/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060203.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 3, 2006, Vol. 10, No. 29 Headlines ALPHA FORTY-FIVE: Involuntary Chapter 11 Case Summary AMC ENTERTAINMENT: Completes Merger with Loews Cineplex AMERICAN ACHIEVEMENT: Posts $2MM Net Loss in Quarter Ended Nov. 26 ANC RENTAL: Liquidating Trust Employs CPT Group as Claims Agent ANCHOR GLASS: Encore Glass Says Disclosure Statement Lacks Info ANCHOR GLASS: Gets Court OK to Tap Schulte Roth as Special Counsel ANCHOR GLASS: Wants to Assume OCI Chemical Supply Contract ATA AIRLINES: C8 Airlines Files Ch. 11 Plan & Disclosure Statement AURA SYSTEMS: Emerges from Bankruptcy Protection AVITAR: Losses & Deficits Spur BDO Seidman's Going Concern Doubt BABCOCK & WILCOX: District Court Confirms Joint Chapter 11 Plan BEAR STEARNS: Moody's Rates Class M-9 Sub. Certificates at Ba1 BEVERLY ENTERPRISES: Plans to Redeem Sr. Sub. Notes for $241.17M BOOTIE BEER: Inks Private Sale of 10M Shares to European Investors BRITISH AMERICAN: Case Summary & 19 Largest Unsecured Creditors CALPINE CORP: Plans to Cut 300 Positions under Restructuring Plan CALPINE CORP: Utilities Who Ask Receive Two-Week Security Deposits CALPINE CORP: Wants Court to Okay Interim Compensation Procedures CANAL CAPITAL: Todman & Co. Raises Going Concern Doubt Over Losses CAPITOL FOOD: Case Summary & 6 Largest Unsecured Creditors CATHOLIC CHURCH: Court Okays Marianist Settlement Pact in Tucson CDEX INC: James Griffin Replaces Malcolm Philips as CEO CHESAPEAKE ENERGY: Moody's Rates $500 Million Add-On Notes at Ba2 CHESAPEAKE KNIFE: Case Summary & 20 Largest Unsecured Creditors CLAREMONT TECHNOLOGIES: Creditors Want Case Converted to Chapter 7 COPYTELE INC: Grant Thornton's Going Concern Doubt Continues CORNELL TRADING: Has Until Today to File Schedules and Statements CORY MILNE: Case Summary & 20 Largest Unsecured Creditors COTT CORP: Poor Performance Cues Moody's Low-B Ratings' Downgrade CUMMINS INC: Earns $550 Million of Net Income in Year 2005 CURATIVE HEALTH: California DHS Audit Shows $39.3M Overpayments DELAFIELD 246: Judge Gropper Okays $150,00 Zion New York Loan DELAFIELD 246: Employs Lee Weintraub as Landscape Architect DOWNTOWN AUTOMOTIVE: Voluntary Chapter 11 Case Summary DUNN'S TRACTOR: Case Summary & 17 Largest Unsecured Creditors EMMIS COMMS: Completes $259-M Sale of 8 TV Stations to Blackstone ENER1 INC: Names Charles A. Gassenheimer Chairman of the Board ENRON CORP: Asks Court to Bless Netherlands Holding Unit Wind-Down ENRON CORP: Settles with Lehman in Equity Transactions Litigation EXTREME MOTOR: Case Summary & 39 Largest Unsecured Creditors GLYCOGENESIS INC: Case Summary & 20 Largest Unsecured Creditors GOODING'S SUPERMARKETS: U.S. Trustee Picks 3-Member Creditors Team GOODING'S SUPERMARKETS: Files Schedules of Assets and Liabilities HANDEX GROUP: Wants to Reject Four Unexpired Real Property Leases HUNTSMAN CORP: Moody's Affirms Corporate Family Rating at B1 IMG HEALTHCARE: Case Summary & 20 Largest Unsecured Creditors IRISH PUB: Chapter 7 Trustee Taps Steven Gabovitch as Accountant JACOBS INDUSTRIES: IRS Says Plan is Unconfirmable Under Sec. 1123 KINETIC CONCEPTS: Earns $46.4 Million of Net Income in 4th Quarter KMART CORP: Court Allows Equity One's Claim for $700,000 LOEWS CINEPLEX: AMC Merger Prompts Moody's to Withdraw All Ratings LOVESAC CORP: Wants Squire Sanders as Lead Bankruptcy Counsel LOVESAC CORP: Wants Bayard Firm as Local Bankruptcy Counsel MARLA IRISH: Case Summary & 14 Largest Unsecured Creditors MERISANT CO: Poor Performance Leads Moody's to Downgrade Ratings MUSICLAND HOLDING: Wants to Return Goods and Obtain Trade Credit MUSICLAND HOLDING: Wants to Pay Warehousing & Shipping Claims MUSICLAND HOLDING: Asks Court to Set May 1 as Claims Bar Date NATIONAL VISION: Debt Repayment Cues Moody's Ratings Withdrawal NORTEL NETWORKS: Moody's Rates $450MM Unsec. Credit Facility at B3 NRG ENERGY: Expects to Get $500M from Sale of 2M Preferred Shares O'SULLIVAN IND: Panel's Investigative Period Extended to Feb. 14 PANTRY INC: Earns $33 Million Net Income in First Fiscal Quarter PHOENIX INDUSTRIAL: Case Summary & 20 Largest Unsecured Creditors PITTSBURGH BREWING: Strikes Deals with Water & Bottle Suppliers PLIANT CORP: Intercompany Claims Get Administrative Claims Status PLIANT CORP: Wants Court to Declare Utilities Adequately Assured PLIANT CORP: Wants to Hire Kekst and Co. as Communications Advisor PRICE OIL: Selling Property in Navarro, Florida, for $1.25 Million PRICE OIL: Secures Capital Bank's Consent to Use Collateral RELIANT ENERGY: SDG&E Customers to Receive $21MM from Settlement RENAISSANCE PROSPECT: Moody's Withdraws $40MM Debt's Low Rating REVLON CONSUMER: Moody's Says Ratings Unaffected by Recent Action ROMACORP INC: Court Sets May 5 as Governmental Claims Bar Date ROTECH HEALTHCARE: Wants Bankruptcy Court Orders Enforced SANMINA-SCI: Prices $750MM of 10.375% Sr. Subordinated Note Offer SOUTHERN UNION: Selling PG Energy Unit Assets to UGI for $580MM STEVE'S SHOES: Can Employ Evans & Mullinix as Bankruptcy Counsel STEVE'S SHOES: Court Approves Asset Sale to Walking Co. for $4.2MM THERMOVIEW INDUSTRIES: Wants Creditors' Committee Disbanded THERMOVIEW INDUSTRIES: Wants Until March 27 to File Bankr. Plan TITAN CRUISE: Obtains $550,000 DIP Loan from First American Bank TITAN CRUISE: Wants to Walk Away from Cash Systems Agreement TMG MARKETING: Case Summary & 18 Largest Unsecured Creditors TNT SANDBLASTING: Case Summary & 20 Largest Unsecured Creditors TRIANGLE INDUSTRIES: Case Summary & 113 Known Creditors UAL CORP: Signs $3 Billion Senior Secured Exit Facility UNICO INC: Posts $371,194 Net Loss in Quarter Ended November 30 USG CORP: Puts Poison Pill Plan in Place Until Plan Confirmation VILLAS AT HACIENDA: Wants Court to Confirm Modified Amended Plan VINTAGE PETROLEUM: Moody's Raises Sr. Unsec. & Sub. Ratings to A3 WINDOW ROCK: U.S. Trustee Amends Creditors Committee Membership WINDOW ROCK: Wants to Hire Ullman Shapiro as Special Counsel WORLD WIDE: No Cause to Extend Exclusive Periods, Carlton Alleges * BOOK REVIEW: Inside Investment Banking: Second Edition ********* ALPHA FORTY-FIVE: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Alleged Debtors: Alpha Forty-Five LLC c/o Photocircuits Corporation 31 Sea Cliff Avenue Glen Cove, New York 11542 -- and -- Beta Forty-Five LLC c/o Photocircuits Corporation 31 Sea Cliff Avenue Glen Cove, New York 11542 Involuntary Petition Date: February 2, 2006 Case Number: 06-70167 & 06-70168 Chapter: 11 Type of Business: The Debtors are affiliates of Photocircuits Corp. Photocircuits filed for chapter 11 protection on Oct. 14, 2005 (Bankr. E.D.N.Y. Case No. 05-89022). Court: Eastern District of New York Petitioners' Counsel: Madlyn Gleich Primoff, Esq. Kaye Scholer LLP 425 Park Avenue New York, New York 10022-3598 Tel: (212) 836-8000 Fax: (212) 836-8689 Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Stairway Capital Payment due under $26,000,000 Management LP Loan and Security 1044 Northern Boulevard Agreement dated Roslyn, New York 11576 05/06/02 AMC ENTERTAINMENT: Completes Merger with Loews Cineplex ------------------------------------------------------- AMC Entertainment Inc. has completed its merger with Loews Cineplex Entertainment Corporation. AMC Entertainment continues as the surviving corporation. Loews Cineplex Entertainment Corporation's holding company, LCE Holdings, Inc., has similarly been merged into Marquee Holdings Inc., the holding company of AMC Entertainment with Marquee Holdings continuing as the holding company of the merged businesses. The merged company will be called AMC Entertainment Inc. and will continue to be headquartered in Kansas City, Missouri. The company will have interests in approximately 415 theatres with 5,672 screens in 29 states and the District of Columbia and 11 countries outside of the United States. Peter C. Brown will remain chairman and chief executive officer, and the combined company will have approximately 24,000 associates serving more than 250 million guests annually. As a result of the merger, approximately 60 percent of the outstanding capital stock of Marquee Holdings will be held by the existing shareholders and approximately 40 percent will be held by the former shareholders of Loews Cineplex Entertainment Corporation. Marquee Holdings' significant shareholders include: -- affiliates of Apollo Management, L.P. (approximately 21%; -- affiliates of J.P. Morgan Partners, LLC (approximately 21%; -- affiliates of Bain Capital, LLC (approximately 15%); -- affiliates of The Carlyle Group (approximately 15%); -- affiliates of Spectrum Equity Investors (approximately 10%; and -- other co-investors and members of management (approximately 18%). "This is a momentous day in the history of the theatrical exhibition industry," Mr. Brown said. "AMC and Loews bring together more than 185 years of combined operating history with a shared commitment to providing guests with the best possible out- of-home entertainment experience. We look forward to many years of continued growth, innovation and the opportunity to serve our guests." Travis Reid, former Loews Cineplex Entertainment Corporation president and chief executive officer will serve as a member of the board of Marquee Holdings Inc., and will be available on a consulting basis to assist with the transition and integration process. "This merger creates one of the biggest and best movie theatre companies in the world," Mr. Reid said. "Associates of both Loews and AMC should take pride in contributing to the birth of this great new company. The Loews team has been working alongside AMC for the past several months to help position the new company for a seamless integration, and I applaud Peter and his leadership team for their dedication to the successful completion of the merger." While the full integration process will take a few months, the new entity will immediately honor all gift cards, gift certificates and group tickets previously issued or purchased from AMC or Loews. In connection with the completion of the merger, AMC Entertainment: -- repurchased $315 million in aggregate principal amount, or 100%, of Loews Cineplex Entertainment Corporation's outstanding 9% Senior Subordinated Notes due 2014 that were tendered in the tender offer and consent solicitation launched December 21, 2005; -- issued $325 million in aggregate principal amount of 11% Senior Subordinated Notes due 2016; and -- refinanced $850 million in aggregate principal amount of the senior credit facilities of AMC Entertainment and Loews Cineplex Entertainment. About Apollo Management Apollo Management, L.P., founded in 1990, is among the most active and successful private investments firms in the United States in terms of both number of investment transactions completed and aggregate dollars invested. Since its inception, Apollo has managed the investment of an aggregate of approximately $13 billion in equity capital in a wide variety of industries, both domestically and internationally, and is currently managing Apollo Investment Fund VI, L.P., its most recent fund with committed capital of $10.1 billion. About J.P. Morgan Partners J.P. Morgan Partners, LLC, is a leading private equity firm with approximately $10 billion in capital under management as of December 31, 2005. Since its inception in 1984, JPMP has invested over $15 billion worldwide in consumer, media, energy, industrial, financial services, healthcare, hardware and software companies. With more than 75 investment professionals in five principal offices throughout the world, JPMP is an experienced investor in companies with worldwide operations. JPMP is a private equity division of JPMorgan Chase & Co. (NYSE: JPM), one of the largest financial institutions in the United States, and is a registered investment adviser with the Securities and Exchange Commission. About Bain Capital Bain Capital -- http://www.baincapital.com/-- is a leading global private investment firm that manages several pools of capital including private equity, venture capital, public equity and leveraged debt assets with more than $27 billion in assets under management. Since its inception in 1984, Bain Capital's private equity team has made investments and add-on acquisitions in over 230 companies around the world, including such leading media, entertainment and publishing companies as Warner Music Group, ProSieben SAT1 Media AG, Houghton Mifflin, Advertising Directory Solutions, and Artisan Entertainment. Headquartered in Boston, Bain Capital has offices in New York, London, Munich, Hong Kong, Shanghai and Tokyo. About The Carlyle Group The Carlyle Group -- http://www.carlyle.com/-- is a global private equity firm with $35 billion under management. Carlyle invests in buyouts, venture capital, real estate and leveraged finance in Asia, Europe and North America, focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, healthcare, industrial, technology & business services and telecommunications & media. Since 1987, the firm has invested $14.9 billion of equity in 439 transactions for a total purchase price of $51.9 billion. The Carlyle Group employs more than 630 people in 14 countries. In the aggregate, Carlyle portfolio companies have more than $30 billion in revenue and employ more than 131,000 people around the world. About Spectrum Equity Investors Spectrum Equity Investors -- http://www.spectrumequity.com/-- is a private equity firm specializing in investments in established companies in the media, communications, entertainment, and information and business services industries. Spectrum manages private equity funds representing $4 billion in committed capital. Representative investments include CBD Media, Classic Media, Eutelsat, Loews Cineplex Entertainment, MyFamily, and Risk Metrics. About Marquee Holdings and AMC Entertainment Marquee Holdings Inc. is a holding company that conducts its business through its subsidiary AMC Entertainment Inc. AMC Entertainment Inc. -- http://www.amctheatres.com/-- is a worldwide leader in the theatrical exhibition industry. The company serves more than 250 million guests annually through interests in 415 theatres and 5,672 screens in 12 countries including the United States. The company is headquartered in Kansas City, Missouri. * * * As reported in the Troubled Company Reporter on Jan. 16, 2006, Fitch Ratings has assigned initial ratings for theatrical exhibition company AMC Entertainment Inc. and its parent, Marquee Holdings Inc.: AMC -- Issuer Default Rating 'B'; -- $850 million of proposed new guaranteed senior secured credit facilities 'BB/RR1' consisting of these facilities: * $200 million revolving credit facility due January 2012; * $650 million term loan B facility due January 2013. -- $455 million of existing guaranteed senior unsecured notes 'B/RR4' consisting of these issues: * $250 million 8 5/8% senior unsecured notes due August 2012; * $205 million LIBOR + 4.25% floating-rate senior unsecured notes due August 2010. -- $1.013 billion of guaranteed senior subordinated notes 'CCC+/RR6' consisting of: * $325 million of proposed new senior subordinated notes due 2016; * $213 million remaining 9.5% existing senior subordinated notes due February 2011; * $175 million 9.875% existing senior subordinated notes due February 2012; * $300 million 8% existing senior subordinated notes due March 2014. Marquee -- Issuer Default Rating 'B'; -- $304 million ($194 million accreted balance) of existing unguaranteed 12% senior discount notes due August 2014 'CCC/RR6'. As reported in the Troubled Company Reporter on February 2, 2006, Standard & Poor's Ratings Services affirmed its ratings, including its 'B' corporate credit rating, on both AMC Entertainment Inc. and AMC's parent, Marquee Holdings Inc. The outlooks for AMC and Marquee are negative. Following the merger, AMC had approximately $2.5 billion in debt in addition to $3 billion in present value of operating leases. As reported in the Troubled Company Reporter on Jan. 10, 2006, Standard & Poor's Ratings Services assigned ratings to the senior secured credit facilities and the senior subordinated notes that will be issued by AMC Entertainment Inc. upon closing of its merger with Loews Cineplex Entertainment Corp. AMC Entertainment will be the surviving entity and retain its name over the merged entity. The company's parent will remain Marquee Holdings Inc. The senior secured credit facilities were rated 'B+', with a recovery rating of '1', indicating a high expectation of full recovery of principal in the event of a payment default. The senior subordinated notes were rated 'CCC+'. As reported in the Troubled Company Reporter on Jan. 6, 2006, Moody's Investors Service assigned a Ba3 rating to the proposed bank facilities of AMC Entertainment, Inc. (AMC) and a B3 rating to AMC's proposed senior subordinated notes issuance. AMC expects to close on its previously announced merger with Loews Cineplex Entertainment Corporation in the beginning of this year and will use proceeds from the bank credit facilities to repay existing bank debt at Loews Cineplex, as well as to provide liquidity for the combined entity. Ratings assigned: AMC Entertainment, Inc.: * Ba3 Assigned to $200 million Senior Secured Revolving Credit Facility matures 2012 * Ba3 Assigned to $650 million Senior Secured Term Loan matures 2013 * B3 Assigned to $325 million Senior Subordinated Notes due 2016 Ratings affirmed: AMC Entertainment, Inc.: * B2 rating on $205 million senior (floating rate) notes due 2010 affirmed * B2 rating on $250 million 8.625% senior notes due 2012 affirmed * B3 rating on $215 million 9.5% senior subordinated notes due 2011 affirmed * B3 rating on $175 million 9.875% senior subordinated notes due 2012 affirmed * B3 rating on $300 million 8% senior subordinated notes due 2014 affirmed Marquee Holdings, Inc.: * B1 Corporate Family Rating affirmed * Caa1 rating on Senior Discount Notes due 2014 ($304 million face value) affirmed Rating Withdrawn: AMC Entertainment, Inc.: * Ba3 $175 million Senior Secured Revolving Credit Facility matures 2009 Outlook changed to stable from negative. AMERICAN ACHIEVEMENT: Posts $2MM Net Loss in Quarter Ended Nov. 26 ------------------------------------------------------------------ American Achievement Corporation delivered its financial results for the quarter ended Nov. 26, 2005, to the Securities and Exchange Commission on Jan. 10, 2005. American Achievement incurred a $2.7 million net loss for the three months ended Nov. 26, 2005, as compared to a $3.2 million net loss for the three months ended Nov. 27, 2004. Net sales decreased $1.3 million, or 2%, to $62 million for the three months ended Nov. 26, 2005, from $63.3 million for the three months ended Nov. 27, 2004. The decrease in net sales was due primarily to a decline in retail high school class rings, college class rings and achievement publication shipments, partially offset by on-campus high school ring shipments and graduation products shipments. The Company's balance sheet at Nov. 26, 2005, showed $511,674,000 in total assets and liabilities of $491,365,000. American Achievement Corporation -- http://www.cbi-rings.com/-- is the leading provider of products associated with graduation and important event commemoration, with a legacy based on the delivery of exceptionally well-crafted products, including class rings, yearbooks, graduation products, achievement publications and affinity jewelry through in-school and retail distribution. AAC's premier brands include: Balfour and ArtCarved, providers of class rings and graduation products; ECI, publisher of Who's Who Among American High School Students(R); Keepsake Fine Jewelry; and Taylor Publishing, publisher of yearbooks. AAC has over 2,000 employees and is majority-owned by Fenway Partners. American Achievement Corp.'s 8-1/4% Senior Subordinated Notes due 2012 carry Moody's Investors Service's B3 rating and Standard and Poor's B- rating. ANC RENTAL: Liquidating Trust Employs CPT Group as Claims Agent --------------------------------------------------------------- As previously reported, the U.S. Bankruptcy Court for the District of Delaware authorized ANC Rental Corporation and its debtor- affiliates to employ R.I. Heller & Company, LLC, as substitute claims and noticing agent for the Clerk of the Bankruptcy Court. Heller is currently charging the ANC Liquidating Trust $5,000 per month. William J. Burnett, Esq., at Flaster/Greenberg, P.C., in Wilmington, Delaware, relates that since the ANC Liquidating Trust is now at the final liquidation stages, it requires little assistance from a claims agent. The Trust can also save the estate sums of money by moving to a fee-for-service type arrangement. For this reason, the Trust sought and obtained the Court's authority to retain CPT Group, Inc., as its substitute official noticing and claims agent for the purpose of assuming full responsibility for: * the distribution of notices and proofs of claims; and * the maintenance, processing and docketing of proofs of claim filed in the Chapter 11 cases. CPT will replace Heller as of February 1, 2006, Mr. Burnett adds. Mr. Burnett notes that CPT has acted as official noticing, claims and balloting agent in numerous cases for a number of years. CPT's methods are likewise highly cost-efficient and would benefit the estate by reducing the overall costs associated with processing notices and claims. As noticing and claims agent, CPT will: (a) electronically transfer the Debtors' creditor database or input data directly from available source files; (b) docket all claims received by the Clerk's Office and by CPT, maintain the official claims register on behalf of the Clerk of the Court, and provide to the Clerk a duplicate, as the Court requires; (c) upon completion of the docketing process for all claims received by the Clerk's Office, turn over to the Clerk a copy of the claims register for the Clerk's review; (d) specify in the claims register for each claim docketed: -- the claim number assigned, -- the date received, -- the name and address of the claimant or agent, and -- the amount and classification of the claim asserted by each claimant; (e) maintain the mailing list of all entities that have filed proofs of claim, which list will be available upon request of any party-in-interest or the Clerk; and (f) other services as may be requested by the Clerk's Office or the Trust in connection with processing claims, providing notice to known creditors, and solicitation and balloting activities. CPT's fees will be treated as administrative expenses and will be paid in the ordinary course of business, based on its hourly rates: Clerical $45 Supervisor/Project Manager $75 Programming/Customs Application Development $125 Bankruptcy Analyst $180 Schedule Preparation $200 Principals $250 Maria Aprile Sawczuk, regional manager of the East Coast Division of CPT Group, Inc., affirms that CPT does not hold nor represent any interest adverse to the estate. Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation, is the world's third-largest publicly traded car rental company. The Company filed for chapter 11 protection on November 13, 2001 (Bankr. Del. Case No. 01-11200). On April 15, 2004, Judge Walrath confirmed the Debtors' 3rd amended Chapter 11 Liquidation Plan, in accordance with Section 1129(a) and (b) of the Bankruptcy Code. Upon confirmation, Blank Rome, LLP, and Fried, Frank, Harris, Shriver & Jacobson, LLP, withdrew as the Debtors' counsel. Gazes & Associates, LLP, and Stevens & Lee, PC, serve as substitute counsel to represent the debtors' post-confirmation interests. When the Company filed for protection from their creditors, they listed $6,497,541,000 in assets and $5,953,612,000 in liabilities. (ANC Rental Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Encore Glass Says Disclosure Statement Lacks Info --------------------------------------------------------------- Encore Glass, Inc., asks the U.S. Bankruptcy Court for the Middle District of Florida to deny approval of the Disclosure Statement explaining Anchor Glass Container Corporation's Plan of Reorganization. Encore Glass filed a proof of claim for $6,102,913, in the Debtor's bankruptcy case in 2002. An appeal with regards to Encore's claim is still pending with the United States District Court for the Middle District of Florida. On August 8, 2005, while the Appeal was still pending, the Debtor filed their third bankruptcy. Immediately, Encore filed a proof of claim in the Debtor's current bankruptcy case, with the contention that the claim, if allowed, must be paid in full in accordance with the treatment of other unsecured creditors in the previous case. Encore objects to the Disclosure Statement because it does not contain a discussion of its claim and the pending appeal, and the treatment the Claim will receive if its appeal is successful. Nor does the Disclosure Statement mention the position Encore has taken with respect to the claim filed in the current case. Without that information, Lori V. Vaughn, Esq., at Foley & Lardner LLP, in Tampa, Florida, asserts, Encore and other creditors will be unable to make an informed decision on the Debtor's Plan of Reorganization. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Gets Court OK to Tap Schulte Roth as Special Counsel ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida authorized Anchor Glass Container Corporation to employ Schulte Roth & Zabel LLP as its special litigation counsel. As reported in the Troubled Company Reporter on Jan. 6, 2006, Schulte Roth will represent the Debtor in the appeal of an adversary proceeding filed by Vincent J. Naimoli, Anchor Glass' former chief executive officer, before the United State Bankruptcy Court for the Middle District of Florida in December 2003. The Adversary Proceeding mainly involved claims for breach of fiduciary duty pursuant to the Employee Retirement Income Security Act of 1974. Mr. Naimoli named the Debtor, two former administrative committees of the Debtor's pension plans and several officers and employees of the Debtor as defendants. On June 3, 2005, the Bankruptcy Court dismissed the Naimoli Complaint. The case is currently on appeal to the United States District Court for the Middle District of Florida. The appeal was placed on the District Court's docket on December 16, 2005. The Debtor will pay Schulte Roth for services rendered at its customary hourly rates: Partners $530 to $775 Special Counsel $520 Associates $205 to $515 Legal Assistant $135 to $260 Schulte Roth is a full service law firm of approximately 410 lawyers with practice in the areas of, among others, corporate, tax, litigation, employment and employee benefits. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Wants to Assume OCI Chemical Supply Contract ---------------------------------------------------------- Anchor Glass Container Corporation asks permission from the U.S. Bankruptcy Court for the Middle District of Florida to assume a supply contract with OCI Chemical Corporation and cure existing monetary defaults. OCI Chemical Corporation is the primary supplier of soda ash to Anchor Glass Container Corporation. Although OCI Chemical has purported to terminate their Contract, to date, OCI Chemical continues to supply the Debtor with soda ash. As reported in the Troubled Company Reporter on Dec. 16, 2006, OCI asked the Bankruptcy Court to lift the automatic stay so it can terminate the contract with the Debtor. The Sales Contract provides that if the Debtor is in default of the Sales Contract, OCI had the option to decline further performance of the Contract. On Aug. 9, 2005, OCI informed the Debtor through a letter that they are declining further performance of the Sales Contract due to the Debtor's numerous and repeated payment defaults. New Contract Terms The Debtor and OCI have compromised and made changes to the Contract to provide better terms and payments. As cure to existing monetary defaults, the Parties agreed that Anchor Glass will pay $1,309,242 upon the Court's approval of the compromise and two equal payments of $654,621 on February 1 and 15, 2006. The "prepay and add" shipment terms will be discontinued and new arrangements will apply to the shipping of product. Upon receipt of the $1,309,242 payment, OCI Chemical will extend 15 days credit terms to Anchor Glass. Upon receipt of the two remaining cure payments, OCI will extend 30-day credit terms from shipment of soda ash from Green River, Wyoming, per contract, up to a maximum of $2,618,483. Should Anchor Glass breach the terms of the Amended Contract, OCI Chemical will have all rights to demand cash in advance of shipment. The compromise also contemplates that Anchor Glass would receive a $840,000 rebate at the end of the term of the Contract. If Anchor Glass performs all of its future obligations under the Amended Contract, then OCI Chemical will waive all breaches of the Contract before the assumption. Anchor Glass accepts and will pay demurrage charges when not caused by OCI Chemical. In addition, OCI Chemical is allowed a $266,398 unsecured claim. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: C8 Airlines Files Ch. 11 Plan & Disclosure Statement ------------------------------------------------------------------ C8 Airlines, Inc., formerly known as Chicago Express Airlines, Inc., delivered to the U.S. Bankruptcy Court for the Southern District of Indiana a Disclosure Statement explaining its Plan of Liquidation yesterday, January 31, 2006. If the Plan is confirmed, following closing of the chapter 11 case, C8 Airlines will be administratively dissolved pursuant to the laws of the State of Georgia. On and after the Confirmation Date, and subject to the Effective Date, the Debtor may, without further Bankruptcy Court approval: (1) use, sell, assign, transfer, abandon or otherwise dispose of at a public or private sale its remaining assets, if any, for the purpose of liquidating and converting those assets into cash, making distributions and fully consummating the Plan; and (2) settle and compromises any Avoidance Claim or Retained Action. C8 Airlines will provide five business days' prior written notice to the Creditors' Committee of any use, sale, assignment, transfer, or other disposal of the Debtor's assets. Assets and Liabilities As of December 31, 2005, the Debtor holds cash and cash equivalents in the approximate amount of $1.7 million. The Debtor believes it will have sufficient funds to pay Allowed Administrative Claims, Allowed Priority Tax Claims and Allowed Professional Fee Claims. It is not expected that, after paying those claims, the Debtor will have sufficient funds to pay ATA Airlines Inc.'s $8.4 million Administrative Claim in full. The ATA Administrative Claim represents C8 Airlines' indebtedness to ATA for postpetition advances made by ATA to or on behalf of the Debtor during the Chapter 11 Case. Despite having insufficient funds to pay the ATA Administrative Claim in full, the Plan, based on the agreement of ATA, proposes to pay Allowed General Unsecured Claims on a pro rata basis a total of the lesser of: (1) $1,000,000; or (ii) one half of amounts (net of attorneys' and other professionals' fees and expenses) recovered through Avoidance Claims. The Debtor's outstanding prepetition indebtedness is more than $340 million. The Debtor and Creditors' Committee estimate that, as of Jan. 31, 2006: -- Priority Tax Claims will approximate $132,000, -- Administrative Claims will fall in the range of approximately $429,000 to $1.2 million, -- Other Priority Claims will not exceed $30,000, and -- General Unsecured Claims will be not more than approximately $340 million. Treatment of Claims and Interests Specifically, under the Plan: (1) Unclassified Claims * Administrative Claims will be paid in Cash in full but without interest. * Priority Tax Claims will be paid in full in Cash, but without interest. * Professional Fee Claims will be paid in Cash. (2) Claims and Interests * Allowed Class 1 Other Priority Claims will be paid in full from the Available Cash to the full extent permitted under Section 507(a) of the Bankruptcy Code, but without interest. * Allowed Class 2 General Unsecured Claims will be paid pro rata from the Preference Recovery Pool to the full extent permitted under Section 507(a) of the Bankruptcy Code, but without interest. * Holders of Class 3 Equity Interests will not receive anything. The Equity Interests will be cancelled on the date the Chapter 11 Case is closed. Best Interest Test The Debtor believes that if its Plan of Liquidation is not confirmed, it is likely that holders of Allowed General Unsecured Claims will receive no distribution under a chapter 7 liquidation. In addition, the distributions to creditors could be materially reduced by additional fees and other costs associated with extended proceedings to propose and confirm an alternative chapter 11 Plan, or if the case were converted to chapter 7, a chapter 7 liquidation. C8 Airlines asserts that the Plan offers the best prospects of recovery for the holders of Claims against and Interests in the Debtor and recommends that holders of Claims and Interests vote to accept the Plan. A full-text copy of C8 Airlines' Disclosure Statement is available for free at http://ResearchArchives.com/t/s?4e2 Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000) AURA SYSTEMS: Emerges from Bankruptcy Protection ------------------------------------------------ Aura Systems, Inc. (Pinks Sheets:AUSI) emerged from Chapter 11 proceedings. The Company's new cusip number is 051526200 and its new trading symbol is AUSI.PK. The recapitalized Company will have approximately 22,600,000 common shares outstanding and no preferred shares. In accordance with the reorganization plan that has been confirmed by the bankruptcy court and became effective on Jan. 31, 2006, each stockholder of old Aura common stock will receive one new share for every 338 old shares. No fractional shares will be issued and the new shares issued will be rounded down to the nearest whole share. Therefore, stockholders will have to own a minimum of 338 old common shares in order to receive one new share, and a minimum of 676 old common shares in order to receive two shares. 