coverage, and overall business outlook is more optimistic than those incorporated by Moody's into the rating. The company's ratings benefit from: * the sponsor's equity investment; * Formica's well known brand name; and * an extensive international presence with distribution networks on four continents. The assigned ratings also benefit from a broad product line that includes HPL (high pressure laminates) that is primarily offered to the non-residential marketplace. Required investments in machinery as well as distribution networks combined with probable low return on investment reduce the likelihood of new competition. The company's balance sheet benefits from "fresh-start" accounting that was effective May 31, 2004 for financial reporting purposes. The stable ratings outlook reflects the expectation that the company should improve its price competitiveness through greater outsourcing of its manufacturing process. Also, Moody's believes that the company's limited exposure to the residential construction segment should limit some of the negative impact from higher interest rates on the company's revenues. Formica Corporation U.S., Formica Canada, Inc., Formica Limited U.K., and Formica S.A. (Spain) are co-borrowers under the facility. The U.S. borrower's credit facilities are guaranteed by the material U.S. domestic subsidiaries and the borrowings of the foreign borrowers are guaranteed by the material U.S. domestic and material foreign subsidiaries of Formica Bermuda Holdings Ltd. The secured credit facilities are secured by a first priority lien and security interest in all present and future capital stock of the company's present and future subsidiaries with various exceptions including those for controlled foreign corporations where 65% of the voting stock will be pledged. The ratings on the secured credit facility are the same as the Corporate Family Rating's. This reflects the preponderance of debt at the senior secured level and the lack of tangible assets that can be relied upon in a distressed scenario. Moody's notes that approximately 55% of the company's sales are outside of North America and various manufacturing facilities are located overseas. Founded in 1913 and headquartered in Cincinnati, Ohio, Formica Corporation is one of the largest producers of decorative high- pressure laminates in the world and a leading brand name in the decorative surfacing products market. Revenues for 2004 were approximately $704 million. FREESCALE SEMICONDUCTOR: Earns $192 Million in Fourth Quarter 2005 ------------------------------------------------------------------ Freescale Semiconductor (NYSE:FSL) (NYSE:FSL.B) reported its financial results for the fourth quarter and fiscal year ended Dec. 31, 2005. Fourth quarter highlights include: * net sales of $1.48 billion; * operating earnings of $202 million or 13.7% of net sales; * gross margin of 45.4%; and * net earnings of $192 million. Fiscal Year 2005 highlights include: * net sales of $5.84 billion; * operating earnings of $600 million or 10.3% of net sales; * gross margin of 42.6%; * net earnings of $563 million; and * repurchase of 4 million shares of Freescale's common stock. "We delivered on our commitments in 2005," Michel Mayer, chairman and CEO, said. "We are pleased with this performance, but clearly are not yet satisfied. We are focusing on a number of initiatives to enhance operating results and grow revenues in 2006 and beyond." Net Earnings Net earnings for the fourth quarter of 2005 were $192 million, compared to $164 million in the third quarter of 2005 and $5 million in the fourth quarter of 2004. Headquartered in Austin, Texas, Freescale Semiconductor Inc. (NYSE:FSL) (NYSE:FSL.B) -- http://www.freescale.com/-- is a global leader in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. Freescale became a publicly traded company in July 2004. The Company has design, research and development, manufacturing or sales operations in more than 30 countries. Freescale, a member of the S&P 500(R), is one of the world's largest semiconductor companies with 2005 sales of $5.8 billion. * * * As reported in the Troubled Company Reporter on Dec. 05, 2005, Moody's Investors Service upgraded the corporate family and senior unsecured debt ratings of Freescale Semiconductor Inc. to Ba1 from Ba2. The ratings outlook is stable. GARDEN STATE: Wants Until April 5 to File Chapter 11 Plan --------------------------------------------------------- Garden State MRI Corporation asks the U.S. Bankruptcy Court for the District of New Jersey to further extend, until April 5, 2006, the time within which it can file a plan of reorganization. The Debtor also wants until June 5, 2006, to solicit acceptances of that plan. The Debtor tells the Court that it has been involved in negotiations with the Golestaneh entities and secured creditors to reach a global settlement that would be the basis for a reorganizing plan. Those negotiations have not been finalized. The extension will allow the Debtor to: * continue to stabilize its business, and * implement its long-term business plan in order to complete negotiations for a chapter 11 plan. Furthermore, the extension will not prejudice the legitimate interest of any creditor or equity security holder. The Debtor has been making timely payment on their postpetition obligations. Headquartered in Vineland, New Jersey, Garden State MRI Corporation, dba Eastlantic Diagnostic Institute -- http://www.eastlanticdiagnostic.com/-- operates an out-patient imaging and radiology facility. The Company filed for chapter 11 protection on June 9, 2005 (Bankr. D. N.J. Case No. 05-29214). Arthur Abramowitz, Esq. and Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of less than $50,000 and estimated debts between $10 million to $50 million. GARDENBURGER INC: Court Scraps Proposed Reclamation Procedures -------------------------------------------------------------- Gardenburger, Inc., failed in its bid to institute procedures for the liquidation and treatment of valid reclamation claims after the Hon. James N. Barr of the U.S. Bankruptcy Court for the Central District of California in Santa Ana denied the Debtor's motion. The Debtor sought to implement a consensual procedure for treating reclamation demands and resolving related disputes in order to avoid the cost and inconvenience of defending reclamation claims. The face amount of reclamation demands filed against the Debtor totaled approximately $256,000 as of December 2005. Proposed Reclamation Procedures Section 546 (c) of the Bankruptcy Code authorizes vendors to reclaim goods sold to a debtor in the ordinary course of business, subject to certain limitations. The Bankruptcy Court may deny reclamation to a vendor only if it: -- grants the vendor an administrative expense priority claim; or -- secures the vendor's claim with a lien. David S. Kupetz, Esq., at SulmeyerKupetz, PC, tells the Bankruptcy Court that granting liens to reclamation claimant would violate the agreements governing the Debtor's post-petition financing arrangements or render these arrangements implausible. Since granting liens to vendors is impossible, the Debtor wants the Bankruptcy Court to approve reclamation procedures designed to determine the allowed amount of each Vendor's claim. The proposed reclamation procedures directs the Debtor to file a reclamation claims report indicating the valued of each vendor's reclamation claim as determined by the Debtor's internal audit. Vendors may object to the reclamation claims report and ask the Bankruptcy Court for the determination of the amount of its claim within 15 days after the report is filed. The reclamation procedures will constitute the vendors' sole remedies with respect to their reclamation demands. Vendors will not be required to take any procedural steps in order to preserve their reclamation claims. A list of vendors who have submitted reclamation demands is available for free at http://researcharchives.com/t/s?46e Headquartered in Los Angeles, California, Gardenburger, Inc. -- http://www.gardenburger.com/-- makes original veggie burgers and innovates in meatless, 100% natural, low-fat food products. The company distributes its meatless products to more than 35,000 foodservice outlets throughout the United States and Canada. Retail customers include more than 30,000 grocery, natural food and club stores. The company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. C.D. Calif. Case No. 05-19539). David S. Kupetz, Esq., at SulmeyerKupetz, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $21,379,886 in assets and $39,338,646 in debts. GARDENBURGER INC: Secures Insurance Premium Financing from PFS -------------------------------------------------------------- The Hon. James N. Barr of the U.S. Bankruptcy Court for the Central District of California in Santa Ana approved the insurance premium financing agreement between Gardenburger, Inc., and Premium Financing Specialists, Inc. The Debtor needs approximately $269,148 to pay annual premiums due on eight insurance policies: Insurance Company Premium ----------------- ------- Liberty Mutual Insurance Co. $130,660 Wausau General Insurance Co. 62,452 Underwriters at Lloyds London 27,692 Employers Insurance Co. of Waus 20,144 Federal Insurance Co. 11,525 Federal Insurance Co. 7,900 Wausau General Insurance Co. 6,275 Great Northern Insurance, Co. 2,500 -------- Total $269,148 The Debtor will make a $69,161 cash down payment to PFS and pay off the $199,986 balance in nine equal monthly installments of $22,874 each for total payments of $205,865 -- including $5,878 in finance charges. The loan accrues interest at 7% interest per annum. To secure the loan, the Debtor grants PFS liens and security interests in: -- the unearned or return premiums and dividends that may become payable under the insurance policies; and -- loss payments that reduce the unearned premiums, subject to any mortgagee or loss payee interests. Headquartered in Los Angeles, California, Gardenburger, Inc. -- http://www.gardenburger.com/-- makes original veggie burgers and innovates in meatless, 100% natural, low-fat food products. The company distributes its meatless products to more than 35,000 foodservice outlets throughout the United States and Canada. Retail customers include more than 30,000 grocery, natural food and club stores. The company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. C.D. Calif. Case No. 05-19539). David S. Kupetz, Esq., at SulmeyerKupetz, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $21,379,886 in assets and $39,338,646 in debts. GMAC: GM's Planned Stake Sale Prompts Moody's to Hold Ba1 Rating ---------------------------------------------------------------- Moody's affirmed GMAC's Ba1 senior unsecured and Not Prime short- term ratings, while keeping the senior unsecured rating under review with direction uncertain and the short-term rating under review for possible upgrade. Moody's also affirmed its Baa3 senior debt rating and Prime-3 short-term debt rating for Residential Capital Corporation, while also keeping the ratings under review with direction uncertain. The ratings were first placed on review on Oct. 17, 2005, following GM's announcement that it would seek to sell a controlling interest in GMAC to a strategic investor in an effort to improve GMAC's access to lower- cost unsecured funding. Moody's has said that it typically seeks to resolve ratings under review within three months of first assigning the review status, but that under certain circumstances, an extension of the review status may be warranted. The sale of GMAC continues to be a developing situation in which no definitive sale agreement has been announced, but GM officials have publicly indicated that they are actively engaged with potential investors in due diligence. In Moody's view, there remains a reasonable probability that GM will reach agreement to sell the GMAC stake, but significant uncertainties remain related to successfully concluding the sale process due to the complex nature of the transaction and high execution risks. Should Moody's come to the view that the pace of progress is such that a definitive sale agreement is not likely to be negotiated within a reasonable timeframe, it may re-link GMAC's ratings with those of its parent GM. This would probably result in a downgrade of GMAC's senior unsecured rating to within one-notch of GM's rating (currently B1, with a negative outlook). Since the October announcement, GM's challenges have intensified, increasing pressure on GMAC's stand-alone credit profile, which Moody's had in October indicated would likely warrant a low-Baa rating. GMAC's stand-alone credit profile is affected by conditions at GM due to the significant financial and operating ties between the two firms that impact GMAC's origination levels, asset quality, and profitability. Moody's views GMAC's capable liquidity management and strong risk management disciplines as rating strengths, but a difficult funding environment and weaker than peer profitability are additional factors constraining the firm's stand-alone credit profile. Moody's could decide to downgrade GMAC's long-term rating if it believes that further deterioration in GM's circumstances has materially worsened GMAC's intrinsic credit profile even absent any changes in its view of the GMAC stake sale process. Moody's also stated that although the residential real estate finance business of ResCap and auto finance business of GMAC are distinct from an operating perspective, ResCap continues to have some dependence on the support of GMAC in regards to its capital structure. Moody's noted that such support has continued to substantially diminish, permitting Moody's to ascribe a single- notch rating differential to the ResCap ratings relative to GMAC's ratings. However, a downgrade of GMAC's ratings would likely be mirrored in a concurrent downgrade of ResCap's ratings as long as there are no material changes in GMAC's corporate ownership of ResCap. Finally, a failure to complete a sale of a majority interest in GMAC could result in additional pressure on General Motor's B1 rating, in Moody's opinion. It would eliminate an important source of cash that would be available to help fund large liquidity requirements that GM might face. These potential liquidity requirements include: * contributions to the resolution of the Delphi reorganization; * an acceleration in the company's restructuring program; or * negative cash flow from the highly stressed automotive operations. GMAC, a wholly-owned subsidiary of GM, provides retail and wholesale financing in support of GM's automotive operations and is one of the world's largest non-bank financial institutions. Its operations also include mortgage and insurance businesses. It reported nine-month earnings of $2.2 billion and total assets of $314 billion at Sept. 30, 2005. ResCap is a holding company for the real estate financing businesses of GMAC, including: * GMAC-RFC Holding, and * GMAC Residential Holding Corp. The principal activities of ResCap involve the origination, purchase, servicing and securitization of residential and commercial mortgage loans and mortgage related products. HALVORSEN BOAT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Halvorsen Boat Company, Inc. 1145 John Fitch Boulevard South Windsor, Connecticut 06074 Bankruptcy Case No.: 06-20025 Chapter 11 Petition Date: January 18, 2006 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtor's Counsel: Jon P. Newton, Esq. Reid & Riege One State Street Hartford, Connecticut 06103 Tel: (860) 240-1090 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Evans, Pires & Leonard $24,762 121 Roberts Street East Hartford, CT 06108 SNET Yellow Pages $24,715 P.O. Box 5078 Saginaw, MI 48605-5078 American Express Gold $17,705 P.O. Box 360002 Fort Lauderdale, FL 33336 WFSB $16,241 P.O. Box 13034 Newark, NJ 07188-0034 Kellogg Marine, Inc. $14,206 5 Enterprise Drive Old Lyme, CT 06371 Town of South Windsor $11,769 1540 Sullivan Avenue South Windsor, CT 06074 CBIA Health Connections $9,010 P.O. Box 150495 Hartford, CT 06115-0495 Chase $8,354 VISA Cardmember Service P.O. Box 15153 Wilmington, DE 19886-5153 The Fisherman, N.E. Edition $7,559 4 Avery Street Mystic, CT 06355 Cummings and Lanza, L.L.C. $7,550 P.O. Box 667 South Windsor, CT 06074 Yankee Gas $5,158 P.O. Box 2249 Hartford, CT 06145-2249 Cumulus Broadcasting $5,100 P.O. Box 643126 Cincinnati, OH 45264-3126 CL&P Northeast Utilities $5,085 P.O. Box 2957 Hartford, CT 06104-2957 Richard A. Reynolds & Co., LLC $4,418 18 North Main Street West Hartford, CT 06107-1919 Infinity Broadcasting $4,000 P.O. Box 13086 Newark, NJ 07188-0086 Bank of the West $3,392 Payoff Department 1450 Treat Boulevard Walnut Creek, CA 94597 South Windsor Garage $2,490 P.O. Box 113 South Windsor, CT 06074 Mercury Marine $2,283 P.O. Box 96964 Chicago, IL 60693 Cedar Island Marina, Inc. $2,094 P.O. Box 181, 34 Riverside Drive Clinton, CT 06413 Verizon Information Services $2,014 P.O. Box 648009 Baltimore, MD 21264-4809 HAWS & TINGLE: Files Plan & Disclosure Statement in Texas --------------------------------------------------------- Haws & Tingle, Ltd., unveiled to the U.S. Bankruptcy for the Northern District of Texas a Disclosure Statement explaining its Plan of Reorganization. Overview of the Plan The Plan proposes to distribute cash to all holders of allowed claims. The cash payments will be funded from the Debtor's cash on hand from prior operations and proceeds of any litigation prosecuted by the Debtor. On the Effective Date, all property of the Debtor and its estate shall, subject to such liens, security interest, assignment or other rights in favor of allowed secured claimants and Plan Trustee, be automatically transferred to the Plan Trustee. Treatment of Claims Administrative and priority claims will be paid in full. Under the Plan, all Allowed Other Priority Claims will be paid either: (a) in full and in cash, on or as soon as practicable after the Initial Distribution Date, or (b) on terms as may be agreed to in writing by the holder of the claim and the Debtor. Secured Tax Claims, in full satisfaction, shall receive, at the Debtor's option, either: (i) payment in Cash; or (ii) other treatment as may be agreed to in writing by the holder of the claim and the Debtor. Holders of Other Secured Claims, in full satisfaction, shall receive, at the Debtor's option: (i) the return of the Collateral securing such claim in full satisfaction of the claim; (ii) payment in cash in an amount equivalent to the lesser of: (a) the value of the holder's collateral or (b) the full amount of the allowed other secured claim; or (iii) other treatment as agreed to in writing by the holder of the claim and the Debtor. In the event that any allowed other secured claim exceeds the value of its collateral, the excess shall constitute a General Unsecured Claim pursuant to the Plan, unless the holder of such claim elects treatment under Section 1111(b) of the Bankruptcy Code and in accordance with Bankruptcy Rule 3014. Holders of General Unsecured Claims will receive payment in cash on a pro rata basis. The Disclosure Statement does not attempt to estimate recoveries by the Debtor's unsecured creditors. On the Effective Date, all interests in the Debtor will be cancelled and interest holders will not receive anything under the Plan. Claims of Zurich The Debtor tells the Court that Zurich, its bonding company, advanced funds to certain projects in order to complete an obligation of the Debtor. Zurich will be indemnified by the Debtor and to a certain extent, by James D. Hasenzahl, Haws & Tingle's CEO. The Debtor says that the owners of the projects entered into by the Debtor, will pay Zurich up to the amount of funds advanced to pay for the obligations on the project. These funds, the Debtor relates, are independent of the estate. Zurich will also receive a one time payment of $300,000 from James D. Hasenzahl and his wife, Lee Hasenzahl. Mr. Hasenzahl will also continue to assist in evaluating claims which arise from former Haws & Tingle projects. In exchange, Zurich and its affiliates will grant the Debtor a full contractual release including any subrogation claims held by Zurich. If Zurich does not consent to the release, the Hasenzahls have the right to withdraw their offer. The Debtor says that the release is predicated on Zurich's consent or a ruling from the Court that the release is binding. Headquartered in Fort Worth, Texas, Haws & Tingle, Ltd., is a building contractor. The Debtor filed for chapter 11 protection on October 6, 2005 (Bankr. N.D. Tex. Case No. 05-82478). Mark Edward Andrews, Esq., and Omar J. Alaniz, Esq., at Neligan Tarpley Andrews & Foley LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. HOLLINGER INT'L: Completes $40.5M Sale of Stake in Canadian Units ----------------------------------------------------------------- Hollinger International Inc. completed the sale of shares representing its 70% interest in Great West Newspaper Group Ltd. to a subsidiary of Glacier Ventures International Corp. and shares representing a 50% interest in Fundata Canada Inc. to Glacier for an aggregate price of approximately CDN$47.1 million or $40.5 million. As reported in the Troubled Company Reporter on December 29, 2005, Hollinger International Inc. signed a Share Purchase Agreement with: * HCPH Canadian Newspaper Holdings Co., its wholly owned subsidiary; * Glacier Ventures International Corp.; * 6490239 Canada Inc., a subsidiary of Glacier; and * Jamison Newspapers Inc., pursuant to which HCPH has agreed to sell shares representing its 70% interest in Great West Newspaper Group Ltd. to 6490239 Canada for a purchase price of CDN$32 million. Fundata Share Purchase Agreement The Company also entered into a Share Purchase Agreement with HCPH and Glacier pursuant to which HCPH has agreed to sell all of the outstanding shares of 3120575 Nova Scotia Company, an HCPH wholly owned subsidiary and holder of shares representing a 50% interest in Fundata Canada Inc., to Glacier for a purchase price of CDN$15,087,000. Hollinger International Inc. is a newspaper publisher whose assets include The Chicago Sun-Times and a large number of community newspapers in the Chicago area as well as in Canada. Hollinger maintains a Web site at http://www.hollingerinternational.com/ At Sept. 30, 2005, Hollinger's balance sheet showed a stockholders' equity deficit of $196,794,000 compared to $152,186,000 of positive equity at Dec. 31, 2004. HOLLINGER INT'L: Sells All Canadian Assets to Glacier for $104.4M ----------------------------------------------------------------- Hollinger International Inc. (NYSE: HLR) and its Canadian affiliate, Hollinger Canadian Publishing Holdings Co., have entered into an agreement to sell substantially all of their remaining Canadian assets, consisting of, among other things: -- around 87% of the outstanding Units of Hollinger Canadian Newspapers, Limited Partnership; and -- all of the shares of: * Hollinger Canadian Newspapers GP Inc.; * Eco Log Environmental Risk Information Services Ltd.; and * KCN Capital News Company to an affiliate of Glacier Ventures International Corp. (TSX: GVC) for an aggregate purchase price of C$121.7 million, or $104.4 million. Hollinger Canadian owns and operates: (1) the Business Information Group, which publishes a variety of trade magazines, directories, newsletters, electronic databases and specialty websites; (2) a group of daily and weekly newspaper and related printing operations in British Columbia, including: * the Nelson Daily News, * West Kootenay Weekender, * Cranbrook Daily Townsman, * Kimberley Daily Bulletin, * East Kootenay Weekly Extra, * East Kootenay Weekly Weekender, * Trail Times, * Fernie Free Press, * Grand Forks Gazette, * Grand Forks Boundary Bulletin, * Creston Valley Advance, * Kamloops Daily News, * Kamloops The Extra, * Prince George Citizen, * Prince George This Week, * Prince George Extra, * Alaska Highway News, * North Peace Express, * The Northener, * Peace River Block News, * The Regional Advertiser, * The Northern Horizon, * The Mirror, * Prince Rupert Daily News, and * Prince Rupert Daily News Extra; (3) the Real Estate Weekly and Kodiak Press in Vancouver, B.C.; and (4) The Sherbrooke Record and Brome County News in the eastern townships of Quebec. KCN publishes the Merritt News and Merritt News Extra in B.C. Eco Log is an electronic information and report service provider that accesses key federal, provincial and private sector databases to help identify potential environmental risks in Canada for real estate developers, banks, insurance companies