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/raid1/www/Hosts/bankrupt/TCR_Public/060410.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, April 10, 2006, Vol. 10, No. 85 Headlines ADELPHIA COMMS: Agrees with Devcon Security on Use of Escrow Funds ADELPHIA COMMS: Wants to File Plan Settling Intercreditor Dispute ADELPHIA COMMS: Units Acquire Forfeited Assets from Rigases AES CORP: Senior Bank Lenders Waive Restatement-Related Default ALLIED HOLDINGS: Extends Forbearance Pact on DIP Loan to April 18 AMCAST INDUSTRIAL: Rejects University Development Lease AMERICAN MEDIA: Restructures to Improve Annual Cash Flow by $19M ASARCO LLC: Court Okays Purchase of Nine Haul Trucks From Liebherr ASARCO LLC: ARCO Wants Stay Lifted to File Cross-Claims ASARCO LLC: Deen Wants Stay Lifted to Determine Arizona Land Title ATA AIRLINES: C8 Airlines Proposes May 19 Plan-Voting Deadline ATA AIRLINES: C8 Airlines Files First Amended Chapter 11 Plan BEAR STEARNS: Moody's Reviewing Subordinated Certs. for Downgrade BROOKS SAND: Smith Mining Wants to Assume Chandler Lease BROOKS SAND: Hires Wise DelCotto as Bankruptcy Counsel BUCKEYE CHECK: S&P Rates 2nd-Lien Secured Bank Facility at CCC+ BURGER KING: Greg Brenneman Leaves as Chairman and CEO CATHOLIC CHURCH: GVA Kidder Values Spokane Properties at $85 Mil. CBRL GROUP: Moody's Cuts Corp. Family Rating to Ba2 CINRAM INT'L: Shareholders to Vote on Trust Conversion on Apr. 28 CITGO PETROLEUM: Discounts Rumored Sale of Strategic Assets CITIGROUP MORTGAGE: Moody's Rates Class M-5 Certificates at Ba1 CONNORS BROTHERS: Revenues Rise 88.9% Year-Over-Year in 2005 CONSTELLATION BRANDS: Earns $325.3 Million in Fiscal 2006 COUNTRYWIDE ALTERNATIVE: Moody's Rates Two Cert. Classes at Low-B CREDIT SUISSE: S&P Upgrades Class Q Certificates' Rating to CCC+ CURATIVE HEALTH: Plans to Eliminate $185 Mil. in Bondholder Debt DANA CORP: Wants to Purchase Mexican Goods for DHAM Conversion DANA CORP: Creditors Committee Selects Kramer Levin as Counsel DANA CORPORATION: Seeks Court Approval to Sell De Minimis Assets DELPHI CORP: Inks Joint Interest Agreement with Creditors' Panel DELPHI CORP: Taps Crowell & Moring as Antitrust Counsel DELPHI CORP: Court Approves Modified Lockport Energy Agreements DIGITAL LIGHTWAVE: Owes Optel Capital $57.1 Million at March 29 EARLE M. JORGENSEN: S&P Lifts Senior Secured Rating to B+ from B EDUCATE INC: S&P Affirms B+ Rating & Revises Outlook to Stable ERA AVIATION: Hires Mikunda Cottrell as Accountant ERA AVIATION: Committee Hires Burr Pease as Bankruptcy Counsel EXIDE TECHNOLOGIES: Reclaims Right to Use Trademark from EnerSys FERRO CORP: Gets 90-Day Waiver on Asset Securitization Program FORESIDE COMPANY: Case Summary & 20 Largest Unsecured Creditors GLOBAL FOOD: Case Summary & 20 Largest Unsecured Creditors GREAT ATLANTIC: S&P Holds B- Rating & Revises Outlook to Stable HAWAIIAN TELCOM: S&P Affirms B Rating With Stable Outlook HOLLINGER INT'L: Balance Sheet Upside Down by $169.85M at Dec. 31 INTELSAT LTD: Lenders Waive Reporting Default Until April 30 INTERNATIONAL MANAGEMENT: Hires Kilpatrick Stockton as Counsel INTERNATIONAL MANAGEMENT: Wants Until May 1 to File Schedules J.C. PENNEY: S&P Lifts Corporate Credit Rating to BBB- from BB+ J.L. FRENCH: Committee Taps Ashby & Geddes as Delaware Counsel KMART CORP: Chuck Conaway Wants $19.6 Million Claim Allowed KMART CORP: Jeri Fisher Wants Lift Stay Objection Overruled MEDIACOM BROADBAND: S&P Rates Proposed $750 Million Loan at BB- MEGA BLOKS: Reports Fourth Quarter and FY 2005 Financial Results MERIDIAN AUTOMOTIVE: Stanfield Presses on to Disqualify Milbank MERIDIAN AUTOMOTIVE: Court Approves Guardian Settlement Agreement MUSICLAND HOLDING: Wants Until July 12 to Remove Civil Actions NELLSON NUTRACEUTICAL: Can Use Cash Collateral on Final Basis NET SERVICOS: Completes Prepayment of Net Sul's Senior Notes NORTHWEST AIR: AFA-CWA Calls for Union Representation Election NORTHWEST AIRLINES: S&P Upgrades Two Cert. Class Ratings to CCC+ NUTRO PRODUCTS: S&P Assigns CCC Ratings to $345 Million Notes ONEIDA LTD: Appoints James Joseph as Company President ORIS AUTOMOTIVE: Taps Johnston Barton as Bankruptcy Counsel ORIUS CORP: Court Sets May 12 bar Date for Filing Proofs of Claim ORIUS CORP: Hires Murphy Austin as Special Litigation Counsel P.H. GLATFELTER: Moody's Puts Ba1 Rating on New $200 Mil. Notes PHI INC: S&P Assigns BB- Rating to Planned $150 Million Sr. Notes PILLOWTEX CORP: Court Approves Amended Disclosure Statement PROSOFT LEARNING: Chosen as LPI's North American Master Affiliate QUANTA CAPITAL: Reports $105.9 Million Net Loss for 2005 RADNOR HOLDINGS: 11% Bond Indenture Allows for $25M Add'l Debt RIVERSTONE NETWORKS: Hold River Amends Tender Offer Equity Deal RIVIERA HOLDINGS: S&P Holds B Corp. Credit Rating on CreditWatch SAFETY PRODUCTS: Releases Financial Statements for Fiscal 2005 SCIENTIFIC GAMES: Unit Buys $12MM Shoreline Star Facility in Conn. SCRIP ADVANTAGE: All Employees Terminated on Friday, April 7 SERACARE LIFE: Taps Cathryn Low as Interim Chief Financial Officer SERVICE CORP: $1 Bil. Alderwoods Deal Cues Moody's Rating Review SND ELECTRONICS: U.S. Trustee Appoints Three-Member Committee SND ELECTRONICS: Gets Interim Okay to Borrow $1 Mil. Postpetition SOMERA COMMS: Recurring Losses Spur Auditors' Going Concern Doubt SPARTA COMMERCIAL: Closes on $4.56-Mil. Private Equity Placement SPECTRUM BRANDS: S&P Lowers Corporate Credit Rating to B- from B TRANSCONTINENTAL GAS: Fitch Rates $200 Million Sr. Notes at BB+ URBI DESARROLLOS: Fitch Rates Proposed $150 Mil. Sr. Notes at BB URBI DESARROLLOS: Moody's Puts Ba3 Rating on $150 Million Notes URS CORP: Earns $82.5 Million of Net Income in Fiscal Year 2005 USG CORP: Del. Bankr. Court Approves Amended Disclosure Statement VENOCO INC: S&P Lifts $150 Million Notes' Rating to CCC+ from B- VERILINK CORP: Case Summary & 20 Largest Unsecured Creditors VISTEON CORP: Fitch Downgrades Sr. Unsecured Debt Rating to CCC- WILDMINT 615: Case Summary & 14 Largest Unsecured Creditors WINN-DIXIE: Competing Bids for BSL Shares Must Be In By May 11 WINN-DIXIE: Blackstone Engagement Amended to Include Bahamas Unit WINN-DIXIE: Wants Plan-Filing Period Extended Until June 29 * Susman Godfrey Plans to Open Office in New York City * BOND PRICING: For the week of Apr. 3 - Apr. 7, 2006 ********* ADELPHIA COMMS: Agrees with Devcon Security on Use of Escrow Funds ------------------------------------------------------------------ Adelphia Communications Corporation, Starpoint Limited Partnership, Cable Sentry Corporation, Coral Security, Inc., and Westview, Inc., each an ACOM Debtor, seek a declaratory judgment that they are entitled to certain amounts held in escrow pursuant to an asset purchase agreement dated January 21, 2005, that they entered into with Devcon Security Services Corporation. Starpoint and its three subsidiaries, Cable, Coral and Westview, operated the residential and commercial security business of the ACOM Debtors in New York, Florida and Pennsylvania. As part of their efforts to exit non-core lines of business, the ACOM Debtors initiated a marketing and sale process for substantially all of their Security Business Assets. The ACOM Debtors subjected the sale of the Security Assets to an auction process. It was ultimately concluded that Devcon's bid was the highest and best offer received for the Security Business. Accordingly, the ACOM Debtors entered into an asset purchase agreement with Devcon, pursuant to which the ACOM Debtors sold the Security Business to Devcon. Pursuant to the APA, the parties prepared an estimate of the purchase price. The Estimated Purchase Price was calculated at $40,229,044. In anticipation of a possible adjustment to the estimated purchase price, the parties agreed to set aside certain funds in an escrow account to be distributed according to the calculation of the final purchase price. Starpoint is the named beneficiary of the Escrow Agreement. Devcon deposited $4,022,904 into the Escrow Account. In a June 28, 2005 letter, Devcon notified the ACOM Debtors that its calculation of the final purchase price is $35,213,388. Devon further stated that due to the difference between the Estimated Purchase Price and the Final Purchase Price, the ACOM Debtors are obliged to return the full Escrow Account amount to Devcon. Devcon asserted that: (i) a certain Bocca Pointe Agreement is subject to cancellation and categorizes it as defaulting recurring monthly revenue. The RMR generated by the Bocca Pointe Agreement is $68,644. Accordingly, Devcon reduced the Estimated Purchase Price by $2,333,896. (ii) the calculation of the value of old inventory requires a reduction of the Estimated Purchase Price. Accordingly, Devcon maintained that the Estimated Purchase Price should be reduced in an amount equal to the difference between the value of the old inventory on February 28, 2005, and its value on December 31, 2004, or $65,398. (iii) it has incurred costs for a "St. Andrews Bulk System Conversion," a cost of transitioning customers from the ACOM Debtors to Devcon. Accordingly, Devcon sought to reduce the Estimated Purchase Price by $160,600 for those costs. The ACOM Debtors dispute Devcon's calculation of the Final Purchase Price. The ACOM Debtors ask the Court to enter a judgment declaring that Devcon's proposed adjustment to the Estimated Purchase Price based on the Boca Pointe Agreement, the value of Old Inventory and the transition costs relating to the St. Andrews Conversion are not permitted under the APA and that the Estimated Purchase Price should not be reduced by those amounts. ACOM, Starpoint, Cable, Coral and Westview also ask the Court to award them costs and disbursements they incurred in their adversary proceeding. Devcon Responds Devcon denies all of the ACOM Debtors' allegations. On Devcon's behalf, Richard S. Miller, Esq., at Greenberg Traurig, LLP, in New York, argues that: 1. The ACOM Debtors' claims are barred because they fail to state a claim to be granted; 2. The ACOM Debtors' action is barred by the doctrine of unclean hands, estoppel, waiver, laches; 3. The ACOM Debtors' action is barred by the statute of limitations; and 4. The ACOM Debtors' action is barred by the parole evidence rule. Devcon asserts that it is entitled to all the funds held in the Escrow Account. Parties Stipulate To avoid the cost and risk of further litigation, the ACOM Debtors and Devcon agree that: a. they will take all steps required to effectuate the release and payment of all sums held in escrow under the Escrow Agreement in this manner: * $2,349,578 to Devcon, * $1,673,326 to the ACOM Debtors, * any and all interest accumulated on the Escrow Account to the Debtors. b. Devcon will pay to the Debtors $49,173 on account of Devcon's usage of vehicles owned by the Debtors for April, May and June 2005; c. they will execute and file with the Bankruptcy Court a stipulation of dismissal; d. each party will bear its own costs and attorneys' fees incurred in connection with the Adversary Proceeding. e. the parties will execute mutual releases, subject to the Debtors' rights to indemnification as set forth in the APA. Judge Gerber approves the Parties' Settlement Agreement. Pursuant to a Court-approved stipulation, the Parties agree that the Adversary Proceeding is dismissed, with prejudice. About Adelphia Communications Headquartered in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 126; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA COMMS: Wants to File Plan Settling Intercreditor Dispute ----------------------------------------------------------------- Adelphia Communications Corporation and its debtor-affiliates seek the authority of the U.S. Bankruptcy Court for the Southern District of New York to file a plan of reorganization that includes a proposed settlement of intercreditor disputes among the ACOM Debtors, the noteholders of Arahova Communications Corporation, the noteholders of Adelphia Communications Corporation and other creditor groups. Marc Abrams, Esq., at Willkie Farr & Gallagher LLP, in New York, relates that for more than two years, the ACOM Debtors have tried to foster a dialogue with representatives of the Arahova noteholders, the ACOM noteholders and other creditor groups to address and resolve significant intercreditor issues that will have a meaningful effect on plan distributions to them and similarly situated creditors within their debtor groups. On June 24, 2005, the ACOM Debtors sought an order in aid of confirmation to create a judicial framework to resolve the Intercreditor Dispute in a manner that avoided potential conflicts of interest. The Court approved the Resolution Process on August 4, 2005. The Court then began Resolution Process hearings on the character and treatment of certain intercompany claims. According to Mr. Abrams, after more than six weeks of settlement conferences, the parties have failed to reach a settlement. One of the key purposes of the Resolution Process was to preserve the value of the Asset Purchase Agreements between the ACOM Debtors, and Time Warner NY Cable LLC and Comcast Corporation for the sale of substantially all of ACOM's assets for $12,700,000,000 in the aggregate and 16% of Time Warner Cable Inc.'s equity securities. The Purchase Agreements contain specific termination rights for the ACOM Debtors and the Purchasers, and provide that upon termination of the Purchase Agreements under certain circumstances, the ACOM Debtors may be required to pay the Purchasers a termination fee of more than $440,000,000. The Purchase Agreements specifically require a closing of the Sale Transaction no later than July 31, 2006. With more than 50 objections to confirmation to the Plan and the substantial ongoing disputes that are the subject of the Resolution Process, there are significant risks to the Plan confirmation and as a result, to the successful consummation of a Sale Transaction, Mr. Abrams maintains. Thus, the ACOM Debtors maintain that they should be authorized to propose a Plan that includes a structure to settle the Intercreditor Dispute and terminate the Resolution Process. Specifically, the ACOM Debtors propose amendments to the Fourth Amended Plan of Reorganization that provide for one or more optional proposed settlements of issues in their bankruptcy cases under these conditions: a. The Amended Plan will be structured to permit creditors to separately accept or reject: * the Plan including the proposed settlement; and * the Plan excluding the proposed settlement, which Plan will provide for reserves or escrows of distributions pending the determination of the Intercreditor Dispute to enable any court resolution of that dispute to be implemented; b. Absent further Court order, the Debtors are not authorized to seek confirmation of any Settlement Plan under Section 1129(b) of the Bankruptcy Code if the Settlement Plan is rejected by a class of creditors made party to a settlement proposed in the Settlement Plan; and c. If the Settlement Plan is rejected by a class of creditors made party to a settlement proposed in the Settlement Plan: * the ACOM Debtors are not authorized to seek confirmation of any Settlement Plan under Section 1129(b); and * the ACOM Debtors will be authorized to seek confirmation of the Reserve Plan, including confirmation under Section 1129(b), if appropriate. Responses Two parties-in-interest do not object to the ACOM Debtors' request: 1. The putative class plaintiffs in a lawsuit pending before the United States District Court for the Southern District of New York captioned In re Adelphia Communications Corp. Securities & Deriv. Litigation, 03 MD 1529 (LMM); and 2. The Official Committee of Equity Security Holders. W.R. Huff Asset Management Co., LLC, also does not object to the ACOM Debtors' request. However, W.R. Huff asserts that the ACOM Debtors should give a notice to their creditors of the voting results and which plan they intend to seek to confirm before the confirmation objection deadline. The Ad Hoc Committee of ACC Senior Noteholders states that if the ACOM Debtors will be able to create a fair and reasonable settlement proposal that has the prospect of acceptance by the various constituents in the ACOM Debtors' Case, it would be the first one to applaud. In the meantime, the ACC Committee urges the ACOM Debtors to keep their "eye on the ball." The pursuit of a "settlement plan" should not become a distraction from all of the other unresolved matters in the ACOM Debtors' Case. The ACC Committee also ask the Court to instruct the ACOM Debtors that they are not to seek an involuntary "cram down" of any "settlement plan" not accepted by each of the classes of claims. The Ad Hoc Committee of FrontierVision Noteholders asks the Court to amend the ACOM Debtors' proposed order to reflect that: a. the ACOM Debtors will be required to use the record developed to date in the Resolution Process as a basis for any treatment proposed to classes of creditors, including the FV Holdco Noteholder class; and b. the ACOM Debtors, the Arahova Committee, the ACC Committee, and Huff are required to engage in good faith settlement discussions with the FV Committee before the filing of the Settlement Plan. The Ad Hoc Adelphia Trade Claims Committee states that they have limited information regarding the terms of any revised plan of reorganization the ACOM Debtors intend to file in connection with their request. Thus, the Trade Committee reserves its rights to participate in the hearing to consider the ACOM Debtors' request and to raise any objections. About Adelphia Communications Headquartered in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 127; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA COMMS: Units Acquire Forfeited Assets from Rigases ----------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Adelphia Communications Corporation's Executive Vice President, General Counsel and Secretary Brad M. Sonnenberg discloses that on March 29, 2006, the United States District Court for the Southern District of New York signed three orders: 1. A Stipulation and Order of Settlement of Amended Petition of ACOM and Various Subsidiaries as to Forfeited Managed Entities. The Stipulation is in furtherance of the terms of the non-prosecution agreement dated April 25, 2005, between the Office of the United States Attorney for the Southern District of New York, and ACOM and its affiliated entities. A full-text copy of the April 25 Settlement is available for free at http://ResearchArchives.com/t/s?74c 2. A Final Order of Forfeiture A full-text copy of the Final Forfeiture Order is available for free at http://ResearchArchives.com/t/s?74d 3. An Amended Final Order of Forfeiture A full-text copy of the Amended Forfeiture Final Order available for free at http://ResearchArchives.com/t/s?74e Pursuant to the Final Forfeiture Orders, all right, title and interest previously held by members of the Rigas family or Rigases-controlled entities in the Forfeited Managed Cable Entities before the District Court's Consent Order of Forfeiture dated June 8, 2005, were transferred to certain subsidiaries of Adelphia Cablevision, LLC, free and clear of all liens, claims, encumbrances and adverse interests. The Forfeited Management Entities are: 1. Adelphia Cablevision Associates of Radnor, L.P., 2. Adelphia Cablevision of West Palm Beach, LLC, 3. Adelphia Cablevision of West Palm Beach II, LLC, 4. Cablevision Business Services, Inc., 5. Desert Hot Springs Cablevision, Inc., 6. Henderson Community Antenna Television, Inc., 7. Highland Carlsbad Cablevision, Inc., 8. Highland Carlsbad Operating Subsidiary, Inc., 9. Highland Prestige Georgia, Inc., 10. Hilton Head Communications, L.P., 11. Ionian Communications, L.P., 12. Montgomery Cablevision Associates, L.P., 13. Prestige Communications, Inc., 14. Highland Video Associates, L.P., excluding the interest held by Highland Video in Bucktail Broadcasting Corp. The forfeited assets acquired by the Adelphia Subsidiaries are cable systems with approximately 219,000 subscribers as of December 31, 2005, that were previously owned or controlled by the Rigas Family Entities. Pursuant to definitive agreements with Time Warner NY Cable LLC, and Comcast Corporation dated April 20, 2005, Time Warner and Comcast agreed to purchase substantially all of the U.S. assets and assume certain of the liabilities of ACOM and its subsidiaries. As part of the sale transaction, Time Warner and Comcast agreed to purchase the assets related to the Forfeited Managed Cable Entities for approximately $967,000,000 in the aggregate, consisting of cash and Class A Common Stock of Time Warner Cable, Inc. On obtaining ownership of the Forfeited Managed Cable Entities, the Adelphia Subsidiaries expect to file Chapter 11 voluntary petitions that will be jointly administered with the ACOM Debtors' Cases. Once the Adelphia Subsidiaries emerge from bankruptcy, ACOM expects to be able to transfer to Time Warner NY and Comcast the assets related to the Forfeited Managed Cable Entities as part of the Sale Transaction. Mr. Sonnenberg relates that there is no assurance that the bankruptcy cases of the Adelphia Subsidiaries will proceed swiftly enough for the transfer to occur concurrent with the closing of the Sale Transaction, and the transfer may not occur until after the initial closing of the Sale Transaction, if at all. Furthermore, there is no assurance that the sale of the assets related to the Forfeited Managed Cable Entities to Time Warner NY and Comcast will occur concurrently with the consummation of the Sale Transactions, if at all. According to Mr. Sonnenberg, pursuant to a prior order of the District Court, on March 30, 2006: (1) each of Century MCE, LLC, Cablevision Business Services, Inc., Desert Hot Springs Cablevision, Inc., Highland Carlsbad Cablevision, Inc., Highland Carlsbad Operating Subsidiary, Inc., Highland Prestige Georgia, Inc. and Prestige Communications, Inc. entered into guaranty agreements for the benefit of Bank of America, N.A., in its capacity as administrative agent under a Credit Agreement, dated April 14, 2000, as amended and supplemented -- the Century Credit Agreement -- pursuant to which each entity agreed to guarantee the obligations of the borrowers under the Century Credit Agreement. (2) each of UCA MCE I, LLC, UCA MCE II, LLC, Hilton Head Communications, L.P. and Ionian Communications, L.P. entered into guaranty agreements for the benefit of First Union National Bank, in its capacity as administrative agent under a credit agreement, dated May 6, 1999, as amended and supplemented -- the UCA Credit Agreement -- pursuant to which each entity agreed to guarantee the obligations of the borrowers under the UCA Credit Agreement. (3) each of Olympus MCE I, LLC, Olympus MCE II, LLC, Adelphia Cablevision Associates of Radnor, L.P., Adelphia Cablevision of West Palm Beach, LLC, Adelphia Cablevision of West Palm Beach II, LLC, Henderson Community Antenna Television, Inc., Highland Video Associates, L.P. and Montgomery Cablevision Associates, L.P., entered into guaranty agreements for the benefit of the Bank of Montreal, in its capacity as administrative agent under a credit agreement, dated September 28, 2001, as amended and supplemented -- the Olympus Credit Agreement -- pursuant to which each entity agreed to guarantee the obligations of the borrowers under the Olympus Credit Agreement. (4) Century MCE, LLC entered into a pledge agreement for the benefit of Bank of America, N.A., in its capacity as administrative agent under the Century Credit Agreement, pursuant to which Century MCE, LLC pledged to the Bank of America, N.A., for the benefit of the agents and lenders under Century Credit Agreement, certain equity interests owned by it in Cablevision Business Services, Inc., Desert Hot Springs Cablevision, Inc., Highland Carlsbad Cablevision, Inc., Highland Carlsbad Operating Subsidiary, Inc., Highland Prestige Georgia, Inc. and Prestige Communications, Inc. (5) each of UCA MCE I, LLC and UCA MCE II, LLC entered into pledge agreements for the benefit of First Union National Bank, in its capacity as administrative agent under the UCA Credit Agreement, pursuant to which each entity pledged to First Union National Bank, for the benefit of the agents and lenders under UCA Credit Agreement, certain equity interests owned by them in Hilton Head Communications, L.P. and Ionian Communications, L.P. (6) each of Olympus MCE I, LLC and Olympus MCE II, LLC entered into pledge agreements for the benefit of the Bank of Montreal, in its capacity as administrative agent under the Olympus Credit Agreement, pursuant to which each entity pledged to the Bank of Montreal, for the benefit of the agents and lenders under Olympus Credit Agreement, certain equity interests owned by them in Adelphia Cablevision Associates of Radnor, L.P., Adelphia Cablevision of West Palm Beach, LLC, Adelphia Cablevision of West Palm Beach II, LLC, Henderson Community Antenna Television, Inc., Highland Video Associates, L.P. and Montgomery Cablevision Associates, L.P. (7) each of the entities that are borrowers or guarantors under the Olympus Credit Agreement entered into a security agreement pursuant to which each entity agreed to grant in favor of the Bank of Montreal, in its capacity as administrative agent under the Olympus Credit Agreement, a limited security interest in certain of its assets in exchange for the agents and lenders under the Olympus Credit Agreement agreeing to forbear from exercising any and all rights and remedies against Coudersport and Bucktail or the equity interests representing the ownership of Coudersport or Bucktail, whether arising under the terms of the Olympus Credit Agreement, applicable law or otherwise. The Official Committee of Unsecured Creditors and the Official Committee of Equity Holders have initiated an adversary proceeding and are prosecuting claims against the lenders and agents under the Company's and its subsidiaries' prepetition credit facilities. The Litigation has been transferred to the District Court, and the District Court will have jurisdiction over the Litigation, except with respect to certain motions to dismiss that are pending before the Bankruptcy Court. About Adelphia Communications Headquartered in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. (Adelphia Bankruptcy News, Issue Nos. 126 & 127; Bankruptcy Creditors' Service, Inc., 215/945-7000) AES CORP: Senior Bank Lenders Waive Restatement-Related Default --------------------------------------------------------------- The AES Corporation obtained the necessary votes from a majority of its bank lenders under its senior bank facility to waive the event of default caused by the restatement of its 2003 financial statements. As reported in the Troubled Company Reporter on April 6, 2006, the Company will be restating its 2003 and 2004 financial statements as a result of errors discovered by management during the 2005 year-end closing process. Based on management's review, it believes that all errors were inadvertent and unintentional. The Senior Bank Facility provides AES with access to: * a $650 million revolving bank loan; and * a $200 million senior secured term loan. The Company, four Subsidiary Guarantors, Citicorp USA, Inc., as Agent, and Citibank N.A., as Collateral Agent and Lender, signed Amendment No. 7 and Waiver No. 3 to the Third Amended and Restated Credit and Reimbursement Agreement, on April 5, 2006. As a result of this waiver and amendment, the Company now has full access to the credit available under its senior bank facility. The interest rate on the $650 million revolving bank loan is LIBOR plus 1.75%. It matures on 2010. The interest rate on the term $200 million Senior Secured Term Loan is LIBOR plus 1.75%. It matures on 2011. As of December 31, 2005, $356 million was available from the $650 million Revolving Bank Loan. A full-text copy of the Amendment No. 7 and Waiver No. 3 to Third Amended and Restated Credit and Reimbursement Agreement is available for free at http://ResearchArchives.com/t/s?79b AES Corporation -- http://www.aes.com/-- is a global power company. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the Company delivers electricity through 15 distribution companies. * * * As reported in the Troubled Company Reporter on Jan. 11, 2006, Moody's affirmed the ratings of The AES Corporation, including its Ba3 Corporate Family Rating and the B1 rating on its senior unsecured debt. Moody's said the rating outlook remains stable. ALLIED HOLDINGS: Extends Forbearance Pact on DIP Loan to April 18 ----------------------------------------------------------------- Allied Holdings, Inc. (Pink Sheets: AHIZQ.PK) reached an agreement to extend a forbearance agreement with respect to the Company's senior secured, super priority, debtor-in-possession credit facility through April 18, 2006. On March 9, 2006, the Company entered into a forbearance agreement whereby the lenders agreed to refrain from exercising certain of their rights under the facility through April 3, 2006 as a result of certain financial covenant violations for the months of December 2005 and January 2006 and the extension addresses violations for the month of February 2006. Terms of the Extension The lenders will continue to make advances to the Company to the extent required by the credit facility so long as the Company remains in compliance with the terms and conditions of the facility and the forbearance agreement. The extension of the forbearance agreement requires the Company to pay the lenders a fee as a condition of the forbearance and to pay an additional fee within 30 days of the execution of the extension, but the additional fee will be waived if the Company and the lenders enter into an amendment to the credit facility. The Company anticipates that it will not have sufficient availability to meet its working capital needs as early as May of 2006 under the present terms of the facility. The Company is currently negotiating with the lenders in an effort to amend the facility to obtain additional availability in order to allow the Company to meet its working capital needs. The Company cannot provide assurance as to whether it will be able to amend the facility or, if amended, whether the additional availability if obtained will be sufficient to allow the Company to meet its needs or whether the Company will be able to remain in compliance with the facility as amended. The extension of the forbearance agreement requires that the Company engage a consultant to advise the Company on various issues regarding the operation of the Company's business. Accordingly, the Company engaged Glass & Associates, Inc. as an operational improvement advisor, subject to approval of the engagement by the bankruptcy court. Glass will report to the Company's President and Chief Executive Officer, with access to the Company's Board of Directors as necessary. "Glass and Allied's senior management team intend to build on the work done by our management team over the past several years and move forward with a process to explore all alternatives to enhance operational performance," Hugh E. Sawyer, President and Chief Executive Officer, said. About Glass & Associates Glass & Associates' professionals have in-depth expertise in operational and financial management. Working with senior management, Glass & Associates -- http://www.glass-consulting.com/ -- has a demonstrated track record of helping companies across multiple industry sectors achieve the best possible outcome for management, lenders, investors and employees. Glass & Associates has completed more than 600 engagements, including Mississippi Chemical Corporation, Southern States Cooperative, Parmalat USA, Tiro Industries, General Chemical and Hamilton Specialty Bar. Glass & Associates is headquartered in New York, with offices in Canton, Charlotte, Chicago, Dallas, Detroit and Houston. About Allied Holdings 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. AMCAST INDUSTRIAL: Rejects University Development Lease ------------------------------------------------------- The Hon. Frank J. Otte of the U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis authorized Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., to reject a lease agreement with the University Development Company, effective as of Jan. 31, 2006. The Debtors used University Development's premises located at 2601 Cambridge Court, Suite 121 in Auburn Hills, Michigan for office space. Because of the planned winding-down of their business operations by mid-2006, the Debtors no longer need the office space and sought to reject the lease agreement. James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, PC, tells the Bankruptcy Court that rejection and termination of the lease will save the estates thousands of dollars for the benefit of creditors. The lease is set to expire in March 2008 and costs the Debtors an average of $54,000 per month. About Amcast Industrial Headquartered in Fremont, Indiana, Amcast Industrial Corporation, manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., filed for chapter 11 protection a second time on Dec. 1, 2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C., represent the Debtors in their restructuring efforts. When the Debtor and its affiliate filed for protection from their creditors, they listed total assets of $97,780,231 and total liabilities of $100,620,855. AMERICAN MEDIA: Restructures to Improve Annual Cash Flow by $19M ---------------------------------------------------------------- American Media Operations, Inc., is planning to restructure certain of its operations to improve its profitability and future net cash flows. Restructuring actions include: -- discontinuing the publication of Celebrity Living Weekly, MPH and Shape En Espanol; -- the relocation of the operations associated with the National Enquirer from New York City, New York to Boca Raton, Florida; -- centralizing certain operations; and -- reducing certain other operating, general and administrative expenses. The combined operating losses from the discontinued publications amounted to around $9.2 million for the twelve months ended December 31, 2005. As part of the Plan, the Company expects to reduce its workforce by approximately 9%. Annual future net cash flows are projected to improve by approximately $19 million as a result of the actions taken under the Plan. The Company intends to record a restructuring charge related to the Plan in the fiscal quarters ending June 30, 2006, and September 30, 2006. Although the Company currently expects that all charges under the Plan will be recognized in its fiscal year ending March 31, 2007, some charges may be recognized in future periods if the related expenses are incurred during those periods. The Company intends to redeploy rack pockets from the discontinued publications to certain of its other publications. The Company also intends to sell certain rack pockets to other publishing clients serviced by its wholly owned subsidiary, Distribution Services, Inc. To the extent the Company is unable to successfully redeploy or sell rack pockets available from the discontinued publications, the Company could incur a non-cash write off of up to $2.5 million. The Company will likely incur these types of costs associated with the Plan: (1) employee severance costs, currently estimated to be approximately $2.0 million in the aggregate; and (2) contract termination costs, including early termination of real estate leases, and costs of relocation of certain operations, currently estimated to be approximately $1.6 million in the aggregate. The Company also plans to spend approximately $0.5 million for the construction of a new data center, as part of its consolidation efforts. The Company currently estimates that restructuring charges in connection with the Plan for the fiscal quarters ending June 30, 2006, and September 30, 2006, will be approximately $2.2 million and $1.4 million. The Company currently estimates that the total amount of the restructuring charges and the construction of a new data center will result in future cash expenditures of approximately $4.1 million, the majority of which will be paid in its fiscal year ending March 31, 2007. Implementation of the Plan is expected to be completed by the end of the fiscal quarter ended September 30, 2006. The Company will continue to publish its remaining 16 titles, as well as its Mini-Mags, Digests and Books series. The Company's eleven consumer magazines include: Star, Shape, Natural Health, Fit Pregnancy, Muscle & Fitness Hers, Men's Fitness, Muscle & Fitness, Flex, Country Weekly, Mira! and Looking Good Now. The Company's five tabloid publications include: National Enquirer, Globe, Examiner, Sun, and Weekly World News. Headquartered in Boca Raton, Florida, American Media Operations Inc. is the nation's largest publisher of celebrity, health and fitness, and Spanish language magazines. * * * As reported in the Troubled Company Reporter on Jan. 20, 2006, Moody's Investors Service assigned a B1 rating to American Media Operations, Inc.'s proposed $510 million senior secured credit facilities and affirmed other low-B and junk ratings. As reported in the Troubled Company Reporter on Jan. 19, 2006, Standard & Poor's Ratings Services lowered the corporate credit rating on American Media Operations Inc. to 'B-' from 'B', and the subordinated debt rating to 'CCC' from 'CCC+'. S&P affirmed the 'B' rating on the company's senior secured bank loan at that time. ASARCO LLC: Court Okays Purchase of Nine Haul Trucks From Liebherr ------------------------------------------------------------------ Judge Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi gave ASARCO LLC permission to purchase from Liebherr Mining Equipment Co. nine haul trucks for $3,500,000 each, and an option to buy 12 additional trucks. As reported in the Troubled Company Reporter on Mar. 17, 2006, Liebherr's analysis of a 14-year period availability of the trucks and comparison of present net buying value of each truck at 15% interest rate, showed that the initial nine 400-ton Liebherr trucks will: * haul 36,000,000 tons of material per year, replacing 16 existing trucks; * reduce the need for 28 truck operators; * save 675,000 gallons of fuel per year; * require 75 fewer tires per year; * avoid $1,000,000 in reconditioning costs per truck when the truck reaches 100,000 operating hours; and * reduce the risk of accidents inherent in operating a mine by avoiding 53,500 truck cycles per year. Once all 21 new Liebherr trucks are in place, the annual cost savings are projected to be $19,000,000 compared to the current fleet, Ms. Mulloy tells the Court. In addition, as soon as ASARCO receives the new trucks, three trucks from Ray Mine will be relocated to Mission Mine to increase its production. The Purchase Agreement generally provides that five of the initial order will be delivered in 2007, and four in 2008. The last truck to be delivered in 2007 will be a reserve truck to be paid on a deferred payment basis with an option to buy that truck. ASARCO can also opt to buy 12 additional trucks, allowing for the delivery of four trucks per year in the first quarter of 2009 to 2011. Each truck will cost $3,500,000, which will increase according to the percentage increase in the Producer Price Index for Mining Machinery and Equipment. Optional equipment and rim prices will also be adjusted according to Producer Price Index. Rimex rim purchase prices, on the other hand, will be subject to a 5% per year escalation, compounded annually. The Trinity dump body price will change based on the difference of the actual price of steel and the base steel price, and increase at time of shipment from material, freight or processing costs. For the trucks and other related equipment purchases, ASARCO will pay: Percentage Time of Payment ---------- --------------------- 10% 52 weeks before the agreed upon factory date of each truck 20% 13 weeks before previous payment date 70% five days after the Monday after acceptance of each truck FCR Supports ASARCO Robert C. Pate, the Future Claims Representative, supports ASARCO LLC's request to purchase nine haul trucks. The FCR notes that due to escalating copper prices and increased operations at competing mines, there is a shortage in the industry of vital haul trucks and even of tires the haul trucks utilize. In order to successfully reorganize and fund a Section 524(g) trust, the FCR says, ASARCO must rehabilitate its mining operations and operate at a wider profit margin. This requires increasing production and acquiring the proper equipment that will enable it to do so. With copper prices at record highs and with ASARCO's competitors running more proficient operations, the swiftness with which ASARCO can improve may very well determine its survival, the FCR asserts. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: ARCO Wants Stay Lifted to File Cross-Claims ------------------------------------------------------- On Aug. 11, 2004, the Department of Environmental Quality in the State of Montana filed a complaint, pursuant to the Montana Comprehensive Environmental Cleanup and Responsibility Act, against ASARCO LLC, American Smelting and Refining Company, Atlantic Richfield Company and ARCO Environmental Remediation LLC in the Montana First Judicial District Court, Lewis & Clark County. The Montana Civil Action alleges contamination and threats of contamination of pollutants and hazardous substances from the Upper Blackfoot Mining Complex in Lewis & Clark County, Montana. It also alleges that the Debtors and Atlantic Richfield are liable for the remedial costs associated with the alleged contamination. The Complaint seeks to recover clean up costs and related damages. Atlantic Richfield has cross-claims against ASARCO for contribution, contractual indemnity and declaratory relief in connection with the Montana Civil Action. Atlantic Richfield seeks: (a) a judgment in an amount equal to remedial action and other costs it incurred with respect to the UBMC and any liability assessed against it in the Montana Civil Action; (b) a declaration that ASARCO is liable for all future remedial actions required by the DEQ or any agency having jurisdiction to abate environmental conditions at the UBMC; and (c) prejudgment interest. James S. Carr, Esq., at Kelley Drye & Warren LLP, in New York, tells the Bankruptcy Court that Atlantic Richfield is prohibited from asserting its cross-claims because of the automatic stay. If Atlantic Richfield is not permitted to plead its cross-claims, it could be foreclosed from obtaining relief under its cross- claims, Mr. Carr asserts. Atlantic Richfield asks the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to lift the automatic stay to plead (but not to prosecute) its cross-claims. In the alternative, Atlantic Richfield asks the Court to declare that the Montana Rules of Civil Procedure is tolled pending further Court order and that the cross-claims are expressly preserved. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Deen Wants Stay Lifted to Determine Arizona Land Title ------------------------------------------------------------------ Ron and Linda Deen own 12 acres of land in Pinal County, Arizona, by right of adverse possession under Arizona law. The Deens have occupied the Property since 1986, and have made improvements on the Property. In October 2005, the Deens asked Asarco, Inc., to disclaim any rights to the Property pursuant to a quitclaim deed because the Deens have been the proper legal owners of the Property due to Arizona adverse possession law. In a letter dated January 2006, ASARCO LLC, as successor-in- interest to Asarco, Inc., asserted ownership of the Property. The Deens wish to resolve the question of ownership of the Property. Timothy P. Dowling, Esq., at Gary, Thomasson, Hall & Marks, PC, in Corpus Christi, Texas, asserts that the proper forum for determining ownership of the Property is an Arizona state court rather than the Texas Bankruptcy Court. Mr. Dowling explains that trial of the issue would be cheaper in Arizona, and it is virtual certainty that the Arizona court would have available to it more relevant evidence for making a proper ruling since the applicable witnesses are "at hand." Besides, Mr. Dowling points out, the Bankruptcy Court is heavily burdened with other more consequential matters, and would apply the law of a foreign jurisdiction. Accordingly, the Deens ask the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to modify the automatic stay to allow their state court litigation in Arizona to determine the correct owner of the Property. Mr. Dowling contends that modifying the automatic stay is allowable because the Property is not necessary for an effective reorganization of the Debtors since none of them have put it to any productive purpose for approximately 20 years. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000). ATA AIRLINES: C8 Airlines Proposes May 19 Plan-Voting Deadline -------------------------------------------------------------- C8 Airlines, Inc., asks the U.S. Bankruptcy Court for the Southern District of Indiana to approve a set of uniform noticing, balloting, voting and tabulation procedures to be used in connection with the solicitation of votes for the acceptance of its First Amended Plan of Liquidation. C8 also asks the Court to fix: * April 11, 2006, as the "voting record date" for determining holders of Claims entitled to: -- receive a solicitation package; and -- vote to accept or reject the Plan; and * May 19, 2006, 4:00 p.m., prevailing Indianapolis time, as the "voting deadline" or the last date by which Ballots and Master Ballots for accepting or rejecting the Plan must be received by the Voting Agent so as to be counted. Confirmation Hearing Judge Lorch will convene a hearing to consider confirmation of C8's Liquidation Plan on June 6, 2006. Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis, relates that objections to confirmation of the Plan must be filed on or before May 19, 2006. Only timely filed and served written objections will be considered. Objections not timely filed and served will be overruled. C8 asks Judge Lorch to declare that the Confirmation Hearing may be continued from time to time by announcing the continuance in open court. The Plan may also be modified pursuant to Section 1127 of the Bankruptcy Code prior to, during, or as a result of, the Confirmation Hearing, in each case without further notice to parties-in-interest. Confirmation Objections must be served on: * C8 and its counsel, Baker & Daniels LLP; * Counsel for the Official Committee of Unsecured Creditors: -- Akin Gump Strauss Hauer & Feld LLP; and -- Greenebaum Doll & McDonald PLLC; and * the U.S. Trustee. Solicitation Packages C8 will send no later than April 18, 2006, or a date that is no later than five business days following the entry of an order approving the Disclosure Statement, solicitation packages containing: (a) a notice of the Confirmation Hearing and related matters, including the voting and tabulation procedures; (b) the Disclosure Statement as approved by the Court; (c) the Liquidation Plan; (d) the order approving the Disclosure Statement; (e) a ballot appropriate for the specific creditor; (f) a pre-addressed return envelope; and (g) a notice of non-voting status. According to Ms. Hall, the Securities and Exchange Commission and the Internal Revenue Service will receive a Confirmation Hearing Notice, copies of the Plan documents and Court order approving the Disclosure Statement. The Solicitation Package will be provided to creditors holding Claims in Classes 1 and 2 who have filed timely Proofs of Claim -- or untimely Proofs of Claim which have been allowed as timely by the Court under applicable law on or before the Voting Record Date -- that: (i) have not been disallowed by a Court order entered on or before the Voting Record Date; or (ii) which are not subject to an objection by a party-in- interest as of the Solicitation Date, unless allowed temporarily for voting purposes under Rule 3018 of the Federal Rules Bankruptcy Procedure, on or before the deadline to file Rule 3018 Motions; or (iii) whose Claims are scheduled in the Schedules of Assets and Liabilities, other than those scheduled as unliquidated, contingent or disputed or that have been superceded by a timely filed Proof of Claim. Holders of equity Interests in Class 3 and holders of Disputed Claims will receive a Confirmation Hearing Notice and notice of non-voting status. Solicitation of Public Debt Holders Because of the complexity and difficulty associated with reaching beneficial owners of publicly traded securities, many of which hold their securities in brokerage accounts and through several layers of ownership, C8 will send the Solicitation Packages in a manner customary in the securities industry so as to maximize the likelihood that Public Holders of the Old Holdings Unsecured Notes will receive the Solicitation Package in a timely fashion. Specifically, C8 will serve a copy of the Solicitation Procedures Order by e-notice, facsimile or other immediate delivery method, on each Public Holder's Nominee -- the bank or brokerage or agent through which the Public Holder holds a Claim -- so that the Nominees will have notice of the procedures. On April 18, 2006, the Voting Agent will transmit Solicitation Packages containing Master Ballots and Beneficial Holder Ballots to the Nominees for the Noteholders. The Nominees will: * distribute the Solicitation Packages within five business days of receipt to the Noteholders, each accompanied by a return envelope addressed to the Nominee; * accept the Beneficial Holder Ballots returned by the Noteholders; and * summarize the Beneficial Holder Ballots on the Master Ballot and transmit the Master Ballot to the Voting Agent by the Voting Deadline. Notices C8 will not provide notice or effect service of any kind on any entity to whom it mailed the notice of the hearing to approve the Disclosure Statement which was returned by the U.S. Postal Service as "undeliverable as addressed," "moved -- left no forwarding address" or "forwarding order expired," or similar reason, unless C8 has been informed in writing by that person of its new address. Contingent, Unliquidated or Disputed Claims Notwithstanding the Bar Date Orders and proper notice of the Bar Dates, a number of creditors whose Claims were listed on the Schedules as unliquidated, disputed, or contingent failed to file timely Proofs of Claim. These creditors will not receive a Solicitation Package, Ms. Hall explains. However, if a portion of the Claim was scheduled as liquidated and a portion was scheduled as unliquidated, and no timely Proof of Claim was filed, that portion of the Claim scheduled as liquidated will be eligible to be voted. The holder of the Claim will receive a Solicitation Package relevant to the liquidated portion of the Claim. In addition, under Section 502(a) of the Bankruptcy Code, even if a Proof of Claim has been timely filed, the Claim will not be allowed for purposes of voting on the Plan if C8 or other parties- in-interest have objected to it on or before the expiration of the time period for the objection to Claims. Objections to Claims are now pending before the Court and C8 will file further objections before the mailing of the Solicitation Packages. To clarify vote tabulation procedures, C8 objects, to the extent not previously objected to, on a limited basis and solely for voting purposes, to any Proof of Claim filed with respect to a Claim that is in an unliquidated amount or purports to be contingent. C8 asks the Court to declare that, unless the holder of an Unliquidated/Contingent Claim obtains an order pursuant to Rule 3018(a) temporarily allowing the Claim for voting purposes, in an amount deemed proper by the Court, any Ballot cast with respect to the Claim will be: * counted in determining whether the numerosity requirement of Section 1126(c) of the Bankruptcy Code has been satisfied; and * counted in an amount of $1 in determining whether the aggregate dollar amount requirement of Section 1126(c) has been satisfied. Any Claim, including Unliquidated/Contingent Claims, to which an objection has been, or will be, filed before confirmation of the Plan will not be counted for any purpose in determining whether the requirements of Section 1126(c) of the Bankruptcy Code have been met, unless: (a) the Claim has been temporarily allowed for voting purposes pursuant to Rule 3018(a) by order entered on a motion or stipulation; or (b) the objection to the Claim has been resolved by the Court in favor of the creditor asserting the Claim. The holder of a Claim to which an objection -- other than the Unliquidated/Contingent Objection -- has been filed on or before the Voting Date and that has not been either resolved by the Court or temporarily allowed by the Court for voting purposes, will receive a Solicitation Package. However, any Ballot completed by that holder will not be counted unless and until, no later than the Confirmation Hearing date, the objection has been resolved or the Claim has been temporarily allowed for voting purposes. Ballots The Ballots will contain prominent statements alerting creditors to certain of the tabulation procedures. The C8 Solicitation Procedures Order will be transmitted to creditors as part of the Solicitation Package. Ballots will be counted and will be deemed to be cast as acceptances of the Plan if the Ballots: * are timely received; * are cast by a holder of an Allowed Claim; * contain sufficient information to permit the identification of the creditor; and * are cast as an acceptance of the Plan. In the same manner, only Ballots that are timely received, are cast by a holder of an Allowed Claim, that contain sufficient information to permit the identification of the creditors, and are cast as a rejection of the Plan, will be counted and will be deemed to be cast as a rejection of the Plan. C8 will not count any Ballot: (a) received after the Voting Deadline; (b) that is illegible or contains insufficient information to permit the identification of the creditor; (c) timely received that contains sufficient information to permit the identification of the creditor and indicates both acceptance and rejection of the Plan; (d) otherwise proper, that indicates neither an acceptance nor rejection of the Plan; (e) cast by a creditor who has: -- not timely filed a Proof of Claim with respect to the Claim being voted and whose Claim either is not listed, or is listed as a disputed, contingent or unliquidated Claim on the Schedules; or -- a creditor who has timely filed a Proof of Claim which is the subject of a pending objection and the Claim has not been temporarily allowed by the Bankruptcy Court for voting purposes; (f) cast by a person that does not hold a Claim in a Class that is entitled to vote to accept or reject the Plan; (g) that is transmitted to the Voting Agent electronically by facsimile or e-mail, unless this requirement is waived by C8 in consultation with the Notice Parties; and (h) that does not have an original signature, unless this requirement is waived by C8 in consultation with the Notice Parties. C8 reserves the right to waive, in consultation with the Notice Parties, any or all of the requirements limiting the means of transmittal of any Ballot, including the Voting Deadline. Tabulation Procedures C8's proposed guidelines for determining the amount and number of Claims are: (a) In determining whether a Class of Claims has accepted the Plan by the requisite dollar amount, the amount of a Claim will be either: * the amount allowed by the Court; or * the amount temporarily allowed by the Court for voting purposes pursuant to Rule 3018(a); or * if not allowed under either way, then: -- the liquidated amount specified in a Claim timely filed with the Court or the Voting Agent by the voting creditor and not purported to be contingent and not subject to a pending objection; or -- if no Proof of Claim has been timely filed, on the basis of the undisputed, noncontingent and liquidated amount of the Claim as it appears in the Schedules on or before the Voting Record Date. (b) Ballots, but not Ballots that are Master Ballots or Beneficial Holder Ballots to be distributed to Public Holders, may be preprinted with the dollar amount. If they are so preprinted, C8 proposes that the Voting Agent use the preprinted amount in tabulating votes unless the holder of the Claim obtains an order from the Court on or before the Confirmation Hearing. Whenever two or more ballots are cast voting the same Claim prior to the Voting Deadline, the last Ballot received prior to the Voting Deadline will be deemed to reflect the voter's intent and, thus, will supersede any prior received Ballots. Any person who holds Claims in more than one Class or more than one Claim within a Class must vote separately with respect to each Claim. To tabulate votes cast by Public Holders, C8 proposes that all Nominees will collect and summarize on a Master Ballot all Beneficial Holder Ballots cast by Public Holders for which they serve and then return the Master Ballot to the Voting Agent by the Voting Deadline. The Nominees will retain for inspection by the Court the Ballots cast by Public Holders for one year following the Voting Deadline. To avoid double counting, votes: (1) cast by Public Holders through a Nominee and transmitted by means of a Master Ballot will be applied against the positions held by the Nominees, as evidenced by the applicable record list of Public Holders or through participation in a securities depository; and (2) submitted by a Nominee on a Master Ballot and any other votes submitted by the Nominee will not be counted in excess of the position maintained by the Nominee on the Voting Record Date. To the extent that any duplicative votes are not reconcilable prior to the Voting Deadline, the Voting Agent will count votes in respect of the Master Ballot in the same proportion as the votes to accept and reject the Plan submitted on the Master Ballot that contained the duplicative vote, but only to the extent of the applicable Nominee's position on the Voting Record Date. To avoid inconsistent treatment and provide guidance to C8 and the Voting Agent, each record holder or Public Holder will be deemed to have voted the full principal amount of its Claim, notwithstanding anything to the contrary on any Ballot. 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. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: C8 Airlines Files First Amended Chapter 11 Plan ------------------------------------------------------------- C8 Airlines, Inc., formerly known as Chicago Express Airlines, Inc., delivered its First Amended Plan of Liquidation and accompanying Disclosure Statement to the U.S. Bankruptcy Court for the Southern District of Indiana on March 30, 2006. Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis, Indiana, relates that under C8's Amended Plan, a Creditors' Liquidation Committee will be formed for the limited purposes of: -- assisting C8 with the appropriate procedures for the settlement of General Unsecured Claims; -- overseeing the distributions to the holders of General Unsecured Claims under the Plan and the collection of Avoidance Claims; and -- appearing before, and being heard by, the Bankruptcy Court and other courts of competent jurisdiction in connection with its duties, and other matters as may be agreed upon. The Creditors' Liquidation Committee will be comprised of the three members of the Post-Confirmation Committee formed in the ATA Reorganizing Debtors' First Amended Plan of Reorganization. The Creditors' Liquidation Committee may employ, without further Court order, professionals to assist it in carrying out its duties, including any professionals retained in C8's Chapter 11 case. C8 will pay the reasonable costs and expenses of the Creditors' Liquidation Committee, including reasonable professional fees, in the ordinary course without further Court order. The fees and expenses will not exceed $40,000. Assets and Liabilities Retained Actions are C8's primary non-cash assets, Ms. Hall explains. C8 is analyzing its prepetition transfers to determine whether it may, and it should, assert Avoidance Claims. C8, with limited oversight of the Official Committee of Unsecured Creditors, will commence, prosecute and possibly settle Avoidance Claims. In addition, C8 may have certain causes of action and claims related to accounts receivable or contracts and agreements. C8 intends to retain all the actions to the extent legally possible, Ms. Hall adds. A non-exclusive list of Retained Actions and Avoidance Actions is available for free at: http://bankrupt.com/misc/C8_Retained_Avoidance_Actions.pdf Avoidance Claim Settlements C8 will provide five business days' prior written notice to the Creditors' Liquidation Committee of a settlement and compromise of an Avoidance Action where payments made by C8 in the 90 days prior to the Petition Date totaled at least $200,000, or where the payments made within a seven-day variance of payments made in the ordinary course totaled at least $50,000. Notwithstanding the notice provision, C8 will have full authority to settle any Avoidance Action for 80% of the asserted Avoidance Action without prior notice to the Creditors' Liquidation Committee. Claims and Interests C8's outstanding prepetition indebtedness totals over $450,000,000, Ms. Hall relates. As of March 30, 2006, C8 and the Official Committee of Unsecured Creditors estimate that: -- Priority Tax Claims will approximate $132,000; -- Other Priority Claims will not exceed approximately $30,000; -- General Unsecured Claims will be approximately $450,000,000; and -- there are no valid secure claims. Administrative Claims C8 and the Creditors Committee estimate Administrative Claims to aggregate approximately $429,000 to $1,200,000. In addition, as of February 28, 2006, the ATA Administrative Claim totaled approximately $6,100,000. C8 believes that it will have sufficient funds to pay Allowed Administrative Claims, Allowed Priority Tax Claims and Allowed Professional Fee Claims. It is not expected that, after paying those claims, C8 will have sufficient funds to pay the ATA Administrative Claim in full. The ATA Administrative Claim consists of expenses paid by ATA for C8 in Cash, and includes Cash funding for ordinary course expenses, fuel, handling costs, the lease payments for C8's aircraft, taxes owed by C8, and the fees and expenses of Professionals employed in C8's Chapter 11 Case. The Cash funding, net of certain refunds received by C8 for insurance policies and other adjustments, total an estimated $27,980,000 in cash funding, which sum may increase with additional scrutiny of (1) professional fees and expenses paid by ATA but which were incurred for the benefit of C8 and (2) potential liability for administrative claims asserted based on the use and rejection of C8's leased aircraft. C8's revenue during this same period totaled $21,870,000, resulting in ATA's Administrative Claim of not less than $6,100,000. Despite having insufficient funds to pay the ATA Administrative Claim in full, the Amended Plan, based on the agreement of ATA, proposes to pay Allowed General Unsecured Claims on a pro rata basis from recoveries of Avoidance Claims a total of the lesser of: (a) $1,000,000; or (b) one half of amounts, net of attorneys' and other professionals' fees and expenses, recovered through Avoidance Claims. Class 2 Claims Similarly, holders of Allowed Class 2 General Unsecured Claims will receive Cash in the total amount of the lesser of: -- $1,000,000; or -- one half of net amounts, net of attorneys' and other professionals' fees and expenses, recovered through Avoidance Claims in satisfaction and discharge of their Claims. The distributions to holders of Allowed Class 2 General Unsecured Claims in satisfaction of their Claims generally should be fully taxable transactions. Accordingly, a holder of an Allowed Claim generally will recognize gain or loss in an amount equal to the difference between: * the "amount realized" by the holder in satisfaction of its Claim; and * the holder's adjusted tax basis in its Claim. The "amount realized" by a holder will equal the sum of the amount of any Cash received. Due to the possibility that a holder of an Allowed Class 2 General Unsecured Claim may receive additional distributions subsequent to the Effective Date in respect of any Avoidance Claims, subsequently disallowed Disputed Claims, or unclaimed distributions, the Tax Code may apply to treat a portion of the later distributions to the holders as imputed interest. In addition, it is possible that any loss and a portion of any gain realized by the holders may be deferred until the holder has received its final distribution, Ms. Hall says. C8 advises holders of Allowed Class 2 General Unsecured Claim to consult their tax advisors as to the tax consequences of the receipt of Cash subsequent to the Effective Date. Class 3 Equity Interests No distributions will be made to Class 3 and the equity Interests will be cancelled on the date C8's Chapter 11 Case is closed. Disclosure Statement Hearing on April 11 The Court will convene a hearing on April 11, 2006, at 10:30 a.m., EDT, to consider approval of C8's Amended Disclosure Statement. At the hearing, the Court will determine whether the Amended Disclosure Statement contains "adequate information" within the meaning of Section 1125 of the Bankruptcy Code. Judge Lorch will convene a hearing to consider confirmation of C8's Amended Liquidation Plan on June 6, 2006. A full-text copy of C8's First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/C8_amended_DisclosureStatement.pdf A full-text copy of C8's First Amended Chapter 11 Plan of Liquidation is available for free at: http://bankrupt.com/misc/C8_amended_LiquidationPlan.pdf Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. 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. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) BEAR STEARNS: Moody's Reviewing Subordinated Certs. for Downgrade ----------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade four certificates previously issued by Bear Stearns Asset Backed Securities Inc., Series 1999-1. The securitization is backed by fixed-rate and adjustable-rate subprime mortgage loans that are primarily originated by Amresco Residential Mortgage Corporation. The four subordinate certificates are placed under review for possible downgrade because existing credit enhancement levels may be low given the current projected losses on the underlying pools. The transactions have taken significant losses causing gradual erosion of the overcollateralization. The 1999-1 fixed-rate pool and adjustable-rate pool, have realized cumulative losses of approximately 5.40% and 5.45%, respectively as of Mar. 25, 2006. Moody's complete rating actions are: Issuer: Bear Stearns Asset Backed Securities, Inc. * Series 1999-1; Class MF-2, current rating A2, under review for possible downgrade; * Series 1999-1; Class BF, current rating Ba2, under review for possible downgrade; * Series 1999-1; Class MV-2, current rating A2, under review for possible downgrade; * Series 1999-1; Class BV, current rating Ba2, under review for possible downgrade. BROOKS SAND: Smith Mining Wants to Assume Chandler Lease -------------------------------------------------------- Smith Mining and Materials asks the U.S. Bankruptcy Court for the Western District of Kentucky in Louisville for permission to assume certain executory contracts and unexpired leases. Smith's mining activities are conducted under Limestone Mineral Lease between G.W. Chandler and Kathy Chandler. In addition, Smith Mining has leased mining rights under a sublease agreement between the Chandlers. The Debtor became aware of a notice of default under the Chandler Lease on or about Feb. 9, 2006. The Debtor says this lease is essential to its operations. The Debtor determined that it was in its best interest to file chapter 11 to preserve the Chandler Lease as an asset of the estate. Smith Mining ceased all operations after its liability insurance coverage was cancelled. On Mar. 16, 2006, the Chandlers filed an adversary proceeding seeking declaration that the Chandler Lease was forfeited by Smith prepetition, due to the alleged transfer of a "controlling interest" in Smith. Smith Mining wants to assume the Chandler contracts in order to assign them to the buyer of Smith Mining's assets. This, the Debtor says, will maximize the potential recovery for Smith Mining's creditors. Headquartered in Louisville, Kentucky, Brooks Sand and Gravel LLC leases an 184-acre sand reserve and processing plant in Bethlehem, Indiana, in Clark County and employs about 15 people. Smith Mining and Materials LLC owns a 226-acre limestone quarry in Brooks, Kentucky, in Bullitt County and employs about 25 people. Brooks Sand and Smith Mining filed for chapter 11 protection on Feb. 9, 2006 (Bankr. W.D. Ky. Case No. 06-30259). When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. BROOKS SAND: Hires Wise DelCotto as Bankruptcy Counsel ------------------------------------------------------ The Honorable Joan L. Cooper of the U.S. Bankruptcy Court for the Western District of Kentucky in Louisville gave Brooks Sand and Gravel LLC and Smith Mining and Materials LLC permission to employ Wise DelCotto PLLC as their bankruptcy counsel. As reported in the Troubled Company Reporter on Mar. 3, 2006, Wise DelCotto is expected to: (a) take all necessary action to protect and preserve the Debtors' estates, including: -- prosecution of actions on the Debtors' behalf, -- defense of any actions commenced against the Debtors, -- negotiations concerning all litigation in which the Debtors are involved, and -- objection to claims filed against the Estates; (b) prepare on behalf of the Debtors, as Debtors-in-possession, necessary motions, applications, answers, orders, reports and papers in connection with the administration of the Debtors' cases; (c) negotiate and prepare, on behalf of the Debtors, a plan or plans of reorganization and all related documents; and (d) perform all other necessary legal services in connection with the Debtors' bankruptcy cases. The Firm's professionals bill: Designation Hourly Rate ----------- ----------- Members and Associates $150 to $290 Paralegals $80 to $100 Laura Day DelCotto, Esq., a member at Wise DelCotto PLLC, disclosed that the Firm received a [$10,000 or $15,000] retainer. Headquartered in Louisville, Kentucky, Brooks Sand and Gravel LLC leases an 184-acre sand reserve and processing plant in Bethlehem, Indiana, in Clark County and employs about 15 people. Smith Mining and Materials LLC owns a 226-acre limestone quarry in Brooks, Kentucky, in Bullitt County and employs about 25 people. Brooks Sand and Smith Mining filed for chapter 11 protection on Feb. 9, 2006 (Bankr. W.D. Ky. Case No. 06-30259). When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. BUCKEYE CHECK: S&P Rates 2nd-Lien Secured Bank Facility at CCC+ --------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B' long-term counterparty credit rating to Buckeye Check Cashing Inc. The outlook is stable. The rating agency also assigned a bank loan rating of 'B' and a recovery rating of '2' to Buckeye's senior secured bank loan and revolving bank facility, indicating a substantial (80%-100%) recovery of principal in the event of a payment default. At the same time, Standard & Poor's assigned a bank loan rating of 'CCC+' and a recovery rating of '5' to Buckeye's second-lien secured bank facility, indicating a negligible (0%-25%) recovery of principal in the event of a payment default. The ratings on Buckeye are based in part on the company's high leverage and low tangible equity. Other considerations include: * Buckeye's demonstrated ability to generate significant earnings and cash flow; * the low credit risk inherent in its product offerings; and * the favorable consumer demand for its dominant product, payday loans. Regulatory exposure is a risk factor for all companies in this market segment of the consumer finance industry. In Buckeye's case, this exposure is heightened due to the company's product and geographic concentrations. Buckeye's new ownership structure is a risk factor given that senior management will concede a majority of seats on its board to private-equity firm Diamond Castle after years of operating freely under limited constraints. Diamond Castle is purchasing slightly more than 80% of Buckeye, with approximately 60% of the transaction financed with term loans. Diamond Castle intends to allow Buckeye to focus on its core competencies and operate independently; however, there is no guarantee it will not intervene to change strategic direction should Buckeye fail to meet performance expectations. Partially mitigating the change in corporate governance is management's continued ownership of a material equity stake in the company. Increased leverage and the associated effect on tangible equity levels is a major rating factor. Total bank loans will comprise approximately 60% and 150% of total assets and equity, respectively. Of greater concern than the sheer magnitude of debt is the lack of tangible equity, as shareholder's equity will be reduced to a substantially negative position by the goodwill generated in the transaction. Although Standard & Poor's recognizes that short-term cash advances do not require as much equity support as do term-lenders or other long-term investors, the lack of tangible equity leaves debt repayment entirely dependent on cash flow. "We take some comfort from Buckeye's demonstrated ability to generate stable earnings and cash flow with minimal credit losses. Nevertheless, aggressive expansion activity, minimal required principal amortization, and the potential for further leverage introduce elements of uncertainty to Buckeye's repayment plan," said Standard & Poor's rating analyst Rian M. Pressman, CFA. Debt principal reduction will be facilitated by the dedication of 50% of "excess" cash flow to this purpose, with step-downs to 25% as leverage is reduced. Cash interest payments will approximate 2.6x projected 2006 EBIT, with interest coverage increasing if debt is paid down as planned. Buckeye's revenue is mostly derived from payday loans and this product is well-positioned to benefit from a customer base stretched financially thin by rising interest rates and the high cost of fuel and healthcare. The growth in payday lending is also likely to instigate further regulatory scrutiny. The impact of such scrutiny may be heightened for Buckeye due to its lack of product and geographic diversification, as a substantial portion of revenue is generated by payday lending in Ohio and Arizona. Dublin, Ohio-based Buckeye was founded in 1987. Leveraging prior experience in retail, management has grown Buckeye into an 180+ store franchise operating in seven states under the "CheckSmart" brand name. Product offerings include: * payday loans; * check-cashing services; and * other related products including: -- prepaid debit cards, -- money orders, and -- wire transfers. The stable outlook is based on the company's ability to: * generate consistent earnings and cash flow; * maintain adequate credit quality metrics; and * reduce leverage as planned. The rating could be positively affected by increased geographic and product diversification and higher capital levels. Negative rating implications could result from: * a change of strategic direction, * an inability to pay down debt as planned, * increased leverage, and * adverse regulatory actions. BURGER KING: Greg Brenneman Leaves as Chairman and CEO ------------------------------------------------------ John Chidsey, Burger King Corporation's former president and chief financial officer, has been named the Company's chief executive officer following the resignation of former CEO Greg Brenneman. Mr. Brenneman is returning to his private equity firm, TurnWorks Inc., to pursue business turnarounds. The Board also announced that Brian Swette, a current independent director, would serve as non-executive chairman. In addition, Ben Wells, 52, senior vice president and treasurer, has been promoted to chief financial officer and treasurer. Mr. Brenneman joined Burger King Corporation in August 2004 to lead a very strong senior team that together has accomplished eight consecutive quarters of positive comparable sales growth. Brenneman has agreed to continue to work with the Board of Directors as a consultant in connection with the transition. "I was brought into Burger King by my longtime friends at TPG, Bain Capital and GS Capital Partners to lead the ongoing turnaround of the company," said Brenneman. "As the company enters this important next phase, the Board and I discussed the commitment necessary for any CEO in a public environment and my career and family goals. As a result, together we decided that the best time to transition leadership was prior to Burger King's initial public offering. I have tremendous confidence in John Chidsey, senior management, Burger King employees and the franchisees, and I look forward to cheering them on every step of the way as a significant shareholder of the company." In a statement, the Board of Directors said: "We are extremely pleased with the progress Burger King has made under Greg's leadership. He told us when he came that he wanted to transition the leadership of the company to John Chidsey at some point. We are confident that now is the right time to set in motion the next phase of the company's development. John is a highly qualified leader who has served as an integral member of the management team. With experience in managing global and franchise brands, including Avis, Budget, Jackson-Hewitt and PHH, John brings outstanding leadership acumen, including important skills in franchisee relations and the ability to build a global business. We have great confidence in John and the executive team and their ability to lead the company beyond this important phase, and we are confident that the company will execute a smooth transition as the brand continues to move forward. "We have known Greg for a long time, and his vast experience and drive for fast-paced change has been invaluable to the brand. We thank Greg for the progress that has been made and look forward to his continued counsel and friendship." Chidsey said, "I am excited to take the reins as CEO at such an important time in the company's history. I have enjoyed working with Greg, and I look forward to continuing to work with the rest of Burger King's extremely talented management team as we continue to build a company in which employees and franchisees can take pride." Prior to serving as Burger King's president and CFO, Chidsey served as president of the Americas and president of North America at the company. Before joining Burger King in March 2004, Chidsey served as chairman and CEO for two corporate divisions at Cendant: the Vehicle Service Division, a $5.9 billion division, which includes Avis Rent A Car and Budget Rent A Car Systems, and the financial services division, a $1.4 billion division that includes Jackson Hewitt and PHH. Previously, Chidsey was the CFO of Pepsi- Cola Eastern Europe and the CFO of PepsiCo World Trading Co. Inc. Chidsey holds an MBA in finance and accounting and a law degree from Emory University in Atlanta, Ga., as well as a bachelor's administration degree from Davidson College, Davidson, North Carolina. He is a certified public accountant and a member of the Georgia Bar Association. Wells has more than 25 years of experience in finance. Before joining Burger King Corporation, Wells spent 15 years at Compaq with his last position as vice president and corporate treasurer. Prior to that, he served in various finance roles at British Petroleum. The Board said, "Ben is a seasoned finance leader with an impressive track record." Swette has served on Burger King's Board since April 2003. From 1998 to 2002, Swette served as COO of eBay in San Jose, Calif. About Burger King The Burger King -- http://www.burgerking.com/-- operates more than 11,000 restaurants in more than 60 countries and territories worldwide. Approximately 90% of Burger King restaurants are owned and operated by independent franchisees, many of them family-owned operations that have been in business for decades. Burger King Holdings Inc., the parent Company, is private and independently owned by an equity sponsor group comprised of Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners. * * * As reported in the Troubled Company Reporter on Feb. 6, 2006, Moody's Investors Service assigned a Ba2 rating to Burger King Corporation's proposed $350 million senior secured term loan B add-on facility. Moody's also affirmed the company's Ba2 corporate family rating as well as the Ba2 rating assigned to BKC's: * $250 million senior secured term loan A; * $750 million senior secured term loan B; and * $150 million senior secured revolving credit facility. In addition, Moody's changed the outlook for BKC to negative from stable. As reported in the Troubled Company Reporter on Feb. 6, 2006, Standard & Poor's Ratings Services assigned its 'B+' rating to quick-service restaurant operator Burger King Corp.'s proposed $350 million add-on to its existing secured term loan B, which matures in 2012. The recovery rating on the company's $1.496 billion credit facility was lowered to '3' from '2'. The rating and recovery rating indicate the expectation for meaningful (50%- 80%) recovery of principal in the event of a payment default. At the same time, Standard & Poor's placed its ratings on Burger King, including the 'B+' corporate credit and bank loan ratings, on CreditWatch with positive implications. CATHOLIC CHURCH: GVA Kidder Values Spokane Properties at $85 Mil. ----------------------------------------------------------------- As previously reported in the Troubled Company Reporter on December 14, 2005, Judge Williams authorized the Committee of Tort Claimants, the Committee of Tort Litigants, and Gayle E. Bush, the Future Claims Representative, to retain GVA Kidder Mathews as their appraiser and consultant. Shaun M. Cross, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, in Spokane, Washington, tells the U.S. Bankruptcy Court for the Eastern District of Washington that a summary of the valuations of parish or diocesan properties has been distributed to counsel of parties-in-interest. According to Mr. Cross, GVA Kidder Mathews' estimate of the fair market value of 40 appraised properties came in at approximately $71,000,000. GVA Kidder Mathews' estimate of the value of 89 consulting properties is approximately $11,000,000 to $14,000,000. Association Comments on Summary Representing the Association of Parishes, Ford Elsaesser, Esq., at Elsaesser Jarzabek Anderson Marks Elliott & McHugh, in Sandpoint, Idaho, asserts that any conclusion as to the appraisals should await the actual publication of the final appraisals on all properties. The Diocese and the Association of Parishes have not agreed to be bound by GVA Kidder's valuations. About the Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 215/945-7000) CBRL GROUP: Moody's Cuts Corp. Family Rating to Ba2 --------------------------------------------------- Moody's Investors Service downgraded CBRL Group, Inc.'s corporate family rating to Ba2 from Ba1, citing significant weakening of credit metrics and a considerable shift in operating strategy resulting from the company's proposed $800 million debt-financed share repurchase initiative and planned monetization of Logan's Roadhouse, Inc. At the same time, Moody's assigned a Ba2 rating to CBRL's proposed $1.25 billion senior secured bank facility consisting of a $250 million revolving credit facility, an $800 million term loan B and a $200 million delayed draw term loan. With the downgrade of the corporate family rating and assignment of the secured ratings, the senior unsecured rating was lowered to Ba3 from Ba1. The rating outlook is stable. Moody's notes that these ratings are subject to a review of the final documentation. These actions conclude the review for possible downgrade that commenced on March 20th. Moody's added that the anticipated divestiture of Logan's and application of proceeds to the term loan in order to meet certain required covenants in the bank facility were factored into the final rating and outlook. Should CBRL decide not to monetize Logan's within the announced timeframe or if the sale significantly changes from the expected scenario, Moody's would need to reassess the impact on all ratings at that time. The rating downgrade reflects: 1) significantly weaker pro forma credit metrics at closing with debt-to-EBITDA at 4.3x and free cash flow-to-debt below 3%; 2) the challenges in revitalizing same store sales growth and margin improvement at the Cracker Barrel Old Country Store concept in the mature, highly competitive family dining category; and 3) reduced diversification with the planned sale of Logan's, currently a higher growth, better performing business in the casual dining category. Supporting the Ba2 corporate family rating is Cracker Barrel's strong brand name recognition, particularly with travelers, CBRL's significant real estate ownership and Cracker Barrel's steady cash flow generation which is aided by modest capital expenditure requirements and a moderate expansion plan. Moody's previous rating action on CBRL was the March 20, 2006 downgrade and placement under review for possible downgrade following the company's announcement to buy back up to $800 million in stock and divest of Logan's by the end of the fourth quarter of fiscal 2006 or during the first quarter of fiscal 2007. Ratings downgraded with a stable outlook: * CBRL Group, Inc. - Corporate family rating to Ba2 from Ba1 and senior unsecured notes to Ba3 from Ba1. Ratings assigned with a stable outlook: * CBRL Group, Inc. - $250 million senior secured revolving credit facility maturing in 2011 at Ba2, $800 million senior secured term loan B maturing in 2013 at Ba2 and $200 million senior secured delayed draw term loan maturing in 2013 at Ba2. The $1.25 billion credit facility is secured by the pledge of stock of all domestic subsidiaries in addition to being guaranteed by those same subsidiaries. Moody's recognizes the senior position of this debt class in relation to the unsecured zero- coupon convertible notes, however, because the secured debt comprises the majority of the capital structure even before any borrowings under the revolver or funding of the delayed draw term loan, the credit facility ratings were kept at the Ba2 corporate family rating level. The Ba3 rating on the unsecured notes reflects the subordinated position of these noteholders. The rating agency added that the $200 million delayed draw term loan represents earmarked capital for refinancing the company's convertible notes which can be redeemed at the company's option any time after April 3, 2007. CBRL Group, Inc., headquartered in Lebanon, Tennessee, is the holding company for two primary restaurant operating entities, Cracker Barrel Old Country Store and Logan's Roadhouse. CBRL reported $2.6 billion in revenues for fiscal 2005 ended July 29, 2005 with Cracker Barrel comprising approximately 85% of consolidated revenues and Logan's representing the remaining 15%. CINRAM INT'L: Shareholders to Vote on Trust Conversion on Apr. 28 ----------------------------------------------------------------- Cinram International Inc.'s (TSX: CRW) Management Proxy Circular relating to its proposed conversion to an income trust has been publicly filed and is also being mailed to shareholders of the Company. The Conversion would be effected pursuant to a plan of arrangement, under which the current shareholders of Cinram would exchange their common shares for units of the newly created Cinram International Income Fund, and Class B exchangeable limited partnership units of a limited partnership owned by the Fund, on a one-for-one basis. The Company has obtained an interim order from the Ontario Superior Court of Justice authorizing it to hold an Annual and Special Meeting of Shareholders to consider, among other matters, the proposed Arrangement. This meeting will be held at the TSX Conference Centre, 130 King Street West, Toronto, Ontario M5X 1J2 on April 28, 2006 at 10:00 am (Toronto time). The resolution approving the Arrangement must be approved by two-thirds of the votes cast, in person or by proxy, by common shareholders of record as at March 20, 2006. If all conditions to the implementation of the Arrangement have been satisfied or waived, Cinram will, as soon as practicable thereafter, apply to the Ontario Superior Court for a final order approving the Arrangement. If the final order of the Court is obtained, the effective date of the Arrangement is expected to be on May 5, 2006. In connection with the Conversion, Cinram will establish a five member Board of Trustees comprised of four existing directors of Cinram and one new member, Mr. Thomas A. Di Giacomo. Since 1993, Mr. Di Giacomo has been the President of Tadico Limited, an advisory and investment company, and from 1972 to 1993, he held positions of increasing responsibility within Manulife Financial, including the positions of Chairman and CEO. The Board of Directors of Cinram has unanimously concluded that, in its opinion, the Arrangement is fair and reasonable and in the best interests of the Company and its shareholders and recommends that shareholders vote in favour of the Arrangement resolution at the meeting. In establishing the terms of the Conversion and in making its recommendation, the Board of Directors considered a number of factors, including the Fairness Opinion from Genuity Capital Markets that the consideration under the Arrangement is fair, from a financial point of view, to shareholders. The recommendation of the Board was considered in the context of several key objectives, including: (a) optimizing distributable cash flow and cash distributions to shareholders; (b) taking into account the Company's multi-jurisdictional operations and cash flows that span Canada, the United States and Europe; (c) preserving the Company's program of substantial capital reinvestment in its facilities and new technology to sustain its growth and profitability in the evolving multimedia replication industry; (d) ensuring access to the capital markets to fund growth and potential acquisitions with a strong public markets currency; (e) allowing investors to focus on the strong cash flow profile of the Company; (f) maintaining the Company's inclusion in the S&P/TSX Composite Index; (g) reorganizing the structure of the Company so that substantially all of the distributions to shareholders (other than non-resident shareholders) are expected to be preserved as dividend income for Canadian income tax purposes; and (h) restructuring the Company's debt facilities to increase cash available for distribution to shareholders The Fund anticipates paying initial annualized distributions of C$3.00 per Unit, payable in equal monthly installments of C$0.25 per Unit, the first of which is expected to be paid on or before June 15, 2006. Based on this level of distributions and the Company's fiscal 2005 operating performance, Cinram would have retained approximately US$120 million for annual capital expenditures and US$33 million in other discretionary reserves, representing approximately an 82% payout ratio. Directors of Cinram, who own, directly or indirectly, or exercise control or direction over, approximately 5.1% of the outstanding common shares, have indicated that they intend to vote in favour of the Conversion. A full-text copy of the notice to the Annual Shareholders meeting is available for free at http://ResearchArchives.com/t/s?796 About Cinram Cinram International Inc. -- http://www.cinram.com/-- is the world's largest independent provider of pre-recorded multimedia products and related logistics services. With facilities in North America and Europe, Cinram manufactures and distributes pre- recorded DVDs, VHS video cassettes, audio CDs, audio cassettes and CD-ROMs for motion picture studios, music labels, publishers and computer software companies around the world. The Company's shares are listed on the Toronto Stock Exchange (CRW) and are included in the S&P/TSX Composite Index. * * * As reported in the Troubled Company Reporter on Mar. 7, 2006, Standard & Poor's Ratings Services placed its 'BB' long-term corporate credit and bank loan ratings on prerecorded multimedia manufacturer Cinram International Inc. on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Nov. 8, 2005, Moody's Investors Service placed Cinram International Inc.'s Ba3 Corporate Family and Ba3 Senior Secured ratings under review direction uncertain. The review is prompted by the company's announcement that it plans to pursue a recapitalization as an income deposit security structure. CITGO PETROLEUM: Discounts Rumored Sale of Strategic Assets ----------------------------------------------------------- Felix Rodriguez, president and CEO of CITGO Petroleum Corporation, reaffirmed the company's commitment to its customers and the U.S. energy marketplace. "CITGO will continue to supply its customers with the top quality products for which our brand is known. We are not selling our wholly owned refineries or other strategic assets," he noted in response to a report carried by an industry media outlet earlier today. Rodriguez added that a letter of intent has been signed with Lyondell Chemical Company to jointly explore the sale of the Lyondell-CITGO Refining LP partnership that operates a refinery in Houston with a crude oil processing capacity of 268,000 barrels per day. Lyondell holds a 58.755 interest in LCR and is the operating partner. CITGO holds a 41.25% interest. Headquartered in Houston, Texas, CITGO -- http://www.citgo.com/-- is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A., the state-owned oil company of Venezuela. PDVSA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * As reported on Feb. 16, 2006, Standard and Poor's Ratings Services assigned a 'BB' rating on CITGO Petroleum Corp. Standard & Poor's 'BB' rating on CITGO is higher than the 'B+' corporate credit rating on PDVSA, because of the relative strength of the refiner's financial profile and the asset protection afforded to CITGO creditors, if CITGO defaults for PDVSA-specific reasons, for example, a Venezuela sovereign default. Nevertheless, CITGO could be challenged by events surrounding PDVSA. CITIGROUP MORTGAGE: Moody's Rates Class M-5 Certificates at Ba1 --------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by Citigroup Mortgage Loan Trust 2006-WF1, Asset-Backed Pass-Through Certificates, Series 2006-WF1, and ratings ranging from Aa2 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Wells Fargo Bank, N.A. originated fixed-rate Alt-A mortgage loans acquired by Citigroup Global Markets Realty Corp. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, and overcollateralization. Moody's expects collateral losses to range from 1.25% to 1.45%. Wells Fargo Bank, N.A. will service the loans. The complete rating actions are: Citigroup Mortgage Loan Trust 2006-WF1 Asset-Backed Pass-Through Certificates, Series 2006-WF1 * Class A-1, Assigned Aaa * Class A-2A, Assigned Aaa * Class A-2B, Assigned Aaa * Class A-2C, Assigned Aaa * Class A-2D, Assigned Aaa * Class A-2E, Assigned Aaa * Class A-2F, Assigned Aaa * Class M-1, Assigned Aa2 * Class M-2, Assigned A2 * Class M-3, Assigned Baa2 * Class M-4, Assigned Baa3 * Class M-5, Assigned Ba1 CONNORS BROTHERS: Revenues Rise 88.9% Year-Over-Year in 2005 ------------------------------------------------------------ Connors Bros. Income Fund's reported fourth quarter and year 2005 results that are in line with recent management expectations. For the fourth quarter of 2005, Connors's revenues rose 35.9% to $231.4 million while net earnings for the fourth quarter of 2005 increased 11.9% to $11.9 million. On a full year basis, reported revenues increased 88.9% from 2004 contributing to record revenues of $881.4 million while reported net earnings totaled $46.9 million, up from $17.3 million in 2004. Net Earnings for the fourth quarter of 2005 increased 11.9% to $11.9 million from $10.6 million in the fourth quarter of 2004, reflecting the addition of the Castleberry's and Sweet Sue/Bryan businesses, the gain from an inventory insurance claim related to Hurricane Katrina, slightly improved volumes, and higher customer pricing. These were partially offset by the continued escalation of fish, other commodity, energy and transportation costs. Net Earnings for 2005 totaled $46.9 million, up from $17.3 million in 2004, reflecting the addition of the Castleberry's and Sweet Sue/Bryan businesses, a full year of earnings from Bumble Bee versus eight months in 2004, higher customer pricing and gains from brand divestitures and the inventory insurance claim related to Hurricane Katrina. These were partially offset by higher commodity and transportation charges. "Despite category softness in the United States related to higher customer pricing, we continued to achieve revenue and share growth in the fourth quarter with full year pro forma revenues up 2.9%," said Christopher Lischewski, president and chief executive officer of the Fund's operating subsidiaries. "Importantly, our new albacore steak pouches and flavored tuna items continued to gain distribution as customers responded favorably to these innovative new products. From a profitability standpoint, the fourth quarter remained challenging for Connors as significant cost inflation in fish, commodities, freight and distribution negatively impacted our margins." Lischewski explained that the continuation of high fish and commodity costs, coupled with increased freight and distribution expense, will result in further cost inflation in 2006. "To counter this cost pressure, we increased albacore pricing in October 2005 and are executing a general price increase of about 5% covering the balance of our product line in April 2006. In addition, we will continue to launch new and innovative items during the year that are expected to drive new usage occasions. Operationally, we expect to complete the integration of Augusta operations by the end of the first quarter with savings expected in the back half, and we have initiated a U.S. supply chain improvement project to reduce transportation and warehousing costs while also lowering working capital requirements." Planned price increases and various cost reduction initiatives, along with improved efficiencies in Connors' processing facilities, are expected to offset the anticipated cost inflation and the short-term consumption decline related to higher pricing. According to Lischewski, the Fund is projecting full year 2006 earnings improvement of about 5% "although both first and second quarter 2006 earnings are projected to be down approximately 10% as our price increase does not take effect until the second quarter and we expect category volume shortfalls as retailers and consumers adjust to higher retail prices." He said, "Lower first half earnings will result in a distributable cash payout ratio well over 100% for the first six months of 2006, trending downward to the mid-90s by year-end based on the expectation of stronger second half results." "2006 will be another challenging year for Connors and the North American food industry. It will be the first year of significant inflation in the U.S. retail food sector in more than a decade and both retailers and consumers are currently resisting higher price points. At Connors, we remain focused on our vision to be the brand leader in shelf stable protein. We will execute responsible pricing actions, drive consumption through innovative new products and aggressively approach every opportunity to reduce cost and improve efficiency. We remain confident in our long-term business strategy and believe we will emerge from the current environment as a stronger company, meeting expectations of both top and bottom line growth," said Lischewski. The Fund's quarterly and annual results were influenced by transaction / acquisition related charges, the sale of non- strategic brands and assets, gains on insurance claims and prior year mark-to-market foreign currency contract charges. Given the significant impact of these charges on reported results, management recommends supplementing the actual and pro forma results with 'adjusted' pro-forma results that exclude these charges or gains. Management believes that this provides better perspective on the underlying health of the business. The charges and gains for the fourth quarter of 2005 include: -- approximately $2.7 million in restructuring charges at the Fund's sardine operations related primarily to accruals recorded for pension plan curtailment and settlement costs associated with transitioning employees to a defined contribution plan. These charges were partially offset by the reduction of unused accruals associated with the closure of the Bath, Maine sardine factory, which is complete. -- a $0.3 million gain relating to the sale of the Fund's can-making equipment. This gain relates to the May 2005 sale, which though favorable, does not reflect the ongoing operations of the business. -- a $1.6 million gain relating to the insurance claim and reimbursement of inventory destroyed by Hurricane Katrina. This gain is net of a $0.2 million EBITDA addback related to sales lost due to the hurricane. The charges and gains for the year ended Dec. 31, 2005 include: -- $8.3 million in inventory step-up charges related to the acquisition of the Castleberry's and Sweet Sue/Bryan businesses and the purchase of the remaining Non- Controlling Interest in the Fund's operating subsidiaries in April 2005. -- $4.9 million in restructuring charges related primarily to accruals recorded for pension plan curtailment and settlement costs associated with transitioning employees to a defined contribution plan, charges related to the closure of the Bath, Maine sardine factory and further headcount rationalizations at Connors. -- a $7.0 million net gain relating to the sale of the Brunswick brand in Australia / New Zealand and the Fund's can-making equipment. This gain mainly relates to the May 2005 sale of the brand, which, though favorable, does not reflect the ongoing operations of the business. -- a $1.6 million gain relating to the insurance claim and reimbursement of inventory destroyed by Hurricane Katrina. This gain is net of a $0.2 million EBITDA addback related to sales lost due to the hurricane. In 2004, results were unfavorably impacted by $11.3 million of non-cash, inventory step-up charges related to the acquisition of Bumble Bee, $4.8 million in restructuring charges, and $2.1 million of foreign currency mark-to-market charges. Prior year's results were favorably impacted by the inclusion of activity related to the Port Clyde and Brunswick brands, which generated EBITDA of $2.2 million for the year ended December 31, 2004. About Connors Connors Bros. Income Fund is a limited purpose trust established under the laws of Ontario that indirectly holds a 100% interest in Clover Leaf Seafoods, L.P. and Bumble Bee Foods, LLC. Together, these two operating companies comprise North America's largest branded seafood company. The Fund's subsidiaries offer a full line of canned tuna, salmon, sardine and specialty seafood products, marketed under leading brands including Clover Leaf(R), Bumble Bee(R), Brunswick(R), Snow's(R) and Beach Cliff(R), as well as a full-line of canned chicken and canned meat products in the U.S. under the Castleberry's(R), Sweet Sue(R), and Bryan(R) brand names. * * * As reported in the Troubled Company Reporter on March 15, 2006, Standard & Poor's Ratings Services assigned its 'B+' long-term corporate credit rating to Toronto-based Connors Bros. Income Fund. Standard & Poor's also assigned its 'B+' bank loan rating with a recovery rating of '3' to the company's indirect operating subsidiaries and co-borrowers, U.S.-based Bumble Bee Foods LLC and Canada-based Clover Leaf Seafoods L.P.'s US$275 million bank loan facility, indicating that the asset values provide lenders with the expectation of meaningful recovery of principal in a payment default scenario. The bank loan rating is based on preliminary terms and conditions and is subject to review once full documentation is received. Proceeds of the new loan will be used to refinance the company's existing debt. The outlook is positive. CONSTELLATION BRANDS: Earns $325.3 Million in Fiscal 2006 --------------------------------------------------------- Constellation Brands, Inc. (NYSE: STZ) (ASX: CBR) reported net sales of $4.6 billion for its fiscal year ended Feb. 28, 2006, up 13% over the prior year. Net sales for fiscal 2006 included $337.5 million of sales for the period March 1, 2005 through Dec. 22, 2005, resulting from the Dec. 22, 2004 acquisition of The Robert Mondavi Corporation, and $43.6 million of sales of Ruffino brands for the period March 1, 2005 through Jan. 31, 2006. Constellation began distributing Ruffino brands in the United States on Feb. 1, 2005. Organic net sales, which exclude net sales of Robert Mondavi and Ruffino brands for these periods, grew 3%, or 4% on a constant currency basis. Growth of branded products in the wine, imported beers and spirits categories, as well as the addition of the higher margin Robert Mondavi brands, drove solid margin expansion. Branded business net sales grew 18%, or 19% on a constant currency basis, while branded business organic net sales increased 6%. "Fiscal 2006 was another terrific year for Constellation Brands in which we successfully managed tremendous growth, improved our profitability, increased free cash flow over the prior year and paid down a substantial amount of debt," stated Richard Sands, Constellation Brands chairman and chief executive officer. Reported net income for fiscal 2006 increased 18% to $325.3 million. Operating income for fiscal 2006 totaled $666.1 million, or 14.5% of net sales, compared with $567.9 million or 13.9% of net sales for fiscal 2005. Reported operating income included $6.4 million of expense related to a United Kingdom pension plan adjustment, and $4.3 million of expenses associated with the company's tender offer for Vincor International Inc. that expired in December 2005, both recorded in the fourth quarter fiscal 2006. Fiscal 2006 and 2005 reported results include acquisition-related integration costs, restructuring and related charges and unusual items. Net income and diluted earnings per share, on a comparable basis, exclude these costs, charges and items. Fiscal 2006 operating income, on a comparable basis, was $760.0 million or 16.5% of net sales, compared with $626.7 million or 15.3% of net sales for the prior year period. On a comparable basis, fiscal 2006 net income and diluted earnings per share increased 21% to $379.8 million and 18% to $1.59, respectively. For fiscal 2006, the company generated $436 million of net cash provided by operating activities and $303.5 million of free cash flow. The company exited fiscal 2006 with approximately $2.81 billion of debt, which represents a decrease of approximately $480 million from the prior year. This decrease resulted primarily from debt payments principally funded from free cash flow and proceeds from asset sales. Fourth Quarter Results Net sales for the fourth quarter fiscal 2006 totaled $1.05 billion, up 1% over prior year fourth quarter, or 4% on a constant currency basis. Fourth quarter net sales included $8.5 million of sales for Robert Mondavi brands for the period Dec. 1 through Dec. 22, 2005, and $7.7 million of sales of Ruffino brands for the period Dec. 1, 2005 through Jan. 31, 2006. For the quarter, organic net sales, which exclude net sales of Robert Mondavi and Ruffino brands for these periods, decreased 1%, but increased 2% on a constant currency basis. Branded business net sales grew 4%, or 5% on a constant currency basis. Organic net sales for the branded business increased 2%, or 3% on a constant currency basis. Reported net income for the fourth quarter fiscal 2006 increased 22% to $58.2 million. Reported operating income totaled $130.7 million for the fourth quarter fiscal 2006, or 12.5% of net sales, compared with $119.6 million or 11.5% of net sales for the fourth quarter fiscal 2005. Fourth quarter fiscal 2006 operating income, on a comparable basis, was $162.8 million or 15.5% of net sales, compared with $159.5 million or 15.4% of net sales for the prior year period. On a comparable basis, fourth quarter fiscal 2006 net income and diluted earnings per share increased 19% to $86.9 million and 16% to $0.36, respectively. "In fiscal 2006 we once again set new financial performance records, experienced true growth for our business, expanded our base of profitability and free cash flow and strengthened our platform for future growth," Sands pointed out. "We added strong wine and spirits brands to our portfolio through acquisitions and new product development, and our imported beer business outpaced U.S. beer market growth. We've restructured our business to meet the needs of our customers and the ever-changing marketplace dynamics, while remaining close to consumer trends. Mining the wealth of consumer insights we continuously gather from our core markets around the world, we are positioned to take advantage of many unharvested opportunities in fiscal 2007, with our sights always set on an unwavering commitment to increasing shareholder value." Vincor Arrangement Agreement On April 3, 2006, Constellation announced that it entered into an arrangement agreement with Vincor International Inc. ("Vincor") under which Constellation will acquire all of the issued and outstanding common shares of Vincor at a cash price of C$36.50 and assume Vincor's net debt. The transaction is valued at approximately C$1.52 (U.S. $1.31) billion and is expected to be completed in early June 2006. About Constellation Brands Constellation Brands, Inc. -- http://www.cbrands.com/-- is a leading international producer and marketer of beverage alcohol brands with a broad portfolio across the wine, spirits and imported beer categories. Well-known brands in Constellation's portfolio include: Corona Extra, Corona Light, Pacifico, Modelo Especial, Negra Modelo, St. Pauli Girl, Tsingtao, Black Velvet, Fleischmann's, Mr. Boston, Paul Masson Grande Amber Brandy, Chi- Chi's, 99 Schnapps, Ridgemont Reserve 1792, Effen Vodka, Stowells, Blackthorn, Almaden, Arbor Mist, Vendange, Woodbridge by Robert Mondavi, Hardys, Nobilo, Alice White, Ruffino, Robert Mondavi Private Selection, Blackstone, Ravenswood, Estancia, Franciscan Oakville Estate, Simi and Robert Mondavi Winery brands. * * * As reported in the Troubled Company Reporter on April 6, 2006, Fitch affirmed BB ratings on Constellation Brands, Inc.'s bank credit facilities and senior unsecured bond debt, and BB- rating on the beverage company's senior subordinated debt obligations, after the company announced a definitive agreement to acquire Vincor International Inc. The Rating Outlook is Stable, Fitch said. Approximately $4.2 billion in aggregate debt, including debt related to the Vincor acquisition, is covered by Fitch's actions. As reported in the Troubled Company Reporter on Dec. 13, 2005, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating and other ratings on beverage alcohol producer and distributor Constellation Brands Inc. As reported in the Troubled Company Reporter on Nov. 16, 2005, Moody's Investors Service assigned a (P)Ba2 rating to Constellation Brands, Inc.'s then-proposed $1.2 billion senior secured credit facility, the proceeds of which are to be used to finance the purchase of Vincor International Inc. At the same time, Moody's confirmed these Constellation Brand ratings: * Ba2 Corporate Family Rating * $2.9 billion senior secured credit facility consisting of a: -- $500 million revolver, -- $600 million tranche A1 term loans, and -- $1.8 billion tranche B term loans, Ba2 * $200 million 8.625% senior unsecured notes, due 2006, Ba2 * $200 million 8% senior unsecured notes, due 2008, Ba2 * GBP 80 million 8.5% senior unsecured notes, due 2009, Ba2 * GBP 75 million 8.5% senior unsecured notes, due 2009, Ba2 * $250 million 8.125% senior subordinated notes, due 2012, Ba3 Moody's changed its ratings outlook to negative from stable, and said its Speculative Grade Liquidity rating is SGL-2. COUNTRYWIDE ALTERNATIVE: Moody's Rates Two Cert. Classes at Low-B ----------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Class B-3 and a B2 rating to Class B-4 issued by Countrywide Alternative Loan Trust 2005-83CB. Additional research is available at http://www.moodys.com/ CREDIT SUISSE: S&P Upgrades Class Q Certificates' Rating to CCC+ ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on 13 classes from Credit Suisse First Boston Mortgage Securities Corp.'s series 2002-CKP1. At the same time, ratings are affirmed on five other classes from the same transaction. The raised and affirmed ratings reflect credit enhancement levels that adequately support the ratings under various stress scenarios. As of March 17, 2006, the trust collateral consisted of 149 loans with an outstanding balance of $935.1 million, down from 156 loans with a balance of $992.9 million at issuance. The master servicer, Midland Loan Services Inc., reported primarily year-end 2004 and year-end 2005 financial data for 99.7% of the pool. Excluding 16 defeased loans totaling $77.2 million (8%), Standard & Poor's calculated a weighted average net cash flow debt service coverage (DSC) of 1.42x, up from 1.37x at issuance. To date, the trust has incurred six losses totaling $2.1 million. The top 10 loans have an aggregate balance of $354.7 million (38%) and a weighted average DSCR of 1.51x, up from 1.37x at issuance. None of the top 10 loans are specially serviced. The seventh- largest loan is secured by six properties, one of which appears on Midland's watchlist. The ninth-largest loan is also on the watchlist. Standard & Poor's reviewed recent property inspections provided by Midland for the top 10 loans, and the collateral was generally characterized as "good" or "excellent." Two of the 19 properties that secure the fourth-largest loan were deemed "poor," and one property was deemed "fair." There are two assets with the special servicer, LNR Partners Inc. The Silverwood Apartments loan ($3.8 million; 0.3%) is secured by a 112-unit multifamily property in Gallatin, Tennessee, that reported a year-end 2004 DSCR of 0.96x. This loan is in its grace period and was transferred to the special servicer in March 2006 because of imminent default. The property was 88% occupied as of March 2005. Should this loan become delinquent in its debt service payments, a moderate loss would be expected. The Admiral Manufactured Housing Community and Self Storage loan ($789,437 balance; 0.1%) is secured by a 449,600-sq.-ft. mixed-use property in Pensacola, Florida. The loan is less than 30 days delinquent in its debt service payments but was transferred to the special servicer because the borrower sold part of the collateral without the lender's consent. The special servicer is currently negotiating a resolution of this issue, and Standard & Poor's expects losses upon such resolution, if any, to be minimal. There are 27 loans with an outstanding balance of $117.6 million (13%) on Midland's watchlist. The seventh-largest loan, the Oak Ridge portfolio, has a balance of $26.9 million (3%) and is secured by six office properties totaling 413,965 sq. ft. in Oak Ridge, Tennessee. One of the six properties in the portfolio has an allocated balance of $2.0 million and reported year-end 2005 DSC of 0.23x and occupancy of 68%. It appears on the watchlist due to a DSC. The ninth-largest loan in the trust, the Summit-Phase II, has a $20.6 million balance (2%) and is secured by a 103,924-sq.-ft. retail property in Birmingham, Alabama. The loan appears on the watchlist erroneously, and Midland has informed Standard & Poor's that this loan will be removed from its upcoming watchlist. The remaining loans on the watchlist appear there due to low DSCRs or occupancy issues. Standard & Poor's stressed the specially serviced assets, loans on the watchlist, and other assets with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings raised: Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2002-CKP1 Rating Class To From Credit enhancement ----- -- ---- ------------------ C AAA AA+ 18.10% D AA+ AA- 15.32% E AA A+ 13.72% F AA- A 12.26% G A+ BBB+ 10.67% H A BBB 9.08% J-AD BBB+ BBB- 6.96% K-Z BBB BB+ 6.96% L BBB- BB 5.23% N BB B+ 3.50% O B+ B 2.58% P B B- 2.04% Q CCC+ CCC 1.51% Ratings affirmed: Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2002-CKP1 Class Rating Credit enhancement ----- ------ ------------------ A-2 AAA 23.81% A-3 AAA 23.81% B AAA 19.56% A-X AAA N/A A-SP AAA N/A N/A -- Not applicable. CURATIVE HEALTH: Plans to Eliminate $185 Mil. in Bondholder Debt ---------------------------------------------------------------- Curative Health Services, Inc., is proceeding with a prepackaged plan of reorganization that is overwhelmingly supported by the holders of its 10.75% senior notes due 2011 and will eliminate the Company's $185 million debt obligation under the Notes and strengthen its balance sheet. After receiving such strong support from the Company's bondholders, Curative and its subsidiaries filed Chapter 11 petitions on March 27, 2006 in the United States Bankruptcy Court for the Southern District of New York seeking court approval of the plan. During hearings held in the first week of the Company's jointly administered Chapter 11 cases, the Court approved the Company's request for several orders that will enable the Company to continue its day-to-day business operations as usual. Among other items, the Court approved orders authorizing the Company to continue to pay its employees' compensation and benefits, and confirming the Company's ability to pay its suppliers and service providers in the ordinary course of business going forward. The Court also entered an interim order approving the Company's previously announced $45 million revolving credit facility with GE Capital Corporation that will provide financing for the Company during these proceedings. The Court has currently scheduled a hearing on confirmation of the Company's plan for May 8, 2006 at 2:00 p.m. EST. "Our operations have continued to run smoothly during this process, and our customers and suppliers have been very supportive of our efforts to eliminate the Company's long-term debt," said Paul F. McConnell, President and Chief Executive Officer of Curative. "During this debt restructuring process and beyond, we intend to continue our long-standing commitment to providing high- quality care and clinical results for our pharmacy patients with serious or chronic medical conditions and comprehensive wound care management services for our hospital clients." Mr. McConnell also emphasized that Curative's employees will of course continue to be paid and receive their benefits without interruption during the debt restructuring. "We appreciate the ongoing loyalty and support of all our employees," said Mr. McConnell. "Their dedication and hard work are critical to our success and integral to the future of the Company. I would also like to thank our patients and customers for their continued support during this process as we continue to provide them with the highest quality of clinical care and customer service." Mr. McConnell concluded, "Our Wound Care Management and Specialty Infusion businesses have produced very good results this past year and they continue to grow. Once our balance sheet issues are behind us, Curative will be poised for even greater success and growth. Our management team is committed to making this restructuring successful and leading Curative towards a bright future." About Curative Health Services Headquartered in Nashua, New Hampshire, Curative Health Services, Inc. -- http://www.curative.com/-- provides Specialty Infusion and Wound Care Management services. The company and 14 of its affiliates filed for chapter 11 protection on Mar. 27, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10552). Brian E. Greer, Esq., and Martin N. Flics, Esq., at Linklaters, represent the Debtors in their restructuring efforts. The Debtors financial condition as of Sept. 30, 2005 showed $155,000,000 in total assets and $255,592,000 in total debts. DANA CORP: Wants to Purchase Mexican Goods for DHAM Conversion -------------------------------------------------------------- Pursuant to Section 363 of the Bankruptcy Code, Dana Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to purchase inventory and finished goods from certain of their Mexican affiliates outside of the ordinary course of business so as to effectuate the conversion of the Debtors' nondebtor affiliate, Dana Heavy Axle Mexico S.A. de C.V. into a maquiladora. Corinne Ball, Esq., at Jones Day, in New York, explains that, before the Petition Date, DHAM was operated as an independent corporate entity. As part of their restructuring plans, the Dana Companies have determined that DHAM should be converted into a maquiladora so as to minimize the U.S. and Mexican taxes relating to DHAM's operations paid by the Dana Companies. The conversion will also have the salutary effect of moving accounts receivable and inventory ownership from DHAM to Dana, which will increase the Debtors' borrowing base under their DIP Credit Facility. A maquiladora is a Mexican corporation that operates under a program developed by the Mexican Secretariat of Commerce and Industrial Development that permits it to: (a) temporarily receive component parts and raw materials from a foreign company without being charged any import duties; (b) convert the component parts and raw materials into finished goods; (c) ship the finished goods to, or on behalf of, the foreign company; and (d) charge the foreign company for the value added in Mexico plus a relatively modest government mandated mark-up. This structure is virtually identical to the way in which other multinational companies utilize the maquila program. According to Ms. Ball, by converting DHAM to a maquiladora, Dana will be able to save approximately $2,000,000 a year in Mexican taxes. The conversion will also enable Dana to move significant taxable income from Mexico to the United States, where the Debtors have net operating losses that can be offset against this income. From and after DHAM's conversion to a maquiladora, DHAM will not be permitted to own any inventory or finished goods, and all such inventory and finished goods will be owned by Dana or one of the other Debtors. This inventory and finished goods will increase the Debtors' borrowing base under the DIP Facility. To accomplish DHAM's conversion into a maquiladora and to minimize the taxes associated with the sale of DHAM's inventory, the Dana Companies intend to implement these transactions: (a) DHAM will sell all of its finished goods intended for Mexican customers to Dana's wholly owned nondebtor affiliate, Dana Comercialzadora S.A. de R.L. de C.V., a Mexican corporation, in exchange for a note issued by SRL for $892,242, which, consistent with past pricing practices, is equal to DHAM's cost plus 6.6%; (b) DHAM will sell all of its existing stock of finished goods intended for export customers to Dana in exchange for a note to be issued by Dana, for $2,525,200, which, consistent with past pricing practices, is equal to DHAM's cost plus 6.6%; (c) DHAM will sell all of its raw material and work in process inventory to Dana's wholly owned nondebtor affiliate, PTG Mexico S. de R.L. de C.V., a Mexican corporation and existing maquiladora, in exchange for a note issued by PTG Mexico, for $18,347,755, which, consistent with existing arm's-length pricing, is equal to DHAM's cost plus 0.25%; (d) PTG Mexico will then sell all of the inventory it purchased from DHAM to Dana at the cost at which it was purchased from DHAM plus 0.05%, in exchange for Dana's issuing a note in favor of PTG Mexico equal in value to the PTG Note and a note representing the excess markup, which are estimated to aggregate $18,439,494; (e) PTG Mexico will repay the PTG Note by transferring the Dana PTG Note to DHAM; (f) DHAM will then dividend the SRL Note, the Dana DHAM Note and the Dana PTG Note to Dana, who will subsequently cancel the Dana DHAM Note and the Dana PTG Note; and (g) PTG Mexico will then dividend the Dana Excess Note to Dana, who will subsequently cancel the Dana Excess Note. Completing the steps will allow DHAM to operate as a maquiladora by placing the title with Dana of the inventory and the finished goods destined for the U.S. market currently owned by DHAM, Ms. Ball notes. At the end of the steps, Dana will hold: (1) a note from SRL in the estimated amount of $892,242; (2) title to the finished goods of DHAM destined for the U.S. market; and (3) title to the work in process and inventory of DHAM. On a going forward basis, Dana or another Debtor will own the inventory being processed, and the finished goods being produced, by DHAM. Because the Debtors anticipate that executing the transition of accounting systems necessary for DHAM's conversion will require several weeks, and they want the conversion to be finished by June 1, 2006, they request that the 10-day stay imposed by Rule 6004(h) of the Federal Rules of Bankruptcy Procedure be waived so that the conversion process can commence immediately. Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) DANA CORP: Creditors Committee Selects Kramer Levin as Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Dana Corporation and its debtor-affiliates' Chapter 11 cases seeks authority from the U.S. Bankruptcy Court for the Southern District of New York, under Sections 328 and 1103 of the Bankruptcy Code and Rule 2014 of the Federal Rules of Bankruptcy Procedure, to retain Kramer Levin Naftalis & Frankel LLP as its counsel, effective as of March 10, 2006. Peter Faulkner, co-chairperson of the Creditors Committee, explains that the Committee selected Kramer Levin primarily because its Corporate Restructuring and Bankruptcy Department has extensive experience in the fields of bankruptcy and creditors' rights. In particular, Kramer Levin has represented creditors committees in the Chapter 11 cases of, among others, Genuity, Inc., Bethlehem Steel Corporation, Adelphia Business Solutions, Inc., Dow Corning Corporation, Leap Wireless, Inc., American Architectural Products, Big V Holdings, and VF Brands, Inc. Mr. Faulkner adds that Kramer Levin's broad-based practice, which includes expertise in the areas of corporate and commercial law, litigation, tax, intellectual property, employee benefits and real estate, will permit it to represent fully the interests of the Creditors Committee in an efficient and effective manner. Kramer Levin will advise and represent the Creditors Committee in connection with these matters: (a) the administration of the Debtors' Chapter 11 cases and the exercise of oversight with respect to the Debtors' affairs including all issues arising from the Debtors, the Committee or the Debtors' cases; (b) the preparation on behalf of the Committee of necessary applications, motions, memoranda, orders, reports and other legal papers; (c) appearances in Court and at statutory meetings of creditors to represent the interests of the Committee; (d) the negotiation, formulation, drafting and confirmation of a plan or plans of reorganization and related matters; (e) investigation, if any, as the Committee may desire concerning, among other things, the assets, liabilities, financial condition, sale of any of the Debtors' businesses, and operating issues concerning the Debtors that may be relevant to the Debtors' Chapter 11 cases; (f) communications with the Committee's constituents and others at the direction of the Committee in furtherance of its responsibilities; and (g) the performance of all of the Committee's duties and powers under the Bankruptcy Code and the Bankruptcy Rules and the performance of other services as are in the interests of those represented by the Committee. Kramer Levin will be paid on an hourly basis, subject to its customary rates: Professional Hourly Rate ------------ ----------- Partners $500 to $780 Counsel $505 to $855 Associates $280 to $530 Legal Assistants $190 to $220 Kramer Levin will also seek reimbursement of out-of-pocket expenses. Thomas Moers Mayer, Esq., a partner at Kramer Levin, assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Mayer discloses that Kramer Levin represents or previously represented various parties-in-interest in matters unrelated to the Debtors' cases. These parties include JPMorgan Chase Bank, Citibank, N.A., Bank of America, N.A., Deutsche Bank, Gabelli Asset Management, Inc., and Deloitte & Touche, LLP. Kramer Levin also provided services to Wilmington Trust Company, in its capacity as the indenture trustee for each of the Debtors' unsecured notes. Kramer Levin has resigned as counsel to the Indenture Trustee. Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) DANA CORPORATION: Seeks Court Approval to Sell De Minimis Assets ---------------------------------------------------------------- Pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, Dana Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to implement procedures for: (i) selling miscellaneous assets that are no longer needed in their ongoing business operations; and (ii) paying applicable broker commissions in the ordinary course of business in connection with the sales. According to Corinne Ball, Esq., at Jones Day, in New York, before the Petition Date, the Debtors sought to streamline their operations and eliminate unnecessary operating expenses through exiting certain non-core business lines, selling surplus assets and transferring certain assets or business lines to nondebtor affiliates. From time to time in the ordinary course of business, the Debtors also sell equipment or other assets related to their ongoing business operations when these items are replaced or otherwise are no longer needed. In furtherance of their restructuring efforts, the Debtors intend to dispose of certain property, including real and personal property on an ongoing basis. These transactions may include the sale or transfer of assets to the Debtors' nondebtor affiliates. The value of these assets -- although not insignificant -- is de minimis in comparison to the size and scope of the Debtors' overall multi-billion dollar business enterprise, Ms. Ball relates. The Debtors anticipate that these dispositions: (a) will involve numerous small transactions or a related series of transactions in which the consideration that the Debtors receive will be equal to or less than $10,000,000 for each transaction; and (b) may include the assumption and assignment to the buyer, or rejection, of executory contracts and unexpired leases related to the De Minimis Assets. Given the relatively de minimis value of these assets and the potential for a significant number of these sales, the Debtors believe that it is appropriate to establish streamlined procedures for notice and approval of each the transaction. The Debtors further believe that the use of brokers will significantly aid in the timely disposition and realization of the maximum possible value for the De Minimis Assets. While the Debtors believe that small dispositions of assets are within the scope of the ordinary course of business doctrine under Section 363(c), they believe that many purchasers, including nondebtor affiliates, will be uncomfortable consummating sales without confirmation that the sales are authorized. Sale Notice Procedures If the aggregate consideration for a De Minimis Asset is less than or equal to $1,500,000 or the book value of assets to be transferred to nondebtor affiliates is less than or equal to $1,500,000, no notice or hearing be required for the Debtors to consummate a sale or transfer. The Debtors will maintain records for all sales or transfers. For the sale of De Minimis Assets outside of the ordinary course of business for more than $1,500,000, but equal to or less than $10,000,000, or for transfers of assets to nondebtor affiliates with a book value of more than $1,500,000 but equal to or less than $10,000,000, these procedures will apply: (a) The Debtors will serve a notice of each Proposed Sale on: -- the U.S. Trustee; -- counsel to the Official Committee of Unsecured Creditors and counsel to any additional official committees appointed in the Debtors' cases; -- counsel to the administrative agent for the DIP Lenders; -- any other known holder of Other Liens against the specific assets to be sold or transferred; -- the proposed purchaser or transferee; -- any known interested party in the De Minimis Assets proposed to be sold or transferred; and -- if applicable, the nondebtor parties to all executory contracts or unexpired leases that the Debtors propose to assume and assign or reject in connection with the Proposed Sale. (b) The Sale Notice will specify: * the assets to be sold or transferred; * the identity of the proposed purchaser or transferee; * the proposed cash sale price and other consideration to be exchanged; * a copy of any documentation executed in contemplation of the transaction; * the identities of any parties holding liens on other interests or potential interests in the property; * the executory contracts and unexpired leases, if any, that the applicable Debtor or Debtors propose to be assumed and assigned or rejected as part of the Proposed Sale; * for any assumption and assignment of an executory contract or unexpired lease, the amounts required to cure any defaults pursuant to Section 365(b); and * an affidavit of the broker, if any, that identifies the broker and the amount of the proposed Broker Commission and contains the disclosures required by Rule 2014 of the Federal Rules of Bankruptcy Procedure; (c) The Sale Notice Parties will have five days to object to the Proposed Sale and any Broker Commission. If no written objection is timely filed, the Debtors will be authorized to consummate the Sale without further Court order; (d) If an objection is filed, the Debtors and the objecting party will use good faith efforts to resolve the objection consensually. If the Parties are unable to resolve the objection, the Debtors will not take any further steps to consummate the proposed transaction without first obtaining Court approval of the Proposed Sale, including the payment of any Broker Commission, upon notice and a hearing; and (e) To the extent that a competing bid is received for the purchase of De Minimis Assets in a particular Proposed Sale after service of the Sale Notice that, in the Debtors' sole discretion, materially exceeds the value of the purchase price contained in the Sale Notice, then the Debtors may file and serve an amended Sale Notice for the Proposed Sale to the subsequent bidder pursuant to the Sale Notice Procedures even if the proposed purchase price exceeds $10,000,000. All purchasers or transferees will take De Minimis Assets sold or transferred by the Debtors "as is" and "where is" without any representations or warranties from the Debtors as to quality or fitness for either their intended purposes or any particular purposes. Nothing in the Sale Notice Procedures would prevent the Debtors, in their sole discretion, from seeking Court approval of any proposed sale transaction upon notice and a hearing or, if necessary to comply with a condition on a sale imposed by a purchaser, to submit a separate order to the Court along with a certificate of no objection to be entered without need for a hearing on the matter. Sale, Free and Clear of Liens Pursuant to Section 363(f), the Debtors will sell the De Minimis Assets free and clear of existing liens, claims and encumbrances. The De Minimis Assets are subject to the liens of the Debtors' DIP Lenders. In addition, other creditors may have or assert liens against certain of the De Minimis Assets. Ms. Ball says the DIP Lenders' liens and Other Liens will attach to the net proceeds from the sales of De Minimis Assets, and the net proceeds would be utilized consistent with the provisions of the DIP Financing Agreement, the Interim DIP Order and any final order approving the DIP Financing Agreement entered in the Debtors' Chapter 11 cases and, with respect to the Other Liens, consistent with applicable law. If a holder of a lien, claim or encumbrance receives the requisite notice and does not timely object to a Proposed Sale, the holder will be deemed to have consented to the Sale and that the property then may be sold free and clear of the holder's liens, claims or encumbrances. USBEF Objects U.S. Bancorp Equipment Finance, Inc., leases certain equipment to Dana Corporation pursuant to a lease agreement. USBEF objects to the Debtors' request to the extent that the Debtors seek authority to sell any of the Equipment without notice to USBEF and without any hearing, irrespective of its alleged "book value" or the consideration to be received. Ronald S. Beacher, Esq., at Pitney Hardin LLP, in New York, notes that USBEF is the owner of the Equipment. Hence, the Debtors cannot sell the Equipment, but rather must assume or reject the Lease in accordance with Section 365. To the extent that it consents to the sale of the Equipment or to the assumption and assignment of the Lease, USBEF objects to the Debtors' proposal that: (i) net sale proceeds will be utilized in accordance with the terms of DIP Financing Agreement and the Interim DIP Order; and (ii) the DIP Lenders hold valid duly perfected security interests in and liens upon the De Minimis Assets. Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Inks Joint Interest Agreement with Creditors' Panel ---------------------------------------------------------------- Before the Petition Date, certain events occurred which prompted informal and formal investigations by Delphi Corporation and third parties. The investigations include: (a) an internal review conducted by Delphi's Audit Committee; (b) a formal ongoing investigations by several governmental agencies; (c) Delphi's restatement of earnings for fiscal years 2001 to 2003; (d) the subject matter related to the commencement of certain class actions, including actions brought under the Employee Retirement Income Security Act of 1974, as amended, and various securities actions; and (e) a review by a special committee of Delphi's Board of Directors of certain shareholder derivative demands and related actions. Delphi is the subject of an ongoing investigation by the Securities and Exchange Commission and other federal authorities involving its accounting for and the adequacy of disclosures for a number of transactions dating from Delphi's spin-off from General Motors Corporation. Delphi is fully cooperating with the SEC's ongoing investigation and requests for information as well as the related investigation being conducted by the Department of Justice. The company has entered into an agreement with the SEC that currently suspends the running of the applicable statute of limitations until April 6, 2006, which is likely to be further extended. Until these investigations are complete, Delphi is not able to predict the effect that these investigations will have on its business and financial condition, results of operations, and cash flows. The SEC investigation and the related investigation by the Department of Justice were not stayed as a result of the Debtors' commencement of their Chapter 11 cases. Delphi completed a financial restatement in June 2005, the effects of which reduced retained earnings as of December 31, 2001 by $265,000,000, reduced 2002 net income by $24,000,000, and reduced 2003 net loss by $46,000,000. In conjunction with the restatement, the audit committee of the company's Board of Directors conducted and concluded an internal investigation of certain accounting transactions over the previous five years. Delphi is continuing to cooperate fully with the government's investigations in these matters. Delphi has made and will continue to make improvements to its policies and procedures as well as to the staffing of positions which play a significant role in internal controls to address these matters as more fully described in SEC filings. Several class action lawsuits have been commenced against Delphi, Delphi Trust I, Delphi Trust II, current and former directors, certain current and former officers, General Motors Investment Management Corporation, and certain current and former employees of Delphi or its subsidiaries, as a result of the Company's announced financial restatement. The lawsuits fall into three categories: (1) lawsuits brought under the ERISA purportedly on behalf of participants in certain of the Company's and its subsidiaries' defined contribution employee benefit pension plans which invested in Delphi common stock; (2) lawsuits alleging that the Delphi and certain of its current and former directors and officers made materially false and misleading statements in violation of federal securities laws; and (3) shareholder derivative actions. The Board of Directors has appointed a special committee to investigate certain shareholder derivative demands. Joint Interest Agreement The Debtors have determined that they will share material confidential information with the Official Committee of Unsecured Creditors and consult with the Committee regarding the ongoing investigations. The Debtors intend to provide confidential information to the designees of the Committee to keep them adequately apprised of the ongoing progress of the Investigations, without losing any privilege or protection attaching to any produced information through the disclosure. Pursuant to a Joint Interest Agreement, the Debtors and the Committee agree that all sharing of information will be protected pursuant to the "common interest" or "joint defense" doctrine, to the fullest extent that protection is available under applicable case law. Accordingly, the Debtors ask the Court to: (a) approve the Joint Interest Agreement with the Committee; (b) enter a protective order with respect to information and documents produced pursuant to the Joint Interest Agreement; and (c) approve procedures to protect confidential and privileged information in fee statements and fee applications of professionals retained in their Chapter 11 cases and enter a protective order with respect to the confidential information. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Taps Crowell & Moring as Antitrust Counsel ------------------------------------------------------- Delphi Corporation and its debtor-affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York for authority to employ Crowell & Moring, LLP, as their antitrust counsel, nunc pro tunc to Oct. 8, 2005. David M. Sherbin, Delphi Corporation's vice president, general counsel, and chief compliance officer, relates that as antitrust counsel, Crowell & Moring will continue their legal advice and representation of the Debtors in an antitrust action styled Emerson Elec., et al. v. Morgan Crucible Co., et al., filed in the United States District Court for the Eastern District of Michigan. The action has been transferred to Judge Simandle of the United States District Court for the District of New Jersey and consolidated in In re Electrical Carbon Products Antitrust Litigation, MDL No. 1514, Master Docket No. 03-cv-2182 (JBS). The Emerson plaintiffs, including Delphi, allege that the defendants engaged in a worldwide conspiracy, the purpose and effect of which was to fix, raise, maintain, or stabilize prices and to allocate markets and customers for electrical carbon products sold in the United States, Europe, and elsewhere. Delphi Corporation and other Emerson plaintiffs seek to recover damages for these alleged overcharges. As compensation for its services, Crowell & Moring has agreed to accept payment on a contingent fee basis. Crowell & Moring will receive a portion of any amount that is recovered by the Debtors as a settlement or judgment in connection with the Emerson litigation. Specifically, Crowell & Moring has agreed to a two-tiered contingent fee arrangement. In the event that settlement negotiations with any or all defendants produce a settlement and recovery for the Debtors prior to the commencement of full-scale litigation, Crowell & Moring will receive an amount equal to 25% of the recovery. In the event litigation with some or all of the defendants continues beyond the initial discovery phase, and thereafter the Debtors secure a settlement or judgment with some or all of the defendants, Crowell & Moring will receive an amount equal to 30% of any amount that is recovered by the Debtors, with certain exceptions. Jerome A. Murphy, Esq., a member of the firm, discloses that Crowell & Moring is a disinterested party in the Debtors' Chapter 11 cases, with no potential conflict of interest. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Court Approves Modified Lockport Energy Agreements ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York allowed Delphi Corporation and its debtor-affiliates to: (1) modify the energy agreements with Lockport Energy Associates LP, the Power Authority of the State of New York, and the New York State Electric and Gas Corporation; (2) assume the modified agreement with Lockport Energy; and (3) consent to lift the automatic stay to record modified easements. The Debtors own and operate a Thermal & Interior Systems Facility at 200 Upper Mountain Road, in Lockport, New York. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, relates that the Lockport Facility's power needs are supplied under these agreements: (a) a Service Agreement, dated April 12, 1989, among General Motors Corporation, the Power Authority of the State of New York, and the New York State Electric and Gas Corporation; and (b) an Energy Sales Agreement, dated April 22, 1991, between GM and Lockport Energy Associates LP. Pursuant to the Service Agreement, NYSEG currently acquires from NYPA and provides to Delphi Automotive Systems, LLC -- as GM's successor-in-interest -- certain low-priced hydropower, designated as expansion power, for usage at the Lockport Facility. A dispute arose regarding the sale and use of expansion power under the Service Agreement and the parties entered into a Settlement Agreement to resolve their dispute. The Settlement Agreement superseded and replaced the Service Agreement and designated the manner in which the electricity needs of the Lockport Facility would be supplied. Under the Energy Sales Agreement, Lockport Energy designed, constructed, and operates a cogeneration system adjacent to the Lockport Facility, which uses natural gas to generate and provide electricity and steam service for usage at the Lockport Facility. The Energy Sales Agreement provides that Lockport Energy will provide all of the Lockport Facility's electricity needs other than the Expansion Power that Delphi receives from NYPA through NYSEG under the Settlement Agreement. Modifications The Debtors have determined that modifying the Lockport Agreements to allow them to terminate the provision of electricity to the Lockport Facility and obtain valuable, low-priced electricity from NYPA will substantially benefit the Lockport Facility by lowering its energy costs. The Debtors entered into a modified agreement with Lockport Energy on February 17, 2005. Under the modified Energy Sales Agreement, Lockport Energy will continue to use certain easements until December 27, 2027. The Debtors have agreed to consent to lifting the automatic stay for the limited purpose of allowing Lockport Energy to record the Easements as modified under the modified Energy Sales Agreement. The Debtors' acceptance of Lockport Energy's proposal to modify the Agreements is conditioned on their ability to obtain an additional 10 megawatts of Expansion Power from NYPA. Mr. Butler reports that an application for that additional Expansion Power is pending. According to Mr. Butler, a new contract with NYPA for the supply of additional 10 megawatts of Expansion Power would secure the availability of low-cost power to the Lockport Facility for at least three years beyond the term of the Energy Sales Agreement, and allow for electricity cost savings for the Debtors for about $14,000,000 during the 2006-2011 period. In addition, the Energy Sales Agreement is scheduled to expire on December 27, 2007, whereas the new contract with NYPA would be in force at least until April 1, 2011. The proposed modifications should reduce or eliminate Lockport Energy's role as a supplier of electricity to the Lockport Facility. Thus, Lockport Energy can sell to third parties some of the gas at a profit that it will share with the Debtors. Currently, the Debtors' share of the profit from these sales to third parties is about $6,000,000. In addition, Lockport Energy has agreed to pay NYSEG $3,350,000 as compensation for the losses it will incur as a result of the Settlement Agreement modification. The Debtors estimate that the amount necessary to cure the defaults existing under the Energy Sales Agreement is $521,976, which is the total amount due for actual steam supplied by Lockport Energy to the Lockport Facility prior to October 8, 2005. The Debtors and Lockport Energy have agreed that the Cure Amount will be offset against the $6,000,000 profit estimate on the sale of natural gas to third parties. In this regard, the Debtors seek the Court's authority to: (1) modify the energy agreements with Lockport Energy, NYPA, and NYSEC; (2) assume the modified agreement with Lockport Energy; and (3) consent to lift the automatic stay to record modified easements. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) DIGITAL LIGHTWAVE: Owes Optel Capital $57.1 Million at March 29 --------------------------------------------------------------- Digital Lightwave, Inc., borrowed $660,000 from Optel Capital, LLC, on March 29, 2006, to fund its working capital requirements. Optel is controlled by Digital Lightwave's largest stockholder and current chairman of the board of directors, Dr. Bryan J. Zwan. The loan bears interest at 10.0% per annum, and is secured by a security interest in substantially all of the Company's assets. Optel can demand payment after March 31, 2006. As of March 29, 2006, the Company owed Optel around $49.9 million in principal plus approximately $7.2 million of accrued interest, all of which is secured by a first priority security interest in substantially all of the Company's assets and accrues 10% annual interest. The Company continues to have insufficient short-term resources for the payment of its current liabilities. As of March 29, 2006, the Company has been unable to secure any financing agreement or to restructure its financial obligations with Optel. The company has warned many times that if it is not able to obtain financing, it expects that it will not have sufficient cash to fund its working capital and capital expenditure requirements for the near term and will not have the resources required for the payment of its current liabilities when they become due. The Company's ability to meet cash requirements and maintain sufficient liquidity over the next 12 months is dependent on the Company's ability to obtain additional financing from funding sources, which may include, but may not be limited to Optel. Optel currently is, and continues to be, the principal source of financing for the Company. The Company has not identified any funding source other than Optel that would be prepared to provide current or future financing to the Company. The Company is continuing its discussions with Optel to restructure its debt by extending the maturity date, and to arrange for additional short-term working capital. If the Company does not reach an agreement to restructure the debt, and obtain additional financing from Optel, the Company will be unable to meet its obligations to Optel and other creditors, and in an attempt to collect payment, creditors including Optel, may seek legal remedies. Based in Clearwater, Florida, Digital Lightwave, Inc., provides the global communications networking industry with products, technology and services that enable the efficient development, deployment and management of high-performance networks. Digital Lightwave's customers -- companies that deploy networks, develop networking equipment, and manage networks -- rely on its offerings to optimize network performance and ensure service reliability. The Company designs, develops and markets a portfolio of portable and network-based products for installing, maintaining and monitoring fiber optic circuits and networks. Network operators and telecommunications service providers use fiber optics to provide increased network bandwidth to transmit voice and other non-voice traffic such as internet, data and multimedia video transmissions. The Company provides telecommunications service providers and equipment manufacturers with product capabilities to cost-effectively deploy and manage fiber optic networks. The Company's product lines include: Network Information Computers, Network Access Agents, Optical Test Systems, and Optical Wavelength Managers. The Company's wholly owned subsidiaries are Digital Lightwave (UK) Limited, Digital Lightwave Asia Pacific Pty, Ltd., and Digital Lightwave Latino Americana Ltda. At December 31, 2005, Digital Lightwave's equity deficit widened to $49,190,000 from a $29,146,000 deficit at Dec. 31, 2004. EARLE M. JORGENSEN: S&P Lifts Senior Secured Rating to B+ from B ---------------------------------------------------------------- Standard & Poor's Rating Services raised its corporate credit rating on Earle M. Jorgensen Co. (EMJ) to 'BB-' from 'B+' and its senior secured rating to 'B+' from 'B', and removed them from CreditWatch where they were placed with developing implications on Jan. 19, 2006, following the company's acquisition by Reliance Steel & Aluminum Co. (unrated). The outlook is stable. At the same time, Standard & Poor's assigned its '3' recovery rating to the company's existing $250 million of senior secured notes, indicating our expectations of meaningful recovery (50%- 80%) of principal in the event of a payment default. Prior to the CreditWatch with developing implications, EMJ's ratings had been placed on CreditWatch with positive implications on Nov. 18, 2005, citing improved operating performance. "The ratings upgrade reflects improvement in EMJ's financial performance, expectation of continued good end markets, and productivity enhancements," said Standard & Poor's credit analyst Dominick D'Ascoli. Indeed, total debt to EBITDA averaged a respectable 2x for the 12 months ended Dec. 31, 2005. With the cancellation of its $300 million revolving credit facility, EMJ will be relying on an $80 million inter-company line of credit ($20 million letter of credit sub-limit) from its parent Reliance. Standard & Poor's believes that, in the event of a liquidity crisis, Reliance would provide additional funding if necessary. The company also had $10 million of cash at Dec. 31, 2005. "We expect Jorgensen to remain competitive through its use of technology and geographic presence. We could revise the outlook to positive if debt is materially reduced and maintained at lower levels," Mr. D'Ascoli said. "Conversely, ratings could be pressured if a meaningful downturn in the company's markets results in a deterioration of the company's performance levels." Lynwood California-based Jorgensen is a relatively large independent distributor of metal products in North America that provides value-added services, including: * cutting, * honing, * polishing, and * other services. EDUCATE INC: S&P Affirms B+ Rating & Revises Outlook to Stable -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Educate Inc. to stable from positive. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on the company. Baltimore, Maryland-based Educate provides retail K-12 tutoring through Sylvan Learning Centers and supplemental education programs in schools. Total debt was $160 million as of Dec. 31, 2005. "The outlook revision reflects declining same-store sales, a drop in fourth quarter EBITDA, and management's expectations of a further sales decline in the first half of 2006," said Standard & Poor's credit analyst Hal F. Diamond. In addition, the company experienced integration problems in recently acquired territories that resulted in lower enrollments and unanticipated operating expenses. These factors overshadow its niche competitive position in its Sylvan Learning Center business, which accounts for roughly 80% of EBITDA. The ratings also consider the company's dependence on its franchisees, accounting for the majority of its profits. Sylvan has the best-known brand within the fragmented remedial learning sector, with a market share of roughly 13%. The company is five times larger than its next-largest competitor, with a broad geographic base of 1,121 centers. Operations are predominantly franchised, though the percentage of centers owned by the company increased to 22% at Dec. 31, 2005, from 14% two years ago due to the acquisition of 86 franchise territories. Management believes there is significant potential for roughly 1,000 additional system-wide learning centers over the long run, but Standard & Poor's is concerned that this expansion may restrain the growth of existing centers and could hamper business execution. Systemwide same-territory revenue growth decreased to 3% in 2005 from an average annual rate of around 10% over the prior few years. Sustaining the historical rate in the intermediate term may be difficult because of the potential for: * increased competition, * saturation, and * rising advertising costs. High advertising expenditures, largely funded by franchisees, are needed to maintain brand awareness and increase enrollment. EBITDA declined 75% in the seasonally weak three months ended Dec. 31, 2005, reflecting a 4% decline in same-territory revenues and increased costs. The company expects that operating income will decline in the first half of 2006, as a result of: * the effects of territory acquisition integration; * enrollment declines; and * costs of expanding the supplemental education material business through mass merchants. ERA AVIATION: Hires Mikunda Cottrell as Accountant -------------------------------------------------- Era Aviation, Inc., and its debtor-affiliate, Era Aviation Investment Group, LLC, sought and obtained authority from the U.S Bankruptcy Court for the District of Alaska to employ Mikunda Cottrell & Co. as their accountant. Mikunda Cottrell is expected to: (a) prepare the Debtors' 2005 tax return, (b) audit financial statements for 2005, and (c) consult with the debtor concerning accounting procedures and upgrading its accounting software. Jim C. Hasle, President of Mikunda Cottrell, tells the Court the Firm will bill: * $16,000 for the preparation of the tax returns; * $61,000 for the 2005 financials; and * $45,000 for the consulting services. Mr. Hasle discloses that the Debtors owe the firm $18,000 for pre- petition accounting services. Mr. Hasle says that the firm has agreed to waive that claim. Mr. Hasle assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Hasle can be reached at: Jim C. Hasle President Mikunda Cottrell & Co. 3601 C Street, Suite 600 Anchorage, AK 99503 Tel: (907) 278-8878 Tel: (907) 278-5779 fax http://www.mcc-cpa.com/ Headquartered in Anchorage, Alaska, Era Aviation, Inc. -- http://www.flyera.com/-- provides air cargo and package express services. The Company filed for chapter 11 protection on Dec. 28, 2005 (Bankr. D. Ak. Case No. 05-02265). Cabot C. Christianson, Esq., at Christianson & Spraker, represents the Debtor in its restructuring efforts. John C. Siemers, Esq., at Burr, Pease & Kurtz, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. ERA AVIATION: Committee Hires Burr Pease as Bankruptcy Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Era Aviation, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the District of Alaska to employ Burr, Pease & Kurtz, PC, as its counsel, nunc pro tunc to Jan. 27, 2006. As reported in the Troubled Company Reporter on Feb. 20, 2006, Burr Pease will: a) give the Committee legal advice with respect to its powers and duties as the Committee; b) prepare on behalf of the Committee, necessary applications, answers, orders, reports, and other legal papers; c) assist the Committee in negotiation and preparation of a plan of arrangement; and d) perform other legal services as requested by the Committee. The Committee told the Court that the lead counsel for this engagement is John C. Seimers, Esq. Mr. Seimers bills $220 per hour for his work. The Committee assures the Bankruptcy Court that Burr Pease holds no interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Anchorage, Alaska, Era Aviation, Inc. -- http://www.flyera.com/-- provides air cargo and package express services. The Company filed for chapter 11 protection on Dec. 28, 2005 (Bankr. D. Ak. Case No. 05-02265). Cabot C. Christianson, Esq., at Christianson & Spraker, represents the Debtor in its restructuring efforts. John C. Siemers, Esq., at Burr, Pease & Kurtz, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. EXIDE TECHNOLOGIES: Reclaims Right to Use Trademark from EnerSys ---------------------------------------------------------------- Exide Technologies (NASDAQ: XIDE) received a favorable ruling in its lawsuit with EnerSys, a manufacturer of industrial batteries. On April 3, the United States Bankruptcy Court for the District of Delaware approved Exide's request to terminate specific agreements with EnerSys, including a trademark license which gave EnerSys the rights to use the Exide(R) trademark for motive and network power batteries in certain countries, including the United States. Under the Court ruling, which EnerSys has the right to appeal, Exide will reclaim the right to fully utilize its Exide(R) brand across all product lines -- throughout most of the world -- after the expiration of a court-ordered transition period. "This week's court ruling is an important milestone for Exide," said Gordon A. Ulsh, President and Chief Executive Officer of Exide Technologies. "The reclamation of the powerful Exide brand will allow us to bring together our global product lines, greatly supporting our business unification strategy going forward." Headquartered in Princeton, New Jersey, Exide Technologies -- http://www.exide.com/-- is the worldwide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represented the Debtors in their successful restructuring. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. * * * As reported in the Troubled Company Reporter on Feb. 6, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Exide Technologies to 'CCC' from 'CCC+' because of Exide's continued poor operating performance and rising debt leverage. The senior secured rating on Exide's recently enlarged first-lien credit facility was lowered to 'CCC' from 'B-', and the recovery rating was lowered to '2' from '1', because of the lower corporate credit rating and the weaker asset protection for the enlarged facility. The senior secured rating and the recovery rating reflect Standard & Poor's expectation that lenders will realize a substantial recovery of principal (80%-100%) in the event of default or bankruptcy. The senior secured rating on Exide's second-lien notes was lowered to 'CC' from 'CCC', reflecting the lower corporate credit rating and an increase in priority debt. FERRO CORP: Gets 90-Day Waiver on Asset Securitization Program -------------------------------------------------------------- Ferro Corporation (NYSE:FOE) obtained a 90-day waiver on its asset securitization program for the recent downgrade events and to allow an extension of reporting requirements. "This waiver is part of our overall plan to ensure the company has access to the financial resources needed for a stronger, more profitable Ferro," said Thomas Gannon, Vice President and Chief Financial Officer. "During this 90-day period we expect to be successful in extending our asset securitization program." About Ferro Corporation Ferro Corp. -- http://www.ferro.com/-- is a major international producer of performance materials for industry, including coatings and performance chemicals. The Company has operations in 20 countries and reported sales of approximately $1.8 billion in 2004. * * * As reported in the Troubled Company Reporter on Mar. 22, 2006, Moody's Investors Service downgraded the senior unsecured ratings of Ferro Corporation to B1 from Ba1 due to continuing delays in the issuance of audited financial statements. "The downgrade of Ferro's ratings to B1 reflects the continuing delay in the delivery of audited financial statements," Moody's said. "While the company business profile is consistent with a rating in the Ba category, according to Moody's rating methodology for the chemical industry, the lack of timely audited financial statements creates uncertainty over the company's financial profile. This uncertainty is reflected by the assignment of the B1 ratings." Moody's then withdrew Ferro's ratings following this downgrade, saying it could reassign ratings to Ferro's notes and bonds once it has received audited financials for 2004 and 2005. Ferro has $355 million of senior unsecured notes and debentures outstanding, with maturities between 2009 and 2028. FORESIDE COMPANY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: The Foreside Company, LLC 33 Hutcherson Drive Gorham, Maine 04038 Bankruptcy Case No.: 06-20118 Type of Business: The Debtor develops, imports, and sells home furnishing and gifts on a wholesale basis and through various retail locations. See http://www.foreside.com/ Chapter 11 Petition Date: April 3, 2006 Court: District of Maine Debtor's Counsel: George J. Marcus, Esq. Marcus, Clegg & Mistretta, P.A. 100 Middle Street, East Tower Portland, Maine 04101 Tel: (207) 828-8000 Fax: (207) 773-3210 Total Assets: $6,148,367 Total Debts: $9,188,833 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Albatrans Inc. - USA Corporate $395,051 149-10 183rd Street Jamaica, NY 11413 David B. Jenkins $160,442 P.O. Box 206 SHS Duxbury, MA 02331 Aloha Giftware Co. $141,622 10 FL NO 178, Fu Hsing North Road Taipei, Taiwan 110 Dileep Trading Corporation $48,556 Bowker Imaging $46,870 United Parcel Services $39,692 Berry, Dunn, McNeil & Parker $35,057 The Hartford $33,366 Caffco International Ltd. $30,668 Popular Art Palace PVT Ltd. $30,355 J.S. McCarthy Printers $29,616 Rajasthan Art Emporium $28,228 George Little Management $19,700 Americas Mart Real Estate LLC $19,222 Storopack $15,420 Roadway Express Inc. $14,833 Anthem Blue Cross and Blue Shield $14,644 F/C Kittery Development LLC $13,960 Bonney Staffing Center $12,022 Chirmi Overseas $11,596 GLOBAL FOOD: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Global Food Equipment Solutions Inc. dba Global Food Equipment Sales & Service 333 West Merrick Road Valley Stream, New York 11580 Tel: (516) 593-5104 Bankruptcy Case No.: 06-70742 Chapter 11 Petition Date: April 7, 2006 Court: Eastern District of New York (Central Islip) Debtor's Counsel: Heath S. Berger, Esq. Steinberg Fineo Berger & Fischoff, P.C. 40 Crossways Park Drive Woodbury, New York 11797 Tel: (516) 747-1136 Fax: (516) 747-0382 Total Assets: $303,240 Total Debts: $1,351,137 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Henny Penny $239,998 1219 US 35 West P.O. Box 60 Eaton, OH 45320 Bizerba USA Inc. $73,768 31 Gordon Road Piscataway, NJ 08854 Getzel Schiff & Ross LLP $36,584 Arnold P. Arpino & Assoc. P.C. 155 East Main Street Smithtown, NY 11787 L Stocker & Sons Inc. $21,362 333 Realty Corp. $19,833 Donna Weiss dba $19,079 Saul Weiss Cash Reg. Daniels Food Equipment $17,751 Southern Pride Distributing Ltd. $9,551 Turbo Air $9,336 Biro Sales Inc. $6,661 LIPA $5,841 Yellow Book $5,202 Inter Metro Industries Corp. $4,801 Rosito Bisani Imports Inc. $4,725 Keyspan $4,414 Roger & Sons $4,400 ABF Freight System Inc. $4,138 Biro Manufacturing Company $3,894 Robot Coupe $2,713 Mil & Mir Steel Products Co. Inc. $1,535 GREAT ATLANTIC: S&P Holds B- Rating & Revises Outlook to Stable --------------------------------------------------------------- Standard & Poor's Ratings Services lowered the short-term rating on The Great Atlantic & Pacific Tea Co. (A&P) to 'B-3' from 'B-2' and revised the outlook to stable from developing. The long-term corporate credit rating is unchanged at 'B-'. "The revisions reflect A&P's announcement that it will pay a special dividend of about $300 million to shareholders in April 2006," said Standard & Poor's credit analyst Mary Lou Burde. Although the August 2005 sale of A&P Canada increased liquidity and allowed the company to reduce funded debt, the payment of the special dividend essentially depletes the excess cash that could have been used for investment in the core U.S. operations. Although other sources of liquidity should be adequate to fund the company's capital spending program for 2006, the reduced cushion is more reflective of a 'B-3' short-term rating. The ratings on Montvale, New Jersey-based A&P reflect: * the company's weak profitability; * difficult industry conditions in its U.S. markets; and * high lease-adjusted debt leverage. The sale of A&P Canada to Metro Inc. for $1.6 billion and the subsequent funded debt reduction eliminated near-term maturities. But the transaction also eliminated an important source of cash flow. Despite the decline in funded debt, substantial lease obligations remain. Total debt to EBITDA for the U.S. operations alone is estimated at more than 7x for the 12 months ended Dec. 3, 2005. Operational challenges following the sale of the solidly performing Canadian business remain substantial, and include soft consumer spending and intense competition from traditional and nontraditional food retailers. A&P's same-store sales in the U.S. (excluding hurricane-affected New Orleans) fell 0.3% for the third quarter of fiscal 2005 ended Dec. 3, 2005. EBITDA excluding nonoperating items rose for the quarter and was flat year-to-date, but remains at weak levels. The lease-adjusted operating margin of 5% is well below the 7% average for rated supermarkets. Profitability has been poor for several years despite numerous attempts to reduce overhead, improve the supply chain, and restructure the store base. A&P operates 407 stores in nine states and the District of Columbia. HAWAIIAN TELCOM: S&P Affirms B Rating With Stable Outlook --------------------------------------------------------- Standard & Poor's Rating Services affirmed its ratings on Hawaiian Telcom Communications, Inc. and related entities, including its 'B' corporate credit rating. The outlook is negative. "The ratings on these entities were removed from CreditWatch, where they were placed with negative implications on Dec. 7, 2005, because Hawaiian Telcom moved almost all back-office services to its own operating platform as of April 1, 2006, and so does not require further costly extensions of its transition services agreement with Verizon Communications, Inc. Hawaiian Telcom is an independent local exchange provider providing integrated telephone service communications services to approximately 646,000 switched access lines throughout the State of Hawaii," said Standard & Poor's credit analyst Susan Madison. Total debt outstanding at Dec. 31, 2005, was approximately $1.3 billion. The ratings for Hawaiian Telcom reflect: * significant operational and integration risk associated with transitioning to a stand-alone company; * the heightened competitive environment for voice and data services in Hawaii; and * a highly leveraged financial profile. Tempering factors include: * the company's position as the incumbent telephone provider in Hawaii; and * advanced network infrastructure. In December 2005, Hawaiian Telcom extended its transition services agreement with Verizon for two months beyond the original Feb. 1, 2006, cutoff date because approximately 20% of back office systems needed to assume operational support of local, long distance and Internet services from Verizon were not complete. At that time, Standard & Poor's lowered its ratings on Hawaiian Telcom, including its corporate credit rating, which was lowered one notch to 'B', and left the ratings on CreditWatch with negative implications based on concerns that further extensions of the Transition Services Agreement would be prohibitively expensive and stress the company's liquidity. HOLLINGER INT'L: Balance Sheet Upside Down by $169.85M at Dec. 31 ----------------------------------------------------------------- Hollinger International Inc. (NYSE: HLR) has filed its Annual Report on Form 10-K for the year ended December 31, 2005, with the Securities and Exchange Commission. For the year ended December 31, 2005, the Company reported total operating revenues of $458 million and an operating loss of $10 million, compared with operating revenues of $464 million and an operating loss of $22 million for the year ended December 31, 2004. The Company's cash position remained strong, with $198 million in cash and cash equivalents and $58 million in short-term investments on hand as of December 31, 2005. At March 30, 2006, cash, cash equivalents and short-term investments totaled approximately $350 million. The Company's Sun-Times News Group (STNG) reported total operating revenues of $458 million for the year ended December 31, 2005, compared with $464 million for the prior year. STNG's segment operating income was $48 million and $96 million in 2005 and 2004, respectively. STNG's 2005 segment operating income before depreciation and amortization was $78 million and 2004 segment operating income before depreciation, amortization and special items was $92 million. Commenting on preliminary expectations for the first quarter, the Company said that advertising revenues are expected to be approximately six percent lower than during the first quarter of 2005. Advertising revenues were impacted by lower results in the automobile, entertainment and national advertising categories, reflecting industry trends. During the first quarter, an investigation of the advertising sales process at the Sun-Times was undertaken by the Audit Committee of the Company's Board of Directors. The Audit Committee determined that the advertising sales process had over-emphasized the attainment of gross revenue targets versus profitable revenue objectives. This emphasis, combined with an ineffective control environment, resulted in inappropriate discounting from standard rates. The Audit Committee's investigation concluded that these process deficiencies had no impact upon reported revenues, but did result in lost profit opportunities. The investigation by the Committee, which is now complete, impaired the productivity of the Sun-Times advertising sales force and contributed to the first quarter decline in revenues versus 2005. The Company has taken interim steps to address the deficiencies in the advertising sales process and weaknesses in related internal controls. A comprehensive reorganization of the advertising sales group for the Sun-Times News Group and redesign of its processes is anticipated to be substantially completed during the second quarter of 2006. It is expected that when fully implemented, the reorganization will provide the Company with a significantly enhanced advertising sales capability and results. The Company reported that the previously announced reorganization of STNG was on track and is expected to deliver improved financial results, beginning in the third quarter. A voluntary employee severance program was offered to employees in late February and has met the Company's objectives. The voluntary severance program represents a significant component of STNG's stated goal of reducing its workforce by ten percent. Gordon A. Paris, Chairman and Chief Executive Officer, said, "Despite a challenging and difficult 2005 and first quarter for STNG, there are many reasons to be optimistic about the prospects for future results. Our leadership team is focusing on the implementation of our reorganization, which will continue to improve editorial quality, emphasize new media opportunities and allow us to deliver the power of the Group to our advertisers, while also significantly tightening our cost structure. The improvements arising from the reorganization should take root in the second quarter and begin showing measurable improvements in the second half of the year. The establishment of strong internal controls and a focus on profitable revenue generation in our advertising sales group should also provide significant opportunities for improved performance. At the same time, our corporate team continues to look for ways to deliver returns for shareholders, such as through our recently announced stock buyback and ongoing prudent asset management, which resulted in the recent sale of substantially all of our Canadian operating assets." The Company also stated that it expects to report its first quarter 2006 earnings results in the first week of May 2006, and intends to hold a conference call for investors and analysts at that time. Annual Meeting of Shareholders The Company expects to hold its Annual Meeting of Shareholders on June 13, 2006 in Chicago, Illinois. Only shareholders of record will be entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof. The Company expects to set the record date as May 1, 2006. Any proposal intended to be presented to shareholders at the Company's Annual Meeting must be received by the Company by April 14, 2006 if the proposal is to be included in the Proxy Statement relating to the Annual Meeting. Such a proposal must also meet the requirements for inclusion in the proxy statement set forth in the Regulations of the SEC issued under the proxy rules. If a proposal is received after this date and presented at the Meeting, the proxy