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. AVITAR: Losses & Deficits Spur BDO Seidman's Going Concern Doubt ---------------------------------------------------------------- BDO Seidman, LLP, expressed substantial doubt about Avitar, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Sept. 30, 2005. The auditing firm pointed to the Company's recurring losses from operations and working capital and stockholder deficits as of Sept. 30, 2005. Avitar incurred a $2,433,000 net loss for the year ended Sept. 30, 2005, compared with net loss of $2,412,000, for the year ended Sept. 30, 2004. The fiscal 2005 net loss reflects: -- increases in operating costs of $1,657,000 related primarily to increased cost of sales associated with higher revenues; -- the continuation of the Company's enhanced ORALscreen(R) sales and marketing program that began in the latter part of fiscal 2004; and -- goodwill impairment for the BJR Security acquisition. For the fiscal year ended Sept. 30, 2005, Avitar reported revenues of $4,509,000 from continuing operations compared to $4,049,000 of revenues from continuing operations in the prior year. The Company's balance sheet at Sept. 30, 2005, showed $2,427,608 in total assets liabilities of $3,688,285 and redeemable convertible preferred stock of 3,345,000, resulting in a stockholders' deficit of $4,605,677. At Sept. 30, 2005, the Company had a working capital deficit of $799,349. Peter P. Phildius, Chairman and CEO commented, "The $140 billion of costs incurred annually by U.S. industry due to drug use by employees is an enormous unaddressed problem for which our technology offers the most viable solution. As the first mover in this space, our challenge has been, and continues to be, to communicate our compelling value proposition to the marketplace. During Fiscal 2005 we have made significant strides in this effort." Mr. Phildius continued, "Through a series of marketing initiatives including webinars, internet based marketing programs, and journal articles, to name a few, we have been able to enhance the awareness and acceptability of oral fluid technology. We are expanding our direct sales organization and are securing additional channel partners, both in the U.S. and internationally, to increase our market penetration. In addition, we continue to develop additional product offerings, including a lab-based oral test, as well as initiating development of software solutions, to more fully offer our customers the total business solution for their employee drug use problem." Avitar, Inc. -- http://www.avitarinc.com/-- develops, manufactures and markets innovative and proprietary medical products. Their field includes the oral fluid diagnostic market, the disease and clinical testing market, and customized polyurethane applications used in the wound dressing industry. Avitar manufactures ORALscreen(R), the world's first non-invasive, rapid, onsite oral fluid test for drugs-of-abuse, as well as HYDRASORB(R), an absorbent topical dressing for moderate to heavy exudating wounds. Avitar is also developing diagnostic strategies for disease and clinical testing in the estimated $25 billion in- vitro diagnostics market. Conditions targeted include influenza, diabetes, and pregnancy. BABCOCK & WILCOX: District Court Confirms Joint Chapter 11 Plan --------------------------------------------------------------- The Hon. Sarah S. Vance of the United States District Court for the Eastern District of Louisiana confirmed the Joint Plan of Reorganization filed by Babcock & Wilcox Company and its debtor-affiliates. Judge Vance confirmed the Debtors' Joint Plan on Jan. 18, 2006, as recommended by the United States Bankruptcy Court for the Eastern District of Louisiana. Entry of the confirmation order by the District Court bulletproofs the asbestos-related channeling order and injunction provisions that underpin the Debtors' plan in accordance with 11 U.S.C. Sec. 524(g)(3)(A). On Dec. 28, 2005, the Hon. Jerry A. Brown of the Bankruptcy Court for the Eastern District of Louisiana issued his findings of fact, conclusions of law and recommendation in favor of confirmation of the Debtors' Joint Plan and the associated proposed settlement agreement. The associated settlement agreement under the Plan, known as the Citgo Settlement, is between McDermott, B&W, Citgo Petroleum Corporation, PDV Midwest Refining, L.L.C. and certain insurers as parties. Citgo Settlement Under the Citgo Settlement, B&W will pay the plaintiffs $7.5 million on the effective date of the Plan, the parties agree to limit B&W's maximum uninsured exposure to $50 million, in the aggregate, and all claims against McDermott will be released. To receive any monies beyond the $7.5 million payment, the plaintiffs must obtain a judgment against B&W in excess of $250 million, and that excess amount must be completely uncollectible from B&W's insurers or its insurance broker. Should that $250 million or greater judgment be obtained, but amounts are collected from B&W's insurers or brokers in excess of $250 million, B&W will have the opportunity to obtain reimbursement of up to $5 million. B&W explains that the Citgo Settlement creates a range of recovery for the plaintiffs against the estate with a $2.5 million floor and a $50 million cap. February 22 Remaining items required for the Plan to become effective include receiving McDermott's shareholder approval, obtaining exit financing for B&W and the completion of certain other conditions by February 22, 2006, the effective date deadline under the Plan. Headquartered in New Orleans, Louisiana, Babcock & Wilcox Company is a wholly owned subsidiary McDermott International, Inc., a leading worldwide energy services company. Babcock & Wilcox filed for bankruptcy as a result of asbestos-related claims. The Company together with its debtor-affiliates, filed for chapter 11 protection on February 22, 2000 (Bankr. E.D. La. Case No. 00- 10992). Jan Marie Hayden, Esq., at Heller, Draper, Hayden, Patrick & Horn, L.L.C., represents the debtors in their restructuring efforts. Since February 2000, B&W has continued to be managed by McDermott; however its results of operations have been deconsolidated from McDermott's financial statements. The Company wrote off its remaining investment in B&W of $224.7 million during the second quarter of 2002. Headquartered in New Orleans, Louisiana, McDermott International, Inc. -- http://www.mcdermott.com/-- is a leading worldwide energy services company. The Company's subsidiaries provide engineering, fabrication, installation, procurement, research, manufacturing, environmental systems, project management and facility management services to a variety of customers in the energy and power industries, including the U.S. Department of Energy. For the year ended Dec. 31, 2004, on a deconsolidated basis, B&W generated operating income of $115.6 million on revenues of $1.37 billion. B&W's net income for the year-ended Dec. 31, 2004, was $99.1 million, including the result of favorable tax valuation allowance adjustment of $26.2 million. At Aug. 24, 2005, B&W had unrestricted cash & cash equivalents of $352 million. BEAR STEARNS: Moody's Rates Class M-9 Sub. Certificates at Ba1 -------------------------------------------------------------- Moody's Investors Service assigned a rating of Aaa to the senior notes issued by Bear Stearns Asset Backed Securities I Trust 2006-PC1, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by People's Choice Home Loans, Inc. originated adjustable-rate (71.86%) and fixed-rate (28.14%) subprime mortgage loans. The ratings are based primarily on: * the credit quality of the loans, * subordination, * overcollateralization, * excess spread, * an interest rate swap agreement, and * a yield maintenance agreement entered into for the benefit of the noteholders. Moody's expects collateral losses to range from 5.70% to 6.20%. EMC Mortgage Corporation will act as a master servicer. Moody's assigned EMC Mortgage Corporation its top servicer rating (SQ1) as a primary servicer of subprime loans. The complete rating actions are: Issuer: Bear Stearns Asset Backed Securities I Trust 2006-PC1 Securities: Asset-Backed Certificates, Series 2006-PC1 * Class A-1, Assigned Aaa * Class A-2, Assigned Aaa * Class A-3, Assigned Aaa * Class M-1, Assigned Aa1 * Class M-2, Assigned Aa2 * Class M-3, Assigned Aa3 * Class M-4, Assigned A2 * Class M-5, Assigned A3 * Class M-6, Assigned Baa1 * Class M-7, Assigned Baa2 * Class M-8, Assigned Baa3 * Class M-9, Assigned Ba1 BEVERLY ENTERPRISES: Plans to Redeem Sr. Sub. Notes for $241.17M ---------------------------------------------------------------- Beverly Enterprises, Inc. (NYSE: BEV), has given a conditional notice of redemption to holders of its 7-7/8% Senior Subordinated Notes Due 2014. Under the indenture governing the Notes, the redemption price will be the greater of: (a) 100% of the principal amount of the Notes; and (b) the sum of the present values of what's left to be paid on the Notes from the redemption date to June 15, 2009, discounted at the applicable treasury rate to the redemption date plus, in either case, accrued and unpaid interest up to but not including the redemption date. Assuming the applicable Treasury Rate on the redemption date is the same as on the date of the notice given to holders, the redemption price for the $215,000,000 aggregate principal amount of the Notes outstanding would be $241,166,365.32, or approximately $1,121.70 per $1,000 principal amount. The Company will publicize the actual redemption price once it has been determined in accordance with the indenture. The redemption is subject to satisfaction of these conditions precedent on the business day immediately preceding the redemption date: (1) the consummation of the merger of PSC Sub, Inc., with the Company; and (2) the discharge of the indenture as to all Notes. The redemption date is March 1, 2006, assuming all conditions for redemption have been satisfied by February 28, 2006. If the conditions for redemption have not been satisfied by February 28, 2006, then the redemption date for the Notes will be on the business day immediately following the day on which all conditions for redemption have been satisfied, but not later than July 3, 2006. If the Notes have not been redeemed by July 3, 2006, then the conditional notice of redemption will expire and the Notes will not be redeemed. Beverly Enterprises, Inc., and its operating subsidiaries are leading providers of healthcare services to the elderly in the United States. At July 31, 2005, BEI operated 345 skilled nursing facilities, as well as 18 assisted living centers, and 64 hospice and home care centers. Through Aegis Therapies, the company offers rehabilitative services on a contract basis to nursing facilities operated by other care providers. * * * As reported in the Troubled Company Reporter on Mar. 28, 2005, Standard & Poor's Ratings Services placed its ratings on Beverly Enterprises Inc. on CreditWatch with negative implications. The CreditWatch listing reflects the announcement that Beverly's board of directors has voted to sell the company through an auction process. This is in response to the possibility that an investor group, the Whitman/Appaloosa group, may take control of the company if it is successful at the upcoming board elections at the company's shareholder meeting in April. The CreditWatch listing reflects the apparent likelihood that a sale of the company will take place. Regardless of who acquires Beverly, it is likely that the company's credit profile will weaken. As reported in the Troubled Company Reporter, on June 16, 2004, Standard & Poor's Ratings Services assigned its 'B' rating to Beverly's the $225 million senior subordinated notes due 2014. The existing ratings on the company were affirmed. The company's bank facility, which is rated 'BB', or one notch above the 'BB-' corporate credit rating, has been assigned a recovery rating of '1'. As reported in the Troubled Company Reporter on Mar. 28, 2005, Moody's Investors Service affirmed the ratings of Beverly Enterprises, Inc., and changed the outlook to developing. This action follows the announcement by Beverly that its Board of Directors voted unanimously to pursue the sale of the company through an auction process. This announcement follows the expression of interest from and ensuing proxy battle with the Whitman/Appaloosa investor group. These ratings were affirmed: * Senior implied rating, Ba3 * Senior unsecured issuer rating, B1 * $90 million senior secured revolving credit facility due 2007, Ba3 * $135 million senior secured term loan B due 2008, rated Ba3 * $215 million 7.875% senior subordinated notes due 2014, rated B2 * $115 million 2.75% convertible subordinated notes, rated B2 As reported in the Troubled Company Reporter on Mar. 24, 2005, Fitch Ratings has placed Beverly Enterprises, Inc., on Rating Watch Evolving. Beverly's Board of Directors announced they were putting the company up for sale. Beverly is currently in the midst of a Proxy contest with a group led by Formation Capital, LLC, which includes a host of investors that have collectively acquired 8.1% of BEV common shares. Formation has provided an indication of interest of $11.50 per share of BEV common stock, or approximately $1.8 billion. Fitch's ratings on Beverly affected by this action include: -- Secured bank facility 'BB'; -- Senior unsecured debt (indicative) 'BB-'; -- Senior secured subordinated notes 'B+'; -- Senior subordinated convertible notes 'B+'. BOOTIE BEER: Inks Private Sale of 10M Shares to European Investors ------------------------------------------------------------------ Bootie Beer Corporation (OTC Bulletin Board: BTIB) entered into a private investment agreement with a European investment group for the purchase of 10 million shares of stock issued by the Company pursuant to Regulation S, which are rules governing offers and sales made outside the U.S. The Company expects to close on the sale by the end of February 2006. "The investment agreement and financial relationship is an exciting and positive step towards achieving the Company's business model objectives and enhancing shareholder equity. The European investment group is a big endorser of the Bootie Beer business model, resulting in indications of follow-on financing to support our growth strategy," stated Tania M. Torruella, CEO of Bootie Beer Corporation. Bootie Beer and Bootie Light are being enthusiastically received by beer wholesalers and retailers across the country, resulting in acquisition of significant contract distribution agreements. According to Paul Beleckas, President of Bootie Beer Corporation, distributors and retailers are making financial and human resource commitments to the promotion and shelf placement of Bootie Brands. As a result, the Company intends to support their distributor and retailer efforts, by allocating much of the proceeds to advertising and marketing to increase consumer demand and revenues in their territory. Headquartered in Winter Park, Florida, Bootie Beer Corporation -- http://www.bootiebeer.com/-- conducts its brewing and packaging operation in La Crosse, Wisconsin. Bootie Beer and Bootie Light compete in the premium beer and premium light beer category. Bootie Brands are brewed with fresh, all-natural ingredients, the finest hops and grains, and ultra-pure local artesian water drawn from the deep Wisconsin wells. The result of the high-quality brewing processes gives Bootie Beer a full-body, smooth lager taste. Bootie Light is seriously light with only 2.6 carbohydrates and 95 calories resulting in a refreshing, crisp light-body beer. Bootie Brands have an outstanding mainstream beer taste and are brewed with uncompromised quality. At Sept. 30, 2005, Bootie Beer Corp.'s balance sheet showed a stockholders' deficit of $$4.6 million, compared to a $1.7 million deficit at Dec. 31, 2004. BRITISH AMERICAN: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: British American Properties Alexandria, LLC 422 Pinewold Drive Houston, Texas 77056 Bankruptcy Case No.: 06-80051 Chapter 11 Petition Date: January 31, 2006 Court: Western District of Louisiana Judge: Henley A. Hunter Debtor's Counsel: Gary K. McKenzie, Esq. Jill Ann Hrivnak, Esq. STEFFES, VINGIELLO & MCKENZIE, L.L.C. 13702 Coursey Boulevard, Building 3 Baton Rouge, Louisiana 70817 Tel: (225) 751-1751 Fax: (225) 751-1998 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ City of Alexandria $90,052 Utility Department P.O. Box 8618 Alexandria, LA 71306 Crawford Lewis, PLLC $39,617 P.O. Box 3656 Baton Rouge, LA 70821 AT&T $12,320 P.O. Box 830018 Baltimore, MD 21283-0018 American Hotel Register Co. $10,877 P.O. Box 94150 Palatine, IL 60094-4150 The Home Depot $3,755 AV Express $3,326 Bell South $2,761 Sayes Office Supply $2,744 Coca-Cola Enterprises $2,646 Cox Cable $2,456 IESI $2,415 Rapides Regional Med. Center $2,412 Phillips Sign Service, Inc. $2,350 Aramark Uniform Services $2,006 Schindler Elevator Company $1,552 Rapides Air $1,527 Auto-Chlor $1,469 LA Occupational $1,360 Emerg Grp of Rapides LLC $1,262 CALPINE CORP: Plans to Cut 300 Positions under Restructuring Plan ----------------------------------------------------------------- Calpine Corporation (OTC Pink Sheets: CPNLQ) reported the initial steps of a comprehensive program designed to "stabilize, improve and strengthen" the company's core power generation business and its financial health. This program will help to ensure that Calpine will emerge from its Chapter 11 restructuring as a profitable, stronger and more competitive power company. Beginning Feb. 1, 2006, Calpine is reducing activities and curtailing expenditures in certain non-core areas and business units, resulting in a staff reduction of approximately 300 positions. Combined with other cost reduction measures, including the closure of non-core offices, these actions are expected to reduce annual operating costs by approximately $50 million, enhancing the company's financial and liquidity positions. Robert P. May, Calpine's Chief Executive Officer, stated, "This announcement represents an important step toward Calpine's successful restructuring and a new beginning for our company. And it starts with a renewed focus on what Calpine does best -- power generation. "Calpine has one of the largest, cleanest and most fuel-efficient power plant fleets in the industry, and we are experienced in every aspect of power generation," added Mr. May. "It is clear, however, that our business must change to reflect today's energy marketplace, and we must bring our operating and cost structures in line with this new reality." Calpine's cost reduction activities return the company's efforts to its core North American power generation business. The areas of its business that will be immediately impacted by this program include: * Business Development: The company is limiting its new business development activities and is focusing ongoing efforts on maximizing the value of its advanced development opportunities, including projects with long-term power contracts or in advanced contract negotiations. The company will look to sell select development projects and will continue to evaluate existing petroleum coke development in Texas. * Construction: Calpine is completing construction projects with long-term power sales commitments and is exploring the opportunity to sell this business unit. The company continues to evaluate those projects without long-term power sales agreements. * Power Services: The company is discontinuing all new business activity for Calpine Power Services and will complete its service obligations under existing contracts. * Marketing and Sales: Calpine is evaluating its future participation in power markets to determine the right balance between short-term, long-term and tolling contracts for the sale of its generation. Until then, the company is curtailing its retail power sales efforts to administering current contracts and is limiting long-term power contracting efforts for its existing generation. * Thomassen Turbine Systems: In keeping with its focus on the North American power generation sector, Calpine has determined that TTS is not a core business for Calpine and every effort will be made to sell this company to a third party. "We have started developing a new business plan, beginning with a top-to-bottom review of our power assets, business units and markets where we are active," continued Mr. May. "Our goal is to provide near-term results, while positioning Calpine for profitable growth. This business plan will be a roadmap for Calpine's future and will ultimately serve as the foundation for our Plan of Reorganization. We have set an aggressive timeline to strengthen our business, our capital structure and our competitive position. Throughout this process, we will continue to work closely with our creditors, the Court and other stakeholders to emerge from Chapter 11 as soon as possible." Full-text copies of Court documents and other general information about the Chapter 11 cases are available at no charge at http://www.kccllc.net/calpine Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. CALPINE CORP: Utilities Who Ask Receive Two-Week Security Deposits ------------------------------------------------------------------ The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York put his final stamp of approval on Calpine Corp.'s proposal to provide Utility Providers who ask for security deposits with deposits equal to two weeks' of average utility service to comply with the adequate assurance of payment requirements under Section 366 of the Bankruptcy Code. Uninterrupted utility services are essential to Calpine's ongoing operations and to the success of the Debtors' reorganization, Richard M. Cieri, Esq., at Kirkland and Ellis, LLP, in New York, told Judge Lifland. Should the Utility Providers refuse or discontinue service, even briefly, Calpine Corporation's business operations would be severely disrupted, jeopardizing the Debtors' reorganization efforts. All Utility Providers are deemed, by virtue of the availability of the Adequate Assurance Deposit and the Adequate Assurance Procedures, to have received adequate assurance of payment and are enjoined from ceasing performance based on adequate assurance of payment related issues pending any Determination Hearing that may be conducted. To the extent that any Utility Provider believes that the Two-Week Deposit and the Adequate Assurance Procedures authorizing those deposits do not constitute satisfactory adequate assurance of payment within the meaning of Section 366(c)(2), the Court, after a proper notice and hearing, may order the modification of the amount of any adequate assurance of payment demand made by any Utility Provider. The Debtors are authorized, with the consent of the Official Committee of Unsecured Creditors, to amend the Utility Service List to add or delete any Utility Provider. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Wants Court to Okay Interim Compensation Procedures ----------------------------------------------------------------- Calpine Corporation and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's permission to establish uniform procedures for the compensation and reimbursement of court-approved professionals on a monthly basis. Specifically, the Debtors propose that: (a) On or before the 30th day of each month after the month for which compensation is sought, each Professional seeking compensation will serve a monthly statement, by hand or overnight delivery, on: * the Debtors, * the Debtors' counsel, * the attorneys for any committees appointed by the U.S. Trustee; and * the U.S. Trustee. (b) Each Monthly Fee Statement must contain a list of the individuals and their titles, who provided services during the statement period, their billing rates, the aggregate hours spent by each individual, a reasonably detailed breakdown of the disbursements incurred and contemporaneously maintained time entries for each individual in increments of tenths of an hour; (c) Each person receiving a Fee Statement will have 15 days after receipt to review it. In the event a person has an objection to a Fee Statement, he will serve on the Professional whose statement is objected to, and the Notice Parties, a written notice of objection statement setting forth the nature of the objection and the amount of fees or expenses at issue, no later than 35 days after the end of the month for which compensation is sought,; (d) At the expiration of the 35-day period, the Debtors will promptly pay 80% of the undisputed fees and 100% of the undisputed expenses identified in each Monthly Statement to which no objection has been served; (e) If the Debtors receive an objection to a particular fee statement, they will withhold payment on that portion of the fee statement to which the objection is directed and promptly pay the remainder of the fees and disbursements in percentages set forth; (f) If the parties to an objection are able to resolve their dispute after the service of Notice of Objection to Fee Statement, and if the party whose statement was objected to serves on the Notice Parties a statement indicating that the objection is withdrawn and describing in detail the terms of the resolution, then the Debtors will promptly pay that portion of the fees statement which is no longer subject to an objection; (g) Every 120 days, but no more than every 150 days, each of the professionals will serve and file with the Court an application for interim or final Court approval and allowance, of the compensation and reimbursement of expenses requested; (h) Any Professional who fails to file an application seeking approval of compensation and expenses previously paid when due will be ineligible to receive further monthly payments of fees or expenses until further Court order, and may be required to disgorge any fees paid since retention or the last fee application, whichever is later; and (i) If a Committee is appointed, the attorneys for the Committee may, in accordance with the foregoing procedure for monthly compensation and reimbursement of Professionals, collect and submit statements of expenses, excluding individual committee members' counsel expenses, with supporting evidence of payment, from members of the Committee he represents. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, tells that Court that the proposed procedures will enable the Debtors to: -- monitor closely costs of administration; -- maintain a level cash flow availability; and -- implement efficient cash management procedures. Moreover, the Debtors will allow the Court and key parties-in- interest to insure the reasonableness and necessity of the compensation and reimbursement sought pursuant to the procedures. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) CANAL CAPITAL: Todman & Co. Raises Going Concern Doubt Over Losses ------------------------------------------------------------------ Todman & Co., CPAs, PC, expressed substantial doubt about Canal Capital Corporation's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Oct. 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations and substantial pension plan obligations. The Company's auditors can be reached at: Todman & Co., CPAs, PC 120 Broadway Suite 3660 New York, New York 10271 Phone: (212) 962-5930 Fiscal Year 2005 Results Canal Capital recognized a $700,000 net income for the year ended Oct. 31, 2005, as compared to the fiscal year 2004 net loss of $600,000. Revenues from continuing operations consist of revenues from the Company's real estate and stockyard operations. Revenues in 2005 increased by $2.3 million to $6.5 million as compared with $4.2 million of revenues in fiscal 2004. The increase in revenues in fiscal 2005 is due primarily to the $2.5 million increase in sales of real estate. Canal Capital's balance sheet at Oct. 31, 2005, showed $5.8 million in total assets and liabilities of $4 million. At Oct. 31, 2005, the Company had working capital of approximately $100,000. However, it also had a $13.3 million accumulated deficit at Oct. 31, 2005. Pension Plans Canal Capital has a defined benefit pension plan covering substantially all of its salaried employees. The Company's funding policy is to contribute the amount that can be deducted for federal income tax purposes. Accordingly, the Company has made contributions of approximately $399,000 for fiscal 2005, $237,000 for fiscal 2004 and $0 for fiscal 2003. The accumulated benefit obligation for the pension plan was $1.7 million and $1.8 million at Oct. 31, 2005 and 2004. Canal Capital Corporation is engaged in two distinct businesses -- stockyard and real estate operations. Canal operates two central public stockyards located in St. Joseph, Missouri and Sioux Falls, South Dakota. The Company's stockyards provide all services and facilities required to operate an independent market for the sale of livestock, including veterinary facilities, auction arenas, auctioneers, weigh masters and scales, feed and bedding, and security personnel. Canal holds property for development or resale consisting of approximately 31 acres of undeveloped land located in the Midwest. The Company constantly evaluates proposals received for the purchase, leasing or development of this asset. Substantially all of Canal's real property is pledged as collateral for its debt obligations. CAPITOL FOOD: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Capitol Food Corp. of Fields Corner c/o Demetrios B. Haseotes 80 Fiarhaven Road Cumberland, Rhode Island 02864 Bankruptcy Case No.: 06-10173 Type of Business: The Debtor owns and operates a grocery store. Chapter 11 Petition Date: January 27, 2006 Court: District of Massachusetts (Boston) Judge: Robert Somma Debtor's Counsel: Andrew M. Osborne, Esq. Osborne & Fonte 20 Eastbrook Road, Suite 304 Dedham, Massachusetts 02026 Tel: (781) 326-3875 Fax: (781) 326-4113 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 6 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Demetrios B. Haseotes Loans $114,633 80 Fairhaven Road Cumberland, RI 02864 Di Giorgio Corporation Waiver of $50,000 White Rose Division objections to 380 Middlesex Avenue rejection of lease Carteret, NJ 07008 Fields Station, LLC Percentage rent $12,000 540 Gallivan Boulevard based on estimated Boston, MA 02124 sales by Ethnic and American, Inc., former subtenant NSTAR Utilities $400 One NSTAR Way Westwood, MA 02090 Keyspan Energy Delivery Utilities $300 P.O. Box 4300 Woburn, MA 01888 A1 Exterminators Services $200 101 Shephard Street Lynn, MA 01902-4597 CATHOLIC CHURCH: Court Okays Marianist Settlement Pact in Tucson ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona authorized the Diocese of Tucson to enter into, and perform its obligations under, the settlement agreement with the Marianist Province of the United States. All claims between the Marianist Province and the Diocese will be released, Judge Marlar rules. The Marianist Province will also be treated as a Participating Third Party and a Released Party under the Diocese's Plan of Reorganization and Confirmation Order. As previously reported in the Troubled Company Reporter on Jan. 3, 2006, the Diocese asked the Court to approve separate settlements with the Marianist Province, and the Diocese of Phoenix and its 38 parishes. Marianist Settlement The Society of Mary is an international religious order of brothers and priests. More than 600 Marianist Province serve in the Province of the United States, which includes Eastern Africa, India, Ireland, Mexico, and Puerto Rico. Marianist Province priests and brothers have served in the Tucson Diocese. According to Susan G. Boswell, Esq., at Quarles & Brady Streich Lang LLP, in Tucson, Arizona, the Tucson Diocese and the Marianist Province have disputes over claims for indemnity and contribution related to alleged tort claims against the Diocese and co-defendants, including claims that the Marianist Province are liable for allegations involving sexual abuse by Marianist Province priests or brothers, working in the Tucson Diocese. The Tucson Diocese and the Marianist Province are co-defendants in certain litigation involving sexual abuse. The Marianist Settlement provides that in consideration of being treated as a Participating Third Party and a Released Party under Tucson's Plan of Reorganization, the Marianist Province agree to contribute $10,000 to the Settlement Trust Fund. The Tucson Diocese and the Marianist Province also exchange mutual releases. The Roman Catholic Church of the Diocese of Tucson filed for chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on September 20, 2004, and delivered a plan of reorganization to the Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson Diocese. (Catholic Church Bankruptcy News, Issue No. 51 Bankruptcy Creditors' Service, Inc., 215/945-7000) CDEX INC: James Griffin Replaces Malcolm Philips as CEO ------------------------------------------------------- CDEX Inc. named James O. Griffin as the Company's Chief Executive Officer, effective Jan. 1, 2006. Mr. Griffin, who joined CDEX in 2005 as Chief Operating Officer, succeeds Malcolm H. Philips, who will continue as Chairman of the CDEX Board. Mr. Griffin, who has an extensive background in developing technology companies in the security industry, will lead the CDEX expansion of its product suite, the company's entrance into new markets, and the establishment of funding initiatives. Under Mr. Griffin's leadership, CDEX will begin implementation of its growth strategy that includes enlarging the company's intellectual property portfolio, expanding research and development capabilities, accelerating the development and launch of new products, expansion of sales channels, entering selected international markets, setting up strategic business alliances for product development, manufacturing, and service and raising capital for the acquisition of new technologies. Going Concern Doubt Aronson & Company expressed substantial doubt about CDEX Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Oct. 31, 2005 and 2004. The auditing firm pointed to the Company's recurring net losses, insufficient working capital, lack of committed borrowing arrangements and an accumulated deficit in excess of $19 million as of Oct. 31, 2005. About CDEX Inc. CDEX Inc. -- http://www.cdex-inc.com/and http://www.valimed.com/ -- is a technology development company with a current focus on developing and marketing products using chemical detection and validation technologies. At present, CDEX is devoting its resources to two distinct areas: (i) identification of substances of concern (e.g., explosives and illegal drugs for homeland security); and (ii) validation of substances for anti- counterfeiting, brand protection and quality assurance (e.g., validation of prescription medication and detection of counterfeit or sub-par products for brand protection). ValiMed is one line of CDEX products for the healthcare market. CDEX is headquartered in Rockville, Maryland with its research and development laboratory in Tucson, Arizona. CHESAPEAKE ENERGY: Moody's Rates $500 Million Add-On Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to Chesapeake Energy's (CHK) $500 million secured natural gas and oil hedging facility maturing 2010. Swap counterparties' credit exposure to CHK arises to the extent oil and natural gas prices exceed the fixed prices of all swaps in the hedge portfolio. Notably, such conditions would also support, and likely increase, the value of the collateral in the asset market. Moody's also assigned a Ba2 rating to CHK's add-on offering of $500 million of 6.5% senior unsecured notes due 2017 and affirmed its Ba2 corporate family rating and all other existing ratings. The rating outlook remains stable due to CHK's: * scale, * diversification, * core basin intensification, and * pattern of adequately competitive leveraged full-cycle returns. CHK is diversified and now the second largest independent natural gas producer. However, the stable outlook assumes post- acquisition leverage reduction from cash flow or common stock proceeds by mid-2006. Leveraged acquisitions before de-leveraging would impact the outlook and possibly ratings. Importantly, the stable outlook also assumes an acceptable outcome to our review of forthcoming 2005 FAS 69 data to update CHK's: 1) leveraged full-cycle return and reserve replacement cost patterns; and 2) the quality and unit costs of the underlying volume components of CHK's 2005 reserve additions. In Moody's view, even acquisitions funded 50% with debt and 50% with common equity would add leverage if the reserves held: -- high proportions of non-producing unfunded proven undeveloped (PUD); -- probable, and possible reserves; -- related risks and heavy future drilling and development capital needs; and -- low proportions of current production and proven developed (PD) reserves. It is by no means certain that CHK will find it convenient to soon launch sufficient common equity to spread the risks of aggressive acquisitions and drilling programs fairly across the capital structure. CHK does remain able to materially reduce debt with cash flow if it significantly reduced its acquisition scale and pace. Furthermore, Moody's estimates that additional material latent asset value cover of debt is provided by a substantial portfolio of drilling rigs and a minority position in a contract drilling company. Note proceeds will repay bank debt; Moody's estimates roughly $500 million of pro-forma year-end 2005 secured bank debt after funding recent acquisitions. The amount of secured debt does not require notching the unsecured notes under the corporate family rating though Moody's notes CHK is increasing its secured bank revolver from $1.25 billion to $2 billion. Consistent substantial use of that facility could result in notching the notes. At this point, Moody's believes that, pro-forma of January 2006 acquisitions: * CHK's 2005 unit drillbit finding and development costs rose to over $9/boe; * all-sources unit reserve replacement costs to over $15/boe; * three year average unit reserve replacement costs to roughly $13/boe; and * total leveraged unit full-cycle costs now is roughly $29/boe. It appears that adjusted debt divided by PD reserves rose to roughly $8.40/boe of PD reserves, up from pro-forma $7.40/PD boe at September 30 last year, and adjusted for 50% of preferred stock, has risen to $9.40/boe of PD reserves. The task of capturing CHK's true underlying performance is complicated by constant acquisitions. CHK's over $6.5 billion in up-cycle acquisitions since Dec. 31, 2003 include large inventories of potential drilling inventory in a number of new plays still in fairly early stages of evaluation. While carrying aggressive leverage, CHK has also injected the risks and challenges of many new plays and basin learning curves into its system. The degree of success will be indicated by: * subsequent sequential quarter organic production trends; * reserve replacement costs as updated annually with FAS 69 data; and * resulting ability of cash flow after sustaining capex to reduce acquisition debt. CHK's contends with the leverage and business risks inherent to its constant outlier drive for step-change growth and capture of key acreage positions in basins and plays it deems important. CHK remains a prime advocate for aggressive growth in this: * historic up-cycle in oil and natural gas prices; * great sector transition; and * historic multiples paid for production and unit costs paid for: -- PD, -- PUD, -- probable, and -- possible reserves. To support its ratings, CHK would need to avoid pushing its profile past a point that could be redressed within 6 months with cash flow or common equity offerings. The hedge facility is first secured by roughly 102 million barrels of oil-equivalent (mmboe) durable U.S. onshore proven oil and gas reserves, estimated by the agent bank as of Sept. 30, 2005. Roughly 68% of the collateral in the proven developed producing (PDP) reserve category, 8.7% in the largely funded proven developed but non-producing (PDNP) category, and 23.3% in the largely unfunded PUD category. Collateral was reduced from 118 mmboe with the agent's release of a portion of collateral to back CHK's increased secured bank revolver. The hedge facility requires maintenance of at least 1.3 times forward present