and a variety of other customers. "With the[se] transaction . . . we can now focus our efforts entirely on leveraging the strength of our more than 100 media properties across the Chicago area, our Sun-Times News Group," said Gordon A. Paris, Chairman and Chief Executive Officer. "We feel confident that our Canadian portfolio of publications will continue to be outstanding contributors to the communities they serve and see ongoing success with their new owner." In December 2005, Hollinger International sold to Glacier its 70% interest in Great West Newspaper Group Ltd. and its 50% interest in Fundata Canada Inc. to Jamison Newspapers Inc. and Glacier for total consideration for total consideration of approximately CDN$47.1 million, or approximately US$40.5 million. Closing is subject to customary conditions, including obtaining all required approvals under the Competition Act (Canada), and is expected to occur prior to the end of February, 2006. Hollinger International's financial adviser in the sale of its Canadian portfolio of publications is Lazard. Hollinger International Inc. is a newspaper publisher whose assets include The Chicago Sun-Times and a large number of community newspapers in the Chicago area as well as in Canada. Hollinger maintains a Web site at http://www.hollingerinternational.com/ At Sept. 30, 2005, Hollinger's balance sheet showed a stockholders' equity deficit of $196,794,000 compared to $152,186,000 of positive equity at Dec. 31, 2004. ISP CHEMCO: Moody's Rates Proposed $1.15 Billion Facilities at Ba3 ------------------------------------------------------------------ Moody's Investors Service assigned Ba3 ratings to the new proposed $1.15 billion guaranteed senior secured credit facilities of ISP Chemco, Inc., a wholly owned subsidiary of International Specialty Holdings, Inc. (Ba3 corporate family rating). The proposed facilities include: * a new $200 million revolver due 2012, and * a new $950 million term loan due 2013. Proceeds from the new credit facilities will be used to fund the recently announced cash tender offers to purchase: * all of the outstanding $200,000,000 in aggregate principal amount of the 10.625% senior secured notes due 2009 issued by Holdings; and * all of the outstanding $405,000,000 in aggregate principal amount of the 10.25% senior subordinated notes due 2011 issued by Chemco. Existing credit facilities at Chemco will also be refinanced. The lower Ba3 rating of the proposed Chemco credit facilities versus the Ba2 on the existing Chemco credit facilities reflects the removal of all debt that was subordinated to the secured credit facilities, and that under a distressed valuation of the collateral, in Moody's opinion, would not be sufficient to cover the secured debt (this assumes that the new revolver is fully drawn). The assigned ratings are subject to a review of the final documentation for the new credit facility agreements. Upon the successful completion of the refinancing all prior ratings will be withdrawn and a new Ba3 Corporate Family Rating will be assigned to Chemco (highest corporate entity where debt is rated). The outlook for both the current and proposed ratings is stable. Ratings Assigned; ISP Chemco, Inc.: a) Proposed $200 million Guaranteed Senior Secured Credit Revolver due 2012 - Ba3 b) Proposed $950 million Guaranteed Senior Secured Term Loan due 2013 - Ba3 Ratings Affirmed; ISP Chemco, Inc.: a) Guaranteed Senior Secured Credit Facilities Ba2 * b) Senior Subordinated Notes: B1* International Specialty Holdings, Inc.: a) Senior Secured Notes: B2* b) Corporate Family Rating: Ba3* * Upon successful completion of the refinancing these ratings will be withdrawn and a new Ba3 Corporate Family Rating will be assigned to ISP Chemco, Inc. The proposed ratings reflect Chemco's relatively strong business position, offset by a high and increased secured debt burden. Moody's view of the strong business position is supported by: * the company's diversified specialty chemical product portfolio and broad customer base; * good market positions in its product niches; * the relative stability of its consumer end markets; * strong growth in revenue and operating profits; and * its steady operating margins (15.0% in 2004). The ratings also derive support from: * the company's cost reduction activities; * significant R&D spending; and * successful past integration of acquired assets. The lower rating for the secured credit facilities is evidenced by the fact that funded debt at ISP Chemco is expected to increase by 38% moving from $688 million currently to $950 million, assuming that the vast majority of the proposed revolver remains undrawn. This increase reflects the refinancing of the existing Holdings debt with new debt at the Chemco level. The credit profile also reflects: * the company's high leverage with debt to EBITDA projected (by Moody's) to approach mid 4.0 times for 2005; * modest coverage of interest expense; and * significant intangible assets. The ratings further consider the potential tax claim against G-I Holdings Inc. (ISP was a subsidiary of G-I prior to 1997, G-I filed Chapter 11 in January 2001 due to asbestos-related claims), which has been pending since 1997 (tax claim as of Oct. 2, 2005 was $305 million, including interest). In addition, debt including Moody's adjustments for pension and lease expense, as well as a modest accounts receivable program, is approaching a level that is high for a Ba3 corporate family rating. Moody's estimates that debt/EBITDA will stay near 4.0 times in 2006 and 2007, and free cash flow to total debt will remain near 4% in 2006 and 2007, also somewhat weak for the Ba3 ratings. Moody's estimates that retained cash flow to total debt would average 14% (reflecting a well placed Ba metric). Moody's estimates include incremental bolt-on acquisitions and continued capital spending. The outlook for the ratings is stable, reflecting ISP Chemco's: * high debt leverage, * steady operating margins, and * recently conservative acquisition strategy. Factors that could contribute to a downgrade include: * a change in acquisition strategy from bolt-on assets to step- out businesses; * an increase in financial leverage (total debt to EBITDA) to greater than 5.0 times; * an unsustainable increase in distributions to ISP Holdings; or * adverse developments with respect to tax litigation. Factors that would support higher ratings include: * a reduction in financial leverage to below 3.5 times on a sustainable basis; * adherence to a conservative acquisition strategy; and * resolution of litigation relating to ISP's prior ownership by G-I Holdings. The newly assigned Ba3 ratings on the new proposed bank facilities was based on a distressed evaluation of ISP Chemco's asset coverage in a default scenario. The notching of ISP Chemco's bank debt at Ba3, the same as the corporate family rating, was based on Moody's view that under a distressed valuation of the projected global collateral asset values were not sufficient to cover at least the value of the potential secured bank obligations (i.e., assumes that the revolving credit and term loan facilities are fully drawn). Typically Moody's only look to North American based assets as being accessible as a priority claim in a recovery analysis. Given this lack of asset coverage the bank facilities are rated at the same level as the corporate family rating. International Specialty Holdings, Inc., headquartered in Wayne, New Jersey, is a holding company whose subsidiaries: * manufacture: -- specialty chemicals, -- industrial chemicals, and -- mineral products; and * make: -- risk arbitrage, and -- other investments (ISP Investco). ISP Chemco Inc., also headquartered in Wayne, New Jersey, manufactures primarily: * specialty chemicals, * industrial chemicals, and * mineral products. IS Holdings is a subsidiary of International Specialty Products, Inc., which is a beneficially owned by Samuel Heyman. J.P. MORGAN: Fitch Affirms Low-B Ratings on 22 Loan Classes ----------------------------------------------------------- Fitch Ratings has taken rating actions on these J.P. Morgan Mortgage Trust issues: Series 2004-A1: * Class A affirmed at 'AAA' * Class B-1 affirmed at 'AA' * Class B-2 affirmed at 'A' * Class B-3 affirmed at 'BBB' * Class B-4 affirmed at 'BB' * Class B-5 affirmed at 'B' Series 2004-A2: * Class A affirmed at 'AAA' * Class B-1 affirmed at 'AA' * Class B-2 affirmed at 'A' * Class B-3 affirmed at 'BBB' * Class B-4 affirmed at 'BB' * Class B-5 affirmed at 'B' Series 2004-A3 Aggregate Pool 1: * Class A affirmed at 'AAA' * Class 1-B-1 affirmed at 'AA' * Class 1-B-2 affirmed at 'A' * Class 1-B-3 affirmed at 'BBB' * Class 1-B-4 affirmed at 'BB' * Class 1-B-5 affirmed at 'B' Series 2004-A3 Aggregate Pool 2: * Class S-F affirmed at 'AAA' * Class S-B-1 affirmed at 'AA' * Class S-B-2 affirmed at 'A' * Class S-B-3 affirmed at 'BBB' * Class S-B-4 affirmed at 'BB' * Class S-B-5 affirmed at 'B' Series 2004-A4: * Class A affirmed at 'AAA' * Class B-1 affirmed at 'AA' * Class B-2 affirmed at 'A' * Class B-3 affirmed at 'BBB' * Class B-4 affirmed at 'BB' * Class B-5 affirmed at 'B' Series 2004-A6: * Class A affirmed at 'AAA' * Class B-1 affirmed at 'AA' * Class B-2 affirmed at 'A' * Class B-3 affirmed at 'BBB' * Class B-4 affirmed at 'BB' * Class B-5 affirmed at 'B' Series 2004-S1 Aggregate Pool 1: * Class A affirmed at 'AAA' * Class 1-B-1 affirmed at 'AA' * Class 1-B-2 affirmed at 'A' * Class 1-B-3 affirmed at 'BBB' * Class 1-B-4 affirmed at 'BB' * Class 1-B-5 affirmed at 'B' Series 2004-S1 Aggregate Pool 2: * Class A affirmed at 'AAA' * Class C-B-1 affirmed at 'AA' * Class C-B-2 affirmed at 'A' * Class C-B-3 affirmed at 'BBB' * Class C-B-4 affirmed at 'BB' * Class C-B-5 affirmed at 'B' Series 2004-S2 Aggregate Pool 1: * Class A affirmed at 'AAA' * Class 1-B-1 affirmed at 'AA' * Class 1-B-2 affirmed at 'A' * Class 1-B-3 affirmed at 'BBB' * Class 1-B-4 affirmed at 'BB' * Class 1-B-5 affirmed at 'B' Series 2004-S2 Aggregate Pool 2: * Class A affirmed at 'AAA' * Class 2-B-1 affirmed at 'AA' * Class 2-B-2 affirmed at 'A' * Class 2-B-3 affirmed at 'BBB' * Class 2-B-4 affirmed at 'BB' * Class 2-B-5 affirmed at 'B' Series 2004-S2 Aggregate Pool 3: * Class A affirmed at 'AAA' * Class 3-B-1 affirmed at 'AA' * Class 3-B-2 affirmed at 'A' * Class 3-B-3 affirmed at 'BBB' * Class 3-B-4 affirmed at 'BB' * Class 3-B-5 affirmed at 'B' All of the mortgage loans in the aforementioned transactions were either originated or acquired by various originators, which include: * Cendant Mortgage Corporation, * Countrywide Home Loans, Inc., * Chase Manhattan Mortgage Corporation, * National City Mortgage Corporation, * Bank of America, N.A., * GreenPoint Mortgage Funding, Inc., * Harris Trust and Savings Bank, and * Mid America Bank, fsb. The mortgage loans consist primarily of fixed- and adjustable- rate, conventional, fully amortizing, first lien residential mortgage loans, substantially all of which have an original term to stated maturity of 15 and 30 years. J.P. Morgan Mortgage Acquisition Corp., a Delaware corporation, had previously acquired the mortgage loans from the originators. The affirmations reflect a satisfactory level of credit enhancement (CE) given future loss expectations and affect approximately $2.76 billion of outstanding certificates. All classes in the transactions detailed above have experienced small to moderate growth in CE since closing, and there have been no collateral losses to date. As of the December 2005 distribution date, the transactions are seasoned from a range of 13 to 22 months, and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from approximately 46% (series 2004-A3 Aggregate Pool 2) to 84% (series 2004-S2 Aggregate Pool 1). Wells Fargo Bank, N.A., rated 'RMS1' for master servicing by Fitch, is the master servicer for all of the transactions, with the exception of series 2004-S1, which has Chase Home Finance, LLC (rated 'RMS1') as the master servicer. All of the mortgage loans are currently serviced by various entities. J.P. MORGAN: Moody's Lifts Ratings on Class J & K Certificates -------------------------------------------------------------- Moody's Investors Service upgraded two classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2003-FL1 as: * Class J, $3,530,505 Floating, upgraded to Aaa from B2 * Class K, $3,234,292, Floating, upgraded to Aa2 from B3 The Certificates are collateralized by three mortgage loans, which range in size from 27.7% to 36.6% of the transaction based on current principal balances. As of the Jan. 17, 2006 distribution date, the transaction's aggregate certificate balance has declined by approximately 95.0% to $22.8 million from $456.0 million at securitization as a result of the payoff of 32 loans originally in the pool. Classes J and K have been upgraded due to significant loan payoffs. The Park Centre VI Loan (36.6% of the pool balance) is secured a 132,800 square foot retail center located in Miami, Florida. Moody's current collateral value and loan to value ratio are $7.5 million and in excess of 100.0% respectively. The AmeriSuites Shelton Corporate Towers Loan (35.7%) is secured by a 128-unit limited service hotel located in Shelton, Connecticut. Moody's current collateral value and LTV are $8.4 million and 92.0% respectively. The Cedars of San Marco Loan (27.7%) is secured by a 168-unit multifamily property located in San Marcos, Texas. Moody's collateral value and LTV are $4.5 million and in excess of 100.0% respectively. J.P. MORGAN: Moody's Lifts $11MM Class L Certs.' Rating to Baa1 --------------------------------------------------------------- Moody's Investors Service upgraded the ratings of nine classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2003-FL2 as: * Class C, $7,595,448, Floating, upgraded to Aaa form Aa1 * Class D, $12,300,000, Floating, upgraded to Aaa from Aa2 * Class E, $10,300,000 Floating, upgraded to Aaa from Aa3 * Class F, $9,800,000, Floating, upgraded to Aaa from A1 * Class G, $10,300,000, Floating, upgraded to Aa2 from A2 * Class H, $9,300,000, Floating, upgraded to Aa3 from Baa1 * Class J, $10,300,000, Floating, upgraded to A1 from Baa2 * Class K, $8,700,000, Floating, upgraded to A3 from Baa3 * Class L, $11,569,459, Floating, upgraded to Baa1 from Ba1 The Certificates are collateralized by one whole mortgage loan, the FelCor Portfolio Loan ($90.2 million). As of the Jan. 17, 2006 distribution date the transaction's certificate balance has decreased by approximately 82.4 % to $90.2 million from $511.7 million at securitization as a result of the payoff of 13 loans and the payment of release premiums and amortization associated with the FelCor Portfolio Loan. Moody's was provided with operating results for both the year-to- date period ending November 2005 and for the trailing 12-month period ending October 2005. Moody's loan to value ratio is 61.6%, compared to 69.3% at Moody's last full review and compared to 71.6% at securitization. Moody's is upgrading Classes C, D, E, F, G, H, J, K and L due to increased credit support and the improved performance of the FelCor Portfolio Loan. The FelCor Portfolio Loan is secured by first priority mortgages on eight separate hotel properties located in five states. The mortgaged properties, with a total room count of 1,992, include: * the Charleston Mills Holiday Inn, Charleston, South Carolina (214 rooms); * the Lexington Hilton Suites, Lexington, Kentucky (174 rooms); * the San Antonio Airport Holiday Inn Select, San Antonio, Texas (397 rooms); * the DFW Embassy Suites, Irving, Texas (305 rooms); * the Jacksonville Embassy Suites (277 rooms); * the Raleigh/Durham Doubletree Guest Suites, Durham, North Carolina (203 rooms); * the Rocky Point Doubletree Guest Suites, Tampa, Florida (203 rooms); and * the Bloomington Embassy Suites, Bloomington, Minnesota (219 rooms). The loan sponsor is FelCor Lodging Limited Partnership (Moody's senior unsecured rating B1; stable outlook). The outstanding loan balance has decreased by approximately 20.7% to $90.2 form $113.7 at securitization due to the release of two of the original ten hotel properties and scheduled amortization. At securitization Moody's recognized average occupancy and an ADR of 68.2% and $98.62 respectively, resulting in RevPAR of $67.26. RevPAR for the trailing 12-month period ending October 2005 was $76.74, representing a 7.9% increase from Moody's RevPAR at securitization. Additionally, year-to-date RevPAR through November 2005 was $79.87, a 7.1% increase from the same period in the previous year. Moody's loan to value ratio for the FelCor Portfolio Loan is 61.6%, compared to 71.6% at securitization. Moody's weighted average LTV for the total pooled debt was 64.9% at securitization. There is additional debt in the form of senior and junior mezzanine loans with a combined original loan balance of approximately $35.0 million. LEVEL 3: S&P's Rating on $691.8 Million Senior Notes Tumble to D ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on long-haul telecommunications carrier Level 3 Communications Inc. to 'SD' from 'CCC', indicating a selective default. The action followed the company's issuance of $692 million of 11.5% senior notes due 2010 in exchange for an aggregate like amount of senior notes due in 2008 consisting of: * $555.8 million of its 9.125% senior notes; * $54.4 million of its 11% senior notes; and * $81.5 million of its 10.5% senior discount notes. The ratings on these three note issues were lowered to 'D' from 'CC'. S&P views completion of the exchange offer as tantamount to a default on original bond issue terms because of the extension of the debt maturity. The ratings were removed from CreditWatch, where they were placed with negative implications following the company's Dec. 12, 2005, announcement of the exchange offer. Subsequent to the downgrades, the corporate credit rating on Level 3 was reassigned at 'CCC+', with a stable outlook. The rating on the 2008 notes not tendered was reassigned at 'CCC-'. The rating on all other unsecured debt was raised to 'CCC-' from 'CC' and the rating on the bank loan of Level 3 Financing was raised to 'CCC+' from 'CCC'. These ratings were removed from CreditWatch, where they were placed with positive implications on Dec. 12, 2005, reflecting prospective credit improvement resulting from the proposed exchange transaction. "The upgrades reflect the modest capital structure improvement achieved by reducing the company's nearest-term debt maturities, as well as potential competitive benefits from industry consolidation, including Level 3's recent acquisition of competitor WilTel Communications Group," said Standard & Poor's credit analyst Eric Geil. MAGRUDER COLOR: Wants to Reject Certain Contracts and Leases ------------------------------------------------------------ Magruder Color Company and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of New Jersey for authority to reject executory contracts and unexpired non-residential real property leases effective as of Dec. 29, 2005. On Dec. 7, 2004, the Court approved the sale of all of the Debtors' business assets to Pochteca Color Company, LLC. The sale did not require the assumption or assignment of any executory contract or unexpired lease to Pochteca. The sale of assets was consummated on December 16, 2005. The Debtors say that they don't need the services or equipment provided under the executory contracts in light of the sale of assets to Pochteca. In addition, the Debtors believe that the executory contracts will no longer provide any value to the Debtors' estates and will avoid unneccessary administrative debt upon their estates. A two-page list of the dozens of contracts and leases the Debtors intend to reject is available for free at: http://ResearchArchives.com/t/s?475 Headquartered in Elizabeth, New Jersey, Magruder Color Company -- http://www.magruder.com/-- and its affiliates manufacture basic pigment and also supply quality products to the ink, paint, and plastics industries. The Company and its debtor-affiliates filed for chapter 11 protection on June 2, 2005 (Bankr. D.N.J. Case No. 05-28342). Bruce D. Buechler, Esq., at Lowenstein Sandler PC represent the Debtors in their restructuring efforts. When the Debtors filed protection from their creditors, they estimated assets and debts of $10 million to $50 million. MAXXIM MEDICAL: Makes 9% Initial Distribution to Unsec. Creditors ----------------------------------------------------------------- Maxxim Medical Group, Inc. has sent an approximate 9% initial distribution to the general unsecured creditors in its bankruptcy case, according to Clear Thinking Group, a retail/consumer products manufacturing consultancy, and Joseph Myers, a partner and managing director in the firm and Creditor Representative for Medical Windown Holdings Inc. (formerly knows as Maxxim Medical Inc.). The initial distribution, which was made in conjunction with the plan administrator, was based on undisputed claims or the undisputed portion of disputed claims. Maxxim filed for Chapter 11 bankruptcy protection in April 2003 in the U.S. Bankruptcy Court, District of Delaware. At the time of the filing, the company manufactured a range of products, including customer procedure trays, single-use drapes and gowns, medical gloves, vascular access and critical care items. Medical Windown Holdings is the successor corporation created by the bankruptcy court when the assets of Maxxim were sold. "Information on additional remittances to Medical Windown's unsecured creditors will follow in the months ahead," Mr. Myers said. About Clear Thinking Group Clear Thinking Group LLC -- http://www.clearthinkinggrp.com/-- provides a wide range of strategic consulting services to retail companies, consumer product manufacturers/distributors and industrial companies. The national advisory organization specializes in assisting small- to mid-sized companies during times of growth, opportunity, strategic change, acquisition, and crisis. About Maxxim Medical Group, Inc. Headquartered in Clearwater, Florida, Maxxim Medical Group, Inc., a leading suppliers of custom-procedure trays, nonlatex examination gloves and other single-use products, filed for chapter 11 protection on Febr. 11, 2003 (Bankr. Del. Case No. 03-10438). Brendan Linehan Shannon, Esq., Edward J. Kosmowski, Esq., Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor and Myron Treppor, Esq., Michael J. Kelly, Esq., at Wilkie Farr & Gallagher represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed both debts and assets of over $100 million. MCMORAN EXPLORATION: Dec. 31 Balance Sheet Upside-Down by $86MM --------------------------------------------------------------- McMoRan Exploration Co. (NYSE: MMR) reported a net loss of $26.1 million for the fourth quarter of 2005 compared with a net loss of $20.6 million for the fourth quarter of 2004. McMoRan's net loss from continuing operations for the 2005 fourth quarter totaled $21 million, which included $21.9 million of exploration expense, including $18 million of nonproductive exploratory costs, a $12.8 million litigation settlement and $2.2 million of start-up costs associated with the MPEH(TM). As of Dec. 31, 2005, the Company's balance sheet showed $407,636,000 in total assets and $494,226,000 in total liabilities, resulting in a stockholders' deficit of $86,590,000. The fourth quarter of 2005 also includes a loss of $4.7 million from discontinued operations, including a $6.5 million charge for the modification of estimated reclamation costs at McMoRan's former sulphur terminal at Port Sulphur, Louisiana resulting from hurricane damage and a gain of $3.5 million from a reduction in the contractual liability associated with certain postretirement benefit costs for former sulphur employees. During the fourth quarter of 2004, McMoRan's net loss from continuing operations totaled $24.2 million, including $2.8 million of MPEH(TM) start-up costs and $20.2 million of exploration expense, including $14.2 million of nonproductive exploratory costs. "During 2005, McMoRan continued to pursue aggressively high impact deep gas exploration targets," James R. Moffett and Richard C. Adkerson, Co-Chairmen of McMoRan, said. "We are encouraged by the results of the program to date and look forward to testing multiple additional targets that have the potential to add meaningful value for shareholders. Our success with the Deep Miocene trend has enabled us to expand our activities and play a leadership role in exploring for 'deeper pools' of hydrocarbons below existing or previous shallow production. As we work to complete our permitting activities for our Main Pass