holders will be able to vote on the proposal at the Annual Meeting using their discretionary authority. Proposals should be sent to: James R. Van Horn General Counsel and Secretary Hollinger International 712 Fifth Avenue New York, NY 10019 The Company expects to mail the Notice of Annual Meeting of Shareholders and Proxy Statement to shareholders of record on or about May 16, 2006. Hollinger International Inc. -- http://www.hollingerinternational.com/-- is a newspaper publisher whose assets include The Chicago Sun-Times and a large number of community newspapers in the Chicago area. At December 31, 2005, Hollinger's balance sheet showed a stockholders' equity deficit of $169,851,000 compared to $152,186,000 of positive equity at Dec. 31, 2004. INTELSAT LTD: Lenders Waive Reporting Default Until April 30 ------------------------------------------------------------ Intelsat Ltd. has until April 30, 2006, to file its fourth quarter and full year 2005 financial statements as lenders to its January 28, 2005, Credit Agreement agreed to waive the reporting default for a month. The company and its dozens of lenders, led by DEUTSCHE BANK TRUST COMPANY AMERICAS, signed a Waiver to the Credit Agreement, on March 30, 2006, granting Intelsat additional time to complete its reporting process. A full-text copy of the Waiver to Credit Agreement is available for free at http://ResearchArchives.com/t/s?79c Intelsat, Ltd., offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat's global satellite, teleport and fiber network for high-quality connections, global reach and reliability. * * * Standard & Poor's Ratings Services assigned a 'BB-' rating on Intelsat Ltd in March 2006, and said the outlook is negative. INTERNATIONAL MANAGEMENT: Hires Kilpatrick Stockton as Counsel -------------------------------------------------------------- International Management Associates, LLC and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Kilpatrick Stockton LLP as their bankruptcy counsel. Kilpatrick Stockton is expected to: a) serve as bankruptcy counsel to the Debtors as debtors in possession; b) provide the Debtors with legal advice with respect to their powers, rights, duties, and obligations in their chapter 11 cases, as it relates to their business operations; c) take all necessary action to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and assist in the preparation of objections to claims filed against the estate; d) assist in preparing on behalf of the Debtors all necessary motions, applications, answers, orders, reports, and papers in connection with the administration of the estate; e) advise the Debtors on the corporate aspects of the Debtors' reorganizations or liquidations and the plans proposed in connection therewith; f) advise and representing the Debtors in hearings and other judicial proceedings in connection with all applications, motions, or complaints and other similar matters to the extent necessary, and as requested by the Debtors; and g) perform all other necessary legal services in connection with the post-petition representation of the Debtors. David S. Meir, Esq., a partner at Kilpatrick Stockton, tells the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $350 - $600 Counsel $350 - $375 Associates $195 - $355 Paralegals $125 - $195 Mr. Meir assures the Court that the Firm is "disinterested" as that term is defined is Section 101(14) of the Bankruptcy Code. Headquartered in Atlanta, Georgia, International Management Associates, LLC -- http://www.imafinance.com/-- managed hedge funds for investors. The company and nine of its affiliates filed for chapter 11 protection on Mar. 16, 2006 (Bankr. N.D. Ga. Case No. 06-62966). David A Geiger, Esq., and Dennis S. Meir, Esq., at Kilpatrick Stockton LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they did not state their total assets but estimated total debts to be more than $100 million. INTERNATIONAL MANAGEMENT: Wants Until May 1 to File Schedules ------------------------------------------------------------- International Management Associates, LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Georgia to extend, until May 1, 2006, the deadline to file their schedules of assets and liabilities and statements of financial affairs. The Debtors tell the Court that their jointly administered cases consist of ten related corporate Chapter 11 filings and have at least several hundred creditors. In addition, the Debtors say, they have no remaining full-time employees. The Debtors relate that prior to filing for bankruptcy, they were the subject of receiverships ordered by both state and federal courts. The receiverships, the Debtors say, were ordered due to alleged malfeasance and mismanagement by the their former managers. The books and records maintained by former management are incomplete and, in some instances, inaccurate or fabricated. The Debtors contend that the extension will afford them time to prepare, compile and analyze their financial records to be incorporated in their schedules and statements of financial affairs. Headquartered in Atlanta, Georgia, International Management Associates, LLC -- http://www.imafinance.com/-- managed hedge funds for investors. The company and nine of its affiliates filed for chapter 11 protection on Mar. 16, 2006 (Bankr. N.D. Ga. Case No. 06-62966). David A Geiger, Esq., and Dennis S. Meir, Esq., at Kilpatrick Stockton LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they did not state their total assets but estimated total debts to be more than $100 million. J.C. PENNEY: S&P Lifts Corporate Credit Rating to BBB- from BB+ --------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit and senior unsecured debt ratings on Plano, Texas-based J.C. Penney Co. to 'BBB-' from 'BB+'. Ratings were removed from CreditWatch where they were placed Feb. 17, 2006, with positive implications. The outlook is stable. "The upgrade returns the rating to investment grade after a three- year gap and reflects the steady and impressive progress management has made in re-establishing J.C. Penney as a much more effective player in the moderately priced, intensely competitive department store sector," said Standard & Poor's credit analyst Gerald Hirschberg. Penney has made substantial progress in improving: * sales, * margins, and * market share, and this has brought the department store and catalog/Internet operations to a satisfactory business profile. This business profile takes into account: * Penney's position as a large competitor in this still consolidating retail sector; * its ability to successfully position itself as a preferred shopping choice for moderate income customers who are attracted to Penney's relatively large offering of private brand and exclusive brand merchandise; and * its good and predictable profitability. Penney has seen operating improvement in each of the past five years, and the company has led the department sector by achieving five consecutive years of same-store sales growth. Although Standard & Poor's believes that Penney will make further gains in 2006, the pace is likely to slow. This should reflect pressures from Federated Department Stores, which will be closing locations and liquidating inventory associated with its 2005 acquisition of May Department Stores. In addition: * much higher energy prices, * a very low savings rate, and * high consumer debt could impact retail purchases during the year. J.L. FRENCH: Committee Taps Ashby & Geddes as Delaware Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of J.L. French Automotive Castings, Inc., and its debtor-affiliates asks the U.S. Bankruptcy Court for the District of Delaware for authority to retain Ashby & Geddes as its Delaware counsel, effective as of Feb. 22, 2006. The Firm will avoid duplicating services performed by the Committee's lead-counsel, Foley & Lardner LLP. Ashby & Geddes is expected to: a) provide legal advice regarding the rules and practices of the Court applicable to the Committee's powers and duties as an Official Committee appointed under Section 1102 of the Bankruptcy Code; b) provide legal advice regarding any disclosure statement and plan filed in this case and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a plan; c) prepare and review applications, motions, complaints, answers, orders, agreements and other legal papers filed on or behalf of the Committee for compliance with the rules and practices of the Court; d) appear in Court to present necessary motions, applications and pleadings and otherwise protect the interest of the Committee and the Debtor's unsecured creditors; and e) perform other legal services for the Committee as the Committee believes may be necessary and proper in these proceedings. William P. Bowden, Esq., a Ashby & Geddes partner, tells the Court that the Firm's other professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- William P. Bowden Partner $455 Ricardo Palacio Associate $375 Ben Keenan Associate $195 Susan Brown Paralegal $160 Mr. Bowden assures the Court that the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc. -- http://www.jlfrench.com/-- is one of the world's leading global suppliers of die cast aluminum components and assemblies. There are currently nine manufacturing locations around the world including plants in the United States, United Kingdom, Spain, and Mexico. The company has fourteen engineering/customer service offices to globally support our customers near their regional engineering and manufacturing locations. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. When the Debtor filed for chapter 11 protection, it estimated assets and debts of more than $100 million. KMART CORP: Chuck Conaway Wants $19.6 Million Claim Allowed ----------------------------------------------------------- Charles C. Conaway, Kmart Corporation's former chairman and chief executive officer, filed Claim No. 38498 against Kmart for $19,635,003. Mr. Conway's claim sought recovery of amounts due under his 2000 Employment Agreement. The Claim also credits all amounts paid to Mr. Conaway under his March 11, 2002 Separation Agreement, in accordance with the Court's order authorizing payment of severance benefits. The Debtors objected to Mr. Conaway's Claim asserting that the Claim is not supported by either an established policy or any written employment agreement. Mr. Conaway responded to the objection noting that it was unsubstantiated and the exhibit to his Claim provides a detailed basis for the amount sought. Accordingly, Mr. Conaway asks the Court to: -- overrule Kmart's Objection to his Claim; -- allow his Claim as a Class 5 claim; and -- grant him: * his allocable portion of the distributions made to Class 5 claimants to date, including his allocable portion of the Trade Vendor/Lease Rejection Claimholder Shares and the Trust Recovery; and * the right to his pro rata share of other distributions as may be made on account of the allowed Class 5 claims. Scott B. Kitei, Esq., counsel for Mr. Conaway, recounts that after the confirmation of Kmart's Plan of Reorganization, the Kmart Creditor Trust filed a complaint against Mr. Conaway, which sought to blame him for Kmart's collapse. Eventually, the Trust's suit was tried before a panel headed by Judge George Pratt of the U.S. Court of Appeals for the Second Circuit. The Panel not only exonerated Mr. Conaway from all charges, but also assessed the Trust for Mr. Conaway's attorney's fees. The Panel's decision was confirmed by the Oakland County Circuit Court and is accordingly binding on the Trust and its privies. According to Mr. Kitei, Mr. Conaway has intentionally deferred prosecuting his Claim until the Trust's litigation was resolved, lest the allegations be interposed as a defense or that the litigation interfere with the arbitration process. Now, however, the arbitration has resulted in Mr. Conaway's complete vindication, thereby permitting him recovery on his claim, Mr. Kitei maintains. About Kmart Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., 215/945-7000) KMART CORP: Jeri Fisher Wants Lift Stay Objection Overruled ----------------------------------------------------------- As reported in the Troubled Company Reporter on Mar. 14, 2006, Jeri Lynn Fisher asked the U.S. Bankruptcy Court for the Northern District of Illinois -- after it amends the July 21, 2003 Order disallowing and expunging her Claim -- to reinstate her Claim and lift the automatic stay with respect her lawsuit against Kmart pending in the Superior Court of Arizona in the County of Navajo. Ms. Fisher explains that: (a) the bankruptcy portion of Kmart's case appears to be closed and there is no longer any reason in existence that justifies Kmart's need or right for stay under the appropriate statutes; (b) Kmart has filed a plan of reorganization, which has been approved; and (c) Kmart, by its misconduct, failed to show justification for the stay by wrongfully refusing to provide her or her counsel information for either settling her Claim or allowing the Claim to be adjudicated in a court of law. Fisher Says Kmart Did Not Inform Claimants Jeri Lynn Fisher asks the Court to overrule Kmart Corporation's objection to her request to reinstate her claim. James W. Hill, Esq., in Phoenix, Arizona, contends that Kmart should not benefit from its wrongful acts, which constituted: * failure to mail notice of its Omnibus Objection to Ms. Fisher or her counsel; * failure to mail the same notice to Virginia Frankowski, another claimant whose claim was likewise expunged as a result of Kmart's Omnibus Objection; * admittedly not mailing any of the 152 claimants copies of the order expunging their claim; * engaging in reprehensible discourteous conduct in not responding to inquiries by counsel of the status of their claim after they had apparently sequestered through the expungement of the claims; and * openly and blatantly violating Rule 11 of the Federal Rules of Civil Procedure in making representations to the Court regarding the merits of the claims. Mr. Hull asserts that an independent investigation should be made of all Creditors involved in Kmart's Omnibus Objection. According to Mr. Hull, the order to the Objection presupposes that none of the 152 claimants involved are expected by Kmart to object to the expungement of their claims. The fact that the copies of the July 30, 2003 Omnibus Objection Order were not mailed to the creditors is outrageous, Mr. Hull asserts. Kmart then cannot argue that Ms. Fisher is guilty of sleeping on her rights. Mr. Hull contends that Kmart's Objection, which made representations of no merit when indeed no investigations were made, constituted a patent violation of Rule 11(b). Kmart Replies William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP, in Chicago, Illinois, points out that contrary to Ms. Fisher's assertions, the Court Order entered in July 2003, expunging claims set forth in Kmart's Omnibus Objection is not identical to the proposed order attached to the copy mailed to creditors. The hearing record also shows that Kmart's counsel received over 90 formal and informal responses to the Omnibus Objection, which is contrary to Ms. Fisher's assertion that not one of the 152 claimants shared opposition. There is no need for any investigation because Ms. Fisher cannot provide documentary support to her contention that her counsel did not receive mail notice, Mr. Barrett tells the Court. Even if the Court grants the request to reinstate the Claim, Ms. Fisher's request to lift stay should be denied, Mr. Barrett explains. Reviving the Claim does not automatically grant the Claim "allowed" status. Rather, allowance of the Claim would have to be adjudicated by the Court as part of the overall claims reconciliation process. By submitting her Claim in the Court, Ms. Fisher has undisputedly voluntarily submitted that Claim to the core and exclusive jurisdiction of the Court for resolution, Mr. Barrett stresses. About Kmart Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., 215/945-7000) MEDIACOM BROADBAND: S&P Rates Proposed $750 Million Loan at BB- --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' bank loan rating to the proposed $750 million senior secured term loan C due 2015 of Mediacom Broadband LLC, a subsidiary of cable TV system operator, Mediacom Communications Corp. A '3' recovery rating was assigned to the loan, indicating expectations of a meaningful (50%-80%) recovery of principal after a payment default or bankruptcy. The loan consists of: * a $500 million tranche C-1; and * a $250 million delayed draw tranche C-2. Proceeds will be used: * to prepay the existing $500 million term loan; * for revolver repayment; and * for general corporate purposes, including potential repayment of the $172.5 million convertible notes due July 1, 2006 of Mediacom. "The recovery rating on Mediacom Broadband's existing $650 million revolving loan and $300 million term loan A was lowered to '3' from '2', based on the $250 million increase in the overall facility and the lack of any corresponding increase in collateral value," said Standard & Poor's credit analyst Eric Geil. The '2' recovery had indicated expectations for substantial (80%- 100%) recovery of principal following a payment default or bankruptcy. A 'BB-' bank loan rating and '3' recovery rating were assigned to the proposed $650 million senior secured term loan B due 2015 of Mediacom LLC. Proceeds will be used: * to prepay the existing $550 million term loan B; * for revolver repayment; and * for general corporate purposes. All other ratings on Mediacom and its subsidiaries, including the 'BB-' corporate credit rating, were affirmed. The outlook is negative. MEGA BLOKS: Reports Fourth Quarter and FY 2005 Financial Results ---------------------------------------------------------------- Mega Bloks Inc. (TSX: MB) disclosed its financial results for the fourth quarter and full year ended Dec. 31, 2005. Net sales for the Toy Division were up 39% to $127.9 million in the fourth quarter, reflecting the contribution of Rose Art sales for the three months. For 2005, toy sales increased 33% to $312.8 million compared to $234.6 million, including Rose Art sales since July 26, 2005. Net sales for the Stationery and Activities Division reached $48.1 million in the fourth quarter and $94.2 million for the year, entirely attributable to Rose Art. Fourth quarter net sales increased 131% to $129.7 million in North America. Canadian sales were strong and U.S. sales increased 151%, driven by MAGNETIX and games and puzzles. For 2005, North American sales were up 98% to $263.5 million. International net sales increased 28% to $46.2 million in the fourth quarter and 41% to $143.6 million in the full year 2005, reflecting continued market penetration in construction toys and a contribution from Rose Art. International net sales represented 26% of total net sales in the fourth quarter and 35% in the full year 2005, compared to 39% and 43% of net sales in corresponding periods of 2004 as a result of the greater scale of the Company's North American business including Rose Art. Earnings from operations increased 120% to $31.7 million in the fourth quarter and 87% to $62.4 million for the full year 2005. Net earnings rose 82% to $20.9 million for the quarter and 57% to $39.6 million for the year. "The fourth quarter and 2005 results are in line with our plan," commented Marc Bertrand, President and CEO of Mega Bloks. "We are excited with the opportunities for our company and we are focused on the execution of the actions that will deliver our revenue and profit plan for 2006 and coming years." Recent Developments On March 24, 2006, Mega Bloks welcomed retired McDonald's Corporation executive Larry Light to its board of directors, where he will sit as an independent director. "We are very excited about adding Larry to our Board. Larry's impressive record as Global Chief Marketing Officer at McDonald's Corporation with its many successful branding initiatives will be of great benefit to the Board. He has now returned to his marketing consultancy, Arcature, where he advises a global Fortune 500 group of clients. We look forward to having his counsel and support as we continue to leverage our competitive strengths and develop our brands," said Marc Bertrand. On March 13, 2006, Mega Bloks and Rose Art announced the alignment of their operations into one company focused on delivering superior customer service, industry-leading product innovation and operational excellence on a global basis. Several facilities in North America will be downsized or closed down, the corresponding manufacturing will be relocated to China and North American distribution of all products manufactured in China will be consolidated in a new facility in Tacoma, Washington. On January 24, 2006, Mega Bloks through its subsidiary Rose Art Industries, Inc., announced an agreement to acquire The Board Dudes, Inc., a privately held company based in Corona, California. The Board Dudes designs and distributes an innovative range of products for the school and office supply markets, including dry erase boards, cork boards, foam boards, school and locker products, novelty items and storage products. The transaction closed during February and is expected to be accretive to earnings. About The Mega Bloks Group Headquartered in Montreal, Canada, The Mega Bloks Group of companies -- http://www.megabloks.com/-- is a leader in providing kids, caregivers and educators creative tools for play and learning. Under the MEGA BLOKS(R) and ROSE ART(R) brands, the Group produces high quality construction and magnetic toy sets, arts and crafts activities, stationery, school supplies, and writing instruments. The Group is headquartered in Montreal and present in 14 countries with sales in over one hundred. Moody's Investors Service assigned Ba3 to Mega Bloks Inc.'s Corporate Family Rating and Ba3 rating to Bank Loan Debt. Moody's said the rating outlook is stable. MERIDIAN AUTOMOTIVE: Stanfield Presses on to Disqualify Milbank --------------------------------------------------------------- As reported in the Troubled Company Reporter on Feb. 27, 2006, Stanfield Capital Partners, LLC, asks the U.S. Bankruptcy Court for the District of Delaware to disqualify Milbank, Tweed, Hadley & McCloy LLP as counsel to the First Lien Committee of Meridian Automotive Systems, Inc., and its debtor-affiliates. Prior to Milbank's retention by the Informal Committee of First Lien Secured Lenders, Stanfield retained Milbank to advise it regarding its holdings of the Meridian Debt. That representation is ongoing and is directly adverse to the current position of the First Lien Committee, Francis A. Monaco, Jr., Esq., Monzack & Monaco, P.A., in Wilmington, Delaware, contends. According to Mr. Monaco, although Milbank received $25,000 from Stanfield for its work, Milbank has ignored its responsibilities towards Stanfield and, despite Stanfield's continuing objections, is now also representing the First Lien Committee, which is an adverse party in the same bankruptcy proceeding. Milbank Objection Under Seal Judge Walrath permits Milbank, Tweed, Hadley & McCloy LLP to file its objection under seal and directs the firm to file a redacted version of the objection. The Objection, and any information derived from it, will remain confidential and will be served on and made available only to Stanfield Capital Partners, LLC, and its advisors. Stanfield Insists on Disqualification Mr. Monaco asserts that Milbank has completely failed in its effort to find any controlling authority, or even persuasive authority, that the current version of Delaware Rule 1.9 does not require a former client's consent to be confirmed in writing. No evidence was presented that Stanfield gave Milbank its "informed consent, confirmed in writing" for Milbank to represent the Informal Committee of First Lien Secured Lenders, Mr. Monaco notes. Mr. Monaco contends that Milbank directly violated the Delaware Rules by choosing to represent the First Lien Committee in direct conflict to Stanfield and by failing to obtain a consent in writing. The First Lien Committee or any First Lien holder has not offered any protest to Stanfield's request to have Milbank removed as counsel, Mr. Monaco notes. Mr. Monaco argues that there is no evidence supporting Milbank's assertion that Stanfield "impliedly" consented to Milbank's representation of the First Lien Committee. Milbank's letter of engagement of the First Lien Committee is dated May 11, 2005. As early as June 9, 2005, Stanfield advised Milbank that it objected to Milbank's representation of the First Lien Committee. The Official Committee of Unsecured Creditors correctly stated that during the negotiations for the terms of the Final DIP Financing Order, Stanfield objected to the continuation of Milbank's representation of the First Lien Committee, Mr. Monaco says. "The Committee, however, entirely misstates the negotiations and resolution reached by the parties." Mr. Monaco tells the Court that the parties reached a compromise that Stanfield would not formally object to Milbank receiving compensation for a portion of the work it has performed for the First Lien Committee relating to the negotiations for the Final DIP Order. However, the Final DIP Order would not authorize Milbank to continue to represent the First Lien Committee going forward. Thus, the Order bifurcates the retention and compensation of counsel for the First Lien Committee. Mr. Monaco contends that the dispute between Stanfield and Milbank was not brought to the Court's attention because Stanfield recognized the potentially prejudicial nature of a public disqualification. Therefore, Stanfield asks the Court to disqualify Milbank as counsel for the First Lien Committee. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Court Approves Guardian Settlement Agreement ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a Settlement Agreement between Meridian Automotive Systems, Inc., and its debtor-affiliates, and Guardian Automotive Corporation. As reported in the Troubled Company Reporter on Mar. 22, 2006, Guardian designed the Parts for approval of an OEM customer of the Debtors and incurred significant design costs. The Design Costs were to be passed through the Debtors through a scheduled increase in the price of the Parts over a period of four years. After Guardian started to perform pursuant to the Guardian Award, Guardian requested an increase in the annual price for manufacturing the Parts. The Debtors did not agree to Guardian's request. Consequently, the Debtors resourced the production of the Parts to another automotive supplier and terminated the Guardian Award. Due to the technical design of the Parts, the Alternate Supplier required copies of the drawings to produce the Parts. In light of the Termination, Guardian was unwilling to provide the Debtors or the Alternate Supplier with the Drawings absent an agreement with respect to recovery of the Design Costs, Mr. Brady tells the Court. To consensually resolve the issues between them, the Debtors and Guardian entered into a settlement agreement, which provides that: (a) the Debtors agree to pay Guardian $290,733 in four equal monthly installments of $72,683; (b) the Debtors and Guardian agree to mutually release each other from any and all claims relating to the Termination; and (c) Guardian has conveyed to the Debtors a copy of the Drawings and has granted to the Debtors a paid-up, royalty-free, non-exclusive license to reproduce, distribute copies of, and make derivative works from the Drawings solely for the purposes of the manufacture or having a third party manufacture the Parts. Because the Drawings are complete and meet the Customer's specifications, the Alternate Supplier will not incur any additional Design Costs to manufacture the Parts. Therefore, the Settlement Payment accelerates the Debtors' payment of the Design Costs. The Settlement Payment also represents an amount less than 50% of the actual design costs. The Customer will reimburse the Debtors for any Design Costs passed by Guardian for the Parts. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000). MUSICLAND HOLDING: Wants Until July 12 to Remove Civil Actions -------------------------------------------------------------- Pursuant to Section 1452(a) of the Judiciary and Judicial Procedures Code, "a party may remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce such governmental unit's police or regulatory power, to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title." Rule 9027(a) of the Federal Rules of Bankruptcy Procedure provides that if the claim or cause of action in a civil action is pending when a case under the Bankruptcy Code is commenced, a notice of removal may be filed in the bankruptcy court only within the longest of: (a) 90 days after the order for relief in the case under the Code; (b) 30 days after entry of an order terminating a stay, if the claim or cause of action in a civil action has been stayed under Section 362 of the Bankruptcy Code; or (c) 30 days after a trustee qualifies in a Chapter 11 reorganization case but not later than 180 days after the order for relief. With respect to postpetition Actions, Bankruptcy Rule 9027(a)(3) provides for removal only within the shorter of: (a) 30 days after the receipt of a copy of the initial pleading stating the claim or cause of action sought to be removed; or (b) 30 days after the receipt of summons if the initial pleading has been filed with the Court, but not served with the summons. Bankruptcy Rule 9006(b) provides that the Court can extend the time periods imposed by Bankruptcy Rule 9027(a). Musicland Holding Corp. and its debtor-affiliates are party to several lawsuits pending in various state courts. Additional actions may be filed against the Debtors. The Debtors reserve the right to subsequently assert that any or all of the Postpetition Actions are stayed by the provisions of Section 362 of the Bankruptcy Code. Since the Petition Date, the Debtors and their professionals have been focusing on: -- preparing and filing their schedules of assets and liabilities and statements of financial affairs; -- responding to the Official Committee of Unsecured Creditors' numerous discovery and due diligence requests for the production of documents; -- obtaining final approval of their postpetition financing arrangement; and -- undertaking and completing the sale and liquidation of substantially all of their assets. As a result, the Debtors have been unable to undertake a thorough analysis of the Actions and to develop a strategy with respect to those Actions. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to extend the time within which they may file notices of removal under Bankruptcy Rule 9027(a)(2)(A) to the later of: (a) July 12, 2006; (b) 30 days after the entry of an order lifting the automatic stay with respect to the particular action sought to be removed; or (c) with respect to postpetition actions, the time periods given in Bankruptcy Rule 9027(a)(3). David A. Agay, Esq., at Kirkland Ellis LLP, in New York, asserts that extending the removal period will give the Debtors an opportunity to make fully informed decisions about the potential removal of all Actions and will assure that the Debtors do not forfeit valuable rights under Section 1452. The rights of the Debtors' adversaries will not be prejudiced by an extension because in the event that a matter is removed, the other parties to an Action may seek to have that action remanded pursuant to Section 1452(b), Mr. Agay points out. About Musicland Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) NELLSON NUTRACEUTICAL: Can Use Cash Collateral on Final Basis ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Nellson Nutraceutical, Inc., and its debtor-affiliates continued access to cash collateral in which Wells Fargo and USB AG assert an interest. UBS AG, as Prepetition Agent for the Prepetition Lenders, asserts an interest in the Debtors' cash collateral. The Debtors owe $336 million to the Prepetition Lenders. Wells Fargo Bank, N.A, the Debtors' cash management bank, also asserts an interest in the Debtors' cash collateral. The Debtors are not aware of any outstanding prepetition debts to Wells Fargo. Wells Fargo provides service documentation to the Debtors. Under the service documentation, Wells Fargo has a lien or security interest in all deposit accounts of the Debtors maintained at Wells Fargo. Wells Fargo entered into a Restricted Account Agreement with UBS and the Debtors for enabling UBS to prefect its security interest in the deposit accounts. The Agreement was amended on Jan. 19, 2006. Under the Restated Restricted Account Agreement, all parties agreed to the relative priority of the security interests of Wells Fargo and UBS with regards to various obligations secured by the Debtors' accounts at Wells Fargo. Wells Fargo is granted security interests and liens on all present and acquired property of the Debtors. The replacement lien granted to Wells Fargo will be in the same validity, priority, and extent as Wells Fargo's asserted prepetition security interests and with the same relative priority vis a vis the replacement liens granted to the Prepetition Lenders. Wells Fargo is also granted a superpriority administrative expense if the replacement lien is inadequate to protect Wells Fargo's interests in the cash collateral. All prepetition and postpetition fees and other bank fees required under the service documentation will be paid on a current basis in the ordinary course of the Debtors' business. The replacement liens and superpriority claims will be subject to an $800,000 carve-out for the Debtors' and Committee's professional fees. The Debtors will use the cash collateral to maintain operations and satisfy postpetition obligations. Headquartered in Irwindale, California, Nellson Nutraceutical, Inc., formulate, make and sell bars and powders for the nutrition supplement industry. The Debtors filed for chapter 11 protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski, Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent the Debtors in their restructuring efforts. Lawyers at Young, Conaway, Stargatt & Taylor, LLP, represent an informal committee of which General Electric Capital Corporation and Barclays Bank PLC are members. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. NET SERVICOS: Completes Prepayment of Net Sul's Senior Notes --------------------------------------------------------- Net Servicos de Comunicacao S.A. (Nasdaq: NETC; Bovespa: NETC4 and NETC3; and Latibex: XNET) publicly reported, under the terms of Instruction # 358/02 issued by Comissao de Valores Mobiliarios -- Brazilian Securities Commission, that the Company accomplished the full prepayment of the financial indebtedness issued under the terms of the capital restructuring process liquidating the Senior Secured Notes and the Senior Secured Floating Rate Notes issued by Net Sul Comunicacoes Ltda., a subsidiary of NET fulfilling clause 3.3.1 -- Use of Proceeds -- of the 5th debentures issuance indenture. Headquartered in Sao Paulo, Brazil, NET Servicos de Comunicacao -- http://Nettv.globo.com/NETServ/br/home/indexNet.jsp?id=1-- is the largest subscriber TV multi-operator in Brazil, as it operates the NET brand in major cities, including operations in the 4 largest cities: Sao Paulo, Rio de Janeiro, Belo Horizonte and Porto Alegre. NET also offers Broadband InterNet services through its NET VIRTUA brand name. * * * As reported in the Troubled Company Reporter on March 15, 2006, Standard & Poor's Rating Services raised on its foreign and local currency corporate credit ratings on Brazilian cable pay-TV and broadband operator Net Servicos de Comunicacao S.A to 'BB-' from 'B+'. The Brazil National Scale rating assigned to NET and its BRL650 million debentures due 2011 was also revised to 'brA' from 'brBBB+'. S&P said the outlook on the ratings was revised to stable from positive. "The upgrade reflects NET's improved operational and financial performance over the past several quarters and our expectation that NET should be able to maintain its current performance over the next few years," said Standard & Poor's credit analyst Jean- Pierre Cote Gil. NORTHWEST AIR: AFA-CWA Calls for Union Representation Election -------------------------------------------------------------- The Association of Flight Attendants-CWA filed a petition with the National Mediation Board to hold a representational election on behalf of Northwest Airlines flight attendants. "Northwest flight attendants are looking for a strong voice to support them during this difficult time, and AFA-CWA is that voice," said Patricia Friend, AFA-CWA International President. "Right now, the Northwest flight attendants are facing the most turbulent time of their careers and they are doing so without a safety net. They have been presented with a devastating tentative agreement from their bankrupt carrier and are already experiencing incredible hardships. They approached AFA-CWA in hopes that our experience could help them navigate through this difficult process and we will do whatever it takes to defend their interests and provide the support they so desperately need." The NMB is the federal agency that oversees union representation elections in the airline industry. Once the NMB verifies that enough signed union representation cards have been collected by AFA-CWA, a secret ballot election will be called to determine who will represent the Northwest flight attendants. In order to file for an election, AFA-CWA collected the required signature cards from the membership. "Northwest flight attendants need the strength and support of a union experienced in representing flight attendants. AFA-CWA is that union," said Northwest flight attendant Shawn Fivecoat. "We desperately need an effective union right now and we are confident that AFA-CWA's extensive expertise will make a valuable difference in the careers of Northwest flight attendants." About the AFA For over 60 years, the Association of Flight Attendants -- http://www.afanet.org/-- has been serving as the voice for flight attendants in the workplace, in the aviation industry, in the media and on Capitol Hill. More than 46,000 flight attendants at 20 airlines come together to form AFA-CWA, the world's largest flight attendant union. AFA is part of the 700,000-member strong Communications Workers of America (CWA), AFL-CIO. About Northwest Airlines Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. NORTHWEST AIRLINES: S&P Upgrades Two Cert. Class Ratings to CCC+ ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three enhanced equipment trust certificates and placed on CreditWatch or revised the CreditWatch status of those and certain other ratings of Northwest Airlines Corp. (rated 'D') subsidiary Northwest Airlines Inc. (also rated 'D'). "The ratings reflect restructuring agreements reached between Northwest and creditors," said Standard & Poor's credit analyst Philip Baggaley. Leveraged leases on B747-400 and B757-200 aircraft backing Northwest's 1996-1 EETC's were restructured into six-year to eight-year operating leases. The leases do not fully pay out any of the classes of certificates, but the Class A certificates, whose rating is raised to 'CCC+' from 'CCC-', may receive full recovery from the residual value of the planes at the end of the leases. A further, potentially significant source of recovery is the $480 million unsecured deficiency claim against Northwest, proceeds of which would be available (after paying senior claims such as liquidity facility draws) first to the Class A certificates. Senior unsecured claims against bankrupt airlines have typically yielded less than 10 cents on the dollar at emergence, but recovery in this bankruptcy could be more substantial, particularly if Northwest does not terminate its pension plans (termination would result in a substantial unsecured claim on behalf of the Pension Benefit Guaranty Corp.). Similarly, Northwest has reached a tentative agreement with holders of the 1999-1 EETC's, under which leveraged leases of B747-400 aircraft are restructured into operating leases. The airline had earlier agreed to perform under the existing leases but subsequently missed a payment and entered into negotiations. The restructured leases and estimated residual values should be enough to repay the Class A certificates and may also pay off the Class B certificates, whose ratings are raised to 'CCC+' from 'CCC'. An unsecured deficiency claim of $301.7 million has been agreed in this case, which would be available in the priority described above. Ratings on each class of the 1999-1 EETC's are placed on CreditWatch with developing implications. The 'D' corporate credit ratings on Northwest Airlines Corp. and its Northwest Airlines Inc. subsidiary reflect the companies' Sept. 14, 2005, bankruptcy filings. Ratings on enhanced equipment trust certificates (EETC's) are on CreditWatch, excepting 'AAA' rated, insured EETC's. Northwest is: * seeking to reorganize in Chapter 11 proceedings; * reducing losses by shrinking capacity; * securing labor cost reductions; and * reducing fixed financial obligations. Northwest states that it will seek to cut its costs by $2.2 billion annually (15%-20%), including $1.4 billion of reduced labor costs (an approximate 35% reduction in overall labor expenses, of which about $500 million had been achieved prior to bankruptcy). In addition, the company is targeting a reduction in debt and leases of about $4.2 billion to $4.4 billion (about 28% of pre-bankruptcy lease-adjusted debt). NUTRO PRODUCTS: S&P Assigns CCC Ratings to $345 Million Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to premium pet food manufacturer and marketer Nutro Products Inc. At the same time, Standard & Poor's assigned its 'B' bank loan ratings and '1' recovery ratings to the company's proposed: * $440 million senior secured term loan B due 2013; and * $100 million revolving credit facility due 2012. Standard & Poor's also assigned its 'CCC' ratings to Nutro's: * proposed $180 million floating rate senior unsecured notes due 2013; and * proposed $165 million senior subordinated notes due 2014. Proceeds of the issuances, along with equity invested by Bain Capital, will be used to finance the planned recapitalization and stock purchase agreement for Nutro. The ratings are based on preliminary terms and are subject to review upon final documentation. The outlook is stable. Pro forma for the transaction, City of Industry, California-based Nutro will have $785 million in total debt outstanding. "The ratings on Nutro reflect the firm's high leverage, narrow business focus, participation within a highly competitive industry, and customer concentration," said Standard & Poor's credit analyst Alison Sullivan. ONEIDA LTD: Appoints James Joseph as Company President ------------------------------------------------------ Oneida Ltd. (OTCBB:ONEIQ) reported the promotion of James E. Joseph to President of the Company, effective May 31, 2006, upon the completion of the year of service of Terry G. Westbrook in that role. Mr. Joseph has been the Company's Executive Vice President for Worldwide Sales and Marketing since April 2005. An Oneida manager for 18 years, Mr. Joseph previously served as the general manager for both foodservice and international operations. Furthermore, Oneida's Board of Directors and Mr. Westbrook, President and Chief Executive Officer of Oneida, have initiated a transition period that will result in the appointment of his successor as Chief Executive Officer. The Company expects to complete the transition process by May 31, 2006, or subject to a mutually agreed upon extension. Mr. Westbrook has been a member of Oneida's Board of Directors since October 2004. In conjunction with the company's restructuring efforts, he was asked to assume the operating position in March 2005. These restructuring efforts are now being concluded through the pre-negotiated plan of reorganization filed March 19, 2006. Mr. Westbrook will continue as a member of the Board pending the confirmation of the Company's Plan of Reorganization. The Company has engaged Heidrick & Struggles to conduct a search for a CEO to succeed Mr. Westbrook and expects that this process will conclude within the next three months. Christopher H. Smith, Chairman of Oneida's Board of Directors, stated, "We are particularly fortunate to be able recognize the outstanding talents and extensive contributions of Jim Joseph by promoting him to the Presidency of Oneida. Our stakeholders wholeheartedly support