/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060417.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, April 17, 2006, Vol. 10, No. 90 Headlines ACTIVANT SOLUTIONS: Moody's Junks Rating on Senior Subord. Notes ACTIVANT SOLUTIONS: S&P Rates Proposed $175MM Facilities at CCC+ ADVANCED MICRO: Earns $185 Million In First Quarter Ended March 26 ALIMENTATION COUCHE-TARD: Moody's Lifts Bank Loan Rating to Ba1 ALLIED HOLDINGS: Seeks Interim Relief Under Section 1113(e) AMCAST INDUSTRIAL: Shutting Down Two Plants by June 2006 AMES DEPT: Wants Plan Solicitation Period Stretched to Oct. 26 AMES TRUE: Moody's Reviewing B3 & Caa Debt Ratings for Downgrade ANCHOR GLASS: Wants to Assume O-N Minerals Supply Agreement ARMSTRONG HOLDINGS: Balance Sheet Upside-Down by $1.3B at Dec. 31 AVIS BUDGET: Prices $1 Billion Senior Notes Offering BOUNDLESS CORP: Delays Filing of 2005 Annual Report on Form 10-K BRIGHTPOINT INC: S&P Lifts Corporate Credit Rating to BB- from B+ CADMUS COMMS: Buys Remaining 20% Stake of KnowledgeWorks Global CENDANT CORP: Avis Budget Prices $1 Billion Senior Notes Offering CHARTER COMMS: S&P Rates Proposed $5.3 Bil. Bank Financing at B CHEMED CORPORATION: Earns $35.8 Million For 2005 Fiscal Year CITIGROUP MORTGAGE: Moody's Rates 2 Certificate Classes at Low-B COLLINS & AIKMAN: Court Approves Tax Claims Settlement Procedures CURATIVE HEALTH: Disclosure & Confirmation Hearings Set for May 8 DELTA AIR: Ct. To Rule on Flight Attendants Union's Contract Today DELTA AIRLINES: Must File Schedules & Statements by May 31 DELTA AIR: Court Okays Assumption of Lion Apparel Agreement DELTA AIR: Wants to Walk Away from Atlanta Airport Tract 6 Lease DOCTORS HOSPITAL: Court Extends DIP Agreements Through June 15 DOCTORS HOSPITAL: Hires Patton Boggs as Healthcare Counsel DOLLAR GENERAL: Moves Forward with New Marketing Strategy D.R. HORTON: Moody's Holds Ba1 Rating on Subordinated Note Issue DUANE READE: S&P Lowers Corporate Credit Rating to CCC from CCC+ ECHOSTAR COMMUNICATIONS: Earns $1.51 Bil. For Year Ended Dec. 31 ENRON CORPORATION: Distributes $4,676,400,000 to Creditors EXIDE TECHNOLOGIES: Court Approves Citicorp Settlement Agreement EXIDE TECHNOLOGIES: Court Approves Fifth Third Leasing Settlement FEDERAL-MOGUL: Plans to Shut Down Clinton Plant & Lay Off Workers FORUM HEALTH: Higher Dec. 2005 Losses Cue Moody's Ba2 Bond Rating G+G RETAIL: Committee Retains Mahoney Cohen as Financial Advisor G+G RETAIL: Court Approves Financo as Investment Banker G+G RETAIL: Court Approves CRP's Retention as Crisis Managers GLOBAL HOME: Organizational Meeting on April 24 in Wilmington GROSS PROPERTIES: Voluntary Chapter 11 Case Summary HELIX ENERGY: Moody's Places Credit & Corp. Family Ratings at B2 HILITE INT'L: Weakening EBIT Margins Cue Moody's Junked Ratings HUGHES NETWORK: S&P Affirms $450MM Sr. Unsecured Notes' B- Rating INDYMAC HOME: Credit Support Erosion Cues Moody's to Cut Ratings JACUZZI BRANDS: Offers to Buy Back $47MM of 9-5/8% Sr. Sec. Notes J.L. FRENCH: Wants to Assume Executory Contracts with Grob Systems KAISER ALUMINUM: Panel Supports Request to Block PBGC Agreements LAURENTIAN BANK: DBRS Confirms Debentures Rating at BBB (Low) LEAR CORP: Moody's Places $800 Mil. Term Loan Ratings at Low-B LONG BEACH: Moody's Cuts Ratings & Reviewing for Further Downgrade MARKSON ROSENTHAL: Case Summary & 19 Largest Unsecured Creditors MEDQUEST INC: S&P Downgrades Rating to B- With Negative Outlook MERIDIAN AUTOMOTIVE: Court Extends Exclusive Periods to July 31 MERIDIAN AUTOMOTIVE: Court Approves MASI's Stipulation With InSite MERIDIAN AUTOMOTIVE: Can Enter Into Tennant Financial Agreement METRIS TRUST: Moody's Confirms Ba2 Rating on Class D Securities MILLS CORPORATION: Mills Limited Refinances $337 Million Debt MILLS CORP: Lenders Agree to Waive Defaults through December 31 MIRANT CORP: NY-Gen Unit Gets Access to $5 Million DIP Financing MIRANT CORP: TransCanada & Gas Transmission Hold $55 Mil. Claims MUSICLAND HOLDING: Donlin Recano OK'd as Panel's Information Agent NASDAQ STOCK: 15% LSE Equity Purchase Cues Moody's Ba3 Ratings NAVISITE INC: Closes $73 Million Silver Point Term Loan Facility NES RENTALS: Continues to Explore Options with Bear Stearns NES RENTALS: Reports Strong Financial Gains in 2005 NORTEL NETWORKS: Names Dietmar Wendt to Lead Global Services OCA INC: U.S. Trustee Appoints Five-Member Creditors Committee OCA INC: Committee Taps William Steffes as Local Counsel ONEIDA LTD: Disclosure Statement Hearing Scheduled on May 1 OPTI CANADA: S&P Assigns BB Long-Term Corporate Credit Rating PLIANT CORP: Noteholders Say Disclosure Statement is Inadequate PREDIWAVE CORP: Case Summary & 30 Largest Unsecured Creditors PROGRESSIVE GAMING: Moody's Junks Bond and Corp. Family Ratings PROSOFT LEARNING: VCampus Buying Company Under Chapter 11 Plan PXRE GROUP: Asks Rating Agencies to Withdraw Claims Paying Ratings PXRE GROUP: S&P Lowers Preferred Stock's Rating to CCC+ from B- RADNOR HOLDINGS: Revolver Availability Increased to $85 Million REAL ESTATE: Moody's Places Ratings on Six Cert. Classes at Low-B REPUBLIC STORAGE: Wants to Hire Duff & Phelps as Investment Banker SOLECTRON CORP: Discloses Second Fiscal Quarter Financial Results SOLUTIA INC: Six Creditors Resigned from Creditors' Committee SOLUTIA: Equity Panel Wants Discovery on Monsanto Issues Continued SYBRON DENTAL: Inks $2 Billion Purchase Deal with Danaher Corp SYBRON DENTAL: Danaher Merger Cues S&P to Put BB+ Rating on Watch TOWER AUTOMOTIVE: Asks Court to Approve Settlements with Retirees UAL: Pilots Demand Immediate Payment of Non-Qualified Benefits UAL CORP: Amends Performance Incentive Plan & LT Incentive Plan UNIVERSITY HEIGHTS: Retains McNamee Lochner as Bankruptcy Counsel USA COMMERCIAL: Files Chapter 11 Protection in Nevada USA COMMERCIAL: Case Summary & 26 Largest Unsecured Creditors USG CORP: Court Okays Ch. 11 Plan Solicitation & Voting Procedures USG CORPORATION: Gets More Time to Make Lease-Related Decisions USG CORP: Wants Speights & Runyan Barred from Pursuing PD Claims WATTSHEALTH FOUNDATION: Sells HMO Business to Care 1st for $30MM WEEKS LANDING: Case Summary & 14 Largest Unsecured Creditors WINN-DIXIE: Miramar Outparcel Sold to Bankatlantic For $2.7 Mil. WINN-DIXIE: Diversified Wants Assumption or Rejection of Contract WINN-DIXIE: Stipulation Resolving HP Hood's Reclamation Claim XEROX CORP: DBRS Shifts Trend on BB Issuer Ratings to Positive YUKOS OIL: Chapter 15 Petition Summary * BOND PRICING: For the week of Apr. 10 - Apr. 14, 2006 ********* ACTIVANT SOLUTIONS: Moody's Junks Rating on Senior Subord. Notes ---------------------------------------------------------------- Moody's Investors Service affirmed Activant Solutions, Inc., corporate family rating of B2; assigned B2 ratings to its proposed senior secured credit facilities and Caa1 to its senior subordinated notes; and revised the outlook to negative from developing. Proceeds of the facilities will be used to finance the acquisition of the company by a consortium of private equity groups; Hellman & Friedman LLC, Thoma Cressey Equity Partners, Inc. and JMI Equity. The outlook revision considers the weakening of Activant's credit metrics following the pending acquisition. Moody's also assigned the speculative grade liquidity ratings of SGL-2. Upon closing of the transaction, the existing unsecured notes ratings will be withdrawn. The B2 corporate family rating reflects: 1) the high leverage levels post closing; 2) potential sensitivity to an economic downturn; 3) likely continuation of the recent pace of acquisitions; 4) challenges in the automotive vertical market; and 5) relatively modest overall organic sales growth. The rating also considers: 1) Activant's expertise and strong customer following in the automotive, hardline/lumber and wholesale and distribution markets; 2) the critical nature of the products to the end users business; 3) diverse customer base; and 4) the recurring nature of a large portion of their cash flows. The B2 rating on the senior secured debt reflects its senior position in the capital structure relative to the senior subordinated notes as well as the benefits of security. The Caa1 rating on the senior subordinated notes reflects their junior most position in the debt structure and limited recovery prospects in a distressed situation. The ratings could be positively influenced by strong organic revenue and cash flow growth accompanied by a significantly reduced leverage. Expanding market share through small acquisitions could provide a positive influence although in the short run, the integration risk and potentially increased debt may offset the upward pressure. Conversely, the ratings could face downward pressure: -- should there be a decline in organic growth for an extended period; -- if the company is unable to reduce expenses during an economic slowdown; and -- if the company makes a large debt financed acquisition. The SGL-2 rating reflects Moody's expectation that over the next twelve months, the company will be able to fund its working capital and capital expenditure requirements through cash flow. In addition to Activant's cash flow from operations, the company's liquidity will be bolstered by its undrawn $40 million senior secured revolving credit facility. The liquidity rating could be negatively impacted by debt financed acquisitions during this period. The ratings are subject to review of final documentation of the financing transaction. This rating was affirmed: * Corporate family rating -- B2 These new ratings were assigned: * $40 million senior secured five year revolving credit facility -- B2 * $390 million senior secured seven year term loan facility -- B2 * $175 million senior subordinated notes due 2016 -- Caa1 * Speculative Grade Liquidity rating -- SGL -- 2 Outlook is negative. These existing ratings will be withdrawn upon closing of this transaction and repayment of the existing notes: * $40 million senior unsecured notes due 2011 issued by Holdings -- Caa1; * $157 million (face value) senior unsecured notes due 2011 -- B2; and * $260 million senior unsecured notes due 2010 -- B2 Activant is a leading provider of enterprise software and systems to small to medium sized retail and wholesale businesses in the automotive parts, hardlines and lumber, and wholesale and distribution business industries in the United States and Canada. Activant will be headquartered in Livermore, California, post closing of the transaction. ACTIVANT SOLUTIONS: S&P Rates Proposed $175MM Facilities at CCC+ ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Livermore, California-based Activant Solutions Inc. to 'B' from 'B+' and removed the rating from CreditWatch, where it was placed on March 13, 2006, with negative implications. At the same time, Standard & Poor's assigned its 'B' rating, with a '2' recovery rating to the company's proposed $430 million senior secured bank facility, which will consist of: * a $40 million revolver (due 2011); and * a $390 million term loan (due 2013). Standard & Poor's also assigned its 'CCC+' rating to Activant's proposed $175 million senior subordinated notes facilities. The outlook is stable. The bank loan rating, which is the same as the corporate credit rating, along with the '2' recovery rating, reflect Standard & Poor's expectation of substantial recovery of principal by creditors in the event of a payment default or bankruptcy. Proceeds from the three tranches of debt, along with about $244 million of sponsor equity and a small portion of cash from the balance sheet, will be used to fund the acquisition of Activant. The ratings downgrade reflects the substantial increase to Activant's operating lease-adjusted debt leverage, which will be above 6.5x following this transaction. "The ratings on Activant reflect its narrow business profile, acquisitive growth strategy and high debt leverage," said Standard & Poor's credit analyst Ben Bubeck. These are only offset partly by: * a leading position in its addressed vertical markets; * a significant amount of recurring revenue; and * consistent profitability. Activant is a leading provider of business management software and solutions to the retail hardlines, lumber and wholesale trade vertical markets; along with the automotive aftermarket. Pro forma for the proposed recapitalization, the company had approximately $595 million of operating lease-adjusted total debt as of December 2005. ADVANCED MICRO: Earns $185 Million In First Quarter Ended March 26 ------------------------------------------------------------------ Advanced Micro Devices, Inc. (NYSE: AMD) reported sales of $1.33 billion, operating income of $259 million, and net income of $185 million for the first quarter ended March 26, 2006. These results include a stock-based compensation expense of $15 million due to the implementation of SFAS 123(R) and an expense of $20 million associated with the partial redemption of senior notes. In the first quarter of 2005, excluding the Memory Products segment1, AMD reported sales of $780 million and operating income of $64 million. In the fourth quarter of 2005, AMD reported sales of $1.35 billion and operating income of $268 million. "AMD had another great quarter," said Robert J. Rivet, AMD's chief financial officer. "Building on our positive momentum, we believe we once again gained dollar market share based on strong customer demand for AMD64 single and multi-core processors. We expanded our global customer base in the quarter, achieved record AMD Opteron processor sales, increased our average selling price, and realized year-over-year sales growth of 71%. Our manufacturing strategy execution was excellent and our technology transitions remain on track, with 65nm production shipments expected in the second half of 2006. "We also continued to execute against our plans to improve our balance sheet. We had a successful equity offering, reduced debt and lowered our debt-to-capital ratio to 12%2." First quarter gross margin increased to a record 58.5%, compared to 57.3% in the fourth quarter of 2005. The increase was largely due to product mix improvement, higher desktop and mobile ASPs, and manufacturing efficiencies. Operating income was $259 million in the first quarter, up from $64 million in the first quarter of 2005 and down slightly from $268 million in the fourth quarter of 2005. Solid first quarter sales were driven by ASP improvements from the prior quarter and increasing customer adoption of AMD's server, mobile and desktop offerings in the commercial segment. Record AMD Opteron processor sales were driven, in particular, by strong demand for dual-core processors for servers and workstations. Shipments of AMD Turion 64(TM) mobile processors also increased quarter-on-quarter. Geographically, processor sales were especially strong in Greater China, Latin America, Russia and South Asia. AMD expects second quarter sales to be flat to slightly down seasonally from the first quarter of 2006. If achieved, this would approximate a 65% increase from comparable sales in the second quarter of 2005. About AMD Advanced Micro Devices - http://www.amd.com/-- is a leading global provider of innovative microprocessor solutions for computing, communications and consumer electronics markets. Founded in 1969, AMD is dedicated to delivering superior computing solutions based on customer needs that empower users worldwide. For more information visit * * * As reported in the Troubled Company Reporter on Jan. 31, 2006, Standard & Poor's Ratings Services raised its ratings on Sunnyvale, California-based Advanced Micro Devices Inc., including its corporate credit rating, to 'B+' from 'B'. In addition, the ratings on the microprocessor manufacturer were removed from CreditWatch with positive implications, where they were placed on Jan. 24, 2006. S&P says the ratings outlook is stable. As reported in the Troubled Company Reporter on Jan. 26, 2006, Fitch Ratings revised Advanced Micro Devices Inc.'s Rating Outlook to Positive from Stable and affirmed the company's 'B' issuer default rating. AMD's 'B/RR4' senior unsecured debt and 'BB/RR1' senior secured bank credit facility are also affirmed. Fitch's action affected approximately $1.2 billion of total debt. As reported in the Troubled Company Reporter on Jan. 26, 2006, Moody's Investors Service raised the corporate family rating of Advanced Micro Devices, Inc., two notches to Ba3, with a stable outlook. ALIMENTATION COUCHE-TARD: Moody's Lifts Bank Loan Rating to Ba1 --------------------------------------------------------------- Moody's Investors Service upgraded all ratings of Alimentation Couche-Tard, Inc. The upgrade is prompted by the operating and financial progress that the company has made since the December 2003 acquisition of Circle K, and Moody's expectation that a meaningful portion of future discretionary cash flow will be used for further balance sheet improvement. The rating outlook is stable. The action concludes the rating review that commenced on Jan. 26, 2006. Ratings upgraded are: * Secured bank loan to Ba1 from Ba2, * $350 million 7.5% senior subordinated notes to Ba2 from Ba3, * Corporate family rating to Ba1 from Ba2. Besides leverage reduction through debt repayment and increased cash flow, the ratings reflect Moody's expectation that the company will continue with its recent strategy of developing new stores, making small acquisitions, and providing modest cash returns to shareholder through its recently initiated dividend. Moody's anticipates that gasoline profitability will eventually retreat to normal levels following unprecedented recent highs, but continued front-end growth will help to maintain good store level margins The stable outlook recognizes that a further upgrade is unlikely within the medium-term because of the company's limited free cash flow and Moody's concern regarding the potential for a sizable debt-financed acquisition. Over the longer term, ratings could move upward once the company's scale increases such that incremental acquisitions would not meaningfully impact credit metrics, if merchandise comparable store sales remain positive while merchandise margins stay near current levels, and if financial flexibility were to strengthen such that EBIT covers interest expense by more than 5 times, leverage falls below 2.5 times, and Free Cash to Debt can be sustained above 12%. Factors that could lead Moody's to consider a negative rating action include a sustained reversal in the pattern of merchandise sales improvement, an increase in debt for purposes such as financing a sizable store count increase, or a reversal in debt protection measure improvements such as debt to EBITDA approaching 4 times, EBIT to interest falling below 3.5 times, or free cash flow to debt permanently falling below 5%. Alimentation Couche-Tard, Inc., with headquarters in Laval, Quebec, operates or licenses about 3,500 convenience stores in the United States and Canada under the "Circle K", "Couche-Tard", "Mac's", and other banners. The company also licenses around 4,200 "Circle K" convenience stores in Mexico and East Asia. Revenue for the twelve months ending Jan. 2005 was about US $9.5 billion. ALLIED HOLDINGS: Seeks Interim Relief Under Section 1113(e) ----------------------------------------------------------- Allied Holdings, Inc. (Pink Sheets: AHIZQ.PK) filed a motion seeking interim relief from the Company's collective bargaining agreement with the International Brotherhood of Teamsters under Section 1113(e) of the U.S. Bankruptcy Code. The motion was filed with the U.S. Bankruptcy Court for the Northern District of Georgia, which is overseeing Allied Holdings' Chapter 11 restructuring. The motion requests a 10% reduction to current wages for employees of Allied's subsidiaries in the United States represented by the Teamsters. The Company emphasized that the request for interim relief is made in order to maintain Allied Holdings as a going concern, to prevent irreparable damage to the Company, to preserve the jobs of its employees, preserve the claims of the Company's financial partners and, ultimately, avoid the threat of liquidation. "We will continue to seek a long-term modification to our current collective bargaining agreement with our U.S. employees represented by the Teamsters, pending the court's ruling on the motion," said Hugh E. Sawyer, President and Chief Executive Officer. "Nevertheless, we must also move quickly to secure cost reductions, maintain adequate working capital and confirm to our financial partners, customers, and other key constituencies that we will maintain our efforts to actively manage this restructuring process." The interim relief request seeks approximately $2 million per month in cost reductions from collective-bargaining employees represented by the Teamsters, effective immediately upon the court's approval. The Company told the court that it meets the "irreparable harm" standard for interim relief and must secure cost savings immediately. Unpaid Leave for Salaried Employees The Company also reported that all of its non-bargaining, salaried employees in North America with annual salaries of less than $80,000 will be required to accept a five-day, non-paid furlough in June 2006 and those with annual salaries of $80,000 or more, including the President and Chief Executive Officer, will be required to accept ten days of unpaid furlough by June 2006, in the event the Company's motion is approved. The non-paid furloughs would reduce the Company's costs by approximately $200,000 in May and approximately $800,000 in June 2006. Mr. Sawyer added, "We have emphasized the need for sacrifice among all of our constituencies as we seek to successfully emerge from bankruptcy. Our motion seeking interim relief regarding our employees represented by the Teamsters requests a 10% reduction in current wages. We will also implement mandatory non-paid furloughs for all of our salaried employees in North America if our motion is approved by the court as a further sign of additional sacrifice among our non-bargaining unit employees." The Company previously reported that it will not have sufficient availability to meet its working capital needs as early as May of 2006 under the present terms of the debtor-in-possession facility. The Company is attempting to obtain additional liquidity to meet its working capital needs but cannot provide assurances as to whether it will be able to obtain additional liquidity. The Company believes that the interim relief sought in its motion and additional liquidity from other sources is necessary in order to allow the Company to meet its working capital needs and avoid further default under the facility. Covenant Default As reported in the Troubled Company Reporter on April 10, 2006, the Company defaulted certain financial covenants contained in its debtor-in-possession credit facility. The Company entered into two forbearance agreements with the lenders under the facility whereby the lenders agreed to refrain from exercising certain of their rights under the facility through April 18, 2006. The Company is attempting to obtain an additional forbearance agreement or an amendment to the debtor-in-possession facility with its lenders. About Allied Holdings Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. AMCAST INDUSTRIAL: Shutting Down Two Plants by June 2006 -------------------------------------------------------- Amcast Industrial Corporation will shutdown its plants in Gas City and Fremont, Indiana sometime between June 16 and June 30, 2006, leaving 500 employees jobless, Rachel Kipp of the Marion Chronicle Tribune reports. This is the company's latest attempt to restore its profitability while under chapter 11 protection. Ms. Kipp reports that Richard A. Lindenmuth, Amcast interim Chief Executive Officer issued a statement saying, "th[ese] closures will result in permanent employment loss for all employees at both sites." Mr. Lindenmuth however assured Amcast employees that, "for the next 60 days, [they] will be paid their normal wages and bonuses and all benefit programs will continue uninterrupted," reports Ms. Kipp. The shutdown comes within about a week of the 60 days' notice of layoffs that the company is required to give to employees and state and local government officials under the federal Worker Adjustment and Retraining Notification Act. As reported in the Troubled Company Reporter on April 5, the Debtors' primarily use their Gas City facility to manufacture aluminum wheels for General Motors Corp. and other customers. The Debtors are negotiating the terms of their contractual pricing with GM, their largest customer and revenue source. The Debtors are asking for certain pricing concessions from GM so that they can continue to operate profitably. Without concessions from GM, Amcast has made it clear that the Gas City plant must be shuttered. Headquartered in Fremont, Indiana, Amcast Industrial Corporation, manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., filed for chapter 11 protection a second time on Dec. 1, 2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C., represent the Debtors in their restructuring efforts. Henry A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP, represent the Official Committee of Unsecured Creditors. Kevin I. Dowd at Berkeley Square Group LLC serves as Amcast's financial advisor. The Creditors' Committee receives financial advice from Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its affiliate filed for protection from their creditors, they listed total assets of $97,780,231 and total liabilities of $100,620,855. AMES DEPT: Wants Plan Solicitation Period Stretched to Oct. 26 -------------------------------------------------------------- Pursuant to Section 1121(d) of the Bankruptcy Code, Ames Department Stores, Inc., Ames Merchandising Corporation, Amesplace.com, Inc., Ames Realty II, Inc., and Ames Transportation Systems, Inc., ask the U.S. Bankruptcy Court for the Southern District of New York to further extend their exclusive period to solicit acceptances for their Chapter 11 Plan through and including Oct. 26, 2006. George A. Davis, Esq., at Weil, Gotshal & Manges LLP, in New York, tells Judge Gerber that the Debtors still haven't finished the process of determining the full extent of their administrative obligations and the resources available to satisfy those obligations. After taking into account the administrative expense claims settled under the Claims Settlement Program, the Debtors anticipate they will have approximately $76,000,000 in administrative expense claims, many of which still need to be reconciled. According to Mr. Davis, the Debtors also need more time to prosecute actions to avoid certain prepetition transfers pursuant to Sections 547, 550, and 551 as well as other relevant provisions of the Bankruptcy Code. As of April 7, 2006, the Debtors have commenced approximately 1,800 Preference Actions. The Debtors believe prosecution of the Preference Actions will likely continue through the end of 2007. The successful prosecution of the Preference Actions is critical to a determination of the ultimate recovery available to creditors in the Debtors' Chapter 11 cases, Mr. Davis asserts. Terms of the Plan The Debtors filed their consolidated Chapter 11 Plan with the Court on Dec. 6, 2004. Rolando de Aguiar, President and Chief Wind Down Officer of Ames Department Stores, Inc., reports that the Plan provides for: A. Substantive Consolidation Entry of the Confirmation Order will constitute the approval, pursuant to Section 105(a) of the Bankruptcy Code, effective as of the Effective Date, of the substantive consolidation of Ames Departments Stores and its affiliates for voting, confirmation, and distribution purposes under the Plan. After the Effective Date: (a) all the Debtors' assets and liabilities will be deemed merged into Ames; (b) all guaranties of any Debtor of the payment, performance, or collection of obligations of another Debtor will be eliminated and canceled; (c) any obligation of any Debtor and all guaranties executed by one or more of the other Debtors will be treated as a single obligation, and the guaranties will be deemed a single Claim against the consolidated Debtors; (d) all joint obligations of two or more Debtors and all multiple Claims against the entities on account of the joint obligations will be treated and allowed only as a single Claim against the consolidated Debtors; (e) all Claims between or among the Debtors will be canceled; and (f) each Claim filed in the Chapter 11 case of any Debtor will be deemed filed against the consolidated Debtors and a single obligation of the consolidated Debtors on and after the Effective Date. The substantive consolidation and deemed merger effected will not affect: (a) the Debtors' legal and organizational structure; (b) defenses to any Causes of Action or requirements for any third party to establish mutuality to assert a right of setoff; and (c) distributions out of any insurance policies or proceeds of the policies. B. Establishment of the Liquidating Trust In the event the Plan Implementation Party elects to establish a Liquidating Trust to facilitate the liquidation and winding up of the Debtors, the Plan Implementation Party will transfer the Liquidating Trust Assets to the Liquidating Trust on the Transfer Date. The Plan Implementation Party consists of the Debtors, the Plan Administrator or the Trustee, as the case may be. C. Closing of Chapter 11 Cases When all Disputed Claims filed against the Debtors have become Allowed Claims or have been disallowed by Final Order, and all of the Liquidating Trust Assets have been distributed in accordance with the Plan, the Trustee will seek authority from the Bankruptcy Court to close the Chapter 11 cases in accordance with the Bankruptcy Code and the Bankruptcy Rules. If at any time the Trustee determines that the expense of administering the Liquidating Trust so as to make a final distribution to its beneficiaries is likely to exceed the value of the assets remaining in the Liquidating Trust, the Trustee will apply to the Bankruptcy Court for authority to: (a) reserve any amounts necessary to close the Chapter 11 Cases; (b) donate any balance to a charitable organization exempt from federal income tax under Section 501(c)(3) of the Tax Code that is unrelated to Ames, the Liquidating Trust, and any insider of the Trustee; and (c) close the Chapter 11 cases in accordance with the Bankruptcy Code and Bankruptcy Rules. D. Cancellation of Existing Securities and Agreements Except for purposes of evidencing a right to distributions under the Plan, on the Effective Date, all the agreements and other documents evidencing the Claims or rights of any holder of a Claim against the Debtors, including all Indentures and Notes issued evidencing the Claims and any options or warrants to purchase Equity Interests, or obligating the Debtors to issue, transfer, or sell Equity Interests or any other capital stock of the Debtors, will be canceled. However, the Indentures will continue in effect solely for the purposes of: (x) allowing the Indenture Trustees to make any distributions on account of Allowed General Unsecured Claims in Class 3 pursuant to the Plan and perform other necessary administrative functions with respect thereto; and (y) permitting the Indenture Trustees to maintain any rights or liens they may have for fees, costs, and expenses under the Indentures. E. Debtors' Post-Confirmation Role (a) Payments and Transfers. Except as otherwise provided in the Plan, on the Effective Date, or as soon thereafter as is reasonably practicable, the Debtors will make payments and transfers to holders of Allowed Claims. (b) Administration of Taxes. Ames will be responsible for all tax matters of the Debtors until certificates of cancellation, dissolution, or merger for all the Debtors will have been filed. (c) Claims Administration and Prosecution and Plan Distributions. Except as otherwise provided in the Plan, the Debtors will continue to have the power and authority to prosecute and resolve objections to Disputed Claims and to hold, manage, and distribute Plan distributions to the holders of Allowed Claims. (d) Dissolution. Within 30 days after its completion of the acts required by the Plan, or as soon thereafter as is practicable, each Debtor will be deemed dissolved for all purposes without the necessity for any other or further actions to be taken by or on behalf of each Debtor. Each Debtor will file with the office of the Secretary of State or other appropriate office for the state of its organization a certificate of cancellation or dissolution, or alternatively, it may be merged with and into another Debtor and so file an appropriate certificate of merger. F. Effect of Confirmation As of the Effective Date, the property of the Debtors' estates will vest in the Plan Implementation Party. A full-text copy of Ames' Chapter 11 Plan is available at no charge at http://ResearchArchives.com/t/s?7e2 A full-text copy of Ames' Disclosure Statement is available at no charge at http://ResearchArchives.com/t/s?7e3 Ames Department Stores filed for chapter 11 protection on Aug. 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMES TRUE: Moody's Reviewing B3 & Caa Debt Ratings for Downgrade ---------------------------------------------------------------- Moody's Investors Service placed Ames True Temper's debt ratings on review for possible downgrade following the recently announced acquisition of Acorn Products for approximately $45 million. On April 7, 2006, Ames acquired Acorn Products, a manufacturer and distributor of non-powered lawn and garden tools, for roughly $45 million all of which was financed with drawdowns from its unrated $130 million credit facility. The rating review will focus on the impact the acquisition is expected to have on Ames' operating and financial prospects, taking into account integration challenges, possible synergies and debt reduction plans. The review will also assess management's plan for additional future acquisitions. These ratings were placed on review for possible downgrade: * Corporate family rating at B3; * $150 million floating rate senior notes at Caa1; * $150 million senior subordinated notes at Caa2 Ames True Temper is the leading North American manufacturer and marketer of non-powered lawn and garden tools and accessories. For the LTM ending Dec. 31 2005, the company had sales of approximately $460 million. ANCHOR GLASS: Wants to Assume O-N Minerals Supply Agreement ----------------------------------------------------------- Pursuant to a Supply Agreement dated Jan. 1, 2004, O-N Minerals (Chemstone) Company, aka Global Stone Chemstone Corp., committed to sell limestone to Anchor Glass Container Corporation until Dec. 31, 2006. Kathleen S. McLeroy, Esq., at Carlton Fields PA, in Tampa, Florida, tells the U.S. Bankruptcy Court for the Middle District of Florida that O-N Minerals is an important supplier of limestone to Anchor Glass. As of March 27, 2006, Anchor Glass has not rejected the Supply Agreement and continues to purchase limestone from O-N Minerals. O-N Minerals has asserted a prepetition unsecured claim for $124,988,24. Anchor Glass and O-N Minerals have agreed to the compromise of the prepetition claim for $87,492. The parties also agreed to continue the Supply Agreement until Dec. 31, 2006. Accordingly, Anchor Glass asks the U.S. Bankruptcy Court for the Middle District of Florida to: a. approve its claims settlement with O-N Minerals; and b. authorize it to assume the Supply Agreement. 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) ARMSTRONG HOLDINGS: Balance Sheet Upside-Down by $1.3B at Dec. 31 ----------------------------------------------------------------- Armstrong Holdings, Inc. (OTC Bulletin Board: ACKHQ) reported $3,558.4 million of net sales for the year ending Dec. 31, 2005, an increase of 1.7% from the $3,497.3 million reported for 2004. Excluding the favorable effects of foreign exchange rates of $22.2 million, consolidated net sales increased 1.1%. Operating earnings recorded for 2005 were $100.7 million compared to an operating loss of $43.8 million for 2004. During 2005, Armstrong recorded $16.9 million non-cash charges related to changes to the U.S. pension plan, and $17.6 million of fixed asset impairment. During 2004, Armstrong recorded $108.4 million non-cash goodwill impairment charges and a $44.8 million fixed asset impairment charge related to European resilient flooring business. For the fourth quarter 2005, net sales of $861.7 million were 0.7% higher than fourth quarter net sales of $855.3 million in 2004. Excluding the unfavorable effects of foreign exchange rates of $10.3 million, net sales increased 2.0%. An operating loss of $10.1 million was recorded for the fourth quarter of 2005 compared to an operating loss of $134.8 million in the fourth quarter of 2004. During 2004, Armstrong implemented several manufacturing and organizational changes to improve its cost structure and enhance its competitive position. The Company did not initiate any additional manufacturing or organizational changes in 2005 but did incur costs in 2005 related to previously announced cost reduction initiatives. In 2005, charges for cost reduction initiatives totaled approximately $53 million, of which approximately $21 million was for accelerated depreciation and fixed asset impairments. The charges for these initiatives incurred in 2004 totaled approximately $50 million, of which approximately $32 million was for accelerated depreciation and fixed asset impairments. The remaining amounts were primarily for severances and other related costs. Segment Highlights for the Full Year 2005 Resilient Flooring Resilient Flooring net sales of $1,185.4 million in 2005 decreased from net sales of $1,215.1 million in 2004. Excluding the favorable impact of foreign exchange rates of $9.0 million, 2005 net sales declined approximately 3% versus 2004. The decline was related to lower laminate sales volume related to a decision by a major customer to increase purchases of non- Armstrong laminate flooring products, and by a decline in residential vinyl sales as consumer preference in the market continued to shift away from vinyl products. An operating loss of $25.8 million was recorded in 2005 compared to an operating loss in 2004 of $150.2 million. 