Energy Hub(TM) project, we are also very positive about the potential values that could be realized by establishing a major new offshore LNG terminal, onsite natural gas storage facilities and a gateway to the U.S. natural gas markets." Cash flows provided by operating activities during the nine months ended Dec. 31, 2005 were $70,115,000, as compared to negative cash flows provided by operating activities of $35,135,000 during the same period in 2004. Settlement Of Litigation McMoRan previously announced that it has reached an agreement in principle with plaintiffs to settle previously disclosed class action litigation in the Delaware Court of Chancery relating to the 1998 merger of Freeport-McMoRan Sulphur Inc. and McMoRan Oil & Gas Co. The settlement resulted in a fourth-quarter 2005 charge to expense, net of the amount of insurance proceeds, of $12.8 million. McMoRan Exploration Co. -- http://www.mcmoran.com/-- is an independent public company engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area. McMoRan is also pursuing plans for the development of the MPEH(TM) which will be used for the receipt and processing of liquefied natural gas and the storage and distribution of natural gas. As of Dec. 31, 2005, the company's stockholders' deficit widened to $86,590,000 from a $49,546,000 deficit at Dec. 31, 2004. MUSICLAND HOLDING: Can Access Cash Collateral on Interim Basis -------------------------------------------------------------- Musicland Group Inc. and its debtor-affiliates obtained prepetition financing under three transactions: Amount Credit Agreement Outstanding ---------------- ----------- $300,000,000 Loan and Security Agreement, $30,352,574 as amended, with Wachovia Bank, N.A., as administrative and collateral agent. Wachovia and Fleet Retail Finance Inc. are co-lead arrangers. Security Agreements with trade creditors $186,270,502 Series A Preferred Stock $25,000,000 Pursuant to various ancillary agreements accompanying the Loan and Security Agreement, the obligations of the Borrowers and the guarantors under the Loan and Security Agreement are secured by a pledge of the capital stock and assets of all of Musicland Holding's subsidiaries. The Secured Trade Creditors were granted a security interest in the inventory of Musicland Holding and its subsidiaries. The Trade Creditors' security interest is subordinate in priority to the security interest granted to Lenders under the Loan and Security Agreement. The Second Lien Trade Creditors are: * BMG Distribution * Buena Vista Home Entertainment, Inc., * Caroline Records, Inc., * EMI Music Marketing, * Metro-Goldwyn-Mayer Home Entertainment, LLC, * Paramount Pictures, * Home Video Division, * RED Distribution, Inc., * Sony Music Entertainment, Inc. * Twentieth Century Fox Home Entertainment, Inc., * Universal Music and Video Distribution, * Warner Home Video, Inc., * Warner/Elektra/Atlantic Corporation, etc. The Bank of New York is the collateral agent for the Second Lien Trade Creditors. The Second Lien Trade Creditors are also parties to a security agreement with Hilco Merchandising Resources, LLC, as Third Lien Merchandise Agent, Media Play, Inc., and Musicland Purchasing Corp. The Merchandise Agent was retained as the exclusive agent for the limited purpose of selling all of the Merchandise located in certain of Media Play's retail store locations. Because the Debtors filed for bankruptcy, absent court authority pursuant to 11 U.S.C. Sec. 363(c), the Debtors have no right to use their lenders' cash collateral. According to Craig Wassenaar, chief financial officer of Musicland Holding Corp., the Debtors require the use of the Cash Collateral to, among other things, pay present operating expenses, including payroll, and to pay vendors on a going-forward basis to ensure a continued supply of materials essential to the Debtors' continued viability. By this motion, the Debtors seek the U.S. Bankruptcy Court for the Northern District of Georgia's authority to use cash collateral in which the Second Lien Trade Creditors and the Third Lien Merchandise Agent have an interest. The Debtors will limit their use of cash collateral to amounts specified in a 12-Week Budget. A full-text copy of Musicland's week-by-week Cash Flow Forecast through March 31, 2006, is available at no charge at http://ResearchArchives.com/t/s?476 A full-text copy of Musicland's monthly Cash Flow Forecast through March 31, 2006, is available at no charge at http://ResearchArchives.com/t/s?477 Musicland Group Inc. Short-term Cash Flow Forecast January 12 to March 31, 2006 Regular Store Receipts & MP GOB $96,407,000 "B" & "C" Liquidation Net Proceeds 61,484,000 MP GOB Proceeds 7,604,000 ----------- Total Receipts 165,495,000 ----------- Product Vendor Payments 54,847,000 Critical Vendor Payments 4,000,000 Sales Tax 26,885,000 Payroll 18,634,000 Rent 15,353,000 Professional Fees 2,514,000 Other 20,734,000 ----------- Total Disbursements 142,967,000 ----------- Net Cash Flow 22,528,000 ----------- Beginning Revolver Balance (30,353,000) ----------- Ending Revolver Balance ($7,825,000) =========== Forecasted Go-Forward Store Count Beginning Store Count 819 (Closed/Moved to Liquidation) (447) ----------- Ending Store Count 372 Borrowing Base Calculation Beginning Inventory $288,066,000 Gross Receipts 85,482,000 COGS (56,376,000) Liquidated Inventory (153,710,000) Returns (10,000,000) ----------- Ending Inventory 133,462,000 The Debtors represent that the Budget is achievable and will allow them to operate in Chapter 11 without the accrual of unpaid administrative expenses. As adequate protection to protect the Subordinated Lien Parties from diminution, if any, in the value of their interest in their collateral, including the Cash Collateral, the Debtors propose that: -- the Second Lien Trade Creditors will be granted a replacement security interest and lien on all the Collateral while the Third Lien Merchandise Agent will be granted a replacement security interest and lien on all Inventory, subject and subordinate to postpetition financing liens and carve-out expenses; -- the Subordinated Lien Parties will be granted a Section 507(b) Claim; and -- the Debtors will pay the reasonable fees and expenses incurred by one counsel to, and one financial advisor retained by, the informal committee of the Second Lien Trade Creditors, and the reasonable fees of the collateral agent for the Second Lien Trade Creditors. Interim Approval Judge Bernstein grants the Debtors' request to use the Cash Collateral on an interim basis. The Court will convene the Final Cash Collateral Hearing on February 7, 2006, at 2:00 p.m. Objections must be filed and served no later than February 1. The Bank of New York, in its capacity as Secured Trade Agent, is represented by Michael A. Bloom, Esq., and Richard S. Toder, Esq., at Morgan, Lewis & Bockius LLP. Hilco Merchant Resources, LLC, as Merchandise Agent, is represented by Eric Kaup, Esq. 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. (Musicland Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) MUSICLAND HOLDING: Can Borrow Up to $60 Million of DIP Financing ---------------------------------------------------------------- Without access to fresh financing, Musicland Holding Corp. and its debtor-affiliates will not be able to sustain on-going business operations, Craig Wassenaar, chief financial officer of Musicland Holding Corp., tells the U.S. Bankruptcy Court for the Northern District of Georgia. The Debtors do not have sufficiently reliable liquidity sources available to ensure continued operations. The Debtors need fresh financing to permit, among other things, the orderly continuation of their businesses, to maintain business relationships with vendors, suppliers and customers, to make payroll disbursements, to make capital expenditures, and to satisfy other working capital and operational needs. By this motion, the Debtors seek the Court's authority to continue their credit relationship with their senior secured lenders. The Debtors seek to convert their prepetition loan agreement -- a revolving secured credit facility with outstanding amounts as of the Petition Date of no less than $38,097,756, into a DIP revolving secured credit facility under Section 364(c) of the Bankruptcy Code. Mr. Wassenaar assures Judge Bernstein that the Debtors have the full support of their prepetition secured lenders, the Second Lien Trade Creditors and their Third Lien Merchandise Agent. Mr. Wassenaar explains that because the Debtors do not believe that it is feasible to attempt to prime the Prepetition Secured Lenders on a non-consensual basis, the DIP financing alternatives are limited. "Moreover, a new DIP lender would also have to prime the Second Lien Trade Creditors and the Third Lien Merchandise Agent, further complicating the landscape for a potential DIP lender." Prior to the Petition Date, the Debtors contacted two lending institutions with broad experience lending to chapter 11 debtors. Neither was willing to go forward with a DIP financing proposal. The Debtors later determined that the proposal from their prepetition secured lenders was their only real DIP financing option. According to Mr. Wassenaar, the Prepetition Lenders' proposal provides the Debtors with funding to operate and maintain their businesses and to pay necessary expenses during their Chapter 11 cases. The Debtors and Wachovia Bank, N.A., as agent for the Prepetition Secured Lenders, engaged in good faith and extensive arm's-length negotiations that culminated in the Prepetition Secured Lenders' agreement to provide the Debtors up to $75,000,000 of secured postpetition financing. The parties entered into a Ratification and Amendment Agreement on January 12, 2006. A full-text copy of the 29-page Ratification Agreement is available for free at http://ResearchArchives.com/t/s?478 The DIP Lenders are Wachovia Bank, N.A., Banc of America Securities, LLC, National City Business Credit, Inc., Western Bank Business Credit, GMAC Commercial Finance LLC, LaSalle Retail Finance, Wells Fargo Retail Finance, LLC, Textron Financial Corporation, Burdale Financial Limited, Grayson & Co., Senior Debt Portfolio, Eaton Vance Senior Income Trust and The CIT Group/Business Credit. Borrowings will be repaid in full, and the $75,000,000 Commitment will terminate, at the earliest of January [__], 2007 or the confirmation of the plan. All direct borrowings and reimbursement obligations under lenders of credit and other obligations under the DIP Financing will be, subject to a carve-out, entitled to joint and several superpriority claim status, and secured by valid and perfected first priority security interests and liens on all Collateral. The Professional Fee Carve-Out will not exceed $1,750,000 for the period from the Petition Date through February 3, 2006, which sum will increase to $3,100,000 for the period from February 4, 2006, through February 28, 2006, and $3,500,000 for the period from and after March 1, 2006. The Carve-Out Expenses also include statutory fees payable to the U.S. Trustee and fees payable to the Clerk of the Bankruptcy Court. The fees are non-refundable under all circumstances. The DIP Credit Agreement provides for a number of fees, including Unused Line Fee, Letter of Credit Fees, DIP Agent's and DIP Lenders' Fees, and Prepayment Fee. The interest rate for Prime Rate Loans is a rate equal to the Prime Rate plus 0.25% per annum. The interest rate for Eurodollar Rate Loans is a rate equal to the Adjusted Eurodollar Rate plus 3.25% per annum. The Default Interest is 2%. The DIP Credit Agreement requires that: -- on or before January 17, 2006, the Debtors must distribute bid packages for 284 retail locations to at least four inventory liquidation agents and file appropriate motions with the Court to commence Going-Out-of-Business Sales; -- on or before February 3, 2006, GOB Sales must commence; and -- on or before February 21, 2006: (a) the Debtors will file a sale motion for substantially all of their assets, which sale will close no later than March 17, 2006, or (b) the Debtors will submit a restructuring plan acceptable to the DIP Agent and DIP Lenders. The Debtors are also required, among others, to maintain Excess Availability not less than $5,000,000; and deliver to the DIP Agent by February 21, 2006, projected consolidated financial statements and a projected Borrowing Base for each month during the 12-month period ending February 2007. Interim Approval Judge Bernstein has permitted the Debtors to borrow up to $60,000,000 under the $75,000,000 DIP Credit Agreement. The Debtors will use the loan proceeds to pay administrative expenses in accordance with a budget. A full-text copy of the Interim DIP Order is available for free at http://bankrupt.com/misc/musicland_interimDIPorder.pdf The Court will convene the Final DIP Hearing on February 7, 2006, at 2:00 p.m. Objections must be filed and served, no later than February 1, 2006 at 4:00 p.m., prevailing Eastern time, on: (a) counsel for the Debtors, Kirkland & Ellis LLP 153 E. 53rd Street New York, New York 10022-4611 Attn: James A. Stempel, Esq. Fax: (312) 861-2200 (b) counsel for the Agent Otterbourg, Steindler, Houston & Rosen, P.C. 230 Park Avenue New York, New York 10169-0075 Attn: Jonathan N. Helfat, Esq. and Andrew M. Kramer, Esq. Fax: (212) 682-6104 (c) counsel for the Secured Trade Agent Morgan, Lewis & Bockius LLP Attn: Michael A. Bloom, Esq., Fax (215) 963-5001 Richard S. Toder, Esq., Fax (212) 309-6001 (d) counsel for the Merchandise Agent Eric Kaup, Esq., Fax (847) 897-0766 (e) counsel to any Committee; and (f) the U.S. Trustee 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. (Musicland Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) MUSICLAND HOLDING: Gets Interim OK to Employ Kirkland as Counsel ---------------------------------------------------------------- Musicland Holding Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Georgia's permission to employ Kirkland & Ellis LLP as their attorneys, effective as of the Petition Date. Kirkland & Ellis will: (a) advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their business and properties; (b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; (c) take necessary actions to protect and preserve the Debtors' estates; (d) prepare all motions, applications, answers, orders, reports and papers necessary to the administration of the Debtors' estates; (e) take necessary actions to obtain approval of a disclosure statement and confirmation of the Debtors' plan of reorganization; (f) represent the Debtors in connection with obtaining postpetition financing; (g) advise the Debtors in connection with any potential sale of assets; (h) appear before the Court, any appellate courts and the United States Trustee and protect the interests of the Debtors' estates before those Courts and the United States Trustee; (i) consult with the Debtors regarding tax matters; and (j) perform all other necessary legal services to the Debtors in connection with the Chapter 11 Cases. The Debtors relate that Kirkland & Ellis has extensive experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under chapter 11 of the Bankruptcy Code. Kirkland & Ellis' hourly rates vary with the experience and seniority of the individuals assigned. Those hourly rates are subject to periodic adjustments to reflect economic and other conditions and are consistent with the rates charged elsewhere: Billing Category Range ---------------- ----- Partners $520 to $950 Of Counsel $280 to $685 Associates $245 to $520 Paraprofessionals $90 to $240 The professionals who are presently expected to have primary responsibility for providing services to the Debtors are: Professional Billing Rate ------------ ------------ James A. Stempel, Esq. $745 Jonathan Friedland, Esq. $635 David Agay, Esq. $510 Andrea Johnson, Esq. $350 Corey Fox, Esq. $315 Cynthia Fung, Esq. $260 Brandon Smith, Esq. $260 As of the Petition Date, the Debtors do not owe Kirkland & Ellis for legal services rendered before the Petition Date. James A. Stempel, Esq., a partner at Kirkland & Ellis, assures the Court that to the best of his knowledge, neither he, the firm nor any partner, of counsel or associate in the firm has any connection with the Debtors, their creditors or any other parties- in-interest, except as disclosed. Kirkland & Ellis is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, Mr. Stempel says. * * * Judge Bernstein approved the Application on an interim basis. Objections must be filed and served no later than Feb. 12, 2006. Absent objections, the Court may approve the Application on a final basis without a Final Hearing Date. 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. (Musicland Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL GAS: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: National Gas Distributors, LLC fdba Paul Lawing Jr., LLC P.O. Box 58051 Fayetteville, North Carolina 28305 Bankruptcy Case No.: 06-00166 Type of Business: The Debtor supplies natural gas, propane, and oil to industrial, municipal, military, and governmental facilities. See http://www.gaspartners.com/ Chapter 11 Petition Date: January 20, 2006 Court: Eastern District of North Carolina (Wilson) Judge: A. Thomas Small Debtor's Counsel: Ocie F. Murray, Jr., Esq. Murray, Craven & Inman, LLP 2517 Raeford Road P.O. Drawer 53007 Fayetteville, North Carolina 28305-3007 Tel: (910) 483-4990 Fax: (910) 483-6822 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 12 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Chatham Investment Fund QP II, LLC $17,000,000 100 Galleria Parkway, Suite 270 Atlanta, GA 30339 First Citizens Bank & Trust Company $15,500,000 Cumberland Commercial Banking P.O. Box 26592 Raleigh, NC 27611 Coral Energy Resources $10,000,000 909 Fannin, Suite 700 Houston, TX 77010 ConocoPhillips $4,500,000 600 North Dairy Ashford Road Houston, TX 77079 Total Gas & Power, NA $4,500,000 800 Gessner, Suite 700 Houston, TX 77024 Arteva Specialties S.A.R.L. $2,100,000 4501 Charlotte Park Drive P.O. Box 37388 Charlotte, NC 28217 Industrial Fuel Company $1,800,000 118 5th Avenue Northwest Hickory, NC 28601 Progress Energy $1,800,000 P.O. Box 1551 Raleigh, NC 27601 Greenville Utilities Commission $1,500,000 P.O. Box 1847 Greenville, NC 27835 Colonial Oil Industries $200,000 P.O. Box 576 Savannah, GA 31402 Omnova Solutions $12,317 175 Ghent Road Akron, OH 443333300 Smithfield Foods Unknown 200 Commerce Street Smithfield, VA 23430 NAVISTAR INT'L: Fitch Places Low-B Debt Ratings on Negative Watch ----------------------------------------------------------------- Fitch Ratings placed the debt ratings of both Navistar International Corp. (NAV) and its subsidiary, Navistar Financial Corp. (NFC) on Rating Watch Negative. The parent and subsidiary credit ratings remain as follows: Navistar International Corp.: -- Issuer Default Rating (IDR) 'BB' -- Senior unsecured debt 'BB' -- Subordinated debt 'B+' Navistar Finance Corp.: -- Senior unsecured secured bank lines 'BB' -- Senior unsecured debt 'BB' The Rating Watch Negative results from Fitch's concerns related to the delay in filing audited year-end financial statements. Specifically, Fitch is concerned with: * the uncertainty regarding the duration of the delay; * the scope of the issues under discussion and the eventual outcome of the audit; and * possible measures creditors may take in a filing-default scenario and the potential for restricted access to financial markets that companies generally face when uncertainty arises from the lack of audited financial statements over a lengthy period time. However, Fitch notes that NAV said that it has received a waiver through May 31 on NFC's $1.2 billion revolver and that unaudited year-end manufacturing cash balances approximated $875 million, up from $731 million at the end of the third quarter. In addition, Fitch expects NAV to be free cash flow positive in 2006. This liquidity should allow Navistar to manage its limited financing needs in 2006. However, if debt-holders pursue covenant measures, liquidity could be significantly stressed. NAV announced that it has delayed filing its fiscal 2005 (Oct. 31 year-end) Form 10-K report with the Securities and Exchange Commission because the company is still in discussions with its outside auditors about 'a number of open items including some complex and technical accounting issues.' NAV cannot determine the impact the resolution of these issues may have, if any, on net income and there has been no determination as to when the ongoing discussions with the company's auditor will be concluded or when NAV will be able to file its Form 10-K. Navistar also said that in mid-December 2005, a key member of the auditor's team went on an unexpected, extended medical leave and that new audit team has been assigned to complete the year-end audit for fiscal 2005. Fitch's credit ratings reflect Navistar's: * improved profitability from industry volumes; * market penetration; and * cost reduction efforts. Fitch expects medium and heavy truck markets to remain strong through 2006. Similar to the pre-buy situation that developed in 2002 and the resulting lower volume in 2003, Fitch expects industry demand to be negatively impacted by more stringent air emissions regulations beginning in 2007. NOBEX CORP: Creditors Panel Wants to Hire Blank Rome as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Nobex Corporation's chapter 11 case asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Blank Rome LLP as its counsel. The Committee hired Blank Rome as its counsel because of the Firm's extensive experience and expertise in bankruptcy and reorganization proceedings. Blank Rome will represent the Committee and perform necessary legal services to it in connection with carrying out its fiduciary duties and responsibilities under Section 1103(c) of the Bankruptcy Code and other relevant provisions of the Bankruptcy Code. Michael B. Schaedle, Esq., and David W. Carickhoff, Esq., are the lead attorneys from Blank Rome performing services to the Committee. Mr. Schaedle charges $405 per hour for his services while Mr. Carickhoff charges $280 per hour. Mr. Schaedle reports Blank Rome's professionals bill: Designation Hourly Rate ----------- ----------- Partners & Counsel $300 - $675 Associates $195 - $400 Paralegals $105 - $250 Blank Rome assures the Court that it does not represent any interest materially adverse to the Debtor's estate and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Durham, North Carolina, Nobex Corporation -- http://www.nobexcorp.com/-- is a drug delivery company developing modified drug molecules to improve medications for chronic diseases. The company filed for chapter 11 protection on Dec. 1, 2005 (Bankr. D. Del. 05-20050). When the Debtor filed for protection from its creditors, it estimated between $1 million to $10 million in assets and $10 million to $50 million in liabilities. NOBEX CORP: Panel Objects to Motion for Final Order on DIP Loan --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Nobex Corporation's chapter 11 case asks the U.S. Bankruptcy Court for the District of Delaware to deny the Debtor's request to obtain post-petition financing on a final basis from Biocon Limited. As previously reported, the Debtors asked the Court for authority to secure post-petition financing from Biocon Limited and it has entered into a Purchase and Sale Agreement dated Dec. 1, 2005, with Biocon for the sale of substantially all of its assets. The Debtor wants to obtain up to $1.2 million in DIP financing from Biocon, plus any Maintained Patent Advances of up to $200,000, of which $350,000 will be available from the closing date of the sale to the entry of a final order by the Court. History of Debtor's Relationship With Biocon In October 2004, the Debtor formed a global product development partnership with Biocon pursuant to a Joint Project Development Agreement (the Oral Insulin JPDA), to jointly develop an oral insulin project technology. In April 2005, the Debtor and Biocon entered into a second product development partnership pursuant to a Joint Project Development Agreement (the BNP JPDA), to jointly develop an oral brain natriuretic peptide product technology. Pursuant to both of those Agreements, Biocon provided the Debtor with approximately $4.8 million, which is reflected on the Debtor's books as a general unsecured claim. Biocon also holds 2 million shares of the Debtor's common stock, which is approximately 30% its common stock. But no mention of the Debtor's transaction and relationship with Biocon is included in the DIP financing motion. Creditors Committee's Objections 1) The Debtor has not disclosed in its filings whether Biocon has any voting rights with which to control the Debtor through its stock interests. Additionally, the Debtor and Biocon are parties to the two JPDAs, which can give Biocon a significant control of the Debtor. 