/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060411.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, April 11, 2006, Vol. 10, No. 86 Headlines 8404 LAREDO: Case Summary & 6 Largest Unsecured Creditors ACE HOME: Moody's Places Class B Certificates' Ba2 Rating on Watch ACE SECURITIES: Moody's Rates Class B-1 Certificates at Ba1 AIRCAST INC: dj Merger Cues S&P to Withdraw B Corp. Credit Rating ALLSERVE SYSTEMS: Ch. 7 Trustee Taps XRoads as Forensic Accountant ALLSERVE SYSTEMS: Hires Caspert Management to Auction Equipment ANCHOR GLASS: Files Supplements to its Second Amended Plan ANCHOR GLASS: Accounting Error Delays 2005 Annual Report Filing ANCHOR GLASS: Seeks Authority to Pay Exit Financing Loan Fees ASARCO LLC: Court Okays CB Richard Ellis as Broker to Sell Assets ATA AIRLINES: C8 Airlines Wants Solicitation Period Extended ATA AIRLINES: Liquidating Units Want Until June 5 to File Plan ATSI COMMUNICATIONS: Equity Deficit Narrows to $5 Mil. at Jan. 31 AVISTA CORP: Amended Facility Reduces Credit Line to $320 Million BRIGHAM EXPLORATION: Moody's Junks Proposed $125 Mil. Note Rating CALPINE CORP: Court Okays Lazard Freres as Committee Fin'l Advisor CALPINE CORP: Acadia Wants Payments & Decisions on Power Contracts CARGO CONNECTION: Redeems Series A 6.5% Conv. Promissory Notes CARMIKE CINEMAS: Receives Non-Compliance Notice from Nasdaq CATHOLIC: Spokane Litigants Settle Protective Order Request CCM MERGER: Poor Performance Cues S&P to Put B+ Rating on Watch CLECO EVANGELINE: Moody's Reviewing & May Downgrade Bond Rating COREL CORP: Dominant Competitor Pressure Cues Moody's B3 Ratings DANA CORP: TPC Says Forward Contract Merchants Aren't Utilities DEEP RIVER: Plan-Solicitation Period Stretched to June 24 DELPHI CORP: Bankruptcy Court Approves UAW Attrition Program DRESSER INC: Wants to Delay Release of Financials Until Sept. 30 DYNEGY HOLDINGS: Moody's Rates Proposed $600 Mil. Facility at Ba3 EAGLEPICHER HOLDINGS: Selling Delphi Claims to Hain for 55% & 75% EMJ CO: Moody's Lifts Note Rating to Ba3 from B1 Following Merger ERA AVIATION: Court Okays Assumption of AAL Aircraft Trust Lease FARMLAND IND: Court Approves $150,000 Deal with Bay State Milling FDL INC: Wants to Hire Dale & Eke as Bankruptcy Counsel FISHERS OF MEN: Voluntary Chapter 11 Case Summary FORD MOTOR: President and COO Jim Padilla To Retire FORD MOTOR: Files Proxy Statement Outlining Executive Compensation FOSS MANUFACTURING: Court Voids Jenifer Smyth's Contract FRONTIER LEASING: Moody's Places $7MM Class B Cert. Rating at Ba2 G+G RETAIL: Panel Hires Jaspan Schlesinger as Conflicts Counsel GATEWAY INTERNATIONAL: Reports $268,712 of Profits in Fiscal 2005 GENERAL MOTORS: CEO Does Not Foresee Long Strike at Delphi GENEVA STEEL: Chap. 11 Trustee Files Plan & Disclosure Statement GENTEK INC: Gets $27.9M from Sale of CableTech Unit & Real Estate GGNSC HOLDINGS: S&P Assigns B- Rating to $100 Million Term Loan GLOBAL HOME: Case Summary & 40 Largest Unsecured Creditors GRAHAM PACKAGING: S&P Puts B Rating on Planned $150 Million Loan HANOVER COMPRESSOR: Posts $38 Mil. Net Loss in Year Ended Dec. 31 HEALTHTRONICS INC: Late 10-K Filing Spurs Nasdaq Delisting Notice HEATING OIL: Plan Confirmation Hearing Set for May 31 HEATING OIL: Selling Office Building for $350,000 HOBNOBBIN LP: Voluntary Chapter 11 Case Summary HONEY CREEK: Files Plan & Disclosure Statement in Northern Texas INTEGRATED ALARM: Incurs $8 Million Net Loss in Fourth Quarter INTELSAT LTD: Filing Delay Cues S&P to Hold Ratings on Neg. Watch INTERNATIONAL MANAGEMENT: Hires W.G. Hays as Financial Consultant INTERNATIONAL MGM'T: U.S. Trustee Appoints 7-Member Investor Panel INTERPUBLIC GROUP: Weak Profits Prompt Moody's Ratings Downgrade INTERSTATE BAKERIES: Sells Whittier Property for $850,000 INTERSTATE BAKERIES: Wants Plan-Filing Period Stretched to Sept. IPAYMENT INC: Moody's Junks Rating on $285MM Subordinated Notes JEROME DUNCAN: Gail Duncan Files New Disclosure Statement in Mich. J.L. FRENCH: Hires Deloitte & Touche as Independent Auditors JO-ANN STORES: S&P Lowers Subordinated Debt Rating to CCC from B- JUSTINE RICE: Voluntary Chapter 11 Case Summary KAISER ALUMINUM: Asks Court to Okay $67.2 Mil. Hartford Settlement KANSAS CITY: 10-K Filing Delay Prompts Moody's Ratings Review KERZNER INTL: Going Private in $3.6-Billion Transaction KRONOS INT'L: Moody's Puts B2 Rating on New EUR400 Million Notes LAIDLAW INT'L: Earns $38 Mil. of Net Income in 2nd Fiscal Quarter LIN TV: Incurs $29.7 Million Net Loss in Fourth Quarter LONDON FOG: Hires Belding Harris as Bankruptcy Counsel LYONDELL CHEMICAL: Mulls Sale of Lyondell-Citgo Houston Refinery MAGRUDER COLOR: Wants Environmental Waste Management as Consultant MARINO AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors MEDIACOM BROADBAND: Moody's Holds Ba3 Rating on Amended Term Loan MEDIACOM COMM: Moody's Holds Junk Rating on Convertible Notes MEDIACOM LLC: Moody's Rates Proposed Amended Term Loan at Ba3 METROFINANCIERA: Fitch Assigns D Individual Rating MILLS CORP: Looks to Goldman & JPMorgan for Help in Restructuring MODTECH HOLDINGS: Secures $25 Mil. Financing from Bank of America MSC-MEDICAL: S&P Downgrades Rating to B- With Negative Outlook MUSICLAND HOLDING: Has Until Aug. 10 to File Lease Decision Motion NASH-FINCH: Earns $13.5 Million of Net Income in Fourth Quarter NELLSON NUTRACEUTICAL: Wants Deloitte & Touche as Auditor NELLSON NUTRACEUTICAL: Creditors Have Until May 31 to File Claim NEXMED INC: Losses & Deficit Trigger Going Concern Doubt NORTHWESTERN CORP: S&P Lifts Sr. Unsecured Rating to BB- from B+ NOVELIS INC: S&P Puts Sr. Unsecured Debt's B Rating on Neg. Watch NPC INT'L: Moody's Rates Proposed $200MM Subordinated Debt at Caa1 NRG ENERGY: Sells Rocky Road & Buys 50% Stake in West Coast Power NUTRAQUEST INC: Wants Plan-Filing Period Extended Until June 9 NUTRO PRODUCT: Moody's Junks Rating on $165MM Subordinated Notes ON SEMICONDUCTOR: Wants to Raise $82M in Stock Sale to Buy Assets ORIS AUTOMOTIVE: Section 341(a) Meeting Scheduled for April 25 OWENS & MINOR: Completes $200 Mil. Offering of 6.35% Senior Notes OWENS CORNING: Disclosure Statement Hearing Adjourned to May 10 PALAZZO DI STONECREST: Files Schedules of Assets and Liabilities PENN TREATY: S&P Affirms & Withdraws Counterparty Credit Rating PHI INC: Gets Requisite Consents for 9-3/8% Senior Notes due 2009 PHOTOCIRCUITS CORP: Panel Wants Court to Verify Glen Cove's Liens PLIANT CORP: Panel Wants to Tap Kramer Capital as Fin'l Advisors PREMIUM PAPERS: Hires Young Conaway as Bankruptcy Counsel PRG-SCHULTZ: Inks Forbearance Agreement with Bank of America PRG-SCHULTZ: KPMG Expresses Going Concern Doubt Opinion RESIX FINANCE: Moody's Lifts Ratings on 3 Resecuritization Deals R.H. DONNELLEY: KPMG Replaces PwC as Auditors for 2006 RITE AID: Declares Series E and I Preferred Stock Dividends RITE AID: Earns $1.24 Billion of Net Income in Fourth Quarter SEARS HOLDINGS: Minority Shareholders Support Privatization SEARS HOLDINGS: Pershing Square Snubs C$18 Per Share Buyout Offer SEQUA CORP: Fitch Affirms Low-B Issuer Default & Sr. Debt Ratings SFA TRUST: Collateral Quality Decline Cues Moody's Ratings Review SND Electronics: Taps BDO Seidman as Tax Accountants SND ELECTRONICS: Taps Lakeside Advisors as Financial Consultant SND ELECTRONICS: Committee Taps Pullman & Comley as Counsel SUNCOM WIRELESS: Moody's Junks Ratings & Says Outlook is Negative TECHNICAL OLYMPIC: Moody's Rates New $250 Mil. Note Issue at Ba3 TELECOM ARGENTINA: Intends to Pay Series A & B Notes on April 18 TELOGY INC: Files Third Amended Disclosure Statement in California TELUS COMMS: DBRS Confirms Ratings Following Corp. Reorganization TENASKA ALABAMA: Moody's Reviewing B1 Bond Rating & May Upgrade TEX STAR: Case Summary & 20 Largest Unsecured Creditors TIER TECHNOLOGIES: Nasdaq Extends Financials Filing Until June 5 UAL CORP: KBC Bank Asks Court to Lift Stay to Exercise Set-Off UAL CORP: Denver County & HSBC's $300-MM Claims Get Stock Reserve UAL CORP: U.S. Bank Holds $30,897,764 Unsecured Claim VERILINK CORP: Files for Voluntary Chapter 11 Protection VERILINK CORP: Case Summary & 20 Largest Unsecured Creditors W HOLDING: Faces Nasdaq Delisting Due to Late 10-K Filing WINN-DIXIE: Wants to Reject Seven Lease Termination Agreements WINN-DIXIE: Wants Court to Approve Modified AT&T Agreements WINN-DIXIE: Wants to Modify Claims Resolution Procedure W.S. LEE: Court Okays Spence Custer as Bankruptcy Counsel * Darrell Tamosuinas and W. Gregory Coward Join Stonehill Group * Leading Retailer, Joseph Nusim, Dies at Age 72 * Large Companies with Insolvent Balance Sheets ********* 8404 LAREDO: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------- Debtor: 8404 Laredo Ltd. fka Morales Investment Co., Ltd. 8404 Killam Laredo, Texas 78045 Bankruptcy Case No.: 06-50059 Type of Business: The Debtor rents warehouse space. Chapter 11 Petition Date: April 3, 2006 Court: Southern District of Texas (Laredo) Debtor's Counsel: Carl Michael Barto, Esq. Law Offices of Carl M. Barto 611 Hidalgo Street Laredo, Texas 78040 Tel: (956) 725-7500 Fax: (956) 722-6739 Total Assets: $2,452,010 Total Debts: $2,087,570 Debtor's 6 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ De Lage Landen Financial Services $17,641 Services 1111 Old Eagle School Road Wayne, PA 19087 De Lage Landen Financial Services $16,257 Services 1111 Old Eagle School Road Wayne, PA 19087 Alarcon, Alberto Services $4,940 Hall, Quintanilla & Alarcon 1302 Washington Laredo, TX 78040 Bruce Werstak Services $4,742 Sames & Werstak 5810 San Bernardo Ste. 400 Laredo TX 78040 Law Offices of Carl M. Barto Attorney fees $4,339 611 Hidalgo Street Laredo, TX 78040 Randy Blair Accounting services $0 6017 Mcpherson Laredo TX 78040 ACE HOME: Moody's Places Class B Certificates' Ba2 Rating on Watch ------------------------------------------------------------------ Moody's Investors Service placed under review for possible downgrade six certificate classes from two ACE subprime mortgage deals issued in 2002 and 2004. The pools are backed by fixed-rate and adjustable-rate subprime mortgage loans that were originated by various lenders. Ocwen Federal Bank, FSB and Saxon Mortgage Services service the loans in the 2002-HE1 deal. Ocwen Federal Bank, FSB services the loans in the 2004-HE1 transaction. The three most subordinate certificates from both deals are being placed on review for downgrade based on the weaker than anticipated performance of the mortgage collateral and the resulting erosion of credit support. In both of the transactions, overcollateralization amounts are currently below their targets and pipeline losses could cause eventual depletion of the overcollateralization and possible losses on the most subordinate tranches. Furthermore, existing credit enhancement levels may be low given the current projected losses on the underlying pools. Complete rating actions are: Issuer: ACE Securities Corp. Home Equity Loan Trust, * Series 2002-HE1, Class M-2, current rating A2, under review for possible downgrade; * Series 2002-HE1, Class M-3, current rating Baa2, under review for possible downgrade; * Series 2002-HE1, Class M-4, current rating Baa3, under review for possible downgrade; * Series 2004-HE1, Class M-5, current rating Baa2, under review for possible downgrade; * Series 2004-HE1, Class M-6, current rating Baa3, under review for possible downgrade; * Series 2004-HE1, Class B, current rating Ba2, under review for possible downgrade. ACE SECURITIES: Moody's Rates Class B-1 Certificates at Ba1 ----------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by ACE Securities Corp. Home Equity Loan Trust 2006-SL2, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Long Beach Mortgage Corporation and Fremont Investment & Loan and various other originated, fixed- rate, closed-end second mortgage loans acquired by DB Structured Products Inc. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, overcollateralization, and an interest rate swap agreement provided by Deutsche Bank AG New York Branch. Moody's expects collateral losses to range from 10.10% to 10.60%. Ocwen Loan Servicing LLC will service the loans, and Wells Fargo Bank NA will act as master servicer. The complete rating actions are: ACE Securities Corp. Home Equity Loan Trust, Series 2006-SL2 Asset Backed Pass-Through Certificates * Class A, Assigned Aaa * Class M-1, Assigned Aa1 * Class M-2A, Assigned Aa2 * Class M-2B, Assigned Aa2 * Class M-3, Assigned Aa3 * Class M-4, Assigned A1 * Class M-5, Assigned A2 * Class M-6A, Assigned A3 * Class M-6B, Assigned A3 * Class M-7, Assigned Baa1 * Class M-8, Assigned Baa2 * Class M-9A, Assigned Baa3 * Class M-9B, Assigned Baa3 * Class B-1, Assigned Ba1 AIRCAST INC: dj Merger Cues S&P to Withdraw B Corp. Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Aircast Inc., including the 'B' corporate credit rating. The ratings were withdrawn following the acquisition of Aircast Inc. by dj Orthopedics Inc. ALLSERVE SYSTEMS: Ch. 7 Trustee Taps XRoads as Forensic Accountant ------------------------------------------------------------------ Charles A. Stanziale, the Chapter 7 Trustee overseeing the liquidation of Allserve Systems Corp., asks the U.S Bankruptcy Court for the District of New Jersey for permission to employ XRoads Solutions Group, LLC, as his special forensic accountant. XRoads will perform forensic investigation work and assess available evidence concerning certain of the Debtor's missing equipment and assets. The scope of XRoads' investigation will include, among other things, a review of: a) the legitimacy and corporate structure of the Debtor's entities, affiliated parties and payment recipients; b) the validity and legitimacy of loan financing documentation; c) the transfer of assets to alleged alter egos of the Debtor; and d) the international tracing of the funds of the Debtor. XRoads intends to charge $75,000 for its services. The standard hourly rates for the firm's professionals are: Professional Hourly Rate ------------ ----------- Principal $450 to $595 Managing Director $400 to $450 Director, Senor Consultant and Consultant $275 to $375 Associate & Paraprofessional $150 to $210 Administrator $125 Holly Felder Etlin, at XRoads, assures the Bankruptcy Court that her firm does not represent any entity holding an interest adverse to the Debtor's Bankruptcy Cases under section 1103(b) of the Bankruptcy Code. XRoads Solutions Group -- http://www.XRoadsllc.com/-- is a professional services firm dedicated to optimizing, defending and perpetuating enterprise value. The firm's expertise include strategic and operational consulting; crisis management (restructuring, turnaround management and bankruptcy support services); and litigation support (including expert witness services, valuations and forensic accounting). Ms. Etlin can be reached at: Holly Felder Etlin XRoads Solutions Group 400 Madison Avenue, 3rd Floor New York, NY 10017 Phone: 212.610.5600 Fax: 212.610.5601 About Allserve Systems Headquartered in North Brunswick, New Jersey, Allserve Systems Corp. was an outsourcing company for the IT industry. The Debtor filed for chapter 11 protection on Nov. 18, 2005 (Bankr. D. N.J. Case No. 05-60401) Allserve's Chapter 11 case was converted into a liquidation proceeding under Chapter 7 of the Bankruptcy Code on Jan. 18, 2006. Charles A. Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney & Carpenter, serves as the Debtor's chapter 7 Trustee. Jeffrey Bernstein, Esq., Jeffrey Thomas Testa, Esq., and Kim M. Diddio, Esq., at McElroy, Deutsch, Mulvaney, & Carpenter, LLP represents Mr. Stanziale. When the Debtor filed for protection from its creditors, it estimated assets between 10 million to $50 million and debts between $50 million to $100 million. ALLSERVE SYSTEMS: Hires Caspert Management to Auction Equipment --------------------------------------------------------------- Charles A. Stanziale, the Chapter 7 Trustee overseeing the liquidation of Allserve Systems Corp., obtained permission from the U.S Bankruptcy Court for the District of New Jersey to employ Caspert Management Co., Inc., as his auctioneer. Caspert Management will supervise the auction of various office furniture and equipment owned by the Debtor pursuant to its ongoing Chapter 7 liquidation. Court documents do not show how much the trustee will pay Caspert Management. Herbert B. Caspert, Casper Management president, assures the Bankruptcy Court that his firm does not hold any interest adverse to the Debtors estates and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. About Caspert Management Caspert Management -- http://www.caspert.com/-- specializes in traditional live on-site Industrial Auctions. Fully qualified professionals manage every detail of its live auctions, from the marketing and asset preparation to the removal. About Allserve Systems Headquartered in North Brunswick, New Jersey, Allserve Systems Corp. was an outsourcing company for the IT industry. The Debtor filed for chapter 11 protection on Nov. 18, 2005 (Bankr. D. N.J. Case No. 05-60401) Allserve's Chapter 11 case was converted into a liquidation proceeding under Chapter 7 of the Bankruptcy Code on Jan. 18, 2006. Charles A. Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney & Carpenter, serves as the Debtor's chapter 7 Trustee. Jeffrey Bernstein, Esq., Jeffrey Thomas Testa, Esq., and Kim M. Diddio, Esq., at McElroy, Deutsch, Mulvaney, & Carpenter, LLP represents Mr. Stanziale. When the Debtor filed for protection from its creditors, it estimated assets between 10 million to $50 million and debts between $50 million to $100 million. ANCHOR GLASS: Files Supplements to its Second Amended Plan ---------------------------------------------------------- On March 31, 2006, Anchor Glass Container Corporation delivered to the U.S. Bankruptcy Court for the Middle District of Florida, supplements to its Second Amended Plan of Reorganization: 1. An Indicative Term Sheet for the New Revolving Credit Facility and New Term Loan Anchor Glass Container Corporation is currently in negotiations with three financial institutions that will provide exit financing. The Debtor aims to obtain a Senior Secured Revolver of up to $65,000,000 and a Senior Secured Term Loan of $145,000,000. The Term Sheet indicates that the Revolver will mature in five years and the Term Loan will mature in seven years. Each of the exit financings will have a default interest rate of 200 bps above applicable rates. A full-text copy of the Exit Financing Term Sheet is available for free at: http://bankrupt.com/misc/Anchor_IndicativeTermSheet.pdf 2. An Amended and Restated Certificate of Incorporation, which provides that Anchor Glass is authorized to issue a total of 25,000,000 shares of common stock, par value $0.01 per share, of which: -- 10,000,000 shares will be issued on the effective date of Anchor Glass' Plan of Reorganization; -- 1,000,000 shares will be reserved solely for issuance under a stock option plan; and -- 14,000,000 will be held as treasury stock for issuance as determined by the Board of Directors of Anchor Glass. The Amended Certificate of Incorporation also provides that in the event of any liquidation and after payment of debts and other liabilities, holders of shares of Common Stock will be entitled to receive all the remaining assets of Anchor Glass available for distribution to its stockholders, ratably in proportion to the number of shares of Common Stock the shareholders held. A full-text copy of the Amended Certificate of Incorporation is available for free at: http://researcharchives.com/t/s?7b2 3. The Amended and Restated Bylaws for Reorganized Anchor Glass, available for free at: http://bankrupt.com/misc/Anchor_AmendedBylaws.pdf Among other things, the Amended By-Laws provides for (i) the administrative structure of Anchor Glass; (ii) information to stockholders regarding the procedures of voting for their shares; and (iii) information on the powers, tenure and compensation, meetings and organization of Anchor Glass' directors and officers. 4. A Stockholders' Agreement, which provides that each holder of Anchor Glass's common stock, par value $0.01 per share, agrees to: -- hold all the shares of the Common Stock registered in its name; and -- vote the Shares at regular and special meeting of Anchor Glass' stockholder. The Agreement will be terminated in the earlier of: -- any public offering of Anchor Glass' equity securities; -- the date of which more than 50% of stockholders agree to terminate the Agreement; or -- March 31, 2016. A full-text copy of the Stockholders' Agreement is available for free at: http://bankrupt.com/misc/Anchor_StockholdersAgreement.pdf 5. A Registration Rights Agreement, a copy of which is available for free at: http://researcharchives.com/t/s?7b3 In connection with the Anchor Glass' issuance of Initial Shares to its stockholders pursuant to the Plan, the Company desires to grant the stockholders registration rights with respect to the Registrable Securities. 6. A New Equity Incentive Plan Summary Term Sheet Anchor Glass' Reorganization Plan provides for the creation of a New Equity Incentive Plan that will grant Reorganized Anchor Glass' directors and employees interests to acquire shares of up to 10% of all issued and outstanding shares of New Common Stock on a fully diluted basis. The allocation and form of Interests will be determined, and the Incentive Plan will be administered by, the compensation committee of the board of directors of Reorganized Anchor Glass. Interests granted under the Incentive Plan will vest 1/3 each year for three years or upon a change in control. The strike price will be the Fair Market Value -- to be determined in good faith by the Compensation Committee -- at the time that Interest is granted. 7. The Alpha Resolution Trust Agreement Anchor Glass and Samuel M. Stricklin, as liquidating trustee, will enter into a Liquidating Trust Agreement, which provides for the establishment of the Alpha Resolution Trust for the benefit of the holders of Allowed Class 5 General Unsecured Claims. Pursuant to the Agreement, the Debtor will transfer to the Liquidating Trust all of its right, title and interest in and to all of: (a) $8,000,000 in cash; and (b) the Utility Settlement Proceeds, free and clear of all liens, claims and encumbrances. The Liquidating Trust will be established for the sole purpose of liquidating and distributing the Trust Assets. The Liquidating Trust will be named "AGCC3 Alpha Resolution Trust" and will become effective on the Effective Date of the Plan. The Liquidating Trustee will, in an expeditious but orderly manner, in accordance with the terms of the Trust Agreement and the Plan, liquidate and convert to Cash the Trust Assets, make timely distributions and not unduly prolong the duration of the Liquidating Trust. The Oversight Committee, which will advise the Liquidating Trust in accordance with the certain terms, will initially consist of members of the Official Committee of Unsecured Creditors, as may be determined exclusively by that Committee. The Oversight Committee will monitor the Liquidating Trustee's disposition and disbursement of the Trust Assets. A Liquidating Trust Reserve will be established to pay the fees and expenses of the Liquidating Trust, the Liquidating Trustee and its professionals, and the taxes for income earned by the Liquidating Trust. A full-text copy of the Alpha Trust Agreement is available for free at http://researcharchives.com/t/s?7b4 Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Accounting Error Delays 2005 Annual Report Filing --------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Anchor Glass Container Corporation discloses that it won't be able to timely file its annual report on Form 10-K for 2005. Mark S. Burgess, chief executive officer of Anchor Glass, points out that a hearing to consider confirmation of the Company's Plan of Reorganization and objections to it has been set on April 17, 2006. If approved by the Bankruptcy Court, all of Anchor Glass' existing common stock interests will be cancelled. Assuming Bankruptcy Court approval of the Plan, the Company expects to emerge from Chapter 11 in May 2006 as a privately held company. Accordingly, it is not expected that the Company will be subject to the reporting requirements of Securities Exchange Act of 1934. On August 2, 2005, the Company's management concluded that $4,500,000 of payments received from a customer during June 2003 had not been accounted for properly. The impact of the improper accounting, net of other adjustments, is to overstate operating income and net income/loss for the June 2003 quarter by $4,200,00. However, because key factual issues remain unresolved, management has not yet been able to determine the correct accounting for the $4.5 million for periods subsequent to June 2003, Mr. Burgess states. The Company's management has also determined that its accounting for two other transactions with the same customer were recorded in error, resulting, on a preliminary basis, in an overstatement of net income/loss during 2001 and 2002 of approximately $2,000,000 and $1,400,000, respectively, and an understatement of net income/loss during 2003 and 2004 of approximately $500,000 and $1,300,000, respectively. In investigating the accounting errors, Mr. Burgess relates that management also identified additional adjustments resulting in an overstatement of net income/loss of approximately $500,000 in each of the years ended 2001 and 2004. As a result, the Company's financial statements for the years 2001, 2002, 2003 and 2004 and for each of the quarters therein should not be relied upon. Additionally, the interim financial statements for the periods ended March 31, 2005 and 2004, as contained in the quarterly report on Form 10-Q for the period ended March 31, 2005, should not be relied upon, Mr. Burgess says. According to Mr. Burgess, the Company's audit committee has commenced a review of these transactions and has retained Jones Day as its independent counsel in connection with the review. The Company stated that these errors reflect material weaknesses in its internal controls over financial reporting. Accordingly, management's assertions contained in the Company's annual report on Form 10-K for the year ended December 31, 2004 should no longer be relied on. Anchor Glass' 2005 annual results will not be filed until the key factual issues are resolved, Mr. Burgess discloses. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Seeks Authority to Pay Exit Financing Loan Fees ------------------------------------------------------------- As a condition to its Plan of Reorganization becoming effective, Anchor Glass Container Corporation must obtain a revolving credit facility of $65,000,000, and a term loan of $135,000,000. Some of these amounts will be used to satisfy claims and some of these will be used to operate the Debtor's business after confirmation of the Plan. The Debtor is currently negotiating with several lenders who are interested in providing the Exit Financing, Robert A. Soriano, Esq., at Carlton Fields PA, in Tampa, Florida, tells the Court. Each potential lender has indicated that to finalize the financing, it will need to conduct certain due diligence for which the lender charges loan fees. The Loan Fees probably are not ordinary course expenses, Robert A. Soriano, Esq., notes. But the Loan Fees will need to be paid before the Plan becomes effective. Accordingly, the Debtor asks the U.S. Bankruptcy Court for the Middle District or Florida for permission to pay the Loan Fees in connection to its exit financing. As of April 4, 2006, the Debtor does not know how much the Loan Fees will be, but these are negotiated amounts and are relatively standard in lending situations, Mr. Soriano says. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASARCO LLC: Court Okays CB Richard Ellis as Broker to Sell Assets ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Mar. 17, 2006, ASARCO LLC sought authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to employ CB Richard Ellis International Mining & Metals Group of CB Richard Ellis Tucson LLC, to serve as its broker and financial advisor. The Court approved ASARCO's request. As broker, CBRE will assist in marketing certain mining assets and properties located in Lewis & Clark County, Montana, commonly known as the Heddleston Property. CBRE will also perform advisory services in connection with the proposed sale or other transaction of the Property. As customary for broker and financial advisory engagements, ASARCO will pay CBRE a transaction fee of 4% of the Transaction Value in the sale of the Property. ASARCO will reimburse CBRE for all actual and reasonable out-of-pocket expenses it incurred in performing the services required. 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 Wants Solicitation Period Extended ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Indiana extends the exclusive period during which C8 Airlines, Inc., may solicit votes for the acceptance or rejection of its Plan of Liquidation to, and including, May 31, 2006. C8 Wants Further Extension Given that consideration of its Disclosure Statement and its Plan of Liquidation will be informed by the resolution of many of the administrative claims filed against its estate, C8 asks the Court to further extend its Exclusive Solicitation Period to allow for full and fair notice of issues to creditors. Specifically, C8 asks Judge Basil H. Lorch to extend the Solicitation Period to July 31, 2006. Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis, Indiana, reminds the Court that C8 timely filed its Liquidating Plan with the Court. Accordingly, good cause exists to extend C8's Exclusive Solicitation Period. 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: Liquidating Units Want Until June 5 to File Plan -------------------------------------------------------------- Ambassadair Travel Club, Inc., and Amber Travel, Inc., ask the U.S. Bankruptcy Court for the District of Indiana to further extend the period: (a) during which only they may file their Chapter 11 plans, to and including June 5, 2006; and (b) for obtaining acceptance of their plans, to and including July 5, 2006. Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis, Indiana, relates that a number of unresolved contingencies exist which prevent Ambassadair and Amber from making a responsible and informed determination of whether filing liquidating plans or converting their cases to Chapter 7 cases is in the best interest of their creditors. Moreover, Ambassadair and Amber need time to analyze the claims filed against them to determine the administrative solvency of their estates. At this time, Mr. Nelson says, the Debtors are currently focused on completing the transactions and financing associated with the Reorganizing Debtors' proposed reorganization. This task continues to consume much of the Debtors' resources and personnel. The Debtors are also expending significant efforts in the liquidation of C8 Airlines, Inc.'s estate. Pending a final ruling on the request, Judge Lorch issued a bridge order extending the exclusive period during which only Ambassadair and Amber may file their plans today, April 11, 2006. 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) ATSI COMMUNICATIONS: Equity Deficit Narrows to $5 Mil. at Jan. 31 ----------------------------------------------------------------- ATSI Communications Inc. delivered its second quarter financial results for the three months ended Jan. 31, 2006, to the Securities and Exchange Commission on Mar. 23, 2006. The company reported a $224,000 net loss on $2,947,000 of total operating revenues for the three months ended Jan. 31, 2006. At Jan. 31, 2006, the company's balance sheet showed $631,000 in total assets and $5,749,000 in total liabilities, resulting in a $5,118,000 stockholders' equity deficit. The company's Jan. 31 balance sheet also showed strained liquidity with $488,000 in total current assets available to pay $5,235,000 in total current liabilities coming due within the next 12 months. Full-text copies of ATSI Communications Inc.'s second quarter financial statements ended Jan. 31, 2006, are available at no extra charge at http://ResearchArchives.com/t/s?7b0 Going Concern Doubt As reported in the Troubled Company Reporter on Nov. 18, 2005, the company has reported recurring net losses from operations, losing $2,224,000 in fiscal 2005 and $8,485,000 in fiscal 2004, and has an accumulated deficit of $78 million. These conditions create substantial doubt as to ATSI's ability to continue as a going concern. Management says it will continue to pursue financing transactions that may include raising additional capital through the sale of common stock, preferred stock, or warrants. Liabilities Exceed Assets At Jan. 31, 2006, the company's stockholders' equity deficit narrowed to $5,118,000 from a $6,218,000 equity deficit at July 31, 2005. About the Company Through its Digerati Networks and Telefamilia Communications subsidiaries, ATSI Communications Inc. -- http://www.atsi.net-- provides VoIP services in Asia, Europe, the Middle East and Latin America. ATSI Communications Inc. is incorporated in the State of Nevada. Old Bankruptcy Information Two ATSI units -- American TeleSource International, Inc. (commonly known as ATSI Texas) and TeleSpan, Inc. -- filed for Chapter 11 protection on Feb. 4 and 18, 2003, in the U.S. Bankruptcy Court for the Western District of Texas (San Antonio) (Lead Bankr. Case No. 03-50753). Martin Warren Seidler, Esq., represented these Debtors, which at the time of their filings, estimated they had $10 to $50 million in assets and $1 to $10 million in debts. These two subsidiaries chapter 11 cases converted to chapter 7 liquidation proceedings on May 14, 2003, and ceased operations. AVISTA CORP: Amended Facility Reduces Credit Line to $320 Million ----------------------------------------------------------------- Avista Corp. (NYSE: AVA) renegotiated its committed line of credit agreement with various banks. The amended line of credit captures lower bank fees and borrowing costs and extends the term of the agreement until 2011. The amended credit line was over- subscribed, with banks pledging in excess of $400 million to the line of credit. However, the company chose to reduce the credit facility from $350 million to $320 million based on forecasted liquidity needs. The committed line of credit was originally entered into on Dec. 17, 2004, with an expiration date of Dec. 16, 2009. The amended line of credit agreement expires on April 5, 2011. "We are extremely pleased to be able to take advantage of the favorable borrowing rates in the market at this time," said Malyn Malquist, Avista Corp. senior vice president and chief financial officer. "We believe this demonstrates recognition by our banks that Avista continues to make progress in restoring its financial health. The renegotiated lower borrowing rate on our credit line will provide continued financial flexibility going forward." Headquartered in Spokane, Washington, Avista Corp. -- http://www.avistacorp.com/-- is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is a company operating division that provides service to 338,000 electric and 297,000 natural gas customers in three western states. Avista's non-regulated subsidiaries include Avista Advantage, which hosts a Web site at http://www.avistaadvantage.com/and Avista Energy with a Web site at http://www.avistaenergy.com/ * * * As reported in the Troubled Company Reporter on Apr. 4, 2006, Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating and all other debt ratings on Avista Corp., reflecting: * the company's stable utility business; * its higher-risk energy trading unit Avista Energy; and * other small non-regulated subsidiaries. The outlook is stable. BRIGHAM EXPLORATION: Moody's Junks Proposed $125 Mil. Note Rating ----------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Brigham Exploration Company's proposed $125 million of senior unsecured notes due 2014. Moody's also assigned a Caa1 Corporate Family Rating to Brigham. The rating outlook is stable. Proceeds from the proposed offering will be used to repay indebtedness under Brigham's existing credit agreements and to fund exploration and development activities. The rating reflects Brigham's small size in terms of production and reserve base, high full-cycle costs, and high leverage as measured relative to its reserve base and current and expected cash flow. The rating also reflects a currently supportive commodity price environment and Brigham's track record of reserve replacement through the drillbit. Applying Moody's Global E&P Industry Rating Methodology, Brigham maps to a Caa rating. The rating outlook is stable, reflecting Moody's expectations that Brigham will likely continue to remain small with production and F&D cost trends that vary significantly with exploration success. A positive outlook or upgrade in the future would require the building of a much more substantial production and reserve base, which will likely take several years given plans to grow organically. Such growth also would need to be accompanied by competitive F&D and full-cycle costs and a moderation in leverage. A negative outlook or downgrade could occur if Brigham's F&D costs worsen or if production does not adequately respond to continued heavy capital spending. During 2005, Brigham reported average daily production of about 5,500 barrels of oil equivalent or 33.1 million cubic feet equivalent and ended the year with total proved and proved developed reserves of 22.2 MMboe and 11.3 MMboe, respectively, making Brigham the smallest E&P company that Moody's rates. Brigham's most recent one-year and three-year average F&D costs are in the $30-$32/boe range and full-cycle costs are over $45/boe. Brigham's leveraged full-cycle ratio, a measure of cash- on-cash returns, is approximately 1.0x. Leverage, as measured by debt to proved developed reserves, is nearly $12/boe, pro forma for the offering and including Brigham's preferred stock as debt. Debt plus future development costs to total proved reserves also is approximately $12/boe. The notes are not notched from the Corporate Family Rating because of the expectation of a low amount of secured debt in Brigham's capital structure. At closing, Brigham's borrowing base under its revolving credit facility will be reduced to $50 million. Current outstanding borrowings under the credit facility are expected to be repaid shortly after closing and no further borrowings are expected in 2006 as internally generated cash flow and cash balances should adequately cover planned capital expenditures. If the borrowing base were increased or if Brigham began using the credit facility regularly, Moody's would likely notch the notes down one from the Corporate Family Rating. Brigham Exploration Company is headquartered in Austin, Texas. CALPINE CORP: Court Okays Lazard Freres as Committee Fin'l Advisor ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved the request of the Official Committee of Unsecured Creditors to retain Lazard Freres & Co. LLC as its financial advisor, effective as of Jan. 10, 2006, on an interim basis. The order becomes final without need for further hearing or the entry of a final order if no objections are received by April 24, 2006, at 10:00 a.m., Eastern Time. The Court will hold a hearing on April 26, 2006, at 10:00 a.m., Eastern Time, to consider any timely filed objections. Committee chairman Charles F. Cerria says Lazard Freres started providing critical services to the Committee on Jan. 10. Lazard Freres is an investment-banking firm focused on providing financial and investment banking advice to its clients. It is a registered broker-dealer and investment advisor registered with the United States Securities and Exchange Commission and is also a member of the National Association of Securities Dealers. The Firm's professionals have been employed as financial advisors and as investment bankers in a number of troubled company situations, including the Chapter 11 cases of Adelphia, Parmalat and Tower Automotive. The Firm and its senior professionals have extensive experience in the reorganization and restructuring of troubled companies, both out-of-court and in Chapter 11 proceedings. Since 1990, the professionals have been involved in over 200 restructurings representing over $300,000,000,000 in restructured debt. As financial advisors, Lazard Freres is expected to: (1) review and analyze the business, operations, liquidity situation, assets and liabilities, financial condition and prospects of the Debtors; (2) review, analyze and report to the Committee with respect to the Debtors' business plan; (3) evaluate the Debtors' debt capacity in light of their projected cash flows; (4) review and provide an analysis of any proposed capital structure for the Debtors; (5) review and provide an analysis of any valuation of the Debtors or their assets; (6) advise and assist the Committee in evaluating any potential DIP loan or other financing for the Debtors; (7) review, analyze and advise the Committee with respect to the existing debt structures of the Debtors, and refinancing alternatives to existing secured debt; (8) advise and assist the Committee in analyzing strategic alternatives available to the Debtors; (9) review and provide an analysis of all restructuring plans; (10) review and provide an analysis of any new securities, other consideration or other inducements to be offered or issued under the Plan; (11) assist the Committee and participate in negotiations with the Debtors; and (12) provide other financial advisory services, including witness testimony, in connection with the Debtors' chapter 11 cases. Lazard Freres will be paid according to this compensation structure: * Payment of a $225,000 advisory fee for each month of Lazard's engagement. The Monthly Advisory Fee for January 2006 will be payable pro rated to provide credit for the first 10 days of the month. * If a restructuring is consummated, Lazard will be entitled to receive a $5,000,000 transaction fee payable upon consummation of the first transaction. * Payment of a $5,000,000 contingent fee upon the occurrence of a restructuring that is supported by the Committee. The Firm will seek reimbursement for reasonable out-of-pocket expenses, and other fees and expenses. As part of the overall compensation payable to the firm, the Committee has agreed to arrange certain indemnification and contribution obligations. David S. Kurtz, managing director at Lazard, assures the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtors' estates. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Acadia Wants Payments & Decisions on Power Contracts ------------------------------------------------------------------ Acadia Power Partners, LLC, asks the U.S. Bankruptcy Court for the Southern District of New York to compel Calpine Energy Services, L.P., to pay all amounts due and owing under various Power Purchase Agreements and to fix a period within which the Debtors must assume or reject those Power Purchase Agreements. APP further asks that if the Court does not compel payment, it should, at a minimum, compel the Debtors to execute an amendment to the Power Purchase Agreements permitting APP to suspend its obligations in the event of a default by CES -- which has already occurred -- to allow APP to market and sell its power outside the Power Purchase Agreements. Terms of the Power Purchase Agreements APP and CES are parties to power purchase agreements involving APP's natural gas fueled electrical generation plant in Acadia Parish, Louisiana, which consists of two combined cycle units. The 2001 PPA is a 20-year contract for APP to sell to CES electrical capacity, associated energy and other services from Power Block 2, one of APP's combined cycle units. The 2003 PPA, meanwhile, is a 19-year contract involving electrical capacity from Power Block 1, the other of the combined cycle units, to be sold also to CES by APP. Under the terms of the Power Purchase Agreements, CES has the right to supply natural gas to fuel the Project, and it is exclusively entitled to all of the capacity and energy output from the facility. APP is obligated to reserve the Project's capacity for CES' exclusive use and to provide energy conversion services when the facility is dispatched by CES. The Power Purchase Agreements require CES to pay APP various capacity reservation fees and amounts associated with fixed and variable operating and maintenance expenses. Each day, CES sends a dispatch notice to APP, which indicates whether CES intends to dispatch the Project on a given day, how many megawatts are to be dispatched, and the duration of the dispatch. CES has continued to send dispatch notices to APP since the Petition Date. On Dec. 21, 2005, the Debtors sought to reject certain contracts, including the Power Purchase Agreements. APP objected to the effective date of rejection. Subsequently, bankruptcy court reference to the Rejection Motion was later withdrawn after the U.S. District Court for the Southern District of New York held that the Federal Energy Regulatory Commission had jurisdiction over the rejection of power contracts. Stefanie Birborwer Greer, Esq., at King & Spalding LLP, in New York, says APP has continued to perform all of its obligations under the Power Purchase Agreements since the Petition Date while CES has failed to pay postpetition amounts that have been due. APP has sent the Debtors a Notice of Default on Jan. 26, 2006, demanding payment of $2,143,597 as an administrative claim owed by CES for postpetition services. As of Feb. 20, 2006, the Debtors have failed to pay $7,510,156 in postpetition amounts. Every day that the Power Purchase Agreements are not rejected, the amount increases by $176,434. On Feb. 2, 2006, APP sent a draft stipulation and order to the Debtors, which proposed that the Debtors and APP agree that the Power Purchase Agreements be rejected as of a date not later than March 31, 2006, subject to Bankruptcy Court and FERC approval. However, Ms. Greer says the Debtors have not responded. Ms. Greer says the motion would limit APP's administrative expense claims against the Debtors and permit APP to mitigate its damage claim against the Debtors. Parties Amend PPAs Barry S. Seidel, Esq., at King & Spalding LLP, in New York, informs the Court that APP and the Debtors have agreed to amend the 2001 and 2003 Power Purchase Agreements. In addition to the remedies for default already provided in the Agreements, APP will have the right to suspend performance if any event of default occurs after Dec. 20, 2005 with respect to CES. APP has the right, exercisable by notice to CES, to suspend its obligations under the Power Purchase Agreements. After CES cures the Default, and provided there is no other Event of Default then occurring, APP will resume performance of its obligations. However, APP will not be obligated or entitled to resume performance of its obligations absent agreement by both CES and APP. APP will be entitled to claims against CES for damages arising out of the occurrence or continuation of an Event of Default. Any damage claims arising during the Suspension Period will be entitled to non-priority unsecured status. Any mitigation by APP during the Suspension Period will reduce, on a dollar-for-dollar basis, first, APP's non-priority claims, then its priority claims, if any, then its administrative claims, if any, and finally, its secured claims. The Debtors believe it is in their best interest to allow APP to suspend performance of its obligations under the Power Purchase Agreements to permit APP to mitigate its damages. If CES seeks to reject the Power Purchase Agreements, APP agrees not to oppose any effort and will cooperate with CES to obtain rejection orders. In addition, APP will support the Debtors' request before the District Court seeking confirmation of the Bankruptcy Court's authority to authorize rejection of the Power Purchase Agreements. If the District Court determines that the Bankruptcy Court has authority to authorize rejection of the Power Purchase Agreements, CES will file a Rejection Motion with the Bankruptcy Court seeking to terminate the Power Purchase Agreements. Mr. Seidel says the parties will soon present to the Court a proposed agreed order. Court Approves Amendments to the Power Purchase Agreement Judge Lifland approves the amendments to the Power Purchase Agreements. The Suspension Period commences on March 22, 2006. Judge Lifland will convene a hearing at a later date to consider APP's request: * for payment of its administrative expense claim; and * for the Court to fix a date by which the Power Purchase Agreements must be assumed or rejected by the Debtors. About Calpine Corporation Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) CARGO CONNECTION: Redeems Series A 6.5% Conv. Promissory Notes -------------------------------------------------------------- Cargo Connection Logistics Holding, Inc. (OTC BB: CRGO) made the decision to redeem its outstanding Series A 6.5% Convertible Promissory Notes which date back prior to 2005 when the Company was still known as ChampionLyte Holdings, Inc. The Company has already begun to redeem these notes. Specifically, these notes were from Advantage Fund I, LLC and are either still in their possession or were assigned to other Holders under the same terms and conditions as the original note. While the notes had favorable terms, the conversion feature potentially hurt the Company by the Holder's ability to obtain and sell additional common shares in the market, potentially causing a downturn in the price per share. "We are continuing to try and redeem the remaining assigned notes from their current holders," said Cargo Connection Logistics Holding, Inc. CFO Scott Goodman. Goodbye, Knightsbridge In addition to the redemption of the old debt, the Company has terminated its consulting agreement with Knightsbridge Capital. In January 2005, ChampionLyte hired Miami-based Knightsbridge to explore strategic options; CEO David Goldberg indicated at that time that Knightsbridge had presented several attractive merger opportunities. "The Company will continue to review all former contracts the Company had entered into prior to Cargo Connection Logistics' involvement to determine the value to the Company as well as to the Company's shareholders," said Mr. Goodman. "The Company has retained new counsel to examine all of the financial instruments and contracts the Company had in place prior to new management taking control in 2005." About Cargo Connection Logistics Holding Cargo Connection Logistics Corp. -- http://www.cargocon.com/-- is a leader in world trade logistics. Headquartered adjacent to JFK International Airport, the company is a transportation logistics provider for shipments importing into and exporting out of the United States, especially through the Gateways of Chicago, Illinois; JFK, New York; Miami, Florida or Atlanta, Georgia, with service areas throughout the Unites States and North America. Mid-Coast Management, Inc. has container freight stations specifically designed to handle internationally arriving freight for the major retail suppliers through its CFS facilities in Florida, Georgia, Illinois, New York and Ohio. Since its inception, Mid-Coast Management has developed relationships with many retailers and also works with Freight Forwarders from around the world. Cargo Connection's balance sheet showed $2,824,440 in total assets at Sept. 30, 2005, and liabilities of $6,102,605, resulting in a $3,278,165 stockholders' deficit. CARMIKE CINEMAS: Receives Non-Compliance Notice from Nasdaq ----------------------------------------------------------- Carmike Cinemas, Inc. (NASDAQ: CKEC) received notice from Nasdaq on Mar. 28, 2006, that it is no longer in compliance with Nasdaq Marketplace Rule 4310(c)(14), which requires timely filing of reports with the Securities and Exchange Commission. This could result in the delisting of Carmike's securities by Nasdaq. Carmike plans to request a hearing from the Nasdaq Listing Qualifications Panel on this matter to present its position. Any action by Nasdaq will be stayed until the hearing is completed and a decision is issued. Carmike's securities will remain listed pending the result of this process. There can be no assurance that Nasdaq will grant Carmike's request for continued listing. Delayed Form 10-K Filing On Mar. 15, 2006, Carmike Cinemas filed a Form 12b-25 with the Securities and Exchange Commission relating to the delayed filing of its Form 10-K for the year ended Dec. 31, 2005. The company has determined that it does not