this decision. "Jim and our marketing, procurement, logistics and customer service teams have greatly improved the outlook for Oneida in the past 18 months. There is yet much to do and Jim has the ability and leadership to maintain and enhance Oneida's dominant position in the tabletop sector." Mr. Smith commented further, "Terry Westbrook's tenure as CEO of Oneida has been a time of extraordinary change and progress. It was Terry's goal to return Oneida to its leadership position in tabletop products by executing a new strategic marketing plan to improve Oneida's brand relevance. Achievement of this goal is within sight. He has rebuilt the senior management team and overseen a turnaround in operating results while helping to design and implement a program to bring the Company's leverage within manageable limits. We respect his desire to return to independent Board membership and the management of his many personal and business activities." Mr. Westbrook commented, "I am very proud of my role in developing the plan to return Oneida to a position of prominence in the tabletop industry. Our consensual recapitalization process should ensure Oneida's leadership in tabletop products long into the future. Following its emergence from chapter 11, Oneida will have solid resources for growth strategies to drive increased profits. "Of equal importance is that we have put together the best management team in our sector. Jim's promotion to the Presidency has our total support, and we have the greatest confidence in Jim and his team. With the recapitalization of the Company and Jim's hand on the helm, the future is bright, indeed." About Oneida Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/ -- is the world's largest manufacturer of stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and the largest supplier of dinnerware to the foodservice industry. Oneida is also a leading supplier of a variety of crystal, glassware and metal serveware for the tabletop industries. The Company and its 8 debtor-affiliates filed for Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at Shearman & Sterling LLP represents the Debtors. Credit Suisse Securities (USA) LLC is the Debtors' financial advisor. When the Debtors filed for protection from their creditors, they listed $305,329,000 in total assets and $332,227,000 in total debts. ORIS AUTOMOTIVE: Taps Johnston Barton as Bankruptcy Counsel ----------------------------------------------------------- Oris Automotive Parts Alabama, Ltd., asks the U.S. Bankruptcy Court for the Northern District of Alabama for permission to employ Johnston, Barton, Proctor & Powell LLP as its bankruptcy counsel. Johnston Barton will: a. give the Debtor legal advice with respect to its duties as debtor-in-possession in the continued operation of its business and management of its assets; b. prepare on behalf of the Debtor necessary motions, applications, answers, contracts, reports and other legal documents; c. perform any and all legal services on behalf of the Debtor arising out of or connected with the bankruptcy proceedings; d. perform other legal services for the Debtor including, but not limited to, work arising out of labor, tax, environmental, corporate, litigation and other matters involving the Debtor; e. advise and consult with the Debtor for the preparation of all necessary schedules, disclosure statement and plans of reorganization; and f. perform all other legal services required by the Debtor in connection with the Debtor's chapter 11 case. Clark R. Hammond, Esq., a partner at Johnston Barton, tells the Court that the Firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Clark R. Hammond, Esq. Partner $330 Shayana Boyd Davis, Esq. Associate $230 Max A. Moseley, Esq. Associate $220 Lindan J. Hill, Esq. Associate $200 Mr. Hammond assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Hammond can be reached at: Clark R. Hammond, Esq. Johnston Barton Proctor & Powell LLP 2900 Amsouth/Harbert Plaza 1901 Sixth Avenue North Birmingham, AL 35203 Tel: (205) 458-9400 Fax: (205) 458-9500 http://www.johnstonbarton.com/ Headquartered in McCalla, Alabama, Oris Automotive Parts Alabama, Ltd. -- http://www.oris-gmbh.de/english/-- manufactures automotive parts. The company filed for chapter 11 protection on Mar. 16, 2006 (Bankr. N.D. Ala. Case No. 06-00813). Clark R. Hammond, Esq., at Johnston, Barton, Proctor & Powell LLP,represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $1 million to $10 million and debts between $10 million to $50 million. ORIUS CORP: Court Sets May 12 bar Date for Filing Proofs of Claim ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, set 4:00 p.m. on May 12, 2006, as the deadline for all creditors owed money by Orius Corp. and its debtor- affiliates to file formal written proofs of claim on account of claims arising prior to Dec. 12, 2005. Creditors must deliver their claim forms either by mail to: The Clerk of the Bankruptcy Court Attn: Mailroom 7th Floor Northern District of Illinois, Eastern Division 219 South Dearborn Chicago, Illinois 60604 Or through the Bankruptcy Court's Electronic Case Filing System at http://www.ilnb.uscourts.gov/ Governmental units have until June 10, 2006, to file proofs of claim of interest. Headquartered in Barrington, Illinois, Orius Corp. -- http://www.oriuscorp.com/-- is a nationwide provider of construction, deployment and maintenance services to customers operating within the telecommunications; broadband; gas and electric utilities; and government industries. The Company and its affiliates filed for chapter 11 protection on Dec. 12, 2005 (Bankr. N.D. Ill. Case No. 05-63876). When the Debtors filed for protection from their creditors, they listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. ORIUS CORP: Hires Murphy Austin as Special Litigation Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, authorized Orius Corp. and its debtor-affiliates to retain Murphy Austin Adams Schoenfeld LLP as their special purpose litigation counsel, nunc pro tunc to Dec. 12, 2005. Murphy Austin will assist and provide information and professional opinion to the Debtors in connection with a lawsuit filed by one of its debtor-affiliates, Copenhagen Utilities and Construction, Inc., against the City of Santa Rosa. The suit, filed in the Superior Court for the State of California, seeks to recover approximately $9 million against Santa Rosa for breach of contract, breach of warranties and related causes of action. Murphy Austin has represented Copenhagen Utilities since the commencement of the case. D. Michael Shchoenfeld, Esq., will lead the Murphy Austin engagement team assigned in Copenhagen Utilities' case. He charges $300 per hour. The rates for other Murphy Austin attorneys range from $210 to $235 per hour. Mr. Shchoenfeld tells the Bankruptcy Court that his firm holds a $2,826 prepetition claim and a $4,000 postpetition claim against the Debtors. Murphy Austin has waived its prepetition claim upon the approval of its engagement. Mr. Shchoenfeld assures the Bankruptcy Court that his firm does not hold any interest adverse to the Debtors or their estates. Headquartered in Barrington, Illinois, Orius Corp. -- http://www.oriuscorp.com/-- is a nationwide provider of construction, deployment and maintenance services to customers operating within the telecommunications; broadband; gas and electric utilities; and government industries. The Company and its affiliates filed for chapter 11 protection on Dec. 12, 2005 (Bankr. N.D. Ill. Case No. 05-63876). When the Debtors filed for protection from their creditors, they listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. P.H. GLATFELTER: Moody's Puts Ba1 Rating on New $200 Mil. Notes --------------------------------------------------------------- Moody's Investors Service rated P.H. Glatfelter Company's new $200 million senior unsecured note issue Ba1. Proceeds will be used to fund a portion of asset acquisitions announced over the past several weeks and to refinance existing debt. The acquired assets have not been as profitable as Glatfelter's incumbent operations, and, when consolidated, will reduce consolidated margins. Over the very near term, with the increased debt load, reduced consolidated profit margins and costs incurred to integrate the acquired operations, Glatfelter's credit profile will lag that appropriate for a Ba1 rated paper and forest products' company. Affirmation of the existing Ba1 rating anticipates that Glatfelter will successfully integrate the acquired operations, increase margins, and reduce debt so that credit protection measures improve. However, given execution risks and the potential that economic activity will decline, the outlook is negative. Outlook Changed: to Negative from Stable Rating Assigned: $200 senior unsecured notes -- Ba1 Rating Affirmed: $150 million 6.875% notes due July 2007 -- Ba1 Key factors influencing the ratings and outlook are: 1) Glatfelter will continue to have modest aggregate scale, and with operations in two product lines and two geographies, will continue to feature a profile consistent with a Ba rated paper and forest products' company; 2) After repaying some indebtedness and subsequent to an integration period for the acquisitions, credit metrics are expected to return to levels consistent with the Ba1 rating; 3) Similarly, profit margins are expected to lag those appropriate for the rating over the very near term, but are expected to improve later this year and into 2007; 4) Historical cash flow has been more volatile than the Ba rating would indicate; and 5) The ability to reduce debt from the proceeds of timberland sales is a positive. Owing to the potential of the required improvement in credit protection measures being frustrated, the outlook is negative. Glatfelter is refinancing its liquidity facility with a new $200 million unsecured 5-year revolving credit facility. With that and the elimination of the $150 million maturity due in 2007, Glatfelter will have good liquidity arrangements. The outlook is negative and may be returned to stable if the company's normalized retained cash flow to adjusted debt approaches 20%. The rating may be subject to downgrade should RCF/TD remain closer to 15%. P.H. Glatfelter Company, headquartered in York, Pennsylvania, is a global manufacturer of specialty and engineered papers. The company's common stock is traded on the New York Stock Exchange under the symbol GLT. PHI INC: S&P Assigns BB- Rating to Planned $150 Million Sr. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Louisiana-based helicopter services company PHI Inc. and assigned its preliminary 'BB-' senior unsecured rating to PHI's proposed issuance of $150 million in senior notes. The outlook remains stable. The rating actions are in response to PHI's announcement that it will redeem its $200 million in senior unsecured notes, concurrent with an issuance of $150 million in senior unsecured notes and $160 million in common equity. "This financing effectively reduces debt by about 25% and solidifies the financial risk profile at the existing rating level," said Standard & Poor's credit analyst Kevin L. Beicke. The excess funds from this financing, along with robust operating cash flows, should be more than sufficient to pay for this year's roughly $121 million share of the company's multiyear fleet expansion. The ratings on PHI primarily reflect the company's weak business risk profile. (Business risk profiles range from vulnerable to excellent.) PHI is subject to the cyclicality and volatility inherent in the oil and gas offshore exploration and production (E&P) industry, PHI's main revenue source. Ratings are further limited by the company's lack of geographical diversity and exposure to weather. Somewhat offsetting these weaknesses are: * PHI's large market share in the Gulf of Mexico; * an oligopolistic industry structure; * a favorable contract structure; and * its expanding air medical operations. PHI's financial risk profile is considered aggressive, but may improve to intermediate with the significant reduction in debt and the expected cash flows to be generated by the ongoing fleet expansion project. "The stable outlook reflects our expectations that PHI's growth initiatives will not negatively affect the company's current financial position," said Mr. Beicke. A proven track record in the air medical segment and substantial growth in operating cash flow are necessary before Standard & Poor's would consider positive ratings actions. PILLOWTEX CORP: Court Approves Amended Disclosure Statement ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the Disclosure Statement explaining Pillowtex Corporation's Amended Joint Chapter 11 Plan of Reorganization. The Court determined that the Disclosure Statement contains adequate information -- the right amount of the right kind of information -- required under Section 1125 of the Bankruptcy Code. Summary of the Amended Joint Plan The Plan provides for the substantive consolidation of the estates of the Debtors. On the Effective Date of the Plan, each Debtor other than Pillowtex will be deemed merged into Pillowtex and: * all assets and liabilities of the Debtors other than Pillowtex will be deemed merged into the assets and liabilities of Pillowtex; * all guarantees of any Debtor of the payment, performance or collection of obligations of any other Debtor will be eliminated and canceled; * any obligation of any Debtor and all guarantees thereof by one or more of the other Debtors will be deemed to be a single claim against the consolidated Debtors; * all joint obligations of two or more of the Debtors and all multiple claims against any such Debtors on account of such joint obligations will be treated and allowed only as a single claim against the consolidated Debtors; and * each proof of claim filed against any Debtor will be deemed filed only against the consolidated Debtors and will be deemed a single obligation of the consolidated Debtors. Treatment of Claims All administrative claims, priority tax claims, revolving lender administrative claims, term lender administrative claims, priority claims, and other secured claims will be paid in full. Convenience claims, totaling $1.5 million, will receive cash in an amount equal to 12% of the claim. General Unsecured Claims, totaling $187.5 million, will receive its pro rata share of: (a) the beneficial interests, (b) the initial distribution amount, and (c) each interim distribution amount. Intercompany claims will be paid through a transfer of assets from one Debtor to another. Any remaining amount of the claim or other claims not satisfied by the value of the assets transferred will be extinguished. Holders of Pillowtex equity and securities trading claims and holders of subsidiary equity will receive nothing. A full-text copy of the Amended Disclosure Statement explaining its Amended Joint Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060407032907 A full-text copy of the Disclosure Statement explaining its Joint Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060407033058 About Pillowtex Corp. Headquartered in Dallas, Texas, Pillowtex Corporation -- http://www.pillowtex.com/-- sold top-of-the-bed products to virtually every major retailer in the U.S. and Canada. The Company filed for Chapter 11 protection on November 14, 2000 (Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a chapter 11 plan, and filed a second time on July 30, 2003 (Bankr. Del. Case No. 03-12339). The second chapter 11 filing triggered sales of substantially all of the Company's assets. David G. Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at Morris Nichols Arsht & Tunnel, represent the Debtors. On July 30, 2003, the Company listed $548,003,000 in assets and $475,859,000 in debts. PROSOFT LEARNING: Chosen as LPI's North American Master Affiliate ----------------------------------------------------------------- Prosoft Learning Corp. was chosen by the Linux Professional Institute as its new Master Affiliate for North America. "We are delighted to welcome Prosoft to our worldwide team of affiliates," Jim Lacey, president and CEO of LPI, said. "Their successful history in providing highly innovative IT training and certification solutions makes them an ideal partner for our efforts to continue to spread Linux professionalism in North America. Lacey noted that Prosoft brings many benefits to LPI, including a commitment to industry standards, a track record in gaining acceptance for vendor-independent certifications, and acknowledged leadership in ICT workforce development through collaborative efforts with state governments and school districts. Benjamin Fink, president and CEO of Prosoft, is equally pleased with the potential of this new partnership with LPI. "We are truly honored and privileged to be chosen as the North American Master Affiliate for LPI. For years we have witnessed steadily increasing demand for Linux-related training and certification, and we believe that the LPI exams represent the best, most rounded and most comprehensive solution for certifying Linux professionals. We look forward to continuing LPI's global success through the development of an aggressive growth strategy for their Linux certification program in the United States and Canada." Larry McArthur, LPI's recently appointed area operations manager for North America and Asia-Pacific, stated that Prosoft and LPI may explore other sub-affiliates to engage in the North American market. These factors made Prosoft the ideal candidate as Master Affiliate in this crucial market: -- An expertise in bringing together multiple stakeholders. LPI was attracted to Prosoft's success in developing the CIW Advisory Council, which brought together representatives from industry, academia, government and not-for-profits in order to develop standards for job-role certifications. Bringing these various constituencies together has led to a widely accepted certification that has been endorsed by governments and trade associations around the world. -- Expertise in managing vendor-independent, job-role certifications. Prosoft's CIW program is one of the leading vendor-neutral IT job-readiness certifications, while the CTP (Convergence Technologies Professional) certification, which Prosoft manages for the Telecommunications Industry Association (TIA), is the leading certification covering convergence technologies such as Voice over Internet Protocol (VoIP). For CTP, Prosoft was able to enlist the support of industry leaders such as Intel, HP, Cisco, Avaya and IBM. -- A worldwide distribution channel. Prosoft is one of the world's largest distributors of IT-related educational content to corporations, learning centers and academic institutions. Prosoft distributes content from offices in North America, Asia and Europe to an extensive network of thousands of partners and authorized content providers. About Linux Professional Institute The Linux Professional Institute -- http://www.lpi.org/-- develops professional certification for the Linux operating system, independent of software vendors or training providers. Established as an international non-profit organization in 1999 by the Linux community, LPI develops accessible, internationally recognized certification programs that have earned the respect of vendors, employers and administrators. LPI's activities involve hundreds of volunteers and professionals throughout the world in many different capacities, and the group encourages active public involvement. LPI's multilevel program of exams is administered globally through Thomson Prometric and Pearson VUE testing centers. LPI's major financial sponsors are Platinum Sponsors IBM, Linux Journal, Linux Magazine, Maxspeed, Novell, SGI and TurboLinux, as well as Gold Sponsors, Hewlett-Packard and IDG. About Prosoft Learning Headquartered inPhoenix, Arizona, Prosoft Learning Corporation -- http://www.ProsoftLearning.com/-- offers content and certifications to enable individuals to develop and validate critical Information and Communications Technology workforce skills. Prosoft is a leader in the workforce development arena, working with state and local governments and school districts to provide ICT education solutions for high school and community college students. Prosoft has created and distributes a complete library of classroom and e-learning courses. Prosoft distributes its content through its ComputerPREP division to individuals, schools, colleges, commercial training centers and corporations worldwide. Prosoft owns the CIW job-role certification program for Internet technologies and the Certified in Convergent Network Technologies certification, and manages the Convergence Technologies Professional vendor-neutral certification for telecommunications. As of Jan. 31, 2006, Prosoft Learning's balance sheet shows a $4,106,000 stockholders' deficit, compared to $3,491,000 of positive equity at July 31, 2005. QUANTA CAPITAL: Reports $105.9 Million Net Loss for 2005 -------------------------------------------------------- Quanta Capital Holdings incurred a $105.9 million net loss for the year ended Dec. 31, 2005, according to a regulatory filing with the U.S. Securities and Exchange Commission. The company's fourth quarter loss totaled $54.7 million, nearly $10 million more than its highest preliminary forecast. Quanta Capital has been battered by losses resulting from hurricanes over the past two years as well as the high cost of severance packages from a wave of departing executives. According to the Royal Gazette, the company's losses came on the heels of last month's announcement that it was exploring "strategic alternatives" including the sale of units, or closing off some units to new business. Investment bank Friedman Billings Ramsey (one of Quanta's largest shareholders) and J.P. Morgan Securities Inc. have been retained to offer the company financial advice. Quanta said it was looking to "preserve shareholder value" and was in a financial position to meet current liabilities. The company expects its 2006 business to be less than a quarter of last year's sales, when net policy sales totaled US$390 million, down from US$419.5 million in 2004. The Royal Gazette says that company's future business prospects were called into question after ratings firm A.M. Best on March 2 downgraded its financial strength rating to B++ -- a rating too low to attract business from many insurance buyers. At the end of March, more than two percent of Quanta's customers had cancelled contracts, and more cancellations are expected, the company said in its filing. Quanta said its downgrade was also hurting business at its Lloyd's unit, an operation that got off the ground last year and wasn't included as part of the A.M. Best ratings cut. Quanta Capital has also been cut from the approved list by leading brokers Aon Corporation and Marsh Inc. Material Weakness PricewaterhouseCoopers, Quanta Capital's auditor, detected several lapses in internal controls at Quanta, that could prevent it from detecting a material accounting error. PwC identified three material weaknesses: 1. The Company did not maintain a sufficient complement of personnel within its U.S. accounting function with appropriate experience and training commensurate with its financial reporting requirements. 2. The Company did not maintain effective controls over the accuracy and completeness of, and access to, certain spreadsheets used in the Company's financial reporting process. 3. The Company did not maintain effective controls over the completion of reconciliations and analyses for gross and ceded premiums, losses, other expenses, and the related balance sheet accounts for its U.S. processed transactions. Some of the deficiencies detected were ones required under corporate governance law Sarbanes-Oxley, which is binding on publicly-listed companies. The company has formed a Finance Internal Control Committee, amongst other measures, and plans to hire a chief accounting officer to help remedy the lack of controls. Quanta Capital Holdings Ltd., a Bermuda holding company, provides specialty insurance, reinsurance, risk assessment and risk consulting products and services through its subsidiaries. Through operations in Bermuda, the United States, Ireland and the United Kingdom, Quanta focuses on writing coverage for specialized classes of risk through a team of experienced, technically qualified underwriters. The company offers specialty insurance and reinsurance products that often require extensive technical underwriting skills, risk assessment resources and engineering expertise. Quanta is listed on the NASDAQ stock market and trades under the symbol QNTA. RADNOR HOLDINGS: 11% Bond Indenture Allows for $25M Add'l Debt -------------------------------------------------------------- Radnor Holdings Corporation and some of its subsidiaries amended their indenture with Wachovia Bank, National Association, dated as of March 11, 2003, which governs the Company's 11% Senior Notes due 2010. The amendment permits the Company to incur an additional $25 million of indebtedness and any refinancing, refunding, deferral, renewal or extension by expanding the definition of "Permitted Indebtedness." The Company's $135 million of 11.0% Senior Notes due 2010 are fully and unconditionally jointly and severally guaranteed by substantially all of the Company's domestic subsidiaries, all of which are 100% owned. Full-text copies of the Indentures governing the 11% Notes, prior to the March 11 Amendment, are available at no charge at http://ResearchArchives.com/t/s?7a7and http://ResearchArchives.com/t/s?7a8 StyroChem Loan Amendment On March 30, 2006, Radnor Holdings Corporation's European subsidiary, StyroChem Finland Oy amended the agreement governing its senior secured term loan facility with institutional lenders in the original aggregate principal amount of $20,000,000. The amendment revised certain covenants, including without limitation, the maximum annual capital expenditures limit, the maximum ratio of the consolidated total debt of Borrower and its subsidiaries to the consolidated EBITDA of Borrower and its subsidiaries and the minimum fixed charge coverage ratio. The amendment also amended certain reporting requirements, the definition of EBITDA for purposes of the agreement and the pricing grid that is used to determine downward adjustments to the interest rate for the term loans. About Radnor Radnor Holdings Corporation -- http://www.radnorholdings.com/-- is a leading manufacturer and distributor of a broad line of disposable foodservice products in the United States and specialty chemical products worldwide. The Company operates 15 plants in North America and 3 in Europe and distributes its foodservice products from 10 distribution centers throughout the United States. Liabilities Exceed Assets As of September 30, 2005, Radnor Holdings' equity deficit widened to $28,800,000 from a $770,000 deficit at December 31, 2004. Tardy 10-K Radnor's Annual Report on Form 10-K for the fiscal year ended December 30, 2005, "could not be filed within the prescribed time period primarily due to the Company's continuing review of the impact of, and disclosures related to, certain financing transactions subsequent to fiscal year end," President and Chief Executive Officer Michael T. Kennedy told the SEC in a March 31 regulatory filing. "The Company is also continuing its review of certain income tax matters," Mr. Kennedy added. Radnor's results of operations for the fiscal year ended December 30, 2005, were negatively impacted by the Gulf Coast hurricanes, and the resulting volatility in the petrochemicals and energy markets. The impact of these events on the Company's pre-tax results of operations has been estimated between $25 million and $30 million, primarily in the fourth quarter. RIVERSTONE NETWORKS: Hold River Amends Tender Offer Equity Deal --------------------------------------------------------------- Hold River LLC reports the amendment of certain terms of, and satisfaction of certain conditions to, its tender offer to purchase up to 19,525,000 shares of common stock of Riverstone Networks, Inc. for a purchase price of $0.80 per share, net to the selling shareholder in cash. The tender offer commenced on March 14, 2006, by Hold River LLC and Hedgehog Capital LLC and is scheduled to expire at 5:00 p.m., New York City time, on Tuesday, April 11, 2006, unless extended. David T. Lu, the managing member of Hedgehog Capital, may also be deemed to be making the offer and has been added as a co-bidder with Hold River LLC and Hedgehog Capital LLC to the tender offer. The tender offer is subject to a number of conditions described in the Offer to Purchase, including conditions pertaining to Riverstone's pending bankruptcy proceeding. Based on reports made by Riverstone and filings made in Riverstone's bankruptcy proceeding, Offerors have determined that certain conditions to the offer have been satisfied. The condition that the bankruptcy court approve Riverstone's proposed asset sale to Lucent Technologies, Inc. has been satisfied and the condition that the bankruptcy court not approve a motion to dismiss Riverstone's voluntary proceedings has been satisfied by virtue of the withdrawal of a previously filed motion to dismiss. The tender offer continues to be subject to other conditions described in the Offer to Purchase. If one or more of the remaining conditions are not satisfied or waived, Offerors may terminate, extend or amend the tender offer, but Offerors may terminate the offer only if a condition is not satisfied. Offerors are acquiring the shares for investment purposes and believe the tender offer represents an effective manner for Offerors to acquire the shares. Liquidity opportunities in the shares have been limited because the shares no longer trade on a national securities exchange, Nasdaq or other over-the-counter market. Offerors believe the tender offer presents one such opportunity for Riverstone shareholders to obtain liquidity for their investment. Another possible source of liquidity for shareholders may be a recovery upon conclusion of Riverstone's bankruptcy through a distribution on liquidation. No assurances can be given as to when or if Rivestone's bankruptcy will be completed or whether a distribution (if any) to shareholders would be greater or lesser than the price offered in the tender offer. Any questions concerning the tender offer may be directed to the depositary for the tender offer: Mellon Investor Services, LLC Telephone (866) 337-6319 Copies of the Offer to Purchase and the related Letter of Transmittal and other tender offer materials may be obtained free of charge from Mellon Investor Services, LLC. Offerors reserve the right to extend its offer from time to time. Any extension would be publicly announced no later than 9:00 a.m., New York City time, on the business day after the day on which the offer was scheduled to expire. Tenders of shares must be made on or prior to the expiration date. About Riverstone Networks Headquartered in Santa Clara, California, Riverstone Networks, Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet infrastructure solutions for business and residential communications services. The company and four of its affiliates filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del. Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. As of Dec. 24, 2005, the Debtors reported assets totaling $98,341,134 and debts totaling $130,071,947. RIVIERA HOLDINGS: S&P Holds B Corp. Credit Rating on CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services held its ratings on Riviera Holdings Corp., including the 'B' corporate credit rating, on CreditWatch with developing implications. The CreditWatch update follows the company's announcement that it has entered into a definitive agreement whereby all outstanding shares other than the shares held by Riviera's Chief Executive Officer, William Westerman, will be acquired by a certain investor group at a price of $17 per share in cash. Previously, Mr. Westerman had agreed to vote in favor of the acquisition and sell his shares to the investor group at $15 per share in cash. The total acquisition price is about $426.5 million, including the repayment or assumption of about $215 million in outstanding Riviera Holdings Corporation debt. Given various approvals, including shareholder and governmental approvals, which are still needed, the transaction would not likely close until the first half of 2007. In resolving the CreditWatch listing, Standard & Poor's will monitor the situation as it develops. Should the notes be fully redeemed, Standard & Poor's would withdraw its ratings on Riviera and remove them from CreditWatch. However, should some or all of the debt remain outstanding under a more highly leveraged capital structure, ratings could be lowered. SAFETY PRODUCTS: Releases Financial Statements for Fiscal 2005 -------------------------------------------------------------- Safety Products Holdings, Inc., as successor to NSP Holdings L.L.C., and Norcross Safety Products L.L.C. reported their financial results for the year ended Dec. 31, 2005. For 2005, net sales of Safety Products were $481.1 million compared to $438.5 million in 2004. Adjusted earnings before interest, taxes, depreciation, and amortization increased to $70.4 million from $64.4 million in 2004 for NSP, and increased to $70.1 million from $63.5 million in 2004 for Safety Products, which represented an increase of 9.4% and 10.4%, respectively. Safety Products' net sales increase of $42.6 million, or 9.7%, was attributable to increased net sales in each of its three operating segments. In Safety Products' general safety and preparedness segment, the net sales increase of $24.0 million, or 7.8%, reflects a combination of overall organic growth in Canada, Europe, and South Africa, favorable exchange rates and incremental net sales resulting from the acquisition of The Fibre-Metal Products Company. In the United States, strong overall market demand was offset by a decrease in government contract shipments resulting in lower net sales. In Safety Products' fire service segment, net sales increased $9.0 million, or 11.5%, reflecting continued strong market demand. In Safety Products' electrical safety segment, net sales increased $9.6 million, or 18.8%, primarily driven by strong market demand and new product penetration. Both Safety Products' general safety and preparedness and electrical safety segments realized increased sales from the hurricane activity in the Gulf Coast region. Safety Products' gross profit increased by $12.9 million, or 8.2%. Excluding the impact of a $5.6 million charge related to inventory purchase accounting adjustments, Safety Products' gross profit increased $18.5 million, or 11.8%. Excluding the $5.6 million of inventory purchase accounting adjustments, Safety Products' gross profit margin of 36.4% in 2005 compared favorably to the 35.7% gross profit margin in 2004. Safety Products' income from operations decreased $21.2 million from $51.1 million in 2004 to $29.9 million in 2005. NSP's income from operations decreased $18.5 million from $51.7 million in 2004 to $33.2 million in 2005. Included in Safety Products' and NSP's income from operations for 2005 were: (1) inventory purchase accounting charges of $5.6 million; (2) incremental amortization expenses of $7.0 million related to purchase accounting; and (3) $16.4 million of management incentive compensation expense for the Company and $13.6 million of management incentive compensation expense for NSP recognized as a result of the acquisition by Holdings of all of the outstanding membership units of NSP from NSP Holdings. Included in income from operations in 2004 were $600,000 of expenses related to exploring strategic alternatives. Excluding these charges, Safety Products' income from operations increased $7.2 million, or 13.5%, and NSP's income from operations increased $7.1 million, or 13.5%. In Safety Products' general safety and preparedness segment (after adjusting for expenses related to purchase accounting), income from operations increased by $3.9 million, or 12.4%, due to the higher net sales volume. In Safety Products' fire service segment (after adjusting for expenses related to purchase accounting), income from operations increased $0.7 million, or 5.4%, as the higher net sales volume was partially offset by lower margin realization and higher administrative expenses. In Safety Products' electrical safety segment (after adjusting for expenses related to purchase accounting), income from operations increased by $3.1 million, or 27.5%, due to higher net sales and improved manufacturing performance. Corporate general and administrative expenses increase by $500,000 for Safety Products and $600,000 for NSP due to higher payroll and administrative expenses including costs associated with public reporting and related compliance requirements of the Sarbanes- Oxley Act of 2002. As of Dec. 31, 2005, NSP and Safety Products had working capital of $130.1 million and $131.8 million and cash of $20.7 million and $20.8 million, respectively. Safety Products' capital expenditures were $9.3 million in 2005 and $6.4 million in 2004. Fibre-Metal Acquisition In November 2005, the Company completed the acquisition of all of the issued and outstanding capital stock of Fibre-Metal. The purchase price of $68.7 million (including $700,000 of acquisition costs) was financed through $65.0 million of additional term borrowings under NSP's senior credit facility and cash on the balance sheet. NSP Holdings Acquisition In May 2005, Safety Products acquired all of the outstanding equity interests of Norcross and NSP Capital for approximately $481.0 million, which included the assumption or repayment of indebtedness but excluded payment of fees and expenses. The acquisition closed on July 19, 2005, and was funded from the issuance and sale of senior pay in kind notes as well as an equity investment from affiliates of Odyssey and GEPT and certain members of management of Norcross. Concurrently with the acquisition, Norcross entered into a new senior credit facility, consisting of a revolving credit facility that provides for up to $50.0 million of borrowings and a $88.0 million term loan. As a result of the acquisition, Safety Products became the sole unit holder of Norcross. Full-text copies of Safety Products Holdings, Inc.'s financial statements for the year ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?797 About Safety Products Holdings, Inc. Safety Products Holdings, Inc., designs, manufactures and markets branded products in the personal protection equipment industry. Safety Products manufacture and market a full line of personal protection equipment for workers in the general safety and preparedness, fire service and electrical safety industries. Safety Products sell products under trusted, long-standing and well-recognized brand names, including North, Fibre-Metal, Morning Pride, Ranger, Servus, Pro-Warrington and Salisbury. Safety Products broad product offering includes, among other things, respiratory protection, protective footwear, hand protection, bunker gear and linemen equipment. At Dec. 31, 2005, the company's balance sheet showed $106,891,000 of positive stockholders' equity compared to a $75,097,000 equity deficit at Dec. 31, 2004. Moody's assigned it's Caa1 rating on June 21, 2005, to approximately $128 million of outstanding 11-3/4% Senior Pay in Kind Notes due January 1, 2012, issued by Safety products Holdings, Inc. Standard & Poor's placed its B- rating on those notes on February 6, 2006. SCIENTIFIC GAMES: Unit Buys $12MM Shoreline Star Facility in Conn. ------------------------------------------------------------------ Scientific Games Corporation's (Nasdaq: SGMS) subsidiary Autotote Enterprises, Inc. has acquired certain assets of The Shoreline Star Greyhound Park & Simulcast Facility located in Bridgeport, Connecticut. The purchase price is approximately $12 million plus certain future contingent payments and will be financed under Scientific Games' existing credit facility. The Company anticipates the acquisition will contribute approximately $2.4 million of yearly EBITDA at existing levels of simulcast handle and will be accretive to earnings. This deal also eliminates existing restrictions on Autotote's ability to simulcast live racing in certain portions of the state. "This deal represents the culmination of years of extended negotiations and will allow Autotote to maximize the potential of its Connecticut operations," Lorne Weil, Chairman & CEO of Scientific Games, stated. "This acquisition is also an integral part of our Connecticut Off-Tack Betting redevelopment plan." "The Shoreline operation has been a mainstay and contributor of the Bridgeport economic community for many years, and under Autotote's leadership will continue to grow and do so," Susan Zeff, CEO and owner of Shoreline commented. "This deal will better serve the players of Connecticut, and will strategically position us to develop relatively untapped markets in the southern portion of the state," Rick Pullman, President of Autotote added. "We have been working with the Shoreline team over the past few months to ensure the seamless integration of the Bridgeport facility into our existing operations." About Autotote Enterprises Autotote Enterprises operates the Connecticut OTB system with 11 locations throughout the state including Sports Haven in New Haven and the Bradley Teletheater. Autotote and Scientific Games Worldwide Sports LTD also provide venue management services to the Mohegan Sun Casino in Uncasville, Connecticut, Isle of Capri Casino at Our Lucaya in Freeport, Grand Bahamas, the Divi Carina Bay Resort Casino in St. Croix, the Randall James Racetrack and Simulcast Center in St. Croix, the Tote Investments Racing Service Simulcast Center in Bridgetown, Barbados, Royal Beach Casino, St. Kitts, and the Ho-Chunk Casino in Baraboo, Wisconsin. About Scientific Games Headquartered in New York City, Scientific Games Corporation -- http://www.scientificgames.com/-- is the leading integrated supplier of instant tickets, systems and services to lotteries, and the leading supplier of wagering systems and services to pari-mutuel operators. It is also a licensed pari-mutuel gaming operator in Connecticut and the Netherlands and is a leading supplier of prepaid phone cards to telephone companies. Scientific Games' customers are in the United States and more than 60 other countries. * * * As reported in the Troubled Company Reporter on April 3, 2006, Moody's Investors Service assigned a Ba2 rating to Scientific Games Corporation's amended credit facilities and affirmed the company's Corporate Family, senior and subordinated ratings at Ba2, Ba2 and B1, respectively. The rating outlook is stable. The amended bank facilities will encompass a $50 million increase to the existing $250 million senior secured guaranteed multi- currency revolving credit facility and a new $100 million senior secured guaranteed term loan, each due Dec. 23, 2009. The increased facilities will be used to provide financing for the recent acquisition of EssNet AB and the potential acquisition of The Global Draw, Ltd. SCRIP ADVANTAGE: All Employees Terminated on Friday, April 7 ------------------------------------------------------------ While Scrip Advantage, Inc., a publicly-traded California corporation, has been actively pursuing potential investors and has secured commitments for debt and debtor-in-possession financing, no equity investor has yet committed to the Company. Even as claims against the company are mounting, talks with potential equity investors continue. However, acting on its duty to preserve assets for both secured and unsecured creditors, SAI is temporarily ceasing operations even as the board of directors continues its search for capital. SAI further analyzes potentially valuable security claims related to unfunded subscription agreements, and pursues foreclosure on CEOAmerica stock that is an asset of the Company. While employment at the company concluded on April 7, 2006, for all employees, the SAI Board of Directors plans to continue pursuing its goal of $3,000,000 in equity capital, which would let the company enter into and pave the way for successfully emerging from Chapter 11 Bankruptcy. SAI equipment assets are being foreclosed on by secured creditors. In a statement of confidence in the company's potential if it emerges from bankruptcy, the secured creditors have also committed to making the equipment assets available to SAI