2) The three previous interim DIP financing orders entered by the Court contain provisions that have a fundamental lack of due process and protection of security interests afforded to the Committee and other parties-in-interest. Paragraph 4.2 of the Third Interim DIP Financing Order provides a waiver of Section 506(c) surcharge rights, which is disadvantageous in light of the low Carve-Out. 3) The proposed $75,000 Carve-Out and the DIP Financing Budget are insufficient to enable the Committee and its professionals to represents its interests and discharge its duties. The current Budget does not have any line items or general amounts that will cover Committee professional fees. 4) The DIP loan should not be used as a leverage to rush the asset sale process because Biocon wants to force the Debtor to close the asset sale by March 10, 2006. The Loan and Security Agreement for the DIP loan contains a provision stating that no advances after Feb. 27, 2006, will be made if a Court order approving the asset sale is not entered by that time. Headquartered in Durham, North Carolina, Nobex Corporation -- http://www.nobexcorp.com/-- is a drug delivery company developing modified drug molecules to improve medications for chronic diseases. The company filed for chapter 11 protection on Dec. 1, 2005 (Bankr. D. Del. 05-20050). When the Debtor filed for protection from its creditors, it estimated between $1 million to $10 million in assets and $10 million to $50 million in liabilities. NORTHWEST AIR: Loses $5 Million a Day Without Labor Concessions --------------------------------------------------------------- Northwest Airlines Corp.'s (OTC: NWACQ.PK) Senior Vice President for finance and controller, David M. Davis, said the airline's financial problems can be overcome only if a competitive cost structure can be implemented that will permit significant labor savings. Mr. Davis' remarks were prepared for presentation at the U.S. Bankruptcy Court for the Southern District of New York hearing today regarding Northwest's motions, filed under Sections 1113(c) and 1114 of the Bankruptcy Code, asking the court to reject the company's collective bargaining agreements with the Air Line Pilots Association and the Professional Flight Attendants Association. On Jan. 17, 2006, the hearing began on the company's motions under Section 1113(c), as well as Section 1114 to modify its retiree employee benefits. "We cannot continue to lose $4 to $5 million per day on top of the $14 billion debt and declining cash balance that we have. Northwest's cash and debt position is unacceptable and among the worst in the industry. We have sold $1.6 billion in assets since 2001, yet have added $2.3 billion in debt. At this rate, by the end of 2006, our cash balance will be less than $700 million without labor cost relief," said Mr. Davis. "Northwest's pay per employee is the highest in the industry. We must address our payroll of $3.6 billion along with work rule issues to make Northwest competitive. The low-cost carriers represented only 8% of the market in 1990, today they represent 28%, and are forecast to control at least 37% of the domestic market by as soon as 2010." "The LCCs have 1,025 aircraft on order or option. With these aircraft they are aggressively moving into Northwest markets and dropping fares, putting pressure on yields that have continued to decline for more than a decade," Mr. Davis commented. "Our competitors are rapidly deploying 70-100 seat aircraft in more than 100 of our markets. No other legacy carrier has a lower percentage of regional departures in their operation and this too must change if we are going to be viable. Work rules must not bind Northwest's 34,000 employees from being competitive in the current environment." In summarizing his presentation, Mr. Davis said, "We believe our business plan is the correct path forward. We need to reduce our fleet by 15%, reducing unprofitable flying and exit unprofitable markets which will save Northwest $400 million annually." "On our domestic network we must match the narrow-body fleet with demand. Internationally, we must optimize our Atlantic schedule and add new routes in the Pacific as our Boeing 787s are delivered. The introduction of the new technology Boeing 787 aircraft and expansion of the Airbus 330 fleet are estimated to improve profitability in excess of $150 million annually." "To buy these new aircraft we must produce sufficient cash to support up to $11 billion in capital requirements needed to achieve fleet renewal over the next 10 years. However, none of this can be achieved without achieving permanent labor cost reductions with ALPA, the International Association of Machinists and Aerospace Workers and PFAA unions and retirees," Mr. Davis said. The IAM, which represents Northwest's ground employees, has agreed to present the company's contract settlement proposal to its members for ratification. As a result of this agreement, IAM and Northwest asked the bankruptcy court judge to postpone IAM's portion of the 1113(c) proceedings. Achieving competitive labor costs is essential to the success of Northwest's business plan. The combination of competitive labor costs and completion of the other aspects of Northwest's restructuring will allow the airline to be a successful long-term competitor and provide the most secure future for the company. 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. O'SULLIVAN IND: Provides Additional Facts Regarding Amended Plan ---------------------------------------------------------------- O'Sullivan Industries Holdings, Inc., and its debtor-affiliates provided additional information to the U.S. Bankruptcy Court for the Northern District of Georgia to address the concerns raised by the Official Committee of Unsecured Creditors and The Bank of New York regarding the adequacy of their Amended Disclosure Statement. The Debtors may file a revised Disclosure Statement or Plan Supplement to reflect the additional information. Valuation of Foreign Assets The Debtors inform the Court that their operations in Canada and the United Kingdom do not represent viable stand-alone operations and cannot be valued on a going concern basis. The Debtors believe that the most appropriate valuation of the their assets in Canada and the U.K., if any, must be based on those assets' liquidation values. At the Debtors' behest, Lazard Freres & Co., LLC, their financial advisor, prepared liquidation analyses of the Canadian and U.K. assets: Foreign Assets Estimated Liquidation Proceeds Hypothetical Liquidation Range Book Value ------------------------------ At 09/30/05 Low High ----------- ------------- -------------- Canada $3,883,000 $2,359,000 $2,941,000 U.K. $3,169,000 $1,577,000 $1,884,000 =========== ============= ============== Foreign Assets Summary of Net Proceeds Available for Distribution Low High ------------- -------------- Proceeds available from liquidation Canada ($411,000) $160,000 U.K. ($83,000) $247,000 ------------- -------------- Total Net Proceeds Available ($494,000) $407,000 Total Estimated Administrative Claims Canada $279,000 $278,000 U.K. $183,000) $175,000 ------------- -------------- Total Net Proceeds Available After Administrative Claims ($494,000) $407,000 ============= ============== Based on the Liquidation Analyses, the Debtors assert that it is doubtful that any proceeds from the liquidation of their assets in Canada and the U.K. would be available for distribution to any unsecured creditors, other than local, domestic unsecured creditors. A full-text copy of the Liquidation Analyses for the Debtors' operations in Canada and the U.K. is available at no charge at http://ResearchArchives.com/t/s?479 Net Operating Losses Lazard also provided a valuation of the tax attributes of the Reorganized Debtors. Lazard calculated a $7,500,000 net present value of the Debtors' post-reorganization consolidated U.S. tax attributes. The Debtors' pre-emergence Net Operating Losses are estimated to total $240,000,000. Liquidation Analysis of Each Debtor Providing information regarding the liquidation analysis of each individual debtor is not relevant because, the Debtors assert, the claims of the holders of the Senior Secured Notes -- which have secured claims against all four of the Debtors by virtue of the Senior Secured Notes and the Senior Secured Notes Guarantees -- would never be fully satisfied in any hypothetical liquidation, and the Debtors' unencumbered assets are not sufficient to cover priority, tax, and administrative claims, which have been greatly inflated because of the Creditors Committee's litigious nature in these cases. Nonetheless, the Debtors delivered to the Court an analysis of the liquidation values of each individual Debtor. A full-text copy of the analysis is available at no charge at: http://ResearchArchives.com/t/s?47a Pending & Potential Litigation None of the Debtors is a plaintiff in any litigation, but the Debtors are prepared to disclose the only potential litigation they currently have threatened, which involves alleged trademark infringement by the former manager of an O'Sullivan Furniture Factory Outlet retail store in Springfield, Missouri, who has been using the name "Oh! Sullivan Furniture Factory Outlet." The Debtors also disclose that 48 product liability claims and seven other claims have been filed against them. A complete list of the claimants is available at no charge at http://ResearchArchives.com/t/s?47b At this time, the Debtors believe that potential preference recoveries will not exceed $1,000,000. The Debtors will provide additional information regarding potential recoveries as soon as practicable. Exit Financing The Debtors also provided non-proprietary, general additional information that is currently available regarding the Exit Financing proposals they have received to date. The Debtors inform the Court that they will not disclose the specific terms of various proposals publicly at this time so as not to undermine their efforts to obtain the most competitive facility. The Debtors relate that they are seeking a $50,000,000 Exit Credit Facility, consisting of a five-year revolving credit facility amounting to $30,000,000 to $35,000,000 and a five-year term loan amounting to $15,000,000 to $20,000,000. Lazard expects the possible rate on the revolving credit facility to range from LIBOR + 200 basis points to LIBOR + 350 basis points. The term loan is expected to be priced at an applicable LIBOR margin that exceeds that of the revolver. Other Disclosures To address the Bank of New York's comments, the Debtors will revise the Plan, among others, to provide that: -- Class 2B (Other Secured Claims Against O'Sullivan Industries, O'Sullivan Virginia, or OFFO) also includes the Allowed prepetition Secured Claim of the Senior Secured Notes Indenture Trustee; -- the Senior Secured Notes Indenture Trustee and the Senior Subordinated Notes Indenture Trustee are included as "Released Parties"; and -- the amount of postpetition interest on the Senior Secured Notes is "approximately $8 million." The Debtors also provided documentation regarding assumptions, calculations, and analysis of the Debtors' Enterprise Value. A full-text copy of the additional information regarding valuation is available at no charge at http://ResearchArchives.com/t/s?47c The Debtors do not believe that they are involved in anything that could be so dramatically characterized. The Debtors also note that it is impractical and dangerous, from a business perspective, to provide in a public document details regarding their business significantly beyond what is already included in the Disclosure Statement. Nonetheless, the Debtors submitted a summary of the "ongoing transformations" of their business. A full-text copy of the summary is available at no charge at http://ResearchArchives.com/t/s?47d Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). On Sept. 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) O'SULLIVAN IND: Defends Lazard's Disinterestedness -------------------------------------------------- As previously reported in the Troubled Company Reporter on December 14, 2005, the Official Committee of Unsecured Creditors opposed O'Sullivan Industries Holdings, Inc., and its debtor-affiliates' engagement of Lazard Freres & Co., LLC, primarily questioning the firm's disinterestedness. Specifically, the Committee argues that Lazard has already earned the $2,000,000 prepetition Restructuring Fee, transforming the firm into the Debtors' largest creditor. "This is patently false," James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, P.A., in Atlanta, Georgia, exclaims. "[The Objection] advocates a per se rule that would disqualify prepetition professionals, notwithstanding the more flexible standard adopted by bankruptcy courts in [the Northern District of Georgia]." Mr. Cifelli clarifies that the Restructuring Fee is only earned in the event that there is a pre-arranged or prepackaged plan and upon the delivery of binding consents to the plan by a sufficient number of creditors or bondholders, as the case may be, to confirm the plan. Mr. Cifelli attests that there were no binding prepetition consents in the Debtors' Chapter 11 cases, hence, as Lazard has acknowledged, the firm did not earn the Restructuring Fee prepetition. The Committee also postulates that if the Debtors were to terminate their prepetition engagement agreement, Lazard would have a prepetition claim against the Debtors. The contingent claim, the Committee argues, renders Lazard not disinterested. Mr. Cifelli states that for the Committee's position to have any merit, the U.S. Bankruptcy Court for the Northern District of Georgia would have to accept the circular argument that the claim created by the denial of the Employment Application creates a conflict of interest that would justify denying the Application in the first place. Similarly, the Committee argues that Lazard should be disqualified on account of its alleged indemnification and reimbursement claims against the Debtors. Mr. Cifelli contends that the fact that the Debtors could potentially have a claim against Lazard, or vice versa, does not warrant denying Lazard's retention. Instead, Mr. Cifelli suggests that a proposed engagement should be examined by the Court on a case-by-case basis, especially in light of the disclosure provided by the Debtors and Lazard. Furthermore, the Committee argues that Lazard's fee arrangement should not be approved under Section 328 of the Bankruptcy Code, but rather the Court should review Lazard's compensation for reasonableness at a later date. "Essentially, the Committee is asking this Court to find that Section 328 should be deleted from the Bankruptcy Code," Mr. Cifelli says. "Because a professional must be retained at the early stages of a case, or risk not being paid its fees, the Committee's argument turns section 328 on its head." Mr. Cifelli relates that allowing debtors to retain professionals under a variety of compensation structures is meant to give them flexibility. It is not meant to undermine retention of their chosen professionals until an indefinite future point in the case, Mr. Cifelli notes. Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). On Sept. 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) ON SEMICONDUCTOR: Wants Senior Secured Credit Agreement Amended --------------------------------------------------------------- ON Semiconductor Corp. together with its primary operating subsidiary Semiconductor Components Industries, LLC, are asking the lenders under their senior secured credit agreement to, among other things reduce the interest rate pricing of the loan facility and to permit certain proposed amendments to its outstanding bond indebtedness. The lenders under the Credit Agreement are: * JPMorgan Chase Bank, N.A., as administrative agent; * JPmorgan Securities Inc., as co-advisor, joint bookrunner, joint lead arranger and co-syndication agent; and * Credit Suisse First Boston, as co-advisor, joint bookrunner, joint lead arranger and co-syndication agent April 2004 Amendment On April 22, 2004, the Company refinanced $320.5 million of loans under our senior bank facilities. It replaced its tranche E term loan facility with a new tranche F term loan facility, which bore interest at a base rate plus a margin that was 0.50% per annum lower than the comparable margin borne by the tranche E term loan facility. Principal repayments of the new tranche F term loan facility were to be due throughout 2008 and 2009, provided that, if the Company had not redeemed or repurchased it second-lien senior secured notes in full on or prior to November 15, 2007, the tranche F term loan facility would mature on November 15, 2007. December 2004 Amendment In December 2004, the Company refinanced the term loans under its senior bank facilities and increased its total borrowings under these facilities to $645.5 million. The Company replaced $320.5 million of the tranche F term loan facility with $645.5 million of a tranche G term loan facility with terms, other than the interest rate and principal balance, that are largely identical to those of the tranche F term loan facility. Proceeds from the tranche G term loan facility were used to acquire $130 million principal outstanding of the Company's first-lien notes and $195 million principal outstanding of the Company's second-lien notes. Principal payments under the tranche G term loan facility are paid quarterly at an annualized rate of 1% of the original principal balance, with the remaining principal due at maturity. The tranche G loan facility expires December 15, 2009, but can be extended to December 15, 2011, provided that the zero coupon convertible senior subordinated notes and the junior subordinated note are redeemed by December 15, 2009 and December 15, 2010, respectively. Covenant Revisions in the Fourth Quarter of 2004 After meeting certain financial conditions during the fourth quarter of 2004, certain financial covenants were revised in the Company's senior bank facilities to: -- increase the maximum amount of sales, transfers and other dispositions of assets during any fiscal year to $50 million aggregate fair market value; -- permit acquisitions of up to $50 million in equity interests of other companies; -- increase the maximum amount of other investments to $100 million; -- remove the minimum cash and cash equivalents requirement; and -- allow payment of fees and expenses in cash to TPG in an aggregate amount not to exceed $2 million in any fiscal year. A full text copy of the Amended and Restated Credit Agreement is available for free at http://ResearchArchives.com/t/s?474 ON Semiconductor Corp. -- http://www.onsemi.com/-- supplies power solutions to engineers, purchasing professionals, distributors and contract manufacturers in the computer, cell phone, portable devices, automotive and industrial markets. As of September 30, 2005, the Company's equity deficit narrowed to $482 million from a $537 million deficit at December 31, 2004. OPTINREALBIG.COM: Wants Plan-Filing Period Stretched to March 3 --------------------------------------------------------------- OptInRealBig.com, LLC, asks the U.S. Bankruptcy Court for the District of Colorado to extend the period within which it has the exclusive right to file a plan of reorganization to March 3, 2006. The Debtor also wants the period within which it has the exclusive right to solicit acceptances for a chapter 11 plan to May 2, 2006. Harold G. Morris, Jr., Esq., at Lindquist & Vennum P., LLP, in Denver, Colorado, informs the Court that the Debtor needs the extension for its request to dismiss its chapter 11 case and litigation settlements are still pending. As reported in the Troubled Company Reporter on Aug. 18, 2005, the Company asked the Court to dismiss their chapter 11 cases. The Debtors remind the Court that they sought protection under chapter 11 to stay 13 legal actions filed against them, particularly those of Microsoft Corporation and American Family Mutual Insurance Co. Pending Litigation Prior to its bankruptcy filing, Microsoft sued the company for sending unsolicited e-mail. The software giant sought a $50 million judgment against OptIn. There are eight cases pending against the Debtors in Lake County, Utah, three in King County, Washington, and one in Santa Barbara, California. All of these suits allege unsolicited e-mail violations. Furthermore, the company's insurer, American Family Mutual Insurance Co., filed an action against OptIn and Mr. Richter seeking declaratory relief denying insurance coverage for costs of defense and liability associated with the various lawsuits pending against it. The Microsoft Settlement Microsoft commenced litigation against the Debtors on Dec. 17, 2003. The suit alleges: -- trespass to chattels; -- conversion; -- violation of the Washington Commercial Electronic Mail Act; -- violation of the Washington Consumer Protecion Act; -- violation of the Federal Computer Fraud and Abuse Act; -- violation of the New York Gen. Bus. Law Section 349; and -- violation of the Lanham Act (false designation of origin). Microsoft also filed a complaint seeking to have any judgment against Mr. Richter deemed non-dischargeable. Since the litigation is costly and time consuming for both parties, OptIn, Mr. Richter and Microsoft engaged in settlement discussions. After several meetings and negotiations, the parties agree that: a) the Debtors will pay Microsoft $7 million within 24 hours after the chapter 11 cases are dismissed; b) the Debtors will consent to a permanent injunction requiring their continued compliance with certain applicable laws; c) the Debtors and Microsoft will issue a press release announcing the terms of the settlement and will refrain from giving any statements which are not in conformity with the prepared statement. According to the Debtors, the settlement will dramatically increase the company's internet market. The settlement will brand OptIn as the most legitimate independent internet advertising service in the United States. The American Family Settlement OptIn and its owner, Scott Allen Richter, has also reached a settlement with American Family Mutual Insurance. The terms of the settlement include: -- a payment to OptIn for an undisclosed amount; -- mutual releases of all claims between the parties including the insurers potential future obligations under prepetition insurance policies; and -- American Family will release the Debtors from a $2.6 million claim. Other Lawsuits The Debtors are confident that the other pending litigation will have minimal effect on the company. As such, they believe that their counsel can easily resolve the cases. An entity known as Infinite Monkeys & Co., LLC, filed a $49,168,000 claim against the Debtors. OptIn does not believe that this claim has any merit. The Debtors believe that with the resolution of the American Family and the Microsoft lawsuits, they can now go back to business in a better financial position. Headquartered in Westminster, Colorado, OptInRealBig.com, LLC, is an e-mail marketing company. The Company filed for chapter 11 protection on March 25, 2005 (Bankr. D. Colo. Case No. 05-16304). John C. Smiley, Esq., at Lindquist & Vennum P., LLP, represents the Debtor. When the Debtor filed for protection from its creditors, it listed estimated assets of $1 million to $10 million and estimated debts of $50 million to $100 million. PREMIER ENT: 10-3/4% Notes Default Prompts Moody's to Junk Ratings ------------------------------------------------------------------ Moody's Investors Service downgraded Premier Entertainment, Inc.'s ratings following the company's Jan. 19, 2006 8-K filing that it received a notice from the trustee on Jan. 6, 2005 relating to its 10-3/4% first mortgage notes due 2012 that an event of default has occurred because of an alleged failure of the Hard Rock Hotel and Casino Biloxi to be operating by the operating deadline as defined in the first mortgage note indenture. A negative ratings outlook was assigned. These ratings were affected: * Corporate family rating, to Caa1 from B3; and * $160 million 10 3/4% first mortgage notes, to Caa1 from B3. The downgrade considers the event of default notice as well as the increased uncertainty regarding the amount and timing of insurance proceeds that could be used to repay the $160 million of outstanding first mortgage notes. The downgrade acknowledges that the company disagrees with the trustee decision to declare an event of default, and that certain of the trustee's assertions are subject to litigation currently pending in the United States District Court for the Southern District of Mississippi. The negative rating outlook considers that the amount of potential impairment could increase over time depending on the outcome of pending insurance matters. The Caa1 rating anticipates that bondholders will likely experience some level of impairment. While insurance proceeds may ultimately be enough to provide first mortgage note holders with full recovery, Premier is still in negotiations regarding its largest layer of insurance coverage, and also announced in the Jan. 19, 2005 8-K that it has filed suits against two of its insurance carriers. Separately, the company's previously announced offer to purchase any and all of its outstanding first mortgage notes has expired without being consummated. According to the Jan. 19, 2005 8-K filing, Premier continues to evaluate its alternatives with respect to the refinancing and repurchase of the first mortgage notes. The downgrade ends the rating review process that began on Aug. 29, 2005 when Moody's placed the ratings of Premier on review for possible downgrade in response to the negative impact that Hurricane Katrina would likely have on the Hard Rock Hotel & Casino Biloxi development project. Although nearly complete at the time, the facility was severally damaged and unable to open as a result of the weather catastrophe. PREMIER ENTERTAINMENT: S&P Junks Ratings and Removes Watch ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Premier Entertainment Biloxi LLC to 'CCC' from 'B-'. At the same time, the ratings were removed from CreditWatch with negative implications where they were placed on Aug. 29, 2005. The outlook is negative. "The downgrade reflects increased uncertainty surrounding the company's ability to resolve insurance claims and refinance its 10.75% first mortgage notes due 2012, and the potential difficulties making interest payments after February 2006," said Standard & Poor's credit analyst Emile Courtney. Premier announced that its December 2005 offer to repurchase the notes has expired without being consummated and that it is evaluating refinancing alternatives. Furthermore, the company stated it has filed lawsuits against two property insurance carriers for failure to cover damages to the Hard Rock Hotel and Casino Biloxi sustained as a result of Hurricane Katrina. These carriers cover potential property insurance proceeds totaling $39 million, a meaningful portion of the estimated $206 million in funding needed to fully rebuild and open the property, as well as pay interest payments on the notes during the reconstruction period. In addition, Premier announced it has received notice of an event of default from the trustee of the notes. The event of default relates to the alleged failure of the Hard Rock Hotel and Casino Biloxi to be in operation by a deadline defined in the notes indenture. The company also announced that in its response to the trustee it disagrees that an event of default has occurred. Premier is the entity formed to construct a Hard Rock-themed casino resort along the Mississippi Gulf Coast in Biloxi, Mississippi. REAL MEX: S&P Places B Corporate Credit Rating on CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B' corporate credit rating, on Long Beach, California-based Real Mex Restaurants Inc. on CreditWatch with developing implications. The rating action follows the company's announcement that it plans to engage financial advisors to assist in exploring strategic alternatives. Ratings could be raised, lowered, or affirmed, depending on the company's chosen strategic alternative and its impact on the company's financial profile. REUNION IND: Selling Plastics Unit Assets to Oneida for $10.9MM --------------------------------------------------------------- Reunion Industries, Inc., entered into an Asset Purchase Agreement to sell the business and substantially all of the assets of its Plastics Segment to Oneida Molded Plastics, LLC, on or before February 28, 2006, for $10.9 million cash and assumption of accounts payable and other current liabilities of the Plastics Segment. Reunion's management disclosed in their Form 10-Q filing for the period ending September 30, 2005, that they need to generate liquidity to service debt and meet future obligations through asset sales. The Company's plastics division generated around $4.87 million in net sales and earned $412,000 in gross profit in the third quarter. Completion of the transaction is subject to the satisfaction of certain conditions, including, among others, financing. Headquartered in Pittsburgh, Pennsylvania, Reunion Industries, Inc. -- http://www.reunionindustries.com/-- owns and operates industrial manufacturing operations that design and manufacture engineered, high-quality products for specific customer requirements, such as large-diameter seamless pressure vessels, hydraulic and pneumatic cylinders, grating and precision plastic components. As of September 30, 2005, the Company's equity deficit narrowed to $24.32 million from a $25.58 million deficit at December 31, 2004. * * * Going Concern Doubt As previously reported in the Troubled Company Reporter on Apr. 29, 2005, Mahoney Cohen & Company, CPA, P.C., raised substantial doubt about Reunion Industries, Inc.'s ability to continue as a going concern after it audited the Company's Form 10-K for the fiscal year ended Dec. 31, 2004. The auditors cited four factors that triggered the going concern opinion: -- the Company's $13.3 million working capital deficit, -- a loss from continuing operations of $3.5 million before gain on debt extinguishment, -- cash used in operating activities of $3.3 million, and -- a deficiency in assets of $25.6 million. REVLON INC: CFO McGuire & Unit's President Kennedy to Swap Jobs --------------------------------------------------------------- Revlon Inc. (NYSE: REV) reported that Thomas McGuire, the company's Chief Financial Officer and Executive Vice President and David Kennedy, President of International and Executive Vice President, will rotate their positions and responsibilities, giving the company the benefit of the varied and valuable experiences and perspectives of two of its most senior executives in these new roles. Jack Stahl, President and Chief Executive Officer, said, "This is a very positive step for Revlon. Tom McGuire and David Kennedy both came to Revlon with terrific credentials and have contributed enormously to the company's progress over the past three years. Under Tom's leadership, our financial strength and flexibility have been significantly enhanced through successful implementation of our comprehensive Sarbanes-Oxley compliance, including enhanced internal controls, as well as our debt-for-equity exchange and debt refinancings. David has successfully strengthened our international management team, reporting structures and controls and developed and implemented strategies that have restored growth to this key segment of our business. At the same time, Tom has strong overseas experience and David has a very solid background in finance. By rotating their roles and responsibilities, Revlon will gain from an exchange of ideas, experiences and skills by two of our most successful executives and a continued close working relationship between them." The rotation of responsibilities will be effective in March 2006 after the company files its Form 10-K for 2005. Mr. McGuire and Mr. Kennedy will work together during the first quarter of 2006 to ensure a smooth transition. Mr. McGuire joined Revlon in 2003. Prior to that, he had been based overseas for more than seven years of his career in a variety of key financial and operational positions. At one point, Mr. McGuire served as Marketing Division Vice President of The Coca-Cola Company. Previously, during his 18-year career at Coca- Cola, he held senior leadership roles abroad, in both Germany and Latin America. Mr. Kennedy joined Revlon in 2002. His 33-year business career includes 20 years in senior finance and accounting positions. From 1998 to 2001, he was Managing Director of Coca-Cola Amatil Ltd., a publicly held company based in Sydney, Australia. Prior to 1998, Mr. Kennedy held several senior management and senior financial positions with The Coca-Cola Company and its divisions and affiliated companies, which he joined in 1980. These included serving as General Manager of The Coca-Cola Fountain Division from 1992 to 1997 and in various key financial positions from 1983 to 1987 for Columbia Pictures Industries, Inc., then a wholly owned subsidiary of The Coca-Cola Company, including as Corporate Controller and Senior Vice President of Finance, where he was responsible for financial reporting and internal controls. A certified public accountant, Mr. Kennedy spent the first eight years of his career at Ernst & Young as an Audit Manager. "Our international business has benefited greatly from David's leadership and I believe that the business will continue to offer significant growth potential as we move forward under Tom's leadership. Both Tom and David are excited by their new roles and this allows us to capitalize on their current experience at Revlon, as well as their previous experience, in these critical and strategic functions," concluded Mr. Stahl. Revlon Inc. is a worldwide cosmetics, skin care, fragrance, and personal care products company. The Company's vision is to deliver the promise of beauty through creating and developing the most consumer preferred brands. Websites featuring current product and promotional information can be reached at http://www.revlon.com/and http://www.almay.com/ Corporate and investor relations information can be accessed at http://www.revloninc.com/ The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R). As of September 30, 2005, the Company's equity deficit widened to $1.17 billion from a $1.02 billion deficit at December 31, 2004. RFSC SERIES: Moody's Reviews Class B-I-2 Certificates' B2 Rating ---------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade one subordinated tranche from one mortgage securitization issued by RFSC Series 2001-RM2 Trust. The action is based on the fact that the bond's current credit enhancement level is low compared to the projected loss numbers for the current rating level. The securitization being placed under review for possible downgrade suffers primarily from the performance of the underlying loans with cumulative losses exceeding our original expectations. The complete rating actions are: Issuer: RFSC Series 2001-RM2 Trust * Class B-I-2, current rating B2, under review for possible downgrade ROMACORP INC: Wants Until June 5 to Make Lease-Related Decisions ---------------------------------------------------------------- Romacorp, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas to extend until June 5, 2006, the time within which they can elect to assume, assume and assign, or reject their unexpired nonresidential real property leases. The Debtors' present unexpired lease decision deadline will expire on March 6, 2006, a day before the confirmation hearing for their Amended Joint Plan of Reorganization. The Debtors are currently parties to 15 unexpired nonresidential real property leases, consisting of their restaurant leases. The proposed Plan provides that all executory contracts and unexpired leases not previously assumed or rejected, not terminated by their terms, or to which a motion to assume or reject is pending, are deemed assumed. The Debtors give the Court three reasons supporting the extension: 1) the Debtors need flexibility during the ongoing Plan solicitation and confirmation process with their creditors constituencies to ensure that the leases will be assumed as provided for in the Plan; 2) the leases are important primary assets of the Debtors that they need to continue operating the company-owned restaurants; and 3) the requested extension will not prejudice the landlords of the leases because the Debtors are current on all post- petition obligations under those leases. Headquartered in Dallas, Texas, Romacorp, Inc., own and operate the Tony Roma chain of restaurants with 22 company-owned stores, 86 domestic franchise stores and 118 international franchise stores. The Debtor and seven of its affiliates filed for chapter 11 protection on November 6, 2005 (Bankr. N.D. Tex. Case No. 05-86818). Peter S. Goodman, Esq., Jason S. Brookner, Esq., Monica S. Blacker, Esq., and Matthew D. Wilcox, Esq., at Andrews Kurth LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,769,000 in total assets and $76,309,000 in total debts. ROMACORP INC: Amended Plan Confirmation Hearing Set for March 7 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas will convene a confirmation hearing at 10:30 a.m., on March 7, 2006, for the Amended Joint Plan of Reorganization filed by Romacorp, Inc., and its debtor-affiliates. The Court approved the adequacy of the Amended Disclosure Statement explaining that Plan on Jan. 17, 2006. The Debtors are now authorized to send copies of the Amended Disclosure Statement and Amended Joint Plan to creditors and solicit their votes in favor of the Plan. Treatment of Claims and Interests Under the Amended Joint Plan 1) Priority non-tax claims will receive cash in an amount equal to the allowed amount of their claims on the Distribution Date. 2) The GECFFC secured claims and the GECFFC guaranty claims will receive, at the option of the Reorganized Debtors either the treatment required under Section 1124(c) of the Bankruptcy Code for those claims or full payment in cash. 3) Allowed other secured claims will receive on the Distribution Date and at the option of the Reorganized Debtor, either: a) the collateral securing the claim; b) cash in an amount equal to the lesser of the allowed amount of those claims with interest and other fees or the value of the collateral securing the claim; c) a cash payment to cure any pre-petition default, reinstatement of the underlying secured debt, reinstatement of all liens, and the Reorganized Debtors' promise to perform its obligations under the original credit agreement; d) the treatment required under Section 1124(2) of the Bankruptcy Code for those claims to be unimpaired or other treatment that the Reorganized Debtors and holder of the claim agree on. 4) Senior noteholder claims will receive their pro rata share of the Reorganized Restaurant Holdings Common Stock on the Distribution Date. 5) General unsecured claims, totaling approximately $3,166,201, will receive either: a) a pro rata share of the Reorganized Restaurant Holdings Common Stock along with the holders of the Senior Noteholder Claims, or b) cash equal to 20% of the claim and subject to a maximum payout of $1 million to all allowed general unsecured claims. 6) Intercompany claims will be reviewed by the Debtors and adjusted, continued or discharged as the Debtors deem appropriate. 7) Equity interests in Roma Restaurant Holdings, Inc. will be cancelled and voided in exchange for a payment of $200,000 to be shared pro rata among the holders of those interests. The legal, equitable and contractual rights of the holders of equity interests in the Subsidiary Debtors will remain unaltered. A full-text copy of the black-lined version of the Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060120015503 Objections to the Amended Plan, if any, must be filed and served by Feb. 22, 2006. Headquartered in Dallas, Texas, Romacorp, Inc., own and operate the Tony Roma chain of restaurants with 22 company-owned stores, 86 domestic franchise stores and 118 international franchise stores. The Debtor and seven of its affiliates filed for chapter 11 protection on November 6, 2005 (Bankr. N.D. Tex. Case No. 05-86818). Peter S. Goodman, Esq., Jason S. Brookner, Esq., Monica S. Blacker, Esq., and Matthew D. Wilcox, Esq., at Andrews Kurth LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,769,000 in total assets and $76,309,000 in total debts. SANKATY HIGH: Moody's Rates $12.5 Million Class E Sub. Notes at B ----------------------------------------------------------------- Fitch Ratings assigns these ratings to Sankaty High Yield Partners III, L.P.: * $95,000,000 class A-1A first senior secured variable-funding notes 'AAA'; * $105,000,000 equivalent class A-1B first second senior secured variable-funding multi-currency notes 'AAA'; * $35,000,000 class A-1C first senior secured variable-funding swingline notes 'AAA'; * $220,000,000 class A-1 first senior secured floating-rate notes 'AAA'; * $14,000,000 class A-2 second senior secured floating-rate notes 'AA'; * $22,500,000 second senior loans 'AA'; * $29,500,000 class B third senior secured fixed-rate notes 'A'; * $11,000,000 class B third senior secured floating-rate notes 'A'; * $7,500,000 class C senior subordinated secured fixed-rate notes 'BBB'; * $43,000,000 class C senior subordinated secured floating- rate notes 'BBB'; * $3,500,000 class D subordinated secured fixed-rate notes 'BB'; * $17,500,000 class D subordinated secured floating-rate notes 'BB'; and * $12,500,000 class E junior subordinated secured floating- rate notes 'B'. At closing, the issuer had unrated equity capital commitments and contributions totaling $119,000,000. The recapitalization extends the life of the vehicle to April 2011. The ratings are based upon: * the proposed target asset pool; * the approved advance rates applicable to those assets; * the credit enhancement provided to the various rated classes of debt through subordination; and * the unrated equity capital. The ratings are also derived from Fitch's assessment of the experience and capability of Sankaty Advisors, LLC, as investment manager. The issuer is structured as a market value collateralized debt obligation, which will invest the proceeds of its note issuance in a diverse portfolio of: * bank loans, * high yield securities, and * mezzanine and special situation investments (including private equities and structured products). Sankaty Advisors, LLC commenced operations in 1998 by investment specialists in: * bank loans, * high yield debt, * mezzanine investments, * structured products, and * equities. Since inception, Sankaty Advisors has managed $12 billion in committed capital and currently has a team of 50 investment professionals. SATMEX: Mexican Government May Sell Stake After Restructuring ------------------------------------------------------------- Mexico's government considers selling its 23.5% stake in financially troubled satellite operator, SATMEX aka Satelites Mexicanos, once it completed its $800 million debt restructuring process, Business News Americas reports. "The [company's concession] contracts include the possibility of selling the [government's] stake, but before that there would have to be a restructuring process. If not, there would be uncertainty for the potential buyer," government official Rodolfo Salgado said in published reports. Mr. Salgado heads the structural change support unit of the transport and communications ministry. Business News relates that SATMEX is in default of $523 million in debts. The Mexican government became involved in a controversy with U.S. creditors after it paid $188 million to the company's principal shareholder, Sergio Autrey. Speculations were high that the government pressured SATMEX to file for bankruptcy in Mexico where debt might be dealt with more favorably, Business News relates. U.S. creditors reluctantly conceded last August to allow the bankruptcy to take place in Mexico. Headquartered in Mexico, Satelites Mexicanos, S.A. de C.V. -- http://www.satmex.com/-- is the leading provider of fixed satellite services in Mexico and is expanding its services to become a leading provider of fixed satellite services throughout Latin America. Satmex provides transponder capacity to customers for distribution of network and cable television programming and on-site transmission of live news reports, sporting events and other video feeds. Satmex also provides satellite transmission capacity to telecommunications service providers for public telephone networks in Mexico and elsewhere and to corporate customers for their private business networks with data, voice and video applications, as well as satellite internet services. The Debtor is an affiliate of Loral Space & Communications Ltd., which filed for chapter 11 protection on July 15, 2003 (Bankr. S.D.N.Y. Case No. 03-41710). Some holders of prepetition debt securities filed an involuntary chapter 11 petition against the Debtor on May 25, 2005 (Bankr. S.D.N.Y. Case No. 05-13862). The Debtor, through Sergio Autrey Maza, the Foreign Representative, Chief Executive Officer and Chairman of the Board of Directors of Satmex filed an ancillary proceeding on Aug. 4, 2005 (S.D.N.Y. Case No. 05-16103). Matthew Scott Barr, Esq., Luc A. Despins, Esq., Paul D. Malek, Esq., and Jeffrey K. Milton, Esq., at Milbank, Tweed, Hadley & McCloy LLP represent the Debtor. When the Debtor filed an ancillary proceeding, it listed $900,000,000 in assets and $688,000,000 in debts. SAV-ON LTD: Secures $1 Million DIP Loan From Phoenix Partners ------------------------------------------------------------- The U.S. Bankruptcy Court Northern District of Texas in Dallas gave its final stamp of approval to the $1 million postpetition financing agreement between Sav-On, Ltd., and Phoenix Partners, Inc. The Debtor will use the proceeds of the postpetition loan to preserve and maintain the property and assets of the estate, and to meet payroll and other essential expenses. Phoenix agrees to provide the Debtor with a $1 million revolving line of credit, carrying an interest rate of 6% per annum payable monthly for a term of one year from the date of initial funding. The total outstanding unpaid balance of any amounts advanced by Phoenix is due and payable in full on the earlier of: a) a demand by Phoenix; b) one year from the date of initial funding; c) the entry of a final, non-appealable order confirming any plan of reorganization proposed by the Debtor; or d) conversion of Debtor's chapter 11 bankruptcy case to a chapter 7 liquidation proceeding. The postpetition loan is secured by a junior priority security interest in and liens upon all of the Debtor's prepetition and postpetition collateral, subject to the acknowledged senior security interest and lien of Comerica Bank and any other valid prior security interest or liens held by any other party on the collateral. Apart from the DIP loan, the Debtor has a $1.54 million prepetition debt to Phoenix. The debt is secured by valid, perfected, and enforceable liens and security interests in substantially all of the Debtor's assets subordinate to existing priority perfected security interests. Headquartered in Dallas, Texas, Sav-On, Ltd., operates 37 retail and commercial stores that sell a wide range of standard office supplies and products predominantly in small towns located in Texas, New Mexico, Colorado, Oklahoma, Louisiana, Tennessee and Alabama. The Debtor filed for chapter 11 protection on Nov. 19, 2005 (Bankr. N.D. Tex. Case No. 05-86875). Donald R. Rector, Esq., at Glast Phillips & Murray, PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $7,844,155 in total assets and $14,971,386 in total debts. SEAGATE TECHNOLOGY: Earns $287 Mil. in Quarter Ended Dec. 30, 2005 ------------------------------------------------------------------ Seagate Technology (NYSE: STX) reported record quarterly revenue of $2.3 billion, net income of $287 million, and diluted earnings per share of $0.57 for the quarter ended Dec. 30, 2005. Included in these results are expenses of $20 million for non-cash stock based compensation and a $6 million one-time charge associated with a licensing arrangement Seagate entered into during the quarter. These results compare to revenue of $1.85 billion, net income of $144 million and diluted earnings per share of $0.29 in the year-ago quarter. "Seagate's outstanding performance reflects the company's unique and consistent ability to successfully capitalize on the accelerating demand for digital content being consumed at home, at work and on the go," Bill Watkins, Seagate president and chief executive officer, said. "Our broad product line coupled with our technology, product and cost leadership continues to deliver key advantages across the expanding markets for disc drives, fueling significant unit and revenue growth. Outlook For the March