expect to file its Form 10-K by the extended Mar. 31, 2006 deadline. The company is finalizing its review of certain technical accounting issues, including the application of FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations," and the impact of certain lease modifications. In addition, in connection with its ongoing review, the company has determined that certain leases may not have been properly classified for accounting purposes. Specifically, management is reviewing approximately 35 leases entered between 1985 to 1999 that have been classified as capital leases. Management is reviewing and analyzing whether these leases should have been classified as operating leases or "long term financing obligations" under EITF 97-10, including any resulting financial statement impact, and whether, with respect to any capital leases, any increase or decrease in existing capital assets or obligations is appropriate. Management is working closely with the Board's Audit Committee in connection with this ongoing review. In addition, Carmike's external accounting advisers are working with management in its analysis of these lease accounting issues. Carmike is also working with its independent registered public accounting firm to resolve these issues. Management currently believes that any potential changes due to the lease accounting issues will not have a material impact on the cash flows of the business. However, due to the highly technical nature of the lease accounting issues and management's ongoing review of certain other accounting issues noted above, there can be no assurance as to the ultimate accounting impact. The resolution of these issues could require Carmike to restate financial statements for certain prior periods. In addition, Carmike's evaluation of internal control over financial reporting as of Dec. 31, 2005 is not yet complete. As the company completes its evaluation of internal control over financial reporting, control deficiencies may be identified and those control deficiencies may represent one or more material weaknesses. The existence of one or more material weaknesses precludes a conclusion by management that the company's internal control over financial reporting was effective at December 31, 2005. The company has been in contact with the administrative agent under its credit agreement. Management is seeking a waiver to provide the company a reasonable period to determine any necessary financial statement adjustments and provide year-end financial statements to the lenders as required, however there can be no assurance that such waiver shall be granted. "We appreciate the patience and understanding our stockholders have given the company during this delay. We continue to work diligently with our audit committee, outside advisers and independent auditors to conclude our review as soon as practicable," stated Martin A. Durant, Carmike's Senior Vice President-Finance, Treasurer and Chief Financial Officer. Headquartered in Columbus, Georgia, Carmike Cinemas, Inc. -- http://www.carmike.com/-- is a premiere motion picture exhibitor in the United States with 301 theatres and 2,475 screens in 37 states, as of December 31, 2005. Carmike's focus for its theatre locations is small to mid-sized communities with populations of fewer than 100,000. Standard & Poor's Ratings Services placed its ratings on Carmike Cinemas including the 'B' corporate credit rating, on CreditWatch with negative implications after the company announced it will not be filing its SEC Form 10-K within the 15-day extension period. Moody's Investors Service also changed the outlook for the company to negative from positive and affirmed Carmike's B2 corporate family rating, the B1 senior secured bank facility rating and the Caa1 rating on Carmike's senior subordinated notes. CATHOLIC: Spokane Litigants Settle Protective Order Request ----------------------------------------------------------- As previously reported, the Diocese of Spokane and 22 members of the Association of Parishes in Washington took an appeal from Judge Williams' order granting the Committee of Tort Litigants' request for partial summary judgment and finding that certain properties that the Diocese "held for another" actually constitute property of the Diocese's estate, to the U.S. District Court for the Eastern District of Washington. The Diocese, the Association of Parishes, St. Philip's Villa, Inc., and certain related schools and ministries also took an appeal from the order issued by the U.S. Bankruptcy Court for the Eastern District of Washington denying the Association's request to dismiss the Litigants Committee's complaint for lack of standing and lack of jurisdiction, to the District Court. Among other things, the parties asked the District Court to review whether the Bankruptcy Court erred: (1) by granting summary judgment without addressing or considering the evidence submitted, and whether it: -- infringed the Diocese's rights under the state or federal Constitutions; and -- violated the Religious Freedom Restoration Act; (2) by expanding the Diocese's estate to include the equitable interest in parish property; (3) in its interpretation of Washington's corporation sole statute, and its ruling that no statutory trust exists; (4) by holding that evidence of bare legal title to real estate in the name of the Bishop of Spokane was sufficient to mandate the Court's determination that there was no material issue of controverted fact presented as to the existence of the Association's claimed and asserted interests in the real estate; (5) by refusing to consider the internal rules of the religious organization to which the Diocese and the non- debtor Parishes belong prior to extinguishing beneficial interests of the non-debtor Parishes in real property; and (6) by finding the existence of a case and controversy between St. Philip's and the Creditors Committee. The Association also asked the District Court to review several other issues including whether the Bankruptcy Court erred: (a) in holding that Section 541 of the Bankruptcy Code creates a private cause of action and remedy allowing a creditors committee to seek declaratory relief in an adversary proceeding against non-debtors; (b) holding that a creditors committee has standing to seek substantive consolidation against non-debtors, non-moneyed entities, which may not be placed into involuntary bankruptcy pursuant to Section 303 of the Bankruptcy Code; and (c) holding that the relief sought by the Litigants Committee in its adversary complaint constituted a "core" proceeding under the Judiciary Procedures Code. The Diocese and the other appellants asked the Bankruptcy Court to stay the Orders pending the appeals. The Litigants Committee, with the support of the Tort Claimants' Committee, objected to the stay requests. District Court Upholds Ruling District Court Judge Justin Quackenbush affirms the Bankruptcy Court's decision denying the Association's request to dismiss the Litigants Committee's complaint. Judge Quackenbush holds that no statute or rule prohibits the Litigants Committee from bringing an adversary action before the Bankruptcy Court. Therefore, the Committee had standing to bring its complaint. According to Judge Quackenbush, to hold that "only the trustee or debtor may bring an action to determine the assets of the estate, particularly in a debtor in possession Chapter 11 case where the debtor has claimed that the parish assets are not part of its bankruptcy estate" would: -- be contrary to the letter and intent of the bankruptcy laws; and -- prevent the Court and the creditors from having full information as to all the assets of the Diocese in voting and ruling on the Chapter 11 Plan of Reorganization. Judge Quackenbush says it is not essential that specific permission be given to bring an adversary action to determine the assets of the estate because it would be a "waste of scarce assets" in the case. Judge Quackenbush further holds that the adversary proceeding is a core issue over which the Bankruptcy Court has jurisdiction. With respect to the summary judgment aspect of the appeal, Judge Quackenbush refrained from issuing a decision and instead directed the parties to address the questions of whether there are material issues of fact in the matter sub judice as to the interest of the parties in the parish real properties, including: -- when the properties were acquired; -- who negotiated their acquisition; -- how they were acquired; -- whose money was utilized to acquire the properties; and -- how the acquired properties were titled. Judge Quackenbush directs the Diocese and the Association to serve and file a joint brief of their appeal referencing arguments raised in Bankruptcy Court pleadings concerning disputed or undisputed material facts and any additional authorities supporting their positions. The Litigants Committee will also file a response. The District Court expects briefing to be completed by early May 2006. 22 Parishes Want Orders Stayed Pending District Court Judge Quackenbush's ruling on the summary judgment issue of the appeal brought by the Diocese of Spokane and the 22 members of the Association of Parishes, the 22 Parishes ask the Court to stay the litigation in the interest of estate financial preservation and judicial economy. "Without a stay pending appeal, the Parishes will be irreparably harmed by the likely liquidation of assets that are necessary for the ongoing operation of the Parishes," John D. Munding, Esq., at Crumb & Munding, P.S., in Spokane, Washington, asserts. Litigants Committee Say No to Stay Request Representing the Committee of Tort Litigants, James I. Stang, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, argues that the 22 Parishes cannot have it both ways. Either the 22 Parishes agree to the settlement at which time the Litigants Committee will stay the adversary proceeding as to the 83 Parishes; or the 22 Parishes will successfully block the settlement in which case they will have undermined their own stated rationale for the stay. Mr. Stang notes that the Bankruptcy Court's Order does not address the real property in which the other 60 or so parish defendants in the adversary proceeding claim an interest, and does not relate to any of the personal property in which all of the parish defendants claim an interest. The Bankruptcy Court's Order also does not deal with the adversary proceedings' claim for substantive consolidation. For these reasons, the Litigants Committee must continue prosecuting the adversary proceeding. Moreover, the 22 Parishes fail to satisfy their burden under Rule 8005 of the Federal Rules of Bankruptcy Procedure to show that a stay is warranted, Mr. Stang asserts. Discovery Requests In December 2005, the Litigants Committee propounded requests for production and special interrogatories on all 83 members of the Association of Parishes. The requests cover a broad spectrum of documents relating to the Parishes' organization, real property ownership, financial information, operations, and ownership of personal property. Objections to Discovery (A) 83 Parishes The 83 Parishes argue that a number of the requests demand documents "without regard to time" and will generate hundreds and, in the larger Parishes, thousands of documents. The 83 Parishes ask the Court to issue a protective order declaring that the Parishes will make available the documents as they are ready for review by the Litigants' Committee's counsel so that the process can take place over a period of time. The responses to the requests will be provided as they are completed, rather than in one large group on any particular date. The Parishes believe that this process allows for a methodical production of the documents and preparation of the appropriate responses. (B) Catholic Charities, et al. Representing Catholic Charities, Inc., Morning Boys' Ranch, Inc., and the Catholic Cemeteries of Spokane, doing business as Holy Cross Cemetery and St. Joseph Cemetery, Christopher J. Kerley, Esq., in Keefe, King & Bowman, P.S., in Spokane, Washington, notes that the Bankruptcy Court has not yet determined whether substantive consolidation is appropriate as to Catholic Charities, Morning Boys and Catholic Cemeteries. Accordingly, unless and until there is a determination by the Court that substantive consolidation is a appropriate under the facts and circumstances of the Three Objecting Parties' existence and operation, the information sought in the Interrogatories or Requests for Production as to real or personal property owned by Catholic Charities, Morning Boys and Catholic Cemeteries is irrelevant, and not subject to discovery, Mr. Kerley asserts. The Three Objecting Parties believe that with the pending settlement proposed by the Diocese to the Litigants Committee, the need or expensive discovery to non-debtor defendants in the adversary proceeding is "dubious". The Catholic Charities, Morning Boys and Catholic Cemeteries ask Judge Williams to stay any further discovery of the matter to maintain the status quo until the settlement has been reviewed and either approved or rejected. Litigants Committee Responds to Discovery Objections Mr. Stang tells the Court that the 83 Parishes fail to provide any facts to substantiate their claim that the requested discovery is burdensome or irrelevant. While the Litigants Committee was willing and able to discuss a compromise with the 83 Parishes, the Parishes have failed to comply with the local rules requiring a meet and confer within five days of filing the request, and also failed to respond to two e-mails requesting a meet and confer. Now that the issue is before the Court, Mr. Stang says, the Parishes should be held accountable for their failure to produce any responses or documents to the Litigants Committee nearly two months after the amended discovery requests were served. According to Mr. Stang, Catholic Charities, Morning Boys' Ranch, and the Catholic Cemeteries of Spokane also fail to articulate any bases for a stay. Mr. Stang notes that the settlement offer provides for a stay of the litigation as to Catholic Charities, Morning Boys' Ranch, and the Catholic Cemeteries of Spokane if they contribute financially to the settlement. However, Catholic Charities, Morning Boys' Ranch, and the Catholic Cemeteries of Spokane "have not made such contributions," Mr. Stang says. Moreover, Catholic Charities, Morning Boys' Ranch, and the Catholic Cemeteries of Spokane's request fails to articulate any good cause for issuance of a protective order. Like the Parishes, Catholic Charities, Morning Boys' Ranch, and the Catholic Cemeteries of Spokane have also failed to meet and confer with the Litigants Committee as required by the Local Rules, Mr. Stang adds. For these reasons, the discovery request should not be subject to a protective order, Mr. Stang explains. Protective Order Requests is Resolved In a court-approved stipulation, the 83 Parishes and the Litigants Committee agree that the 83 Parishes will make discovery requests available, as they are ready for review. The 83 Parishes promise to make discovery responses for as many Parishes as possible. The 83 Parishes also withdraw their objection with regards the interrogatories and document requests. The request for protective order filed by Catholic Charities, Inc., Morning Boys' Ranch, Inc., and the Catholic Cemeteries of Spokane, is withdrawn. 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) CCM MERGER: Poor Performance Cues S&P to Put B+ Rating on Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on CCM Merger Inc., including the 'B+' corporate credit rating, on CreditWatch with negative implications. Detroit-based CCM Merger is the parent company of MotorCity Casino. The CreditWatch listing reflects a decline in MotorCity's operating performance in 2005 relative to Standard & Poor's previous expectations. EBITDA performance in 2005 fell short of expectations partly due to a more competitive marketing environment in the Detroit market. CCM Merger does not publicly file its financial statements. Even though revenue growth in 2006 has been positive through February, Standard & Poor's will review CCM Merger's EBITDA expectations for 2006 and in subsequent years, as well as expectations for competitive operating conditions in the Detroit gaming market, when resolving its CreditWatch listing. If the ratings review results in a downgrade, Standard & Poor's expects it would be limited to one notch. CLECO EVANGELINE: Moody's Reviewing & May Downgrade Bond Rating --------------------------------------------------------------- Moody's Investors Service placed the B1 rating of the senior secured bonds of Cleco Evangeline, LLC under review for possible upgrade. The review of Evangeline's rating was prompted by the review for upgrade of The Williams Companies, Inc., initiated April 4, 2006. The review of Williams will focus on the company's improved credit and liquidity prospects. Fundamental to the rating of Evangeline is the fact that Williams guarantees the payments of its subsidiary, Williams Power Company, Inc., under a long-term tolling agreement between WP and Evangeline that expires in 2020. This tolling agreement is the principal source of cash flow for the Evangeline project. The power project, which is located in the overbuilt southeastern U.S., has been dispatched less often than had been originally anticipated. However, the project continues to receive regular capacity payments, which represent the core component of cash flow for debt service, and are based upon the plant's average and peak availability target levels. Given the historical operating performance of the plant, Moody's anticipates that Evangeline will be able to continue to achieve required availability levels and receive associated capacity payments. Evangeline's ability to cover required debt service obligations has remained robust due to the receipt of contracted capacity payments. The rating review will focus on the outcome of the Williams ratings review, and will also assess the expected financial performance at Evangeline as it operates in a power market that Moody's believes will remain severely overbuilt over the next several years. Located in St. Landry, Evangeline Parish, Louisiana, Evangeline is a 785 MW natural gas fired generating station. Evangeline is owned 100% by Cleco Corporation, an electric utility and energy company headquartered in Pineville, Louisiana. COREL CORP: Dominant Competitor Pressure Cues Moody's B3 Ratings ---------------------------------------------------------------- Moody's Investors Service assigned first time corporate family rating of B3 to Corel Corporation and B3 ratings to Corel's proposed senior secured term loan facility and senior secured revolving credit facility. Moody's also assigned a SGL-2 liquidity rating, reflecting good liquidity. Combined proceeds of $90 million from the term loan and those of Corel's IPO, expected to take place simultaneously with the debt financing, will be used to repay Corel's existing debt. The rating outlook is stable. The ratings reflect Corel's niche nature and the presence of dominant competitors in each of Corel's key product categories; its need to make its products industry compatible and thus reliance on other similar players for technical information; the small size of total revenue and with some of its new revenue generating initiatives still in the early stage of being implemented; and limited asset protection with its balance sheet largely comprised of intangible assets. The ratings also considers the long track record of Corel's key products; Corel's strong free cash flow generation, especially compared to its amount of borrowing and cash cost base; and its modest leverage with Debt to EBITDA at less than two times. Corel's ratings could be negatively influenced to the extent that: (1) it is unable to develop versions compatible with on-going industry standards which will result in decline in product sales; (2) a significant leveraging event partly due to further acquisitions to add to Corel's product portfolio; and (3) unsuccessful acquisitions strategy which may result in loss making new products and services. These first time ratings were assigned: * Corporate family rating -- B3 * $75 million senior secured revolving credit facility due 2011 -- B3 * $90 million senior secured term loan facility due 2012 -- B3 * Speculative Grade Liquidity rating of SGL-2 The rating outlook is stable Corel Corporation is a global packaged software company. It provides products in the areas of office productivity, graphics, and digital imaging software. DANA CORP: TPC Says Forward Contract Merchants Aren't Utilities --------------------------------------------------------------- As reported in the Troubled Company Reporter on Mar. 24, 2006, the U.S. Bankruptcy Court for the Southern District of New York allowed Dana Corporation and its debtor-affiliates, on an interim basis, to pay 215 utility companies in order to continue access to their services. TPC Wants to Be Removed from List Before the Petition Date, EnergyUSA-TPC Corp. entered into various contracts with Dana Corporation for the future purchase and supply of natural gas for Dana and various of its subsidiaries, including Preferred Technical Group, Inc., Spicer Driveshaft Manufacturing, Inc., and Glacier Vandervell, Inc. The Debtors identified TPC as a "Utility Company" in the Utility Motion. Jason M. Torf, Esq., at Schiff Hardin LLP, in Chicago, Illinois, clarifies that TPC is not a "utility" within the meaning of Section 366 of the Bankruptcy Code because, among others: (1) TPC has no monopoly on the sale or distribution of natural gas to the Mitchell, Marion, Ft. Wayne and Columbia City, Indiana facilities, the Toledo, Maumee, McConnelsville, and Cadwell, Ohio facilities, or any other facilities of the Debtors. The Debtors may purchase gas from any other source who will sell it; and (2) TPC is not regulated by any utility regulatory body. It has no filed tariffs and no distribution facilities. Except for contracts voluntarily entered into with counterparties, TPC owes no obligation -- as a utility does -- to sell or deliver natural gas to any person. Mr. Torf contends that TPC is a "forward contract merchant" under Section 101(26). TPC enters into forward contracts, under Section 101(25), for the purchase and sale of natural gas to other parties. Hence, the relationship between Debtors and TPC is not governed by Section 366, but by Section 556 of the Bankruptcy Code and the terms of their Contracts. Section 556 provides that the right of forward contract merchants to liquidate forward contracts will not be stayed, avoided, or otherwise limited by operation of any provision of the Bankruptcy Code or by a Court order. Accordingly, TPC asks the Court to: (a) deny the Debtors' Utility Motion to the extent it purports to include TPC, on the grounds that TPC is not a "Utility" or "Utility Company"; and (b) vacate the Interim Utility Order with respect to TPC. KY Utilities' Objection Deadline Extended The Debtors engaged into negotiations with Kentucky Utilities Company and Louisville Gas and Electric Company. In a Court-approved stipulation, the Parties agree that: (1) the deadline for the KY Utilities to file and properly serve a Procedures Objection is extended through and including March 28, 2006. A Procedures Objection filed and served by the KY Utilities on or before March 28, 2006 will be deemed timely under the Opt-Out Procedures; (2) the Final Hearing to resolve any Procedures Objection filed by the KY Utilities will be conducted on April 19, 2006 at 10:00 a.m., Eastern Time; (3) in the event that the KY Utilities do not file a Procedures Objection or the Court denies any request of the KY Utilities to opt-out of the Adequate Assurance Procedures, the deadline for the KY Utilities to request an Adequate Assurance Deposit or make an Additional Assurance Request is extended through and including the later of: (x) April 24, 2006; or (y) three business days following the Court's denial of any request by the KY Utilities to opt out. The KY Utilities are restrained from discounting, altering or refusing service to the Debtors to the same extent restrained under the Utility Motion and Utility Order until the latest of: (a) an out-of-court resolution of any timely Procedures Objection filed by the KY Utilities; (b) a ruling by the Court on any timely Procedures Objection filed by the KY Utilities; (c) an out-of-court resolution of an Additional Assurance Request made by the KY Utilities; or (d) a Court ruling on an Adequate Assurance Request made by the KY Utilities. 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) DEEP RIVER: Plan-Solicitation Period Stretched to June 24 --------------------------------------------------------- The United States Bankruptcy Court for the District of New Jersey, extended, until June 24, 2006, the period within which Deep River Development Group, L.L.C., has the exclusive right to solicit acceptances of its plan. The Debtor said that the extension would allow them more time to solicit acceptances and resolve any plan-related objections that may be filed. Terms of the Plan As reported in the Troubled Company Reporter on Aug. 16, 2005, the Debtor delivered a Disclosure Statement explaining its Plan to the Bankruptcy Court. Under the Plan, these secured claims will be paid in full: Secured Creditor Claim Amount ---------------- ------------ Lee County Tax Assessor $23,783 G.P.G. Development, LLC $3,884,000 John and Lisa Schmidlin $683,683 Sea Jade Holding, LLC $364,208 LaRue Management, Inc. $125,894 Sycamore/Custom Living LLC $644,462 Valley Club Investment Group $462,887 Custom Living Investment Group I, LLC $167,009 Al Prince & Associates $35,952 General unsecured creditors, owed $1,039,695, are impaired. The Disclosure Statement does not discuss how the Debtor will pay unsecured claims, nor does the Debtor indicate what creditors could expect to receive if the estate were liquidated under chapter 7 of the Bankruptcy Code. The Debtor's two equity holders -- Valley Club Investment Group III, LLC (1%), and Custom Living Investment Group I, LLC (99%) -- will retain their equity interests in the Reorganized Debtor. Plan Funding The Debtor obtained a $29 million real estate construction loan commitment from Long Ridge Capital Associates LLC. The loan will refinance the development of the Debtor's property to attract a higher market value. Headquartered in Chester, New Jersey, Deep River Development Group, L.L.C., filed for chapter 11 protection on June 29, 2005 (Bankr. D.N.J. Case No. 05-31279). Morris S. Bauer, Esq., at Ravin Greenberg PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $10,630,651 in assets and $7,259,431 in debts. DELPHI CORP: Bankruptcy Court Approves UAW Attrition Program ------------------------------------------------------------ The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York approved on April 7, 2006, Delphi Corporation and its debtor-affiliates' attrition agreement with the United Auto Workers Union and its former parent, General Motors Corp. Nick Zieminski, at Reuters, reports that the bankruptcy court approval allows Delphi to provide about 13,000 UAW members with retirement incentives funded by GM. Around 5,000 Delphi workers can now also opt to return to jobs at GM. Attrition Program Delphi, GM and UAW conceived the attrition program to rapidly reduce labor cost structures at Delphi's U.S. operations. At the core of the plan are incentives to ease the transition of workers into retirement as well as programs to facilitate the repatriation of UAW-represented Delphi employees back to GM. As reported in the Troubled Company Reporter on March 23, 2006, approximately 13,000 hourly union-represented employees may be eligible to participate in the plan. Certain eligible hourly employees will be offered a lump sum payment of $35,000 to retire. Another 5,000 employees will have the opportunity to transfer to GM through the end of September 2007. GM agreed to provide substantial financial support under the program. Under the proposed plan, GM will assume the financial obligations related to the lump sum payments to be made to eligible Delphi U.S. hourly employees accepting normal or voluntary retirement incentives and certain post-retirement employee benefit obligations related to Delphi employees who flow to GM under the plan. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of ehicle 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. DRESSER INC: Wants to Delay Release of Financials Until Sept. 30 ---------------------------------------------------------------- Dresser, Inc. is seeking an extension from the lenders under its senior secured credit facility and senior unsecured term loan of its financial statement delivery requirement. The request would extend the deadline to Sept. 30, 2006, for providing audited financial statements for the fiscal year ended Dec. 31, 2005, and unaudited financial statements for the fiscal quarters ended March 31 and June 30, 2006. Except for the delivery of its financial statements and related Securities and Exchange Commission filings, the Company believes it is in compliance with all other requirements of its credit facility and loan agreements. The Company said the delay was necessary in order to address certain accounting issues, including the need for certain accounting and auditing procedures related to a foreign joint venture. The financial results of the joint venture did not become significant to the company until Dresser sold two of its business units on Nov. 30, 2005. Dresser estimates its portion of the net income from the joint venture in 2005 to be less than $3 million. In 2005, the company received approximately $1.9 million in cash dividends from the joint venture. The company noted that it does not expect any of the accounting issues to affect its cash position, but some could potentially affect the timing of recognition of certain revenues and expenses. As the company has previously noted, its backlog, bookings and cash flow remain strong. Since early December 2005, it has made approximately $276 million in voluntary prepayments on its debt, consisting of $236 million from the net cash proceeds of the divestitures and $40 million from its operating cash flow. It will make its next regularly scheduled interest payment to the holders of its 9-3/8% Senior Subordinated Notes on April 14, 2006. About Dresser, Inc. Based in Addison, Texas, Dresser, Inc. -- http://www.dresser.com/ -- is a worldwide leader in the design, manufacture and marketing of highly engineered equipment and services sold primarily to customers in the flow control, measurement systems, and compression and power systems segments of the energy industry. The Company has a comprehensive global presence, with over 8,500 employees and a sales presence in over 100 countries worldwide. Dresser, Inc.'s 9-3/8 Senior Subordinated Notes due 2011 carry Moody's Investor Service's and Standard & Poor's single-B ratings. * * * As reported in the Troubled Company Reporter on March 30, 2006, Moody's Investors Service placed these ratings for Dresser, Inc., under review for possible downgrade as a result of the company's inability to file its 2005 Annual Report on Form 10-K by the March 31, 2006 requirement: * Ba3 -- Corporate Family Rating; * Ba3 rated senior secured Tranche C term loan maturing 2009; * B1 rated senior unsecured term loan maturing 2010; and * B2 rated senior subordinated notes maturing 2011. DYNEGY HOLDINGS: Moody's Rates Proposed $600 Mil. Facility at Ba3 ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Dynegy Holdings Inc.'s proposed $600 million senior secured bank facility. The rating outlook is stable. The bank facility, which replaces DHI's current $400 million revolving credit facility, includes a $400 million three-year revolver and a $200 million six-year synthetic letter of credit facility. The facilities are secured by a first priority lien on substantially all of the company's assets, including the stock in its subsidiaries. The facility also benefits from a guarantee from parent company, Dynegy Inc., and from the majority of its subsidiaries. The revolver is available for collateral requirements and other letters of credit, capital expenditures and working capital needs. Moody's expects that DHI will be in compliance with the financial covenants package included in the agreement. The stable rating outlook reflects Moody's expectation of DHI's continued operating performance improvement as the power markets recover. DHI's ratings could improve through a combination of improving operational performance, consistent positive free cash flow, and cash flow coverage above 10%. The ratings could drop as a result of further deterioration in operating or financial performance relative to plan, a leveraging acquisition, or further reduction in liquidity. Headquartered in Houston, Texas, Dynegy Inc., is the parent of Dynegy Holdings Inc. Dynegy's primary business is power generation. EAGLEPICHER HOLDINGS: Selling Delphi Claims to Hain for 55% & 75% ----------------------------------------------------------------- EaglePicher Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Ohio to authorize the private sale of their assets, consisting of claims in the Delphi Automotive Systems, LLC, chapter 11 case, to Hain Capital Holdings, LLC. EaglePicher Automotive, Inc., EaglePicher Holdings' debtor- affiliate holds a $339,670 prepetition claim against Delphi. In addition EP Automotive has filed a reclamation demand for goods currently held by Delphi. Under the Transfer of Claims agreement with Hain, the Debtors agree to sell their Delphi unsecured claim for approximately $159,950, representing 55% of the claim amount. The Debtors will also sell its reclamation claim to Hain for 75% of its value. The U.S. Bankruptcy Court for the Southern District of New York, which has jurisdiction over Delphi's bankruptcy case, will determine the value of the reclamation claim. EaglePicher Inc., another debtor-affiliate, also proposes to sell its $48,943 unsecured claim and $7,994 reclamation claim to Hain for $26,919 and $5,995, respectively. Jeffrey A. Marks, Esq., at Squire, Sanders & Dempsey LLP, tells the Bankruptcy Court that the sale of its Delphi claims will give the Debtors access to much-needed cash. Mr. Marks adds that Hain's purchase offer is fair and reasonable considering the likely distributions to creditors expected in the Delphi bankruptcy case. About EaglePicher Headquartered in Phoenix, Arizona, EaglePicher Incorporated -- http://www.eaglepicher.com/-- is a diversified manufacturer and marketer of innovative advanced technology and industrial products for space, defense, automotive, filtration, pharmaceutical, environmental and commercial applications worldwide. The company along with its affiliates and parent company, EaglePicher Holdings, Inc., filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P, represents the Debtors in their restructuring efforts. Houlihan Lokey Howard & Zukin is the Debtors financial advisor. When the Debtors filed for protection from their creditors, they listed $535 million in consolidated assets and $730 in consolidated debts. EMJ CO: Moody's Lifts Note Rating to Ba3 from B1 Following Merger ----------------------------------------------------------------- Moody's Investors Service upgraded the rating for Earle M. Jorgensen Company's senior secured notes to Ba3 from B1 and confirmed the company's Ba3 corporate family rating. The upgrade to the senior secured notes is related to the merger of EMJ and Reliance Steel & Aluminum Co., which closed on April 3, 2006. As part of the merger agreement, EMJ's $300 million secured revolving credit facility was terminated and a new revolving credit facility was established with Reliance as the lender. The new revolver is for $80 million but availability could be limited by the amount that is permitted to be drawn under Reliance's $700 million credit facility. If requested by Reliance, the new revolver shall be secured by EMJ's assets that are not pledged to the senior secured notes, essentially domestic accounts receivable and inventory. In consideration of the small size of the revolver relative to EMJ's current and total assets, Moody's raised the rating of the notes to Ba3, which is equal to EMJ's corporate family rating. Reliance is not guaranteeing EMJ's debt nor will EMJ guarantee Reliance's debt. EMJ's rating outlook is stable. This concludes Moody's review of EMJ, which began upon the merger announcement in January 2006. EMJ's ratings reflect the relatively high and stable margins associated with its core bar and tubular products, a diverse mix of customers served by its broad North American metals distribution network, and the relative stability of the metals distribution business. EMJ's advanced information technology systems and efficient management of working capital and fixed assets enhance its customer service levels and help generate strong returns on assets. The ratings are constrained by fluctuating demand and prices for metals, the cyclicality of the end markets that consume metals, and risks related to the parent company, Reliance, including merger integration risk. EMJ's $250 million of 9.75% senior secured notes are secured by its property, plant and equipment, which had a net book value of about $130 million at Dec. 31, 2005. The notes can be put to the company upon a change of control. At the end of 2005, EMJ had borrowings of $29 million under its secured revolving credit facility, total debt of $286 million, net working capital of $271 million, and total assets of about $650 million. Reliance and EMJ merged on April 3, 2006. EMJ had net sales and EBITDA of $1.7 billion and $152 million, respectively, for the twelve months ended Dec. 31, 2005. In 2005, Reliance had net sales and EBITDA of $3.4 billion and $410 million, respectively. Reliance's debt will be $1.1 billion pro forma for the merger, or 2x pro forma EBITDA. In the next week, Moody's plans to publish a Special Comment on North American metals distributors. The report will look more closely at several distributors, including EMJ and Reliance, and examine the characteristics of the industry that influence Moody's ratings. ERA AVIATION: Court Okays Assumption of AAL Aircraft Trust Lease ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Alaska gave Era Aviation, Inc., authority assume its Aircraft Lease Agreement dated June 10, 2005, with AAL Aircraft Trust, c/o Wells Fargo Delaware Trust Company. As reported in the Troubled Company Reporter on Mar. 3, 2006, the Lease Agreement covers the lease of a DeHavilland Dash 8 - 37 passenger twin propeller aircraft with Registration Number N735AG, Serial Number 258. Under that Lease Agreement, the Debtor exercised the first of three one-year lease extensions on Sept. 27, 2005, extending the term of the aircraft lease for 12 months until Dec. 10, 2006. Pursuant to 11 U.S.C. Section 1110(a)(2), the Debtor agreed to perform all obligations required under the Aircraft Lease Agreement with AAL Aircraft. The Debtor told the Court that due to the importance of the Lease Agreement to its air transportation business, assumption of the lease is in the best interests of its estate so it can continue its core operations of providing passenger air transportation. The Debtor assured the Court that it has provided adequate assurance of future performance under Section 365(b)(1)(C) of the Bankruptcy Code because it has more than sufficient cash to satisfy all of its ongoing obligations under the lease. 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. FARMLAND IND: Court Approves $150,000 Deal with Bay State Milling ----------------------------------------------------------------- J.P. Morgan Trust Company, N.A., in its capacity as Liquidating Trustee of FI Liquidating Trust appointed in Farmland Industries, Inc., and its debtor-affiliates' chapter 11 cases, sought and obtained permission from the U.S. Bankruptcy Court for the Western District of Missouri to sell all of the Debtors' right, title and one-third interest in United Processors, LLC, to Bay State Milling Company, free and clear of liens, claims and interest. As reported in the Troubled Company Reporter on Feb. 8, 2006, Bay State offered to purchase the United Processors stake for $150,000. The Liquidating Trustee said that it previously marketed the United stake to potential buyers but no one was interested. The Liquidating Trustee believes that the purchase price for the United stake is fair and reasonable, and the proposed sale is in the best interests of the Debtors' estate, creditors and other parties in interest. The Liquidating Trustee relates that the proceeds of the sale will be distributed in accordance with the Plan. About United Processors LLC United Processors LLC evaluates, builds, and acquires businesses and operations with an emphasis in the flour milling industry. United Processor is currently owned in equal third interests by Farmland Industries, Inc., Bay State Milling Company, and Cenex Harvest States Cooperatives. United Processor's only holding is a 66.42% interest in Rocky Mountain Milling LLC, which operates a flour mill in Colorado. About Bay State Milling Company Bay State Milling Company -- http://www.baystatemilling.com/-- operates flour mills in the Bay State and other states. The company provides U.S. wholesale and retail bakers, as well as bakery and food service distributors, will a variety of flour products. It mills about 7 million pounds of flour each day and specializes in rye, durum, and whole wheat flours. Subsidiary Rocky Mountain Milling produces organic wheat flours. The company is owned by the Rothwell family and was formed by Bernard Rothwell in 1899. Bay State Milling operates facilities in the eastern, midwestern, and southwestern US. About Farmland Industries, Inc. Farmland Industries, Inc., was one of the largest agricultural cooperatives in North America with about 600,000 members. The firm operates in three principal business segments: fertilizer production; pork processing, packing and marketing; and beef processing, packing and marketing. The company, along with its affiliates, filed for chapter 11 protection (Bankr. W.D. Mo. Case No. 02-50557) on May 31, 2002 before the Honorable Jerry W. Venters. The Debtors' Counsel is Laurence M. Frazen, Esq. of Bryan Cave LLP. When the Debtors filed for chapter 11 protection, they listed total assets of $2.7 billion and total debts of $1.9 billion. Pursuant to the Second Amended Joint Plan of Reorganization filed by Farmland Industries, Inc. and its debtor- affiliates, the court declared May 1, 2004, as the Effective Date of the Plan. FDL INC: Wants to Hire Dale & Eke as Bankruptcy Counsel ------------------------------------------------------- FDL, Inc. asks the U.S. Bankruptcy Court for the Southern District of Indiana for permission to employ Dale & Eke, P.C., as its bankruptcy counsel. Dale & Eke will: a. provide the Debtor counseling and legal advice with respect to its powers and duties as a debtor in a Chapter 11 proceeding; b. prepare on behalf of the Debtor the necessary petitions, pleadings, motions, notices, orders, applications, documents, reports and other legal documents as may be required throughout these proceedings; c. prepare on behalf of the Debtor its first day motions, attending hearings thereon, and preparing related documents; and d. perform all other legal services for the Debtor. Deborah J. Caruso, Esq., a partner at Dale & Eke, tells the Court that the Firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Deborah J. Caruso, Esq. Attorney $350 Erick P. Knoblock, Esq. Attorney $275 Lana D. Harves Legal Assistant $75 Ms. Caruso assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Kokomo, Indiana, FDL, Inc. manufactures office and fast food metal furniture. The company filed for Chapter 11 protection on March 24, 2006 (Bankr. S.D. In. Case No. 06-01222). Deborah Caruso, Esq., and Erick P. Knoblock, Esq., at Dale & Eke, P.C., represent the Debtor. When the company filed for protection from its creditors, it did not state its assets but estimated debts between $10 Million and $50 Million. FISHERS OF MEN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Fishers of Men Christian Fellowship Church 8623 Hemlock Hill Drive Houston, Texas 77083 Bankruptcy Case No.: 06-31373 Type of Business: The Debtor previously filed for chapter 11 protection on Aug. 2, 2004 (Bankr. S.D. Tex. Case No. 04-41043). Chapter 11 Petition Date: April 3, 2006 Court: Southern District of Texas (Houston) Debtor's Counsel: James A. McGuire, Esq. Milledge Law Firm, P.C. 10333 Northwest Freeway, Suite 202 Houston, Texas 77092 Tel: (713) 812-1409 Fax: (713) 812-1418 Total Assets: $11,000,000 Total Debts: $299,000 The Debtor does not have unsecured creditors who are not insiders. FORD MOTOR: President and COO Jim Padilla To Retire --------------------------------------------------- Jim Padilla will retire as president and chief operating officer of Ford Motor Company (NYSE: F), effective July 1. His responsibilities will be assumed by Chairman and Chief Executive Officer Bill Ford through the chairing of a new Executive Operating Committee composed of the automaker's executive vice presidents. Mr. Padilla's retirement plans cap a distinguished 40-year career and include his decision not to stand for re-election to the company's Board of Directors at the Annual Meeting in May. The following month, Padilla celebrates his 60th birthday. "I'm grateful for the 40 years of service Jim Padilla has given to Ford Motor Company. They reflect the commitment and dedication that make Ford people so special in our industry," Bill Ford said. "The legacy of Jim's impassioned leadership will be his tireless pursuit of excellence, his inspired championing of workplace diversity and the mentoring he practiced that paved the way for so many of our senior executives leading Ford today." Ford executives who have risen through the company's leadership ranks under Padilla's tenure have included: * Mark Fields, executive vice president and president, The Americas; * Mark Schulz, executive vice president and president, International Operations; * Anne Stevens, executive vice president and chief operating officer, The Americas; and * Lewis Booth, executive vice president, Ford of Europe and Premier Automotive Group. "Bill Ford and I have worked hard to develop and assemble the best leadership for the company," Mr. Padilla said. "We have the right team for the job at hand and it is time for me to allow them to grow even further and transition into the new roles that await them. It is because of these individuals, and the people they lead, that I leave Ford with confidence in the company's future." As part of Padilla's transition to retirement, Fields and Schulz, who reported to Padilla, will begin reporting directly to Bill Ford. Mr. Ford's other direct reports remain unchanged. Additionally, Bill Ford will chair a new Executive Operating Committee that will be composed of the company's executive vice presidents, including Fields, Schulz, Stevens, Booth and Chief Financial Officer Don Leclair. Mr. Padilla joined Ford in 1966 as a quality control engineer. In 1976, he accepted the first of a series of management positions in product engineering and manufacturing. From 1992 to 1996, Padilla served in senior manufacturing, engineering and general management roles at Jaguar during its critical turnaround period. From 1996 through 1998, he was president of Ford South America Operations, where he was responsible for restructuring the company's operations after the breakup of Autolatina, a joint venture with Volkswagen. He was named group vice president, Global Manufacturing in 1999 and added the Quality organization in 2001. From 2001 to 2002, he was group vice president, North America, and was then elevated to executive vice president of the company, president of The Americas. In that role, he was responsible for all operations in the development, manufacturing, marketing and sales of Ford, Mercury and Lincoln vehicles in the United States, Canada, Mexico and South America. The Board of Directors appointed Mr. Padilla chief operating officer and chairman of Automotive Operations in April 2004. He joined the Board of Directors and became the company's president and chief operating officer in February 2005. Mr. Padilla holds bachelor's and master's degrees in chemical engineering and a master's degree in economics from the University of Detroit-Mercy. He was a White House Fellow and served as special assistant to the U.S. Secretary of Commerce in 1978 and 1979. In 2001, he was named a Fellow by the National Academy of Engineering. Mr. Padilla is a member of the U.S. Department of Commerce's Manufacturing Council. He also is the chair of the Corporate Board of Advisors of the National Council of La Raza. About Ford Motor Company Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- is the world's third largest automobile manufacturer. The Company manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported on March 15, 2006, Fitch Ratings downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'BB' from 'BB+'. The downgrade was based on increasing concerns over the deep stresses affecting the Company's supplier base, which could restrict Ford's ability to reduce costs. As reported in the Troubled Company Reporter on Jan. 13, 2006, Moody's Investors Service lowered its ratings on Ford Motor Company (Corporate Family and long-term to Ba3 from Ba1). The rating outlook for Ford Motor is negative. As reported in the Troubled Company Reporter on Jan. 9, 2006, Standard & Poor's Ratings Services lowered its corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. (Ford Credit), and all related entities to 'BB-/B-2' from 'BB+/B-1' and removed them from CreditWatch, where they were placed on Oct. 3, 2005, with negative implications. The outlook is negative. FORD MOTOR: Files Proxy Statement Outlining Executive Compensation ------------------------------------------------------------------ Ford Motor Company (NYSE: F) filed its 2006 proxy statement with the Securities and Exchange Commission on April 7, 2006. The statement outlines compensation for select executives, including William Clay Ford, Jr., chairman and chief executive officer. This year, the Compensation Committee of the Board of Directors decided to provide additional information regarding executive compensation in the spirit of proposed SEC rule changes. The proxy now includes a table summary of the dollar values of the total annual compensation provided, granted to, or received by each of the named executives during 2005, 2004 and 2003. It is important to note that the amounts shown associated with stock awards reflect the fair market value of the common stock on the date of the grant, and amounts shown associated with option awards reflect the Black-Scholes value of the option grants on the date of the grant. Whether exercising stock options is profitable depends on the relationship between the company's common stock's market price and the option's exercise price, as well as on the grantee's investment decisions. Therefore, placing a current value on outstanding options is highly speculative and may not represent the true benefit, if any, that may be realized by the grantee. 