2005 operating results reflect the negative impact of sales volume declines and increased cost to acquire petroleum-based raw materials. Contributing to the 2004 loss were a $108.4 million non-cash goodwill impairment charge, a $44.8 million non-cash fixed asset impairment charge related to the company's European resilient business and $32.7 million cost reduction initiative charges. Wood Flooring Wood Flooring net sales of $833.9 million in 2005 were level with sales of $832.1 million in the prior year. Unit volume increased 2% while prices were lowered in response to declining lumber prices. Operating income grew to $60.9 million in 2005 compared to operating income of $51.4 million in 2004. Operating results benefited from increased volume, manufacturing efficiencies related to cost reduction initiatives and improvements in productivity at some plant locations. The improvement was made despite fixed asset impairment charges of $15.4 million in 2005. Textiles and Sports Flooring Textiles and Sports Flooring net sales of $279.0 million increased in 2005 compared to $265.4 million in 2004. Excluding the $4.2 million translation effect of changes in foreign exchange rates, net sales increased by 3.5%, primarily due to strong volume and favorable mix in carpet tile and sports flooring. An operating loss of $4.4 million was recorded in 2005 compared to an operating loss of $7.1 million recorded for 2004. The reduced 2005 operating loss was primarily due to increased sales volume, improved product mix, manufacturing efficiencies and reduced overhead expenses. Building Products Building Products net sales of $1,047.6 million in 2005 increased from $971.7 million in the prior year. Excluding the $8.8 million translation effect of the changes in foreign exchange rates, sales increased by 6.8%, primarily due to higher sales volume in commercial markets and improved pricing. Operating income increased to $148.5 million from $127.0 million of operating income in 2004. Volume growth and increased equity earnings in WAVE drove operating income improvement. Price realization essentially offset inflationary pressure from raw materials, energy and freight. Cabinets Cabinets 2005 net sales of $212.5 million were level with 2004 sales of $213.0 million. Operating loss of $9.7 million was recorded in 2005 compared to an operating income of $1.4 million in the prior year. Operating losses in 2005 were primarily caused by manufacturing inefficiencies resulting from plant consolidation and higher SG&A expenses. At Dec 31, 2006, Armstrong Holdings' liabilities surpassed its assets by $1.305 billion. A full-text copy of Armstrong's 2005 Annual Report on Form 10-K is available for free at http://ResearchArchives.com/t/s?7e4 About Armstrong Armstrong Holdings, Inc. is the parent company of Armstrong World Industries, Inc., Headquartered in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world. The Company and its debtor-affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The Debtors tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. When the Debtors filed for protection from their creditors, they listed $4,032,200,000 in total assets and $3,296,900,000 in liabilities. (Armstrong Bankruptcy News, Issue No. 90; Bankruptcy Creditors' Service, Inc., 215/945-7000) AVIS BUDGET: Prices $1 Billion Senior Notes Offering ---------------------------------------------------- Avis Budget Car Rental, LLC, has priced a private offering of $1 billion aggregate principal amount of its senior notes, which includes: * $375 million in aggregate principal amount of its 7.625% senior notes due 2014, * $375 million in aggregate principal amount of its 7.75% senior notes due 2016, and * $250 million in aggregate principal amount of its floating rate senior notes due 2014. Cendant Corporation's (NYSE:CD) vehicle rental business intends to use the net proceeds from this offering, together with term borrowings under its new senior secured credit facility, principally to repay asset-backed vehicle indebtedness. The notes are unsecured and are not guaranteed by Cendant. This offering is part of Cendant's plan to separate Cendant into four independent, pure-play companies -- one each for Cendant's real estate, travel distribution, hospitality and vehicle rental businesses. Closing of the offering of the notes is scheduled for April 19, 2006 and is subject to customary conditions. The closing of the sale of the notes is not contingent upon the consummation of Cendant's planned separation transactions. The notes will be offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States pursuant to Regulation S under the Securities Act. The notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. About Cendant Corporation Headquartered in New York City, Cendant Corporation -- http://www.cendant.com/-- is primarily a provider of travel and residential real estate services. With approximately 85,000 employees, the Company provides these services to businesses and consumers in over 100 countries. About Avis Budget Car Rental Based in Parsippany, New Jersey, Avis Budget Car Rental, LLC -- http://www.avis.com/-- operates two of the most recognized brands in the global vehicle rental industry through Avis Rent A Car System, LLC, and Budget Rent A Car System, Inc. Avis is a leading rental car supplier to the premium commercial and leisure segments of the travel industry and Budget is a leading rental car supplier to the price-conscious segments of the industry. * * * As Reported in the Troubled Company Reporter on March 22, 2006, Fitch Ratings expects to assign a 'BB' Issuer Default Rating and a 'BB-' senior unsecured debt rating, with a stable outlook, to Avis Budget Rental Car, LLC, in connection with Cendant Corp.'s decision to split itself into four publicly traded companies through share stock dividends of existing companies. From a legal perspective, Avis Budget Group, the ultimate parent company of ABC LLC, will be the surviving corporate entity of Cendant. The split is expected to be completed by October 2006. Fitch expects the effective spin-off from Cendant will not result in any significant changes to the key elements of ABC's existing strategic plan or management. BOUNDLESS CORP: Delays Filing of 2005 Annual Report on Form 10-K ---------------------------------------------------------------- Boundless Corporation will delay filing its 2005 Annual Report on Form 10-K with the Securities and Exchange Commission. Delays in completing its 2005 audit precluded filing the annual report by the March 31 deadline. The 2005 audit is delayed because the Company had to allocate significant time and resources to file its: -- 2003 annual report on Form 10-K; -- 2004 annual report on Form 10-K; and -- quarterly reports on Form 10-Q for all quarters of 2004 and 2005. These reports were filed from March 2 through March 8, 2006. Headquartered in Hauppauge, New York, Boundless Corp., is a global technology company and is composed of two subsidiaries: Boundless Technologies, Inc., a desktop display products company, and Boundless Manufacturing Services, Inc., an emerging EMS company providing build-to-order systems manufacturing, printed circuit board assembly. The Company and its four affiliates filed for chapter 11 protection on March 12, 2003, with the U.S. Bankruptcy Court for the Eastern District of New York. At Sept. 30, 2005, Boundless Corp.'s stockholders' deficit widened to $15,076,000 from a $14,905,000 equity deficit at Dec. 31, 2004. * * * Going Concern Doubt BP Audit Group, PLLC, the Company's auditor, expressed substantial doubt about Boundless Corporation's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004, and 2003. The auditing firm pointed to the Company's: -- and its subsidiaries' Chapter 11 bankruptcy filing; -- substantial losses from operations since 2000; and -- stockholders' deficit. BP Audit stressed that the continuation of the Company's business as a going concern depends on its ability to confirm a plan of reorganization under the Bankruptcy Code and emerge from bankruptcy protection and then subsequently, among other things: -- the ability of the Company to restructure the terms of its secured debtors-in-possession financing to reduce its cost of borrowing; -- the ability of the Company to negotiate trade financing with suppliers at acceptable terms; -- the ability of the Company to negotiate contracts for the sale of its manufacturing services to customers to provide additional liquidity for operations; -- the ability of the Company to generate cash from operations and to maintain adequate cash on hand; and -- the ability of the Company to achieve profitability. BRIGHTPOINT INC: S&P Lifts Corporate Credit Rating to BB- from B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Indianapolis, Indiana-based Brightpoint Inc. to 'BB-' from 'B+'. The upgrade reflects expectations that Brightpoint will sustain its profitable revenue growth and good financial profile for the rating. The outlook is revised to stable from positive. "The rating on Brightpoint reflects the company's narrow product base, significant supplier concentration, and stable but relatively modest operating margins," Standard & Poor's credit analyst Martha Toll-Reed said. These factors are partly offset by Brightpoint's good market position and minimally leveraged balance sheet. Brightpoint is a leading distributor and provider of value-added logistics services in the fragmented and highly competitive wireless communications products distribution market. Fiscal 2005 revenues were $2.1 billion. Double-digit growth in worldwide wireless product shipments is expected to continue, based on: * increased market penetration, particularly in developing countries; and * a significant base of replacement product sales. Brightpoint's revenue growth is expected to generally reflect industry growth rates, but could be more moderate, based on the company's strategic emphasis on logistics services, which have a smaller revenue impact than distribution services. Consolidated EBITDA margins (adjusted for capitalized operating leases) improved to 2.8% in fiscal 2005, from 2.4% in the prior two years, largely driven by strong growth in the more profitable Americas division. Although consolidated EBITDA margins are expected to remain in the 2.5% to 3.0% range, growth and operating performance by geographic segment have been more volatile. Assuming consistent profitability, free operating cash flow levels are expected to be moderately positive, driven by good working capital management and the growth of Brightpoint's less capital- intensive logistics business. Capital expenditures are expected to remain modest. CADMUS COMMS: Buys Remaining 20% Stake of KnowledgeWorks Global --------------------------------------------------------------- Cadmus Communications Corporation (Nasdaq: CDMS) purchased, through a subsidiary, the remaining 20% of KnowledgeWorks Global Limited from Datamatics Technologies Limited. This gives the Company 100% ownership of its content services operations in Mumbai and Chennai, India. KGL was formed in 2003 as a joint venture with DTL, a business process outsourcing services provider in India. KGL provides a full range of content processing, content management and related services to scientific, technical and medical, scholarly and educational publishers, and other organizations on a global basis. "We are very excited about the potential for KGL and our ability to continue to grow our services to the STM and education markets through the use of our global content services platform," Bruce V. Thomas, president and chief executive officer of Cadmus, remarked. "Our operations in Mumbai and Chennai provide a full range of highly automated content services including copy editing, issue management, composition, SGML/XML processing and data conversion. "We felt the time was right to negotiate the termination of the joint venture agreement to provide us with 100% ownership of the operations in India and as we continue to expand our global operations. "We are extremely grateful to DTL and to Dr. Lalit Kanodia, founder and chairman of DTL, who has served as a director for KGL, for the relationship that has existed since 2000 and for our partnership in establishing KGL in 2003," Mr. Thomas continued. "We have obtained a great deal of knowledge about conducting business in India and learned from one of the leading business process outsourcing providers in India. "We believe entering the market in India through the joint venture with DTL helped us limit our risk, gave us insight into business operations in India, and helped us establish our content services platform in a manner that could quickly and efficiently serve the needs of our customers." In August of 2005, Cadmus transferred Atul Goel to Mumbai to serve as President and COO of KGL. Mr. Goel was formerly the senior vice president of Cadmus' U.S. Production Technology operations and has been instrumental in developing the workflows and systems that link Cadmus and KGL production operations. Mr. Goel will be focused on further integration and standardization of workflows allowing Cadmus to offer both its U.S. and international publishing customers a number of standardized workflows, which will optimize the mix of localized service and offshore production that best meets each publisher's needs. Furthermore, Mr. Goel will continue to guide the growth and development of the KGL team to meet the expanding outsourcing needs of U.S. and international publishers. About KnowledgeWorks KnowledgeWorks Global Limited -- http://www.kwglobal.com/-- is an Indian-based content services company that is owned by Cadmus Communications Corporation. KGL provides a full range of content processing, content management, XML coding and related services to scholarly, educational, and trade publishers around the world. KGL operates two processing centers in India, Mumbai and Chennai, with employees skilled in major publishing production platforms including XyVision, 3B2, TeX, Quark and InDesign. About Cadmus Based in Richmond, Virginia, Cadmus Communications Corporation -- http://www.cadmus.com/-- provides end-to-end, integrated graphic communications services to professional publishers, not-for-profit societies and corporations. Cadmus is the world's largest provider of content management and production services to scientific, technical and medical journal publishers, the fifth largest periodicals printer in North America, and a leading provider of specialty packaging and promotional printing services. * * * Cadmus Communications' 8-3/8% Senior Subordinated Notes due 2014 carry Moody's Investors Service's B2 rating and Standard & Poor's single-B rating. CENDANT CORP: Avis Budget Prices $1 Billion Senior Notes Offering ----------------------------------------------------------------- Cendant Corporation (NYSE:CD) reported that the parent of its vehicle rental business, Avis Budget Car Rental, LLC, has priced a private offering of $1 billion aggregate principal amount of its senior notes, which includes: * $375 million in aggregate principal amount of its 7.625% senior notes due 2014, * $375 million in aggregate principal amount of its 7.75% senior notes due 2016, and * $250 million in aggregate principal amount of its floating rate senior notes due 2014. Cendant's vehicle rental business intends to use the net proceeds from this offering, together with term borrowings under its new senior secured credit facility, principally to repay asset-backed vehicle indebtedness. The notes are unsecured and are not guaranteed by Cendant Corporation. This offering is part of Cendant's plan to separate Cendant into four independent, pure-play companies -- one each for Cendant's real estate, travel distribution, hospitality and vehicle rental businesses. Closing of the offering of the notes is scheduled for April 19, 2006 and is subject to customary conditions. The closing of the sale of the notes is not contingent upon the consummation of Cendant's planned separation transactions. The notes will be offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States pursuant to Regulation S under the Securities Act. The notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. About Avis Budget Car Rental Based in Parsippany, New Jersey, Avis Budget Car Rental, LLC -- http://www.avis.com/-- operates two of the most recognized brands in the global vehicle rental industry through Avis Rent A Car System, LLC and Budget Rent A Car System, Inc. Avis is a leading rental car supplier to the premium commercial and leisure segments of the travel industry and Budget is a leading rental car supplier to the price-conscious segments of the industry. About Cendant Corporation Headquartered in New York City, Cendant Corporation -- http://www.cendant.com/-- is primarily a provider of travel and residential real estate services. With approximately 85,000 employees, the Company provides these services to businesses and consumers in over 100 countries. * * * As reported in the Troubled Company Reporter on March 17, 2006, Standard & Poor's Ratings Services assigned its 'BBB-' rating and '1' recovery rating to Cendant Car Rental Group LLC's $2.375 billion secured credit facility. The facility consists of: * a $1.5 billion revolving credit facility that matures in 2011; and * an $875 million term loan that matures in 2012. At the same time, Standard & Poor's assigned its 'BB-' rating to the company's $1 billion of senior unsecured notes that mature in 2014 and 2016. Proceeds will be used to reduce asset-backed debt. The financings are associated with Cendant Corp.'s plans to separate itself into four entities by the fall of 2006. CHARTER COMMS: S&P Rates Proposed $5.3 Bil. Bank Financing at B --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its ratings to Charter Communications Operating LLC's proposed $5.3 billion senior secured bank financing, consisting of: * a $5 billion seven-year term loan; and * a $300 million one-year revolving credit facility. The borrower is a holding company indirectly owned by the ultimate parent, Charter Communications Inc., which directly owns all of the material operating subsidiaries. These facilities are rated 'B' (two notches higher than the 'CCC+' corporate credit rating on Charter Communications Inc.) with a recovery rating of '1', indicating the expectation for full recovery of principal in the event of a payment default. Proceeds will be used to refinance the existing: * $2 billion term loan A, due 2010; and * $3 billion term loan B, due 2011. All other ratings on Charter, including the 'CCC+' corporate credit rating are affirmed. The outlook is negative. "The proposed bank transaction reduces near-term financial pressure by eliminating existing term loan A amortization that begins in 2007, and extending term loan B maturities to 2013 from 2011," Standard & Poor's credit analyst Eric Geil said. Nevertheless, Charter's: * weak revenue growth; * flat EBITDA; * high interest expense; * substantial capital expenditures; and * sizable negative discretionary cash flow continue to overwhelm the incremental financial profile enhancement. Although Charter's basic subscriber erosion decelerated in 2005 and high-speed data customer growth was solid, until the company achieves EBITDA growth that begins to translate into sustainable discretionary cash flow, there will be considerable uncertainty about Charter's financial prospects beyond the near term. Voice over Internet protocol phone service, launched on a wide basis in 2005, could strengthen the company's subscriber retention and bundled service penetration. However, potential phone company launches of fiber optic network-delivered video and data services are likely to challenge Charter within the next two years. CHEMED CORPORATION: Earns $35.8 Million For 2005 Fiscal Year ------------------------------------------------------------ Chemed Corporation delivered its financial statements for the fiscal year ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 16, 2006. For the year Dec. 31, 2005, the company reported $35.8 million of net income on $926.5 million revenues compared to $27.5 million of net income on $735.3 million revenues for the same period in 2005. The company gives significant factors affecting its cash flows during 2005 and financial position at Dec. 31, 2005: * continuing operations generated cash of $81.6 million; * spent net cash of $6.2 million on business combinations; * borrowed $85 million in long-term debt; * repaid $141.6 million to reduce long-term debt; and * spent $26.0 million on capital expenditures. Full-text copies of Chemed Corporation's financial statements for the fiscal year ended Dec. 31, 2005, are available for free at http://researcharchives.com/t/s?7d6 Headquartered in Cincinnati, Ohio, Chemed Corporation -- http://www.chemed.com/-- operates VITAS Healthcare Corporation, the nation's largest provider of end-of-life care, and Roto- Rooter, the nation's largest commercial and residential plumbing and drain cleaning services provider. * * * As reported in the Troubled Company Reporter on Jan. 26, 2005, Moody's Investors Service assigned a Ba2 senior implied rating to Chemed Corporation's proposed credit facilities, and a Ba3 rating to the Company's existing senior notes. Moody's also assigned an SGL-1 liquidity rating to the Company. Moody's said the ratings outlook is stable. This is the first time Moody's has assigned ratings to Chemed Corp. The ratings assigned: * $140 Million Senior Secured Revolver maturing 2010 -- Ba2 * $85 Million Senior Secured Bank Debt maturing 2010 -- Ba2 * $150 Million 8.75% Senior Notes due 2011 -- Ba3 * Senior Implied -- Ba2 * Senior Unsecured Issuer Rating -- Ba3 * SGL -- 1 * Outlook -- Stable As reported in the Troubled Company Reporter on Jan. 26, 2005, Standard & Poor's Ratings Services raised its ratings on Cincinnati, Ohio-based hospice, plumbing, and drain cleaning services provider Chemed Corporation. The corporate credit rating was raised to 'BB-' from 'B+', the senior secured debt rating to 'BB' from 'B+', and the senior unsecured debt rating to 'B' from 'B-'. At the same time, Standard & Poor's assigned a 'BB' rating and a recovery rating of '1' to Chemed's new senior secured credit facilities. These consist of an $85 million senior secured term loan and a $140 million revolving credit facility, both due in 2010. Standard & Poor's also revised its outlook on Chemed to stable from negative. CITIGROUP MORTGAGE: Moody's Rates 2 Certificate Classes at Low-B ---------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by Citigroup Mortgage Loan Trust Inc. Series 2006-HE1, and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by mortgage loans originated or acquired by Centex, MortgageIT, Quick Loan Funding, First Horizon and Option One. The pool consists of both adjustable-rate and fixed-rate subprime mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, over- collateralization, excess spread and an interest rate cap contract. Moody's expect collateral losses ranging from 6.05% to 6.55%. Wells Fargo Bank, N.A. and JPMorgan Chase Bank will service the loans. The Class M-10 and Class M-11 certificates 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. The complete rating actions are: Citigroup Mortgage Loan Trust, Inc. Asset-Backed Pass-Through Certificates, Series 2006-HE1 * Class A-1, rated Aaa * Class A-2, rated Aaa * Class A-3, rated Aaa * Class A-4, rated Aaa * Class M-1, rated Aa1 * Class M-2, rated Aa2 * Class M-3, rated Aa3 * Class M-4, rated A1 * Class M-5, rated A2 * Class M-6, rated A3 * Class M-7, rated Baa1 * Class M-8, rated Baa2 * Class M-9, rated Baa3 * Class M-10, rated Ba1 * Class M-11, rated Ba2 COLLINS & AIKMAN: Court Approves Tax Claims Settlement Procedures ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan approved procedures established by Collins & Aikman Corporation and its debtor-affiliates for: a) settling non-tax claims; b) settling tax claims; and c) maintaining the claims register. As reported in the Troubled Company Reporter on March 17, 2006, the Debtors will adopt these procedures to resolve Non-Tax and Tax Claims: (a) The Debtors may settle any Non-Tax Claim for at most $200,000, and any Tax Claim for at most $500,000, without notice or a hearing, except as otherwise provided; (b) No settlement will be agreed to unless it is reasonable in the business judgment of the affected Debtor; (c) No settlement will be effective unless it is executed by an authorized representative of the relevant Debtor; (d) A settlement of a Non-Tax or Tax Claim will be effective only if: (1) the Debtors provide a copy of the proposed settlement to: -- counsel to the Debtors' secured lenders; and -- counsel to the Official Committee of Unsecured Creditors; and (2) none of the Notice Parties object to the settlement within 10 days of receipt. (e) If any of the Notice Parties objects to the settlement, the Debtors will seek to resolve, in good faith, the objection. If the objection cannot be resolved, the Debtors may request Court approval of the settlement pursuant to applicable law; and (f) No later than 45 days after each three-month period, the Debtors will file with the Court and serve on all affected claimants and the Notice Parties, a statement with respect to the immediately preceding quarter. The statement will include: -- the names of each affected Non-Tax or Tax Claim claimant; and -- the terms of the each settlement reached. Claims Register Procedures Kurztman Carson Consultants, LLC, the Debtors' official claims and noticing agent, maintains a register of claims filed. Mr. Schrock relates that in many instances, the claims filed name a Debtor or Debtors that do not match with what is reflected in the supporting documentation. In addition, often a claimant provides written documentation subsequent to filing a claim, and this new documentation provides additional information as to the appropriate Debtor or Debtors against whom the claim is asserted. In this regard, the Debtors want to adopt these procedures for maintaining the claims register: (a) Where the Debtors listed on a proof of claim form do not match those listed on the supporting documentation, the Claims Agent may enter the claim on the Claims Register as if filed against the Debtors identified in the supporting documentation without further action by the Court, provided that the Claims Agent will provide written notice to the claimant of the action and the claimant may oppose it; (b) Where the Debtors distributed a personalized proof of claim form listing the scheduled amount of the claim and the claimant simply returned the form in blank, the Claims Agent will docket the blank proof of claim as if asserted in the amount listed in the personalized proof of claim form; and (c) Where claimants (i) state in their proofs of claim, or in supporting documentation that they are "not interested in a claim," or "do not have a claim," or (ii) write "N/A" on their proof of claim and fail to provide supporting documentation, the Claims Agent will treat those claims as withdrawn, provided that the Claims Agent will provide written notice to the claimant of this treatment and the claimant may oppose it. Mr. Schrock asserts that through the procedures, the Debtors will avoid the cost of having counsel draft and file numerous motions and send out numerous hearing notices. The procedures will also reduce the burden on the Court's docket while still protecting the interests of all creditors, Mr. Schrock says. ACE American Objection ACE American Insurance Company issued various insurance policies to the Debtors. According to David A. Lerner, Esq., at Plunkett & Cooney, P.C., in Bloomfield Hills, Michigan, the Debtors' procedures for resolving non-tax claims may modify the terms and conditions of these ACE Policies. The Procedures for Non-Tax Claims fail to provide notice to ACE of the claims to which the ACE Policies might apply, and it appears to provide for the Debtors to enter into settlements without any input from ACE, Mr. Lerner says. Mr. Lerner relates that pursuant to the ACE Policies, the Debtors are required to provide notice to ACE of every occurrence that may result in a claim. In addition, ACE may have the duty to defend claims. ACE also has the right to associate in the defense, investigation, and settlement of claims to which the insurance applies, and to control the defense, investigation and settlement of claims. Furthermore, the Debtors have continuing contractual obligations to defend and cooperate with ACE in the defense and investigation of all claims to which the insurance applies. Violation of the Debtors' contractual obligations under the ACE Policies could vitiate any otherwise available insurance coverage for the claims. Mr. Lerner points out that failure of the Procedures for Non-Tax Claims to require the Debtors to comply with their contractual obligations or provide adequate treatment of the ACE Policies may excuse ACE from any further obligations to provide coverage or render other performance to the Debtors under the ACE Policies. Accordingly, ACE asks the Court to modify the Procedures for Non- Tax Claims. ACE believes that the procedures should provide for: a. timely notice of the Debtors' attempt to resolve any claims to which the insurance might apply; b. the ability to participate in the settlement negotiations and to object to the proposed settlement; c. the ability to prevent the Debtors from waiving any defenses to the claims; d. the ability to enforce the Debtors' continuing duties of cooperation under ACE Policies; and e. the ability to prevent the Debtors from settling a claim in a manner which ACE deems improper or unreasonable. The Bankruptcy Court rules that if the claim is alleged to be covered by an insurance policy issued by ACE American Insurance Company, the Court directs the Debtors to provide notice to ACE in accordance with the applicable policy terms and conditions. The Debtors may proceed to settle the claim in accordance with the policy provisions. About Collins & Aikman Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000) CURATIVE HEALTH: Disclosure & Confirmation Hearings Set for May 8 ----------------------------------------------------------------- The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York set a combined hearing on May 8, 2006, to determine the adequacy of Curative Health Services Inc. and its debtor-affiliates' Disclosure Statement and confirmation of their Prepackaged Chapter Plan of Reorganization. Key Terms of the Plan Under the Plan, the equity interests of each Reorganized Debtor other than Curative will be issued to Reorganized Curative to recreate the corporate structure. The Reorganized Debtors will continue to exist after the effective date as separate corporate entities. On the effective date, Electing Senior Noteholders and the Rights Holders will own 100% of the 17,520,765 shares of New CURE Stock issued and outstanding as of the effective date, subject to dilution by the issuance of shares of New CURE Stock (a) New Restricted Stock, (b) upon the exercise of New Options issued under the New Management Incentive Plan and (c) in connection with the McConnell Investment. Exit Financing The Debtors, as borrowers or guarantors, after consultation with the Ad Hoc Committee, will enter into the exit financing to provide liquidity for working capital and other general corporate purposes of the Reorganized Debtors. In addition, the proceeds of the exit financing will be used to repay in full all amounts outstanding under the DIP Financing and may be used to fund other indebtedness of the Reorganized Debtors including the cash consideration to: * Electing Senior Noteholders; * Non-Electing Senior Noteholders; * holders of Allowed Curative General Unsecured Claims; * holders of Allowed Apex General Unsecured Claims; and * holders of Allowed eBioCare General Unsecured Claims. New Debt On the effective date, the Debtors, as borrowers or guarantors, will obtain a new debt after consultation with the Ad Hoc Committee if the New Debt is not part of the Exit Financing. Treatment of Claims Under the Plan, * Administrative Expense Claims; * Professional Compensation and Reimbursement Claims; * DIP Claims; and * Priority Tax Claims, will be paid in full. Secured Bank Claims will be paid in full from the proceeds of the DIP Financing. Other secured claims and other priority claims of: * Curative Health; * Apex Therapeutic Care, Inc.; and * Ebiocare.com, Inc., will be paid in full. Holders of Allowed Senior Note Claims will receive a cash payment approximately equal to 54.9% of their Senior Note Claim, unless a holder of an Allowed Senior Note Claim: (a) is an accredited investor or qualified institutional buyer, (b) holds Senior Notes in an aggregate principal face amount equal to or greater than $1 million and (c) elects to receive its Pro Rata Share of New CURE Stock and Cash Consideration the value of which, on the Effective Date, will not exceed approximately 54.9% of the holder's Senior Note Claim. Holders of Curative general unsecured claims will receive a promissory note in face amount equal to approximately 56% of their claims. Apex general unsecured claims will also receive a promissory note equal to approximately 5.2% of their claims while eBioCare general unsecured claims will receive a promissory note equal to approximately 5.9%. Holders of general unsecured claims may elect to receive cash payment equal to 50% of the face amount of the holder's applicable promissory note. All Intercompany Claims will be extinguished. Holders of Equity Interests in the Debtors will receive nothing and those interests will be cancelled. About Curative Health Services Headquartered in Nashua, New Hampshire, Curative Health Services, Inc. -- http://www.curative.com/-- provides Specialty Infusion and Wound Care Management services. The company and 14 of its affiliates filed for chapter 11 protection on Mar. 27, 2006 (Bankr. S.D.N.Y. Case No. 06-10552). Brian E. Greer, Esq., and Martin N. Flics, Esq., at Linklaters, represent the Debtors in their restructuring efforts. The Debtors financial condition as of Sept. 30, 2005 showed $155,000,000 in total assets and $255,592,000 in total debts. DELTA AIR: Ct. To Rule on Flight Attendants Union's Contract Today ------------------------------------------------------------------ Teamster flight attendants at Delta Comair are preparing for possible job actions. Federal Bankruptcy Judge Adlai Hardin is scheduled to rule on Delta Comair's motion to reject the flight attendants' contract today, April 17, 2006. If the judge grants Delta Comair's motion, the carrier must then decide if it intends to impose cruel concessions. The flight attendants, who voted 93% in favor of authorizing job actions, will be free to respond with self-help actions should the company choose to implement their plan. "Under a fair agreement we've met the company's needs, but they haven't budged off their unfair demand for excessive concessions," said Connie Slayback, Local 513 President. "Delta Comair is putting the flight attendants in the position of giving massive concessions while still being in danger of losing their jobs." * Comair has used unrealistic and artificial methods to inflate its demands from the flight attendants, selecting a number of flight attendants that is far lower than the number of employees actually working. * The company refuses to credit the flight attendants for deferring a pay increase that would otherwise take effect in the first year of an agreement -- reaping millions of dollars in savings, but not giving one penny in credit to the flight attendants. * Comair refuses to give its flight attendants wage and benefit increases granted to its pilots and mechanics. It has even proposed a 401(k) plan for the flight attendants that is inferior to those of the pilots and mechanics, while entirely eliminating Comair's defined contribution to the flight attendants' pension. Negotiations between Comair and the Teamsters continued on April 14 but no agreement has yet been reached due to the Company's refusal to alter its improper costing, unfair concession demands, and rejection of real job protections. "We have always been willing to do our fair share in response to the Delta Comair bankruptcy," Ms. Slayback said. "The company's executives are using the bankruptcy court to avoid a meaningful agreement, arrogantly assuming the judge will endorse their bad faith bargaining." About Teamsters The International Brotherhood of Teamsters, with 1.4 million members, is one of the largest labor unions in the world. It is also the most diverse union in the U.S. The union represents everyone from A to Z - from airline pilots to zookeepers. One out of every ten union members is a Teamster. About Delta Air Headquartered in Atlanta, Georgia, Delta Air Lines, Inc. -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. DELTA AIRLINES: Must File Schedules & Statements by May 31 ---------------------------------------------------------- The Hon. Adlai S. Hardin Jr. of the U.S. Bankruptcy Court for the Southern District of New York gave Delta Air Lines, Inc., and its debtor-affiliates until May 31, 2006, to file their Schedules of Assets and Liabilities, Schedules of current income and expenditures, schedules of executory contracts and unexpired leases, and Statements of Financial Affairs. Judge Hardin also declared that the deadline will not be further extended absent extraordinary and unforeseeable circumstances. As reported in the Troubled Company Reporter on Mar. 29, 2006, the Debtors said that they need to compile enormous information to prepare their Schedules. The Debtors have mailed notices to more than 350,000 potential creditors, and anticipate listing in their Schedules nearly 18,000 executory contracts, 750 pending litigations and more than 10,000 payments made within 90 days prior to filing for bankruptcy. When completed, the Debtors' Schedules will be approximately 6,500 pages long. Given the enormity of the task of reviewing and compiling all of the data. Additionally, numerous significant business and legal issues have arisen in just the past few months that have required and will continue to require a great deal of attention, the Debtors said. The Debtors' employees and professionals have recently devoted much time and effort to: (i) address issues raised by numerous airport lessors and holders and trustees of airport-related financial instruments and analyzing the Debtors' airport leases and financings to permit future planning of these leases and financings; (ii) address more than 80 filed reclamation claims, totaling $15,787,048; (iii) enforce the automatic stay against numerous creditors seeking to contravene the mandates of the Bankruptcy Code; (iv) prepare for and defend against several high stakes litigations, in which counterparties alleged postpetition damages or claims in the hundreds of millions of dollars; (v) Section 1113 negotiations with Delta Air Lines, Inc.'s pilots union and Comair, Inc.'s flight attendants union and preparing for related proceedings regarding both; (vi) analyze a significant number of nonresidential real property leases and executory contracts in order to determine whether to assume or reject them; and (vii) continue to evaluate the Debtors' many aircraft financing arrangements in light of Bankruptcy Code section 1110 and conducting negotiations with numerous counterparties. Moreover, the Debtors have lost several important personnel in the last two months, including their Senior Vice President of Restructuring. The Debtors also noted that Northwest Airlines Corporation and its subsidiaries, which filed Chapter 11 petitions within minutes of the Debtors, were recently granted an extension of the deadline to file their Schedules until May 1, 2006. The Debtors pointed out that the Debtors are much larger than Northwest Airlines, thereby making the preparation of their extensive Schedules more arduous and time-consuming. By many metrics, including both assets and liabilities, the Debtors are more than 50% bigger than Northwest. Still, despite being considerably larger than Northwest, the Debtors are asking for only a few weeks more than Northwest has already been granted in which to file their Schedules. The Debtors also told the Court that they have consulted the U.S. Trustee and the Official Committee of Unsecured Creditors and both have given their consent to the extension. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000). DELTA AIR: Court Okays Assumption of Lion Apparel Agreement ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave Delta Air Lines, Inc., and its debtor-affiliates permission to assume a Uniform Apparel and Security Agreement, dated Sept. 22, 2004, between Delta Air Lines, Inc., and Lion Apparel, Inc. Under the Agreement, Lion Apparel furnishes uniforms for Delta's in flight service, airport customer service and city ticket office personnel. In exchange, Delta: (i) directs its Public Contact Personnel to purchase their uniform apparel from Lion Apparel by means of a uniform allotment system that establishes an annual allowance for each employee; and (ii) makes payments to Lion Apparel for those orders that fall within each employee's available annual allowance. To secure its obligations under the Agreement, Delta transferred $7,500,000 to a deposit account with The Bank of New York and provided Lion Apparel with a duly perfected security interest in the funds held in the account, pursuant to the terms of a Deposit Account Control Agreement, dated Sept. 22, 2004. Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, tells the Court that, by assuming the Agreement and fulfilling other related conditions, the Deposit will be released to Delta, free and clear of Lion Apparel's Security Interest, much earlier than if the Agreement were not assumed. The Agreement is the result of extensive negotiation between the Debtors and Lion Apparel. The Debtors do not believe that they can secure the goods and services that are the subject of the Agreement from any other party on better terms. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000). DELTA AIR: Wants to Walk Away from Atlanta Airport Tract 6 Lease ---------------------------------------------------------------- Delta Air Lines, Inc., and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of New York for permission to reject its lease agreement with the City of Atlanta, Georgia governing the use and occupancy of the aircraft maintenance hangar and related facilities and premises on Tract No. 6 at the Hartsfield-Jackson Atlanta International Airport in the counties of Fulton and Clayton, Georgia. Under a Lease Agreement for Aircraft Maintenance Hangar and Related Facilities on Tract No. 6, dated Aug. 11, 1997, Delta is responsible for providing maintenance and repair services for the Leased Premises. According to Sharon Katz, Esq., at Davis Polk & Wardwell, in New York, the costs incurred by Delta for leasing the premises and subleasing portions of it exceeds the benefit that Delta receives from the use of the facility and the rent received under the subleases. In addition, as part of their ongoing restructuring efforts, the Debtors have determined that the premises, and therefore, the lease, are not necessary to their continued business operations. Under Section 554(a) of the Bankruptcy Code, the Debtors also propose to abandon all furniture, fixtures and equipment remaining on Leased Premises. The Debtors request that holders of any claim for damages arising from the rejection of the Lease be required to file a proof of claim on or before the later of: (a) the deadline to be established by the Court to file proof of claim, or (b) 30 days after the effective date of the rejection. Absent a timely filing, the claim will be irrevocably barred. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000). DOCTORS HOSPITAL: Court Extends DIP Agreements Through June 15 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas in Houston approved a third amendment to the debtor-in-possession financing agreements between Doctors Hospital 1997 LP and two separate DIP lenders, GE HFS Holdings, Inc., and Bruckmann, Rosser, Sherrill & Co., L.P. GE extended a $10 million secured revolving credit facility in April 2005 to fund the Debtor's postpetition operations. At the same time, the Debtor also obtained an $865,000 secured term loan from Bruckmann Rosser. Under a third amendment, the DIP loan facilities from GE and Bruckmann Rosser continue through June 15, 2006. The Debtor will pay a $16,500 extension fee to GE. Joshua W. Wolfshohl, Esq., at Porter & Hedges, LLP, told the Bankruptcy Court that without access to the DIP facilities, the Debtor would be forced to curtail its normal operations, causing harm to its business and the patients that rely on its services. Pursuant to the third amendment, the Debtor also acknowledges its arrearages with respect to leased property located at 510 West Tidwell in Houston, Texas, and agrees to pay $100,000 per month to Healthcare Financial Services, LLC, GE's affiliate, which is the current lessor of the property lease. GE has agreed to defer collection of the lease payments until the earlier of June 15, 2006 or confirmation of a chapter 11 plan. Headquartered in Houston, Texas, Doctors Hospital 1997 LP, dba Doctors Hospital Parkway-Tidwell, operates a 101-bed hospital located in Tidwell, Houston, and a 152-bed hospital located in West Parker Road, Houston. The Company filed for chapter 11 protection on April 6, 2005 (Bankr. S.D. Tex. Case No. 05-35291). James M. Vaughn, Esq., at Porter & Hedges, L.L.P., represents the Debtor in its restructuring efforts. Robert S. Blanc, Esq., at Gardere Wynne Sewell LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $41,643,252 and total debts of $66,306,939. On Feb. 8, 2006, Doctors Hospital 1997, L.P., delivered its first amended Chapter 11 Plan of Reorganization and an updated Disclosure Statement explaining the amended plan to the Bankruptcy Court. DOCTORS HOSPITAL: Hires Patton Boggs as Healthcare Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas in Houston authorized Doctors Hospital 1997 LP to retain Patton Boggs LLP, as its special healthcare counsel, nunc pro tunc to Jan. 1, 2006. The Debtors hired Patton Boggs as their special counsel because of the firm's extensive experience in the areas of healthcare compliance and enforcement. In this engagement, Patton Boggs will: a) review and analyze the Debtor's capital and organizational structure and the proposed Plan of Reorganization; b) communicate with various governmental and regulatory agencies regarding the compliance of the Plan with applicable statutes and regulations; and c) provide other appropriate and necessary legal services for the Debtor. Laurence J. Freedman, Esq., and Laura Laemmle, Esq., will serve as lead attorneys in the Debtor's case. Mr. Freedman charges $540 per hour for his services while Ms. Laemmle bills at $425 per hour. Mr. Freedman assures the Bankruptcy Court that his firm does not hold any interest adverse to the Debtor's estate and is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Houston, Texas, Doctors Hospital 1997 LP, dba Doctors Hospital Parkway-Tidwell, operates a 101-bed hospital located in Tidwell, Houston, and a 152-bed hospital located in West Parker Road, Houston. The Company filed for chapter 11 protection on April 6, 2005 (Bankr. S.D. Tex. Case No. 05-35291). James M. Vaughn, Esq., at Porter & Hedges, L.L.P., represents the Debtor in its restructuring efforts. Robert S. Blanc, Esq., at Gardere Wynne Sewell LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $41,643,252 and total debts of $66,306,939. On Feb. 8, 2006, Doctors Hospital 1997, L.P., delivered its first amended Chapter 11 Plan of Reorganization and an updated Disclosure Statement explaining the amended plan to the Bankruptcy Court. DOLLAR GENERAL: Moves Forward with New Marketing Strategy --------------------------------------------------------- Dollar General Corp. is hoping to spur sales by introducing a new store format and initiating a variety of marketing and advertising strategies, The Wall Street Journal reports. Known for offering "everyday low prices" to customers, Dollar General admitted that its strategy, without effective advertising, is more vulnerable in today's competitive and promotional environment. Kris Hudson, writing for the Journal, says that Dollar General will study the impact of its advertising circular, released on March 31, 2006, to determine where and how often it should advertise. Ms. Hudson further reports that the retailer is experimenting with a new floor plan for its stores that would emphasize improved product placements, operational efficiencies and customer service. Dollar General's same-store sales for the five-week period ended March 31, 2005, decreased 1.5%, compared to a 4.2% increase in the five-week period ended April 1, 2005. The Company reports that same-store sales of highly consumable merchandise increased moderately for the period, while sales of home products, basic apparel and seasonal merchandise declined. Total retail sales for the period equaled $793.2 million, a 4.9% increase compared to $756.2 million last year. Net sales in fiscal 2005 were $8.58 billion, an increase of 12% over fiscal 2004. About Dollar General Headquartered in Goodlettsville, Tennessee, Dollar General Corporation -- http://www.dollargeneral.com/-- is a Fortune 500(R) discount retailer with 7,821 neighborhood stores as of October 28, 2005. Dollar General stores offer convenience and value to customers by offering consumable basic items that are frequently used and replenished, such as food, snacks, health and beauty aids and cleaning supplies, as well as a selection of basic apparel, housewares and seasonal items at everyday low prices. * * * Dollar General's 8-5/8% Exchange Notes due 2010 carry Moody's Investors Service's Ba1 rating. D.R. HORTON: Moody's Holds Ba1 Rating on Subordinated Note Issue ---------------------------------------------------------------- Moody's Investors Service assigned Baa3 ratings to D.R. Horton's $250 million of 6% senior notes due 2011 and $500 million of 6.5% senior notes due 2016, proceeds of which will be used to retire bank debt. At the same time, Moody's affirmed the company's Baa3 rating on its existing senior note issues and Ba1 rating on its subordinated note issues. The ratings outlook is stable. The stable ratings outlook is based on Moody's expectation that Horton will maintain capital structure discipline even as it takes advantage of numerous growth opportunities and that homebuilding debt/capitalization will generally stay at or close to the 45% stated target for the company. The ratings reflect the company's long and consistent history of revenue and earnings growth, successful track record of integrating acquisitions, the largest shareholders' equity base in the homebuilding industry, leading share position in many of the markets it serves, tight cost controls, healthy returns, and minimal off-balance sheet obligations. At the same time, the ratings continue to incorporate Horton's somewhat higher-than-average business risk profile given its past healthy appetite for acquisitions, which its current strategy does not totally disavow. In addition, capacity under its large bank credit facility gives the company ample dry powder to releverage the balance sheet on short notice. The ratings also consider that the company has a sizable proportion of its earnings coming from California and that it engages in speculative home building to a greater extent than many of its peers. Going forward, the ratings could benefit from the company's lowering of its stated debt leverage target to 40% from 45% and from its operating at or below this newly stated target for more than one year while other key metrics--interest coverage, ROA, and gross margins--remain at or above current levels. The ratings would be pressured by a sustained rise in debt leverage to 50% or more from either a major debt-financed acquisition, a large scale share repurchase program or one-time dividend, or a major land impairment charge. Moody's believes that the capital base of an investment grade company cannot be subject to management actions that decapitalize or unduly stress the balance sheet. Headquartered in Ft. Worth, Texas, D.R. Horton, Inc., is engaged in the construction and sale of homes designed principally for the entry-level and first time move-up markets. The company currently builds and sells homes in 26 states and 77 markets, with a geographic presence in the Midwest, Mid-Atlantic, Southeast, Southwest, and Western regions of the United States. Revenues and net income for the trailing twelve-month period that ended Dec. 31, 2005, were approximately $14.2 billion and $1.5 billion, respectively. DUANE READE: S&P Lowers Corporate Credit Rating to CCC from CCC+ ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on New York-based Duane Reade Inc. The corporate credit rating was lowered to 'CCC' from 'CCC+'. The outlook continues to be negative. "The downgrade is based on the company's weaker-than-expected operating trends in the fourth quarter of 2005 and management's inability to turn around a deteriorating performance," said Standard & Poor's credit analyst Diane Shand. Ratings on Duane Reade reflect: * the company's very highly leveraged capital structure; * weak financial flexibility due to continued net losses; * extremely thin cash flow protection measures; and * narrow geographic focus. Duane Reade is one of the largest drug chains in the New York metropolitan area; more than half of its 251 stores are in Manhattan. Duane Reade's operating performance has been declining since the fourth quarter of 2001. The company's operating margin fell to 9.4% in 2005, from 11.4% in the previous year and a high of 16.4% in 2000. The erosion is attributable to: * lack of sales leverage; * lower margin on front-end merchandise; * increased labor expense, higher inventory shrink losses; * an increased portion of low-margin pharmacy sales; and * greater competition from national drugstore chains and the mail-order divisions of pharmacy benefit managers. Margins are expected to remain under pressure as Standard & Poor's believes it will be difficult for the company to gain market share, given the growing competition from CVS, Rite Aid, and mail order companies. ECHOSTAR COMMUNICATIONS: Earns $1.51 Bil. For Year Ended Dec. 31 ---------------------------------------------------------------- EchoStar Communications Corporation (Nasdaq: DISH) reported total revenue of $2.18 billion for the quarter ended Dec. 31, 2005, a 12.8% increase compared with $1.93 billion for the corresponding period in 2004. Net income totaled $133 million for the quarter ended Dec. 31, 2005, compared with $70 million during the corresponding period in 2004. For the year ended Dec. 31, 2005, EchoStar reported total revenue of $8.43 billion compared with $7.15 billion for the year ended Dec. 31, 2004, an increase of 17.8%. EchoStar's net income for the year ended Dec. 31, 2005, totaled $1.51 billion, compared with $215 million for the year ended Dec. 31, 2004. Net income for the year ended Dec. 31, 2005, includes a non- recurring, non-cash benefit of approximately $593 million to recognize the tax benefits of previously reported tax losses and a $134 million gain related to the settlement of EchoStar IV satellite insurance and related claims. DISH Network added approximately 330,000 net new subscribers during the quarter ended Dec. 31, 2005, giving the company approximately 12.04 million subscribers as of that date, an increase of 1.135 million subscribers compared to the number of subscribers as of Dec. 31, 2004. EchoStar's balance sheet at Dec. 31, 2005, showed $7,410,210 in total assets and $8,276,834 in total liabilities, resulting in a stockholders' deficit of $866,624. A full-text copy of the Company's 2005 annual report on form 10-K is available for free at http://researcharchives.com/t/s?7d5 About EchoStar EchoStar Communications Corporation -- http://www.echostar.com/-- serves more than 11.71 million satellite TV customers through its DISH Network(TM), and is a leading U.S. provider of advanced digital television services. DISH Network's services include hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. EchoStar has been a leader for 25 years in satellite TV equipment sales and support worldwide. EchoStar is included in the Nasdaq-100 Index (NDX) and is a Fortune 500 company. * * * As reported in the Troubled Company Reporter on Jan. 23, 2006, Moody's Investors Service affirmed all ratings for EchoStar Communications Corporation and subsidiary EchoStar DBS Corporation following the company's announcement of a proposed $1 billion senior unsecured debt issuance (not rated by Moody's) at EDBS. Moody's said the outlook remains stable. Moody's took these actions: EchoStar Communications Corporation: * Corporate Family Rating -- Ba3 (affirmed) * Convertible Subordinated Notes -- B2 (affirmed) * Speculative Grade Liquidity Rating -- SGL-1 (affirmed) EchoStar DBS Corporation: * Senior Unsecured Notes due 2014 -- Ba3 (affirmed) As reported in the Troubled Company Reporter on Jan. 23, 2006, Fitch Ratings affirmed Echostar Communications Corporation's 'BB-' Issuer Default Rating, and affirmed the 'B' rating on the convertible subordinated notes. Fitch also affirms the 'BB-' rating on the senior unsecured notes issued by Echostar's wholly owned subsidiary Echostar DBS Corporation. In addition, Fitch assigned a 'BB-' rating to the proposed offering of $1 billion in senior notes in accordance with SEC rule 144A. Approximately $5.9 billion of debt as of the end of the third quarter is affected by Fitch's action. Fitch said the rating outlook is stable. ENRON CORPORATION: Distributes $4,676,400,000 to Creditors ---------------------------------------------------------- Enron Corp. and its reorganized debtor-affiliates inform the Court that they have commenced their ninth distribution to creditors holding allowed claims. The distribution amounts to $4,676,400,000, which consists of $4,108,400,000 in cash and shares of Portland General Electric Company stock valued at $568,000,000. The distributed shares include 27,036,445 shares of PGE, which represents approximately 43% of PGE's 62,500,000 issued and outstanding shares. PGE was an affiliate of Enron that recently became independent with the issuance of the new common stock. PGE returned as a publicly traded company in the New York Stock Exchange. Schedules reflecting the current and cumulative distributions made or to be made through April 2006 on a class-by-class basis are available for free at http://ResearchArchives.com/t/s?7dd "T[he] distribution is the most significant amount recovered to date and represents a tremendous financial outcome for the Enron estate," said John Ray, President and Chairman of the Board. "We are dedicated to continuing the process of resolving the remaining claims, recovering amounts due to creditors from third parties and distributing value." About Enron Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, represent the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 170; Bankruptcy Creditors' Service, Inc., 15/945-7000) EXIDE TECHNOLOGIES: Court Approves Citicorp Settlement Agreement ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approves a settlement agreement resolving an adversary proceeding and claims filed by Reorganized Exide Technologies against: * Citicorp Vendor Finance, Inc., formerly known as Copelco Capital, Inc.; and * CitiCapital Commercial Leasing Corporation, formerly known as Associates Leasing, Inc. James O'Neill, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub P.C., in Wilmington, Delaware, relates that pursuant to a master lease agreement, the Debtors and General Electric Capital Corporation executed several equipment schedules for the purported lease of equipment. This includes Schedule A-1 and Schedule G-1B. Subsequently, GECC assigned all of its rights, title and interest in and to the Schedules, the A-1 Equipment and the G-1B Equipment to CitiCapital. On Dec. 23, 1996, the Debtors entered into a lease agreement with Keystone Leasing Service, whereby the Debtors leased equipment from Keystone. Similarly, Keystone assigned all of its right, title, and interest in, and to, the Keystone Agreement and Equipment to JDR Capital Corporation. JDR, in turn, assigned all of its right, title, and interest in, and to, the Keystone Agreement and Equipment, to Citicorp. In March 2003, the Debtors filed an adversary proceeding, which sought a declaration that the purported leases, including the Master Agreement and the Keystone Agreement, are disguised financing agreements. The Adversary Proceeding is currently pending before the Court. To resolve the dispute, the Reorganized Debtors, Citicorp, and CitiCapital entered into a consensual settlement. The Settlement Agreement provides that: (a) Citicorp and CitiCapital will waive, release and withdraw with prejudice all of their claims against the Reorganized Debtors, subject to reservations; (b) The Reorganized Debtors will renew the Master Agreement, solely as it relates to the Schedule for an additional two-year term, effective upon expiration of the current term. The quarterly rent payable during the renewal term, due and payable on March 31, 2006, will equal 73% of the quarterly rent payable during the initial term and be payable quarterly, in arrears; (c) The Reorganized Debtors have the option to purchase from Citicorp and CitiCapital the G-1B Equipment for $1,116,279 and the A-1 Equipment for $1,523,721, to be paid in cash or other immediately available funds, plus all taxes and all reasonable costs and expenses associated with the purchase on or before May 15, 2006. If the Reorganized Debtors make the payment for: -- the G-1B Equipment on or before March 31, 2006, the rent due and payable in March 2006, on Schedule G-1B will be waived; and -- the A-1 Equipment on or before March 31, 2006, the rent due and payable in March 2006, on Schedule A-1 will be reduced to $193,586; (d) On the Closing Date, the Reorganized Debtors will purchase from Citicorp the Equipment subject to the Keystone Agreement; (e) At the end of each quarterly period, commencing March 23, 2006, and provided that they are not then in default, the Reorganized Debtors will have the option to purchase all of the remaining equipment covered by Schedule A-1 for an amount equal to the greater of: * the Fair Market Value of the Equipment; or * the product of the applicable Capitalized Lessor's Cost of the equipment and the applicable stipulated loss value percentage set forth in the Settlement Agreement, determined as of the sale date; (f) In consideration of the alleged defaults under the Master Agreement and the Keystone Agreement, the Reorganized Debtors will pay $404,147 to CitiCapital, payable in four consecutive installments of $101,037 in cash or other immediately available funds, commencing on March 23, 2006, and continuing on June 23, 2006, Sept. 23, 2006, and Dec. 23, 2006; (g) Except as provided in the Settlement Agreement, Citicorp and CitiCapital will waive any default or event of default under the Master Agreement and the Keystone Agreement that occurred on or prior to the Closing Date. Citicorp and CitiCapital will waive, with prejudice, any and all accrued but unpaid late charges due under the Master Agreement and the Keystone Agreement as of the Closing Date for $470,900; (h) All other terms of the Master Agreement and the Keystone Agreement not inconsistent with the terms of the Settlement Agreement will remain in full force and effect; (i) The Reorganized Debtors will voluntarily dismiss, with prejudice, the Adversary Proceeding as to Citicorp and CitiCapital; and (j) The Settlement Agreement will not be construed as an admission or concession by any party of the truth of any allegation or the validity of any claim asserted in the Adversary Proceeding, and all the allegations are expressly denied. Nothing in the Settlement Agreement will be deemed an admission that the Master Agreement and the Keystone Agreement are, or are not, financing agreements that create a security interest, or that they are, or are not, "true leases". Mr. O'Neill asserts that the terms of the Settlement Agreement are favorable to the Reorganized Debtors because: -- they will achieve valuable rent concessions, obtain waivers of certain alleged defaults, and acquire substantial flexibility with respect to the potential purchase of the Equipment; and -- the Equipment subject to the Master Agreement and the Keystone Agreement are essential to the operation of the Reorganized Debtors' businesses and could not be replaced within a reasonable amount of time or at a reasonable cost. About Exide Headquartered in Princeton, New Jersey, Exide Technologies -- http://www.exide.com/-- is the worldwide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represented the Debtors in their successful restructuring. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue Nos. 81 & 82; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 6, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Exide Technologies to 'CCC' from 'CCC+' because of Exide's continued poor operating performance and rising debt leverage. The senior secured rating on Exide's recently enlarged first-lien credit facility was lowered to 'CCC' from 'B-', and the recovery rating was lowered to '2' from '1', because of the lower corporate credit rating and the weaker asset protection for the enlarged facility. The senior secured rating and the recovery rating reflect Standard & Poor's expectation that lenders will realize a substantial recovery of principal (80%-100%) in the event of default or bankruptcy. The senior secured rating on Exide's second-lien notes was lowered to 'CC' from 'CCC', reflecting the lower corporate credit rating and an increase in priority debt. EXIDE TECHNOLOGIES: Court Approves Fifth Third Leasing Settlement ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approves a settlement agreement resolving an adversary proceeding and claims filed by Reorganized Exide Technologies against Fifth Third Leasing Company. James O'Neill, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub P.C., in Wilmington, Delaware, relates that the Debtors and General Electric Capital Corporation were parties to a master lease agreement dated December 23, 1997, for the lease of certain equipment. Pursuant to the terms of the Master Agreement, the Debtors and GECC executed equipment schedule F-1. GECC assigned all of its rights, title and interest in, and to, the Agreement and the Equipment, to Fifth Third. A portion of Equipment has been leased or subleased by the Debtors to Daramic, Inc., pursuant to a sublease dated Dec. 15, 1999. In March 2001, the Debtors purchased equipment from Fifth Third. Subsequently, the Debtors filed an adversary proceeding in March 2003, which sought a declaration that purported leases, including the Master Agreement, are disguised financing agreements. Fifth Third denied the allegation and affirmatively asserted that the Master Agreement was a "true lease" and sought to compel assumption or rejection of the Agreement. After arm's-length negotiations, the Reorganized Debtors and Fifth Third reached a consensual settlement regarding the Adversary Proceeding and the claims and defenses set forth in the Proceeding. The terms of the Settlement Agreement are: (a) Fifth Third will waive, release and withdraw with prejudice all of its claims against the Reorganized Debtors, subject to reservations; (b) The Master Agreement, solely as it relates to the F-1 Schedule, will be deemed renewed for an additional two-year term from Jan. 1, 2006, to Dec. 31, 2007. The monthly rent payable during the first renewal term will be $43,333 and be payable monthly, in advance, on the first calendar day of each month; (c) The First Renewal Term will begin effective Jan. 1, 2006. The payments due for Jan. 1, 2006, Feb. 1, 2006, and March 1, 2006, aggregating $129,999 will be paid by the Reorganized Debtors within five business days of the Closing Date; (d) The Reorganized Debtors will purchase from Fifth Third, on or within five business days after the Closing Date, the Daramic Equipment for a total purchase price of $75,000; (e) The Reorganized Debtors will have an option during the First Renewal Term to purchase from Fifth Third the equipment remaining under the F-1 Schedule not including the Daramic and Sold Equipment for an aggregate of $800,000; (f) At the expiration of the First Renewal Term, the Reorganized Debtors will have these options: * Purchase from Fifth Third the Remaining F-1 Equipment for an amount equal to the Fair Market Value In Continued Use determined as of the sale date, provided that if the FMVICU: -- exceeds $700,000, the purchase price for the equipment will be $700,000; and -- less than $500,000, the purchase price for the equipment will be $500,000. * Return to Fifth Third the Remaining F-1 Equipment. In the event the Reorganized Debtors elect to do so: -- the Reorganized Debtors will pay to Fifth Third, in cash or other immediately available funds, an amount equal to 3.5% of the Capitalized Lessor's Cost; and -- the Agreement will be deemed terminated as to the Remaining F-1 Equipment. * Renew the Agreement, as it relates to the Remaining F-1 Equipment for an additional two-year term, effective upon expiration of the First Renewal Term. In the event the Reorganized Debtors elect to renew the Agreement, the monthly rent payable during the Second Renewal term will be $31,633 and be payable monthly, in advance, on the first calendar day of each month; (g) At the expiration of the Second Renewal Term, the Reorganized Debtors will have these options: * Return to Fifth Third the Remaining F-1 Equipment. In the event the Reorganized Debtors elect to do so: -- the Reorganized Debtors will pay to Fifth Third, in cash or other immediately available funds, an amount equal to 2.5% of the Capitalized Lessor's Cost; and -- the Agreement will be deemed terminated as to the Remaining F-1 Equipment. * Purchase from Fifth Third the Remaining F-1 Equipment for an amount equal to the Fair Market Value In Continued Use determined as of the sale date provided that if the FMVICU: -- exceeds $400,000, the purchase price for the equipment will be $400,000; and -- less than $200,000, the purchase price for the equipment will be $200,000; (h) Except as provided in the Settlement Agreement, Fifth Third will waive any default or event of default under the Agreement that occurred on or prior to the Closing Date including defaults relating in any way to the Chapter 11 cases or the confirmed Plan of Reorganization. In addition, Fifth Third will waive, with prejudice, any and all accrued but unpaid late charges due under the Master Agreement as of the Closing Date; (i) All other terms of the Master Agreement not inconsistent with the terms of the Settlement Agreement will remain in full force and effect; (j) The Reorganized Debtors will voluntarily dismiss, with prejudice, the Adversary Proceeding as to Fifth Third; and (k) The Settlement Agreement will not be construed as an admission or concession by any party of the truth of any allegation or the validity of any claim asserted in the Adversary Proceeding, and all the allegations are expressly denied. Specifically, but without limitation, nothing in the Settlement Agreement will be deemed an admission that the Master Agreement is, or is not, a financing agreement that creates a security interest or that it is or is not a "true lease." About Exide Headquartered in Princeton, New Jersey, Exide Technologies -- http://www.exide.com/-- is the worldwide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represented the Debtors in their successful restructuring. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue Nos. 81 & 82; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 6, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Exide Technologies to 'CCC' from 'CCC+' because of Exide's continued poor operating performance and rising debt leverage. The senior secured rating on Exide's recently enlarged first-lien credit facility was lowered to 'CCC' from 'B-', and the recovery rating was lowered to '2' from '1', because of the lower corporate credit rating and the weaker asset protection for the enlarged facility. The senior secured rating and the recovery rating reflect Standard & Poor's expectation that lenders will realize a substantial recovery of principal (80%-100%) in the event of default or bankruptcy. The senior secured rating on Exide's second-lien notes was lowered to 'CC' from 'CCC', reflecting the lower corporate credit rating and an increase in priority debt. FEDERAL-MOGUL: Plans to Shut Down Clinton Plant & Lay Off Workers ----------------------------------------------------------------- Federal-Mogul Corporation will close a facility in Clinton County, Michigan, by October 2008, The Associated Press reports. The move is part of the three-year restructuring plan Federal- Mogul unveiled in January. The Clinton Plant is home to 420 employees. Federal-Mogul will lay off 300 workers by the end of 2006 and 100 more by the end of next year, the report says. Paula Silver, Federal-Mogul's spokesperson, said some workers may be transferred to the company's facility in Greenville. Ms. Silver did not indicate how many will be moved, according to AP. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some US$6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed US$10.15 billion in assets and US$8.86 billion in liabilities. At Dec. 31, 2004, Federal-Mogul's balance sheet showed a US$1.925 billion stockholders' deficit. At Nov. 30, 2005, Federal-Mogul's balance sheet showed a US$1,450.4 billion stockholders' deficit, compared to a US$1.926 billion deficit at Dec. 31, 2004. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. (Federal-Mogul Bankruptcy News, Issue No. 106; Bankruptcy Creditors' Service, Inc., 215/945-7000) FORUM HEALTH: Higher Dec. 2005 Losses Cue Moody's Ba2 Bond Rating ----------------------------------------------------------------- Moody's Investors Service downgraded the bond rating for Forum Health to Ba2 from Baa3 following our Watchlist action dated Jan. 18, 2006. The rating remains on Watchlist for possible further downgrade. The downgrade is due to greater-than-expected operating losses in December 2005 and losses as reported through the first quarter ending Mar. 31, 2006 of $15.5 million. The rating downgrade is consistent with the remaining challenges and necessary turnaround, although we note that the new management team and Wellspring Partners, Ltd., have begun to implement initiatives over the last 60 days that should be evident in improved operations in subsequent periods. The continued Watchlist status reflects the system's immense challenges in successfully executing a turnaround. Because of the degree of uncertainty surrounding a number of key issues, we view the current rating action as an interim action and we expect to re-evaluate the rating again within the next 90 days, as is typical for the Watchlist period. The key issues we expect to get further clarity on and incorporate into the next rating review include: 1) the likelihood of receiving concessions from unions, which is critical to the system's long-term viability; 2) plans for the restructuring of services as currently offered at the Forum Health system; 3) demonstrated success in implementing turnaround initiatives and validating savings; and 4) the likelihood of receiving waivers from banks providing liquidity support. Forum received one-year extensions of its $18 million letter of credit from Fifth Third Bank and its $42 million standby bond purchase agreement from JPMorgan and MBIA. However, Forum may require waivers from both banks because of violation of certain covenants at fiscal year end Dec. 31, 2005. Legal Security: Gross revenue pledge and mortgages on the primary facilities Interest Rate Derivatives: None Strengths: * Prominent market position in the consolidated two-system Youngstown, Ohio area with about 44% market share in three counties * Adequate system-wide consolidated cash position with $132 million as of Mar. 31, 2006, which has rebounded in March from better collections and payables management after declining in December, January, and February * Moderate debt position relative to Forum's size * Demonstration of strong commitment to turning around operations with the recent hiring of new Chief Executive Officer and Chief Financial Officer and the engagement of Wellspring, a consulting firm that has completed a very thorough diagnostic study of the system and has been retained for further assistance in implementing turnaround initiatives and recommending strategic options * Implemented lower benefits structure for non-union staff with annualized savings of $5.5 million Challenges: * Sizable and unexpected consolidated operating losses of nearly $34 million based on unaudited fiscal year 2005 statements and continued losses in the first quarter of 2006 of $9.9 million * Competition from a financially strong and equally-sized hospital system, which is building a new hospital, and from physicians, who are competing heavily for outpatient services * Economically weak service area, which is contributing to higher self-pay and charity care as well as payer mix shifts to less-profitable insurance plans * Significant and multi-year declines in inpatient and outpatient surgeries from increased competition * Heavily unionized workforce with about 75% of employees in unions, compared with a much smaller portion at Forum's primary competitor. Forum will need to secure concessions from the unions in order to ensure the system's long-term financial viability * Capital needs in order to remain competitive * Liquidity risk associated with two bank agreements, supporting a total of $60 million in debt, which were extended for a year but require waivers for covenant violations and will be subject to renewal risk at the end of 2006 Recent Developments/Results: Since our last report in January 2006, Forum has reported December 2005 through March 2006 financial results. December 2005 results were worse than expected based on 11-month performance primarily because of accounting changes. Twelve-month unaudited results for fiscal year 2005 indicate a consolidated operating loss of approximately $34 million for the system excluding $11 million of restructuring and impairment charges. The primary reason for the unexpectedly large loss reported on Dec. 31, 2005, relates to $16 million in adjustments to bad debt, charity care and contractual allowances to reflect a change in recording adjustment to a cash collection basis. This adjustment relates to prior reported periods in 2005, and therefore could be considered non-recurring. We believe this change indicates that prior results may have been overstated and future results will reflect this cash basis practice. Operating losses in the first quarter of 2006 were particularly large, totaling $9.9 million for the consolidated system. The losses were due to reimbursement reductions related to workers compensation and Medicaid as well as lighter inpatient volumes from a milder-than-expected flu season. Outpatient surgeries continue to be a challenge with a decline of 3% in the first three months. A new management team and Wellspring are beginning to implement turnaround initiatives, the benefits of which we believe should start to become apparent in subsequent reporting periods. Wellspring identified opportunities of between $24 million and $32 million in improvement. These opportunities are in the areas of revenue cycle initiatives, labor productivity, supplies, purchased services and wages and benefits. The system is still in the process of developing strategic alternatives for Forum Health. Forum continues to face a number of fundamental operating challenges. The local economy remains weak, as evidenced by a large and growing self-pay patient population. There has been a shift in managed care enrollment to lower-reimbursement health plans. Forum has also lost revenue from changes in the Medicare wage index recalibration that resulted in another $5 million annualized reduction beginning in October 2005. Wellspring's findings indicated many of the challenges outlined above and emphasized what we believe are these key imperatives: 1) union concessions will be required to ensure the long-term viability of the system because Forum's wage and benefit structure places the system at a significant competitive and operating disadvantage; 2) Northside Medical Center will need to be significantly restructured, including potential closures and downsizings of certain services; 3) Trumbull Memorial Hospital may need service enhancement to maximize its operating potential; and 4) physician relationships need to be closely managed to maintain loyalty, especially as restructuring plans are further defined. Early evidence of revenue cycle improvements, specifically improved collections, is apparent in the system's ability to restore its cash position in March. Unrestricted cash for the system increased by $5 million in the month. The system has two bank agreements. The Series 1997B bonds are insured floaters, insured by MBIA with a standby bond purchase agreement from JPMorgan. The Series 2002B bonds are variable rate bonds supported by a letter of credit with Fifth Third Bank. Both the SBPA and LOC were extended until Jan. 15, 2007. However, Forum requires waivers from JPMorgan and Firth Third for covenant violations in 2005. Outlook: The continued Watchlist status reflects the system's immense challenges in successfully executing a turnaround. Because of the degree of uncertainty surrounding a number of key issues, we view the current rating action as an interim action and we expect to re-evaluate the rating again within the next 90 days, as is typical for the Watchlist period. The key issues we expect to get further clarity on and incorporate into the next rating review include: 1) the likelihood of receiving concessions from unions, which is critical to the system's long-term viability; 2) plans for the restructuring of services as currently offered by Forum Health and potential savings; 3) demonstrated success in implementing turnaround initiatives; and 4) the likelihood of receiving waivers from banks providing liquidity support. What could change the rating up: Significant improvement in operating performance with evidence of ability to sustain and meet budgets, growth in unrestricted cash, stability in volumes, demonstration of an ability to meet capital requirements to remain competitive What could change the rating down: Continued operating losses, an increase in debt to finance a new hospital or other capital needs, decline in unrestricted cash, further notable declines in volumes, inability to achieve targeted union concessions Key Indicators Assumptions & Adjustments: -- Based on financial statements for Forum Health -- First number reflects audit year ended December 31, 2004 -- Second number reflects unaudited 12-month financial statements ended Dec. 31, 2005 -- Investment returns smoothed at 6% unless otherwise noted -- Inpatient admissions: 30,693 -- Total operating revenues: $499.4 million; $506.7 million -- Moody's-adjusted net revenue available for debt service: $31.1 million; $8.1 million -- Total debt outstanding: $184.5 million; $181.9 million -- Maximum annual debt service: $12.8 million; $14.5 million -- MADS coverage with reported investment income: 2.6 times; 0.5 times -- Moody's-adjusted MADS coverage with normalized investment income: 2.4 times; 0.6 times -- Debt-to-cash flow: 7.2 times; 113.3 times -- Days cash on hand: 94 days; 89 days -- Cash-to-debt: 67%; 69% -- Operating margin: -1.8%; -6.7% -- Operating cash flow margin: 4.7%; 0.1% Rated Debt: * Series 1997A ($82 million): Aaa; Ba2 underlying rating; MBIA insured * Series 1997B ($42 million): Aaa/VMIG1; Ba2 underlying rating; MBIA insured, SBPA JPMorgan * Series 2002A ($39 million): Ba2 * Series 2002B ($18 million): Aa1/VMIG1; supported by Fifth Third letter of credit G+G RETAIL: Committee Retains Mahoney Cohen as Financial Advisor ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in G+G Retail, Inc.'s chapter 11 cases sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Mahoney Cohen & Company, CPA, PC, as its financial advisor, nunc pro tunc to Feb. 2, 2006. The Committee selected Mahoney Cohen because of the firm's experience in and knowledge of business reorganizations under chapter 11 of the bankruptcy code and its familiarity with the Debtor's industry. Mahoney Cohen is expected to: a) assist the Committee in its review of the financial aspects of any proposed asset purchase agreement or plans of liquidation and assist the Committee in negotiating, evaluating and qualifying any competing offers; b) assist the Committee in its evaluation of liquidating cash flow or other projections prepared by the Debtor or its financial advisors; c) monitor the Debtor's activities regarding cash expenditures and general business operations subsequent to the Petition Date; d) assist the Committee in its review of monthly operating reports to be submitted by the Debtor or its accountants; e) manage or assist with any investigation into prepetition acts, conduct, property, liabilities and financial condition of the Debtor, its management or creditors, including the operation of the Debtor's business; f) analyze transactions with vendors, insiders, related or affiliated companies, subsequent and prior to the Debtor's bankruptcy filing; g) analyze transactions with the Debtor's financing institutions, if applicable and provide financial analysis related to any debtor-in-possession financing, including advising the Committee concerning those matters; h) assist the Committee in any litigation proceedings against the financing institutions of the Debtor, insiders and other potential adversaries, including testimony, if necessary; i) attend meetings with representatives of the Committee and their counsel and prepare presentations to the Committee that provide analyses and updates on diligence; and j) perform any other services that Mahoney Cohen deems necessary. Jeffrey T. Sutton, a director of Mahoney Cohen, discloses that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Shareholders and Directors $390-$520 Managers and Senior Managers $290-$390 Senior Accountants and Staff $135-$290 If its blended hourly rate exceeds $285 per hour, the firm says it will voluntarily reduce its fees to cap the blended rate at $285 per hour. Mr. Sutton assures the Court that Mahoney Cohen does not hold any interests adverse to the Debtor and is disinterested as that term is defined in Sec. 101(14) of the Bankruptcy Code. About Mahoney Cohen Mahoney Cohen -- http://www.mahoneycohen.com/-- is a certified public accounting and management consulting firm servicing the middle market. The firm currently has a staff of over 215, including 26 partners, and offices in New York City, Miami, Florida and Boca Raton, Florida. About G+G 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. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. 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. G+G RETAIL: Court Approves Financo as Investment Banker ------------------------------------------------------- G+G Retail, Inc., sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Financo, Inc., as its investment banker, nunc pro tunc to Jan. 25, 2006. As reported in the Troubled Company Reporter on Feb. 7, 2006, Financo will: a) meet with the Debtor's management and familiarize itself with the business, operations, properties, assets, liabilities, financial condition and prospects of the Debtor; b) evaluate the Debtor's short-term and long-term borrowing capacity; c) consult with, advise and assist the Debtor in identifying and evaluating various potential financing and strategic alternatives that may be available to the Debtor including potential improvements to agreements with existing lenders, landlords, and credit card program operators; d) advise the Debtor as to the timing, structure and pricing of a potential transaction; e) assist the Debtor, its management and advisors in the preparation of a written memorandum describing the Debtor, its business, financial condition, results of operations, prospects and other material matters concerning the Debtor for the purpose of soliciting interest from third parties to engage in potential capital investment; f) assist the Debtor, its management and advisors in the preparation of a written memorandum and other materials that will be useful in soliciting offers for the sale of the company's PR Division; g) identify, update, review and approach on an ongoing basis a list of parties that might be interested in acquiring the PR Division; h) assist in arranging for a DIP financing; i) meet with the Debtor's Board of Directors to discuss the financial implications of a transaction; and j) provide expert testimony when necessary. Under an engagement agreement, the Debtor will pay Financo: a) an engagement fee of $50,000 for services connected with the sale of the PR Division; b) capital engagement fee of $50,000 for services connected with obtaining a capital investment; c) a success fee in the event that the Debtor's Puerto Rico business and assets are sold; d) a success fee in the event that Financo arranges a capital investment; and e) a success fee upon the consummation of a sale of the company. Michael O'Hara, a member at Financo assured the Court that the Firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. About Financo Financo Inc. -- http://www.financo.com/-- is an investment banking firm that provides investment banking services to retail and consumer businesses on a wide variety of corporate matters, including merger and acquisition transactions, debt restructurings, private placements of debt and equity securities and corporate valuation. Mr. O'Hara can be reached at Financo's New York office: Michael O'Hara Financo Inc. 535 Madison Avenue New York, NY 10022 Tel: 212-593-9000 Fax: 212-593-0309 About G+G 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. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. 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. G+G RETAIL: Court Approves CRP's Retention as Crisis Managers ------------------------------------------------------------- G+G Retail, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ: -- Corporate Revitalization Partners, LLC, as its crisis managers and financial advisors; and -- Charles F. Kuoni III as its chief restructuring officer. Mr. Kuoni is a director at CRP. He assisted the Debtor in planning for its chapter 11 planning. As CRO during the Debtor's chapter 11 proceeding, Mr. Kuoni will assist the Debtor in its operations and the completion of the sale of substantially all of G+G's assets. Professional Services In particular, Mr. Kuoni will: a) serve as the interface between counsel and management to assist with the Debtor's duties in managing the bankruptcy estate; b) attend court hearings and provide testimony on those matters that the CRO is knowledgeable and is deemed to have expertise; c) assist in the development of a plan and negotiate with unsecured creditors; d) provide testimony on the feasibility of a plan and whether the plan provides for a recovery that is greater than the recovery of unsecured creditors under chapter 7; e) work with the Debtor's counsel in preparing a disclosure statement and a chapter 11 plan; f) assist management in complying with the monthly reporting requirement to the U.S. Trustee; g) assist with real estate lease negotiations; and h) do other duties as the Board of Directors and CRP may agree upon. CRP will also: a) work with the Debtor and its counsel to gather information and data necessary to prepare bankruptcy schedules; b) work with prospective DIP lenders; c) work with management to identify additional overhead cost savings, including a review of distribution center and store operating overhead; d) work with management to prepare scripts for dealing with employee questions regarding bankruptcy; e) work with management on handling vendor calls regarding the collection of past due amounts and deposits for future goods; f) work to establish procedures for dealing with reclamation claims including the verification of inventory and validity of claims; g) work with management to evaluate the impact on cash flow of fewer stores and less merchandise inventory in 2007 projections as a result of the reduced level of merchandise purchased in January and February 2006; h) work on preparing the weekly cash flow projection for the DIP; i) join with management in negotiating regarding funding of current obligations; j) contact liquidators and arrange for liquidation of non- core stores; k) act as a repository for any legal notices received from landlords and distribute same to legal team and management; l) attend critical meetings and Board meetings when asked; m) work with management preparing for and presenting all of the services enumerated to the Board of Directors; and n) assist the Debtor in complying with its reporting requirements as a debtor-in-possession, including the filing of monthly operating reports. The Court also authorized the Debtor to employ these professionals from CRP to provide services in support of Mr. Kuoni's role: Professional Description of Services ------------ ----------------------- William Snyder, Will provide testimony in support Managing Partner of the motion to obtain DIP financing and the sale motion with respect to the Debtor's efforts to obtain new equity investors, financing, DIP financing and efforts to negotiate the sale of the Debtor's assets. In addition, Mr. Snyder may provide testimony on those matters at later hearings if necessary. Gil Osnos, Will provide assistance to the Partner Debtor with respect to store operations and general merchandising. Mr. Osnos's involvement in the case, however, is expected be very limited since the Debtor anticipates operating as a going concern for a short period of time prior to the proposed sale of substantially all of the Debtor's assets. William J. Sanford, Will assist the Debtor in Associate complying with its financial reporting requirements while in chapter 11, which includes assisting the Debtor with the preparation and filing of the monthly operating reports. In addition, Mr. Sanford will provide additional support to the Debtor with respect to matters involving accounting functions, vendor reclamations, and other matters that may arise during the case. Substituted Associates May be utilized to provide the same types of services to the Debtor if Mr. Sanford is unavailable. Compensation As reported in the Troubled Company Reporter on Feb. 2, 2006, William K. Snyder disclosed his firm's professionals' current hourly billing rates: Designation Rate ----------- ---- Managing Partners $350-$475 Partners/Directors $225-$350 Associates $175-$225 Mr. Kuoni III's fees will be capped at $16,250 per week billed on an hourly basis. Furthermore, the firm will receive a $350,000 success fee if the Debtor will be sold as a going concern or emerge from chapter 11 as a going concern with at least 250 stores in accordance with a plan. Mr. Snyder assures the Court that CRP and Mr. Kuoni are disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. 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. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. 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. GLOBAL HOME: Organizational Meeting on April 24 in Wilmington ------------------------------------------------------------- The United States Trustee for Region III will hold an organizational meeting to appoint an official committee of unsecured creditors in Global Home Products LLC's chapter 11 cases at 1:00 p.m. on April 24, 2006, at the Hotel DuPont, located at 100 W. 11th St., in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtors will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/-- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates filed for Chapter 11 protection on Apr. 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and debts of more than $100 million. GROSS PROPERTIES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Gross Properties, L.L.C. 1304 East Republic Road Springfield, Missouri 65804 Bankruptcy Case No.: 06-60242 Chapter 11 Petition Date: April 6, 2006 Court: Western District of Missouri (Springfield) Judge: Arthur B. Federman Debtor's Counsel: David E. Schroeder, Esq. David Schroeder Law Offices, P.C. 1524 East Primrose Street, Suite A Springfield, Missouri 65804 Tel: (417) 890-1000 Fax: (417) 886-8563 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor does not have any unsecured creditors who are not insiders. HELIX ENERGY: Moody's Places Credit & Corp. Family Ratings at B2 ---------------------------------------------------------------- Moody's assigned first time ratings to Helix Energy Solutions Group, Inc. With a stable outlook, Moody's assigned a B2 Corporate Family Rating to Helix, and a B2 rating to the company's new $1,090 million senior secured credit facilities. The new credit facilities consist of an $840 million term loan B and a $250 million 5-year revolving credit facility. The term loan proceeds will fund the cash portion of the $1.4 billion acquisition of Remington Oil and Gas, a small, deepwater focused exploration and production company. The B2 ratings reflect: -- the very high cost, small scale, short lived asset base of the pro forma E&P business which contains less than a B2 profile and is expected to contribute approximately two-thirds of the near-term pro forma EBITDA for Helix; -- Moody's view of leverage on the E&P business, which ranks among the highest for E&P companies in our rated universe after Moody's allocation of only the new debt being used to acquire Remington to the E&P business; -- the lumpy nature of the deepwater Gulf of Mexico region, which is where the company's prospects primarily are located; -- the expectation that outstanding debt could remain high until 2008 as the company pursues an aggressive drilling program and further fleet expansion for the services business; and -- the need for Helix to demonstrate the success of its integrated services and E&P business model. The ratings are supported by: -- a solid oilfield services business that will generate about one-third of the near-term pro forma EBITDA and enhances the overall credit profile of the company; -- added scale to the E&P operations with the Remington acquisition; -- Remington's established track record of reserve and production growth; and -- the company's services business focus in the very active deepwater GOM which should provide enhanced visibility to that business' earnings and cash flows. The stable outlook reflects the continued momentum in the services business, which is expected to remain favorable at least through 2006 and could provide cash flow support for the company's expensive deepwater E&P opportunities. The stable outlook also assumes: -- that no material incremental debt is utilized for the drilling program and possible fleet expansion; -- the E&P leveraged full cycle costs will significantly improve from the Moody's estimated $35.00/boe to $40.00/boe range on a pro forma basis based on Moody's allocation of the new debt to the E&P business, the Q4'05 cost structure for both companies, and includes a three year all sources-F&D of $22.80/boe pro forma for the Remington acquisition; and -- that there will be continued growth in the reserves at more competitive and sustainable costs. Acquisitions will be assessed on their individual merits. However, retention of the stable outlook requires that any material acquisitions are funded largely with common equity and that leverage will not increase. A positive ratings action would be considered in the event of a significant and permanent debt reduction that significantly brings leverage on the E&P business down while also demonstrating sustained sequential quarterly production gains. A ratings upgrade would also require significantly improved capital productivity evidenced by significant growth in the proven reserve base with a balance of PD and PUD reserves at sustainable costs, improved cash-on-cash returns, and a clear demonstration that the company can and will operate with leverage on the PD reserve base within $8.00/boe. Moreover, Moody's would expect to see the company's services business continuing to post improving results with lease adjusted leverage on that business no greater than 3.0x in the upcycle. The facilities are not notched up from the Corporate Family Rating despite being secured by essentially all of the assets of the company. The rationale is due to: i) the preponderance of secured debt in the capital structure relative to the total unsecured debt; ii) the lack of a borrowing base mechanism which would offer better protection for the lenders in the event the short- lived E&P assets experience any significant deterioration; and iii) the company's contemplation of a IPO spin-off of the GOM shelf marine contracting services, the assets of which would then be removed from the collateral package, though the lenders would still have the Helix owned shares of that entity upon the IPO. Helix Energy Solutions Group, Inc., headquartered in Houston, Texas, is engaged in the exploration and production of oil and natural gas primarily in the Gulf of Mexico and provides oilfield services to the oil and gas industry. HILITE INT'L: Weakening EBIT Margins Cue Moody's Junked Ratings --------------------------------------------------------------- Moody's Investors Service lowered the Corporate Family rating of Hilite International, Inc., to Caa1 from B2. The senior secured bank credit facilities' ratings of its U.S. subsidiary, Hilite Industries, Inc., and its European subsidiary, Hilite Germany GmbH & Co, KG have also been lowered to Caa1 from B2, and Hilite Industries' senior subordinated notes' rating has been lowered to Caa3 from Caa1. The rating outlook is Negative. The downgrade reflects Hilite's continued weakening EBIT margins and free cash flow as a result of the continuing difficult operating environment for automotive suppliers. Factors influencing the company's weak performance are its high concentration of domestic OEM customers which have experienced lower production volumes in 2005, and an unfavorable sales mix shift that has resulted in revenue shortfalls relative to prior expectations. Moreover, the effects of continued negotiated price downs with OEMs, and higher raw material costs have adversely affected margins. Debt metrics have shown a commensurate deterioration with EBIT/Interest falling below 1 times and Debt/EBITDA exceeding 5 times. While the company has remained cash flow generative, Moody's notes that capital reinvestment has been at modest levels that may not be sustainable. Absent initiatives to improve earnings and cash flow generation, the company's credit metrics and operating trends are more consistent with a Caa rating under Moody's Auto Supplier Rating Methodology. The rating outlook remains negative. Overall industry trends for automotive suppliers remain under pressure, and with some revenue concentration with GM, Hilite remains subject to potential disruptions at key customers during the coming year. With limited balance sheet liquidity and modest headroom under financial covenants in debt agreements, Hilite has limited capacity to withstand adverse developments. Ratings downgraded: * Hilite International -- Corporate Family, Caa1 from B2 * Hilite Industries, Inc. -- $60 million senior secured revolving credit and $70 million senior secured term loan to Caa1 from B2 -- $30 million senior subordinated notes to Caa3 from Caa1 * Hilite Germany GmbH & Co. KG -- $50 million senior secured term loan to Caa1 from B2 Moody's last rating action for Hilite was on Aug. 25, 2005 when the ratings were lowered. Hilite, headquartered in Cleveland, Ohio, is a designer and manufacturer of highly engineered, valve-based components, assemblies, and systems used principally in powertrain applications for the automotive market. The company's annualized revenues approximate $400 million. HUGHES NETWORK: S&P Affirms $450MM Sr. Unsecured Notes' B- Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' rating on Germantown, Maryland-based satellite services provider Hughes Network Systems' $450 million senior unsecured notes due 2014, which was increased from $375 million. All other ratings, including the 'B' corporate credit rating, were affirmed; the outlook is stable. Proceeds from the $450 million senior unsecured notes will be used to refinance existing debt and to fund additional cash to the balance sheet. Total debt is roughly $830 million on an operating-lease-adjusted basis, and including $51 million in debt from customer equipment financing. "The ratings continue to reflect competitive telecommunications industry conditions, mature revenue prospects for core enterprise services, uncertain growth potential for small business and consumer applications given rising competition from faster, more economical phone and cable TV company data alternatives, a leveraged financial profile, and potential operating and financial risk from the Spaceway broadband satellite project," said Standard & Poor's credit analyst Allyn Arden. Tempering factors include: * HNS' leading position in the very small aperture terminal (VSAT) industry; * a degree of revenue stability from three-to-five year contracts with large enterprise customers; * VSAT technology's ability to provide ubiquitous, point to multipoint connectivity, which partly buffers competitive pressure from terrestrial networks; and * good customer and geographic diversity. INDYMAC HOME: Credit Support Erosion Cues Moody's to Cut Ratings ---------------------------------------------------------------- Moody's Investors Service downgraded two certificates and placed on review for possible downgrade one certificate previously issued by IndyMac Home Equity Mortgage Loan Asset Backed Trust, Series SPMD 2000-C and 2001-C. The securitizations are backed by subprime mortgage loans that were originated by IndyMac Bank F.S.B. The subordinate certificates are being downgraded and placed on review for possible downgrade because of the erosion in credit support and the pipeline of seriously delinquent loans will likely contribute to ongoing weak performance. The transactions have lender-paid mortgage insurance which may reduce the severity of loss associated with many of the riskier loans, including manufactured housing loans, which form a component of the loan collateral. IndyMac Bank F.S.B. is servicing the transaction and Deutsche Bank National Trust Company is the trustee. Moody's complete rating actions are: Issuer: IndyMac Home Equity Mortgage Loan Asset Backed Trust Depositor: IndyMac ABS, Inc Downgrades: * Series 2001-C; Class M-2, downgraded to Baa2 from A2 * Series 2001-C; Class B, downgraded to B2 from Ba1 Review for possible downgrade: * Series 2000-C; Class MV-1, current rating Aa2, under review for possible downgrade JACUZZI BRANDS: Offers to Buy Back $47MM of 9-5/8% Sr. Sec. Notes ----------------------------------------------------------------- Jacuzzi Brands, Inc., commenced an "asset disposition offer" for the purchase of an aggregate of up to $47,690,000 aggregate principal amount of its 9-5/8% Senior Secured Notes Due 2010 at a purchase price of $1,000 per $1,000 principal amount of the Securities, plus accrued and unpaid interest to the date of payment. The offer will expire at 12:01 a.m., New York City time, on May 22, 2006, unless extended. On June 30, 2005, the Company completed the sale of its investment in Rexair, Inc. to Rhone Capital LLC. On July 1, 2005, the Company completed the sale of substantially all of the assets of Eljer Plumbingware, Inc. to affiliates of Sun Capital Partners, Inc. The Indenture governing the Securities requires Jacuzzi to reinvest the net proceeds from asset sales in assets useful to its business within one year of the closing, or use such proceeds to repay debt senior to the Securities. To the extent that Jacuzzi does not so apply the proceeds, it must make an asset disposition offer to purchase the Securities. Jacuzzi has applied approximately $98.8 million of the asset sale proceeds to retire its term loan and repay the balance of its asset-based credit facility. The Company has determined to launch the offer at this time with the remaining proceeds, net of certain expenses and payments incurred in connection with the dispositions, as provided in the Indenture. The offer is being made only by the Offer to Purchase dated April 11, 2006. Persons with questions regarding the offer should contact: Diana Burton Vice President-Investor Relations Telephone (561) 514-3850 About Jacuzzi Brands Headquartered in West Palm Beach, Florida, Jacuzzi Brands, Inc. -- http://www.jacuzzibrands.com/-- is a global manufacturer and distributor of branded bath and plumbing products for the residential, commercial and institutional markets. These include whirlpool baths, spas, showers, sanitary ware and bathtubs, as well as professional grade drainage, water control, commercial faucets and other plumbing products. The company's products are marketed under our portfolio of brand names, including JACUZZI(R), SUNDANCE(R), ZURN(R) and ASTRACAST(R). Jacuzzi Brands' 9-5/8% Senior Secured Notes due 2010 carry Moody's Investors Service's, Standard & Poor's, and Fitch Ratings' single- B ratings. J.L. FRENCH: Wants to Assume Executory Contracts with Grob Systems ------------------------------------------------------------------ J.L French Automotive Castings and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to assume some unexpired executory contracts. The Debtors tell the Court that they selected Grob Systems, Inc., to supply specialized, necessary production line equipment for their GMT-900 and I4 programs. On Jan. 10, 2006, Grob Systems announced its deferring of performance on the contracts based on unconfirmed rumors about the Debtors' financial position that had appeared in the financial press. The Debtors explained to Grob Systems about their financial condition and plan to restructure their debt facilities, including their intention to file prearranged chapter 11 cases. On Jan. 19, 2006, the Debtors and Grob Systems, entered into a Purchase Agreement Modification involving the Debtors to, among other things, use their best efforts to obtain Court's authority to assume the Grob Contracts. The settlement also required Grob Systems to, among other things, resume performing under the Grobs Contracts. The Debtors wants to assume the Grob Contracts and to: a) fulfill their obligations under the settlement; b) maintain good relations with a critical supplier of production line machinery; c) ensure that their participation in the GMT-900 and I4 program proceeds as planned; and d) enhance their chances of securing additional business from existing customers. The Debtors believe it is essential to pay all obligations owed under the Grob Contracts to ensure that Grob Systems continues to perform its obligations under those contracts. Full-text copies of the contracts the Debtors intend to assume are available for free at http://researcharchives.com/t/s?7ca 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. Judy A. O'Neill, Esq., at Foley & Lardner LLP represents the Official Committee of Unsecured Creditors. When the Debtor filed for chapter 11 protection, it estimated assets and debts of more than $100 million. KAISER ALUMINUM: Panel Supports Request to Block PBGC Agreements ---------------------------------------------------------------- As reported in the Troubled Company Reporter on Mar. 31, 2006, Kaiser Aluminum Corporation its debtor-affiliates, the PBGC and the Union VEBA Trust will, on the Effective Date of the Plan, entered into the Stock Transfer Restriction Agreement and the Registration Rights Agreement. The Stock Transfer Restriction Agreement prevents the PBGC and the Union VEBA Trust from transferring or otherwise disposing of more than 15% of the total number of shares of the stock issued to each under the Plan in any 12-month period without prior written approval of Reorganized KAC's board of directors in accordance with Reorganized KAC's Certificate of Incorporation. In the Registration Rights Agreement, the PBGC and the Union VEBA Trust acknowledge that all resales of Registrable Securities are subject to the terms of the Stock Transfer Restriction Agreement and the restrictions on transfer contained in Reorganized KAC's Certificate of Incorporation. Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, related that the Reorganizing Debtors have recently become aware that certain parties have expressed interest in acquiring all or a portion of the PBGC's or the VEBA Trusts' claims against the Reorganizing Debtors or rights to distributions under the Plan. In fact, some discussions among the parties have already occurred. The Reorganizing Debtors were concerned that any disposition by the PBGC or the VEBA Trusts could make them ineligible for the benefits of the Section 382(l)(5) safe harbor, which will constitute an attempt to "exercise control over property of the estate" in violation of Section 362(a)(3) of the Bankruptcy Code. Moreover, any disposition could require the Reorganizing Debtors to modify the Plan because certain dispositions will require changes to the Reorganized KAC's Certificate of Incorporation, the Stock Transfer Restriction Agreement or the Registration Rights Agreement, which could delay the confirmation process. To ensure the preservation of certain carryforwards of net operating losses and that any agreement will not delay the confirmation process, the Reorganizing Debtors asked Judge Fitzgerald to prohibit the PBGC and the VEBA trusts from entering into agreements regarding their claims or rights to distributions under the Plan without prior Court approval. Creditors Committee Supports Kaiser's Request The Official Committee of Unsecured Creditors asserts that courts have uniformly held that a debtor's net operating losses constitute property of the debtor's estate. Accordingly, courts have the authority to protect the net operating losses. Against this backdrop, the Creditors Committee informs Judge Fitzgerald that it supports the request filed by Kaiser Aluminum & Chemical Corporation and its debtor-affiliates to prohibit the Pension Benefit Guaranty Corporation and the voluntary employees' beneficiary association trusts benefiting certain hourly and salaried retirees from entering into certain agreements, which could jeopardize the Reorganizing Debtors' ability to use their net operating losses. William P. Bowden, Esq., at Ashby & Geddes, in Wilmington, Delaware, explains that any disposition of claims or rights to distributions under the Reorganizing Debtors' confirmed Plan of Reorganization could severely limit the Reorganizing Debtors' rights to use the NOLs, thereby negatively impacting them and their creditors. Based on its independent review and analysis of the Reorganizing Debtors' existing projections and cash flows, the Creditors Committee concludes that Kaiser will: * receive significant value under the Section 382(1)(5) of the Internal Revenue Code bankruptcy exception; and * be able to utilize the NOLs to avoid the payment of all taxes for a number of years thereby shielding them from being compelled to pay a significant amount of taxes, which benefits all of the their creditors. Moreover, since Kaiser Aluminum Corporation's financial performance has been stronger than projected, the Creditors Committee believes that taxable income is likely to be higher in 2006 and could likewise be higher in subsequent years than previously projected, which will make the NOLs even more valuable to Reorganized KAC. Any disposition of claims or rights to distributions under the Reorganization Plan could require the Reorganizing Debtors to modify the Plan, which could severely delay the confirmation process to the detriment of the creditors, Mr. Bowden explains. Mr. Bowden notes that the Reorganizing Debtors engaged in several months of arm's-length negotiations surrounding the terms of the "Stock Transfer Restriction Agreement", "Certificate of Incorporation" and the "Registration Rights Agreement" with the PBGC and the Union VEBA Trust. The PBGC and the Union VEBA Trust agreed to the terms and conditions provided in those documents. In addition, the issues, including the value of the NOLs, were fully disclosed in the Disclosure Statement to the Reorganization Plan. Creditors voted overwhelmingly in favor of the Plan under the assumption that the Reorganizing Debtors would be able to utilize the NOLs. "It is clear that the PBGC and the VEBA Trusts were well aware of the Debtors' need to preserve the use of the NOLs and the value of the NOLs to the Debtors and their creditors," Mr. Bowden asserts. 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) LAURENTIAN BANK: DBRS Confirms Debentures Rating at BBB (Low) ------------------------------------------------------------- Dominion Bond Rating Service confirmed the ratings of Laurentian Bank of Canada. The ratings and trends of the Bank are supported by some improvement in the Bank's earnings and internal capital generation. However, it remains to be seen if the branch expansion and efforts to improve cross-selling will eventually result in an acceptable level of profitability. Rating action: * Short-Term Instruments -- Confirmed R-2 (high) * Deposits & Senior Debt -- Confirmed BBB * Subordinated Debentures -- Confirmed BBB (low) * Non-Cumulative Preferred Shares -- Confirmed Pfd-3n * Cumulative Preferred Shares -- Confirmed Pfd-3 DBRS agrees the Bank is following the best path available to it to improve earnings over the longer term, but execution has been slow. Laurentian also continues to face significant hurdles in reducing its high cost structure, which will be difficult to address as a result of the unionized workforce and the comparatively small scale of the operation. However, despite the low level of internal capital generation, the Bank retains a reasonably strong financial risk profile and a generally low business risk profile. While credit risk metrics have improved on an absolute basis, they have not improved as much as for the larger Schedule 1 Chartered banks, largely as a result of unprecedented improvements in the larger banks' corporate portfolios, where Laurentian has less exposure. However, when the corporate credit cycle eventually turns, Laurentian should be in good shape relative to its larger competitors as a result of its greater emphasis on personal lending. While the Bank has seen some expansion in its businesses outside of Quebec, primarily through B2B Trust, it remains heavily dependant on the Quebec economy. LEAR CORP: Moody's Places $800 Mil. Term Loan Ratings at Low-B -------------------------------------------------------------- Moody's Investors Service affirmed Lear Corporation's Corporate Family rating of B2 and assigned a B2 rating to the company's new $600 million first lien term loan and a B3 rating to the new $200 million second lien term. At the same time, the rating agency lowered the ratings on Lear's senior unsecured notes to B3 to reflect lower recovery expectations upon the pledge of certain assets to the company's secured indebtedness. The latter action concludes a review announced on Mar. 30, 2006. In addition, the company's Speculative Grade Liquidity rating was affirmed at SGL-3, but will be revisited upon closing of the amendment required for the new transactions. The rating actions follow the announcement by the company of underwritten plans to refinance up to $717 million of indebtedness that either matures in February 2007 or may be put to the company in the same month by holders of its current zero coupon convertible note issue. Lear will also amend the terms of its principal bank credit facilities. This will involve supplementing the current collateral package, and revising its financial covenants. Although the financing plans successfully address a substantial cash requirement in early 2007, the outlook remains negative due to the challenging environment for profitability in North America and prospects for external developments in that market to disrupt automotive industry activity. Ratings affirmed: * Corporate Family, B2 * Speculative Grade Liquidity, SGL-3 Outlook, negative Ratings assigned: * $600 million first lien term loan, B2 * $200 million second lien term loan, B3 Ratings lowered: * Senior unsecured notes to B3 from B2 * Shelf ratings to (P)B3, (P)Caa2 and (P)Caa3 from (P)B2, (P) Caa1, and (P) Caa2 for senior unsecured, subordinated and preferred respectively Lear's financing plans total $800 million and include a new $600 million first lien term loan and a new $200 million second lien term loan. The first lien term loan will mature in March 2012, and the second lien term loan will mature on September 2012. Proceeds from these transactions will be used to repay an existing $400 million bank term loan with a maturity in February 2007 and to fund a bank controlled account which will address the potential put of up to $316.5 million of Lear's convertible notes in February 2007. To the extent the convertible notes are paid, redeemed, or purchased and cancelled prior to their February put-date, a corresponding amount in the controlled account will be released to Lear. An amendment to the company's existing bank credit facility will be required to close on the new transactions. On a pro forma basis, the first lien debt will aggregate $2.3 billion and consist of a $1.7 billion revolving credit, which is not rated, and the new $600 million term loan. The transactions essentially represent a refinancing. Consequently, Lear's overall leverage and prospective operating performance will not be affected. Lear's interest expense will increase slightly, and a higher proportion of it will be cash pay. However, the resultant impact on the company's EBIT/Interest coverage and FCF generation in light of the elimination of its dividend will not significantly alter debt protection measures. These will remain consistent with the B2 Corporate Family rating, which has been affirmed. Lear's bank debt and public debt currently benefit from upstream guarantees from the company's principal subsidiaries, and include provisions that ensure that both bank and public debt benefit equally from the additions of any new subsidiary guarantors. This feature ensures that the claims of the bank and public debt remain pari passu within the company's capital structure. However, the banks also benefit from the pledge of shares of a limited number of subsidiaries that do not serve as guarantors. The bank amendment will provide the banks with certain incremental collateral consisting of additional shareholdings in subsidiaries as well as certain inventory, property, plant & equipment, intercompany notes, intellectual property, and other assets. The significance of the subsidiaries whose shares are pledged to the banks, but who will not be guarantors, will rise substantially from current circumstances. Furthermore, the terms of the amendment will also introduce limitations on asset sales, mandatory repayment provisions in certain circumstances, and tighter limitations on the amount of aggregate subsidiary indebtedness, potentially assuring higher values accrete to the pledged equity interests in the subsidiaries. Lear's indentures for its unsecured notes currently have certain exclusions and limitations on the amount of assets that can be pledged without providing ratable security to note holders. The more restrictive of these lien baskets was approximately $400 million at the end of December. The bank amendment will also provide additional headroom under the company's existing leverage and interest coverage ratios. While the collection of collateral being provided establishes some benefit to the first lien bank debt, the rating agency concluded that a full notch differential from the Corporate Family rating was not warranted at this time. This flows from the preponderance of total balance sheet debt which secured obligations would represent, the inherent limitations and variability associated with subsidiary enterprise valuations, and constraints under the applicable provisions of the note indentures on liens over other assets. Consequently, the new first lien term loan is rated level with the Corporate Family rating at B2. The new second lien term loan will have a junior interest over the collateral and is rated B3 to reflect its junior priority and limited rights under the inter- creditor agreement. Although effectively subordinated to the claims of the secured debt, senior unsecured ratings have been lowered one notch from Corporate Family to B3 given reservations on values subject to priority secured claims and expectations that recovery rates for unsecured notes might not materially differ from the second lien debt. Upon closing of the transactions and related amendment, Lear's liquidity profile could improve. However, execution of the refinancing is contingent on receiving certain amendments from bank lenders. As a result, the SGL-3 rating has been affirmed at this time, but will be revisited when the refinancing is completed. Lear Corporation, headquartered in Southfield, Michigan, is an integrator of automotive interiors, including seat systems, interior trim and electrical systems. The company had revenues of $17 billion in 2005 and has more than 110,000 employees in 34 countries. LONG BEACH: Moody's Cuts Ratings & Reviewing for Further Downgrade ------------------------------------------------------------------ Moody's Investors Service downgraded and placed under review for possible downgrade twelve certificates from five deals from Long Beach Mortgage Company deals. The transactions are backed by primarily first lien adjustable and fixed rate subprime mortgage loans originated by Long Beach. The master servicer on the deals is Long Beach Mortgage Company. The twelve subordinate classes are being downgraded and placed on review for possible downgrade because existing credit enhancement levels may be low given the current projected losses on the underlying pools. The transactions have taken significant losses causing gradual erosion of the overcollateralization. In addition, the severity of loss on the liquidated loans has begun to increase due among other factors to a higher concentration of manufactured housing loans. In the review Moody's also focused on the various triggers available to the transactions and how they have helped protect investors. Downgrades: Issuer: Long Beach Mortgage Loan Trust Asset Backed Certificates * Series 2002-1; Class M3, downgraded to B1 from Baa3; * Series 2002-2; Class M4A, downgraded to Caa1 from Ba3; * Series 2002-2; Class M4B, downgraded to Caa1 from Ba3; * Series 2002-5; Class M-3, downgraded to Baa3 from Baa2; * Series 2002-5; Class M-4A, downgraded to B2 from Baa3; * Series 2002-5; Class M-4B, downgraded to B2 from Baa3; Issuer: ACE Securities Corporation, Home Equity Loan Trust 1999-LB2 * Series 1999-LB2; Class B, downgraded to Baa3 from Baa2; Review for possible downgrade: Issuer: ACE Securities Corporation, Home Equity Loan Trust 1999-LB2 * Series 2001-4; Class M2, current rating Baa1, under review for possible downgrade; * Series 2001-4; Class M3, current rating Caa1, under review for possible downgrade; * Series 2002-1; Class II-M1, current rating Aa2, under review for possible downgrade; * Series 2002-1; Class M2, current rating A2, under review for possible downgrade; * Series 2002-2; Class M3, current rating Baa2, under review for possible downgrade. MARKSON ROSENTHAL: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Markson Rosenthal & Company, Inc. 301 Sylvan Avenue Englewood Cliffs, New Jersey 07632 Bankruptcy Case No.: 06-13163 Type of Business: The Debtor manufactures point of purchase displays and offers contract packaging services. See http://www.marksonrosenthal.com Chapter 11 Petition Date: April 14, 2006 Court: District of New Jersey (Newark) Debtor's Counsel: Allen J. Underwood, II, Esq. Becker, Meisel LLC Eisenhower Plaza II 354 Eisenhower Parkway, Suite 2800 Livingston, New Jersey 07039 Tel: (973) 422-1100 Fax: (973) 422-9122 Total Assets: $0 Total Debts: $11,870,120 Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Jay Packaging Corp. $474,975 100 Warwick Industrial Drive Warwick, RI 02886 Pinnacle Staffing $427,287 P.O. Box 17589 Greenville, SC 29606 Snelling Personnel Service $409,357 P.O. Box 650765 Dallas, TX 75265 Alliance Display & Packaging $385,025 P.O. Box 102064 Atlanta, GA 30368 Schiffenhaus Packaging Corp. $352,939 P.O. Box 34232 Newark, NJ 07189 New Dimensions Research Corp. $325,050 260 Spagnoli Road Melville, NY 11747 Mannkraft Corp. $300,432 P.O. Box 820405 Philadelphia, PA 19182 Diamond Packaging Corp. $264,157 111 Commerce Drive Rochester, NY 14692 Cameo Personnel Systems, Inc. $206,568 Rex Corp. $194,569 NPC National Packaging $167,231 Island Architectural Woodworking Inc. $161,432 Adeco Employment Service $135,563 Panel Prints, Inc. $125,435 Kelly Temporary Services, Inc. $112,348 Squire Corrugated Container Corp. $112,332 Hilb, Rogal & Hobbs $105,646 Fras Air Contracting, Inc. $104,067 Unity Graphics & Engraving $102,613 Sicht Pack Hagner, Inc. $87,086 MEDQUEST INC: S&P Downgrades Rating to B- With Negative Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three diagnostic imaging companies: * The corporate credit rating on Center for Diagnostic Imaging Inc. was lowered to 'B' from 'B+'; the rating outlook is stable. * The rating on MedQuest Inc. was lowered to 'B-' from 'B'; the rating outlook is negative. * The rating on Radiologix Inc. was lowered to 'B-' from 'B+'; the rating outlook is negative. "The downgrades reflect the increasing probability that Medicare reimbursement cuts mandated by the Deficit Reduction Act of 2005 will affect the company following the legislation's implementation on Jan. 1, 2007," said Standard & Poor's credit analyst Cheryl Richer. "In addition, the potential exists for subsequent reimbursement pressures from private payors." The long-term environment for diagnostic scans remains attractive because of: * imaging's ability to limit unnecessary health treatment; * the expanded medical applications for diagnostic tools; and * the aging population. However, these favorable prospects have been overshadowed by equipment overcapacity. Despite material operations in certificate-of-need states that limit competition, barriers to entry are only moderate, and competition has increased. In addition, there has been a concerted effort by both government and private insurers to reign in the cost and use of scans. MERIDIAN AUTOMOTIVE: Court Extends Exclusive Periods to July 31 --------------------------------------------------------------- Judge Walrath of the U.S. Bankruptcy Court for the District of Delaware extends Meridian Automotive Systems, Inc., and its debtor-affiliates' exclusive periods to: (a) file a plan of reorganization through May 31, 2006; and (b) solicit acceptances of that plan through July 31, 2006. The Court overruled an objection interposed by the Informal Committee. First Lien Committee's Secret Objection Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that on April 3, 2006, the Informal Committee of First Lien Secured Lenders shared with the Debtors, a draft of its proposed objection, to allow the Debtors to determine whether the Objection should be filed under seal. Upon review, the Debtors determined that the Objection contains statement and arguments concerning their business operations that could have a destabilizing effect, based on potential reactions by their customers and suppliers. At the Debtors' request, the Court authorized the Informal Committee to file the Objection under seal. The Court also permitted the Debtors to file their reply to the Objection under seal. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Court Approves MASI's Stipulation With InSite ------------------------------------------------------------------ On Sept. 13, 1999, InSite Angola LLC and Meridian Automotive Systems, Inc., formerly known as American Bumper Mfg. Co., entered into an Industrial Lease Agreement concerning manufacturing premises in Angola, Indiana. Pursuant to the Lease, MASI has a right of first refusal with respect to any third party offer to purchase the Premises. InSite has received an offer to purchase the Premises from Hanning & Bean Enterprises, Inc. Insite has provided notice of the Offer to MASI. The terms of the Offer are without prejudice to any and all of MASI's rights under the Lease, including the right to assume, assume and assign, or reject the Lease by Hanning. The Offer specifically requires the delivery at closing of an Assignment and Assumption of Lease. MASI has reviewed the terms of the Offer and has elected not to exercise its right of first refusal under the Lease. Thus, Hanning asks the Court to authorize MASI to exercise its election. Accordingly, MASI and InSite agree that: (a) InSite complied with its obligation under the Lease, triggering MASI's right to elect whether to exercise its right of first refusal to purchase the Premises; (b) the terms of the Offer are without prejudice to any and all of MASI's rights under the Lease; (c) MASI has declined to exercise its right of first refusal under the Leases with respect to the sale of the Premises to Hanning; and (d) neither MASI's decision not to exercise its right of first refusal nor InSite's sale of the Premises to Hanning will prejudice any of MASI's rights with respect to the Lease. Judge Walrath approves the Stipulation in its entirety. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Can Enter Into Tennant Financial Agreement --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Meridian Automotive Systems, Inc., and its debtor-affiliates authority to enter into an Agreement with Tennant Company and execute the Schedules and perform all obligations under the Agreement pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code. The Tennant proposal contemplates a master lease agreement with and lease financing through Tennant Financial Services, which includes a combination of 36-month and 60-month lease terms with total monthly lease payments of $13,300, for 20 sweepers. The Quoted Monthly Payment was 15% lower than the next lowest proposal the Debtors received, Mr. Brady tells the Court. The Debtors and Tennant Financial are currently finalizing the terms of the Master Agreement based on Tennant's proposal. Upon execution of the Agreement, the Debtors will begin negotiating separate equipment schedules for each of their manufacturing facilities based on the number of sweepers needed at each facility, Mr. Brady relates. The Schedules will be governed by the general terms of the Agreement and the Debtors will have no obligation to lease any equipment from Tennant until a Schedule is executed. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000). METRIS TRUST: Moody's Confirms Ba2 Rating on Class D Securities --------------------------------------------------------------- Moody's Investors Service confirmed the rating of one class and upgraded the ratings of three subordinate classes of securities issued from the Metris Master Trust, Series 2005-2 and related Metris Secured Note Trust. These securities have been under review for possible upgrade since they were issued, on Oct. 19, 2005. The rating action concludes Moody's review of the bonds. Upgraded Ratings: Issuer: Metris Master Trust * $54,500,000 Class M Floating Rate Asset Backed Securities, Series 2005-2, upgraded to Aa1 from Aa2 * $69,700,000 Class B Floating Rate Asset Backed Securities, Series 2005-2, upgraded to Aa3 from A2 Issuer: Metris Secured Note Trust * $78,800,000 Class C Floating Rate Asset Backed Securities, Series 2005-2, upgraded to Baa1 from Baa2 Confirmed Rating: Issuer: Metris Secured Note Trust * $39,400,000 and 35,400,000 Class D Floating Rate Asset Backed Securities, Series 2005-2, at Ba2 Rationale: On Aug. 4, 2005, Metris Companies, Inc., announced that it had agreed to be acquired by subsidiaries of HSBC Finance Corporation. Following this acquisition, which closed on Dec. 2, 2005, Metris was merged with and into HSBC. The credit strength of HSBC is considerably stronger than Metris. The credit strength of the seller/servicer is an important consideration in Moody's credit opinion of the related asset- backed securities due to the correlation between the viability of the revolving securitization program and that of the related seller/servicer. It is Moody's opinion that higher-rated seller/servicers are more likely to maintain the ongoing servicing and origination requirements of such a program. As a consequence of the acquisition, Moody's upgraded 17 classes of securities issued from the Metris Trusts on Jan. 11, 2006. Since the 2005-2 securities were issued prior to, and in anticipation of, the close of the acquisition, they were structured with a unique feature, described below, that allowed changes to the capital structure of certain classes. Unique Structural Feature of Series 2005-2 Bonds: The subordinate classes of the Series 2005-2 securities issued from Metris Trusts contain a structural feature which enables the Transferor to reduce the excess collateral. On Apr. 4, 2006, HSBC notified Moody's of its intention to utilize this option by reducing the Ba2-rated Class D notes by $4.0 million, from $39.4 million to $35.4 million. In addition, the unrated Owner Certificate was reduced by $12.1 million, from $66.67 million to $54.57 million. Performance: In 2001 and 2002, an aggressive underwriting and credit line assignment strategy resulted in marked deterioration in the collateral performance. Since then, a positive credit cycle and a more conservative underwriting and risk management strategy have significantly improved the credit performance of the trust. For example, over the last two years collateral performance of the securitized Metris credit card portfolio has steadily improved. Most notably, the excess spread margin, a proxy for profitability in securitized pools, widened to a high of over 9% in September 2005 from a low of nearly 1% in June 2003. Similarly, loss rates have fallen from a peak of 22.6% in February 2003 to a low of 13.0% in September 2005. Moody's considered this improvement in collateral performance in its review of the related bonds. Metris Companies Inc., headquartered in Minnetonka, Minnesota, was the thirteenth largest general purpose credit card issuer in U.S. and had total managed receivables of $5.9 billion as of June 30, 2005. Following the acquisition Metris was merged with and into HSBC Finance Corporation. HSBC Finance Corporation is a consumer finance company that offers a range of retail financial products, including real-estate secured loans, credit cards, auto loans, unsecured personal loans, and credit-related insurance products. As of June 30, 2005, the company had managed assets of almost $147 billion and common equity of $16.8 billion. HSBC is an indirect subsidiary of UK- based HSBC Holdings plc, a global financial services firm with global assets of almost $1.5 trillion. MILLS CORPORATION: Mills Limited Refinances $337 Million Debt ------------------------------------------------------------- In a Form 8-K filing with the Securities and Exchange Commission, The Mills Corporation reported that on Apr. 7, 2006, The Mills Limited Partnership refinanced $337 million of existing non- recourse mortgage and mezzanine debt secured by the Sawgrass Mills property that was due on July 7, 2006 with a new $625 million mortgage loan from JP Morgan Chase Bank, N.A. The new mortgage loan is generally non-recourse to Mills Limited, subject to customary recourse carveouts, and has a two-year term, subject to three one-year extension options. The new mortgage loan bears interest at a floating rate of one month LIBOR plus 1.68%, and is prepayable at any time, subject to a prepayment penalty and spread maintenance during the first 12 months. LIBOR is capped at 5.5% through an interest rate cap agreement entered into with JPMorgan Chase Bank, N.A., which runs for the initial term of the loan. The net proceeds from the new mortgage loan totaled approximately $246 million plus an additional $25 million which is held in escrow and will be used to fund completion and lease-up of the Sawgrass Mills project. In conjunction with the refinancing, Mills Limited terminated a forward starting swap associated with the Sawgrass Mills property on Apr. 11, 2006, which netted approximately $15.0 million in additional proceeds. The new mortgage loan includes events of defaults that are customary for a mortgage financing, and the occurrence of any of such events of default would entitle the lenders under the new mortgage loan to accelerate the new mortgage loan. "The refinancing of Sawgrass Mills, together with our planned refinancing of Madrid Xanadu and Vaughan Mills, as well as our renewed access to our line of credit should provide the Company with the liquidity needed to continue pursuing our core development projects and prudently investing in our existing assets." said Chairman and CEO, Lawrence C. Siegel. "This financial flexibility should also strengthen the Company's position with respect to its previously announced exploration of strategic alternatives." JPMorgan Chase Bank, N.A., is the lender on the new Sawgrass Mills mortgage loan and is also an agent or lender for certain other loans made in the ordinary course to Mills Limited and various operating subsidiaries of the company. Default Waiver The company, through Mills Limited, entered into an amendment of its credit facility with JPMorgan Chase Bank, N.A., as lender and administrative agent, and the other lenders, providing a conditional waiver through Dec. 31, 2006, of events of default under the facility that are associated, among other things, with: * the pending restatement of the financial statements of Mills Corporation and Mills Limited, and * the delay in the filing of the 2005 Form 10-K of Mills Corp. and Mills Limited. 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. MILLS CORP: Lenders Agree to Waive Defaults through December 31 --------------------------------------------------------------- The Mills Corporation disclosed in a Form 8-K filing with the Securities and Exchange Commission that on Apr. 5, 2006, The Mills Limited Partnership entered into an Amendment No. 3 and Waiver to its Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of Dec. 17, 2004, among Mills Limited, JPMorgan Chase Bank, N.A., as lender and administrative agent, and the other lenders. Default Waivers The agreement provides a conditional waiver through Dec. 31, 2006, of events of default under the facility that are associated, among other things, with: * the pending restatement of the financial statements of Mills Corporation and Mills Limited, and * the delay in the filing of the 2005 Form 10-K of Mills Corp. and Mills Limited. New Borrowings The agreement also permits the company, subject to conditions, to obtain new borrowings up to $341 million, which constitutes the currently unused portion of the $1.0 billion revolving commitment under the facility. The new borrowings are permitted in two stages, with: -- the first stage commencing immediately allowing for aggregate new borrowings up to $50 million and -- the second stage commencing not earlier than June 30, 2006 allowing for new borrowings in excess of $50 million. As a condition to the borrowings in either stage, unrestricted cash balances of Mills Limited and its wholly owned subsidiaries are not permitted to exceed $20 million. Among other conditions, new borrowings will not be permitted after May 1, 2006 until such time as waivers or standstill agreements that are coterminous with the agreement are obtained with respect to defaults under four construction project loans in Pittsburgh, Cincinnati, St. Louis and Discover Mills, which are guarantied by Mills Limited. Security Interest In connection with the agreement, Mills Limited entered into a security agreement pursuant to which Mills Limited granted to the Lenders a security interest in substantially all of Mills Limited's pledgeable assets. The security interest secures new borrowings under the agreement on a first priority basis, with existing borrowings under the facility and under the company's existing term loan agreement with JPMorgan Chase Bank, N.A. secured on a second priority basis. The agreement also permits certain deficiency obligations under each of the four Guarantied Project Loan to become secured by the security agreement in the event the lenders under such Guarantied Project Loans agree to the waiver and standstill arrangements. In addition, Mills Limited is required to use commercially reasonable efforts to provide additional collateral by May 1, 2006. Budgeting Requirements The agreement also establishes a budget of projected sources and uses for Mills Limited and its consolidated subsidiaries through Dec. 31, 2006. The agreement requires that all expenditures and facility borrowings be made in accordance with that budget, and requires Mills Limited to certify compliance with the requirement on a bi-weekly basis. Any changes to the budget must have the approval of the Agent and a steering committee of the Facility Lenders. Financial Consultant The company says that the Lenders have retained a financial consultant for the purpose of, among other things, monitoring compliance with the budget and reviewing the budget projections. The company says that the financial consultant will be required to deliver a report to the steering committee by June 30, 2006. In the event the report indicates that the financial consultant's projections of necessary revolving loan borrowings under the facility as of Dec. 31, 2006 will exceed Mills Limited's budgeted estimate by more than $50 million, the steering committee will have the authority to require termination of the agreement and the facility on Aug. 31, 2006, unless prior to August 31 an acceptable agreement for a sale or merger transaction involving all or substantially all of the assets of the company, Mills Limited and their subsidiaries has been executed. New Dividend Restrictions The agreement also sets new limitations on dividends and distributions by the company and Mills Limited. The company says that with respect to dividends to be declared and paid in the second fiscal quarter of 2006: * the per share dividend paid to holders of common stock must not exceed 50% of the per share common dividend paid in the second quarter of 2005, and * the per share dividend paid to holders of preferred stock must not exceed 100% of the per share preferred dividend payable under each series of preferred stock. Dividends to be declared and paid in the third fiscal quarter of 2006 are subject to the same aggregate amount limitations, but are subject to these additional conditions: 1) If the steering committee elects to terminate the facility on Aug. 31, 2006 as a result of a financial consultant report, the company will not be permitted to pay a third quarter dividend. 2) If the company were to determine to declare and pay dividends for the third quarter, Mills Limited must certify to the Lenders that the company is engaged in negotiations with one or more bona fide purchasers for a merger or sale involving all or substantially all of the assets of the company, Mills Limited and their subsidiaries and that an agreement providing for a closing date no later than Dec. 31, 2006 is expected to be entered into on or before Aug. 31, 2006. In the event that a third quarter dividend is paid without a sale or merger agreement being entered into prior to Aug. 31, 2006, no further borrowings would be permitted after the date which is thirty days following Aug. 31, 2006, unless on or before the 30th day the steering committee approves an extension on the basis of information concerning an expected sale or merger transaction. Fourth quarter dividends are prohibited in all cases. Other Covenants The company reports that the agreement also sets new limitations on the incurrence of indebtedness, with new indebtedness permitted only for refinancings relating to the Sawgrass Mills, Madrid Xanadu and Vaughan Mills projects. Asset sales are also subject to new limitations, with permitted construction assets and dispositions being limited to transactions contemplated by the budget and sales of certain unimproved or unleased real property. Consent Fees The company says that the agreement also provides for a 10 basis point fee to the Lenders upon execution as well as a 15 basis point fee to the Lenders upon receipt of waivers from the lenders on the Guarantied Project. The fees are assessed on the aggregate term loan and revolving loan commitments of the Facility Lenders that consent to the agreement. Interest Rate Increase In addition, the agreement also increases the interest rate applicable to LIBOR based borrowings under the Facility from LIBOR plus 1.45% to LIBOR plus 2.25%. The Facility fee, assessed at a rate of .25% on the maximum amount of the Facility, remains unchanged by the Agreement. Upon the occurrence of an event of default, incremental default interest at a rate of 2% per annum will be due on all amounts that were outstanding under the Facility during the period in which the waivers under the Agreement were in effect. Mills Limited is also obligated to pay a $1.0 million fee to J.P. Morgan Securities Inc., one half of which has already been paid. Amendment and Waiver to Term Loan Agreement The company also reported that on Apr. 5, 2006, Mills Limited entered into an Amendment No. 1 and Waiver to its Term Loan Agreement, dated as of Jan. 5, 2006, by and between Mills Limited and JPMorgan Chase Bank, N.A., as lender and administrative agent. The amendment and waiver prohibit further borrowings under the Term Loan, which has an outstanding balance of approximately $65 million. In addition, the amendment and waiver increases the interest rate applicable to LIBOR borrowings under the Term Loan from LIBOR plus 2.0% to LIBOR plus 2.5%. Other terms and conditions of the amendment and waiver are substantially the same as those under "Amendment No. 3 and Waiver to Second Amended and Restated Revolving Credit and Term Loan Agreement." JPMorgan Chase Bank, N.A., which serves as the Agent and a Lender under the Facility, individually or through its affiliates, is the administrative agent and lender on the company's Term Loan. JPMorgan is also an agent or lender for certain other loans made in the ordinary course to Mills Limited and various operating subsidiaries of the company. Affiliates of JPMorgan Chase Bank, N.A. also perform investment banking and advisory services for the company and Mills Limited from time to time for which they receive customary fees and expenses, and are currently assisting the company in connection with its previously announced exploration of strategic alternatives. 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. MIRANT CORP: NY-Gen Unit Gets Access to $5 Million DIP Financing ---------------------------------------------------------------- The Honorable Michael D. Lynn of the U.S. Bankruptcy Court for the Northern District of Texas authorizes Mirant NY-Gen, LLC, to enter into the debtor-in-possession facility and to execute and deliver the DIP Facility Credit Agreement and the DIP Facility documents. Summary of the DIP Facility The salient terms of the DIP Facility are: Borrower: Mirant NY-Gen, LLC Lender: Mirant Americas, Inc. Facility: A revolving loan of $5,000,000, which may, from time to time, be prepaid and reborrowed Closing Date: Will not occur if these conditions are not satisfied: (a) The parties' execution of the DIP Facility Agreement, and MAI's receipt of all required documents; (b) There exists no default or event of default; and (c) True and correct representations and warranties. Commitment Termination Date: The Commitment Termination Date will be the earliest of: (a) June 30, 2006; (b) the date of termination of MAI's obligations to make revolving loans or to permit existing revolving loans to remain outstanding due to the occurrence of an Event of Default; (c) the date of indefeasible prepayment in full by Mirant NY-Gen of the revolving loans; (d) the date on which any liens securing any outstanding obligations or payments to the MAI are set aside or avoided, or the related claims are disallowed in any manner; and (e) the effective date of Mirant NY-Gen's Plan of Reorganization. Use of Proceeds: The proceeds will be used solely for working capital and remediation of the Swinging Bridge Dam in accordance with a budget that evidences: i. completion of planned remediation prior to the scheduled Commitment Termination Date; and ii. that the planned remediation work can be completed by MAI with funding in an amount less than or equal to the commitment under the DIP Facility. The Budget, which will be subject to MAI's review and approval must be approved by the Bankruptcy Court, and must not contravene any requirement of law or any DIP Facility document. Interest: Mirant NY-Gen will pay interest to MAI in arrears in respect of the unpaid principal amount of each revolving loan on each applicable payment date at the applicable LIBOR Rate plus 4.25%. Default Rates: In the event of default, the interest rates applicable to the revolving loans will be increased by two percentage points per annum. All outstanding obligations will bear interest at the default rate applicable to those obligations. Priority: Mirant NY-Gen's obligations under the DIP Facility will, at all times, constitute a Superpriority Claim in MAI's Chapter 11 cases, having priority over all administrative expenses under Sections 503(b) or 507(b) of the Bankruptcy Code, subject only to the Carve Out. Security: Mirant NY-Gen will grant, in favor of MAI, a security interest in all the real, intangible, and personal property and other assets: * a legal, valid, perfected and enforceable security interest in: -- all right, title and interest of Mirant NY-Gen in the Collateral; and -- avoidance power claims and any recoveries under Section 549; * a first priority perfected security interest in all of the Collateral that is not encumbered by liens in favor of any other person, subject only to certain permitted liens; and * a fully perfected security interest in all of the Collateral encumbered on the Petition Date, subject only to certain permitted liens. Carve Out: Includes the allowed unpaid fees and expenses payable under Sections 330 and 331 to professional persons employed by Mirant NY-Gen pursuant to Bankruptcy Court orders, as well as payment of certain fees pursuant to Section 1930 of the Judiciary Procedures Code and to the clerk of the Bankruptcy Court. Indemnification: Mirant NY-Gen will indemnify and hold harmless MAI for all claims arising in connection with, among other things: * Mirant NY-Gen's Chapter 11 cases and the extension, suspension, termination and administration of the DIP Facility, except to the extent that the liability arises from MAI's gross negligence or willful misconduct; * certain costs, losses or expenses arising in connection with revolving loans; and * certain liabilities for taxes in connection with the DIP Facility. The Court rules that NY-Gen's obligations and indebtedness arising under the DIP Facility and the DIP Facility Documents will: i. have priority over any and all administrative expenses of the kind specified in Sections 503(b) or 507(b) of the Bankruptcy Code; ii. be secured by a lien on property of NY-Gen's estate that is not otherwise subject to a lien; and iii. be secured by a junior lien on property of the NY-Gen's estate that is subject to a lien; provided, however, that the lien is subject to the Carve-Out. So long as no Default or Event of Default have occurred and will be continuing under the DIP Facility, NY-Gen will be permitted to pay compensation and reimbursement of expenses allowed and payable under Sections 330 and 331 of the Bankruptcy Code or any order of the Bankruptcy Court governing procedures for interim compensation and reimbursement of expenses of professionals. A full-text copy of the Order approving NY-Gen's $50 million DIP Facility is available for free at: http://ResearchAarchives.com/t/s?7e0 Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on January 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to power generator and developer Mirant Corp. and said the outlook is stable. That rating reflected the credit profile of Mirant, based on the structure the company expects to have on emergence from bankruptcy at or around year-end 2005, S&P said. MIRANT CORP: TransCanada & Gas Transmission Hold $55 Mil. Claims ---------------------------------------------------------------- The Honorable Michael D. Lynn of the U.S. Bankruptcy Court for the Northern District of Texas rules that Gas Transmission Northwest Corporation will have a final present value net allowed claim in Mirant Debtor Class 3 for $21,892,210, plus interest at 4.70% from July 15, 2003, through the Jan. 3, 2006, the effective date of Mirant Corporation and its debtor-affiliates' Plan of Reorganization, compounded quarterly. As reported in the Troubled Company Reporter on Feb. 16, 2006, TransCanada and GTN asked the Court to compel the Debtors to abide by their on-the-record agreements and provide additional relief to TransCanada and GTN to compensate for the Debtors' unjustified refusal to do so. The Debtors, TransCanada Gas and Gas Transmission are parties to contracts for the transportation of natural gas. The Contracts are governed by their tariffs regulated by the Federal Energy and Regulatory Commission. The Debtors rejected the Gas Contracts, which gave rise to rejection damages. Gas Transmission and TransCanada timely filed their proofs of claim. The Debtors' Plan contains two provisions for how claims will be treated with respect to interest: a. Those claims that have a contractual rate accrue interest at the non-default contractual rate, with compounding in accordance with the scheduled payments; and b. Those claims that do not have a contractual rate accrue 4% simple interest. Subsequently, the Debtors reached a settlement agreement with TransCanada and Gas Transmission, on the eve of the plan confirmation hearing. The Settlements addressed the interest rate for each of the GTN and TransCanada claims and how they would be treated under the Second Amended Plan. For each of GTN and TransCanada, the agreement was that their claims would accrue contractual interest at 4.7%. Because the relevant, contractual FERC Interest Rate changes each quarter, the 4.7% rate represents the blended rate over the 2.5% year period of time from the Petition Date through the Effective Date. Those agreements were read in open court at the status conference in advance of the plan confirmation hearing on November 30, 2005. The Debtors reneged on their agreement to pay contractual interest under the Plan. The Debtors refuse to execute final settlement documents or file Rule 9019 motions, preventing TransCanada and GTN from receiving their proper distributions in the Debtors' Chapter 11 cases. Court Order Under a Settlement Agreement and Release between GTN and the Debtors, GTN will have a gross Allowed Claim for $25,000,000. A portion of the GTN Gross Allowed Claim in the principal amount of $3,108,790 was secured, and the Settlement Order granted GTN permission to apply the proceeds of certain assurances to satisfy the secured portion of the GTN Gross Allowed Claim. GTN's Net Allowed Claim is $24,572,116. The Disbursing Agent will issue to GTN shares of New Mirant Common Stock corresponding to the total Allowed Claim, including interest, for $24,572,116 in Mirant Debtor Class 3 - Unsecured Claims, to the extent the shares have not previously been issued. After the Disbursing Agent issues the shares, it will provide notice to GTN of the issuance of all shares issued to GTN on account of the GTN Net Allowed Claim and the account number. GTN will also receive any and all subsequent distributions under the Plan of Reorganization in accordance with being a holder of an Allowed Claim in Mirant Debtor Class 3 - Unsecured Claims, corresponding to a total Allowed Claim, including interest, of $24,572,116, including without limitation the corresponding Pro Rata Share of the Designated Net Litigation Distributions. TransCanada Gas Services Inc., on the other hand, will have a final present value allowed claim in Mirant Debtor Class 3 for $37,000,000, plus interest at 4.70% from July 15, 2003, through the Effective Date, compounded quarterly. The Court rules that the TransCanada Allowed Claim will be satisfied by: (a) the Debtors assigning to TransCanada or its assignee or designee by quitclaim assignment any and all rights and claims that the Debtors may have against Androscoggin Energy, LLC, or any of its affiliates in connection with the contracts, which are the subject of the TransCanada Allowed Claim and the distribution and payment being made in the Debtors' bankruptcy case based on the TransCanada Allowed Claim; and (b) distribution in the Debtors' bankruptcy case based on a Mirant Debtor Class 3 claim for $29,750,000, plus interest at 4.70% compounded quarterly from July 15, 2003, through the Effective Date. The TransCanada Allowed Claim is separate from and in addition to the previously Allowed Claim for $2,450,000 of TransCanada and certain of its affiliates, which was allowed pursuant to the Court's Order dated Sept. 2, 2004. TransCanada's Distribution Claim is $33,391,807. The Disbursing Agent will issue to TransCanada shares of New Mirant Common Stock corresponding to a total Allowed Claim, including interest, in the amount of $33,391,806 in Mirant Debtor Class 3 - Unsecured Claims. After the Disbursing Agent issues the shares, the Disbursing Agent will provide notice to TransCanada of the issuance of the shares and the account number. TransCanada will also receive any and all subsequent distributions under the Plan in accordance with being a holder of an Allowed Claim in Mirant Debtor Class 3 - Unsecured Claims, corresponding to a total Allowed Claim, including interest, of $33,391,806, including without limitation the corresponding Pro Rata Share of the Designated Net Litigation Distributions. About Mirant Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on January 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to power generator and developer Mirant Corp. and said the outlook is stable. That rating reflected the credit profile of Mirant, based on the structure the company expects to have on emergence from bankruptcy at or around year-end 2005, S&P said. MUSICLAND HOLDING: Donlin Recano OK'd as Panel's Information Agent ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York gave the Official Committee of Unsecured Creditors of Musicland Holding Corp. and its debtor-affiliates authority to retain Donlin, Recano & Company, Inc., as its information agent, nunc pro tunc to Feb. 9, 2006. As reported in the Troubled Company Reporter on Mar. 17, 2006, Donlin Recano will: (a) provide access to information for the Committee's constituents through web-based technology developed by Donlin Recano, which include certain information: * General case information including case dockets, access to docket filings, composition of the Committee, their counsel, and the date, place and time of the Section 341 meeting; * Answers to frequently asked questions, discussing a general overview of the Chapter 11 process, the role of the Committee, the responsibility of committee members, and the filing of a proof of claim; * A Committee reports section providing monthly operating reports filed by the debtor and monthly Committee written reports summarizing recent proceedings, events and public financial information; * A password protected confidential information access section whereby creditors who have executed a confidentiality agreement may retrieve confidential information; * A case calendar section which will include case matters of relevance to the unsecured creditors; * A section providing the creditor the ability to e-mail a question and receive a response; * Press releases issued by each of the Committee and the Debtors; * Highlights of significant events in the cases; * Links to other relevant Web sites; and * Any other information to be posted at the direction of the Court, the Committee or its counsel. (b) solicit and receive comments form the unsecured creditors through the Committee Web site and the ability of the creditors to e-mail comments and questions; (c) establish and maintain a telephone number and call center for unsecured creditors to call with questions; (d) provide notice to the unsecured creditors as to the existence of the Committee Web site; and (e) provide other services as required by the Court, the Committee or its counsel to assist the Committee in complying with the requirements of Section 1102(b)(3) of the Bankruptcy Code. The Debtors will pay Donlin Recano for its services in these amounts: Category Amount -------- ------ Monthly Base Fee $150 per month Posting Documents to Web site $50 per document Web site Maintenance and Monitoring $115 to $250 per hour Data Entry $35 per hour Imaging/Storage $0.18 per image Facsimile Noticing $0.12 per page Photocopying & Laser Printing $0.10 per page E-mail Transmission (attachments only) $0.015 per kilobyte Out-of-Pocket Expenses At Cost Louis A. Recano, a principal at Donlin Recano, assured the Court that the firm and its employees are disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. About Musicland Holding 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) NASDAQ STOCK: 15% LSE Equity Purchase Cues Moody's Ba3 Ratings -------------------------------------------------------------- Moody's Investors Service lowered the ratings on The Nasdaq Stock Market, Inc., to Ba3 from Ba2. The rating action applies to NASDAQ's Corporate Family rating, as well as to its $750 million Six Year Senior Secured Term Loan and $75 million Senior Secured Revolving Credit Facility. The rating outlook was also lowered to negative from stable. On Oct. 6, 2005, Moody's assigned a first-time provisional (P)Ba2 rating to NASDAQ'S $825 million in bank facilities, which the company raised to finance its acquisition of the INET trading platform. The rating action was prompted by NASDAQ's announcement that it has acquired for approximately 1,175 pence per share 38.1 million shares of the London Stock Exchange plc. Total consideration paid by NASDAQ for its 14.99% stake in the LSE was approximately GBP 447.7 million. The announcement comes approximately two weeks after NASDAQ had formally withdrawn its public bid for the LSE. In lowering the ratings, Moody's said that the share purchase will initially result in a material increase in leverage and erosion of debt service coverage. The negative outlook reflects the elevated probability that a full transaction with the LSE could eventually be consummated and could result in additional credit degradation, placing additional downward pressure on the ratings, with the extent dependent upon ultimate financing structure. "NASDAQ's announcement is simply the latest chapter in the company's pursuit of the LSE, and is indicative of management's tolerance to withstand near- and intermediate-term degradation of the firm's credit profile in order to meet strategic objectives," says Moody's Senior Vice President Blaine Frantz. "Under most conceivable deal structures, a