quarter, Seagate expects to report revenue of approximately $2.25 billion, and diluted earnings per share of approximately $0.55, excluding expenses associated with non-cash stock based compensation. Non-cash stock based compensation is expected to be approximately $21 million or $0.04 per share, equating to GAAP earnings per share of approximately $0.51. For fiscal year 2006, Seagate now expects to report earnings per share in the range of $2.20 - $2.25, excluding charges for non- cash stock based compensation. Charges for non-cash stock based compensation are expected to be approximately $0.16 per share, which equates to GAAP diluted earnings per share in the range of $2.04 - $2.09. This compares to Seagate's previously stated fiscal year guidance of approximately $2.00 per share or approximately $1.84 per share when including charges for non-cash stock based compensation. The annual outlook incorporates a 5% tax rate during the March and June quarters. Dividend The company has declared a quarterly cash distribution of $0.08 per share to be paid on or before Feb. 17, 2006 to all common shareholders of record as of Feb. 3, 2006. Seagate Technology -- http://www.seagate.com/-- is the worldwide leader in the design, manufacture and marketing of hard disc drives, providing products for a wide-range of Enterprise, Desktop, Mobile Computing, and Consumer Electronics applications. Seagate's business model leverages technology leadership and world-class manufacturing to deliver industry-leading innovation and quality to its global customers, and to be the low cost producer in all markets in which it participates. The company is committed to providing award-winning products, customer support and reliability to meet the world's growing demand for information storage. Seagate was named 2006 Company of the Year by Forbes Magazine. * * * As reported in the Troubled Company Reporter on Dec. 23, 2005, Moody's Investors Service placed the ratings of Seagate Technology HDD Holdings on review for possible downgrade. The review is prompted by the company's announcement of its intention to acquire Maxtor Corporation in an all-stock transaction for approximately $1.9 billion. Concurrently, Moody's is also placing the ratings for Maxtor under review for a possible upgrade. The acquisition, which has been approved by both boards of directors, is expected to close by the end of June 2006 and is subject to customary approvals and consents. Ratings under review for possible downgrade; 1) Ba1 rating to Seagate's $150 million guaranteed senior secured revolving credit facility, due 2007 2) Ba2 rating to Seagate's $400 million senior notes 8%, due 2009 3) Ba1 Corporate Family Rating to Seagate 4) SGL -- I liquidity rating to Seagate These ratings have been placed on review for possible upgrade: 1) B2 rating to Maxtor's remaining $135 million of the $230 million 6.8% convertible senior notes, due 2010 2) Caa1 rating to Maxtor Corporation's $60 million 5-3/4% convertible subordinated debentures, due 2012 3) B2 Corporate Family Rating to Maxtor SHERIDAN HEALTHCARE: S&P Affirms Corporate Credit Rating at B+ -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Sheridan Healthcare Inc. in light of the company's proposed second amendment to its senior secured credit agreement. The rating outlook remains stable. The 'B+' bank loan rating and recovery rating of '3' on the company's first-lien credit facility were also affirmed. The '3' recovery rating indicates the expectation for meaningful (50%-80%) recovery of principal in the event of a payment default. As part of the proposed credit agreement amendment, Sheridan will issue an $80 million first-lien term loan B add-on and use the proceeds to: * retire its $65 million second-lien loan; * repay about $13 million drawn under the company's revolver; and * fund $3 million of related transaction costs. The amendment will also increase the size of the company's revolver to $50 million from $40 million, and should reduce the pricing on the company's term B loan. After the transaction, Sheridan's $180 million term B loan will be the company's only outstanding debt. "The ratings evidence our ongoing concerns regarding Sheridan's narrow operating focus and the concentration of its payors and regions of operation," said Standard & Poor's credit analyst Jesse Juliano. "The ratings also reflect Sheridan's exposure to malpractice risk, the threat of increased competition, and the company's relatively high debt burden. These concerns are partially offset by Sheridan's strong operating performance since Standard & Poor's initially assigned ratings to the company in October 2004, an industry trend toward physician outsourcing, and the company's leading niche positions in anesthesia and neonatology staffing, which have contributed to its consistent organic growth." Sunrise, Florida-based Sheridan provides physician staffing and physician practice management services to hospitals and office- based medical practices, focusing on the anesthesia and neonatology markets, which represent about three-fourths of its revenues. Sheridan holds the No. 1 and No. 2 positions in anesthesia and neonatology staffing, respectively, and provides services to multiple facilities and contracts. SKIN NUVO: Court Sets February 28 for Disclosure Statement Hearing ------------------------------------------------------------------ The Honorable Gregg W. Zive of the U.S. Bankruptcy Court for the District of Nevada will convene a hearing on Feb. 28, 2006, at 2:00 p.m., to consider the adequacy of information contained in Skin Nuvo International, LLC, and its debtor-affiliates' Disclosure Statement explaining its First Amended Joint Plan of Reorganization. Parties who want to receive copies of the Disclosure Statement and any exhibits may request a copy from: Keith Miles Aurzada Hance Scarborough Wright Ginsberg & Brusilow, LLP 1401 Elm Street, Suite 4750 Dallas, Texas 75202 Tel: (214) 651-6511 As previously reported in the Troubled Company Reporter on Dec. 26, 2005, the Plan is a liquidating plan and provides for distributions of the cash sale proceeds in accordance with the priorities under the Bankruptcy Code. Under the plan, any remaining assets will also be liquidated and distributed, as will estate assets, including avoidance actions and other causes. The plan also appoint Greg Murray as chief executive officer of the Reorganized Debtor and will have the authority to take all actins necessary to effectuate the plan. Treatment of Claims Under the Plan, only Allowed Customer Claims are unimpaired. Allowed Customer Claims, estimated to be $12 million, will be paid the value of their claims in services to be provided by GRF Delaware MedSpa Holdings, LLC, which has assumed the obligation to provide such services. Allowed Priority Unsecured Claims will: (i) be paid in one cash payment on the later of: (1) the effective date (or as soon as reasonably practicable thereafter) and (2) 15 business days following the date the Claim is allowed by Final Order, or (ii) receive such other less favorable treatment that may be agreed upon in writing by the Chief Executive Officer and such holder. Should the cash be insufficient to pay Allowed Priority Unsecured Claims in full, the holders of these claims will be paid on a pro rata basis. If a Buyer has assumed a claim, the holder of the claim will look solely to the Buyer for payment and will receive nothing from the Debtors or the estates. Secured Creditors, except Syneron Inc., will have their collateral returned. Deficiency in the claims will be treated as an Allowed General Unsecured Claim. Syneron will have the Syneron Equipment returned and will be sold pursuant to the terms of the Sale Order. Syneron will be entitled to retain the proceeds of the Syneron Sale except that should the Court determine that Syneron does not hold a valid, enforceable, nonavoidable lien on one or more pieces of equipment, Syneron must deliver to the Debtors the proceeds derived from the piece or pieces of equipment, less the pro rata cost of sale. Allowed General Unsecured Claims will receive a Pro Rata share of the Sale Proceeds and Estate Assets. Holder of General Unsecured Claims having claims of less than $50 will receive nothing under the plan. Holders of Allowed Subordinated Claims and Allowed Interests will receive nothing under the Plan. 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., at Hance Scarborough Wright Ginsberg & Brusilow, LLP and Nile Leatham, Esq. & James B. MacRobbie, Esq., at Kolesar & Leatham, Chtd., 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. STEWART ENT: Delays Filing of Form 10-K for Fiscal Year 2005 ------------------------------------------------------------ Stewart Enterprises, Inc. (Nasdaq NMS: STEIE) will file a Form 12b-25 announcing the delay of filing its results for the fiscal year 2005 on Form 10-K. Stewart Enterprises, Inc. was unable to file its Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2005 by Jan. 17, 2006 because the Company has experienced significant delays in completing its consolidated financial statements and its Section 404 assessment of internal control over financial reporting. The delays are primarily a result of: (1) the Company's deferred revenue project not being completed by that time, (2) the disruption caused by Hurricane Katrina, and (3) the Company's continued efforts to complete management's assessment of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, principally with regard to the deferred revenue project. As previously reported, in connection with its internal control assessment under Section 404 of Sarbanes-Oxley, the Company undertook a project in 2005 to verify the balances in deferred preneed cemetery service and merchandise revenue and deferred preneed funeral revenue by physically reviewing substantially all of the preneed cemetery and funeral service and merchandise contracts included in its backlog. This process involved the physical review of nearly 700,000 preneed contracts. The Company's review of these contracts is substantially complete, and the results of that review are in the process of being analyzed by the Company and are subject to completion of audit procedures by the Company's independent registered public accounting firm. Deferred Revenue Project Although the deferred revenue project is not yet complete, based on information currently available, management believes that the project will result in a restatement of the Company's financial statements for fiscal years 2001 through 2004, including the quarters therein, and the first three quarters of 2005. Management believes that a significant portion of the adjustment will relate to the cumulative effect of adopting Staff Accounting Bulletin 101 on Nov. 1, 2000, but that a material portion of the adjustment will impact reported revenues and earnings for fiscal years 2001 through 2005. Management believes that the restatement will result in adjustments for prior period financial statements that will increase deferred revenue at Oct. 31, 2005 in an amount that is not currently expected to materially exceed $120 million, that will decrease shareholders' equity at Oct. 31, 2005 in an amount that is not currently expected to materially exceed $75 million and increase deferred tax assets at Oct. 31, 2005 in an amount that is not currently expected to materially exceed $45 million. Deferred revenue and the related non-controlling interest in funeral and cemetery trusts as originally reported as of Oct. 31, 2004 was approximately $1.1 billion. The Company has identified a significant number of contracts under which services and or merchandise have been delivered but related trust funds have not been withdrawn. As a result, based on information developed in the project, the Company has been able to withdraw approximately $19 million from its trust accounts during 2005 representing amounts that were not withdrawn in prior periods, even though the related services and merchandise had been delivered in prior periods. Nonreliance On Previously Issued Financial Statements Due to the restatements described, the Company's audit committee concluded on Jan. 16, 2006 that the previously issued financial statements for all annual and quarterly periods for fiscal years 2001 through 2005 should no longer be relied upon. Effect On Debt Agreements The restatements relating to the deferred revenue project may create a default or event of default under the Company's bank credit facility. Also, if the Company is unable to file the completed 2005 Form 10-K by Feb. 1, 2006, there will be a default under the credit facility that will become an event of default if not cured within 15 days. The Company has initiated contact with its lead lenders under the facility and expects to seek, and receive, waivers of any such defaults in the near future. Nasdaq Listing Additionally, as previously disclosed, the Nasdaq Stock Market has granted the Company's request for an extension of time within which to file the 2005 Form 10-K and its Third Quarter Report until Feb. 15, 2006. If the Company is not able to meet that deadline, the Company would request an extension. However, there can be no assurances that such an extension would be granted and the Company may be subject to further delisting proceedings by Nasdaq. Nasdaq notified the Company on Jan. 17, 2006 that the Company's filing on Oct. 24, 2005 of the Form 10-K/A for the fiscal year ended Oct. 31, 2004 without an audit report and without the certifications of the CEO and CFO was an additional noncompliance with the continued listing requirements of Nasdaq Marketplace Rule 4310(c)(14). The Company plans to present its views to the Panel by Jan. 24, 2006 Anticpated Filing Schedule The Company intends to file the 2005 Third Quarter Report prior to or concurrently with filing its 2005 Form 10-K. The Company is working diligently to complete the 2005 Form 10-K by the extended deadline of Feb. 1, 2006 and file its 2005 Third Quarter Report by Feb. 1, 2006. The Company also plans to file a complete Form 10-K/A for the fiscal year ended Oct. 31, 2004 by Feb. 15, 2006. Material Weakness The Company is required to provide management's annual report on internal control over financial reporting in the 2005 Form 10-K. Management anticipates that the report, and the related auditor's report, will conclude that as of Oct. 31, 2005, the Company's internal control over financial reporting was not effective due to material weakness related to its accounting for deferred revenue. A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Additionally, this control deficiency could result in further misstatements to the Company's goodwill, deferred taxes, deferred preneed revenue, revenue, equity and disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected. Accordingly, as of Oct. 31, 2005, management determined that this control deficiency represented a material weakness in internal control over financial reporting. Founded in 1910, Stewart Enterprises -- http://www.stewartenterprises.com/-- is the third largest provider of products and services in the death care industry in the United States, currently owning and operating 231 funeral homes and 144 cemeteries. Through its subsidiaries, the company provides a complete range of funeral merchandise and services, along with cemetery property, merchandise and services, both at the time of need and on a preneed basis. Stewart Enterprises' 6.25% Senior Notes due 2013 carry Moody Investor's Service's B1 rating and Standard & Poor's BB rating. STRATUS SERVICES: Swaps Preferred Stock Held by Pinnacle with Note ------------------------------------------------------------------ Stratus Services Group Inc. issued to Pinnacle Investment Partners, L.P., a secured convertible promissory note in the aggregate principal amount of $2,356,850 in exchange for 21,531 shares of the Company's Series I Preferred Stock held by Pinnacle. As a result of the exchange, there are no longer outstanding shares of Series I Preferred Stock and the Company no longer has any obligation to pay Pinnacle any amounts owed to it under the terms of the Series I Preferred Stock, including $103,716 of unpaid dividends, which had accrued through December 28, 2005. The Convertible Note, which is secured by substantially all of the Company's assets, becomes due under these terms: * $1.8 million becomes due and payable in cash upon the earlier of the Company's receipt of $1.8 million of accounts receivable or March 15, 2006; * $331,850 and accrued interest at a rate of 12% per annum payable in 24 equal installments of principal and interest during the period commencing June 28, 2007 and ending on May 28, 2009; * $225,000 and accrued interest at the rate of 6% per annum becomes due and payable on December 28, 2007; provided, however, that the Company has the right to pay the amount in cash or shares of its common stock (valued at $0.0072 per share). Pinnacle has the right to convert the principal amount of and interest accrued under the Convertible Note at any time under these terms: * $331,850 of the principal amount and unpaid interest accrued is convertible into the Company's common stock at a conversion price of $.06 per share. * $225,000 of the principal amount and unpaid accrued interest is convertible into the Company's common stock at a conversion price of $0.0072. Pinnacle may not convert the Convertible Note to the extent that the conversion would result in Pinnacle owning in excess of 9.999% of the then issued and outstanding shares of the Company's common stock. Pinnacle may waive this conversion restriction upon not less than 60 days prior notice to the Company. Stratus Services Group Inc. provides a wide range of staffing and productivity consulting services nationally through a network of offices located throughout the United States. As of June 30, 2005, Stratus Services' balance sheet reported a $4,249,489 equity deficit compared to a $4,507,221 equity deficit at September 30, 2004. In a 12b-25 filing with the Securities and Exchange Commission reporting its inability to file its Form 10-K for the year ending September 30, 2005, in a timely manner, the Company discloses that it expects to report a net loss from continuing operations of $8.2 million for the 2005 fiscal year compared to $1.3 million for the 2004 fiscal year. During the 2005 fiscal year, the Company incurred a loss on impairment of goodwill of $3.3 million and other charges, primarily for adjustments to reserves and premiums associated with prior years' workers' compensation insurance policies, of $739,000. Fiscal 2004 included a gain on redemption of Series A redeemable preferred stock of $2.1 million. STRATUS SERVICES: Randall Gruber Replaces Amper as Auditor ---------------------------------------------------------- Stratus Services Group, Inc. replaced its independent auditor, Amper, Politziner & Mattia, P.C., with Randall Gruber, CPA. Amper raised substantial doubt about the Company's ability to continue as a going concern after auditing the Company's Form 10-K for the year ended Sept. 30, 2004. Amper also pointed out material weaknesses in the effectiveness of the Company's internal controls pursuant to standards established by the Public Company Accounting Oversight Board. These material weaknesses are: (1) limited resources and manpower in the finance department; (2) inadequacy of the financial review process as it pertains to various account analyses; and (3) inadequate documentation of financial procedures as it relates to certain accounting estimates and accruals. Randall Gruber will audit the Company's financial statements for the year ending September 30, 2005. In a 12b-25 filing with the Securities and Exchange Commission reporting its inability to file its Form 10-K for the year ending September 30, 2005, in a timely manner, the Company discloses that it expects to report a net loss from continuing operations of $8.2 million for the 2005 fiscal year compared to $1.3 million for the 2004 fiscal year. During the 2005 fiscal year, the Company incurred a loss on impairment of goodwill of $3.3 million and other charges, primarily for adjustments to reserves and premiums associated with prior years' workers' compensation insurance policies, of $739,000. Fiscal 2004 included a gain on redemption of Series A redeemable preferred stock of $2.1 million. Stratus Services Group Inc. provides a wide range of staffing and productivity consulting services nationally through a network of offices located throughout the United States. As of June 30, 2005, Stratus Services' balance sheet reported a $4,249,489 equity deficit compared to a $4,507,221 equity deficit at September 30, 2004. SUPERB SOUND: Hires Michael Walsh as Ordinary Course Attorney ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis allowed Superb Sound, Inc., to employ Michael S. Walsh, PC, as its attorney in the ordinary course of business. Mr. Walsh will act as the Debtor's ordinary course attorney nunc pro tunc to Oct. 14, 2005. Mr. Walsh has served as the Debtor's "in-house counsel" for the last 19 years. He will continue to render services relating to, among other things: a) legal representation for real estate matters; b) legal representation for labor and employment matters; and c) legal advice pertaining to general commercial, corporate, and regulatory matters. The ordinary course attorney will not be involved in the administration of the Debtor's chapter 11 case but will provide services in connection with the Debtor's ongoing business operation or services ordinarily provided by in-house counsel to a corporation. Mr. Walsh bills $200 per hour for his services. The Bankruptcy Court allows the Debtor to pay, without formal application, all of the postpetition fees due to Mr. Walsh as long as it does not exceed $3,000 per month. Mr. Walsh will be required to submit an application for allowance of compensation if his payments exceed the $3,000 monthly limit. The Debtor says payments to Mr. Walsh historically averaged from $15,000 to 20,000 per year. Mr. Walsh assures the Bankruptcy Court that he does not hold any interest adverse to the Debtor or its estate. The Debtor's ordinary course attorney can be reached at: Michael S. Walsh, P.C. 11350 N. Meridian Street, Suite 420 Carmel, Indiana, 46032 Headquartered in Indianapolis, Indiana, Superb Sound, Inc., dba Ovation, Ovation Audio/Video and Ovation Home -- http://www.ovation-av.com/-- is an audio, video and mobile electronics specialist. The company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. S.D. Ind. Case No. 05-29137). William J. Tucker, Esq., at William J. Tucker & Associates, LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $9,416,642 in assets and $14,546,796 in debts. TACTICA INT'L: Court Confirms Chapter 11 Reorganization Plan ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York confirmed Tactica International, Inc.'s Revised First Amended Plan of Reorganization on Jan. 12, 2006. Voting among the general unsecured creditors was 99% in favor of the reorganization plan. The Plan proposes to eliminate approximately $13 million of Tactica's pre-petition liabilities. The plan calls for Tactica's prepetition creditors to receive distributions of these assets: a) $2,175,000 cash paid by Tactica's former shareholders; b) $700,000 cash paid by Tactica; c) $75,000 cash paid by Tactica, Tatica's parent IGIA, Inc., and the Board Members; d) up to $275,000 cash paid by Innotrac Corporation; e) the rights and proceeds in connection with avoidance and other actions including uncollected pre-petition invoices payable by a Tactica customer; and f) newly issued shares of IGIA's common stock in number equal to 10% of the outstanding shares of common stock as of the Plan's effective date and exempted from the registration requirements of Section 5 of the Securities Act of 1933, as amended and State registration requirements by virtue of Section 1145 of the Bankruptcy Code and applicable non- bankruptcy law. Treatment of Claims Classified Claims: Secured Tax claims, consisting of all allowed secured claims for federal, state and local taxes, will be paid in full either on a) the third business day after the effective date of the Plan; b) the date on which, in the Reorganized Debtor's sole discretion, sufficient proceeds from the Exit Facility become available to repay the claim; or c) the date on which there is a final order allowing the claim. Other Secured Creditor Claims, will be paid in full either through: a) the return of the property subject to the senior, perfected and indefeasible lien or security interest; b) all net