2005 Executive Compensation Compensation of Ford executives for 2005 generally consisted of salary and stock-based awards. No bonuses were paid for 2005 under the Annual Incentive Compensation Plan. Compensation details found in the 2006 proxy statement include: * William Clay Ford, Jr., chairman and chief executive officer, received no cash salary or bonus for 2005. The value of his 2005 compensation totaled $13,298,279. In lieu of a cash salary for the first quarter of 2005, he received a restricted common stock grant of 32,837 shares with a one year restriction period valued at $372,043, continuing his practice of tying his compensation to the long-term performance of the company. In addition, Mr. Ford was granted 1,685,393 stock options under the 1998 Long-Term Incentive Plan with a Black-Scholes value on the date of grant of $7,499,999. On May 11, 2005, Mr. Ford committed to forego any new compensation, including salary, bonus or other awards, until the company's Automotive Sector achieves sustainable profitability. As a result, he did not receive any form of salary for his services as CEO for the second, third or fourth quarter of 2005. Mr. Ford received a performance-based incentive program award of 632,587 Restricted Stock Equivalents with a value of $4,959,482 on the date of grant, for 2005 performance under the 1998 Long-Term Incentive Plan, as his eligibility for the award was established prior to the May 2005 commitment to forgo new compensation. For the third year, Mr. Ford has committed to donate shares representing his performance award to charities of his choice on the date the restrictions lapse in 2007. Mr. Ford also received other compensation totaling $466,755, which included $297,201 in value for required use of the corporate aircraft. * Jim Padilla, president and chief operating officer, earned $1,458,333 in salary. The value of his 2005 compensation totaled $6,752,248. Mr. Padilla received stock and stock equivalent awards totaling $1,986,781, which included: (a) a performance-based incentive program award of 236,166 Restricted Stock Equivalents with a value of $1,851,541 for 2005 performance and (b) a long-term incentive payout of common stock with a value of $135,240 for the 2003-2005 performance period. In addition, Mr. Padilla received 629,213 stock options under the 1998 Long-Term Incentive Plan with a Black-Scholes value on the date of grant of $2,799,998. Other compensation totaled $507,136, which included $204,672 in value for required use of the corporate aircraft and $21,250 in SSIP matching contributions and related credits. * Mark Fields, executive vice president and president, The Americas, earned $972,500 in salary. The value of his 2005 compensation totaled $3,209,832. Mr. Fields received stock and stock equivalent awards totaling $215,470, which included: (a) a performance-based incentive program award of 20,583 Restricted Stock Equivalents with a value of $161,374 for 2005 performance and (b) a long-term incentive payout of common stock valued at $54,096 for the 2003-2005 performance period. In addition, Mr. Fields received 87,500 stock options under the 1998 Long Term Incentive Plan with a Black-Scholes value on the date of grant of $389,375. Other compensation totaled $1,632,487, which included a $1 million cash retention payment, $214,479 in value for personal use of the company aircraft, and $13,200 in SSIP matching contributions and related credits. * Don Leclair, executive vice president and chief financial officer, earned $916,667 in salary. The value of his 2005 compensation totaled $1,580,122. Mr. Leclair received stock and stock equivalent awards totaling $186,619, which included: (a) a performance-based incentive program award of 20,583 Restricted Stock Equivalents with a value of $161,374 for 2005 performance and (b) a long-term incentive payout of common stock with a value of $25,245 for the 2003-2005 performance period. In addition, Mr. Leclair received 87,500 stock options under the 1998 Long-Term Incentive Plan with a Black-Scholes value on the date of grant of $389,375. Other compensation totaled $87,461, which included $13,500 in SSIP matching contributions and related credits. * Greg Smith, former vice chairman, earned $880,000 in salary. The value of his 2005 compensation totaled $1,596,949. Mr. Smith received stock and stock equivalent awards totaling $215,470, which included: (a) a performance-based incentive program award of 20,583 Restricted Stock Equivalents with a value of $161,374 for 2005 performance and (b) a long-term incentive payout of common stock with a value of $54,096 for the 2003-2005 performance period. In addition, Mr. Smith received 87,500 stock options under the 1998 Long Term Incentive Plan with a Black-Scholes value on the date of grant of $389,375. Other compensation totaled $112,104, which included $13,200 in SSIP matching contributions and related credits. Executives Not Standing for Board Re-election * Carl E. Reichardt, 74, a board member since 1986, and Marie- Josee Kravis, 56, a board member since 1995, have decided to not stand for re-election at the company's Annual Meeting on May 11. * James J. Padilla, 59, intends to retire from the company effective July 1, 2006, and also will not stand for Board re- election at the company's Annual Meeting on May 11. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?7ae About Ford Motor Company Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- is the world's third largest automobile manufacturer. The Company manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported on March 15, 2006, Fitch Ratings downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'BB' from 'BB+'. The downgrade was based on increasing concerns over the deep stresses affecting the Company's supplier base, which could restrict Ford's ability to reduce costs. As reported in the Troubled Company Reporter on Jan. 13, 2006, Moody's Investors Service lowered its ratings on Ford Motor Company (Corporate Family and long-term to Ba3 from Ba1). The rating outlook for Ford Motor is negative. As reported in the Troubled Company Reporter on Jan. 9, 2006, Standard & Poor's Ratings Services lowered its corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. (Ford Credit), and all related entities to 'BB-/B-2' from 'BB+/B-1' and removed them from CreditWatch, where they were placed on Oct. 3, 2005, with negative implications. The outlook is negative. FOSS MANUFACTURING: Court Voids Jenifer Smyth's Contract -------------------------------------------------------- The Hon. J. Michael Deasy of the U.S. Bankruptcy Court for the District of New Hampshire gave Patrick J. O'Malley, the chapter 11 Trustee for Foss Manufacturing Company, Inc., authority to release the Debtor from its five-year contract with Jenifer Smyth, daughter of the company's former CEO Stephen Foss As reported in the Troubled Company Reporter on Feb. 6, 2006, Ms. Smyth signed on as the company's director of marketing in August 2005, receiving: (a) an annual salary of $104,000 plus a guaranteed 3% increase per year; (b) participation in an incentive plan where she could earn up to 30% of her salary; and (c) 60% reimbursement of her health club membership dues. Mr. O'Malley contended that the estate no longer required her services and rejection of her employment was appropriate. Headquartered in Hampton, New Hampshire, Foss Manufacturing Company, Inc. -- http://www.fossmfg.com/-- is a producer of engineered, non-woven fabrics and specialty synthetic fibers, for a variety of applications and markets. The Company filed for chapter 11 protection on Sept. 16, 2005 (Bankr. D.N.H. Case No. 05-13724). Andrew Z. Schwartz, Esq., at Foley Hoag LLP represents the Debtor in its restructuring efforts. Beth E. Levine, Esq., at Pachlski, Stang, Ziehl et al, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $49,846,456 in assets and $53,419,673 in debts. FRONTIER LEASING: Moody's Places $7MM Class B Cert. Rating at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned ratings on two classes of certificates issued in Frontier Leasing Corporation's fifth equipment lease securitization. The complete rating actions are: Issuer: Frontier Funding Company V, LLC * $51,599,725 Class A Receivables-Backed Certificates, rated Aaa * $7,188,816 Class B Receivables-Backed Certificates, rated Ba2 The ratings of the Class A notes are based on a financial guaranty policy issued by CIFG Assurance North American whose insurance financial strength rating is Aaa. Support to CIFG consists of approximately 19.25% subordination and a reserve account with a target of 1% of the original pool balance plus 1% of the current pool balance. Credit support protecting the Class B notes includes 8% subordination and the reserve account. A major risk factor in the transaction is performance volatility resulting from Frontier's limited capital position. To mitigate this risk, PFSC and Wells Fargo provide servicing oversight; PFSC will take over the day-to-day servicing responsibilities if Frontier is unable to service the portfolio. Wells Fargo is the backup servicer. Furthermore, principals at Frontier are experienced in the leasing industry and performance of Frontier's prior four securitizations serve as a proxy for Frontier performance. Moody's believes that based on the transaction's structure, the servicing provided by Frontier with servicing oversight by Portfolio Financial Servicing Company and Wells Fargo, and the amount of credit enhancement, CIFG's risk in insuring the notes is investment-grade at closing. As of the closing date, the securitized portfolio consists of approximately 1,932 small ticket equipment leases. Equipment concentrations include laundry, car wash and restaurant equipment. The pool is fairly diversified with limited lessee concentrations or state concentrations. A portion of proceeds from the sale of the notes will be used to prefund the purchase of up to approximately $8 million of additional equipment leases that will be originated by Frontier during the three months subsequent to the closing date. To the extent that Frontier's lease origination volume is insufficient to use this amount of prefunding, a prepayment of the notes will occur. Frontier was founded in April of 1999 to originate and service equipment leases to a broad range of small-and medium sized businesses on a national level. The firm focuses primarily on the small-ticket sector of the equipment leasing market. Most leases range from $5,000 to $250,000, with an average transaction size of $40,000. The notes were sold in a privately negotiated transaction without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. RiviereJenison Securities Ltd., acted as Initial Purchaser. Quadrant Financial Group, LLC was financial advisor to Frontier. G+G RETAIL: Panel Hires Jaspan Schlesinger as Conflicts Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of G+G Retail, Inc.'s chapter 11 cases, sought and obtained authority from the United States Bankruptcy Court for the Southern District of New York, to retain Jaspan Schlesinger Hoffman LLP as conflicts counsel. The Committee selected Jaspan Schlesinger because of the firm's extensive experience, expertise and knowledge in the field of litigation in and outside of bankruptcy and in the fields of debtors' and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. As conflicts counsel, Jaspan Schlesinger will: a) assist and advise the Committee in the investigation of the security interests, liens and claims of The CIT Group; b) commence, if necessary, and prosecute adversary proceedings against CIT; c) attend meetings and negotiate with the representatives of the Debtor or any party which is the subject of investigation by the Committee or against which the Committee may commence an adversary proceeding; d) take all necessary action to protect and preserve the interests of the Committee and unsecured creditors, including: * the prosecution of actions on their behalf; and * negotiations concerning litigation in which the Debtor is involved; and e) prepare on behalf of the Committee all necessary adversary complaints and related motions, applications, answers, orders, reports and other papers in support of positions taken by the Committee. The CIT Group is a duly appointed co-chairperson to the Committee and is represented by Patrick Rohan. To the best of the Committee's knowledge, Jaspan Schlesinger does not hold or represent any interest adverse to the Debtor and is "disinterested" pursuant to Sec. 101(14) of the Bankruptcy Code. Jaspan Schlesinger's professionals bill: Professional Hourly Rate ------------ ----------- Partners/Counsel $415 - $525 Associates $250 - $390 Legal Assistants $185 Founded in 1946, Jaspan Schlesinger Hoffman LLP -- http://www.jshllp.com/-- is a general practice law firm, with a substantial bankruptcy law practice. The firm is also active in estate and tax planning, probate, education and municipal matters, tax certiorari and condemnation matters, commercial and corporate matters, litigation, real estate, zoning, environmental, international transactions, securities, lending, intellectual property, and matrimonial and family matters. The firm maintains offices in Garden City, New York and Wilmington, Delaware. Headquartered in New York, New York, G+G Retail Inc. retails ladies wear and operates 566 stores in the United States and Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A. Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C. represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of more than $100 million and debts between $10 million to $50 million. GATEWAY INTERNATIONAL: Reports $268,712 of Profits in Fiscal 2005 ----------------------------------------------------------------- Gateway International Holdings, Inc., reported a $268,712 net loss on $18,902,590 of net sales for the year ended Sept. 30, 2005. At Sept. 30, 2005, the company's balance sheet showed $21,783,848 in total assets, $7,735,031 in total liabilities, and $14,048,817 in positive stockholders' equity. Full-text copies of Gateway International Holdings, Inc.'s financial statements for the year ended Sept. 30, 2005, are available for free at http://ResearchArchives.com/t/s?7b5 SEC Action The U.S. Securities and Exchange Commission instituted proceedings under Section 12(j) of the Securities Exchange Act of 1934 against Gateway International Holdings, Inc. The SEC also instituted cease and desist proceedings against Lawrence A. Consalvi, the President, Chief Executive Officer and Director of the company, under Section 21(c) of the Securities Exchange Act of 1934. This Administrative Proceeding, File No. 3-11894, arose from the company's failure to comply with reporting obligations while securities were registered with the SEC. Mr. Consalvi, during his tenure as President, caused the company to violate these reporting requirements. On Aug. 18, 2005, the Administrative Law Judge issued an Initial Decision and ordered the revocation of each class of the company's securities. The ALJ further ordered that Mr. Consalvi, cease and desist from committing any violation or future violations of Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13. On September 7, 2005, Gateway filed a petition with the Commission for a review of the Initial Decision, and on September 12, 2005, the Commission granted the petition for review pursuant to Rule 411 of the Commission's Rules of Practice. The Company awaits the final decision of the Commission. About Gateway International Holdings Inc. Gateway International Holdings Inc. (Pink Sheets: GWYI) -- http://www.gwyi.com/-- is a diversified holding company that operates through its wholly owned subsidiaries principally in the aerospace and defense markets. It currently has 8 subsidiaries in operation including: * Eran Engineering, Inc.; * Elite Machine Tool Company, Inc.; * All American CNC Sales, Inc.; * A-Line Capital Corporation; * Accurate Technology; * ESK, Inc., * Spacecraft Machines, Inc.; and * Nu-Tech Industrial Sales, Inc. The Company and its subsidiaries are engaged in acquiring, refurbishing and selling pre-owned and new Computer Numerically Controlled machine tools, and manufacturing of precision component parts in the fields of defense, aerospace, automotive and medical tools. GENERAL MOTORS: CEO Does Not Foresee Long Strike at Delphi ---------------------------------------------------------- Rick Wagoner, General Motors Corp.'s Chairman and Chief Executive Officer, admitted that a long-term strike at auto parts-supplier Delphi Corp. would have a huge impact on GM's own operations, The Wall Street Journal reports. According to Mr. Wagoner, GM is currently stockpiling parts as a safeguard against a Delphi strike, although he sees the possibility of a long-term strike as unlikely. Delphi's plan to return to profitability includes the rejection of its labor agreements with the United Autoworkers Union pursuant to Sections 1113 and 1114 of the Bankruptcy Code. Among other modifications, Delphi is proposing to cut the wages of its salaried workforce to $16.50 per hour beginning Sept. 3, 2007. The employees would receive a $50,000 "wage buydown" payment. The UAW has vowed to stage a long-term strike if the Bankruptcy Court allows Delphi to reject its existing labor contracts. According to the union, Delphi is using the bankruptcy process to circumvent the collective bargaining process and slash jobs and wages and drastically reduce health care, retirement and other hard-won benefits. The Bankruptcy Court provided a five-week period between the filing of the Sections 1113 and 1114 motions in April 2 and the Court hearing to allow Delphi and UAW to resolve their dispute. About General Motors General Motors Corp. -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world's leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on April 3, 2006, Moody's Investors Service lowered the ratings of General Motors Corporation: Corporate Family Rating and senior unsecured to B3 from B2 and Speculative Grade Liquidity Rating to SGL-3 from SGL-2. The outlook is negative. GMAC and ResCap are unaffected. The GM rating actions came in response to the company's disclosure that restatements of its 2002, 2003 and 2004 financial statements could result in the acceleration of as much as $3 billion in various lease obligations and in the company potentially not being be able to borrow under its $5.6 billion unused revolving credit facility. As reported in the Troubled Company Reporter on April 6, 2006, Standard & Poor's Ratings Services held all of its ratings on General Motors Corp., including its 'B' long-term and 'B-3' short- term corporate credit ratings, on CreditWatch with negative implications after the Company announced that it entered into an agreement to sell a 51% ownership stake in General Motors Acceptance Corp. to a consortium headed by Cerberus Capital Management L.P. As reported in the Troubled Company Reporter on April 6, 2006, Fitch Ratings retained General Motors Corp. Issuer Default Rating of 'B', Rating Watch Negative, following the Company's announcement of the sale of its controlling interest in GMAC. GENEVA STEEL: Chap. 11 Trustee Files Plan & Disclosure Statement ---------------------------------------------------------------- James T. Markus, the Trustee appointed in the Chapter 11 cases of Geneva Steel LLC and its debtor-affiliates, presented to the U.S. Bankruptcy Court for the District of Utah a disclosure statement explaining its Joint Chapter 11 Plan of Liquidation. Estimated Claim Recoveries A) Geneva Estates The Trustee tells the Court that the $132,000,000 Secured Lenders Claims filed against the Geneva Estates has been fully satisfied, with the exception of a hold back of $1,000,000 to cover previously paid fees and expense of the Lenders. The unpaid sum of $2,287,692 payable to Fried and Company, the Trustee notes, constitutes an additional amount to be paid to satisfy the Secured Lenders' Claims. To date, Geneva holds a remaining $51 million with which to satisfy claims against the Geneva Estate, and estimates $29,021,600 of potential recovery available for Allowed General Unsecured Creditors Claims. B) Geneva Holdings As of Feb. 28, 2006, Geneva Holdings had cash of $39,238 and no other assets. Liquidated claims filed against Geneva Holdings total approximately $2,470,000. The Trustee believes that at least $2,1460,000 of the filed claims will be disallowed, as the amount consists of two duplicate claims by Travelers Insurance and the State of Utah Department of Natural Resources Division of Oil, Gas and Mining based on a reclamation contract dated May 20, 1998. Obligations under that contract, according to the Trustee, have already been satisfied. Two of the remaining claims are by the Internal Revenue Services for $17,000 and $16,500. If the IRS claims are allowed as priority tax claims, the Trustee says, distribution to other unsecured creditors of the Holdings estate would be de minimus. Holdings' schedules list an unliquidated possible pension obligation claim by the PBGC with a scheduled amount of $10,300,000. The PBGC has filed unliquidated claims against Holdings and the Trustee believes that the Pension Benefit Guaranty Corporation will ultimately file a liquidated claim in the approximate amount of $21,000,000, as a joint and several claim against all of the Debtors, including Holdings. If allowed, PBGC's claim will constitute approximately 98.5% of the claims against Holdings, and creditors with unsecured claims against Holdings would receive, at most a distribution of approximately 1.5%, the Trustee relates. C) Iron Ore Mines Iron Ore Mines had cash of $6,779,993 and no other assets as of Feb. 28, 2006. Eleven proofs of claim were filed against Iron Ore Mines, with only one claim being liquidated, in the amount of $280. The remainder of the claims are contingent unliquidated indemnity claims by former officers and directors and unliquidated claims filed by the PBGC. The schedules for Iron Ore Mines list only two claims. One is a contingent unliquidated "possible pension obligation" claim by the PBGC with a scheduled claim amount of $10,300,000. The other is a contingent, unliquidated claim by the Utah Division of Oil, Gas and Mining. The Trustee estimates that the PBGC and the other unsecured creditor will receive a distribution of approximately 31% on their claims. D) Williams Farm Ten proofs of claim were filed against Williams Farm, with only one claim being liquidated, in the amount of $280. The other claims were unliquidated claims filed by the PBGC and former officers, directors or employees of Williams Farm. The schedules for Williams Farm list only two claims. One is an unliquidated "possible pension obligation" claim by the PBGC with a scheduled amount of $10,300,000. The other is a contingent, disputed unliquidated claim by Atlas Sales, Inc., with no scheduled amount for the claim. As of Feb. 28, 2006, Williams Farm had cash of $5,695 and no other assets. Distribution to unsecured creditors, including the PBGC, would be approximately 1/30 of 1% of their claims. If the Williams Farm Property or its value is recovered by the Trustee, distribution to unsecured creditors would be the percentage obtained by dividing the value of the recovered property by the amount of the allowed claims. Treatment of Claims Under the Plan, holders of these claims are entitled to full recovery: 1) Administrative Expense Claims; 2) Priority Tax Claims; 3) Class 1 Priority Non-Tax Claims; and 4) Class 2 Secured Claims. General Unsecured Claims and the PBGC Claims will receive pro rata share of all cash available for distribution between 25% to 45%. Each holder of an Allowed Unsecured Convenience Claim will receive cash from the applicable liquidating trust in an amount equal to 35% of the allowed claim, not exceeding $1,750. Holders of Late, Penalty, Subordinated and Interest Claims will receive nothing under the Plan. A full-text copy of Geneva's Plan and Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060410045647 Headquartered in Provo, Utah, Geneva Steel LLC owns and operates an integrated steel mill. The Company filed for chapter 11 protection on January 25, 2002 (Bankr. Utah Case No. 02-21455). Andrew A. Kress, Esq., Keith R. Murphy, Esq., and Stephen E. Garcia, Esq., at Kaye Scholer LLP, represent the Debtor in its chapter 11 proceeding. James T. Markus was appointed as the chapter 11 Trustee for the Debtor's estate on June 22, 2005. John F. Young, Esq., at Block Markus & Williams, LLC represents the chapter 11 Trustee. Dianna M. Gibson, Esq., and J. Thomas Beckett, Esq., at Parsons Behle & Latimer, represent the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it listed $262 million in total assets and $192 million in total debts. GENTEK INC: Gets $27.9M from Sale of CableTech Unit & Real Estate ----------------------------------------------------------------- GenTek Inc. (NASDAQ: GETI) completed the sale of its CableTech cable and wire manufacturing business in Stouffville, Canada to Southwire Canada Company for $24.1 million. The Company also obtained $3.8 million on March 17, 2006, from the sale of 45 acres of unimproved real estate that was not included in the Southwire transaction. GenTek is retaining $19.4 million of accounts receivable, which, net of certain retained obligations, is expected to generate additional cash of $6.0 million to $8.0 million. The CableTech business had adjusted EBITDA of $4.7 million in 2005. All proceeds from these sales, less associated transaction costs, will be utilized to pay down the Company's long term debt obligations. As previously disclosed, in the fourth quarter of 2005 a pretax charge of $6.8 million was recorded for the impairment of the Canadian cable and wire manufacturing business, and the Company expects to record an additional charge of $2.0 million to $3.0 million in the first quarter of 2006 related to this transaction. GenTek Inc. -- http://www.gentek-global.com/-- provides specialty inorganic chemical products and services for treating water and wastewater, petroleum refining, and the manufacture of personal- care products, valve-train systems and components for automotive engines and wire harnesses for large home appliance and automotive suppliers. GenTek operates over 60 manufacturing facilities and technical centers and has approximately 6,900 employees. * * * As reported in the Troubled Company Reporter on Feb. 24, 2005, Moody's Investors Service placed these new ratings on GenTek Inc.: * B2 for the $60 million senior secured revolving credit facility, due 2010, * B2 for the $235 million senior secured term loan B, due 2011, * Caa1 for the $135 million second-lien term loan, due 2012, * B2 senior implied rating, and * Caa2 issuer rating. and said the rating outlook is stable. GGNSC HOLDINGS: S&P Assigns B- Rating to $100 Million Term Loan --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to GGNSC Holdings LLC. The rating outlook is stable. In addition, Standard & Poor's assigned its bank loan and recovery ratings to GGNSC's: * $400 million first-lien bank facilities; and * $100 million second-lien bank facility. The first-lien facilities, which consists of: * a $50 million revolving credit; and * a $350 million term loan, are rated 'B+' (one notch higher than the 'B' corporate credit rating on GGNSC) with a recovery rating of '1', indicating a high expectation for full recovery of principal in the event of a payment default. The $100 million second-lien term loan is rated 'B-' (one notch below the corporate credit rating) with a recovery rating of '3', indicating the expectation for meaningful (50%-80%) recovery of principal in the event of a payment default. The company will use the proceeds from the term loans as part of a larger deal, which includes a $1.4 billion commercial mortgage- backed securities transaction, to finance the acquisition of Beverly Enterprises Inc. by Pearl Senior Care Inc., an affiliate of Fillmore Capital Partners LLC. Pro forma debt outstanding for GGNSC will be about $450 million. Fort Smith, Arkansas-based GGNSC Holdings LLC is a newly formed parent company for the operating divisions that previously comprised most of the operations of Beverly Enterprises. Under a new organization structure, the real estate for 262 nursing homes and 17 assisted living facilities were acquired by an entity called Geary Property Holdings LLC and is, therefore, separated from the operations. The operations for each of the facilities under GGNSC are organized as individual limited liability corporations. Geary is controlled by Beverly Enterprises Inc. GGNSC pays rent to Geary for the use of the facilities through a master lease agreement. "The speculative-grade ratings on nursing home and assisted-living facility operator GGNSC reflect the chronic risks the company faces as a sizable participant in an industry that is subject to payment cuts (most recently on Jan. 1, 2006)," said Standard & Poor's credit analyst David Peknay. "This risk is somewhat mitigated by GGNSC's geographical dispersion, with locations in 22 states, and by a presence in related businesses that now comprise about 20% of total revenues." An earlier concern regarding substantial insurance exposure has been eased because of the new corporate structure by which each of GGSNC's 262 nursing homes are organized into individual limited liability corporations. The tail insurance exposure accumulated prior to the completion of Fillmore's acquisition of Beverly and implementation of the new corporate structure on March 14, 2006, is carried by Beverly Enterprises, not GGNSC. GLOBAL HOME: Case Summary & 40 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Global Home Products LLC 550 Polaris Parkway, Suite 500 Westerville, OH 43082 Tel: (614) 823-3950 Bankruptcy Case No.: 06-10340 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- GHP Holding Company LLC 06-10341 GHP Operating Company LLC 06-10343 Anchor Hocking Acquisition, Inc. 06-10346 AH Acquisition Puerto Rico, Inc. 06-10349 Anchor Hocking, Inc. 06-10350 Anchor Hocking Consumer Glass Corp. 06-10353 Anchor Hocking CG Operating Company LLC 06-10354 Anchor Hocking Operating Company LLC 06-10355 Burnes Acquisition, Inc. 06-10356 Intercraft Company 06-10357 Burnes Puerto Rico, Inc. 06-10359 Picture, LLC 06-10360 Burnes Operating Company LLC 06-10362 Mirro Acquisition Inc. 06-10363 Mirro Operating Company LLC 06-10364 Mirro Puerto Rico, Inc. 06-10365 Type of Business: The Debtor is an international dealer of houseware and home products. It is a leading manufacturer of high quality glass products for consumers and the food services industry, and one of the largest designers and marketers of photo frames, photo albums and related home decor products. See http://www.anchorhocking.com/and http://www.burnesgroup.com/ Chapter 11 Petition Date: April 10, 2006 Court: District of Delaware (Delaware) Judge: Kevin Gross Debtors' Counsel: Bruce Grohsgal, Esq. James E. O'Neill, Esq. Laura Davis Jones, Esq. Sandra G.M. Selzer, Esq. Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP 919 North Market Street, 16th Floor Wilmington, Delaware 19801 Tel: (302) 778-6403 Fax: (302) 652-4400 Estimated Assets: $50 Million to $100 Million Estimated Debts: More than $100 Million Debtors' 40 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Zhejian Taizhou Aishida Trade $4,563,554 Electrical Equipment No. 01 Baizhang Road Economic Development Zone Wengling, Zhejaing, China Zhejiang Supor Cookware Trade $4,265,089 Co. Ltd. BCA FA Ach/Zhejiang Supor Cookware Zhejaing, China Amerada Hess Corporation Trade $3,706,265 P.O. Box 905243 Charlotte, NC 28290-5243 Lewisburg Container Trade $1,972,578 Company, Inc. P.O. Box 873525 Kansas City, MO 64187-3525 Imasa LC Trade $1,961,349 Industria Mexicana Del Aluminio 70 Northeast Loop 410 Suite 525 San Antonio, TX 78216 Morrison Express Corp. Trade $1,237,622 114 Southfield Parkway Suite 170 Forest Park, GA 30297 Packaging Credit Co. Trade $1,094,561 36596 Treasury Center Chicago, IL 60694-6500 Chu Kwun Kee Metal Mfy. Ltd. Trade $999,077 6/F CKK Industrial Building 1 On Lok Mun Street Fanling NT, Hong Kong Perot Systems Corp. Trade $997,786 13880 Dulles Corner Lane Herndon, VA 20171-4600 Novelis Do Brasil Ltda. Trade $807,818 Itaubrsp F/C Alcan Aluminio Do Bras Av. Das Nacoes Unidas 12551 15 Andar Sao Paulo, SP 04578-000 Color Box, Inc. Trade $789,854 P.O. Box 751876 Charlotte, NC 28275-1876 Timberline Packaging, Inc. Trade $685,839 400 Technology Drive Coal Center, PA 15423 International Paper Trade $600,220 1689 Solutions Center Chicago, IL 60677-1006 Hellmann Worldwide-Atlanta Trade $552,320 2250 Spiegel Drive, Suite #9 Groveport, OH 43125 FMC Wyoming Corp. Trade $549,425 P.O. Box 75103 Charlotte, NC 28275 Asia Trading Co. Trade $509,668 Unit 401, Tower II South Seas Centre 75 Mody Road Kowloon, Hong Kong Xiamen Jun-Yi Metal Co. Ltd. Trade $489,723 Building No. 1 Jiwei Industrial Workshop Xianhou Village, Heshan Town Xiamen, Fujian, 361009 China Sairwind Co. Ltd. Trade $432,456 Liao-Zai Yuan-Zhou Bo-Luo Hui-Zhou Jame Most Enterprise Trade $399,551 Company Ltd. Sound Trade Ltd. No. 1-2 Lane 56 Chung Cheng Road Hsin Chuang Taipei, Dongguang Power King Enterprise Ltd. Trade $358,100 BB&T Factors Corporation P.O. Box 890011 Charlotte, NC 28289-0011 Shenang Xingguang Trade $356,363 Tempered Glass XG Operation Intl. Ltd. 24A, Block C, ChangLe Building Baihua 4th Road, FuTian District ShenZen, China Guangdong 518028 She Shine Enterprise Co. Ltd. Trade $354,474 No. 42-9, Pei Tao Li Tan Shui Chen Taipei, Hsien Niagara Plastics LLC Trade $322,947 P.O. Box 1362 Buffalo, NY 14240 Champion Graphics Corp. Trade $257,385 3901 Virginia Avenue Cincinnati, OH 45227 Carolina Component Trade $241,201 Inteplast Group Ltd. Trade $232,615 Akzo Nobel Non-Stick Coatings Trade $228,756 Superior Laminating LLC Trade $225,588 New Leaf (HK) Ltd. Trade $221,801 Inter-Rep Associates, Inc. Trade $218,464 Imusa Trade $205,798 Columbus Paper Box Trade $199,007 Sherwin Williams, S.A. de C.V. Trade $198,908 Durobor S.A. Trade $198,821 U.S. Silica Company Trade $195,588 Transamerica International Ltd. Trade $195,527 Unisource Worldwide, Inc. Trade $192,211 Grimm Industries Trade $189,588 Cam Pazarlama A.S. Trade $185,031 Filtrona Extrusion Inc. Trade $183,807 Columbia GRAHAM PACKAGING: S&P Puts B Rating on Planned $150 Million Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' bank loan rating to Graham Packaging Co.'s proposed incremental $150 million first-lien term loan B due 2011, based on preliminary terms and conditions. At the same time, Standard & Poor's affirmed its ratings, including its 'B' corporate credit rating, on the plastic packaging producer. The outlook remains positive. Proceeds from the term loan B, which is being added through an amendment to Graham's existing credit facilities, will be used to partially repay outstanding amounts under the second-lien term loan C and revolving credit facility. Graham's total debt was $2.6 billion at Dec. 31, 2005. "The ratings on Graham Packaging Holdings Co. and its 100%-owned operating subsidiary, Graham Packaging Co., reflect its satisfactory business profile as a leading producer of value-added plastic containers and its highly leveraged financial profile," said Standard & Poor's credit analyst Liley Mehta. The business risk assessment incorporates the company's: * leading shares in niche markets, * strong customer relationships, * low-cost position, and * technical capabilities, which are offset by: * participation in highly fragmented, and * competitive markets, and customer concentration. Graham is a leading manufacturer of customized, blow-molded plastic containers for: * noncarbonated beverages and foods, * household cleaning products, * personal care products, and * automotive lubricants with sales of $2.5 billion. Following the acquisition of Owens-Illinois Inc.'s plastic container business (for about $1.2 billion in October 2004), the combined operations benefit from: * leadership positions in numerous niche markets; * complementary technologies; and * an expanded customer base. Graham's product innovation and design capabilities have positioned it as a leader in high-growth, value-added, "hot-fill" polyethylene terephthalate (PET) containers for noncarbonated, nonrefrigerated beverages (juices, isotonics, and teas) and food items, a product offering that has been taking market share from glass and metal products. HANOVER COMPRESSOR: Posts $38 Mil. Net Loss in Year Ended Dec. 31 ----------------------------------------------------------------- Hanover Compressor Company (NYSE:HC) reported financial results for the quarter and year ended Dec. 31, 2005. Fourth quarter 2005 revenue increased to $359.3 million, a 16% increase over fourth quarter 2004 revenue of $310.1 million. EBITDA for the fourth quarter 2005 was $78.5 million, a 17% increase over fourth quarter 2004 EBITDA of $67.4 million. Net loss for the fourth quarter 2005 was $4.2 million, or $0.04 per share compared to a net loss of $20.2 million, or $0.24 per share in the fourth quarter 2004. Included in fourth quarter 2005 EBITDA is $1.6 million in foreign currency translation losses compared to $4.6 million in foreign currency translation gains during fourth quarter 2004. The company's provision for income taxes for the fourth quarters of 2005 and 2004 did not include a tax benefit for the company's tax losses in the U.S. and certain international jurisdictions. For the year ended Dec. 31, 2005, revenue increased to $1,375.6 million, a 16% increase over 2004 revenue of $1,188.6 million. EBITDA for 2005 increased to $310.2 million, a 6% increase over 2004 EBITDA of $293.0 million. For 2005, Hanover recorded a net loss of $38.0 million, or $0.42 per share, compared to a net loss of $44.0 million, or $0.52 per share in 2004. Included in 2005 EBITDA is a $7.3 million charge for the early extinguishment of debt and $7.9 million in foreign currency translation losses. Included in 2004 EBITDA is a $4.2 million benefit from the reversal of a provision for the cost of the securities related litigation and foreign currency translation gains of $5.2 million. "During 2005, Hanover made significant progress in building the foundation for a profitable future," said John Jackson, President and Chief Executive Officer of Hanover. "However, we will not be satisfied until we achieve targeted profitability levels with our return on investment consistently exceeding our cost of capital. We are continuing our disciplined growth strategy in 2006, improving returns on existing assets while selectively adding to assets and project backlog in all regions of the world." U.S. rental revenue increased in the fourth quarter 2005 and in the year ended Dec. 31, 2005, compared to the same periods in the prior year, due primarily to improvement in market conditions that led to an improvement in pricing. Gross margin was flat for the fourth quarter 2005. For the year ended Dec. 31, 2005, gross margin increased compared to the same period in the prior year due primarily to improved pricing in 2005 and the company's efforts to reduce current fleet maintenance and repair expenses. During the second half of 2005, the company opened a facility to repair and overhaul approximately 200,000 horsepower of idle equipment over the next two years. Hanover incurred repair expenses in connection with this program that decreased our gross margin by approximately 2% for the fourth quarter of 2005 and 1% for the year ended 2005. Fourth quarter 2005 international rental revenue and gross profit increased, compared to the same period a year earlier, due primarily to increased compression and plant rental activity in Nigeria and Latin America. Gross margin in the fourth quarter 2005, was impacted by approximately 3% due to increased labor and repair and maintenance costs in Argentina. The Company's Argentine operations have experienced an increase in labor costs due to pressures from unions for increased compensation for workers only a portion of which is recoverable from customers. During the year ended Dec. 31, 2005, international rental revenue and gross profit increased, compared to the year ended Dec. 31, 2004, due primarily to new rental projects that have come on-line in 2005. Gross margin as a percentage decreased primarily by approximately 1% due to lower margin projects in Nigeria and by approximately 2% due to an increase in costs in Argentina. Parts, service and used equipment revenue and gross profit for the fourth quarter 2005 was higher than the fourth quarter 2004 due primarily to higher used rental equipment and installation sales. Parts, service and used equipment revenue includes two business components: parts and service; and used rental equipment and installation sales. The company's used rental equipment sales and installation revenues and related gross margin vary significantly from period to period and are dependent upon the exercise of purchase options on rental equipment by customers and the start of new projects by customers. For the fourth quarter 2005, parts and service revenue totaled $41.9 million with a gross margin of 26%, down from $42.2 million, but a marked improvement from a 22% gross margin, in the same period a year ago. Gross margin improved due primarily to higher pricing in the U.S. market resulting from improved market conditions. Used rental equipment and installation sales revenue in the fourth quarter 2005 was $25.7 million with a gross margin of 18%, compared to $3.6 million at a (17)% gross margin for the same period a year earlier. Parts, service and used equipment revenue for the year ended Dec. 31, 2005, were higher than the year ended Dec. 31, 2004, due primarily to improved business conditions and an increase in used rental equipment and installation sales. For the year ended Dec. 31, 2005, parts and service revenue was $152.4 million with a gross margin of 26%, compared to $139.3 million and 24%, respectively, for the year ended Dec. 31, 2004. Used rental equipment and installation sales revenue for the year ended Dec. 31, 2005, was $73.2 million with a gross margin of 22%, compared to $41.1 million with a 27% gross margin for the year ended Dec. 31, 2004. The increase in revenue in 2005 was primarily due to a $20.3 million sale of used rental equipment related to a gas plant in Madisonville, Texas. For the fourth quarter 2005 and year ended Dec. 31, 2005, compression fabrication revenue, gross profit and gross margin increased compared to the fourth quarter and the year ended Dec. 31, 2004, due primarily to improved market conditions in 2005 that led to improved pricing and also improved due to our focus on operational efficiencies. As of Dec. 31, 2005, the company had compression and accessory fabrication backlog of approximately $85.4 million compared to $56.7 million at Dec. 31, 2004. Production and processing equipment fabrication gross profit and gross margin for the fourth quarter 2005 was lower than the fourth quarter 2004 due to approximately $3 million in expected cost overruns and late delivery penalties on projects due to poor performance. The impact of the cost overruns was partially offset by favorable foreign currency trends. Production and processing equipment fabrication revenue for the year ended Dec. 31, 2005, was greater than for the year ended Dec. 31, 2004, primarily due to the company's focus on fabrication sales and an improvement in market conditions. As of Dec. 31, 2005, the company had a production and processing equipment fabrication backlog of $287.7 million compared to $234.2 million at Dec. 31, 2004. General Selling, general, and administrative expense for the fourth quarter 2005 was $50.7 million, compared to $46.9 million in the fourth quarter 2004. As a percentage of revenues, SG&A was 14.1% in the fourth quarter 2005 versus 15.1% in the fourth quarter of 2004. Depreciation and amortization expense for the fourth quarter 2005 decreased to $44.2 million, from $46.4 million in the same period of 2004. Fourth quarter 2005 depreciation and amortization expense decreased primarily due to reduced amortization of deferred debt issuance costs associated with the debt that was repaid in 2004 and 2005. Depreciation and amortization expense for 2005 was $182.7 million, compared to $175.3 million in 2004. Depreciation and amortization expense increased in 2005, in comparison to 2004, due to net additions of property, plant and equipment placed in service during the year. The company's effective tax rate for the fourth quarter 2005 was 261% compared to (47)% for the fourth quarter 2004. For 2005, Hanover's effective tax rate was (294)%, compared to (84)% in 2004. Due to the company's recent tax losses in certain jurisdictions (primarily U.S.), Hanover cannot reach the conclusion that it is "more likely than not" that certain of its deferred tax assets will be realized in the near future. Accordingly, the company's provision for income taxes for 2005 did not include a full tax benefit for the company's tax loss in the U.S. and certain international jurisdictions. Hanover had capital expenditures of approximately $52 million in the fourth quarter 2005, compared to approximately $33 million in the fourth quarter of 2004. For 2005, Hanover had capital expenditures of approximately $155 million compared to $90 million in 2004. At Dec. 31, 2005, the company had approximately $1.49 billion in debt and compression equipment lease obligations, compared to $1.66 billion at Dec. 31, 2004. At Dec. 31, 2005, Company debt included approximately $48 million outstanding under its new five-year $450 million bank credit facility and the Company had approximately $53.4 million in cash on its balance sheet. Total compression horsepower at Dec. 31, 2005, was approximately 3,320,000 including approximately 2,438,000 horsepower in the United States and approximately 882,000 horsepower internationally. Hanover's compression horsepower utilization rate as of Dec. 31, 2005, on a total horsepower basis, was approximately 86%, an increase over utilization of approximately 85% at Sept. 30, 2005, and 82% at Dec. 31, 2004. U.S. and international utilization at Dec. 31, 2005, was approximately 82% and 98%, respectively, compared to approximately 80% and 98%, respectively, at Sept. 30, 2005, and approximately 77% and 98%, respectively, at Dec. 31, 2004. About Hanover Compressor Company Hanover Compressor Company -- http://www.hanover-co.com/-- is a global market leader in full service natural gas compression and a leading provider of service, fabrication and equipment for oil and natural gas production, processing and transportation applications. Hanover sells and rents this equipment and provides complete operation and maintenance services, including run-time guarantees for both customer-owned equipment and its fleet of rental equipment. * * * As reported in the Troubled Company Reporter on Jan. 25, 2006, Moody's Investors Service withdrew the Ba3 rating on Hanover Compressor Company's core wholly owned operating subsidiary Hanover Compression Limited Partnership's $350 million secured bank revolving credit facility. The credit facility, due to mature in December 2006, was replaced with a new five-year $450 million senior secured revolving credit facility. Moody's does not rate the new facility. No other ratings are affected by this action. Four layers of bond debt issued by Hanover Compressor and maturing between 2008 and 2014 carry low-B ratings from Moody's Investors Service and Standard & Poor's Rating Services. HEALTHTRONICS INC: Late 10-K Filing Spurs Nasdaq Delisting Notice ----------------------------------------------------------------- HealthTronics, Inc. (NASDAQ:HTRN), received, on April 3, 2006, a letter from the Nasdaq National Market stating that because HealthTronics has not timely filed its Annual Report on Form 10-K for the year ended Dec. 31, 2005, it is in violation of Nasdaq Marketplace Rule 4310(c)(14) and, therefore, its common stock is subject to delisting from the Nasdaq National Market. Nasdaq Marketplace Rule 4310(c)(14) requires HealthTronics to make, on a timely basis, all filings with the Securities and Exchange Commission as required by the Securities Exchange Act of 1934, as amended. According to the notice of delisting, HealthTronics' common stock will be delisted from the Nasdaq Stock Market on April 12, 2006, unless HealthTronics requests a hearing before a Nasdaq Listing Qualifications Panel in accordance with the applicable Nasdaq Marketplace rules. HealthTronics has requested such a hearing for a review of the delisting determination. This request will automatically stay the delisting of HealthTronics' common stock pending the Nasdaq Listing Qualifications Panel's review and decision. There can be no assurance, however, that the Nasdaq Panel will grant HealthTronics' request for continued listing. HealthTronics intends to file its Annual Report on Form 10-K for the year ended Dec. 31, 2005 as soon as practicable following the resolution of matters related to the restatement described in the Company's Current Report on Form 8-K filed with the SEC on March 31, 2006 and the completion of the audit of its financial statements. About HealthTronics, Inc. Headquartered in Austin, Texas, HealthTronics, Inc. -- http://www.healthtronics.com/-- provides healthcare services primarily to the Urology community, and manufactures and distributes medical devices. The Company also manufactures specialty vehicles used for the transport of high technology medical devices, broadcast & communications equipment and the Homeland Security marketplace. * * * As reported in the Troubled Company Reporter on April 7, 2006, Moody's Investors Service placed HealthTronics, Inc.'s ratings under review for possible downgrade following the company's announcement on March 31, 2006 that its financial statements should be restated. HealthTronic's current ratings from Moody's are: * Corporate family rating, rated Ba3 * $50 million senior secured revolving credit facility due 2010, rated Ba3 * $125 million senior secured term loan B due 2011, rated Ba3 HEATING OIL: Plan Confirmation Hearing Set for May 31 ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut approved the First Amended Disclosure Statement explaining the First Amended Joint Plan of Reorganization of Heating Oil Partners, LP, and its debtor-affiliates. The Bankruptcy Court determined that the Debtors' Disclosure Statement contains adequate information -- the right amount of the right kind -- for creditors to make informed decisions when the Debtor asks them to vote to accept the Plan. The Debtors proposes to implement the Plan through: a. Substantive Consolidation; b. Cancellation of Existing Securities and Agreements; c. New Working Capital Facility; and d. New Membership Interests, New Holdings Common Stock and New Option Interests. Treatment of Claims Under the Plan, Administrative Expenses, totaling approximately $62.4 million will be paid in full and in cash. Priority Tax Claims, totaling approximately $3.6 million, at the sole option of the Debtors, will be either: a. paid in full and in cash on the effective date; or b. paid in full and in cash in equal semi-annual installments over a period not exceeding six years from the date of assessment, with interest at the applicable rate or other amount determined by the Court. Holders of allowed Secured Claims, estimated at $118 million, will receive a pro-rata share of the New Holdings Common Stock and the New Option Interests. The disclosure statement does not disclose the estimated recoveries for secured claimholders. In full payment of Other Secured Claims, totaling $3.7 million, the claim will be either: a. reinstated, b. paid in full and in cash together with any postpetition interest, c. satisfied by the surrender of the collateral securing such Allowed Claim, or d. rendered unimpaired in accordance with Section 1124 of the Bankruptcy Code. Holders of General Unsecured Claims, estimated to total $3.37 million, will receive: a. their pro-rate share of the $425,000 distribution amount; plus b. their pro-rate share of the $100,000 release based amount, in the event that: -- the holder of the Allowed General Unsecured Claim elects the release provided in the Plan; or -- the Court approves the release section the Plan. The Debtor estimates that General Unsecured Claimants will recover $12.6% of their claims without the release amount or 15.56% if the release amount is included. Old Equity Interests will be cancelled under the Plan and interest holders will receive no distributions. The Bankruptcy Court will convene a hearing at 2:30 p.m. on May 31, 2006, to consider confirmation of the Debtors' First Amended Joint Plan of Reorganization. About Heating Oil Headquartered in Darien, Connecticut, Heating Oil Partners, L.P. -- http://www.hopheat.com/-- is one of the largest residential heating oil distributors in the United States, serving approximately 150,000 customers in the Northeastern United States. The Company's primary business is the distribution of heating oil and other refined liquid petroleum products to residential and commercial customers. The Company and its subsidiaries filed for chapter 11 protection on Sept. 26, 2005 (Bankr. D. Conn. Case No. 05-51271) and filed for recognition of the chapter 11 proceedings under the Companies' Creditors Arrangement Act (Canada). Craig I. Lifland, Esq., and James Berman, Esq., at Zeisler and Zeisler, represent the Debtors in their restructuring efforts. Jeffrey D. Prol, Esq., at Lowenstein Sandler PC, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $127,278,000 in total assets and $155,033,000 in total debts. HEATING OIL: Selling Office Building for $350,000 ------------------------------------------------- Heating Oil Partners, LP, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Connecticut to approve the proposed sale of a portion of their Kennett Square property, free and clear of liens, to Truskey Real Estate Partnership, LP. The Debtors' Kennett Square property, located at 431 South Walnut Street, Kennett Square in Chester County, Pennsylvania, consists of two contiguous lots: -- Lot 1 contains a freestanding office, a garage measuring approximately 1,800 square feet and a 1 million gallon storage tank. -- Lot 2 contains a freestanding building built in 1960 with approximately 1,800 square feet of office space. Truskey proposes to purchase Lot 2, which previously served as the Debtors' reporting office, for $350,000 in cash. The sale is subject to higher and better offers at the hearing approving the Truskey purchase agreement. A copy of the purchase agreement governing the sale is available for a fee at: http://www.researcharchives.com/bin/download?id=060410052458 Beiler-Campbell Realtors, the Debtors' broker, has marketed the property in the past two years. Beiler-Campbell will get a 6% commission at the closing of the sale. About Heating Oil Headquartered in Darien, Connecticut, Heating Oil Partners, L.P. -- http://www.hopheat.com/-- is one of the largest residential heating oil distributors in the United States, serving approximately 150,000 customers in the Northeastern United States. The Company's primary business is the distribution of heating oil and other refined liquid petroleum products to residential and commercial customers. The Company and its subsidiaries filed for chapter 11 protection on Sept. 26, 2005 (Bankr. D. Conn. Case No. 05-51271) and filed for recognition of the chapter 11 proceedings under the Companies' Creditors Arrangement Act (Canada). Craig I. Lifland, Esq., and James Berman, Esq., at Zeisler and Zeisler, represent the Debtors in their restructuring efforts. Jeffrey D. Prol, Esq., at Lowenstein Sandler PC, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $127,278,000 in total assets and $155,033,000 in total debts. HOBNOBBIN LP: Voluntary Chapter 11 Case Summary ----------------------------------------------- Lead Debtor: Hobnobbin, LP 200 Industrial Street New Castle, Pennsylvania 16102 Bankruptcy Case No.: 06-21409 Debtor affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Interchange Specialty Services, Inc. 06-21414 Type of Business: The Debtors offer freight car maintenance and repair services. See http://www.iss-inc.com/ Chapter 11 Petition Date: April 3, 2006 Court: Western District of Pennsylvania (Pittsburgh) Debtors' Counsel: Robert O. Lampl, Esq. Law Offices of Robert O. Lampl 960 Penn Avenue, Suite 1200 Pittsburgh, Pennsylvania 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 Estimated Assets Estimated Debts ---------------- --------------- Hobnobbin, LP $1 Million to $1 Million to $10 Million $10 Million Interchange Specialty $100,000 to $500,000 to Services, Inc. $500,000 $1 Million The Debtors did not file a list of their 20 largest unsecured creditors. HONEY CREEK: Files Plan & Disclosure Statement in Northern Texas ---------------------------------------------------------------- Honey Creek Kiwi LLC delivered a Disclosure Statement explaining its Chapter 11 Plan of Liquidation to the U.S. Bankruptcy Court for the Northern District of Texas on March 27, 2006. Overview of the Plan The Plan provides for a reduction in debt service on the bonds by means of a reduction in principal balance and interest rate or a reduction in interest rate, at the option of the Bondholders. The Plan also provides for a partial payout over time of prepetition claims. The reduction in debt service allows the Debtor's existing cash flow to service the restructured bond debt, the debt service on prepetition claims, preserves the tax exempt status of the bonds, and allows the Debtor to pay post petition operating expenses on a current basis. Treatment of Claims Under the Plan, on the Effective Date, each holder of an Allowed Claim in Class 1 will receive a Plan Secured Note and will retain its Tax Liens securing its Allowed Secured Claim as security for the Plan Secured Note until that Note is paid in full. Any Allowed Secured Claims (and any Allowed Unsecured Claims) in Class 2 of the Indenture Trustee will be treated in one of the two following manners, depending upon the 1111(b) Election of the Indenture Trustee: I. MuniMae Alternative Treatment 1: If the Indenture Trustee has not made an 1111(b) election by the expiration of the time set forth in Bankruptcy Rule 3014, the Allowed Unsecured Claims of the Indenture Trustee will be treated as set forth in Class 4D and the Allowed Secured Claims of the Indenture Trustee will be treated as: a) Issuance of Renewal Note: Under Alternative Treatment 1, on the Distribution Date, the holder of an Allowed Claim in Class 2A will receive a restated and renewal promissory note (in full and complete satisfaction of all Secured Claims of the Class 2A Claimant) in the form of the original Bond Note, but modified to provide that: 1) the principal amount is reduced to $15,750,000 as the Court may determine to be the value of the collateral securing the Allowed Secured Claim, 2) the interest rate changed to fixed at 6.0% per annum, 3) the Maturity Date will be changed to the 35th anniversary of the Distribution Date; 4) payments will be interest only until the 5th anniversary of the Distribution Date and principal and interest over the remaining term of the note in equal monthly installments. b) Auction of Equity Interests: Under Alternative Treatment 1, in accordance with the provisions of section 4.5A, the sole membership interest in the Reorganized Debtor will be auctioned at the Confirmation Hearing to the highest bidder for cash in accordance Section 7.1. c) Modification of Loan Documents: Under Alternative Treatment 1, the Bond Loan Documents will be modified in accordance with Section 4.2A.3 to the extent that modifications are not inconsistent with the previsions of this Section 4.2A.1 II. MuniMae Alternative Treatment 2: If the Indenture Trustee has made an 1111(b) election by the expiration of the time set forth in Bankruptcy Rule 3014, the Allowed Secured Claims of the Indenture Trustee will be treated as: a) Issuance of Renewal Note: Under Alternative Treatment 2, on the Distribution Date, the holder of an Allowed Claim in Class 2A will receive two promissory notes in full and complete satisfaction of all Claims of that holder: 1) a promissory note in the form of the Original Bond Note, but modified to provide that i) the principal amount will be equal $15,750,000 as the Court may determine to be the value of the collateral securing the Allowed Secured Claim, ii) the interest rate changed to a fixed rate of 6.0% per annum, iii) the maturity date will be changed to the 35th anniversary of the Distribution Date; iv) the Series A Note will be payable interest only until the 5th anniversary of the Distribution Date and principal and interest over the remaining term of the note in equal monthly installments. 