successful acquisition of the LSE or another strategic exchange would result in a very significant increase in debt, cashflow leverage, and a decline in fixed-charge coverage at NASDAQ. Moody's noted that NASDAQ's purchase of a large stake in the LSE, after it failed to reach a mutually acceptable merger agreement with the London-based exchange, highlights the company's determination to consummate a material, strategic acquisition as exchanges around the world position themselves for eventual cross- border consolidation. Notwithstanding the potential degradation of credit metrics associated with any material transaction, Moody's nonetheless believes that NASDAQ stands to benefit from industry consolidation. "A transaction with the LSE could be viewed as a transformational acquisition/merger for NASDAQ, boosting its scale, marketing reach and global presence. "Both NASDAQ and LSE have complementary business/revenue mixes, and Moody's expects that consolidation would benefit the combined entities through cost and revenue efficiencies. The combination would also benefit NASDAQ's geographic earnings diversification. These ratings on The Nasdaq Stock Market, Inc., were lowered: * Corporate Family Rating to Ba3 from Ba2 * $750 Million Six Year Senior Secured Term Loan to Ba3 from (P)Ba2 * $75 Million Senior Secured Revolving Credit Facility to Ba3 from (P)Ba2 NASDAQ operates The NASDAQ Stock Market and provides securities listing trading and information products and services. NASDAQ reported $880 million of revenues and $62 million of net income for 2005. NAVISITE INC: Closes $73 Million Silver Point Term Loan Facility ---------------------------------------------------------------- NaviSite, Inc. (NASDAQ: NAVI) closed its previously reported $70 million term loan facility and $3 million revolving credit facility with Silver Point Finance, as well as a $5 million credit facility with Atlantic Investors, its majority stockholder. Lane, Berry & Co. International, LLC, acted as NaviSite's placement agent in the transactions with Silver Point Finance. In addition, Atlantic Investors has restructured the terms of the existing $3 million secured promissory note issued to it by NaviSite, extending the maturity date to five years and 90 days after the date of the Silver Point Finance transaction. Proceeds from the Silver Point term loan facility have been used to repay and extinguish NaviSite's Silicon Valley Bank line of credit, the Waythere, Inc. (formerly Surebridge, Inc.) convertible promissory notes, other short-term debt and to pay transaction fees and expenses. Proceeds from the $3 million revolving credit facility from Silver Point Finance and $5 million credit facility from Atlantic Investors are expected to be used for general corporate and working capital purposes. "We are very pleased to announce the completion of these financing transactions," Arthur Becker, CEO of NaviSite said. "NaviSite has demonstrated significant operating momentum in fiscal year 2006 through our business unit realignment, our strong EBITDA performance, and organic revenue growth. "The refinancing of our maturing debt represents a major milestone in the transformation of the Company's capital structure. We believe this achievement represents another critical step in NaviSite's continued success." John Gavin, CFO of NaviSite, added, "This refinancing significantly strengthens NaviSite's balance sheet. The Company can now shift focus from managing short-term debt considerations to achieving longer-term financial objectives and continuing to create stockholder value." The associated term loan and credit facility from Silver Point Finance includes customary representations, warranties and covenants. Key terms of the term loan and revolving credit facility include: -- $70 million term loan facility with 3.5 million common stock warrants -- The term loan matures five years after the closing date. -- The first year of the term requires interest-only payments, payable on a quarterly basis. Quarterly principal payments commence April 30, 2007, with a balloon payment at the end of the five-year term. The interest on the term loan facility will be paid at an annual rate of LIBOR plus 5% in cash with 3% accrued in year one and LIBOR plus 7% in cash with 1% accrued for the years thereafter. -- Silver Point Finance received warrants for the purchase of 9% of NaviSite's fully diluted shares of common stock, equaling approximately 3.5 million shares, at an exercise price of $0.01 per share. Silver Point Finance has agreed not to sell or transfer any shares acquired upon exercise of the warrants during the three months after closing. -- The facility requires mandatory prepayments in the event of the sale of equity shares or asset sales, among other things. -- The term loan facility is secured by all of the assets of the Company. -- $3 million revolving credit facility -- The revolving credit facility is available on a revolving basis for five years from the closing date. -- The interest on the revolving credit facility will be paid at an annual rate of LIBOR plus 8% in cash based upon the outstanding principal amount. -- The revolving credit facility has similar mandatory prepayment requirements and security interest provisions as described in the term loan facility. -- The revolving credit facility is secured by all of the assets of the Company. As a condition to Silver Point Finance's term and revolving credit facilities, Atlantic Investors has restructured its $3 million unsecured loan, with principal and accrued interest payable on July 11, 2011. In addition, Atlantic Investors will provide a committed unsecured credit facility of $5 million for the five- year duration of the Silver Point Finance facilities, interest to be paid at the same rate as the Silver Point Finance revolving credit facility. Atlantic Investors' obligation to continue to provide the credit facility can be eliminated based upon NaviSite reaching certain financial covenants. About Lane Berry Lane, Berry & Co. International, LLC -- http://www.laneberry.com/ -- provides investment banking services to corporations, their Boards, Special Committees of Boards and shareholders on matters relating to mergers, acquisitions, divestitures, debt and equity financings, debt restructurings, recapitalizations and corporate governance issues. Lane Berry offers sophisticated, objective advice and transaction execution based upon the extensive experience of its senior investment bankers. About NaviSite Inc. NaviSite Inc. -- http://www.navisite.com/-- provides IT hosting, outsourcing and professional services for mid- to large-sized organizations. Over 900 companies across a variety of industries tapped NaviSite to build, implement and manage their systems and applications. NaviSite has 15 data centers and eight major office locations across the United States, United Kingdom and India. At Jan. 31, 2006, Navisite's balance sheet showed a stockholders' deficit of $7,987,000, compared to $2,672,000 deficit at July 31, 2005. NES RENTALS: Continues to Explore Options with Bear Stearns ----------------------------------------------------------- As previously reported in the Troubled Company Reporter, NES Rentals Holdings, Inc., hired Bear Stearns as its financial advisor. Michael A. Disser, NES Rentals' Vice President of Marketing, confirmed last week that Bear Stearns is still on board as management continues to review various strategic alternatives. The lead Bear Stearns professional advising NES Rentals is: Ken Viellieu Senior Managing Director Bear Stearns Three First National Plaza Chicago, IL 60602 Telephone (312) 580-4404 About NES Rentals Holdings, Inc. NES Rentals Holdings, Inc. -- http://www.nesrentals.com/-- is the fifth largest company in the $29 billion equipment rental industry. The company focuses on renting specialty and general equipment to industrial and construction end-users. It rents more than 750 types of machinery and equipment, and distributes new equipment for nationally recognized original equipment manufacturers. NES Rentals also sells used equipment as well as complementary parts, supplies and merchandise, and provides repair and maintenance services to its customers. In addition to the rental business NES Rentals is the second largest supplier of traffic and safety services to the construction industry. The company is a leading competitor in many of the geographic markets it reaches, from its approximately 117 locations in 34 states. As reported in the Troubled Company Reporter on Feb 24, 2006, Standard & Poor's Ratings Services placed its ratings on equipment rental company NES Rental Holdings Inc., including its 'B+' corporate credit rating, on CreditWatch with developing implications. "[NES'] ratings could be raised in the near term if the company is sold to a buyer with a higher credit profile," said Standard & Poor's credit analyst John R. Sico. "Conversely, if the company were sold to an entity with a weaker credit profile or to a financial sponsor in a leveraged transaction, the ratings could be lowered." NES RENTALS: Reports Strong Financial Gains in 2005 --------------------------------------------------- NES Rentals Holdings, Inc. released its 2005 financial results, highlighting solid increases in rental revenues, operating margins and operating income. The improved results reflect the company's focus on enhanced customer service efforts in 2005 following its financial turnaround in 2004. "NES Rentals' commitment to customer service is making a tangible difference in company performance," said Chairman and Chief Executive Officer Andrew Studdert. "We continue to achieve success because of our loyal customer base, quality fleet and dedicated employees." Solid financial performance was achieved in tandem with operational initiatives including the development of new equipment standards. "Looking ahead, our focus will remain on providing our customers with the best service and equipment available," Mr. Studdert said. "We are planning new rental equipment purchases in excess of $100 million in the coming year." Strong 2005 financial results place NES Rentals in a favorable position as the company continues reviewing strategic alternatives announced in January 2006 which could include the sale of the company, a merger, acquisition or other major transaction. Rental Revenues Increase Rental revenues for year end December 31, 2005, totaled $447 million, an increase of $14 million over the previous year. Rental revenues accounted for 77 percent of the company's total revenues in 2005, up from 74 percent in 2004. Rental rate improvement and strong market conditions drove same-store revenues up 9 percent in 2005. Total NES Rental revenues were $582 million in 2005. Operating Margins Improve Gross margins, excluding depreciation expense, increased from 43 percent in 2004 to 48 percent in 2005, a direct result of improved rental rates and lower costs. Selling, general and administrative expenses decreased 4 percent, or $6 million, to 22 percent of total revenues from 23 percent in 2004. Operating Income Grows Operating income in 2005 was $33 million, up $64 million over the 2004 operating loss of $31 million. The company's net loss was minimized to $7 million in 2005 down from $69 million in 2004. These results were achieved through lower operating costs, improved rental rates and the implementation of company-wide service and maintenance programs to improve equipment reliability. Cash Flow and Fleet Investment Remain Strong Healthy company cash flows continued in 2005 as market conditions in the construction and industrial sectors improved. NES Rentals generated $99 million in cash from operations in 2005. In addition, the company spent $100 million on new rental equipment and allocated $40 million to debt reduction payments in 2005. About NES Rentals Holdings, Inc. NES Rentals Holdings, Inc. -- http://www.nesrentals.com/-- is the fifth largest company in the $29 billion equipment rental industry. The company focuses on renting specialty and general equipment to industrial and construction end-users. It rents more than 750 types of machinery and equipment, and distributes new equipment for nationally recognized original equipment manufacturers. NES Rentals also sells used equipment as well as complementary parts, supplies and merchandise, and provides repair and maintenance services to its customers. In addition to the rental business NES Rentals is the second largest supplier of traffic and safety services to the construction industry. The company is a leading competitor in many of the geographic markets it reaches, from its approximately 117 locations in 34 states. As reported in the Troubled Company Reporter on Feb 24, 2006, Standard & Poor's Ratings Services placed its ratings on equipment rental company NES Rental Holdings Inc., including its 'B+' corporate credit rating, on CreditWatch with developing implications. "[NES'] ratings could be raised in the near term if the company is sold to a buyer with a higher credit profile," said Standard & Poor's credit analyst John R. Sico. "Conversely, if the company were sold to an entity with a weaker credit profile or to a financial sponsor in a leveraged transaction, the ratings could be lowered." NORTEL NETWORKS: Names Dietmar Wendt to Lead Global Services ------------------------------------------------------------ Dietmar Wendt will join Nortel Networks [NYSE: NT, TSX: NT] as president of Global Services effective May 1, 2006. Mr. Wendt, 46, will report directly to Mike Zafirovski, president and chief executive officer of Nortel. He will be responsible for Nortel's Global Services business, including its financial performance, portfolio development and go-to-market strategies. Nortel recently reinforced its commitment to growth in this business with a sweeping simplification of its integrated services and a series of new commercial services offerings. "Dietmar knows what it takes to create and maintain a razor-sharp business focus on services, one of the areas we have identified as key to driving momentum and growth for Nortel," Mr. Zafirovski said. "He has managed multi-billion dollar services and technology businesses. He has built and nurtured global customer relationships. His leadership and experience will be critical as we target growth in our revenue mix from services." "Network-based services and solutions will be a key driver for future economic growth and innovation across all industries around the world," Mr. Wendt said. "These services and solutions have to be seamlessly connected and integrated with clients' existing IT and telecommunications infrastructures. Nortel is ideally positioned to address this need, and I'm excited to be leading the dedicated team of Nortel professionals focused on making that happen." Mr. Wendt will join Nortel from IBM in Shanghai, China, where he is currently vice president, Asia Pacific Information Technology Services Transformation. Prior to that, Mr. Wendt was vice president, Integrated Technology Services for IBM in Central Europe and Russia. He has also held a variety of executive positions internationally with IBM in sales and product management. Born and educated in Germany, Mr. Wendt speaks fluent German and English. He will be based at Nortel's headquarters in Toronto. Nortel's Global Services include a full range of integrated services for design, deployment, management and maintenance of end-to-end multi-vendor network solutions, including seamless migration to next generation technologies. Headquartered in Ontario, Canada, Nortel Networks Corporation -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on March 15, 2006, Standard & Poor's Ratings Services placed its ratings on Nortel Networks Ltd., including the 'B-' long-term corporate credit rating, on CreditWatch with negative implications, after: * Nortel's announced restatement of financial results for: -- 2003, -- 2004, and -- first nine months of 2005; and * a delay in meeting its filing requirements for 2005. The financial restatements are limited in scope and are expected to be modest in comparison with Nortel's previous restatement activities. In addition, Nortel expects to complete its restatements, as well as file its 2005 annual report by the end of April 2006. Nevertheless, Nortel will not be in compliance with its various regulatory filing requirements as of March 16, 2006, and as a result will be in breach of covenants under its recently completed US$1.3 billion credit facility, as well as the EDC support facility. It will subsequently (as of April 1) be in breach of covenants under its public indentures. OCA INC: U.S. Trustee Appoints Five-Member Creditors Committee -------------------------------------------------------------- The U.S. Trustee for Region 5 appointed five creditors to serve on an Official Committee of Unsecured Creditors in OCA, Inc., and its debtor-affiliates' chapter 11 cases: 1. Applied Discovery, Inc. Attn: Courtney Cunniff 13427 Northeast 16th Street, Suite 200 Bellevue, WA 98005 2. Adorno & Yoss LLP Attn: Steven J. Solomon 2525 Ponce de Leon Boulevard, Suite 400 Miami, FL 33143 3. Buckley King Attn: Harry W. Greenfield 1400 Fifth Third Center 600 Superior Avenue, East Cleveland, OH 44114 4. Meckler Bulger & Tilson, LLP Attn: Walter G. Roth 123 North Wacker Drive, Suite 1800 Chicago, IL 60606 5. Navigant Consulting, Inc. Attn: Neil Luria 2344 Roxboro Cleveland, OH 44106 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/-- provides a full range of operational, purchasing, financial, marketing, administrative and other business services, as well as capital and proprietary information systems to approximately 200 orthodontic and dental practices representing approximately almost 400 offices. The Company and its debtor-affiliates filed for Chapter 11 protection on March 14, 2006 (Bankr. E.D. La. Case No. 06-10179). William H. Patrick, III, Esq., at Heller Draper Hayden Patrick & Horn, LLC, represents the Debtors. When the Debtors filed for protection from their creditors, they listed $545,220,000 in total assets and $196,337,000 in total debts. OCA INC: Committee Taps William Steffes as Local Counsel -------------------------------------------------------- The Official Committee of Unsecured Creditors of OCA, Inc., and its debtor-affiliates asks the U.S. Bankruptcy Court for the Eastern District of Louisiana for authority to retain William E. Steffes, Esq., and the law firm of Steffes, Vingiello & McKenzie, LLC, as its local counsel, nunc pro tunc to March 30, 2006. Steffes Vingiello will assist the Committee in performing its duties in the Debtors' Chapter 11 cases and will take any action necessary or required to represent the Committee' interests. The firm will work with Jenner & Block, LLP, of Chicago, Illinois, which serves as the Committee's national counsel. The Committee did not disclose how much Steffes Vingiello charges for its services. Mr. Steffes assures the Bankruptcy Court that his firm does not hold any interest adverse to the Debtors' estates. About Steffes, Vingiello & McKenzie Steffes, Vingiello & McKenzie, LLC -- http://www.steffeslaw.com/ -- is an eight-attorney law firm with offices in Baton Rouge and New Orleans, Louisiana. The firm concentrates in complex bankruptcies, workouts, reorganizations, insolvency matters, banking and commercial litigation. Mr. Steffes can be reached at: William E. Steffes, Esq. Steffes, Vingiello & McKenzie, LLC 13702 Coursey Boulevard, Building 3 Baton Rouge, LA 70817 About OCA, Inc. Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/-- provides a full range of operational, purchasing, financial, marketing, administrative and other business services, as well as capital and proprietary information systems to approximately 200 orthodontic and dental practices representing approximately almost 400 offices. The Company and its debtor-affiliates filed for Chapter 11 protection on March 14, 2006 (Bankr. E.D. La. Case No. 06-10179). William H. Patrick, III, Esq., at Heller Draper Hayden Patrick & Horn, LLC, represents the Debtors. When the Debtors filed for protection from their creditors, they listed $545,220,000 in total assets and $196,337,000 in total debts. The United States Trustee appointed an official committee on March 24, 2006. The Committee's hired Mark K. Thomas, Esq., at Jenner & Block, LLP, as lead counsel; William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC, as local counsel; and Mohsin Y. Meghji at Loughlin Meghji + Company as its financial advisor. ONEIDA LTD: Disclosure Statement Hearing Scheduled on May 1 ------------------------------------------------------------ The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York will consider the adequacy of the Disclosure of the Disclosure Statement explaining Oneida Ltd. and its debtor-affiliates' Joint Prenegotiated Plan of Reorganization at 10:00 a.m. on May 1, 2006. Overview of the Plan The Plan contemplates payment in full and in cash of all Administrative Claims, Priority Tax Claims, Other Priority Claims and General Unsecured Claims, the payment in full and in cash of all Secured Tranche A Claims, and the conversion of all Secured Tranche B Claims into 100% of the issued outstanding common stock of Reorganized Oneida Exit Facility The Debtors tell the Court that pursuant to the plan, they will enter into an Exit Facility in order to finance their emergence from chapter 11. The Exit Facility provides for a five-year revolving commitment of $80 million and a $90 million six-year term loan. In connection with procurement of the Exit Facility, the Debtors are required to pay an arrangement fee to Credit Suisse Securities (USA) LLC and will seek approval of the Court to make such payment. The Debtors believe that the Exit Facility will provide sufficient liquidity to fund their emergence from chapter 11, as well as general corporate purposes following the Effective Date. Terms of the Plan Under the Plan, Administrative Claims, Priority Tax Claims and Claims under DIP Credit Agreement will be paid in full. Holders of Secured Tranche A Claims will receive cash equal to the their claim. The Debtors tell the Court that subject to Section 5.11 of the Prenegotiated Plan, if the Bank of America letter of credit is outstanding following the effective date, BofA will receive: (i) a cash deposit or (ii) an irrevocable letter of credit issued under the Exit Facility, in an amount, equal to 105% of the face amount of the outstanding Bank of America letter of credit, less any BofA Cash Collateral. Holders of Secured Tranche B Claims will receive, in the aggregate, a number of shares of Reorganized Oneida Common Stock equal to 100% of the issued and outstanding shares of Reorganized Oneida Common Stock on the Effective Date. The Debtors say that in case of any Holder of a Tranche B Claim that is unable to hold shares of Reorganized Oneida Common Stock, the designee or designees of that Holder will receive that number of shares of Reorganized Oneida Common Stock equal to the Holder's pro rata portion of the Tranche B Common Stock. The Debtors tell the Court that in no event will there be more than 50 Holders of Tranche B Common Stock on the effective date. Holders of the Secured PBGC Claims will receive their pro rata share of the PBGC Note. The Debtors say that if holders of secured PBGC claims accept the plan, a variable interest promissory note in the principal amount of $3 million, with straight-line amortization over 10 years, bearing 4.5% interest in fiscal year ending 2007 and for fiscal years ending 2008 through 2006, unless prepaid, minimum 4.5% interest, with a possible increase to 10% if the Debtors' projected EBITDAR is exceeded by 20% will be issued. However if holders reject the Plan, then a non-interest bearing promissory note in the principal amount of $3 million, with straight-line amortization over 10 years, will be issued. Holders of Other Secured Claims will retain the legal, equitable and contractual rights of the claim and that claim will be reinstated. Holders of Other Priority Claims and General Unsecured Claims will receive, at the election of the Debtors: (i) to the extent then due and owing on the effective date, the allowed other priority claim and general unsecured claim will be paid in full and in cash by the Reorganized Debtors; (ii) to the extent not due and owing on the effective date, the allowed other priority claim and general unsecured claim will be paid in full and in cash by the Reorganized Debtors when the claim becomes due and owing in the ordinary course of business; or (iii) treatment that will render the claim unimpaired pursuant to Section 1124 of the Bankruptcy Code. Specified Unsecured Claims comprise claims associated with: (a) Oneida's guarantee of that certain letter of credit, in the amount of approximately EUR2,325,000, issued by Banca Nazionale Del Lavoro, Spa in favor of Oneida Italy SRL, approximately EUR1,000,000 of which was outstanding as of the Mar. 19, 2006, and (b) the aggregate amount owed to the PBGC in connection with the distressed termination of the Pension Plans including and any deficiency claims of the PBGC with respect to the Secured PBGC Claim. The Debtors tell the Court that on the effective date specified unsecured claims will be discharged and holders of these claims will receive nothing under the plan. Subordinated Claims will receive the same treatment as specified unsecured claims. Equity Interests Oneida will be cancelled and holders will not receive anything. About Oneida Ltd. Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/ -- is the world's largest manufacturer of stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and the largest supplier of dinnerware to the foodservice industry. Oneida is also a leading supplier of a variety of crystal, glassware and metal serveware for the tabletop industries. The Company and its 8 debtor-affiliates filed for Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at Shearman & Sterling LLP represents the Debtors. Credit Suisse Securities (USA) LLC is the Debtors' financial advisor. When the Debtors filed for protection from their creditors, they listed $305,329,000 in total assets and $332,227,000 in total debts. OPTI CANADA: S&P Assigns BB Long-Term Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' long-term corporate credit rating to Calgary, Alta.-based OPTI Canada Inc. At the same time, Standard & Poor's assigned its 'BB+' bank loan rating with a recovery rating of '1' to OPTI's proposed seven-year US$400 million secured term loan B. The '1' recovery rating reflects high expectation of full recovery of principal in a default scenario. The 'BB+' bank loan rating is one notch above the corporate credit rating, because the collateral value supporting the loan has a high probability of enabling lenders to recover all principal and accrued interest under a default scenario and likely liquidation process. The outlook is stable. "The ratings on OPTI are constrained by OPTI's aggressive financial risk profile, which reflects the company's lack of significant cash flow generation and the risk of construction cost increases until Phase 1 of its Long Lake Project begins operations," Standard & Poor's credit analyst Jamie Koutsoukis said. "Nevertheless, we believe the risk of cost overruns is tempered by the relatively short timeline to project completion and the substantial amount of capital costs already committed to the project. Initial bitumen production should begin by the end of 2006. "Furthermore, the OrCrude upgrading process which will be implemented at the project should allow OPTI to significantly reduce its exposure to natural gas fuel requirements and receive an improved netback, which we assess as a strength to the company's credit profile," Ms. Koutsoukis added. OPTI was established in 1999 to commercialize the OrCrude process in Canada and to develop integrated bitumen and heavy oil projects. The company holds a 50% interest in three separate oil sands leases at: * Long Lake, * Cottonwood, and * Leismer with Nexen Inc. (BBB-/Stable/--), its joint venture partner holding the other 50% interest. Currently the company is developing its Long Lake Project in the Athabasca oil sands region of Alberta, which involves the construction of a 72,000 barrels per day (bbl/d) SAGD (steam- assisted gravity drainage) operation and a 72,000 bbl/d on-site upgrader, which will use the OrCrude process. The three basic bitumen upgrading processes that work together to create the OrCrude process are distillation, solvent de- asphalting, and thermal cracking. The upgrader also uses conventional hydrocracking and gasification technologies. Initial production from the SAGD portion of the project is expected to begin in late 2006 with the upgrader expected to come on-line in mid-2007. There are plans to expand the project through an additional three phases, which could expand upgrading capacity to about 280,000 bbl/d between 2013 and 2017. The stable outlook reflects our expectation that OPTI will be able to complete Phase 1 on schedule and without any material cost increases or any need for additional funding. Once OPTI begins production at its oil sands project and internally generated cash flows are sufficient to meet the company's debt and maintenance capital expenditure commitments, there should be a material improvement in OPTI's financial risk profile. As the company's financial profile strengthens, the company's overall credit profile will improve, which should, in turn, result in a positive rating action. Conversely, if OPTI encounters cost overruns as it proceeds with expansion phases and the project economics do not meet expectations, a negative rating action could occur. PLIANT CORP: Noteholders Say Disclosure Statement is Inadequate --------------------------------------------------------------- The ad hoc committee of certain holders of 11-1/8% Senior Secured Notes due 2009 issued by Pliant Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to deny approval of the Disclosure Statement accompanying the Debtors' Joint Plan of Reorganization. The Second Lien Noteholders Committee complains that the Disclosure Statement omits significant information that is necessary for creditors to properly evaluate the Plan. James O'Neill, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, notes that throughout the Disclosure Statement the Debtors assert that the Plan leaves Class 5 claims of the Second Lien Noteholders unimpaired. Yet some Plan provisions clearly impair the Class 5 claimholders. Several other provisions also impair the Class but the Disclosure Statement lacks sufficient information to allow Second Lien Noteholders to make a determination. The Second Lien Noteholders also questions the Plan's feasibility. The Disclosure Statement, Mr. O'Neill asserts, contains a number of deficiencies in furnishing adequate information to creditors to enable them to make an informed judgment if the Plan is feasible. Mr. O'Neill points out the Debtors summarily stated in the Disclosure Statement that a contraction in trade terms and an increase in raw material prices led to their need to file for bankruptcy. However, the Disclosure Statement does not address why the trade terms were shortened or why the company was unable to react to the increase in raw material prices. The Second Lien Noteholders also found other deficiencies in the Disclosure Statement, including: -- failure to provide breakdown or explain the huge amount of the $114,600,000 administrative expense claims; -- the use of stale financial data; -- omission discussing the Debtors' transactions with its insiders; -- failure to disclose the estimated administrative expense claims the Debtors expect to incur including those in respect of professional fees; -- omission of explanation why the Debtors maintain that claims of the Revolving Credit Facility Lenders -- Class 3 Claims -- are impaired; and -- absence of an explanation for the creation of the New Pliant and its merger of the existing Pliant on the Effective Date. Two parties-in-interest share the Second Lien Noteholders' concerns with regards to the Disclosure Statement: 1. Wells Fargo Bank, N.A. in its capacity as successor indenture trustee to Wilmington Trust Company; and 2. The ad hoc committee of holders of certain of the 11-5/8% Senior Secured Notes due 2009 and the 11-1/8% Senior Secured Notes due 2009 -- First Lien Noteholders. Michael J. Sage, Esq., at Stroock & Stroock & Lavan LLP, in New York, representing the First Lien Noteholders Committee, tells the Court that the requirement in the Unimpaired Opt-Out Election form that the First Lien Noteholders certify that their claim is unimpaired to opt out from the releases contained in the Plan is inappropriate. As proposed, the Unimpaired Opt-Out Election form would effectively require the First Lien Noteholders to either certify that their claim is unimpaired or refuse to execute the ballot, in which case the First Lien Noteholders would be deemed to have granted the releases contained in the Plan. Mr. Sage also notes that ample provision should be made to afford parties-in-interest with sufficient time and opportunity to take discovery in connection with the proceedings related to confirmation of the Plan. 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. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) PREDIWAVE CORP: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: PrediWave Corporation fdba Rainbow Video System Corporation 48431 Milmont Drive Fremont, California 94538 Bankruptcy Case No.: 06-40547 Chapter 11 Petition Date: April 14, 2006 Court: Northern District of California (Oakland) Judge: Randall J. Newsome Debtor's Counsel: Robert A. Klyman, Esq. Latham & Watkins LLP 633 West 5th Street, Suite 4000 Los Angeles, California 90071 Tel: (213) 485-1234 Estimated Assets: More than $100 million Estimated Debts: More than $100 million Debtor's 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ New World TMT Ltd. Litigation $182,000,000 c/o Ronald M. Oster, Esq. Dennis S. Ellis, Esq. Joshua G. Hamilton, Esq. Paul Hastings Janofsky & Walker LLP 515 South Flower Street, 25th Floor Los Angeles, CA 90071 Mimi Sen Jane Lain DBA Legal-translation $83,028 Awesome Linguistic Solutions 450 Taraval Street, PMB# 232 San Francisco, CA 94116 Flash Shanghai Trade-inventory $64,941 No. 2 Gu Tang Road Wujuan Economics Development Zone Wujang, Jiangsu District, China Advanced Discovery Inc. Legal & professional $37,353 Navigant Consulting Inc. Legal & professional $34,672 Allen & Overy Legal & professional $28,241 Merrill Communications LLC Legal & professional $23,222 Blue Cross of California Health insurance $20,587 Computer Modules Inc. Computer parts $20,087 St. Paul Travelers Business insurance $17,485 Sutter Hill Investors LLC Rent - office space $14,536 Kabir K. Rahman Contract office labor $12,834 Employers Insurance Group Workman compensation $7,596 P G & E Monthly utilities $6,867 Ajilon Professional Professional services $4,640 Staffing, LLC Park Centre Apartments Homes Office rental space $2,715 California State State sales tax $2,635 Hotjobs.com Recruiting listings $2,349 Mercedes-Benz Financial Auto lease $2,298 CDW Direct, LLC Computer parts $2,296 Westcore Rent - office space $2,143 NTD Patent & Trade Mark Patent & Trademarks $2,015 Agency HyperSurf Internet Services Internet service & $1,868 maintenance Verizon Wireless Cellular telephone $1,623 Service SBC Corporation Utility-Telephone $1,593 (Now AT&T) service Sycamore Bay Rent - office space $1,415 Porsche Financial Service Auto lease $1,335 MBA Office Supply Office supplies & $1,278 machine maintenance BMW Financial Service Auto lease $1,099 Franchise Tax Board State income taxes $1,050 PROGRESSIVE GAMING: Moody's Junks Bond and Corp. Family Ratings --------------------------------------------------------------- Moody's Investors Service downgraded Progressive Gaming International Corporation's Corporate Family and senior secured bond rating to Caa1 from B3. The ratings outlook is negative. The ratings downgrade reflects: 1) a decline in earnings and negative cash flow from operations in the year-ended Dec. 31, 2005; 2) a decline in the installed base of both table games and slot machines; 3) significant reliance on new product introductions to jump start revenue and earnings growth in 2006 and beyond; 4) limited liquidity given the termination of the company's revolving credit facilities; and, to a lesser degree concerns; and 5) over the increasing complexity of the company's more technology driven revenue and exchange transactions evidenced by the amended filing of its Sept. 30, 2005, 10-Q to reclassify a nonrecurring licensing transaction from revenues into a gain on sale category and the disclosure of a material weakness in internal controls in its 10-K related to significant non-routine complex transactions. In addition, the rating actions take into account the uncertainty surrounding the time it may take for new product introductions to result in higher revenues and the likelihood the company's internally generated cash flow will not be sufficient to fund all capital, intellectual property and game title investment spending, and interest needs in 2006. If the company does not meet its earnings estimates it will need to draw upon its cash reserves. The completes the review of the company's ratings that began on Mar. 28, 2006. Progressive Gaming International Corporation formerly Mikohn Gaming Corp., headquartered in Las Vegas, Nevada, is a supplier of integrated casino management systems software and games for the gaming industry. Revenues for the year ended Dec. 31, 2005, were $78 million. PROSOFT LEARNING: VCampus Buying Company Under Chapter 11 Plan -------------------------------------------------------------- Prosoft Learning Corporation (POSO.OB) will be acquired by VCampus Corporation (NASDAQ:VCMP) under a chapter 11 plan that will cancel all existing Prosoft shares and issue 100% of the new common stock in Reorganized Prosoft to VCampus. The acquisition will enable VCampus to add the market-leading CIW (Certified Internet Web Professional) certification to its Select Partner Program, as well as offer the CTP (Convergence Technologies Professional) credential, which Prosoft manages for the Telecommunications Industry Association. Based on Prosoft's fiscal 2005 revenues, the acquisition will more than double the total revenues of VCampus, as well as more than double its certification-related revenues. With more than 84,000 certificates issued, the CIW program is one of the world's leading vendor-neutral Internet skills certifications. The CIW certification program has been endorsed by Departments of Education and/or Departments of Workforce Development in 12 U.S. states, as well as by a growing number of governments, trade associations and schools around the world. VCampus believes there is significant potential for additional growth in both domestic and international markets given the growing trend of Internet skills being taught in secondary and post-secondary classrooms. The CTP certification is a fast-growing certification for professionals working with convergence technologies such as Voice over Internet Protocol. The CTP Advisory Council consists of industry heavyweights such as Cisco, IBM and Toshiba. In need of balance sheet restructuring to address its November 2005 default on its debt obligations, Prosoft has been evaluating its strategic alternatives for several months. Chapter 11 Process Pursuant to the terms of the definitive agreement between Prosoft and VCampus, Prosoft will seek confirmation of a formal plan of reorganization in the United States Bankruptcy Court for the District of Arizona. This plan of reorganization provides for the cancellation of all of Prosoft's existing common stock, options, warrants and equity rights, with no consideration available to such equity holders, and the purchase by VCampus of all of the new equity in the reorganized company. VCampus intends to continue substantially all of Prosoft's current operations and retain virtually all Prosoft employees. The closing of the acquisition pursuant to the definitive agreement is subject to customary conditions, including the approval of the reorganization plan by the Court. Under the terms of the definitive agreement, VCampus will pay approximately $2.3 million to acquire all of the newly issued capital stock of reorganized Prosoft. VCampus will also be assuming certain liabilities and obligations of Prosoft, including essential trade payables, as part of the reorganization. The purchase price is subject to a working capital adjustment at closing. Benefits of VCampus "Prosoft adds significant depth to our portfolio of certification tracks in a growing market for providing career entry-level professional credentials in Internet-related technology for millions of high school graduates worldwide. "Prosoft's well-established reputation as a provider of one of the world's leading vendor-neutral IT certifications, combined with a solid sales organization in Europe, Asia and North America, will help VCampus to establish its leadership in this emerging market and pursue its rapid growth plans. "Most importantly, Prosoft brings a talented and experienced group of professionals to the VCampus team to help us grow faster than VCampus can by itself. There is a very good strategic fit with our Select Partner Program. "The acquisition also creates a critical mass of revenues to better support the overhead associated with operating as a public company," said Nat Kannan, chairman and CEO of VCampus. "Given our previously disclosed default on our debt obligations, our options were limited in the type of transactions available to us," Benjamin Fink, CEO of Prosoft Learning Corporation, said. "Our execution of the definitive agreement with VCampus represents the culmination of more than nine months of searching for the best available exit strategy for Prosoft and its constituents. The true beneficiaries of this transaction are Prosoft's customers and partners, as they will be served by a stronger, larger and better- capitalized company. "We are confident that we will be able to continue to maintain normal company operations through the completion of this process, and preserve the interests of our customers, employees and suppliers." The parties expect to complete the acquisition before the end of the second calendar quarter of this year. About VCampus Headquartered in Reston, Virginia, VCampus Corporation -- http://www.vcampus.com/-- provides end-to-end e-learning services and helps organizations that offer professional certifications and credentials unlock the value of their traditional branded course content. Through its innovative Select Partner(TM) Program, VCampus repurposes value-added training content for online delivery to enhance and support professional development programs. The Select Partner Program provides custom course development, publishing, hosting, e-commerce, reporting, account support and marketing services. With more than a decade of e-learning experience, VCampus has delivered more than 3 million courses to more than 1 million desktops/users in professional credentialing and certification organizations, associations, non-profits, corporations, government agencies and higher education institutions. VCampus distributes a courseware library of more than 3,800 Web-based courses. About Prosoft Learning Headquartered inPhoenix, Arizona, Prosoft Learning Corporation -- http://www.ProsoftLearning.com/-- offers content and certifications to enable individuals to develop and validate critical Information and Communications Technology workforce skills. Prosoft is a leader in the workforce development arena, working with state and local governments and school districts to provide ICT education solutions for high school and community college students. Prosoft has created and distributes a complete library of classroom and e-learning courses. Prosoft distributes its content through its ComputerPREP division to individuals, schools, colleges, commercial training centers and corporations worldwide. Prosoft owns the CIW job-role certification program for Internet technologies and the Certified in Convergent Network Technologies certification, and manages the Convergence Technologies Professional vendor-neutral certification for telecommunications. At Jan. 31, 2006, Prosoft Learning's balance sheet shows a $4,106,000 stockholders' deficit, compared to $3,491,000 of positive equity at July 31, 2005. PXRE GROUP: Asks Rating Agencies to Withdraw Claims Paying Ratings ------------------------------------------------------------------ PXRE Group Ltd. (NYSE: PXT) requested that the major credit rating agencies withdraw their financial strength and claims paying ratings of the Company and its operating subsidiaries. PXRE's Board of Directors has commenced a strategic evaluation process in response to downgrades of the Company's operational ratings to a level below the critical 'A' rating category. The Company is currently evaluating various strategic alternatives to determine the course of action that is in the best interest of its shareholders and reinsurance clients. "After much consideration, we have asked the major rating agencies to withdraw their financial strength and claims paying ratings for PXRE," Jeffrey L. Radke, President & Chief Executive Officer of PXRE Group, said. "In the period since the downgrades, we have found that operational ratings below the critical 'A' category provide little value for a reinsurer." The Company anticipates that certain rating agencies will continue to maintain the debt ratings on the 8.85% Capital Trust Pass- through Securities issued by PXRE Capital Trust I. About PXRE With operations in Bermuda, Europe and the United States, PXRE -- http://www.pxre.com/-- provides reinsurance products and services to a worldwide marketplace. The Company's primary focus is providing property catastrophe reinsurance and retrocessional coverage. The Company also provides marine, aviation and aerospace products and services. The Company's shares trade on the New York Stock Exchange under the symbol "PXT." * * * PXRE carries Standard & Poor's and A.M. Best's BB- credit ratings. The Company's senior unsecured debt has a BB rating from Fitch. The thee agencies assigned these ratings in Feb. 2006. PXRE GROUP: S&P Lowers Preferred Stock's Rating to CCC+ from B- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its counterparty credit ratings on PXRE Group Ltd. (NYSE:PXT) and PXRE Corp. to 'B+' from 'BB-' and removed the ratings from CreditWatch negative where they were placed on Feb. 16, 2006. In addition, Standard & Poor's also lowered its rating on PXRE's Capital Trust I preferred stock, supported by deferrable subordinated debt from PXRE Corp., to 'CCC+' from 'B-', and lowered its counterparty credit and financial strength ratings on Bermuda-based PXRE Reinsurance Ltd. and U.S.