proceeds from the sale, liquidation or abandonment of any asset on account of which the holder has a senior, perfected and indefeasible or security interest (less the costs of maintaining, preserving and liquidating the collateral); c) cash payment; or d) treatment of the claim as provided in the final order approving the postpetition financing from IGIA. Unsecured Priority Claims will be paid in full. Holders of Unsecured Non-priority Claims or general unsecured claims will receive their pro rata share of: a) the initial distribution on the Effective Date consisting of: -- $700,000 in cash; -- the net Innotrac Reallocated Proceeds as of the effective date; -- $1.6 million from Reallocated Settlement Monies; and -- the IGIA Stock; and b) beneficial interests in the Creditor Trust created pursuant to the Debtor's confirmed Plan. The claims of board members and officers are subordinated and junior in right of payment to the holders of all general unsecured claims will receive no distribution under the plan. All equity interests in the Debtor will be cancelled and extinguished on the effective date. In consideration of the IGIA Conversion of Debt and Exchange of Intercompany Loan and other undertakings made by IGIA in connection with the Plan and contributing the Parent Company Stock as part of the initial distribution, IGIA will receive, shares of stock in the Reorganized Debtor in an amount directly proportionate to the amount of its interest in the Debtor. A copy of the Debtor's Revised First Amended Plan of Reorganization is available for free at: http://researcharchives.com/t/s?473 Headquartered in New York, New York, Tactica International, Inc., a wholly owned subsidiary of IGIA, Inc. -- http://www.igia.com/ -- designs, develops and markets personal and home care items under the IGIA and Singer brands. Product categories include hair care, dental care, skin care, sports and exercise, household and kitchen. Tactica holds an exclusive license to market a line of floor care products under the Singer name. Tactica also owns rights to the "As Seen On TV" trademark. The Company filed for chapter 11 protection on Oct. 21, 2004 (Bankr. S.D.N.Y. Case No. 04-16805). Timothy W. Walsh, Esq., at Piper Rudnick, LLP, represents the Debtor in its restructuring effort. When the Company filed for protection from its creditors, it reported $10,568,890 in assets and debts totaling $14,311,824. TREASURE ISLAND: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Treasure Island, Inc. 380 Franklin Turnpike Mahwah, New Jersey 07430 Bankruptcy Case No.: 06-10416 Type of Business: The Debtor sells 3,000 gift products through catalogs. See http://www.treasureislandgifts.com/ Chapter 11 Petition Date: January 20, 2006 Court: District of New Jersey (Newark) Judge: Novalyn L. Winfield Debtor's Counsel: Howard S. Greenberg, Esq. Ravin Greenberg, PC 101 Eisenhower Parkway Roseland, New Jersey 07068 Tel: (973) 226-1500 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Regency International $751,833 11 East 26th Street New York, NY 10010 Attn: Dick Merhige Tel: (212) 947-7500 Hallmark Cards $567,977 8600 NE Underground Drive Kansas City, MO 64161 Tel: (816) 452-6672 Kent Advertising $509,735 38 Old Chura Lane South Salem, NY 10590 Tel: (914) 533-5040 Carter Grandle $481,132 2150 Whitefield Avenue Sarasota, FL 34243 Tel: (941) 751-1000 Kurt S. Adler, Inc. $294,587 1107 Broadway New York, NY 10010 Brown Jordan Co. $230,587 Mulia Perkasa USA $213,327 Commodore Manufacturing Corp. $209,770 Puleo Tree Company $206,216 Cast Classics, Inc. $167,942 Barthelmess USA $142,095 Brent Associates Inc. $136,999 Hanamint Corporation $129,440 Colonial Candle of Cape Cod $126,098 Winston Furniture Company $116,089 Treasure Garden $115,595 Meadow Craft Inc. $113,669 Dimension Industries Co., Ltd. $111,812 Celebrity Inc. $97,947 Christmas by Krebs $95,878 TRUMP ENT: Inks Pacts With TER Keystone for Gaming Facility Biz --------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Robert M. Pickus, executive vice president and secretary of Trump Entertainment Resorts, Inc., discloses that on Dec. 26, 2005, TER Keystone Development, LLC, entered into a limited liability company agreement with certain parties to form Keystone Redevelopment Partners, LLC. Keystone Redevelopment was formed for the purposes of jointly leasing or purchasing an 18-acre parcel of land located in Philadelphia, Pennsylvania, and to construct, own and operate a gaming and entertainment facility on the premises. Keystone Redevelopment entered into a management agreement with TER Management Co., LLC, an indirect wholly owned subsidiary of TER, Inc., under which Keystone Redevelopment engaged TER Management as its exclusive agent to manage and operate the Facility on its behalf. The initial term of the Management Agreement is for 10 years from the Petition Date, and may be extended. According to Mr. Pickus, TER Keystone has a 63.5555% interest in Keystone Redevelopment, as adjusted from time to time. TER Keystone made an initial capital contribution to Keystone Redevelopment in the form of an options agreement and "pre- formation and development materials", including surveys, studies, design drawings and applications for permits, licenses or approvals that pertain to the Premises. If the Pennsylvania Gaming Control Board awards a Gaming License to Keystone Redevelopment, the Limited Liability Company Agreement contemplates that TER Keystone and the General Members will each make an additional capital contribution of $39,854,115 in cash, in TER Keystone's case. Mr. Pickus further explains that Keystone Redevelopment will be managed by a board of directors, which will be comprised of three TER Keystone representatives and two representatives elected by the General Members. Pursuant to the Limited Liability Company Agreement, so long as TER Keystone or any of its affiliates own more than 15% interest in Keystone Redevelopment, TER Keystone and its affiliates will be subject to certain non-competition obligations with respect to owning and operating casinos in certain geographical areas near the Premises. TER Keystone may transfer its interest in Keystone Redevelopment, in whole or in part, at any time, subject to certain conditions set forth in Keystone Redevelopment Agreement. Pursuant to the terms of the Management Agreement: a. TER Management will be paid: -- a base management fee based on the Gross Revenue of Keystone Redevelopment; and -- an incentive management fee based on the Gross Operating Profit of Keystone Redevelopment, for each fiscal year; and b. TER Management and its affiliates are subject to certain non-competition obligations with respect to owning and operating casinos in certain geographical areas near the Premises. Mr. Pickus further discloses that Keystone Redevelopment may terminate the Management Agreement upon three months' notice in the event that TER Management or its affiliates own less than 10% in the equity interest of Keystone Redevelopment. Trade Name and Trademark License Agreement In connection with Keystone Redevelopment Agreement and the Management Agreement, Keystone Redevelopment and Trump Entertainment Resorts Holdings, L.P., entered into a Trade Name and Trademark License Agreement dated Dec. 26, 2005. TER Holdings, which holds the exclusive right to use the name "Trump" for Casino Services and Products, licensed the name "Trump" to Keystone Redevelopment for use in connection with the operation of the Facility. The term of the License Agreement will commence on the date that the Pennsylvania Gaming Control Board issues a License to Keystone Redevelopment and terminates upon the occurrence of certain events specified in the License Agreement. Pursuant to the License Agreement, Keystone Redevelopment agreed to pay TER Holdings a monthly license fee based on the Gross Revenues of Keystone Redevelopment, for each month. The Management Agreement and the License Agreement will automatically terminate if either of the two Gaming Licenses is not awarded to Keystone Redevelopment. Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino Resorts, Inc., nka Trump Entertainment Resorts, Inc. -- http://www.thcrrecap.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The Company and its debtor-affiliates filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A., represent the Debtors in their successful chapter 11 restructuring. When the Debtors filed for protection from their creditors, they listed more than $500 million in total assets and more than $1 billion in total debts. The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005, and the plan took effect on May 20, 2005. (Trump Hotels Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000). * * * As reported in the Troubled Company Reporter on Nov. 10, 2005, Moody's Investors Service affirmed the ratings of Trump Entertainment Resorts, Inc. Trump's rating outlook is stable: -- $200 million senior secured revolver due 2010 -- B2; -- $150 million senior secured term loan due 2012 -- B2; -- $150 million senior secured delayed draw term loan due 2012 -- B2; -- $1.25 billion second lien senior secured notes due 2015 -- Caa1; -- Speculative grade liquidity rating -- SGL-3; and -- Corporate family rating -- B3. TRUMP ENT: TrumpStreet Applies for Pennsylvania Gaming License -------------------------------------------------------------- Officials from Trump Entertainment Resorts, Inc. (NASDAQ NMS: TRMP) and the newly created Keystone Redevelopment Partners, LLC, personally delivered to the Pennsylvania Gaming Control Board the full application for TrumpStreet Casino and Entertainment Complex. Together, Trump Entertainment Resort officials, Pat Croce, and other members of Keystone Redevelopment Partners boarded a bus fully-wrapped with renderings of the $350 million proposed development in North Philadelphia and delivered the applications to Harrisburg. "Trump Entertainment Resorts and its partners in TrumpStreet have formed Keystone Redevelopment Partners for this exciting venture because we believe we have the right proposal to attract patrons, produce revenue for the City and State, and drive the area's economic development through the financial strength of TrumpStreet," said James B. Perry, President and Chief Executive Officer of Trump. "This is a team that is dedicated to the City and to the community and, together, we hope to become Philadelphia and Pennsylvania's newest and one of the best corporate citizens in Philadelphia and Pennsylvania." The gaming floor will be at the center of the action at TrumpStreet, featuring 3,000 of the most popular slot machines in a vibrant casino. The complex will also showcase a variety of food and beverage outlets, theaters, retail and other entertainment amenities that will highlight the best in Philadelphia cuisine, music and entertainment. Specifically, TrumpStreet will feature an attached 3-theater movieplex, a steakhouse, a buffet, a sports bar, a food court, two casual dining restaurants, an oyster bar, several casino bars, and other dining venues that will seek to ensure the highest levels of tourism activity and customer satisfaction. Keystone Redevelopment Partners, a joint venture between Trump Entertainment Resorts and a group of dedicated local investors led by Pat Croce, is pursuing one of two Philadelphia Category 2 Gaming Licenses anticipated to be issued by the Pennsylvania Gaming Control Board by the end of 2006. Each license will initially allow the operation of up to 3,000 slot machines with the ability to apply for an additional 2,000 slot machines. If successful in obtaining one of the two slot licenses, TrumpStreet would be planned for the former Budd Co. factory site located at the intersection of Interstate 76 and Pennsylvania Route 1 in the Nicetown section of the City. As previously announced, Trump has a five-year option to either lease or buy the site for the potential development of a gaming facility. Keystone Redevelopment Partners represents a "dream team" alliance for a casino venture in Pennsylvania -- the combination of the strength of the Trump brand coupled with several prominent Philadelphia partners. Trump Entertainment Resorts, Inc., will be the majority partner and will act as the developer and manager for the project. The dynamic partners represent some of the best known names in Philadelphia sports, food, business and entertainment. "TrumpStreet is designed to be an entertainment destination that is a tribute to the rich culture of the City of Philadelphia," Pat Croce said today. "The design will honor the past of the Budd site while enhancing the community. It's exciting to be part of a project that could serve as the economic catalyst to revitalize an entire neighborhood." James B. Perry commented that the Philadelphia application is part of the strategic plan for Trump Entertainment Resorts to diversify outside of the Atlantic City market. "We are currently investigating numerous options to grow the company and build on the strength of the Trump brand, and TrumpStreet represents a tremendous opportunity for us to participate in a significant project to create value for our shareholders," Perry said. Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino Resorts, Inc., nka Trump Entertainment Resorts, Inc. -- http://www.thcrrecap.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The Company and its debtor-affiliates filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A., represent the Debtors in their successful chapter 11 restructuring. When the Debtors filed for protection from their creditors, they listed more than $500 million in total assets and more than $1 billion in total debts. The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005, and the plan took effect on May 20, 2005. (Trump Hotels Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000). * * * As reported in the Troubled Company Reporter on Nov. 10, 2005, Moody's Investors Service affirmed the ratings of Trump Entertainment Resorts, Inc. Trump's rating outlook is stable: -- $200 million senior secured revolver due 2010 -- B2; -- $150 million senior secured term loan due 2012 -- B2; -- $150 million senior secured delayed draw term loan due 2012 -- B2; -- $1.25 billion second lien senior secured notes due 2015 -- Caa1; -- Speculative grade liquidity rating -- SGL-3; and -- Corporate family rating -- B3. TRUMP ENT: RSH Wants World's Fair Site Sale Funds Distributed ------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Sept. 22, 2005, the U.S. Bankruptcy Court for the District of New Jersey approved the sale of the World's Fair Site in Atlantic City, New Jersey, to BET Investments, Inc., for $25,150,000. However, the proceeds of the World's Fair Sale could not be distributed in view of a Court order prohibiting distributions to beneficial owners of Old THCR Common Stock under the confirmed Plan of Reorganization of Trump Hotels & Casino Resorts, Inc., nka Trump Entertainment Resorts, Inc. Daniel K. Astin, Esq., at The Bayard Firm, in Wilmington, Delaware, notes that the Order Prohibiting Distributions was a result of a request filed by 17 shareholders asking the Court to enforce its previous orders concerning the record distribution date. The shareholder group alleged that the first distribution made by the Debtors to non-affiliated shareholders did not conform to the terms of the Plan. Pursuant to the Order Prohibiting Distributions, The Bayard Firm served as escrow agent with respect to the World's Fair Sale Proceeds. The Sale Proceeds could not be distributed until the Court gives further order regarding the record date and distribution issues. As of Dec. 20, 2005, The Bayard Firm holds $24,518,791 in an interest bearing escrow account as the World's Fair Sale Proceeds. Robino Stortini Holdings LLC asks the Court to direct the Debtors to make an interim distribution of the World's Fair Escrow Funds until the resolution of the distribution issues. RSH was previously a member of the Equity Committee. RSH, however, resigned prior to the sale of the World's Fair Site. Mr. Astin explains that the Sale Proceeds have been held in escrow for almost four months. Thousands of shareholders have not received their full distributions pursuant to the Plan. Mr. Astin points out that regardless of how the Court decides the record date and distribution issues, the non-prevailing party will appeal the decision to the U.S. District Court for the District of New Jersey. Any appeal would further delay a distribution to the remaining non-affiliated shareholders, Mr. Astin explains. RSH suggests that a reserve be established pending the account of the record date and distribution litigation. Reorganized Debtors Object "The RSH Motion is premature and should be denied," Charles A. Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney & Carpenter, LLP, in Newark, New Jersey, tells the Court. Mr. Stanziale argues that the question yet to be decided by the Court is not how much should be distributed, but to whom it should or should not be distributed -- which is not addressed in RSH's request. Mr. Stanziale explains that the ultimate issue currently pending before the Court is whether the Reorganized Debtors' first distribution was made to the proper equity holders in accordance with the confirmed Plan of Reorganization and the applicable federal securities laws and regulations. The Court had not yet ruled on the Equity Distribution Issue. The Reorganized Debtors believe that distributions under the Plan must be made according to the express terms of the Plan and the distribution procedures set forth in the laws and regulations governing the securities markets. RSH has pointed out that thousands of shareholders have not received their full distribution pursuant to the Plan. However, until the Court rules on the Equity Distribution Issue, it remains undecided which of the thousands are entitled to the distribution, and which are not, Mr. Stanziale maintains. Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino Resorts, Inc., nka Trump Entertainment Resorts, Inc. -- http://www.thcrrecap.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The Company and its debtor-affiliates filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A., represent the Debtors in their successful chapter 11 restructuring. When the Debtors filed for protection from their creditors, they listed more than $500 million in total assets and more than $1 billion in total debts. The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005, and the plan took effect on May 20, 2005. (Trump Hotels Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000). * * * As reported in the Troubled Company Reporter on Nov. 10, 2005, Moody's Investors Service affirmed the ratings of Trump Entertainment Resorts, Inc. Trump's rating outlook is stable: -- $200 million senior secured revolver due 2010 -- B2; -- $150 million senior secured term loan due 2012 -- B2; -- $150 million senior secured delayed draw term loan due 2012 -- B2; -- $1.25 billion second lien senior secured notes due 2015 -- Caa1; -- Speculative grade liquidity rating -- SGL-3; and -- Corporate family rating -- B3. ULTIMATE FORD: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Ultimate Ford, Inc. dba Ultimate Ford Giddings P.O. Box 859 Giddings, Texas 78942 Bankruptcy Case No.: 06-10061 Type of Business: The Debtor is a dealer of Ford cars. See http://www.autoultimate.com/ Ultimate Ford previously filed for chapter 11 protection on March 11, 2005 (Bankr. W.D. Tex. Case No. 05-11279). Chapter 11 Petition Date: January 19, 2006 Court: Western District of Texas (Austin) Debtor's Counsel: Christopher J. Tome, Esq. Law Offices of Christopher Tome 8650 Spicewood Springs Road, PMB 504 Austin, Texas 78759 Tel: (512) 249-1904 Fax: (512) 249-1920 Estimated Assets: $1 Million to $10 Million Estimated Debts: $100,000 to $500,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Section 940 & 941 $40,000 P. O. Box 21126 Taxes Philadelphia, PA 19114 Jeffrey L. Wilner Attorney Fees from $20,000 1415 Louisiana, Suite 4175 Previous Bankruptcy Houston, TX 77002 Case No. 0511279 AER Manufacturing, Inc. Purchase Money $12,632 P.O. Box 974180 Dallas, TX 753974180 ADP Leasing Delinquent Operating $8,000 Expenses Arnold Oil Company Purchase Money $6,000 U.S. Trustee Trustee Operating $5,000 Assessments from Previous Chapter 11 Case No. 0511279 General Truck & Body Purchase Money $3,517 Manufacturing BBH Financial Delinquent Operating $3,056 Expenses Texas Auto Carriers Delinquent Operating $1,716 Expenses Gage Accessories Purchase Money $1,595 Bonds Distribution Purchase Money $1,551 Safety-Kleen Systems Purchase Money $1,551 GNK Services Purchase Money $1,500 Omnicron Electronics Purchase Money $1,500 Custom Sounds Purchase Money $1,439 Brenham Baner Non-Purchase Money $847 MUZAK Purchase Money $783 B & K Distributing Purchase Money $300 KRXT, Inc. Delinquent Operating $300 Expenses Elgin Courier Non-Purchase Money Unknown URBAN TELEVISION: Auditor Uncertain About Going-Concern Ability --------------------------------------------------------------- Comiskey & Company, PC, expressed substantial doubt about Urban Television Network Corporation's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Sept. 30, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations. The Company's auditors can be reached at: Comiskey & Company, P.C. 789 Sherman Street Suite 385 Denver, Colorado 80203 Phone: (303) 830-2255 http://www.comiskey.com/ Fiscal Year 2005 Results Urban Television incurred a $2,841,559 net loss for the fiscal year ended Sept. 30, 2005, in contrast to a $7,525,621 net loss for the fiscal year ended Sept. 30, 2004. The decreased loss of $4,684,062 for 2005 was primarily attributed to the $4,634,975 decrease in administrative expenses of which $4,289,674 was attributable to a decrease in stock based compensation, $388,166 to a decrease in legal expenses and a $209,869 decrease in consulting expenses. Revenues for fiscal 2005 were $297,954 compared to $222,794 for fiscal 2004, an increase of $75,160. The increase in revenues is primarily attributable to increases in revenues from the production of events and uplink services. At Sept. 30, 2005, the Company's balance sheet showed $4,816,503 in total assets and liabilities of $1,902,899. The Company reported $18,431,993 of accumulated deficit at Sept. 30, 2005. Urban Television's current liabilities at Sept. 30, 2005 were $1,902,899, which exceeded current assets of $51,941 by $1,850,958. Nielsen Agreement Urban Television and its UATV Network signed an agreement with Nielsen Media Research for National and Local Syndication Service. Nielsen, the leading provider of television and audience measurement services, measures the viewing habits of TV homes including the urban consumers who view the UATV programming. The agreement will allow UATV to use Nielsen Media Research data for marketing, programming and advertiser purposes. UATV can use the data from Nielsen to guarantee advertisers a specific number of viewers for their advertisements. This agreement with Nielsen Media Research finalizes the earlier disclosure regarding Nielsen made by UATV on Oct. 26, 2005. About Urban Television Fort Worth, Texas-based Urban Television Network Corporation -- http://www.uatvn.com/-- is a television network composed of broadcast television station affiliates across the country that airs programming supplied by the network via satellite transmission. The network is the first and only minority certified network to specifically target America's urban market that is comprised of African Americans, English speaking Hispanic Americans and many other urban consumers. The network has approximately 70 affiliates with a household coverage of approximately 22 million households. UTIX GROUP: Vitale Caturano Raises Going Concern Doubt ------------------------------------------------------ Vitale, Caturano & Company, Ltd., expressed substantial doubt about Utix Group, Inc., fka Corporate Sports Incentives, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the years ended Sept. 30, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations, net working capital deficiency and stockholders' deficit. The Company's auditors can be reached at: Vitale, Caturano & Company, Ltd. 80 City Square Boston, Massachusetts 02129 http://www.vitale.com/ Fiscal Year 2005 Results Utix incurred a $9,960,585 net loss on $6,901,494 of revenue for the fiscal year ended Sept. 30, 2005, in contrast to a $3,824,970 net loss on $2,264,862 of revenue in the prior year. The Company attributes the 260% increase in net loss to: -- approximately $3 million in