2) a subordinate promissory note in the form of the Original Bond Note, but modified to provide that a) the principal amount will be equal to the Allowed Secured Claim amount less the principal balance of the Series A Note, b) the Series B Note will bear no interest, c) the Maturity Date will be changed to the 35th anniversary of the Distribution Date; d) the Series B Note will be payable in a single payment upon the Maturity Date or upon refinancing of the Series B Note; provided, however, at all times the right to payment of the Series B Note will be subordinate to payment of the Series A Note. b) No Unsecured Claim if 1111(b) Election Made: Aside anything in Section 4.4D to the contrary, as a result of the 1111(b) election, if Alternative Treatment 2 is in effect, the holder of the Class 2A Claim will receive nothing on account of any Unsecured Claim. c) No Equity Auction if 1111(b) Election Made: Under the Alternative Treatment 2, the provisions of Section 4.5B will control and no auction will occur under Section 7.1. Each holder of an Allowed Secured Claim in Class 2B to 2J will be treated as: i) General Treatment Each holder of an Allowed Secured Claim against the Debtor will, at the sole option of the Reorganized Debtor, receive on the Distribution Date on account of its Allowed Secured Claim: a) a Plan Secured Note; b) treatment as provided under section 1124(2) of the Bankruptcy Code, with the Cash payments required by section 1124(2)(A) and (C) of the Bankruptcy Code being made on the Distribution Date; or c) the holder's Collateral. If the holder of an Allowed Secured Claim against the Debtor receives treatment as provided in (a) or (b) above, that holder will retain any Liens securing the Allowed Secured Claim until paid in full. Any Deficiency Amount related to a Secured Claim will be treated as a Class 4C Trade Vendor Claim. ii) Negotiated Treatment The Debtor, Committee and any holder of a Class 2B to 2J Allowed Secured Claim may agree to any alternate treatment of that Secured Claim, which treatment will include preservation of holder's Lien; provided, however, that treatment will not provide a return to any holder of an amount having a present value in excess of the amount of the holder's Allowed Secured Claim. Each agreement will be presented to the Bankruptcy Court before or within 30 days after the Effective Date and will not materially and adversely impact the treatment of any other creditor under the Plan. Each holder of an Allowed Priority Non-tax Claim against the Debtor will receive on the Distribution Date the right to payment or refund in accordance with the policies of the Debtor then in effect. Allowed Priority Non-tax Claims held by the Debtor's employees will be paid in the Debtor's ordinary course of business pursuant to the terms of the Debtor's employee policies as may be changed from time to time. If Alternative Treatment 1 is applicable, Allowed Equity Interests Holders will receive nothing on account of interest. If Alternative Treatment 2 is applicable, Alternative Building Concepts Group, Inc., the Debtor's sole managing member, will retain its membership interest in the Debtor unaffected by the Plan. The holders of Disallowed Claims, Subordinated Claims, Penalty Claims and any other Claims against the Debtor will receive no distributions under the Plan. A full-text copy of the Chapter 11 Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060410052933 Headquartered in Mesquite, Texas, Honey Creek Kiwi LLC owns a 656-unit apartment complex known as the Honey Creek Apartments. The company filed for chapter 11 protection on August 24, 2005 (Bankr. N.D. Tex. Case No. 05-39524). Richard G. Grant, Esq., at Roberts & Grant, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. INTEGRATED ALARM: Incurs $8 Million Net Loss in Fourth Quarter -------------------------------------------------------------- Integrated Alarm Services Group, Inc. (NASDAQ: IASG), disclosed its financial results for the fourth quarter and fiscal year 2005 ended December 31, 2005. Revenue for the fourth quarter was $25.6 million up 23% over fiscal 2004 fourth quarter revenue of $20.7 million. The net loss for the fourth quarter ending December 31, 2005, was $8.0 million compared to a net loss of $8.1 million in the fourth quarter of 2004. Revenue for fiscal year 2005 was $99.2 million up 23% over fiscal year 2004 revenue of $80.4 million. The net loss for fiscal year 2005 was $22.3 million compared to a net loss of $11.7 million for fiscal year 2004. For the full year 2005 the aggregate owned portfolio annualized attrition rate was 13.7% versus 11.6% for fiscal 2004. Fourth quarter achievements and activities included: -- The acquisition of the assets of Financial Security Services, Inc. (FSS) for $23 million cash. The acquired assets included: a portfolio of dealer loans with a par value of $17 million, a central station in South St. Paul, Minnesota, a wholesale monitoring business generating $220,000 of recurring monthly revenue (RMR), and an owned portfolio of alarm contracts generating $11,000 of RMR. -- The payment of an $18 million dealer note receivable. -- The purchase of 312,626 shares of IASG stock into treasury. -- A 14.0 percent reduction in fourth quarter annualized Owned Portfolio attrition from the third quarter level to 15.3 percent. -- The initiation of a strategic review of operations to improve profitability and growth prospects. In announcing the year-end results, Timothy M. McGinn, Chairman and CEO, said, "2005 was a challenging year for our Company. 2005 revenues increased by 23 percent and EBITDA increased by 11 percent. We are not at all satisfied with these results." Mr. McGinn continued, "We began the year with numerous regulatory and compliance issues. While further work is required, our Form 10-K documents good progress on several fronts including Sarbanes- Oxley Section 404 compliance and we are, and have been since the second quarter, timely in our SEC filings. Mid-year we encountered attrition difficulties with our owned portfolio of alarm contracts. At the time, I indicated the attrition challenge would not be solved in one quarter. We are not at goal; however we have made significant retention progress in the fourth quarter and attrition is once again moving in the right direction. We concluded 2005 with the engagement of Allen & Co. to perform a strategic options analysis to improve shareholder value." Mr. McGinn concluded, "IASG was considerably less active in the marketplace in 2005 compared to recent years. This is in part because of the challenges faced by the Company in 2005 and also the rising price environment for portfolio acquisitions and alarm business activities. We did, however make an important strategic acquisition with the October purchase of FSS. FSS adds to our portfolio of products that we bring to alarm dealers and further augments our infrastructure." At December 31, 2005, IASG had $16.2 million in cash, $16.2 million of secured notes receivable from dealers and stockholders' equity of $120.1 million. The Company had $125.8 million of debt and capital leases at December 31, 2005, and ended fiscal 2005 with a net debt (debt less cash) to equity ratio of .91 to 1. IASG had no outstanding balance on the $30 million senior credit facility at the end of 2005. IASG ended fiscal 2005 with an owned portfolio of approximately 159,000 contract equivalents generating RMR of approximately $4.8 million and wholesale monitoring of approximately 728,000 alarms (including IASG's owned portfolio accounts) generating approximately $3.1 million in RMR. Revenue from the owned portfolio is split 80% residential and 20% commercial. The Company employed 837 employees at December 31, 2005, down from 874 a year earlier. About Integrated Alarm Services Integrated Alarm Services Group -- http://www.iasg.us/-- provides total integrated solutions to independent security alarm dealers located throughout the United States to assist them in serving the residential and commercial security alarm market. IASG's services include alarm contract financing including the purchase of dealer alarm contracts for its own portfolio and providing loans to dealers collateralized by alarm contracts. IASG, with 5,000 independent dealer relationships, is also the largest wholesale provider of alarm contract monitoring and servicing. * * * Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and 'B-' second lien senior secured debt rating on Integrated Alarm Services Group Inc. in July 2005. Moody's Investors Service also confirmed the B3 credit ratings of Integrated Alarm and changed the outlook to negative. INTELSAT LTD: Filing Delay Cues S&P to Hold Ratings on Neg. Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services held all ratings on fixed satellite services provider Intelsat Ltd. (BB-/Watch Neg/--) on CreditWatch with negative implications after the company failed to file its 2005 form 10-K by March 31, 2006, as required by the SEC. The bank agreement also required the company to provide financial statements by the same date. "Intelsat's lenders are waiving any default that would result from failure to provide required financial statements, effective for 30 days beginning March 30, 2006," said Standard & Poor's credit analyst Eric Geil. In an SEC late filing notice, Intelsat indicated that it has encountered delays and greater complication than anticipated in its year-end reporting process. The exchange offer for notes issued in Jan. 2005, and a required 10-K footnote presenting financial information on debt guarantors and non-guarantors were cited as factors in the delay. The ratings were placed on CreditWatch with negative implications on Aug. 29, 2005, after Intelsat's announcement of its agreement to acquire competing FSS operator PanAmSat Holding Corp. and subsidiaries for $6.4 billion, consisting of: * $3.2 billion in cash for equity; and * $3.2 billion in existing PanAmSat debt. At the same time, the 'BB' corporate credit rating and all other ratings on PanAmSat also were placed on CreditWatch with negative implications. Pro forma consolidated leverage is elevated, in the upper 7x area, based on: * Intelsat's results for the 12 months ended Sept. 30, 2005; and * PanAmSat's full-year 2005 results. In resolving the CreditWatch listing, Standard & Poor's will review the combined company's operating and financial plans, and expects to determine the ratings at around the time the transaction closes, which the company expects will occur in the second or third quarter of 2006. Standard & Poor's expects the corporate credit rating of the combined entity to be no lower than 'B+', barring any further unforeseen financial reporting difficulties or outcomes. INTERNATIONAL MANAGEMENT: Hires W.G. Hays as Financial Consultant ----------------------------------------------------------------- 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 W.G. Hays & Associates, LLC as their financial consultant and accountants. W.G. Hays is expected to: (a) consult with and advise the Debtors on matters pertaining to the financial posture of the Debtors; (b) perform forensic accounting services in connection with the deterioration of the Debtors' businesses; (c) develop reporting formats, processes and procedures for the systematic analysis of the Debtors' assets, including the identification of such assets; (d) investigate the books and records of the Debtors for related party or fraudulent transactions; (e) provide expert testimony, as required; (f) investigate and analyze any allegations of fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity in the management of the affairs of the Debtors of or by former management of the Debtors or with respect to services performed by third parties; and (g) perform other services incidental and necessary to the Debtors' performance of their duties in their Chapter 11 cases. W. Danfield Hays, a member of W.G. Hays, tells the Court that the Firm's professionals bill: Consultants Hourly Rate ----------- ----------- William G. Hays, Jr. $315 William F. Perkins $225 William D. Hays $195 Daisy Williams $165 M. Aggie Caldwell $145 Mr. Hays discloses that the Firm's paraprofessionals bill $60 per hour. Mr. Hays 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 MGM'T: U.S. Trustee Appoints 7-Member Investor Panel ------------------------------------------------------------------ The United States Trustee for Region 21 appointed seven investors to serve on an Official Committee of Investors in International Management Associates, LLC and its debtor-affiliates' chapter 11 cases pursuant to Section 1102(a) of the Bankruptcy Code: 1. Roger L. O'Neal GTO Development, LLC 100 Wilshire Boulevard, Suite 1270 Santa Monica, CA 90401 Tel: (310) 245-8656 Fax: (310) 314-4801 2. Charles D. Busskohl 12098 North 137th Way Scottsdale, AZ 85259 Tel: (480) 767-1638 Fax: (480) 767-1748 3. William E. Johnson 1683 Red Mountain Road Aspen, CO 81611 Tel: 970-949-1111 (cell) 4. Jaswinder S. Grover Suite 101, 600 South Rancho Las Vegas, NV 89106 Tel: (702) 401-3979 Fax: (702) 254-5885 5. Scott G. Baker 667 Main Street Hingham, MA 02043 Tel: (781) 640-3287 Fax: (781) 749-7335 6. Blaine E. Bishop 8775 Colonial Drive Duluth, GA 30097 Tel: (615) 496-5206 Fax: (770) 573-0828 7. Stephen Atwater 2510 Sugarloaf Club drive Duluth, GA 30097 Tel: (770) 497-4948 Fax: (800) 510-5523 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. INTERPUBLIC GROUP: Weak Profits Prompt Moody's Ratings Downgrade ---------------------------------------------------------------- Moody's Investors Service downgraded The Interpublic Group of Companies, Inc.'s corporate family and senior unsecured long term debt ratings to Ba3 from Ba1. The outlook remains negative. The downgrade reflects weaker than previous expectations by Moody's for IPG's fiscal year 2006 profitability and Moody's expectation that the turnaround at IPG will extend from 2007 into 2008, which is moderately longer than originally anticipated. IPG's current and near term operating performance do not support the Ba3 rating, although Moody's is expecting steady improvements. In the absence of top line growth, as well as cost savings in certain subsidiaries, such as Lowe, in 2006, the rating will likely be cut further. The Ba3 rating also relies heavily on an expected decline in professional fees to restore the company's operating profit margins and reflects concern regarding the weakening credit profile of IPG's largest client, General Motors. Moody's believes that although GM will continue to aggressively market its products, IPG's margins could possibly be negatively impacted over the near term due to market share declines and pressure on GM to reduce costs. The Ba3 rating also reflects Moody's belief that IPG will continue to file its results on a timely basis. Further, IPG benefits from its sizable cash balance of over $2 billion at year end, resulting in low net debt, and no significant maturities until 2008, all providing the company with the flexibility to focus on its turnaround for the next two years. The negative outlook reflects the continued uncertainty surrounding the timing of operating results improvements, including industry comparable revenue growth and operating margins. It also considers the potential for higher than expected internal control remediation costs, as well as uncertainty on the timing of completion of remedial measures and on realization of benefits from these measures through internal control process and management information systems improvement. Refinancing the significant debt maturities in 2008 well in advance of their maturity will also impact the rating. The Interpublic Group of Companies, Inc., with headquarters in New York, is one of the largest advertising, marketing and corporate communications holding companies in the world. Downgrades: Issuer: Interpublic Group of Companies, Inc. * Corporate Family Rating, Downgraded to Ba3 from Ba1 * Preferred Stock Shelf, Downgraded to (P)B2 from (P)Ba3 * Senior Unsecured Bank Credit Facility, Downgraded to Ba3 from Ba1 * Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to Ba3 from Ba1 * Senior Unsecured Regular Bond/Debenture, Downgraded to Ba3 from Ba1 * Senior Unsecured Shelf, Downgraded to (P)Ba3 from (P)Ba1 * Subordinated Shelf, Downgraded to (P)B1 from (P)Ba2 INTERSTATE BAKERIES: Sells Whittier Property for $850,000 --------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri gave Interstate Bakeries Corporation and its debtor-affiliates permission to sell their real property located at 13448 Lambert Road, in Whittier, California, to John B. and Gail L. Lascari for $850,000. Hilco Industrial, LLC and Hilco Real Estate, LLC, assisted the Debtors in the sale and marketing of the Whittier Property. At an auction held on February 27, 2006, the Lascaris offered $850,000, for the purchase of the Whittier Property. The Whittier Property will be transferred to the Lascaris, free and clear of all liens, claims and encumbrances. All valid and enforceable liens, claims and encumbrances will attach to the proceeds of the Sale, in the same relative priority as existed with respect to the Property. The Court authorizes the Debtors to pay outstanding real and personal property taxes for the tax year 2004-2005 with respect to the Property totaling $7,173, plus $10 in late fees to the Los Angeles County Tax Collector at the Closing. Penalties on 2004- 2005 Property Taxes are disallowed. After the Closing and Payment, the Debtors will have no further liability to the Los Angeles County Tax Collector for real or personal property taxes with respect to the Property. Judge Venters clarifies that the Order will not modify the Debtors' obligations under the Successful Sale Agreement to prorate taxes for the 2005-2006 tax year at Closing. In the event that the Lascaris fail to close the sale for any reason, the Debtors are authorized to consummate the sale transaction with the next highest or otherwise best bidder. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Kenneth A. Rosen, Esq., at Lowenstein Sandler, PC, represents the Official Committee of Unsecured Creditors. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal, LLP, represents the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014, on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000) INTERSTATE BAKERIES: Wants Plan-Filing Period Stretched to Sept. ---------------------------------------------------------------- Interstate Bakeries Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Missouri to further extend their exclusive periods to: (a) file a plan of reorganization through September 22, 2006; and (b) file and solicit acceptances of that plan through November 21, 2006. J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, reports that as of March 23, 2006, the Debtors have completed the reviews and effected the consolidations in nine of their profit centers. The Debtors have begun the proposed consolidation activities in their 10th profit center. The Debtors have closed seven bakeries, 200 distribution centers, and 200 thrift stores. They have also remapped almost all of their original 9,100 delivery routes. As previously reported, the Debtors anticipated that there would be a period of transition before the true impact of the projected efficiencies could be realized. The initial results have been mixed and the analysis of the results has been complicated by increase of costs of raw materials and energy over the last six months, Mr. Ivester tells the Court. As a consequence, the Debtors are examining the prospect of passing the increased costs along through strategic pricing actions. Mr. Ivester explains that the Debtors will need to monitor and analyze future sales results to ascertain the implications of any price increases on customer demand. As of March 23, 2006, the Debtors have reached long-term extensions with 42 of their local collective bargaining units, which is 21% of their unionized workforce. The long-term extensions modify and extend the existing CBAs until 2010. Under the long-term extensions, the Debtors have reached agreements with locals affiliated with each of the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union. The Debtors hope to use those agreements as the framework for negotiating similar agreements with the remaining IBT and BCTGM collective bargaining units. However, substantial work remains to be done to reach acceptable agreements with the remaining collective bargaining units, Mr. Ivester notes. The Debtors have also made significant progress in: -- completing audits; -- adopting financial controls to comply with Sarbanes- Oxley; -- responding to a pending SEC investigation; and -- addressing various tax issues, including net operating losses generated after their Chapter 11 cases were filed. The Debtors have filed sixteen omnibus objections to claims, resulting in more than 2,500 claims being modified or removed from their claims registers. The Debtors expect to continue resolving more than 8,800 claims filed in their Chapter 11 cases through negotiation and further omnibus claims objections. As of March 23, 2006, the Debtors have filed 21 motions rejecting 355 real property leases, thereby reducing unnecessary drains on their cash resources. The Debtors have also sold real property aggregating $84,000,000. Mr. Ivester asserts that a credible long-term business plan is essential to the assessment of a reasonable range of values for the Debtors' reorganized businesses and the determination of how much debt and equity those businesses will be able to support -- both of which assessments are prerequisites to the filing of a plan of reorganization. Once the Debtors have formulated a credible long-term business plan, they anticipate engaging in discussions with all of their constituents regarding a plan of reorganization, including continuing discussions with the union employees' collective bargaining units, as necessary, Mr. Ivester tells Judge Venters. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Kenneth A. Rosen, Esq., at Lowenstein Sandler, PC, represents the Official Committee of Unsecured Creditors. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal, LLP, represents the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014, on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000) IPAYMENT INC: Moody's Junks Rating on $285MM Subordinated Notes --------------------------------------------------------------- Moody's Investors Service assigned first-time corporate family rating of B2 to iPayment Inc., B1 ratings to its proposed senior secured term loan facility and senior secured revolving credit facility, and Caa1 to its proposed senior subordinated notes. Moody's also assigned a SGL-2 liquidity rating, reflecting fairly good liquidity. Combined proceeds of $735 million are expected finance a management buyout of iPayment and refinance a portion of existing debt. The rating outlook is stable. The ratings reflect iPayment's high degree of leverage with Debt to EBITDA at 6.5x as a result of the proposed MBO; its limited track record at current business profile and scale, the rapid growth of the company through acquisitions; the risk of larger and better capitalized competitors penetrating the small and medium business space; and significant reliance on one vendor which provides the bulk of the transaction processing services. Profitability metrics, though strong, having exhibited some moderate declines recently. The company also has limited asset protection from a small base of tangible assets though this is mitigated by a liquid market for merchant portfolios. The ratings of the secured bank facilities and the subordinated notes reflect their contractual ranking and collateral coverage in the case of the secured bank facilities. The rating also considers the generally favorable macro environment for electronic payment processing industry, especially growth in the SMB space which iPayment focuses on; iPayment's diverse customer base with no customer concentration by size or sector; the strong recurring nature of its revenue as a result of improving retention rates; and the expectation that iPayment will continue to be free cash flow positive despite the significant increase in interest expense due to the current MBO. The ratings could experience upward pressure were the company to: 1) Significantly de-lever, with Debt to EBITDA falling to less than 4x; 2) demonstrate evidence of continued organic growth; and 3) sustain current profitability metrics. Conversely, the ratings could face downward pressure if: -- there is a trend of market share loss or revenue declines perhaps due to increasing competitive landscape; -- iPayment is unable to generate positive free cash flow; and -- there is further increase in leverage either as a result of further debt financed acquisitions or declining revenue and profitability measures due to competitive pressures. These first time ratings were assigned: * Corporate family rating -- B2 * $50 million senior secured revolving credit facility due 2012 -- B1 * $450 million senior secured term loan facility due 2013 -- B1 * $285 million senior subordinated notes due 2014 -- Caa1 * Speculative Grade Liquidity rating of SGL-2 The rating outlook is Stable Headquartered in Nashville, Tennessee, iPayment is a provider of credit and debit card-based payment processing services to small merchants. As of January 2006, it provides services to approximately 140,000 active small merchants located across the United States. JEROME DUNCAN: Gail Duncan Files New Disclosure Statement in Mich. ------------------------------------------------------------------ Gail Duncan and Shashi K. Tejpaul unveiled a disclosure statement explaining their proposed plan of reorganization in Jerome Duncan, Inc.'s chapter 11 case to the U.S. Bankruptcy Court for the Eastern District of Michigan. Gail Duncan is the wife of Mr. Tejpaul and the daughter of Richard Duncan, co-founder of the Debtor. Mr. Duncan sold and turned over a controlling interest in the company to Ms. Duncan in 1993. No Tangible Assets The proponents tell the Court that the Debtor's tangible assets have been liquidated and ongoing operations have ceased. As reported in the Troubled Company Reporter on Feb. 2, 2006, the Court approved the sale of substantially all of the Debtor's assets to Suburban Ford of Sterling Heights L.L.C. for $14.8 million, free and clear of all liens, claims and encumbrances. The proponents believe that the only substantial assets remaining that have value are the Ford Litigation and Avoidance Actions. Ford Litigation The Plan Proponents tell the Court that they will assume full responsibility to personally fund all the costs and expenses of the Ford Litigation, which they believe could cost up to $600,000. The Plan Proponents say that they have a very strong case and the litigation may result in a recovery of more than $30 million. Treatment of Claims Under the Proposed Plan, claims are grouped into three classes: * Class 1 - Allowed Administrative Claims; * Class 2 - Allowed Unsecured Claims; and * Class 3 - Allowed Claims of Ford Motor Credit Company. The proponents tell the Court that these claims will receive distributions in accordance with the priorities established in the Bankruptcy Code. Ford's claim will be subordinated to all other claims. A full-text copy of Gail Duncan and Shashi K. Tejpaul's Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060410050647 A full-text copy of Gail Duncan and Shashi K. Tejpaul's Plan of Reorganization for Jerome Duncan, Inc., is available for a fee at: http://www.researcharchives.com/bin/download?id=060410050954 Headquartered in Sterling Heights, Michigan, Jerome Duncan Inc., was the largest dealer of automobiles manufactured by Ford Motor Company in the state of Michigan. The Debtor employed over 200 individuals in its operations and generated between $300 and $500 million in annual sales. The company filed for chapter 11 protection on June 17, 2005 (Bankr. E.D. Mich. Case No. 05-59728). Arnold S. Schafer, Esq., at Schafer and Weiner, PLLC, represents the Debtor in its restructuring efforts. Judith Greenstone Miller, Esq., at Jaffe, Raitt, Heuer & Weiss, PC, represents the Official Committee of Unsecured Creditors. J.L. FRENCH: Hires Deloitte & Touche as Independent Auditors ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware gave J.L French Automotive Castings and its debtor-affiliates permission to employ Deloitte & Touche LLP as their independent auditors and accountants. As reported in the Troubled Company Reporter on Mar. 16, 2006, Deloitte & Touche will: a. audit the consolidated annual financial statements of the Debtors and the consolidated financial statements of the Debtors' subsidiaries for the fiscal years ended Dec. 31, 2005 and thereafter; b. perform reviews of interim financial statements; and c. as may be agreed to by the Firm, render other audit and accounting services, including: * assistance in connection with reports requested of the Debtors by the Court, the U.S. Trustee or parties-in- interest, as the Debtors, their attorneys or financial advisors may from time to time request; * accounting advisory services during the course of the reorganization; and * other similar requested assistance requested by the Debtors. The Debtors told the Court that the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partner/Principal/Director $460 - $650 Senior Manager $390 - $490 Manager $320 - $390 Senior Accountants $200 - $250 Staff Accountants $135 - $180 Paraprofessionals $60 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. JO-ANN STORES: S&P Lowers Subordinated Debt Rating to CCC from B- ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Hudson, Ohio-based specialty retailer Jo-Ann Stores Inc. to 'B-' from 'B+'. The subordinated debt rating was lowered to 'CCC' from 'B-'. The outlook is negative. All ratings were removed from CreditWatch, where they were placed with negative implications on Oct. 6, 2005. "The downgrade is based on the continuation of weak operating trends and the expectation of a challenging year," said Standard & Poor's credit analyst Robert Lichtenstein. Moreover, the company's direction is uncertain given the departure of key executives whose positions have not yet been filled. EBITDA in 2005 dropped to $65 million from $143 million the year before due to poor execution and softening industry trends. As a result leverage, increased to 7x from 3.7x the year before. The ratings on Jo-Ann Stores reflect: * declining operating trends; * uncertainty related to the departure of key executives; and * weak credit measures. Operating performance weakened significantly in 2005 after three years of improving trends. The decline was due to poor execution and softening industry trends. Same-store sales decreased 0.8% in 2005, versus an increase of 3.2% in the prior year, while operating margins for the 12 months ended Jan. 28, 2006, dropped to 11% from 14.5%. The decline was due to higher promotional activity and markdowns as the company liquidated inventory. JUSTINE RICE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Justine Lorainne Rice P.O. Box 211 17466 Luna De Miel Rancho Santa Fe, California 92067 Tel: (858) 688-5197 Bankruptcy Case No.: 06-00730 Type of Business: The Debtor previously filed for chapter 11 protection on February 27, 2006 (Bankr. S.D. California, Case No. 06-00318). Chapter 11 Petition Date: April 7, 2006 Court: Southern District of California (San Diego) Judge: James W. Meyers Debtor's Counsel: Bruce A. Wilson, Esq. Bruce A. Wilson, APLC 2031 Fort Stockton Drive San Diego, California 92103 Tel: (619) 497-0627 Fax: (619) 497-0628 Total Assets: $2,857,755 Total Debts: $1,829,098 The Debtor did not file a list of its 20 largest unsecured creditors. KAISER ALUMINUM: Asks Court to Okay $67.2 Mil. Hartford Settlement ------------------------------------------------------------------ In May 2000, Kaiser Aluminum & Chemical Corporation filed an insurance coverage action against certain insurers, including certain "Hartford Parties," in the Superior Court of California for the County of San Francisco, styled as Kaiser Aluminum & Chemical Corporation v. Certain Underwriters at Lloyds, London, Case No. 31241. The Hartford Parties are: (1) "Hartford" -- Hartford Accident and Indemnity Company, First State Insurance Company, New England Reinsurance Corporation, and Nutmeg Insurance Company; (2) The Hartford Financial Services Group, Inc.; (3) each of Hartford's and Hartford Financial's parents, direct and indirect subsidiaries, divisions, holding companies, merged companies, acquired companies, predecessors-in-interest, successors-in-interest and assigns; and (3) Hartford's and Hartford Financial's directors, officers, shareholders, agents, attorneys and employees. The insurance coverage, which is the subject of the Products Coverage Action, spans the period from 1959 to 1985 and involves more than 300 insurance policies. These insurance policies include the policies issued by the Hartford Parties insuring KACC. The Coverage Action In the Products Coverage Action, KACC seeks a declaratory judgment that the Insurers are obligated to cover the asbestos-related bodily injury products liability claims that have been asserted against KACC. The Products Coverage Action also seeks damages for breach of contract and breach of the covenant of good faith and fair dealing against several of the Insurers. According to Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, the Products Coverage Action -- if successful -- would establish KACC's rights, and the Insurers' obligations, with respect to the Asbestos Products Claims and would allow KACC to recover its costs from the Insurers in connection with the defense and settlement of the Asbestos Products Claims. KACC also sued a limited number of insurers, including one of the Hartford Parties, on premises claims in a companion action, styled Kaiser Aluminum & Chemical Corp. v. Insurance Company of North America. et al., Case No. 322710, which is also pending in the San Francisco Superior Court. Ms. Newmarch explains that in general, a product claim is a claim for injury resulting from a product manufactured or sold by KACC, while a premises claim is a claim for injury resulting from exposure to an allegedly hazardous product or condition at a facility owned and operated by KACC. The Settlement Agreement KACC and the Hartford Parties reached a settlement that resolves all claims against the Hartford Parties with respect to the Hartford Subject Policies, including coverage for Channeled Personal Injury Claims, as well as other present and future liabilities. The Channeled Personal Injury Claims are the asbestos personal injury claims, the PI claims related to coal tar pitch volatile, the PI claims related to noise induced hearing loss and the silica-related PI claims. The principal terms of the Settlement Agreement are: (a) Hartford will pay $67,200,000 to the Funding Vehicle Trust, or if the Funding Vehicle Trust is not in existence at the time any payment becomes due, then to the Insurance Escrow Agent. Upon the payment of the $67,200,000 settlement amount to the Insurance Escrow Account, legal and equitable title to the Settlement Amount will pass irrevocably to the Insurance Escrow Agent to be distributed pursuant to the Reorganizing Debtors' confirmed Plan of Reorganization; (b) The Hartford Parties specifically contracted to receive all of the benefits of being designated as Settling Insurance Companies in the Plan, including, but not limited to, the Personal Injury Channeling Injunctions. The Hartford Parties will be entitled to, upon Court approval of the Settlement Agreement and following the Plan's Effective Date, the protections provided by that designation and treatment without further Court order; (c) KACC, on behalf of itself and the other KACC Parties, will release all of its rights under the Hartford Subject Policies, and will dismiss each of the Hartford Parties from the Coverage Actions; (d) The Settlement Agreement covers all claims that might be covered by the Hartford Subject Policies. Accordingly, KACC will sell, and the Hartford Parties will buy back, the Hartford Subject Policies pursuant to Sections 363(b) and 363(f) of the Bankruptcy Code, free and clear of all liens on, claims against, or interests in, the Hartford Subject Policies, with Hartford's payment of the Settlement Amount constituting the consideration for the buy-back. The order approving the Settlement Agreement must include a finding that the Hartford Parties are good faith purchasers of the Hartford Subject Policies pursuant to Section 363(m). The Hartford Parties also contracted to receive the benefits of the Approval Order Injunction, enjoining parties from asserting any claims against the Hartford Parties relating to the Hartford Subject Policies; (e) If any claim is brought against any of the Hartford Parties that is subject to a PI Channeling Injunction, the Funding Vehicle Trust will exercise its reasonable best efforts to establish that the claim is enjoined as to the Hartford Parties by the PI Channeling Injunction; (f) The Hartford Parties will not seek reimbursement of any payments that Hartford is obligated to make under the Settlement Agreement, or any other payments Hartford has made to or for the benefit of KACC or, upon its creation, the Funding Vehicle Trust, under the Hartford Subject Policies, whether by way of contribution, subrogation, indemnification or otherwise, from any entity other than the Hartford Parties' reinsurers. In no event will the Hartford Parties make any claim for, or relating to insurance, reinsurance or retrocession against KACC or, upon its creation, the Funding Vehicle Trust; and (g) The Settlement Agreement contains certain rights of termination, including if asbestos legislation were to be enacted into a law prior to the last scheduled payment. A full-text copy of the Settlement Agreement is available for free at http://bankrupt.com/misc/HartfordPartiesSettlement.pdf Settlement Must be Approved Ms. Newmarch informs the Court that the Settlement Agreement will eliminate KACC's continuing costs of prosecuting the Coverage Actions against the Hartford Parties, as well as uncertainty regarding future payments by the Hartford Parties. The Settlement Agreement will also secure the payment of a total fixed amount from Hartford without further delay and cost to KACC. Accordingly, KACC asks the Court to approve the Settlement Agreement. KACC further asks Judge Fitzgerald to: (a) authorize the sale of the Hartford Subject Policies to the Hartford Parties free and clear of liens, claims, interests and other encumbrances; and (b) enjoin all claims against the Hartford Parties relating to the Hartford Subject Policies, including, but not limited to: -- any claims arising out of or attributable to: * asbestos or asbestos containing products, * coal tar pitch volatiles, * noise induced hearing loss, * silica or silica containing products, * benzene in any form and from any source, or * any other type of personal injury, wrongful death, property damage, or products liability claim; and -- any claim arising under any federal, state or local statute, rule, regulation or ordinance governing, regulating or relating to health, safety, hazardous substances or the environment. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 93; Bankruptcy Creditors' Service, Inc., 215/945-7000) KANSAS CITY: 10-K Filing Delay Prompts Moody's Ratings Review ------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade all debt ratings of Kansas City Southern, and its wholly owned subsidiaries The Kansas City Southern Railway Company, and Kansas City Southern de Mexico, S.A. de C.V. Moody's review was prompted by the inability of KCS to file its Form 10-K after requesting an extension and indicating the filing would be made by Mar. 31, 2006. Moody's review will focus on whether KCS will be able to file audited financial statements over the very near term and whether any additional adverse financial matters are disclosed, the prospects for the separate bank syndicates for both KCSR and KCSM to provide waivers to provide full access to the revolving credit facilities, and whether the inability to produce financial statements on a timely basis indicates a broader material weakness in financial reporting or in control procedures. Neither KCSR nor KCSM are in compliance with the reporting requirement of their respective bank agreements and, if the financial statements are not filed by April 30, 2006, may not comply with reporting requirements of certain lease agreements. The company is seeking waivers to provide access to the revolvers. The company is still in the seasonally low portion of the year and may need access to the revolver over the near term to supplement its cash position. The delay in filing stems from the inability of the company to complete the account reconciliation of its subsidiary, KCSM, and provide its auditor the information to issue an opinion, although KCS acquired full control of KCSM during 3Q, 2005. Also, KCS previously indicated that management's opinion was that a material weakness existed in financial controls, but was isolated in the tax reporting area. Inability to file financial statements on a timely basis, however, could indicate broader weakness in financial controls which could give rise to future restatements. Ratings under review for possible downgrade: * Kansas City Southern convertible preferred at Caa1, corporate family at B1, shelf (P)B2 and (P)B3 * Kansas City Southern Railway senior unsecured at B2, senior secured at Ba3, shelf (P)B2 and (P)B3 * Kansas City Southern de Mexico, S.A. de C.V. senior unsecured at B2, corporate family at B2 Kansas City Southern, based in Kansas City, Missouri, operates a class I railroad and owns Mexico's northeast railway concession. KERZNER INTL: Going Private in $3.6-Billion Transaction ------------------------------------------------------- Kerzner International Limited (NYSE:KZL) and an investor group which led by the Company's Chairman, Sol Kerzner and its Chief Executive Officer, Butch Kerzner, entered into a definitive agreement under which the Company will be acquired by the investor group for $76.00 in cash per outstanding ordinary share. The investor group also includes Istithmar PJSC, which is a significant shareholder of the Company, Whitehall Street Global Real Estate Limited Partnership 2005, Colony Capital LLC, Providence Equity Partners, Inc., and The Related Companies, L.P., which is affiliated with one of the Company's Directors. The aggregate transaction value, including the assumption of $599 million of net debt as of December 31, 2005, is approximately $3.6 billion. The Board of Directors of the Company, upon the unanimous recommendation of a Special Committee of Directors formed to evaluate the terms of the transaction, has approved the merger agreement. The Special Committee, which includes representatives of two significant shareholders that are not affiliated with the investor group, negotiated the price and other terms of the merger agreement with the assistance of its financial and legal advisors. In accordance with the merger agreement, the Company and the Special Committee's advisors, working under the supervision of the Special Committee, will actively solicit superior proposals during the next 45 days. The Kerzners and Istithmar have agreed to cooperate in this solicitation process. In the event the merger agreement is terminated, in order for the Company to enter into a superior transaction arising during the 45-day solicitation period, the investor group will receive a break-up fee of 1% of the equity value of the transaction (approximately $30 million). In addition, in the event of a superior transaction, Sol and Butch Kerzner have agreed to provide certain transitional services to the acquiring party for a period of six months and, in the event of certain all-cash acquisitions, to vote in favor of the superior transaction. The Company noted that there can be no assurance that the solicitation of superior proposals will result in an alternative transaction. The Company does not intend to disclose developments with respect to the solicitation process unless and until its Board of Directors has made a decision. "We believe that the acquisition by the investor group represents an excellent opportunity for the Company's shareholders, and in addition, we will be actively soliciting other offers to ensure that value is maximized for all of our shareholders," said Eric Siegel, Chairman of the Special Committee of the Board of Directors. "We are delighted to be able to move forward with this transaction. The Company remains fully committed to all of its current development and expansion plans as scheduled, including our Phase III expansion on Paradise Island and our joint ventures in Dubai and Morocco. Furthermore, our entire team remains focused on and committed to developing an outstanding proposal in connection with one of the two casino licenses to be issued by the Government of Singapore," said Butch Kerzner, Chief Executive Officer of the Company. "My father's and my confidence in the business is reflected by the fact that we will increase our ownership interest in the Company to about 25% upon the completion of this transaction. Throughout this process, it will remain business as usual for all of our operations and we anticipate that all employees, including the existing management team, will retain their current positions after our transaction closes." The transaction is expected to close in mid-2006 and is subject to certain terms and conditions customary for transactions of this type, including the receipt of financing and regulatory approvals. Deutsche Bank Securities Inc. and Goldman Sachs Credit Partners have provided commitments to the investor group for the debt portion of the financing for the transaction. The transaction also requires approval of the merger agreement by the Company's shareholders. The Kerzners and Istithmar, which together own approximately 24% of the Company's ordinary shares, have agreed to vote in favor of the transaction. Upon the completion of the transaction, Sol Kerzner will remain Chairman of the Company and will continue to oversee the development and construction of the Company's projects, and Butch Kerzner will remain Chief Executive Officer. The Company will schedule a special meeting of its shareholders for the purpose of obtaining shareholder approval. Upon completion of the transaction, the Company will become a privately held company and its common stock will no longer be traded on The New York Stock Exchange. J.P. Morgan Securities Inc. is serving as financial advisor and Cravath, Swaine & Moore LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are serving as legal advisors to the Special Committee of the Company's Board of Directors. Deutsche Bank AG and Groton Partners LLC are serving as financial advisors and Simpson Thacher & Bartlett LLP is serving as legal advisor to the investor group. About Istithmar Istithmar PJSC is a major investment house based in the United Arab Emirates focusing on private equity, real estate and other alternative investments. Established in 2003, Istithmar was created with the key mission of earning exceptional returns for its investors while maintaining due regard for risk. Istithmar, which means investment in Arabic, applies global expertise with local insights to coordinate the appraisal and implementation of various opportunities. Istithmar's 'I' investment philosophy is based around three core principles -- Ideas, Inquiry & Integrity -- sets the foundation for the firm which has a broad portfolio of highly successful companies in markets from North America to Europe to Asia to the Middle East. Established with an initial investment capital pool of $2 billion, Istithmar has, to date, invested in 30 companies deploying approximately $1 billion in equity capital. It currently focuses its activities in four industry verticals -- Consumer, Financial Services, Industrial and Real Estate. About Whitehall The Whitehall Street Real Estate Funds are Goldman, Sachs & Co.'s primary real estate investment vehicle. Goldman Sachs manages the Whitehall Funds and is also Whitehall's largest investor. Since 1991, Whitehall has invested approximately $16 billion of equity in real estate and other derivative investments with a gross cost basis of approximately $50 billion. Its investments have been made in 20 countries and include interests in real estate assets, portfolio companies, non-performing loans, mezzanine loans and other related products. About Colony Capital Founded in 1991 by Chairman and Chief Executive Officer Thomas J. Barrack Jr., Colony is a private, international investment firm focusing primarily on real estate-related assets and operating companies. At the completion of this transaction, Colony will have invested more than $20 billion in over 8,000 assets through various corporate, portfolio and complex property transactions. Colony Capital is headquartered in Los Angeles, with offices in Beirut, Boston, Hawaii, Hong Kong, London, Madrid, New York, Paris, Rome, Seoul, Shanghai, Singapore, Taipei, and Tokyo. About Providence Equity Partners Providence Equity Partners Inc. is a global private investment firm specializing in equity investments in media and entertainment, communications and information companies around the world. The principals of Providence Equity manage funds with over $9 billion in equity commitments and have invested in more than 80 companies operating in over 20 countries since the firm's inception in 1990. Providence Equity is headquartered in Providence, Rhode Island and also has offices in New York and London. About The Related Companies The Related Companies, L.P., was founded in 1972 by Chairman and CEO Stephen M. Ross. Related is headquartered in New York City. To date, Related has developed or acquired real estate assets worth over $10 billion with another $7 billion currently in development. A fully integrated privately owned firm with divisions in development, acquisitions, financial services, property management, marketing and sales, Related is synonymous with architectural and service excellence, and has significant developments, partners and affiliates in Miami, Chicago, Boston, Los Angeles and San Francisco. Related's historic development of the 2.8 million square foot Time Warner Center has transformed Columbus Circle into one of New York City's premier destinations and has significantly increased the value of commercial and residential property in the surrounding neighborhoods. About Kerzner International Kerzner International Limited -- http://www.kerzner.com/-- through its subsidiaries, is a leading international developer and operator of destination resorts, casinos and luxury hotels. The Company is also a 37.5% owner of BLB Investors, L.L.C., which owns Lincoln Park in Rhode Island and pari-mutuel racing facilities in Colorado. In the U.K., the Company is currently developing a casino in Northampton and received a Certificate of Consent from the U.K. Gaming Board in 2004. In its luxury resort hotel business, the Company manages ten resort hotels primarily under the One&Only brand. The resorts, featuring some of the top-rated properties in the world, are located in The Bahamas, Mexico, Mauritius, the Maldives and Dubai. An additional One&Only property is currently in the planning stages in South Africa. * * * As reported in the Troubled Company Reporter on Mar. 22, 2006, Moody's Investors Service placed the ratings on review for downgrade on Kerzner International Limited's Ba3 Corporate Family Rating and B2 Guaranteed Senior Subordinate Ratings; and Kerzner International North America, Inc.'s (P) B2 Guaranteed Senior Subordinate shelf. As reported in the Troubled Company Reporter on Mar. 22, 2006, Standard & Poor's Ratings Services placed its ratings on the hotels and a casino owner and operator Kerzner International Ltd., including its 'BB-' corporate credit rating, on CreditWatch with negative implications. KRONOS INT'L: Moody's Puts B2 Rating on New EUR400 Million Notes ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Kronos International, Inc.'s new EUR400 million senior secured notes due 2013 and affirmed its corporate family rating and stable outlook. Moody's views the refinancing of KII's existing EUR375 million senior secured notes in order to reduce interest expense as favorable and the EUR25 million increase in debt as not material to the rating. The rating on the EUR375 million senior secured notes due 2009 will be withdrawn after they are repaid with the proceeds of the newly issued notes due 2013. Assignments: Issuer: Kronos International Inc. * Senior Secured Regular Bond/Debenture, Assigned B2 The key ratings factors currently influencing KII's rating and outlook are: Factor 1 - Business Profile: The seven criteria within Factor 1 generate a score of 1, which maps to a "B" rating. Additionally, KII's B1 Corporate Family Rating takes into account the uncertainty regarding pending litigation against NL Industries, Inc., and possible future claims related to potential lead paint liability. Factor 2 - Size and Stability: two of the three criteria map to the "B" category due to the company's small size and the lack of product diversity. Factor 3 -- Cost Position: KII benefits from having maintained relatively strong financial metrics including EBITDA, even in the chemical industry downturn of 2000-2002. The first two metrics in this factor, EBITDA margin and return on assets both map to the "A" ratings category. The B2 rating on the notes reflect their structural subordination to all indebtedness and liabilities of the company's operating subsidiaries and the contractual subordination to the company's $80 million revolving credit facility. In addition, it is likely that in a stressed scenario, the security will not be sufficient to cover the principal amount of the notes. There is also a concern over any additional indebtedness that KII might incur in the future to help satisfy any liabilities at NL related to lead paint litigation, however Moody's notes that KII is limited by its indenture on the restricted payments that it can make to its parent. There is language in the indenture that allows each holder of the notes to require KII to purchase all or a portion of the holder's notes at a price of 101% of the principal amount if there is a change of control to someone other than a Permitted Holder. Permitted Holders include Harold Simmons, his family trusts, trustees of a Simmons Trust, a KII employee pension plan or fund or persons acting for such plan or fund. The stable outlook reflects favorable industry dynamics with relatively high capacity utilization rates, which could support higher prices and the expectation for improved growth in Europe, KII's main market. If NL Industries Inc., KII indirect parent company, experiences significant cash settlement costs relating to lead paint litigation, there would be downward pressure on the rating. An upgrade could result if Moody's concerns over NL's lead paint litigation exposure were to lessen. However, Moody's believes that a resolution to this issue in the near-term is unlikely. Kronos International, Inc., is a wholly owned subsidiary of Kronos Worldwide, Inc., headquartered in Dallas, Texas and produces TiO2 pigments in Europe. For the LTM ended Dec. 31, 2005, the company reported sales of $851 million. LAIDLAW INT'L: Earns $38 Mil. of Net Income in 2nd Fiscal Quarter ----------------------------------------------------------------- Laidlaw International, Inc. (NYSE: LI), disclosed its financial results for its fiscal second quarter ended February 28, 2006. Laidlaw reported net income from continuing operations of $38 million for its second quarter 2006, as compared to net income from continuing operations of $21 million for second quarter 2005. "These results reflect our attention to improvement in all aspects of our business," said Kevin Benson, President and Chief Executive Officer of Laidlaw International, Inc. "We also benefited from reduced interest costs following last year's debt refinancing." Mr. Benson added, "The share buyback program we announced last quarter is well underway with 1.7 million shares repurchased by the end of the second quarter." Second Quarter Results Laidlaw reported consolidated revenue for the second quarter of $789 million, up 3% from $764 million in the prior year. The expansion in revenue is due to Education Service's efforts to improve school bus contract rates and Greyhound's ticket price increases. EBITDA of $122 million was up 6% from the prior year and EBITDA margin increased as a percentage of revenue as a result of improved operating profitability at Laidlaw's two largest segments. Revenue growth and the focus on operating profitability at both Education Services and Greyhound contributed to the margin expansion, more than offsetting fuel price increases. Shareholder Distributions During the second quarter, Laidlaw commenced a repurchase program of up to $200 million of its common stock. As of February 28, 2006, the Company had purchased 1.7 million shares at an average price of $27.16 per share for a total consideration of $46 million. Additionally, the Board of Directors declared a dividend payable of $0.15 per share to the owners of the Company's common stock. Stockholders of record as of May 3, 2006 will be paid the dividend on May 26, 2006. Balance Sheet As of February 28, 2006, the Company had cash and cash equivalents of $155 million and debt outstanding of $305 million. Net capital expenditures for the six-month period were $141 million, as compared to $53 million for the prior year. Outlook The Company anticipates fiscal 2006 revenue will increase one to three percent as compared to 2005. Fiscal 2006 EBITDA is projected to range from $440 million to $470 million with the improvement coming principally from the Greyhound segment. Net capital expenditures for fiscal 2006 are projected to be approximately $200 million to $235 million reflecting higher spending after two years of restraint at Education Services and an increase in bus lease buy-outs at Greyhound. Headquartered in Arlington, Texas, Laidlaw, Inc., now known as Laidlaw International, Inc. -- http://www.laidlaw.com/-- is North America's #1 bus operator. Laidlaw's school buses transport more than 2 million students daily, and its Transit and Tour Services division provides daily city transportation through more than 200 contracts in the US and Canada. Laidlaw filed for chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No. 01-14099). Garry M. Graber, Esq., at Hodgson Russ LLP, represents the Debtors. Laidlaw International emerged from bankruptcy on June 23, 2003. * * * Moody's Investors Service has upgraded the ratings of Laidlaw International Inc. senior implied to Ba2 from B1, in June 2005. In a related action, Moody's assigned Ba2 ratings to the company's $300 million Term Loan and $300 million Revolving Credit facility. Moody's said the rating outlook is stable. LIN TV: Incurs $29.7 Million Net Loss in Fourth Quarter ------------------------------------------------------- LIN TV Corp. (NYSE: TVL) reported its financial results for the fourth quarter and year ended December 31, 2005. Net revenues for the fourth quarter of 2005 were $111.5 million compared to net revenues of $108.1 million in the fourth quarter of 2004, a 3% increase. Direct operating and selling, general and administrative expenses, which exclude depreciation and amortization of intangible assets, were $61.0 million in the fourth quarter of 2005 compared to $52.7 million in the fourth quarter of 2004. Amortization of program rights increased to $8.9 million in the fourth quarter of 2005 from $7.2 million in the fourth quarter of 2004, and depreciation and amortization of intangible assets increased to $10.3 million in the fourth quarter of 2005 from $8.8 million in the comparable 2004 period. Corporate overhead increased to $6.5 million in the fourth quarter of 2005 from $5.0 million in the fourth quarter of 2004. Operating loss for the fourth quarter of 2005 was $8.6 million compared to income of $34.4 million for the fourth quarter of 2004. Operating loss for the fourth quarter of 2005 included a $33.4 million pre-tax impairment in the carrying value of goodwill, which was reflected as an operating expense. Net loss for the fourth quarter of 2005 was $29.7 million compared to net income of $62.2 million in the fourth quarter of 2004. Net revenues for the year ended December 31, 2005 increased to $380.4 million compared to net revenues of $376.7 million in the comparable period of 2004. Operating income for the year ended December 31, 2005 was $42.4 million compared to $101.0 million in the year ended December 31, 2004. Net loss for the year ended December 31, 2005 was $26.1 million compared to 2004 net income of $93.0 million. Results for the fourth quarter and full year 2005 were impacted by the acquisition of seven television stations in 2005. Net loss for 2005 includes a $14.4 million pre-tax loss resulting from the extinguishment of debt, a $33.4 million pre-tax loss related to an impairment in the carrying value of goodwill and a pre-tax decrease of $10.5 million in the gain from the Company's derivative instruments compared to the gain recognized in 2004. Net income for 2004 reflected a $3.3 million gain resulting from the cumulative effect of a change in accounting principle related to the consolidation of the Company's ownership stake in Banks Broadcasting, Inc., on March 31, 2004 following the adoption of FIN 46(R). Net income in both the fourth quarter and the full year 2004 also included a benefit from income tax of $50.1 million related to the reversal of the Company's tax valuation allowance. Capital expenditures were $18.0 million for the year ended December 31, 2005, compared to $28.8 million for the year ended December 31, 2004. The Company received $5.0 million in cash distributions from equity investments for the year ended December 31, 2005, compared to $7.9 million for the year ended December 31, 2004. The Company adopted SFAS 123(R), "Share-Based Payment" in the fourth quarter of 2005. Stock-based compensation for the quarters ended December 31, 2005 and 2004 were $1.9 million and $28,000, respectively, and for the years ended December 31, 2005 and 2004, were $3.8 million and $0.4 million, respectively. Gary Chapman, LIN TV's Chairman, President and Chief Executive Officer, said "We are pleased to have grown fourth quarter revenues despite a difficult comparison to last year's quarter, which included a significant amount of political revenue. The increase in revenues was driven principally by the acquisition of the UPN affiliated stations in Indianapolis and Columbus we acquired in March, as well as by the five stations we acquired from Emmis Communications in November. We are focused on improving our entire station group's operating performance in 2006 and expect demand for political and Olympic advertising will provide a catalyst for increased revenues in 2006." Balance Sheet Total debt outstanding on December 31, 2005, was $981.7 million and cash and cash equivalent balances were $11.1 million. The Company's net consolidated leverage as defined in its credit facility was approximately 7.1x as of December 31, 2005. Guidance Based on current pacings, LIN TV expects that first quarter revenue will increase 24% to 26% compared to net revenue of $78.8 million for the first quarter of 2005. Excluding the 2005 acquisitions, the Company expects same station revenue to increase in the low single digits from the first quarter of the prior year. Expense guidance for the full year 2006 is as follows: About LIN TV LIN TV Corp. -- http://lintv.com/-- owns and operates 30 T.V. in 18 mid-sized markets in the U.S. and Puerto Rico. LIN TV owns approximately 20% of KXAS-TV in Dallas, Texas and KNSD-TV in San Diego, California through a joint venture with NBC, and is a 50% non-voting investor in Banks Broadcasting, Inc., which owns KWCV-TV in Wichita, Kansas and KNIN-TV in Boise, Idaho. LIN TV also is a one-third owner of WAND-TV, the ABC affiliate in Decatur, Illinois, which it manages pursuant to a management services agreement. * * * Standard & Poor's Ratings Services lowered its ratings on LIN TV Corp., including lowering its long-term corporate credit rating to 'B+' from 'BB-' in August 2005. S&P said the outlook is stable. Moody's Investors Service put Ba2 corporate family rating on LIN TV. Moody's also placed B1 ratings on the Company's senior secured bank credit facility and senior subordinated debts. LONDON FOG: Hires Belding Harris as Bankruptcy Counsel ------------------------------------------------------ London Fog Group, Inc., and its debtor-affiliates sought and obtained permission from the U.S. Bankruptcy Court for the District of Nevada to employ Belding, Harris & Petroni, Ltd. as their bankruptcy counsel. Belding Harris is expected to: a. examine and prepare records and reports as required by the Bankruptcy Code, Federal Rules of Bankruptcy Procedure and Local Bankruptcy Rules; b. prepare applications and proposed orders to be submitted to the Court; c. identify and prosecute claims and causes of action assertable by the Debtors on behalf of the estate; d. examine proofs of claim anticipated to be filed and the possible prosecution of objections to certain claims; e. advise the Debtors and prepare documents in connection with the contemplated ongoing operation of the Debtors' business; f. assist and advise the Debtors in performing other official functions as set forth in Section 521, of the Bankruptcy Code; and g. advise and prepare a Plan of Reorganization, Disclosure Statement, related documents, and confirmation of the Plan. Stephen R. Harris, Esq., a member at Belding Harris, tells the Court that the Firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Stephen R. Harris, Esq. Attorney $350 Chris D. Nichols, Esq. Attorney $275 Gloria M. Petroni, Esq. Attorney $300 Stephen C. Moss, Esq. Attorney $275 Paraprofessional Services $30 - $125 Mr. Harris assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Seattle, Washington, London Fog Group, Inc. -- http://londonfog.com/-- designs and retails the latest styles in jackets and other professional apparel. The company and six of its affiliates filed for chapter 11 protection on March 20, 2006 (Bankr. D. Nev. Case No. 06-50146). Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd., represents the Debtors in their restructuring efforts. Avalon Group, Ltd., serves as the Debtors' financial advisor. When the Debtors filed for protection from their creditors, they estimated that their assets and debts totaled $50 million to $100 million. LYONDELL CHEMICAL: Mulls Sale of Lyondell-Citgo Houston Refinery ---------------------------------------------------------------- Lyondell Chemical Company (NYSE: LYO) and CITGO Petroleum Corporation signed a letter of intent to jointly explore the sale of the Lyondell-CITGO Refining LP partnership, which operates a refinery in Houston, Texas, with a crude oil processing capacity of 268,000 barrels per day. Litigation Settlement The companies also reported the settlement of all disputes between Lyondell, CITGO and Petroleos de Venezuela, S.A., including the litigation concerning the refinery crude supply agreement. The cash settlement amount was not disclosed. The demand for refined products in the United States and the lack of available refining capacity has further enhanced the value of full-conversion refineries such as LCR. The Houston refinery has the ability to transform very heavy high-sulfur crude oil into clean fuels including reformulated gasoline and low-sulfur diesel, as well as other high-value products such as jet fuel and aromatics. The refinery is strategically located on the U.S. Gulf Coast with access to interstate pipelines and the Port of Houston. The companies will move diligently and expeditiously to prepare an offering memorandum and establish a data room for interested bidders. Any sale would be subject to the approval of appropriate governing bodies. Lyondell-Citgo Refining LP was formed in 1993 as a joint venture between Lyondell Chemical Company and CITGO Petroleum Corporation, an indirect wholly owned subsidiary of Petroleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela. In 1997, LCR completed an upgrade of the refinery to process large volumes of very heavy, high sulfur crude oil from Venezuela. Lyondell holds a 58.75% interest in LCR and CITGO holds a 41.25% interest. About CITGO Petroleum Headquartered in Houston, Texas, CITGO Petroleum Corporation -- http://www.citgo.com/-- is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals, refined waxes, asphalt and other industrial products. The company is owned by PDV America, Inc., an indirect wholly owned subsidiary of Petroleos de Venezuela, S.A., the national oil company of the Bolivarian Republic 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. About Lyondell Chemical Headquartered in Houston, Texas, Lyondell Chemical Company -- http://www.lyondell.com/-- is North America's third-largest independent, publicly traded chemical company. Lyondell is a major global manufacturer of basic chemicals and derivatives including ethylene, propylene, titanium dioxide, styrene, polyethylene, propylene oxide and acetyls. Lyondell employs approximately 10,000 people worldwide. * * * As reported in the Troubled Company Reporter on Feb. 7, 2006, Fitch Ratings has upgraded these ratings for Lyondell Chemical Company: -- Issuer default rating to 'BB-' from 'B'; -- Senior secured credit facility to 'BB+' from 'BB/RR1'; -- Senior secured notes and debentures to 'BB+' from 'BB-/RR2'; and -- Subordinated notes to 'B+' from 'B/RR4'. For Lyondell, approximately $2.9 billion of debt is covered. The Rating Outlook for Lyondell was revised to Stable from Positive. MAGRUDER COLOR: Wants Environmental Waste Management as Consultant ------------------------------------------------------------------ Magruder Color Company, Inc., nka Maggyco Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the District of New Jersey for permission to employ Environmental Waste Management Associates, LLC as their environmental consultants. Environmental Waste will: (1) assist the Debtors in determining a fixed-price for cleanup of the Debtors' real estate and planning for completing any necessary remediation; (2) conduct further subsurface investigation at the Debtors' facilities; (3) prepare Preliminary Assessment Reports; preliminary site inspection, review environmental database records, review historical records and attempt to search for any other readily available information that may be required under the Industrial Site Recovery Act by the New Jersey Department of Environmental Protection; (4) obtain and review available historical fire insurance maps as an aid in identifying potential areas of environmental concern at the Debtors' facilities; (5) perform site inspection and private utility markout of the Debtors' facilities to identify and unmarked utilities; (6) investigate and delineate subsurface soil and ground water conditions, coordinate and oversee installation of corings in the concrete floors of any buildings in which borings will be installed; and (7) analyze soil and ground water for appropriate parameters, based upon known or suspected materials usage in the areas of the Debtors; facilities. Christopher W. Richter, a technical director of Environmental Waste, tells the Court that the Firm will bill: * $15,000 for the preparation of the four preliminary assessment reports; * $68,000 for the remedial investigation proposed to determine the fixed price for cleanup; and * $12,000 for drilling, sampling and analysis to complete the remedial investigation activities. Mr. Richter assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Elizabeth, New Jersey, Magruder Color Company -- http://www.magruder.com/-- and its affiliates manufacture basic pigment and also supply quality products to the ink, paint, and plastics industries. The Company and its debtor-affiliates filed for chapter 11 protection on June 2, 2005 (Bankr. D.N.J. Case No. 05-28342). Bruce D. Buechler, Esq., at Lowenstein Sandler PC represent the Debtors in their restructuring efforts. When the Debtors filed protection from their creditors, they estimated assets and debts of $10 million to $50 million. MARINO AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Marino Automotive Group LLC dba Freeway Mitsubishi dba Duarte Mitsubishi 1125 Central Avenue Duarte, California 91010 Tel: (626) 301-4181 Bankruptcy Case No.: 06-11330 Type of Business: The Debtor is a dealer and provider of Mitsubishi cars, trucks, and SUVs. See http://www.duartemitsubishi.com/ Chapter 11 Petition Date: April 7, 2006 Court: Central District Of California (Los Angeles) Judge: Richard M. Neiter Debtor's Counsel: Susan K. Seflin, Esq. Levene Neale Bender Rankin & Brill LLP 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Taxes $266,648 SPF - Insolvency 300 North Los Angeles Street #4062 Stop Los Angeles, CA 90012 Creative Realty Partners Trade Debt $162,000 301 North Lake Avenue, Suite 910 Pasadena, CA 91101 State Board of Equalization Sales Tax $121,000 P.O. Box 942879 Sacramento, CA 94279 Mitsubishi Motor Sales Rent $89,313 Of America WF Business Payment Processing Wells Fargo $24,959 Credit Card Employment Development Taxes $22,822 Department Charter Media Advertising $21,250 Federated Insurance Trade Debt $20,043 Carsdirect.com Advertising $13,552 Berliner & Company Accounting $11,987 Trader Publishing Co. Advertising $11,358 RJ Channels, Inc. Accounting Services $10,293 Horizon Law Group LLP Trade Debt $8,250 Univision Radio L.A., Inc. Advertising $7,400 Modern Consumer LLC Trade Debt $6,165 Ionics Ultrapure Water Trade Debt $6,021 Aramark Uniform Service Trade Debt $5,635 Neleven, LLC Trade Debt $5,430 Who's Calling Trade Debt $4,249 Pennysaver Advertising $4,050 MEDIACOM BROADBAND: Moody's Holds Ba3 Rating on Amended Term Loan ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the proposed amended term loan of Mediacom LLC and affirmed the Ba3 rating on the amended senior secured term loans of Mediacom Broadband LLC. LLC and Broadband are wholly owned subsidiaries of Mediacom Communications Corporation. The proposed transaction provides incremental financing capacity to repay Mediacom's $172.5 million of 5.25% convertible notes maturing July 2006, extends maturities of existing term loans, and slightly increases bank capacity. As such, it represents a modest improvement in Mediacom's liquidity, although Mediacom's overall cost of debt will rise slightly following the expected repayment of the 5.25% convertible notes. The proposed transaction would increase LLC's existing senior secured term loan B to $650 million from $500 million, as well as providing Broadband with capacity for an incremental $250 million term. Moody's expects Mediacom to apply proceeds from the increased term loans to repayment of existing borrowings under its revolving credit facilities and the maturing convertibles, and it should not result in a material increase in overall debt. Moody's also affirmed Mediacom's B1 corporate family rating and all other ratings. These ratings reflect high financial risk, as well as Mediacom's slower rollout of new products and weaker operating performance relative to peers. The high loan-to-value coverage inherent in its incumbent cable assets, strong liquidity, management's commitment to improving the credit profile, and the potential for incremental revenue and cash flow growth over the long term as penetration of advanced services increases, however, support the ratings. Rating actions: Issuer: Mediacom LLC * Ba3 Secured Bank Rating Assigned * B3 Rating on Senior Notes Affirmed Issuer: Mediacom Broadband * Ba3 Secured Bank Rating Affirmed * B2 Rating on Senior Notes Affirmed Issuer: Mediacom Communications * B1 Corporate Family Rating Affirmed * Caa1 Rating on Convertible Senior Notes Affirmed * SGL-2 Speculative Grade Liquidity Rating Affirmed The stable outlook reflects Moody's expectation that subscriber losses and margin erosion will moderate, and that the company will refrain from any re-leveraging initiatives prior to a meaningful reduction in debt. The strength of the company's liquidity profile will continue to be an important consideration in both the company's ratings and outlook. A positive outlook or upgrade is highly unlikely over the next 12-to-18 months given the magnitude of de-leveraging required to support higher ratings. Leverage approaching 8 times debt-to-EBITDA would likely pressure the rating down. Failure to stabilize erosion of basic subscribers and customer relationships, particularly given the near completion of the majority of DBS local TV signal rollouts, could also result in a negative outlook or downgrade. The Ba3 senior secured ratings on the bank facilities reflect the effective and structural seniority of this debt to all the unsecured debt of the company, even though the bank lenders have a security interest in stock only, not the company's assets. This senior-most debt class, which comprises slightly over 50% of total debt, also benefits from a still fairly large layer of junior capital beneath, notwithstanding a potential modest decline in this cushion due to the maturity of convertible notes at the ultimate parent within the year. The B2 and B3 senior unsecured ratings for the intermediate holding company notes of Broadband and LLC, respectively, reflect their structural and effective subordination to the large subsidiary bank credit facilities and all other claims at the subsidiary level. The lower rating for the LLC notes primarily reflects its lower quality assets relative to Broadband, as well as the higher leverage at the LLC subsidiary, even though Moody's recognizes Mediacom can shift capital between the entities, with some limitations. Notwithstanding the perceived higher quality of the Broadband assets, however, the repayment of the convertible notes could pressure the B2 rating on the Broadband notes down, given the reduction in junior capital and increase in bank debt. Mediacom Communications Corporation is a domestic multiple system cable operator serving approximately 1.4 million subscribers in a wide variety of small markets. The company maintains its headquarters in Middletown, New York. The company's corporate family rating is B1 and the rating outlook is stable. MEDIACOM COMM: Moody's Holds Junk Rating on Convertible Notes ------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the proposed amended term loan of Mediacom LLC and affirmed the Ba3 rating on the amended senior secured term loans of Mediacom Broadband LLC. LLC and Broadband are wholly owned subsidiaries of Mediacom Communications Corporation. The proposed transaction provides incremental financing capacity to repay Mediacom's $172.5 million of 5.25% convertible notes maturing July 2006, extends maturities of existing term loans, and slightly increases bank capacity. As such, it represents a modest improvement in Mediacom's liquidity, although Mediacom's overall cost of debt will rise slightly following the expected repayment of the 5.25% convertible notes. The proposed transaction would increase LLC's existing senior secured term loan B to $650 million from $500 million, as well as providing Broadband with capacity for an incremental $250 million term. Moody's expects Mediacom to apply proceeds from the increased term loans to repayment of existing borrowings under its revolving credit facilities and the maturing convertibles, and it should not result in a material increase in overall debt. Moody's also affirmed Mediacom's B1 corporate family rating and all other ratings. These ratings reflect high financial risk, as well as Mediacom's slower rollout of new products and weaker operating performance relative to peers. The high loan-to-value coverage inherent in its incumbent cable assets, strong liquidity, management's commitment to improving the credit profile, and the potential for incremental revenue and cash flow growth over the long term as penetration of advanced services increases, however, support the ratings. Rating actions: Issuer: Mediacom LLC * Ba3 Secured Bank Rating Assigned * B3 Rating on Senior Notes Affirmed Issuer: Mediacom Broadband * Ba3 Secured Bank Rating Affirmed * B2 Rating on Senior Notes Affirmed Issuer: Mediacom Communications * B1 Corporate Family Rating Affirmed * Caa1 Rating on Convertible Senior Notes Affirmed * SGL-2 Speculative Grade Liquidity Rating Affirmed The stable outlook reflects Moody's expectation that subscriber losses and margin erosion will moderate, and that the company will refrain from any re-leveraging initiatives prior to a meaningful reduction in debt. The strength of the company's liquidity profile will continue to be an important consideration in both the company's ratings and outlook. A positive outlook or upgrade is highly unlikely over the next 12-to-18 months given the magnitude of de-leveraging required to support higher ratings. Leverage approaching 8 times debt-to-EBITDA would likely pressure the rating down. Failure to stabilize erosion of basic subscribers and customer relationships, particularly given the near completion of the majority of DBS local TV signal rollouts, could also result in a negative outlook or downgrade. The Ba3 senior secured ratings on the bank facilities reflect the effective and structural seniority of this debt to all the unsecured debt of the company, even though the bank lenders have a security interest in stock only, not the company's assets. This senior-most debt class, which comprises slightly over 50% of total debt, also benefits from a still fairly large layer of junior capital beneath, notwithstanding a potential modest decline in this cushion due to the maturity of convertible notes at the ultimate parent within the year. The B2 and B3 senior unsecured ratings for the intermediate holding company notes of Broadband and LLC, respectively, reflect their structural and effective subordination to the large subsidiary bank credit facilities and all other claims at the subsidiary level. The lower rating for the LLC notes primarily reflects its lower quality assets relative to Broadband, as well as the higher leverage at the LLC subsidiary, even though Moody's recognizes Mediacom can shift capital between the entities, with some limitations. Notwithstanding the perceived higher quality of the Broadband assets, however, the repayment of the convertible notes could pressure the B2 rating on the Broadband notes down, given the reduction in junior capital and increase in bank debt. Mediacom Communications Corporation is a domestic multiple system cable operator serving approximately 1.4 million subscribers in a wide variety of small markets. The company maintains its headquarters in Middletown, New York. The company's corporate family rating is B1 and the rating outlook is stable. MEDIACOM LLC: Moody's Rates Proposed Amended Term Loan at Ba3 ------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the proposed amended term loan of Mediacom LLC and affirmed the Ba3 rating on the amended senior secured term loans of Mediacom Broadband LLC. LLC and Broadband are wholly owned subsidiaries of Mediacom Communications Corporation. The proposed transaction provides incremental financing capacity to repay Mediacom's $172.5 million of 5.25% convertible notes maturing July 2006, extends maturities of existing term loans, and slightly increases bank capacity. As such, it represents a modest improvement in Mediacom's liquidity, although Mediacom's overall cost of debt will rise slightly following the expected repayment of the 5.25% convertible notes. The proposed transaction would increase LLC's existing senior secured term loan B to $650 million from $500 million, as well as providing Broadband with capacity for an incremental $250 million term. Moody's expects Mediacom to apply proceeds from the increased term loans to repayment of existing borrowings under its revolving credit facilities and the maturing convertibles, and it should not result in a material increase in overall debt. Moody's also affirmed Mediacom's B1 corporate family rating and all other ratings. These ratings reflect high financial risk, as well as Mediacom's slower rollout of new products and weaker operating performance relative to peers. The high loan-to-value coverage inherent in its incumbent cable assets, strong liquidity, management's commitment to improving the credit profile, and the potential for incremental revenue and cash flow growth over the long term as penetration of advanced services increases, however, support the ratings. Rating actions: Issuer: Mediacom LLC * Ba3 Secured Bank Rating Assigned * B3 Rating on Senior Notes Affirmed Issuer: Mediacom Broadband * Ba3 Secured Bank Rating Affirmed * B2 Rating on Senior Notes Affirmed Issuer: Mediacom Communications * B1 Corporate Family Rating Affirmed * Caa1 Rating on Convertible Senior Notes Affirmed * SGL-2 Speculative Grade Liquidity Rating Affirmed The stable outlook reflects Moody's expectation that subscriber losses and margin erosion will moderate, and that the company will refrain from any re-leveraging initiatives prior to a meaningful reduction in debt. The strength of the company's liquidity profile will continue to be an important consideration in both the company's ratings and outlook. A positive outlook or upgrade is highly unlikely over the next 12-to-18 months given the magnitude of de-leveraging required to support higher ratings. Leverage approaching 8 times debt-to-EBITDA would likely pressure the rating down. Failure to stabilize erosion of basic subscribers and customer relationships, particularly given the near completion of the majority of DBS local TV signal rollouts, could also result in a negative outlook or downgrade. The Ba3 senior secured ratings on the bank facilities reflect the effective and structural seniority of this debt to all the unsecured debt of the company, even though the bank lenders have a security interest in stock only, not the company's assets. This senior-most debt class, which comprises slightly over 50% of total debt, also benefits from a still fairly large layer of junior capital beneath, notwithstanding a potential modest decline in this cushion due to the maturity of convertible notes at the ultimate parent within the year. The B2 and B3 senior unsecured ratings for the intermediate holding company notes of Broadband and LLC, respectively, reflect their structural and effective subordination to the large subsidiary bank credit facilities and all other claims at the subsidiary level. The lower rating for the LLC notes primarily reflects its lower quality assets relative to Broadband, as well as the higher leverage at the LLC subsidiary, even though Moody's recognizes Mediacom can shift capital between the entities, with some limitations. Notwithstanding the perceived higher quality of the Broadband assets, however, the repayment of the convertible notes could pressure the B2 rating on the Broadband notes down, given the reduction in junior capital and increase in bank debt. Mediacom Communications Corporation is a domestic multiple system cable operator serving approximately 1.4 million subscribers in a wide variety of small markets. The company maintains its headquarters in Middletown, New York. The company's corporate family rating is B1 and the rating outlook is stable. METROFINANCIERA: Fitch Assigns D Individual Rating -------------------------------------------------- Fitch Ratings assigned these ratings to Metrofinanciera, a Mexican mortgage lender: -- Foreign Currency Long-term Issuer Default Ratings 'BB-' -- Foreign Currency Short-term IDR 'B' -- Local Currency Long-term IDR 'BB-' -- Local Currency Short-term IDR 'B' -- Individual Rating 'D' -- Support Rating '5' The Rating Outlook is Stable. Fitch expects to assign a 'B' rating to an upcoming issuance of US$100 million subordinated perpetual non-cumulative securities. The expected rating on the issue reflects the fact that securities will be ranked junior to unsubordinated debtors, which comprise the vast majority of total liabilities (funding from government entities, bank facilities and domestic commercial paper). This rating will be made final upon receipt of conclusive documents confirming information already received. Metrofinanciera's ratings reflect its adequate asset quality and strong profitability but also consider its: * tight capitalization, * low liquidity, * systemic risks, and * high loan concentration. Similar to its peers, pressures on: * profitability, * asset quality, and * capitalization are slightly increasing. The company's profitability has remained strong, owing to: * a rapidly expanding asset base, * tight non-interest cost control, and * historically low provisioning; but also challenged by: * narrowing margins, * branch expansion, * growing loan loss provision, and * the increasingly competitive environment. The on-balance nonperforming loan ratio increased to 3.0% of total loans at year-end 2005 from 1.4% at year-end 2004 (reserve coverage declined to 90% from 100%). Construction loans account for 60% of its loan portfolio and the balance is comprised of mortgages. Loan concentrations are high, albeit improving. Since mortgage lenders like Metrofinanciera are not allowed to receive deposits, the company has successfully accessed local and international debt capital markets to obtain on-balance sheet funding and securitize a large portion of loans in order to support growth. Common to its peers, Metrofinanciera's capital is tight. At year-end 2005, the equity-to-assets ratio stood at 7.2%, although it has been improving recently. Despite strong internal capital generation and recurring securitizations, capital remains constrained due to rapid asset growth. Metrofinanciera is a Sociedad Financiera de Objeto Limitado (SOFOL, a mortgage non-bank bank) founded in 1996. At year-end 2005, it was the fourth largest SOFOL in terms of loans, with a market share of 8.3%. The SOFOLES were created, as a result of NAFTA, to allow financial intermediaries (such as non-bank bank institutions) to begin operating in Mexico and spur greater competition and specialization in the financial sector. After Mexican banks were privatized during the 1990s, they curtailed lending to the lower income housing market. Moreover, given the effects of the 1995 Tequila Crisis on banks, SOFOLES concentrated most of home financing over the following decade, while banks basically resumed mortgage lending last year. MILLS CORP: Looks to Goldman & JPMorgan for Help in Restructuring ----------------------------------------------------------------- The Mills Corporation (NYSE:MLS) reported a series of changes to: * enhance organizational efficiency, * strengthen the finance and accounting team and * reduce the cost of ongoing operations. Among other things, the measures are intended to facilitate the Company's proactive exploration of strategic alternatives. a) Richard J. Nadeau has been appointed executive vice president for finance and accounting and is expected to transition to the chief financial officer position. He will strengthen the Company's financial reporting team and assist in the previously disclosed restatement process and the consideration of strategic alternatives. He will continue to work with the Company's current Chief Financial Officer M.J. Morrow and her team. A 30-year accounting and auditing veteran, Mr. Nadeau formerly was chief financial officer for Colt Defense LLC in Hartford, Connecticut, and before that, an audit partner at KPMG and Arthur Andersen. Mr. Nadeau has broad REIT and real estate industry experience. b) The Company has reorganized its corporate structure and made key staffing changes. Leasing, development, marketing and external communications now report directly to new Chief Operating Officer Mark S. Ordan. c) The recently established Oversight Committee of the board of directors is working closely with management and the board's Executive Committee in various areas, including operational, governance, personnel and budget matters. d) The Company has implemented a further reduction in force of approximately 70 people, bringing the total headcount reduction made in the last 90 days to approximately 160 people. Additional positions have been eliminated through attrition. The total workforce reductions and attrition are expected to result in an annual run-rate cost savings of approximately $35 million. These anticipated savings are expected to be offset in 2006 by non-recurring charges, including severance and costs associated with the Company's pending restatement of its financial statements and related matters. The Company believes its workforce now is appropriate for the size of its operations and development pipeline. e) The reduction in force included James F. Dausch, who is leaving as president of the Company's development division effective May 2, 2006. Mr. Dausch is expected to continue to serve with the Company in a consulting role, working on state and local issues in New Jersey regarding our largest project, Meadowlands Xanadu. Mr. Dausch will directly advise the Meadowlands head of development, Dan Haggarty, and senior management. Mike Bryant, a development industry veteran, will be overseeing the development division of the company. Mr. Bryant has been a consultant for The Mills and for many years was a senior-level executive with The Rouse Company, where he had responsibility for a nationwide portfolio of developments. f) The Company is aggressively pursuing the exploration of strategic options to enhance shareholder value, which may include a sale of all or part of the Company or a recapitalization. President Mark D. Ettenger is leading the Company's strategic alternatives initiative along with his other responsibilities. Goldman, Sachs & Co. and J.P. Morgan Securities are assisting the Company with this process. "Today's announcements signal our commitment to strengthen the Company and enhance shareholder value," commented Laurence C. Siegel, chairman of the board and chief executive officer. "We welcome Rick Nadeau and his tremendous skill set and experience, and are pleased that Jim Dausch will continue to help us advance the important Meadowlands Xanadu project." "These changes are designed to help ensure that we continue to build value in our core operating properties and development and redevelopment opportunities and that we prudently manage our resources and spending," added Mr. Siegel. About The Mills Corporation Headquartered in Arlington, Virginia, The Mills Corporation -- http://www.themills.com/-- is a developer, owner and manager of a diversified global portfolio of retail destinations including regional shopping malls, market dominant retail and entertainment centers, and international retail and leisure destinations. It currently owns 42 properties in the U.S., Canada and Europe, totaling 51 million square feet. In addition, The Mills has various projects in development, redevelopment or under construction around the world. Its portfolio of real estate properties generated more than $8.7 billion in retail sales in 2004. The Mills is traded on the New York Stock Exchange under the MLS ticker. * * * As reported in the Troubled Company Reporter on March 24, 2006, The Mills Corporation disclosed that the Securities and Exchange Commission has commenced a formal investigation. The SEC initiated an informal inquiry in January after the Company announced the restatement of its prior period financials. Mills is restating its financial results from 2000 through 2004 and its unaudited quarterly results for 2005 to correct accounting errors related primarily to certain investments by a wholly-owned taxable REIT subsidiary, Mills Enterprises, Inc., and changes in the accrual of the compensation expense related to its Long-Term Incentive Plan. Asking Lenders for Waivers As previously reported, under the terms of its revolving credit facility, Mills Corp. is Required to complete the restatement of its financial statements by Apr. 1, 2006. The Company is seeking an extension from the lenders under that facility of the time for completing the restated financial statements and issuing its 2005 audited financial statements. At the same time, the Company will seek a waiver of any covenant defaults that may exist, in order to obtain borrowing capacity under its credit facility. MODTECH HOLDINGS: Secures $25 Mil. Financing from Bank of America ----------------------------------------------------------------- Modtech Holdings, Inc. (Nasdaq:MODT) secured a $25 million revolving credit facility with Bank of America Business Capital to refinance existing debt and for ongoing working capital needs. "This new financing arrangement represents a milestone in the Company's turnaround strategy and will allow us to reduce annual interest expense while having greater access to, and flexibility in utilizing, the fundsm," Modtech Holdings Chief Executive David Buckley commented. The previous facility, in addition to higher interest costs, involved relatively restrictive covenants, which also led to additional expenses during the last thirteen months." "However, substantial improvement in sales and stronger underlying financial performance during that time have enabled us to negotiate better terms and establish a financial relationship with a more traditional lender," Mr. Buckley continued. "In addition, the financial and operating benefits of this new credit facility are expected to contribute to further business growth and improving financial results, both of which are anticipated in 2006." Default The Term Loan balance totals $12.9 million, and the revolving Credit Loan balance totals $4.8 million as of Dec. 31, 2005 and the entire balance has been classified as current as the Company was in default of certain financial covenants. The Company did not seek waivers for this default due to the replacement of the Credit Facility with a new credit facility on April 4, 2006. A full-text copy