value collateral cover ($650 million) of the full $500 million facility. Coverage now exceeds 2 times. The agent bank calculates collateral present value. Moody's confirms that the agent is using traditional conservative risk adjustments to the PDNP and PUD reserve categories and using suitably conservative price forecasts. CHK recently announced $796 million of oil and natural gas property acquisitions, containing 44 mmboe in proven reserves, from seven private firms. CHK also acquired 13 land drilling rigs for $150 million currently under contract with other exploration and production companies. The oil and gas reserves contain relatively low components of PD reserves (45% of proven reserves) and current daily production (9,000 boe/day). CHK again is paying a premium for: * PD reserves ($40/boe); * current daily production ($88,400/boe per day); * proven reserves loaded for development capital ($24/boe); and * PUD, probable, and possible drilling locations. CHK reports that: * 34% of the properties intensify its current Barnett Shale holdings; * 34% is in South Texas; * 12% is in the Permian Basin; * 11% in its core Mid-continent region; and * 9% in East Texas. Credit exposure under the hedge facility is measured by the agent bank's exposure management model. As exposures rise to maximum permitted future exposure, measured to a 95% confidence level, or two standard deviations of price movement, the agent bank can both require additional collateral and cessation further hedging activity. Te agent bank calculates that CHK can hedge up to a peak Potential Future Exposure (PFE). During the fourth quarter 2005 historic surge in natural as prices, the peak actual month- end mark-to-market exposure under the facility was $233 million at the end of September and the maximum PFE was $365 million at the end of December. Before the reduction in collateral, the agent bank's reserve engineering and conservative price projections a year-end 2006 net present value of the collateral, discounted at 9% (PV9), of $1.335 billion. After the reduction in collateral, the PV9 value of the hedge was calculated to be $1.175 billion. Moody's exploration and production company evaluation model currently supports a Ba2 corporate family rating. The model indicates a Baa rating profile for CHK's: * PD reserve scale, * total reserve scale, * production volume scale, and * estimated leveraged full-cycle returns (updated soon). This is offset: * by a Ba rating profile for retained cash flow, less sustaining capex, coverage of debt; * by single B profiles for total unit full-cycle costs, all- sources unit reserve replacement costs, and fully burdened leverage on total reserves (adjusted debt and proven reserve development capex, divided by proven reserves); and * by the Caa profile of Debt/boe of PD reserves and preferred stock adjusted Debt/boe of PD reserves (granting 50% equity credit for CHK's preferreds). Catalysts for credit accretion, stagnation, or deterioration remain largely in the degree to which CHK: 1) can replace and grows production at competitive reserve replacement costs and full-cycle cash-on-cash returns; and 2) funds acquisitions and capital spending with debt. CHK's internal capital spending budget is diversified across many onshore basins, plays and play types, several of which have early stage potential for material growth but come with attendant risk. Support comes from: 1) risk mitigation benefit of CHK's comparatively large onshore reserve and production scale; 2) fairly high degree of basin diversification; 3) learning curve, oilfield services, and cost benefits of concentrated operations in four Mid-continent basins that may support competitive unit full-cycle costs; and 4) a durable production base as indicated by an over 8 year PD reserve life and large diversified drilling inventory. Chesapeake Energy Corporation is headquartered in Oklahoma City, Oklahoma. CHESAPEAKE KNIFE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Chesapeake Knife & Tool Company, Inc. aka Chesapeake Knife & Tool Co., Inc. aka Chesapeake Knife & Tool aka CK&T aka Chesapeake Knife & Tool Franchise Co. aka CK&T Franchise Corporation 9385-G Gerwig Lane Columbia, Maryland 21046 Tel: (410) 720-5114 Bankruptcy Case No.: 06-10480 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Chekt, Incorporated 06-10481 CK&T, Inc. 06-10484 Type of Business: The Debtors sell kitchen cutlery and gift items from seven retail stores and on-line at http://www.chesapeakeknifeandtool.com/ Chapter 11 Petition Date: January 31, 2006 Court: District of Maryland (Baltimore) Judge: Duncan W. Keir Debtors' Counsel: Glenn D. Solomon, Esq. Offit Kurman, P.A. 8 Park Center Court, Suite 200 Owings Mills, Maryland 21117-3754 Tel: (443) 738-1500 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Chesapeake Knife & Tool Company, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Swiss Army Brands Trade $181,630 One Research Drive Shelton, CT 06484-0874 Attn: Stacey Clemons Tel: (800) 243-4045 Kershaw Knives (Shun) Trade $150,892 18600 Southwest Teton Avenue Tualatin, OR 97062 Attn: Dennis Epstein Jeff Goddard Tel: (800) 325-2891 Wusthof Trident of America Trade $115,346 333 South Highland Avenue Briarcliff Manor, NY 10510 Attn: Scott Severenson Tel: (800) 289-9878 Willitts Designs International Trade $103,433 1129 Industrial Avenue Petaluma, CA 94975 Attn: Audrey Lackey Tel: (707) 778-7211 C.A.S. IBERIA, Inc. Trade $39,368 650 Industrial Boulevard Sale Creek, TN 37373 Leatherman Tool Group Trade $31,043 12106 NE Ainsworth Circle Portland, OR 97220-9001 WorldWise Imports Trade $29,380 4390 East Alexander Road Las Vegas, NV 89115 A.T. Cross Company Trade $28,520 One Albion Road Lincoln, RI 02865-3700 Columbia River Knife & Tool Trade $27,732 9720 Southwest Hillman Court Suite 805 Wilsonville, OR 97070-7712 Benchmade Knife Company Trade $27,563 300 Beaver Creek Road Oregon City, OR 97045 Luminox Watch Company Trade $25,986 421 Midland Avenue Wayne, PA 19087 Buck Knives, Inc. Trade $20,206 660 South Lochsa Street Post Falls, ID 83854 Colibri Group Trade $19,280 100 Niantic Avenue Providence, RI 02907 Spyderco, Inc. Trade $15,725 820 Spyderco Way Golden, CO 80403 TRG Group Trade $15,639 9643 Olive Boulevard St. Louis, MO 63132 DOVO Trade $15,272 Postfach 190146 D-42701 Solingen Germany Rounds Van Duzer Architect $12,018 Architects, P.C. 467 A North Washington Street Falls Church, VA 22046 Taylor Cutlery Trade $11,314 4043 Fordtown Road Kingsport, TN 37662 White Marsh Mall, Inc. Rent $10,927 8200 Perry Hall Boulevard Baltimore, MD 21236 Charles Mall Co. L.P. Rent $9,582 c/o Simon Property Group 115 West Washington Street Indianapolis, IN 46204 CLAREMONT TECHNOLOGIES: Creditors Want Case Converted to Chapter 7 ------------------------------------------------------------------ John Morita, Dwayne Yaretz, Robert Rosner and Marcella Kam, creditors of Claremont Technologies Corporation ask the U.S. Bankruptcy Court for the District of Nevada to convert the Debtor's chapter 11 case to a chapter 7 liquidation proceeding. The Creditors remind the Court that the case was originally commenced through an involuntary chapter 7 liquidation. The Creditors say that the Debtor's prepetition filings with the Securities and Exchange Commission showed no meaningful assets or revenues. Despite this, the Creditors relate, the Debtor's management contested the involuntary petition causing expenditures of tens of thousands of dollars in legal fees. Furthermore, the Creditors say, the Debtor wasted precious assets and even incurred additional debt to resist submitting to the bankruptcy court's jurisdiction. Eventually, the Debtor agreed to entry of an order for relief under Chapter 11. The Creditors disclose that the Debtor's Schedules and Statement of Affairs demonstrated that the only material asset of the Debtor were common shares in Safe-Cell Tab, Inc., its wholly owned subsidiary. The Debtor's Monthly Operating Reports also showed that it had no revenues and the value of the inventory held by its subsidiary totaled only $16,000. To further substantiate the grounds for conversion, the Creditors tell the Court that the Debtor's Board of Directors consists of three individuals, one of which was responsible for lending the funds used to contest the involuntary petition. The Creditors say that that individual is listed as one of the Debtor's creditors and continues to charge a management fee, which is leading the Debtor deeper into insolvency. Finally, the Creditors say that bias exists in the way the company's president treats one of its creditors, who happens to be his brother. This treatment, the Creditors claim, poisons the Debtor's objectivity, limits the Debtor's capacity to be fair, and prohibits the Debtor from negotiating an arms-length unbiased reorganization plan. All of this, the Creditors argue, provides justification for the case to be converted to a chapter 7 liquidation. Headquartered in Las Vegas, Nevada, Claremont Technologies Corp. develops the first and only independent lab certified device, the Safe Cell Tab, which helps eradicate all cancer-causing radiation from electromagnetic frequencies. The Company was subject to an involuntary chapter 7 petition on March 25, 2005 (Bankr. D. Nev. Case No. 05-12235). The Debtor consented to an entry of an order for relief under chapter 11 on Aug. 24, 2005. COPYTELE INC: Grant Thornton's Going Concern Doubt Continues ------------------------------------------------------------ Grant Thornton LLP expressed substantial doubt about CopyTele, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Oct. 31, 2005. The auditing firm pointed to the Company's net losses and accumulated deficit of approximately $72,908,000 at the end of fiscal 2005. Grant Thornton issued a similar going concern opinion after its audit of the Company's financial statements for fiscal 2004. Fiscal Year 2005 Results CopyTele incurred a $4,451,257 net loss for the fiscal year ended Oct. 31, 2005, in contrast to a $3,360,655 net loss in the prior year. Net sales decreased by approximately $54,000 in fiscal 2005, to $$440,000, as compared to approximately $494,000 of net sales in fiscal 2004. The Company's total assets have steadily eroded over the last several years. As of Oct. 31, 2005, the Company's balance sheet showed $1,466,253 in total assets, versus $2,316,050 and $6,562,403 in total assets at Oct. 31, 2004 and 2001. At Oct. 31, 2005, the Company had liabilities of $348,230. Working capital at Oct. 31, 2005 decreased to $1,086,000 from $1,829,000 at the end of fiscal 2004. CopyTele, Inc.'s -- http://www.copytele.com/-- principal operations are the development, production and marketing of multi- functional hardware and software based encryption products that provide information security for domestic and international users over virtually every communications media, and the development, production and marketing of thin, high brightness, flat panel video displays. The Company sells its encryption products directly to end-users and through dealers and distributors. CORNELL TRADING: Has Until Today to File Schedules and Statements ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts gave Cornell Trading, Inc., until today, Feb. 3, 2006, to file its lists of creditors and equity security holders, schedules of assets and liabilities, statement of financial affairs, and schedule of executory contracts and unexpired leases. The Debtor told the Court that the size and complexity of its operations made it impossible to complete its Schedules and Statements within the 15-day deadline provided by Bankruptcy Rule 1007(c). In response, the Bankruptcy Court gave Cornell an extension through today to prepare the required Schedules and Statements. Headquartered in Williston, Vermont, Cornell Trading, Inc. -- http://www.aprilcornell.com/-- sells women's and children's apparel including dresses, skirts, blouses, and sleepwear. Cornell also offers books and housewares like table linens, placemats and napkins, bedding, and dolls and stuffed animals. The Company filed for chapter 11 protection on January 4, 2006 (Bankr. D. Mass. Case No. 06-10017). Christopher J. Panos, Esq., at Craig & Macauley, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated debts and assets between $10 million to $50 million. CORY MILNE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Cory Dale Milne 9497 South Lady Dove Lane South Jordan, Utah 84095 Bankruptcy Case No.: 06-20247 Chapter 11 Petition Date: February 1, 2006 Court: District of Utah (Salt Lake City) Debtor's Counsel: Blake D. Miller, Esq. Miller Guymon, P.C. 165 South Regent Street Salt Lake City, Utah 84111 Tel: (801) 363-5600 Fax: (801) 363-5601 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Lisa Garrard $100,000 6443 South 1865 East Salt Lake City, UT 84121 Select Portfolio Servicing $100,000 P.O. Box 551170 Jacksonville, FL 32255 Richard Carling $84,111 Beneficial Life Tower 36 South State Street, Suite 1200 Salt Lake City, UT 84111 Dallas Cooke, CPA $27,694 Strategic Staffing $20,561 Stephen B. Elggren, P.C. $17,934 Furniture Mattress Supply, Co. 2005 $15,804 Richard B. Frandsen $10,260 Outsource Receivables Mgt. $9,258 Dennis L. Mangrum $6,907 Steven L. Ingleby $6,201 CMA Business Credit Services $5,157 Labor Commission of Utah $4,982 Bullock Law Firm $4,846 Parsons Kinghorn Harris $4,563 LHR for First National Visa $3,905 Sanders & Douglas $3,900 Ralph R. Tate $3,217 Northland Group, Inc. $3,180 Richard B. Frandsen $2,688 COTT CORP: Poor Performance Cues Moody's Low-B Ratings' Downgrade ----------------------------------------------------------------- Moody's Investors Service downgraded the debt ratings of Cott Corporation to reflect the company's weak operating performance to date, as well as Moody's expectation that continued operating challenges will drag down performance through 2006 until the company's restructuring plans are fully implemented. The ratings outlook is stable. The rating action concludes the review for possible downgrade that began on Sept. 21, 2005. Downgrades: Issuer: Cott Beverages, Inc. * Senior Subordinated Regular Bond/Debenture, Downgraded to B1 from Ba3 Issuer: Cott Corporation * Corporate Family Rating, Downgraded to Ba3 from Ba2 Outlook Actions: Issuer: Cott Beverages, Inc. * Outlook, changed to stable from rating under review Issuer: Cott Corporation * Outlook, changed to stable from rating under review The downgrade of Cott's corporate family rating to Ba3 reflects the company's weak operating performance to date, which stems primarily from significant increases in input costs, including the cost of: * PET bottles, * high fructose corn syrup, and * aluminum cans. Also, over the last several years, Cott has focused on volume, rather than profitable, growth as it added capacity to meet stronger-then-expected demand for retailer-branded carbonated soft drinks (CSD's). More recently, the company's CSD volumes slowed as a result of increased promotional activity from larger branded competitors and the ongoing consumer shift towards more healthy beverages, such as lower-margined bottled water. As a result, EBITA margin in 2005 (calculated using Moody's standard analytic adjustments) declined to below 6% from over 9% last year, while EBITA/Average Assets declined to below 9%. Moody's notes that Cott is implementing an extensive restructuring plan that is designed to: -- reduce costs; -- improve efficiency; -- improve customer and supplier relationships; and -- increase penetration into the fast-growing non-carbonated beverage category. While Cott has a successful track record for implementing these types of initiatives, the restructuring will take time to gain traction and the company's operating performance and financial metrics will not show significant improvement until 2007. Cott's Ba3 rating reflects the key rating drivers that Moody's has identified for the global soft beverage industry: 1) Scale and diversification: with revenues of $1.7 billion in 2005, Cott is much smaller and less diversified than its larger competitors. 2) Franchise strength: although Cott is the number-four manufacturer of CSD's in the world, its retailer-branded products lack the brand equity of competing products marketed and distributed by much larger, better capitalized branded companies. Additionally, Cott holds a modest share of the CSD market as a whole. However, the retailer-branded category continues to grow at a faster pace than the overall CSD market due to retailer consolidation and the focus of major retailers on growing their own brands. 3) Profitability and pricing: given its focus on retailer- brands, Cott is a price follower. Recent cost increases along with a continued widening of the gap between retailer and branded prices, have allowed Cott to take some price increases. However, the delay in raising its prices has resulted in significant margin declines for the company in recent quarters. 4) Leverage and coverage metrics. Cott has typically generated strong cash flows that have been used to quickly reduce acquisition debt. At 3.1x as of Dec. 31, 2005, Debt/EBITDA remains strong for the rating category, and relative to net debt, cash flow before working capital and capital spending remains solid. However, higher capital spending and increased debt due to acquisitions have weakened Free Cash Flow/Debt to below 9%. Due to operating performance challenges and debt related to the recent acquisition of Macaw, the company's interest coverage has fallen to less than 3.0x. Cott's liquidity position remains sound, supported by positive cash flow generation and modest debt amortization. Cott has limited near term debt maturities, and as of Dec. 31, 2005, had $22 million of cash and ample availability under the accounts receivable securitization facility and amended $225 million credit facility that matures in 2010, which, under certain circumstances, can be upsized to $350 million. The company is expected to be in compliance with existing financial covenants over the next twelve months. The stable outlook is supported by Cott's sound liquidity position that should enable the company to comfortably manage through the near-term challenges, as well as some tolerance at the current rating level for modest adverse fluctuations in credit statistics. However, negative rating pressure would build: * if Cott were to fail to demonstrate steady progress in implementing its restructuring initiatives; and * if the company's enterprise value were to erode due to worse than expected operating performance. Quantitatively, the outlook would be revised to negative if EBITDA less Capital Expenditures/Interest were to fall below 1.5 times, EBITA Margin below 4.0% and EBITA Return on Assets below 6.0%. Moody's also cautions that erosion to these levels would signal a decline in recovery values, and would likely trigger a further one notch downgrade of the B1 rating on the senior subordinated notes. Conversely, a positive outlook would require evidence of meaningful success in implementing the company's restructuring initiatives and a sustained turnaround in operating performance such that EBITDA less Capital Expenditures/Interest exceeded 3 times and EBITA Margin exceeded 7.5%. The B1 rating on the senior subordinated notes remains one notch below the Ba3 corporate family rating, reflecting Moody's expectation for strong enterprise and recovery values in the event of default. The rating incorporates the contractual subordination to senior debt (consisting of secured revolver outstandings, capital leases plus approximately $183 million of accounts payable and accrued liabilities as of Dec. 31, 2005). Cott's secured revolving credit facility is not rated by Moody's. Headquartered in Toronto, Ontario, Cott Corporation is the world's largest retailer-brand, soft drink supplier with a leading position in take-home CSD markets in: * the US, * Canada, and * the UK. Fiscal 2005 revenue exceeded $1.7 billion. CUMMINS INC: Earns $550 Million of Net Income in Year 2005 ---------------------------------------------------------- Cummins Inc. (NYSE:CMI) reported profits as measured by earnings before interest and taxes (EBIT) of $907 million for the year 2005, a 67 percent increase from 2004. Sales increased 18 percent to $9.92 billion, from $8.44 billion in 2004. Net income for 2005 was $550 million, up 57 percent from $350 million in 2004. The Company's strong operating performance in 2005 allowed it to improve its cash position by $168 million, while also reducing net debt by $259 million. In the fourth quarter of 2005, Cummins sales increased 17 percent to a record $2.75 billion from $2.35 billion in the same period in 2004. Net income rose 40 percent in the fourth quarter to $167 million, or $3.31 share, from $119 million during the same period in 2004. The Company's earnings before interest and taxes (EBIT) for the fourth quarter of 2005 of $269 million -- or 9.8 percent of sales -- were 56 percent higher than the same period in 2004. All four Cummins operating segments posted revenue and Segment EBIT increases. The Company's gross margin in the fourth quarter of 2005 was 22.5 percent compared to 20.1 percent during the same period in 2004. For all of 2005, gross margins were 22.0 percent -- their highest level since 1997. Cummins fourth quarter of 2005 results include tax benefits of $13.5 million related to the favorable resolution of prior year matters and additional benefits from repatriated dividends under the American Jobs Creation Act of 2004. "Our results for both the fourth quarter and all of 2005 are outstanding," said Cummins Chairman and Chief Executive Officer Tim Solso. "This performance is evidence that we are transforming Cummins into a less cyclical, more diversified company while converting a larger percentage of sales into profit." "As good as the last two years have been, we are expecting 2006 to be more profitable, even if growth in our end markets moderates," Mr. Solso added. "We have significant opportunities as a result of our product mix, our leading position in many of the markets we serve, our global network of plants, technical centers, distributors and first-rate partners as well as our commitment to being a low-cost producer." Based on its current plans and forecasts, the Company expects to earn between $2.50 and $2.60 a share in the first quarter and between $11.90 and $12.10 a share for all of 2006. The Company's North American engine business remains very strong, but international sales growth was even better in 2005. For all of 2005, international sales represented 51 percent of the Company's total consolidated sales and 55 percent in the fourth quarter. The Company saw significant EBIT gains in its Engine, Power Generation and Distribution businesses in 2005. For the year, Segment EBIT for the Engine business -- the Company's largest -- grew 77 percent to $582 million as sales rose 23 percent. Power Generation Segment EBIT more than doubled in 2005 to $145 million. The Company's Distribution business saw its Segment EBIT increase 35 percent in 2005 to $107 million. The Company's Components Segment reported a 6 percent increase in Segment EBIT to $89 million. Cummins Inc. -- http://www.cummins.com/-- a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins serves customers in more than 160 countries through its network of 550 Company-owned and independent distributor facilities and more than 5,000 dealer locations. With more than 28,000 employees worldwide, Cummins reported sales of $8.4 billion in 2004. * * * As reported in the Troubled Company Reporter on Sept. 20, 2005, Moody's Investors Service raised its rating of Cummins Inc.'s debt securities (senior unsecured to Ba1 from Ba2), and also affirmed the company's Ba1 corporate family rating and SGL-1 speculative grade liquidity rating. The rating outlook is changed to positive from stable. As reported in the Troubled Company Reporter on Aug. 5, 2005, Standard & Poor's Ratings Services raised its rating on the $28,000,000 Structured Asset Trust Unit Repackagings Cummins Engine Co. Debenture-Backed Series 2001-4 certificates to 'BBB-' from 'BB+'. CURATIVE HEALTH: California DHS Audit Shows $39.3M Overpayments --------------------------------------------------------------- The Department of Health Services of the State of California has been conducting audits of three independent retail California pharmacies that previously did business with two of Curative Health Services, Inc.'s subsidiaries -- Apex Therapeutic Care, Inc., and eBioCare.com, Inc. -- which provided contract pharmacy and billing services to the three Pharmacies. The Company has learned that DHS issued final audit findings to the Pharmacies on Dec. 14, 2005. The DHS audits included a review of the Pharmacies' Medi-Cal billing for blood products supplied to the Pharmacies by Apex and eBioCare for the period from Oct. 1, 2001, to May 30, 2004. The final audit findings issued by DHS against the Pharmacies allege that the Pharmacies received overpayments of approximately $39.3 million collectively. Approximately 85% of the assessment against the Pharmacies relates to claims that DHS alleges were improperly reimbursed at 1% over the Pharmacies' cost of acquiring the product from Apex and eBioCare. DHS alleges that those reimbursements was improper because, in its view, payments should have been made at 1% over the cost the Pharmacies would have incurred if they had acquired the product directly from the product manufacturer. Substantially all of the balance of the assessment against the Pharmacies is based on allegedly improper reimbursement for the medically necessary anti-inhibitor product called FEIBA. DHS alleges that the Pharmacies submitted claims for FEIBA improperly, in its view, when they used factor product service codes. Apex and eBioCare used the factor product service codes when submitting claims on behalf of the Pharmacies because EDS, the company that processes claims for payment on behalf of DHS, could not accept the FEIBA-specific service code into its systems. The Company believes the allegations asserted by DHS against the Pharmacies are without merit, and the Company expects the Pharmacies to vigorously defend against these allegations through administrative and judicial proceedings. The Company also is aware that other similar retail pharmacy relationships in California are being audited by DHS. Although Apex and eBioCare are not being audited by DHS, the Company anticipates that if DHS prevails and the Pharmacies are required to return any overpayments, the Pharmacies may assert claims for indemnification against Apex and eBioCare for such overpayments. Based on facts and circumstances known to date, the Company believes that some amount of monetary loss is reasonably possible if the Pharmacies assert and prevail on indemnification claims against Apex and eBioCare. The Company estimates that the range of loss may be anywhere from $0 to $39.3 million. Curative Health Services, Inc. -- http://www.curative.com/-- is a leading provider of Specialty Infusion and Wound Care Management services. The Specialty Infusion business, through its national footprint of Critical Care Systems branch pharmacies, provides a cost-effective alternative to hospitalization, delivering pharmaceutical products and comprehensive infusion services to pediatric and adult patients in the comfort of their own home or alternate setting. Each JCAHO accredited branch pharmacy has a local multidisciplinary team of experienced professionals who clinically manage all aspects of a patient's infusion and support needs. The Wound Care Management business is a leading provider of wound care services specializing in chronic wound care management. The Wound Care Management business manages, on behalf of hospital clients, a nationwide network of more than 100 Wound Care CenterA(R) programs that offer a comprehensive range of services for treatment of chronic wounds, including outpatient, inpatient, post-acute and hyperbaric oxygen therapy. * * * Going Concern Doubt Management says that in the absence of a significantly improved operating cash flow or the restructuring of the senior notes, Curative currently does not expect to be able to service its debt obligations coming due in fiscal 2006. For this reason, management raised substantial doubt about the Company's ability to continue as a going concern. Ernst & Young LLP issued clean and unqualified opinions after auditing Curative's financial statements for the year ended Dec. 31, 2004, and 2003. DELAFIELD 246: Judge Gropper Okays $150,00 Zion New York Loan ------------------------------------------------------------- The Hon. Allan M. Gropper of the U.S. Bankruptcy Court for the Southern District of New York gave Delafield 246 Corporation permission to borrow up to $150,000 from Zion New York, LP., its affiliate, at an interest rate equal to 200 basis points over the Citibank Prime rate. As previously reported in the Troubled Company Reporter, the City of New York opposed the Debtor's move to secure the additional $150,000 loan from Zion. Michael A. Cardozo, Esq., Corporation Counsel of the City of New York, argued that the new debt further encumbers property of the estate without providing any additional benefit. Mr. Cardozo reasoned the Debtor didn't need to raise additional debt since any need for cash should come from a capital infusion or sale of the Debtor's assets. A sale, according to Mr. Cardozo, would enable the Debtor to pay off its debts and allow a new developer to come in and restore and develop the Riverdale property. The borrowed funds are to be used to pay professional fees incurred in the development of a restoration plan for the Debtor's real property located in Riverdale, New York, real property taxes and fees of the U.S. Trustee. Judge Gropper also authorized the Debtor to grant liens against the lots. The liens are junior to any existing liens of the City of New York and the Delafield Estates Homeowners Association and any priority liens of the City that may come into existence during the course of the bankruptcy proceedings. Judge Gropper also ordered that in the event the City will pay certain funds now in escrow to the Debtor in connection with completion of a restoration plan, the Debtor may place the funds in a separate account and hold them as additional security for the loan. Headquartered in Plainview, New York, Delafield 246 Corporation is a real estate investor and developer. The Company filed for chapter 11 protection on November 29, 2004 (Bankr. E.D.N.Y. Case No. 04-87515, transferred May 13, 2005, to Bankr. S.D.N.Y. Case No. 05-13634). Daniel A Zimmerman, Esq., at the Law Offices of Steven Cohn PC, represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $13,000,000 in assets and $9,001,200 in debts. DELAFIELD 246: Employs Lee Weintraub as Landscape Architect ----------------------------------------------------------- Delafield 246 Corporation sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Lee Weintraub Landscape Architecture, LLC, as its landscape architect. The Debtor is seeking approval of a restoration plan with respects to its lots in the real estate development known as the Delafield Estates located in Riverdale, Bronx County, New York. The Debtor says that the restoration plan is part of its plan of reorganization. Lee Weintraub is expected to: a. review previously prepared plan including the original development plans prepared by Polshek and Partners and their consultants and attempted restoration plans by Ludwig P. Bono AIA and Elliot Vilkas AIA Architech; b. attend meetings with the New York City Planning Commission to review the project; c. assist the Debtor's counsel as required, in connection with the project; d. review the site and engage a surveyor who will: 1. update an existing topographic survey for the site dated Mar. 30, 2003 to current regulations set forth in Article X of the New York Zoning Regulation, 2. survey and locate topographical contour lines on a two-foot interval, locate all tress of at least six- inch caliper, locate the boundaries of the steep slope areas, locate geologic features, aquatic features and botanical environment; and 3. define slope areas by shading and indicate percentages of >25%, 20-24%, 15-19%, 10-14%, or <10%; e. review the surveyors data and format into plans that serve to introduce the restoration plan as part of a larger set of drawings; f. retain an arborist to identify the trees, and asses and certify the current conditions of each tree cited on the surveyor's drawing; g. retain a civil engineer to review the existing site infrastructure; h. schedule a meeting with the New York City Planning Commission to review the results of the survey and the work of the arborist, and discuss the procedure for documenting the restoration plan; i. prepare a landscape restoration plan for the New York City Planning Commission to review; j. modify the restoration plan to meet the New York City Planning Commission's comments; k. assist the New York City Planning Commission as required to obtain a memorandum approving the landscape restoration plan; l. upon completion of its services, certify to the Debtor that a restoration plan in conformity with the New York City Planning Commission Zoning handbook has been submitted for approval; m. confer with the Debtor and defer to the instructions of the Debtor on the scope and timing of all the work; and n. file an application for allowance of professional fees and reimbursement of expenses, upon completion of services, under the terms of its agreement with the Debtor, with the Court pursuant to applicable statues and rules. Lee Weintraub, principal at Lee Weintraub, will be the lead person for this engagement and will bill $175 per hour for his services. Mr. Weintraub discloses that the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Project Management $120 Technical Staff $95 Mr. Weintraub further discloses that the surveyor's fee is capped at $45,000. For other consultants retained by the Firm, Mr. Weintraub relates, the Firm will be compensated in an amount equal to the direct consultant expense. Mr. Weintraub tells the Court that the Firm has received a $30,000 retainer. The Debtor tells the Court that the fees for the engagement are capped at $143,250 exclusive of the fees for the arborist and civil engineer. Mr. Weintraub assures the Court that the Firm does not represent any interest adverse to Debtor or its estate. Headquartered in Plainview, New York, Delafield 246 Corporation is a real estate investor and developer. The Company filed for chapter 11 protection on November 29, 2004 (Bankr. E.D.N.Y. Case No. 04-87515, transferred May 13, 2005, to Bankr. S.D.N.Y. Case No. 05-13634). Daniel A Zimmerman, Esq., at the Law Offices of Steven Cohn PC, represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $13,000,000 in assets and $9,001,200 in debts. DOWNTOWN AUTOMOTIVE: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Downtown Automotive Group, LLC dba North Seattle Nissan 1520 Northwest 50th Seattle, Washington 98107 Bankruptcy Case No.: 06-10228 Type of Business: The Debtors is a dealer of new and used Nissan cars. Downtown Automotive also sells car parts and accessories. See http://www.northseattlenissan.com/ Chapter 11 Petition Date: February 1, 2006 Court: Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Jack J. Cullen, Esq. Foster Pepper PLLC 1111 3rd Avenue, Suite 3400 Seattle, Washington 98101-3299 Tel: (206) 447-4669 Fax: (206) 749-2001 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtors list of its 20 largest unsecured creditors was not available as of press time. DUNN'S TRACTOR: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Dunn's Tractor Service, Inc. 9042 Taylors Road Delmar, Maryland 21875 Bankruptcy Case No.: 06-10438 Type of Business: The Debtor is a wrecking, demolition and excavation contractor. The Debtor specializes in grading, demolition, excavation, land clearing and drilling. Chapter 11 Petition Date: January 29, 2006 Court: District of Maryland (Baltimore) Judge: E. Stephen Derby Debtor's Counsel: Ann Shaw, Esq. The Law Firm of Ann Shaw 212 West Main Street, Suite 303 P.O. Box 448 Salisbury, Maryland 21803-0448 Tel: (410) 742-9171 Total Assets: $2,713,982 Total Debts: $2,548,668 Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Komat'su Financial Bank loan $349,024 1333 Butterfield Road, Suite 600 P.O. Box 7049 Downers Grove, IL 60515-7049 Financial Federal Credit, Inc. Bank loan $261,000 P.O. Box 201146 Houston, TX 77216-1146 Ford Credit Bank loan $95,277 c/o Correspondence P.O. Box 472687 Charlotte, NC 28247-2687 J & S Equipment, Inc. Bank loan $42,242 11660 Sharptown Road Mardela Springs, MD 21837 Vermeer/Mid Atlantic, Inc. $24,071 8830 Corridor Road Annapolis Junction, MD 20701 Wright Express $11,948 P.O. Box 639 Portland, ME 04104 - and - Wright Express c/o Fidelity National Credit Services, Ltd. 2421 North Glassell Street P.O. Box 3051 Orange, CA 92857 Wicomico Soil Conservation $2,372 District 2322B Goddard Parkway, Suite 3 Salisbury, MD 21801 Keen Compressed Gas Company $2,309 P.O. Box 15151 Wilmington, DE 19850-5151 Folcomer Equipment Corporation $1,536 629 South Philadelphia Boulevard P.O. Box 340 Aberdeen, MD 21001-0340 - and - Folcomer Equipment Corporation c/o Voss, Michaels, Lee & Associates, Inc. P.O. Box 1829 Holland, MI 49422-1829 Tilcon Delaware $956 Pennsy Supply, Inc. P.O. Box 3331 Harrisburg, PA 17105 Welding By Jackson, Inc. $462 P.O. Box 39 Delmar, DE 19940 Powerplan $456 P.O. Box 5328 Madison, WI 53705-0328 Farm Plan $442 P.O. Box 4450 Carol Stream, IL 60197-4450 J.P. Self & Associates, Inc. $429 9021 Sherwood Court Presto, PA 15142 Sussex Irrigation Company $370 11329 Trussum Pond Road Laurel, DE 19956 NAPA Auto Parts $330 8660 Ocean Highway Delmar, MD 21875 Truck Tech Industries, Inc. $221 321-A South Division Street Fruitland, MD 21826 EMMIS COMMS: Completes $259-M Sale of 8 TV Stations to Blackstone ----------------------------------------------------------------- Emmis Communications Corporation completed the sale of substantially all of the assets of: -- KHON-TV (Ch. 4, Fox affiliate); -- KHAW-TV; and -- KAII-TV; and KOIN(TV) (Ch. 6, CBS affiliate). The Company also completed the sale of all of the outstanding capital stock of SJL of Kansas Corp., which owns: -- KSNT(TV) (Ch. 27, NBC affiliate); -- KSNW(TV) (Ch. 3, NBC affiliate); -- KSNC(TV); -- KSNG(TV); and -- KSNK(TV). The stock and assets were sold to Montecito Broadcast Group, LLC, an affiliate of The Blackstone Group, for $259 million. That transaction closed on January 27, 2006. The Company sold several of its stations last year to these companies: Buyer No. of TV Stations Purchase Price ----- ------------------ -------------- LIN TV Corp 5 TV Stations $517 Million Blackstone Group LP 4 TV Stations $259 Million SJL Broadcast Group Journal Communications 3 TV Stations $235 Million Gray Television 1 TV Station $186 Million Emmis Communications Corporation -- http://www.emmis.com/-- is an Indianapolis-based diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. Emmis owns 23 FM and 2 AM domestic radio stations serving the nation's largest markets of New York, Los Angeles and Chicago as well as Phoenix, St. Louis, Austin, Indianapolis and Terre Haute, Indiana. Emmis has recently announced its intent to seek strategic alternatives for its 16 television stations, which will result in the sale of all or a portion of its television assets. In addition, Emmis owns a radio network, international radio stations, regional and specialty magazines and ancillary businesses in broadcast sales and book publishing. * * * As reported in the Troubled Company Reporter on Oct. 5, 2005, Moody's Investors Service affirmed the long-term ratings of Emmis Communications Corporation and its wholly owned subsidiary, Emmis Operating Company, and changed the outlook to positive. Emmis Operating Company: * Ba2 rating on its senior secured credit facilities; and * B2 rating on its $375 million of senior subordinated notes due 2012. Emmis Communications Corporation: * B3 rating on the $350 million senior unsecured floating rate notes due 2012, * B3 rating on the 12.5% senior discount notes due 2011; * Caa1 rating on the $143.8 million of cumulative convertible preferred stock; * Ba3 corporate family rating; and * SGL-3 rating. ENER1 INC: Names Charles A. Gassenheimer Chairman of the Board -------------------------------------------------------------- Ener1, Inc., named Charles A. Gassenheimer Chairman of the Board of Directors. Mr. Gassenheimer was appointed as Chief Executive Officer of Ener1 Group, Inc., the Company's majority stockholder, on January 17, 2006. Prior to joining Ener1 Group, Mr. Gassenheimer was Managing Director and Portfolio Manager of both the Convertible Arbitrage Division and Private Investment Group of Satellite Asset Management, a hedge fund with approximately $6 billion in assets under management and offices in New York and London. Satellite's affiliates own approximately 47.5% of the Company's senior secured convertible debentures due January 2009, which the Company issued in January 2004, and approximately 70.3% of the Company's senior secured convertible debentures due March 2009, which the Company issued in March 2005. As reported in the Troubled Company Reporter on Jan. 20, 2006, the Company dismissed its chairman and chief executive officer, Kevin Fitzgerald. Ener1, Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- is an alternative energy technology company. The company's interests include: 80.5% of EnerDel -- http://www.enerdel.com/-- a lithium battery company in which Delphi Corp. owns 19.5%; 49% of Enerstruct, a Japanese lithium battery technology company in which Ener1's strategic investor ITOCHU owns 51%; wholly owned subsidiary EnerFuel, a fuel cell testing and component company -- http://www.enerfuel.com/-- and wholly owned subsidiary NanoEner -- http://www.nanoener.com//-- which develops nanotechnology- based materials and manufacturing processes for batteries and other applications. The Company's balance sheet showed $13,957,000 in total assets at Sept. 30, 2005, and liabilities of $94,834,000, resulting in a stockholders' deficit of $80,877,000. ENRON CORP: Asks Court to Bless Netherlands Holding Unit Wind-Down ------------------------------------------------------------------ Before Enron Corporation and its debtor-affiliates filed for bankruptcy peition, approximately 141 of Enron' subsidiaries were incorporated in The Netherlands, Martin A. Sosland, Esq., at Weil Gotshal & Manges LLP, in New York, relates. Many of those entities have now been dissolved or are due to be dissolved. According to Mr. Sosland, Dutch entities were frequently used as holding companies in projects and other group structures for tax reasons. In almost all cases, a particular entity would be concerned with a single project. Enron Netherlands Holding B.V., however, is an exception. In 1996, ENHBV was formed in The Netherlands to provide inter- company loans to some Enron-affiliated businesses relating to group projects located outside the United States. ENHBV, in turn, received loans from other Enron affiliates to provide it with funds to make the loans. Equity Trust, a Netherlands Company, serves as the independent managing director of ENHBV. ENHBV is a wholly owned subsidiary of Enron. At present, ENHBV is not involved in any sort of insolvency or restructuring proceeding, Mr. Sosland says. However, Mr. Sosland points out, ENHBV creditors are expected to receive considerably less than a full recovery of amounts owed to them given the collectibility of certain of the loans made by ENHBV. After the Petition Date, Enron worked closely with Equity Trust to allow ENHBV to function as a going concern. Enron and ENHBV also worked to settle direct claims by and against ENHBV. By this motion, Enron, Enron do Brazil Holdings Ltd., Enron Brazil Power Holdings XI Ltd., Atlantic Commercial Finance Inc. and Enron Caribbean Basin LLC -- the Reorganized Debtor Parties -- ask Judge Gonzalez to approve an overall asset distribution plan that will allow ENHBV to pay its creditors and wind down its operations as a going concern. Specifically, the Reorganized Debtor Parties ask the Court to approve: a. A Claims Settlement Agreement, dated December 2, 2005, among: -- ENHBV -- Enron Capital & Trade Resources (Recoveries) Limited, -- Enron Capital & Trade Resources Limited, and -- Joint Administrators Anthony Victor Lomas and Steven Anthony Pearson; and b. An overall asset distribution methodology between the Reorganized Debtor Parties and these non-Debtor Parties: -- ENHBV -- Prisma Energy Holdings (Turkey) B.V., -- Cherokee Finance S.a.r.l., -- Offshore Power Operations C.V., and -- Enron Light Hydrocarbons France. Claims Against ENHBV The Reorganized Debtor Parties constitute around 86% of ENHBV's creditor pool: Enron 72% Enron do Brazil Holdings 11% Enron Brazil Power Holdings XI 3% Other than ECTRR, the remaining smaller creditors of ENHBV are all Reorganized Debtors or non-debtors controlled by Enron, Mr. Sosland notes. The claims against ENHBV are: ENHBV Claims (In Millions) As of Before After 12/02/01 Settlement Settlement -------- ---------- ---------- 3rd Party Creditors: ECTRR ($165.91) ($168.55) - Brazil Power Devt. Trust/West LP (226.47) - - Cherokee Finance S.a.r.l. (21.62) - - Enron Light Hydrocarbons France (2.86) - - -------- ---------- ---------- (416.86) (168.55) - Enron Related: Enron Corp. (1,202.03) (1,225.99) (1,225.99) Enron do Brazil Holdings Ltd. (187.14) (190.64) (190.64) Enron Brazil Power Holdings (57.12) (58.21) (58.21) Prisma Energy Holdings (Turkey) B.V. (40.65) (41.29) (41.29) Cherokee Finance S.a.r.l. (21.62) (21.96) (21.96) Offshore Power Op. CV (4.35) (4.41) (4.41) Enron Light Hydrocarbons (2.86) (2.90) (2.90) Atlantic Commercial Finance Inc. (0.05) (0.05) (0.05) Enron Caribbean Basin LLC - (0.12) (0.12) -------- ---------- ---------- (1,491.34) (1,545.57) (1,545.57) TOTAL Outstanding Liabilities as of 12/31/05 ($1,908.20) ($1,714.12) ($1,545.57) ========== ========== ========== ENHBV Assets ENHBV assets consist primarily of amounts receivable under various promissory notes with Enron-related companies, and cash. Some smaller amounts owed to ENHBV are not evidenced by a promissory note, Mr. Sosland states. ENHBV Assets as of December 31, 2005 Cash $191,600,000 Notes Receivable: EPE-Empresa Produtora de Energia Ltda./ Gasocidente do Mato Grossa Ltda. -- Cuiaba Notes 211,280,000 Enron Bolivia Note 7,160,000 Enron Dutch Holdings Note 6,710,000 Enron Europe Ltd. Note -- the EEL Note 1,318,640,000 Enron Coal Services Note 178,580,000 Enron Wind Note 17,730,000 Enron subsidy for Enron Wind 26,350,000 Enron Servicios Mexico Note 1,970,000 Risk Management Trading Corp. Claim 1,880,000 ENBV Note 16,100,000 Enron Gas and Petrochemical Ltd. Note 1,890,000 Enron Mauritius Co. 3,450,000 Enron Broadband Services France S.A.S. 1,540,000 Enron Broadband Services Asia/Pacific Singapore Pte Ltd 330,000 Enron Broadband Services Belgium SA 140,000 Enron Broadband Services Netherlands B.V. 10,000 Enron Broadband Services Italy SRL 10,000 Enron Metals & Commodity Limited 400,000 -------------- Notes Receivable Subtotal 1,794,170,000 -------------- T O T A L $1,985,770,000 ============== The assets of ENHBV are not expected to be fully recovered. For instance, Mr. Sosland points out, EEL's third-party administrators and PricewaterhouseCoopers LLP estimate the EEL Note's recovery at only 5%. Proposed Settlement The Parties propose that the first step in the overall settlement of ENBV's operations is a compromise of the ECTRR Claim. Thus, the terms of the Settlement Agreement provides these salient terms: A. Compromise of ECTRR's Creditor Position To effect an overall resolution of all of the ENHBV Claims, ENHBV will compromise the ECTRR Claim for this consideration: -- a one-time payment of $28,000,000 plus interest accruing at 4.5% from December 2, 2005, to the date of payment, using ENHBV's cash reserves; -- an assignment of a 9.87% interest of ENHBV's notes receivable claims against EEL, Enron Coal Services Limited and Enron Netherlands B.V.; and -- a potential "upside" payment of 9.87% of any gross sales proceeds over and above $220,000,000 received on any sale of the Cuiaba Notes if the Cuiaba Notes are sold to a third party individually or as part of a larger transaction on or before eight months after the Effective Date of the Settlement Agreement. B. Releases ENHBV, on the one hand, ECTRR and ECTRL, on the other hand, will exchange mutual releases. C. Effectiveness The effectiveness of the Settlement Agreement is conditioned on the Court's approval of the Settlement and the written consent of each and every remaining creditor of ENHBV. A full-text copy of the Settlement Agreement is available for free at: http://bankrupt.com/misc/ENHBV_ClaimSettlementAgreement.pdf Proposed Asset Distribution Plan After consummation of the Settlement Agreement, the Asset Distribution Plan, involving all of ENHBV's remaining creditors, will be effectuated using the Parties' proposed distribution methodology. The material terms and provisions of the Asset Distribution Plan include: A. Distribution to the Settling Creditors The amount owed to each Settling Creditor will be agreed to by all Settling Creditors. In full and final compromise and settlement of the ENHBV Claims, all ENHBV's assets will be assigned or distributed to the Settling Creditors, except for approximately $5,000,000 in cash reserves -- the Dissolution Holdback -- which will be used to pay: -- Equity Trust's managing director fees, -- taxes due to The Netherlands, and -- costs of dissolution. Generally, ENHBV's assets will be distributed pro rata to each of its creditors, including any remaining balance of the Dissolution Holdback, on an "AS IS" "WITH ALL FAULTS" basis, except: a. Enron and Enron Caribbean will be paid in full for certain expenses of ENHBV that were paid by these creditors after the Petition Date or allocated pursuant to the Court-approved overhead allocation methodology totaling around $4,656,000; and b. In order to allow certain promissory notes to be contributed to Prisma Energy International Inc. and to simplify continued holdings of particular notes given ongoing arbitration proceedings, three groups of promissory notes will be each distributed to a single creditor. The three groups of promissory notes are: 1. The Cuiaba Notes will be distributed to Enron in anticipation of their contribution to Prisma under the Contribution and Separation Agreement; 2. The Enron (Bolivia) CV Note will be distributed to PEHT as a means of contributing this asset to Prisma; and 3. The Enron Dutch Holdings Note will be distributed to a single creditor, Enron do Brazil Holdings, to simplify the continued holding of that particular note given ongoing arbitration proceedings with Saras S.p.A. Raffinerie Sarde (Italy), pursuant to the Rules of Arbitration of the International Chamber of Commerce, ICC Arbitration Case No. 11980/ACS/FM, with respect to Sarlux S.r.l., an integrated gasification combined cycle power plant located in Sardinia, Italy. The Parties expect an interim distribution of all ENHBV's assets, except the Dissolution Holdback, to the Settling Creditors at closing. C. Releases ENHBV and the Settling Creditors will exchange mutual releases. D. Effectiveness The effectiveness of the Asset Distribution Plan is conditioned on the Court's approval and the written consent of each and every remaining creditor, other than ECTRR and the Netherlands taxing authorities, of ENHBV to the compromise. A full-text copy of the Asset Distribution Plan is available for free at http://bankrupt.com/misc/ENHBV_AssetDistributionPlan.pdf The Reorganized Debtor Parties believe that the Settlement is a favorable development for their Chapter 11 cases because it allows for full and final settlement of all ENHBV Claims and ENHBV's orderly agreed upon dissolution. According to Mr. Sosland, in the event that ENHBV is not able to amicably resolve the ENHBV Claims, ENHBV will be required to file an involuntary insolvency proceeding in The Netherlands. If that were to happen, a trustee would be appointed to assume management of ENHBV. An insolvency proceeding would likely lead to higher costs, more delays and some loss of control over the process by the Reorganized Debtor Parties. Furthermore, the compromises embodied in the Asset Distribution Plan are fair, Mr. Sosland adds. The Reorganized Debtor Parties contend that the Court's approval is warranted with respect to its equity power under Section 105(a) of the Bankruptcy Code because much of the value from ENHBV's dissolution will flow to the Reorganized Debtor Parties' estates and their creditors. Judge Gonzalez approves the Reorganized Debtors' request in its entirety. Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. (Enron Bankruptcy News, Issue No. 167; Bankruptcy Creditors' Service, Inc., 15/945-7000) ENRON CORP: Settles with Lehman in Equity Transactions Litigation ----------------------------------------------------------------- Enron Corp. reached an agreement with Lehman Holdings Inc. and three affiliates to settle the equity transactions adversary proceeding that Enron filed against Lehman Holdings in the Enron bankruptcy case. According to the terms of the agreement, Lehman Holdings will pay Enron $69.9 million in cash and withdraw with prejudice its approximately $173 million claim against the Estate. "We are pleased with this settlement, the first we have reached in the equity transactions litigation," John J. Ray III, Enron's President and Board Chairman, said. "We look forward to successfully resolving the remaining equity transactions cases." Equity transactions cases remain pending against Credit Suisse First Boston, UBS, and Bear Stearns. Enron's complaint against Lehman Holdings includes claims asserting preferences, fraudulent transfers and/or conveyances, and recovery of payments pursuant to other applicable federal and state law. The settlement remains subject to the approval of the United States Bankruptcy Court for the Southern District of New York. Enron is represented in this matter by Venable LLP and Togut, Segal & Segal. About Lehman Holdings Inc. An innovator in global finance, Lehman Brothers -- http://www.lehman.com/-- serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private investment management, asset management and private equity. The Firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world. About Enron Corp. Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. Enron filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Confirmed Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. EXTREME MOTOR: Case Summary & 39 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Extreme Motor Sports, Inc. aka Xtreme Motor Sports P.O. Box 1849 Grand Central Station New York, New York 10163 Bankruptcy Case No.: 06-10192 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Howard M. Mansdorf 06-10190 Chapter 11 Petition Date: February 2, 2006 Court: Southern District of New York Judge: Robert D. Drain Debtors' Counsel: Yann Geron, Esq. Fox Rothschild LLP 100 Park Avenue, Suite 1500 New York, New York 10017 Tel: (212) 878-7900 Fax: (212) 692-0940 -- and -- Gilbert A. Lazarus Lazarus & Lazarus, P.C. 240 Madison Avenue, 8th Floor New York, New York 10016 Tel: (212) 889-7400 Estimated Assets Estimated Debts ---------------- --------------- Extreme Motor Sports, Inc. $1 Million to $1 Million to $10 Million $10 Million Howard M. Mansdorf Less than $50,000 $1 Million to $10 Million A. Extreme Motor Sports, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kawasaki Motors Finance Corp. Business Debt $587,304 P.O. Box 25301 Santa Ana, CA 92799-5301 North Fork Bank Business Debt $70,070 275 Broadhollow Road P.O. Box 8914 Melville, NY 11747 Bank of New York Business Debt $60,000 One Wall Street New York, New York 10286 Tucker Rocky Distributing Business Debt $53,421 4900 Alliance Gateway Freeway Fort Worth, TX 76177 GE Commercial Finance Purchase Money $50,000 3225 Cumberland Boulevard Security Suite 830 Atlanta, GA 30339 41 West Sunrise Highway, LLC Business Debt $43,000 MBNA America Business Debt $34,179 American Express Business Debt $32,471 Estate of Marvin L. Lindner Rent in Arrears $21,038 SFX Marketing, Inc. Business Debt $20,000 Discover Card Business Debt $10,533 Fox Racing USA Inc. Business Debt $9,256 M&T Bank Business Debt $8,734 BBH Financial Services Co. Business Debt $5,592 Romaha Importers Business Debt $4,213 Chase Auto Finance Business Debt $4,071 ADP Lightspeed Business Debt $2,172 Waste Management of LI Business Debt $1,924 Lockhart Phillips USA Business Debt $1,550 Phillips Motorsport Group Business Debt $1,273 B. Howard M. Mansdorf's List of 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Kawasaki Motors Finance Corporation $587,304 P.O. Box 23501 Santa Ana, CA 92799-5301 Country Wide Home Mortgage $448,000 SVB-314, P.O. Box 5170 Simi, CA 93062-5170 GE Commercial Finance $200,000 3225 Cumberland Boulevard, Suite 830 Atlanta, GA 30339 New York State Department of $104,506 Taxation and Finance North Fork Bank $70,000 David Brite $65,000 Bank of New York $60,000 MBNA America $30,622 American Express Business Credit Card $20,831 Snap-On-Credit LLC $14,000 American Express Executive Business Card $12,149 Discover Card $10,532 M&T Bank $8,734 Platinum Plus For Business $8,452 Ziegelman & Rubinstein, LLP $7,852 Chase Automotive Finance $7,401 BBH Financial Service Company $5,592 Dell Financial Services Unknown Polaris Sales Inc. Unknown GLYCOGENESIS INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Glycogenesys, Inc. fdba Safescience, Inc. 31 St. James Avenue, Suite 520 Boston, Massachusetts 02116 Bankruptcy Case No.: 06-10214 Type of Business: The Debtor manufactures pharmaceutical products. Chapter 11 Petition Date: February 2, 2006 Court: District of Massachusetts Debtor's Counsel: Andrew G. Lizotte, Esq. Hanify & King, P.C. Professional Corporation One Beacon Street Boston, Massachusetts 02108 Tel: (617) 423-0400 Fax: (617) 556-8985 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Ropes & Gray $731,063 One International Place Boston, MA 02110 Johnson Matthey $187,785 Pharmaceutical Materials P.O. Box 88909 Chicago, IL 60695 PPD Development, LP $87,243 12937 Collections Center Drive Chicago, IL 60693 L.E.K. Consulting $73,000 Torys LLP $63,040 The Matthews Consultancy Ltd. $60,558 WPI $60,216 Greenberg Traurig LLP $57,738 Deloitte & Touche LLP $55,500 Northeastern University $50,000 Hyaluron, Inc. $48,925 Medelis, Inc. $47,343 The Ruth Group $43,872 Quest Pharmaceutical Services $40,788 The NASDAQ Stock Market, Inc. $39,758 Veristat, Inc. $38,867 One Kendall Square Assoc., LLC $36,386 Sharp Healthcare $35,045 The University of Arizona $33,000 Wayne State University Undetermined GOODING'S SUPERMARKETS: U.S. Trustee Picks 3-Member Creditors Team ------------------------------------------------------------------ The United States Trustee for Region 21 appointed three creditors to serve on the Official Committee of Unsecured Creditors in Gooding's Supermarkets, Inc.'s chapter 11 case: 1. Valencia Community College c/o Keith Houck, V.P. for Administrative Services P.O. Box 3028 Orlando, Florida 32802 Tel: (407) 592-3465; Fax: (407) 582-3007 2. Tropical Nut & Fruit, Inc. c/o Cheryle MacKenzie 3368 Bartlett Blvd. Orlando, Florida 32811 Tel: (407) 992-0701; Fax: (407) 843-6766 3. Southern Wine & Spirits Of America, Inc. c/o Laurence Chaplin, Administrative V.P. 16295 NW 16th Court Miami, Florida 33169 Tel: (305) 627-1400; Fax: (305) 621-9157 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc., dba Gooding's, offers catering services and operates a chain of supermarkets in Central Florida. The Company filed for chapter 11 protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No. 05-17769). When the Debtor filed for protection from its creditors, it listed estimated assets of $1 million to $10 million and estimated debts of $10 million to $50 million. GOODING'S SUPERMARKETS: Files Schedules of Assets and Liabilities ----------------------------------------------------------------- Gooding's Supermarkets, Inc., delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Middle District of Florida, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $10,917,466 C. Property Claimed as Exempt D. Creditors Holding $7,766,690 Secured Claims E. Creditors Holding $185,938 Unsecured Priority Claims F. Creditors Holding $2,457,375 Unsecured Nonpriority Claims ----------- ------------ Total $10,917,466 $10,410,003 Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc., dba Gooding's, offers catering services and operates a chain of supermarkets in Central Florida. The Company filed for chapter 11 protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No. 05-17769). When the Debtor filed for protection from its creditors, it listed estimated assets of $1 million to $10 million and estimated debts of $10 million to $50 million. HANDEX GROUP: Wants to Reject Four Unexpired Real Property Leases ----------------------------------------------------------------- Handex Group, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida for permission to reject four burdensome, unexpired nonresidential real property leases. The Debtors want to walk away from their future obligations under four lease agreements: Leased Premises Landlord --------------- -------- 309-A Norton Road A-Climate Control Saraland, AL 36571 310-F Shelton Beach Road Saraland, AL 36571 9005 St. Andrews Way BE Commercial Properties Mt. Dora, FL 32757 30941 Suneagle Drive Mt. Dora, FL 32757 2304 Gravel Drive, Bldg. 31 Riverbend Properties Fort Worth, TX 76118 c/o Stoneleigh Huff 2501 Gravel Drive Fort Worth, TX 76118 500 Campus Drive TMC Marlboro, LLC Morganville, NJ 07751 Attn: Ed Babits 100 Campus Drive Morganville, NJ 07751 In most cases, Handex has guaranteed the obligations of its affiliates and subsidiaries under the leases. The Debtors determined that the leases no longer represent value to their estate. Furthermore, the Debtors say, marketing and selling any of the leases won't result in any economic benefit to their estates. Although the Debtors believe that some of the leases were terminated prepetition and, hence, no administrative claim will arise, it is possible the Court might rule otherwise. Therefore, to avoid accruing any administrative expenses in connection with each lease, the Debtors want a court order making it clear the leases have been rejected. Headquartered in Mount Dora, Florida, Handex Group Inc. -- http://www.handex.com/-- and its affiliates help companies solve environmental issues. The Debtors offer management and consulting services, which include remediation, regulatory support, risk management, waste minimalization, health and safety training, data support, engineering and construction services. The Debtors filed for chapter 11 protection on Nov. 23, 2005 (Bankr. M.D. Fla. Case No. 05-17617). When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $10 million to $50 million. HUNTSMAN CORP: Moody's Affirms Corporate Family Rating at B1 ------------------------------------------------------------ Moody's Investors Service affirmed the B1 corporate family rating of Huntsman Corporation (HC) and of Huntsman International LLC (HI -- which also has a B1 corporate family rating). The change in outlook to developing is the result of HC's announcement that the Board of Director's has engaged financial and legal advisors to assist it in evaluating a sale of HC and other alternatives to enhance shareholder value, including continuing to execute its business plan and remain an independent public company. This action suggests that over the medium term that the ratings may change subject to a specific sale or other alternative whose financial impact is as yet unknown. In the event that management was to cease these deliberations the outlook would likely move back to positive. The decision to evaluate a sale and other alternatives by HC's management was prompted by the receipt of an indication of interest from an outside party, occurring in late 2005, regarding an acquisition of all of the outstanding stock of the HC. Huntsman Corporation is a global manufacturer of differentiated and commodity chemical products. Huntsman's products are used in a wide range of applications, including those in the: * adhesives, * aerospace, * automotive, * construction products, * durable and non-durable consumer products, * electronics, * medical, * packaging, * paints and coatings, * power generation, * refining, and * synthetic fiber industries. Huntsman had revenues for the twelve months ended Sept. 30, 2004 of $12.9 billion. IMG HEALTHCARE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: IMG Healthcare LLC aka IMG Healthcare Network LLC aka Internal Medicine Group LLC 10001 Lake Forest Boulevard, Suite 1000 New Orleans, Louisiana 70127 Bankruptcy Case No.: 06-10059 Type of Business: The Debtor provides healthcare services to patients in the greater New Orleans area. See http://www.imghealthcare.com/ Chapter 11 Petition Date: January 30, 2006 Court: Eastern District of Louisiana Judge: Jerry A. Brown Debtor's Counsel: William C. Gambel, Esq. Milling Benson Woodward L.L.P. 909 Poydras Street, Suite 2300 New Orleans, Louisiana 70112-1010 Tel: (504) 569-7000 Fax: (504) 569-7001 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Healthcare Realty Trust, Inc. Unknown P.O. Box 281363 Atlanta, GA 30384-1363 Tel: (615) 269-8175 Beckman Coulter Capital Unknown P.O. Box 41601 Philadelphia, PA 19101-1601 Tel: (610) 386-2595 Barret Kain, et al. Unknown c/o Christopher T. Grace, Jr., Esq. 110 Veterans Memorial Boulevard, Suite 360 Metairie, LA 70005 Tel: (504) 833-2130 Saint Tammany Parish Hospital Unknown Service District No. 1 1202 South Tyler Street Covington, LA 70433 Tel: (985) 898-4483 Dr. Scott Acosta Unknown 1226 Camp Street New Orleans, LA 70130 Tel: (504) 522-6917 Dr. Joseph Murray Unknown 4525 Toby Lane Metairie, LA 70003 Tel: (504) 885-1409 Estate of Dr. Curtis Bonin Unknown 7310 Jade Street New Orleans, LA 70124 Tel: (504) 282-5877 Blitch Knevel Architects Unknown 757 Saint Charles Avenue New Orleans, LA 70130 Tel: (504) 524-4634 Dr. William Buffet Unknown 45130 West Merrimeade Lane Abita Springs, LA 70420 Tel: (985) 809-7634 Oncology Therapeutics Network Unknown Los Angeles, CA 90074-4342 Tel: (800) 482-6700 Dr. Cornelia Williams Unknown 1568 Webster Street New Orleans, LA 70118 Tel: (504) 891-3086 Methodist Hospital Unknown 5620 Read Boulevard New Orleans, LA 70127 Tel: (610) 768-3300 Slidell Memorial Hospital Unknown 1001 Gause Boulevard Slidell, LA 70458 Tel: (985) 649-8734 Beahm & Green Unknown 145 Robert East Lee Boulevard, Suite 408 New Orleans, LA 70124-2552 Tel: (504) 288-2000 Dr. John D'Antoni Unknown 707 Hollybrook Drive Longview, TX 75605 Dr. Sandra Spedal Unknown 1320 West Drive Westwego, LA 70094 Tel: (504) 371-6678 City of New Orleans Unknown Tax Assessor 1300 Perdido Street, Room 1E12 New Orleans, LA 70112 Tel: (504) 565-7070 Hunter Medical Systems, Inc. Unknown P.O. Box 73230 Metairie, LA 70033-3230 Tel: (504) 888-0336 Physician Sales & Services, Inc. Unknown 150 Canvasback Drive Saint Rose, LA 70087-4009 Tel: (504) 578-4178 Tenet Healthcare Corporation Unknown Memorial Medical Center P.O. Box 66047 Anaheim, CA 92816-6047 Tel: (504) 899-4143 IRISH PUB: Chapter 7 Trustee Taps Steven Gabovitch as Accountant ---------------------------------------------------------------- Joseph Braunstein, the chapter 7 trustee appointed in Irish Pub Restaurants, Inc.'s case, asks the U.S. Bankruptcy Court for the District of Massachusetts for permission to employ Steven A. Gabovitch as his accountant. Mr. Gabovitch is expected to: a) assist with payroll and year-end employee financial matters; b) prepare tax returns; and c) assist the Trustee with respect to any other financial matters associated with the administration and closing of the Debtor's estate. Mr. Gabovitch advised the Trustee that his average hourly rate is $175. To the best of the Trustee's knowledge, Mr. Gabovitch does not represent any interest materially adverse to the Debtor pursuant to Section 327(a) of the Bankruptcy Code. Headquartered in Boston, Massachusetts, Irish Pub Restaurants, Inc., operates a chain of Bennigan's casual dining restaurants with locations in Massachusetts, New York and Connecticut. The Company filed for chapter 11 protection on September 7, 2004 (Bankr. D. Mass. Case No. 04-17339). Lewis A. Sassoon, Esq., at Sassoon & Cymrot, LLP, represents the Debtor in its restructuring efforts. On June 2, 2005, the Debtor's case was converted to a chapter 7 proceeding. When the Company filed for protection from its creditors, it estimated above $10 million in assets and debts. JACOBS INDUSTRIES: IRS Says Plan is Unconfirmable Under Sec. 1123 ----------------------------------------------------------------- The Internal Revenue Service asks the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, to deny confirmation of Jacobs Industries, Inc., and its debtor- affiliates' combined Plan and Disclosure Statement because the plan fails to comply with the basic requirements of any chapter 11 plan outlined in Section 1123 of the Bankruptcy Code. Stephen J. Murphy, Esq., the U.S. attorney for the Eastern District of Michigan, explains that the Plan is unacceptable because: a) it proposes to pay the IRS' $131,364 priority tax claim three months after the effective date instead of no more than 30 days after the effective date; b) it intends to pay the IRS 4% annual interest, instead of the current 7% interest rate; and c) the Plan does not contain any provision addressing what happens in the event of a default. Mr. Murphy tells the Bankruptcy Court that the Debtors should not be allowed to take advantage of the special and equitable benefits afforded by bankruptcy while failing to comply with the Bankruptcy Code's statutory requirements. Headquartered in Fraser, Michigan, Jacobs Industries, Inc., manufactures automotive interiors in roll forming and channel, stampings and assembled product. The company along with its three affiliates filed for chapter 11 protection on Sept. 26, 2005 (Bankr. E.D. Mich. Case No. 05-72613). Charles J. Taunt, Esq., and Erika D. Hart, Esq., at Charles J. Taunt & Associates, P.L.L.C., represents the Debtors in their restructuring. When the Debtor filed for protection from its creditors, it listed $19,513,913 in total assets and $21,413,576 in total debts. KINETIC CONCEPTS: Earns $46.4 Million of Net Income in 4th Quarter ------------------------------------------------------------------ Kinetic Concepts, Inc. (NYSE: KCI) reported fourth quarter 2005 total revenue of $322.0 million, an increase of 18% from the fourth quarter of 2004, and full-year 2005 total revenue of $1.21 billion, an increase of 22% over the prior year. Excluding foreign currency exchange movements, total revenue for the fourth quarter increased 19% and revenue climbed 21% for the full year 2005, compared to the corresponding periods of the prior year. Net earnings for the fourth quarter of 2005 were $46.4 million, an increase of 36% over net earnings of $34.2 million for the same period one year ago. For the year, net earnings were $122.2 million, a 27% increase over the prior year. "During the fourth quarter, we continued to successfully execute on our plan to bring KCI's proven V.A.C. therapy to patients in need," stated Dennert O. Ware, President and Chief Executive Officer of KCI. "We generated strong profits and cash flows during the period in spite of changes in the U.S. competitive environment, year-end budget constraints internationally and unfavorable currency movements." Fourth Quarter 2005 Domestic revenue for the fourth quarter of 2005 was $239.7 million, an increase of 19% from the prior-year period due to increased rental and sales volumes for V.A.C. wound healing devices and related disposables. International revenue of $82.3 million increased 14% compared to the prior-year period. Excluding the effects of foreign currency exchange movements, international revenue increased 19%, during the fourth quarter. Worldwide V.A.C. revenue was $248.6 million for the fourth quarter of 2005, an increase of 25% from the prior-year period. Foreign currency exchange movements negatively impacted worldwide V.A.C. revenue by 1%, compared to the fourth quarter of the prior year. The growth in V.A.C. revenue stemmed from volume increases driven by our continued focus on marketing and selling efforts, which are raising customer awareness. Worldwide surfaces revenue was $73.4 million for the fourth quarter of 2005, a decrease of 2% from the prior-year period. Unfavorable currency exchange rate movements accounted for all of the fourth quarter 2004 surface revenue decrease. Year Ended 2005 Domestic revenue for 2005 was $886.2 million, a 19% increase from 2004 due directly to increased rental and sales volumes for V.A.C. wound healing devices and related disposables. International revenue of $322.4 million increased 30% compared to 2004 due primarily to higher V.A.C. unit volumes. Foreign currency exchange movements favorably impacted international revenue by 3% during 2005. Worldwide V.A.C. revenue was $907.5 million for 2005, an increase of 30% from the prior year due primarily to increased rental and sales volumes. Foreign currency exchange movements favorably impacted 2005 worldwide V.A.C. revenue by approximately 1%. Worldwide surfaces revenue was $301.0 million for 2005, an increase of 3% from the prior year due primarily to higher international sales, particularly in Canada. For the year, foreign currency exchange movements accounted for approximately 1% of the worldwide surfaces revenue increase. Outlook KCI currently projects full year 2006 revenue of $1.34 billion to $1.39 billion based on continued demand for its V.A.C. negative pressure wound therapy devices and related supplies. While KCI continues to expand the V.A.C. market and currently projects double-digit growth in 2006, the revenue growth rate for 2006 is expected to be lower than 2005 due, in part, to lower reimbursement for negative pressure wound therapy supplies under Medicare Part B and the current competitive environment. Therapeutic surfaces revenue for 2006 is expected to be in a range consistent with historical levels. Net earnings per diluted share for 2006 are currently projected to be $2.59 to $2.69, based on a weighted average share estimate of 73.5 million to 74.5 million shares. Also, the 2006 net earnings forecast includes after-tax expenses of approximately $7.0 million to $8.0 million, or $0.10 to $0.11 per share, related to the recognition of stock-based compensation expense under Statement of Financial Accounting Standards No. 123-R. Kinetic Concepts, Inc., designs, manufactures, markets and provides a wide range of proprietary products that can improve clinical outcomes while helping to reduce the overall cost of patient care. * * * As reported in the Troubled Company Reporter on Apr. 20, 2005, Moody's Investors Service upgraded these ratings of Kinetic Concepts, Inc.: * Guaranteed senior secured revolving credit facility due 2009, upgraded to Ba3 from B1 * Guaranteed senior secured term loan B due 2010, upgraded to Ba3 from B1 * Guaranteed unsecured subordinated notes due 2013, upgraded to B2 from B3 * Senior implied rating, upgraded to Ba3 from B1 * Senior unsecured issuer rating, upgraded to B1 from B2 The ratings outlook was also changed from stable to positive. As reported in the Troubled Company Reporter on Mar. 16, 2005, Standard & Poor's Ratings Services raised its corporate credit rating on medical device manufacturer and hospital supplier Kinetic Concepts Inc. to 'BB' from 'BB-'. At the same time, Standard & Poor's raised its rating on the senior secured credit facility and raised its rating on KCI's senior subordinated debt. The outlook remains stable. KMART CORP: Court Allows Equity One's Claim for $700,000 -------------------------------------------------------- Equity One, Inc., formerly known as I.R.T. Property Company filed Claim No. 38510 in Kmart Corporation's Chapter 11 cases, covering lease rejection damages and cure claim amounts for eight Kmart Stores. Kmart objected to the Claim. In accordance with U.S. Bankruptcy Court for the Northern District of Illinois' ruling on Kmart's Objection, Equity One received initial distributions of certain shares of Kmart Common Stock into online brokerage accounts on the Lease Rejection portion of the Claim as it related to certain stores, including Kmart Store No. 7350. However, Equity One and Kmart discovered two clerical errors in the settlement: (a) one brokerage account was over-funded by a total of 794 shares of Stock; and (b) the Claim was incorrectly deemed settled as to Lease Rejection damages for Kmart Store No. 3652 in addition to the other Kmart stores. Equity One and Kmart have resolved their dispute as to the portion of the Claim with respect to the lease agreement for Kmart Store No. 3652 located in Baton Rouge, Los Angeles. The parties agree that Equity One will have an Allowed Class 5 Lease Rejection Claim for $700,000, which will be satisfied in accordance with the terms of Kmart's Plan of Reorganization subject to the corrections of the specified errors in the settlement. The first distribution to be made on account of the Allowed Claim will be made during the Distribution Period in January 2006. Kmart is not relieved of its responsibility to credit an existing Equity One Computershare Account with any supplemental distributions now or in the future as they relate to the Claim -- including damage settlements on Kmart Stores No. 7350 and 3847 -- or any other similar claim -- including Kmart Stores No. 3690 in San Antonio, Texas. Equity One's Claim Nos. 38510 and 54033 against or arising out of Kmart Stores No. 3652, 3747, 3847, 3925, 3966, 3994, 4893, and 7350 will be expunged in their entirety except for the Allowed Claim and any supplemental distributions for Kmart Stores No. 3847, 7350, and 3690. Equity One is forever barred from asserting, collecting, or seeking to collect any other claims or amounts with respect to the Lease relating to Kmart Store No. 3652 except for the Allowed Claim and any distributions made with respect to it. The Court signs the Agreed Order presented by the parties. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 106; Bankruptcy Creditors' Service, Inc., 215/945-7000) LOEWS CINEPLEX: AMC Merger Prompts Moody's to Withdraw All Ratings ------------------------------------------------------------------ Moody's Investors Service withdrew all ratings on Loews Cineplex Entertainment Corporation following the completion of its merger with AMC Entertainment, Inc. In connection with the completion of the merger, AMC repurchased all of Loews Cineplex's outstanding 9% Senior Subordinated Notes due 2014 and issued $325 million of 11% Senior Subordinated Notes due 2016. Ratings withdrawn include: Loews Cineplex Entertainment Corporation: * Corporate Family Rating, previously rated B1 * Senior Secured Bank Credit Facility, previously rated B1 * Senior Subordinated Regular Bond/Debenture, previously rated B3 Outlook, changed to rating withdrawn from negative. The merged company, called AMC Entertainment Inc., is headquartered Kansas City, Missouri. The company has interests in approximately 415 theatres with 5,672 screens in 29 states and the District of Columbia and 11 countries outside of the United States. LOVESAC CORP: Wants Squire Sanders as Lead Bankruptcy Counsel ------------------------------------------------------------- The LoveSac Corporation and its debtor-affiliates ask the Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware for permission to employ Squire, Sanders & Dempsey LLP as their bankruptcy counsel. Squire Sanders will: (a) advise the Debtors with respect to their power and duties as debtors-in-possession in the continued management and operation of their businesses and property; (b) attend meetings and negotiate with representatives of creditors and other parties-in-interest and advise and consult on the conduct of the Debtors' bankruptcy cases, including all of the legal and administrative requirements of operating in chapter 11; (c) assist the Debtors with the preparation of their Schedules of Assets and Liabilities and Statements of Financial Affairs; (d) advise the Debtors in connection with any sales of assets or business combinations, including the negotiation of asset, stock, purchase, merger or joint venture agreements, formulate and implement appropriate procedures with respect to the closing of any of those transactions, and counseling the Debtors in connection with those transactions; (e) advise the Debtors in connection with any postpetition financing and cash collateral arrangements and negotiate and draft documents relating to them, provide advice and counsel with respect to prepetition financing arrangements, and negotiate and draft documents relating to them; (f) advise the Debtors on matters relating to the evaluation of the assumption, rejection or assignment of unexpired leases and executory contracts; (g) advise the Debtors with respect to legal issues arising in or relating to the Debtors' ordinary course of business, including attendance at senior management meetings, meetings with the Debtors' financial and turnaround advisors and meetings of the board of directors; (h) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on their behalf, the defense of any actions commenced against them, negotiations concerning all litigation in which the Debtors are involved and objecting to claims filed against the Debtors' estates; (i) prepare, on the Debtors' behalf, all motions, applications, answers, orders, reports and papers necessary to the administration of the estates; (j) negotiate and prepare, on the Debtors' behalf, a plan or plans of reorganization, disclosure statement and all related agreements and documents and taking any necessary action on behalf of the Debtors to obtain confirmation of those plan or plans; (k) attend meetings with third parties and participating in negotiations with respect to the above matters; (l) appear before the Court, any appellate courts and the United States Trustee and protecting the interests of the Debtors' estates before those court and the United States Trustee; (m) perform all other necessary legal services and provide all other necessary legal advice to the Debtors in connection with their bankruptcy cases; and (n) perform all other necessary legal services and provide all other necessary legal as requested by the Debtors including but not limited to corporate finance, franchising, litigation, regulatory, labor, tax, corporate and intellectual property matters. Stephen D. Lerner, Esq., a partner at Squire, Sanders & Dempsey LLP, discloses that the Firm received a $100,000 retainer. The Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $295 to $790 Associates and Of Counsel $145 to $630 Paralegals and Legal Assistants $50 to $240 Mr. Lerner assures the Court that Squire, Sanders & Dempsey LLP does not hold or represent an interest adverse to the Debtors' estates and is disinterested as that term is defined in the U.S. Bankruptcy Code. Mr. Lerner also disclosed that Stephen C. Mahon, Esq., a partner at Squire Sanders, is a current limited partner holding less than 1% interest in Walnut Investment Partners, L.P., and Walnut Private Equity Fund, L.P. These two funds are shareholders in The LoveSac Corporation. Mr. Lerner added that Mr. Mahon has no personal involvement in the funds' investment in the Debtors and is simply a passive limited partner in the funds. Mr. Mahon will not be involved in the Firm's representation of the Debtors. Squire Sanders & Dempsey LLP -- http://www.ssd.com/-- is a multi- jurisdictional law firm with approximately 800 lawyers practicing in offices throughout the Americas, Europe and Asia. Headquartered in Salt Lake City, Utah, The LoveSac Corporation -- http://www.lovesac.com/-- operates and franchises retail stores selling beanbags furniture. The LoveSac Corp. and three affiliates filed for chapter 11 protection on Jan. 30, 2006 (Bankr. D. Del. Case No. 06-10080). When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. LOVESAC CORP: Wants Bayard Firm as Local Bankruptcy Counsel ----------------------------------------------------------- The LoveSac Corporation and its debtor-affiliates ask the Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware for permission to employ The Bayard Firm as their local bankruptcy counsel, nunc pro tunc to Jan. 30, 2006. Bayard will: (a) provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their businesses, management and any liquidation, abandonment, as well as the administration of their estates and property; (b) take necessary action to protect and preserve the Debtors' estates, including assisting in the prosecution of actions on behalf of the Debtors, defending any action commenced against the Debtors, negotiating with respect to all litigation in which the Debtors are involved, and objecting to claims filed against the Debtors' estates; (c) prepare, on the Debtors' behalf, all necessary applications, motions, responses, objections, orders, reports, and other legal papers; (d) negotiate and draft any agreements for the sale or purchase of assets of the Debtors, if appropriate; (e) negotiate and draft a plan of reorganization, consensual or otherwise, and all documents related to them, including, but not limited to, the disclosure statements and ballots for voting; (f) take the steps necessary to confirm and implement the Plan, including, if needed, modifications and negotiating financing for the Plan; and (g) render other legal services for the Debtors as may be necessary and appropriate in the Debtors' bankruptcy cases. Charlene D. Davis, Esq., a director at The Bayard Firm, discloses that the Firm received a $25,000 retainer. Bayard's professionals bill: Designation Hourly Rate ----------- ----------- Directors $435 to $590 Associates and Counsel $205 to $425 Paralegals $155 to $185 Ms. Davis assures the Court that The Bayard Firm neither holds nor represents any interest adverse to the Debtors and Bayard is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. The Bayard Firm -- http://www.bayardfirm.com/-- is a full-service law firm. Headquartered in Salt Lake City, Utah, The LoveSac Corporation -- http://www.lovesac.com/-- operates and franchises retail stores selling beanbags furniture. The LoveSac Corp. and three affiliates filed for chapter 11 protection on Jan. 30, 2006 (Bankr. D. Del. Case No. 06-10080). When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. MARLA IRISH: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Marla J. Irish 17550 Nina Street Omaha, Nebraska 68130 Bankruptcy Case No.: 06-80078 Chapter 11 Petition Date: January 30, 2006 Court: District of Nebraska (Omaha Office) Judge: Chief Judge Timothy J. Mahoney Debtor's Counsel: William L. Biggs, Jr., Esq. Gross & Welch, P.C., L.L.O. 2120 South 72 Street 1500 Omaha Tower Omaha, Nebraska 68124 Tel: (402) 392-1500 Fax: (402) 392-8101 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mid City Bank Signature Loan $306,750 Attn: Jim Fitl 304 South 42nd Street Omaha, NE 68131 Tel: (402) 558-8000 Mid City Bank Personal loan $150,250 Mid City Bank Unsecured portion $67,377 MBNA $6,859 P.O. Box 15026 Wilmington, DE 19850-5026 American Express $6,158 P.O. Box 297804 Fort Lauderdale, FL 33329 Capital One Account in name of $6,361 P.O. Box 790216 Blackthorne Real Saint Louis, MO 63179-0216 Estate Development Co. and Kevin D. Irish. May also be guaranteed by Debtor. Capital One Billed to $5,883 Blackthorne Real Estate and Kevin D. Irish Alegent HealthImmanual $4,571 Medical Center 2301 North 117th Avenue Suite 100 Omaha, NE 68164-3483 Capital One Platinum Mastercard $2,366 Havers Mar-H $500 8032 Maple Street Omaha, NE 68134 Dillards $407 P.O. Box 4599 Carol Stream, IL 60197-4599 Tim Swisher $200 David, Larimer, Kuhl & Swisher 1004 Farnam Street, Suite 204 Omaha, NE 68102 Marks Claire & Richards, LLC $128 10605 Miracle Hills Drive Suite 300 P.O. Box 542005 Omaha, NE 68154 Capital One $89 MERISANT CO: Poor Performance Leads Moody's to Downgrade Ratings ---------------------------------------------------------------- Moody's Investors Service downgraded the senior secured bank facilities of Merisant Company to Caa1 from B2 and its senior subordinated notes to Ca from Caa2. Moody's also downgraded the senior subordinated debt of Merisant's parent -- Merisant Worldwide -- to C from Caa3, as well as the corporate family rating to Caa3 from B3. The outlook is stable. The downgrade follows: * the continuing deterioration in the company's sales, earnings, and cash flow; * the continuing weakening of the company's debt protection measures; and * the increased risk that Merisant will be unable to adequately improve its financial flexibility in order to prevent a default on its securities and bank facilities. Ratings downgraded are: Issuer: Merisant Co. Downgrades: * $35M Senior Secured Bank Credit Facility due 2009, downgraded to Caa1 from B2 * $36.6.M Senior Secured Bank Credit Facility due 2009, downgraded to Caa1 from B2 * $165.8M Senior Secured Bank Credit Facility due 2010, downgraded to Caa1 from B2 * $225M 9.5% Senior Subordinated Regular Bond/Debenture Due 2013, downgraded to Ca from Caa2 Issuer: Merisant Worldwide, Inc. Downgrades: * Corporate Family Rating, downgraded to Caa3 from B3 * $136.0M Senior Subordinated Regular Bond/Debenture due 2014, downgraded to C from Caa3 The ratings downgrade reflects Merisant's continuing decline in sales, earnings, and cash flow -- particularly in its North American retail division in grocery, club and mass channels. Overall income from operations (excluding restructuring fees and charges) fell from $74.9 million in 2003 to $46.4 million in 2004 and to $40.1 million for the 12-months ended September 2005. This has resulted in an increase in enterprise-wide debt/EBITDA (including Moody's standard analytic adjustments) from 6.5X in 2004 to 7.4X for the 12-months ended Sept. 20, 2005. Market share gains from Johnson & Johnson's Splenda brand was the primary driver for the earnings dissapointments. Another smaller factor was unfavorable press in Europe regarding the health profile of aspartame. Moody's believes that further erosion in profits and credit metrics is possible as Splenda rolls out its products worldwide and/or if other competitive responses by Merisant are unsuccessful. While Moody's recognizes the new product innovation efforts that Merisant's new management team is pursuing, they have to date been unable to stop the decline in sales and earnings, and may take longer-than anticipated to gain traction. Given the burden of Merisant's high leverage and its declining financial flexibility, Moody's believes that the risk of default has increased. The new rating levels and stable outlook reflect Moody's view of Merisant's uncertain financial flexibility and recovery values in a distressed scenario. In relation to the company's enterprise value, Moody's notes Merisant's still sizeable global market share (26% dollar share in 2004) in the growing low calorie tabletop sweeteners market, with sizeable shares in: * North America, * the UK, * France, and * Mexico. Merisant also benefits from geographic diversification and a broad foodservice customer base. However, failure to stabilize its operating performance such that enterprise value deteriorates could result in further downgrades. The senior secured credit facilities were downgraded two notches and are now rated two notches higher than the corporate family rating. This widened notching reflects the superior position of the credit facilities relative to the overall enterprise ratings as the facilities, with their first claim on the assets are likely to experience significantly better recovery prospects relative to other debt classes in a distressed scenario. The senior subordinated notes at Merisant Company are notched down from the corporate family rating reflecting their effective and contractual subordination to the senior secured credit facilities. The senior subordinated notes are guaranteed on a subordinated basis by Merisant's direct holding company and its US subsidiaries. The senior subordinated notes at Merisant Worldwide are notched down from the corporate family rating, as well as from the senior subordinated debt at Merisant, due to its contractual and effective subordination to senior Merisant debt, as well as its structural subordination to debt at Merisant. Merisant Worldwide, Inc. is headquartered in Chicago, Illinois. The company had LTM Sept. 30, 2005, revenues of approximately $327 million. The company packages and distributes low calorie tabletop sweeteners (primarily aspartame and saccharin-based), which include: * Equal, * NutraSweet, and * Candarel brands, via foodservice and retail channels in over 100 countries. MUSICLAND HOLDING: Wants to Return Goods and Obtain Trade Credit ---------------------------------------------------------------- To satisfy their customers' requests, Musicland Holding Corp. and its debtor-affiliates strive to ensure that their stores are well-stocked with the most popular and recently released movies, music and other entertainment products. However, the demand for a particular movie or album is difficult to predict. Return rights permit a retailer to return inventory at any time to its vendors for credit against the amounts owed for past purchases or for credit against future purchases. Those return rights enable a retailer to ensure a sufficient supply of new products as they are released and before the demand can be fully ascertained, shift the risk of obsolete and undesired product from the retailer to the vendor, and enable the Debtors to maintain a broader selection of inventory without significant risk of loss if the products cannot be sold. According to James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, the Debtors customarily purchase movies, music and entertainment products from vendors with return rights. The Debtors rely on return rights in purchasing Inventory and establishing Inventory levels. On a monthly basis, the Debtors designate some of their unsalable or slow-moving Inventory for return to vendors. Mr. Sprayregen discloses that the Debtors, excluding MediaPlay stores, had $297 million of Inventory held for sale as of January 4, 2006. Mr. Sprayregen notes that to manage the Debtors' inventory effectively and efficiently, the Debtors must have the ability (i) to return Inventory existing on the Petition Date; and (ii) to order entertainment products postpetition on credit with the ability to return unsold Inventory. The Debtors entered into security agreements with a number of the Debtors' major music and video suppliers in November 2003. In those Trade Lien Agreements, the Debtors granted those vendors second liens on all the Debtors' inventory held for sale, junior in priority to the liens securing the Debtors' obligations to Wachovia Bank, National Association, the Debtors' prepetition lender. Mr. Sprayregen relates that the Debtors' books showed that the Trade Lien Creditors were owed more than $180 million as of the Petition Date. Mr. Sprayregen tells the U.S. Bankruptcy Court for the Southern District of New York that the Debtors have worked closely with an Informal Committee of Trade Lien Vendors to develop an acceptable returns program for the Trade Lien Creditors during the Chapter 11 Cases. Subsequently, the parties agreed to two standard forms of agreements that will serve as basis for the Debtors' negotiations with the Trade Lien Creditors and with the unsecured vendors. Mr. Sprayregen, however, notes that no vendor is obligated to accept an Agreement and the Debtors are not obligated to enter into an Agreement with any vendor. The Trade Committee is composed of: * Buena Vista Home Entertainment, Inc., * EMI Recorded Music, * North America, * Paramount Pictures, * Home Video Division, * Sony BMG Music Distribution, * Sony Pictures Home Entertainment Inc., * Twentieth Century Fox Home Entertainment LLC, * Universal Music and Video Distribution, * V.P.D. IV, Inc., * Warner/Elektra/Atlantic Corporation, and * Warner Home Video Inc. Each of the original signatories to the Trade Lien Agreements -- Columbia Tristar Home Entertainment, Inc., and V.P.D. IV, Inc. -- currently are represented on the Trade Committee. Mr. Sprayregen relates that the Agreements reflect the fact that bankruptcy disrupts the normal inventory return process. Moreover, the Agreements establish terms for the return of prepetition goods to the Debtors' vendors for credit against the vendor's prepetition claims and for open account credit based on the prepetition inventory returned. The salient terms of the Agreements are: a. Postpetition Line of Credit. The vendor will provide the Debtors with an open ongoing line of credit equal to 100% of each dollar of prepetition merchandise returned by the Debtors. That line of credit will remain open and available until the earlier of 30 days after the effective date of an Agreement, or the occurrence of a termination event. The full amount of the postpetition account will be immediately due upon termination. b. Priority and Security for Postpetition Account -- Trade Lien Creditors. If the vendor also is a Trade Lien Creditor, the Postpetition Account will be secured pursuant to the terms of a Trade Lien Agreement. The liens securing a Postpetition Account owed to a Trade Lien Creditor will be subordinate to: * all liens in favor of Wachovia; * any valid, perfected and non-avoidable liens as of the Petition Date, and * any carve-outs for the fees and expenses of Chapter 11 professionals stated in any cash collateral order or DIP Financing approved by the Court. -- Superpriority Administrative Claim. Any Postpetition Account will be granted an allowed superpriority administrative claim pursuant to Section 364(c)(1) of the Bankruptcy Code with priority over all administrative expenses or other claims under Section 503(b) or 507(b) and with recourse to all property of the Debtors' Estates. However, that superpriority administrative claim will be: * subject and subordinate to any valid, perfected and non-avoidable liens; * subordinate to any administrative priority granted to Wachovia and the lenders party to any DIP Financing approved by the Court; * subject and subordinate to the fees of the U.S. Trustee and the fees payable to the Clerk of the Court pursuant to 28 U.S.C. Section 1930(a); and * subject and subordinate to any carve-outs for fees and expenses for Chapter 11 professionals specified in any Court-approved cash collateral order or DIP Financing. c. Liens, Diminution of Value. The liens granted to secure the Postpetition Account of a Trade Lien Creditor will be, at all times, ranked pari passu with the liens granted to the Trade Lien Creditors pursuant the terms of the security agreements among the Debtors and those Trade Lien Creditors in effect immediately after the Petition Date and any replacement liens granted to the Trade Lien Creditors for adequate protection pursuant to the Court orders approving the DIP Financing or any further order authorizing the continued use of the Trade Lien Creditors' cash collateral. Upon the return of Prepetition Merchandise, there will be a diminution in the value of the collateral securing the Trade Lien Creditors in an amount equal to the fair market value of those returned merchandise and, in accordance with the terms of the Order authorizing the DIP Financing, the Trade Lien Creditors will automatically receive adequate protection replacement liens. d. Returns of Prepetition Merchandise. The vendor will accept from the Debtors the return of any and all Prepetition Merchandise in accordance with the vendor's standard return policy and practice for so long as the Agreement remains in effect. All returns of Prepetition Merchandise will first be credited dollar-for-dollar against the vendor's claims for goods sold and delivered to the Debtors prior to the Petition Date; and second, will be credited dollar-for-dollar against the Postpetition Account. That Prepetition Merchandise returned to a vendor will be free and clear of all claims and liens and will be valued, authorized and verified pursuant to the standard return practice and policy for the vendor's merchandise. e. Vendors' Claims. The Trade Lien Creditor and unsecured vendor's Prepetition Claims are enforceable against the Debtors and admitted and allowed as a secured claim or claim in an amount at least equal to the vendor's Prepetition Claim. Nothing will preclude the Debtors or any other party-in-interest from asserting any objection, claim or cause of action against the vendor; provided that, the terms of the Order approving the DIP Financing will govern the rights of the Debtors or any other party-in- interest as against the Trade Lien Creditors. The Trade Lien Creditor and unsecured vendor's Postpetition Account will constitute a Secured Postpetition Vendor Claim or a Postpetition Vendor Claim. Mr. Sprayregen asserts that the Agreements will enhance the Debtors' financial performance, the value of the Debtors' business and the prospects for a successful reorganization. Those Agreements are critically important to the Debtors and are in the best interests of the estates. Therefore, pursuant to Sections 364 and 546(h), the Debtors seek the Court's authority to return prepetition inventory of prepackaged media including CDs, DVDs and games to the Debtors' vendors, and to incur and obtain from those vendors an open Postpetition line of credit equal to one dollar for every dollar of prepetition Inventory returned. The Debtors propose to provide these parties-in-interest with written notice within five business days upon execution of an Agreement: a. U.S. Trustee, b. counsel to Wachovia, and c. counsel to the Trade Committee, Michael A. Bloom, Esq., at Morgan, Lewis & Bockius LLP, in Philadelphia, Pennsylvania. A Notice Party is entitled to object to the Debtors' execution of the Agreement within 10 days of the date of written notice, if: a. executed Agreement contains terms and conditions that differ in some material respect from the original form; b. the different terms and conditions adversely affect the objecting Notice Party's interests. A full-text copy of the Trade Lien Creditors Agreement is available for free at http://ResearchArchives.com/t/s?4de A full-text copy of the Unsecured Vendors Agreement is available for free at http://ResearchArchives.com/t/s?4df 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) MUSICLAND HOLDING: Wants to Pay Warehousing & Shipping Claims ------------------------------------------------------------- Musicland Holding Corp. and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's authority to pay prepetition claims relating to shipping and other potential lien claimants in amounts determined by the Debtor as necessary and appropriate. Shippers and Warehousemen According to James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, the Debtors hire shippers and warehousemen to assure the timely shipping and delivery of goods sold in the ordinary course of the Debtors' businesses. The Debtors believe that, unless paid, Shippers and Warehousemen may withhold delivery of, or access to, the goods in their possession, which have a value well in excess of the amount of Warehousing Claims. Moreover, under the laws of many states, Shippers and Warehousemen may have a possessory lien on goods in their possession. Mr. Sprayregen says that in connection with the normal operation of their businesses, the Debtors purchase music, movies and entertainment-related products from numerous vendors and suppliers. The Debtors' ability to timely receive, distribute and return those Retail Goods depends on the maintenance of a successful and efficient supply and delivery network. Thus, Mr. Sprayregen notes that the Debtors' business operations and their reorganization's success depends on the maintenance of reliable and efficient transportation and sale processing systems for Retail Goods. Those systems involve the use of the Shippers and Warehousemen. Mr. Sprayregen discloses that the Debtors have historically paid $50 million annually to the Shippers and Warehousemen, a portion of which is outstanding at any time. The Debtors expect that, as of the Petition Date, some of the Shippers and Warehousemen will have $10 million in outstanding invoices prior to the Petition Date. Some of the Shippers and Warehousemen may refuse to continue to carry goods and make timely delivery. Based on the Debtors' belief that majority of the Shippers and Warehousemen do not have the right to refuse performance or assert liens under their contracts, and considering that the Shippers and Warehousemen currently are holding $73 million of goods, the Debtors seek the Court's permission to pay up to $10 million. Further, the Debtors ask the Court's permission to make non- disputed prepetition payments to the Shippers and Warehousemen relating to the $10 million Shipping Charges to: (a) obtain release of critical or valuable goods or equipment that may be subject to liens; (b) maintain a reliable, efficient and smooth distribution system; and (c) induce critical shippers, warehousemen and other creditors with potential liens to continue to carry goods and equipment and make timely delivery. Lien Claimants In addition, the Debtors routinely transact business with a number of other third parties who have the potential to assert mechanics' or artisans' liens against the Debtors and their property if the Debtors fail to pay for the goods or services rendered. Those Lien Claimants perform various services for the Debtors, including new store build-outs, store remodeling and repairs. Mr. Sprayregen explains that although the Debtors have generally made timely payments to the Lien Claimants as of the Petition Date, a substantial number of the Lien Claimants may have been unpaid for certain prepetition goods and services. Mr. Sprayregen argues that the existence and perfection of the Mechanics' Liens could possibly place the Debtors out of compliance under their various leases. Moreover, certain Lien Claimants may refuse to perform their ongoing obligations under those agreements with the Debtors, including installation, servicing and warranty obligations. To avoid undue delay and to facilitate the continued operation of the Debtors' businesses, the Debtors seek the Court's immediate authority to pay the claims of Lien Claimants that have given or could give rise to a lien against the Debtors' assets, provided that the Debtors will not be authorized to pay a Lien Claimant unless the Lien Claimant has perfected or is capable of perfecting one or more liens in respect of that claim. Court Order Judge Bernstein grants the Debtors' request on an interim basis. Judge Bernstein authorizes the Debtors to pay prepetition Shipping Charges of up to $10 million subject to having the ability to do so under the Debtors' proposed DIP financing. Further, Judge Bernstein allows the Debtors to pay prepetition Lien Claims of up to $2 million. 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) MUSICLAND HOLDING: Asks Court to Set May 1 as Claims Bar Date ------------------------------------------------------------- Musicland Holding Corp. and its debtor-affiliates anticipate filing their Schedules of Assets and Liabilities 75 days after the Petition Date. Thus, it is essential to ascertain the full nature, extent and scope of the claims asserted against the Debtors and their estates as soon as possible. Further, to develop a comprehensive, viable reorganization plan, the Debtors must have complete and accurate information regarding the nature, amount and status of all claims against the Debtors that will be asserted in the Chapter 11 Cases. Bar Dates Pursuant to Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to establish May 1, 2006, as the last day for all creditors, other than governmental units, to file prepetition claims. Pursuant to Section 502(b)(9) of the Bankruptcy Code, the Debtors ask the Court to establish July 12, 2006, as last day for all governmental units to file prepetition claims. The Debtors propose the later of the General Bar Date or 30 days after a claimant's notification of the Debtors' amendment to the Schedules -- reducing or deleting the undisputed, noncontingent and liquidated amounts or changing the classification of the claim -- as the amended schedule bar date. In addition, the Debtors propose that the Bar Date for rejection damage claims will be the later of the General Bar Date or 30 days after the date of the Rejection Order. The Debtors want to retain the right to: (a) dispute, assert offsets or defenses against, any claim filed, listed or reflected in the Schedules as to nature, amount, liability, or classification; or (b) subsequently designate any claim as disputed, contingent, or unliquidated. Filing Claims The Debtors require these persons or entities to file a Proof of Claim on or before the Bar Date: (a) any entity whose claim is listed as disputed, contingent, or unliquidated in the Debtors' Schedules and that desires to participate in any of the Debtors' Chapter 11 cases or share in any distribution in those chapter 11 cases; (b) any entity whose claim is improperly classified in the Debtors' Schedules or is listed in an incorrect amount and that desires to have its claim allowed in a classification or amount other than that listed in the Schedules; or (c) any entity whose claim against a Debtor is not listed in the applicable Debtors' Schedules. Entities holding these claims need not file a proof of claim: * claims listed in the Debtors' Schedules as contingent, unliquidated or disputed, and which are not disputed by the creditor holding that claim as to nature, amount, or classification; * claims on account of which a proof of claim has already been properly filed with the Court; * claims previously allowed by the Court; * claims allowable under Sections 503(b) and 507(a)(1) of the Bankruptcy Code as administrative expenses of the chapter 11 cases; * claims made by any of the Debtors or any direct or indirect subsidiary of any of the Debtors against one or more of the other Debtors; or * claims for which specific deadlines have previously been fixed by the Court. Entities asserting Claims against more than one Debtor are required to file a separate proof of claim form with respect to each Debtor. Each proof of claim must identify the particular Debtor against which the Claim is asserted. The Debtors propose to mail notice of the Bar Dates to their known creditors and rely on publication to give notice to their unknown creditors. The Debtors will publish the Bar Date Notice in USA Today (National Edition) and a trade publication in wide circulation. Pursuant to Bankruptcy Rule 3003(c)(2), any entity that is required to file a proof of claim but fails to timely do so by the applicable Bar Date will be: (a) forever barred, estopped and enjoined from asserting any claim that: * exceeds the amount identified in the Schedules as undisputed, non-contingent, and liquidated; or * is of a different nature, classification or priority than any claim identified in the Schedules; and (b) barred from participating in any distribution from any Debtor's estate with respect to that Unscheduled Claim. 