should funding occur and operations resume under a Chapter 11 reorganization within the next 75 days. Bankruptcy Banter Scrip Advantage provided no insight in last week's announcement about when or where it might file a chapter 11 petition. Michael Finney at KGO-TV reported on Feb. 9, 2006, about Scrip Advantage's bankruptcy plans after receiving numerous questions from viewers after his Dec. 28, 2005, broadcast about the non- profit's difficulties. "We've talked to a board member for Scrip Advantage," Mr. Finney reported in February. "He says the bankruptcy proceedings have taken longer than expected. He says they are in the process of exploring all their options and will notify everyone when everything is completed." "We also spoke with the Fresno County District Attorney's office," Mr. Finney continued. "They are prepared to file charges against Scrip, but have not yet decided whether to file criminal or civil charges. The DA's office says it needs to wait to see what Scrip will do next before filing the charges." A transcript of Mr. Finney's report on Dec. 28, 2005, is available at no charge at http://ResearchArchives.com/t/s?7a9 About Scrip Advantage, Inc. Headquartered in Fresno, California, Scrip Advantage, Inc. (OTC: SCPV) -- http://www.scripadvantage.com/-- is a specialized marketing company, selling gift certificates at a discount to face value to non-profit organizations, primarily parochial schools and sports leagues, for their fundraising efforts. SAI launched in February 1999 and exhibited a compound annual growth rate of 90% from June 2000 through 2004 when its annualized revenue approached $200 million. SERACARE LIFE: Taps Cathryn Low as Interim Chief Financial Officer ------------------------------------------------------------------ SeraCare Life Sciences, Inc. appointed Cathryn Low as its interim Chief Financial Officer. Ms. Low is a Turnaround and Workout Specialist at Prolman Associates, a firm specializing in business turnarounds and management of Chapter 11 reorganizations. She is expected to serve as interim CFO of SeraCare until a permanent replacement is identified. Ms. Low, 53, has provided interim financial management to public and privately held businesses since 1987, both inside and outside of the Chapter 11 process. She has also held several senior financial and operational management positions, including serving as Senior Vice President and CFO of Yankee Bank in Boston and as CEO of Colts Manufacturing, Inc. In addition, since September 2000, Ms. Low has been a commercial real estate sales and investment advisor with Langston & Low, providing services to ACI Commercial, Inc. from September 2000 to February 2005 and to Burnham Real Estate Services, Inc. from March 2005 to the present. The Bankruptcy Court in San Diego appointed her a Bankruptcy Examiner in 1999. Tom Lawlor, Chief Operating Officer, stated: "We are very pleased to bring someone of Cathryn's caliber and expertise on board to assist us during the restructuring process. Cathryn has extensive experience with corporate turnarounds, and she possesses the financial and restructuring skills necessary to help us improve our accounting and financial reporting infrastructure. We look forward to working with Cathryn as we progress through the Chapter 11 process." Ms. Low earned a B.A. in biological sciences from Mount Holyoke College and an MBA in finance and accounting from Columbia University. SEC Subpoena Separately, SeraCare reported that, following a request from the Securities and Exchange Commission for a voluntary production of certain documents, the Company has received a subpoena from the SEC. The subpoena calls for the production of the documents that were originally requested, as well as additional documents. About SeraCare Life Sciences Based in Oceanside, California, Seracare Life Sciences, Inc. -- http://www.seracare.com/-- develops and manufactures biological based materials and services for diagnostic tests, commercial bioproduction of therapeutic drugs, and medical research. The Company filed for chapter 11 protection on March 22, 2006 (Bankr. S.D. Calif. Case No. 06-00510). Brian Metcalf, Esq., and Suzanne Uhland, Esq., at O'Melveny & Myers LLP, represent the Debtor. When the Debtor filed for protection from its creditors, it listed $119.2 million in assets and $33.5 million in debts. SERVICE CORP: $1 Bil. Alderwoods Deal Cues Moody's Rating Review ---------------------------------------------------------------- Moody's Investors Service placed the credit ratings of Service Corporation International on review for potential downgrade following the announcement that it entered into a definitive agreement to acquire Alderwoods Group, Inc., for total cash consideration of approximately $1.2 billion. The credit ratings of Alderwoods were placed on review with direction uncertain. The acquisition, which is expected to close by the end of calendar year 2006, is subject to approval by regulators and Alderwoods' shareholders. The transaction is not subject to any financing conditions. SCI currently has $470 million in cash on its balance sheet and has received a commitment letter from JPMorgan for an $850 million bridge facility. The details of the expected financing package have not been disclosed. Moody's expects a weakening of SCI's credit metrics pro forma for the acquisition, excluding the impact of potential cost synergies. Assuming SCI uses the $850 million interim bridge facility along with cash on hand to finance the acquisition, debt to EBITDA would increase from 4 times at Dec. 31, 2005 to about 5 times on a pro forma basis. Moody's review of SCI's ratings will focus on the expected post- acquisition capital structure and financial policy, the amount and timing of potential cost savings and asset sale proceeds, and management's operational strategy for the combined entity. SCI announced that the debt of Alderwoods will remain outstanding or will be refinanced in connection with the acquisition. Alderwoods' credit facility and $200 million of senior unsecured notes have change in control provisions. Alderwoods' credit ratings will remain under review with direction uncertain until there is increased certainty regarding the outcome of the merger and the post-acquisition capital structure. If a tender offer is commenced to retire the senior unsecured notes of Alderwoods, Moody's will consider the extent of covenant protection and credit support for any notes not redeemed in the tender offer. If the acquisition is consummated and all of the debt of Alderwoods is retired, then all the credit ratings of Alderwoods will likely be withdrawn. These SCI ratings were placed on review for potential downgrade: * $300 million 7% senior unsecured notes due 2017, Ba3 * $250 million 6.75% senior unsecured notes due 2016, Ba3 * $56 million 7.875% senior unsecured debentures due 2013, Ba3 * $342 million 7.7% senior unsecured notes due 2009, Ba3 * $195 million 6.5% senior unsecured notes due 2008, Ba3 * Senior unsecured shelf registration, (P)Ba3 * Senior subordinated, subordinated, and junior subordinated shelf registrations, (P)B2 * Corporate family rating, Ba3 These Alderwoods ratings were placed on review with direction uncertain: * $75 million senior secured revolving credit facility due 2008, B1 * $162 million senior secured term loan B due 2009, B1 * $200 million 7.75% senior unsecured notes due 2012, B2 * Corporate family rating, B2 Moody's affirmed the SGL-2 rating of SCI reflecting its good liquidity profile, without giving effect to the proposed acquisition of Alderwoods. Moody's will determine whether the SGL rating should be revised when there is more certainty regarding the post-acquisition capital structure. Service Corp, headquartered in Houston, Texas, is the leading provider of funeral and cemetery services in the world. Revenue for the year ended Dec. 31, 2005 was about $1.7 billion. Alderwoods Group, Inc., headquartered in Cincinnati, Ohio, is the second largest operator of funeral homes and cemeteries in North America. Revenue for the year ended Dec. 31, 2005, was $749 million. SND ELECTRONICS: U.S. Trustee Appoints Three-Member Committee ------------------------------------------------------------- The United States Trustee for Region 2 appointed three creditors to serve on an Official Committee of Unsecured Creditors in SND Electronics, Inc.'s chapter 11 case: 1. Intel Americas, Inc. c/o Tiffany Silva Assistant Secretary 2200 Mission College Boulevard Santa Clara, CA 95052 Tel: (408) 765-3852 Fax: (408) 765-7636 2. Western Digital Technologies, Inc. c/o Michael Cobb, Esq. Associate General Counsel 20511 Lake Forest Drive Lake Forest, CA 92630 Tel: (949) 672-7832 Fax: (949) 672-5444 3. Mainstream Global c/o Juan Yepez President 354 Merrimack Street Lawrence, MA 01843 Tel: (978) 682-6767 Fax: (978) 682-6765 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Greenwich, Connecticut, SND Electronics, Inc. -- http://www.snd.com/-- distributes electronic equipment for computer and communications products. The company filed for chapter 11 protection on Mar. 9, 2006 (Bankr. D. Conn. Case No. 06-30286). Douglas S. Skalka, Esq., at Neubert, Pepe, and Monteith, P.C., represents the Debtor in its restructuring efforts. As of Feb. 24, 2006, the Debtor reported assets totaling $10,323,554 and debts totaling $12,703,812. SND ELECTRONICS: Gets Interim Okay to Borrow $1 Mil. Postpetition ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut gave SND Electronics, Inc., permission to obtain $1 million postpetition loans from SND Electronics LLC on an interim basis. The Debtor tells the Court that its lender, SND Electronics LLC, provides loans and credit accommodations to the Debtor pursuant to an existing loan agreement. The agreement includes a $7.5 million revolving credit facility. As of the close of business on Mar. 8, 2006, the aggregate amount of all loans and prepetition debts owed by the Debtor under and in connection with the prepetition financing agreements was approximately $2.3 million, plus interest and other charges. The Debtor says that it needs more available sources of working capital to fund its operations and to be able to maintain business relationships with its vendors, suppliers, and customers. Furthermore, the Court also allowed the Debtor to use the lender's cash collateral, including proceeds from the Debtor's accounts receivable, on an interim basis. A full-text copy of an interim budget is available for free at http://researcharchives.com/t/s?79d As adequate protection for the lender's interests, SND Electronics LLC will receive a valid and perfected first priority security interest and lien superior to all other liens, claims or security interests that any creditor of the Debtor's estate may have. Headquartered in Greenwich, Connecticut, SND Electronics, Inc. -- http://www.snd.com/-- distributes electronic equipment for computer and communications products. The company filed for chapter 11 protection on Mar. 9, 2006 (Bankr. D. Conn. Case No. 06-30286). Douglas S. Skalka, Esq., at Neubert, Pepe, and Monteith, P.C., represents the Debtor in its restructuring efforts. As of Feb. 24, 2006, the Debtor reported assets totaling $10,323,554 and debts totaling $12,703,812. SOMERA COMMS: Recurring Losses Spur Auditors' Going Concern Doubt ----------------------------------------------------------------- Somera Communications, Inc.'s (Nasdaq: SMRA) independent registered public accounting firm, PricewaterhouseCoopers LLP, included an explanatory paragraph in its audit report in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2005, relating to the Company's ability to continue as a going concern. The Company has incurred recurring losses from operations and negative cash flows that raise substantial doubt about its ability to continue as a going concern. As of Dec. 31, 2005, Somera had * $6.5 million in cash and cash equivalents, * $11.2 million in short-term investments, and * no long-term debt. The Company believes that cash and cash equivalents, proceeds from short-term investments and anticipated cash flow from operations will be sufficient to fund the Company's working capital and capital expenditure requirements for at least the next 12 months. However, the Company has incurred losses from operations and negative cash flows over the last three years and cannot provide assurance that actual cash requirements will not be greater than what the Company currently expects. Somera previously reported a series of operational rebalancing actions including the elimination of 70-80 positions, consolidation of facilities and reduction of other overhead costs. The goal of the Company's rebalancing effort is to reduce costs so that the Company achieves quarterly break-even at revenue levels of $16-$18 million per quarter. While the Company believes it has made substantial progress toward implementing this plan, there can be no assurance that the cost reduction targets or revenue levels will be achieved, which could result in the Company incurring continued operating losses, and consumption of working capital and cash and short-term investment balances. A full-text copy of the Company's 2005 Annual Report in Form 10-K is available at no charge at http://ResearchArchives.com/t/s?7a3 About Somera Headquartered in Copell, Texas, Somera Communications, Inc. -- http://www.somera.com/-- is a telecom asset management firm that assists service providers in generating greater value from their network assets in the form of lower operating costs, longer product life, higher productivity, and real measurable savings. Somera provides immediate availability of quality, warranted new and refurbished equipment at savings of 25% to 60%. Extending these benefits is Somera RecoveryPLUS, which deploys knowledgeable personnel, proven processes and proprietary software to each client location to provide professional discovery, valuation and asset cataloging, thereby enhancing ongoing network efficiency while improving the accuracy and quality of reports required of today's regulatory environment. In addition, Somera offers outsourced network operations, logistics, and technical service, as well as comprehensive repair services for wireless, wireline, and data products -- all at significant savings and reduced cycle times. Founded in 1995, Somera has developed an impressive base of over 1,100 customers worldwide, including the industry leaders from each segment of the telecommunications market. SPARTA COMMERCIAL: Closes on $4.56-Mil. Private Equity Placement ---------------------------------------------------------------- Sparta Commercial Services, Inc., concluded a private placement offering of its common stock, which began in December 2005. The Company obtained $4,561,766 from the transaction. On March 29, 2006, the Company issued 1,799,102 shares of its common stock, par value $0.001 per share, to accredited investors for an aggregate purchase price of $350,825. On March 14, 2006, the Company issued 4,039,200 common shares for $787,644. In December 2005, the Company sold 17,555,369 shares for $3,423,297. Headquartered in New York City, Sparta Commercial Services, Inc. -- http://www.spartacommercial.com/-- is an internet-based acceptance and leasing company dedicated exclusively to the powersports industry, which includes motorcycles over 600ccs, 4-stroke all-terrain vehicles and select scooters. The Company provides a full line of financing solutions including retail installment sales contracts and leases, as well as related services including GAP coverage and vehicle service contracts. From inception through April 30, 2005, the Company was in a developmental stage period. In fiscal year 2005, the Company began to obtain regulatory approval in several states, prior to commencing active operations. At Jan. 31, 2006, the company's stockholders' equity deficit widened to $2,763,288 from a $451,024 deficit at April 30, 2005. SPECTRUM BRANDS: S&P Lowers Corporate Credit Rating to B- from B ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Spectrum Brands Inc., including its corporate credit rating to 'B-' from 'B'. At the same time, the ratings on the Atlanta, Georgia-based battery manufacturer were placed on CreditWatch with negative implications. About $2.3 billion of debt is affected by this action. The downgrade and CreditWatch placement follow the company's announcement that it is substantially lowering its earnings guidance for the second quarter of fiscal 2006 due to continued operating challenges in its battery segment and increasing commodity costs. This represents the company's third earnings guidance revision since September 2005. Standard & Poor's had assumed that due to seasonal working capital requirements in the second quarter, the company would have a tight covenant cushion on its 6.6x leverage covenant in the quarter. Substantial operating improvement was then expected for the second half of fiscal 2006. As a result of the revised guidance reflecting continued poor operating performance, the company will need to further amend its bank facility in order to maintain access to its $300 million revolver. The company previously amended its bank facility in December 2005 as a result of weak operating performance. Standard & Poor's will meet with management to discuss these issues and the potential for further near-term impact to the ratings. The review will focus primarily on: * the company's liquidity and continued access to its revolving credit facility; * ability to generate cash flow; * long-term operating trends in the battery business; and * commodity cost pressures. TRANSCONTINENTAL GAS: Fitch Rates $200 Million Sr. Notes at BB+ --------------------------------------------------------------- Transcontinental Gas Pipe Line Corp.'s (TGPL) $200 million 6.40% senior notes due April 15, 2016 are rated 'BB+' by Fitch Ratings. The rating is currently on Rating Watch Positive, as are the outstanding $1.0 billion 'BB+' senior unsecured notes and 'BB+' issuer default rating of TGPL. TGPL is one of two FERC regulated interstate gas pipelines wholly owned by The Williams Companies, Inc. (WMB; senior unsecured rated 'BB', Rating Watch Positive by Fitch). Proceeds from the senior note issuance will be used for general corporate purposes at TGPL, including the funding of expansion related capital expenditures. TGPL's rating incorporates its strong individual operating and financial profile, offset by the structural and functional ties between TGPL and its ultimate parent WMB. TGPL participates in WMB's daily cash management program under which TGPL makes and/or receives advances from WMB. In addition, TGPL has paid cash dividends to WMB of approximately $700 million over the four year period 2002-2005. Fitch notes that TGPL's various debt agreements provide limited bondholder protection against TGPL's ability to make upstream cash dividends and/or intercompany advances to WMB. TGPL is one of the nation's premier interstate pipelines as evidenced by its: * strong market position; * low-cost structure; and * above-average growth potential in capacity short markets. Operating characteristics remain favorable with the vast majority of TGPL's revenues derived from fixed demand payments. Firm transportation contracts average about 5.0 years, minimizing near- term capacity turnback risk. Moreover, the overall physical reach of the TGPL system enables it to compete effectively for incremental transportation volumes in its key markets. TGPL's stand-alone credit measures have continued to remain healthy despite higher dividend payments to WMB and remain consistent with investment grade parameters. For the fiscal year ended Dec. 31, 2005, cash flow coverage of interest was 5.7x with debt/EBITDA approximating 2.0x. The Rating Watch Positive status for WMB and TGPL acknowledges the significant progress WMB has made toward: * achieving its stated debt reduction goals; * expanding the cash flow production of its retained integrated natural gas businesses; and * reducing overall credit risk. In the coming weeks, Fitch expects to conduct a detailed assessment of WMB's credit profile and business risk position. Key components of the review will include an analysis of WMB's prospective financial performance under more conservative gas price assumptions and the extent that recently executed offtake agreements and other hedging activity has reduced the imputed debt associated with WMB's off balance sheet power contract obligations. URBI DESARROLLOS: Fitch Rates Proposed $150 Mil. Sr. Notes at BB ---------------------------------------------------------------- Fitch Ratings assigned an international scale rating of 'BB' to Urbi Desarrollos Urbanos, S.A. de C.V.'s proposed offering of up to US$150 million senior notes due 2016. Proceeds from the offering will be used to repurchase local Certificados Bursatiles issuances equivalent to approximately US$136 million (URBI03 and URBI05) and repayment of other loans. Additionally, Fitch has affirmed Urbi's 'A+(mex)' national scale rating. The Rating Outlook for all ratings is Stable. The ratings reflect Urbi's: * strong market position; * increasing geographic and customer diversification; * significant land reserve; * exposure to the developing Mexican mortgage market; and * manageable financial profile. The company operates in the highly fragmented but rapidly consolidating Mexican homebuilding industry and is the third largest homebuilder in Mexico in terms of homes sold. Urbi is well positioned to benefit from expected strong growth in the homebuilding market in Mexico. The company owns a significant amount of land, predominately in: * Baja California, * Mexico City, and * Guadalajara, providing the company with flexibility to meet growing demand for new homes. At the end of December 2005, the company had five years of land reserves based on the volume of homes sold in 2005. The acquisition of land reserve has been primarily achieved through seller-financed, deferred payments plans, which are on balance sheet and generally have a term of less than three years. Urbi is operationally solid and continues to benefit from its strong revenue and unit growth. Over the last five years, revenues grew at a rapid 18.7% compound annual growth rate while units sold increased from 14,636 to 24,865. Over the same period, the company has been able to maintain stable EBITDA margins of approximately 24% by adhering to strict cost and expense controls and managing production with commercial cycles. In addition, the strategic alliance signed with Outinord (manufacturer of concrete molds) at the end of 2005, and the company?s technological platform (Urbinet) are expected to have a positive impact on operating performance, as a result of increased production and a decrease in construction time (days). Urbi has increased its geographic and product diversification over the last several years. Urbi currently operates in seven states of the country and the Mexico City metropolitan area but remains geographically concentrated in the economically strong Baja California state. Further penetration in: * Mexico City, * Monterrey, and * Guadalajara should further increase geographic diversification. In addition, the company continues to diversify its product mix away from affordable entry level houses (i.e., low income), which represented 69.4% of houses sold and 50% of revenues, down from 93% of houses sold in 2000, to low middle-income and high middle- income homes. The company's sales mix provides flexibility to direct its commercial strategies according to market needs. Urbi is exposed to liquidity risks and working capital constraints associated with the timing of government-related mortgage funding of low-income homes. Financial institutions providing such funding include: * Infonavit, * Sociedad Hipotecaria Federal, and * Fovissste. While virtually all of the low-income housing is pre-sold with pre-approved financing, low-income mortgages are only disbursed following home completion and delivery to the buyer, which typically takes two to four months. Also, the timing of disbursement may vary substantially depending on: * the location of the property (state); * the financial institution's available funding allocation; and * its backlog of pending funding. The: * continued development of Mexico's mortgage market; * increasing alternatives of funding sources; and * increasing availability of credit in Mexico are expected to somewhat lower these risks over the medium term and support industry growth. Urbi's liquidity and financial position is adequate to manage these risks, and is consistent with the rating category. Total debt-to-EBITDA ended the year at 1.0x and has ranged between 1.0x and 1.8x over the last several years. The company's leverage position is expected to gradually improve as EBITDA grows and total debt remains at current levels. Urbi's liquidity is solid with a cash and marketable securities balance of Ps$1.8 billion and short-term debt of Ps$743 million. High levels of liquidity adds financial flexibility to the company given the high working capital requirements associated with the seasonality of the construction cycle and timing of receipts of low-income mortgage funding. The proposed debt offering would result in an extended maturity profile and further lower refinancing risks. Urbi is one of the largest housing developers in Mexico. The company builds and sells houses mainly in the states of: * Baja California, * Sonora, * Sinaloa, * Chihuahua, * Nuevo Leon, * Aguascalientes, * Guadalajara, and * Mexico City's metropolitan area. Urbi specializes in affordable entry-level and low middle-income housing, although also participates in high middle-income and upper-income housing segments. In 2005 Urbi sold 24,865 houses and earned Ps$8,194 million in revenues. URBI DESARROLLOS: Moody's Puts Ba3 Rating on $150 Million Notes --------------------------------------------------------------- Moody's assigned a Ba3 senior unsecured rating to Urbi Desarrollos Urbanos, S.A. de C.V.'s $150 million notes. Moody's also assigned a Ba3 corporate family rating to URBI. This is the first time Moody's has rated URBI, a homebuilder engaged in the development, construction, marketing and sale of affordable, middle-income and residential housing in Mexico. The rating outlook is stable. The company is planning to issue the $150 million of senior unsecured notes to refinance existing debt. According to Moody's, the Ba3 rating reflects URBI's strong financial position, and the financial flexibility that has allowed it to respond effectively to the volatile Mexican property market. URBI has produced consistently sound profitability, and maintained good liquidity, with a conservative capital structure. The company is a public company with a solid corporate infrastructure, which enhances transparency and governance. URBI has modest independence on its board of directors, with three out of nine members being independent. The company's land bank, cost controls, and firm technological platform support its strong operating margins. URBI has been in business since 1981, and is a public company traded on the Mexican Bolsa de Valores since 2004. URBI has strong liquidity with more than $7 billion Mx pesos in cash and availability on its committed bank lines. URBI has committed lines of credit with various banks totaling $5 billion Mx pesos with an outstanding balance of $303 million pesos as of Dec. 31, 2005. The lines have various terms ranging from one year to four years. The company also has strong credit metrics. At Dec. 31, 2005, URBI's EBITDA margin was 26%, its fixed charge coverage was 5.75x and Debt/EBITDA was 1x. URBI's primary credit challenges are its reliance on the Mexican economic and political environment, and important role the government plays in supporting housing policy, and the high costs of land and land development. Furthermore, the housing development market is fragmented, and homes are built on a predominately speculative basis, since URBI and other home developers have the risk of finding homebuyers. The funding of homes remains concentrated with Sociedad Hipotecaria Federal, INFONAVIT and FOVISSTE -- all government-related entities -- and the timing of receipt of the mortgages funded by them can range from three to twelve months. The stable rating outlook reflects Moody's expectation that URBI will maintain a conservative approach to leverage, and stable earnings. Moody's believes that URBI has solid franchise value, with a well-recognized brand and good land reserves. Furthermore, Moody's expects that URBI will continue to focus on targeting all segments of the housing market, while maintaining high quality construction and good operating controls. A rating upgrade would reflect a reduction in leverage, measured as follows: debt to total assets below 10%, and debt to EBITDA below 1x. An upgrade would also be considered should operating margins move to the low to mid 20% range, and EBITDA/Interest approach 10x, all while the company continues to improve its industry leadership. A rating downgrade would result from debt to total assets approaching 20%, fixed charge coverage falling below 4x, and operating margins falling below 15%. A downgrade could also result from a loss in falling out of top ten homebuilders in terms of units sold, as well as from an adverse shift in the Mexican Government's housing policy. Urbi Desarrollos Urbanos is a publicly traded, fully integrated homebuilder engaged in the development, construction, marketing and sale of affordable housing in Mexico. The firm reported assets of $12.1 billion Mx pesos and equity of $6.7 billion Mx pesos at Dec. 31, 2005. URS CORP: Earns $82.5 Million of Net Income in Fiscal Year 2005 --------------------------------------------------------------- URS Corporation (NYSE: URS) disclosed its financial results for the fiscal year ended December 30, 2005. Revenues increased 16% to $3,917.6 million from $3,382.0 million for the Company's 2004 fiscal year, which ended on October 31, 2004. Net income for fiscal 2005 was $82.5 million including a pre-tax charge of $33.1 million net of tax, related to $127.2 million of note redemptions, the retirement of $10.0 million of the Company's 12-1/4% notes and $1.8 million of its 6-1/2% debentures, and the restructuring of the Company's senior credit facility, all of which took place during the first nine months of fiscal 2005. Net income for fiscal 2004 ended October 31, 2004, was $61.7 million. Net income for fiscal 2004 included a previously reported pre-tax charge of $28.2 million related to note redemptions of $260 million. During fiscal 2005, the Company repaid $238.4 million of debt, including $127.2 million of note redemptions through the use of cash on hand and proceeds from the Company's common stock offering in the second quarter of fiscal 2005. As a result, the Company's debt to total capitalization ratio improved to 19% at December 30, 2005, from 34% at December 31, 2004. As of December 30, 2005, the Company's backlog was $3.84 billion, compared to $3.63 billion as of December 31, 2004. Commenting on the Company's financial results, Martin M. Koffel, Chairman and Chief Executive Officer, stated: "URS delivered strong financial results in 2005, driven by high growth rates in our federal, state and local government and international business sectors. In addition, we benefited by shifting resources into emerging areas of the domestic private sector market, including assisting utility companies to comply with new environmental regulations affecting coal-fired power plants." Mr. Koffel continued: "Throughout the year, URS also benefited from our focus on cash management and our deleveraging strategy. URS generated $200.4 million in cash from operations in 2005 and repaid $238.4 million of debt, including $127.2 million of note redemptions through the use of proceeds from our common stock offering in June. These actions helped reduce interest expense by 48% for the year." "Looking forward, we see favorable long-term trends in all of our sectors, and have entered 2006 with the strongest book of business in the Company's history. We are well positioned to continue to deliver top line growth and profits for our stockholders." For the fourth quarter of fiscal 2005, the Company reported revenues of $1.071 billion, net income of $25.9 million. For the fourth quarter of fiscal 2004 ended on October 31, 2004, the Company reported revenues of $907.4 million, net income of $26.1 million. The Company noted that its change to a calendar fiscal year resulted in a two-month transition period in November and December 2004 that is not indicative of any quarterly or annual periods. The transition also makes it impractical to make meaningful net income and EPS comparisons between the calendar fourth quarter periods in 2004 and 2005. However, URS has provided revenue comparisons between the fourth quarter of fiscal 2005 and the comparable calendar period in 2004 at the end of this release. Weighted-average shares outstanding for purposes of calculating diluted EPS were 50.4 million in the fourth quarter of fiscal 2005, compared with 44.6 million in the fourth quarter of fiscal 2004 ended on October 31, 2004. Earnings Outlook For fiscal 2006, the Company expects revenues of approximately $4.1 billion. Assuming it meets this revenue expectation, the Company expects that net income will be approximately $110 million and EPS will be approximately $2.12 for fiscal 2006. The Company's net income and EPS guidance for 2006 includes an expected after tax impact of $10 million related to the implementation of Statement of Financial Accounting Standards 123 (Revised), which requires that the costs of equity based compensation be recognized in the financial statements. In addition, the Company expects its effective tax rate in 2006 to be approximately 42%, consistent with 2005. Finally, the Company's weighted average shares outstanding for 2006 is expected to be 52 million, compared with 47.8 million in 2005. The increase in weighted average shares outstanding primarily reflects the full year impact of the Company's common stock offering in the second quarter of fiscal 2005 and shares expected to be issued pursuant to the Company's employee stock option and purchase plans. The Company expects to repay approximately $100 million of debt during fiscal 2006. Headquartered in San Francisco, URS Corporation -- http://www.urscorp.com/-- operates in more than 20 countries with approximately 29,000 employees providing engineering and technical (professional planning, design, program and construction management, and operations and maintenance) services to federal, state and local governmental agencies as well as private clients in the chemical, pharmaceutical, oil and gas, power, manufacturing, mining and forest products industries. * * * Standard & Poor's Ratings Services raised its corporate credit rating on engineering services firm URS Corp. to 'BB+' from 'BB' in July 2005. Standard & Poor's also assigned a 'BB+' rating to the company's $650 million senior secured bank facility. S&P said the outlook is stable. Moody's Investors Service upgraded the credit ratings of URS Corporation, with both the senior implied rating and the rating on the $650 million senior secured credit facility moving to Ba1. Moody's said the ratings outlook is stable. USG CORP: Del. Bankr. Court Approves Amended Disclosure Statement ----------------------------------------------------------------- The Honorable Judith K. Fitzgerald approved, on April 7, 2006, the Amended Disclosure Statement explaining the Amended Plan or Reorganization filed by USG Corporation and its debtor-affiliates. Judge Fitzgerald determined that the Amended Disclosure Statement contained adequate information -- the right amount of the right kind of information necessary for creditors to make an informed decision. The Debtors are now authorized to solicit acceptances for the Amended Plan. The Court allowed the Debtors to hire Logan & Company, Inc., as voting agent. Ballots should be received by June 2, 2006, by the Voting Agent. Objection should be filed with the Court and received by the: (a) Debtors' counsel; (b) Creditors Committee's counsel; (c) Futures Representative's counsel; and (d) U.S. Trustee's counsel, no later than 5:00 p.m., Eastern Time, on May 26, 2006. Judge Fitzgerald will consider confirmation of the Debtors' Amended Plan on June 15, 2006. Terms of the Plan As reported in the Troubled Company Reporter on Feb. 27, 2006, the plan provides, among other things, for the creation of an asbestos personal injury trust under Section 524(g) of the Bankruptcy Code to satisfy all asbestos personal injury claims and obligations against and equity interests in the Debtors. The Plan will also implement the Debtors' agreement with the Asbestos Personal Injury Committee and Dean M. Trafelet, the Legal Representative for Future Asbestos Personal Injury Claimants, to resolve all asbestos personal injury claims. Under the Asbestos Agreement, USG will use its reasonable best efforts to have the Effective Date of the Plan occur on or before July 1, 2006. Unless otherwise agreed in writing by the parties, the agreement terminates if, among other things, the Effective Date has not occurred on or before August 1, 2006. Mr. DeFranceschi relates that the Effective Date will not occur and the Plan will not be consummated unless and until a Confirmation Order has been entered by the Bankruptcy Court and fully affirmed by the District Court. Creation of Asbestos Personal Injury Trust The Asbestos Personal Injury Trust will be established on the Effective Date. The Trust is intended to be a "qualified settlement fund" within the meaning of the Treasury Regulations issued under Section 468B of the Internal Revenue Code. The Asbestos Personal Injury Trust aims to: (1) direct the processing, liquidation and payment of all Asbestos PI Claims in accordance with distribution procedures and order confirming the Plan; (2) preserve, hold, manage and maximize the assets of the Asbestos Personal Injury Trust for use in paying and satisfying Asbestos PI Claims; and (3) qualify at all times as a qualified settlement fund. Under the Plan, the sole recourse of a PI Claimholder will be to the Asbestos Personal Injury Trust, and that holder will have no right whatsoever at any time to assert its PI Claim against any "Protected Party," constituting: * any debtor, reorganized debtor or any affiliate; * any former or present director, officer or employee of any debtor but only in their capacity; * any stockholder; * any entity that becomes a direct or indirect transferee of or, successor to, any assets of any debtor or the Asbestos Personal Injury Trust; * any entity that makes a loan to any debtor or the Asbestos Personal Injury Trust, but only to the extent that debt is asserted to exist by reason of that entity becoming a lender or to the extent any pledge of assets made in connection with a loan is sought to be upset or impaired; * any entity alleged to be directly or indirectly liable for the conduct of, claims against or demands on any debtor, to the extent that alleged liability arises due to: -- an entity's ownership of a financial interest in any debtor or affiliate; -- an entity's involvement in the management of any Debtor; -- an entity's service as an officer, employee or any entity that owns a financial interest in any debtor; -- an entity's involvement in a transaction changing the corporate structure, or in a loan or other financial transaction affecting the financial condition, of any party that owns a financial interest in any debtor, including, involvement in providing financing or advice and acquiring or selling a financial interest in any entity; or * any Settling Insurer, defined as any insurance asset entity that enters into a settlement prior to the conclusion of the Plan's confirmation hearing that is: -- sufficiently comprehensive in the determination of the Debtors, the PI Committee, and the Futures Representative to warrant treatment of those protected parties as to the Asbestos PI Claims channeled to the Asbestos Personal Injury Trust; and -- approved by the Bankruptcy Court. The PI Trust will indemnify and hold each Protected Party harmless from and against any PI Claim and related damages. Asbestos Personal Injury Trust Fund According to Mr. DeFranceschi, the amounts the Debtors must pay into the Asbestos Personal Injury Trust depend on whether the Fairness in Asbestos Injury Resolution Act of 2005 or substantially similar legislation is enacted and made law pursuant to the Plan. The Debtors will fund the Asbestos Personal Injury Trust: (a) On the Effective Date, the Debtors will pay $890,000,000 and issue a $10,000,000 promissory note to the PI Trust, payable no later than December 31, 2006. The Asbestos Personal Injury Trust, on any default, will have the right to foreclose on the Reorganized USG stock that secures the Note. The Asbestos Personal Injury Trust will be entitled only to that stock or its proceeds to the extent necessary to satisfy the principal amount of the Note, and any interest, fees or other charges due. (b) On the Effective Date, the Debtors will issue one or more contingent payment notes aggregating $3,050,000,000 to the PI Trust, which notes will be payable in the event that the FAIR Act of 2005 or any substantially similar legislation creating a national trust or similar fund has not been enacted and made law on or before the date -- Trigger Date -- that is 10 days after final adjournment of the 109th Congress of the United States. However: (i) If the FAIR Act is not enacted and made law on or before the Trigger Date, the obligations under the Contingent Payment Note will vest and the Reorganized Debtors will satisfy the Contingent Payment Note. (ii) If the FAIR Act is enacted and made law on or before the Trigger Date and is not subject to a constitutional challenge to its validity on or before 60 days after the Trigger Date, the obligations under the Contingent Payment Note will not vest and will be fully canceled. (iii) If the FAIR Act is enacted and made law on or before the Trigger Date but is subject to a Challenge Proceeding as of 60 days after the Trigger Date, the Debtors' obligations under the Contingent Payment Note will depend on whether the Challenge Proceeding is upheld: A) If the Challenge Proceeding is resolved by a Final Order in that the FAIR Act is unconstitutional in its entirety or as applied to debtors in Chapter 11 cases whose plans of reorganization have not yet been confirmed and become substantially consummated, so that those debtors will not be subject to the FAIR Act, then the obligations under the Contingent Payment Note will vest and the Reorganized Debtors will satisfy the Contingent Payment Note, with the first payment of $1.9 billion being due within 30 days after the Final Order and the second payment of $1.15 billion being due within 180 days after the Final Order; and B) If the Challenge Proceeding is resolved by any other Final Order, then the obligations under the Contingent Payment Note will not vest and the Contingent Payment Note will be fully canceled. Until the time as the Contingent Payment Note is either paid in full or canceled, Reorganized USG will not declare any dividend to the holders of its stock or repurchase its stock in an amount that exceeds $150,000,000. In addition, until the Contingent Payment Note is either paid in full or canceled, the amount of the Reorganized Debtors' indebtedness that is senior to the Contingent Payment Note will be limited to: -- an exit financing facility not to exceed $750,000,000; -- amounts necessary to fund any Plan distributions, after taking into account available cash, including payments to the Asbestos Personal Injury Trust, the unsecured creditors and PD Claimholders; -- amounts necessary to fund the operations, capital expenditures and working capital of the Reorganized Debtors; -- other customary items like leases, hedging, interest rate protection, taxes and similar items; -- $125,000,000 general basket; and -- any refinancing. As a result, Mr. DeFranceschi explains, if the FAIR Act is made into law, the Debtors' payments for the PI Claims would be limited to $900,000,000 -- an amount that the Debtors believe is approximately what they would be required to pay into the national trust fund contemplated by the current version of the FAIR Act of 2005. The PI Committee and the Futures Representative, after consultation with the Debtors, will select individuals to serve as Asbestos Personal Injury Trustees. The Asbestos Personal Injury Trustees will implement the PI Trust Distribution Procedures that will process and pay the unpaid portion of the PI Claims' liquidated value generally on an impartial, first-in, first-out basis, with the intention of paying all claimants over time as equivalent a share as possible of the claims value. The Asbestos Personal Injury Trust will protect, defend, indemnify and hold harmless, to the fullest extent, each Protected Party from and against any Asbestos PI Claim and any related damages. A.P. Green Issues The Asbestos Personal Injury Committee, the Asbestos Personal Injury Futures Representative and the Asbestos Property Damage Committee have asserted that the Debtors are liable for claims arising from the sale of asbestos-containing products by A.P. Green Refractories Co. and its successors. A.P. Green was acquired by merger into U.S. Gypsum in 1967 and became a publicly traded company in 1988. The Plan, if confirmed, will channel all Asbestos Personal Injury Claims asserted against the Debtors on account of or relating to A.P. Green or any of its affiliates or predecessors, to the Asbestos Personal Injury Trust, and those claims will be paid pursuant to the Asbestos Personal Injury Trust Distribution Procedures. Sources of Cash Mr. DeFranceschi informs Judge Fitzgerald that financing for the Plan is expected to be provided from: (1) Cash The financial and operational performance of the Debtors' businesses during the reorganization cases has enabled them to accumulate almost $1,600,000,000 in cash and marketable securities. Most of that cash will be used in funding the Plan. (2) Rights offering to USG stockholders The Debtors expect to raise $1,800,000,000 in new equity funding through a Rights Offering. For each share of common stock outstanding on the record date, the stockholder will receive a right to purchase one new USG common share at $40. If all stockholders exercise their rights, the percentage ownership of each stockholder in USG will remain unchanged following the Rights Offering. The Rights Offering will be supported, subject to Bankruptcy Court approval, by a backstop equity agreement from Berkshire Hathaway Inc., USG's largest shareholder with approximately 15% of USG's shares and the Chairman of the Official Committee of Equity Security Holders. (3) New debt financing The Debtors expect to raise about $1,000,000,000 of debt financing in the second half of 2006 if the payments pursuant to the Contingent Payment Note become necessary. Terms of that financing have not been determined. The Debtors disclose that they are currently in the process of receiving proposals from several financial institutions that may be interested in providing financing. As a result, the Debtors do not anticipate encountering any difficulty in obtaining the financing necessary to fund obligations under the Plan and ongoing business needs. (4) Tax refunds The Debtors' transfers of cash to the Asbestos Personal Injury Trust, including payments of principal and interest on the Note and the Contingent Payment Note, are expected to produce tax deductions that will offset the Debtors' taxable income in the years in which the transfers are made and generate net operating losses in those years that may be carried back to 10 previous taxable years. Based on the amount of taxes that they paid during the carry-back period, the Debtors expect to obtain refunds of around $1,100,000,000 assuming that the Debtors transfer a total of $3,950,000,000 to the Asbestos Personal Injury Trust. Distributions Under the Plan Mr. DeFranceschi relates that although asbestos property damage claims will not be channeled to the PI Trust, the Debtors have been making, and will continue to make, efforts to resolve all Claims, including the unliquidated or disputed PD Claims. Holders of stock interests in USG Corporation as of the Effective Date will retain their shares and will have the right to purchase additional reorganized USG's common stock in connection with a rights offering. Furthermore, Mr. DeFranceschi states that only the PI Claim holders under Class 7, which will receive their distributions from the Asbestos Personal Injury Trust, are entitled to vote on the Plan. All other classes are unimpaired because the Plan does not modify the legal, equitable or contractual rights attaching to the claims or interests of certain classes, other than by curing defaults and reinstating maturities. Mr. DeFranceschi says that distributions to be made to holders of Allowed Claims will be deemed made on the Effective Date or as promptly as practicable, but in any event no later than 60 days after the Effective Date or the later date when the applicable conditions regarding cure payments for executory contracts and unexpired leases, undeliverable distributions, or canceled instruments or securities are satisfied. Postpetition Interest with respect to all other claims, excluding the Asbestos PI Claims, the Litigation Claims, and the Asbestos PD Claims, will have a 6.50% rate per annum compounded on each anniversary of the Petition Date on the allowed amount of those claims from the Petition Date through the Effective Date. Reorganized USG will make all Distributions of cash, the Note, the Contingent Payment Note and other instruments or documents required under the Plan. Each Disbursing Agent will serve without bond, and any Disbursing Agent may employ or contract with other entities to assist in or make the Distributions required by the Plan. On the Effective Date, each holder of an Allowed Claim will receive the full amount of the Distributions. On each quarterly distribution date, distributions will also be made to holders of Disputed Claims in any class that were allowed during the preceding calendar quarter, to the extent not distributed earlier at the discretion of the applicable Disbursing Agent. A blacklined copy of the Debtors' First Amended Plan is available for free at: http://bankrupt.com/misc/usg1stamendedplan.pdf A blacklined copy of the Debtors' First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/usg1stamendeddisclosurestatement.pdf About USG Corp. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. VENOCO INC: S&P Lifts $150 Million Notes' Rating to CCC+ from B- ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' ratings on independent exploration and production company Venoco Inc. and assigned its 'B-' rating and '2' recovery rating to the company's $350 million five-year second-lien term loan. The outlook is stable. In addition, the ratings for the company's $150 million in outstanding senior unsecured notes are also raised to 'B-' from 'CCC+' as the notes will hold a second-priority lien and rank pari passu with the new term loan in the interim period. The ratings affirmation follows the company's announcement that it will be acquiring TexCal Energy. Pro forma for the acquisition, Carpinteria, California-based Venoco will have about $629 million in long-term debt. "If Venoco is able to execute a planned public offering in the near term as outlined, Standard & Poor's will reexamine (and comment on) notching implications for the notes, as the senior notes could revert to their unsecured status depending on the potential repayment with regard to the second-lien term loan," said Standard & Poor's credit analyst Jeffrey B. Morrison. "In addition, ratings are dependent on the receipt of final lending documents," he continued. The stable outlook incorporates the expectation that Venoco will maintain sufficient liquidity in the near term to fund capital spending and increased debt service, and maintain current ratings. A negative ratings action could result, however, if operating performance deviates materially from expectations, especially as the company's financial profile will be in a weaker position after funding the acquisition of TexCal Energy. In the longer term, positive ratings actions will be dependent on Venoco's ability to: * reduce leverage to more appropriate levels; * improve organic reserve replacement; and * demonstrate more consistent production growth. VERILINK CORP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Verilink Corporation 127 Jetplex Circle Huntsville, Alabama 35758 Bankruptcy Case No.: 06-80566 Type of Business: The Debtor develops, manufactures and markets a broad suite of products that enable telecommunication carriers, service providers, international enterprises to build converged access networks for communications services. See http://www.verilink.com Chapter 11 Petition Date: April 9, 2006 Court: Northern District of Alabama (Decatur) Debtor's Counsel: Robert McCay Dearing Mercer, Esq. Powell Goldstein LLP One Atlantic Center, 14th Floor 1201 West Peachtree Street Atlanta, Georgia 30309 Tel: (404) 572-6976 Fax: (404) 572-6999 Total Assets: $37,221,000 Total Debts: $23,913,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Kennedy Company Stock Purchase $2,400,000 12048 East Ida Circle Englewood, CO 80111 Flash Electronics Trade Debt $1,053,054 45 Starboard Drive Fremont, CA 94538 Arrow Electronics, Inc. Trade Debt $490,439 493 F Corporate Drive Huntsville, AL 35805 Jack P. Reily Finder's Fee $480,000 Reily Communications Consulting 800 West 5th Street, suite 608 Austin, TX 78703 Zhone Technologies Trade Debt $414,758 71 Oakport Street Oakland, CA 94621 Leigh Beldin Severance $345,557 614 Cliffgate Lane Castle Rock, CO 80108 Terayon Communication Systems Trade Debt $336,617 4988 Great America Parkway Santa Clara, CA 95054 CM Solutions Trade Debt $293,522 2674 South Harper Road Corinth, MS 38834 HRH of Alabama, Inc. Trade Debt $138,869 Timothy R. Anderson Severance $106,448 Micro Ram Electronics, Inc. Trade Debt $83,473 Tom Abernathy Severance $78,562 JT Communications, Inc. Trade Debt $71,879 C&C Fabrication Co., Inc. Trade Debt $64,185 Blue Cross/Blue Shield Insurance Premiums $61,675 RS Electronics Trade Debt $59,983 NComm, Inc. Trade Debt $55,000 JP Electronics Trade Debt $41,148 Stephen Gould Corp. Trade Debt $39,816 Qualtech Backplane Trade Debt $39,007 VISTEON CORP: Fitch Downgrades Sr. Unsecured Debt Rating to CCC- ---------------------------------------------------------------- Fitch Ratings downgraded Visteon Corporation as: -- Issuer Default Rating to 'CCC' from 'B' -- Senior secured bank facility to 'B/RR1' from 'BB/RR1' -- Senior unsecured debt to 'CCC-/RR5' from 'B/RR4' The downgrade reflects: * Fitch's view that Visteon will be challenged to produce positive free cash flow through 2008 due to the decline in Ford-related revenues (that the company projects will be more than offset by growth in non-Ford revenues); * the extent of the company's restructuring activities over the near-term; * Visteon's product portfolio; and * uncertain profitability of newly-booked business given the company's evolving cost structure. Although liquidity in the short-term remains adequate, Visteon has stated that it is seeking an amended or replacement bank facility to meet maturities in 2006 and 2007. In the absence of a new bank agreement and in the event that EBITDA improvement over 2005 results does not occur, a violation of financial covenants could occur. Recovery ratings on the senior secured bank facility remain at 'RR1' (full recovery expected) due to the collateral package that includes substantially all domestic assets plus a pledge of capital stock of 65% of many first-tier foreign subsidiaries. Although North American manufacturing assets could be of limited value in a stress scenario, receivables and inventory, plus the stock in many international subsidiaries should provide full coverage for the bank facilities. Fitch expects that any new or amended bank facility would be well-collateralized, although additional access to capital may be limited. The recovery rating on Visteon's unsecured debt has been downgraded to 'RR5' (below - average recovery value of 10-30%) from 'RR4' based on the limited value of the assets that would remain following repayment of the secured facilities. Ford-related revenues are projected to continue to decline steadily for the foreseeable future due to: * production declines at Ford; * contractual price decreases; and * the probability that Ford will continue to book business away from Visteon. Scheduled production declines over the short term at Ford will be supplemented by an acceleration of facility closures at Ford under its longer-term restructuring plan, producing significant revenue pressure at Visteon. Visteon's substantial restructuring over the next several years includes the expected closure or disposition of 23 plants as well as a significant reduction in salaried and administrative cost. The extent and timetable of this restructuring indicates that Visteon's near-term cost structure will remain highly uncertain. As a result, the profitability of newly-booked business also remains uncertain. Given: * the rapid pace of change in the industry, * the lack of technology-driven, * sustainable-margin products, and * Visteon's revenue pressures, more extensive restructuring efforts could be required. Fitch views Visteon's ability to produce positive cash flow through the next three years as questionable. Visteon management anticipates an improvement in 2006 profitability as a result of previous cost saving actions taken in 2005. The transaction with Ford provided substantial relief from legacy liabilities and unprofitable assets, and also substantially enhanced the operating flexibility in North America by flowing all UAW workers under a national agreement back to Ford. The downgrade also reflects further balance sheet degradation, which is expected to continue in the absence of positive free cash flow. Liquidity includes approximately $865 million in cash as of Dec. 31, 2005, although a majority of this is held overseas. Visteon had approximately $321 million in availability under its bank agreements. Existing bank covenants will tighten in the third and fourth-quarter 2006 (4Q'06), and improvement in EBITDA versus 2005 will be needed to avoid a violation. Facing this prospect and due to the maturity of $1.1 billion in debt through mid-2007, Visteon is seeking to amend or replace its existing bank facilities. The banks are likely to negotiate a well-collateralized facility, which could limit the amount of availability under any new facility. Visteon also has access to $400 million in an escrow fund, which was set up at the time of the agreement with Ford in order to finance restructuring activities at Visteon. Visteon remains heavily dependent on former parent Ford's North American operations. The North American operations of Ford will represent about 24% of Visteon's post-Ford-transaction total annual revenue while total sales to Ford Motor Co. will represent around 50%. Year-to-date North American Ford production has declined by 55,921 units or 6.5% versus the same period last year. Despite shedding high-cost domestic facilities, Visteon's fourth quarter operating performance was below Fitch's expectations. EBITDA for the quarter and full year was $21 million and $203 million, respectively. Total Debt-to-Operating EBITDA at the end of 2005 was 9.8x while Operating EBITDA-to-Gross Interest Expense was 0.5x. Free cash flow was negative $148 million, being adversely affected by working capital run-off in the quarter as a result of the Ford transaction. While debt levels were only modestly higher than expectations at Dec. 31, 2005, Visteon's debt has substantially increased during 1Q'06 as the company completed a $350 million term loan transaction on Jan 9. Along with other off-balance sheet debt including operating leases and foreign securitization and factoring, 1Q'06 total adjusted debt could be above $3 billion versus $2.8 billion at the end of 4Q'05. Even though the total amount of Visteon debt has gone up since the end of 2005, the company believes that it will be in compliance with its bank covenant leverage ratio of 4.75x due to improved profitability. WILDMINT 615: Case Summary & 14 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Wildmint 615, LLC 1160 Haisley Road Prescott, Arizona 86303 Bankruptcy Case No.: 06-00936 Debtor affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Rector 42, LLC 06-00937 Chapter 11 Petition Date: April 6, 2006 Court: District of Arizona (Phoenix) Judge: Redfield T. Baum Debtors' Counsel: Scott B. Cohen, Esq. Sacks Tierney, P.A. 4250 North Drinkwater Boulevard, 4th Floor Scottsdale, Arizona 85251 Tel: (480) 425-2616 Fax: (480) 970-4610 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtors' Consolidated List of their 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Siemens Financil Services, Inc. Judgment $6,155,104 5300 Broken Sound Boulevard Northwest Boca Raton, FL 33487-3509 Siemens Medical Solutions Judgment $1,751,667 USA, Inc. c/o Corporation Trust Co. 1209 Orange Street Wilmington, DE 19801 CIT Financial USA Inc. Judgment $869,429 One CIT Drive #1320-1 Livingston, NJ 07039 Wells Fargo Bank Arizona N.A. Judgment $409,809 100 West Washington Street Phoenix, AZ 85003 Stephanie Darcy Real Estate $250,000 2800 Neilson Way, #1508 Improvements/ Santa Monica, CA 90405 Mortgage Payments G.M.K. Assets Corporation Judgment $250,000 Fresno County Tax Collector Real Property Taxes $17,428 Arizona Medical Board Lawsuit Pending $3,700 Arizona Wholesale Supply Co. Judgment $2,484 Building Trends Judgment Unknown Creditors Trade Lawsuit Pending Unknown Association Inc. Darlene Gee Unliquidated Unknown David Bittner Unliquidated Unknown Emmanuel Community Lawsuit Pending Unknown Baptist Church WINN-DIXIE: Competing Bids for BSL Shares Must Be In By May 11 -------------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to: (a) exercise their consent to the sale by W-D (Bahamas) Ltd., of shares of common stock of Bahamas Supermarkets Limited pursuant to the terms of a Share Purchase Agreement dated March 29, 2006, to BK Foods, Ltd., or the party submitting the highest or otherwise best offer for the shares; (b) enter into a transition services agreement by which the Debtors will continue to provide the Purchaser under the Agreement with services related to the operation and management of the businesses which the Debtors currently provide to BSL; and (c) enter into a non-competition agreement by which the Debtors will refrain from competing with the Purchaser for a period of two years. W-D (Bahamas) is a subsidiary of the Debtors, which owns 3,546,085 of the issued and outstanding shares of common stock of BSL. BSL operates 12 supermarkets in the Bahamas under the Debtors and City Markets banners. Neither W-D (Bahamas) nor BSL is a debtor in the Debtors' Chapter 11 cases. Because W-D (Bahamas) is a holding company, it would dividend all proceeds from the sale of the Shares up to the Debtors, including amounts necessary to pay Graham, Thompson & Co., legal counsel in the Bahamas to W-D (Bahamas) in connection with the sale of the Shares. BK Foods presented the Debtors with the most attractive offer for the Shares. Share Purchase Agreement On March 29, 2006, W-D (Bahamas) and BK Foods entered into a Share Purchase Agreement. Pursuant to the Agreement, upon the satisfaction of several conditions, W-D (Bahamas) is obligated to transfer all of its right, title and interest in and to the Shares to the Purchaser. The aggregate purchase price under the Agreement is 50,000,000 Bahamian dollars. An auction will be held on May 15, 2006. Conditions to Closing include: (a) the Debtors obtaining Court authority to exercise their consent to the execution of the Agreement by W-D (Bahamas); and (b) the Purchaser and Seller's satisfaction of their "Required Statutory Approvals," as stated in the Agreement. A full-text copy of the Share Purchase Agreement is available for free at http://ResearchArchives.com/t/s?7a0 The parties will enter into a Transition Services Agreement to ensure that management and operational know-how regarding the operation of the businesses will be transferred by the Debtors in an orderly fashion to the Purchaser. Unless the Purchaser exercises its right to terminate for convenience, for breach or for an event of force majeure, the Transition Services Agreement will run for 12 months. The Debtors will receive a fee for the transition services performed, which fee will approximate $1,000,000, exclusive of amounts that the Debtors are entitled to receive in connection with procurement services performed for the Purchaser. A full-text copy of the Transition Services Agreement is available for free at http://ResearchArchives.com/t/s?7a1 The parties' Non-Competition Agreement is intended to ensure that, for a limited period of time (two years), the Purchaser is able to benefit from its purchase without the threat of competition from Winn-Dixie. A full-text copy of the Non-Competition Agreement is available for free at http://ResearchArchives.com/t/s?7a2 Although the Shares are being sold by a non-debtor, the Debtors recognize that the execution of the Shareholder Consent may, in and of itself, constitute a disposition of property of the estate that is outside of the ordinary course of business. Accordingly, the Debtors believe they should obtain Court authority for their execution of the Shareholder Consent. Additionally, the Transition Services Agreement and the Non- Competition Agreement constitute transactions that are outside of the ordinary course of business and, thus, require Court approval. The Debtors believe that the terms of the Transition Services Agreement and the Non-Competition Agreement are fair and reasonable and that the execution of the agreements is a necessary component of the overall transaction structure. Auction If one or more Qualified Competing Bids are timely received, an auction will be held for the Shares at 10:00 a.m. on May 15, 2006. The deadline to file Qualified Competing Bids is May 11, 2006, at 5:00 p.m., Eastern Daylight Time. Bids must be served on: The Blackstone Group L.P. Attention: Ramesh Chakrapani/Michael Kovacs 345 Park Avenue, 29th Floor New York, NY 10154 chakrapani@blackstone.com kovacs@blackstone.com Among other things, competing bids must exceed the purchase price by at least $1,500,000. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Blackstone Engagement Amended to Include Bahamas Unit ----------------------------------------------------------------- As reported in the Troubled Company Reporter on June 13, 2005, the U.S. Bankruptcy Court for the Middle District of Florida approved Winn-Dixie Stores, Inc., and its debtor-affiliates' modified application to employ The Blackstone Group, L.P., as their restructuring consultant. Blackstone Retention Supplement The Debtors ask the Court to approve their supplement to the terms of their previously approved retention of The Blackstone Group, L.P., to include financial advisory services that the firm will provide in connection with the Debtors' disposition of their interests in supermarket operations in the Bahamas. The Debtors also seek the Court's authority to pay Blackstone on the terms provided in their amended letter agreement dated March 16, 2006. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that the Debtors have asked Blackstone to identify and investigate potential purchasers and transaction structures for the sale of their Bahamas Operations. In November 2005, Blackstone began a marketing process targeting selected potential purchasers. After significant analysis and based on Blackstone's assistance, the Debtors determined that the best structure for a sale of the Bahamas Operations would be a sale by W-D (Bahamas) Ltd., a non-Debtor subsidiary, of shares in Bahamas Supermarkets Limited, also a non-Debtor subsidiary, that operates the Bahamas Operations. After the marketing process conducted by Blackstone, the Debtors determined that BK Foods, Ltd., has presented the most attractive offer for the Shares. Accordingly, on March 29, 2006, W-D Bahamas and BK Foods entered into a share purchase agreement for sale of the Shares to BK Foods, subject to certain contingencies. The SPA also contemplates the opportunity for the submission of higher and better offers from other potential purchasers through an auction process. Mr. Baker asserts that Blackstone's involvement in the Sale Process is essential to ensure that the Debtors' estates obtain maximum value from any sale of the Bahamas Operations. Although the current terms of Blackstone's retention contemplate that Blackstone will provide a variety of services in connection with potential transactions, they do not specifically encompass the provision of Blackstone's services related to the Sale Process, nor do they provide for payment to Blackstone in consideration for those services. In connection with the Sale Process, Blackstone is expected to: (a) assist the Debtors in the preparation of marketing materials with respect to the Sale Process; (b) assist the Debtors in identifying and contacting potential buyers of the Bahamas Operations and parties-in-interest to the Sale Process; (c) assist the Debtors with respect to the due diligence efforts of third parties in connection with the Sale Process; (d) assist and advise the Debtors concerning the terms, conditions, and impact of the proposed sale of the Bahamas Operations; (e) evaluate competing offers for the sale of the Bahamas Operations, including valuations, contingencies, and financing requirements; (f) assist the Debtors in the negotiation of definitive documentation regarding a potential sale of the Bahamas Operations; and (g) provide the Debtors with other advisory services as are customarily provided in connection with the sale of the Bahamas Operations. The Debtors propose to pay Blackstone a $1,125,000 fee. Blackstone will earn the Bahamas Transaction Fee only upon consummation of a sale of the Bahamas Operations, Mr. Baker assures Judge Walrath. Mr. Baker ascertains that: (a) Blackstone has had no affiliation with any identified parties-in-interest with respect to the sale of the Bahamas Operations, or their attorneys and accountants; and (b) Blackstone is a "disinterested person" within the meaning of Sections 101(14) and 327(a) of the Bankruptcy Code. Except as supplemented, the parties have agreed that the terms of Blackstone's retention in the Debtors' Chapter 11 cases will otherwise remain the same. According to Mr. Baker, the Creditors Committee has informed the Debtors that it supports the Supplement to Blackstone's retention. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Wants Plan-Filing Period Extended Until June 29 ----------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to further extend their exclusive periods to: (a) propose one or more plans of reorganization to June 29, 2006; and (b) solicit acceptances of those plans to Aug. 29, 2006. In the interim, the Debtors ask the Court to extend their Exclusive Plan Proposal Period until the April 20, 2006, omnibus hearing, or until a final ruling is entered with respect to their Extension Motion. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that since March 9, 2006, the Debtors have continued to engage in discussions with the Official Committee of Unsecured Creditors regarding the appropriate structure of, and terms for, a plan of reorganization. Mr. Baker tells the Court that the most significant open issue remains the treatment of unsecured claims against each of the individual affiliated Debtors, or in the alternative, consideration of the substantive consolidation of the Debtors' estates. Mr. Baker relates that the Debtors have, over the past several months, provided representatives of the Creditors Committee with documents and analyses regarding the Substantive Consolidation Issue. The Debtors have shared the information with representatives of the indenture trustee for the Debtors' publicly traded notes, and are in the process of sharing the information with representatives of an ad hoc committee of trade creditors. Although discussions with respect to the Substantive Consolidation Issue are continuing in earnest, the creditor constituencies have not yet reached a consensus on this issue. Thus, negotiations will not be completed prior to the expiration of the current Exclusive Proposal Period, Mr. Baker says. Representatives of the major creditor constituencies agree that an extension of the Debtors' exclusive periods would enhance the chances that creditors might reach a consensus on the Substantive Consolidation Issue, Mr. Baker tells the Court. The Debtors intend to continue refining their business plan and providing representatives of the Creditors Committee and other parties-in-interest with documents that will help them in understanding the facts underlying the Substantive Consolidation Issue. If, at the end of the extension period, the Debtors and the Creditors Committee cannot agree on a Plan treatment of the Substantive Consolidation Issue, the Debtors intend to file a plan of reorganization that proposes to compromise the Substantive Consolidation Issue on terms that will be fair to all creditor constituencies and preferable to the risk, expense, and delay otherwise attendant to extended litigation of those issues, Mr. Baker tells the Court. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000). * Susman Godfrey Plans to Open Office in New York City ------------------------------------------------------ Susman Godfrey L.L.P. reported the opening of an office in New York City, adding a fifth office to the firm's current line-up of four offices, located in Houston, Dallas, Los Angeles, and Seattle. The firm's founder, Stephen D. Susman, will start the New York office for the firm. Mr. Susman said: "While our firm is often on a short list of candidates for handling major commercial litigation anywhere in the nation, we assume that there are other types of commercial cases arising in New York that we would get an opportunity to handle if we had an office there." In January 2005, the firm was named one of the top two litigation boutiques in the country by The American Lawyer. During the course of the last 25 years, the firm has won some of the biggest cases in U.S. history, including: * Samsung v. Texas Instruments, Inc., in which it won a $1.1 billion settlement on behalf of Texas Instruments; * the $536 million jury verdict on counterclaim in El Paso Natural Gas Co., et al., v. GHR Energy Corp.; and * the Corrugated Container Antitrust case, where it won a verdict for the plaintiffs, and the case eventually settled for $500 million. It has always been one of the top plaintiff's antitrust trial firms in the country and recently it has become one of the top patent infringement trial firms as well. In addition to their "results driven" attitude, the firm received national attention this past January when their associates received bonuses that almost matched their annual salaries. "It was a big year for me," said Brooke Taylor, a fifth-year associate at Susman Godfrey who received a bonus that was "very close to 100%" of her annual salary, which she said was $130,000. The New York office will concentrate on representing plaintiffs on a contingent fee basis in antitrust, intellectual property, securities, and accounting malpractice litigation. Susman Godfrey L.L.P. -- http://www.susmangodfrey.com/-- is a law firm with more than 75 lawyers in Houston, Dallas, Los Angeles, and Seattle. Founded in 1980, the firm represents plaintiffs and defendants in a broad range of commercial litigation matters, including antitrust, patent and intellectual property, securities and corporate governance litigation, energy, commercial and products liability litigation, bankruptcy and financial restructuring, accounting malpractice, arbitration, and foreign and international litigation matters. * BOND PRICING: For the week of Apr. 3 - Apr. 7, 2006 ----------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 12/31/04 0 Acme Metals Inc 10.875% 12/15/07 0 Adelphia Comm. 3.250% 05/01/21 3 Adelphia Comm. 6.000% 02/15/06 2 Adelphia Comm. 7.500% 01/15/04 57 Adelphia Comm. 7.750% 01/15/09 60 Adelphia Comm. 7.875% 05/01/09 59 Adelphia Comm. 8.125% 07/15/03 60 Adelphia Comm. 8.375% 02/01/08 58 Adelphia Comm. 9.250% 10/01/02 59 Adelphia Comm. 9.375% 11/15/09 60 Adelphia Comm. 9.500% 02/15/04 64 Adelphia Comm. 9.875% 03/01/05 57 Adelphia Comm. 9.875% 03/01/07 59 Adelphia Comm. 10.250% 06/15/11 61 Adelphia Comm. 10.250% 11/01/06 58 Adelphia Comm. 10.500% 07/15/04 62 Adelphia Comm. 10.875% 10/01/10 56 AHI-Dflt07/05 8.625% 10/01/07 68 Allegiance Tel. 11.750% 02/15/08 40 Allegiance Tel. 12.875% 05/15/08 32 Amer & Forgn Pwr 5.000% 03/01/30 68 Amer Color Graph 10.000% 06/15/10 71 American Airline 9.980% 01/02/13 72 American Airline 9.980% 01/02/13 72 American Airline 9.980% 01/02/13 72 Ames Dept Stores 10.000% 04/15/06 0 AMR Corp. 10.290% 03/08/21 73 Antigenics 5.250% 02/01/25 55 Anvil Knitwear 10.875% 03/15/07 53 AP Holdings Inc 11.250% 03/15/08 15 Archibald Candy 10.000% 11/01/07 7 Armstrong World 6.350% 08/15/03 74 Armstrong World 6.500% 08/15/05 74 Armstrong World 7.450% 05/15/29 74 Armstrong World 9.000% 04/17/01 62 Armstrong World 9.000% 06/15/04 72 Arvin Capital I 9.500% 02/01/27 70 Asarco Inc. 7.875% 04/15/13 71 Asarco Inc. 8.500% 05/01/25 75 At Home Corp. 0.525% 12/28/18 2 At Home Corp. 4.750% 12/15/06 4 ATA Holdings 13.000% 02/01/09 1 Atlantic Coast 6.000% 02/15/34 17 Atlas Air Inc 8.010% 01/02/10 61 Autocam Corp. 10.875% 06/15/14 68 Avado Brands Inc 11.750% 06/15/09 1 Aviation Sales 8.125% 02/15/08 44 Avondale Mills 10.250% 07/01/13 72 Banctec Inc 7.500% 06/01/08 75 Bank New England 8.750% 04/01/99 7 Bank New England 9.500% 02/15/96 5 BBN Corp 6.000% 04/01/12 0 Big V Supermkts 11.000% 02/15/04 0 Budget Group Inc. 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 56 CCH II/CCH II CP 10.250% 01/15/10 56 Cell Therapeutic 5.750% 06/15/08 48 Cell Therapeutic 5.750% 06/15/08 62 Charter Comm Hld 8.625% 04/01/09 71 Charter Comm Hld 9.625% 11/15/09 70 Charter Comm Hld 10.000% 04/01/09 72 Charter Comm Hld 10.000% 05/15/11 55 Charter Comm Hld 10.750% 10/01/09 72 Charter Comm Hld 11.125% 01/15/11 56 Charter Comm Inc 5.875% 11/16/09 70 Cherokee Int'l 5.250% 11/01/08 70 Chic East Ill RR 5.000% 01/01/54 50 CIH 9.920% 04/01/14 52 CIH 10.000% 05/15/14 52 CIH 11.125% 01/15/14 53 Ciphergen 4.500% 09/01/08 72 Clark Material 10.750% 11/15/06 0 CMI Industries 9.500% 10/01/03 0 Collins & Aikman 10.750% 12/31/11 33 Comcast Corp. 2.000% 10/15/29 43 Compudyne Corp. 6.250% 01/15/11 75 Concentric Network 12.750% 12/15/07 0 Coyne Intl Enter 11.250% 06/01/08 72 CPNL-Dflt12/05 4.750% 11/15/23 31 CPNL-Dflt12/05 6.000% 09/30/14 25 CPNL-Dflt12/05 7.625% 04/15/06 60 CPNL-Dflt12/05 7.750% 04/15/09 60 CPNL-Dflt12/05 7.750% 06/01/15 27 CPNL-Dflt12/05 7.875% 04/01/08 61 CPNL-Dflt12/05 8.500% 02/15/11 38 CPNL-Dflt12/05 8.625% 08/15/10 39 CPNL-Dflt12/05 8.750% 07/15/07 62 CPNL-Dflt12/05 10.500% 05/15/06 60 Cray Inc. 3.000% 12/01/24 73 Cray Research 6.125% 02/01/11 32 Curative Health 10.750% 05/01/11 61 Dal-Dflt09/05 9.000% 05/15/16 25 Dana Corp 5.850% 01/15/15 64 Decorative Home 13.000% 06/30/02 0 Decrane Aircraft 12.000% 09/30/08 73 Delco Remy Intl 9.375% 04/15/12 48 Delco Remy Intl 11.000% 05/01/09 52 Delphi Auto Syst 7.125% 05/01/29 62 Delphi Corp 6.500% 08/15/13 59 Delphi Trust II 6.197% 11/15/33 34 Delta Air Lines 2.875% 02/18/24 22 Delta Air Lines 7.541% 10/11/11 65 Delta Air Lines 7.700% 12/15/05 24 Delta Air Lines 7.900% 12/15/09 26 Delta Air Lines 8.000% 06/03/23 22 Delta Air Lines 8.187% 10/11/17 65 Delta Air Lines 8.270% 09/23/07 70 Delta Air Lines 8.300% 12/15/29 26 Delta Air Lines 8.540% 01/02/07 33 Delta Air Lines 8.540% 01/02/07 43 Delta Air Lines 8.950% 01/12/12 70 Delta Air Lines 9.200% 09/23/14 67 Delta Air Lines 9.250% 03/15/22 23 Delta Air Lines 9.300% 01/02/10 75 Delta Air Lines 9.320% 01/02/09 56 Delta Air Lines 9.375% 09/11/07 72 Delta Air Lines 9.750% 05/15/21 25 Delta Air Lines 9.875% 04/30/08 64 Delta Air Lines 10.000% 05/17/10 71 Delta Air Lines 10.000% 06/01/10 63 Delta Air Lines 10.000% 06/01/11 46 Delta Air Lines 10.000% 06/05/11 59 Delta Air Lines 10.000% 06/05/13 59 Delta Air Lines 10.000% 08/15/08 26 Delta Air Lines 10.000% 12/05/14 46 Delta Air Lines 10.060% 01/02/16 66 Delta Air Lines 10.080% 06/16/07 59 Delta Air Lines 10.125% 05/15/10 25 Delta Air Lines 10.125% 06/16/09 61 Delta Air Lines 10.125% 06/16/10 60 Delta Air Lines 10.375% 02/01/11 25 Delta Air Lines 10.375% 12/15/22 31 Delta Air Lines 10.500% 04/30/16 75 Discovery Zone 13.500% 08/01/02 0 Diva Systems 12.625% 03/01/08 1 Dura Operating 9.000% 05/01/09 49 Dura Operating 9.000% 05/01/09 51 DVI Inc 9.875% 02/01/04 11 Dyersburg Corp 9.750% 09/01/07 0 Eagle Family Food 8.750% 01/15/08 73 Eagle Food Centre 11.000% 04/15/05 1 Eagle-Picher Inc 9.750% 09/01/13 70 Encompass Service 10.500% 05/01/09 0 Encysive Pharmacy 2.500% 03/15/12 70 Enrnq-Dflt05/05 7.375% 05/15/19 39 Epix Medical Inc. 3.000% 06/15/24 65 Exodus Comm. Inc. 5.250% 02/15/08 0 Exodus Comm. Inc. 11.250% 07/01/08 0 Fedders North AM 9.875% 03/01/14 65 Federal-Mogul Co. 7.375% 01/15/06 44 Federal-Mogul Co. 7.500% 01/15/09 41 Federal-Mogul Co. 8.160% 03/06/03 43 Federal-Mogul Co. 8.250% 03/03/05 38 Federal-Mogul Co. 8.330% 11/15/01 37 Federal-Mogul Co. 8.370% 11/15/01 38 Federal-Mogul Co. 8.370% 11/15/01 43 Federal-Mogul Co. 8.800% 04/15/07 43 Finova Group 7.500% 11/15/09 35 FMXIQ-DFLT09/05 13.500% 08/15/05 40 Foamex L.P.-DFLT 9.875% 06/15/07 42 Ford Motor Co 6.500% 08/01/18 67 Ford Motor Co 6.625% 02/15/28 66 Ford Motor Co 7.125% 11/15/25 70 Ford Motor Co 7.400% 11/01/46 66 Ford Motor Co 7.500% 08/01/26 70 Ford Motor Co 7.700% 05/15/97 70 Ford Motor Co 7.750% 06/15/43 65 Ford Motor Co 8.875% 01/15/22 75 Ford Motor Cred 5.650% 01/21/14 73 Ford Motor Cred 5.750% 01/21/14 74 Ford Motor Cred 5.750% 02/20/14 71 Ford Motor Cred 5.750% 02/20/14 73 Ford Motor Cred 5.900% 02/20/14 74 Ford Motor Cred 6.000% 02/20/15 72 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 11/20/14 71 Ford Motor Cred 6.000% 11/20/14 73 Ford Motor Cred 6.000% 11/20/14 74 Ford Motor Cred 6.050% 02/20/14 74 Ford Motor Cred 6.050% 02/20/15 73 Ford Motor Cred 6.050% 03/20/14 74 Ford Motor Cred 6.050% 04/21/14 75 Ford Motor Cred 6.050% 12/22/14 73 Ford Motor Cred 6.100% 02/20/15 73 Ford Motor Cred 6.150% 01/20/15 73 Ford Motor Cred 6.150% 12/22/14 73 Ford Motor Cred 6.200% 03/20/15 74 Ford Motor Cred 6.200% 04/21/14 75 Ford Motor Cred 6.250% 01/20/15 74 Ford Motor Cred 6.250% 03/20/15 74 Ford Motor Cred 6.300% 05/20/14 75 Ford Motor Cred 6.350% 04/21/14 75 Ford Motor Cred 6.500% 03/20/15 74 Ford Motor Cred 7.250% 08/20/32 67 Gateway Inc. 2.000% 12/31/11 71 General Motors 7.125% 07/15/13 73 General Motors 7.400% 09/01/25 66 General Motors 7.700% 04/15/16 71 General Motors 8.100% 06/15/24 65 General Motors 8.250% 07/15/23 69 General Motors 8.375% 07/15/33 72 General Motors 8.800% 03/01/21 71 General Motors 9.400% 07/15/21 72 Global Health SC 11.000% 05/01/08 3 GMAC 5.350% 01/15/14 74 GMAC 5.750% 01/15/14 75 GMAC 5.850% 06/15/13 75 GMAC 5.900% 01/15/19 72 GMAC 5.900% 01/15/19 72 GMAC 5.900% 02/15/19 72 GMAC 5.900% 10/15/19 71 GMAC 6.000% 02/15/19 72 GMAC 6.000% 02/15/19 72 GMAC 6.000% 02/15/19 73 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 73 GMAC 6.000% 03/15/19 74 GMAC 6.000% 04/15/19 73 GMAC 6.000% 09/15/19 72 GMAC 6.000% 09/15/19 73 GMAC 6.050% 08/15/19 70 GMAC 6.050% 08/15/19 72 GMAC 6.050% 10/15/19 75 GMAC 6.100% 09/15/19 73 GMAC 6.125% 10/15/19 74 GMAC 6.150% 09/15/19 72 GMAC 6.200% 04/15/19 71 GMAC 6.250% 01/15/19 74 GMAC 6.250% 04/15/19 74 GMAC 6.250% 05/15/19 74 GMAC 6.250% 07/15/19 74 GMAC 6.250% 12/15/18 74 GMAC 6.300% 08/15/19 74 GMAC 6.350% 04/15/19 74 GMAC 6.350% 07/15/19 74 GMAC 6.350% 07/15/19 74 GMAC 6.400% 11/15/19 74 GMAC 6.400% 11/15/19 74 GMAC 6.400% 12/15/18 74 GMAC 6.500% 02/15/20 74 GMAC 6.650% 02/15/20 75 GMAC 6.800% 10/15/18 75 Golden Books Pub 10.750% 12/31/04 0 Graftech Int'l 1.625% 01/15/24 74 GST Network Fndg 10.500% 05/01/08 0 Gulf Mobile Ohio 5.000% 12/01/56 74 Gulf States Stl 13.500% 04/15/03 0 Horizon Fin Corp 11.750% 05/08/09 0 Incyte Corp 3.500% 02/15/11 74 Inland Fiber 9.625% 11/15/07 62 Insight Health 9.875% 11/01/11 54 Insilco Corp 12.000% 08/15/07 0 Iridium LLC/CAP 10.875% 07/15/05 27 Iridium LLC/CAP 11.250% 07/15/05 27 Iridium LLC/CAP 13.000% 07/15/05 26 Iridium LLC/CAP 14.000% 07/15/05 26 Isolagen Inc. 3.500% 11/01/24 57 JL French Auto 11.500% 06/01/09 0 Jordan Industries 10.375% 08/01/07 55 Kaiser Aluminum & Chem. 9.875% 02/15/02 49 Kaiser Aluminum & Chem. 10.875% 10/15/06 53 Kaiser Aluminum & Chem. 10.875% 10/15/06 53 Kaiser Aluminum & Chem. 12.750% 02/01/03 6 Kevco Inc 10.375% 12/01/07 0 Key Plastics 10.250% 03/15/07 0 Kmart Corp. 8.540% 01/02/15 16 Kmart Corp. 8.990% 07/05/10 12 Kmart Corp. 9.350% 01/02/20 7 Kmart Funding 8.800% 07/01/10 52 Liberty Media 3.250% 03/15/31 73 Liberty Media 3.750% 02/15/30 57 Liberty Media 4.000% 11/15/29 61 Lifecare Holding 9.250% 08/15/13 59 Macsaver Financl 7.400% 02/15/02 0 Macsaver Financl 7.600% 08/01/07 3 Macsaver Financl 7.875% 08/01/03 0 Merisant Co 9.500% 07/15/13 64 Metricom Inc 13.000% 02/15/10 0 Mosler Inc 11.000% 04/15/03 0 Movie Gallery 11.000% 05/01/12 47 MSX Int'l Inc. 11.375% 01/15/08 65 Muzak LLC 9.875% 03/15/09 60 Natl Steel Corp. 8.375% 08/01/06 8 New Orl Grt N RR 5.000% 07/01/32 69 New World Pasta 9.250% 02/15/09 8 North Atl Trading 9.250% 03/01/12 69 Northern Pacific RY 3.000% 01/01/47 55 Northern Pacific RY 3.000% 01/01/47 55 Northwest Airlines 6.625% 05/15/23 42 Northwest Airlines 7.039% 01/02/06 5 Northwest Airlines 7.625% 11/15/23 43 Northwest Airlines 7.875% 03/15/08 44 Northwest Airlines 8.130% 02/01/14 65 Northwest Airlines 8.700% 03/15/07 44 Northwest Airlines 8.875% 06/01/06 45 Northwest Airlines 8.970% 01/02/15 41 Northwest Airlines 9.875% 03/15/07 45 Northwest Airlines 10.000% 02/01/09 44 Northwest Stl&Wir 9.500% 06/15/01 0 NTK Holdings Inc. 10.750% 03/01/14 73 Nutritional Src. 10.125% 08/01/09 50 NWA Trust 11.300% 12/21/12 69 Oakwood Homes 7.875% 03/01/04 8 Oakwood Homes 8.125% 03/01/09 15 Oscient Pharm 3.500% 04/15/11 75 Osu-Dflt10/05 13.375% 10/15/09 0 Outboard Marine 10.750% 06/01/08 1 PCA LLC/PCA Fin 11.875% 08/01/09 20 Pegasus Satellite 9.625% 10/15/49 9 Pegasus Satellite 12.375% 08/01/06 10 Pegasus Satellite 12.500% 08/01/07 10 Piedmont Aviat 10.250% 01/15/49 0 Pixelworks Inc. 1.750% 05/15/24 70 Pliant-DFLT/06 13.000% 06/01/10 45 Pliant-DFLT/06 13.000% 06/01/10 46 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 7.250% 01/15/07 0 Polaroid Corp. 11.500% 02/15/06 0 Pope & Talbot 8.375% 06/01/13 70 Pope & Talbot 8.375% 06/01/13 71 Pres Riverboat 13.000% 09/15/01 5 Primedex Health 11.500% 06/30/08 59 Primus Telecom 3.750% 09/15/10 42 Primus Telecom 8.000% 01/15/14 69 Primus Telecom 12.750% 10/15/09 72 Read-Rite Corp. 6.500% 09/01/04 14 Refco Finance 9.000% 08/01/12 62 Reliance Group Holdings 9.000% 11/15/00 17 Reliance Group Holdings 9.750% 11/15/03 0 Renco Metals Inc 11.500% 07/01/03 0 RJ Tower Corp. 12.000% 06/01/13 67 Safety-Kleen Crp 9.250% 06/01/08 0 Salton Inc. 12.250% 04/15/08 65 Source Media Inc. 12.000% 11/01/04 0 Spinnaker Inds 10.750% 10/15/06 0 Steel Heddle 10.625% 06/01/08 0 Steel Heddle 13.750% 06/01/09 0 Sterling Chem 11.250% 04/01/07 0 Summit Secs Inc 9.500% 09/15/05 0 Tekni-Plex Inc. 12.750% 06/15/10 69 Thermadyne Holdings 12.500% 06/01/08 0 Toys R Us 7.375% 10/15/18 73 Trans Mfg Oper 11.250% 05/01/09 64 Transtexas Gas 15.000% 03/15/05 0 Tribune Co 2.000% 05/15/29 72 Trism Inc 12.000% 02/15/05 1 Triton Pcs Inc. 8.750% 11/15/11 67 Triton Pcs Inc. 9.375% 02/01/11 67 Tropical SportsW 11.000% 06/15/08 10 Twin Labs Inc 10.250% 05/15/06 2 United Air Lines 7.270% 01/30/13 48 United Air Lines 7.870% 01/30/19 55 United Air Lines 9.350% 04/07/16 30 United Air Lines 10.020% 03/22/14 45 United Air Lines 10.360% 11/13/12 5 Univ Health Svcs 0.426% 06/23/20 58 US Air Inc. 10.250% 01/15/49 0 US Air Inc. 10.250% 01/15/49 6 US Air Inc. 10.250% 01/15/49 6 US Air Inc. 10.300% 01/15/49 1 US Air Inc. 10.550% 01/15/49 1 US Air Inc. 10.680% 06/27/08 1 US Air Inc. 10.700% 01/01/49 8 US Air Inc. 10.900% 01/01/49 3 US Air Inc. 10.900% 01/01/49 6 Venture Hldgs 12.000% 06/01/09 0 Wachovia Corp 13.000% 02/01/07 65 Werner Holdings 10.000% 11/15/07 29 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Wheeling-Pitt St 6.000% 08/01/10 70 Williams Commun 10.875% 10/01/09 0 Winsloew Furniture 12.750% 08/15/07 15 World Access Inc. 4.500% 10/01/02 3 World Access Inc. 13.250% 01/15/08 5 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero Jainga, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo Junior M. Pinili, Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***