of the loan and security agreement is available at no charge at http://ResearchArchives.com/t/s?7a5 About Modtech Holdings, Inc. Headquartered in Perris, California, Modtech(TM) Holdings, Inc. -- http://www.modtech.com/-- is a leading national designer and manufacturer of modular buildings, both permanent and relocatable. In the school industry, the Company has advanced typical modular building technology to greater dimensions of flexibility and architectural integrity. Modtech(TM) has substantial product and geographic diversification throughout the southwestern states and a growing presence in Florida and Texas. Modtech's commercial and industrial buildings are sold to a diverse end-user market and may be leased through national, regional, and local dealers. The Company also designs and manufactures modular buildings to customer specifications for a wide variety of uses. MSC-MEDICAL: S&P Downgrades Rating to B- With Negative Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Jacksonville, Florida-based workers' compensation-related ancillary products and services provider MSC - Medical Services Company, the operating subsidiary of holding company MCP-MSC Acquisition Inc. The corporate credit rating was lowered to 'B-' from 'B'. The outlook is negative. "The downgrade reflects our concerns about the company's ability to maintain its current base business and its substantially weaker-than-expected operating performance during 2005, which has resulted in weaker credit metrics than previously envisioned and little cushion under the company's tight financial covenants," said Standard & Poor's credit analyst Alain Pelanne. The ratings continue to reflect: * MSC's below-anticipated operating performance; * narrow business focus; * potential competition for its pharmacy benefits manager (PBM) business; * relatively low barriers to entry for its services; * reliance on its large workers' compensation insurance clients; * potential pricing pressure; and * its significant debt burden. These concerns are only partially mitigated by: * MSC's near-leading position in its industry; and * the trend by insurance carriers and others to outsource the company's services. MSC is the second-largest procurement provider of ancillary health care products and services to workers' compensation payors in the U.S. The company's customers include: * insurance carriers, * self-insured third-party administrators, and * those customers covered under state funds. MSC provides PBM services (approximately 53% of revenues) and coordinates and negotiates for the delivery of: * medical devices, * orthotics and prosthetics, * durable medical equipment, and * medical supplies. The company uses more than 7,000 vendors and provides more than 20,000 health care products and services. MUSICLAND HOLDING: Has Until Aug. 10 to File Lease Decision Motion ------------------------------------------------------------------ As previously reported, Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York authorized Musicland Holding Corp. and its debtor-affiliates to sell substantially all of their assets to Trans World Entertainment Corporation pursuant to an Asset Purchase Agreement. Any and all objections not withdrawn, waived, settled or otherwise resolved are overruled. The Court also authorizes the Debtors to enter into an Agency Agreement with their GOB Agent. The Court permits the Debtors to hold in escrow, pursuant to an arrangement to be agreed in writing by the Secured Trade Committee, the Official Committee of Unsecured Creditors and the Debtors, the balance of the cash portion of the Purchase Price and to not pay any prepetition debt or adequate protection claim related to it. Judge Bernstein clarifies and confirms that the Excluded Assets are: (a) the insurance program or other agreements related to the Debtors' previous insurance coverage by American Insurance Company and the claim administration services provided by ESIS, Inc.; (b) any agreements related to ACE's or ESIS' administration of claims made against the Debtors; (c) any collateral posted pursuant to the High Deductible Agreements; (d) any third party administration service agreements relating to claims against the Debtors that require them to pre- fund loss and expense payments; and (e) funds provided pursuant to those third party Service Agreements. The Debtors will not transfer to TWEC any asset, equipment or software it leases or licenses from Advanced Communication Design, Inc. The Debtors will return to ACD all of its equipment, software and proprietary data. Pursuant to Section 365(d)(4) of the Bankruptcy Code, the Court extends the time within which the Debtors must file a motion to assume and assign or reject their unexpired non-residential property leases through and including August 10, 2006. The Court authorizes the Debtors to sell, transfer and convey the TWEC Store Lease Rights to TWEC pursuant to the APA. TWEC will have until August 10, 2006, to direct the Debtors to assume and assign any TWEC Store Lease to it or its affiliates. Judge Bernstein rules that from the first proceeds of the Debtors' sale of substantially all of their assets, $416,000 will be placed in a segregated account to be held by the Debtors: Claimant Amount ------- ------ Local Tax Authorities, represented by $275,000 Linebarger, Goggan, Blair & Sampson, LLP Texas Ad Valorem Tax Authorities represented 65,000 by McCreary, Veselka, Brag & Allen, PC Texas Ad Valorem Tax Authorities represented 4,000 by the Law Offices of Robert Luna Texas Ad Valorem Tax Authorities represented 72,000 by Perdue, Brandon, Fielder, Collins & Mott, LLP A full-text copy of the 26-page TWEC Sale Order is available for free at http://bankrupt.com/misc/MusiclandTWECOrder.pdf The Court also approved certain procedures to be applied to any Sales to be held at the Stores. A full-text copy of the GOB Sale Guidelines is available for free at http://bankrupt.com/misc/MusiclandGOBSaleGuidelines.pdf 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) NASH-FINCH: Earns $13.5 Million of Net Income in Fourth Quarter --------------------------------------------------------------- Nash-Finch Company's (NASDAQ:NAFC) net earnings for the fiscal 2005 year were $41.3 million as compared to $14.9 million for fiscal 2004. Fiscal 2005 results included a net favorable impact of $1.4 million. Fiscal 2004 net earnings included several events, which had a net unfavorable impact of $24.0 million the largest of which was a special charge of $21.0 million involving primarily non-cash costs associated with the closure of 18 retail stores at the end of the second quarter 2004. Total sales for fiscal 2005 were $4.56 billion as compared to $3.90 billion in fiscal 2004, primarily reflecting the Company's acquisition from Roundy's Supermarkets, Inc., of wholesale food distribution centers located in Lima, Ohio and Westville, Indiana effective March 31, 2005. For the fourth quarter of 2005, total sales were $1.12 billion compared to $920 million in the prior-year period. Net earnings were $13.5 million for the fourth quarter 2005, compared to $11.2 million for the fourth quarter 2004. Net earnings for the fourth quarter 2005 were favorably affected by $1.1 million as a result of the reversal of tax reserves. Net earnings for the fourth quarter 2004 were affected by several events, listed on the attached schedule, that had a net unfavorable impact of $0.5 million the most significant of which were the payment of a call premium for early redemption of our 8.5% Senior Subordinated Notes and non-cash charges related to the refinancing of the Company's Senior Credit Facility. Food Distribution Results Food distribution segment sales for fiscal 2005 increased 36.1% to $2.67 billion compared to $1.96 billion in fiscal 2004, and for the fourth quarter 2005 increased 45.7% to $684.8 million from $470.0 million in the fourth quarter 2004. The acquisition of the distribution centers represented approximately 89% and 90% of the increase in food distribution sales in the yearly and quarterly comparisons. Excluding the impact of the acquisition, food distribution sales increased 4.0% in 2005 as compared to 2004, and 4.4% in the fourth quarter 2005 as compared to the year earlier quarter, primarily as a result of adding new accounts. Food distribution segment profits increased to $88.3 million in fiscal 2005 from $76.0 million in fiscal 2004, and increased to $23.6 million from $19.7 million in the fourth quarter comparison. In both the annual and quarterly comparisons, however, segment profits decreased as a percentage of sales, from 3.9% in fiscal 2004 to 3.3% in fiscal 2005, and from 4.2% to 3.4% in the quarterly comparison. The decrease in profit margins in the food distribution segment was partially due to inadequate execution in the management of manufacturer promotional spending. Also contributing to the margin decline were the demands of integrating the acquired distribution centers. This was a significant acquisition for the Company that diverted attention from our core business operations and entailed a more complex and costly integration process than we had expected. Military Distribution Results Military distribution segment sales for fiscal 2005 were $1.16 billion compared to $1.12 billion in fiscal 2004, an increase of 3.1%. Fourth quarter 2005 military segment sales of $272.4 million were slightly lower than the $274.7 million of sales recorded in the fourth quarter 2004. The sales growth during all of fiscal 2005 was due to increases in domestic commissary customer traffic, which in the fourth quarter 2005 was essentially offset by a decline in shipments to the overseas commissary system. Segment profits increased 8.3% in the annual comparison, from $36.3 million to $39.3 million, and 7.2% in the quarterly comparison, from $8.6 million to $9.3 million, reflecting increased annual sales as well as productivity improvements. Retail Results Corporate retail sales were $729.1 million in fiscal 2005 as compared to $813.8 million in fiscal 2004, and $166.0 million in the fourth quarter 2005 compared to $175.3 million in the comparable 2004 quarter. The decrease in retail sales is due to store closures that occurred during 2004 and 2005 and to same store sales decreases of 4.1% in the annual comparison and 2.7% in the quarterly comparison. Retail segment fiscal 2005 profits were $26.6 million, or 3.7% of sales, compared to $28.1 million, or 3.5% of sales, in fiscal 2004. Retail segment fourth quarter 2005 profits were $8.3 million, or 5.0% of sales, compared to $10.3 million, or 5.9% of sales, in the year earlier quarter. The decrease in retail profitability was primarily the result of negative same store sales as well as inadequate execution in pricing during the third quarter of 2005. The Company's store count at the end of fiscal 2005 was 78 compared to 85 at the end of fiscal 2004. The net decrease in stores during 2005 reflects both opportunistic sales of retail stores to existing food distribution customers and the closing of underperforming stores. Nash Finch Company -- http://www.nashfinch.com/-- is a Fortune 500 company and one of the leading food distribution companies in the United States. Nash Finch's core business, food distribution, serves independent retailers and military commissaries in 31 states, the District of Columbia, Europe, Cuba, Puerto Rico, Iceland, the Azores and Honduras. The Company also owns and operates a base of retail stores, primarily supermarkets under the Econofoods(R), Family Thrift Center(R) and Sun Mart(R) trade names. * * * As reported in the Troubled Company Reporter on March 9, 2006, Moody's Investors Service placed all ratings of Nash Finch Company under review for possible downgrade. The review was prompted by the ongoing discussion with the SEC regarding potential insider trading by certain company officers and directors, the abrupt departures of the CEO and General Counsel, and the apparent challenges in filling the CEO position. Ratings placed under review for downgrade are: * $125 million senior secured revolving credit facility (2009) of B1 * $175 million senior secured term loan (2010) of B1 * $322 million 3.5% convertible subordinated notes (2035) of B3 * Corporate family rating of B1 As reported in the Troubled Company Reporter on Feb. 20, 2006, Standard & Poor's Ratings Services placed its ratings on Nash Finch Co., including its 'B+' corporate credit rating, on CreditWatch with negative implications. NELLSON NUTRACEUTICAL: Wants Deloitte & Touche as Auditor --------------------------------------------------------- Nellson Nutraceutical, Inc., and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for permission to employ Deloitte & Touche LLP as their independent auditor and accountant, nunc pro tunc to Feb. 20, 2006. Deloitte & Touche will audit the Debtors' financial statements for the year ended Dec. 31, 2005, and any subsequent year requested by the Debtors. Marshall H. Mathison, a partner at Deloitte & Touche LLP, discloses that the Firm received a $57,900 prepetition retainer. Deloitte's professionals will charge the Debtors: Designation Hourly Rate ----------- ----------- Partner $440 Senior Manager $350 Manager $280 Senior Auditor $210 Semi-Senior Auditor $160 Staff $140 Mr. Mathison assures the Court that Deloitte & Touche LLP does not hold or represent any interest adverse to the Debtors and their estates and the Firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Objections to Deloitte & Touche's retention, if any, must be filed by 4:00 p.m. on Apr. 12, 2006. The Court will convene a hearing at 1:30 p.m. on Apr. 19, 2006, to consider the Debtors' request. 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. In its Schedules of Assets and Liabilities filed with the Court, Nellson Nutraceutical has $312,334,898 in total assets and $345,227,725 in total liabilities when it filed for bankruptcy. NELLSON NUTRACEUTICAL: Creditors Have Until May 31 to File Claim ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware, set 4:00 p.m. on May 31, 2006, as the deadline for all creditors owed money by Nellson Nutraceutical, Inc., and its debtor- affiliates on account of claims arising prior to Jan. 28, 2006, to file their proofs of claim. Creditors must file written proofs of claim on or before the May 31 Claims Bar Date and those forms must be delivered to: Nellson Claims Processing c/o AlixPartners, LLC 2100 McKinney Avenue, Suite 800 Dallas, Texas 75201 Governmental units have until 4:00 p.m. on July 27, 2006, to file proofs of claim. A proof of claim should be filed against a specific Debtor: Fed. Tax. Debtor Case No. ID No. ------ -------- -------- Nellson Nutraceutical, Inc. 06-10072 5044 Nellson Holdings, Inc. 06-10073 0642 Nellson Intermediate Holdings, Inc. 06-10074 0653 Nellson Northern Operating, Inc. 06-10075 7694 Nellson Nutraceutical Eastern Division, Inc. 06-10076 8503 Nellson Nutraceutical Powder Division, Inc. 06-10077 3670 Vitvex Foods, Inc. 06-10078 9218 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. In its Schedules of Assets and Liabilities filed with the Court, Nellson Nutraceutical has $312,334,898 in total assets and $345,227,725 in total liabilities when it filed for bankruptcy. NEXMED INC: Losses & Deficit Trigger Going Concern Doubt -------------------------------------------------------- NexMed, Inc. (NASDAQ: NEXM) delivered its financial results for the fiscal year ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 16, 2006. For the full year ended Dec. 31, 2005, the company reported a $15.4 million net loss on $2.4 million of net revenues compared to a $17.0 million net loss on $359,369 of net revenues for the same period in 2004. The 2005 revenue is primarily attributable to the revenue recognized in connection with the company's Novartis licensing agreement. For the year ended 2005, the net loss applicable to common stock was $16,550,479 compared to $17,023,648 for the same period in 2004. The decrease in net loss applicable to common stock is primarily attributable to the increase in revenues and ongoing efforts to reduce overhead. The Company currently has approximately $9 million in cash. Nasdaq Delisting As reported in the Troubled Company Reporter on Jan. 10, 2006, the company received a notice from Nasdaq indicating that it did not comply with the minimum $50 million market value of listed securities requirement for continued listing set forth in Marketplace Rule 4450(b)(1)(A). Additionally, the Company does not comply with the alternative Marketplace Rule 4450(b)(1)(B) which requires total assets and total revenue of $50 million each for the most recently completed fiscal year or two of the last three most recently completed fiscal years. Nasdaq will provide written notice that the Company's common stock will be delisted from the Nasdaq National Market at the opening of business on Jan. 31, 2006 unless the Company's market value of listed securities is $50 million or more for a minimum of 10 consecutive business days during the 30-day period ended Jan. 30, 2006 or if the company's total stockholder equity is above $10 million before January 30, 2006 in accordance with Marketplace Rule 4450 (a)(3). Should the Company receive such notice, it plans to file a request for a hearing with the Nasdaq's Listing Qualifications Panel to appeal the Nasdaq determination. The company has been informed that the appeal process may take up to 4 weeks during which the Company's stock will remain listed on the Nasdaq National Market. Going Concern Doubt PricewaterhouseCoopers LLP expressed substantial doubt about NexMed's ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's recurring losses, negative cash flows from operations and limited capital resources. About NexMed Headquartered in Robbinsville, New Jersey, NexMed, Inc. -- http://www.nexmed.com/-- an innovative drug developer, offers large pharmaceutical companies the opportunity to save considerably on R&D costs, develop new patient-friendly transdermal products, and extend patent lifespans and brand equity, through participation in early stage licensing and development partnerships. NexMed currently has a host of medicines in development, such as treatments for nail fungus, sexual disorders and more, all based on its proprietary NexACT drug delivery technology. Current partners include Novartis International Pharmaceutical for a topical anti-fungal nail treatment, and Schering AG for Alprox-TD, a topical treatment for erectile dysfunction. As of Dec. 31, 2005, the company's balance sheet showed an accumulated deficit of $117.7 million compared to a $102.2 million deficit for the same period in 2004. NORTHWESTERN CORP: S&P Lifts Sr. Unsecured Rating to BB- from B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit rating on NorthWestern Corp., an electric and gas utility, to 'BB+' from 'BB' because management continues to take positive steps to: * improve regulatory relations; * resolve litigation; and * strengthen the company through: -- noncore asset sales, -- utility investment, and -- debt reduction. In addition, certain senior secured debt ratings were raised to 'BBB-' from 'BB+' and others raised to 'BB+' from 'BB'. The senior unsecured rating was raised to 'BB-' from 'B+'. The company remains on CreditWatch with developing implications. The CreditWatch listing reflects: * Black Hills Corp.'s (BBB-/Watch Neg/--) offer to purchase the electric and gas utility for all stock or stock plus cash; and * the continuation of Montana Public Power Inc.'s (not rated) offer to acquire Sioux Falls, South Dakota-based NorthWestern with all-debt financing. "We believe that the existence of two offers increases the likelihood that NorthWestern will be sold," said Standard & Poor's credit analyst Gerrit Jepsen. Given the pending offers, uncertainty remains regarding NorthWestern's future credit ratings, which could be raised, lowered, or remain the same. Standard & Poor's will resolve the CreditWatch listing when the board of directors and the shareholders decide which, if either, of the bids they will accept, or when they firmly reject both offers. It is unclear what the timetable for resolution will be, given recently filed litigation by existing shareholders and the possibility of a shareholder proxy contest. "If an offer is accepted, we will want to assess the combined entity's creditworthiness before assigning new credit ratings," said Mr. Jepsen. "If all offers are rejected, we will likely affirm the existing ratings and assign a positive outlook, assuming NorthWestern's financial performance is still on an improving trend." NorthWestern had $743 million of total debt as of Dec. 31, 2005. Management's continued ability to favorably resolve outstanding litigation, the lack of an adverse outcome from a pending U.S. SEC investigation, and Standard & Poor's expectation that the company will achieve its financial performance projections all factor heavily into the ratings. NOVELIS INC: S&P Puts Sr. Unsecured Debt's B Rating on Neg. Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' long-term corporate credit and bank loan ratings and 'B' senior unsecured debt rating on Novelis Inc. on CreditWatch with negative implications. The CreditWatch placement follows Novelis' announcement that it has asked for a 31-day extension of the compliance filing waiver from its bank group to complete the filing of: * its 2005 restated first- and second-quarter results; and * its 2005 third-quarter results. The possibility of a technical notice of default and subsequent enforcement action by the banking syndicate seems unlikely, as the company has stated that it has paid down debt and that the magnitude of the restatements is small, generally noncash in nature, and likely to be marginally positive to net income. "Given the statements by the company, we believe that Novelis will be able to obtain the required waivers," said Standard & Poor's credit analyst Don Marleau. "Nevertheless, as with any reporting and filing issue, there remains uncertainty and Novelis' inability to obtain a waiver could result in a technical default under the bank credit agreement; therefore, the ratings on the company could be lowered," Mr. Marleau added. Although recent financial statements have not been filed, Novelis has stated that it has used free cash flow to pay down debt by more than US$300 million in 2005 and an additional US$80 million in the first quarter of 2006. The company expects to reduce debt by a total of US$200 million-US$250 million in 2006. The ratings on Novelis reflect its aggressive financial profile, characterized by a heavy debt burden and low, but stable margins. These weaknesses are alleviated by the company's leading position in the global aluminum rolled products market and extensive geographical and product diversity. Novelis uses primary and recycled aluminum to produce: * can sheet for sale to beverage producers and can fabricators; * various rolled products for construction, industrial, and transportation uses; and * foil for packaging. The company began stand-alone operations in January 2005 after Alcan Inc. (BBB+/Stable/A-2) spun off substantially all of its aluminum rolling businesses. Novelis' management is completely independent of Alcan, although the companies will have in place multiyear metals sales agreements. NPC INT'L: Moody's Rates Proposed $200MM Subordinated Debt at Caa1 ------------------------------------------------------------------ Moody's Investors Service assigned B1 ratings to NPC International, Inc.'s proposed $275 million term loan B and $75 million revolving credit facility and a Caa1 rating to the proposed $200 million in senior subordinated notes. A B2 Corporate Family and SGL-3 Speculative Grade Liquidity rating were also assigned. The outlook is stable. These are first time ratings for this company. NPC is being acquired by Merrill Lynch Global Private Equity Group for approximately $615 million. Proceeds from the proposed offerings along with approximately $163 million in equity contributed by MLGPE and management will be used to finance the acquisition. The B2 corporate family rating reflects NPC's limited product offering, concentrated day part, limited geographic diversification, competitive pressures and commodity price exposure as well as relatively high leverage, modest coverage, and marginal free cash flow generation. However, the ratings also incorporate NPC's positive same store sales growth, the benefits derived from its meaningful scale within the Pizza Hut franchise system, relatively flexible cost structure, and adequate liquidity. NPC International, Inc., headquartered in Lenexa, Kansas, is the largest franchisee of Pizza Hut restaurants with approximately 790 units located in 26 states. NRG ENERGY: Sells Rocky Road & Buys 50% Stake in West Coast Power ----------------------------------------------------------------- NRG Energy, Inc. (NYSE: NRG), acquired the remaining 50% ownership interest in West Coast Power LLC, becoming the sole owner of West Coast Power's 1,808 megawatts of generation in Southern California. The Company also completed the sale of its 50 percent ownership interest in Rocky Road Power LLC, in East Dundee, Ill., to Dynegy Inc. (NYSE: DYN). NRG paid Dynegy $205 million for its interest in West Coast Power and received $45 million from Dynegy for the Company's interest in Rocky Road. This acquisition brings NRG's net generating capacity in southern California to 1,808 megawatts. "We are pleased to be increasing our investment in California as the State has made progress with regard to capacity markets and long-term contracting options," said David Crane, NRG President and Chief Executive Officer. "As we've said, we will continue to pursue market development that supports the continued operations of existing plants that Californians need and investment in the next generation of energy infrastructure." Generating facilities in southern California now wholly owned by NRG include El Segundo, Cabrillo I (Encina), Cabrillo II (13 combustion turbines in the San Diego area) and the retired Long Beach station. NRG Energy, Inc. owns and operates a diverse portfolio of power- generating facilities, primarily in Texas and the Northeast, South Central and Western regions of the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities. NRG also has ownership interests in generating facilities in Australia and Germany. NRG Energy, Inc., currently owns and operates a diverse portfolio of power-generating facilities, primarily in the Northeast, South Central and Western regions of the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities. NRG also has ownership interests in generating facilities in Australia and Germany. * * * As reported in the Troubled Company Reporter on Jan. 16, 2006, Fitch Ratings placed a 'BB' rating to NRG's $5.2 billion secured credit facility, consisting of: * a $3.2 billion secured term loan B and $2 billion of revolving credit/synthetic letter of credit facilities, * a 'B' rating to NRG's proposed $3.6 billion issuance of senior unsecured notes, and * a 'CCC+' rating to NRG's proposed issuance of $500 million mandatory convertible preferred stock. In addition, Fitch has assigned NRG a 'B' issuer default rating, as well as recovery ratings for the debt instruments. Fitch said the Rating Outlook is Stable. As reported in the Troubled Company Reporter on Jan. 9, 2006, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on power generation company NRG Energy Inc. Standard & Poor's also assigned its: * 'BB-' rating and '1' recovery rating to NRG's $3.2 billion first lien term loan B and $2 billion revolving credit and LOC facilities, * 'B-' rating to NRG's $3.6 billion unsecured notes, and * 'CCC+' rating to NRG's $500 million mandatory convertible securities. The 'BB-' rating and '1' recovery rating on the $3.2 billion term loan B and $2 billion revolving credit and LOC facilities indicate the expectation of full recovery of principal in the event of a payment default. Standard & Poor's affirmed its 'CCC+' ratings on NRG's preferred stock issues. The stable outlook reflects Standard & Poor's view that NRG's credit quality should not significantly deteriorate in the short term. NUTRAQUEST INC: Wants Plan-Filing Period Extended Until June 9 -------------------------------------------------------------- Nutraquest, Inc., asks permission from the U.S. Bankruptcy Court for the District of New Jersey to: a) file a plan until June 9, 2006; and b) solicit acceptances of that Plan until August 8, 2006. Although it has already filed its Plan on Feb. 17, 2006, the Debtor believes that it cannot submit a complete and accurate disclosure statement explaining that Plan unless certain significant open issues are resolved, including without limitation: -- the Napa Actions; -- the FTC Action; and -- the documentation and approval of the Advertising Cases settlements. The Debtor assures the Court that the extension is not meant for purposes of delay. Overview of the Plan Under the Plan, Administrative Expense Claims, Priority Tax Claims and Nontax Priority Claims are entitled to full payment in cash. Class 3 Settled Ephedra PI Claims will also be paid in full but will be treated according to the Ephedra PI Settlement Agreement. Holders of Class 2 General Unsecured Claims will share, pro rata, a $50,000 pot funded entirely from the Debtor's cash on hand. On the effective date of the Plan, the Park Class Claim and all Individual Park Class Member Claims will be automatically assumed by the Park Claims Resolution Facility. Each Individual Park Class Member Claim will be treated in accordance with the Park Settlement Agreement. Only Allowed Individual Park Class Member Claims will receive monetary distributions under the Plan and the Park Settlement Agreement. Similarly, the Markowitz Class Claim and all Individual Markowitz Class Member Claims will be assumed by the Markowitz Claims Resolution Facility on the Effective Date. Each Individual Markowitz Class Member Claim will be treated in accordance with the Markowitz Settlement Agreement. Only Allowed Individual Markowitz Class Member Claims will receive monetary distributions under the Plan and the Markowitz Settlement Agreement. The current interests holders will retain their Interests under the Plan. A full-text copy of Nutraquest's Chapter 11 Reorganization Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060410050244 Headquartered in Manasquan, New Jersey, Nutraquest, Inc., is the marketer of the ephedra-based weight loss supplement, Xenadrine RFA-1. The Company filed for chapter 11 protection on October 16, 2003 (Bankr. N.J. Case No. 03-44147). Andrea Dobin, Esq., and Simon Kimmelman, Esq., at Sterns & Weinroth, P.C. represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. NUTRO PRODUCT: Moody's Junks Rating on $165MM Subordinated Notes ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Nutro Product, Inc.'s new senior secured credit facilities, a B3 to its senior unsecured notes, a Caa1 to its senior subordinated notes, as well as a B2 corporate family rating. The outlook on all ratings is stable. These represent first time ratings for this company. Ratings assigned are: * Corporate family rating of B2 * $440 million senior secured 6-year revolving credit at B1 * $100 million senior secured 7-year term loan at B1 * $180 million senior unsecured 7.5-year notes at B3 * $165 million senior subordinated 8-year notes at Caa1 The key rating factors currently influencing Nutro's ratings and stable outlook are: -- While the qualitative profile of Nutro's business is strong, its credit metrics are very weak and pull the overall rating down to the B2 level. -- Nutro is a moderate sized manufacturer of premium pet food sold exclusively through the niche category of specialty pet retailers. -- The company has built a solid franchise within this specialty retailer segment, where consumer trends are attractive with increases in pet ownership as well as the purchase of premium pet foods expected to continues. -- Sales and earnings growth has been strong and stable, although there exists the risk of larger competitors moving more aggressively into the specialty retail segment. -- Nutro's distribution model with specialty retailers has worked well, with the company being able to pass along raw material price increases with no noticeable margin compression. -- The company's profitability is top tier for the consumer products industry. -- Nutro's post-acquisition financial policy is very aggressive, with leverage and cash flow in relation to debt more representative of credits rated Caa and lower. -- Moody's notes that Nutro's independent auditors, as part of the audit of 2005 financial information, identified several material weaknesses and significant deficiencies in the company's internal controls over financial reporting. -- The outlook on Nutro's ratings is stable, reflecting our expectation that the company will maintain solid operating performance, remedy its accounting deficiencies, successfully transition a material portion of its production to a new manufacturing facility, and reduce leverage by bringing debt/EBITDA to below 6.0 times by Dec. 31, 2007. Nutro Products, Inc., headquartered in City of Industry California, is a manufacturer of premium pet food. ON SEMICONDUCTOR: Wants to Raise $82M in Stock Sale to Buy Assets ----------------------------------------------------------------- ON Semiconductor Corporation is offering 10,500,000 shares of its common stock to help finance its purchase of LSI Logic's wafer fabrication facility and certain other semiconductor manufacturing equipment in Gresham, Oregon. The Company needs $105 million to buy the assets. The Company expects to net $74.0 million from the stock offering, after deducting the underwriter's discounts and commissions and other expenses related to the offering based on an assumed offering price of $7.31, the reported sale price of its common shares on April 5, 2006. If Morgan Stanley & Co. Incorporated, the underwriter, exercises its over-allotment option to purchase additional shares from the Company in full, the Company estimates that its net proceeds will be around $82.1 million, after deducting the underwriter's discounts and commissions and other related expenses. The Company granted Morgan Stanley the right to purchase up to an additional 1,131,063 shares of common stock to cover over-allotments. The Company has not paid any cash dividends on its common stock since its initial public offering, and it does not presently intend to do so. The Company's senior bank facilities restrict our ability to pay cash dividends to our common stockholders. The Company's outstanding shares after the offering is completed, if the over-allotment option is exercised in full, will be 323,978,806 common shares. The Company's common shares are traded in the Nasdaq National Market under the symbol "ONNN". The Company's common shares are traded between $6.99 and $7.45 this month. A full-text copy of the Prospectus Supplement is available for free at http://ResearchArchives.com/t/s?7b1 ON Semiconductor Corp. -- http://www.onsemi.com/-- supplies power solutions to engineers, purchasing professionals, distributors and contract manufacturers in the computer, cell phone, portable devices, automotive and industrial markets. At Dec. 31, 2005, the Company's equity deficit narrowed to $300.3 million from a $537 million deficit at Dec. 31, 2004. ORIS AUTOMOTIVE: Section 341(a) Meeting Scheduled for April 25 -------------------------------------------------------------- A meeting of Oris Automotive Parts Alabama, Ltd.'s creditors will be held at 1:30 p.m., on Apr. 25, 2006, at Robert S. Vance Federal Building, 1800 5th Avenue, Room 127, in Birmingham, Alabama. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. 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. OWENS & MINOR: Completes $200 Mil. Offering of 6.35% Senior Notes ----------------------------------------------------------------- Owens & Minor, Inc. (NYSE:OMI) successfully completed its public offering of $200 million of its 6.35% Senior Notes due 2016 and accepted tenders from holders of 99.99% of the Company's 8-1/2% Senior Subordinated Notes due 2011 pursuant to its previously reported tender offer and consent solicitation for any and all of its outstanding $200 million of Existing Notes. Completion of New Notes Offering The New Notes were offered to the public at a price of $999.39 per $1,000 note, under a registration statement filed with the Securities and Exchange Commission on April 3, 2006. The New Notes are general senior unsecured obligations of the Company, pay interest semi-annually and are guaranteed on a senior unsecured basis by the Company's subsidiaries that incur or guarantee debt under the Company's revolving credit facility. Consistent with its existing corporate credit rating, Owens & Minor was assigned an investment grade rating of "BBB-" from Standard & Poor's, along with a rating of "Ba2" from Moody's, for the New Notes. In addition, Owens & Minor received an investment grade rating of "BBB-" from Fitch Ratings for these New Notes. As previously reported in the Troubled Company Reporter on April 6, 2006, the Company intends to use the net proceeds from the New Notes, together with cash on hand, to fund its tender offer to purchase for cash any and all of the Existing Notes. Acceptance of Requisite Consents The tender offer for the Existing Notes includes a consent solicitation to proposed amendments to eliminate substantially all of the covenants and certain events of default in the indenture relating to the Existing Notes. As of 5:00 p.m., New York City time, on April 3, 2006, tenders and consents were received with respect to $199,980,000 aggregate principal amount of the Existing Notes (99.99% of the total outstanding principal amount of the Existing Notes). Following the completion of the offering of the New Notes, the Company accepted and paid for all of the tenders and consents received as of the Consent Date. Holders who tendered on or prior to the Consent Date received total consideration of $1,050.23, including a $30.00 consent payment per $1,000 of Existing Notes properly tendered. Holders of the Existing Notes who properly tender after the Consent Date and on or prior to 11:59 p.m., New York City time, on April 17, 2006, will be eligible to receive the tender consideration which equals $1,020.23 per $1,000 of Existing Notes. The tender consideration is the total consideration minus the $30.00 consent payment. The exact terms and conditions of the tender offer and consent solicitation are specified in, and qualified in their entirety by, the Company's Offer to Purchase and Consent Solicitation Statement, dated March 21, 2006. Lehman Brothers Inc. is acting as exclusive dealer manager and solicitation agent for the tender offer and the consent solicitation. The information agent for the tender offer and consent solicitation is Georgeson Shareholder Communications, Inc. The depositary for the tender offer and consent solicitation is SunTrust Bank. Questions regarding the tender offer and consent solicitation may be directed to: Lehman Brothers Inc. Telephone (212) 528-7581 (collect) Toll Free (800) 438-3242 Requests for copies of the Offer to Purchase and related documents may be directed to: Georgeson Shareholder Communications, Inc. Telephone (212) 440-9800 (banks and brokerage firms) Toll Free (800) 868-1351 Lehman Brothers acted as the sole book-running manager, Banc of America Securities LLC, Citigroup and SunTrust Robinson Humphrey were senior co-managers and JPMorgan, KeyBanc Capital Markets and Wachovia Securities were co-managers for the public offering of the New Notes. A registration statement relating to the New Notes was filed and declared effective on April 3, 2006. Copies of the final prospectus relating to the offering of the New Notes can be obtained from: Lehman Brothers 745 7th Avenue New York, NY 10019 Toll Free 1-888-603-5847 A full-text copy of the Preliminary Prospectus for the New Notes is available at no charge at http://ResearchArchives.com/t/s?77a About Owens & Minor Headquartered in Richmond, Virginia, Owens & Minor, Inc. -- http://www.owens-minor.com/-- is the leading distributor of national name-brand medical and surgical supplies and a healthcare supply chain management company. With a diverse product and service offering and distribution centers throughout the United States, the Company serves hospitals, integrated healthcare systems, alternate care locations, group purchasing organizations, the federal government and consumers. A FORTUNE 500 company, Owens & Minor provides technology and consulting programs that enable healthcare providers to maximize efficiency and cost- effectiveness in materials purchasing, improve inventory management and streamline logistics across the entire medical supply chain -- from origin of product to patient bedside. The Company also has established itself as a leader in the development and use of technology. Owen & Minor's 8-1/2% Senior Subordinated Notes due 2011 carry Moody's Investors Service's Ba3 rating. OWENS CORNING: Disclosure Statement Hearing Adjourned to May 10 --------------------------------------------------------------- The Honorable Judith K. Fitzgerald adjourns the hearing to consider the approval of the Disclosure Statement with respect to the Fifth Amended Plan of Owens Corning and its debtor-affiliates to Wednesday, May 10, 2006, at 9:00 a.m. The Disclosure Statement Hearing may be adjourned from time to time without further notice other than an announcement of the adjourned date or dates at the Hearing or at an adjourned hearing. As reported in the Troubled Company Reporter on April 6, 2006, the Debtors, the Official Committee of Asbestos Claimants and the Legal Representative for Future Claimants delivered a revised Fifth Amended Joint Plan of Reorganization and an accompanying Disclosure Statement to the Court on March 29, 2006. The Revised Fifth Amended Plan and Disclosure Statement report recent developments in the Debtors' Chapter 11 cases since the filing of the Fifth Amended Plan in December. The Revised Plan and Disclosure Statement also reflect additional terms, which clarify or supplement certain provisions in the Disclosure Statement, to address the concerns raised by the official representatives of the bondholders and trade creditors. In a regulatory filing with the Securities and Exchange Commission, Stephen K. Krull, Owens Corning's senior vice president and general counsel, discloses that Owens Corning previously recorded expenses with respect to its primary prepetition bank credit facility for the period from the Petition Date through December 31, 2005, relating to postpetition interest and certain other postpetition fees on a basis consistent with the Fifth Amended Plan. With respect to postpetition interest and other fees payable under the Prepetition Credit Facility, Mr. Krull says the Revised Fifth Amended Plan provides that, if the holders of debt under the Prepetition Credit Facility are deemed unimpaired, or are deemed to be impaired and the class of the holders accepts the Revised Fifth Amended Plan -- and the Revised Fifth Amended Plan is confirmed and becomes effective -- then the holders of debt under the Prepetition Credit Facility will be paid: a. interest accrued through the date of delivery of the initial distribution under the Revised Fifth Amended Plan to holders of claims under the Prepetition Credit Facility -- the Initial Bank Holders' Distribution -- on the principal amount outstanding under the Prepetition Credit Facility as of the Petition Date, when calculated at the floating Base Rate plus 2% on a compounding basis; and b. any accrued and unpaid postpetition fees payable under the Prepetition Credit Facility through the date of delivery of the Initial Bank Holders' Distribution, plus accrued interest pursuant to the Prepetition Credit Facility calculated on a compounding basis. In light of the terms of the Revised Fifth Amended Plan, and absent developments that alter the Debtors' view of the likelihood of amounts that may be paid under the Revised Fifth Amended Plan to holders of debt under the Prepetition Credit Facility, Owens Corning anticipates: * recording, for the period ended March 31, 2006, additional expenses -- currently estimated to be in the range of $10,000,000 to $15,000,000 -- with respect to the Prepetition Credit Facility for the period from the Petition Date through December 31, 2005; and * accruing for the first quarter of 2006, and future periods prior to the Plan effective date, additional expenses that reflect the treatment provided in the Revised Fifth Amended Plan with respect to postpetition interest and other fees payable under the Prepetition Credit Facility. A full-text copy of the Revised Fifth Amended Plan is available for free at http://ResearchArchives.com/t/s?783 A full-text copy of the Revised Fifth Amended Disclosure Statement is available at http://ResearchArchives.com/t/s?784at no extra charge. Mr. Krull notes that the Revised Amended Disclosure Statement has been prepared in accordance with Section 1125 of the Bankruptcy Code and Rule 3016 of the Federal Rules of Bankruptcy Procedure and not in accordance with federal or state securities laws or other non-bankruptcy laws or regulations. Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 128; Bankruptcy Creditors' Service, Inc., 215/945-7000) PALAZZO DI STONECREST: Files Schedules of Assets and Liabilities ---------------------------------------------------------------- Palazzo Di Stonecrest, LLC delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Northern District of Georgia, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $19,500,000 B. Personal Property C. Property Claimed as Exempt D. Creditors Holding $8,389,847 Secured Claims E. Creditors Holding $500 Unsecured Priority Claims F. Creditors Holding Unsecured Nonpriority Claims ----------- ---------- Total $19,500,000 $8,390,347 Headquartered in Atlanta, Georgia, Palazzo Di Stonecrest, LLC, filed for chapter 11 protection on Mar. 7, 2006 (Bankr. N.D. Ga. Case No. 06-62584). David L. Miller, Esq., at the Law Office of David L. Miller, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $1 million and $10 million. PENN TREATY: S&P Affirms & Withdraws Counterparty Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC' counterparty credit rating on Penn Treaty American Corp. Standard & Poor's also subsequently withdrew this rating at the company's request. PTAC's primary insurance operating company, Penn Treaty Network America Insurance Co. (B/Stable/--), will continue to be rated by Standard & Poor's. The ratings on PTAC were based on: * its below-average business profile; * limited but improving business volume; and * below-average but improving earnings performance. PHI INC: Gets Requisite Consents for 9-3/8% Senior Notes due 2009 ----------------------------------------------------------------- PHI Inc. (Nasdaq: PHII) (Nasdaq: PHIIK) received, as of 5:00 p.m., New York City time, on April 6, 2006, tenders and consents from holders of over 90% of the aggregate principal amount of its outstanding 9-3/8% Senior Notes due 2009 in connection with its previously reported cash tender offer and consent solicitation for the Notes, which commenced on March 24, 2006. PHI intends to execute a supplemental indenture to the indenture governing the Notes to eliminate substantially all of the restrictive covenants, and certain events of default provisions in the Indenture and to shorten the minimum redemption notice period from 30 to five days should PHI elect to redeem any outstanding Notes in accordance with the Indenture. The Supplemental Indenture will not become operative until a majority in aggregate principal amount of the outstanding Notes has been purchased by PHI pursuant to the terms of the tender offer and the consent solicitation. PHI's obligation to accept for purchase, and to pay for, any Notes pursuant to the tender offer is conditioned upon, among other things, its completion of financing transactions with net proceeds to PHI of not less than $219 million. Subject to the satisfaction or waiver of these conditions, on the Initial Settlement Date all Holders who validly tendered and did not withdraw their Notes prior to the Consent Deadline will receive a consent payment of $2.00 per $1,000 principal amount of the Notes validly tendered and accepted for purchase, in addition to the tender offer consideration of $1,046.88 per $1,000 principal amount of Notes plus accrued and unpaid interest on those Notes. Holders who validly tender their Notes after the Consent Deadline but before the expiration of the tender offer will not receive the Consent Payment, but will receive on the Final Settlement Date the tender offer consideration for Notes accepted for purchase in accordance with the terms of PHI's Offer to Purchase and Consent Solicitation Statement, together with accrued and unpaid interest on those Notes. The Initial Settlement Date will occur on the business date we select, no later than the Final Settlement Date, after satisfaction or waiver of the conditions to the tender offer and the consent solicitation. The tender offer and the consent solicitation will expire at 9:00 a.m. New York City time, on April 24, 2006, unless extended or terminated by PHI, and the Final Settlement Date is expected to be the next business day. Any Notes not tendered and purchased pursuant to the tender offer will remain outstanding and the holders thereof will be subject to the terms of the supplemental indenture even though they did not consent to the amendments. UBS Investment Bank is acting as the dealer manager and solicitation agent, and D.F. King & Co., Inc. is the information agent for the tender offer. Requests for documentation should be directed to: D.F. King & Co., Inc. Telephone (212) 269-5550) for banks and brokerage firms Toll Free (888) 567-1626 Questions regarding the tender offer and consent solicitation should be directed to: UBS Investment Bank Attention: Liability Management Group Telephone (203) 719-4210 (collect) Toll Free (888) 722-9555 x4210 About Petroleum Helicopters Headquartered in Lafayette, La., PHI -- http://www.phihelico.com/ -- provides helicopter transportation and related services to the oil and gas industry, air medical industry and others and also provides third-party maintenance services to select customers. PHI's Common Stock is traded on The Nasdaq National Market System (symbols PHII and PHIIK). * * * As reported in the Troubled Company Reporter on April 10, 2006, 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. PHOTOCIRCUITS CORP: Panel Wants Court to Verify Glen Cove's Liens ----------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of Photocircuits Corporation asks the U.S. Bankruptcy Court for the Eastern District of New York to determine the extent, validity and priority of the liens asserted by the City of Glen Cove against the Debtor's property. Specifically, Glen Cove asserts that the Debtor has past due water and sewer charges aggregating $2,372,378, a portion of which, consisting a principal amount of $1,041,015 plus accrued interest, was added to Glen Cove's 2005 tax roll with respect to the Debtor's real property identified on the Nassau County tax map as Section 21, Block S, Lot 212P. In addition, Glen Cove asserts that the Debtor has unpaid city and school district taxes aggregating $478,285. Glen Cove contends that its claims against the Debtor for past due water and sewer charges, including both the Pre-2004 Charges and the 2004 and Subsequent Charges, as well as its claims for city and school district taxes, are all secured by liens against the Debtor's property and that the liens "are all first priority, priming, senior liens, by virtue of certain provisions of New York state law and the City of Glen Cove local law." The Committee disputes that the 2004 and Subsequent Charges give rise to secured claims in favor of Glen Cove and that any property of the Debtor other than Parcel 212P is subject to liens of Glen Cove arising from unpaid water and sewer charges. Accordingly, the Committee requests a declaratory judgment that: (a) the Water and Sewer Charges Liens are limited in amount to the Pre-2004 Charges; and (b) as limited, the Water and Sewer Charges Liens do not encumber any property of the Debtor other than Parcel 212P. The Committee also argues that the Water and Sewer Charges Liens were not filed of record and were not perfected during the Debtor's bankruptcy filing, except with respect to liens against Lot 212P arising from the Pre-2004 Charges Hence, the Committee believes that it is entitled to avoid the Water and Sewer Charges Liens, except with respect to liens against Lot 212P arising from the Pre-2004 Charges pursuant to Section 545(b) of the Bankruptcy Code and to preserve the avoided liens for the benefit of the Debtor's estate pursuant to Section 551 of the Bankruptcy Code. Headquartered in Glen Cove, New York, Photocircuits Corporation -- http://www.photocircuits.com/-- was the first independent printed circuit board fabricator in the world. Its worldwide reach comprises facilities in Peachtree City, Georgia; Monterrey, Mexico; Heredia, Costa Rica; and Batangas, Philippines. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. E.D.N.Y. Case No. 05-89022). Gerard R. Luckman, Esq., at Silverman Perlstein & Acampora LLP, represents the Debtor in its restructuring efforts. Ted A. Berkowitz, Esq., and Louis A. Scarcella, Esq., at Farrell Fritz, P.C., represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated more than $100 million in assets and debts. PLIANT CORP: Panel Wants to Tap Kramer Capital as Fin'l Advisors ---------------------------------------------------------------- To guide it through Pliant Corporation and its debtor-affiliates' chapter 11 cases, the Official Committee of Unsecured Creditors believes it critically needs to retain financial advisory services. After a competitive selection process, the Committee decided to retain the services of Kramer Capital Partners, LLC, pursuant to the terms of an engagement letter. The Committee selected Kramer based in large part on the experience of its professionals and on its familiarity with the Debtors' industry. Kramer Capital, which maintains offices at 750 Washington Boulevard, Stamford, in Connecticut, has been involved with and represented creditors in significant Chapter 11 cases. In that regard, the Committee seeks the U.S. Bankruptcy Court for the District of Delaware's permission to retain Kramer Capital as its financial advisor, effective January 18, 2006. Kramer Capital will: a. evaluate the Debtors' assets and liabilities; b. analyze the Debtors' financial and operating statements; c. analyze the Debtors' business plans and forecasts; d. evaluate the Debtors' liquidity, its debtor-in-possession financing, cash collateral usage and adequate protection, and the prospects for any exit financing in connection with any plan of reorganization and any related budgets; e. provide specific valuation or other financial analyses as the Committee may require in connection with the Debtors' bankruptcy cases; f. assess the financial issues and options concerning the sale of the Debtors, or any of them, or their respective assets or structuring any plan of reorganization; and g. provide testimony in court, on behalf of the Committee, if necessary or as reasonably requested by the Committee. The Creditors Committee proposes that Kramer Capital be: -- paid a $125,000 monthly fee commencing January 18, 2006; -- paid a 1% transaction fee for Unsecured Creditor Recoveries; and -- reimbursed for its actual and necessary out-of-pocket expenses. As part of the overall compensation payable to Kramer Capital, the Committee proposes that the Debtors indemnify and hold harmless the firm and its affiliates, from and against any losses, claims or liabilities arising out of the engagement and reimburse the Indemnified Parties for any legal or other expenses they reasonably incurred. However, there will be no liability for indemnity or reimbursement for any loss, claim or liability that is finally judicially determined to have resulted from the willful misconduct, gross negligence or breach of duty of loyalty of any Indemnified Party. Derron S. Slonecker, managing director at Kramer, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, in that it: a. is not a creditor, equity security holder, or an insider; b. is not and was not, within two years before the Petition Date, a director, officer or employee of the Debtors; and c. does not have an interest materially adverse to the interest of the estate or of any class creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason. About Pliant Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy counsel. The Ontario Superior Court of Justice named RSM Richter, Inc., as the Debtors' information officer in their restructuring proceeding under Companies Creditors Arrangement Act in Canada. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. (Pliant Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) PREMIUM PAPERS: Hires Young Conaway as Bankruptcy Counsel --------------------------------------------------------- Premium Papers Holdco, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Young Conaway Stargatt & Taylor, LLP as their counsel. Young Conaway is expected to: a. provide legal advice with respect to the Debtors' powers and duties as Debtors in possession in the continued operation of their businesses and management of their properties; b. prepare and pursue confirmation of a plan and approval of a disclosure statement; c. prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports and other legal papers; d. appear in Court and to protect the interests of the Debtors before the Court; and e. perform all other legal services for the Debtors which may be necessary and proper in these proceedings. Robert S. Brady, Esq., a partner at Young Conaway, tells the Court that the Firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Robert S. Brady, Esq. Attorney $500 Joseph A. Malfitano, Esq. Attorney $340 Sean T. Greecher, Esq. Attorney $255 Donald J. Bowman, Jr., Esq. Attorney $255 Ian S. Fredericks, Esq. Attorney $240 Thomas Hartzell Paralegal $175 Mr. Brady assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC -- http://www.smartpapers.com-- manufactures and markets a wide variety of premium coated and uncoated printing papers, such as Kromekote, Knightkote, and Carnival. The Company and two of its affiliates filed for chapter 11 protection on March 21, 2006 (Bankr. D. Del. Case No. 06-10269). Ian S. Fredericks, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they did not disclose their total assets but estimated debts between $10 million and $50 million. PRG-SCHULTZ: Inks Forbearance Agreement with Bank of America ------------------------------------------------------------ On Nov. 8, 2005, PRG-Schultz International, Inc., and its domestic subsidiaries entered into a Forbearance Agreement with Bank of America, N.A. Under the Forbearance Agreement, Bank of America agreed to forbear from exercising any right or remedy under the prior senior credit facility and related credit documents. BofA only forbear to the extent that those right or remedy arose exclusively as a result of the occurrence of some acknowledged events of default. Bank of America retained its right to prohibit some payments to the holders of the Company's 4-3/4% convertible notes. In addition to the financial covenant defaults, the acknowledged events of default included the failure to provide information and documentation regarding some of the Company's subsidiaries. The company paid BofA $100,000 in consideration for its willingness to enter the Forbearance Agreement. The company will also reimburse some expenses of BofA and its counsel. The Company satisfied all of its obligations under the Forbearance Agreement, and replaced the prior senior credit facility with its new senior facility on March 17, 2006. $10 Million Bridge Loan On Dec. 23, 2005, the Company entered into a Credit Agreement, Security Agreement and Pledge Agreement with Petrus Securities L.P. and Parkcentral Global Hub Limited and Blum Strategic Partners II GmbH & Co. K.G. and Blum Strategic Partners II, L.P. These agreements evidence a term loan to PRG-Schultz USA Inc., a wholly owned subsidiary of the Company, in an aggregate principal amount of $10 million. This loan was repaid upon closing of the new senior credit facility on March 17, 2006. The Blum Entities are beneficial owners of the Company's common stock and the new securities issued in the Company's recent financial restructuring, and they have the right to designate a member of the Company's Board of Directors and to have an observer present at all Board meetings. The Petrus Entities are also beneficial owners of the Company's common stock and the new securities issued in the restructuring. The Petrus Entities and Blum Capital Partners L.P. served on the Ad Hoc Committee of holders of the Company's convertible notes due November 2006. Financial Restructuring On Oct. 19, 2005, the Board of Directors of the Company formed a Special Restructuring Committee to oversee the efforts of the Company, with the assistance of its financial advisor, Rothschild Inc., to restructure the Company's financial obligations, including its obligations under its $125 million 4-3/4% Convertible Notes due November 2006, and to improve the Company's liquidity. The Company successfully completed the financial restructuring on March 17, 2006. Pursuant to the financial restructuring, the Company exchanged: -- $400 principal amount of the company's 11.0% Senior Notes Due 2011, plus an additional amount of principal equal to accrued and unpaid interest due on the existing notes held by the tendering holders; -- $480 principal amount of the company's 10.0% Senior Convertible Notes Due 2011 convertible into new 10.0% Senior Series B Convertible Participating Preferred Stock and common stock; and -- one share, $120 liquidation preference, of its 9.0% Senior Series A Convertible Participating Preferred Stock convertible into common stock; for each $1,000 principal amount of outstanding 4.75% Convertible Subordinated Notes due November 2006. Approximately 99.6% of the aggregate $125 million outstanding convertible notes were tendered for exchange and accepted by the Company. The material terms of these new securities include: -- The new senior notes bear interest at 11%, payable semiannually in cash, and are callable at 104% of face in year 1, 102% in year 2, and at par in years 3 through 5. -- The new senior convertible notes bear interest at 10%, payable semiannually in cash or in kind, at the option of the Company. The new senior convertible notes are convertible at the option of the holders, upon satisfaction of some conditions, into shares of new series B preferred stock having a 10% annual dividend and a liquidation preference equal to the principal amount of notes converted. Dividends on the new series B preferred stock may be paid in cash or in kind, at the option of the Company. Each $1,000 of face amount of such notes are convertible into approximately 2.083 shares of new series B convertible preferred stock; provided that upon the occurrence of some events, including approval by the shareholders of an amendment to the Company's Articles of Incorporation to allow sufficient additional shares of common stock to be issued for the conversion, they will be convertible only into common stock at a rate of approximately 1,538 shares per $1,000 principal amount. The new series B preferred stock is convertible at the option of the holders into shares of common stock at the rate of $0.65 of liquidation preference per share of common stock, subject to certain conditions, including approval by the shareholders of an amendment to the Company's Articles of Incorporation to allow sufficient additional shares of common stock to be issued for the conversion. -- The new series A preferred stock has a 9% dividend, payable in cash or in kind, at the option of the Company. The new series A preferred stock is convertible at the option of the holders into shares of common stock at the rate of $0.28405 of liquidation preference per share of common stock. -- The series A and series B preferred stock have the right to vote with the Company's common stock on most matters requiring shareholder votes. The Company has the right to redeem the new senior convertible notes at par at any time after repayment of the new senior notes. The Company also has the right to redeem the new series A and series B preferred stock at the stated liquidation preference at any time after repayment of the new senior notes and the new senior convertible notes. -- Both the new senior notes and the new senior convertible notes mature on the fifth anniversary of issuance. The new series A and series B preferred stock must be redeemed on the fifth anniversary of issuance. Immediately following the closing of the financial restructuring transactions, the existing common shareholders owned approximately 54% of the equity of the Company. If all the new senior convertible notes had converted into series B preferred stock immediately on completion of the financial restructuring, the existing common shareholders would have owned approximately 30% of the equity of the Company. New Senior Secured Credit Facility As a part of its financial restructuring, the Company also entered into a new senior secured credit facility with Ableco LLC and The CIT/Group/Business Credit, Inc., a portion of which is being syndicated to the Company's prior bridge financing lenders, Petrus Securities L.P. and Parkcentral Global Hub Limited and Blum Strategic Partners II GmbH & Co. K.G. and Blum Strategic Partners II, L.P.. The new credit facility includes: (1) a $25 million term loan, and (2) a revolving credit facility that provides for revolving loan borrowings of up to $20 million. No borrowings are currently outstanding under the revolving credit facility. PRG-Schultz USA, Inc., a direct wholly owned subsidiary, is the primary borrower under the new senior secured credit facility. The Company and its existing and subsequent acquired or organized direct and indirect domestic wholly owned subsidiaries have guaranteed the new facility. PRG-Schultz USA and all of the Company's other subsidiaries' obligations under the new senior secured credit facility are secured by liens on substantially all of the Company's assets (including the stock of our domestic subsidiaries and two-thirds of the stock of certain of our foreign subsidiaries). The new senior secured credit facility will expire on the fourth anniversary of the closing of the exchange offering. The term loan under the new senior secured credit facility will amortize with quarterly payments beginning on the first anniversary of the closing date of $250,000 per quarter for the second year of the facility, and $500,000 per quarter for the third and fourth years of the facility, with the balance due at maturity on the fourth anniversary of closing. The Company's ability to borrow revolving loans under the new senior secured credit facility is limited to a borrowing base of a percentage of eligible domestic receivables, subject to adjustments. Based on this borrowing base calculation, the Company had approximately $15.0 million of availability under the revolving credit facility at the closing of the exchange offer. The interest on the term loan is based on a floating rate equal to the reserve adjusted London inter-bank offered rate, or LIBOR, plus 8.5% (or, at our option, a published prime lending rate plus 5.5%). The interest rate on outstanding revolving credit loans is based on LIBOR plus 3.75% (or, at our option, a published prime lending rate plus 1.0%). The Company will also pay an unused commitment fee on our revolving credit facility of 0.5%. The new senior secured credit facility also required the payment of commitment fees, closing fees and additional expense reimbursements of approximately $1.0 million at closing. A full-text copy of the Forbearance Agreement is available for free at http://ResearchArchives.com/t/s?7ac A full-text copy of the Amendment to a Forbearance Agreement and Credit Agreement is available at no extra charge at http://ResearchArchives.com/t/s?7ad PRG-Schultz International, Inc. (NASDAQ: PRGX) -- http://www.prgx.com/-- and subsidiaries, incorporated in the State of Georgia in 1996, is the leading worldwide provider of recovery audit services to large and mid-size businesses having numerous payment transactions with many vendors. The Company currently provides services to clients in over 30 countries. At Dec. 31, 2005, the company's balance sheet showed a $102,365,000 stockholders' equity deficit compared to $103,584,000 of positive stockholders' equity at Dec. 31, 2004. * * * Going Concern Doubt KPMG LLP in Atlanta, Georgia, raised substantial doubt about PRG- Schultz International, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's: -- substantial debt obligations; -- significant losses for the years ended Dec. 31, 2003, 2004, and 2005; -- stockholders' equity deficit at Dec. 31, 2005. PRG-SCHULTZ: KPMG Expresses Going Concern Doubt Opinion ------------------------------------------------------- Auditors working for KPMG LLP in Atlanta, Georgia, raised substantial doubt about PRG-Schultz International, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's: -- substantial debt obligations; -- significant losses for the years ended Dec. 31, 2003, 2004, and 2005; -- stockholders' equity deficit at Dec. 31, 2005. Financials The company reported a $207,740,000 net loss on $292,152,000 of revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $162,062,000 in total assets and $264,427,000 in total liabilities, resulting in a $102,365,000 stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $106,539,000 in total current assets available to pay $115,662,000 in total current liabilities coming due within the next 12 months. Audit Contract for State of California Medicare On March 29, 2005, the Centers for Medicare & Medicaid Services, the federal agency that administers the Medicare program, awarded the company a contract to provide recovery audit services for the State of California's Medicare spending. The three-year contract was effective on March 28, 2005. To fully address the range of payment recovery opportunities, the Company has sub-contracted with Concentra Preferred Systems, the nation's largest provider of specialized cost containment services for the healthcare industry. Concentra will add its clinical experience to the company's expertise in recovery audit services. The company began to incur capital expenditures and employee compensation costs related to this contract in 2005. Revenues from the contract are expected later in 2006. Full-text copies of PRG-Schultz International, Inc.'s financial statements for the year ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?7ab PRG-Schultz International, Inc. (NASDAQ: PRGX) -- http://www.prgx.com/-- and subsidiaries, incorporated in the State of Georgia in 1996, is the leading worldwide provider of recovery audit services to large and mid-size businesses having numerous payment transactions with many vendors. The Company currently provides services to clients in over 30 countries. At Dec. 31, 2005, the company's balance sheet showed a $102,365,000 stockholders' equity deficit compared to $103,584,000 of positive stockholders' equity at Dec. 31, 2004. RESIX FINANCE: Moody's Lifts Ratings on 3 Resecuritization Deals ----------------------------------------------------------------- Moody's Investors Service upgrades three tranches issued by RESIX Finance Limited Credit-Linked Notes, Series 2003-A and 2003-B. These deals are resecuritizations of RESI 2003-A and RESI 2003-B certificates, which have been upgraded. The tranches in the RESIX deals are identical to the corresponding RESI deals. The underlying deals are performing better than expected due to the high prepayment volumes, low delinquency percentages, and low credit losses. Complete rating actions are: Issuer: RESIX Finance Limited Credit-Linked Notes, Series 2003-A * Class B-10, Upgraded from B3 to Ba3. Issuer: RESIX Finance Limited Credit-Linked Notes, Series 2003-B * Class B-9, Upgraded from B2 to Ba2; * Class B-10, Upgraded from B3 to Ba3. R.H. DONNELLEY: KPMG Replaces PwC as Auditors for 2006 ------------------------------------------------------ The Audit and Finance Committee of R.H. Donnelley Corporation's Board of Directors dismissed PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm on March 30, 2006. Effective March 31, 2006, the Audit Committee appointed KPMG LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2006. Prior to the merger of Dex Media, Inc., with and into a wholly owned subsidiary of R.H. Donnelley, Dex Media's audit committee engaged KPMG as Dex Media's independent registered public accounting firm for the fiscal years ended December 31, 2004, and December 31, 2005, and the interim period from January 1, 2006 through January 31, 2006. PwC's reports on the Company's financial statements for the fiscal years ended December 31, 2004, and December 31, 2005, did not contain an adverse opinion nor were they qualified as to uncertainty, audit scope or accounting principle. During the Company's two fiscal years ended December 31, 2004, and December 31, 2005, and the interim period from January 1, 2006 through March 31, 2006, there were no unresolved disagreements between PwC and the Company. R.H. Donnelley -- http://www.rhd.com/-- is a Yellow Pages publisher and local online search company. RHD publishes directories with total distribution of approximately 28 million serving approximately 260,000 local and national advertisers in 19 states. RHD publishes directories under the Sprint Yellow Pages(R) brand in 18 states with total distribution of approximately 18 million serving approximately 160,000 local and national advertisers, with major markets including Las Vegas, Nevada, and Orlando and Fort Myers, Florida. In addition, RHD publishes directories under the SBC Yellow Pages brand in Illinois and Northwest Indiana with total distribution of approximately 10 million serving approximately 100,000 local and national advertisers. RHD also offers online city guides and search websites in its major Sprint Yellow Pages markets under the Best Red Yellow Pages(R) brand at http://www.bestredyp.com/and in the Chicago area at http://www.chicagolandyp.com/ * * * After the Company completed its acquisition of Dex Media, Standard & Poor's Ratings Services lowered its ratings on R.H. Donnelley Corp. and its operating subsidiary Donnelley, Inc., including its corporate credit rating to 'BB-' from 'BB'. Furthermore, Standard & Poor's affirmed bank loan rating on RHD Inc. and all ratings on the Dex family of companies, including the corporate credit rating of 'BB-'. S&P said the outlook is stable. As reported in the Troubled Company Reporter on Jan. 13, 2006, Fitch Ratings placed a 'B+' Issuer Default Rating and a 'CCC+' rating to RHD's senior unsecured notes. Fitch said the Rating Outlook is Stable. As reported in the Troubled Company Reporter on Jan. 12, 2006, Moody's Investors Service affirmed R.H. Donnelley Corporation's B1 Corporate Family rating and assigned a Caa1 rating to its $2.142 billion senior unsecured notes. Moody's said the rating outlook is stable. RITE AID: Declares Series E and I Preferred Stock Dividends ----------------------------------------------------------- Rite Aid Corporation (NYSE, PCX: RAD) disclosed Friday that its Board of Directors declared a cash dividend of $0.875 per share on its 7.0% Series E Mandatory Convertible Preferred Stock for the period commencing on February 1, 2006 through April 30, 2006. The dividend is payable on May 1, 2006, to shareholders of record as of April 17, 2006. Rite Aid Corporation further disclosed that its Board of Directors has declared a cash dividend of $0.3438 per share on its 5.5% Series I Mandatory Convertible Preferred Stock for the period commencing on February 1, 2006 through April 30, 2006. The dividend is payable on May 1, 2006, to shareholders of record as of April 17, 2006. About Rite Aid Rite Aid Corporation -- http://www.riteaid.com/-- is one of the nation's leading drugstore chains with annual revenues of $17.3 billion and approximately 3,320 stores in 27 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Feb. 16, 2006, Fitch took these rating actions on Rite Aid Corporation: -- Issuer Default Rating affirmed at 'B-' -- $1.75 billion secured bank credit facility affirmed at 'BB-'/ Recovery Rating 'RR1' -- Secured notes affirmed at 'BB-'/ Recovery Rating 'RR1' -- Senior unsecured notes downgraded to 'CCC+' from 'B-'/Recovery Rating to 'RR5' from 'RR4' Rite Aid's Rating Outlook remains Stable. The ratings reflected Rite Aid's strategy to focus on its stores and customer service levels, its adequate liquidity, and the positive demographics of the drug retailing industry. Also considered is Rite Aid's financial leverage, operating statistics that trail its largest competitors, as well as the highly competitive nature of the drug retailing business. As reported in the Troubled Company Reporter on Sept. 1, 2005, Moody's Investors Service lowered the Speculative Grade Liquidity Rating of Rite Aid Corporation to SGL-3 from SGL-2, affirmed all long-term debt ratings (Corporate Family Rating of B2), and revised the rating outlook to negative from stable. The downgrade of the Speculative Grade Liquidity Rating reflects Moody's expectation that mediocre operating cash flow and planned capital investment increases over the next twelve months will require the company to rely on external financing sources to cover the cash flow deficit. Moody's lowered its Speculative Grade Liquidity Rating to SGL-3 from SGL-2 and affirmed these ratings: -- $860 million 2nd-lien senior secured notes at B2; -- $1.28 billion of senior notes at Caa1; -- $250 million of 4.75% convertible notes at Caa1; and -- Corporate Family Rating (previously called the Senior Implied Rating) at B2. RITE AID: Earns $1.24 Billion of Net Income in Fourth Quarter ------------------------------------------------------------- Rite Aid Corporation (NYSE, PCX: RAD) disclosed its financial results for its fourth quarter ended March 4, 2006. Revenues for the 14-week fourth quarter were $4.77 billion versus revenues of $4.34 billion in the prior year 13-week fourth quarter. Revenues increased 9.9%. Same store sales for the 14-week fourth quarter increased 2.5% over the prior year 14-week comparable period, consisting of a 2.5% pharmacy same store sales increase and a 2.5% increase in front-end same store sales. Prescription sales accounted for 62.2% of total sales, and third party prescription sales represented 93.7% of pharmacy sales. Net income for the fourth quarter increased to $1.24 billion compared to 2004's fourth quarter net income of $228.6 million. The increase was primarily due to a $1.231 billion income tax benefit from the reduction of a valuation allowance against deferred tax assets compared to a $179.5 million similar valuation allowance reduction for the like period last year. Also contributing to the increase is a reversal of the $20 million accrual established in fiscal 2003 for potential liability arising out of the U.S Attorney's investigation into prior management's business practices under former CEO Martin Grass, which is no longer needed because the investigation of the company has been closed without any fine to Rite Aid. Included in the fourth quarter results were a LIFO charge of $9.4 million compared to last year's LIFO credit of $36.2 million and store closing and impairment charges of $42.4 million compared to last year's $24.4 million charge. Adjusted EBITDA of $181.4 million or 3.8% of revenues for the fourth quarter compared to $167.9 million or 3.9% of revenues for the like period last year. The $13.5 million increase is primarily due to the extra week in the current year's fourth quarter. Excluding the extra week, which contributed approximately $15.0 million, adjusted EBITDA was flat. "We are pleased with the improvements in our business during the fourth quarter, including a return to positive increases in pharmacy same store sales despite a milder cough, cold and flu season than last year. We also saw an increase in the number of prescriptions we filled for seniors despite the challenges all pharmacies experienced implementing Medicare Part D," said Mary Sammons, Rite Aid president and CEO. "With the opening of 40 new and relocated stores in the quarter, we completed fiscal 2006 with three times as many new and relocated stores as the year before. "A significant event during the period was notification by the U.S. Attorney's Office that it has closed its investigation of the company relating to the business practices of prior management," Mr. Sammons said. "We are pleased that the U.S. Attorney informed us that no penalty would be levied against Rite Aid." In the fourth quarter, the company opened 7 stores, relocated 33 stores, acquired 1 store, closed 18 stores and remodeled 10 stores. Stores in operation at the end of the quarter totaled 3,323. Year-End Results For the 53-week fiscal year ended March 4, 2006, Rite Aid had revenues of $17.3 billion as compared to revenues of $16.8 billion for the 52-week prior year. Revenues increased 2.7%. Same store sales for the 53-week year increased 1.1% over the prior 53-week comparable period. This increase consisted of a 0.3% pharmacy same store sales increase and a 2.6% increase in front-end same store sales. Prescription sales accounted for 63.2% of total sales, and third party prescription sales were 93.9% of pharmacy sales. Net income for the year was $1.273 billion compared to net income of $302.5 million for last year. The increase was primarily due to a $1.239 billion income tax benefit from the reduction of a valuation allowance against deferred tax assets compared to a $179.5 million similar valuation allowance reduction last year. Included in the results for the year were a LIFO charge of $32.2 million compared to last year's LIFO credit of $18.9 million and store closing and impairment charges of $68.7 million compared to last year's $35.7 million charge. These negative factors were partially offset by a reduction in interest expense and a lower loss on debt modifications and retirements. Adjusted EBITDA of $675.6 million or 3.9% of revenues for this year compared to $726.0 million or 4.3% of revenues for last year. The $50.4 million decrease is primarily due to higher selling, general and administrative expenses. Partially offsetting these higher expenses was the $15.0 million of contribution from the extra week. "While our full year results are not as strong as we had hoped, we believe the investment we made in staffing the stores to improve customer satisfaction, ramping up our real estate department for our growth program and marketing to seniors to promote our pharmacists' expertise in Medicare Part D will pay off significantly down the road," Mr. Sammons said. For the year, the company opened 17 new stores, relocated 53 stores, acquired six stores, closed 56 stores, which includes 13 stores closed due to hurricane Katrina, and remodeled 173 stores. Stores in operation at the end of the year totaled 3,323. Company Announces Guidance for Fiscal 2007 Rite Aid announces that it expects sales to be between $17.350 billion and $17.6 billion in fiscal 2007, which has 52 weeks, with same store sales improving 1.75 percent to 3.25% over fiscal 2006. Net income (loss) for fiscal 2007 is expected to be between a net loss of $5 million and net income of $40 million. Adjusted EBITDA is expected to be between $650 million and $725 million. Capital expenditures, excluding proceeds from sale and leaseback transactions, are expected to be between $450 million and $500 million. Proceeds from sale and leaseback transaction are expected to be between $50 million and $100 million. Rite Aid Corporation -- http://www.riteaid.com/-- is one of the nation's leading drugstore chains with annual revenues of $17.3 billion and approximately 3,320 stores in 27 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Feb. 16, 2006, Fitch took these rating actions on Rite Aid Corporation: -- Issuer Default Rating affirmed at 'B-' -- $1.75 billion secured bank credit facility affirmed at 'BB-'/ Recovery Rating 'RR1' -- Secured notes affirmed at 'BB-'/ Recovery Rating 'RR1' -- Senior unsecured notes downgraded to 'CCC+' from 'B-'/Recovery Rating to 'RR5' from 'RR4' Rite Aid's Rating Outlook remains Stable. The ratings reflected Rite Aid's strategy to focus on its stores and customer service levels, its adequate liquidity, and the positive demographics of the drug retailing industry. Also considered is Rite Aid's financial leverage, operating statistics that trail its largest competitors, as well as the highly competitive nature of the drug retailing business. As reported in the Troubled Company Reporter on Sept. 1, 2005, Moody's Investors Service lowered the Speculative Grade Liquidity Rating of Rite Aid Corporation to SGL-3 from SGL-2, affirmed all long-term debt ratings (Corporate Family Rating of B2), and revised the rating outlook to negative from stable. The downgrade of the Speculative Grade Liquidity Rating reflects Moody's expectation that mediocre operating cash flow and planned capital investment increases over the next twelve months will require the company to rely on external financing sources to cover the cash flow deficit. Moody's lowered its Speculative Grade Liquidity Rating to SGL-3 from SGL-2 and affirmed these ratings: -- $860 million 2nd-lien senior secured notes at B2; -- $1.28 billion of senior notes at Caa1; -- $250 million of 4.75% convertible notes at Caa1; and -- Corporate Family Rating (previously called the Senior Implied Rating) at B2. SEARS HOLDINGS: Minority Shareholders Support Privatization ----------------------------------------------------------- Sears Holdings Corporation (Nasdaq: SHLD) reported that its wholly owned subsidiary, SHLD Acquisition Corp., entered into agreements with shareholders who have committed to vote an aggregate of 7,611,000 common shares of Sears Canada in favor of a going private transaction that is expected to close in December 2006 at the current offer price of C$18 per share. Giving effect to the 10,209,246 common shares purchased previously in the offer, the 7,500,000 common shares committed and tendered by Vornado Realty, L.P., and the support commitments for 7,611,000 common shares, Sears Holdings and its affiliates have acquired in the offer or obtained commitments for an aggregate of 25,320,246 common shares, representing over 50% of the common shares (including Deferred Shares Units and unexercised options) that were not owned by Sears Holdings and its affiliates at the commencement of the offer. Accordingly, Sears Holdings and its affiliates will own or have support commitments for sufficient shares to assure the necessary shareholder approval of a going private transaction of Sears Canada at the offer price of C$18 per share. SHLD Acquisition Corp. has extended its offer until 5:00 p.m. on Aug. 31, 2006. SHLD Acquisition Corp. will acquire any and all shares validly tendered to its offer prior to the extended expiry time. Sears Canada common shares tendered to the take-over bid by SHLD Acquisition Corp., will be taken up and paid for not later than 10 days after their tender. Alan Lacy, vice chairman of Sears Holdings, commented, "We are pleased that our transaction has received the support of a majority of the minority shareholders, including the two largest minority shareholders. With the success of our offer assured, we expect other Sears Canada shareholders to tender their common shares in order to promptly receive our offer price of C$18 per share." Mr. Lacy continued, "Sears Holdings would like to thank the executives and associates of Sears Canada, who have worked hard to remain focused on the business of serving our customers during the pendency of our offer. We look forward to their continued support and commitment as we work to leverage the strengths of our two companies." About Sears Holdings Sears Holdings Corporation -- http://www.searsholdings.com/-- is the nation's third largest broadline retailer, with approximately $55 billion in annual revenues, and with approximately 3,900 full- line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as one of the leading retailers of tools, lawn and garden, home electronics and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. * * * As reported in the Troubled Company Reporter on Dec. 30, 2005, Moody's Investors Service assigned a speculative grade liquidity rating of SGL-1 to Sears Holdings Corporation and affirmed the long-term ratings of the company and its subsidiaries with a stable rating outlook. Ratings affirmed: Sears Holdings Corp.: * Corporate family rating at Ba1 Sears Roebuck Acceptance Corp.: * Senior secured bank facility at Baa3 * Senior unsecured notes at Ba1 Rating assigned: * Speculative grade liquidity rating of SGL-1 The SGL-1 speculative grade liquidity rating is based on: * Sears Holdings' very good liquidity that reflects significant cash balances; * revolving credit availability; and * readily salable assets, including non-core brands and extraneous real estate, a sizeable amount of which is valued below market as a result of Kmart's significant post-Chapter 11 rebase of its pre-petition real estate portfolio. SEARS HOLDINGS: Pershing Square Snubs C$18 Per Share Buyout Offer ----------------------------------------------------------------- Pershing Square Capital Management LP is hoping to get a better offer price for its 5.2% stake in Sears Canada Inc. despite Sears Holdings Corp.'s firm stand to buy Sears Canada shares for a top price of CA$18 per share. Kevin Bell at Bloomberg News reports that Pershing Square may go to court in a bid to force Sears Holdings to raise the price offered by its wholly owned subsidiary, SHLD Acquisition Corp., for the shares of Sears Canada. According to Mr. Bell, Pershing Square is ready to exercise its legal rights to secure a better value for the shares that they say Sears Holdings is trying to acquire for a "wholly inadequate" price. Sears Holdings wants to take Sears Canada private in order to cut costs and make the company more competitive against other retailers like Wal-Mart. On April 6, 2006, Sears Holdings disclosed that it has acquired or obtained commitments for an aggregate of 25,320,246 common shares, representing over 50% of the common shares it did not previously own prior to the tender offer. Sears held approximately 53.8% of the outstanding shares of Sears Canada before its takeover bid. About Sears Holdings Sears Holdings Corporation -- http://www.searsholdings.com/-- is the nation's third largest broadline retailer, with approximately $55 billion in annual revenues, and with approximately 3,900 full- line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as one of the leading retailers of tools, lawn and garden, home electronics and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. * * * As reported in the Troubled Company Reporter on Dec. 30, 2005, Moody's Investors Service assigned a speculative grade liquidity rating of SGL-1 to Sears Holdings Corporation and affirmed the long-term ratings of the company and its subsidiaries with a stable rating outlook. Ratings affirmed: Sears Holdings Corp.: * Corporate family rating at Ba1 Sears Roebuck Acceptance Corp.: * Senior secured bank facility at Baa3 * Senior unsecured notes at Ba1 Rating assigned: * Speculative grade liquidity rating of SGL-1 The SGL-1 speculative grade liquidity rating is based on: * Sears Holdings' very good liquidity that reflects significant cash balances; * revolving credit availability; and * readily salable assets, including non-core brands and extraneous real estate, a sizeable amount of which is valued below market as a result of Kmart's significant post-Chapter 11 rebase of its pre-petition real estate portfolio. SEQUA CORP: Fitch Affirms Low-B Issuer Default & Sr. Debt Ratings ----------------------------------------------------------------- Fitch Ratings affirmed Sequa Corporation's (SQA) debt and Recovery Ratings as: -- Issuer Default Rating 'B+' -- Senior unsecured notes 'BB/RR2' Fitch also assigns new ratings to these: Warwick International Group International Limited: Chromalloy UK Ltd.: Chromalloy Holland B.V.: -- Senior secured bank credit facility 'BB+/RR1' The Rating Outlook is Stable. The ratings cover approximately $900 million of outstanding debt. The senior secured bank credit facility is not an obligation of SQA and is not guaranteed by SQA. The facility was closed in December 2005, and was primarily created to provide funds for repatriation of foreign income related to the Jobs Creation Act. The facility consists of: * a $100 million term loan; * a $35 million revolving credit facility; and * a $50 million letter of credit facility, all of which expire in 2010. SQA's ratings and Outlook reflect the company's improving operating results, maintenance of liquidity and fully funded pension plans offset by high leverage and negative free cash flow (FCF) since 2002 (driven by discretionary pension contributions and working capital needs for new business). SQA's revenues increased by 7.2% in 2005 and 20.5% in 2004 with EBITDA margins up 52 basis points over the same two-year period to 10.4%. With a number of outsourcing contract wins with US airlines and continuing efforts by airlines to reduce costs by outsourcing, the outlook for SQA's largest segment, Aerospace (Chromalloy), is positive. As a conglomerate -- albeit one that has been narrowing its focus on jet engine maintenance, repair and overhaul (MRO) -- SQA has a highly diversified portfolio of subsidiaries across products and geographies, reducing the concentration risk of individual operating businesses. Fitch's concerns are focused on high leverage and a history of poor FCF that has led to the company funding operations via asset sales for the past few years. Fitch expects FCF to be negative once again this year, but this is expected to be driven by capital expenditures for new factories both in the US and overseas. Exclusive of the planned over 40% jump in capital expenditures for these plants, FCF could be positive based on recent trends. Fitch is also concerned about SQA's exposure to the automobile industry and in particular its ARC Automotive business, where one of its largest customers, Delphi, is in bankruptcy. Although Delphi accounted for 36% of ARC's 2005 sales, it generated less than 5% of SQA's sales. Fitch's concerns regarding original equipment manufacturers' (OEM) possible attempts to expand market share in the MRO aftermarket are largely mitigated by Chromalloy's ability to normally provide parts faster than OEMs, decreasing engine down time. Concern is also mitigated by the desire of clients to ensure that equipment is available from more than one source. The RRs and notching of the debt tranches reflect Fitch's recovery expectations under a scenario in which distressed enterprise value is allocated to the various debt classes. The analysis was based on an ongoing concern scenario as it exceeds likely liquidation values. RRs at the senior secured level benefit from guarantees and security in the assets of: * Warwick International, * Chromalloy UK, * Chromalloy Holland, and * Chromalloy Thailand. This results in expected recovery of 100% ('RR1'). The senior notes, which are unsecured, are presently expected to see a recovery in the 70%-90% range ('RR2'). Noteholders are offered some protection from a leveraged buyout, as the change of control covenants require that SQA tender for the notes at 101% of face value upon such a change. The unsecured RR is unchanged despite the addition of the senior secured debt because expected recoveries remain within the 'RR2'band. At Dec. 31, 2006, SQA had a liquidity position of $376 million, consisting of: * $289 million of cash; * $55 million of availability under its up to $75 million receivables purchase agreement (no utilization - asset base constrained); and * $32 million available under a $35 million revolving credit facility. The company had an additional $13 million available for letters of credit under its $50 million letter of credit facility. SQA's leverage (utilizing Fitch's global definition of debt to operating EBITDA) was 4.6x in 2005, largely unchanged from 2004 as the company borrowed $131 million near year-end, offsetting improved EBITDA. Interest coverage (using Fitch's global definition of operating EBITDA-to-interest) was 2.8x in 2005, up from 2.4x the prior year as the result of improving EBITDA and little interest expense generated by the end of year increase in debt. Adjusting the ratios for pension expense, leverage rose to 4.5x in 2005 versus 4.3x in 2004 and interest coverage rose to 2.9x from 2.6x during the same time frame. SFA TRUST: Collateral Quality Decline Cues Moody's Ratings Review ----------------------------------------------------------------- Moody's Investors Service placed three classes of notes issued by SFA Collateralized Asset-Backed Securities I Trust on review for downgrade, the $200,500,000 Class A Floating Rate Notes due 2030, the $14,000,000 Class B-1 Floating Rate Notes due 2035 and the $8,500,000 Class B-2 8.575% Notes due 2035. The transaction, secured by a pool of asset-backed securities, closed on June 22, 2000. The Class A Floating Rate Notes due 2035 was downgraded on June 30, 2004. According to Moody's, the rating action is due to continued deterioration in collateral quality since June 2004. Moody's indicated that, as of the Monthly Report dated Feb. 2, 2006, the below-investment grade component of the collateral pool had a Moody's weighted average rating factor of 4589 and had grown to comprise over 52% of performing assets in the pool. Additionally, the Class A, Class B and Class C Overcollateralization Tests are out of compliance. The Class A Notes have delivered by 58.53%, to a current balance of $83,151,926.9, from $200,500,000 at the closing date. Ratings Under Review for Possible Downgrade: * Issuer: SFA Collateralized Asset-Backed Securities I Trust Description: $200,500,000 Class A Floating Rate Notes due 2030 Prior Rating: B2 Current Rating: B2 * Issuer: SFA Collateralized Asset-Backed Securities I Trust Description: -- $14,000,000 Class B-1 Floating Rate Notes due 2035 -- $8,500,000 Class B-2 8.575% Notes due 2035 Prior Rating: Caa3 Current Rating: Caa3 SND Electronics: Taps BDO Seidman as Tax Accountants ---------------------------------------------------- SND Electronics, Inc. asks the U.S. Bankruptcy Court for the District of Connecticut for permission to employ BDO Seidman, LLP, as tax accountants. BDO Siedman will provide the Debtor and its non-debot subsidiaries with tax services for the year ended Dec. 31, 2006. BDO Siedman will: a. prepare the Debtor and its non-debtor subsidiaries' Federal Consolidated Income Tax return for the year ended Dec. 31, 2005; b. prepare pro forma Federal separate company returns for SND Electronic's subsidiaries for the period ending Dec. 31, 2005; c. prepare states of Connecticut, New York, California, Texas, and Alabama corporate income tax returns for SND Electronics' subsidiaries for the period ending Nov. 30, 2005; and d. provide analysis of the Debtor's financial transactions. Robert C. Pedersen, a partner at BDO Seidman, tells the Court that the Firm will charge the Debtor: Transaction Amount ----------- ------- Retention Fee $10,750 Upon providing information $9,750 for preparation of the corporate income tax returns Upon delivery of the tax returns $5,250 ------- Total $25,750 Mr. Pedersen assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. 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: Taps Lakeside Advisors as Financial Consultant --------------------------------------------------------------- SND Electronics, Inc. asks the U.S. Bankruptcy Court for the District of Connecticut for authority to employ Lakeside Advisors Group, LLC as its financial consultant. Lakeside Advisors will: a. advise and assist the Debtor in forecasting, planning, controlling and other aspects of managing cash; b. advise and assist the Debtor in obtaining debtor in possession financing, if necessary; c. advise and assist the Debtor in the pursuit of credit insurance claims on foreign accounts receivable; d. advise and assist the Debtor in organizing resources and activities to effectively and efficiently plan, coordinate and manage the chapter 11 process, including communications with customers, lenders, suppliers, employees and other professional persons and parties in interest; e. assist the Debtor in designing and implementing programs to manage or divest assets, improve operations, reduce costs and restructure, as necessary, with the objective of improving the profitability and prospects for sale of, the Debtor's business; f. advise and assist the Debtor in its interactions with any official committees, other constituencies and their professionals including assisting in the preparation of monthly operating reports and other financial reports as may be required by the Court or parties in interest; g. advise and assist the Debtor in the development of an exit strategy from the bankruptcy process including assistance in the preparation of a plan of reorganization or liquidation, information to be included in a disclosure statement or, alternatively assisting in completing a sale of the Debtor's principal assets in the bankruptcy process; h. advise the Debtor with respect to resolving disputes and otherwise assisting in the management of the claims process; i. render expert testimony considering, among other things, the plan of reorganization or liquidation and other matters that may arise in this case consistent with the above described services; and j. provide other services consistent with those described above as may be necessary. Michael E. Imber, a principal of Lakeside Advisors, tells the Court that the Firm's professional bill $250 per hour. Mr. Imber discloses that for this engagement, the Firm will require a retainer of $20,000. Mr. Imber assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. 