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL VISION: Debt Repayment Cues Moody's Ratings Withdrawal --------------------------------------------------------------- Moody's Investors Service withdrew all ratings on National Vision, Inc. Ratings have been withdrawn because all rated debt has been repaid as part of the recent leveraged buyout of the company by Berkshire Partners LLC. These ratings are withdrawn: * Senior secured note rating of B3 * Corporate family rating of B3 National Vision, Inc., with headquarters in Lawrenceville, Georgia, is a provider of optical services in host locations. Revenue for the twelve months ended July 2, 2005 was approximately $225 million. NORTEL NETWORKS: Moody's Rates $450MM Unsec. Credit Facility at B3 ------------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to the senior secured Tranche A of Nortel's proposed interim facility and a B3 to its proposed senior unsecured Tranche B interim facility; upgraded existing 2023 senior notes to B2, affirmed the B3 Corporate Family Rating, B3 Senior Unsecured ratings of Nortel and the SGL-3 liquidity rating. The ratings outlook remains negative. Nortel is borrowing $1.3 billion under an interim one-year credit facility with the intent to use the proceeds to repay its $1.275 billion of 6.125% notes which mature Feb. 15, 2006. The interim facility will be comprised of two tranches: * an $850 million senior secured Tranche A; and * a $450 million Senior Unsecured Tranche B. The B2 Senior Secured rating assigned to Tranche A of the interim credit facility reflects the pledge of substantially all of the company's U.S. and Canadian assets as collateral. Moody's notes that the company's foreign assets will not be a part of the collateral package. The collateral package represents approximately 60% of the company's consolidated assets and revenue. The $200 million 6.875% senior notes due 2023 were also granted the same collateral package, in accordance with the terms of the indenture, hence the upgrade of the notes to B2. The continued notching up of the 2023 notes will depend on future collateral package, if any, when permanent financing is put in place. Moody's notes that pro forma for the transaction, secured obligations will represent approximately 30% of Nortel's consolidated total borrowings. The new facilities are issued by Nortel Networks Inc. (NNI) and will be guaranteed by Nortel Networks Corporation (NNC) and Nortel Networks Limited (NNL). The B3 corporate family rating reflects significant challenges Nortel faces to restore market credibility as well as revenue and profitability growth amidst an intensively competitive and consolidating market for telecommunications equipment. Internal disruption due to its ongoing accounting investigation has hampered Nortel's recovery from the telecom spending downturn that began in 2001. The rating also reflects weak overall credit metrics and significant senior management turnover that has disrupted development and execution of a clear strategy to regain profitable market share growth. The company has lost market share in key product areas, particularly in its higher growth Wireless Networks segment. The ratings also incorporate the company's sustained investments in key, next generation wireless and wireline technologies, as spending on research and development as a percentage of total revenue has remained the highest among its peers at approximately 18%. Nortel holds solid market positions in voice over IP and dense wavelength division multiplexing transport technologies. The company will continue to focus on operating cost reduction through further real estate optimization and other cost containment actions, as it targets a decline in operating expenses to the mid 30% range (as a percentage of revenue) versus the low 40% range for 2004. The negative ratings outlook considers: * Moody's expectation for modest improvement in financial performance in 2006; * limitations to cash flow generation; and * continuing exposure to shareholder litigation and federal investigations. Although the company has maintained adequate liquidity to address near term funding requirements, cash balances may fall significantly within the next 12 months should Nortel be unable to refinance $1.3 billion interim credit facility which matures February 2007 and/or face material unfavorable outcome to the ongoing litigation. The ratings could face further downward pressure to the extent: 1) Nortel experiences slower recovery of profitability than expected; 2) changes in market conditions negatively impact Nortel's competitive position and prospects for recovery; or 3) Nortel materially reduces its financial flexibility perhaps through acquisitions or from judgments or settlements against the company from outstanding litigation or penalties resulting from federal investigations. The ratings outlook could be revised to stable upon successful refinancing of the company's $1.3 billion interim financing and to the extent the company continues to increase credit protection measures through sustained improvement in operational performance while adequately addressing deficiencies in its internal controls. As of Dec. 31, 2005, the company had approximately unrestricted cash of $3.0 billion and debt of $3.9 billion. The SGL-3 speculative grade liquidity rating reflects the company's: * substantial current cash balances; * expectations for negative free cash flow in 2006; * limited sources of committed external liquidity; * significant near term debt maturities; and * limited ability for asset sales due to the assets that are encumbered under the secured credit facility and notes. The company does not have access to any committed credit facilities beyond $300 million of committed portion of the $750 million EDC facility. These ratings were assigned: Nortel Networks Inc.: * Senior Secured Interim Credit Facility -- B2 * Senior Unsecured Interim Credit Facility -- B3 This rating was upgraded: * 6.875% Senior Secured notes due 2023 -- to B2 from B3 These ratings were affirmed: Nortel Networks Corporation: * 4.25% Senior Unsecured Convertible notes (guaranteed by Nortel Networks Limited) -- B3 Nortel Networks Limited: * Corporate Family Rating -- B3 * Preferred Stock -- Caa3 * Speculative Grade Liquidity rating -- SGL-3 Nortel Networks Capital Corporation: * 7.40% Senior Unsecured notes (guaranteed by Nortel Networks Limited) -- B3 * 7.875% Senior Unsecured notes (guaranteed by Nortel Networks Limited) -- B3 Nortel Networks Corporation is a global telecommunications networking solutions provider headquartered in Brampton, Ontario, Canada. NRG ENERGY: Expects to Get $500M from Sale of 2M Preferred Shares ----------------------------------------------------------------- NRG Energy, Inc., is offering 2,000,000 shares of its 5.75% mandatory convertible preferred stock for $250 per preferred share. The Company expects to raise $500 million in gross proceeds from this offering, and $486.25 million after underwriting discounts are deducted from the gross proceeds. To the extent the underwriters sell more than 2,000,000 preferred shares, the underwriters have the option to purchase up to 300,000 additional preferred shares before February 27, 2005, at $243.125 per preferred share. The joint book-running managers for the offer are: * Morgan Stanley; * Citigroup; * Lehman Brothers; * Banc Of America Securities Llc; * Deutsche Bank Securities; * Goldman, Sachs & Co.; and * Merrill Lynch & Co. Concurrently with this offering, the Company is offering senior notes and shares of its common stock. As reported in the Troubled Company Reporter on Jan. 30, 2006, the Company sold $3.6 billion of debt of what is said to be the biggest sale of junk bonds since 1989. The Company sold: -- $2.4 billion of 7.375% notes maturing in 2016; and -- $1.2 billion of 7.25% notes maturing in 2014. As reported in the Troubled Company Reporter on Feb. 1, 2006, the Company is offering 20,855,057 shares of its stock to the public priced at $48.75 per share. The company expects to net $985,083,508 after deducting expenses and the 3% underwriters' discount. The preferred stock offering is not conditioned on the consummation of these concurrent offerings. Description of the Preferred Stock The Company will pay dividends on each share of its mandatory convertible preferred stock in an annual amount of $14.375. Dividends will accrue and cumulate from the date of issuance. The Company will pay dividends in cash on March 15, June 15, September 15 and December 15 of each year prior to March 15, 2009. The first dividend payment will be made on March 15, 2006, in the amount of $1.7170 per preferred share. Each preferred share has a liquidation preference of $250, plus accrued, cumulated and unpaid dividends. Each preferred share will automatically convert on March 16, 2009, into between 4.1356 and 5.1282 shares of the Company's common stock. At any time prior to March 16, 2009, holders may elect to convert each preferred share into 4.1356 common shares. If the closing price per common share exceeds $90.675 for at least 20 trading days within a period of 30 consecutive trading days, the Company may elect to cause the conversion of all, but not less than all, of the preferred shares then outstanding at the conversion rate of 4.1356 common shares per preferred share. A full-text copy of the Prospectus is available for free at http://ResearchArchives.com/t/s?4d4 Prior to the preferred stock offering, there has been no public market for the Company's mandatory convertible preferred stock. The Company's has applied to list its mandatory convertible preferred stock on the New York Stock Exchange under the symbol "NRGPra". Shares of our common stock are listed on the New York Stock Exchange under the symbol "NRG." NRG Energy, Inc. currently owns and operates a diverse portfolio of power-generating facilities, primarily in the Northeast, South Central and Western regions of the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities. NRG also has ownership interests in generating facilities in Australia and Germany. * * * As reported in the Troubled Company Reporter on Jan. 16, 2006, Fitch Ratings has initiated rating coverage of NRG Energy, Inc. by assigning a 'BB' rating to NRG's proposed $5.2 billion secured credit facility, consisting of: * a $3.2 billion secured term loan B and $2 billion of revolving credit/synthetic letter of credit facilities, * a 'B' rating to NRG's proposed $3.6 billion issuance of senior unsecured notes, and * a 'CCC+' rating to NRG's proposed issuance of $500 million mandatory convertible preferred stock. In addition, Fitch has assigned NRG a 'B' issuer default rating, as well as recovery ratings for the proposed debt instruments. The Rating Outlook is Stable. The ratings have been initiated by Fitch as a service to investors. Recovery ratings by Fitch are: NRG Energy, Inc. -- $3.2 billion secured term loan 'RR1'; -- $1 billion secured revolving credit line 'RR1'; -- $1 billion secured synthetic letter of credit 'RR1'; -- $3.2 billion senior unsecured notes 'RR4'; -- $500 million mandatory convertible preferred stock 'RR6' As reported in the Troubled Company Reporter on Jan. 9, 2006, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on power generation company NRG Energy Inc. Standard & Poor's also assigned its: * 'BB-' rating and '1' recovery rating to NRG's $3.2 billion first lien term loan B and $2 billion revolving credit and LOC facilities, * 'B-' rating to NRG's $3.6 billion unsecured notes, and * 'CCC+' rating to NRG's $500 million mandatory convertible securities. The 'BB-' rating and '1' recovery rating on the $3.2 billion term loan B and $2 billion revolving credit and LOC facilities indicate the expectation of full recovery of principal in the event of a payment default. Standard & Poor's affirmed its 'CCC+' ratings on NRG's preferred stock issues. The stable outlook reflects Standard & Poor's view that NRG's credit quality should not significantly deteriorate in the short term. O'SULLIVAN IND: Panel's Investigative Period Extended to Feb. 14 ---------------------------------------------------------------- As previously reported in the Troubled Company Reporter on November 14, 2005, the Official Committee of Unsecured Creditors told Judge C. Ray Mullins of the U.S. Bankruptcy Court for the Northern District of Georgia that without foundation in applicable law, O'Sullivan Industries Holdings, Inc., and its debtor- affiliates seek to provide excessive consideration to Senior Secured Noteholders in the guise of "adequate protection." The Committee believes that the Senior Secured Noteholders are more than adequately protected by the Debtors' maintaining the going- concern value of their business. Thus, the Committee asked the U.S. Bankruptcy Court for the Northern District of Georgia to substantially modify the adequate protection stipulation to ensure that the Debtors' Chapter 11 cases proceed on a level playing field, with a full and complete opportunity for the Committee to fulfill its statutory obligations. The Committee also asks the Court to consider its proposed alternative Adequate Protection Stipulation, which provides the Senior Secured Notes with "adequate protection" that the law compels, without sacrificing the rights of general unsecured creditors. James R. Sacca, Esq., at Greenberg Traurig, LLP, in Atlanta, Georgia, related that on Nov. 3, 2005, the Committee received a revised version of the Adequate Protection Stipulation. Less than 24 hours later, the Committee received a further revised Adequate Protection Stipulation, which made additional substantive changes to the Initial Revised Adequate Protection Stipulation. In addition, Mr. Sacca contended that the Committee should be given more time to investigate the prepetition senior secured notes liens and Bank of New York's claim. The Committee asked the Court to extend the deadline for it to bring any action to challenge the Prepetition Senior Secured Notes Liens and the BNY Claim to January 24, 2006. Furthermore, Mr. Sacca argued that: * The Senior Secured Noteholders impermissibly seek to limit the rights of discovery and the rights of third parties-in-interest to commence an adversary proceeding; * Without due notice, the Debtors and the Senior Secured Noteholders seek to cap the amount that the Committee can spend on its Investigation; and * The Senior Secured Noteholders have added a new limitation that essentially waives the rights of all third parties to have their administrative claims paid from either the Prepetition Senior Secured Notes Collateral, the Postpetition Senior Secured Notes Collateral, or the unencumbered assets of the Debtors' estates, if the cases are not successful. Court Order Pursuant to the Adequate Protection Stipulation, the Official Committee of Unsecured Creditors is authorized to investigate and commence actions challenging the validity, perfection, and enforceability of The Bank of New York's liens in the Debtors' property and the amount and allowability of the Debtor's prepetition indebtedness. In a Court-approved stipulation, the Debtors, the Creditors' Committee, and the Ad Hoc Senior Secured Noteholders Committee -- GoldenTree Asset Management L.P., Mast Credit Opportunities I, (Master) Ltd., and Breakwater Fund Management, LLC -- agree to extend the Committee's Investigative Period until February 14, 2006. Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on 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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) PANTRY INC: Earns $33 Million Net Income in First Fiscal Quarter ---------------------------------------------------------------- The Pantry, Inc. (NASDAQ: PTRY), disclosed its financial results for its first fiscal quarter ended December 29, 2005. Total revenues for the quarter were approximately $1.3 billion, a 39.7% increase from last year's first quarter. Net income was $33.0 million, more than double net income a year ago of $12.4 million, or $0.59 per share. The results for the first quarter of fiscal 2006 include approximately $0.05 per share in expenses related to the Company's refinancing of its credit facilities. "Our first quarter performance was exceptionally strong, reflecting unusually favorable conditions in the gasoline market early in the quarter, and benefits from prior year acquisitions," said Peter J. Sodini, President and Chief Executive Officer. "In addition, we continued to benefit from solid increases of nearly 5% in both comparable store merchandise sales and gasoline gallons sold. We believe that our ongoing strategic initiatives, including the rollout of additional food service offerings and private label merchandise is helping to drive growth, as are the attractive demographics of our southeastern markets and the appeal of our modern store base, most of which has been remodeled and rebranded under the Kangaroo banner over the last three years." Merchandise revenues for the quarter increased 10.3% overall and 5.0% on a comparable store basis. The merchandise gross margin was 37.5%, a 120 basis-point improvement from 36.3% a year ago. Total merchandise gross profits were $118.7 million, a 14.1% increase from last year's first quarter. Comparable store gasoline gallons rose 4.6%, while total gallons sold increased 20.1%. Total gasoline revenues were up 52.6%, in part due to a 27.1% increase in the average retail price per gallon, to $2.44. The gross margin per gallon was 21.2 cents, compared with 14.6 cents a year ago. Gasoline gross profits for the quarter totaled $86.6 million, a 73.6% increase from last year's first quarter. Mr. Sodini continued, "We also made excellent strategic progress across several fronts during the quarter. In October, we announced an extension of our gasoline supply agreement with Citgo, as well as a new agreement with ExxonMobil, enhancing the flexibility and security of our gasoline supplies. We announced agreements for two accretive 'tuck-in' acquisitions involving a total of 58 stores in Mississippi, Louisiana and North Carolina. In addition, we strengthened our capital structure through a $150 million convertible notes offering and a refinancing of our credit facilities, which will reduce interest expense and increase our capacity to finance future acquisitions." Mr. Sodini concluded, "As we recently announced, we have increased our earnings per share guidance for fiscal 2006 to a range between $2.95 and $3.05, excluding pending or future acquisitions. This increase reflects both the strong first quarter results and our assumption that gasoline margins will be closer to historical levels over the balance of the year, including the normal seasonal weakness in the current quarter." Headquartered in Sanford, North Carolina, The Pantry, Inc. is the leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated convenience store chains in the country, with net sales for fiscal 2005 of approximately $4.4 billion. As of September 29, 2005, the Company operated 1,400 stores in eleven states under a number of banners including Kangaroo Express(SM), Golden Gallon(R), and Cowboys(SM). The Pantry's stores offer a broad selection of merchandise, as well as gasoline and other ancillary services designed to appeal to the convenience needs of its customers. * * * As reported in the Troubled Company Reporter on Nov. 17, 2005, Moody's Investors Service rated the proposed secured bank loan and senior subordinated convertible notes of The Pantry, Inc. at Ba3 and B3 and affirmed the existing senior subordinated notes at B3 and the corporate family rating at B1. Proceeds from the new debt principally will be used to repay the existing term loan. The rating outlook remains stable. As reported in the Troubled Company Reporter on Nov. 16, 2005 Standard & Poor's Ratings Services affirmed leading convenience store operator The Pantry Inc.'s 'B+' corporate credit rating and changed the outlook to positive from stable. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating to The Pantry's proposed $205 million senior secured term loan due 2012 and $125 million revolving credit facility due 2012. The recovery rating on the loan is '1', indicating the expectation for full recovery of principal in the event of payment default. At the same time, Standard & Poor's assigned its 'B-' rating to the company's proposed $130 million convertible senior subordinated debentures due 2012 to be issued under Rule 144A. Ratings on the company's existing senior subordinated notes were affirmed at 'B-'. Proceeds from refinancing transaction will be used to pay down existing senior secured debt. Pro forma for the transaction, the company will have about $798 million of debt outstanding. PHOENIX INDUSTRIAL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Phoenix Industrial Finishing, Inc. 7401 Detour Avenue Cleveland, Ohio 44103 Bankruptcy Case No.: 06-10257 Type of Business: The Debtor provides coating & pretreatment services. See http://www.phoenix-finishing.com/ Chapter 11 Petition Date: February 1, 2006 Court: Northern District of Ohio (Cleveland) Judge: Arthur I. Harris Debtor's Counsel: Mary K. Whitmer, Esq. Kohrman Jackson & Krantz P.L.L. 1375 East 9th Street One Cleveland Center, 20th Floor Cleveland, Ohio 44114-1793 Tel: (216) 696-8700 Fax: (216) 621-6536 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 79th St. Associates, LLC Landlord $400,000 Shoreway Industrial Park 23220 Chagrin Boulevard #202 Beachwood, OH 44122 Internal Revenue Service Federal taxes $213,969 P.O. Box 21126 Philadelphia, PA 19114 Reserve Network Trade debt $85,590 P.O. Box 631857 Cincinnati, OH 45263-1857 Seibert Powder Coatings Trade debt $64,145 Bureau of Workers Workers compensation $62,898 Compensation taxes Wells Fargo Unsecured loan $60,032 Cuyahoga County Treasurer $32,156 Key Bank Unsecured loan $27,133 BTR Plating Resources Trade debt $22,000 Illuminating Company Utility services $19,365 United Healthcare Employee benefits $11,056 (February Bill) Ameritemps, Inc. Trade debt $9,945 Nordson Corporation Trade debt $8,379 Toyota Motor Credit Corp. Forklift leases $7,578 ILT Toyota-Lift Trade debt $7,457 Gas House Trade debt $5,482 V.O. Baker Trade debt $4,996 Sherwin Williams Trade debt $3,923 Bosworth Industrial Supply Trade debt $3,411 Co. Cintas Corporation #012 Trade debt $3,016 PITTSBURGH BREWING: Strikes Deals with Water & Bottle Suppliers --------------------------------------------------------------- The Hon. M. Bruce McCullough of the U.S. Bankruptcy Court for the Western District of Pennsylvania, on Jan. 31, 2006, ordered Pittsburgh Brewing to make regular payments to Pittsburgh Water and Sewer Authority and CCL Container, Len Boselovic of the Pittsburgh Post-Gazette reports. The revised agreement with the water utility requires the Debtor to deposit $110,000 in four equal monthly installments and pay its bills averaging $5,500 per month. The debtor's new deal with CCL Container continues the brewer's supply of aluminum bottles through December 2006 and delays a $0.024 per container price increase until July 2006. At the same time, Judge McCullough denied Pittsburgh Water and CCL Container's motions to terminate their services without a court hearing if the Debtor defaults on its payments. Judge McCullough rejected the request despite the Debtor agreeing to the provision, Mr. Boselovic relates. Headquartered in Pittsburgh, Pennsylvania, Pittsburgh Brewing Company, Inc. -- http://www.pittsburghbrewingco.com/-- manufactures malt liquors, such as beer and ale. Its products include Iron City Beer, IC Light Beer, and Augustiner Amber Lager. The Company filed for chapter 11 protection on Dec. 7, 2005 (Bankr. S.D. Penn. Case No. 05-50347). Robert O. Lampl, Esq., at Law Office Robert O. Lampl, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, its assets and debts estimated $1 million to $10 million. PLIANT CORP: Intercompany Claims Get Administrative Claims Status ----------------------------------------------------------------- In the normal operations of their businesses, Pliant Corporation and its debtor-affiliates engage in transactions involving intercompany trade and intercompany capital needs: (a) Trade Receivables and Trade Payables Certain Debtors receive checks and wire transfers from customers, and fund payables on behalf of various other Debtors. In some instances, the Debtors' funds are commingled in the Cash Management Systems. Accordingly, at any given time there are Intercompany Claims owing among the Debtors. The Debtors' intercompany accounts reflect the net position of both receipts and disbursements received or made on behalf of each Debtor. (b) Centrally Billed Expenses The Debtors incur centrally billed expenses, like insurance premiums, taxes and leased equipment. These charges are allocated among the Debtors and are reflected on the Debtors' intercompany accounts. (c) Corporate Expense Allocation Charges for corporate expenses provided by the Debtors are allocated to each Debtor based upon the cost of service provided, directly identifiable costs and other allocation methods. (d) Advances In the ordinary course of business, the Debtors may make advances to each other to fund their operations. (e) Accrued Interest The Debtors may owe interest to each other for outstanding Intercompany Claims. The interest is charged monthly based on the net Intercompany Claims outstanding at the end of the month. At any given time, there may be Intercompany Claims owing among the Debtors. The Debtors maintain records of all Intercompany Transactions and can ascertain, trace and account for all Intercompany Transactions. To ensure that each individual Debtor will not fund, at the expense of its creditors, the operations of another entity, the Debtors request that, pursuant to Sections 503(b)(1) and 364(b) of the Bankruptcy Code, all Intercompany Claims against a Debtor by another Debtor arising after the Petition Date as a result of Intercompany Transaction be accorded administrative priority expense status. Pliant Corp. chief executive officer Harold C. Bevis explains that if all Intercompany Claims are accorded administrative priority expense status, each entity will continue to bear ultimate repayment responsibility for the ordinary course transactions. Administrative expense treatment for intercompany transactions has been granted in other comparable Chapter 11 cases in the District of Delaware, Mr. Bevis notes, citing In re FLYi, Inc., Case No. 05-20011; In re Federal-Mogul Global, Inc., Case No. 01- 10578; In re NationsRent, Inc., Case No. 01-11628; and In re FFC Holdings, Inc., Case No. 01-2399. The U.S. Bankruptcy Court for the District of Delaware grants the Debtors' request. Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. (Pliant Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) PLIANT CORP: Wants Court to Declare Utilities Adequately Assured ---------------------------------------------------------------- Pursuant to Sections 105(a) and 366 of the Bankruptcy Code, Pliant Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to: (a) prohibit utility companies from discontinuing, altering or refusing service to the Debtors; (b) establish procedures whereby the Debtors will provide a deposit to utility companies requesting for additional adequate assurance of payment; (c) deem the utility companies to have received adequate assurance of payment; and (d) establish procedures for resolving requests for additional assurance of payment. In the operation of their manufacturing, distribution and office facilities, the Debtors incur utility expenses in the ordinary course of business for, among other things, water, sewer service, electricity, gas, local telephone service, and waste disposal. On an annual basis, the Debtors spend $21,000,000 for various utility services, with an average monthly cost of $1,750,000. Approximately 89 utility companies in the United States and Canada provide services to the Debtors. A non-exhaustive list of the utility companies is available for free at: http://bankrupt.com/misc/pliant_utilities.pdf Harold C. Bevis, chief executive officer of Pliant Corporation, tells the Court that the uninterrupted utility services are essential to the Debtors' ongoing operations and, therefore, to the success of their reorganization efforts. Should one or more of the Utility Companies refuse or discontinue service even for a brief period, the Debtors' operations would be severely disrupted, Mr. Bevis says. This would damage customer relationships, revenues, and profits and would ultimately adversely affect the Debtors' restructuring efforts, to the detriment of their estates, creditors, and employees. Adequate Assurance of Payment Section 366(a) prohibits utilities from altering, refusing, or discontinuing service to a debtor for the first 30 days of a bankruptcy case. Upon expiration of the 30-day period, however, Section 366(b) provides that a utility company may -- but need not -- terminate services if a debtor has not provided the utility with adequate assurance of payment. Before the Petition Date, the Debtors, according to Mr. Bevis, were current in the payment of invoices they received from the Utility Companies. The Debtors also propose to provide deposits to the Utility Companies as additional adequate assurance of payment. A Utility Company requiring a Deposit must send a notice within 20 days of the entry of a final order approving the Debtors' request to Stephen T. Auburn, Pliant Corporation, 1475 E. Woodfield Road, Schaumburg, Illinois 60173, with a copy to: (i) Matthew E. McClintock, Esq. Sidley Austin LLP One South Dearborn St. Chicago, Illinois 60603; and (ii) Edmon L. Morton, Esq. Young Conaway Stargatt & Taylor, LLP The Brandywine Building 1000 West Street, 17th Floor Wilmington, Delaware 19801. If a Utility Company fails to timely send an Additional Payment Request, it will have waived its right to request a Deposit from the Debtors and will be deemed to have received adequate assurance of payment. The Debtors will provide the Requesting Utilities, within 10 business days of receiving the Request, the Deposit in an amount equal to the average cost to the Debtors of two weeks of service from the Requesting Utility over the 12 months preceding the Petition Date. Additional Assurance Appeals In accordance with Section 366(c)(2), all Utility Companies will be authorized to assert that the treatment afforded pursuant to the proposed procedures does not constitute satisfactory adequate assurance of payment. These Appeals must: (i) be in writing; (ii) set forth the location for which utility services are provided; (iii) include a summary of the Debtors' payment history relevant to the affected accounts, including any security deposits or other pre-payments or assurances previously provided by the Debtors; (iv) describe in sufficient detail the reasons why the treatment afforded pursuant to the Adequate Assurance Procedures does not constitute satisfactory adequate assurance of payment; (v) include a proposal for what would constitute adequate assurance from the Debtors, along with an explanation of why the proposal is reasonable; and (vi) be served upon Mr. Auburn, with a copy to Mr. McClintock and Mr. Morton. If the Debtors believe that the treatment requested in the Appeal is reasonable, or if the Debtors otherwise reach agreement with the Utility Company on an acceptable form of adequate assurance, the Debtors will comply with the request or otherwise provide additional adequate assurance without further notice or order of the Court. Where a Utility Company files an Appeal and the Debtors are unable to reach a compromise, a hearing to determine whether additional assurance is necessary will be held. The Court enters a bridge order approving the Debtors' Utilities Motion. Until the time the Final Order is entered by the Court, all Utility Companies are prohibited from discontinuing, altering or refusing service to the Debtors on account of any unpaid prepetition charges, or the Debtors' bankruptcy filing. Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. (Pliant Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) PLIANT CORP: Wants to Hire Kekst and Co. as Communications Advisor ------------------------------------------------------------------ In light of the size and complexity of Pliant Corporation and its debtor-affiliates' chapter 11 cases, they require the services of a seasoned and experienced corporate and crisis communications advisor, and one that is familiar with their businesses and operations and the Chapter 11 process. According to Stephen T. Auburn, Pliant Corp.'s vice president and general counsel, Kekst and Company, Incorporated, is particularly well suited to serve as the Debtors' corporate communications advisor in their Chapter 11 cases. Founded in 1970, Kekst has extensive experience in crisis communications involving transactions, bankruptcies, restructurings and reorganizations. Kekst has an excellent reputation for the services it has rendered in the Chapter 11 cases of Delta Air Lines, Inc.; Allied Holdings, Inc.; Winn-Dixie Stores, Inc.; Pegasus Satellite Communications, Inc.; Loral Space & Communications; Fibermark, Inc.; Factory 2-U Stores, Inc.; Kmart Corporation; Polaroid Corporation; Pacific Gas & Electric; Owens Corning; and R.H. Macy & Co. On October 31, 2005, the Debtors engaged Kekst to provide corporate and crisis communications services. Since that time, the Firm's professionals have worked closely with the Debtors' management team and the Debtors' other professionals, and they have become well acquainted with the Debtors' operations and businesses. Pursuant to Sections 327(a) and 328(a) of the Bankruptcy Code, the Debtors seek the U.S. Bankruptcy Court for the District of Delaware's consent to employ Kekst as their corporate communications advisor, effective on their bankruptcy petition date. Kekst will: -- provide general strategic public relations advice related to the reorganization to the Debtors' management; -- prepare, distribute and follow-up on press releases and responsive statements relevant to the Chapter 11 cases and their progress; -- assist in answering questions from the media on the Debtors' behalf and proactively contacting and speaking with the media as necessary to convey information; -- provide monitoring services related to the media's coverage of the Debtors' reorganization and professional evaluation of its importance, quality and tone; -- prepare, including original writing or editing of, various correspondence, memoranda, letters, web sites and other communications related to the reorganization for the Debtors to use with its employees, customers, sales agents, vendors and other key business constituencies; -- prepare or edit materials to anticipate the concerns of and likely questions from various constituencies affected by the reorganization and development of appropriate information for the Debtors to use in response; -- attend meetings and participate in phone conferences with, among others, the Debtors' management and its attorneys and financial advisors as required; -- attend court hearings and develop information about the hearings for the benefit of internal and external constituencies; and -- consult and review drafts of all materials with all appropriate company officials and attorneys. The Debtors will pay Kekst for its professional services on an hourly basis: Professional Hourly Rate ------------ ----------- Partners $500 to $625 Senior Associates $250 to $375 Associates $175 to $225 In addition, the Debtors will reimburse Kekst for its reasonable out-of-pocket expenses and other charges. Kekst has received a $75,000 non-refundable minimum fee and $75,000 additional payment in connection with prepetition services rendered to the Debtors and for the proposed postpetition representation of the Debtors. Additionally, it has received a $20,000 deposit to be used towards out-of-pocket expenses. Kekst has applied a portion of these payments to satisfy its prepetition fees and expenses, and continues to hold the balance as of the Petition Date. Kekst intends to maintain a minimum credit balance of $25,000 for fees and $5,000 for expenses throughout these cases, and to retain the balances until final payment of its outstanding fees and expenses. The Debtors must provide additional funds as needed to maintain the balances. The Debtors will indemnify Kekst and its professionals against losses, claims, and liabilities incurred in connection with the engagement, unless the claims are judicially determined to have resulted primarily from Kekst's gross negligence or willful misconduct. Michael Freitag, shareholder at Kekst, discloses that the Firm had relationships with, or is performing services for, these entities in matters unrelated to the Debtors' cases: * ConocoPhillips, * DuPont, * Johnson & Johnson, * St. Paul Travelers, * Yellow Roadway Corp., and * Zurich Financial. Mr. Freitag assures the Court that Kekst is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. (Pliant Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) PRICE OIL: Selling Property in Navarro, Florida, for $1.25 Million ------------------------------------------------------------------ Price Oil, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Alabama for permission to sell four acres of undeveloped land located at Navarre Parkway in Navarre, Florida, in a private sale under Bankruptcy Rule 6004(f). Robert V. Seigel proposes to buy the property for $1.25 million contingent on satisfactory completion of his due diligence. Mr. Seigel's due diligence period expires on Feb. 8, 2006. Colonial Bank asserts a first priority mortgage lien on the Navarro property securing repayment of a $660,000 loan. Colonial also asserts a second priority mortgage lien on the same property in connection with an additional $300,000 loan. The Debtors owe approximately $22 million to Colonial Bank under various lines of credit and real estate loans. The Debtors say that Colonial agrees to the proposed sale. John P. Whittington, Esq., at Bradley Arant Rose & White LLP, tells the Bankruptcy Court that the Tax Collector of Santa Rosa County, Florida, could assert a lien on the property. However, Mr. Whittington argues, applicable non-bankruptcy law permits the sale free and clear of the Tax Collector's interest. Mr. Whittington says that Mr. Seigel's bid is the highest and best offer for the property after a lengthy and open marketing process conducted by the Debtors' real estate broker, Bob Evans of Florida Coast Realty, Inc. Papers filed with the bankruptcy court state that parties-in- interest have until Feb. 8, 2005, to object to the proposed sale or to notify the Debtor that they intend to bid for the property. Headquartered in Niceville, Florida, Price Oil, Inc., supplies gasoline fuel to convenience store owners and operators throughout Alabama and Florida panhandle. The Debtor also owns, operates and lease multiple convenience stores. The Debtor and five of its affiliates filed for chapter 11 protection on Dec. 22, 2005 (Bankr. M.D. Ala. Case No. 05-34286). M. Leesa Booth, Esq., at Bradley, Arant, Rose & White represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed $10 million to $50 million in assets and debts. PRICE OIL: Secures Capital Bank's Consent to Use Collateral ----------------------------------------------------------- The Hon. Dwight H. Williams, Jr., of the U.S. Bankruptcy Court for the Middle District of Alabama approved an adequate protection agreement allowing Price Oil, Inc., and its debtor-affiliates to continue using collateral securing payment of their prepetition obligations to Capital Bank. Capital asserts claims against the Debtors on account of a Dec. 22, 2004, promissory note in the original principal amount of $678,535. The claims are secured by security interests on four 2005 Heil Petroleum Transport Trailers and four 2005 Kenworth T800 Tractors. Patrick Darby, Esq., at Bradly Arant Rose & White LLP, tells the Bankruptcy Court that continued use of the vehicles is necessary to administer and preserve the value of the Debtors' estate. As adequate protection for Capital's interest in the vehicles, the Debtors agree to: -- maintain insurance on the vehicles and provide proofs of insurance to Capital; and -- make monthly adequate protection payments to capital of $12,901, beginning Jan. 20, 2005, and every month afterwards. Capital will apply the adequate protection payments to principal and interest due on the 2004 promissory note. A copy of the Debtor's security agreement with Capital is available for a fee at: http://www.researcharchives.com/bin/download?id=060202015210 Headquartered in Niceville, Florida, Price Oil, Inc., supplies gasoline fuel to convenience store owners and operators throughout Alabama and Florida panhandle. The Debtor also owns, operates and lease multiple convenience stores. The Debtor and five of its affiliates filed for chapter 11 protection on Dec. 22, 2005 (Bankr. M.D. Ala. Case No. 05-34286). M. Leesa Booth, Esq., at Bradley, Arant, Rose & White represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed $10 million to $50 million in assets and debts. RELIANT ENERGY: SDG&E Customers to Receive $21MM from Settlement ---------------------------------------------------------------- San Diego Gas & Electric's (SDG&E) customers would receive approximately $21 million from energy company Reliant for issues related to the California energy crisis of 2000-01. SDG&E also expects to receive an additional $20 million from Reliant at a later date. During 2000-01, San Diegans were the first to feel the impact as electricity prices climbed sharply. California natural gas and electricity customers have since received several refunds as a result of state and federal investigations into the causes of the energy crisis. SDG&E was the first to file a complaint with the Federal Energy Regulatory Commission in 2000, claiming that rates were unreasonable during the energy crisis. Since then, SDG&E's customers have received refund allocations of more than $165 million. SDG&E -- http://www.sdge.com/-- is a regulated public utility that provides safe and reliable energy service to 3.3 million consumers through 1.3 million electric meters and more than 800,000 natural gas meters in San Diego and southern Orange counties. The utility's area spans 4,100 square miles. Exceptional customer service is a priority of SDG&E as it seeks to enhance the region's quality of life. SDG&E is a regulated subsidiary of Sempra Energy (NYSE:SRE). Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company. Contact: San Diego Gas & Electric Peter Hidalgo Telephone (877) 866-2066 Headquartered in Houston, Texas Reliant Energy, Inc. -- http://www/reliant.com/-- provides electricity and energy services to retail and wholesale customers in the U.S. The company provides energy products and services to approximately 1.9 million electricity customers, ranging from residences and small businesses to large commercial, industrial, governmental and institutional customers, primarily in Texas. Reliant also serves commercial and industrial clients in the PJM (Pennsylvania, New Jersey, Maryland) Interconnection. The company is one of the largest independent power producers in the nation with more than 19,000 megawatts of power generation capacity in operation or under contract across the U.S. These strategically located generating assets utilize natural gas, wind, fuel oil and coal. * * * As reported in the Troubled Company Reporter on Nov. 7, 2005, Fitch Ratings affirmed Reliant Energy, Inc.'s outstanding credit ratings: -- Senior secured at 'BB-'; -- Senior unsecured at 'B+'; -- Senior subordinated convertible notes at 'B'; -- Pennsylvania Economic Development Financing Authority's $500 million 6.75% exempt facilities revenues bonds due Dec. 1, 2036 at 'BB-'. and revised its Rating Outlook to Stable from Positive. RENAISSANCE PROSPECT: Moody's Withdraws $40MM Debt's Low Rating --------------------------------------------------------------- Moody's withdrew the Ba3/NP rating on this transaction for business reasons. The transactions were on Moody's Watchlist with the direction uncertain. * $40MM Renaissance Prospect Group, LLC Taxable Variable/Fixed Rate Trust Redeemable Securities (Prospect Heights Event Center Development Project), Series 2004 REVLON CONSUMER: Moody's Says Ratings Unaffected by Recent Action ----------------------------------------------------------------- Moody's Investors Service stated that Revlon Consumer Products Corporation's long and short-term ratings (B3 -- corporate family rating; SGL-3) and its stable ratings outlook are not impacted by the announcements regarding its earnings guidance, restructuring actions, or equity offerings. Earlier, Revlon 1) affirmed its 2005 earnings guidance of $170 million of EBITDA; 2) repeated its expectation for sales and earnings growth in 2006 on the strength of its new and restaged brand initiatives; 3) announced a $10 million restructuring program largely related to sales and marketing staff; 4) indicated that it would seek an amendment of its bank credit facilities to provide flexibility in light of the restructuring charge and upfront product launch expenditures; and 5) detailed its equity offering plans, which will include a $110 million rights offering in March 2006 and $75 million public offering by June 30, 2006. Revlon's ratings and stable outlook already consider the potential for sales and earnings growth, primarily due to its shelf space gains for the Almay brand restaging and the launch of its new Vital Radiance line. However, the ratings also incorporate the significant execution challenges which accompany these initiatives, including: * sizable upfront investments; * the potential for other brands to struggle while the company focuses on these programs; and * the difficulties in attracting a distinct customer base to the Vital Radiance brand. These risks are mitigated to a degree by the $185 million aggregate equity offerings which Moody's had anticipated would be consummated by March 2006 and are now being delayed, in part, until June 2006. Although Moody's is moderately concerned about the partial delay in the equity offering, and the near-term earnings (and covenant) pressure presented by the restructuring plan, the ratings still consider Revlon's adequate liquidity profile as reflected its in SGL-3 rating. The view is supported by the planned $110 million rights offering for March 2006 (as backstopped by MacAndrew & Forbes), which meets a key requirement of the bank credit agreement and, thereby, prevents acceleration of Revlon's debt obligations. Further, the temporary liquidity shortfall caused by the delayed $75 equity offering is more than offset by the extension of Revlon's $87 million credit line from MacAndrews & Forbes until the equity issuance is completed in June 2006. In the event that the planned credit agreement amendment is not executed, Moody's still anticipates covenant compliance to be maintained (albeit with limited cushion) and notes that Revlon's use of the unsecured MacAndrews & Forbes line would not impact covenant calculations. Moody's will continue to monitor Revlon's financing developments and its execution of key operating initiatives with regards to: the company's ability to: * maintain liquidity; * generate positive cash flow; and * reduce its onerous debt levels. ROMACORP INC: Court Sets May 5 as Governmental Claims Bar Date -------------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Texas, Dallas Division, set May 5, 2006 at 5:00 p.m. Central Time, as the deadline for all creditors owed money on account of governmental claims arising after Nov. 6, 2005, by Romacorp, Inc. and its debtor-affiliates. All proofs of claim must be delivered by mail to: The Garden City Group, Inc. P.O. Box 9000 #6365 Merrick, NY 11566-9000 or hand-delivered to: The Garden City Group, Inc. 105 Maxess Road Melville, NY 11747 with a copy to: Andrews Kurth LLP Attn: Jason S. Brookner 1717 Main Street, Suite 3700 Dallas, Texas 75201 Headquartered in Dallas, Texas, Romacorp, Inc., owns and operates 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. ROTECH HEALTHCARE: Wants Bankruptcy Court Orders Enforced --------------------------------------------------------- Rotech Healthcare, Inc., on behalf of itself and the Chapter 11 estate of Rotech Medical Corporation, and certain of its former subsidiaries, asks the U.S. Bankruptcy Court for the District of Delaware to compel Sheila Bell-Messier to comply with the orders issued by the Bankruptcy Court: (a) confirming the Rotech Debtors' Plan of Reorganization; and (b) fixing the deadline for filing claims against the Rotech Debtors to August 29, 2000. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that on April 5, 2004 - more than two years after the Bankruptcy Court confirmed the Rotech Debtors' Plan -- Ms. Bell-Messier, acting as relator on behalf of the U.S. Government, filed a complaint with the U.S. District Court for the Eastern District of Texas based on qui tam provisions of the United States False Claims Act. Ms. Bell-Messier asserted claims of the U.S. Government against certain of the Reorganized Rotech Debtors for alleged violations of the FCA that occurred prior to the Petition Date. The Complaint was filed under seal. The Prepetition Claims Mr. Brady recounts that Ms. Bell-Messier was a Rotech employee who was served a notice of the Rotech Debtors' Bar Date. However, Ms. Bell-Messier did not file a proof of claim with respect to any of the claims she subsequently asserted in her Complaint. Similarly, the U.S. Government, which also received notice of the Bar Date and filed multiple proofs of claim against the Rotech Debtors for claims arising under the FCA, did not file a proof of claim with respect to any of the claims asserted in the Complaint. On September 1, 2005, the Reorganized Rotech Debtors asked the Texas District Court to dismiss the Prepetition Claims asserted by Ms. Bell-Messier on the grounds that the Claims were discharged under the Plan, and the Confirmation Order enjoined the continued pursuit of the Claims. The Reorganized Rotech Debtors further argued that their confirmed Plan implemented a settlement agreement between the Rotech Debtors and the U.S. Government, which resolved claims that had been filed by the U.S. Government in respect of claims under the FCA. According to Mr. Brady, the Settlement Agreement released certain FCA Claims that the U.S. Government asserted, but specifically did not limit the release of all other claims that were discharged by operation of the Plan. The U.S. Government informed the Texas District Court and Ms. Bell-Messier that it would not intervene as a plaintiff in the Complaint and that its position was that the Prepetition Claims have been discharged pursuant to the Bankruptcy Court's orders. Undeterred, Ms. Bell-Messier filed an amended complaint with the Texas District Court on July 13, 2005, and has continued to pursue the discharged Prepetition Claims as a "relator" plaintiff. On January 11, 2006, Magistrate Judge Carolyn Craven issued a report and recommendation concluding that the Prepetition Claims have not been discharged by the Bankruptcy Court. Rotech Opposes Judge Craven's Report On the Reorganized Rotech Debtors' behalf, Mr. Brady argues that Judge Craven's conclusion was based on a misunderstanding of the Settlement Agreement, which resolved certain other FCA Claims that were filed in the Rotech Debtors' cases, but did not address the claims asserted in Ms. Bell-Messier's Amended Complaint. Obviously, Mr. Brady says, Judge Craven failed to understand what the U.S. Government itself has acknowledged that the Prepetition Claims were not asserted prior to the Bar Date and were forever discharged pursuant to the Bar Date Order. Moreover, the Rotech Plan and the Confirmation Order discharged and released the Claims. "Magistrate Judge Carolyn Craven . . . completely ignored the Bar Date Order and the Confirmation Order," Mr. Brady complains. For this reason, the Reorganized Rotech Debtors are filing objections to the Report and Recommendation with the Texas District Court. Because the Report and Recommendation depends completely on the interpretation of the effect of the Bankruptcy Court's prior orders, the Reorganized Rotech Debtors believe it is appropriate for the Bankruptcy Court to interpret and enforce its prior orders, and provide guidance to the Texas District Court. Specifically, the Reorganized Rotech Debtors ask the Bankruptcy Court to enforce the discharge and injunctive provisions of the Confirmation and Bar Date Orders by directing Ms. Bell-Messier to cease and desist in her prosecution of the Prepetition Claims asserted in her Complaint. Mr. Brady points out that Ms. Bell-Messier's prosecution of the Prepetition Claims clearly violates the Confirmation Order, which confer on the Reorganized Rotech Debtors the protections set forth in Sections 1141 and 524 of the Bankruptcy Code. Ms. Bell- Messier has likewise violated the Bar Date Order by seeking to pursue claims that were forever waived in 2000. Rotech Cases Must be Reopened The Reorganized Rotech Debtors ask Judge Walrath to reopen Case Nos. 00-750, 00-757, 00-759, and 00-825 of the Rotech Debtors' Chapter 11 cases, for the sole purpose of adjudicating their request to enforce prior orders of the Bankruptcy Court. Integrated Health Services, Inc. -- http://www.ihs-inc.com/-- operated local and regional networks that provide post-acute care from 1,500 locations in 47 states. The Company and its 437 debtor-affiliates filed for chapter 11 protection on February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical Corporation and its direct and indirect debtor-subsidiaries broke away from IHS and emerged under their own plan of reorganization on March 26, 2002. Abe Briarwood Corp. bought substantially all of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan on May 12, 2003, and that plan took effect September 9, 2003. Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D. Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP, represent the IHS Debtors. On September 30, 1999, the Debtors listed $3,595,614,000 in consolidated assets and $4,123,876,000 in consolidated debts. (Integrated Health Bankruptcy News, Issue No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000) SANMINA-SCI: Prices $750MM of 10.375% Sr. Subordinated Note Offer ----------------------------------------------------------------- Sanmina-SCI Corporation (Nasdaq: SANM) has priced its offering of $600 million aggregate principal amount of 8.125% Senior Subordinated Notes due 2016. The issue price of the notes is 100%. The joint book-running managers of Sanmina's note offering, which is expected to close on Feb. 15, 2006, are: * Banc of America Securities LLC, * Citigroup Global Markets Inc., and * Deutsche Bank Securities Inc. The Company is commencing a cash tender offer and consent solicitation for any and all $750 million aggregate principal amount of its outstanding 10.375% Senior Secured Notes due 2010 (CUSIP Nos. 800907AF4 and 800907AE7). The tender offer will be financed with the proceeds of the offering of senior subordinated notes together with up to approximately $250 million of cash on hand. The total consideration per $1,000 principal amount of 10.375% Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on Feb. 13, 2006 unless extended will be calculated based on the present value on the initial payment date of $1,051.88 (the redemption price for the 10.375% Notes on Jan. 15, 2007, which is the earliest redemption date for the 10.375% Notes) and interest payments through Jan. 15, 2007, determined using a discount factor equal to the yield on the Price Determination Date of the 3% U.S. Treasury Note due Dec. 31, 2006, plus a fixed spread of 50 basis points. The Price Determination Date will be 2:00 p.m., New York City time, on Feb. 13, 2006 (unless the Company extends the tender offer prior to the Price Determination Date, in which case such date will be the tenth business day prior to expiration of the tender offer). Holders who validly tender their 10.375% Notes by the Consent Payment Deadline will receive payment on the initial payment date, which is expected to be on Feb. 15, 2006. In connection with the tender offer, the Company is soliciting consents to proposed amendments to the indenture governing the 10.375% Notes, which would eliminate substantially all of the restrictive covenants and certain events of default in the indenture. The Company is offering to make a consent payment of $30.00 per $1,000 principal amount of 10.375% Notes to holders who validly tender their 10.375% Notes and deliver their consents on or prior to the Consent Payment Deadline. Holders may not tender their 10.375% Notes without delivering consents, and may not deliver consents without tendering their 10.375% Notes. The tender offer is scheduled to expire at 5:00 p.m., New York City time, on Feb. 28, 2006, unless extended or earlier terminated. However, no consent payments will be made in respect of 10.375% Notes tendered after the Consent Payment Deadline. Holders who tender their notes after the Consent Payment Deadline but on or prior to the expiration date will receive the total consideration referred to above per $1,000 principal amount of 10.375% Notes validly tendered and not withdrawn, less $30.00 per $1,000 principal amount. Tendered 10.375% Notes may not be withdrawn and consents may not be revoked after the Consent Payment Deadline at which time it is expected that the Company and the trustee for the 10.375% Notes will execute an amendment to the indenture governing the 10.375% Notes to effect the proposed amendments. The tender offer and consent solicitation are subject to the satisfaction of certain conditions, including the receipt of sufficient financing to consummate the tender offer and consent solicitation on terms satisfactory to the Company and the receipt of consents from holders of a majority in principal amount of the outstanding 10.375% Notes. The closing of the offering of the senior subordinated notes is subject to customary closing conditions. The complete terms and conditions of the tender offer and consent solicitation are described in the Offer to Purchase and Consent Solicitation Statement of the Company dated January 31, 2006, copies of which may be obtained by contacting the depositary and information agent for the offer: D. F. King and Co., Inc., Telephone (212) 269-5550 (collect) Toll-Free (800) 659-5550 Banc of America Securities LLC is the exclusive dealer manager and solicitation agent for the tender offer and consent solicitation. Additional information concerning the tender offer and consent solicitation may be obtained by contacting: Banc of America Securities LLC High Yield Special Products Telephone (704) 388-9217 (collect) Toll-Free (888) 292-0070 When available, a prospectus supplement relating to this proposed offering may be obtained from: Prospectus Department Banc of America Securities 100 W. 33rd Street, 3rd Floor New York, NY 10001 Headquartered in San Jose, California, Sanmina-SCI Corporation -- http://www.sanmina-sci.com/-- is a leading electronics contract manufacturer serving the fastest- growing segments of the $125 billion global electronics manufacturing services market. Recognized as a technology leader, Sanmina-SCI provides end-to-end manufacturing solutions, delivering unsurpassed quality and support to large OEMs primarily in the communications, defense and aerospace, industrial and medical instrumentation, computer technology and multimedia sectors. Sanmina-SCI has facilities strategically located in key regions throughout the world. * * * As reported in yesterday's Troubled Company Reporter, Standard & Poor's Ratings Services assigned its 'B' senior subordinated rating to Sanmina-SCI Corporation's $600 million senior subordinated notes due 2016. Proceeds from the notes, together with cash on hand, will be used to tender for all of the company's 10-3/8% senior secured notes due 2010. Outstandings under the notes to be tendered are about $750 million. SOUTHERN UNION: Selling PG Energy Unit Assets to UGI for $580MM --------------------------------------------------------------- Southern Union Company (NYSE: SUG) has entered into a definitive agreement to sell the assets of its PG Energy natural gas distribution division in Pennsylvania to UGI Corporation for $580 million. Proceeds from the sale will be used to retire a portion of the acquisition debt to be incurred in connection with Southern Union's previously announced $1.6 billion purchase of Sid Richardson Energy Services Company which is slated for an early March closing. "PG Energy is a well-managed natural gas distribution company with a significant presence in northeastern and central Pennsylvania. The sale of PG Energy in conjunction with the acquisition of Sid Richardson Energy Services will allow Southern Union to continue to grow as one of the country's leading energy companies," said George L. Lindemann, Southern Union's chairman, president and CEO. "Because Southern Union will no longer have a large employee base in Pennsylvania, we will be consolidating our corporate operations and activities in Houston." Both companies' boards of directors have approved the transaction, which is subject to antitrust clearance, approval by the Pennsylvania Public Utilities Commission and other customary closing conditions. The sale is expected to close in the third quarter of 2006. "This agreement is a significant step for Southern Union and is consistent with the company's mission to create value for its shareholders," said Eric D. Herschmann, senior executive vice president of Southern Union. About PG Energy Headquartered in Wilkes-Barre, Pa., PG Energy is a natural gas distribution company serving approximately 158,000 customers in 13 counties throughout northeastern and central Pennsylvania. About UGI Based in Valley Forge, Pa., UGI Corporation (NYSE:UGI) -- http://www.ugicorp.com/-- is a holding company with propane marketing, utility and energy marketing subsidiaries. Through subsidiaries, UGI owns 44% of AmeriGas Partners, LP (NYSE:APU), the nation's largest retail propane marketer, and owns Antargaz, one of the largest LPG distributors in France. About Southern Union Southern Union Company -- http://www.southernunionco.com/-- is engaged primarily in the transportation, storage and distribution of natural gas. Through Panhandle Energy, the Company owns and operates 100% of Panhandle Eastern Pipe Line Company, Trunkline Gas Company, Sea Robin Pipeline Company, Southwest Gas Storage Company and Trunkline LNG Company - one of North America's largest liquefied natural gas import terminals. Through CCE Holdings, LLC, Southern Union also owns a 50 percent interest in and operates the CrossCountry Energy pipelines, which include 100 percent of Transwestern Pipeline Company and 50 percent of Citrus Corp. Citrus Corp. owns 100 percent of the Florida Gas Transmission pipeline system. Southern Union's pipeline interests operate approximately 18,000 miles of interstate pipelines that transport natural gas from the San Juan, Anadarko and Permian Basins, the Rockies, the Gulf of Mexico, Mobile Bay, South Texas and the Panhandle regions of Texas and Oklahoma to major markets in the Southeast, West, Midwest and Great Lakes region. Through its local distribution companies, Missouri Gas Energy, PG Energy and New England Gas Company, Southern Union also serves approximately one million natural gas end-user customers in Missouri, Pennsylvania, Rhode Island and Massachusetts. * * * As reported in the Troubled Company Reporter on Dec. 22, 2005, Moody's Investors Service placed under review for possible downgrade the Baa3/negative outlook senior unsecured debt ratings of Southern Union Company (SUG) and its transportation and storage subsidiary, Panhandle Eastern Pipe Line Company, LLC, following SUG's announcement to acquire Sid Richardson Energy Services Co., a gas gathering and processing company based in Fort Worth, Texas, for $1.6 billion. Ratings of SUG under Review are: Southern Union Company: -- Baa3 senior unsecured debt -- Baa3 senior implied ratings Southern Union Company: -- Ba2 non-cum. perpetual preferred securities Panhandle Eastern Pipe Line Company, LLC: -- Baa3 senior unsecured debt. STEVE'S SHOES: Can Employ Evans & Mullinix as Bankruptcy Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Kansas gave Steve's Shoes, Inc., permission to employ Evans & Mullinix, P.A., as its general bankruptcy counsel. The Debtor tells the Court that it selected Evans & Mullinix as its counsel because of the Firm's expertise and knowledge in corporate bankruptcy laws and procedures. Evans & Mullinix will perform all appropriate and necessary legal services to the Debtor in connection with all restructuring matters related to its chapter 11 case. Thomas M. Mullinix, Esq., and Joanne B. Stutz, Esq., are the lead attorneys from Evans & Mullinix performing services to the Debtor. Mr. Mullinix discloses that his Firm received a $97,708 retainer. Messrs. Mullinix and Stutz each charge $300 per hour for their services. Evans & Mullinix's paralegals bill $65 per hour for their services. Evans & Mullinix assures the Court that it does not represent any interest materially adverse to the Debtor and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Lenexa, Kansas, Steve's Shoes, Inc. -- http://www.stevesshoes.com/-- is a shoe retailer. The Company filed for chapter 11 protection on Jan. 6, 2006, (Bankr. D. Kan. Case No. 06-20015). When the Debtor filed for protection from its creditors, it listed total assets of $9,494,325 and total debts of $20,200,821. STEVE'S SHOES: Court Approves Asset Sale to Walking Co. for $4.2MM ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Kansas approved Steve's Shoes, Inc.'s request to sell substantially all of its assets free and clear of all liens, interests and encumbrances to Walking Co. The Court entered its order on Jan. 31, 2006. In an auction conducted on Jan. 26, 2006, Walking Co. submitted the highest and best bid for the assets. Walking Co. bid $4.2 million to acquire 35 of 45 store locations and retained the right to accept, assign or reject the remaining 10 stores after a 90-day trial period. The Court ruled that Walking Co. is a good faith purchaser pursuant to Section 363(m) of the Bankruptcy Code and the sale is in the best interest of the Debtor's estate and its creditors. A full-text copy of the Asset Sale Agreement is available for free at http://ResearchArchives.com/t/s?4e0 Headquartered in Lenexa, Kansas, Steve's Shoes, Inc. -- http://www.stevesshoes.com/-- is a shoe retailer. The Company filed for chapter 11 protection on Jan. 6, 2006, (Bankr. D. Kan. Case No. 06-20015). When the Debtor filed for protection from its creditors, it listed total assets of $9,494,325 and total debts of $20,200,821. THERMOVIEW INDUSTRIES: Wants Creditors' Committee Disbanded ----------------------------------------------------------- ThermoView Industries, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Kentucky to disband the Official Committee of Unsecured Creditors appointed in their chapter 11 cases because they have sold substantially all of their assets and the Committee no longer has a role to fulfill in their bankruptcy proceedings. As reported in the Troubled Company Reporter on Oct. 5, 2005, ThermoView Acquisition Corporation, a special acquisition entity established by MMP Capital Partners, LP, offered to buy the Debtors' assets for $10 million. The Bankruptcy Court approved the sale, free and clear of liens, on Nov. 23, 2005. GE Capital Equity Investment Inc. advanced $2.7 million to the Debtors to allow them to comply with closing obligations related to the sale. In exchange for the postpetition financing, the Debtors granted GE replacement liens superior to any other claims or liens, including the proceeds of causes of action. David M. Cantor, Esq., at Seiller Waterman LLC tells the Bankruptcy Court that it is highly unlikely that future recovery of any funds into the Debtors' estates will exceed $2.7 million. The Debtors also want the Bankruptcy Court to vacate the Committee appointment because the constitution of the Committee violated the requirements of Section 1102 of the Bankruptcy Code. Section 1102 outlines the U.S. Trustee's right to appoint an official committee of unsecured creditors or other committees in a bankruptcy case. The Debtors did not provide additional information regarding the alleged violation. Headquartered in Louisville, Kentucky, ThermoView Industries, Inc. -- http://www.thv.com/-- is a national company that designs, manufactures, markets and installs high-quality replacement windows and doors as part of a full-service array of home improvements for residential homeowners. The Company and its subsidiaries filed for chapter 11 protection on Sept. 26, 2005 (Bankr. W.D. Ky. Case Nos. 05-37123 through 05-37132). When the Debtors filed for protection from their creditors, they listed $3,043,764 in total assets and $34,104,713 in total debts. THERMOVIEW INDUSTRIES: Wants Until March 27 to File Bankr. Plan --------------------------------------------------------------- Thermoview Industries, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Kentucky, to extend, until March 27, 2006, the period within which they have the exclusive right to file a chapter 11 plan. The Debtors also ask the Court to extend, until April 26, 2006, the period within which they can solicit acceptances of that plan. The Debtors are waiting for a Court order approving Morris- Anderson & Associates, Ltd.'s employment as their financial advisor. The Debtors say they need Morris-Anderson's input to formulate a feasible plan of liquidation. Headquartered in Louisville, Kentucky, ThermoView Industries, Inc. -- http://www.thv.com/-- is a national company that designs, manufactures, markets and installs high-quality replacement windows and doors as part of a full-service array of home improvements for residential homeowners. The Company and its subsidiaries filed for chapter 11 protection on Sept. 26, 2005 (Bankr. W.D. Ky. Case Nos. 05-37123 through 05-37132). When the Debtors filed for protection from their creditors, they listed $3,043,764 in total assets and $34,104,713 in total debts TITAN CRUISE: Obtains $550,000 DIP Loan from First American Bank ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized Titan Cruise Lines and its debtor-affiliate to obtain an additional $550,000 postpetition loan from First American Bank. On September 15, 2005, the Court entered an order allowing the Debtors to obtain up to $850,000 of DIP financing from the Bank. The Debtors also obtained an additional $300,000 of working capital loans on October 15. A second amended DIP financing order approved an increase in the DIP facility to $1,370,000. The Debtors' existing DIP facility expired on January 8. The new funds will be used for emergency operating expenses. The Debtors' management believes that the postpetition funds from FAB should be sufficient to pay necessary wind-down expenses through confirmation of a liquidating plan. Headquartered in Saint Petersburg, Florida, Titan Cruise Lines and its subsidiary owns and operates an offshore casino gaming operation. The Company and its subsidiary filed for chapter 11 protection on August 1, 2005 (Bankr. M.D. Fla. Case Nos. 05-15154 and 05-15188). Gregory M. McCoskey, Esq., at Glenn Rasmussen & Fogarty, P.A., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. TITAN CRUISE: Wants to Walk Away from Cash Systems Agreement ------------------------------------------------------------ Titan Cruise Lines and its debtor-affiliate asks the U.S. Bankruptcy Court for the Middle District of Florida for authority to reject a cash access agreement with Cash Systems Carribean Corporation effective as of January 31, 2006. On June 4, 2004, Titan and Cash Systems entered into an agreement under which Cash Systems provided cash advance services, automated teller machine services, and check guarantee services to the Debtors for an initial three-year term. Cash Systems supplied the equipment, software and processing systems necessary for the services. Under the agreement, Cash Systems financed the purchase and placement of up to 10 TDN ticket redemption machines for the Debtors. Cash Systems agreed to pay commissions to Titan from each cash advance and ATM transaction less fees for check guarantee services and installment payments for the purchase of the TDN ticket redemption machines. The Debtors want to walk away from the agreement, because it has no value to the estate and the purchaser of Titan's assets doesn't wish to assume the agreement. Headquartered in Saint Petersburg, Florida, Titan Cruise Lines and its subsidiary owns and operates an offshore casino gaming operation. The Company and its subsidiary filed for chapter 11 protection on August 1, 2005 (Bankr. M.D. Fla. Case Nos. 05-15154 and 05-15188). Gregory M. McCoskey, Esq., at Glenn Rasmussen & Fogarty, P.A., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. TMG MARKETING: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: TMG Marketing, Inc. 717-17th Street, Suite 1900 Denver, Colorado 80202 Bankruptcy Case No.: 06-10325 Chapter 11 Petition Date: February 1, 2006 Court: District of Colorado Judge: Howard R. Tallman Debtor's Counsel: Stephen C. Nicholls, Esq. 1725 Gaylord Street, Suite 100 Denver, Colorado 80206 Tel: (303) 329-9700 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Crescent Real Estate Lease Payments $1,676,142 Equities, LP John Mansville Plaza P.O. Box 848243 Dallas, TX 75284 Millennium Teleservices Sales Commissions $792,454 425 Raritan Center Parkway Edison, NJ 08837 APAC Customer Services, Inc. Sales Commissions $374,970 7550 Collections Center Drive Chicago, IL 60693 Internal Revenue Service Taxes $264,325 MS-5028-DEN 600-17th Street Denver, CO 80202-2490 Stacy Wissel Preferred Payments $153,916 Concerto Software, Inc. Licenses $120,000 SMT Direct Marketing Sales Commissions $103,611 Hogan & Hartson LLP Legal Services $85,887 TCIM Services Sales Commissions $65,158 1020 28th Avenue, LLC Lease Payments $65,000 Wells Fargo Card Services, Inc. Business Credit Card $48,826 13th Column Sales Commissions $48,475 Telespectrum Worldwide, Inc. Sales Commissions $38,225 Puget Sound Leasing Co., Inc. Goods $31,396 Noble Systems Corporation Maintenance Fees $30,005 ICG Telecom Group, Inc. Phone Services $25,752 United Mileage Plus Business Credit Card $25,000 Colorado Department of SUTA (CO) Qtr 1 $21,226 Labor and Employment TNT SANDBLASTING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: TNT Sandblasting & Painting, Inc. 3615 Kingston Road New Iberia, Louisiana 70560 Tel: (337) 369-3006 