non-cash operating, interest and other expenses associated with warrant and option issuances; -- high expenses related to a large redemption only contract; -- $1 million in inventory provisions and fixed assets write-downs; and -- increased staffing, facilities and marketing costs. At Sept. 30, 2005, the Company's balance sheet showed $2,579,234 in total assets and liabilities of $7,692,731, resulting in a stockholders' deficit of $5,113,497. The company had a $3,919,868 working capital deficit as of Sept. 30, 2005. Convertible Notes Default Utix was in default on its 12% Convertible Notes as of Sept. 30, 2005. Subsequent to Sept. 30, 2005, the Company repaid $200,000 plus accrued interest on this note. From the date of default, interest accrues at 15%. To defer demand on $300,000 of these notes, the Company issued additional warrants to purchase 2,400,000 shares at $0.125. These warrants will expire in December 2007. The holders of the remaining $810,000 in notes have agreed to extend the maturity of their notes and to convert principal into the next equity round of financing. About Utix Headquartered in Burlington, Massachusetts, Utix Group, Inc. -- http://www.utix.com/-- provides gift tickets to retail buyers and corporations that are redeemable at golf courses, ski resorts, spas, and movie theaters in the United States. The company's products consist of recreation products, such as Utix Golf Tickets, SwingPack, and Utix Ski Tickets; and leisure products, including Utix Spa Ticket and Movie Ticket. It distributes its products through prepaid manual plastic gift tickets to corporations and other business users, as well as sells prepaid magnetic strip gift tickets through mass merchandise retail chains. WILSHIRE CREDIT: Fitch Affirms Low-B Ratings on 4 Loan Classes -------------------------------------------------------------- Fitch Ratings has taken rating actions on three Wilshire Credit Corporation issues: Series 1996-3: * Class PO affirmed at 'AAA' * Class M-1 affirmed at 'AAA' * Class M-2 affirmed at 'AAA' * Class M-3 upgraded to 'AAA' from 'AA-' * Class B-1 upgraded to 'A+' from 'BBB' * Class B-2 upgraded to 'BBB' from 'BB+' Series 1997-WFC1: * Classes PO and IO affirmed at 'AAA' * Class M-1 affirmed at 'AAA' * Class M-2 affirmed at 'AAA' * Class M-3 upgraded to 'AA+ from 'AA' * Class B-1 affirmed at 'BB+' * Class B-2 affirmed at 'B+' Series 1998-WFC2: * Class IO affirmed at 'AAA' * Class M-1 affirmed at 'AAA' * Class M-2 affirmed at 'AAA' * Class M-3 affirmed at 'AAA' * Class B-1 affirmed at 'BB+' * Class B-2 affirmed at 'B' The above transactions consist primarily of fixed- and adjustable- rate, closed-end conventional loans secured by first and junior liens on residential one- to four-family properties. A small percentage of the above deals were composed of acquired reperforming and Chapter 13 bankruptcy loans at origination. In addition, at origination series 1998-WFC2 consisted of approximately 9% of commercial loans. The affirmations reflect adequate relationships of credit enhancement (CE) to future loss expectations and affect $30.9 million of outstanding certificates. The upgrades reflect a significant improvement in the relationship of CE to future loss expectations and affect $8.46 million of outstanding certificates. The cumulative losses for the above trusts have been minimal considering the collateral type and vintage. The cumulative losses as a percentage of the original balance on the above transactions range from 1.33% to 3.21%. The transactions utilize a not rated class to absorb any losses to the deal. As of the December 2005 distribution date, the transactions are seasoned from a range of 90 to 108 months and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from approximately 6% to 11%. The servicer for the above transactions is Wilshire Credit Corp. which is rated 'RPS1-' for subprime product and 'RSS1-' for special servicing. WINN-DIXIE: John Dasburg Resigned as Director Effective Dec. 31 --------------------------------------------------------------- On Dec. 27, 2005, John H. Dasburg advised the Chairman of the Board of Winn-Dixie Stores, Inc., that he was resigning as a Director of the Company effective as of Dec. 31, 2005. The Company had previously reported that Mr. Dasburg would not stand for re-election at the annual shareholders' meeting originally scheduled for Oct. 27, 2005. That meeting has been suspended indefinitely. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: DFI Trust Beneficially Owns 48,056,704 Shares --------------------------------------------------------- On Dec. 28, 2005, some shareholders of Winn-Dixie Stores, Inc., contributed their shares of Winn-Dixie common stock to the Davis Family Irrevocable Term Trust in exchange for separate shares of beneficial interest in DFI Trust. As a result, the DFI Trust has a beneficial interest in more than 10% of Winn-Dixie's shares. Specifically, DFI discloses to the Securities and Exchange Commission that it beneficially owns 48,056,704 shares of Winn-Dixie common stock. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: JEA Wants to Compel Compliance on Discovery Requests ---------------------------------------------------------------- Jacksonville Electric Authority asks the U.S. Bankruptcy Court for the Middle District of Florida to compel Winn-Dixie Stores, Inc., and its debtor-affiliates to comply with its discovery requests. Richard R. Thames, Esq., at Stutsman & Thames, P.A., in Jacksonville, Florida, relates that on the Petition Date, the Debtors owe JEA $607,000 for utility services. However, notwithstanding the fact that the $607,000 is the largest potential write-off in JEA history, JEA has been compelled by the Court to continue providing utility services to the Debtors without the benefit of a postpetition security deposit. Mr. Thames notes that since Winn-Dixie has continued to report significant losses, JEA has renewed its request for a postpetition security deposit as adequate assurance of future payment. To make a proper evidentiary showing at the hearing on this renewed request, JEA served a request for document production requiring the Debtors to produce this information relative to its financing importance: a. all documents reflecting the amount borrowed and presently available under the Debtors' DIP credit facility with Wachovia Bank; b. all the Debtors' financial statements since the bankruptcy filing; c. the Debtors' business plan or the most recent draft of that plan; d. the Debtors' budgets, pro-forma income statements and financial forecasts for the balance of 2005 and for all of 2006. The Debtors have objected to the document requests as being "overly broad" or "not reasonably calculated to lead to the discovery of admissible evidence." Mr. Thames argues that the Debtors' contentions are not well-founded. He explains that the requested documents are needed to show that: -- the Debtors continue to lose money; -- the Debtors anticipates losing more money; and -- the Debtors' financial forecasting is highly suspect, all of which bears on the risk facing JEA and other utility suppliers. "There is nothing confidential about the historical documents, and any concerns about the business plan or future revenues can easily be addressed through a confidentiality order," Mr. Thames says. "Moreover, disclosure of financial statements, business plans and the like are part of the trade-off inherent in the Chapter 11 process." Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000). YOUNG BROADCASTING: Liquidity Concerns Cue S&P to Lower Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Young Broadcasting Inc., including lowering its long-term corporate credit to 'CCC+' from 'B-', because of heightened concerns about the company's liquidity in the intermediate term. The outlook is negative. The New York, New York-based television broadcaster had approximately $787 million in debt outstanding at Sept. 30, 2005. The downgrade recognizes that Young's cash cushion, which has provided primary support for the rating, is likely to dwindle more quickly over the next two years than we had incorporated into our previous rating assumptions. "Young underperformed relative to our expectations in 2005," explained Standard & Poor's credit analyst Alyse Michaelson Kelly, "which gives us even greater concern that the company's cash balances will erode in 2006 and 2007 more rapidly than it can grow cash flow." Decreasing cash balances could also endanger compliance with the minimum cash requirement included in Young's credit agreement. "Absent asset sales, we expect Young to face difficulty in meeting its financial obligations in the intermediate term," Ms. Kelly added. * BOND PRICING: For the week of Jan. 16 - Jan. 20, 2006 ------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- Adelphia Comm. 3.250% 05/01/21 3 Adelphia Comm. 6.000% 02/15/06 3 Adelphia Comm. 7.500% 01/15/04 58 Adelphia Comm. 7.750% 01/15/09 59 Adelphia Comm. 7.875% 05/01/09 57 Adelphia Comm. 8.125% 07/15/03 56 Adelphia Comm. 8.375% 02/01/08 59 Adelphia Comm. 9.250% 10/01/02 58 Adelphia Comm. 9.375% 11/15/09 61 Adelphia Comm. 9.875% 03/01/05 57 Adelphia Comm. 9.875% 03/01/07 58 Adelphia Comm. 10.250% 11/01/06 57 Adelphia Comm. 10.250% 06/15/11 62 Adelphia Comm. 10.500% 07/15/04 60 Adelphia Comm. 10.875% 10/01/10 58 Allegiance Tel. 11.750% 02/15/08 26 Allegiance Tel. 12.875% 05/15/08 28 Alt Living Scvs 7.000% 06/01/04 1 Amer & Forgn PWR 5.000% 03/01/30 72 Amer Color Graph 10.000% 06/15/10 69 American Airline 9.980% 01/02/13 69 American Airline 10.430% 09/15/08 70 American Airline 10.430% 09/15/08 70 Ames Dept Stores 10.000% 04/15/06 0 AMR Corp. 9.750% 08/15/21 72 AMR Corp. 9.800% 10/01/21 71 AMR Corp. 9.880% 06/15/20 72 AMR Corp. 10.125% 06/01/21 74 AMR Corp. 10.150% 05/15/20 74 AMR Corp. 10.200% 03/15/20 74 AMR Corp. 10.290% 03/08/21 75 AMR Corp. 10.550% 03/12/21 75 Amtran Inc. 9.625% 12/15/05 4 Anker Coal Group 14.250% 09/01/07 0 Antigenics 5.250% 02/01/25 58 Anvil Knitwear 10.875% 03/15/07 47 Apple South Inc. 9.750% 06/01/06 3 Archibald Candy 10.000% 11/01/07 0 Asarco Inc. 7.875% 04/15/13 56 Asarco Inc. 8.500% 05/01/25 60 ATA Holdings 12.125% 06/15/10 4 ATA Holdings 13.000% 02/01/09 5 At Home Corp. 4.750% 12/15/06 0 Atlantic Coast 6.000% 02/15/34 6 Atlas Air Inc 8.770% 01/02/11 57 Autocam Corp. 10.875% 06/15/14 70 Aviation Sales 8.125 02/15/08 54 Avondale Mills 10.250% 07/01/13 71 Bank New England 8.750% 04/01/99 8 Bank New England 9.500% 02/15/96 4 Big V Supermkts 11.000% 02/15/04 0 BTI Telecom Corp 10.500% 09/15/07 52 Budget Group Inc. 9.125% 04/01/06 0 Builders Transpt 8.000% 08/15/05 0 Burlington North 3.200% 01/01/45 60 Cell Therapeutic 5.750% 06/15/08 57 Cellstar Corp. 12.000% 01/15/07 42 Charter Comm Inc 5.875% 11/16/09 73 Charter Comm Hld 8.625% 04/01/09 71 Charter Comm Hld 9.625% 11/15/09 73 Charter Comm Hld 10.000% 04/01/09 73 Charter Comm Hld 10.000% 05/15/11 55 Charter Comm Hld 10.250% 01/15/10 67 Charter Comm Hld 11.125% 01/15/11 56 CIH 10.000% 05/15/14 56 Ciphergen 4.500% 09/01/08 75 Clark Material 10.750% 11/15/06 0 CMI Industries 9.500% 10/01/13 0 Collins & Aikman 10.750% 12/31/11 32 Color Tile Inc 10.750 12/15/01 0 Comcast Corp. 2.000% 10/15/29 40 Compudyne Corp 6.250% 01/15/11 70 Cons Container 10.125% 07/15/09 66 Covad Communication 3.000% 03/15/24 65 CPNL-Dflt12/05 4.000% 12/26/06 10 CPNL-Dflt12/05 4.750% 11/15/23 20 CPNL-Dflt12/05 6.000% 09/30/14 16 CPNL-Dflt12/05 7.625% 04/15/06 33 CPNL-Dflt12/05 7.750% 04/15/09 37 CPNL-Dflt12/05 7.750% 06/01/15 10 CPNL-Dflt12/05 7.875% 04/01/08 37 CPNL-Dflt12/05 8.500% 02/15/11 24 CPNL-Dflt12/05 8.625% 08/15/10 24 CPNL-Dflt12/05 8.750% 07/15/07 39 CPNL-Dflt12/05 10.500% 05/15/06 35 Cray Inc. 3.000% 12/01/24 69 Cray Research 6.125% 02/01/11 27 Curagen Corp. 4.000% 02/15/11 69 Curagen Corp. 4.000% 02/15/11 68 Curative Health 10.750% 05/01/11 66 DAL-DFLT09/05 9.000% 05/15/16 22 Dana Corp 5.850% 01/15/15 66 Dana Corp 7.000% 03/15/28 67 Dana Corp 7.000% 03/01/29 69 Delco Remy Intl 9.375% 04/15/12 38 Delco Remy Intl 11.000% 05/01/09 44 Delphi Auto Syst 6.500% 05/01/09 55 Delphi Auto Syst 7.125% 05/01/29 55 Delphi Corp 6.500% 08/15/13 55 Delphi Trust II 6.197% 11/15/33 29 Delta Air Lines 2.875% 02/18/24 22 Delta Air Lines 7.299% 09/18/06 75 Delta Air Lines 7.541% 10/11/11 63 Delta Air Lines 7.700% 12/15/05 20 Delta Air Lines 7.900% 12/15/09 23 Delta Air Lines 8.000% 06/03/23 22 Delta Air Lines 8.187% 10/11/17 61 Delta Air Lines 8.300% 12/15/29 23 Delta Air Lines 8.540% 01/02/07 53 Delta Air Lines 8.540% 01/02/07 26 Delta Air Lines 8.540% 01/02/07 71 Delta Air Lines 8.540% 01/02/07 29 Delta Air Lines 8.540% 01/02/07 29 Delta Air Lines 9.200% 09/23/14 57 Delta Air Lines 9.250% 12/27/07 17 Delta Air Lines 9.250% 03/15/22 21 Delta Air Lines 9.300% 01/02/10 54 Delta Air Lines 9.320% 01/02/09 55 Delta Air Lines 9.450% 02/26/06 54 Delta Air Lines 9.480% 06/05/06 46 Delta Air Lines 9.750% 05/15/21 23 Delta Air Lines 9.875% 04/30/08 67 Delta Air Lines 10.000% 08/15/08 25 Delta Air Lines 10.000% 05/17/09 62 Delta Air Lines 10.000% 06/01/10 64 Delta Air Lines 10.000% 06/01/10 49 Delta Air Lines 10.000% 06/01/10 69 Delta Air Lines 10.000% 06/01/11 26 Delta Air Lines 10.000% 06/05/11 54 Delta Air Lines 10.000% 06/18/13 63 Delta Air Lines 10.060% 01/02/16 60 Delta Air Lines 10.080% 06/16/07 60 Delta Air Lines 10.080% 06/16/08 58 Delta Air Lines 10.080% 06/16/08 58 Delta Air Lines 10.080% 06/16/08 58 Delta Air Lines 10.125% 05/15/10 25 Delta Air Lines 10.125% 06/16/10 58 Delta Air Lines 10.125% 06/16/10 58 Delta Air Lines 10.125% 06/16/10 61 Delta Air Lines 10.375% 02/01/11 24 Delta Air Lines 10.375% 12/15/22 23 Delta Air Lines 10.430% 01/02/11 20 Delta Air Lines 10.500% 04/30/16 68 Delta Air Lines 10.790% 03/26/13 20 Delta Mills Inc. 9.625% 11/15/33 39 Diva Systems 12.625% 03/01/08 0 Duane Reade Inc 9.750% 08/01/11 72 Dura Operating 9.000% 05/01/09 52 Dura Operating 9.000% 05/01/09 55 Duty Free Int'l. 7.000% 01/15/04 4 DVI Inc. 9.875% 02/01/04 14 Epix Medical Inc. 3.000% 06/15/24 61 Exodus Comm. Inc. 5.250% 02/15/08 0 Exodus Comm. Inc. 11.625% 07/15/10 0 Falcon Products 11.375% 06/15/09 3 Fedders North AM 9.875% 03/01/14 70 Federal-Mogul Co. 7.375% 01/15/06 35 Federal-Mogul Co. 7.500% 01/15/09 36 Federal-Mogul Co. 8.160% 03/06/03 34 Federal-Mogul Co. 8.370% 11/15/01 33 Federal-Mogul Co. 8.800% 04/15/07 36 Finova Group 7.500% 11/15/09 35 FMK- DFLT03/04 10.750% 10/15/06 74 FMXIQ-DFLT09/05 13.500% 08/15/05 15 Foamex L.P.-DFLT 9.875% 06/15/07 15 Ford Holdings 9.375% 03/01/20 75 Ford Motor Co. 6.500% 08/01/18 68 Ford Motor Co. 6.625% 02/15/28 64 Ford Motor Co. 7.400% 11/01/46 62 Ford Motor Co. 7.500% 08/01/26 69 Ford Motor Co. 7.700% 05/15/97 67 Ford Motor Co. 7.750% 06/15/43 64 Ford Motor Co. 8.875% 01/15/22 72 Ford Motor Co. 8.900% 01/15/32 74 Ford Motor Cred 5.000% 09/21/09 72 Ford Motor Cred 5.000% 09/21/09 75 Ford Motor Cred 5.100% 02/22/11 72 Ford Motor Cred 5.150% 01/20/11 73 Ford Motor Cred 5.200% 03/21/11 73 Ford Motor Cred 5.200% 03/21/11 74 Ford Motor Cred 5.250% 03/21/11 73 Ford Motor Cred 5.250% 02/22/11 75 Ford Motor Cred 5.250% 09/20/11 73 Ford Motor Cred 5.300% 04/20/11 71 Ford Motor Cred 5.400% 09/20/11 73 Ford Motor Cred 5.400% 10/20/11 71 Ford Motor Cred 5.400% 10/20/11 74 Ford Motor Cred 5.450% 04/20/11 73 Ford Motor Cred 5.450% 10/20/11 74 Ford Motor Cred 5.500% 04/20/11 74 Ford Motor Cred 5.500% 10/20/11 73 Ford Motor Cred 5.550% 08/22/11 73 Ford Motor Cred 5.550% 09/20/11 74 Ford Motor Cred 5.600% 12/20/10 75 Ford Motor Cred 5.600% 04/20/11 73 Ford Motor Cred 5.650% 07/20/11 75 Ford Motor Cred 5.650% 12/20/11 73 Ford Motor Cred 5.650% 01/21/14 71 Ford Motor Cred 5.700% 05/20/11 74 Ford Motor Cred 5.750% 06/21/11 75 Ford Motor Cred 5.750% 08/22/11 74 Ford Motor Cred 5.750% 12/20/11 73 Ford Motor Cred 5.750% 02/21/12 73 Ford Motor Cred 5.750% 01/21/14 73 Ford Motor Cred 5.750% 02/20/14 70 Ford Motor Cred 5.750% 02/20/14 70 Ford Motor Cred 5.850% 07/20/11 75 Ford Motor Cred 5.850% 01/20/12 75 Ford Motor Cred 5.900% 02/21/12 75 Ford Motor Cred 5.900% 02/20/14 70 Ford Motor Cred 6.000% 01/20/12 75 Ford Motor Cred 6.000% 01/21/14 70 Ford Motor Cred 6.000% 03/20/14 71 Ford Motor Cred 6.000% 03/20/14 69 Ford Motor Cred 6.000% 03/20/14 73 Ford Motor Cred 6.000% 03/20/14 69 Ford Motor Cred 6.000% 11/20/14 70 Ford Motor Cred 6.000% 11/20/14 72 Ford Motor Cred 6.000% 11/20/14 72 Ford Motor Cred 6.000% 01/20/15 70 Ford Motor Cred 6.000% 02/20/15 70 Ford Motor Cred 6.050% 03/20/12 74 Ford Motor Cred 6.050% 03/20/14 71 Ford Motor Cred 6.050% 04/21/14 68 Ford Motor Cred 6.050% 12/22/14 74 Ford Motor Cred 6.050% 12/22/14 73 Ford Motor Cred 6.050% 12/22/14 70 Ford Motor Cred 6.050% 02/20/15 70 Ford Motor Cred 6.100% 02/20/15 72 Ford Motor Cred 6.150% 12/22/14 70 Ford Motor Cred 6.150% 01/20/15 70 Ford Motor Cred 6.200% 03/20/15 73 Ford Motor Cred 6.250% 02/21/12 74 Ford Motor Cred 6.250% 12/20/13 69 Ford Motor Cred 6.250% 01/20/15 72 Ford Motor Cred 6.250% 03/20/15 72 Ford Motor Cred 6.300% 05/20/14 73 Ford Motor Cred 6.350% 04/21/14 73 Ford Motor Cred 6.500% 12/20/13 68 Ford Motor Cred 6.500% 02/20/15 71 Ford Motor Cred 6.500% 03/20/15 70 Ford Motor Cred 6.520% 03/10/13 74 Ford Motor Cred 6.550% 07/21/14 72 Ford Motor Cred 6.600% 10/21/13 73 Ford Motor Cred 6.650% 10/21/13 73 Ford Motor Cred 6.650% 06/20/14 74 Ford Motor Cred 6.750% 10/21/13 73 Ford Motor Cred 6.750% 06/20/14 73 Ford Motor Cred 6.800% 03/20/15 72 Ford Motor Cred 6.850% 05/20/14 74 Ford Motor Cred 6.850% 06/20/14 73 Ford Motor Cred 7.250% 07/20/17 70 Ford Motor Cred 7.250% 07/20/17 70 Ford Motor Cred 7.350% 09/15/15 73 Ford Motor Cred 7.500% 08/20/32 66 Ford Motor Cred 7.550% 09/30/15 74 Gateway Inc. 2.000% 12/31/11 69 General Motors 7.125% 07/15/13 71 General Motors 7.400% 09/01/25 65 General Motors 7.700% 04/15/16 68 General Motors 8.100% 06/15/24 67 General Motors 8.250% 07/15/23 68 General Motors 8.375% 07/15/33 69 General Motors 8.800% 03/01/21 68 General Motors 9.400% 07/15/21 71 Global Health SC 11.000% 05/01/08 1 GMAC 5.250% 01/15/14 73 GMAC 5.700% 10/15/13 72 GMAC 5.700% 12/15/13 74 GMAC 5.900% 01/15/19 74 GMAC 5.900% 01/15/19 71 GMAC 5.900% 02/15/19 69 GMAC 5.900% 10/15/19 65 GMAC 6.000% 02/15/19 73 GMAC 6.000% 02/15/19 70 GMAC 6.000% 02/15/19 74 GMAC 6.000% 03/15/19 74 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 72 GMAC 6.000% 04/15/19 73 GMAC 6.000% 09/15/19 72 GMAC 6.000% 09/15/19 73 GMAC 6.050% 08/15/19 73 GMAC 6.050% 08/15/19 70 GMAC 6.050% 10/15/19 74 GMAC 6.100% 09/15/19 74 GMAC 6.125% 10/15/19 70 GMAC 6.150% 09/15/19 73 GMAC 6.150% 10/15/19 71 GMAC 6.250% 12/15/18 75 GMAC 6.250% 01/15/19 73 GMAC 6.250% 04/15/19 75 GMAC 6.250% 05/15/19 74 GMAC 6.250% 07/15/19 73 GMAC 6.300% 08/15/19 73 GMAC 6.300% 04/15/19 73 GMAC 6.350% 07/15/19 73 GMAC 6.350% 07/15/19 73 GMAC 6.500% 11/15/18 74 GMAC 6.500% 12/15/18 74 GMAC 6.500% 01/15/20 73 GMAC 6.600% 06/15/19 74 GMAC 6.650% 10/15/18 75 GMAC 6.650% 02/15/20 71 GMAC 6.700% 08/15/16 73 GMAC 6.750% 10/15/11 74 GMAC 6.750% 06/15/17 74 GMAC 6.750% 06/15/19 75 GMAC 6.750% 03/15/20 72 GMAC 6.800% 10/15/18 74 Golden Books Pub 10.750% 12/31/04 0 Graftech Int'l 1.625% 01/15/24 73 Gulf Mobile Ohio 5.000% 12/01/56 72 Gulf States STL 13.500% 04/15/03 0 HNG Internorth 9.625% 03/15/06 37 Imperial Credit 9.875% 01/15/07 0 Impsat Fiber 6.000% 03/15/11 73 Inland Fiber 9.625% 11/15/07 51 Iridium LLC/CAP 10.875% 07/15/05 23 Iridium LLC/CAP 11.250% 07/15/05 26 Iridium LLC/CAP 13.000% 07/15/05 26 Iridium LLC/CAP 14.000% 07/15/05 26 Isolagen Inc. 3.500% 11/01/24 51 Jts Corp. 5.250% 04/29/02 0 Kaiser Aluminum & Chem. 9.875% 02/15/02 50 Kaiser Aluminum & Chem. 10.875% 10/15/06 51 Kaiser Aluminum & Chem. 10.875% 10/15/06 51 Kaiser Aluminum & Chem. 12.750% 02/01/03 10 Kellstrom Inds 5.500% 06/15/03 0 Key3Media Group 11.250% 06/15/11 0 Kmart Corp. 8.540% 01/01/15 16 Kmart Corp. 8.990% 07/05/10 21 Kmart Corp. 9.350% 01/02/20 26 Kmart Corp. 9.780% 01/05/20 73 Kmart Funding 8.800% 07/01/10 30 Kmart Funding 9.440% 07/01/18 61 Level 3 Comm. Inc. 2.875% 07/15/10 67 Level 3 Comm. Inc. 6.000% 09/15/09 68 Level 3 Comm. Inc. 6.000% 03/15/10 65 Liberty Media 3.750% 02/15/30 55 Liberty Media 4.000% 11/15/29 60 LTV Corp. 8.200% 09/15/07 0 Macsaver Financl 7.400% 02/15/02 3 Macsaver Financl 7.600% 08/01/07 3 Mcms Inc. 9.750% 03/01/08 0 Merisant Co 9.500% 07/15/13 62 MHS Holdings Co 16.875% 09/22/04 0 Metamor Worldwid 2.940% 08/15/04 0 Motels of Amer 12.000% 04/15/04 68 MRS Fields 9.000% 03/15/11 70 MSX Int'l Inc. 11.375% 01/15/08 68 Muzak LLC 9.875% 03/15/09 57 Natl Steel Corp. 8.375% 08/01/06 10 Natl Steel Corp. 9.875% 03/01/09 10 New Orl Grt N RR 5.000% 07/01/32 73 Nexprise Inc. 6.000% 04/01/07 0 North Atl Trading 9.250% 03/01/12 58 Northern Pacific RY 3.000% 01/01/47 60 Northern Pacific RY 3.000% 01/01/47 60 Northwest Airlines 6.625% 05/15/23 36 Northwest Airlines 7.248% 01/02/12 16 Northwest Airlines 7.360% 02/01/20 71 Northwest Airlines 7.625% 11/15/23 38 Northwest Airlines 7.626% 04/01/10 62 Northwest Airlines 7.875% 03/15/08 40 Northwest Airlines 8.070% 01/02/15 41 Northwest Airlines 8.130% 02/01/14 34 Northwest Airlines 8.700% 03/15/07 36 Northwest Airlines 8.875% 06/01/06 37 Northwest Airlines 8.970% 01/02/15 21 Northwest Airlines 9.179% 04/01/10 26 Northwest Airlines 9.875% 03/15/07 38 Northwest Airlines 10.000% 02/01/09 37 NTK Holdings Inc. 10.750% 03/01/14 63 Nutritional Src. 10.125% 08/01/09 70 Oakwood Homes 7.875% 03/01/04 12 Oakwood Homes 8.125% 03/01/09 12 O'Sullivan Ind. 10.630% 10/01/08 61 Osu-Dflt10/05 13.375% 10/15/09 0 Outboard Marine 9.125% 04/15/17 0 Overstock.com 3.750% 12/01/11 67 Overstock.com 3.750% 12/01/11 72 Owens-Crng Fiber 8.875% 06/01/02 75 PCA LLC/PCA Fin 11.875% 08/01/09 23 Pegasus Satellite 9.625% 10/15/06 9 Pegasus Satellite 12.375% 08/01/06 10 Pegasus Satellite 12.500% 08/01/07 10 Pegasus Satellite 13.500% 03/01/07 0 Pen Holdings Inc. 9.875% 06/15/08 62 Phar-Mor Inc. 11.720% 09/11/02 1 Piedmont Aviat 9.900% 11/08/06 0 Piedmont Aviat 10.000% 11/08/12 9 Piedmont Aviat 10.200% 05/13/12 0 Piedmont Aviat 10.250% 01/15/49 12 Pinnacle Airline 3.250% 02/15/25 73 Pixelworks Inc. 1.750% 05/15/24 70 Pliant-DFLT/06 13.000% 06/01/10 23 Pliant-DFLT/06 13.000% 06/01/10 23 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 11.500% 02/15/06 0 Primedex Health 11.500% 06/30/08 57 Primus Telecom 3.750% 09/15/10 30 Primus Telecom 5.750% 02/15/07 65 Primus Telecom 8.000% 01/15/14 59 Primus Telecom 12.750% 10/15/09 53 Psinet Inc. 10.000% 02/15/05 0 Psinet Inc. 11.000% 08/01/09 0 Railworks Corp. 11.500% 04/15/09 0 Read-Rite Corp. 6.500% 09/01/04 15 Reliance Group Holdings 9.000% 11/15/00 24 Reliance Group Holdings 9.750% 11/15/03 0 RJ Tower Corp. 12.000% 06/01/13 71 Salton Inc. 12.250% 04/15/08 57 Scotia Pac Co 7.710% 01/20/14 74 Solectron Corp. 0.500% 02/15/34 73 Source Media Inc. 12.000% 11/01/04 75 Specialty PaperB 9.375% 10/15/06 75 Sterling Chem 11.250% 04/01/07 0 Tekni-Plex Inc. 12.750% 06/15/10 62 Toys R Us 7.375% 10/15/18 73 Trans Mfg Oper 11.250% 05/01/09 62 Transtexas Gas 15.000% 03/15/05 1 Tribune Co 2.000% 05/15/29 74 Triton Pcs Inc. 8.750% 11/15/11 69 Triton Pcs Inc. 9.375% 02/01/11 69 Twin Labs Inc. 10.250% 05/15/06 7 United Air Lines 7.270% 01/30/13 65 United Air Lines 7.762% 10/01/06 60 United Air Lines 7.870% 01/30/19 63 United Air Lines 8.030% 07/01/11 73 United Air Lines 8.250% 04/26/08 3 United Air Lines 9.000% 12/15/03 20 United Air Lines 9.020% 04/19/12 71 United Air Lines 9.125% 01/15/12 21 United Air Lines 9.350% 04/07/16 71 United Air Lines 9.560% 10/19/18 70 United Air Lines 9.750% 08/15/21 19 United Air Lines 10.250% 07/15/21 22 United Air Lines 10.670% 05/01/04 20 United Air Lines 11.210% 05/01/14 23 United Homes Inc 11.000% 03/15/05 0 Univ. Health Services 0.426% 06/23/20 56 Universal Stand 8.250% 02/01/06 1 US Air Inc. 10.250% 01/15/49 12 US Air Inc. 10.550% 01/15/49 25 US Air Inc. 10.610% 06/27/07 0 US Air Inc. 10.700% 01/01/49 26 US Air Inc. 10.700% 01/15/49 3 US Air Inc. 10.700% 01/15/49 25 US Air Inc. 10.750% 01/15/49 25 US Air Inc. 10.750% 01/15/49 13 US Air Inc. 10.800% 01/01/49 4 US Air Inc. 10.800% 01/01/49 27 US Air Inc. 10.800% 01/01/49 28 US Air Inc. 10.900% 01/01/49 6 US Airways Pass 6.820% 01/30/14 65 Universal Stand 8.250% 02/01/06 1 Venture Hldgs 9.500% 07/01/05 0 Venture Hldgs 11.000% 06/01/07 0 Venture Hldgs 12.500% 06/01/07 0 WCI Steel Inc. 10.000% 12/01/04 60 Werner Holdings 10.000% 11/15/07 25 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Wheeling-Pitt St 5.000% 08/01/11 65 Wheeling-Pitt St 6.000% 08/01/10 70 Winstar Comm 10.000% 03/15/08 0 Winstar Comm 12.750% 04/15/10 0 World Access Inc. 4.500% 10/01/02 4 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry 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 ***