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 24, 2006, Vol. 10, No. 47 Headlines ACCO BRANDS: S&P Affirms BB- Rating & Says Outlook is Negative ACTIVISION INC: S&P Affirms BB- Credit Rating With Neg. Outlook ACURA PHARMA: Equity Deficit Multiplies 5x to $6.16MM at Dec. 31 ADDISON-DAVIS: Posts $1.1 Mil. Net Loss in Quarter Ended Dec. 31 ADM TRONICS: Dec. 31 Balance Sheet Upside-Down by $3.1 Million AFC ENTERPRISES: Increases Share Repurchase Program to $115 Mil. AHPC HOLDINGS: Receives Nasdaq Non-Compliance Notice ALLIED HOLDINGS: CEO Hugh Sawyer Cuts Personal Salary by 15% AMERICAN AIRLINES: Moody's Affirms Corp. Family Rating at B3 ANCHOR GLASS: Files First Amended Plan of Reorganization ANDROSCOGGIN ENERGY: Committee Taps Phoenix as Financial Expert ASARCO LLC: 12 Debtors Want Baker Botts as Bankruptcy Counsel ASARCO LLC: Subsidiary Panel & FCR Want Legal Analysis as Advisor ATA AIRLINES: Court Approves Sabre Restructuring Agreement ATA AIRLINES: Court Okays to Use ATSB Lenders' Cash Collateral AXCESS INT'L: December 31 Balance Sheet Upside-Down by $4.59 Mil. BIOGEN IDEC: S&P Lifts Sr. Unsecured Debt Rating to BBB from BB+ BOYD GAMING: P. Chakmak Replacing CFO E. Landau Upon Retirement BUFFALO MOLDED: Wants McDonald Hopkins as Substitute Counsel BROOKLYN HOSPITAL: Court Fixes April 21 as Claims Bar Date CALPINE CORP: Construction Finance Wants Waiver from Noteholders CANWEST MEDIAWORKS: Moody's Confirms Sr. Subor. Bond Rating at B2 CARRINGTON MORTGAGE: Moody's Rates Class M-10 Certificates at Ba1 CASE NEW HOLLAND: Moody's Rates $350 Mil. Senior Notes at Ba3 CDC MORTGAGE: S&P Downgrades Rating on Class B Debt to B from BB CENTENNIAL COMMS: Updates Financial Outlook for FY Ending May 31 CENTURYTEL: Moody's Affirms Preferred Shelf (P) Ba1 Rating CHEMED CORP: Discloses Financial Results for Fourth Quarter CHEMTURA CORP: Focusing on Performance Chemicals Business COMDISCO INC: Makes Distribution to Contingent Rights Holders CONNECTICARE INC: S&P Affirms Financial Strength Rating at BB+ CONTINENTAL AIRLINES: Moody's Affirms Corp. Family Rating at B3 COVAD COMMS: Completes Acquisition of NextWeb in Cash & Stock Deal CSC HOLDINGS: Moody's Rates $2.4BB Proposed Sr. Facility at Ba3 CSC HOLDINGS: S&P Rates Proposed $2.4 Billion Facilities at BB DATATEC SYSTEMS: Wants Claim Objection Period Extended to Sept. 30 DELTA AIRLINES: Court Okays Reinstatement of Severance Program DIGITAL LIGHTWAVE: Owes Optel Capital $53.4 Million as of Feb. 15 DRESSER-RAND GROUP: Reduces Debt by $30 Million in Two Months DRESSER-RAND GROUP: Restructures Steam Turbine Business DTE ENERGY: 2005 Earnings Increase 25% to $537 Million DYNTEK INC: Losses Continue in Quarter Ended December 31 EMMIS COMMUNICATIONS: Moody's Affirms Senior Debt Rating at B3 EPOCH INVESTMENTS: Creditors Must File Proofs of Claim by March 10 FIREARMS TRAINING: Dec. 31 Balance Sheet Upside-Down by $27.7 Mil. FORD CREDIT: S&P Puts BB Rating on $59.1 Million Class D Notes FORD CREDIT: Fitch Puts BB+ Rating on $59.1 Million Class D Notes GLOBE LIFT: Case Summary & Largest Unsecured Creditor GRANITE BROADCASTING: Marketing WB TV Stations to More Buyers GS MORTGAGE: Fitch Lifts Class G Certs.' Rating to BBB- from B+ GUITAR CENTER: Posts $76.7-Mil. of Net Income in Fiscal Year 2005 HARD ROCK: S&P Places B+ Corporate Credit Rating on CreditWatch HOVNANIAN ENTERPRISES: Moody's Affirms Low-B Ratings on Securities HOVNANIAN ENTERPRISES: Fitch Rates $250 Million Sr. Notes at BB+ IASIS HEALTHCARE: Moody's Affirms $475MM Sr. Notes Rating at B3 INDIGITA CORP: Case Summary & 9 Largest Unsecured Creditors INTEGRATED ELECTRICAL: Can Obtain DIP Financing on Interim Basis INTEGRATED ELECTRICAL: Can Use Cash Collateral on Interim Basis INTEGRATED ELECTRICAL: Disclosure Statement Hearing Set on Mar. 10 INTEGRATED HEALTH: Balks at Abe Briarwood's Move to Release $1.5MM INTEGRATED HEALTH: Court Delays Entry of Final Decree to Oct. 30 ISLE OF CAPRI: Earns $4.1 Mil. Net Income in Quarter Ended Jan. 22 J.P. MORGAN: Moody's Affirms Low-B Ratings on Eight Cert. Classes KERZNER INTERNATIONAL: Earns $7.1 Million in Fourth Quarter KNOLL INC: Buying Back Common Shares Through Banc of America KNOLL INC: Declares $0.10 Quarterly Cash Dividend on Common Shares LASERSIGHT: CFO & Secretary Resigns & Z. Tang Named as Successor LB COMMERCIAL: Fitch Junks $17.3 Million Class L Certs.' Ratings LIBERTY MEDIA: Completes Acquisition of Provide Commerce, Inc. MERIDIAN AUTOMOTIVE: Foley Okayed Despite U.S. Trustee's Protest MERISTAR HOSPITALITY: Moody's Junks Subordinate Debt Ratings MORGAN STANLEY: S&P Puts Three Debt Classes' Low Ratings on Watch MUSCLETECH RESEARCH: Court Sets Feb. 28 to Hear Monitor's Request NCI BUILDING: S&P Says BB Credit Rating Unaffected by Merger Plan NES RENTAL: S&P Places B+ Corporate Credit Rating on CreditWatch NETWORK PLUS: Hires Recovery Services as Collection Agent NOBLE DREW: Court Okays N. Cheng's Retention as Accountants NVIDIA CORP: Earns $98.1 Million of Net Income in Fourth Quarter ONE PRICE: Chapter 7 Trustee Wants Weiser as Expert Witness OREGON ARENA: Liquidating Trustee Prepares to Sue Paul Allen PANTRY INC: Names President & CEO Peter J. Sodini Board Chairman PAPERSWEEP INC: Creditors Must File Claims by April 4 PARKWAY HOSPITAL: Taps Loeb & Troper for Auditing Services PERFORMANCE TRANSPORTATION: Hires Sitrick as PR Consultant PHOTOCIRCUITS CORP: Court Approves $1MM Sale of All Estate Assets PLUM POINT: S&P Puts Preliminary B Rating on $760 Million Debts PRICE OIL: Creditors Committee Hires Pachulski Stang as Counsel PRICELINE.COM INC: Earns $3.8 Million in Fourth Quarter QUESTRON TECH: Plan Trustee Has Until April 24 to Object to Claims RADNET MANAGEMENT: S&P Junks $60 Mil. 2nd-Lien Term Loan's Rating SALOMON BROTHERS: Fitch Junks $8.8 Million Class M Certs.' Ratings SATCON TECHNOLOGY: Posts $1.3 Mil. Loss in Quarter Ended Dec. 31 SHULLSBURG CREAMERY: Pursues Going-Concern Sale of Assets SUPRESTA: Poor Credit Metrics Prompt Moody's B1 Debt Ratings STONE ENERGY: Unable to Tap Bank Line Until Default Is Cured TECHALT INC: Closes Agreement to Acquire Cypher Wireless TRIMAS CORP: Weak Balance Sheet Cues Moody's Rating Downgrades UAL CORP: Provides Status Report on Plan Consummation US AIRWAYS: Incurs $261 Million Net Loss in Fourth Quarter USN CORP: Equity Deficit Tops $9 Million at December 31 USN CORP: Wants to Make Changes to Confirmed Plan VENDTEK SYSTEMS: October 31 Balance Sheet Upside-Down by $712,000 VIRGINIA DEVLIN: Case Summary & 6 Largest Unsecured Creditors WELLCARE HEALTH: S&P Revises Outlook to Positive from Stable WESTON NURSERIES: Has Until March 1 to Decide on Unexpired Leases WESTON NURSERIES: Has Until March 13 to File Chapter 11 Plan WILD OATS: Earns $3.6 Million in Quarter Ended Dec. 31 WINN-DIXIE: DIP Credit Agreement Amended on January 31 WINN-DIXIE: Court Okays Rejection of Nine Equipment Contracts WINN-DIXIE: Wants to Reject 13 Contracts & Leases by March 9 WORLDCOM INC: Settles Dispute Over APCC's $44.9MM Unsecured Claim * Robert Manzo Joins Capstone Advisory Group * SEC Proposes Deregistration Process for Foreign Private Issuers * BOOK REVIEW: Falling Through the Safety Net: Insurance Status and Access to Health Care ********* ACCO BRANDS: S&P Affirms BB- Rating & Says Outlook is Negative -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on office products manufacturer ACCO Brands Corp. to negative from stable. At the same time, Standard & Poor's affirmed all its outstanding ratings on the Lincolnshire, Illinois-based company, including its 'BB-' corporate credit rating. Total debt outstanding at Dec. 31, 2005, was about $942 million. The outlook revision follows ACCO's weaker-than-expected operating performance for its fiscal year ended December 2005 and its revised guidance for fiscal 2006. Standard & Poor's had previously expected improvements in operating performance through cost savings from merger synergies and the company's continued focus on cost containment. However, despite a 3% increase in pro forma net sales, pro forma EBITDA declined by about 11% versus the prior year due to: * unfavorable pricing in certain office products categories; * higher raw material costs; and * double-digit increases in distribution and freight costs. "As such, credit protection measures have weakened, and we now believe that the company may be challenged to strengthen credit protection measures to levels more appropriate for the current ratings as previously expected," said Standard & Poor's credit analyst David Kang. ACTIVISION INC: S&P Affirms BB- Credit Rating With Neg. Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on video game publisher Activision Inc. to negative from stable, reflecting challenges associated with the video game console transition and the underperformance of two key titles over the holiday season. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating on the company. Activision has no debt outstanding as of Dec. 31, 2005. "The negative outlook reflects our expectation that 2006 will be a soft year for video game publishers, including Activision," said Standard & Poor's credit analyst Andy Liu. The rating on Activision reflects: -- some product lifecycle and seasonality risks; -- its earnings concentration in key titles; -- the hit-driven nature of the business; and -- the highly competitive video game market. These factors are partially offset by the company's stable of franchise titles and its cash cushion. The demand for current-generation console titles was weak in the December 2005 quarter as consumers continued to wait for next- generation consoles to become available before making significant purchases of new titles. With Xbox 360 in very limited supply and the launch of Sony Corp.'s PlayStation3 anticipated in mid- or late-2006, the demand for next-generation titles was insufficient to offset the weakness experienced by current-generation titles. Heightened competitive pressure, which is also a function of the console transition, led to aggressive discounting by video game publishers. Many top-selling games were discounted to $39.99 from $49.99. For Activision, the demand weakness associated with console transition and the heightened competitive pressure were compounded by the underperformance of two key titles: * True Crime: New York City, and * GUN. All these factors led to a significant decrease in Activision's profitability. In light of the projected small installed base of next-generation consoles, Activision has reduced its release slate and projected revenues in 2006. However, in 2007, when both consoles are available and assuming in sufficient quantity, Activision is likely to resume its revenue and profit growth. ACURA PHARMA: Equity Deficit Multiplies 5x to $6.16MM at Dec. 31 ---------------------------------------------------------------- Acura Pharmaceuticals, Inc. (OTC.BB-ACUR), reported a $7.1 million net loss for the quarter ending December 31, 2005, compared to a $2.1 million net loss for the same period in 2004. For calendar year 2005 the