Fax: (337) 365-2227 Bankruptcy Case No.: 06-50051 Type of Business: The Debtor manufactures machinery sandblasting parts and provides painting contractor services. Chapter 11 Petition Date: February 1, 2006 Court: Western District of Louisiana Judge: Gerald H. Schiff Debtor's Counsel: D. Patrick Keating, Esq. 117 West Landry Street P.O. Box 490 Opelousas, LA 70571 Tel: (337) 594-8200 Fax: (337) 942-2821 http://www.rickkeating.com/ Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank One Property $385,000 712 Center Street New Iberia, LA 70560 Lafayette Paint & Supply $309,100 P.O. Box 837 Broussard, LA 70518 Bank One Goods $213,000 P.O. Box 901008 Fort Worth, TX 76101 Internal Revenue Service Taxes $196,592 600 South Maestri, Stop 31 New Orleans, LA 70130 Ameron Protective Coating $128,500 P.O. Box 20 Little Rock, AR 72203 Zurich Insurance $125,255 3072 Paysphere Circle Chicago, IL 60674 International Paint $88,850 St. Martin Oil & Gas $79,150 Glynn Russo $77,000 Iberia Industrial & Marine $69,700 Custom Abrasives $64,600 K&J Supplies $31,500 Rental Equipment Xchange $27,600 US Minerals $23,200 State of Louisiana Taxes $22,850 Rig Blast $21,850 Vida Paint & Supply $19,900 Iberia Rental Service $18,900 Occupational Medicine Clinic $18,000 Shipyard Supply $17,600 TRIANGLE INDUSTRIES: Case Summary & 113 Known Creditors ------------------------------------------------------- Debtor: Triangle Industries, Inc. dba Circle of Life 15000 Gratiot Detroit, Michigan 48205 Bankruptcy Case No.: 06-41077 Type of Business: The Circle of Life Hospital (fka Saratoga Hospital) is a behavioral health hospital operating at the Debtor's address since late-2004. Chapter 11 Petition Date: January 31, 2006 Court: Eastern District of Michigan (Detroit) Judge: Marci B. McIvor Debtor's Counsel: Arnold S. Schafer, Esq. Schafer and Weiner, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, Michigan 48304 Tel: (248) 540-3340 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 113 Known Creditors: Entity Claim Amount ------ ------------ 15000 Associates Exclusive Realty Unknown 607 Shelby Street, Suite 500 Detroit, MI 48226 A & H Pharmacy Services, Inc. Unknown 15000 Gratiot Street, 140 Detroit, MI 48205 Absopure Water Unknown Department #11138546 P.O. Box 701760 Plymouth, MI 48170 Accident Fund Insurance Unknown Company of America P.O. Box 77000 Department 77125 Detroit, MI 48277 Acme Neon Signs Unknown 4145 7th Concession R.R. #1 Windsor, Ontario ADM Consulting, Inc. Unknown 712 Berkshire Grosse Pointe, MI 48230 ADP Screening & Selection Services Unknown 36307 Treasury Center Chicago, IL 60694 Aegis Concepts, Inc. Unknown 16950 Nineteen Mile Road Office Suite 6A Clinton Township, MI 48038 AFLAC Unknown Remittance Processing Services 1932 Wynnton Road Columbus, GA 31999 Albin Business Copiers Unknown P.O. Box 346 Farmington, MI 48332 American Fence and Supply Co., Inc. Unknown 21717 Republic Oak Park, MI 48237 AMR of Michigan Unknown P.O. Box 100217 Atlanta, GA 30384-0217 Amy Monicatti Leyva Unknown 1708 Roseland Royal Oak, MI 48073 Angelica Textile Systems Unknown 1820 Iowa Avenue Lorain, OH 44052 Beaumont Reference Lab Unknown P.O. Box 5043 Troy, MI 48007 Blue Cross Blue Shield Unknown P.O. Box 79001 Detroit, MI 48279 Bon Seours Cottage Hospital Unknown 468 Cadieux Road Detroit, MI 48205 Brenda J. Baker Unknown 680 West Lincoln Birmingham, MI 48009-1964 BullsEye Telecom Unknown c/o Franklin Bank P.O Box 33025 Detroit, MI 48232 BullsEye Telecome Unknown c/o Franklin Bank P.O. Box 33025 Detroit, MI 48232 Cardinal Health Medical Products & Service Unknown P.O. Box 70539 Chicago, IL 60673 Care Choices HMO Unknown Department CH 10591 Palatine, IL 60055 Caring Hands LLC Unknown 12428 Kenilworth DRive Sterling Heights, MI 48313 Chamber of Commerce Map Project Unknown 1717 Dixie Highway, Suite 500 Covington, KY 41011 Charles Mady Unknown Exclusive Realty 607 Shelby Street, Suite 500 Detroit, MI 48226 Comerica Bank Unknown 500 Woodward Avenue Detroit, MI 48226 Comprehensive Geriatric Services Unknown 26811 Ryan Road Warren, MI 48091-4075 Concentra Medical Center Unknown P.O. Box 5106 Southfield, MI 48086-5106 DeltaT Unknown Group Detroit, Inc. P.O. Box 884 Bryn Mawr, PA 19010 Detroit Chamber of Commerce Unknown One Woodward Avenue, Suite 1900 Detroit, MI 48232 Detroit Newspaper Unknown Drawer 7713 P.O. Box 79001 Detroit, MI 48279-7713 Direct Supply Unknown P.O. Box 88201 Milwaukee, WI 53288-0201 Dish Network Unknown Department 0063 Palatine, IL 60055-0063 Diversified Medical, LLC Unknown 27000 Hill Tech Court, Suite 200 Farmington, MI 48331 Easton Telecom Services, LLC Unknown P.O. Box 550 Richfield, OH 44286 Electronic Safety Services, Inc. Unknown P.O. Box 80777 Saint Clair Shores, MI 48080 Ervin Leasing Company Unknown Department 77228 P.O. Box 77000 Detroit, MI 48277 Ervin Leasing Compnay Unknown Department 77228 P.O. Box 77000 Detroit, MI 48277 Erving Leasing Company Unknown Department 77228 P.O. Box 77000 Detroit, MI 48277 Fed Ex Unknown P.O. Box 371461 Pittsburgh, PA 15250-7461 Frank McCormick & Khalaf, LLC Unknown 28 West Adams, Suite 1400 Detroit, MI 48226 Goodwill Printing Company Unknown P.O. Box 21820 Detroit, MI 48221 Health Care Association of Michigan Unknown P.O. Box 80050 Lansing, MI 48908-0050 Health Care Logistics, Inc. Unknown P.O. Box 25 Circleville, OH 43113 Health Care Systems, Inc. Unknown 5921 Carmichael Road Montgomery, AL 36117 Home Depot Unknown Department 322010923591 P.O. Box 6029 The Lakes, NV 88901 Humana Unknown P.O. Box 0599 Carol Stream, IL 60132 Humana Health Care PPO Unknown P.O. Box 0859 Carol Stream, IL 60132-0859 IVC Healthcare Staffing Unknown 2900 South State Street, Suite 1 Ann Arbor, MI 48104 Joint Commission of Accreditation Unknown of Healing One Renissance Boulevard Villa Park, IL 60181 Kitch Drutchas Wagner Denardis & Valitutti Unknown One Woodward Avenue, 10th Floor Detroit, MI 48226 Kroger Prescription Plans Unknown P.O. Box 641172 Cincinnati, OH 45264 Language Line Services Unknown P.O. Box 16012 Monterey, CA 93942 Lynn T. Pantano, PH.D. Unknown 19228 Linville Grosse Pointe, MI 48236 Marie Ruth Greenspan, Ph.D. Unknown 217 Knowles, Suite 260 Royal Oak, MI 48067 Maxim Healthcare Services, Inc. Unknown 12588 Collections Center Drive Chicago, IL 60693 MedDispenses Unknown 6250 Shiloh Road, Suite 240 Alpharetta, GA 30005 Medical Integrated Services, Inc. Unknown 2020 Front Street, Suite 135 Cuyahoga Falls, OH 44221 Medical Transcription Services, Inc. Unknown 888 West Big Beaver, Suite 300 Troy, MI 48084 Medifax EDI Unknown 13093 Collectiosn Center Drive Chicago, IL 60693 Metro Messenger 2, LLC Unknown P.O. Box 36857 Grosse Pointe, MI 48236 Metropolitan Orthopedic Association Unknown 22050 Greater Mack Avenue Saint Clair Shores, MI 48080 Miami Ambulance Co., LLC Unknown 3590 Northwest 36th Street Miami, FL 33142 Michigan Association of CMH Boards Unknown 426 South Walnut Lansing, MI 48933 Michigan Maintenance Supply Company Unknown 22740 Van Dyke Warren, MI 48089 Michigan Occupational Medical Services Unknown 2021 Solutions Center Chicago, IL 60677 Midwest Waste Services, LLC Unknown 1924 East 177th Street Lansing, IL 60438 Miller Canfield Paddock & Stone PC Unknown 150 West Jefferson, Suite 2500 Detroit, MI 48226 Monster, Inc. Unknown Nancy Kissick's Professional Nursing, Inc. 37040 Garfield, Suite T6 Clinton Township, MI 48036 Nature Nook Unknown 503 East Nine Mile Road Ferndale, MI 48220 Nextel Communications Unknown P.O. Box 4191 Carol Stream, IL 90197 Office Depot Unknown Department 568404286791 Des Moines, IA 50368 Palace Sports & Entertainment, Inc. Unknown P.O. Box 79001 Detroit, MI 48279 Parnin Janitor Supply Co. Unknown 15356 Middlebelt Livonia, MI 48154 Pay Systems Unknown 16000 West Nine Mile Road, Suite 302 Southfield, MI 48075 PCI Unknown 21717 Repubic Street Oak Park, MI 48237 Pepsi Cola Unknown P.O. Box 75948 Chicago, IL 60675 Pharma Source Healthcare, Inc. Unknown 4936 Blazer Parkway Dublin, OH 43017 Pitney Bowes Purchase Power Unknown P.O. Box 856042 Louisville, KY 40285 Pitney Bowes Supplies Unknown P.O. Box 856042 Louisville, KY 40285-6042 Polk & Associates, PLC Unknown P.O. Box 861 Troy, MI 48099 Pre Check, Inc. Unknown P.O. Box 58 Bellaire, TX 77402 Professional Credential Verification Unknown Service 1305 Abbott Road East Lansing, MI 48823 Professional Medical, Inc. Unknown 1917 Garnet Court New Lenox, IL 60451 Professional Nursing Unknown 7001 Kilworth Lane Springfield, VA 22151 Psygenics, Inc. Unknown 32540 Schoolcraft, Suite 210 Livonia, MI 48152 Quest Diagnostics Unknown 13138 Collections Center Drive Chicago, IL 60693 Redford Lock Company, Inc. Unknown 26515 South Grand River Redford, MI 48240 Resource One Unknown 52188 Van Dyke, Suite 117 Utica, MI 48316 Retail Interior Services Unknown P.O. Box 423 Mason, OH 45040 Roche Diagnostics Corporation Unknown P.O. Box 50457 Indianapolis, IN 46250-0457 RSDM, LLC Unknown 5840 Sterling Drive, Suite 550 Howell, MI 48843 Service Care, Inc. Unknown 13147 Balfour Huntington Woods, MI 48070 Shamrock Cab Company Unknown 30546 Gratiot Roseville, MI 48077 Shell Unknown Credit Card Center P.O. Box 183018 Columbus, OH 43218-3016 Signs Now Unknown 832 Production Place Holland, MI 49423 Specialized Pharmacy Service Unknown 33510 Schoolcraft Livonia, MI 48150 Saint John Health System Unknown 22101 Moross Grosse Pointe, MI 48236 Staples Unknown Department DET 2368 P.O. Box 83689 Chicago, IL 60696-3689 SVS Vision Unknown 140 Macomb Mount Clemens, MI 48043-5631 The Fred Barton Co. Unknown 565 East Milwaukee Detroit, MI 48202 The Mobile Medical Group Unknown 24301 Telegraph Road Southfield, MI 48034 Ticket Savers Unknown 30335 Gratiot Avenue Roseville, MI 48066 Tri County Floor Coverings Unknown 1100 East Maple Road Troy, MI 48083 Unique Food Management, Inc. Unknown 248 South Telegraph Road Pontiac, MI 48341 Universal Macomb Ambulance Service Unknown 37583 Mound Rd. Sterling Heights, MI 48310 USA Safe Lock Unknown 21612 Lakeland Saint Clair Shores, MI 48081 Visionshare, Inc. Unknown 2550 University Avenue, West Suite 310 South Saint Paul, MN 55114 VPA Diversified Unknown Diversified Medical, LLC P.O. Box 1500 Novi, MI 48376 Walker Printery, Inc. Unknown Michigan Office Plant 13351 Cloverdale Avenue Oak Park, MI 48237 Welch Allyn Protocol, Inc. Unknown MS 90 P.O. Box 410090 Portland, OR 97208-4100 William Hose Unknown 607 Shelby Detroit, MI 48226 Yellow Pages Directory Unknown P.O. Box 95450 Atlanta, GA 30347 UAL CORP: Signs $3 Billion Senior Secured Exit Facility ------------------------------------------------------- United Air Lines, Inc., entered into a new $3,000,000,000 senior secured revolving credit facility and term loan on February 1, 2006, the effective date of its plan of reorganization. As previously reported, the Exit Facility is being provided by a syndicate of banks and other financial institutions led by JPMorgan Securities Inc. and Citicorp Global Markets Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, N.A., and Citicorp USA, Inc., as co-administrative agents and co- collateral agents, General Electric Capital Corporation, as syndication agent, and JPMCB, as paying agent. The Exit Facility is comprised of two separate tranches: (i) a Tranche A consisting of up to $200,000,000 revolving commitment available for Tranche A loans and for standby letters of credit to be issued in the ordinary course of business of United or one of its subsidiary guarantors; and (ii) a Tranche B consisting of a term loan commitment of up to $2,450,000,000 available at the time of closing and additional term loan commitments of up to $350,000,000 available upon, among other things, United's acquiring unencumbered title to some or all of the airframes and engines that are currently subject to United's 1997 EETC transaction. The loans mature on February 1, 2012. Borrowings under the Exit Facility bear interest at a floating rate, which can be either a base rate, or at our option, a LIBOR rate, plus an applicable margin of 2.75% in the case of the base rate loans and 3.75% in the case of the LIBOR loans. The Tranche B term loan requires regularly scheduled semi-annual payments of principal equal to 0.5% of the original principal amount of the Tranche B term loan. At any time prior to February 1, 2007, United may use the proceeds from any lower cost refinancing to redeem some or all of the term loans at a price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the date of redemption. UAL Corporation, United's parent company, disclosed in a regulatory filing with the Securities and Exchange Commission that the obligations under the Exit Facility are unconditionally guaranteed by UAL and certain of its direct and indirect domestic subsidiaries of the Company other than United, and are secured by a security interest in substantially all of the tangible and intangible assets of the Guarantors. The obligations under the Exit Facility are also secured by a pledge of the capital stock of United and its direct and indirect subsidiaries, except that a pledge of any first tier foreign subsidiary is limited to 65% of the stock of such subsidiary and such foreign subsidiaries are not required to pledge the stock of their subsidiaries. The Exit Facility contains covenants that will limit the ability of United and the Guarantors to, among other things, incur or guarantee additional indebtedness, create liens, pay dividends on or repurchase stock, make certain types of investments, restrict dividends or other payments from United's direct or indirect subsidiaries, enter into transactions with affiliates, sell assets or merge with other companies, modify corporate documents or change lines of business. The Exit Facility also requires compliance with several financial covenants, including: -- a minimum ratio of EBITDA to the sum of cash interest expense, aircraft rent and scheduled debt payments; -- a minimum unrestricted cash balance of $1,200,000,000, to be reduced to $1,000,000,000 after December 31, 2006; and -- a minimum ratio of market value of collateral to the sum of: (A) the aggregate outstanding amount of the loans; plus (B) the undrawn amount of outstanding letters of credit; (C) the unreimbursed amount of drawings under the letters of credit; and (D) the termination value of certain interest rate protection and hedging agreements with the exit lenders and their affiliates, of 150%. United will use the borrowings under the Exit Facility to finance working capital needs and for other general corporate purposes. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service, Inc., 215/945-7000) UNICO INC: Posts $371,194 Net Loss in Quarter Ended November 30 --------------------------------------------------------------- Unico Incorporated delivered its financial results for the quarter ended Nov. 30, 2005 to the Securities and Exchange Commission on Jan. 26, 2006. Unico's third quarter results showed a significant reduction in net loss from the same quarter in the previous year. The company incurred a $371,194 net loss for the three-months ended Nov. 30, 2005, as compared to a $3,104,242 net loss for the same period in the prior year. The Company attributes the $2,733,048 decrease in net loss for the three month period ended Nov. 30, 2005 compared to the same period ended Nov. 30, 2004 to a $1,665,164 decrease in interest expense and a $1,000,000 decrease in lease expense. For the three months ended Nov. 30, 2005, Unico reported revenues of $26,202 in contrast to zero revenues for the comparable period in fiscal 2004. "There has clearly been improvement in Unico's financial performance in the quarter reported in this 10-QSB filing, as compared to the corresponding period in the previous year. As we move forward as an operating company, Unico will continue to focus on increasing revenues from our mining operations while controlling cost and, ultimately, returning value for shareholders," said Mark A. Lopez, chief executive officer. Unico's balance sheet at Nov. 30, 2005, showed $1,038,904 in total assets and liabilities of $3,902,118, resulting in a stockholders' deficit of $2,863,214. The Company had an accumulated deficit of $19,868,933 at Nov. 30, 2005. As of Nov. 30, 2005 the Company had a deficit in working capital of $3,722,820. Going Concern Doubt HJ Associates & Consultants, LLP, expressed substantial doubt about Unico's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Feb. 28, 2005 and Feb. 29, 2004. The auditing firm pointed to the Company's recurring losses from operations and stockholders' deficit. Unico Inc. (OTCBB:UNCN) is a publicly traded company incorporated in Arizona that is focused on the production of ores and precious metals such as gold, silver, lead, and zinc at its three mine properties: the Deer Trail Mine the Bromide Basin Mine and the Silver Bell Mine. USG CORP: Puts Poison Pill Plan in Place Until Plan Confirmation ---------------------------------------------------------------- USG Corporation (NYSE: USG) has not declared a cash dividend with respect to its common stock. As reported on Jan. 30, 2006, USG adopted a Reorganization Rights Plan, commonly referred to as a "poison pill." These plans are accomplished by declaring a dividend of preferred stock purchase rights that, until certain triggering events occur, attach to and cannot be traded separately from the company's common stock. Under the new shareholder rights plan, if any person acquires beneficial ownership of 5% or more of USG's voting stock, shareholders other than the 5% triggering shareholder will have the right to purchase additional USG common stock at half their market price, thereby diluting the triggering shareholder. USG shareholders who already own 5% or more of USG's common stock as of Jan. 30, 2006, including Berkshire Hathaway Inc., will not trigger these rights so long as they do not increase their percentage ownership of USG common stock by more than an additional 1% while the plan is in effect, other than pursuant to proportional participation in the $1.8 billion common stock rights offering also reported by USG on Jan. 30, 2006 to provide funding to finance a portion of the payments in its proposed plan to emerge from Chapter 11 proceedings. The new rights plan will expire on Dec. 31, 2006 or, if later, 30 days after the effectiveness of the plan of reorganization if the FAIR Act has not passed in the current session of Congress. However, the company's Board of Directors has the power to accelerate or extend the expiration date of the rights. In addition, the USG Board of Directors has the right, before or after the rights plan expires, to take such other actions that it determines in the exercise of its fiduciary duties to be necessary in the future, which could include the adoption of a new shareholder rights plan or further amendments of the existing plans. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., at Jones Day represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. VILLAS AT HACIENDA: Wants Court to Confirm Modified Amended Plan ---------------------------------------------------------------- The Villas at Hacienda del Sol and its creditor, Western Plains Development Corp., ask the U.S. Bankruptcy Court for the District of Arizona to confirm their Modified First Amended Plan. The Confirmed First Amended Plan As reported in the Troubled Company Reporter on Jan. 24, 2006, the Court confirmed the chapter 11 plan filed by Western Plains. The Court determined that the Plan satisfied the 13 standards for confirmation listed in Section 1129(a) of the Bankruptcy Code. The confirmed plan provides for the auction of the Debtor's apartment project at 2550 East River Road, Tucson, Arizona. The Debtor and Western Plains tell the Court that although an auction has been scheduled for Feb. 21, 2006, the plan has not been substantially consummated (as that term is defined in Section 1101(2) of the Bankruptcy Code). Proposed Private Sale The Debtor tells the Court that it wants to enter into a private sale transaction with TNS LLC pursuant to a Purchase and Sale Agreement and Escrow Instructions. Under the agreement, TNS LLC will buy the project for $23 million by paying: * an initial escrow deposit of $2.8 million, of which: -- $1 million is non-refundable unless the Debtor defaults on the purchase agreement, and -- $1.8 million is refundable until the end of the due diligence period; and * $20.2 million in cash or cash equivalent on or before the closing of the sale. The private sale transaction transfers to the TNS LLC all of the estate's title, right and interest in and to the project, together with its associated assets, including without limitation, all of the Debtor's personal property relating to the project and all related intangible property, including certain contracts, but specifically excluding any causes of action, free and clear of all liens, claims, encumbrances or other liabilities. The Debtor says that it prefers to enter in to a private sale rather than an auction because the $23 million price is greater than the initial $20 million bid that will start the auction. The Debtor says that the additional $3 million now on the table is sufficient to pay all creditors' claims in full, while realizing some return for equity interest holders. The Debtor discloses that $2 million of the deposit is already on deposit in the trust account of Evan Thompson, Esq., the Debtor's special counsel. If the Court confirms the Modified Plan, the Debtor says, then TNS LLC has three business days to deposit the additional $800,000. If TNS LLC fails to deposit the additional sum, or if the private sale fails to close by the agreed closing date, then the project will be sold at the auction. The Auction will be continued to a date approximately 30 days after the closing date of the private sale. Distribution of the Proceeds Upon the closing of the Proposed Sale, proceeds of the sale will be used immediately to: * pay the usual and ordinary costs of closing, including, without limitation, customary prorations, title insurance, and escrow fees; and * pay the secured claim of Lenox in full. All amounts remaining will held in an interest bearing account for distribution pursuant to the Modified Plan. Western Plains' Condition Western Plains tells the Court that it is willing to forego its rights under the confirmed plan including: (a) proceeding with the auction, and (b) developing the project with the winning bidder at the auction, pursuant to the terms and conditions of a Settlement and Mutual Release Agreement. Settlement Agreement Under the Settlement and Mutual Release Agreement, Western Plains will be paid $2,764,176 from TNC LLC's deposit. Western Plains, the Debtor and all related parties will exchange mutual releases. TNS LLC will acquire Western Plains' lien to secure repayment of the refundable deposit. The Modified Plan The Debtor and Western Plains tell the Court that their Modified Plan meets the requirements of Sections 1122 and 1123 of the Bankruptcy Code. The Debtor and Western Plains further says that the plan is confirmable under Section 1129 of the Bankruptcy Code since it does affect the interest of any creditors, secured, unsecured or priority, or the interests of the equity security holders. The Modified Plan does nothing more than facilitate the $23 million private sale transaction now and delay an auction if it's needed. The Debtor assures the Court that Lenox's interests in finality are respected by the immediate grant of stay relief to Lenox to permit it to initiate a private foreclosure sale of its deed of trust under Arizona law. The Debtor says that if the Private Sale fails to close, the auction and continued retention of CB Richard Ellis Tucson, LLC, to market the project, will provide for a vehicle for payment of creditors. If the auction fails to close Lenox is still protected by its ability to complete its foreclosure sale. The Court will conduct a hearing on Monday, Feb. 6, 2006, to confirm Modified First Amended Plan. A full-text copy of the Purchase and Sale Agreement and Escrow Instruction is available at no charge at: http://ResearchArchives.com/t/s?4d5 A full-text copy of the Settlement and Mutual Release Agreement is available at no charge at: http://ResearchArchives.com/t/s?4d6 A full-text redlined copy of the Modified First Amended Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060202020022 Headquartered in Tucson, Arizona, Villas At Hacienda Del Sol, Inc. -- http://www.thevillasathaciendadelsol.com/-- filed for chapter 11 protection on March 28, 2005. (Bankr. D. Ariz. Case No. 05- 01482). Matthew R.K. Waterman, Esq., at Waterman & Waterman, PC, represents the Debtor. When the Company filed for protection from its creditors, it estimated assets and liabilities between from $10 million to $50 million. VINTAGE PETROLEUM: Moody's Raises Sr. Unsec. & Sub. Ratings to A3 ----------------------------------------------------------------- Moody's Investors Service upgraded Vintage Petroleum Inc.'s senior unsecured and senior subordinated ratings to A3 from Ba3 and B1, respectively. These rating changes are a result of a guarantee provided by Occidental Petroleum Corporation (Oxy) of Vintage's debt following the completion of the merger between the two companies. This rating action completes the rating review initiated on Oct. 14, 2005, when the merger was announced. As a result of the guarantee, Vintage's $350 million 8.25% notes due 2012 and its $200 million 7.875% notes due 2011 are pari passu with all of Oxy's senior unsecured obligations, which are rated A3. In addition, Moody's has withdrawn its ratings of Vintage's shelf registrations due to their deregistration. Occidental Petroleum Corporation, headquartered in Los Angeles, California, is an international oil and gas company with primary operations in: * the U.S., * the Middle East, and * Latin America. Occidental also manufactures and markets commodity chemicals. WINDOW ROCK: U.S. Trustee Amends Creditors Committee Membership --------------------------------------------------------------- The United States Trustee for Region 16 amended the membership of the Official Committee of Unsecured Creditors in Window Rock Enterprises Inc.'s chapter 11 case. The U.S. Trustee removed Retail Business Solutions, Inc. and Tabs Group, Inc. from the Committee. The Creditors Committee is now composed of: 1. Nutritional Laboratories International, Inc. Attn: Ron Danenberg, CEO Terry Benisher, President Mark Richter, CFO Rusty Murphy, Esq. 1001 South 3rd West Missoula, Montana 59801 Phone: 406-532-5493, Fax: 406-273-5498 2. Vitamin Shoppe Industries, Inc. Attn: Ronald M. Neifield 2101 91st Street North Bergen, New Jersey 07047 Phone: 201-624-3440, Fax: 201-868-0727 3. Pacific Eagle International Security Inc. Attn: Mach Nguyen 10379 Los Alamitos Boulevard Los Alamitos, California 90720 Phone: 562-493-6110, Fax: 562-493-6190 4. General Nutrition Distribution L.P. Attn: David J. Sullivan 300 Sixth Avenue, 3rd Floor Pittsburgh, Pennsylvania 15222 Phone: 412-288-4770, Fax: 412-338-8900 5. Meiselman, Denlea, Packman, Carton & Eberz P.C. Attn: Toni Breedlove 1311 Mamorneck Avenue White Plains, New York 10605 - and - Meiselman, Denlea, Packman, Carton & Eberz P.C. Attn: Toni Breedlove 1824 Baywood Drive, Apartment 101 Corona, California 92881 Phone: 914-517-5000, Fax: 914-517-5055 6. Walmart Stores, Inc. Attn: Marlene L. Allen-Hammarlund Graham, Savage, Nolan & Tilden 3750 University Avenue, #250 Riverside, California 92501-3335, Phone: 951-684-2171, Fax: 951-684-2150 7. Bonilla Design Attn: Nicole Bonilla 2657 E. Horseshoe Pl. Chandler, Arizona 85249 Phone: 480-659-9814, Fax: 480-659-9815 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Brea, California, Window Rock Enterprises Inc. -- http://windowrock.net/-- manufactures and sells all-natural dietary and nutritional supplements. The Debtor is also producing its own TV, radio and print advertising campaigns for nutritional and dietary supplements and has distribution in over 40,000 Food Drug Mass Clubs as well as Health and Fitness Channels. The Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr. C.D. Calif. Case No. 05-50048). Robert E. Opera, Esq., Winthrop Couchot, PC represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of more than $100 million. WINDOW ROCK: Wants to Hire Ullman Shapiro as Special Counsel ------------------------------------------------------------ Window Rock Enterprises, Inc. asks the U.S. Bankruptcy Court for the Central District of California for permission to employ Ullman, Shapiro & Ullman, LLP as its special regulatory counsel. The Debtor tells the Court that it hired Ullman Shapiro because the Firm specializes in food, drug and cosmetic surgery regulatory laws. Ullman Shapiro will: 1) represent the Debtor in complying with the requirements of the Federal drug Administration, the Federal Trade Commission and other federal regulatory agencies; 2) represent the Debtor in complying with the requirements of applicable state statutes and regulations, including consulting the Debtor regarding its compliance with federal and state regulations in connection with the sale and marketing of its products; and 3) render all other legal services to the Debtor as required in the terms of the Retainer Agreement between Ullman Shapiro and the Debtor. Marc Ullman, Esq., a senior partner at Ullman Shapiro, discloses that his Firm received a $222,000 retainer. Mr. Ullman charges $415 per hour for his services. Mr. Ullman reports Ullman Shapiro's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Steven Shapiro Partner $310 Marc S. Ullman Partner $310 Charles H. Knull Trademark Counsel $285 Ira R. Hecht Business & Tech. Counsel $325 Irving L. Wiesen Counsel $325 Seth A. Flaum Associate $230 Vanessa Riviere Associate $165 Ullman Shapiro assures the Court that it does not represent any interest materially adverse to the Debtor pursuant to Section 327(a) of the Bankruptcy Code. Headquartered in Brea, California, Window Rock Enterprises Inc. -- http://windowrock.net/-- manufactures and sells all-natural dietary and nutritional supplements. The Debtor is also producing its own TV, radio and print advertising campaigns for nutritional and dietary supplements and has distribution in over 40,000 Food Drug Mass Clubs as well as Health and Fitness Channels. The Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr. C.D. Calif. Case No. 05-50048). Robert E. Opera, Esq., Winthrop Couchot, PC represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of more than $100 million. WORLD WIDE: No Cause to Extend Exclusive Periods, Carlton Alleges ----------------------------------------------------------------- Carlton Financial Corporation, a creditor in World Wide Financial Services, Inc.'s chapter 11 proceeding, asks the U.S. Bankruptcy Court for the Eastern District of Michigan to deny the Debtor's request to extend its exclusive plan filing period to May 1, 2006. Carlton Financial tells the Court that the Debtor is relying on Section 1121(d) of the Bankruptcy Code to have its motion approved. Section 1121(d) states that the Court may extend a request to extend exclusivity periods for cause. Carlton Financial argues that the term "cause" used in Section 1121(d) is not defined in the Bankruptcy Code but in determining whether cause exists for an extension, courts rely on several factors, including: (1) the size and complexity of the case; (2) the necessity of sufficient time to permit the debtor to negotiate a plan of reorganization and prepare adequate information; (3) the existence of good faith progress toward reorganization; (4) the fact that the debtor is paying its bills as they become due; (5) whether the debtor has demonstrated reasonable prospects for filing a viable plan; (6) whether the debtor has made progress in negotiations with its creditors; (7) the amount of time which has elapsed in the case; (8) whether the debtor is seeking an extension of exclusivity to pressure creditors to submit to the debtor's reorganization demands; and (9) whether an unresolved contingency exists. Carlton Financial contends that: (A) the Debtor did not address any of those factors; (B) the Debtor is not paying its postpetition obligations to Carlton Financial when due; and (C) the Debtor is not operating in compliance with the requirements of the Bankruptcy Code. GMAC-RFC's Limited Objection GMAC/Residential Funding Corporation -- the Debtor's largest unsecured creditor -- tells the Court that it does not object to the Debtor's request for more time to propose a chapter 11 plan so long as the other dates triggered by or associated with the Plan and Disclosure Statement are also changed. In line with the approval of the Debtor's request, GMAC-RFC suggests that the Court's Case Management Order entered on November 14, 2005, be revised. GMAC-RFC also seeks modification of those dates so that it tracks the approximate previous timing of date. Headquartered in Southfield, Michigan, World Wide Financial Services, Inc., is a mortgage company. The company filed for chapter 11 protection on Oct. 4, 2005 (Bankr. E.D. Mich. Case No. 05-75180). Dennis W. Loughlin, Esq., and Lynn M. Brimer, Esq., at Raymond & Prokor, P.C., represent the Debtor in its restructuring efforts. The Debtors' Schedules of Assets and Liabilities, filed in November 2005, show $2.5 million in assets and $32.5 million in liabilities. * BOOK REVIEW: Inside Investment Banking: Second Edition -------------------------------------------------------- Author: Ernest Bloch Publisher: Beard Books Softcover: 440 Pages List Price: $34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1587982684/internetbankrupt Even though Bloch states that "no last word may ever be written about the investment banking industry," he nonetheless has written a definitive book on the subject. Bloch wrote Inside Investment Banking after discovering that no textbook on the subject was available when he began teaching a course on investment banking. Bloch's book is like a textbook, though one not meant to be limited to classroom use. It's a complete, knowledgeable study of the structure and operations of the field of investment banking. With a long career in the field, including work at the Federal Reserve Bank of New York, Bloch has the background for writing the book. He sought the input of many of his friends and contacts in investment banking for material as well as for critical guidance to put together a text that would stand the test of time. While giving a nod to today's heightened interest in the innovative securities that receive the most attention in the popular media, Inside Investment Banking concentrates for the most part on the unchanging elements of the field. The book takes a subject that can appear mystifying to the average person and makes it understandable by concentrating on its central processes, institutional forms, and permanent aims. The author shows how all aspects of the complex and ever-changing field of investment banking, including its most misunderstood topic of innovative securities, leads to a "financial ecology" which benefits business organizations, individual investors in general, and the economy as a whole. "[T]he marketplace for innovative securities becomes, because of its imitators, a systematic mechanism for spreading risk and improving efficiency for market makers and investors," says Bloch. For example, Bloch takes the reader through investment banking's "market making" which continually adapts to changing economic circumstances to attract the interest of investors. In doing so, he covers the technical subject of arbitrage, the role of the venture capitalist, and the purpose of initial public offerings, among other matters. In addition to describing and explaining the abiding basics of the field, Bloch also takes up issues regarding policy (for example, full disclosure and government regulation) that have arisen from the changes in the field and its enhanced visibility with the public. In dealing with these issues, which are to a large degree social issues, and similar topics which inherently have no final resolution, Bloch deals indirectly with criticisms the field has come under in recent years. Bloch cites the familiar refrain "the more things change, the more they remain the same" and then shows how this applies to investment banking. With deregulation in the banking industry, globalization, mergers among leading investment firms, and the growing number of individuals researching and trading stocks on their own, there is the appearance of sweeping change in investment banking. However, as Inside Investment Banking shows, underlying these surface changes is the efficiency of the market. Anyone looking for an authoritative work covering in depth the fundamentals of the field while reflecting both the interest and concerns about this central field in the contemporary economy should look to Bloch's Inside Investment Banking. After time as an economist with the Federal Reserve Bank of New York, Ernest Bloch was a Professor of Finance at the Stern School of Business at New York University. ********* 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, Cherry Soriano-Baaclo, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili, Jr., Tara Marie Martin, Marie Therese V. Profetana, Shimero Jainga, 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 ***