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: Committee Taps Pullman & Comley as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors in SND Electronics, Inc.'s chapter 11 case, asks the U.S. Bankruptcy Court for the District of Connecticut for permission to retain Pullman & Comley, LLC, as its counsel. Pullman & Comley will: a) provide the Committee legal advice with respect to its powers during the continuance of the chapter 11 case; b) represent the Committee as an interested party-in-connection with any proceedings in this case which effect the creditors' rights; c) prepare on behalf of the Committee any necessary pleadings, reports or other legal papers; d) retain professionals to assist the Committee; and e) perform all other legal services for the Committee as may be necessary or appropriate. Irve J. Goldman, Esq., and Jessica Grossarth, Esq., the principal counsel of the Committee, will bill $350 and $235 per hour for their work. The Firm's professionals bill: Professional Hourly Rate ------------ ----------- Attorneys $140 - $460 Paralegals $140 - $160 The Committee assures the Bankruptcy Court that Pullman & Comley 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 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. SUNCOM WIRELESS: Moody's Junks Ratings & Says Outlook is Negative ----------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of Suncom Wireless, Inc., to Caa3 with a negative outlook due to the greatly increased probability that the company will seek to restructure its balance sheet in the near term. The ratings on the company's 8.5% senior notes have been downgraded to Caa2, while the company's speculative grade liquidity rating of SGL-4 was affirmed. The affected ratings are: Downgrades: Issuer: Suncom Wireless, Inc * Corporate Family Rating, Downgraded to Caa3 from Caa1 * Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2 from Caa1 Outlook Actions: Issuer: Suncom Wireless, Inc * Outlook, Changed To Negative From Rating Under Review Confirmations: Issuer: Suncom Wireless, Inc * Senior Secured Bank Credit Facility, Confirmed at B2 * Senior Subordinated Regular Bond/Debenture, Confirmed at Ca The Caa3 corporate family rating reflects the very high probability of default by Suncom Wireless, Inc. The auditors report to the 2005 financial statements of Suncom Wireless, Inc., contains a going concern qualification noting "substantial doubt" that Suncom Wireless can continue as a going concern since "it will not have sufficient resources to meet its working capital requirements, capital expenditures, contractual debt maturities, interest payments and other activities past early 2007". Suncom Wireless consumed over $215 million of cash in 2005 and is unlikely to generate positive cash flow in the near term. The negative rating outlook reflects Moody's concern that given both the financial and operating difficulties facing Suncom Wireless, the rating could continue to fall. Moody's analysis focuses on Suncom Wireless, Inc., excluding the $195 million of additional liquidity at the parent company, Suncom Wireless Holdings, Inc., as additional investment by Holdings into its subsidiary appear to be at the option of Holdings's management. In addition to the company's considerable debt burden of approximately $1.7 billion, Suncom Wireless's cost structure makes the company uncompetitive. While Suncom's average revenue per subscriber at $52 per month is near industry average, Suncom subscribers have much higher usage than typical subscribers. This increases costs due to high off network usage and lack of scale economies compared to the four large national wireless carriers, and reduced Suncom's adjusted EBITDA margins to below 5%. In addition, relatively high margin roaming revenues are expected to decline as rates are reduced and Cingular volumes migrate to the Cingular network. Consequently, improving the EBITDA margin closer to the industry average of 35% will be extremely challenging. Thus, any restructuring will have to address the company's cost structure in addition to its capital structure. For even if Suncom were to restructure its debt to reduce its interest expense burden, the company will require considerable liquidity before EBITDA can cover Suncom's ongoing capital expenditure and working capital requirements. At this time, Moody's is confirming the B2 rating on Suncom Wireless's senior secured term loan as these lenders are well protected, in Moody's opinion, due to their collateral and guarantee package and should enjoy full recovery in the event of default. The same cannot be said regarding the senior unsecured debt, as Moody's believes these creditors are likely to suffer impairment in the now increasingly likely event of default. Consequently, Moody's downgraded the $725 million of 8.5% senior notes to Caa2 reflecting the probability for a more than modest impairment in the event of default. The subordinated lenders are the most poorly positioned in the capital structure are will likely suffer substantial impairment upon any restructuring warranting a Ca rating. Suncom Wireless's SGL-4 rating reflects the weak liquidity profile of the company. Suncom Wireless consumed cash in 2005 and will continue to do so over the coming four quarters. While Suncom Wireless, Inc., had approximately $155 million of cash and short- term investments at Dec. 31, 2005, annual cash interest expense is approximately $150 million, and the company has no liquidity facility. Given the high probability of default in the near term, in Moody's opinion, the company's liquidity profile is best characterized as "weak". Moody's notes that market expectations for high recovery values appear to rely on spectrum value assumptions that may not be achieved. While spectrum is a key asset for wireless service providers, the supply of additional spectrum via upcoming FCC auctions reduces the scarcity value of Suncom's spectrum holdings. Further, the recent purchase announcement by Leap Wireless for spectrum of bankrupt Urban Comm values that spectrum significantly below levels experienced in the most recent auction results from Feb 2005. Headquartered in Berwyn, Pennsylvania, Suncom Wireless, Inc., is a regional wireless telecommunications service provider with approximately 952,000 subscribers in the southeastern US and Puerto Rico, and LTM revenues of $826 million. TECHNICAL OLYMPIC: Moody's Rates New $250 Mil. Note Issue at Ba3 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the new $250 million issue of senior notes of Technical Olympic USA, Inc. At the same time, Moody's affirmed all of the company's existing ratings, including the Ba3 corporate family rating, Ba3 on the existing issue of senior notes, and B2 on the existing issues of senior subordinated notes. The ratings outlook remains stable. The stable ratings outlook reflects Moody's expectation that the company will maintain capital structure discipline while pursuing its expansion opportunities by limiting reported debt leverage to between 45% to 55%. The ratings consider the moderately heavy adjusted debt leverage employed, the developing strategy of moving more assets off the balance sheet, the still-heavy geographic concentration in Florida, and the lack of certainty with regard to the plans of TOA's ultimate owner, Technical Olympic S.A., of Athens, Greece. At the same time, the ratings are supported by the company's transition from a start up/roll up operation to one that possesses moderate size, scale, improved competitive position, and the opportunity to harvest the benefits of the infrastructure investment made in the last four years. Moody's expects these benefits to be translated into continued strong earnings growth and improved financial ratio performance going forward. The rating actions are: * Ba3 assigned on the $250 million of senior notes due 2011 * Ba3 corporate family rating is affirmed * Ba3 on $300 million of 9% senior notes due July 1, 2010 is affirmed * B2 on $125 million of 7.5% senior subordinated notes due March 15, 2011 is affirmed * B2 on $185 million of 10.375% senior subordinated notes due July 1, 2012 is affirmed * B2 on $200 million of 7.5% senior subordinated notes due Jan. 15, 2015 is affirmed All of the rated debt is guaranteed by the company's material operating subsidiaries other than its mortgage and title subsidiaries. Headquartered in Hollywood, Florida, Technical Olympic USA, Inc., builds and sells single family homes largely for the move-up homebuyer. It also operates captive mortgage origination and title insurance service companies. It is 67%- owned by Technical Olympic S.A. Revenues and net income for 2005 were approximately $2.5 billion and $218 million, respectively. Established in 1965 and headquartered in Athens, Greece, Technical Olympic S.A., is one of the larger construction companies in Greece, with additional construction ventures in the U.K., Romania, and the Balkans. It is managed and approximately 46%- owned by Constantine Stengos and his family. TELECOM ARGENTINA: Intends to Pay Series A & B Notes on April 18 ---------------------------------------------------------------- Telecom Argentina S.A. (NYSE: TEO & BASE: TECO2) reported its intention to make a Note Payment on Series A Notes due 2014 and Series B Notes due 2011 on April 18, 2006, or as soon as practicable thereafter. This Note Payment will result in the payment in whole of the principal amortization scheduled to be paid on Oct. 15, 2008, and April 15, 2009, (in total equivalent to 7.54% of Serie A Notes and 15% of Series B Notes). The payment of the principal amortization scheduled for Oct. 15, 2008, will be made entirely with Excess Cash as of Dec. 31, 2005. The principal amortization payment scheduled for April 15, 2009, will be partially made with Excess Cash as of Dec. 31, 2005, and partially made as a voluntary prepayment. The voluntary prepayment will result in a reduction of Excess Cash amounts payable under the Notes on the next Mandatory Prepayment Date. Payment shall be made to the holders of the Notes held in global form through the settlement systems of DTC, Euroclear and Clearstream, as applicable. Payments to holders of Notes in certificated form will be made by wire transfer to the accounts of the respective holders. Telecom Argentina is a company incorporated under the laws of Argentina with its registered office at: Telecom Argentina S.A. Alicia Moreau de Justo 50 Piso 10, C1107AAB Buenos Aires, Argentina Telecom Argentina is one of Argentina's largest telecommunications operators. It provides local and long distance telephony, mobile communications (through its subsidiary Telecom Personal), data and Internet access services in Argentina. It also operates a mobile license in Paraguay through one of its subsidiaries. Telecom Argentina common stock is listed on the Buenos Aires Stock Exchange under the ticker "TECO2" and Telecom Argentina ADSs are listed on the New York Stock Exchange under the ticker "TEO". * * * On March 23, 2006, Standard & Poor's Ratings Agency has placed the B- local and foreign currency issuer credit ratings of Telecom Argentina S.A. to Watch Positive from Stable. TELOGY INC: Files Third Amended Disclosure Statement in California ------------------------------------------------------------------ Telogy, Inc., and its debtor-affiliate e-Cycle L.L.C., submitted to the U.S. Bankruptcy Court for the Northern District of California a third amended disclosure statement explaining their Fourth Amended Joint Plan of Reorganization. Overview of the Plan The Plan provides that the Debtors will reorganize through an asset disposition transaction of the Debtors' businesses to the Reorganized Debtors, newly formed Delaware limited liability companies. The Debtors say that the Reorganized Companies will have a significantly deleveraged capital structure. The Reorganized Debtors will operate the Debtors' business funded from their ongoing business operations, and with the funding available under the Exit Facility. Reorganized e-Cycle will be held as a subsidiary of Reorganized Telogy. Holders of the Debtors' approximately $170.4 million of senior secured debt, including accrued and unpaid interest, will exchange their existing claims for equity interests in the Reorganized Telogy, and the Debtors' $75.2 million, excluding accrued and unpaid interest, of unsecured subordinated and junior subordinated debt would be extinguished or exchanged for equity interests in Reorganized Telogy. Exit Facility The Debtors tell the Court that on the Effective Date, Reorganized Telogy and the Exit Lenders will enter into the Exit Financing Agreements. The Exit Facility will provide: (i) a revolving credit facility of at least $20 million, partially drawn as of the Effective Date; (ii) a term of five years; (iii) interest will be payable quarterly in arrears; (iv) the indebtedness of Reorganized Telogy and its subsidiaries evidenced by the Exit Facility will rank senior in right of payment to any and all subordinated indebtedness of such entities and pari passu in right of payment with all other existing and future unsubordinated indebtedness, including the New Term Loan; (v) secured with a first priority security interest in and lien on substantially all assets of Reorganized Telogy and its subsidiaries, pari passu with the Term Loan Notes; (vi) financial covenants customary for loans of this type, and will be agreed to by the Ad Hoc Lender Committee and the Debtors, including, without limitation, in respect of maximum capital expenditures and leverage and minimum cash balances; (vii) other covenants customary for debt of this type, and as will be agreed to by the Ad Hoc Lender Committee and Debtors; and (viii) all documentation relating to the Exit Facility will be governed by the law of the State of New York. Treatment of Claims Under the fourth amended plan: * Allowed Administrative Claims; * DIP facility Claims; * Allowed Tax Claims; * Allowed Priority Claims; * Critical Vendor Claims; and * Convenience Claims, will be paid in full. Allow Priority Claims, at the Debtors' option, will be paid: (a) in the full allowed amount of the allowed claim in cash on the latest of: -- the Effective Date, -- the Allowance Date of such Claim or -- the date such Claim becomes payable according to its terms; or (b) on terms as may be agreed to by the Holder of the claim. Holders of Prepetition Senior Secured Claims will receive, in full satisfaction of their claims: (a) a pro rata share of 791,330 Series A New Shares; (b) a Pro Rata share of $30 million of the Term Loan Notes; and (c) a payment of $1.3 million in accordance with section 9.1 of the Plan. The legal, equitable and contractual rights to which the Holder of the Charter One Secured Claims is entitled will be reinstated and the Holder will be paid in accordance with such legal, equitable and contractual rights. If the Holder of a Pool Owner Claim doesn't accept the Pool Purchase Offer and Compromise, and if it is determined that the Holder has an Allowed Secured Claim, then the Holder of that claim will have the collateral securing its claim abandoned to it in full satisfaction and release of the allowed secured claim. The Debtors tell the Court that allowed other secured claims will receive either of theses treatments at their option: (a) the Plan will: (i) not alter the legal, equitable or contractual rights to which the claim entitles the holder or (ii) otherwise render the claim unimpaired pursuant to Section 1124 of the Bankruptcy Code; (b) the Debtors will distribute to the holder the property securing the claim; (c) the Holder will be accorded other treatment as may be agreed to; or (d) for any secured claim that is a secured Claim because of right of setoff, the Holder of that claim shall be permitted to offset the claim against amounts due to Debtors. The Debtors tell the Court that if holders of subordinated claims accept the Plan then they will receive in full satisfaction of their claims, a pro rata share of * 4,790 Series A New Shares; and * two series of Subordinated Claim Warrants, Series X and Series Y, to acquire 88,398 Series A New Shares. The subordinated claim warrants granted to each holder of a subordinated claim will be divided equally between the two series and all subordinated claim warrants will vest on the effective date. However, the Debtors say that if holders of subordinated claims vote to reject the Plan, then their claims will be treated as general unsecured claims. Holders of general unsecured claims will receive their pro rata share of $100,000. Holders of Intercompany Claims will not receive nor retain anything under the plan. Junior Subordinated Claims will be discharged and holders of these claims will receive nothing under the plan. Equity Interests will be cancelled and holder of those interests will also receive nothing under the plan. A full-text copy of the Debtors' Third Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060410051306 About Telogy Inc Headquartered in Union City, California, Telogy, Inc. -- http://www.tecentral.com/-- rents, sells, leases electronic test equipment including oscilloscopes, spectrum, network, logic analyzers, power meters, OTDRs, and optical, from manufacturers like Tektronix, Rohde & Schwarz. Telogy, Inc., and its debtor-affiliate, e-Cycle, LLC, filed for chapter 11 protection on Nov. 29, 2005 (Bankr. N.D. Calif. Case No. 05-49371). Ramon M. Naguiat, Esq., at Pachulski, Stang, Ziehl, Young Jones & Weintraub P.C. represents the Debtor in its restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. TELUS COMMS: DBRS Confirms Ratings Following Corp. Reorganization ----------------------------------------------------------------- Dominion Bond Rating Service released reports on TELUS Corporation and its wholly owned subsidiary TELUS Communications Inc. The reports support the recent confirmation of the Company's credits at BBB (high)/A (low), respectively, on Mar. 1, 2006, following the Company's announcement that it had completed a corporate reorganization that effectively combined its fixed-line and wireless operations into one company, TELUS Communications Company. For more information on this credit or on this industry, please visit http://www.dbrs.com/ TENASKA ALABAMA: Moody's Reviewing B1 Bond Rating & May Upgrade --------------------------------------------------------------- Moody's Investors Service placed the B1 rating of the senior secured bonds of Tenaska Alabama Partners, L.P.'s, an 845 MW natural gas and oil-fired project combined cycle power project in Autauga County, Alabama, under review for upgrade. The rating review for TAP is prompted by the review for upgrade of The Williams Companies, Inc., initiated April 4, 2006 reflecting improvements in operating performance and financial profile at Williams. Williams guarantees the payments of its subsidiary, Williams Power Company, Inc., under a long-term fuel conversion service agreement between Williams Power and TAP. TAP's B1 rating is currently constrained by the credit profile of Williams. The FCSA is the source of essentially all of the project's cash flow. It is Moody's opinion that based on current market prices for natural gas and power, the project would not likely be able to generate sufficient cash to cover operating costs and debt service without the Williams Power contract. Other drivers of the TAP rating are supportive of a rating higher than B1, including: TAP's historical operating performance, an experienced operator, the benefit of a long term services agreement, the expected stability of its highly contracted projected cash flows, and projected debt service coverage ratios in the range of 1.30 times. The rating is highly likely to be revised upward in the event of an upgrade of Williams senior unsecured rating. Tenaska Alabama Partners, L.P. is an 845 MW gas and oil-fired power project located in central Alabama. TEX STAR: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Tex Star Can, LLC 1515 Emerald Plaza College Station, Texas 77845 Bankruptcy Case No.: Chapter 11 Petition Date: April 3, 2006 Court: Southern District of Texas (Houston) Debtor's Counsel: Lawrence J. Maun, Esq. Lawrence J. Maun, P.C. 9800 Richmond Avenue, Suite 520 Houston, Texas 77042 Tel: (713) 266-2560 Fax: (713) 266-2568 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ West, Webb Albritton & Gentry $76,958 1515 Emerald Plaza College Station, TX 77845 Regal Chemical Co. $18,448 [Address not provided] BWI $7,145 [Address not provided] Snell Wylie & Tibbals $5,552 Turfgrass America $5,115 Patout & Company $4,675 Estes, Incorporated $4,660 Garrett Engineering $4,250 Callaway Golf $3,908 Farm Plan $2,487 Kolkhorst Petroleum Co., Inc. $2,288 Chrysler Financial $1,860 Mid South Synergy $1,580 Grimes County MUD #1 Taxes $1,460 Acushnet Company $1,258 Srixon Sports USA, Inc. $1,203 William Kerr Agency $1,082 Card Service Center $1,065 It's A Sign, LLC $1,021 R & R Products, Inc. $865 TIER TECHNOLOGIES: Nasdaq Extends Financials Filing Until June 5 ---------------------------------------------------------------- As reported in the Troubled Company Reporter on March 21, 2006, Tier Technologies, Inc. (NASDAQ:TIERE), received the decision of the Nasdaq Listing Qualifications Panel granting the Company's request for continued listing of its common stock on The Nasdaq National Market, subject to certain conditions. One of the Panel's conditions for continued listing required that the Company file with the Securities and Exchange Commission by May 5, 2006, its Annual Report on Form 10-K for the fiscal year ended Sept. 30, 2005 and its Form 10-Q for the quarter ended Dec. 31, 2005. On March 24, 2006, Tier concluded it would be unlikely to meet the May 5, 2006 deadline because of delays that have occurred related to the reconciliation of certain accounting records of one of Tier's payment processing centers. At that time, Tier sent a letter to the Panel requesting an extension of the deadline until June 5, 2006. On March 31, 2006, Nasdaq granted Tier's request for the extension and continued listing on The Nasdaq National Market, subject to two conditions. First, on or before April 5, 2005, the Company was required to provide the Panel with a substantive status report on the Audit Committee investigation that addresses specific questions posed by the Panel. Second, on or before June 5, 2006, the Company will file its Form 10-K for the fiscal year ended Sept. 30, 2005 and its Form 10-Q for the quarter ended Dec. 31, 2005. In addition, in order to fully comply with the terms of the Panel's exception, Tier must be able to demonstrate compliance with all requirements for continued listing on The Nasdaq National Market. In the event it is unable to do so, Tier's common stock could be delisted from The Nasdaq National Market. As previously reported, the Audit Committee of the Company's Board of Directors retained the independent law firm of Ropes & Gray LLP in December 2005 to conduct an independent investigation of restatement-related issues. The scope of the investigation includes: (i) examination of the qualitative and financial reporting issues giving rise to the restatement, including the issues Tier's management brought to the Audit Committee's attention; (ii) review of Tier's proposed restatement and related filings as they are prepared by the Company; (iii) review of accounting control and management issues that come to the Audit Committee's attention during the course of its investigation; and (iv) identification of remedial measures that the Audit Committee recommends the Company implement in light of its findings. On April 5, 2006, Tier provided the Panel with a substantive status report addressing the questions posed by the Panel on March 10, 2006, which the Company was required to address as a condition of continued listing on The Nasdaq National Market. While the Company believes it has satisfied this condition to continued listing, there can be no assurance that the Panel will find this report satisfactory, in which case Tier's common stock could be delisted from The Nasdaq National Market. About Tier Headquartered in Reston, Virginia, Tier Technologies, Inc. -- http://www.tier.com/-- is a leading provider of transaction processing and packaged software and systems integration services for public sector clients. The company combines its understanding of enterprise-wide systems with domain knowledge enabling clients to rapidly channel emerging technologies into their operations. The company focuses on sectors that are driven by forces that make demand for its services less discretionary and are likely to provide the company with recurring long-term revenue streams. * * * Defaults As reported in the Troubled Company Reporter on March 21, 2006, the expected restatement, the delayed availability of Tier Technologies, Inc.'s financial statements for the fiscal year ended Sept. 30, 2005, and the anticipated loss for the quarter ended Sept. 30, 2005, constituted events of default under the revolving credit agreement between the Company and its lender, City National Bank. In addition, the Company incurred similar events of default for the quarter ended Dec. 31, 2005. UAL CORP: KBC Bank Asks Court to Lift Stay to Exercise Set-Off -------------------------------------------------------------- United Air Lines, Inc., before it filed for bankruptcy protection, maintained various operational bank accounts at KBC Bank NV in Brussels, Belgium, including Account Nos. 427-9154491-73, 427-9154492-74, and 427-9154491-90. The aggregate balance in the Operational Accounts on the Petition Date was EUR2,751,729. On December 12, 2002, United withdrew EUR1,000,000 from the Operational Accounts leaving an aggregate balance of EUR1,751,729. In a letter dated December 20, 2002, KBC informed United that it was placing an administrative freeze on the Operational Accounts. As of the Petition Date, United leased two B737 aircraft, commonly known as tail numbers 955UA and 957UA pursuant to certain lease agreements. KBC is an owner participant under these Lease Agreements. In 2003, KBC sought to set off the funds it held in the Operational Accounts against the due and owing prepetition lease payments. The Set-off Motion has been the subject of litigation before the Bankruptcy Court, the United States District Court for the Northern District of Illinois, Eastern Division, and the Belgium Commercial Court, and remains pending before the Bankruptcy Court. KBC filed two claims against United's estate -- Claim Nos. 43707 and 43708 -- aggregating $23,6585,922, plus interest, fees and costs. United objected to the Claims and the Set-off Motion on several grounds including that Belgian law does not permit set-off under these circumstances. United does not admit the liability or the validity of the Claims nor does it admit that a set-off is proper. In recognition of the expense and the risk of litigation, the parties have decided to settle their dispute. The parties agree that: a. the Objections and the Set-off Motion will be withdrawn, with prejudice; b. as soon as practicable, KBC will lift the administrative freeze on the Operational Accounts; c. after lifting the administrative freeze, Untied will remit to KBC $521,554 in full satisfaction of KBC's set-off claims against United; d. United will be entitled to retain the balance of the Operational Accounts upon its payment to KBC; e. the Claims will be allowed as a general unsecured claims for $23,658,922 against the United bankruptcy estate, in full satisfaction of any unsecured claims against the Reorganized Debtors; f. all other claims filed or asserted by KBC in the Reorganized Debtors' Chapter 11 cases are withdrawn, with prejudice; and g. the parties will exchange mutual releases. About UAL Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News, Issue No. 120; Bankruptcy Creditors' Service, Inc., 215/945-7000) UAL CORP: Denver County & HSBC's $300-MM Claims Get Stock Reserve ----------------------------------------------------------------- UAL Corporation and its debtor-affiliates' Plan of Reorganization provides that on the Plan's effective date, the Reorganized Debtors will reserve share of New UAL Common Stock for the benefit of holders of disputed whose claims, if allowed may be entitled to distributions of New UAL Common Stock. The Debtors, the City and County of Denver, Colorado, and HSBC Bank USA, National Association, entered into a stipulation to establish what the New UAL Common Stock will be reserved under the Plan on account of: -- Claim No. 38747 filed by Denver on May 12, 2003; -- Claim No. 36750 filed by HSBC on May 9, 2003. Denver, HSBC and the Debtors agree that on the Effective Date, the Debtors will reserve shares of New UAL Common Stock equal to the amount necessary to satisfy distributions required under the Plan if Claim Nos. 38747 and 36750 were allowed as unsecured claims for $300,000,000. However, Denver and HSBC will not be entitled to distributions on account of these claims that exceed the $300,000,000 Reserve. About UAL Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service, Inc., 215/945-7000) UAL CORP: U.S. Bank Holds $30,897,764 Unsecured Claim ----------------------------------------------------- Pursuant to a Trust Agreement dated April 1, 2001, U.S. Bank National Association serves as indenture trustee for the $34,590,000 California Statewide Communities Development Authority Special Facilities Revenue Bonds, Series 2001. U.S. Bank timely filed a proof of claim with respect to the Bonds for $34,998,354 representing the principal and prepetition interest. In 2003, the U.S. Bankruptcy Court for the Northern District of Illinois partially lifted the automatic stay permitting U.S. Bank to apply and disburse $1,123,717 in bond funds that it held. The Court further lifted the automatic stay to allow U.S. Bank to apply and disburse certain construction funds that it held with respect to the Bonds for $1,521,408. The Construction Fund Order also provided that U.S. Bank would continue to hold $1,455,465 of the construction funds. UAL Corporation and its debtor-affiliates sought the turnover of the $1,455,465 in construction funds. However, the Court allowed the turnover of only $1,191,547 and authorized U.S. Bank to set off $233,824 from the Disputed Construction Fund Amounts and the $30,094 in postpetition costs. The Debtors and U.S. Bank each appealed the order to the United States District Court for the Northern District of Illinois, which affirmed the Bankruptcy Court's order. The Debtors and U.S. Bank further appealed the District Court's order to the United States Court of Appeals for the Seventh Circuit Court, which has not issued a ruling yet. To resolve the matter, the parties entered into a stipulation, agreeing that: a. U.S. Bank will have an allowed $30,897,764 unsecured claim, which will be a Class 2E-6 Claim under the Debtors' Plan of Reorganization; b. If, as a result of the litigation concerning the Disputed Construction Funds currently pending in the Seventh Circuit, U.S. Bank turns over to the Debtors the Disputed Construction Funds, U.S. Bank will have an additional unsecured claim equal to the amount of the Construction Funds turned over. The additional claim will also be under Class 2E-6. c. If, as a result of the litigation concerning the Disputed Construction Funds currently pending in the Seventh Circuit, U.S. Bank is authorized to offset amounts due to it from the Debtors, U.S. Bank may apply and disburse the Disputed Construction Funds. If U.S. Bank is entitled to offset against all of the Disputed Construction Funds, then there will not be any additional claim. About UAL Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News, Issue No. 117; Bankruptcy Creditors' Service, Inc., 215/945-7000) VERILINK CORP: Files for Voluntary Chapter 11 Protection -------------------------------------------------------- Verilink Corporation (NasdaqNM:VRLK) filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Verilink called the filing a necessary step in its strategy to reorganize its debt structure and relieve some of its financial pressures. Under Chapter 11, Verilink retains control of its assets and is authorized to operate its business as a debtor-in- possession under the jurisdiction of the U.S. Bankruptcy Court for the Northern District of Alabama. Turnaround CEO Appointed Verilink has engaged the nationally recognized corporate advisory and turnaround management services firm of Grisanti, Galef & Goldress. In addition, Verilink has named Lee N. Katz, a managing partner of Grisanti, Galef & Goldress, as President and Chief Executive Officer of Verilink. Mr. Katz has over 30 years of experience in corporate restructuring, turnarounds and workouts of firms operating under federal bankruptcy protection. Mr. Katz has acted as Chairman, President and CEO of dozens of under-performing closely held and public companies. Most recently, Mr. Katz served as Director of Reorganization of FirstPlus Financial Group, Inc., a multi-billion dollar mortgage company, where he restructured over $1 billion in debt to enable the company to emerge from Chapter 11 Bankruptcy. "We want to assure our customers and suppliers that this filing will not impact our day-to-day operations, and we remain committed to serving the needs of our customers," said Mr. Katz. "While filing Chapter 11 is never an easy decision, we believe it will provide Verilink with the flexibility needed to address Verilink's financial challenges and valuable 'breathing room' to strengthen Verilink's financial affairs." "We are moving quickly to leverage our leading products and strong customer relationships into developing a sound economic plan for our company," said Jim Nevelle, Vice President of Sales and Marketing of Verilink. Verilink intends to operate in the normal course of business during its Chapter 11 case and will continue payment of its employees' wages and benefits and meeting its customer-related obligations. Workforce Reduction Implemented Verilink has implemented a comprehensive cost-saving program that includes a reduction in its workforce by approximately 20% as of April 7, 2006. As part of this action, Leigh S. Belden, previous President and Chief Executive Officer, and Timothy R. Anderson, previous Chief Financial Officer, were among the employees whose last day of employment was April 7. Verilink anticipates that Mr. Belden and Mr. Anderson will assist Verilink in the reorganization process in a consulting role. Mr. Belden and Steven C. Taylor have resigned from Verilink's board of directors as of April 8 and April 9. About Verilink Corp. Headquartered in Hunstville, Alabama, Verilink Corporation -- http://www.verilink.com/-- is a leading provider of next- generation broadband access solutions for today's and tomorrow's networks. The Company develops, manufactures and markets a broad suite of products that enable carriers and enterprises to build converged access networks to cost-effectively deliver next- generation communications services to their end customers. The Company and its debtor-affiliate filed for chapter 11 protection on April 9, 2006 (Bankr. N.D. Ala. Case No. 06-80566 & 06-80567). Robert McCay Dearing Mercer, Esq., at Powell Goldstein LLP, represents the Debtors. When the Debtors filed for protection from their creditors, they listed total assets of $37,221,000 and total debts of $23,913,000. VERILINK CORP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Verilink Corporation 127 Jetplex Circle Huntsville, Alabama 35758 Bankruptcy Case No.: 06-80566 Debtor affiliate filing separate chapter 11 petitions: Entity Case No. ------ -------- Larscom Incorporated 06-80567 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) Debtors' 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 Debtors' 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 W HOLDING: Faces Nasdaq Delisting Due to Late 10-K Filing --------------------------------------------------------- W Holding Company, Inc. (NYSE: WHI) reported that on April 5, 2006, the Company received notice from The Nasdaq Stock Market indicating that the Company's Series B, C, D, E, F, G and H preferred securities are subject to potential delisting from The Nasdaq Stock Market for the Company's inability to file its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2005 in a timely fashion, as required under Marketplace Rule 4310(c)(14). On March 16, 2006, the Company reported that it expects to complete its previously reported restatement and file its Annual Report on Form 10-K for the year ended Dec. 31, 2005, within 30 days after said date. The Company intends to request a hearing before a Nasdaq Listing Qualifications Panel to review the Staff Determination. This request will stay the delisting pending the hearing and a determination by the Nasdaq Listing Qualifications Panel. There can be no assurance that the Panel will grant the Company's request for continued listing of its preferred securities. W Holding Company, Inc. (NYSE : WHI) -- http://www.w-holding.com/ -- is a Puerto Rico based financial holding company offering a full range of financial services through their wholly-owned subsidiaries, Westernbank Puerto Rico and Westernbank Insurance Corp. Westernbank offers a full range of business and consumer financial services, including banking, trust and brokerage services. Westernbank Insurance Corp. is a general insurance agent placing property, casualty, life and disability insurance. As of Sept. 30, 2005, Westernbank had total assets of $15.7 billion and a stockholders' equity of $1.2 billion. WINN-DIXIE: Wants to Reject Seven Lease Termination Agreements -------------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to reject, effective as of the Petition Date, seven lease termination agreements: Effective Date Store No. Non-Debtor Party of Agreement --------- ---------------- -------------- 264 E&A Acquisition II LP 11/30/2004 714 Bay Landing I, Inc. 12/28/2004 376 Lantana Square Shopping Center, Ltd. 12/01/2004 1270 Invesco, LP 12/15/2004 1341 1997 Properties, LLC 11/30/2004 2462 440 Group, Ltd. 01/24/2005 2491 Vineyard Marketplace LP 08/31/2004 The Debtors reserve the right to challenge the executory or unexpired nature of any of the Termination Agreements. The rejections apply only to these Termination Agreements and do not apply to any other agreements that the Debtors may have with the Non-Debtor Parties, D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court. Each of the Termination Agreements provides for, among other things: (a) the termination of the underlying lease of non-residential real property; and (b) the Debtors' payment to the landlord under each Lease of a specific amount in monthly installments over periods ranging from 6 months to 84 months. According to Mr. Baker, the payments remaining under the Lease Termination Agreements as of the Petition Date exceeded $5,000,000 in the aggregate. Although the Debtors recognize that the Termination Agreements may not be executory and that they stopped making payments under those agreements as of the Petition Date, the Debtors have determined to reject the Termination Agreements out of an abundance of caution. Mr. Baker explains that by rejecting the Termination Agreements, the Debtors will ensure that any continuing obligations arising under the Termination Agreements -- agreements that have provided no tangible benefit to their estates or creditors since the Petition Date -- will be cut off and treated as prepetition obligations. To the extent that any party to a Termination Agreement has not already filed a proof of claim for amounts arising under that Termination Agreement, the Debtors ask the Court to set the deadline for filing a proof of claim for rejection damages 10 days after approval of the rejection. 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 Court to Approve Modified AT&T Agreements ----------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates and AT&T Corp. are parties to: * the AT&T Master Agreement, * the AT&T Service Order Attachment-Voice/Data Service, and * the Addendum to AT&T Service Order Attachment-Voice/Data Service. The Prepetition Agreements provide the Debtors with data frame relay network services that allow them to transport critical data, including point of sale authorizations, inventory inquiries and sales reports, between their various locations. The Prepetition Agreements have become uneconomically unfavorable to the Debtors, D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court. Mr. Baker explains that the Prepetition Agreements contain, among other problematic terms, contract-pricing provisions, intended to guarantee a return to AT&T that will satisfy a "minimum annual revenue commitment" or "MARC" that is based on the number of stores previously operated by the Debtors. With the Debtors' decision to sell or close in excess of 300 stores, they are now unable to satisfy the MARC. Moreover, the Debtors' ability to adjust contract pricing based on the existing "business downturn" provision in the Prepetition Agreements has been exceeded. As a result, the Debtors are subject to a shortfall penalty or a rate increase. Mr. Baker relates that the Debtors have been engaged in negotiations with AT&T to modify the MARC and address other problematic terms in the Prepetition Agreements. The negotiations have produced an agreement in principal that is substantially reflected in: * the Addendum #1 to AT&T Master Agreement, * the amended and restated AT&T Service Order Attachment- Voice/Data Service, and * the amended and restated Addendum to AT&T Service Order Attachment-Voice/Data Service. Pursuant to these Postpetition Amendments: (a) the Debtors' MARC will be reduced from $3.48 million per year to $1.68 million per year; (b) the business downturn provision will permit a further 15% reduction in commitment before a rate increase is triggered; (c) the early termination penalties applicable to the last two years of the contract term will be reduced; and (d) the Debtors will be entitled to credits of $138,300 during the first month and, if agreed terms are satisfied, $276,000 in the 45th month of the amendment term. The agreement in principle contemplates that the Debtors will assume the Prepetition Agreements as modified by the Postpetition Amendments, pursuant to Section 365(a) of the Bankruptcy Code. In conjunction with the assumption of the Modified Agreements, the Debtors have agreed that the prepetition unsecured non- priority claim asserted by AT&T for $1,129,758, as evidenced by Claim No. 833, will be allowed in full. AT&T will facilitate the assumption by agreeing that: (a) the Debtors will not be required to pay the amount of the Prepetition Claim as cure under Section 365(b)(1)(A) of the Bankruptcy Code; (b) it will waive in full the requirements of Section 365(b)(1); (c) the Prepetition Claim will not have administrative expense status as a result of the assumption of the Modified Agreements or for any other purpose; and (d) the Prepetition Claim will retain the status of a prepetition unsecured non-priority claim. Accordingly, pursuant to Sections 105 and 365 of the Bankruptcy Code and Rule 6006 of the Federal Rules of Bankruptcy Procedure, Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to: (a) approve their assumption of the Modified Agreements; (b) enforce AT&T's waiver of the requirements of Section 365(b)(1); (c) allow the Prepetition Claim for $1,129,758; and (d) provide that the Prepetition Claim will not be paid as cure but will instead retain the status of a prepetition unsecured non-priority claim. 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 to Modify Claims Resolution Procedure ------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U. S. Bankruptcy Court for the Middle District of Florida to modify the previously approved Claims Resolution Procedure to: (a) increase by $1,000,000, the aggregate amount of cash payments the Debtors can make to settle de minimis Litigation Claims; and (b) require mediation as a prerequisite to stay relief for liquidation of Litigation Claims. A full-text copy of the revised Claims Resolution Procedures is available for free at http://ResearchArchives.com/t/s?7aa As of March 31, 2006, more than 12,900 proofs of claim have been filed against the Debtors in their Chapter 11 cases, of which 3,200 Claims were unliquidated personal injury or property damage claims for which litigation had been commenced or threatened against the Debtors prepetition, D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court. As of March 27, 2006, the Debtors have settled or have agreed to settle 1,010 Litigation Claims asserting $100,711,436 for a total settlement amount of $11,181,894 consisting of: -- $1,082,071 in cash payments; and -- the balance in allowed claims. The resolution of these claims in this cost-effective manner has significantly enhanced the value of the Debtors' estates, Mr. Baker asserts. As of March 31, 2006, the Debtors have utilized $1,082,071 of the $1,500,000 allocated for de minimis settlements. Mr. Baker explains that these de minimis cash payment settlements have been particularly beneficial to the estate because these claims have been settled at an average rate of 3.5% of the amount demanded in the corresponding Proofs of Claim. The Debtors anticipate that they can resolve 300 of the remaining 1,400 Litigation Claims through de minimis cash payments if the established limit is increased by $1,000,000. Although 50 of the remaining 1,400 Litigation Claimants have requested mediation of their claims pursuant to the Claims Resolution Procedure, the remainder have not yet committed to mediation, Mr. Baker tells the Court. A handful of these claimants have already filed motions seeking relief from the automatic stay to liquidate their claims in other forums. The Debtors estimate that the liquidation of the Litigation Claims through: (a) litigation in the various state courts would cost the Debtors an average of $11,500 per claim in litigation fees and other costs, resulting in a total potential cost to the Debtors' estates of $16,000,000 in litigation fees and expenses; and (b) mediation under the Claims Resolution Procedure would be $2,400 per claim, resulting in a potential cost to the Debtors' estates of $3,400,000. Based on these estimates, the mediation of the unresolved Litigation Claims through the Claims Resolution Procedure could potentially save the Debtors' estates up to $12,600,000 in litigation fees and expenses. The Claims Resolution Procedure, however, does not presently require that Litigation Claimants participate in mediation prior to seeking relief from the automatic stay to liquidate their claims in other forums. Mr. Baker asserts that the mediation of the claims would promote the cost effective and timely liquidation and settlement of the Litigation Claims. 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). W.S. LEE: Court Okays Spence Custer as Bankruptcy Counsel --------------------------------------------------------- W.S. Lee & Sons, Inc. and its debtor-affiliate, Lee Systems Solutions, LLC, sought and obtained authority from the U.S. Bankruptcy Court for the Western District of Pennsylvania to employ Spence, Custer, Saylor, Wolfe & Rose, LLC as their counsel. Spence, Custer is expected to: a. continue to provide advice and assistance to represent the Debtors' interest in the case; b. complete the filing of the appropriate schedules; c. advise the Debtors regarding their rights, options, and obligations under the Chapter 11 proceedings; and d. aid in formulating and proposing Plans and Disclosure Statements. James R. Walsh, Esq., an attorney at Spence Custer, tells the Court that the Firm's professionals bill $200 per hour. Mr. Walsh assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Altoona, Pennsylvania, W.S. Lee & Sons, Inc. -- http://www.wslee.com/-- distributes food and non-food products primarily to schools, restaurants, hospitals and other institutions in the Mid-Atlantic region. The Company and its wholly owned subsidiary, Lee Systems Solutions, LLC, filed for chapter 11 protection on March 14, 2006 (Bankr. W.D. Pa. Case No. 06-70148). James R. Walsh, Esq., at Spence Custer Saylor Wolfe & Rose LLC, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated total assets of less than $50,000 and total debts between $1 million and $10 million. Documents submitted to the Court however show that the Debtors are indebted to Omega Bank in an amount of $20,021,000. * Darrell Tamosuinas and W. Gregory Coward Join Stonehill Group --------------------------------------------------------------- Darrell J. Tamosuinas and W. Gregory Coward have joined Stonehill Group, LLP as Principals in Stonehill's Business Advisory Group, which provides interim management and business advisory services to management and boards of middle-market public and private companies. The scope of services provided by the Business Advisory Group includes a full range of restructuring and financial and operational performance improvement activities relating to underperforming or troubled companies. Mr. Tamosuinas has over 30 years of financial and operational business experience, including: * company ownership; * partnership at Ernst & Young LLP including service as Director of their Restructuring Services for the Midwest Region; * Vice President, Chase Manhattan Bank's Corporate Bank, Petroleum Division; and * Principal at a Midwest corporate renewal firm. He holds a B.S. in Mechanical Engineering from the University of Southern California and an MBA from California Polytechnic University. He is a CPA and CIRA (Certified Insolvency & Restructuring Advisor). Mr. Coward has over 30 years of executive leadership experience, including CEO of public and private company turnarounds with complex marketing, manufacturing, and workforce situations, board positions, and ownership and management of acquisitions and startups in a wide variety of industries. He holds a B.A. from Trinity College and an MBA from Darden (University of Virginia). Headquartered in Minneapolis, Minnesota, Stonehill Group, LLP -- http://www.stonehillgrp.com/-- is a financial services firm founded in December 2000. The firm's partners, principals and consultants have extensive, successful business experience as CEOs, CFOs, directors, financial advisors and/or owners of, and counselors to, public and privately held companies. Stonehill Group provides consulting services to companies facing unique and important issues with business and financial components, such as litigation, refinancing of the business, and major management, operational, or insolvency issues. * Leading Retailer, Joseph Nusim, Dies at Age 72 ------------------------------------------------ Joseph Nusim, whose career as a leader in retailing spanned over 50 years and a turnaround specialist for troubled companies, died of complications from lymphoma at his home in Wayne, New Jersey, on April 3rd at the age of 72. In the early 1970s he became Executive VP of the Jamesway Corporation, a major merchandise retailer in 1985 he left to become Chairman. CEO and Managing Director of Makro a division of Dutch giant SHV when SHV expanded its European operation to the US, bringing one of the first warehouse clubs to these shores. After overseeing the acquisition of Makro by K-Mart in 1990, Mr. Nusim took on the challenge of turning around the troubled Channel Home Centers as President and CEO. When Channel was acquired by Rickel Home Centers in 1996, he became Chairman and President until 1998. Most recently he was Co-Chairman of the Board of Loehmanns. In 1998 he started the Nusim Consulting Group. An expert in turnaround issues facing retailers, he was a frequent advisor and speaker on the subject. He served on the Board of Directors of Frank's Nursery, Scotty's Home Centers, Frankel's Home Furnishings. Herman's Sporting Goods, Woodworkers Warehouse, Lion Brand, and Kimco Realty Corporation. He served on the Advisory Board of Wells Fargo Bank Retail Division and DJM Asset Management Corp. He was a consultant to GE Capital and the Blackstone Group. A founder of the International Mass Retail Association, he was on the Board and was a frequent speaker on retailing and turnaround issues. Mr. Nusim is survived by his second wife Rosemary, his son, Steven Nusim of Montclair, N.J., a daughter Zina Nusim of East Brunswick, N.J., a stepdaughter Kim Wood, three grandchildren, a brother Stanley Nusim and a sister Roberta Nusim, both of New York City, Contributions can be made to the Joseph Nusim Fund for Mantle Cell Lymphoma, 20 Stoney Ridge Lane, Riverside, Conn. 06878. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Abraxas Petro ABP (24) 122 (5) Accentia Biophar ABPI (9) 39 (19) AFC Enterprises AFCE (49) 213 40 Adventrx Pharma ANX (8) 24 (9) Alaska Comm Sys ALSK (19) 576 28 Alliance Imaging AIQ (40) 675 1 AMR Corp. AMR (1,478) 29,495 (2,156) Atherogenics Inc. AGIX (115) 198 173 Bally Total Fitn BFT (1,463) 486 (442) Biomarin Pharmac BMRN (77) 195 (29) Blount International BLT (145) 455 112 CableVision System CVC (2,414) 9,845 (428) CCC Information CCCG (95) 112 34 Centennial Comm CYCL (1,069) 1,409 32 Cenveo Inc CVO (50) 1,080 122 Choice Hotels CHH (167) 265 (57) Cincinnati Bell CBB (710) 1,863 16 Clorox Co. CLX (528) 3,567 (205) Cogdell Spencer CSA (50) 178 N.A. Columbia Laborat CBRX (15) 15 (3) Compass Minerals CMP (79) 750 195 Crown Media HL CRWN (123) 1,274 (99) Deluxe Corp DLX (82) 1,426 (277) Denny's Corporation DENN (265) 513 (86) Domino's Pizza DPZ (511) 461 4 DOV Pharmaceutic DOVP (19) 102 79 Echostar Comm DISH (867) 7,410 247 Emeritus Corp. ESC (113) 748 (29) Emisphere Tech EMIS (15) 19 (1) Encysive Pharm ENCY (11) 147 111 Foster Wheeler FWLT (313) 1,895 (146) Gencorp Inc. GY (73) 1,057 9 Graftech International GTI (183) 887 245 H&E Equipment SE HEES (5) 531 (92) Hercules Inc. HPC (25) 2,569 331 Hollinger Int'l HLR (170) 1,065 (354) I2 Technologies ITWO (71) 202 (34) ICOS Corp ICOS (59) 242 122 IMAX Corp IMAX (23) 243 35 Immersion Corp. IMMR (17) 45 29 Incyte Corp. INCY (19) 374 326 Indevus Pharma IDEV (126) 100 65 Investools Inc. IED (24) 73 (47) Koppers Holdings KOP (195) 552 132 Kulicke & Soffa KLIC (3) 440 217 Labopharm Inc. DDS (3) 55 17 Level 3 Comm. Inc. LVLT (476) 8,277 242 Ligand Pharm LGND (110) 315 (102) Linn Energy LLC LINE (45) 280 (51) Lodgenet Entertainment LNET (70) 263 14 Maxxam Inc. MXM (661) 1,048 101 Maytag Corp. MYG (187) 2,954 150 McDermott Int'l MDR (83) 1,668 230 McMoran Exploration MMR (58) 408 67 NPS Pharm Inc. NPSP (98) 331 234 New River Pharma NRPH (6) 54 47 Nighthawk Radiol NHWK (78) 36 4 Omnova Solutions OMN (15) 360 65 ON Semiconductor ONNN (276) 1,148 202 Quest Res. Corp. QRES (73) 247 (61) Qwest Communication Q (3,217) 21,497 (1,071) Revlon Inc. REV (1,096) 1,044 121 Riviera Holdings RIV (31) 212 2 Rural/Metro Corp. RURL (89) 310 54 Rural Cellular RCCC (481) 1,481 130 Sealy Corp. ZZ (412) 895 24 Sepracor Inc. SEPR (165) 1,275 769 Spatialight Inc. HDTV (4) 12 (2) St. John Knits Inc. SJKI (52) 213 80 Sun Healthcare SUNH (3) 512 (67) Tivo Inc. TIVO (27) 162 27 USG Corp. USG (302) 6,142 1,579 Unigene Labs Inc. UGNE (17) 13 (11) Unisys Corp UIS (33) 4,029 339 Vertrue Inc. VTRU (30) 446 (82) Weight Watchers WTW (81) 835 (38) Worldspace Inc. WRSP (1,492) 724 221 WR Grace & Co. GRA (559) 3,517 876 ********* 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 ***