Company had a net loss of $12.1 million compared to a net loss of $70.0 million in 2004. The 2004 net loss includes a charge of $72.5 million for amortization of debt discount and private debt offering costs, and a gain of $14.6 million from debt restructuring and divestment of non- strategic assets. As of February 1, 2006, the Company had cash and cash equivalents of approximately $647,000. The Company estimates its current cash reserves will be sufficient to fund the development of OxyADF(TM) tablets and related operating expenses through mid-to-late March, 2006. To continue operating, the Company must raise additional financing or enter into appropriate collaboration agreements with third parties providing for cash payments to the Company. No assurance can be given that the Company will be successful in obtaining any financing or in securing collaborative agreements with third parties on acceptable terms, if at all, or if secured, that financing or collaborative agreements will provide for payments to the Company sufficient to continue funding operations. In the absence of financing or third-party collaborative agreements, the Company will be required to scale back or terminate operations or seek protection under applicable bankruptcy laws. A full text copy of the Company's Annual Report inform 10-K filed with the Securities and Exchange Commission is available for free at http://ResearchArchives.com/t/s?5bf Acura Pharmaceuticals, Inc. -- http://www.acurapharm.com/-- together with its subsidiaries, is an emerging pharmaceutical technology development company specializing in proprietary opioid abuse deterrent formulation technology. As of December 31, 2005, the Company's equity deficit widened to $6,162,000 from a $1,085,000 deficit at December 31, 2004. ADDISON-DAVIS: Posts $1.1 Mil. Net Loss in Quarter Ended Dec. 31 ---------------------------------------------------------------- Addison-Davis Diagnostics, Inc., delivered its financial results for the quarter ended Dec. 31, 2005, to the Securities and Exchange Commission on Feb. 21, 2006. During the three months ended Dec. 31, 2005, Addison-Davis incurred a $1,189,262 net loss on zero revenues, compared to a $520,240 net loss on $1,811 of revenue during the three months ended Dec. 31, 2004. While acknowledging that it failed to generate any revenue during the quarter, the Company's management said that they are encouraged about the Company's future prospects. Management reports that the Company is focused on: a) selling and marketing its Drug Stop product to the institutional market; b) supporting its Licensee in efforts to sell and market Drug Stop in the over-the-counter market; and c) taking the appropriate steps to contain general business overhead The Company's balance sheet at Dec. 31, 2005, showed $1,183,071 in total assets and $3,083,724 in total liabilities, resulting in a stockholders' deficit of $1,884,713. The Company had a $629,832 working capital deficit at Dec. 31, 2005. A full-text copy of the regulatory filing is available for free at http://researcharchives.com/t/s?5bd Going Concern Doubt Armando C. Ibarra, Jr., CPAs, expressed substantial doubt about Addison-Davis' ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended June 30, 2005. The auditing firm pointed to the Company's continuing losses from operations. Addison-Davis' former auditor, Corbin & Company, LLP, also raised substantial doubt about the Company's ability to continue as a going concern after auditing its financial statements for the fiscal year ended June 30, 2004. Apart from recurring losses, the auditing firm pointed to the Company's failure to preserve patent rights on NICOWater(TM), which had been its sole revenue- generating product. About Addison-Davis Based in Westlake Village, California, Addison-Davis Diagnostics, Inc. -- http://www.addisondavis.com/-- offers quick response diagnostic tests that are user friendly, produce fast simple results and are less costly, less problematic and less time consuming. The Company is currently focused on bringing fast and reliable "Point-of-care" Diagnostic Testing through the use of its patented technology to Healthcare Professionals, Hospitals, certain branches of the Government and the Workplace environment for drugs-of-abuse and medical conditions and diseases. ADM TRONICS: Dec. 31 Balance Sheet Upside-Down by $3.1 Million -------------------------------------------------------------- ADM Tronics Unlimited, Inc., delivered its financial results for the quarter ended Dec. 31, 2005, to the Securities and Exchange Commission on Feb. 21, 2006. For the three months ended Dec. 31, 2005, ADM reported a $746,821 net loss, compared to a $1,682,098 net loss for the three months ended Dec. 31, 2004. The Company generated $470,671 of revenue for the three months ended Dec. 31, 2005, a 41% increase versus $334,183 of revenue for the comparable period in 2004. Revenues from the Company's chemical activities decreased by $10,106, offset by an increase of $146,594 in the Company's medical technology activities in the 2005 period as compared to the 2004 period. The decrease in revenue from chemical activities primarily resulted from a significant customer of the Company's chemical products ceasing operations in August 2005, resulting in no orders during the quarter ended Dec. 31, 2005. The Company's balance sheet at Dec. 31, 2005, showed $3,277,542 in total assets and liabilities of $6,443,681, resulting in a stockholders' deficit of $3,166,139. A full-text copy of the regulatory filing is available for free at http://researcharchives.com/t/s?5c1 Going Concern Doubt Raich Ende Malter & Co. LLP expressed substantial doubt about ADM Tronics' ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended March 31, 2005. The auditing firm pointed to the Company's recurring losses from operations and stockholders deficiency. About ADM Tronics Headquartered in Northvale, New Jersey, ADM Tronics Unlimited, Inc., -- http://www.admtronics.com/-- produces and markets chemical products for industrial users. The Group also manufactures, markets and leases medical equipment and medical devices. AFC ENTERPRISES: Increases Share Repurchase Program to $115 Mil. ---------------------------------------------------------------- AFC Enterprises, Inc. (Nasdaq: AFCE) reported that its Board of Directors has approved increasing its share repurchase program, expanding the program from $100 million to $115 million, effective immediately. The program, which is open-ended, allows the Company to repurchase its shares on the open market from time to time in accordance with the requirements of the Securities and Exchange Commission. Since AFC announced its initial share repurchase program in 2002, the Company has repurchased an aggregate of 5.4 million shares of common stock for approximately $100 million under this program, including approximately 1.5 million shares of common stock for approximately $19.4 million during 2005. The Company now has $15 million available for repurchases under the program. As of February 22, 2006, there were 30.2 million shares of the Company's common stock outstanding. AFC Enterprises, Inc. -- http://www.afce.com/-- is the franchisor and operator of Popeyes(R) Chicken & Biscuits, the world's second- largest quick-service chicken concept based on number of units. As of Dec. 25, 2005, Popeyes had 1,828 restaurants in the United States, Puerto Rico, Guam and 24 foreign countries. AFC has a primary objective to be the world's Franchisor of Choice(R) by offering investment opportunities in its Popeyes Chicken & Biscuits brand and providing exceptional franchisee support systems and services. At Oct. 2, 2005, AFC Enterprises, Inc.'s balance sheet showed a $44.2 million stockholders' deficit compared to $140.9 million of positive equity at Dec. 26, 2005. AHPC HOLDINGS: Receives Nasdaq Non-Compliance Notice ---------------------------------------------------- AHPC Holdings, Inc. (Nasdaq: GLOV) reported the receipt of a Nasdaq Staff Deficiency letter from The Nasdaq Stock Market indicating the Company is not in compliance with Nasdaq's requirements for continued listing because the Company's shareholders equity amount is below the minimum requirement of $2.5 million and, accordingly, does not comply with Marketplace Rule 4310(c)(2)(B). The Company is currently considering its options. In the event that the Company is unable to deliver a plan to achieve and sustain compliance with all Nasdaq listing requirements that is acceptable to Nasdaq, the Company expects to receive notification that its securities will be delisted. At that time, the Company may appeal the Staff's decision to a Nasdaq Listing Qualifications Panel. There can be no assurance that the Nasdaq Listing Qualifications Panel will decide to allow the Company to remain listed or that any Company actions to attempt to comply with alternative listing criteria will prevent the delisting of its common stock from the Nasdaq SmallCap Market. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 26, 2005, Grant Thornton LLP expressed substantial doubt about American Health Products Corporation's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended June 30, 2005, and 2004. The auditing firm points to the Company's recurring losses, including the $1,151,549 net loss incurred for the year ended June 30, 2005. AHPC Holdings, Inc., fka WRP Corporation, operates through American Health Products, its wholly owned subsidiary. About the Company Headquartered in Glendale Heights, AHPC Holdings, Inc. -- http://www.ahpc.com/-- markets disposable medical examination, foodservice and retail gloves. The Company's wholly owned subsidiary, American Health Products Corporation, supplies branded and private label disposable gloves to the healthcare, foodservice, retail and industrial markets nationwide. ALLIED HOLDINGS: CEO Hugh Sawyer Cuts Personal Salary by 15% ------------------------------------------------------------ Allied Holdings, Inc. (Pink Sheets: AHIZQ.PK) reported that its President and Chief Executive Officer, Hugh E. Sawyer, has volunteered to take a 15% cut in his annual salary. The salary reduction will begin on Mar. 1, 2006. Hugh E. Sawyer, Allied Holdings' President and Chief Executive Officer, stated, "Our objective is to use the bankruptcy process to lower our debt, reduce the multi-year cost increases associated with our contract with our Teamster-represented employees in the U.S. and address certain customer pricing issues. While progress has been made and many of our key constituencies have already sacrificed greatly in an effort to allow our Company to emerge from bankruptcy, there is still work to be done. All of our constituencies must sacrifice in a manner necessary to permit our Company to emerge from bankruptcy." "I recognize that the decision to reduce my annual salary by 15% is a modest step in terms of our Company's overall cost structure, but I believe this decision is appropriate given my commitment to shared sacrifice and the values upon which our Company was founded," Mr. Sawyer continued. Mr. Sawyer already contributes a portion of the cost for his health care benefits in a manner consistent with all other non-bargaining employees. Details regarding 2005 total compensation will not be released until the spring, but Mr. Sawyer stated that he would not receive any bonus or equity compensation for 2005. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. AMERICAN AIRLINES: Moody's Affirms Corp. Family Rating at B3 ------------------------------------------------------------ Moody's Investors Service affirmed all debt ratings of AMR Corp., and its primary subsidiary American Airlines, Inc. -- corporate family rating at B3 -- as well as all tranches of the Enhanced Equipment Trust Certificates supported by payments from American and the SGL-2 Speculative Grade Liquidity Rating. The outlook has been changed to stable from negative. The stable outlook reflects Moody's expectation of steadily improving operating and financial performance during 2006 resulting primarily from yield-driven revenue growth while maintaining control of the growth of unit costs. The company should generate sufficient cash from operations to meet scheduled debt maturities as well as planned capital spending without adding additional debt. American has had some success reducing its non-fuel costs, and Moody's anticipates the airline will be able to control costs given expectations of a modest volume increase. Supporting the revenue growth expectation are the recent success in yield, and higher traffic to international markets where the company has more pricing power relative to its domestic markets, as well as the company's efforts to broaden its product offerings and expand revenue sources. Moody's also notes that American has substantial cash on hand, and the approximate $3.8 billion balance is adequate to cushion any shortfall from operations for the near term debt requirements and non-aircraft capital spending. Moody's expects American will lower its debt by at least $1.25 billion -- the scheduled maturities for 2006 -- while maintaining a cash balance in line with the recently reported level. Also supporting the outlook is American's demonstrated ability to access the capital markets with recent bond and equity offerings. AMR's ratings reflect its position as the world's largest passenger airline, with a substantial international network with particular strengths servicing Latin America and Europe. Nonetheless, EBIT margin of 2.9% during 2005 was down somewhat from the prior year, and the company reported a net loss of $860 million. Higher fuel costs offset much of the cost savings achieved. As well, American is highly leveraged, with debt to EBITDA of 11.0 times at FY 2005, which is high for its rating category. Moody's anticipates that the leverage metrics will improve measurably going forward as the company lowers debt with improving cash flow from operations. American's rating could improve with sustained net income, with an EBIT margin greater than 10%, and debt to EBITDA approaching 7x to 8x. According to American international ASM's are expected to increase by approximately 4% in 2006 by increasing frequencies in existing markets, principally China, India and Japan. To date, the company has reported higher international bookings and yields exceeding those of the prior year. Moody's expects continued RASM growth in 2006, in part achieved through an overall decrease to the company's capacity. Domestic ASM's are expected to decline 4% as American plans to eliminate service to certain low-density cities. At the same time, measures to enhance productivity will be expanded such as simplification of pilot scheduling, shorter ground and taxi times at its hub airports, and seeking more cost- efficient distribution channels, which should more than offset some cost increases. In affirming the SGL-2 Speculative Grade Liquidity rating, Moody's noted that AMR reported approximately $3.8 billion in unrestricted cash and equivalents as of Dec. 31, 2005, and that with anticipated improvements in operating cash flows, the company should maintain a good liquidity profile over the coming 12 months. The company bolstered its cash balances during 2005 through a $450 million bond offering, a primary equity offering of $223 million, and a $130 million engine-backed EETC. Moody's expects the company to preserve a high level of cash going forward, even after $1.2 billion in scheduled debt maturities in 2006. Capital expenditures are expected to approximate $600 million in 2006, less than historic levels, as American reduces its new aircraft deliveries. American will take delivery of two mainline aircraft in 2006, but thereafter no scheduled mainline or regional aircraft deliveries will occur until 2013. Although the average age of AMR's mainline fleet is relatively high, the company is taking measures to accelerate retirement of older aircraft such as the MD-80 and A300 series. Additionally, the company expects to contribute approximately $250 million to its pension plans. Barring an unforeseen worsening to the operating environment, Moody's expects that the company will remain in compliance with all its debt covenants in the near term. American Airlines Inc., and its parent company, AMR Corporation, are headquartered in Fort Worth, Texas. ANCHOR GLASS: Files First Amended Plan of Reorganization -------------------------------------------------------- Anchor Glass Container Corporation delivered its First Amended Plan of Reorganization and Disclosure Statement to the U.S. Bankruptcy Court for the Middle District of Florida on Feb. 15, 2006. Mark S. Burgess, chief executive officer of Anchor Glass Container Corporation, discloses that on confirmation of the Amended Plan, Reorganized Anchor Glass' total long-term outstanding debt obligations will be $135,000,000, which consists of the New Term Credit Facility. In addition, Anchor Glass will have available to it a $65,000,000 New Revolving Credit Facility, a portion of which will be drawn on or about the Effective Date to fund the payments under the Plan. According to Mr. Burgess, based on Anchor Glass' current level of operations, it will have sufficient cash flow to meet its needs at least through the period ending April 30, 2006, after taking into account the fact that interest payments on the Senior Notes will not be due during the pendency of the Chapter 11 Case. A valuation analysis was not included in the papers filed with the Bankruptcy Court last week. They will be filed at a later date, Mr. Burgess says. Anchor Glass proposes that the Court fix January 31, 2006, as the date for determining which Holders of Senior Notes are entitled to vote on the Plan. The Senior Notes Indenture Trustee will not vote on behalf of the individual noteholders. Classification of Claims Anchor Glass amended its estimates of Administrative Claims, Other Priority Claims, GE Capital Secured Claims and Other Secured Claims against the estates: Original Amended Class Description Estimated Amt. Estimated Amt. ----- ----------- ------------- -------------- N/A Administrative $32,700,000 $34,735,000 Claims 1 Other Priority 500,000 160,000 Claims 3 GE Capital 9,500,000 9,659,574 Secured Claim 4 Other Secured 1,000,000 830,000 Claims The Plan outlines this scheme for classifying claims in accordance with 11 U.S.C. Sec. 1122: Class Description Estimated Amt. Impairment ----- ----------- -------------- ---------- N/A Administrative $34,735,000 Unimpaired Claims N/A Note Purchase $125,000,000 Unimpaired Agreement Claims N/A Priority Tax $4,500,000 Unimpaired Claims 1 Other Priority $160,000 Unimpaired; deemed to Claims have accepted the Plan 2 Senior Note $368,302,778 Impaired; entitled to Secured Claims vote 3 GE Capital $9,659,574 Unimpaired; deemed to Secured Claim have accepted the Plan 4 Other Secured $830,000 Unimpaired; deemed to Claims have accepted the Plan 5 General $120,000,000 Impaired; entitled to Unsecured Claims vote 6 Common Stock Impaired; deemed to Interests have rejected the Plan Noteholders Will Own the Reorganized Company The Plan proposes that holders of Class 2 Senior Note Secured Claims will receive all shares of the New Common Stock, subject to dilution by exercise of the New Equity Incentive Options. Existing Securities Will Be Cancelled Class 6 Common Stock Interest Holders will not receive nor retain any property on account of their Common Stock Interests. On the Effective Date, the Existing Securities of Anchor Glass will be deemed cancelled. All of Anchor Glass' obligations under the Existing Securities will be consequently discharged. However, the Senior Notes Indenture will continue in effect solely to allow a Senior Notes Representative to make the distributions under the Plan and permit the Representative to maintain any rights it may have for fees, costs and expenses under the Senior Notes Indenture. In addition, the cancellation of the Senior Notes Indenture will not impair the rights and duties under all agreements between the Senior Notes Trustee and the beneficiaries of the trust created. New Securities to be Issued Reorganized Anchor Glass will: (a) on the Effective Date, authorize 25,000,000 shares of New Common Stock; (b) on the Distribution Date, issue up to 10,000,000 shares of New Common Stock for distribution to holders of Allowed Senior Notes Claims; and (c) reserve for issuance the number of shares of New Common Stock necessary to satisfy the required distributions of options granted under the New Equity Incentive Plan. The New Common Stock issued under the Plan will be subject to dilution based on: (i) the issuance of New Common Stock pursuant to the New Equity Incentive Plan; and (ii) any other shares of New Common Stock issued post- emergence. Releases As of the Effective Date, Anchor Glass and all Holders of Claims against Anchor Glass will be deemed to forever release, waive and discharge all claims, demands, debts, rights, causes of action, or liabilities then existing or thereafter arising against: (i) the Debtor, (ii) Reorganized Anchor Glass, (iii) Anchor Glass' directors and officers, (iv) the Ad Hoc Committee of Senior Noteholders, (v) the Note Purchasers, and (vi) the members, agents, representatives, and professionals for the Senior Noteholders and the Note Purchasers. A full-text copy of Anchor Glass' First Amended Plan of Reorganization is available for free at: http://researcharchives.com/t/s?5c2 A full-text copy of Anchor Glass First Amended Disclosure Statement is available for free at: http://researcharchives.com/t/s?5c3 Disclosure Statement Hearing Judge Paskay will convene a hearing on February 28, 2006, to consider approval of the Debtor's First Amended Disclosure Statement. 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. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANDROSCOGGIN ENERGY: Committee Taps Phoenix as Financial Expert --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Androscoggin Energy LLC's chapter 11 case asked the U.S. Bankruptcy Court for the District of Maine, five days prior to the hearing confirming the Company's Plan of Reorganization, for permission to employ Phoenix Management Services, Inc., as its financial expert, to: 1) render expert witness testimony on certain financial issues, including the capitalization of the Debtor at the time that Calpine Northbrook Corp. of Maine, Inc., and Calpine Eastern Corp., contributed capital to the Debtor for which it now asserts as an unsecured claims and the proper classification of the Calpine claims; and 2) perform all other necessary financial expert and investment banking services to the Committee in connection with the Debtor's chapter 11 case. Vincent J. Colista, a managing director and partner at Phoenix Management, is one of the lead professionals from the Firm performing services to the Committee. Mr. Colista charges $395 per hour for his services. Bankruptcy Court records don't show Phoenix Management's professionals' compensation rates. Phoenix Management assures the Court that it does not represent any interest materially adverse to the Debtor or its estate and the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and as modified by Section 1107(b). Headquartered in Boston, Massachusetts, Androscoggin Energy LLC, owns, operates, and maintains an approximately 150-megawatt, natural gas-fired cogeneration facility in Jay, Maine. The Company filed for chapter 11 protection on November 26, 2004 (Bankr. D. Me. Case No. 04-12221). Michael A. Fagone, Esq., at Bernstein, Shur, Sawyer & Nelson represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $207,000,000 and total debts of $157,000,000. The Bankruptcy Court confirmed the Debtor's Second Amended Chapter 11 Plan of Reorganization on Feb. 15, 2006. ASARCO LLC: 12 Debtors Want Baker Botts as Bankruptcy Counsel ------------------------------------------------------------- Certain subsidiaries of ASARCO LLC seek authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to employ Baker Botts LLP to serve as their bankruptcy counsel. The Subsidiary Debtors' Chapter 11 cases are jointly administered with ASARCO's case. The Subsidiary Debtors are: (1) Encycle, Inc.; (2) ASARCO Consulting, Inc.; (3) ALC, Inc.; (4) American Smelting and Refining Company; (5) AR Mexican Explorations, Inc.; (6) AR Sacaton, LLC; (7) ASARCO Master, Inc.; (8) ASARCO Oil and Gas Company, Inc.; (9) Bridgeview Management Company, Inc.; (10) Covington Land Company; (11) Government Gulch Mining Company, Limited; and (12) Salero Ranch, Unit III, Community Association, Inc. Baker Botts serves as bankruptcy counsel to ASARCO. Hence, Baker Botts is familiar with the complex financial affairs and business operations of ASARCO and its entire network of subsidiaries. Thomas L. Aldrich, the Subsidiary Debtors' Officer, contends that, if the Subsidiary Debtors are not permitted to engage Baker Botts, they will be deprived of the economics and efficiencies of utilizing counsel who possess a wealth of accumulated knowledge and information. Baker Botts will: (a) assist the Subsidiary Debtors in exploring restructuring alternatives and developing and implementing a reorganization strategy; (b) develop, negotiate, and promulgate a Chapter 11 plan of reorganization and disclosure statement for the Subsidiary Debtors; (c) advise the Subsidiary Debtors with respect to their rights and obligations as debtors and other areas of bankruptcy law; (d) protect and preserve the Subsidiary Debtors' estates, including, the prosecution, defense, negotiations and prosecutions of all actions on filed for or against the Subsidiary Debtors and their estates; (e) prepare all necessary applications, motions, answers, orders, briefs, reports and other papers in connection with the administration of their estates; (f) represent the Subsidiary Debtors at all hearings and proceedings; (g) perform all other necessary legal services in connection with their Chapter 11 cases; and (h) render general, non-bankruptcy legal services as the Subsidiary Debtors may from time to time request, including, without limitation, environmental, corporate, real estate, litigation, tax, and other matters. Given the fact that most of the Subsidiary Debtors have no assets and current operations, compensation for Baker Botts' services will be paid by ASARCO. Baker Botts will not keep separate time entries for each of the Subsidiary Debtors from the time records with services provided to ASARCO. Baker Botts will seek compensation for services provided to both ASARCO and the Subsidiary Debtors by filing a single, combined fee application. Baker Botts will be compensated on its standard hourly basis, plus reimbursement of expenses charges incurred: Professional Hourly Rate ------------ ----------- Partners $375-$700 Associates $195-$370 Paralegals $120-$185 Paralegal Clerks $50-$100 Jack L. Kinzie, Esq., at Baker Botts LLP, in Dallas, Texas, assures the Court that the firm does not represent any interest adverse to the Subsidiary Debtors, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Kinzie discloses that, in matters relating to intercompany claims, Baker Botts will not represent the Subsidiary Debtors in the liquidation of any potential claim held by or against ASARCO, or the determination of the priority status of any claim. Instead, co-counsel with Baker Boots will handle any matters related to any intercompany claim. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Subsidiary Panel & FCR Want Legal Analysis as Advisor ----------------------------------------------------------------- As part of ASARCO LLC and its debtor-affiliates' reorganization efforts, they hired Hamilton, Rabinovitz & Alschuler, Inc., to provide them consulting services in relation to asbestos and silica personal injury claims. The Official Committee of Unsecured Creditors for the Asbestos Subsidiary Debtors and Robert C. Pate, the legal representative for future asbestos personal injury claimants, see a need for a similar consultant. Hence, the Subsidiary Committee and the Futures Representative seek authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to retain Legal Analysis Systems, Inc., as their asbestos claims estimation consultant. The Subsidiary Committee and FCR believe that Legal Analysis' services are both necessary and appropriate and will assist the Subsidiary Committee and FCR in the negotiation, formulation, development, and implementation of a plan of reorganization. Legal Analysis is a firm noted for its expertise and experience in providing expert consultation and advice regarding estimation liabilities, development of procedures and facilities, and settlement of asbestos claims and other matters involving the valuation and treatment of asbestos bodily injury claims, Debra L. Innocenti, Esq., at Oppenheimer, Blend, Harrison & Tate, Inc., in San Antonio, Texas, tells the Court. Legal Analysis will: (a) provide estimation of the number and value of present and future asbestos personal injury claims; (b) develop claims procedures to be used in the development of financial models of payments and assets of a claims resolution trust; (c) review and analyze the Debtors' claims database and review and analyze the Debtors' resolution of asbestos claims; (d) evaluate reports and opinions of experts and consultants retained by other parties to the Debtors' bankruptcy proceedings; (e) evaluate and analyze proposed proofs of claim and bar dates and analyze data from the proofs of claim; (f) provide quantitative analyses of other matters related to asbestos bodily injury claims as may be requested by the Subsidiary Committee and FCR; and (g) provide testimony on matters required by the Subsidiary Committee and FCR. Legal Analysis will be paid on an hourly basis in accordance with its hourly rates: Professional Hourly Rate ------------ ----------- Mark A. Peterson $700 Daniel Relles 425 Mark A. Peterson, president of Legal Analysis Systems, Inc., discloses that Legal Analysis has performed work in various other bankruptcy matters, and many of the parties-in-interest in the current bankruptcy case may have had some involvement in some or all of those prior cases. Nonetheless, he assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code; holds no interest adverse to the Debtors and their estates; and has no connection to the Debtors, their creditors or their related parties. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000). ATA AIRLINES: Court Approves Sabre Restructuring Agreement ---------------------------------------------------------- Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis, Indiana, recounts that ATA Airlines, Inc., and Sabre Inc., are parties to: (1) a Distribution Agreement, which is a participating carrier agreement dated April 30, 1992; (2) a Hosting Agreement, which is an information technology services agreement dated October 2, 2003; and (3) a Software License, which is a master agreement for software license and professional services dated June 15, 2000. As part of its restructuring efforts, the Debtor developed a new business plan that contemplates a scheduled service business smaller than the scheduled service business existing when the Agreements were originally executed. After extensive negotiations, the Debtor and Sabre entered into a restructuring agreement, which reflects the Debtor's current needs. The Restructuring Agreement: (a) provides for several amendments to the Agreements that will substantially reduce the Debtor's costs; (b) establishes the cure that the Debtor will pay to Sabre in conjunction with the Debtor's assumption of the Amended Agreements as well as for the payment by the Debtor of the cure to Sabre over a period of time; and (c) reduces the Debtor's costs going forward by eliminating its obligation to continue to use and pay for products and services that are no longer necessary or useful to its operations. Sabre has agreed to reduce certain minimum monthly fees, resulting in substantial savings to the Debtor, Mr. Nelson relates. The payment of the cure amount will also fully satisfy all of Sabre's filed or scheduled claims. In exchange, the Debtor has agreed to extend the term of the Hosting Agreement and to a higher charge for one aspect of the Agreements. Accordingly, Judge Basil H. Lorch of the U.S. Bankruptcy Court for the Southern District of Indiana approves the Restructuring Agreement, and authorizes the Debtor to assume the Amended Agreements. The Restructuring Agreement is filed under seal. 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. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. 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. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Court Okays to Use ATSB Lenders' Cash Collateral -------------------------------------------------------------- As reported in the Troubled Company Reporter on Feb. 13, 2006, ATA Airlines, Inc., its debtor-affiliates and the ATSB Lenders stipulate that the carrier may use the ATSB Lenders' cash collateral and other collateral until the occurrence of the Plan Effective Date. Currently, the Reorganizing Debtors are: * seeking to negotiate definitive documentation for the Exit Facility and other transactions contemplated in connection with the Reorganizing Debtors' emergence from the Chapter 11 cases; and * preparing to consummate the Amended Plan and cause the occurrence of the Effective Date. The Debtors covenant with the ATSB Lenders to maintain: (i) at least $35,000,000 in Available Cash during the Extension Period; and (ii) no less than the greater of the Available Cash amount or 90% of the Available Cash amount forecasted at each week end in the Debtors' cash forecast: Week Ending Available Cash 90% of Available Cash ----------- -------------- --------------------- 02/03/06 $41,502,353 $37,352,117 02/10/06 $41,843,142 $37,658,828 02/17/06 $33,618,989 $35,000,000 02/24/06 $36,924,044 $35,000,000 03/3/06 Not Applicable $35,000,000 * * * The U.S. Bankruptcy Court for the Southern District of Indiana put its stamp of approval on the stipulation authorizing the Reorganizing Debtors to use the ATSB Lenders' cash collateral and other collateral until the occurrence of the Plan Effective Date. 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. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. 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. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000) AXCESS INT'L: December 31 Balance Sheet Upside-Down by $4.59 Mil. ----------------------------------------------------------------- AXCESS International Inc. reported it financial results for the fourth quarter and fiscal year ended Dec. 31, 2005. For the three months ended Dec. 31, 2005, AXCESS International's Radio Frequency Identification (RFID) systems revenues increased to $417,751 from RFID revenues of $151,080 for the same period in 2004. For the fiscal year ended Dec. 31, 2005, RFID revenues increased to $986,377 from revenues of $772,475 in 2004. The increase in revenues in the fourth quarter and on an annual basis is due to the Company gaining traction in the active RFID market and continued improvement in technology and customer system implementation. For the fiscal year ended Dec. 31, 2005, AXCESS' net loss decreased to $3,256,054 from a net loss of $3,416,554 for the year ended Dec. 31, 2004. Financing Transactions In December 2005, AXCESS closed on a $813,021 preferred stock offering for 956,495 shares (that pay no dividends) and 956,495 five-year warrants to purchase the Company's common stock at $1.50 per share. A large portion of that funding came from its largest shareholder group, including Amphion Innovations PLC (AMP.L), a company that creates, operates, and finances technology companies and continues to support AXCESS and its progress. Going Concern Doubt Hein & Associates LLP expressed substantial doubt about AXCESS International's ability to continue as a going concern after reviewing the Company's financial statements for the years ended December 31, 2004 and 2003. "AXCESS' recurring losses from operations and resulting continued dependence on external financing raise substantial doubts about its ability to continue as a going concern," the auditing firm said. "If the Company is unable to generate profitable operations or raise additional capital, it may be forced to seek protection under federal bankruptcy laws," management's warned. For the fiscal year ended Dec. 31, 2005, AXCESS International reported total assets of $932,979 and total liabilities of $5,520,301. Headquartered in Dallas, Texas, AXCESS International Inc. -- http://www.axcessinc.com-- through its proprietary technology, is a manufacturer of advanced physical security and enterprise asset management systems that can automatically locate, identify, track, monitor, count, and protect people, property and vehicles. The purpose of the systems is: to reduce loss and liability; to increase the efficiency of a client's employees; and to improve the management of personal property, logistics, and facilities. Axcess utilizes two patented and integrated technologies: battery- powered wireless tagging called Active-Radio Frequency Identification (RFID) and network based streaming digital video (IPTV). As of Dec. 31, 2005, AXCESS International's stockholders' deficit widened to $4,587,322 from a deficit of $4,581,010 at Dec. 31, 2004. BIOGEN IDEC: S&P Lifts Sr. Unsecured Debt Rating to BBB from BB+ ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and senior unsecured debt ratings on biopharmaceutical company Biogen Idec Inc. to 'BBB' from 'BB+'. The outlook is stable. "The upgrade reflects the continued strong performance of a key product in the face of newer competition, exceptional growth in a co-promoted product, and the financial capacity of a now essentially debt-free balance sheet," said Standard & Poor's credit analyst David Lugg. "Also, concerns that the marketing withdrawal of the company's promising multiple sclerosis (MS) drug Tysabri would be disruptive to management and operations have not been borne out." The ratings on Biogen Idec reflect the biopharmaceutical company's leading positions in the treatment of cancer and MS, as well as its strong financial profile. These factors are partially offset by the company's high revenue dependence on only two drugs and its relatively thin near-term product pipeline. Formed in late 2003 through the all-equity merger of Biogen Inc. and Idec Pharmaceutical Corp., Cambridge, Massachusetts-based Biogen Idec is the third-largest biopharmaceutical company in the U.S. based on sales. It specializes in the development of monoclonal antibody-based cancer treatments and autoimmune disease treatments. The company currently has four marketed products: * Avonex, for the treatment of MS; * Rituxan and Zevalin, both for the treatment of B-cell non-Hodgkin's lymphoma; and * Amevive, for the treatment of psoriasis. Of these, only Avonex and Rituxan have achieved significant market success. Indeed, Biogen Idec is seeking to divest Amevive. The company is expected to continue turning in solid operational performance. EBITDA margins are roughly 40%, and free cash flow is estimated to be in excess of $400 million for 2005. Return on capital is depressed because of the all-equity merger. Financially, with the company's repayment of the majority of its LYONs issue, Biogen Idec is virtually unleveraged. Management's growth strategy now places a greater emphasis on externally generated growth, in particular the licensing or acquisition of products or companies. In 2005, the company licensed three drugs early in clinical development from Protein Design Laboratories Inc. (unrated) for total consideration of $100 million. It is likely that this activity will accelerate and may require debt financing. Standard & Poor's anticipates that any borrowings utilized to achieve growth objectives will be moderate and that credit measures will remain consistent with an investment-grade rating. BOYD GAMING: P. Chakmak Replacing CFO E. Landau Upon Retirement --------------------------------------------------------------- Boyd Gaming Corporation's (NYSE: BYD) long-time Chief Financial Officer Ellis Landau has informed the Company that he intends to retire on May 31, 2006. Mr. Landau, 62, has been the Company's CFO since he joined Boyd Gaming in 1990, where he led or played a significant role in the Company's financial, acquisition, and development strategies and endeavors during that time. The Company said that Paul Chakmak, currently Senior Vice President for Finance and Treasurer, will be promoted to succeed Landau as Chief Financial Officer and Treasurer on June 1, 2006. Bill Boyd, Chairman and Chief Executive Officer of Boyd Gaming said, "Ellis has played a tremendous role in the growth of our Company over the past 16 years as we moved from a small private company to one of the leading companies in our industry today. I know how respected he is both inside Boyd Gaming and in the financial community at large for both his financial and business skills and for his integrity. I am really pleased that he has been on our team for these many years, and speak for so many others at Boyd Gaming in wishing him well as he enjoys his years ahead." Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) -- http://www.boydgaming.com/-- is a leading diversified owner and operator of 19 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana and Louisiana. The Company is also developing Echelon Place, a world class destination on the Las Vegas Strip, expected to open in early 2010. Additionally, the Company was recently recognized by Forbes Magazine as the best managed company in the category of Hotels, Restaurant and Leisure. * * * As reported in the Troubled Company Reporter on Jan. 30, 2006, Standard & Poor's Ratings Services assigned a 'B+' rating to Boyd Gaming Corp.'s proposed $250 million senior subordinated notes due 2016. At the same time, Standard & Poor's affirmed its existing ratings on the Las Vegas-based casino operator, including its 'BB' issuer credit rating. S&P said the outlook is stable. BUFFALO MOLDED: Wants McDonald Hopkins as Substitute Counsel ------------------------------------------------------------ Buffalo Molded Plastics, Inc., dba Andover Industries asks the Honorable Thomas P. Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania in Erie for permission to employ McDonald Hopkins, Co., L.P.A. The Debtor wants to substitute McDonald Hopkins for Lindahl Gross Lievois, P.C., its current bankruptcy counsel. McDonald Hopkins purchased substantially all of the assets of Lindahl Gross. Nicole C. Amey, Esq., at McDonald Hopkins in Bingham, Michigan, relates that, effective Jan. 1, 2006, employees previously employed by Lindahl Gross, including shareholders and attorneys, are now employed by McDonald Hopkins. Stephen M. Gross, Esq., at Lindahl Gross in Bingham, Michigan, said that the substitution will not cause any delay in its bankruptcy case because the particular attorneys responsible for the Debtor's representation will continue to do so. Papers filed with the Court did not indicate the hourly rate the professionals will be paid. Headquartered in Andover, Ohio, Buffalo Molded Plastics, Inc., dba Andover Industries -- http://www.andoverplastics.com/-- manufactures rocker panels, grilles, pillars and body side molding components for General Motors Corp. and DaimlerChrysler. The Company filed for chapter 11 protection on Oct. 21, 2004 (Bankr. W.D. Pa. Case No. 04-12782). David Bruce Salzman, Esq., at Campbell & Levine, LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts in the $10 million to $50 million range. David W. Lampl, Esq., at Leech Tishman Fuscaldo & Lampl, LLC, represents the Official Committee of Unsecured Creditors in the Debtor's chapter 11 case. BROOKLYN HOSPITAL: Court Fixes April 21 as Claims Bar Date ---------------------------------------------------------- The United States Bankruptcy