-based PXRE Reinsurance Co. (PXRE U.S.; collectively referred to as PXRE) to 'BB+' from 'BBB-'. The outlook on all these ratings is stable. Subsequently, at management's request, Standard & Poor's has withdrawn the ratings on PXRE Reinsurance Ltd., PXRE U.S., and PXRE Group Ltd. The ratings on PXRE Capital Trust I's preferred stock and its guarantor, PXRE Corp., were not withdrawn because the preferred shares remain in the public domain, and thus are subject to continued monitoring by Standard & Poor's. "The downgrades reflect our concern of the potential that the selective cancellation of reinsurance contracts by PXRE's clients could result in PXRE's exposures being concentrated in certain zones, thus resulting in a mismatch between current and prospective exposures and reinsurance protection relative to the capital base," Standard & Poor's credit analyst Steven Ader explained. "Specifically, a significant catastrophic event in an exposed zone could result in material losses without an appropriate premium base in terms of both total amount and diversification by exposure location to offset these losses, resulting in a greater financial impact than if none of the clients cancelled their coverage." This risk is further exacerbated by weak financial flexibility, borne from a materially diminished competitive position, resulting in a questionable ability to raise capital in response to any adverse industry or company event (including the potential for reserve additions on 2005 hurricane losses). The ratings on PXRE reflect adequate capital adequacy and liquidity recently bolstered by the successful liquidation of the fixed-income investment portfolio at PXRE Reinsurance Ltd. in March 2006. Offsetting factors include: * a materially diminished competitive position; * weak financial flexibility; and * the potential for adverse selection and exposure concentration triggered by PXRE's clients exercising their right to cancel their reinsurance contracts. The stable outlook incorporates Standard & Poor's expectation that PXRE's capital and liquidity are supportive of their current obligations. RADNOR HOLDINGS: Revolver Availability Increased to $85 Million --------------------------------------------------------------- Radnor Holdings Corporation can borrow up to $85 million from its bank lenders under its domestic revolving credit facility after they amended their Credit Agreement on April 4, 2006. The Revolver Amendment provides that the borrowing base may not exceed the sum of: (1) 85% of the eligible receivables of the Company and its domestic operating subsidiaries; plus (2) the lesser of: (a) 60% of the Borrowers' eligible inventory; or (b) $40 million; less (3) outstanding letters of credit; less (4) outstanding swing loans; less (5) $6.0 million. The Revolver Amendment became effective March 31, 2006. As of Sept. 30, 2005, the Company had $62.4 million outstanding under its revolving credit facilities. After taking into account cash on hand of $2.1 million, the Company has had the ability to draw up to an additional $10.1 million under these facilities as of Sept. 30, 2005. Interest on the revolving loans increased and is payable at the domestic rate (equal to the greater of National City Bank's prime rate or the Fed Funds Rate plus .75%) or LIBOR loan rate plus, in each case, the applicable margin. The applicable margin for LIBOR rate loans will vary from 1.75% to 3.25% per annum and the applicable margin for domestic rate loans will vary from 0.00% to 1.50% per annum based on the Company's undrawn availability. The Revolver Amendment also increased the letter of credit fee payable to the lenders initially to 2.50% per annum of the face amount of all outstanding letters of credit. The letter of credit fee will subsequently be adjusted to between 1.75% and 3.25% based on the Company's undrawn availability. The Revolver Amendment also provides that the fixed charge coverage ratio requirement will not be applicable until the second fiscal quarter of 2006 and will only be tested if undrawn availability falls below $10.0 million or upon the occurrence and continuation of a default. The Revolver Amendment decreased the limit on permitted capital expenditures for calendar year 2006 to $17.5 million. The Revolver Amendment also includes an early termination fee. Bond Covenant Modified As reported in the Troubled Company Reporter on April 10, 2006, Radnor Holdings Corporation and some of its subsidiaries amended their indenture with Wachovia Bank, National Association, dated as of March 11, 2003, which governs the Company's 11% Senior Notes due 2010. The amendment allowed the Company to incur an additional $25 million of indebtedness by expanding the definition of "Permitted Indebtedness." The Company's $135 million of 11.0% Senior Notes due 2010 are fully and unconditionally jointly and severally guaranteed by substantially all of the Company's domestic subsidiaries, all of which are 100% owned. About Radnor Holdings Radnor Holdings Corporation -- http://www.radnorholdings.com/-- is a leading manufacturer and distributor of a broad line of disposable foodservice products in the United States and specialty chemical products worldwide. The Company operates 15 plants in North America and 3 in Europe and distributes its foodservice products from 10 distribution centers throughout the United States. Liabilities Exceed Assets At Sept. 30, 2005, Radnor Holdings' equity deficit widened to $28,800,000 from a $770,000 deficit at Dec. 31, 2004. Tardy 10-K Radnor's Annual Report on Form 10-K for the fiscal year ended December 30, 2005, "could not be filed within the prescribed time period primarily due to the Company's continuing review of the impact of, and disclosures related to, certain financing transactions subsequent to fiscal year end," President and Chief Executive Officer Michael T. Kennedy told the SEC in a March 31 regulatory filing. "The Company is also continuing its review of certain income tax matters," Mr. Kennedy added. Radnor's results of operations for the fiscal year ended December 30, 2005, were negatively impacted by the Gulf Coast hurricanes, and the resulting volatility in the petrochemicals and energy markets. The impact of these events on the Company's pre- tax results of operations has been estimated between $25 million and $30 million, primarily in the fourth quarter. REAL ESTATE: Moody's Places Ratings on Six Cert. Classes at Low-B ----------------------------------------------------------------- Moody's Investors Service assigned these definitive ratings to certificates issued by Real Estate Asset Liquidity Trust Commercial Mortgage Pass-Through Certificates, Series 2006-1: * Aaa to the $215.0 million Class A-1 Certificates due December 2021, * Aaa to the $142.4 million Class A-2 Certificates due December 2021, * Aa2 to the $6.7 million Class B Certificates due December 2021, * A2 to the $8.9 million Class C Certificates due December 2021, * Baa2 to the $0.001million Class D-1 Certificates due December 2021, * Baa2 to the $8.4 million Class D-2 Certificates due December 2021, * Baa3 to the $0.001 million Class E-1 Certificates due December 2021, * Baa3 to the $2.9 million Class E-2 Certificates due December 2021, * Ba1 to the $2.8 million Class F Certificates due December 2021, * Ba2 to the $2.2 million Class G Certificates due December 2021, * Ba3 to the $1.0 million Class H Certificates due December 2021, * B1 to the $1.0 million Class J Certificates due December 2021, * B2 to the $1.0 million Class K Certificates due December 2021, * B3 to the $0.5 million Class L Certificates due December 2021, * Aaa to the $0.001 million Class XP-1 Certificates due December 2021, * Aaa to the $369.3 million Class XP-2 Certificates due December 2021, * Aaa to the $0.001 million Class XC-1 Certificates due December 2021, and * Aaa to the $396.2 million Class XC-2 Certificates due December 2021. The ratings on the Certificates are based on the quality of the underlying collateral -- a pool of multifamily and commercial loans located in Canada. The ratings on the Certificates are also based on the credit enhancement furnished by the subordinate tranches and on the structural and legal integrity of the transaction. The pool's strengths include its high percentage of less risky asset classes, recourse on 74.1% of the pool, the overall low leverage and the creditor friendly legal environment in Canada. Moody's concerns include the concentration of the pool, where the top ten loans account for 58.6% of the total pool balance and the existence of subordinated debt on 5.6% of the pool. Moody's beginning loan-to-value ratio was 79.1% on a weighted average basis. REPUBLIC STORAGE: Wants to Hire Duff & Phelps as Investment Banker ------------------------------------------------------------------ Republic Storage Systems Company, Inc., asks the U.S. Bankruptcy Court for the Northern District of Ohio for permission to employ Duff & Phelps Securities, LLC, as its investment banker. D&P will: a) provide specific services appropriate and feasible in order to advise the Debtor with the sale or refinance of its business; and b) provide financial advisory and investment banking services, including general restructuring advice and banking services with regard to any potential public or private financing, any potential sale of the Debtor's assets to another corporation or business entity, any restructuring, reorganization recapitalization, or similar transactions. The Debtor will pay D&P a monthly fee of $25,000. D&P will credit 100% of the monthly fees, including any amounts received pre-petition, towards any fees payable in connection with the completion of a transaction. To date, D&P received a total of $120,879.01, consisting of $100,000 in monthly fees and $20,879.01 in out of pocket expenses. The Debtor will pay D&P a transaction fee, which will be the greater of: a) $250,000; b) a Financing Fee, equal to 2.5% of the first $10 million of principal balance of any new secured, unsecured indebtedness or equity capital raised plus 3.5% of that new capital raised in excess of $10 million, provided however, that capital provided by sources that have been in discussions with the Debtor and listed on Exhibit A of the Retention Agreement shall be subject to 50% of the aforementioned Financing Fee; or c) a Sale Fee, which in the event of a sale of all, or substantially all, of the Debtor's assets through either an asset sale or stock sale, D&P will earn a fee of 2.5% of the first $10 million of Sale Value plus 3.5% of such Sale Value in excess of $10 million. In addition to compensation for professional services rendered by its personnel, Debtor will reimburse D&P for its reasonable out- of-pocket and incidental expenses as documented for travel, meals, lodging, and other miscellaneous expenses incurred in connection with the case. The Debtor submits that D&P does not hold or represent any interest adverse to the Debtor as debtor-in-possession or to its estate, that D&P is a "disinterested person" as that term is defined in Sections 101(14) and 1107(b) of the Bankruptcy Code. Headquartered in Canton, Ohio, Republic Storage Systems Company, Inc. -- http://www.republicstorage.com/-- an employee-owned firm, manufactures industrial and commercial shelving, storage rack, mezzanine systems and shop equipment. The Company filed for Chapter 11 protection on March 14, 2006, (Bankr. N.D. Ohio Case No. 06-60316). James Michael Lawniczak, Esq., at Calfee, Halter & Griswold, LLP, 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. SOLECTRON CORP: Discloses Second Fiscal Quarter Financial Results ----------------------------------------------------------------- Solectron Corporation (NYSE:SLR) reported sales of $2.50 billion in the second quarter of fiscal 2006, an increase of 1.8% over first quarter revenues of $2.46 billion. Revenues in the second quarter of fiscal 2005 were $2.76 billion. The company reported GAAP profit after tax from continuing operations of $17.1 million in the second quarter of fiscal 2006, compared with a GAAP profit after tax from continuing operations of $20.2 million in the first quarter of fiscal 2006. In the second quarter of fiscal 2005, Solectron reported a GAAP loss after tax from continuing operations of $3.1 million. The company reported GAAP profit after tax of $30.4 million in the second quarter of fiscal 2006, including a gain of approximately $13.3 million from discontinued operations, primarily related to a working capital settlement in connection with a past divestiture. Non-GAAP profit after tax was $29.7 million in the second quarter of fiscal 2006, compared with non-GAAP profit after tax of $28.1 million for the first quarter of fiscal 2006. In the second quarter of fiscal 2005, Solectron reported non-GAAP profit after tax of $44.7 million. Non-GAAP financial results do not include restructuring costs, impairment charges, amortization of intangibles, stock-based compensation expenses, or other infrequent or unusual items. The financial results of prior periods have been adjusted to exclude the impact of stock compensation charges and amortization of intangibles. "We are pleased to see that revenue growth has resumed over the past two quarters and that we are delivering on our commitment to return to growth in fiscal 2006," said Mike Cannon, president and chief executive officer, Solectron. "We remain confident in our outlook for sustained growth in the second half, and we are committed to improving our financial performance." Third Quarter 2006 Guidance Fiscal third quarter guidance is for sales of $2.5 billion to $2.7 billion. Headquartered in Milpitas, California, Solectron Corporation -- http://www.solectron.com/-- provides a full range of worldwide manufacturing and integrated supply chain services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, product manufacturing, and product warranty and end-of-life support. * * * As reported in the Troubled Company Reporter on Feb. 16, 2006, Moody's Investors Service put a B3 rating on Solectron's $150 million ten-year senior subordinated notes and affirmed Solectron's existing ratings including its B1 Corporate Family rating. Moody's said the ratings outlook remains stable. Fitch Ratings also placed a 'B+' rating on Solectron's $150 million of senior subordinated notes. SOLUTIA INC: Six Creditors Resigned from Creditors' Committee ------------------------------------------------------------- In 2004, Austin Industries, Inc., resigned as member of the Official Committee of Unsecured Creditors of Solutia, Inc., et al. Deirdre A. Martini, before she resigned as the United States Trustee for Region 2, appointed BASF Corporation to the panel. Six more members resigned from the Committee: -- Fidelity Management & Research Co., -- Shell Chemical, LP, -- J.P. Morgan Chase Bank, -- Monsanto Company, -- Trust Company of the West, and -- Xerion Partners I, LLC The Creditors Committee is now comprised of: (1) Pension Benefit Guaranty Corporation 1200 K Street N.W., Suite 340 Washington, D.C. 20004 Attn: Rodney Carter, Financial Analyst Tel. No.: (202) 3276-4070, ext. 3941 (2) BASF Corporation 300 Continental Drive North Mount Olive, New Jersey 07028 Attn: Tom A. Turner, Corporate Credit Manager c/o Sharon Levine, Esq. Tel. No.: (973) 597-2374 (3) Toray Industries, Inc. 461 Fifth Avenue, 9th Floor New York, NY 10017 Attn: Yusuke Orito Chief Executive Representative for the Americas Tel. No.: (212) 697-8150 Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOLUTIA: Equity Panel Wants Discovery on Monsanto Issues Continued ------------------------------------------------------------------ "The Plan [of Reorganization] proposed and described in the Disclosure Statement amounts to little more than a repeat one- sided give-away by Solutia to Pharmacia Corporation and Monsanto Company, much like the original 1997 Spin-Off of Solutia from Old Monsanto and the Amendment to the Distribution Agreement in 2000," Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, contends. The Plan bears striking similarity to the Spin-Off and Amendment by using Solutia to protect and insulate Old Monsanto and New Monsanto from the Environmental Legacy Liabilities, Ms. Dine points out. "Monsanto, with the assistance of Solutia and the Official Committee of Unsecured Creditors, seek to accomplish [that] goal through inadequate and misleading information to Solutia's unsecured creditors and public shareholders." The Official Committee of Equity Security Holders relates that shortly before taking her medical leave, Judge Beatty informed the Debtors that the Equity Committee should be entitled to discovery concerning the claims asserted in its Adversary Proceeding, as well as discovery relating to the Global Settlement, originally announced on June 20, 2005, that was to form the basis of the Debtors' proposed plan of reorganization. "Rather than proceed with any such discovery or cooperate in any meaningful way with the Equity Committee, the Debtors took advantage of this Court's leave to file the Plan and Disclosure Statement without any of the Settling Parties first providing the Equity Committee with any discovery. "This action was contrary to this Court's admonitions to the Settling Parties that the failure to cooperate with the Equity Committee with respect to discovery would effectively delay any proceedings towards confirmation of a plan of reorganization," Ms. Dine says. The Equity Committee submits that before a hearing on the Disclosure Statement can proceed and before any comprehensive objections can be filed, there must be threshold discovery of the information underlying and supporting the Plan. Without this discovery, the Equity Committee cannot fairly test the adequacy of the Disclosure Statement with respect to key issues in the Plan. The Equity Committee notes that: (1) The Disclosure Statement fails to provide anything but a cursory analysis of the claims asserted by Old Monsanto and New Monsanto. Nor does the Disclosure Statement provide any disclosure quantifying these allegedly significant claims against the Debtors' estates. (2) The Disclosure Statement contains no meaningful analysis of the potential claims of the Debtors' estates against Old Monsanto and New Monsanto. Nor does the Disclosure Statement quantify the potential value of the claims against New Monsanto or Old Monsanto. (3) The Disclosure Statement misleadingly suggests that New Monsanto will make significant monetary and other contributions to the Plan to justify the substantial amount of the ownership interest in Reorganized Solutia to be provided to New Monsanto under the Plan. When, in fact, New Monsanto will actually make only minimal contributions to the estate in exchange for the windfall recovery it is proposed to receive under the Plan. (4) Information relating to the Debtors' determination of value for Reorganized Solutia is wholly inadequate and misleadingly suggests a substantially underestimated enterprise value for Reorganized Solutia. For these reasons, the Equity Committee served discovery requests on each of the Settling Parties in March 2006. However, the Settling Parties have resisted the discovery and failed to cooperate with the Equity Committee, claiming that discovery is premature or irrelevant. According to Ms. Dine, the Debtors have suggested to the Equity Committee that they are prepared to offer the Equity Committee limited discovery on the condition that the Equity Committee will waive substantial portions of its discovery until after approval of the Disclosure Statement. The Equity Committee maintains that discovery relating to these issues is necessary: * Quantification and analysis of the claims asserted by Monsanto and Pharmacia against the Debtors; * Quantification and analysis of the claims of the Debtors' estates against Monsanto and Pharmacia; * Analysis and information relating to the valuation of Solutia and the value of the New Common Stock to be issued by Reorganized Solutia; and * Further analysis and information relating to the Environmental Legacy Liabilities. Until necessary discovery is completed and threshold issues are determined, Solutia cannot present its stakeholders with adequate disclosure to enable them to evaluate and vote on the Plan, Ms. Dine avers. Thus, the Equity Committee asks the U.S. Bankruptcy Court for the Southern District of New York to continue the Disclosure Statement hearing and the deadline to file objections to the Disclosure Statement to allow discovery to proceed forward. Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) SYBRON DENTAL: Inks $2 Billion Purchase Deal with Danaher Corp -------------------------------------------------------------- Danaher Corporation (NYSE: DHR) and Sybron Dental Specialties Inc. signed a definitive agreement pursuant to which Danaher will make a cash tender offer to acquire all of the outstanding shares of Sybron Dental for $47 per share, for an aggregate price of approximately $2 billion, including transaction costs and net of cash acquired, to be followed by a second step cash-out merger at the offer price. In addition, Danaher expects to assume approximately $200 million of debt in connection with the acquisition. The Board of Directors of Sybron Dental unanimously recommended that the shareholders of Sybron Dental accept the offer. The offer is subject to customary conditions, including tender of a majority of the outstanding shares into the offer, and the absence of a material adverse change with respect to Sybron Dental. Danaher anticipates completing the offer in the second quarter of 2006. "the combination of Danaher and Sybron Dental makes very strong strategic and financial sense," Danaher's President and CEO, H. Lawrence Culp, Jr., said. "Sybron's consumables and small equipment offering are a logical extension of Danaher's existing dental equipment portfolio and will allow us to more broadly serve the dental community. "We also believe there are excellent opportunities to strengthen Sybron Dental as well as accelerate its growth with the application of the Danaher Business System. We look forward to working with this talented organization." "We firmly believe the transaction with Danaher serves the best interests of our shareholders and will provide numerous benefits for our employees and customers, Floyd W. Pickrell, Jr., Chief Executive Officer of Sybron Dental Specialties, said. "Danaher is committed to investing in our business, promoting further innovation in our product development efforts, and enhancing efficiencies in our operations. We believe our combined efforts will help Sybron extend the leadership position we have built in attractive markets throughout the world." Credit Suisse Securities (USA) LLC acted as financial advisor to Sybron Dental, and Hughes Hubbard & Reed LLP and Quarles & Brady LLP provided legal counsel to Sybron Dental. About Danaher Danaher Corporation - http://www.danaher.com/-- is a leading manufacturer of Professional Instrumentation, Industrial Technologies, and Tools and Components. About Sybron Dental Based in Newport Beach, California, Sybron Dental Specialties -- http://www.sybrondental.com/-- and its subsidiaries are leading manufacturers of both a broad range of value-added products for the dental profession, including the specialty markets of orthodontics, endodontics and implantology, and a variety of infection prevention products for use by the dental and medical professions. Sybron Dental reported annual revenues of approximately $650 million in fiscal year 2006. Sybron's 8-1/8% Senior Subordinated Notes due 2012 carry Moody's Investors Service's B1 rating and Standard & Poor's BB- rating. SYBRON DENTAL: Danaher Merger Cues S&P to Put BB+ Rating on Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Sybron Dental Specialties Inc., including the 'BB+' corporate credit rating, on CreditWatch with positive implications (indicating that the ratings could be raised or affirmed upon further review). The CreditWatch placement follows the announcement that Danaher Corporation will acquire the company. Danaher anticipates that the acquisition will be completed in the second quarter of 2006. At that point, Standard & Poor's will withdraw its corporate credit rating on Sybron, as well as the ratings of any retired debt. However, if any of Sybron's rated debt were to remain outstanding after the transaction, we would likely raise the rating on that debt. This is due to Danaher's stronger credit quality relative to Sybron. TOWER AUTOMOTIVE: Asks Court to Approve Settlements with Retirees ----------------------------------------------------------------- Tower Automotive, Inc. (OTCBB: TWRAQ.PK) and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve settlements with two groups representing current and future retirees. Both settlements include modifications to retiree health care benefits that are imperative to Tower's successful restructuring and emergence from bankruptcy. The settlements cover retired salaried employees company-wide as well as current and future retirees of the recently closed Milwaukee facility. The agreement with salaried retirees was reached with the Official Committee of Retirees. Under the agreement, Tower will continue its current benefit payments to salaried retirees through June 30, 2006. The Retiree Committee will establish a Voluntary Employee Benefits Association trust to administer future benefits. Tower will make a cash payment to the VEBA on July 1 and another payment in cash and equity when the company emerges from Chapter 11 reorganization. These payments will total approximately $5 million. If Tower's reorganization is not completed by July 1, the company will make supplemental cash payments to the VEBA until the reorganization is complete. In addition, retiree life insurance will continue at the current benefit levels. The Retiree Committee represents approximately 200 retired salaried workers and their dependents. Tower also submitted to the Court a previously announced agreement with unions representing employees and retirees at its Milwaukee manufacturing facility. Under that agreement, Tower will continue current benefit payments through June 30, 2006. A separate VEBA will administer benefits for current and future Milwaukee retirees beginning July 1. The company will contribute approximately $30 million in equity in the reorganized company to the VEBA when Tower emerges from bankruptcy. Tower may make additional cash payments if certain financial milestones are met. The Milwaukee agreement covers approximately 4,600 current and future retirees and their dependents. The Milwaukee location ceased operations last month. "The decision to ask our retired colleagues for changes to the benefits they receive was a difficult one, but it is a necessary step in achieving the cost savings that are critical to our reorganization plan," Kathleen Ligocki, president and chief executive officer of Tower said. "These agreements, which resolve over 90 percent of Tower's retiree obligations, enable the company to reduce its costs while providing a framework for continued healthcare coverage. We appreciate the retirees' willingness to join with us in doing their part to ensure that our reorganization plan is successful, and we are pleased that agreements could be reached without the need for the Bankruptcy Court to rule on Tower's request to modify the benefits." Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05- 10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. UAL: Pilots Demand Immediate Payment of Non-Qualified Benefits -------------------------------------------------------------- On March 21, 2006, the U.S. Bankruptcy Court for the Northern District of Illinois directed United Air Lines, Inc., to pay non-qualified pension benefits for November 2005 through January 2006. Three days later, United asked the Court to correct a "clerical error" with respect to that order. United argues that the order omitted language necessary for it to take appeal because the order did not give it the opportunity to segregate amounts necessary to non-qualified benefits. URPBPA Challenges United's Request "It is disingenuous for United to argue that the March 21, 2006 order is somehow deficient and that this deficiency is due to the Court's alleged 'clerical error' when, in fact, United is asking for new relief," Eric E. Newman, Esq., at Meckler Bulger & Tilson, in Chicago, Illinois, tells Judge Wedoff. United, Mr. Newman notes, seems to be asking for permission to place the non-qualified benefits it owes retired pilots into some type of escrow account. But United provides no reason why it should retain control over the amount it owes the retired pilots, says Mr. Newman. Mr. Newman asserts that United's attempt to withhold payments, despite the fact that it did not contest that it owes this money, appears to be nothing more than an unjustified stalling tactic. Accordingly, the United Retired Pilots Benefit Protection Association asks the Court to deny United's request and require United to either immediately pay non-qualified benefits for November 2005 through January 2006 or post an appropriate supersedeas bond. 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. 121; Bankruptcy Creditors' Service, Inc., 215/945-7000) UAL CORP: Amends Performance Incentive Plan & LT Incentive Plan --------------------------------------------------------------- Paul R. Lovejoy, UAL Corporation's senior vice president, general counsel and secretary, informs the Securities and Exchange Commission that on Feb 22, 2006, the Human Resources Subcommittee of the Board of Directors of UAL Corporation approved and recommended an amendment to the UAL Corporation Performance Incentive Plan. The Board adopted the amendment on February 23, 2006. Similarly, the HR Committee also approved, and the Board adopted, an amendment to the United NewVentures Long Term Incentive Plan. Under the terms of the PIP and LTIP Amendments: (a) no participant who is, or was, an officer of UAL or United Air Lines, Inc., at any time from January 1, 2003, through the date of payment of the incentive award will be entitled to receive payment of an incentive award under the PIP or LTIP; and (b) payment of the incentive awards for 2003 may be made in the form of the issuance of non-equity securities of UAL or the payment of cash as soon as practicable, but in any event no later than 270 days following Feb. 1, 2006, the date UAL emerged from Chapter 11; and Participants of the PIP will be entitled to receive incentive awards only if they are employed by UAL or an affiliate on the date of the payment of the award. The total principal amount of all of the non-equity securities issued for payment of all of the incentive awards under the LTIP, together with any cash payments of incentive awards under the LTIP, may not exceed $11,000,000. A full-text copy of the PIP Amendment is available for free at http://ResearchArchives.com/t/s?7de A full-text copy of the LTIP Amendment is available for free at http://ResearchArchives.com/t/s?7df 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. 119; Bankruptcy Creditors' Service, Inc., 215/945-7000) UNIVERSITY HEIGHTS: Retains McNamee Lochner as Bankruptcy Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York approved the request of University Heights Association Inc. to retain McNamee, Lochner, Titus & Williams, P.C., as its bankruptcy counsel. McNamee Lochner will: a) assist in preparing and filing with the Court and the U.S. Trustee's office all schedules and statements required by the Court Bankruptcy Rules, the Bankruptcy Code and U.S. Trustee; b) represent the Debtor at all meetings of creditors; c) assist in preparing and filing the Debtor's chapter 11 plan and obtaining Court's approva for that plan; d) assist in the preparation of a disclosure statement; e) assist in the protection of the Debtor's interest in executory contracts or leases; f) defend any motions to lift stay and any other ancillary motions necessary within the context of the chapter 11 proceedings; and g) represent the Debtor's interest in any and all other related proceedings during the course of the Debtor's chapter 11 case. Peter A. Pastore, Esq., a principal at McNamee Lochner, tells the Court that his Firm received a $17,732 prepetition retainer. Court documents don't disclose how much McNamee Lochner's professionals will be paid. Mr. Pastore assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Albany, New York, University Heights Association Inc. -- http://www.universityheights.org/-- is composed of four educational institutions that aim to enhance the economic vitality and quality of life of its immediate community. The company filed for chapter 11 protection on Feb 13, 2006 (Bankr. N.D.N.Y. Case No. 06-10226). Peter A. Pastore, Esq., at McNamee, Lochner, Titus & Williams, PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and liabilities between $10 million and $50 million. USA COMMERCIAL: Files Chapter 11 Protection in Nevada ----------------------------------------------------- USA Commercial Mortgage Company and certain of its affiliates have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in order to address liquidity needs and debt restructuring. The company filed its petition with the U. S. Bankruptcy Court for the Southern District of Nevada. The company also does business under the name USA Capital. In connection with the company's Chapter 11 filings, USA Commercial Mortgage said it is in active discussions with leading financial institutions to provide debtor-in-possession financing. USA Commercial Mortgage Company is seeking a $100 million credit facility to fund operations and provide capacity to fund new loans. Filings for Chapter 11 reorganization have been made for these entities: * USA Commercial Mortgage Company; * USA Capital Realty Advisors, LLC; * USA Securities, LLC; * USA Capital First Trust Deed Fund, LLC; and * USA Capital Diversified Trust Deed Fund, LLC. Thomas Allison Named Chief Executive Officer The Company retained Mesirow Financial Interim Management, one of the nation's top restructuring consulting firms, to assist in reorganizing operations and securing DIP financing in order to rebuild the company's core loan origination, underwriting and servicing operations. Thomas J. Allison, Mesirow executive vice president and senior managing director, has been named chief executive officer for USA Commercial Mortgage and its affiliates associated with the Chapter 11 petition. Mr. Allison is considered one of the foremost professionals in the restructuring and turnaround field, and has been managing complex turnaround situations since 1979. Mr. Allison replaces Joseph D. Milanowski who had been president, chief operating officer and a director of USA Commercial Mortgage Company since 1998, and had been associated with the company since 1993. "We are entering into this process with a solid plan," Mr. Allison said. "We are working on liquidity to fund our commitments and to improve our collection process. What we need is time to get our investor accounts and loans back in order and to put the systems and processes in place to enable the company to operate properly on a going-forward basis. If all goes well, we hope to be able to pay creditors in full and to pay investors in accordance with their contracts." First-Day Motions USA Commercial Mortgage Company filed "first-day motions" in the Bankruptcy Court intended to ensure that the company's business continues to function with minimal disruption. The court filings are intended to: * ensure the company is able to pay its employee wages and benefits, suppliers, investors and borrowers; * obtain interim financing; * maintain cash management programs; and, * retain legal, financial and other professionals to support the company's reorganization plans. The company retained Ray Quinney & Nebeker of Salt Lake City, Utah and Schwartzer & McPherson of Las Vegas as its legal counsel for these filings. New Website on Chapter 11 Filings The company has published a new website -- http://www.usacapitalcorp.com/-- to provide a single source of information about the company, the filings, and the progress of its reorganization. Information is available for investors, borrowers and media on the new website which replaces the company's previous websites. SEC Inquiry One of the filing entities, USA Capital First Trust Deed Fund, LLC, disclosed in prior reports filed with the SEC that the SEC is currently conducting an investigation of the operations of USA Capital First Trust Deed Fund, LLC, its manager, USA Securities, LLC, USA Commercial Mortgage Company, and USA Capital Diversified Trust Deed Fund, LLC. The SEC is investigating possible violations of federal securities laws by these entities. USA Securities, USA Commercial Mortgage Company and their affiliates are cooperating fully in the investigation. The company said that Allison, as the new CEO of the company, is conducting his own investigation of the concerns raised by the SEC. About USA Commercial Mortgage Company Based in Las Vegas, Nevada, USA Commercial Mortgage Company (dba USA Capital) -- http://www.usacapitalcorp.com/-- provides more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide. The Company and its debtor-affiliates filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev. Case Nos. 06-10725 to 06-10729). Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, represents the Debtors. When the Debtors filed for protection from their creditors, they estimated assets of more than $100 million and debts between $10 miilion and $50 million. USA COMMERCIAL: Case Summary & 26 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: USA Commercial Mortgage Company fka USA Capital 4484 South Pecos Road Las Vegas, Nevada 89121 Bankruptcy Case No.: 06-10725 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- USA Capital Realty Advisors, LLC 06-10726 USA Capital Diversified Trust Deed Fund, LLC 06-10727 USA Capital First Trust Deed Fund, LLC 06-10728 USA Securities, LLC 06-10729 Type of Business: The Debtor provides more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide. See http://www.usacapitalcorp.com/ Chapter 11 Petition Date: April 13, 2006 Court: District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtors' Counsel: Lenard E. Schwartzer, Esq. Schwartzer & Mcpherson Law Firm 2850 S. Jones Boulevard, Suite 1 Las Vegas, NV 89146 Tel: 702-228-7590 Fax: 702-892-0122 Total Assets Total Debts ------------ ----------- USA Commercial Mortgage Company $50 Million to $10 Million to $100 Million $50 Million USA Capital Realty Advisors, LLC $1 Million to $100,000 to $10 Million $500,000 USA Capital Diversified Trust More than $100 $500,000 to Deed Fund, LLC Million $1 Million USA Capital First Trust Deed $67,755,553 $329,549 Fund, LLC USA Securities, LLC $0 to $50,000 $0 to $50,000 A. USA Commercial Mortgage Company's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Bunch, Dell $10,500,000 1909 Red Robin Court Las Vegas, NV 89134 Peterson, Michael $1,500,000 c/o John F. O'Reilly O'Reilly Law Group, LLC 325 South Maryland Parkway Las Vegas, NV 89101 Nevada State Bank $300,000 P.O. Box 990 Las Vegas, NV 89125 Paris Line LLC $236,823 4759 Illustrious Street Las Vegas, NV 89147 Pecos Professional Park $181,081 4484 South Pecos Park Las Vegas, NV 89121 Wells Fargo Bank $150,292 MAC T5601012 P.O. Box 659700 San Antonio, TX 78286 Annee of Paris Coiffures, Inc. $136,116 8049 Pinncale Peak Las Vegas, NV 89113 Haspinov, LLC $107,022 4484 South Pecos Rd. Las Vegas, NV 89121 Bank of America $100,000 P.O. Box 30750 Los Angeles, CA 90030 USA Commercial Real Estate Group $51,869 4484 South Pecos Rd Las Vegas, NV 89121 Citibank $50,000 U.S. Bank $46,766 Goolde Patterson Ales & Day $46,463 Nevada Department of Taxation $40,942 Advanced Information Systems $32,428 Scotsman Publishing, Inc. $24,147 RD Advertising $24,054 West Coast Life Insurance Company $24,020 Russell AD Development Group, LLC $21,000 Special Order Systems $18,211 B. USA Capital Realty Advisors, LLC's 2 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Kummer, Kaempfer Bonner & Renshaw $55,327 3800 Howard Hudges Parkway, 7th Floor Las Vegas, NV 89109 InterShow $9,795 The Githler Center 1258 North Palm Avenue Sarasota, FL 34236 C. USA Capital Diversified Trust Deed Fund, LLC, has no Unsecured Creditors who are not insiders. D. USA Capital First Trust Deed Fund, LLC, has no Unsecured Creditors who are not insiders. E. USA Securities, LLC's 4 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ James Hull Commissions $385 George Gorman Commissions $369 R. Hagmaier Commissions $200 Tim Rich Commissions $112 USG CORP: Court Okays Ch. 11 Plan Solicitation & Voting Procedures ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approves, in its entirety, USG Corporation and its debtor-affiliates' procedures for distribution of solicitation packages and tabulation of votes to accept or reject the Plan. Logan & Company, Inc., will serve as the Debtors' voting agent in connection with the preparation, distribution and tabulation of ballots. Judge Judith K. Fitzgerald directs the Debtors to mail Solicitation Packages containing copies of: (a) the confirmation hearing notice; (b) the disclosure statement; (c) the letters recommending acceptance of the Plan; (d) letters or other communications to a holder from a firm representing that holder for Solicitation Packages sent to a Direct Asbestos Personal Injury Claimholder; and (e) an appropriate form of ballot and a ballot return envelope for Solicitation Packages sent to a Class 7 claim holder. Consistent with Sections 1126(f) of the Bankruptcy Code, the Solicitation Packages for holders of claims or interests against any Debtor in a class that is deemed to accept the Plan will not include a ballot. Judge Fitzgerald also rules that these appropriate Ballots will be distributed to the Class 7 Claimholders: Ballot No. 1 Individual Ballot for Class 7 Direct Asbestos PI Claims Ballot No. 2 Master Ballot for Class 7 Direct Asbestos PI Claims Ballot No. 3 Individual Ballot for Class 7 Asbestos PI Indirect Claims Judge Fitzgerald approves the Solicitation and Tabulation Procedures, including the special procedures relating to Asbestos PI Claims. Judge Fitzgerald establishes April 3, 2006, as the record date to determine which creditors and interest holders are entitled to receive Solicitation Packages and, where applicable, vote on the Plan, pursuant to Rule 3017(d) of the Federal Rules of Bankruptcy Procedure. All Solicitation Packages will be mailed on or before April 24, 2006. To be counted as votes to accept or reject the Plan, all Ballots must be properly executed, completed and delivered to Logan & Company no later than 5:00 p.m., Eastern Time, on June 2, 2006. Furthermore, Judge Fitzgerald approves the procedures with respect to distribution of the Solicitation Packages to securities holders. Each claim within a class of claims entitled to vote to accept or reject the Plan will be temporarily allowed in accordance with the tabulation rules provided in the Solicitation and Tabulation Procedures. Any claimant that seeks to challenge the allowance of its claim for voting purposes in accordance with the General Tabulation Rules will promptly serve a Rule 3018 Motion to the Debtors. About USG Corp. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 107; Bankruptcy Creditors' Service, Inc., 215/945-7000) USG CORPORATION: Gets More Time to Make Lease-Related Decisions --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave USG Corporation and its debtor-affiliates until the earlier of September 1, 2006, or the effective date of their chapter 11 plan, without prejudice to their right to seek further extensions to assume or reject non-residential real property leases. Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, told Judge Fitzgerald that the Debtors have approximately 146 real property leases. Given the importance of those leases to their ongoing operations and the number of leases at issue, the Debtors need more time to decide on how to treat their leases pursuant to Section 365(d)(4) of the Bankruptcy Code. A schedule of the Debtors' Real Property Leases is available for free at http://bankrupt.com/misc/usgrealpropertyleases.pdf Pending their decision, the Debtors assure Judge Fitzgerald that they will perform all of their obligations pertaining to the leases arising from and after the Petition Date in a timely fashion, including payment of postpetition rent due. Therefore, there should be little or no prejudice to the landlords under the real property leases as a result of the requested extension. According to the Debtors, the aggregate amount of prepetition arrearages under the leases is relatively small, as rent under many of the leases was paid in advance. About USG Corp. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 107; Bankruptcy Creditors' Service, Inc., 215/945-7000) USG CORP: Wants Speights & Runyan Barred from Pursuing PD Claims ---------------------------------------------------------------- USG Corporation and its debtor-affiliates want the U.S. Bankruptcy Court for the District of Delaware to preclude Speights & Runyan from pursuing any claim it has not demonstrated in its Verified Statement of Multiple Representations Pursuant to Fed. R. Bankr. P. 2019 it had authority to file. The Debtors explain that approximately 65% of the pre-Bar Date asbestos property damage claims that remain pending against them were filed by Speights & Runyan; yet it does not appear that Speights & Runyan was authorized by its purported clients to file the vast majority of those claims. The Debtors note that the only claim documents ever filed by or on behalf of hundreds of claimants were signed and submitted solely by Speights & Runyan, there is no evidence that these claimants ever intended to pursue claims in these proceedings, and Speights & Runyan's 2019 Statement does not provide any evidence that the firm was, in fact, authorized to file these claims. Speights & Runyan filed its 2019 Statement in December 2004. The 2019 Statement was accompanied by two exhibits that purportedly contained the information required by the Court's October 22, 2004 Order. Among the attachments to the 2019 Statement was a spreadsheet listing 283 claimants for which Speights & Runyan claimed authorization to file asbestos property damage claims against Debtors. The spreadsheet assigned number codes for the claimed authorization as to each claimant. Accordingly, the Debtors assert, those claims have no place in the chapter 11 proceedings, and their inclusion among the claims that the Debtors must address threatens to waste the time and resources of the Court, the Debtors, and other claimants. Specifically, the Debtors want to preclude Speights & Runyan from pursuing these categories of claims: (a) 32 claims filed by Speights & Runyan that are not listed on Speights & Runyan's 2019 Statement; (b) 6 claimants listed on the Speights & Runyan 2019 Statement that the Debtors have not been able to associate with any claimant; (c) More than 400 claims for which Speights & Runyan's only purported authority is a putative nationwide class that was rejected by the South Carolina court in which Speights & Runyan sought to have it certified; (d) 8 claims for which Speights & Runyan's authority purportedly results from a South Carolina-only class that was certified days before Debtors filed for Chapter 11 protection; and (e) 88 claims for which the only purported authorization provided by Speights & Runyan is various unsigned form or sample authorization or agreement forms. Speights & Runyan Objects Speights & Runyan reminds the Court that the firm has an ethical obligation as counsel in Anderson Memorial Hospital v. W.R. Grace & Co., et al., Case No. 92-CP-25-279 (Hampton County, SC, filed December 23, 1992) to protect the rights of absent class members. Hence, Speights & Runyan asserts that its 2019 statement -- which identified the Anderson Complaint and the Anderson Class Certification Order as the instruments which provided the firm with authority to file the claims -- was appropriate. However, since the Bankruptcy Court in In re W.R. Grace & Co., Case No. 01-01139(JFK), has disagreed with Speights & Runyan's assertion, the firm suggests that the USG Court enter a case management order similar to the one entered in Grace, providing that the firm will product to the Debtors the actual basis -- rather than an exemplar or blank contract -- for its authority for pending claims. Speights & Runyan will also identify any claims remaining for which its sole basis of authority is the Anderson Memorial putative class action. The firm will amend its 2019 Statement to refer to the actual document, if any. Parties Stipulate In a stipulation approved by the Court, the Debtors and Speights & Runyan agree that the firm will withdraw all claims on behalf of non-South Carolina claimants for which the firm's sole basis of authority is the Anderson Memorial putative "worldwide" class. Speights & Runyan will produce to the Debtors the actual basis for its authority to file claims, including documentation supporting that authority. Speights & Runyan will also amend its Rule 2019 Statement. Hearing on the Debtors' request is adjourned to a later date. About USG Corp. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., 215/945-7000) WATTSHEALTH FOUNDATION: Sells HMO Business to Care 1st for $30MM ---------------------------------------------------------------- WattsHealth Foundation Inc. will sell its UHP Healthcare HMO for $30 million to Care 1st Health Plan, an Alhambra-based HMO, Daniel Yi of the Los Angeles Times reports. Most WattsHealth members obtain coverage through Medi-Cal, the state-run health plan for low-income residents, and Medicare, the federal program for the elderly, while Care 1st serves patients exclusively through contracts with Medi-Cal. Mr. Yi reports that according to WattsHealth's officials, the plan's 80,000 members would keep their coverage and should see little change, they said. WattsHealth's board of directors voted on Monday, Apr. 10, 2006, to sell the HMO business in order to emerge from bankruptcy. The sale transaction will require approval from state regulators and the U.S. Bankruptcy Court for the Central District of California. Under the agreement, Care 1st will: * pay $30 million for the foundation's HMO contracts with members and providers, and * donate $500,000 to the foundation's charitable efforts. Mr. Yi reports that Walter Gray, vice president of business development of Care 1st, said that the purchase would allow Care 1st to grow and break into the Medicare and dental plans. Mr. Gray further said that it hopes to hire most of the foundations employees but there will be some layoffs, relates Mr. Yi. Mr. Yi reports that Gary Klausner, Esq., WattsHealth's bankruptcy counsel, said the proceeds of the sale sale and the foundation's existing assets, including cash reserves, would allow it to pay creditors. Headquartered in Inglewood, California, WATTSHealth Foundation, Inc., dba UHP Healthcare, provides comprehensive medical and dental services for Commercial, Medi-Cal and Medicare members in the Greater Southern California area. The Company filed for chapter 11 protection on May 31, 2005 (Bankr. C.D. Calif. Case No. 05-22627). Gary E. Klausner, Esq., at Stutman Treister & Glatt represents the Debtor in its restructuring efforts. Richard K. Diamond, Esq., at Danning, Gill, Diamond & Kollitz, LLP, represents the Official Committee of Unsecured Creditors, and Ronald F. Greenspan and Matthew Pakkala at FTI Consulting, Inc., serve as the Committee's financial advisors. When the Debtor filed for protection from its creditors, it estimated assets and debts of $50 million to $100 million. WEEKS LANDING: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Weeks Landing, LLC 9167 Brendan Lake Court Bonita Springs, Florida 34135 Bankruptcy Case No.: 06-01721 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Shell Cove Marine Properties, LLC 06-01722 Estero Commons, LLC 06-01723 131 Group, Inc. 06-01724 Type of Business: Michele Pessin is the manager and sole shareholder of the Debtor and its affiliates. Chapter 11 Petition Date: April 14, 2006 Court: Middle District of Florida (Fort Myers) Debtors' Counsel: Jordi Guso, Esq. Berger Singerman, P.A. 200 South Biscayne Boulevard, Suite 1000 Miami, Florida 33131-5308 Tel: (305) 755-9500 Fax: (305) 714-4340 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million A. Weeks Landing, LLC's 7 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ William Hickman $250,000 9155 Brendan Lake Court Bonita Springs, FL 34135 Bay Crossing Realty $180,000 26251 South Tamiami Trail Bonita Springs, FL 34134 Larry Warner $137,400 791 12 Avenue South Naples, FL 34102 Hans Wilson & Assoc., Inc. $137,400 1938 Hill Avenue Fort Myers, FL 33901 Ron Classe Personal Loan $74,000 P. Grady Minor & Assoc., P.A. $40,000 Marc Shapiro, Esq. Attorney's Fees $7,000 B. Shell Cove Marine Properties, LLC's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ William Hickman Personal Loan $10,000 9155 Brendan Lake Court Bonita Springs, FL 34135 C. Estero Commons, LLC's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Larner Warner Professional $60,000 761 12 Avenue South Naples, FL 34102 D. 131 Group, Inc.'s 5 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Malcolm Turner $727,000 Ceder Hammock Naples, FL 34102 Cheffy - Pasadomo Professional $50,000 821 5th Avenue South Services Suite 201 Naples, FL 34102 Ron Classe Personal Loan $35,000 27041 Driftwood Drive Bonita Springs, FL 34135 Larry Warner Professional $19,500 Services Richardson - Sellers, P.A. $150 WINN-DIXIE: Miramar Outparcel Sold to Bankatlantic For $2.7 Mil. ---------------------------------------------------------------- As reported in the Troubled Company Reporter on Mar. 1, 2006, Winn-Dixie Stores, Inc., and its debtor-affiliates lease Store No. 250 located in a shopping center in Miramar, Florida. Winn Dixie Stories also own a piece of property adjacent to the Miramar Store. The Debtors have no development plans for the Miramar Outparcel, D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates. Through the marketing efforts of DJM Asset Management, Inc., the Debtors received six offers for the Miramar Outparcel. The Debtors have determined that BankAtlantic's $2,575,000 offer is the highest and best offer for the Miramar Outparcel. The Debtors and BankAtlantic entered into a Purchase Agreement dated Jan. 4, 2006, where the Debtors agreed to sell WD Stores' fee simple title interest in the Miramar Outparcel, and WD Stores' interest in all related appurtenances, rights, easements, rights-of-way, tenement, and hereditaments to BankAtlantic. BankAtlantic has deposited an initial earnest money deposit of $100,000 and a second deposit of $150,000 with an escrow agent. The parties agree that the initial minimum overbid that may be accepted by the Debtors at any auction must have a value of at least $2,555,100. The Debtors will be responsible for payment of the brokerage commission due to BankAtlantic's broker, totaling $70,000, only if the transaction is consummated at the date and time of Closing. Accordingly, the Debtors seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to sell WD Store's interest in the Miramar Outparcel and all related assets, free and clear of liens, claims, interests, and subject to higher or better offers. Mr. Baker notes that any sale of the Miramar Outparcel, including the proposed sale to BankAtlantic, will include exclusive use restrictions to assure that no entity may develop the property in a way that competes with the Debtors' Miramar Store. Update No auction was conducted because the Debtors have not received qualified competing bids for the property. By agreement between Bankatlantic and the Debtors, the purchase price for the Miramar Outparcel increased by $200,000, making the new Purchase Price $2,775,000. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Diversified Wants Assumption or Rejection of Contract ----------------------------------------------------------------- Before Winn-Dixie Stores, Inc., and its debtor-affiliates filed for bankruptcy, they entered into a contract with Diversified Maintenance Systems, Inc., for floor care and janitorial services, dated as of March 4, 2004. Diversified agreed to clean all flooring for the Debtors' facilities. In return, the Debtors agreed to compensate Diversified based on annual price per square feet. At that time, Diversified provided janitorial services for 431 of the Debtors' facilities throughout Florida and Georgia. Diversified and SBM of Davie, Inc., entered into a Subcontractor General Agreement dated July 19, 2004, which required Diversified to pay SBM for services rendered to the Debtors' facilities only after the Debtors paid Diversified. Dawn A. Carapella, Esq., at Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A., in Tampa, Florida, tells the Court that Diversified is owed $946,000 in prepetition services provided to the Debtors for services from January 23 through February 21, 2005. As a result of the prepetition payment the Debtors owed Diversified, SBM initiated a state court action against Diversified for payments comprised in the prepetition services rendered to the Debtors by Diversified, Ms. Carapella relates. Diversified filed a notice of removal of the State Court Action on January 9, 2006, thereby initiating an adversary proceeding. Diversified has continued to do business with the Debtors. Ms. Carapella notes that the Debtors have neither accepted nor rejected the Diversified Janitorial Service Agreement and accordingly, have not cured the prepetition arrears under the agreement. Ms. Carapella asserts that Diversified will suffer severe damage beyond the compensation available under the Bankruptcy unless the Debtors are compelled to assume or reject the Diversified Janitorial Service Agreement. Although Diversified's position is that it is not required to pay SBM until the Debtors pay, it is embroiled in litigation commenced by SBM for payment of the prepetition amounts. If the Debtors assume the Diversified Janitorial Service Agreement and propose a prompt cure, then Diversied's litigation will be resolved. Ms. Carapella contends that Diversified should not be required to shoulder the burden of litigation with SBM until at least the end of May 2006 before it will know whether the Debtors will assume the executory contract and cure the prepetition arrearages. Accordingly, Diversified asks the Court to compel the Debtors to assume or reject the Diversified Janitorial Service Agreement without delay. 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. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Stipulation Resolving HP Hood's Reclamation Claim ------------------------------------------------------------- As reported in the Troubled Company Reporter on Oct. 24, 2005, Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to determine the amount of the reclamation claims that have not been fully reconciled and agreed by the vendors. HP Hood's Reclamation Claim The Debtors and HP Hood LLC have contemplated that an agreement regarding the reconciliation treatment of HP Hood's reclamation claim will reduce the likelihood of potential litigation. HP Hood LLC's reclamation claims involve three divisions -- HP Hood, Heluva Good, and Crowley. To avoid unnecessary expenses and litigation, the parties stipulate that: (a) The Reclamation/Trade Lien Stipulation has the effect of allowing non-duplicative Reclamation Claims from different divisions, subsidiaries, and affiliates of a legal entity and accordingly, the Reclamation Claim of HP Hood is comprised of the reclamation claims of its divisions. HP Hood's reclamation window for its Reclamation Demand is the 10-day period from Feb. 9 to 18, 2005; (b) HP Hood's Reclamation Claim with respect to the HP Hood division is allowed for $290,261. The Allowed Reclamation Claims of the Crowley and Heluva Good divisions have already been determined, and HP Hood has already opted into the Reclamation/Trade Lien Program; and (c) Each party will bear its own expenses. 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). XEROX CORP: DBRS Shifts Trend on BB Issuer Ratings to Positive -------------------------------------------------------------- Dominion Bond Rating Service changed the trend on the Issuer Rating of Xerox Corporation and Xerox Canada Inc., to Positive from Stable. The trend change recognizes the progress the Company has made in strengthening its financial profile. Trend Actions: * Xerox Canada Inc. -- Issuer Rating BB (high) Trend Changed to Positive * Xerox Corporation -- Issuer Rating BB (high) Trend Changed to Positive DBRS notes that this progress has occurred as strong free cash flow has enabled debt reduction and has resulted in improved financial leverage and coverage metrics. As at the end of December 2005, Xerox was virtually debt free in the core business. Structural subordination is diminishing for unsecured bondholders, as outstanding secured debt declines and unencumbered assets exceed unsecured debt. Other positive developments augmenting financial flexibility include the recent $700 million unsecured debt issuance, and the recent replacement of the $1.0 billion secured credit facility with a new $1.25 billion unsecured credit facility. Xerox has also been successful in translating flat revenues into attractive overall earnings and cash flow growth, due to expense reduction initiatives and lower financing costs. Xerox's focused research and development spending has enabled it to produce advanced technology, with numerous recent product upgrades and introductions. The Company has placed considerable emphasis on colour products, which presents an attractive opportunity going forward, given that colour presently provides five times the revenue and profit per page as does black and white. However, the Company's improvement is tempered by the lack of meaningful revenue growth in this mature and highly competitive industry. Xerox's main challenge is to maintain its momentum and expand revenues through new product introductions by leveraging its technological expertise. Given that 71% of revenues are provided by the more stable post- sale revenue sources, expansion of the installed base of equipment is a critical success factor. Post-sale revenues remain flat, but are expected to increase modestly going forward. DBRS notes that Xerox's rating is likely to be upgraded if it can overcome its lack of revenue growth and maintain its momentum on strengthening its financial profile. YUKOS OIL: Chapter 15 Petition Summary -------------------------------------- Petitioner: Eduard K. Rebgun Foreign Representative Debtor: Yukos Oil Company aka Oao NK Yukos 31A Dubininskaya Street Moscow, Russia Case No.: 06-10775 Type of Business: The Debtor is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in the energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. See http://yukos.com/ The Debtor previously filed for bankruptcy protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A consortium of 14 bank lenders led by Societe Generale SA, filed a new bankruptcy suit in the Moscow Arbitration Court on March 10, 2006, in an attempt to recover the remainder of a US$1 billion debt under outstanding loan agreements. Chapter 15 Petition Date: April 13, 2006 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Petitioner's Counsel: Howard Seife, Esq. Chadbourne & Parke LLP 30 Rockefeller Plaza New York, NY 10112 Tel: (212) 408-5100 Fax: (212) 541-5369 Total Assets: More than $100 Million Total Debts: More than $100 Million * BOND PRICING: For the week of Apr. 10 - Apr. 14, 2006 ------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- Acme Metals Inc 10.875% 12/15/07 0 Adelphia Comm. 3.250% 05/01/21 2 Adelphia Comm. 6.000% 02/15/06 2 Adelphia Comm. 7.500% 01/15/04 57 Adelphia Comm. 7.750% 01/15/09 60 Adelphia Comm. 7.875% 05/01/09 57 Adelphia Comm. 8.125% 07/15/03 60 Adelphia Comm. 8.375% 02/01/08 59 Adelphia Comm. 9.250% 10/01/02 60 Adelphia Comm. 9.375% 11/15/09 62 Adelphia Comm. 9.500% 02/15/04 64 Adelphia Comm. 9.875% 03/01/05 57 Adelphia Comm. 9.875% 03/01/07 60 Adelphia Comm. 10.250% 06/15/11 63 Adelphia Comm. 10.250% 11/01/06 60 Adelphia Comm. 10.500% 07/15/04 62 Adelphia Comm. 10.875% 10/01/10 60 Advanced Access 10.750% 06/15/11 74 AHI-Dflt07/05 8.625% 10/01/07 68 Allegiance Tel. 11.750% 02/15/08 39 Allegiance Tel. 12.875% 05/15/08 32 Amer & Forgn Pwr 5.000% 03/01/30 69 Amer Color Graph 10.000% 06/15/10 69 American Airline 9.980% 01/02/13 72 American Airline 9.980% 01/02/13 72 American Airline 9.980% 01/02/13 72 Ames Dept Stores 10.000% 04/15/06 0 AMR Corp. 10.290% 03/08/21 73 Antigenics 5.250% 02/01/25 55 Anvil Knitwear 10.875% 03/15/07 53 AP Holdings Inc 11.250% 03/15/08 15 Archibald Candy 10.000% 11/01/07 7 Armstrong World 6.350% 08/15/03 74 Armstrong World 6.500% 08/15/05 74 Armstrong World 7.450% 05/15/29 74 Armstrong World 9.000% 04/17/01 62 Armstrong World 9.000% 06/15/04 72 Arvin Capital I 9.500% 02/01/27 70 Asarco Inc. 7.875% 04/15/13 75 At Home Corp. 0.525% 12/28/18 2 At Home Corp. 4.750% 12/15/06 4 ATA Holdings 13.000% 02/01/09 1 Atlantic Coast 6.000% 02/15/34 16 Atlas Air Inc 8.010% 01/02/10 61 Autocam Corp. 10.875% 06/15/14 68 Avado Brands Inc 11.750% 06/15/09 1 Aviation Sales 8.125% 02/15/08 44 Banctec Inc 7.500% 06/01/08 75 Bank New England 8.750% 04/01/99 7 BBN Corp 6.000% 04/01/12 0 Big V Supermkts 11.000% 02/15/04 0 Budget Group Inc. 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 55 CCH II/CCH II CP 10.250% 01/15/10 60 Cell Therapeutic 5.750% 06/15/08 48 Cell Therapeutic 5.750% 06/15/08 62 Charter Comm Hld 8.625% 04/01/09 72 Charter Comm Hld 9.625% 11/15/09 72 Charter Comm Hld 10.000% 04/01/09 73 Charter Comm Hld 10.000% 05/15/11 56 Charter Comm Hld 10.750% 10/01/09 75 Charter Comm Hld 11.125% 01/15/11 58 Charter Comm Inc 5.875% 11/16/09 70 Cherokee Int'l 5.250% 11/01/08 70 Chic East Ill RR 5.000% 01/01/54 50 CIH 9.920% 04/01/14 54 CIH 10.000% 05/15/14 54 CIH 11.125% 01/15/14 55 Ciphergen 4.500% 09/01/08 72 Clark Material 10.750% 11/15/06 0 CMI Industries 9.500% 10/01/03 0 Collins & Aikman 10.750% 12/31/11 31 Comcast Corp. 2.000% 10/15/29 41 Concentric Network 12.750% 12/15/07 0 Coyne Intl Enter 11.250% 06/01/08 72 CPNL-Dflt12/05 4.750% 11/15/23 31 CPNL-Dflt12/05 6.000% 09/30/14 26 CPNL-Dflt12/05 7.625% 04/15/06 57 CPNL-Dflt12/05 7.750% 04/15/09 59 CPNL-Dflt12/05 7.750% 06/01/15 24 CPNL-Dflt12/05 7.875% 04/01/08 59 CPNL-Dflt12/05 8.500% 02/15/11 39 CPNL-Dflt12/05 8.625% 08/15/10 40 CPNL-Dflt12/05 8.750% 07/15/07 59 CPNL-Dflt12/05 10.500% 05/15/06 60 Cray Inc. 3.000% 12/01/24 72 Cray Research 6.125% 02/01/11 32 Curagen Corp 4.000% 02/15/11 72 Curative Health 10.750% 05/01/11 61 Dal-Dflt09/05 9.000% 05/15/16 24 Dana Corp 5.850% 01/15/15 74 Dana Corp 7.000% 03/01/29 75 Decorative Home 13.000% 06/30/02 0 Decrane Aircraft 12.000% 09/30/08 73 Delco Remy Intl 9.375% 04/15/12 47 Delco Remy Intl 11.000% 05/01/09 52 Delphi Auto Syst 7.125% 05/01/29 63 Delphi Corp 6.500% 08/15/13 65 Delphi Trust II 6.197% 11/15/33 41 Delta Air Lines 2.875% 02/18/24 25 Delta Air Lines 7.541% 10/11/11 69 Delta Air Lines 7.700% 12/15/05 23 Delta Air Lines 7.900% 12/15/09 25 Delta Air Lines 8.000% 06/03/23 26 Delta Air Lines 8.187% 10/11/17 69 Delta Air Lines 8.270% 09/23/07 70 Delta Air Lines 8.300% 12/15/29 25 Delta Air Lines 8.540% 01/02/07 33 Delta Air Lines 8.540% 01/02/07 43 Delta Air Lines 8.950% 01/12/12 70 Delta Air Lines 9.200% 09/23/14 68 Delta Air Lines 9.250% 03/15/22 24 Delta Air Lines 9.300% 01/02/10 75 Delta Air Lines 9.320% 01/02/09 54 Delta Air Lines 9.375% 09/11/07 72 Delta Air Lines 9.750% 05/15/21 23 Delta Air Lines 9.875% 04/30/08 64 Delta Air Lines 10.000% 05/17/10 71 Delta Air Lines 10.000% 06/01/10 63 Delta Air Lines 10.000% 06/01/11 46 Delta Air Lines 10.000% 06/05/11 59 Delta Air Lines 10.000% 06/05/13 59 Delta Air Lines 10.000% 08/15/08 25 Delta Air Lines 10.000% 12/05/14 46 Delta Air Lines 10.060% 01/02/16 66 Delta Air Lines 10.080% 06/16/07 59 Delta Air Lines 10.125% 05/15/10 25 Delta Air Lines 10.125% 06/16/09 61 Delta Air Lines 10.125% 06/16/10 60 Delta Air Lines 10.375% 02/01/11 24 Delta Air Lines 10.375% 12/15/22 31 Delta Air Lines 10.500% 04/30/16 75 Discovery Zone 13.500% 08/01/02 0 Diva Systems 12.625% 03/01/08 1 Dura Operating 9.000% 05/01/09 49 Dura Operating 9.000% 05/01/09 51 DVI Inc 9.875% 02/01/04 11 Dyersburg Corp 9.750% 09/01/07 0 Eagle Family Food 8.750% 01/15/08 73 Eagle Food Centre 11.000% 04/15/05 1 Eagle-Picher Inc 9.750% 09/01/13 70 Encompass Service 10.500% 05/01/09 0 Encysive Pharmacy 2.500% 03/15/12 68 Encysive Pharmacy 2.500% 03/15/12 68 Epix Medical Inc. 3.000% 06/15/24 70 Exodus Comm. Inc. 5.250% 02/15/08 0 Exodus Comm. Inc. 11.250% 07/01/08 0 Fedders North AM 9.875% 03/01/14 66 Federal-Mogul Co. 7.375% 01/15/06 43 Federal-Mogul Co. 7.500% 01/15/09 43 Federal-Mogul Co. 8.160% 03/06/03 37 Federal-Mogul Co. 8.250% 03/03/05 44 Federal-Mogul Co. 8.330% 11/15/01 37 Federal-Mogul Co. 8.370% 11/15/01 37 Federal-Mogul Co. 8.370% 11/15/01 38 Federal-Mogul Co. 8.800% 04/15/07 43 Finova Group 7.500% 11/15/09 34 FMXIQ-DFLT09/05 13.500% 08/15/05 41 Foamex L.P.-DFLT 9.875% 06/15/07 38 Ford Motor Co 6.500% 08/01/18 67 Ford Motor Co 6.625% 02/15/28 66 Ford Motor Co 7.125% 11/15/25 68 Ford Motor Co 7.400% 11/01/46 67 Ford Motor Co 7.500% 08/01/26 67 Ford Motor Co 7.700% 05/15/97 68 Ford Motor Co 7.750% 06/15/43 69 Ford Motor Cred 5.450% 04/20/11 73 Ford Motor Cred 5.650% 01/21/14 73 Ford Motor Cred 5.750% 01/21/14 73 Ford Motor Cred 5.750% 02/20/14 71 Ford Motor Cred 5.750% 02/20/14 73 Ford Motor Cred 5.900% 02/20/14 74 Ford Motor Cred 6.000% 01/20/15 72 Ford Motor Cred 6.000% 01/21/14 75 Ford Motor Cred 6.000% 03/20/14 72 Ford Motor Cred 6.000% 03/20/14 73 Ford Motor Cred 6.000% 03/20/14 73 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 11/20/14 71 Ford Motor Cred 6.000% 11/20/14 72 Ford Motor Cred 6.000% 11/20/14 73 Ford Motor Cred 6.050% 02/20/14 75 Ford Motor Cred 6.050% 02/20/15 70 Ford Motor Cred 6.050% 03/20/14 74 Ford Motor Cred 6.050% 04/21/14 73 Ford Motor Cred 6.050% 12/22/14 70 Ford Motor Cred 6.050% 12/22/14 74 Ford Motor Cred 6.100% 02/20/15 72 Ford Motor Cred 6.150% 01/20/15 73 Ford Motor Cred 6.150% 12/22/14 73 Ford Motor Cred 6.200% 04/21/14 75 Ford Motor Cred 6.250% 01/20/15 73 Ford Motor Cred 6.250% 03/20/15 73 Ford Motor Cred 6.300% 05/20/14 75 Ford Motor Cred 6.300% 05/20/14 75 Ford Motor Cred 6.350% 04/21/14 73 Ford Motor Cred 6.500% 02/20/15 74 Ford Motor Cred 7.500% 08/20/32 74 Gateway Inc. 2.000% 12/31/11 71 General Motors 7.125% 07/15/13 72 General Motors 7.400% 09/01/25 64 General Motors 7.700% 04/15/16 70 General Motors 8.100% 06/15/24 66 General Motors 8.250% 07/15/23 69 General Motors 8.375% 07/15/33 71 General Motors 8.800% 03/01/21 70 General Motors 9.400% 07/15/21 72 Glenoit Corp 11.000% 04/15/07 0 Global Health SC 11.000% 05/01/08 2 GMAC 5.250% 01/15/14 73 GMAC 5.350% 01/15/14 74 GMAC 5.700% 10/15/13 75 GMAC 5.750% 01/15/14 74 GMAC 5.900% 01/15/19 71 GMAC 5.900% 01/15/19 72 GMAC 5.900% 02/15/19 71 GMAC 5.900% 10/15/19 71 GMAC 6.000% 02/15/19 72 GMAC 6.000% 02/15/19 73 GMAC 6.000% 02/15/19 73 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 73 GMAC 6.000% 04/15/19 72 GMAC 6.000% 09/15/19 72 GMAC 6.000% 09/15/19 72 GMAC 6.050% 08/15/19 70 GMAC 6.050% 08/15/19 73 GMAC 6.050% 10/15/19 72 GMAC 6.100% 09/15/19 70 GMAC 6.125% 10/15/19 74 GMAC 6.150% 08/15/19 72 GMAC 6.150% 09/15/19 72 GMAC 6.150% 10/15/19 72 GMAC 6.200% 04/15/19 73 GMAC 6.250% 01/15/19 73 GMAC 6.250% 04/15/19 71 GMAC 6.250% 05/15/19 74 GMAC 6.250% 07/15/19 74 GMAC 6.250% 12/15/18 74 GMAC 6.300% 08/15/19 74 GMAC 6.300% 08/15/19 74 GMAC 6.350% 04/15/19 74 GMAC 6.350% 07/15/19 74 GMAC 6.350% 07/15/19 74 GMAC 6.400% 11/15/19 73 GMAC 6.400% 12/15/18 74 GMAC 6.500% 02/15/20 74 GMAC 6.500% 05/15/19 75 GMAC 6.500% 12/15/18 75 GMAC 6.650% 02/15/20 75 GMAC 6.700% 06/15/18 75 GMAC 7.000% 11/15/24 74 Golden Books Pub 10.750% 12/31/04 0 Graftech Int'l 1.625% 01/15/24 73 Graftech Int'l 1.625% 01/15/24 73 GST Network Fndg 10.500% 05/01/08 0 Gulf Mobile Ohio 5.000% 12/01/56 74 Gulf States Stl 13.500% 04/15/03 0 Horizon Fin Corp 11.750% 05/08/09 0 Incyte Corp 3.500% 02/15/11 74 Inland Fiber 9.625% 11/15/07 60 Insight Health 9.875% 11/01/11 54 Insilco Corp 12.000% 08/15/07 0 Iridium LLC/CAP 10.875% 07/15/05 25 Iridium LLC/CAP 11.250% 07/15/05 22 Iridium LLC/CAP 13.000% 07/15/05 26 Iridium LLC/CAP 14.000% 07/15/05 26 Isolagen Inc. 3.500% 11/01/24 57 JL French Auto 11.500% 06/01/09 0 Jordan Industries 10.375% 08/01/07 55 Kaiser Aluminum & Chem. 9.875% 02/15/02 51 Kaiser Aluminum & Chem. 10.875% 10/15/06 55 Kaiser Aluminum & Chem. 10.875% 10/15/06 56 Kaiser Aluminum & Chem. 12.750% 02/01/03 5 Kevco Inc 10.375% 12/01/07 0 Key Plastics 10.250% 03/15/07 0 Kmart Corp. 8.540% 01/02/15 16 Kmart Corp. 8.990% 07/05/10 12 Kmart Corp. 9.350% 01/02/20 7 Kmart Funding 9.440% 07/01/18 70 Lehman Bros Hldg 10.000% 10/30/13 73 Liberty Media 3.250% 03/15/31 75 Liberty Media 3.750% 02/15/30 57 Liberty Media 4.000% 11/15/29 61 Lifecare Holding 9.250% 08/15/13 62 Macsaver Financl 7.400% 02/15/02 0 Macsaver Financl 7.600% 08/01/07 3 Macsaver Financl 7.875% 08/01/03 0 Merisant Co 9.500% 07/15/13 64 Metricom Inc 13.000% 02/15/10 0 Mosler Inc 11.000% 04/15/03 0 Movie Gallery 11.000% 05/01/12 48 MSX Int'l Inc. 11.375% 01/15/08 69 Muzak LLC 9.875% 03/15/09 60 Natl Steel Corp. 8.375% 08/01/06 8 New Orl Grt N RR 5.000% 07/01/32 69 New World Pasta 9.250% 02/15/09 8 North Atl Trading 9.250% 03/01/12 73 Northern Pacific RY 3.000% 01/01/47 54 Northern Pacific RY 3.000% 01/01/47 54 Northwest Airlines 6.625% 05/15/23 43 Northwest Airlines 7.039% 01/02/06 5 Northwest Airlines 7.625% 11/15/23 43 Northwest Airlines 7.875% 03/15/08 43 Northwest Airlines 8.130% 02/01/14 68 Northwest Airlines 8.700% 03/15/07 44 Northwest Airlines 8.875% 06/01/06 43 Northwest Airlines 8.970% 01/02/15 42 Northwest Airlines 9.875% 03/15/07 44 Northwest Airlines 10.000% 02/01/09 41 Northwest Stl&Wir 9.500% 06/15/01 0 NTK Holdings Inc. 10.750% 03/01/14 74 Nutritional Src. 10.125% 08/01/09 65 NWA Trust 11.300% 12/21/12 69 Oakwood Homes 7.875% 03/01/04 8 Oakwood Homes 8.125% 03/01/09 10 Oscient Pharm 3.500% 04/15/11 75 Osu-Dflt10/05 13.375% 10/15/09 0 Outboard Marine 10.750% 06/01/08 1 Overstock.com 3.750% 12/01/11 74 PCA LLC/PCA Fin 11.875% 08/01/09 20 Pegasus Satellite 9.625% 10/15/49 9 Pegasus Satellite 12.375% 08/01/06 9 Pegasus Satellite 12.500% 08/01/07 10 Piedmont Aviat 10.250% 01/15/49 0 Pixelworks Inc. 1.750% 05/15/24 69 Pliant-DFLT/06 13.000% 06/01/10 46 Pliant-DFLT/06 13.000% 06/01/10 48 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 7.250% 01/15/07 0 Polaroid Corp. 11.500% 02/15/06 0 Pres Riverboat 13.000% 09/15/01 5 Primedex Health 11.500% 06/30/08 58 Primus Telecom 3.750% 09/15/10 41 Primus Telecom 8.000% 01/15/14 68 Primus Telecom 12.750% 10/15/09 73 Read-Rite Corp. 6.500% 09/01/04 14 Refco Finance 9.000% 08/01/12 62 Reliance Group Holdings 9.000% 11/15/00 16 Reliance Group Holdings 9.750% 11/15/03 1 Renco Metals Inc 11.500% 07/01/03 0 RJ Tower Corp. 12.000% 06/01/13 69 Safety-Kleen Crp 9.250% 06/01/08 0 Salton Inc. 12.250% 04/15/08 70 Silverleaf Res 8.000% 04/01/10 35 Source Media Inc. 12.000% 11/01/04 0 Spinnaker Inds 10.750% 10/15/06 0 Steel Heddle 10.625% 06/01/08 0 Steel Heddle 13.750% 06/01/09 0 Sterling Chem 11.250% 04/01/07 0 Summit Secs Inc 9.500% 09/15/05 0 Tekni-Plex Inc. 12.750% 06/15/10 68 Thermadyne Holdings 12.500% 06/01/08 0 Toys R Us 7.375% 10/15/18 73 Trans Mfg Oper 11.250% 05/01/09 64 Transtexas Gas 15.000% 03/15/05 0 Tribune Co 2.000% 05/15/29 72 Trism Inc 12.000% 02/15/05 1 Triton Pcs Inc. 8.750% 11/15/11 71 Triton Pcs Inc. 9.375% 02/01/11 70 Tropical SportsW 11.000% 06/15/08 10 Twin Labs Inc 10.250% 05/15/06 2 United Air Lines 7.270% 01/30/13 48 United Air Lines 7.870% 01/30/19 55 United Air Lines 9.350% 04/07/16 30 United Air Lines 10.020% 03/22/14 45 United Air Lines 10.360% 11/13/12 5 Univ Health Svcs 0.426% 06/23/20 57 US Air Inc. 10.250% 01/15/49 0 US Air Inc. 10.250% 01/15/49 6 US Air Inc. 10.250% 01/15/49 6 US Air Inc. 10.300% 01/15/49 1 US Air Inc. 10.550% 01/15/49 1 US Air Inc. 10.680% 06/27/08 1 US Air Inc. 10.700% 01/01/49 8 US Air Inc. 10.900% 01/01/49 3 US Air Inc. 10.900% 01/01/49 6 Venture Hldgs 12.000% 06/01/09 0 Wachovia Corp 13.000% 02/01/07 65 Werner Holdings 10.000% 11/15/07 29 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Wheeling-Pitt St 6.000% 08/01/10 70 Williams Commun 10.875% 10/01/09 0 Winsloew Furniture 12.750% 08/15/07 15 World Access Inc. 4.500% 10/01/02 3 World Access Inc. 13.250% 01/15/08 5 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero Jainga, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo Junior M. Pinili, Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***