Court for the Eastern District of New York, set Apr. 21, 2006, at 4:00 p.m., as the deadline for all creditors owed money by The Brooklyn Hospital Center and its debtor-affiliate Caledonian Health Center, Inc., on account of claims arising prior to Sept. 30, 2005, to file their proofs of claim. Creditors must file written proofs of claim on or before the April 21 Claims Bar Date and those forms must be delivered to: Clerk of the U.S. Bankruptcy Court Eastern District of New York The Brooklyn Hospital Center Claims Processing 271 Cadman Plaza East, Suite 1595 Brooklyn, New York 11201 Headquartered in Brooklyn, New York, The Brooklyn Hospital Center -- http://www.tbh.org-- provides a variety of inpatient and outpatient services and education programs to improve the well being of its community. The Debtor, together with Caledonian Health Center, Inc., filed for chapter 11 protection on Sept. 30, 2005 (Bankr. E.D.N.Y. Case No. 05-26990). Lawrence M. Handelsman, Esq., and Eric M. Kay, Esq., at Stroock & Stroock & Lavan LLP represent the Debtors in their restructuring efforts. Glenn B. Rice, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. Clifford A. Zucker, CPA, a member at J.H. Cohn LLP, provides the Debtors with accounting and financial advisory services; the Committee retained Alvarez & Marsal, LLC, as its financial advisor. When the Debtors filed for protection from their creditors, they listed $233,000,000 in assets and $337,000,000 in debts. CALPINE CORP: Construction Finance Wants Waiver from Noteholders ---------------------------------------------------------------- Calpine Construction Finance Company, L.P. and CCFC Finance Corp. commenced a consent solicitation, for holders of record as of Feb. 21, 2006, to seek a waiver under the indenture governing their $415,000,000 principal amount of Second Priority Senior Secured Floating Rate Notes due 2011 and that CCFC is requesting a similar waiver from the lenders under the credit and guarantee agreement governing its $385,000,000 First Priority Senior Secured Institutional Term Loans due 2009. The proposed waivers would waive certain existing defaults under the Credit Agreement and Indenture that occurred following the filing by Calpine Corporation (OTC Pink Sheets: CPNLQ), the Company's ultimate parent, and certain of Calpine Corporation's controlled subsidiaries, for bankruptcy on Dec. 20, 2005. The defaults under the Credit Agreement and Indenture resulted from the failure of one of Calpine Corporation's controlled subsidiaries to make payments to CCFC under a gas sale and power purchase agreement. Obtaining both waivers would, among other things, have the effect of permitting CCFC to make certain distributions to CCFC Preferred Holdings, LLC, its indirect parent, to enable CCFCP to pay the semi-annual dividend on its redeemable preferred shares. With respect to the Indenture, a waiver agreement will be executed following receipt by the Company of the consent of at least a majority in aggregate principal amount of outstanding Notes. With respect to the Credit Agreement, a similar waiver agreement will be executed following receipt by CCFC of the consent of lenders holding more than 50% of the aggregate outstanding Term Loans. The effectiveness of each of the waivers is conditioned, among other things, upon the effectiveness of the other. The waivers will be effective immediately upon satisfaction of the conditions precedent to their effectiveness, which may occur prior to the expiration of the consent solicitation and request for waiver under the Credit Agreement. Consents given in the consent solicitation may be revoked at any time prior to the effectiveness of the waiver under the Indenture, but not thereafter. Upon their effectiveness, the respective waiver agreements will implement the waivers for all holders of the Notes and lenders under the Term Loans whether or not they provided their consent. The consent solicitation under the Indenture and waiver request under the Credit Agreement will expire at 5:00 p.m., New York City time, on Mar. 3, 2006, unless extended. The consent solicitation may be amended, extended or terminated, at the option of the Company, as set forth in the solicitation letter and consent form from the Company. For a complete statement of the terms and conditions of the consent solicitation, holders of the Notes should refer to the solicitation letter. The Company has retained Merrill Lynch & Co. to serve as Solicitation Agent for the consent solicitation. Global Bondholder Services Corporation will act as Information Agent in connection with the consent solicitation. Questions concerning the terms of the consent solicitation, and requests for copies of the solicitation letter, the consent form or other related documents should be directed to the Information Agent by calling 866-736-2200. Wilmington Trust Company will act as Tabulation Agent. Requests for assistance in delivering consents should be directed to the Tabulation Agent at 302-636-6181. Goldman Sachs Credit Partners L.P. is the administrative agent under the Credit Agreement. The administrative agent will be contacting lenders under the Credit Agreement in connection with CCFC's request for the waiver. About Calpine Construction Finance Company L.P. CCFC is an indirect subsidiary of Calpine Corporation. It was formed to develop, own and operate power generating facilities and currently owns and operates six core natural gas-fired combined- cycle facilities, which have a combined estimated peak capacity of 3,667 megawatts and a combined estimated nominal capacity of 3,347 megawatts. The facilities are the 594-megawatt Brazos Valley project in Thompsons, Texas; the 642-megawatt Hermiston project near Hermiston, Oregon; the 751-megawatt Magic Valley project near Edinburg, Texas; the 609-megawatt Osprey project near Auburndale, Florida; the 543-megawatt Sutter project near Yuba City, California; and the 528-megawatt Westbrook project near Westbrook, Maine. CCFC Finance Corp. is an indirect subsidiary of Calpine Corporation that was formed solely to act as co-issuer of the Notes. A major power company, Calpine Corporation supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. About Calpine Corporation 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. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. CANWEST MEDIAWORKS: Moody's Confirms Sr. Subor. Bond Rating at B2 ----------------------------------------------------------------- Moody's Investors Service confirmed the Ba3 Corporate Family Rating and B2 Senior Subordinate rating of CanWest MediaWorks Inc., and changed the outlook to negative. Moody's also withdrew CanWest's senior secured and senior unsecured ratings as previously rated debt has been repaid and Moody's has not been requested to rate CanWest's new bank facility. In September 2005, Moody's placed the ratings of CanWest under review for possible upgrade following the company's decision to sell a minority interest in its Canadian newspaper and interactive media assets. The confirmation of CanWest's Ba3 Corporate Family Rating reflects a more modest debt reduction and weaker operating results than Moody's expected; Canwest raised about $100 million less in equity than expected and their recently announced Canadian and Australian broadcast operations underperformed Moody's expectations. Moody's expects poor Canadian broadcast segment results for the next two years, moderating results for Network Ten in Australia, margin pressure in the newspaper segment, and increasing capital expenditures to keep credit metrics weak for the rating category, despite likely modest improvement through 2007. The Corporate Family Rating is supported by CanWest's significant market positions in Canadian newspaper publishing, Canadian TV broadcasting and Australian TV broadcasting, the divisibility and salability of Canwest's diverse and largely publicly-traded asset mix, as well as management's continued commitment to further reduce debt. The rating is constrained, however, by Moody's expectation of weak credit metrics for the rating in 2007. The negative outlook reflects those expected weak metrics. As the company has become organizationally more complex, with all assets except Canadian TV and the National Post newspaper now only partially owned, the Retained Cash Flow and Free Cash Flow metrics become relatively more important as they are the only ones to reflect Canwest's minority interest distributions. By 2007, Moody's expects Retained Cash Flow/Debt of 11% and Free Cash Flow/Debt of just 4%, both after Moody's standard adjustments. The ratings may be considered for a downgrade if CanWest is unable to improve upon these expectations, towards mid-teens and mid- single digits respectively. This would likely be caused by an inability to restore the Canadian broadcasting business to levels of profitability consistent with its peers and its track record, or if it incurs debt for acquisitions. The ratings would be considered for an upgrade if the company is able to achieve sustainable free cash flow/debt towards the upper single digits and retained cash flow/debt in the upper teens, most likely caused by a strong improvement in the company's Canadian broadcasting segment and the sale of other non-strategic assets to reduce debt. Moody's is concerned that CanWest's current lack of competitive Canadian television shows might take a number of years to fix, and may involve increased programming costs which could further pressure margins. At the same time, viewership continues to migrate from conventional TV towards specialty channels, where Canwest has only a minor market position. Moody's notes, however, that Canwest has in the past demonstrated market leadership in Canadian TV broadcasting, along with the disproportionate cash flows associated with it, and it is possible that they may do so again. It is also likely that Canwest will need to incur higher capital expenditures for high definition broadcasting. Moody's believes that the company's Canadian newspaper business will continue to grow in the low single digit range, although Canwest, along with its Canadian newspaper competitors, will face a continuation of the margin pressure of the last few years, caused by a continuing decline in circulation as readers migrate to electronic media. Moody's currently expects relatively modest consolidated free cash flow generation to limit significant reduction in debt, absent further asset disposals. The senior subordinated rating is confirmed at two notches below the Corporate Family Rating due to the subordinated nature of its position against both operating company debt and the senior secured debt at the company itself. Moody's estimates that approximately 70% of CanWest's consolidated debt is structurally or legally superior to the company's remaining senior subordinated debt issue of CN$937 million. Outlook Actions: Issuer: CanWest MediaWorks Inc. * Outlook, Changed To Negative From Rating Under Review Confirmations: Issuer: CanWest MediaWorks Inc. * Corporate Family Rating, Confirmed at Ba3 * Senior Subordinated Regular Bond/Debenture, Confirmed at B2 Withdrawals: Issuer: CanWest MediaWorks Inc. * Senior Secured Bank Credit Facility, Withdrawn, previously rated Ba2 CanWest MediaWorks Inc., is a communications holding company based in Winnipeg, Manitoba Canada, with interests in TV, radio and publishing operations in Canada, Australia, New Zealand, the Republic of Ireland, Israel, Turkey and the UK. CARRINGTON MORTGAGE: Moody's Rates Class M-10 Certificates at Ba1 ----------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by Carrington Mortgage Loan Trust, Series 2006-NC1 and ratings ranging from Aa1 to Ba1 to the subordinate certificates. The securitization is backed by New Century originated adjustable- rate and fixed-rate sub-prime mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization and excess spread. Moody's expects collateral losses to range from 4.40% to 4.90%. New Century Mortgage Corporation will service the loans. Moody's has assigned New Century Mortgage Corporation its servicer quality rating as a primary servicer of subprime loans. Actions taken are: Issuer: Carrington Mortgage Loan Trust, Series 2006-NC1 * Class A-1, Assigned Aaa * Class A-2, Assigned Aaa * Class A-3, Assigned Aaa * Class A-4, Assigned Aaa * Class M-1, Assigned Aa1 * Class M-2, Assigned Aa2 * Class M-3, Assigned Aa3 * Class M-4, Assigned A1 * Class M-5, Assigned A2 * Class M-6, Assigned A3 * Class M-7, Assigned Baa1 * Class M-8, Assigned Baa2 * Class M-9, Assigned Baa3 * Class M-10, Assigned Ba1 CASE NEW HOLLAND: Moody's Rates $350 Mil. Senior Notes at Ba3 ------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 rating to the $350 million of senior notes issued by Case New Holland Inc., a 100%-owned subsidiary of CNH Global N.V. The notes are unconditionally guaranteed by CNH, certain direct and indirect domestic subsidiaries of Case, and certain direct and indirect non-domestic subsidiaries of CNH. Proceeds will be used to refinance maturing debt. The rating outlook is negative. The Ba3 rating and negative outlook reflect the ongoing difficulties that CNH has faced in achieving a fully effective integration of the Case and New Holland brands, and the likely softening in agricultural equipment markets during 2006. Although the company has had a degree of success in integrating the design and manufacturing components of the two businesses, it continues to face important challenges, particularly in the area of strengthening its dual-brand marketing strategy and it global dealer network. The company must also continue to improve operating efficiencies by reducing purchasing costs and further streamlining its global manufacturing footprint. As a result of these ongoing challenges, CNH's operating performance and return measures continue to under perform relative to its peers, its market share has eroded, and its debt protection measures remain weak for the Ba3 rating level. In order to stabilize its position at the current rating, CNH will need to capitalize on recent reorganization initiatives designed to better position the Case and New Holland product offerings relative to competitors and to stabilize its share position. In addition, it will be important for the company to continue strengthening its credit metrics from their currently weak levels. The rating agency would view it positively if credit metrics demonstrated improvement from year-end 2005 levels that approximated the following: operating margin from 4.4% to 5.5%; interest coverage from just over 1x to a level in excess of 2x; and a reduction in debt/EBITDA from 8x to a level approximating 6x. CNH Global N.V., headquartered in the Netherlands, is a leading global producer of agricultural and construction equipment. Case New Holland Inc., headquartered in Lake Forest, Illinois, is a wholly owned subsidiary of CNH., and indirectly through its subsidiaries, owns substantially all of the US assets of CNH. CDC MORTGAGE: S&P Downgrades Rating on Class B Debt to B from BB ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings to 'B' from 'BB' on class B from CDC Mortgage Capital Trust 2001-HE1 and class B-2 from CDC Mortgage Capital Trust 2002-HE2. Both ratings remain on CreditWatch with negative implications. The lowered ratings reflect actual and projected credit support percentages that are insufficient to maintain the previous ratings. Excess interest has been insufficient to cover realized losses for both series. During the past 12 months, average monthly realized losses for series 2001-HE1 were $121,708, which is 44.85% more than the average monthly excess interest of $84,026 generated during the period. Average monthly realized losses for series 2002-HE2 were $344,404 for the same period, which is 78.79% more than the average monthly excess interest of $192,632. Overcollateralization levels for both series are below their targets because overcollateralization is being used to cover losses. The ratings on the two downgraded classes remain on CreditWatch negative because of the additional projected losses expected to result from high delinquencies. As of the January 2006 distribution date, total delinquencies for series 2001-HE1 were 45.08%, with 25.79% categorized as seriously delinquent (90-plus days, foreclosure, and REO); for series 2002-HE2, total delinquencies were 38.31%, with 19.1% categorized as seriously delinquent. Standard & Poor's will continue to closely monitor the performance of these transactions. If the delinquent loans translate into realized losses that continue to outpace excess interest, the ratings on these classes are likely to be cut to 'CCC' or lower, depending on the size of the losses and the remaining credit support. If losses are considerably lower than our projections, the current 'B' ratings are likely to be affirmed. The collateral for all of the transactions consists of pools of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings lowered and remaining on creditwatch negative: CDC Mortgage Capital Trust Rating Series Class To From ------ ----- -- ---- 2001-HE1 B B/Watch Neg BB/Watch Neg 2002-HE2 B-2 B/Watch Neg BB/Watch Neg CENTENNIAL COMMS: Updates Financial Outlook for FY Ending May 31 ---------------------------------------------------------------- Centennial Communications Corp. (NASDAQ: CYCL) updated its financial outlook for the 2006 fiscal year ending May 31, 2006. For the 2006 fiscal year, the Company now expects consolidated adjusted operating income (AOI) from continuing operations between $350 million and $360 million, including an approximately $9 million startup loss related to its recent launch of service in Grand Rapids and Lansing, Michigan. Centennial also now anticipates consolidated capital expenditures of approximately $150 million for fiscal 2006. The Company is adjusting its fiscal 2006 outlook to reflect several operating trends, including weaker than expected subscriber growth in its Caribbean wireless segment resulting in lower revenues and AOI. Centennial expects postpaid average revenue per user (ARPU) in Puerto Rico to decline below $70 for the fiscal third quarter due to lower access and airtime revenue. In addition, AOI continues to be pressured by higher customer acquisition costs associated with stronger than expected customer activations in U.S. wireless, as well as higher costs related to increased minutes-of-use and increased equipment expense resulting from GSM handset upgrades. "We took many important steps during 2005 to improve an already strong competitive position in each of our local markets, and are beginning to see good progress as we measure the early impact of these initiatives," said Michael J. Small, Centennial's chief executive officer. "With our network replacement and upgrade complete in Puerto Rico, the reach, reliability and capabilities of our network are once again proving to be an important competitive differentiator as we deliver next-generation services. We also reorganized our customer-facing organizations in Puerto Rico and launched new markets in our Midwest footprint to support renewed U.S. subscriber growth. We are confident that our local market strategy remains the right one." In U.S. wireless, Centennial expects to grow postpaid subscribers by approximately 20,000 for the fiscal third quarter ending February 28, 2006, compared to a loss of 1,600 postpaid subscribers during the year-ago quarter. In Caribbean wireless, the Company does not expect to add postpaid subscribers during the fiscal third quarter, versus approximately 13,200 net postpaid subscriber additions during the year-ago quarter. Fiscal 2006 Outlook Updated Outlook Previous Outlook --------------- ---------------- Consolidated Adjusted $350 million to $370 million to Operating Income (AOI) $360 million $390 million Consolidated Capital $150 million $160 million Expenditures (Capex) Consolidated AOI from continuing operations for fiscal year 2005 was $366.4 million, which included $9.1 million of non-recurring items. The Company has not included a reconciliation of projected AOI because projections for some components of this reconciliation are not possible to forecast at this time. Based in Wall, N.J., Centennial Communications Corp. (NASDAQ:CYCL) -- http://www.centennialwireless.com/-- is a leading provider of regional wireless and integrated communications services in the United States and the Caribbean with approximately 1.3 million wireless subscribers and 326,400 access lines and equivalents. The U.S. business owns and operates wireless networks in the Midwest and Southeast covering parts of six states. Centennial's Caribbean business owns and operates wireless networks in Puerto Rico, the Dominican Republic and the U.S. Virgin Islands and provides facilities-based integrated voice, data and Internet solutions. Welsh, Carson, Anderson & Stowe and an affiliate of the Blackstone Group are controlling shareholders of Centennial. At Nov. 30, 2005, Centennial Communications' balance sheet showed a $490,868,000 stockholders' deficit, compared to a $518,432,000 deficit at May 31, 2005. CENTURYTEL: Moody's Affirms Preferred Shelf (P) Ba1 Rating ---------------------------------------------------------- Moody's Investors Services affirmed CenturyTel's Baa2 senior unsecured long-term rating following the company's authorization of a $1.0 billion share repurchase program on Feb. 22, 2006. Moody's believes that given the strength of the company's cash flows and strong balance sheet at 12/31/05, the execution of the share repurchase program will not materially weaken the company's credit metrics. Moody's anticipates that CenturyTel will have sufficient liquidity and financial flexibility to maintain its financial metrics close to current levels at the end of 2007. Moody's also assumes that should CenturyTel identify and pursue any significant acquisitions over the next twelve to sixteen months, the company will curtail its execution of this share repurchase program. As part of this rating action, Moody's affirms these ratings: * Senior Unsecured Rating -- Baa2 * Senior Unsecured Shelf -- (P) Baa2 * Preferred Shelf -- (P) Ba1 * Commercial Paper -- P-2 The rating outlook is stable. CenturyTel, Inc., headquartered in Monroe, Louisiana is a regional communications company engaged primarily in providing local exchange telephone services in various regions of the United States. CHEMED CORP: Discloses Financial Results for Fourth Quarter ----------------------------------------------------------- Chemed Corporation (NYSE:CHE), reported financial results for its fourth quarter ended December 31, 2005, versus the comparable prior-year period, as follows: Consolidated Operating Results from Continuing Operations -- Consolidated Revenue increased 16% to $248 million; -- Diluted EPS from Continuing Operations of $.15; -- Adjusted Pro Forma Diluted EPS from Continuing Operations of $.61 after excluding settlement of the California wage and hour class action, LTIP and certain other items. VITAS generated record operating results -- Quarterly Net Patient Revenue of $169 million, up 19%; -- Average Daily Census (ADC) of 10,412, up 14%; -- Adjusted EBITDA of $24.7 million, an increase of 21%. Roto-Rooter segment reported record Revenue and Adjusted EBITDA -- Revenue of $79 million, an increase of 10%; -- Adjusted EBITDA of $14.5 million, an increase of 21%. "VITAS continues to generate excellent census and admissions growth, with fourth-quarter ADC totaling 10,412, up 14%, and admissions in the quarter of 12,487, an increase of 8% over the prior-year quarter. Net income for VITAS in the quarter was $2.5 million. After excluding the aftertax cost of the class action litigation in California, LTIP and OIG investigation, VITAS' net income of $13.8 million increased 29% when compared to the prior-year adjusted pro forma net income. VITAS had a fourth- quarter adjusted EBITDA margin of 14.6%," stated Kevin McNamara, Chemed president and chief executive officer. "The litigation settlement involved a wage-hour class action case pending against VITAS in California. This case was filed in April 2004, shortly after completion of the VITAS acquisition. We accrued a pretax liability of $2.3 million and accounted for this issue as an assumed liability on our opening balance sheet. Since the establishment of this accrual, there has been a significant increase in litigation, high settlements and unfavorable verdicts against companies involving wage-hour claims in California. Recognizing this legal climate, we have reached a tentative agreement to resolve this matter. Generally Accepted Accounting Principles (GAAP) do not allow for a period of more than 12-months post acquisition to finalize the quantification of existing contingencies on the opening balance sheet of an acquisition. As a result, VITAS' fourth-quarter operating results include an aftertax charge of $10.8 million representing the portion of this preliminary settlement not accounted for on VITAS' opening balance sheet. "Roto-Rooter also reported solid financial operating results. For the fourth quarter of 2005, Roto-Rooter had revenue of $79 million, an increase of 10%. Adjusted EBITDA was $14.5 million, an increase of 21% at a margin of 18.3%." Guidance for 2006 "Going into 2006," Mr. Williams stated, "we anticipate VITAS to generate a revenue increase of 15% to 18%, increased admissions of 7% to 9% and continued expansion of EBITDA margins through the leveraging of central support costs. This should result in VITAS increasing its adjusted EBITDA margin approximately 60 to 80 basis points. "Roto-Rooter is estimated to generate a 5% to 6% increase in revenue in 2006, with adjusted EBITDA margins averaging between 16% and 17%. "Based upon these factors and an average diluted share count of 27.0 million, our expectation is that full-year 2006 earnings per diluted share from continuing operations, excluding any charges or credits not indicative of ongoing operations as well as excluding any expense for stock options required under SFAS 123R, will be in the range of $2.20 to $2.35." Chemed Corp. operates VITAS Healthcare Corporation (VITAS), the nation's largest provider of end-of-life care, and Roto-Rooter, the nation's largest commercial and residential plumbing and drain cleaning services provider. * * * As reported in the Troubled Company Reporter on Jan. 26, 2005, Moody's Investors Service assigned a Ba2 senior implied rating to Chemed Corporation's proposed credit facilities, and a Ba3 rating to the Company's existing senior notes. Moody's also assigned an SGL-1 liquidity rating to the Company. Moody's said the ratings outlook is stable. This is the first time Moody's has assigned ratings to Chemed Corp. The ratings assigned: * $140 Million Senior Secured Revolver maturing 2010 -- Ba2 * $85 Million Senior Secured Bank Debt maturing 2010 -- Ba2 * $150 Million 8.75% Senior Notes due 2011 -- Ba3 * Senior Implied -- Ba2 * Senior Unsecured Issuer Rating -- Ba3 * SGL -- 1 * Outlook -- Stable As reported in the Troubled Company Reporter on Jan. 26, 2005, Standard & Poor's Ratings Services raised its ratings on Cincinnati, Ohio-based hospice, plumbing, and drain cleaning services provider Chemed Corporation. The corporate credit rating was raised to 'BB-' from 'B+', the senior secured debt rating to 'BB' from 'B+', and the senior unsecured debt rating to 'B' from 'B-'. At the same time, Standard & Poor's assigned a 'BB' rating and a recovery rating of '1' to Chemed's new senior secured credit facilities. These consist of an $85 million senior secured term loan and a $140 million revolving credit facility, both due in 2010. Standard & Poor's also revised its outlook on Chemed to stable from negative. CHEMTURA CORP: Focusing on Performance Chemicals Business --------------------------------------------------------- Chemtura Corporation (NYSE: CEM) disclosed its organizational changes geared towards placing greater focus on specific businesses and functional areas. Performance Chemicals will report directly to Robert L. Wood, chairman and chief executive officer who believes that "direct interaction with those business leaders will improve customer focus and create better communication, accountability and delivery of results." Myles S. Odaniell, former executive vice president of Performance Chemicals, is leaving the company to pursue other interests. Robert B. Weiner, former executive vice president of Supply Chain Operations, also is leaving the company to pursue other interests. A replacement will be named in the near future. Chemtura's Global Research & Development group, headed by John A. Lacadie, will report to Gregory E. McDaniel, who has been promoted to executive vice president, Strategy, New Business Development and Technology. Mr. McDaniel will also have responsibility for Industrial Water Treatment on an interim basis. Global Customer Care and Logistics will report to Marcus Meadows- Smith, executive vice president, Crop Protection and Consumer Products. Gary Yeaw has been promoted to executive vice president, Human Resources and Communications, adding Communications and Environmental, Health & Safety to his previous Human Resources responsibilities. Karen Osar, executive vice president and chief financial officer, will take direct responsibility for Investor Relations, which has been split out of the Communications group. "We've made a number of organization changes to enable me to focus more directly on our Performance Chemicals businesses, to align our technology organization with our strategy and new business opportunities, and to bring more customer-focused leadership to Global Customer Care and Logistics," said Mr. Wood. "We believe these changes will enable us to improve our performance and make greater strides in achieving our financial and process excellence goals. "I want to thank Myles Odaniell and Bob Weiner for their significant contributions to the transformation of Chemtura and wish them great success in their future endeavors," said Wood. Chemtura Corporation -- http://www.chemtura.com/-- is a global manufacturer and marketer of specialty chemicals, crop protection and pool, spa and home care products. Headquartered in Middlebury, Connecticut, the company has approximately 7,300 employees around the world. * * * As reported in the Troubled Company Reporter on Sept. 26, 2005, Moody's Investors Service affirmed the ratings of Chemtura Corporation (Chemtura -- Corporate Family Rating of Ba1) and changed the outlook on the company's ratings to negative from stable. Specifically, Moody's affirmed these ratings: * Corporate Family Rating -- Ba1 * Senior Unsecured Notes due 2012, $375 million -- Ba1 * Senior Unsecured Floating Rate Notes due 2010, $225 million -- Ba1 * Senior Unsecured Notes, $260 million due 2023 and 2026 -- Ba1 * Senior Unsecured Notes, $10 million due 2006 -- Ba1 * Senior Unsecured Notes, $400 million due 2009 -- Ba1 As reported in the Troubled Company Reporter on July 7, 2005, Standard & Poor's Ratings Services raised its ratings, including the corporate credit rating to 'BB+' from 'BB-', on Chemtura Corp. (fka Crompton Corp.). S&P said the outlook is stable. COMDISCO INC: Makes Distribution to Contingent Rights Holders ------------------------------------------------------------- Comdisco Holding Company, Inc. (OTC:CDCO) will make a cash payment of $.0247 per right on the contingent distribution rights (OTC:CDCOR), payable on Mar. 16, 2006 to contingent distribution rights holders of record on Mar. 6, 2006. This distribution relates to sharing amounts due contingent distribution rights holders in conjunction with recent settlements from the Disputed Claims Reserve of the Bankrupt estate of Comdisco, Inc. Comdisco Holding Company has approximately 152.3 million contingent distribution rights outstanding. Effect on Common Stock The plan of reorganization of the company's predecessor, Comdisco, Inc., entitles holders of Comdisco Holding Company's contingent distribution rights to share at increasing percentages in proceeds realized from Comdisco Holding Company's assets after the minimum percentage recovery threshold was achieved in May, 2003. The amount due contingent distribution rights holders is based on the amount and timing of distributions made to former creditors of the company's predecessor, Comdisco, Inc., and is impacted by both the value received from the orderly sale or run-off of Comdisco Holding Company's assets and on the resolution of disputed claims still pending in the bankruptcy estate of Comdisco, Inc. As the disputed claims are allowed or otherwise resolved, payments are made from funds held in a disputed claims reserve established in the bankruptcy estate for the benefit of former creditors of Comdisco, Inc. Since the minimum percentage recovery threshold has been exceeded, any further payments from the disputed claims reserve to former creditors of Comdisco, Inc. entitle holders of contingent distribution rights to receive p